10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2021

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 001-36268

MyMD Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

New Jersey

22-2983783

(State or other jurisdiction

of incorporation)

(IRS Employer

Identification No.)

855 N. Wolfe Street, Suite 623

Baltimore, MD 21205

(Address of principal executive offices and zip code)

(856) 848-8698

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, no par value per share		MYMD		The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

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

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

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
		Emerging growth company	[ ]

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of May 14, 2021, there were 36,880,037 shares outstanding of the registrant’s common stock.

EXPLANATORY NOTE

This report is the Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 of MyMD Pharmaceuticals, Inc., which was formerly known as Akers Biosciences, Inc. prior to the consummation on April 16, 2021 of the merger described below.

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 Pharmaceuticals, Inc., a New Jersey corporation previously known as Akers Biosciences, Inc. (the “Company”), XYZ Merger Sub Inc., a Florida corporation and a wholly owned subsidiary of the Company (“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”), (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 payments 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 payable upon the achievement of certain market capitalization milestone events during the 36-month period immediately following the closing of the Merger. 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 owned approximately 22.95% of the outstanding equity of the Company.

The Merger is expected to be treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of Akers Biosciences, Inc.’s operations were disposed of as part of the consummation of the Merger and therefore no goodwill or other intangible assets were recorded by the Company as a result of the Merger. MyMD Florida is expected to be treated as the accounting acquirer, as its stockholders control the Company after the Merger, even though Akers Biosciences, Inc. was the legal acquirer.

See Note 1 of the Unaudited Condensed Consolidated Financial Statements for additional information.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	44

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70

Item 3.	Defaults Upon Senior Securities	70

Item 4.	Mine Safety Disclosures	70

Item 5.	Other Information	70

Item 6.	Exhibits	71

Signatures		73

PART I - Financial Information

Item 1. Financial Statements.

MYMD PHARMACEUTICALS, INC. AND SUBSIDIARIES

(previously known as Akers Biosciences, Inc.)

Condensed Consolidated Balance Sheets

March 31, 2021 and December 31, 2020

	As of
	March 31,			December 31,
	2021			2020
	(unaudited)			(audited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	569,366		$	18,617,955
Marketable Securities		30,480,537			16,718,452
Other Receivables		3,026,137			1,200,009
Prepaid expenses		214,111			294,343
Current assets of discontinued operations		7,700			12,002

Total Current Assets		34,297,851			36,842,761

Non-Current Assets
Other Assets		1,500,000			-

Total Non-Current Assets		1,500,000			-

Total Assets	$	35,797,851		$	36,842,761

LIABILITIES
Current Liabilities
Trade and Other Payables	$	2,335,751		$	2,203,902
Current liabilities of discontinued operations		38,308			59,393

Total Current Liabilities		2,374,059			2,263,295

Total Liabilities	$	2,374,059		$	2,263,295

Commitments and Contingencies

SHAREHOLDERS’ EQUITY
Preferred Stock, no par value, 50,000,000 total preferred shares authorized
Series A Convertible Preferred Stock, 10,000,000 shares designated, $0.001 par value and a stated value of $0.0725 per share, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020		-			-
Series C Convertible Preferred Stock, 1,990,000 shares designated, no par value and a stated value of $4.00 per share, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020		-			-
Series D Convertible Preferred Stock, 211,353 shares designated, no par value and a stated value of $0.01 per share, 72,992 shares issued and outstanding as of March 31, 2021 and December 31, 2020		144,524			144,524
Series E Junior Participating Preferred Stock, 100,000 shares designated, no par value and a stated value of $0.001 per share, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020		-			-
Common stock, no par value, 100,000,000 shares authorized 8,326,730 and 8,792,946 issued and outstanding as of March 31, 2021 and December 31, 2020		171,925,670			171,598,681
Accumulated Deficit		(138,646,402	)		(137,163,739	)

Total Shareholders’ Equity		33,423,792			34,579,466

Total Liabilities and Shareholders’ Equity	$	35,797,851		$	36,842,761

See accompanying notes to the condensed consolidated financial statements

MYMD PHARMACEUTICALS, INC. AND SUBSIDIARIES

(previously known as Akers Biosciences, Inc.)

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)

	For the Three Months Ended
	March 31,
	2021			2020
Product Revenue	$	-		$	-
Product Cost of Sales		-			-
Gross Income		-			-

Research and Development Expenses		(19,365	)		2,483,057
Administrative Expenses		1,508,336			1,055,148
Sales and Marketing Expenses		-			6,250

Loss from Operations		(1,488,971	)		(3,544,455	)

Other (Income) Expenses
(Gain)/Loss on Investments		(12,649	)		36,714
Loss on Fair Market Value of Equity Investments		14,402			-
Interest and Dividend Income		(43,453	)		(46,703	)
Total Other Income		(41,700	)		(9,989	)

Loss from Continuing Operations Before Income Tax		(1,447,271	)		(3,534,466	)

Income Tax Benefit		-			-

Loss from Continuing Operations		(1,447,271	)		(3,534,466	)

Loss from Discontinued Operations Before Income Tax		(35,392	)		(4,070	)

Income Tax		-			-

Loss from Discontinued Operations		(35,392	)		(4,070	)

Net Loss		(1,482,663	)		(3,538,536	)

Other Comprehensive Income (Loss)
Net Unrealized Loss on Marketable Securities		-			(240,937	)
Total Other Comprehensive Income (Loss)		-			(240,937	)

Comprehensive Loss	$	(1,482,663	)	$	(3,779,473	)

Basic and Diluted loss per common share from continuing operations	$	(0.17	)	$	(3.18	)
Basic and Diluted loss per common share from discontinued operations	$	(0.00	)	$	(0.00	)
Basic and Diluted loss per common share	$	(0.17	)	$	(3.18	)

Weighted average basic common shares outstanding		8,544,298			1,113,737

See accompanying notes to the condensed consolidated financial statements

MYMD PHARMACEUTICALS, INC. AND SUBSIDIARIES

(previously known as Akers Biosciences, Inc.)

Condensed Consolidated Statement of Changes in Shareholders’ Equity

For the Three Months Ended March 31, 2021 and 2020

	Series D Convertible											Accumulated
	Preferred Stock				Common Stock							Other
							Common		Accumulated			Comprehensive			Total
	Shares		Series D		Shares		Stock		Deficit			Income/(Loss)			Equity
Balance at December 31, 2019 (audited)		-	$	-		869,732	$	128,920,414	$	(119,583,130	)	$	17,886		$	9,355,170
Net loss		-		-		-		-		(3,538,536	)		-			(3,538,536	)
Stock-based compensation – acquisition of license for series D convertible preferred stock		211,353		418,479		-		-		-			-			418,479
Stock-based compensation – acquisition of license for common stock		-		-		205,702		814,578		-			-			814,578
Exercise of prepaid equity forward contracts for common stock		-		-		382,500		77		-			-			77
Stock-based compensation – restricted stock units		-		-				8,620		-			-			8,620
Net unrealized loss on marketable securities		-		-		-		-		-			(240,937	)		(240,937	)

Balance at March 31, 2020 (unaudited)		211,353	$	418,479		1,457,934	$	129,743,689	$	(123,121,666	)	$	(223,051	)	$	6,817,451

	Series D Convertible												Accumulated
	Preferred Stock				Common Stock								Other
								Common		Accumulated			Comprehensive		Total
	Shares		Series D		Shares			Stock		Deficit			Income/(Loss)		Equity
Balance at December 31, 2020 (audited)		72,992	$	144,524		8,792,946		$	171,598,681	$	(137,163,739	)	$	-	$	34,579,466
Net loss		-							-		(1,482,663	)		-		(1,482,663	)
Common stock cancelled for prepaid equity forward contract for common stock		-		-		(466,216	)		-		-			-		-
Stock-based compensation – restricted stock units		-							326,989		-			-		326,989

Balance at March 31, 2021 (unaudited)		72,992	$	144,524		8,326,730		$	171,925,670	$	(138,646,402	)	$	-	$	33,423,792

See accompanying notes to the condensed consolidated financial statements

MYMD PHARMACEUTICALS, INC. AND SUBSIDIARIES

(previously known as Akers Biosciences, Inc.)

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2021 and 2020

(unaudited)

	For the Three Months Ended
	March 31,
	2021			2020
Cash flows from operating activities:
Net loss from continuing operations	$	(1,447,271	)	$	(3,534,466	)
Net loss from discontinued operations		(35,392	)		(4,070	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss/(gain) on sale of securities		(12,649	)		36,714
Loss on fair market value of equity investments		14,402			-
Accrued interest/dividends		(24,324	)		(4,713	)
Depreciation and amortization		-			-
Impairment of intangible assets		-			-
Share based compensation to directors - restricted stock units		326,989			1,302
Share based compensation - shares issued to vendors		-			7,318
Share based compensation - shares issued for Cystron		-			1,233,057
Changes in assets and liabilities
Decrease in prepaid expenses		80,232			89,897
Increase/(decrease) in trade and other payables		(1,368,151	)		531,819
Increase in right-of-use liabilities		-			1,128
Cash Flows from Discontinued Operations		(16,783	)		(324,969	)
Net cash used in operating activities		(2,482,947	)		(1,966,983	)

Cash flows from investing activities:
Short-term note receivable		(1,800,000	)		-
Purchases of marketable securities		(15,269,129	)		(41,989	)
Proceeds from sale of marketable securities		1,503,487			2,303,890
Net cash (used in)/provided by investing activities		(15,565,642	)		2,261,901

Cash flows from financing activities
Net proceeds from the exercise of prepaid equity forward contracts for the purchase of common stock		-			77
Net cash provided by financing activities		-			77

Net increase/(decrease) in cash and restricted cash		(18,048,589	)		294,995
Cash and restricted cash at beginning of period		18,617,955			632,538
Cash and restricted cash at end of period	$	569,366		$	927,533

Supplemental cash flow information
Cash paid for:
Interest	$	-		$	-
Income Taxes	$	-		$	-

Supplemental Schedule of Non-Cash Financing and Investing Activities
Net unrealized losses on marketable securities	$	-		$	(240,937	)
Operating lease right-of-use asset obtained in exchange for lease obligation	$	-		$	306,706
Other assets - Investment in Oravax included in trade and other payables	$	1,500,000		$	-

See accompanying notes to the condensed consolidated financial statements

MYMD PHARMACEUTICALS, INC. AND SUBSIDIARIES

(previously known as Akers Biosciences, Inc.)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Description of Business

MyMD Pharmaceuticals, Inc., previously known as Akers Biosciences, Inc., is a New Jersey corporation. These consolidated financial statements include four wholly owned subsidiaries as of March 31, 2021, XYZ Merger Sub, Inc. (“Merger Sub”), Cystron Biotech, LLC (“Cystron”), Akers Acquisition Sub, Inc. and Bout Time Marketing Corporation, (together, the “Company”). All material intercompany transactions have been eliminated in consolidation.

The Company was historically a developer of rapid health information technologies and between March 2020 and April 2021, was primarily focused on the development of a vaccine candidate against SARS-CoV-2, a coronavirus currently causing a pandemic throughout the world (“COVID-19”). Following closing of the Merger and the Contribution Transaction described below that occurred on April 16, 2021, the Company is focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets, MyMD-1 and Supera-CBD.

On July 7, 2020, the Company immediately ceased the production and sale of its rapid, point of care screening and testing products. The Company will continue to provide support for these testing products that remain in the market through respective product expiration dates. For a more detailed description of the Company’s cessation of its screening and testing products (Note 5).

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 Pharmaceuticals, Inc., a New Jersey corporation previously known as Akers Biosciences, Inc. (the “Company”), 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”), (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 during the 36-month period immediately following the closing of the Merger (the “Milestone Period”). 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.

The Company acquired 100% of the membership interests of Cystron pursuant to a Membership Interest Purchase Agreement, dated March 23, 2020 (as amended by Amendment No. 1 on May 14, 2020, the “MIPA”) from certain selling parties (the “Cystron Sellers”). Cystron is a party to a License and Development Agreement (as amended and restated on March 19, 2020, in connection with our entry into the MIPA, the “License Agreement”) with Premas Biotech PVT Ltd. (“Premas”) whereby Premas granted Cystron, amongst other things, an exclusive license with respect to Premas’ vaccine platform for the development of a vaccine against COVID-19. On April 16, 2021, pursuant to the Contribution and Assignment Agreement, dated March 18, 2021 (the “Contribution Agreement”) by and among the Company, Cystron, Oravax Medical, Inc. (“Oravax”) and, for the limited purpose set forth therein, Premas, the parties consummated the transactions contemplated therein. Pursuant to the Contribution Agreement, among other things, the Company caused Cystron to contribute substantially all of the assets associated with its business of developing and manufacturing Cystron’s COVID-19 vaccine candidate to Oravax (the “Contribution Transaction”) (Note 3).

Effective as of 4:05 pm Eastern Time on April 16, 2021, the Company filed an amendment to its Amended and Restated Certificate of Incorporation to affect the Reverse Stock Split. As a result of the Reverse Stock Split, immediately following the effective time of the Merger, every two shares of the Company Common Stock held by a stockholder immediately prior to the Reverse Stock Split were combined and reclassified into one share of the Company’s 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 Company Common Stock was entitled to receive an additional share of Company Common Stock. The number of shares on equity related disclosures included in this Quarterly Report on Form 10-Q, including the condensed consolidated financial statements and accompanying notes, were retrospectively adjusted to reflect the effects of the Reverse Stock Split.

In connection with the closing of the Merger, the Company changed its name to MyMD Pharmaceuticals, Inc. and its NASDAQ trading symbol to MYMD (Note 3).

Note 2 – Significant Accounting Policies

(a) Basis of Presentation

The Condensed Consolidated Financial Statements of the Company are prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States of America (US GAAP).

Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. As such, the information included in these financial statements should be read in conjunction with the audited financial statements as of and for the years ended December 31, 2020 and 2019 included in the Company’s 2020 Form 10-K, as filed on March 1, 2021. In the opinion of the Company’s management, these condensed consolidated financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of March 31, 2021 and its results of operations and cash flows for the three months ended March 31, 2021 and 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2021.

(b) Use of Estimates and Judgments

The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes for revenue recognition, recording research and development expenses, allowances for doubtful accounts, inventory and prepaid asset write-downs, impairment of equipment and intangible assets and valuation of share-based payments.

(c) Functional and Presentation Currency

These condensed consolidated financial statements are presented in U.S. Dollars, which is the Company’s functional currency. All financial information has been rounded to the nearest dollar. Foreign Currency Transaction Gains or Losses, resulting from cash balances denominated in Foreign Currencies, are recorded in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

(d) Comprehensive Loss

The Company follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 220 in reporting comprehensive loss. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income.

(e) Cash and Cash Equivalents

The Company considers all highly liquid investments, which include short-term bank deposits (up to three months from date of deposit) that are not restricted as to withdrawal date or use, to be cash equivalents.

(f) Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, marketable securities, receivables and trade and other payables. The carrying value of cash and cash equivalents, receivables and trade and other payables approximate their fair value because of their short maturities.

The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:

Level 1	Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2	Inputs to the valuation methodology include:

	●	quoted prices for similar assets or liabilities in active markets;

	●	quoted prices for identical or similar assets or liabilities in inactive markets;

	●	inputs other than quoted prices that are observable for the asset or liability;

	●	inputs that are derived principally from or corroborated by observable market data by correlation or other means

	If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

(f) Fair Value of Financial Instruments, continued

The following is a description of the valuation methodologies used for assets measured at fair value as of March 31, 2021 and December 31, 2020.

Marketable Securities: Valued using quoted prices in active markets for identical assets.

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities at March 31, 2021	$	30,480,537	$	-	$	-

Marketable securities at December 31, 2020	$	16,718,452	$	-	$	-

Marketable securities are classified as available for sale and are valued at fair market value. Maturities of the securities are less than one year.

As of March 31, 2021, the Company held certain mutual funds, which, under FASB ASC 321-10, were considered equity investments. As such, the change in fair value in the three months ended March 31, 2021 was a loss of $14,402.

Gains and losses resulting from the sales of marketable securities were gains (losses) of $12,649 and $(36,714) for the three months ended March 31, 2021 and 2020, respectively.

Proceeds from the sales of marketable securities in the three months ended March 31, 2021 and 2020 were $1,503,487 and $2,303,890, respectively.

(g) Other Receivables

During the year ended December 31, 2020, the Company advanced MyMD Florida $1,200,000 under a secured promissory note (the “Bridge Loan Note”). During the three months ended March 31, 2021, the Company advanced additional draws of $1,800,000 to MyMD Florida under the Bridge Loan Note (see Note 3). The Company accrued interest of $26,137 during the three months ended March 31, 2021, which is included in interest and dividend income on the Condensed Consolidated Statement of Comprehensive Loss. As MyMD Florida is the surviving entity and a wholly owned subsidiary of the Company after the consummation of the Merger on April 16, 2021, the promissory note was eliminated in the consolidated financial statements of the Company after the Merger. (Note 3).

(h) Prepaid Expenses

Prepaid expenses represent expenses paid prior to the date that the related services are rendered or used are recorded as prepaid expenses. Prepaid expenses are comprised principally of prepaid insurance.

(i) Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash on deposit with financial institutions and accounts receivable. At times, the Company’s cash in banks is in excess of the FDIC insurance limit. The Company has not experienced any loss as a result of these cash deposits. These cash balances are maintained with two banks.

(j) Risk Management of Cash and Investments

It is the Company’s policy to minimize the Company’s capital resources to investment risks, prioritizing the preservation of capital over investment returns. Investments are maintained in securities, primarily publicly traded, short-term money market funds based on highly rated federal, state and corporate bonds, that minimize the risk to the Company’s capital resources and provide ready access to funds.

The Company’s investment portfolios are regularly monitored for risk and are held with two brokerage firms.

(k) Investments

In accordance with FASB ASC 323, the Company recognizes investments in joint ventures based upon the Company’s ability to significantly influence the operational or financial policies of the joint venture. An objective judgment of the level of influence is made at the time of the investment based upon several factors including, but not limited to the following:

	a)	Representation on the Board of Directors

	b)	Participation in policy-making processes

	c)	Material intra-entity transactions

	d)	Interchange of management personnel

	e)	Technological dependencies

	f)	Extent of ownership and the ability to influence decision making based upon the makeup of other owners when the shareholder group is small.

The Company follows the equity method for recording investments in joint ventures when the existence of significant influence over operational and financial policy has been established, as determined by management; otherwise, the Company will record these investments using the cost method.

Investments recorded using the cost method will be assessed for any decrease in value that has occurred that is other than temporary and the other than temporary decrease in value shall be recognized. As and when circumstances and facts change, the Company will evaluate the Company’s ability to significantly influence operational and financial policy to establish a basis for converting the investment accounted for using the cost method to the equity method of valuation.

(l) Research and Development Costs

In accordance with FASB ASC 730, research and development costs are expensed as incurred and consist of fees paid to third parties that conduct certain research and development activities on the Company’s behalf. These costs included costs incurred to acquire and develop the license for the COVID-19 vaccine project (See Note 3).

(m) Income Taxes

The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of March 31, 2021, and December 31, 2020, no liability for unrecognized tax benefits was required to be reported.

There is no income tax benefit for the losses for the three months ended March 31, 2021 and 2020 since management has determined that the realization of the net deferred assets is not assured and has created a valuation allowance for the entire amount of such tax benefits.

The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. There were no amounts accrued for penalties and interest for the three months ended March 30, 2021 and 2020. The Company does not expect its uncertain tax position to change during the next twelve months. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

(n) Basic and Diluted Earnings per Share of Common Stock

Basic earnings per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered anti-dilutive.

Diluted net loss per share is computed using the weighted average number of shares of common and dilutive potential common stock outstanding during the period.

As the Company reported a net loss for the three months ended March 31, 2021 and 2020, common stock equivalents were anti-dilutive.

The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:

	For the Three Months Ended March 31,
	2021		2020
Stock Options		-		20
RSUs		394,680		-
Warrants to purchase common stock		5,463,032		123,645
Pre-funded Warrants to purchase common stock		986,486		15,000
Series D Preferred Convertible Stock		36,496		105,677
Warrants to purchase Series C Preferred stock		27,500		995,000
Total potentially dilutive shares		6,908,194		1,239,342

(o) Stock-based Payments

The Company accounts for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (the “2018 Update”). The amendments in the 2018 Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Prior to the 2018 Update, Topic 718 applied only to share-based transactions to employees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.

The Company has elected to account for forfeiture of stock-based awards as they occur.

(p) Reclassifications

Certain prior year amounts have been reclassified to conform to the current year’s presentation.

(q) Discontinued Operations

In accordance with FASB ASC 205, results of operations of a component of an entity that has either been disposed of or is held for sale is to be reported as discontinued operations in the condensed consolidated financial statements if the disposition or sale represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results (Note 5).

(r) Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements Adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (the “2020 Update”). The amendments in the 2020 Update affect entities that issue convertible instruments and/or contracts in an entity’s own equity. For convertible instruments, the instruments primarily affected are those issued with beneficial conversion features or cash conversion features because the accounting models for those specific features are removed. However, all entities that issue convertible instruments are affected by the amendments to the disclosure requirements in the 2020 Update. For contracts in an entity’s own equity, the contracts primarily affected are freestanding instruments and embedded features that are accounted for as derivatives under the current guidance because of failure to meet the settlement conditions of the derivatives scope exception related to certain requirements of the settlement assessment. The settlement assessment was simplified by removing the requirements (1) to consider whether the contract would be settled in registered shares, (2) to consider whether collateral is required to be posted, and (3) to assess shareholder rights. Those amendments also affect the assessment of whether an embedded conversion feature in a convertible instrument qualifies for the derivatives scope exception. Additionally, the amendments in this Update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The amendments in the 2020 Update are effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. An entity should adopt the guidance as of the beginning of its annual fiscal year. Entities are allowed to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company adopted this standard as of January 1, 2021 and the adoption did not have a material impact on its financial statements.

Recently Issued Accounting Pronouncements Not Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

Note 3 – Recent Developments, Liquidity and Management’s Plans

Acquisition and Disposition of Cystron

On March 23, 2020, the Company acquired Cystron pursuant to the MIPA. Cystron was incorporated on March 10, 2020. Upon the Company’s purchase of Cystron, Cystron’s sole asset consisted of an exclusive license with respect to Premas’ vaccine platform for the development of a vaccine against COVID-19 and other coronavirus infections. Since its formation and through the date of its acquisition by the Company, Cystron did not have any employees. The acquisition of Cystron was accounted for as the purchase of an asset.

On March 18, 2021, the Company and the Cystron Sellers, which are also shareholders of Oravax, entered into a Termination and Release Agreement terminating the MIPA effective upon consummation of the Contribution Agreement. In addition, the Cystron Sellers agreed to waive any change of control payment triggered under the MIPA as a result of the Merger.

On April 16, 2021, the parties consummated the Contribution Transaction. Pursuant to the Contribution Agreement, effective upon the closing of the Merger, the Company agreed (i) to contribute an amount in cash equal to $1,500,000 to Oravax and (ii) cause Cystron to contribute substantially all of the assets associated with its business or developing and manufacturing Cystron’s COVID-19 vaccine candidate to Oravax. In consideration for the Company’s commitment to consummate the Contribution Transaction, Oravax issued to the Company 390,000 shares of its capital stock (equivalent to 13% of Oravax’s outstanding capital stock on a fully diluted basis) and assumed all of the obligations or liabilities in respect of the assets of Cystron (excluding certain amounts due to Premas), including the obligations under the license agreement with Premas. In addition, Oravax agreed to pay future royalties to the Company equal to 2.5% of all net sales of products (or combination products) manufactured, tested, distributed and/or marketed by Oravax or its subsidiaries.

As of March 31, 2021 and December 31, 2020, $300,000 and $1,510,290, respectively, is included in Trade and Other Payables for amounts due to Premas’ under the MIPA. During March 2021, the Company paid Premas a total of $1,200,000, deferred $300,000 to a future date to be determined by Premas. The remaining balance of $10,290 was waived per the terms of the Contribution Agreement and was credited to Research and Development Expenses in the Condensed Consolidated Statement of Comprehensive Loss for the three months ended March 31, 2021.

For the three months ended March 31, 2021 and 2020, $(19,365) and $2,483,057, respectively, is included in Research and Development Expense within the Consolidated Statement of Comprehensive Loss.

Agreement and Plan of Merger and Reorganization

On November 11, 2020, the Company, Merger Sub, and MyMD Florida entered into the Merger Agreement. In addition, in connection with the execution of the Merger Agreement, the Company agreed to advance a bridge loan of up to $3,000,000 to MYMD Florida pursuant to the Bridge Loan Note.

On April 16, 2021, the parties consummated the transactions contemplated pursuant to the Merger Agreement, including the Merger, and 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. 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 Common Stock, including shares underlying MyMD Florida’s outstanding equity awards, was converted into the right to receive (x) 0.7718 shares of Company Common Stock, (y) the Additional Consideration, and (z) potential Milestone Payments (up to 28,553,307 shares, the aggregate number of shares issued by the Company to pre-Merger MyMD Florida stockholders at the closing of the Merger), payable upon the achievement of certain market capitalization milestone events during the Milestone Period. Immediately following the effective time of the Merger, the Company effected the Reverse Stock Split. In connection with the closing of the Merger, the Company changed its name to MyMD Pharmaceuticals, Inc. and the Company Common Stock listed on The Nasdaq Capital Market, previously trading through the close of business on April 16, 2021 under the trading symbol “AKER”, commenced trading on The Nasdaq Capital Market, on a post-Reverse Stock Split adjusted basis, under the trading symbol “MYMD” on April 19, 2021.

Upon completion of the Merger and the transactions contemplated in the Merger Agreement, the Company issued 28,553,307 post reverse stock split shares of Company Common Stock to the former stakeholders of pre-Merger MyMD Florida at the Exchange Ratio. Upon completion of the Merger and the transactions contemplated in the Merger Agreement, the former stakeholders of pre-Merger MyMD Florida held approximately 77.05% of the Company’s Common Stock outstanding 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 pre-Merger MyMD Florida Common Stock assumed by the company at closing and after adjustments based on the Company’s net cash at closing. Holders of pre-Merger common stock of the Company held approximately 22.95% of the outstanding equity of the Company. Also upon completion of the Merger and the transactions contemplated by the Merger Agreement, the Company assumed 4,188,315 MyMD Florida stock options subject to certain terms contained in the Merger Agreement (including, but not limited to, the amendment of such stock option to extend the term of such stock option for a period expiring on April 16, 2024, the second-year anniversary of the Merger (the “Option Exercise Period”).

The holders of approximately 49.68% of outstanding shares of Company Common Stock are subject to lockup agreements pursuant to which such stockholders have agreed, except in limited circumstances, not to transfer, grant an option with respect to, sell, exchange, pledge or otherwise dispose of, or encumber, any shares of Company capital stock for 180 days following the effective time of the Merger. For the subsequent 180 days after the initial 180-day lock-up period, any disposal of Company Common Stock must be only in accordance with the volume limitations set forth in paragraph (2) of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Act”).

Pursuant to the terms and conditions of the Merger Agreement, not later than 30 days after the Option Exercise Period, the Company will pay stockholders of MyMD Florida the Additional Consideration from the exercise of any MyMD Florida options assumed by the Company prior to the second-year anniversary of the Merger; provided, however, the amount of such payment will not exceed the maximum amount of cash consideration that may be received by stockholders of MyMD Florida without affecting the intended tax consequences of the Merger.

Under the terms of the Merger Agreement, the Company has agreed to pay contingent consideration to MyMD Florida stockholders in the form of the Milestone Payments. The Milestone Payments are payable in the dollar amounts set forth in the chart below upon the achievement of the milestone events set forth opposite such dollar amount during the Milestone Period as follows:

Milestone Event		Milestone Payment

Market capitalization of the Company for at least 10 trading days during any 20 consecutive trading day period during the Milestone Period is equal to or greater than $500 million (the “First Milestone Event”).		$20 million.

For every $250 million incremental increase in market capitalization of the 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 billion market capitalization of the Company.		$10 million per each incremental increase (it being understood, however, that, if such incremental increase results in market capitalization equal to $1 billion, such $20 million payment in respect of such incremental increase shall be payable without duplication of any amount payable in respect of a Second Milestone Event).

Market Capitalization of the Company for at least 10 trading days during any 20 consecutive trading day period is equal to or greater than $1 billion (the “Second Milestone Event”).		$25 million.

For every $1 billion incremental increase in market capitalization of the 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 million per each incremental increase.

Each milestone payment will be payable in shares of Company Common Stock (the “Milestone Shares”), with the number of Milestone Shares to be issued determined by dividing the applicable Milestone Payment amount by the volume-weighted average price of a share of the Company’s common stock during the 10 trading days immediately preceding the achievement of the milestone event; provided, however, that in no event shall the price of a share of Company Common Stock used to determine the number of Milestone Shares to be issued be deemed to be less than $5.00 per share (as adjusted for stock splits, stock dividends, reverse stock splits, and the like occurring after the closing date). Notwithstanding the foregoing, the number of Milestone Shares payable by the Company shall not exceed 28,553,307 shares of Company Common Stock issued to MyMD Florida stockholders at the closing in connection with the Merger.

Secured Promissory Note

On November 11, 2020, concurrently with the execution of the Merger Agreement, the Company agreed to provide a bridge loan up to an aggregate principal amount of $3,000,000 to pre-Merger MyMD Florida pursuant to the Bridge Loan Note. Advances under the Bridge Loan Note (“Bridge Loan Advances”) were made in the amounts and at the times as needed to fund MyMD Florida’s operating expenses. Bridge Loan Advances accrue interest at 5% per annum, which may be increased to 8% per annum upon occurrence of any event of default, from the date of such default. The principal and the accrued interest thereon are to be repaid on the earliest of (a) April 15, 2022; (b); if the Merger was consummated, then upon demand of the Company following the consummation of the Merger; or (c) the date on which the obligations under the Bridge Loan Note are accelerated upon event of default as set forth in the Bridge Loan Note. The payment and performance of all obligations under the Note are secured by a first priority security interest in all of MyMD Florida’s right, title and interest in and to its assets as collateral. The outstanding principal amount and the accrued interest of the Bridge Loan Note were convertible into shares of MyMD Florida Common Stock in accordance with the terms of the Merger Agreement.

As of March 31, 2021 and December 31, 2020, the Company had advanced MyMD Florida $3,000,000 and $1,200,000, respectively, under the Bridge Loan Note, which is classified as Other Receivables on the Condensed Consolidated Balance Sheets.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The unaudited pro forma condensed combined financial statements as of and for the three months ended March 31, 2021, give effect to the merger of Merger Sub with and into MyMD Florida and have been prepared in accordance with the guidance under Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 805: Business Combinations. This transaction is accounted for as a reverse acquisition involving only the exchange of equity; whereby, the fair value of the equity of the accounting acquiree (the Company) is used to measure consideration transferred since the value of the Company’s equity interests are more reliably measurable than the value of the accounting acquirer’s (pre-Merger MyMD Florida) equity interest. Pre-Merger MyMD Florida is the accounting acquirer based upon the terms of the merger and other factors, such as the number of shares issued to pre-Merger MyMD Florida stockholders under the Merger Agreement upon closing of the Merger, relative voting rights and the composition of the combined company’s board and senior management. The unaudited pro forma condensed combined financial statements also give effect to the purchase of substantially all of the assets and certain liabilities of Supera Pharmaceuticals, Inc., a Florida corporation (“Supera”), pursuant to an Asset Purchase Agreement, dated November 11, 2020, by and between pre-Merger MyMD Florida and Supera (the “Supera Purchase”) and the Contribution Transaction. Certain fair values of the acquired assets and assumed liabilities may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they may be adjusted retrospectively in subsequent periods within the measurement period when it reflects new information obtained about facts and circumstances that were in existence at the acquisition date. The measurement period cannot exceed one year from the acquisition date. The following selected unaudited pro forma financial data does not give effect to the potential issuance of the Milestone Shares, which is contingent upon achievement of certain market capitalization milestone events during the Milestone Period, or the potential payment of Additional Consideration, which is contingent upon exercise of the options to purchase pre-Merger MyMD Florida common stock assumed by the Company upon closing of the Merger during the Option Exercise Period.

The following should be read with the unaudited pro forma condensed combined financial statements presented below:

	●	The accompanying notes to the unaudited pro forma condensed combined financial statements;
	●	The Company’s audited consolidated financial statements as of and for the year ended December 31, 2020 and the notes relating thereto in the Company’s Annual Report on Form 10-K as filed with the SEC on March 1, 2021.
	●	The Company’s unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2021 and the notes relating thereto of this quarterly report;
	●	Pre-Merger MyMD Florida’s unaudited financial statements as of and for the three months ended March 31, 2021 and the notes relating thereto, contained in Exhibit 99.2; and
	●	Supera’s unaudited financial statements as of and for the three months ended March 31, 2021 and the notes relating thereto, contained in Exhibit 99.1.

The Company is providing the following unaudited pro forma condensed combined financial information to aid in the analysis of the financial aspects of the transactions.

The unaudited pro forma condensed combined balance sheet as of March 31, 2021 combines the historical unaudited consolidated balance sheet of the Company as of March 31, 2021 with the historical unaudited balance sheet of pre-Merger MyMD Florida as of March 31, 2021, giving pro forma effect to the Supera Purchase, the Contribution Transaction, and the proposed merger as if they had consummated on March 31, 2021.

The unaudited pro forma condensed combined statement of comprehensive loss for the three months ended March 31, 2021 combines the historical unaudited consolidated statement of comprehensive loss of the Company for the three months ended March 31, 2021 with the historical unaudited statement of operations of pre-Merger MyMD Florida for the three months ended March 31, 2021, giving pro forma effect to the Supera Purchase, the Contribution Transaction, and the proposed merger as if they had consummated as of January 1, 2021.

The historical financial information has been adjusted in the respective unaudited pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the Supera Purchase, the Contribution Transaction or the proposed merger, (2) factually supportable, and (3) with respect to the statements of comprehensive loss, expected to have a continuing impact on the combined company.

The unaudited pro forma condensed combined financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to represent what the financial position or results of operations would have been if the Supera Purchase, the Contribution Transaction or the proposed merger had been completed as of the dates indicated in the unaudited pro forma condensed combined financial statements or that will be realized upon the consummation of the proposed transactions.

The historical unaudited pro forma condensed combined financial statements of the Company and pre-Merger MyMD Florida included herein have been prepared in accordance with GAAP. The application of the acquisition method of accounting is dependent upon certain valuations and other studies that have yet to be completed or have not progressed to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments are preliminary, subject to further revision as additional information becomes available and additional analyses are performed and have been made solely for the purpose of providing unaudited pro forma condensed combined financial statements. Upon consummation of the Merger, final valuations and studies will be performed. Differences between these preliminary estimates and the final acquisition accounting may occur and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the combined company’s future financial position and results of operations. Fair values determined as of the assumed acquisition dates are based on the most recently available information. To the extent there are significant changes to the Company’s or pre-Merger MyMD Florida’s business, or as new information becomes available, the assumptions and estimates herein could change significantly.

Because pre-Merger MyMD Florida will be treated as the accounting acquirer, pre-Merger MyMD Florida’s assets and liabilities will be recorded at their pre-combination carrying amounts and the historical operations that are reflected in the financial statements will be those of pre-Merger MyMD Florida. The Company’s assets and liabilities will be measured and recognized at their fair values as of the date of the Merger, and consolidated with the assets, liabilities and results of operations of pre-Merger MyMD Florida after the consummation of the Merger. The unaudited pro forma condensed combined statement of comprehensive loss includes certain acquisition accounting adjustments described therein.

The unaudited pro forma condensed combined statement of comprehensive loss does not include (a) the impacts of any revenue, cost or other operating synergies that may result from the Merger or any related restructuring costs; (b) certain amounts resulting from the Merger that were determined to be of a non-recurring nature.

The Supera Purchase and the merger have been consummated as of the date of the preparation of these pro forma financial statements.

MyMD Pharmaceuticals, Inc. and Subsidiaries

Pro Forma Condensed Combined Balance Sheets

March 31, 2021

(unaudited)

				Accounting
				Acquirer			Cystron
	Legal Acquirer			Pre-Merger MyMD			Biotech Spin-off								Pro Forma
	Company			Florida			Adjustments			AJE #	Adjustments			AJE #	Combined

Current assets:
Cash and Cash Equivalents	$	569,366		$	437,178		$	-			$	-			$	1,006,544
Marketable Securities		30,480,537			-			(1,500,000	)	a		(3,379,614	)	1		25,600,923
Other Receivables		3,026,137			-			-				(3,026,137	)	4		-
Prepaid Expenses		223,029			1,218			-				-				223,029
Total current assets		34,297,851			438,396			(1,500,000	)			(6,405,751	)			26,830,496

Non-Current Assets
Investment in Oravax		1,500,000			-			-				-				1,500,000
Goodwill		-			-			-				18,467,102		8		18,467,102
Total Non-Current Assets		1,500,000			-			-				18,467,102				19,967,102

Total Assets	$	35,797,851		$	438,396		$	1,500,000			$	12,061,351			$	46,797,598

Current Liabilities
Trade and Other Payables	$	2,374,059		$	2,204,805		$	(1,500,000	)	a	$	688,913		6	$	3,767,777
Bridge Loan Payable - Related Party		-			3,000,000			-				(3,000,000	)	2,4		-
Accrued Interest		-			257,411			-				(257,411	)	1		-
Due to Related Party Starwood Trust and Jonnie Williams, Sr and Supera		-			185,577			-				(185,577	)	1		-
Line of Credit, Related Party, net unamortized Debt Discount		-			2,936,626			-				(2,936,626	)	1		-
Payroll Protection Program Loan		-			70,600			-				-				70,600
Total current liabilities		2,374,059			8,655,019			(1,500,000	)			(5,690,701	)			3,838,377

Total Liabilities	$	2,374,059		$	8,655,019		$	(1,500,000	)		$	(5,690,701	)		$	3,838,377

Commitments and contingencies

Stockholders’/Members’ Deficit
Preferred Stock, no par value, 50,000,000 total preferred shares authorized
Series C Convertible Preferred Stock, 1,990,000 shares designated, no par value and a stated value of $4.00 per share, 0 shares issued and outstanding as of March 31, 2021		-			-			-				-				-
Series D Convertible Preferred Stock, 211,353 shares designated, no par value and a stated value of $0.01 per share, 72,992 shares issued and outstanding as of March 31, 2021		144,524			-			-				-				144,524
Series E Junior Participating Preferred Stock, 100,000 shares designated, no par value and a stated value of $0.001 per share, 0 shares issued and outstanding as of March 31, 2021		-			-			-				-				-
Common stock, no par value, 100,000,000 shares authorized 8,326,730 issued and outstanding as of March 31, 2021		171,925,670			-			10,290		b		(40,451,041	)	3,5,6,7,8		131,484,919
Common Stock $0.0001 par value, 90,000,000 shares authorized 40,043,504 outstanding as of March 31, 2021					4,004			-				(4,004	)	3		-
Additional Paid-in-Capital		-			43,411,488			-				(43,411,488	)	3		-
Accumulated Deficit		(138,646,402	)		(51,632,115	)		(10,290	)	b		101,618,585		1,2,5,6,7,8		(88,670,222	)
Total Stockholders’/Members’ Deficit		33,423,792			(8,216,623	)		-				17,752,052				42,959,221

Total Liabilities and Shareholders’ Equity	$	35,797,851		$	438,396		$	(1,500,000	)		$	12,061,351			$	46,797,598

MyMD Pharmaceuticals Inc. and Subsidiaries

Pro Forma Condensed Combined Statements of Comprehensive Loss

For the Three Months Ended March 31, 2021

(unaudited)

				Accounting
				Acquirer			Cystron
	Legal			Pre-Merger			Biotech
	Acquirer			MyMD			Spin-off			AJE				AJE	Pro Forma
	Company			Florida			Adjustments			#	Adjustments			#	Combined

Product Revenue	$	-		$	-		$	-			$	-			$	-
Product Cost of Sales		-			-			-				-				-
Gross Income		-			-			-				-				-

Operating Expenses:
Administrative Expenses		1,508,336			1,247,248			-				-				2,755,584
Sales and Marketing Expenses		-			-			-				-				-
Research and Development Expenses		(19,365	)		1,052,001			10,290		bb		-				1,042,926
Total operating expenses		1,488,971			2,299,249			10,290				-				3,798,510

Loss from operations		(1,488,971	)		(2,299,249	)		(10,290	)			-				(3,798,510	)

Other (Income) Expense:
Loss on Disposal of Property and Equipment		-			-			-				-				-
Foreign Currency Transaction Loss		-			-			-				-				-
Gain on Investments		(12,649	)		-			-				-				(12,649	)
Loss on fair market value of Equity Investments		14,402														14,402
Interest and Dividend (Income)/Expense		(43,453	)		660,564			-				26,137		aa		643,248
Total Other (Income)/Loss		(41,700	)		660,564			-				26,137				645,01

Loss from Continuing Operations Before Income Tax		(1,447,271	)		(2,959,813	)		(10,290	)			(26,137	)			(4,443,511	)

Income Tax Benefit		-			-			-				-				-

Net Loss from Continuing Operations		(1,447,271	)		(2,959,813	)		(10,290	)			(26,137	)			(4,443,511	)

Basic and Diluted loss per common share from continuing operations	$	(0.17	)												$	(0.12	)
Weighted average basic common shares outstanding		8,544,298										28,955,790				37,500,088

Notes to Unaudited Pro forma condensed combined Financial Statements

1.	Description of the Transaction and Basis of the Pro Forma Presentation

The unaudited pro forma condensed combined financial statements were prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States of America (US GAAP) and pursuant to the rules and regulations of SEC Regulation S-X, and present the pro forma financial position and results of operations of the combined companies based upon the historical data of the Company and pre-Merger MyMD Florida, after giving effect to the Supera Purchase, the Contribution Transaction and the Merger.

In accordance with the guidance under FASB ASC 805: Business Combinations, this transaction is accounted for as a reverse acquisition involving only the exchange of equity; whereby, the fair value of the equity of the accounting acquiree (the Company) is used to measure consideration transferred since the value of the Company’s equity interests are more reliably measurable than the value of the accounting acquirer’s (pre-Merger MyMD Florida) equity interest. Pre-Merger MyMD Florida is the accounting acquirer based upon the terms of the Merger.

Merger Agreement

Pursuant to the Merger Agreement, Merger Sub merged with and into pre-Merger MyMD Florida, with pre-Merger MyMD Florida continuing after the Merger as the surviving corporation on April 16, 2021. Based on the Exchange Ratio of 0.7718, the Company issued to pre-Merger MyMD Florida’s shareholders 0.7718 shares of the Company’s common stock per share of pre-Merger MyMD Florida’s common stock, pursuant to the terms of the Merger Agreement. On a pro forma basis, based upon the number of shares of the Company’s common stock issued in the Merger (including shares of the Company’s common stock issuable upon certain outstanding Company options and warrants), pre-Merger Company shareholders own approximately 22.95% of the combined company and pre-Merger MyMD Florida shareholders own approximately 77.05% of the combined company.

The Company issued 28,553,307 shares of common stock and 4,188,315 stock options to the pre-Merger MyMD Florida shareholders on a post reverse split basis.

Treatment of the MyMD and Supera Merger

The merger of Supera into pre-Merger MyMD Florida was treated as a merger under common control. The financial statements were combined, and intercompany transactions were eliminated. Intercompany eliminations consisted of $444,000 related to the use and reimbursement of expenses for a private aircraft as recorded in the Statements of Operations for the three months ended March 31, 2021.

Pre-Merger MyMD Florida’s shareholders owned 60% and Supera shareholders owned 40% of the combined entity. Based upon an exchange ratio of 1.3575 shares of pre-Merger MyMD Florida’s common stock per share of Supera common stock, pre-Merger MyMD Florida issued 33,937,909 common shares to the shareholders of Supera upon the closing of the merger. Pre-Merger MyMD Florida had approximately 73,991,413 of common shares issued and outstanding and 10,853,360 stock options outstanding upon completion of the Merger.

The pro forma condensed combined financial statements present the pre-Merger MyMD Florida’s combined entity as of and for the three months ended March 31, 2021.

Treatment of the Contribution and Assignment Agreement in the Merger

On March 18, 2021, the Company entered into the Contribution Agreement by and among the Company, Cystron, and Oravax, pursuant to which the Company agreed to contribute (i) an amount in cash equal to $1,500,000 to Oravax, (ii) cause Cystron to contribute substantially all of the assets associated with its business of developing and manufacturing a COVID-19 Vaccine Candidate to Oravax, and deliver to Premas on behalf of Cystron $1,200,000 in satisfaction of all current accrued and unpaid milestone payments due pursuant to the License Agreement between Cystron and Premas (such transaction, the “Contribution Transaction”). The aggregate purchase price for the contribution consisted of 390,000 shares of capital stock of Oravax, or 13% of the projected outstanding shares of Oravax and the assumption of all obligations or liabilities in respect of the assets of Cystron, including the License Agreement. In addition, Oravax agreed to pay future royalties to the Company equal to 2.5% of all net sales of products (or combination products) manufactured, tested, distributed and/or marketed by Oravax or its subsidiaries. In addition to the cash amount equal to $1,200,000, the Company will hold for payment and delivery, an additional amount equal to $300,000 and 67,286 shares of the Company’s common stock and 72,922 shares of the Company’s Series D Convertible Preferred Stock, due to Premas, to be paid and delivered at a future date upon Premas obtaining the requisite permissions from Indian Authorities and making a demand on the Company for payment and delivery of the same. For the avoidance of doubt, the 134,572 shares of the Company’s common stock and 72,992 shares of the Company’s Series D Convertible Preferred Stock referred to in the preceding sentence were previously issued and are outstanding in the stock books of the Company registered in the name of Premas. (Note 3)

The Company will not have significant influence on the operating and financing decisions of Oravax. The Company treated the transaction under the cost method of accounting per the guidance contained in FASB ASC 325 Investments - Other which is included in the Condensed Consolidated Balance Sheet as of March 31, 2021. (Adjustments a,b)

Treatment of the Starwood Line of Credit in the Merger

Pursuant to the Merger Agreement, in connection with the Merger, all amounts due and owing with respect to the line of credit established between pre-Merger MyMD Florida and The Starwood Trust were paid in full upon the closing of the Merger. The unaudited pro forma condensed combined balance sheet is adjusted to reclassify the line of credit plus its accrued interest to marketable securities to reflect the disbursement of funds (Adjustment 1). Any amounts to be used to pay off The Starwood Trust to repay in full the line of credit established between pre-Merger MyMD Florida and The Starwood Trust immediately following the closing is being treated as a reduction to the Company’s $25,000,000 minimum cash contribution merger condition. (Adjustment 1)

Treatment of the Bridge Loan Note in the Merger

The Bridge Loan Note pursuant to which the Company was able to loan to pre-Merger MyMD Florida up to $3.0 million became an intercompany transaction upon the closing of the Merger and as such is eliminated in the pro forma condensed combined balance sheet as of December 31, 2020 (Adjustment 2, 4). The outstanding loan amount, plus accumulated interest, are being treated as a reduction to the Company’s $25,000,000 minimum cash contribution merger condition. As of March 31, 2021, the Company had advanced pre-Merger MyMD Florida a total of $3,000,000 under the Bridge Loan Note.

Treatment of Stock Options, Restricted Stock Units and Warrants in the Merger

All pre-Merger MyMD Florida stock options granted under the pre-Merger MyMD Florida stock option plan that are outstanding prior to the effective date of the Merger were cancelled and re-issued under the Company’s stock option plan based upon the original terms, as adjusted for the share exchange ratio, vested immediately and will expire two years from the effective date of the transaction. The fair market value of the options was calculated utilizing the Black-Scholes methodology using the Company’s closing share price of $4.94 per share on April 16, 2020. The pro forma condensed combined balance sheet has been adjusted to reflect the compensation expense associated with the modification of the outstanding options, net of the previously amortized costs.

The cash exercise price received by the combined company upon exercise of the pre-Merger MyMD Florida stock options prior to expiration was accumulated and distributed to pre-Merger MyMD Florida shareholders of record as of the effective date of the Merger. Due to the significant uncertainties related to the exercise of the pre-Merger MyMD Florida stock options, the fair market value of such potential exercise is not measurable as of the pro forma date and is being treated as an undefined contingent liability.

Per the Merger Agreement, there is no requirement for pre-Merger MyMD Florida stock options to be exercised as of the effective date of the Merger and are therefore being treated as unissued shares for the pro forma condensed combined financial statements.

All of the Company’s restricted stock units granted under the Company’s incentive stock option plan that are outstanding prior to the effective date of the Merger vested upon the completion of the transaction. The vested RSUs are to be settled in shares of common stock of the Company to be issued upon closing of the Merger and with giving effect to any shares that would be withheld for tax liability. The pro forma condensed combined balance sheet has been adjusted for the effect of the unamortized compensation expense (Adjustment 6).

The Company’s outstanding warrants are un-affected by the Merger and their pre-Merger terms and conditions will remain in effect until the expiration.

Treatment of the Excess Cash Contribution

Pursuant to Amendment No. 1 to the Merger Agreement, a contribution of Parent Net Cash in excess of the Minimum Parent Net Cash, as adjusted for the Bridge Loan and the Starwood Line of Credit, reduced the number of available Merger Shares. The following table provides details of the adjustment:

Excess Parent Cash Calculation
Parent Cash, Cash Equivalents and Marketable Securities as of December 31, 2020	$	35,336,407
Less
Net change year-to-date		(4,279,566	)
Liabilities, less non-cash items		(495,306	)
Estimated operating and other expenses		(1,000,000	)
Available funds under the Bridge Loan		-
Contribution and Assignment Agreement		(1,500,000	)
Starwood Line-of-Credit Retirement		(3,192,119	)
Parent Net Cash, Cash Equivalents and Marketable Securities as of April 16, 2021	$	24,869,416
Minimum Parent Net Cash, per Merger Agreement	$	25,000,000
Less
Bridge Loan, actual		(3,000,000	)
Available funds under the Bridge Loan		-
Starwood Line-of-Credit Retirement		(3,192,119	)
Adjusted Minimum Parent Net Cash, per Merger Agreement	$	18,807,881
Excess Parent Net Cash Contribution	$	6,061,535
Excess Cash Factor Calculation
Excess Parent Net Cash	$	6,061,535
Divided by Valuation Peg		206,000,000
Excess Cash Factor		2.95	%

Merger Share Calculation, per Merger Agreement
Adjusted outstanding shares of the Company’s common stock as of April 16, 2021		9,752,195
Divided by 20% plus the Excess Cash Factor		22.95	%
Merger Shares of common stock of the combined company		42,493,817
Multiplied by 80% less the Excess Cash Factor		77.05	%
Estimated shares of the Company’s common stock issued to MyMD upon closing of the Merger		32,741,622

Treatment of the Market Capitalization Milestones

The ability of the combined company to meet the market capitalization milestones is subject to the combined company’s future performance and other market conditions that are out of the company’s control. As such, the fair market value of the Milestone Shares is not measurable as of the pro forma date and is being treated as an undefined contingent liability.

Treatment of the Transaction Costs

Transaction costs primarily consist of printing, stock exchange, accounting and legal fees which are estimated to range from $750,000 to $1,500,000. There can be no assurance that these estimates will not change. Due to the expected volatility of the anticipated transaction costs, they are being treated as a contingent liability and have been excluded from the pro forma condensed combined financial statements. These transactions and related costs are one-time events and are not expected to have a continuing impact on the combined entity and as such would not impact the pro forma earnings per share.

2.	Preliminary Purchase Price

The Company issued to pre-Merger MyMD Florida shareholders and their designees a number of shares of its common stock (including in respect of outstanding pre-Merger MyMD Florida options), which represented approximately 80% of the combined company. The estimated preliminary purchase price, which represented the consideration transferred to the pre-Merger MyMD Florida stockholders in the reverse merger, was calculated based on the number of shares of the combined company that the Company’s shareholders owned as of the closing of the Merger. The accompanying unaudited pro forma condensed combined financial statements reflect an estimated purchase price of approximately $48.18 million, which consists of the following:

Estimated number of shares of the combined company owned by the Company’s shareholders⁽¹⁾		9,752,195
Multiplied by the price per share of the Company’s common stock⁽²⁾	$	4.94
Estimated purchase price	$	48,175,844

(1)

Represents the number of shares of the combined company that the Company’s shareholders owned as of the closing of the Merger pursuant to the Merger Agreement, which, for purposes of these pro forma financial statements, is calculated as the sum of a) 8,326,730 the Company’s shares outstanding as of March 3, 2021, b) 36,496 shares of the Company’s common stock issuable upon conversion of the Company’s Series D Convertible Preferred Stock, c) 402,483 shares of the Company’s common stock issued upon settlement of the Company’s restricted stock units that vested upon the completion of the Merger, and d) 986,486 shares of the Company’s common stock underlying outstanding the Company’s pre-funded warrants.

(2)	$4.94 was the closing trading price of the Company’s common stock on April 16, 2021.

The number of shares of common stock the Company issued to pre-Merger MyMD Florida shareholders (including in respect of outstanding pre-Merger MyMD Florida options), for purposes of these pro forma financial statements, is calculated pursuant to the terms of the Merger Agreement as follows:

Shares of Company common stock outstanding as of April 16, 2021	8,326,730
Shares of Company common stock subject to Series D Convertible Preferred stock	36,496
Shares of Company common stock subject to outstanding restricted stock units	402,483
Shares of Company common stock subject to outstanding pre-funded warrants⁽¹⁾	986,486
Adjusted outstanding shares of Company common stock	9,752,195
Divided by the assumed percentage of Company ownership of the combined company	22.95	%
Estimated adjusted total shares of common stock of the combined company	42,493,817
Multiplied by the assumed percentage of pre-Merger MyMD Florida ownership of the combined company	77.05	%
Estimated shares of Company common stock issued to pre-Merger MyMD Florida upon closing of the Merger⁽²⁾	32,741,622

(1)

986,486 shares of Company common stock underlying outstanding the Company’s pre-funded warrants are included in the calculation of the estimated total number of shares to be issued upon the completion of the Merger. An additional 5,463,032 shares issuable upon exercise of the outstanding the Company’s warrants with a strike price in excess of $3.44 were excluded per the Merger Agreement.

(2)

The common stock issued to pre-Merger MyMD Florida upon closing includes 4,188,315 shares allocated to fully vested stock options of pre-Merger MyMD Florida assumed by the Company upon closing, which will expire two years from the effective date of the Merger. Pursuant to the terms of the Merger Agreement, shares have been allocated to pre-Merger MyMD Florida’s outstanding stock options, however, there is no requirement for these options to be exercised as of the effective date of the Merger.

The allocation of the preliminary purchase price to the estimated fair value of the assets acquired and liabilities assumed as of March 31, 2021, (Adjustment 8) is as follows:

	Based on Historical Balance Sheet of the Company as of March 31, 2021			Pro Forma Adjustments⁽¹⁾⁽²⁾			Purchase Price Allocation – Pro Forma

Total Consideration	$	48,175,844		$	-		$	48,175,844
Cash and Cash Equivalents		569,366			-			569,366
Marketable Securities		30,480,537			(1,500,000	)		28,980,537
Other Receivables		3,026,137			(3,026,137	)		-
Prepaid Expenses		221,811			-			221,811
Investment in Oravax		1,500,000			-			1,500,000
Trade and Other Payables		(2,374,059	)		811,087			(1,562,972	)
Net Tangible Assets Acquired		33,423,792			(3,715,050	)		29,708,742
Excess of Purchase Price Over Net Assets Acquired to be Allocated to Goodwill	$	14,752,052		$	(3,715,050	)	$	18,467,102

(1)

(2)

The adjustments reflect the effect of the Contribution and Assignment Agreement, the elimination of the MyMD Bridge Loan and an adjustment for withholding taxes on the issuance of shares to settle the RSUs.

The purchase price allocation will remain preliminary until the Company completes a final valuation of the assets acquired and liabilities assumed as of the date that the Merger was consummated. The excess of consideration transferred over the estimated fair value of the net identifiable assets will be allocated to goodwill. The final determination of the allocation consideration transferred is expected to be completed as soon as practicable after the consummation of the Merger but will in no event exceed one year from the acquisition date. The final amounts allocated to assets acquired and liabilities assumed could differ significantly from the amounts presented in the unaudited pro forma condensed combined financial statements. For acquired working capital accounts such as prepaid expenses and other current assets, accounts payable and certain accrued expenses, the Company determined that no preliminary fair value adjustments were required due to the short timeframe until settlement for these assets and liabilities.

3.	Accounting Policies and Merger Pro Forma Adjustments

Based on the Company’s review of pre-Merger MyMD Florida’s summary of significant accounting policies disclosed in pre-Merger MyMD Florida’s financial statements, the nature and amount of any adjustments to the historical financial statements of pre-Merger MyMD Florida to conform its accounting policies to those of the Company are not expected to be significant. Upon consummation of the Merger, further review of pre-Merger MyMD Florida’s accounting policies and financial statements may result in required revisions to pre-Merger MyMD Florida’s policies and classifications to conform to the Company’s accounting policies.

The adjustments included in the pro forma condensed combined balance sheet are as follows:

(a)

To record the disbursement of the $1,500,000 investment in Oravax under the Contribution and Assignment Agreement to be paid by the Company.

Description	Debit		Credit
Trade and Other Payables	$	1,500,000
Marketable Securities			$	1,500,000

(b)

To record the effect on the Consolidated Balance Sheets from the reduction of research and development expense incurred during the three months ended March 31, 2021 that are non-recurring as the result of the Contribution Transaction.

Description	Debit		Credit
Accumulated Deficit	$	10,290
Common Stock			$	10,290

(1)

To record the payoff of the Starwood Line of Credit plus accumulated interest upon close of the Merger.

Description	Debit		Credit
Starwood Line of Credit	$	2,936,626
Due to Related Party		185,577
Starwood Line of Credit – Accrued Interest		257,411
Marketable Securities			$	3,379,614

(2)

To record interest expense on the Company/pre-Merger MyMD Florida Bridge Loan.

Description	Debit		Credit
Accumulated Deficit	$	26,137
Other Receivables			$	26,137

(3)

To reclassify the pre-Merger MyMD Florida Common Stock and Additional Paid-In Capital

Description	Debit		Credit
Pre-Merger MyMD Florida Common Stock	$	4,004
Pre-Merger MyMD Florida Additional Paid-In Capital		43,411,488
Common Stock			$	43,415,492

(4)

To eliminate the Company/pre-Merger MyMD Florida Bridge Loan.

Description	Debit		Credit
Bridge Loan – Related Party	$	3,026,137
Other Receivables			$	3,026,137

(5)

To record the expenses related to the modification of the outstanding pre-Merger MyMD Florida stock options’ expiration dates to comply with the Merger Agreement.

Description	Debit		Credit
Accumulated Deficit	$	37,373,172
Common Stock			$	37,373,172

(6)

To record the expenses related to the accelerated vesting of the outstanding unvested Restricted Stock Units pursuant to the terms of the restricted stock unit agreements and record the federal and state withholding liability.

Description	Debit		Credit
Accumulated Deficit	$	979,757
Trade and Other Payables			$	688,913
Common Stock				290,844

(7)

To reclassify the Company’s deficit account.

Description	Debit		Credit
Common Stock	$	139,662,586
Accumulated Deficit			$	139,662,449

(8)

To record the acquisition value of the Merger in excess of tangible assets acquired.

Description	Debit		Credit
Goodwill	$	18,467,102
Common Stock			$	18,467,102

The adjustment included in the pro forma condensed combined statement of comprehensive loss is as follows:

(aa)

To record the interest on the Company/pre-Merger MyMD Florida Bridge Loan for the three months ended March 31, 2021.

Description		Debit				Credit
Interest and Dividend Expense						$	26,137

(bb)

To record the elimination of a credit balance in research and development expense incurred during the three months ended March 31, 2021 that are non-recurring as the result of the Contribution Transaction. (Note 3)

Description		Debit				Credit
Research and Development Expense		$	10,290			$

The pro forma condensed combined basic and diluted earnings per share from continuing operations have been adjusted to reflect the pro forma condensed combined net loss for the three months ended March 31, 2021. In addition, the numbers of shares used in calculating the pro forma condensed combined basic and diluted net loss per share have been adjusted to reflect the estimated total number of shares of common stock of the combined company outstanding as of the closing of the Merger. The estimated total numbers of shares of common stock of the combined company outstanding as of the closing of the Merger was calculated as the estimated adjusted total shares of common stock issued and outstanding of the combined company of 37,282,520, plus 4,188,315 shares reserved for pre-Merger MyMD Florida stock options assumed by the Company at closing, 986,486 shares reserved for pre-funded warrants of the Company, and 36,496 shares reserved for the Series D Convertible Preferred stock as described in Note 2, “Preliminary Purchase Price.” The following table sets forth the calculation of the pro forma weighted average number of common shares outstanding — basic and diluted:

				Pro Forma Weighted Average Shares
	All Shares Issued/Issuable upon Merger			Pro Forma Weighted Average Shares for the Year Ended March 31, 2021⁽³⁾
Pre-Merger MyMD Florida:
Common shares issued and outstanding		73,991,413			-
Stock options outstanding		10,853,360			-
Total pre-Merger MyMD Florida share basis		84,844,773			-
Post conversion basis at the Exchange Ratio of 0.7718		65,479,931
Effect of 1-for-2 reverse stock split		(32,738,309	)
Post reverse split basis at the Exchange Ratio of 0.7718		32,741,622			-
Recapitalization/Conversion of pre-Merger MyMD Florida common shares into Company common shares based on the Exchange Ratio:		28,553,307			28,553,307
Recapitalization/Conversion of pre-Merger MyMD Florida stock options into Company common shares based on the Exchange Ratio⁽¹⁾		4,188,315			-
		32,741,622			28,553,307

The Company pre-Merger:
Common shares: issued and outstanding⁽²⁾		8,326,730			8,544,298
Post-merger:
Series D Convertible Preferred stock converted to common stock		36,496			-
Restricted Stock Units converted to common stock; vesting accelerated to the effective date		402,483			402,483
Pre-funded warrants convertible to common stock		986,486			-
		9,752,195			8,946,781
Estimated adjusted total shares of common stock for the combined entity		42,493,817			37,500,088

(1)

Pursuant to the terms of the Merger Agreement, shares have been allocated to pre-Merger MyMD Florida’s outstanding stock options, however, there is no requirement for these options to be exercised as of the effective date of the Merger and are therefore being treated as unissued shares for the purposes of calculating the weighted-shares outstanding.

(2)	The Company’s pre-Merger common shares issued and outstanding of 8,326,730 was the actual number of common shares issued and outstanding as of March 31, 2021.
(3)	All outstanding stock options, Series D convertible preferred stock and pre-funded warrants exercisable for the combined company’s common stock are anti-dilutive and therefore excluded from the weighted-average shares calculation for the three months ended March 31, 2021 as referenced in the pro forma condensed combined Statement of Comprehensive Loss.

Liquidity

As of March 31, 2021, the Company’s cash on hand was $569,366 and marketable securities were $30,480,537. The Company has incurred a net loss from continuing operations of $1,447,271 and a net loss from discontinued operations of $35,392 for the three months ended March 31, 2021. As of March 31, 2021, the Company had working capital of $31,923,792, stockholders’ equity of $33,423,792 and an accumulated deficit of $138,646,402. During the three months ended March 31, 2021, cash flows used in operating activities were $2,482,947, consisting primarily of a net loss of $1,482,663 and a decrease in trade and other payables of $1,368,151 offset by non-cash share-based compensation of $326,989. Since its inception, the Company has met its liquidity requirements principally through the sale of its common stock in public and private placements.

The Company evaluated the 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 March 31, 2021 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.

Note 4 - Trade and Other Payables

Trade and other payables consist of the following:

	March 31, 2021		December 31, 2020

Accounts Payable – Trade	$	1,960,284	$	569,999
Accrued Expenses		75,467		123,613
Accounts Payable – Other (Note 3)		300,000		1,510,290
	$	2,335,751	$

SEC Form 10-Q filed by MyMD Pharmaceuticals Inc.