SEC Form 10-Q/A filed by Oragenics Inc. (Amendment)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

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

For the quarterly period ended March 31, 2022.

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

For the transition period from __________ to __________

Commission File Number: 001-32188

ORAGENICS, INC.

(Exact name of registrant as specified in its charter)

florida

59-3410522

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

4902 Eisenhower Blvd., Suite 125

Tampa, Florida 33634

(Address of principal executive offices)

813-286-7900

(Issuer’s telephone number)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		OGEN		NYSE American

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 and Exchange Act of 1934 during the preceding 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 ☒ No ☐

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

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

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

As of April 30, 2022, there were 116,394,806 shares of Common Stock, $.001 par value, outstanding.

EXPLANATORY NOTE

Oragenics Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment No. 1”) to amend its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on May 13, 2022 (the “Original Form 10-Q”).

Background of Restatement

This Amendment No. 1 is being filed for the sole purpose of restating certain of the financial statements included in the Original Form 10-Q (the “Restatement”) due to the Company discovering that it made the following errors in the Original Form 10-Q: (i) not properly analyzing research and development contracts. The total adjustments made resulted in a decrease in net loss of approximately $1.4 million for the three-month period ended March 31, 2022. On April 10, 2023, the Company filed a Current Report on Form 8-K disclosing that the unaudited consolidated financial statements included in the Original Form 10-Q should not be relied upon.

Internal Control Considerations

In connection with the Restatement, management has concluded that the Company had a material weakness as of March 31, 2022, as the Company’s procedures relating to the review of research and development contracts was insufficient, resulting in material errors in the financial statements. For a discussion of management’s considerations of the Company’s research and development contract procedures, and material weakness identified, refer to Controls and Procedures in Part I, Item 4.

Items Amended in this Amendment No. 1

This Amendment No. 1 sets forth the Original Form 10-Q, as modified and superseded where necessary to reflect the Restatement and the related disclosure controls and procedures and internal control considerations. Accordingly, the following items included in the Original Form 10-Q have been amended:

● Part I, Item 1, Consolidated Financial Statements

● Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations

● Part I, Item 4, Controls and Procedures

● Part II, Item 1A, Risk Factors

Additionally, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including with this Amendment No. 1 currently dated certifications from its Chief Executive Officer, and President, and Chief Financial Officer.

Except as described above and in 1A: Amendment To Previously Reported Quarterly Financial Statements, this Amendment No. 1 does not amend, update or change any other disclosures in the Original Form 10-Q. In addition, the information contained in this Amendment No. 1 does not reflect events occurring after the Original Form 10-Q and does not modify or update the disclosures therein, except to reflect the effects of the Restatement.

		Page
PART I – FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	3

	Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited)	4

	Consolidated Statement of Changes in Shareholders’ Equity for the three months ended March 31, 2022 and 2021 (unaudited)	5

	Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and March 31, 2021 (unaudited)	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	27

Item 4.	Controls and Procedures	27

PART II – OTHER INFORMATION		28

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

Signatures		32

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Oragenics, Inc.

Consolidated Balance Sheets

	March 31, 2022 As Restated			December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	21,372,463		$	27,265,703
Other receivables		—			6,987
Prepaid expenses and other current assets		1,721,874			434,699
Total current assets		23,094,337			27,707,389
Property and equipment, net		121,845			45,708
Operating lease right-of-use assets		431,961			477,882
Total assets	$	23,648,143		$	28,230,979
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	1,094,052		$	947,574
Short-term notes payable		122,175			303,416
Operating lease liabilities		192,535			194,270
Total current liabilities		1,408,762			1,445,260

Long-term liabilities:
Operating lease liabilities		253,928			299,520
Total long-term liabilities		253,928			299,520

Shareholders’ equity:
Preferred stock, no par value; 50,000,000 shares authorized; 9,417,000 Series A shares, 6,600,000 Series B shares, issued and outstanding at March 31, 2022 and December 31, 2021, respectively		2,656,713			2,656,713
Common stock, $0.001 par value; 250,000,000 and 200,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively, 116,394,806 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		116,395			116,395
Additional paid-in capital		195,077,466			194,987,219
Accumulated deficit		(175,865,121	)		(171,274,128	)
Total shareholders’ equity		21,985,453			26,486,199
Total liabilities and shareholders’ equity	$	23,648,143		$	28,230,979

See accompanying notes.

Oragenics, Inc.

Consolidated Statements of Operations

(Unaudited)

	2022			2021
	For the Three Months Ended March 31, 2022
	2022 As Restated			2021
Grant revenue	$	15,083		$	-

Operating expenses:
Research and development		3,293,661			3,260,904
General and administrative		1,331,549			1,976,576
Total operating expenses		4,625,210			5,237,480
Loss from operations		(4,610,127	)		(5,237,480	)
Other income (expense):
Interest income		11,906			20,033
Interest expense		(3,246	)		(2,568	)
Local business tax		(490	)		(600	)
Miscellaneous income		10,964			670
Total other income, net		19,134			17,535
Loss before income taxes		(4,590,993	)		(5,219,945	)
Income tax benefit		—			—
Net loss	$	(4,590,993	)	$	(5,219,945	)
Basic and diluted net loss per share	$	(0.04	)	$	(0.05	)
Shares used to compute basic and diluted net loss per share		116,394,806			102,973,369

See accompanying notes.

Oragenics, Inc.

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

As Restated

	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
	Common Stock				Preferred Stock				Additional Paid In		Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balances at December 31, 2021		116,394,806	$	116,395		16,017,000.000	$	2,656,713	$	194,987,219	$	(171,274,128	)	$	26,486,199
Compensation expense relating to option issuances		—		—		—		—		90,247		—			90,247
Net loss		—		—		—		—		—		(4,590,993	)		(4,590,993	)
Balances at March 31, 2022		116,394,806	$	116,395		16,017,000.000	$	2,656,713	$	195,077,466	$	(175,865,121	)	$	21,985,453

	Common Stock				Preferred Stock						Additional Paid In		Accumulated			Total Shareholders’
	Shares		Amount		Shares			Amount			Capital		Deficit			Equity
Balances at December 31, 2020		91,766,928	$	91,767		16,017,133.483		$	7,174,854		$	164,022,957	$	(154,444,983	)	$	16,844,595
Compensation expense relating to option issuances		—		—		—			—			1,123,761		—			1,123,761
Series C dividend		—		—		33.016			1,117,531			—		(1,117,531	)		—
Series C redemption						(166.499	)		(5,635,672	)							(5,635,672	)
ATM offering – net of expenses		21,398,765		21,399		—			—			26,654,993		—			26,676,392
Issuance of common stock from warrant exercise		2,472,573		2,472		—			—			2,258,864		—			2,261,336
Net loss		—		—		—			—			—		(5,219,945	)		(5,219,945	)
Balances at March 31, 2021		115,638,266	$	115,638		16,017,000.000		$	2,656,713		$	194,060,575	$	(160,782,459	)	$	36,050,467

See accompanying notes.

Oragenics, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	2022			2021
	For the Three Months Ended March 31,
	2022 As Restated			2021
Cash flows from operating activities:
Net loss	$	(4,590,993	)	$	(5,219,945	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,468			12,725
Gain on sale of property and equipment		(10,964	)		—
Stock-based compensation expense		90,247			1,123,761
Changes in operating assets and liabilities:
Other receivables		6,987			—
Prepaid expenses and other current assets		(1,287,175	)		120,311
Accounts payable and accrued expenses		146,478			(364,281	)
Net cash used in operating activities		(5,636,952	)		(4,327,429	)
Cash flows from investing activities:
Proceeds from sale of property and equipment		12,000			—
Purchase of property and equipment		(87,047	)		—
Net cash used in investing activities		(75,047	)		—
Cash flows from financing activities:
Payments on short-term notes payable		(181,241	)		(113,346	)
Redemption of Series C Preferred stock		—			(5,635,672	)
Proceeds from issuance of common stock for warrant exercise		—			2,261,336
Net proceeds from issuance of common stock		—			26,676,392
Net cash provided by (used in) financing activities		(181,241	)		23,188,710
Net increase (decrease) in cash and cash equivalents		(5,893,240	)		18,861,281
Cash and cash equivalents at beginning of period		27,265,703			17,639,575
Cash and cash equivalents at end of period	$	21,372,463		$	36,500,856
Supplemental disclosure of cash flow information:
Interest paid	$	3,246		$	2,568
Non-cash investing and financing activities:
Stock dividend on Series C Preferred stock	$	—		$	1,117,531

See accompanying notes.

Oragenics, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization

Oragenics, Inc. (formerly known as Oragen, Inc.) (the “Company” or “we”) was incorporated in November, 1996; however, operating activity did not commence until 1999. We are focused on the development of the NT-CoV2-1 intranasal vaccine candidate to combat the novel Severe Acute Respiratory Syndrome coronavirus (“SARS-CoV-2”) coronavirus pandemic and the further development of effective treatments for novel antibiotics against infectious disease.

1A: Amendment To Previously Reported Quarterly Financial Statements

The Company’s previously issued unaudited consolidated financial statements for the three-month period ended March 31, 2022 have been restated related to the Company’s accounting for certain research and development expenses; certain upfront and prepayments made to vendors, and their classification on the Company’s unaudited consolidated financial statements.

Management reviewed the terms and conditions of the contracts and the payments and concluded that during the three-month period ending March 31, 2022 amounts were paid as part of a prepayment arrangement. Management reviewed Accounting Standards Codification Topic 730 Research and Development guidance related to recording initial upfront payments to vendors; and determined that the unaudited consolidated financial statements originally reported for the three-month period ended March 31, 2022 classified as research and development expense on the unaudited consolidated statement of operations that should be classified as prepaid expense on the Company’s unaudited consolidated balance sheet.

The Company has restated its accounting for these prepaid research and development expenses and recorded them as prepaid assets on its unaudited consolidated balance sheet with changes to the amount of research and development expense recorded on its unaudited consolidated statement of operations for the three-month period ended March 31, 2022.

As a result of these adjustments, net loss for the three-months ended March 31, 2022 was reduced by $1.4 million, the total assets reported for the same period increased by $1.4 million and total equity increased by $1.4 million. The Company has reported an amended net loss of $4.6 million versus the previously reported net loss of approximately $6 million. For the same period the Company has also reported amended total assets of approximately $24 million and accumulated deficit of $176 million; versus $22 million and $177 million respectively.

The following tables summarize the effect of the restatement on the Company’s consolidated unaudited financial statements for the three months ended March 31, 2022:

Oragenics, Inc.

Consolidated Balance Sheets

March 31, 2022

	As Previously Reported			Adjustment		As Restated
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	21,372,463			-	$	21,372,463
Other receivables		—			-		—
Prepaid expenses and other current assets		277,473			1,444,401		1,721,874
Total current assets		21,649,936					23,094,337
Property and equipment, net		121,845					121,845
Operating lease right-of-use assets		431,961					431,961
Total assets	$	22,203,742				$	23,648,143
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	1,094,052				$	1,094,052
Short-term notes payable		122,175					122,175
Operating lease liabilities		192,535					192,535
Total current liabilities		1,408,762					1,408,762

Long-term liabilities:
Operating lease liabilities		253,928					253,928
Total long-term liabilities		253,928					253,928

Shareholders’ equity:
Preferred stock, no par value; 50,000,000 shares authorized; 9,417,000 Series A shares, 6,600,000 Series B shares, issued and outstanding at March 31, 2022 and December 31, 2021, respectively		2,656,713					2,656,713
Common stock, $0.001 par value; 250,000,000 and 200,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively, 116,394,806 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		116,395					116,395
Additional paid-in capital		195,077,466					195,077,466
Accumulated deficit		(177,309,522	)		1,444,401		(175,865,121	)
Total shareholders’ equity		20,541,052					21,985,453
Total liabilities and shareholders’ equity	$	22,203,742				$	23,648,143

Oragenics, Inc.

Consolidated Statements of Operations

(Unaudited)

	As Previously Reported			Adjustment			As Restated
	For the Three Months Ended March 31, 2022
	As Previously Reported			Adjustment			As Restated
Grant revenue	$	15,083			-		$	15,083

Operating expenses:
Research and development		4,738,062			(1,444,401	)		3,293,661
General and administrative		1,331,549						1,331,549
Total operating expenses		6,069,611						4,625,210
Loss from operations		(6,054,528	)					(4,610,127	)
Other income (expense):
Interest income		11,906						11,906
Interest expense		(3,246	)					(3,246	)
Local business tax		(490	)					(490	)
Miscellaneous income		10,964						10,964
Total other income, net		19,134						19,134
Loss before income taxes		(6,035,394	)					(4,590,993	)
Income tax benefit		—						-
Net loss	$	(6,035,394	)				$	(4,590,993	)
Basic and diluted net loss per share	$	(0.05	)				$	(0.04	)
Shares used to compute basic and diluted net loss per share		116,394,806						116,394,806

Oragenics, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	As Previously Reported			Adjustment			As Restated
	For the Three Months Ended March 31, 2022
	As Previously Reported			Adjustment			As Restated
Cash flows from operating activities:
Net loss	$	(6,035,394	)		1,444,401		$	(4,590,993	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,468						8,468
Gain on sale of property and equipment		(10,964	)					(10,964	)
Stock-based compensation expense		90,247						90,247
Changes in operating assets and liabilities:
Other receivables		6,987						6,987
Prepaid expenses and other current assets		157,226			(1,444,401	)		(1,287,175	)
Accounts payable and accrued expenses		146,478						146,478
Net cash used in operating activities		(5,636,952	)					(5,636,952	)
Cash flows from investing activities:
Proceeds from sale of property and equipment		12,000						12,000
Purchase of property and equipment		(87,047	)					(87,047	)
Net cash used in investing activities		(75,047	)					(75,047	)
Cash flows from financing activities:
Payments on short-term notes payable		(181,241	)					(181,241	)
Redemption of Series C Preferred stock		—						—
Proceeds from issuance of common stock for warrant exercise		—						—
Net proceeds from issuance of common stock		—						—
Net cash provided by (used in) financing activities		(181,241	)					(181,241	)
Net increase (decrease) in cash and cash equivalents		(5,893,240	)					(5,893,240	)
Cash and cash equivalents at beginning of period		27,265,703			-			27,265,703
Cash and cash equivalents at end of period	$	21,372,463			-		$	21,372,463
Supplemental disclosure of cash flow information:
Interest paid	$	3,246					$	3,246
Non-cash investing and financing activities:
Stock dividend on Series C Preferred stock	$	—					$	—

2. Basis of Presentation, As Restated

The accompanying unaudited interim consolidated financial statements as of March 31, 2022 and December 31, 2021 (audited) and three months ended March 31, 2022 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim consolidated financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete consolidated financial statements. In the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial condition, results of operations and cash flows for the periods presented. The results of operations for the interim period ended March 31, 2022, are not necessarily indicative of the results of operations that may be expected for the year ended December 31, 2022, or any future period.

These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2021, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 2022. The Company has incurred recurring losses and negative cash flows from operations since inception. To date, the Company has not generated significant revenues from operations. The Company incurred a net loss of $4,590,993 and used cash of $5,636,952 in its operating activities during the three months ended March 31, 2022. As of March 31, 2022, the Company had an accumulated deficit of $175,865,121.

The Company expects to incur substantial expenditures to further develop its technologies. The Company believes the working capital at March 31, 2022 will be sufficient to meet the business objectives as presently structured through the fourth quarter of 2022. As such, there is substantial doubt that we can continue as a going concern beyond that date.

The Company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in the Company’s focus and direction of its research and development programs, competitive and technical advances, or other developments. Additional financing will be required to continue operations after the Company exhausts its current cash resources and to continue its long-term plans for clinical trials and new product development. There can be no assurance that any such financing can be realized by the Company, or if realized, what the terms thereof may be, or that any amount that the Company is able to raise will be adequate to support the Company’s working capital requirements until it achieves profitable operations.

The Company intends to seek additional funding through sublicensing arrangements, joint venturing or partnering, sales of rights to technology, government grants and public or private financings. The Company’s future success depends on its ability to raise capital and ultimately generate revenue and attain profitability. The Company cannot be certain that additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to the Company. If the Company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and the Company’s current shareholders may experience dilution. If the Company is unable to obtain funds when needed or on acceptable terms, the Company may be required to curtail its current development programs, cut operating costs and forego future development and other opportunities.

3. Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements include the accounts of Oragenics, Inc. and our wholly-owned subsidiary Noachis Terra, Inc. All intercompany balances and transactions have been eliminated.

New Accounting Standards

There are no additional accounting pronouncements issued or effective during the three months ended March 31, 2022, that have had, or are expected to have, a material impact on our consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The principal area of estimation reflected in the consolidated financial statements is stock-based compensation.

Stock-Based Payment Arrangements

Generally, all forms of stock-based payments, including stock option grants, and warrants are measured at their fair value on the awards’ grant date using a Black-Scholes pricing model. Stock-based compensation awards issued to non-employees for services rendered are recorded at the fair value of the stock-based payment. The expense resulting from stock-based payments are recorded in research and development expense or general and administrative expense in the consolidated statement of operations, depending on the nature of the services provided. Stock-based payment expense is recorded over the requisite service period in which the grantee provides services to us. To the extent the stock option grants, or warrants do not vest at the grant date they are subject to forfeiture.

Stock-Based Compensation

US GAAP requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values as of the grant date. Stock-based compensation expense is recorded over the requisite service period in which the grantee provides services to us, to the extent the options do not vest at the grant date and are subject to forfeiture. For performance-based awards that do not include market-based conditions, we record share-based compensation expense only when the performance-based milestone is deemed probable of achievement. We utilize both quantitative and qualitative criteria to judge whether milestones are probable of achievement. For awards with market-based performance conditions, we recognize the grant-date fair value of the award over the derived service period regardless of whether the underlying performance condition is met. In connection with adopting ASU 2016-09, the Company made an accounting policy election to account for forfeitures in compensation expense as they occur.

Warrants

The Company used the Black Scholes Option Pricing Model in calculating the relative fair value of any warrants that have been issued.

Net Loss Per Share

During all periods presented, the Company had securities outstanding that could potentially dilute basic earnings per share in the future but were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive because the Company reported a net loss for all periods presented. Basic and diluted net loss per share amounts are the same for the periods presented. Net loss per share is computed using the weighted average number of shares of common stock outstanding.

Concentrations

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains cash accounts in commercial banks, which may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. As of March 31, 2022, the uninsured portion of this balance was $21,122,463. As of December 31, 2021, the uninsured portion of this balance was $27,015,703.

Grant Revenue

Grant revenues are derived from a small business innovation research grant in the amount of $250,000 (“Computer-aided Design for Improved Lantibiotics” R41GM136034. The Company recognizes grant revenue as reimbursable grant costs are incurred up to the pre-approved award limits within the budget period. The costs associated with these reimbursements are reflected as a component of research and development expenses in the accompanying consolidated statement of operations.

4. Stock-based Compensation

The Company recognized stock-based compensation on all employee and non-employee awards as follows:

	For the Three Months Ended March 31, 2022		For the Three Months Ended March 31, 2021
Research and development	$	39,455	$	30,927
General and administrative		50,792		1,092,834
Total Stock-based compensation	$	90,247	$	1,123,761

The following table summarizes the stock option activity during the three months ended March 31, 2022:

Summary of Stock Option Activity

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value⁽¹⁾
Outstanding at December 31, 2021		6,724,402		$	0.95		7.99	$	2,773
Granted		—			—		—	$	—
Exercised		—			—		—	$	—
Forfeited		(54,498	)		1.53		—	$	—
Outstanding at March 31, 2022		6,669,904		$	0.95		7.75	$	—

Exercisable at March 31, 2022		5,961,568		$	0.96		7.61	$	—

(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing market price of our common stock as of December 31, 2021 and March 31, 2022, respectively.

Total unrecognized compensation cost related to unvested stock options was $311,534 as of March 31, 2022 and is expected to be recognized over a weighted-average period of less than two years.

On February 25, 2022, the Company held its reconvened Annual Meeting. At the Annual Meeting, the shareholders of the Company approved and ratified the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) Which is a successor to the Company’s 2012 Equity Incentive Plan (the “2012 Plan”). The 2021 Plan was originally approved by the Company’s Board of Directors on March 13, 2021. The 2021 Plan provides the aggregate number of shares of Common Stock that may be issued under the 2021 Plan will not exceed the sum of (i) 10,000,000 new shares, (ii) the number of shares remaining available for the grant of new awards under the 2012 Equity Incentive Plan (the “2012 Plan”) as of immediately prior to the effective date of the 2021 Plan, and (iii) certain shares subject to outstanding awards granted under the 2012 Plan that may become available for issuance under the 2021 Plan, as such shares become available from time to time. As of March 31, 2022, 10,582,806 shares of common stock are available for future awards under the 2021 Plan.

Each executive officer and non-employee director receiving equity-based awards is subject to a minimum dollar value stock ownership holding requirement with respect to the awards received as well as all prior equity awards under the Plan which requirements are intended to align the ability to sell shares with the performance of the Company’s stock price. The executive officer recipients each have a minimum dollar value stock ownership holding requirement threshold equal to two times (2x) their then base salaries below which dollar threshold they would be precluded from selling any shares of Company stock obtained from the Company under its Plan. Also, the non-employee directors are each subject to a minimum dollar value stock ownership holding requirement threshold equal to six times the annual Board retainer ($270,000) below which dollar threshold they would be precluded from selling shares of Company stock acquired from the Company under its Plan.

5. Warrants

During the three months ended March 31, 2021, the Company issued an additional 2,472,573 shares of common stock as a result of the exercise of certain outstanding warrants as follows: (i) warrants to acquire 360,000 shares of Common Stock at an exercise price of $1.00 per share were exercised and (ii) warrants to acquire 2,112,573 shares of Common Stock at an exercise price of $0.90 per share were exercised. The warrant exercises provided aggregate gross proceeds to the Company of $2,261,336.

A summary of warrant activity for the year ended December 31, 2021 and the three months ended March 31, 2022 is as follows:

Schedule of Warrants Activity

	Warrants			Weighted Average Price
Balance - December 31, 2020		20,513,145		$	1.36
Granted		—			—
Exercised		(2,472,573	)		0.91
Expired		—			—
Balance - December 31, 2021		18,040,572			1.42
Granted		—			—
Exercised		—			—
Expired		—			—
Balance - March 31, 2022		18,040,572		$	1.42

The warrants outstanding as of March 31, 2022 are as follows:

Schedule of Warrants Outstanding

Exercise Price		Warrants Outstanding		Expiration Date
$	3.10		48,387	9/19/2022
$	2.00		900,000	4/10/2023
$	3.10		462,106	5/10/2024
$	3.10		602,414	7/25/2024
$	3.10		1,064,518	11/8/2024
$	1.00		3,174,500	7/17/2025
$	0.90		2,588,647	3/25/2024
$	1.25		9,200,000	5/1/2025
			18,040,572

All outstanding warrants are classified as equity on the Company’s Consolidated Balance Sheets.

6 Prepaid Expense, As Restated

As of March 31, 2022 and December 31, 2021, the Company had $1,721,874 and $434,699, respectively, in prepaid expenses and other current assets. The balance for the three-month period ending March 31, 2022 reflects approximately $1.4 million paid to third-party vendors for research and development to be completed, $0.3 million in prepaid insurance, and deposits of approximately $0.02 million.

Schedule of Prepaids

	March 31, 2022		December 31,
	Restated		2021
Prepaid Expense		1,703,934		416,759
Deposits		17,940		17,940
Total		1,721,874		434,699

7. Short-Term Notes Payable

As of March 31, 2022 and December 31, 2021, the Company had $122,175 and $303,416, respectively, in short-term notes payable for the financing of various insurance policies.

Products Liability Insurance

The product liability insurance policy has been renewed in subsequent periods without premium financing.

Directors’ and Officers’ Insurance

On July 24, 2021, the Company entered into a short-term note payable for $600,169 bearing interest at 5.34% to finance a portion of the directors’ and officers’ liability insurance and employment practices liability insurance premiums. Principal and interest payments on this note began August 24, 2021 and are made evenly based on a straight-line amortization over a 10-month period with the final payment being due on May 24, 2022.

On July 24, 2020, the Company entered into a short-term note payable for $413,784 bearing interest at 5.39% to finance a portion of the directors’ and officers’ liability insurance and employment practices liability insurance premiums. Principal and interest payments on this note began August 24, 2020 and were made evenly based on a straight-line amortization over an 11-month period with the final payment being made on June 28, 2021.

8. Commitments and Contingencies

Additional Consideration-NTI Acquisition

In connection with the Company’s acquisition of NTI, the Company is obligated to pay the former sole shareholder of NTI contingent consideration based upon the exercise of certain of the Company’s outstanding warrants as follows: (i) twenty percent (20%) of the cash proceeds received by the Company upon exercise of the Company’s warrants carrying an exercise price of $0.75 and $0.90 and (ii) forty-five percent (45%) of the cash proceeds received by the Company upon exercise of the Company’s warrants carrying an exercise price of $1.00, in each case, for so long as the warrants remain outstanding. The Company’s previously issued warrants carrying an exercise price of $0.75 have expired by their terms. As a result, no additional consideration will be due to the former sole shareholder of NTI relating to these warrants.

During the three months ended March 31, 2021, 2,472,573 warrants were exercised as follows: (i) 360,000 shares at an exercise price of $1.00 per share and (ii) 2,112,573 at an exercise price of $0.90 per share. See Note 8. Shareholders’ Equity.

As a result of the warrant exercises in 2021, the Company paid $542,263 of additional consideration to the sole former shareholder of NTI. The additional consideration payment is included in research and development expenses.

During the three months ended March 31, 2022, no warrants were exercised that resulted in the payment of additional consideration to the sole former shareholder of NTI.

NIH License

Through NTI, the Company is a party to a Patent License and Biological Materials License Agreement (the “License Agreement” or “NIH License”), dated March 23, 2020, with the United States Department of Health and Human Services (the “HHS”), as represented by the National Institute of Allergy and Infectious Diseases (“NIAID”), an Institute within the National Institutes of Health (“NIH”). Under the terms of the License Agreement, we hold a nonexclusive, worldwide license to certain specified patent rights (including patent applications, provisional patent applications and Patent Cooperation Treaty (“PCT”) patent applications) and biological materials relating to the use of pre-fusion coronavirus spike proteins to exploit products (“Licensed Products”) and practice processes (“Licensed Processes”) that are covered by the licensed patent rights and biological materials for the purpose of developing and commercializing a vaccine product candidate for SARS-CoV-2.

Under the terms of the License Agreement, the NIAID is entitled to receive a non-creditable, nonrefundable upfront license issue royalty of $30,000 and reimbursement of $11,739 for our pro rata share of the NIAID’s past and future patent prosecution-related expenses (which amounts have already been paid). Additionally, the NIAID is entitled to receive lump sum nonrefundable minimum annual royalties, which increase in the year after the first commercial sale of any Licensed Products or the practice of any Licensed Processes, as well as lump sum benchmark royalties following our completion of certain commercial development and sales-related benchmarks. The NIH is entitled to receive earned royalties on the annual net sales of Licensed Products and the practice of any Licensed Processes (subject to certain reductions), at certain low- to mid-single digit royalty rates, which rates vary based on the total amount of annual net sales and the geographic market in which those sales occur. We must provide regular written reports to the NIAID on the development status of and royalty payments relating to the Licensed Products and the Licensed Processes.

The License Agreement will expire upon (a) twenty (20) years from the first commercial sale where no licensed patent rights exist or have ceased to exist or (b) the expiration of the last patent contained in the licensed patent rights, unless terminated earlier. None of the applications included in the NIH licensed patent rights have issued yet. The NIH may terminate or modify the license in the event of a material breach, including if the Company does not meet certain milestones by certain dates, or upon certain insolvency events that remain uncured following the date that is 90 days following written notice of such breach or insolvency event. The Company may terminate the license, or any portion thereof, at its sole discretion at any time upon 60 days written notice to the NIH.

NRC License

On July 26, 2021, the Company entered into a non-exclusive Technology License Agreement (the “License Agreement”) with the National Research Council of Canada (“NRC”) pursuant to which the NRC grants to the Company a license to use NRC’s inventions, patents, trade secrets, know-how, copyright, biological material, designs, and/or technical information created by or on behalf of the NRC (the “NRC Technologies”) relating to the derivatives of CHO ^{2353 TM} Cell Line listed in the License Agreement (the “Stable Cells”) to: (i) make, research, and develop SARS-CoV-2 spike protein manufactured by a Stable Cell (the “Drug Substance”) within Canada, Australia, the United Kingdom, the European Union and the United States (U.S.) (collectively the “Territory”); (ii) file regulatory approval, export and sell the final formulation of the Drug Substance (“Products”) and (iii) engage contractors to use the Stable Cells to make Drug Substance or Products on behalf of the Company to be used and sold, worldwide, by the Company. The License Agreement was subsequently amended to include the Delta and Omicron variants. In addition, the Company subsequently amended the License Agreement to broaden the non-exclusive field of use to include all diseases caused by coronaviruses and any genetic variants thereof.

As consideration for the grant of the license, the Company will pay to the NRC an annual (low five digits) license fee, with the initial portion of the fee covering the first three years of the license. Additionally, we will pay certain milestone payments (a) upon transfer of each Stable Cell listed in the Agreement and (b) with regard to each of the first three Products, (i) upon submission of the Investigational New Drug application (IND) related thereto, (ii) upon dosing the first patient in a Phase 1 or Phase 2 clinical trial, (iii) upon dosing the first patient in a Phase 3 clinical trial and (iv) upon first regulatory approval. Milestone payments range from the low five digits to high six digits. In addition, Oragenics will pay a low single-digit royalty to the NRC for the sale of Products, based on sales revenue, commencing after the first commercial sale.

Pursuant to the License Agreement, the NRC is required to bear the responsibility and pay the costs to obtain and maintain patents related to the NRC Technologies in the U.S., Canada, Brazil, European Union, Japan, South Korea, Singapore, Australia, China, and India, and the NRC shall use reasonable efforts to obtain and maintain those patents. Additional countries may be requested by us, in which event, the NRC will file and maintain such patents, at our expense.

Pursuant to the License Agreement, we are required to indemnify and hold the NRC and its employees and agents harmless from and against all liability and damages in connection with or arising out of all claims, demands, losses, damages, costs including solicitor and client costs, actions, suits or proceedings brought by any third party that are in any manner based upon, arising out of, related to, occasioned by, or attributable to the manufacturing, distribution, shipment, offering for sale, sale, or use of Products, services based on the NRC Technologies and product liability and infringement of intellectual property rights other than copyright, if any, licensed under the License Agreement.

Unless terminated earlier, the License Agreement will terminate twenty (20) years from the effective date of the License Agreement. Either party may terminate the License Agreement, by giving written notice to the other party, if the other party defaults or is in breach of the License Agreement, provided that if the defaulting party cures the breach within 60 days after the notice is given, the License Agreement shall continue in full force and effect. The NRC may terminate the License Agreement if the Company becomes bankrupt, or insolvent, or has a receiver appointed to continue its operations, or passes a resolution for winding up. The License Agreement contains customary confidentiality obligations.

In addition, in connection with the initiative to develop its vaccine, we also previously entered into a material transfer agreement with the NRC for SARS-CoV-2 trimeric spike protein Wuhan variant and SARS-CoV-2 trimeric spike protein South African variant to move forward with pre-clinical testing.

Leases

Lab Facility-Alachua. The Company’s Alachua facility is being leased from a real estate developer for a term of five years beginning in December 2019. Under the amended lease agreement, the rental payments range from $12,870 per month to $13,338 per month. The lease may be terminated prior to its stated expiration date upon the payment of nine-months rent.

Corporate Office – Tampa. In November of 2016, the Company entered into an amendment for the leased office space for corporate personnel located in Tampa, FL. The amended lease is for approximately 2,207 square feet. The lease period for the office space is for thirty-six months commencing on March 1, 2017. Lease payments range from $4,138 per month to $4,392 per month inclusive of insurance, taxes and utilities. The lease expired on February 29, 2020. In November of 2019, the Company entered into an amendment for the Tampa facility for a term of three years beginning in March of 2020. Under the amended lease agreement, the rental payments range from $4,524 per month to $4,800 per month.

Supplemental balance sheet information related to leases is as follows:

Maturities of operating lease liabilities are as follows:

Year ended December 31:
2022	$	163,244
2023		169,656
2024		146,718
Total	$	479,618
Less: Imputed interest		(33,155	)
Present value of lease liabilities	$	446,463

The cost component of operating leases is as follows:

	For the Three Months Ended March 31, 2022		For the Three Months Ended March 31, 2021
Operating lease cost	$	57,129	$	56,964
Short-term lease cost		1,634		611
Total lease cost	$	58,763	$	57,575

Supplemental cash flow information related to operating leases is as follows:

For the Three Months

Ended March 31, 2022

For the Three Months

Ended March 31, 2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

58,535

56,554

9. Shareholders’ Equity

Common Stock

The Company’s Board of Directors and the Company’s shareholders, at its reconvened 2020 Annual Meeting on February 25, 2022, approved an amendment to our Amended and Restated Articles of Incorporation to (i) increase the number of authorized shares of common stock from 200,000,000 shares to 250,000,000 shares.

During the three months ended March 31, 2022, the Company issued no shares of common stock.

During the three months ended March 31, 2021, the Company issued an aggregate of 23,871,338 shares of common stock comprised of (i) 21,398,765 shares of common stock issued in connection with sales under its ATM Program which generated gross proceeds of approximately $27.8 million and (ii) 2,472,573 shares of common stock issued as the result of the exercise of certain outstanding warrants which generated gross proceeds of approximately $2.3 million as a result of the exercise of certain outstanding.

Preferred Stock

Series C Non-Voting, Non-Convertible, Preferred Stock Dividend and Redemption

During the three months ended March 31, 2021, the Company provided a notice of redemption, to the holder of the Company’s Series C Preferred Stock to redeem all outstanding Series C Preferred Stock (which included the dividend of 26.697 shares paid on January 28, 2021 and any accrued dividends due through the redemption date of March 13, 2021). The Series C Preferred Stock redemption amount of approximately $5.6 million was paid on March 15, 2021 and all outstanding shares of Series C Preferred Stock were cancelled.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 24, 2022.

As used in this quarterly report the terms “we”, “us”, “our”, “Oragenics” and the “Company” mean Oragenics, Inc. and its wholly owned subsidiary Noachis Terra Inc., unless the context otherwise requires.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are not historical facts, but are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. These forward-looking statements include statements about our strategies, objectives and our future achievement. To the extent statements in this Quarterly Report involve, without limitation, our expectations for growth, estimates of future revenue, our sources and uses of cash, our liquidity needs, our current or planned clinical trials or research and development activities, product development timelines, our future products, regulatory matters, expense, profits, cash flow balance sheet items or any other guidance on future periods, these statements are forward-looking statements. These statements are often, but not always, made through the use of word or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and “would. “These forward-looking statements are not guarantees of future performance and concern matters that could subsequently differ materially from those described in the forward-looking statements. Actual events or results may differ materially from those discussed in this Quarterly Report on Form 10-Q. Except as may be required by applicable law, we undertake no obligation to update any forward-looking statements or to reflect events or circumstances arising after the date of this Report. Important factors that could cause actual results to differ materially from those in these forward looking statements are in the section entitled “Risk Factors” in the most recent Annual Report on Form 10- K, as updated by our recent Form 8-K Report filed with the Securities and Exchange Commission, and the other risks and uncertainties described elsewhere in this report as well as other risks identified from time to time in our filings with the Securities and Exchange Commission, press releases and other communications. In addition, the statements contained throughout this Quarterly Report concerning future events or developments or our future activities, including concerning, among other matters, current or planned clinical trials, anticipated research and development activities, anticipated dates for commencement of clinical trials, anticipated completion dates of clinical trials, anticipated meetings with the FDA or other regulatory authorities concerning our product candidates, anticipated dates for submissions to obtain required regulatory marketing approvals, anticipated dates for commercial introduction of products, and other statements concerning our future operations and activities, are forward-looking statements that in each instance assume that we are able to obtain sufficient funding in the near term and thereafter to support such activities and continue our operations and planned activities in a timely manner. There can be no assurance that this will be the case. Also, such statements assume that there are no significant unexpected developments or events that delay or prevent such activities from occurring. Failure to timely obtain sufficient funding, or unexpected developments or events, could delay the occurrence of such events or prevent the events described in any such statements from occurring.

Overview

We are a development-stage company dedicated to fighting infectious diseases including coronaviruses and multidrug-resistant organisms. Our lead product (NT-CoV2-1) is an intranasal vaccine candidate to prevent coronavirus disease 2019 (“COVID-19”) from the SARS-CoV-2 virus and variants thereof. The NT-CoV2-1 program leverages coronavirus spike protein research licensed from the National Institute of Health and the National Research Council of Canada with a focus on reducing viral transmission and offering a more patient-friendly intranasal administration. Our lantibiotics program features a novel class of antibiotics against bacteria that have developed resistance to commercial antibiotics.

Our SARS-CoV-2 Vaccine Product Candidate - NT-CoV2-1

Following our May 2020 acquisition of one hundred percent (100%) of the total issued and outstanding common stock of Noachis Terra, Inc. (“Noachis Terra”) we are focused on the development and commercialization of a vaccine product candidate to provide long-lasting immunity from SARS-CoV-2, which causes COVID-19. Noachis Terra is a party to a worldwide, nonexclusive intellectual property and biological materials license agreement with the National Institute of Allergy and Infectious Diseases (“NIAID”), an institute within the National Institutes of Health (“NIH”), relating to certain research, patent applications and biological materials involving pre-fusion stabilized coronavirus spike proteins and their use in the development and commercialization of a vaccine to provide specific, long lasting immunity from SARS-CoV-2. Since the acquisition we have conducted testing in animal models, including SARS-CoV-2 challenge studies in hamsters, using specific formulations for intramuscular administration (our Terra CoV-2 vaccine candidate) and intranasal administration (our NT-CoV2-1 vaccine candidate), both based on the NIAID pre-fusion stabilized spike protein antigens. Following consideration of a number of factors, including but not limited to the competitive landscape, we determined to bring the intranasal vaccine candidate NT-CoV2-1, into further development due to the greater differentiation versus current COVID-19 vaccines and the potential benefits of intranasal over intramuscular administration. We believe these benefits could include a higher reduction of transmission of SARS-CoV-2 and would offer a needle-free delivery option. We therefore are currently focusing our development efforts on our more highly differentiated NT-CoV2-1 vaccine candidate.

Coronaviruses are a family of viruses that can lead to upper-respiratory infections in humans. Recent clinical reports also suggest that the SARS-CoV-2 virus can affect other body-systems, including the nervous, cardiovascular, gastrointestinal and renal systems. Among the recent iterations of coronaviruses to move from animal to human carriers is SARS-CoV-2, which, beginning in Wuhan, China, in late 2019, caused a global pandemic due to its rapid spread and the relatively high mortality rate (as compared to the seasonal influenza). In late April of 2022, the World Health Organization’s estimates indicate the number of worldwide COVID-19 infections have exceeded 505 million and the number of deaths directly attributed to COVID-19 have exceeded 6.2 million. Pfizer/-BioNTech received FDA approval for their COVID-19 vaccines in August of 2021 and the Moderna vaccine in January 2022. The Janssen vaccine is currently available in the United States under Emergency Use Authorizations (“EUA”) by the FDA. We believe given the size of the worldwide pandemic that even with additional vaccines projected to be available in the months ahead, there will be demand for the highly differentiated NT-CoV2-1 vaccine, once development is successfully completed. We intend to combine the research, patent applications and biological materials covered by our NIAID license with our existing clinical research and manufacturing capabilities to respond rapidly to this ongoing, global, public health issue. We believe our NT-CoV2-1 vaccine holds the possibility of playing an important role in addressing this issue.

Coronaviruses, such as SARS-CoV-2, possess signature protein spikes on their outer capsule. The NIAID license covers patents and data on a vaccine candidate that were created based on a stabilized pre-fusion spike trimeric protein. By stabilizing the spike protein in the pre-fusion state, the number of immunogenic centers is increased thereby allowing for a greater likelihood of successful antibody binding, resulting in an improved immunogenic response. The genetic code, acquired from the NIH, for the stabilized pre-fusion spike protein was provided to Aragen Bioscience, Inc. (“Aragen”) for the purpose of insertion of the spike protein gene sequence into a Chinese Hamster Ovary (“CHO”) cell line. Aragen is a leading contract research organization focused on accelerating pre-clinical biologics product development, has extensive experience building CHO cell lines for recombinant proteins, such as monoclonal antibodies. Aragen has successfully inserted the NIH pre-fusion spike protein gene sequence into a CHO cell line and is currently developing both the analytical tests and identifying preliminary cell line growth conditions to optimize the spike protein titers. Currently, “mini-pool” production and analytical development is underway. The process to transfer to full-scale manufacture has begun.

The NIH’s pre-clinical study shows that this spike protein, adjuvanted with the mouse specific TLR-4-agonist Sigma Adjuvant System (“SAS”, a TLR-4 agonist) that induces T cell activation), generates neutralizing antibody titers in both a pseudovirus neutralization assay and a plaque reduction neutralization titer (PRNT) assay. Recently released information indicated that pretreatment of mice with the NIH-created COVID-19 spike protein in combination with the SAA adjuvant completely inhibited viral growth in the nasal cavities and lungs of infected animals compared to unvaccinated control animals. In October 2020, we received feedback to our Type B Pre-IND Meeting Request from the FDA. The response indicated that the FDA broadly supported our planned approach to the pre-clinical program that would support the clinical development of the Terra CoV-2 vaccine. Due to our current focus on our intranasal vaccine candidate, we have submitted a request to the FDA for a type B Pre-IND Meeting Request to discuss NT-CoV2-1, which is expected to occur by mid-July 2022.

We also entered into a material transfer agreement with Biodextris Inc. for the use of three intranasal mucosal adjuvants in our Terra CoV-2 and NT-CoV2-1 vaccine candidates. BDX100, BDX300 and BDX301 are proteosome-based adjuvants comprised of proteins and lipopolysaccharides with improved attributes including enhanced immune response, manufacturing efficiency and the benefits of intranasal vaccine administration. The agreement allows for the future collaboration regarding the intranasal delivery of vaccine during clinical development with the opportunity to enter into a commercial agreement upon regulatory approval of the intranasal vaccine.

The NT-CoV2-1 vaccine containing Inspirevax’s intranasal mucosal adjuvant BDX301 has been studied in pre-clinical animal studies, including hamster viral challenge studies and mouse immunogenicity studies. A rabbit toxicology study has been initiated and is required for regulatory approval prior to the Phase 1 clinical study. We believe the NT-CoV2-1 vaccine has the potential to lead to a higher reduction of transmission of SARS-CoV-2 and offers a needle-free delivery option. This vaccine could also permit cost effective storage and distribution at refrigerated temperatures, which should facilitate distribution.

On July 26, 2021, we entered into a licensing agreement with the NRC that enables us to pursue the rapid development of next-generation vaccines against the SARS-CoV-2 virus and its variants. The license was subsequently extended to include the Omicron variant. In addition, we broadened the non-exclusive field of use to include all diseases caused by coronaviruses and any genetic variants thereof. The NRC technologies, in combination with the U.S. NIH elements found in our NT-CoV2-1 vaccine candidates, provide us with a platform that can generate cell lines for high-yield production of spike protein antigens for existing and emerging variants of concern. This platform should allow production of cell lines within six to eight weeks of spike gene sequence availability, compared with six to nine months for traditional production of such cell lines. The NRC technologies, developed with support from the NRC’s Pandemic Response Challenge Program, are expected to expedite the evaluation of SARS-CoV-2 antigen candidates in pre-clinical and clinical studies.

We began pre-clinical studies in June of 2021 through our collaboration and material transfer agreement with the NRC. We initiated an immunogenicity study in mice to evaluate several adjuvant candidates. On August 30, 2021, we announced the successful completion of these mouse immunogenicity studies that supported further development using either the intramuscular or intranasal routes of administration. A hamster challenge study was initiated in September of 2021 to assess inhibition of viral replication using adjuvants specific for intramuscular and intranasal administration. In December of 2021, we announced that both formulations generated robust immune responses and reduced the SARS-CoV-2 viral loads to undetectable levels in the nasal passages and lungs five days following a viral challenge. By contrast, hamsters in the control groups that had received saline or adjuvants alone had no detectable immune response and substantial viral loads. The vaccines delivered by intranasal and intramuscular routes generated immune responses as measured by multiple assays.

Through assessment of a variety of factors including evolving variants and available vaccines in use, we have determined to focus our development efforts on the intranasal delivery of our vaccine product candidate, NT-CoV2-1, which is more highly differentiated than the currently available and late-stage COVID-19 vaccines. As a result, we expect to file an IND application with the FDA in the third quarter of 2022 and immediately upon receipt of approval from the FDA to commence a Phase 1 clinical study with NT-CoV2-1, the protocol for which is currently under development.

We expect to use our currently available cash resources to continue to advance the development of NT-CoV2-1 through IND-enabling studies, including immunogenicity, viral challenge studies, toxicology studies, and the Phase 1 trial with further clinical development being contingent upon the receipt of additional funding, including non-dilutive government grant funding which we continue to pursue, or partnering or out-licensing opportunities.

Our Antibiotic Product Candidate - Oragenics Derived Compound (ODC-x)

Members of our scientific team discovered that a certain bacterial strain of Streptococcus mutans, produces Mutacin 1140 (MU1140), a molecule belonging to the novel class of antibiotics known as lantibiotics. Lantibiotics, such as MU1140, are highly modified peptide antibiotics made by a small group of Gram-positive bacterial species. Over 60 lantibiotics have been discovered, to date. We believe lantibiotics are generally recognized by the scientific community to be potent antibiotic agents.

In nonclinical testing, MU1140 has shown activity against all Gram-positive bacteria against which it has been tested, including those responsible for a number of healthcare associated infections, or HAIs. A high percentage of hospital-acquired infections are caused by highly antibiotic-resistant bacteria such as methicillin-resistant Staphylococcus aureus (MRSA) or multidrug-resistant Gram-negative bacteria. We believe the need for novel antibiotics is increasing as a result of the growing resistance of target pathogens to existing FDA approved antibiotics on the market.

Lantibiotics have been difficult to investigate for their clinical usefulness as therapeutic agents in the treatment of infectious diseases due to a general inability to produce or synthesize sufficient quantities of pure amounts of these molecules. Traditional fermentation methods can only produce minute amounts of the lantibiotic.

In June 2012, we entered into a worldwide exclusive channel collaboration agreement with Precigen, Inc (formerly known as Intrexon Corporation), ILH Holdings, Inc. (n/k/a Eleszto Genetika, Inc. (“EGI”), for the development and commercialization of the native strain of MU1140 and related homologs to use its advanced transgene and cell engineering platforms. In September of 2021, we and EGI, mutually terminated the amended and restated worldwide exclusive channel collaboration agreement dated March 1, 2021 (the “Lantibiotic ECC”) pursuant to which we were pursuing the development of OG716 as a lead product candidate for the treatment of C. diff. As a result of the mutual termination of the Lantibiotic ECC, we ceased pre-clinical development of our product candidate OG716 and other compounds covered by the Lantibiotic ECC, all licenses provided pursuant to the Lantibiotic ECC between the parties were terminated and there are no continuing obligations between the parties, except as to confidentiality. We made no payments to EGI in connection with the mutual termination. Each party retained all right and title to their own respective intellectual property. The termination of the Lantibiotic ECC was to enable us to focus on our continuing independent research and development efforts relative to lantibiotics in order to identify new compounds to pursue.

The timing of the filing of an IND regarding any future lantibiotic candidate is subject to our having sufficient available human, material and financing capital, which includes research subjects, both animal and human, given all of our anticipated needs and expected requirements in connection with our ongoing research and development initiatives. We expect to continue to advance our lantibiotics program to an IND filing based on the availability of both human and financial capital. Based upon the current funding we expect to continue to focus on the identification of new potential product lantibiotic candidates, efficient and cost-effective improvements in the manufacturing processes and pre-clinical studies required to support a first in human Phase 1 clinical study.

In October 2021, we were awarded a small business innovation research grant in the amount of $250,000 (“Computer-aided Design for Improved Lantibiotics”, R41GM136034) for the Company’s continued research and development of lantibiotics, including its collaborative program with the Biomolecular Sciences Institute at Florida International University (FIU). The grant provides the Company with funding to develop novel lantibiotics for the treatment of ESKAPE pathogens (defined as Enterococcus faecium, Staphylococcus aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, and Enterobacter spp.).

Product Candidates.

Through our wholly-owned subsidiary, Noachis Terra, we began the research and development stage for our new Terra CoV-2 and NT-CoV2-1 vaccine product candidate. We hold a nonexclusive, worldwide intellectual property license agreement for certain research, patent applications and biological materials relating to the use of pre-fusion coronavirus spike proteins for the development and commercialization of a vaccine against SARS-CoV-2.

Additionally, we are developing semi-synthetic lantibiotic analogs that may be effective against systemic Gram-positive multidrug infections, and analogs that may be effective in treating Gram-negative infections. We seek to protect our product candidates through patents and patent applications pursuant to the terms of our license agreements.

Product/Candidate	Description	Application	Status

NT-CoV2-1	Intranasal vaccine candidate (recombinant protein + adjuvant) to provide long lasting immunity against SARS-CoV-2	Broad, community-based vaccine immunity against SARS-CoV-2	Pre-clinical

Terra CoV-2	Intramuscular vaccine candidate (recombinant protein + adjuvant) to provide long lasting immunity against SARS-CoV-2	Broad, community-based vaccine immunity against SARS-CoV-2	Pre-clinical

Antibiotics	Semi-synthetic analogs of MU1140: Member of lantibiotic class of antibiotics	Healthcare-associated infections	Pre-clinical

Our Business Development Strategy

Success in the biopharmaceutical and product development industry relies on the continuous development of novel product candidates. The large majority of product candidates do not make it past all clinical trials which forces companies to look externally for innovation. Accordingly, we expect from, time to time, to seek strategic opportunities through various forms of business development, which can include strategic alliances, licensing deals, joint ventures, collaborations, equity-or debt-based investments, dispositions, mergers and acquisitions. We view these business development activities as a necessary component of our strategies, and we seek to enhance shareholder value by evaluating business development opportunities both within and complementary to our current business as well as opportunities that may be new and separate from the development of our existing product candidates.

Recent Developments

On February 25, 2022 we held our annual meeting of shareholders for 2020 at which time our shareholders approved: (i) the adoption of an amendment to our Amended and Restated Articles of Incorporation to provide for a reduced quorum requirement of one-third (1/3) of shares entitled to vote represented in person or by a proxy, in order to constitute a meeting of shareholders; (ii) the adoption of an amendment to our Amended and Restated Articles of Incorporation which increased the number of authorized shares of our Common Stock from 200,000,000 shares of Common Stock to 250,000,000 shares of Common Stock; and (iii) the adoption of our new 2021 Equity Incentive Plan.

On February 3, 2022 we amended our NRC license agreement to expand the non-exclusive field of use to include all diseases caused by coronaviruses and any genetic variant thereof.

Financial Overview

Impact of the Novel Coronavirus.

The current COVID-19 pandemic has presented a substantial public health and economic challenge around the world and is affecting our employees, development partners, communities and business operations, as the U.S. and global economies and financial markets. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information or trends that may emerge concerning COVID-19, the actions taken to contain it or treat its impact, and the impact on local, regional, national and international markets.

Our management has closely monitored the impact of COVID-19 on our business operations. Due to stay-at-home orders in the United States, we have instituted a work-from-home plan for our employees. We have no plans to furlough employees at this time. However, the Company is dependent on its workforce to deliver and advance its research. While expected to be temporary, prolonged workforce disruptions may negatively impact future operations in fiscal year 2022 and the Company’s overall liquidity.

To date, we and our development partners, have been able to conduct ordinary operations at or near normal levels and do not currently anticipate any interruptions for the foreseeable future. However, there could be additional repercussions for our operations, particularly for the initial development of our Nt-CoV2-1 product candidate, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites. The continuation of the pandemic could adversely affect our planned clinical trial operations, including our ability to conduct the trials on the expected timelines and recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if their geography is impacted by the pandemic. Further, the COVID-19 pandemic could result in delays in our clinical trials due to prioritization of hospital resources toward the pandemic, the broad emergency use authorization of vaccines, restrictions in travel, potential unwillingness of patients to enroll in trials at this time, or the inability of patients to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services. In addition, we rely on independent clinical investigators, contract research organizations and other third-party service providers to assist us in managing, monitoring and otherwise carrying out our preclinical studies and clinical trials, and the pandemic may affect their ability to devote sufficient time and resources to our programs or to travel to sites to perform work for us.

Research and Development Expenses, As Restated

Research and development consist of expenses incurred in connection with the discovery and development of our product candidates. These expenses consist primarily of employee-related expenses, which include salaries and benefits and attending science conferences; expenses incurred under our license agreements with third parties and under other agreements with contract research organizations, investigative sites and consultants that conduct our clinical trials and a substantial portion of our nonclinical studies; the cost of acquiring and manufacturing clinical trial materials; facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities and equipment, and depreciation of fixed assets; license fees, for and milestone payments related to, in-licensed products and technology; stock-based compensation expense; and costs associated with nonclinical activities and regulatory approvals. We expense research and development costs as incurred, up-front payment and prepayments related to research and development activities and in-licensed products and technology are recorded as prepaid expenses on the balance sheet and recorded as expenses on the Company’s consolidated statement of operations as work is performed or the expense is incurred.

Our research and development expenses can be divided into (i) clinical research, and (ii) nonclinical research and development activities and (iii) manufacturing process development and analytical testing procedure development. Clinical research costs consist of clinical trials, manufacturing services, regulatory activities and related personnel costs, and other costs such as rent, utilities, depreciation and stock-based compensation. Nonclinical research and development costs consist of our research activities, nonclinical studies, related personnel costs and laboratory supplies, and other costs such as rent, utilities, depreciation and stock-based compensation and research expenses we incur associated with the development of our product candidates. While we are currently focused on advancing our product development programs, our future research and development expenses will depend on the clinical success of our product candidates, as well as ongoing assessments of each product candidate’s commercial potential. In addition, we cannot forecast with any degree of certainty which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans, research expenses and capital requirements.

Our research and development expenses were 3,293,661 and 3,260,904 for the three months ended March 31, 2022 and 2021, respectively.

Our current product development strategy contemplates an expected increase in our research and development expenses in the future as we continue the advancement of our product development programs for our vaccine and lantibiotic product candidates, with greater near-term emphasis on our vaccine product candidate. The lengthy process of completing pre-clinical studies, clinical trials; seeking regulatory approval for our product candidates; and expanding the potential claims we are able to make, requires expenditure of substantial resources. Any failure or delay in completing pre-clinical studies, clinical trials, or in obtaining regulatory approvals, could cause a delay in generating product revenues and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations. Our current product candidates are not expected to be commercially available until we are able to obtain regulatory approval from the FDA or the regulatory authority in other jurisdictions where we may seek approval.

Our plan is to budget and manage expenditures in research and development such that they are undertaken in a cost-effective manner yet still advance the research and development efforts. While we have some control under our Lantibiotic program and the License agreements as to the planning and timing of our research and development and therefore the timing of when expenditures may be incurred for various phases of agreed upon projects, actual expenditures can vary from period to period. Subject to available capital, we expect overall research and development expenses to increase as a result of our vaccine product candidate and as our financial resources permit. Our research and development projects are currently expected to be taken to the point where they can be licensed or partnered with larger pharmaceutical companies.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs for personnel in executive, finance, and administrative functions. Other general and administrative expenses include facility costs not otherwise included in research and development expenses, patent filing, and professional fees for legal, consulting, auditing and tax services.

We anticipate that our general and administrative expenses to increase for, among others, the following reasons:

	●	to support our research and development activities, which, subject to available capital, we expect to expand as we continue the development of our product candidates;

	●	the efforts we undertake from, time to time, to raise additional capital; and

	●	the increased payroll, and stock-based compensation, expanded infrastructure and higher consulting, legal, accounting and investor relations costs associated with being a public company.

Other Income (Expense)

Other income (expense) includes local business taxes, gain on sale of property and equipment, as well as interest income and expense. Interest income consists of interest earned on our cash and cash equivalents, and interest earned on the stock subscription receivable. The primary objective of our investment policy is capital preservation. Interest expense consists primarily of interest and costs associated with our indebtedness.

Income Taxes

At December 31, 2021, the Company has federal and state tax net operating loss carryforwards of $145,260,353. Federal and state tax net operating loss carryforwards generated prior to December 31, 2017 will expire through 2037 and are not subject to taxable income limitations. Federal tax net operating loss carryforwards generated subsequent to December 31, 2017, do not expire but are subject to taxable income limitation pursuant to the Tax Cuts and Jobs Act that was enacted on December 22, 2017. State of Pennsylvania tax net operating loss carryforwards will expire through 2036. The Company also has federal research and development tax credit carryforwards of $4,027,180. The federal tax credit carryforward will expire beginning in 2021 and continuing through 2041 unless previously utilized.

Utilization of net operating loss carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or, could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“IRC Section 382”) and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change, as defined by IRC Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The Company has completed several financings since its inception, as well as the recent acquisition of Noachis Terra, which may result in a change in ownership as defined by IRC Section 382, or could result in a change in control in the future. In each period since our inception, we have recorded a 100% valuation allowance for the full amount of our deferred tax asset, as the realization of the deferred tax asset is uncertain. As a result, we have not recorded any federal tax benefit in our statements of operations.

Results of Operations for the Three Months Ended March 31, 2022 and 2021, As Restated

Grant revenue. Grant revenue was $15,083 for the three months ended March 31, 2022 compared to $-0- for the three months ended March 31, 2021; an increase of $15,083, or 100.0%. This increase was attributable to the award of a small business innovation research grant.

Research and Development, as Restated. Research and development expenses were $3,293,661 for the three months ended March 31, 2022 compared to $3,260,904 for the three months ended March 31, 2021, an increase of $32,757. This increase was primarily due to costs associated with the NT-CoV2-1 vaccine program, costs associated with our lantibiotic program, bonuses, and patent costs of $475,053, $51,220, $39,060, and $31,248, respectively. These increases were partially offset by decreases in costs associated with the payment of additional consideration relating to the acquisition of Noachis Terra, Inc., and salaries of $542,263, and $41,636, respectively.

General and Administrative. General and administrative expenses were $1,331,549 for the three months ended March 31, 2022 compared to $1,976,576 for three months ended March 31, 2021, a decrease of $645,027 or 32.6%. This decrease was primarily due to decreases increases in non-employee stock-based compensation, salaries, employee stock-based compensation, benefits, and payroll taxes of $999,844, $83,655, $42,197, $16,322 and $14,695. These decreases were offset by increases in costs associated with filing fees and registration costs, bonus, insurance, legal, and accounting costs of $350,796, $70,000, $38,141, $33,690, and $22,685, respectively.

Other Income. Other income, net was $19,134 for the three months ended March 31, 2022 compared to $17,535 for the three months ended March 31, 2021, resulting in an increase of $1,599. The net change was primarily attributable to a decrease in interest income of $8,127 and an increase in the gain on sale of property and equipment of $10,964.

Liquidity and Capital Resources, As Restated

Since our inception, we have funded our operations primarily through the sale of equity securities in our initial public offering, the sale of equity securities and warrants in private placements, debt financing, warrant exercises, public offerings, and grants. During the three months ended March 31, 2022 and March 31, 2021 our operating activities used cash of $5,636,952, and $4,327,429, respectively. The use of cash was primarily driven by an increase in cash used for prepaid expenses related to research and development costs of approximately $1.3 million. We had a working capital surplus of $21,685,575 and $26,262,129 at March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022 and March 31, 2021, our investing activities used cash of $(75,047) and $-0- respectively. The cash used by investing activities during the three months ended March 31, 2022, was primarily due to the purchase of property and equipment net of the proceeds from the sale of property and equipment.

During the three months ended March 31, 2022 and March 31, 2021, our financing activities used and provided cash of $(181,241) and $23,188,710 respectively. The cash used by and provided in financing activities during the three months ended March 31, 2022 and March 31, 2021, was primarily due to payments on short term notes payable, the sales of common stock, the exercise of warrants, and the redemption of the Series C Preferred stock.

Financing

Additional details of our financing activities for the periods reflected in this report are provided below as well as certain information on our outstanding shares of preferred stock:

November 2020 Public Offering.

On November 24, 2020, we closed an underwritten public offering for gross proceeds of approximately $6.0 million, which included the full exercise of the underwriter’s over-allotment option to purchase additional shares, prior to deducting underwriting discounts and commissions and offering expenses. The offering was comprised of 14,189,189 shares of common stock at a price to the public of $0.37 per share. We granted the underwriter a 45-day option to purchase up to 2,128,378 additional shares of our common stock at the public offering price, less underwriting discounts and commissions. The underwriter exercised its option in full to purchase 2,128,378 additional shares of common stock, which the indicated gross proceeds reflect. We intend to use the net proceeds of the offering primarily to continue funding our pre-clinical development of our SARS-CoV-2 vaccine, NT-CoV2-1 and our lantibiotics program and for general corporate purposes, including research and development activities, capital expenditures and working capital. Dr. Frederick Telling who is a Director of the Company, participated in the offering through the purchase of 100,000 shares of the Company’s common stock. Dr. Telling’s participation was approved by the Company’s Audit Committee.

December 2020 Registered Direct Offering.

On December 29, 2020, we closed a registered direct offering for gross proceeds of approximately $6.5 million, prior to deducting underwriting discounts and commissions and offering expenses. The offering was comprised of 14,444,444 shares of common stock at a price to the public of $0.45 per share. We intend to use the net proceeds of the offering primarily to continue funding our pre-clinical development of our SARS-CoV-2 vaccine, NT-CoV2-1 and our lantibiotics program and for general corporate purposes, including research and development activities, capital expenditures and working capital.

At-the- Market (“ATM Program”)

On February 1, 2021, we entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners, as sales agent (the “Sales Agent”), pursuant to which we may offer and sell through or to the Sales Agent shares of our Common Stock (the “ATM Program”). During the three months ended March 31, 2021, we issued an aggregate of 21,398,765 shares of Common Stock and received gross proceeds of an aggregate of approximately $27.8 million under our ATM Program. Any Shares offered and sold in the ATM Program were issued pursuant to our universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”) of which $9,671,869 remains available under our Shelf Registration Statement. The ATM Program will terminate upon (a) the election of the Agent upon the occurrence of certain adverse events, (b) 10 days’ advance notice from one party to the other, or (c) the sale of the balance available under our Shelf Registration Statement. Under the terms of the Sales Agreement, the Sales Agent is entitled to a commission at a fixed rate of 3.0% of the gross proceeds from each sale of shares under the Sales Agreement.

Other Financings

We enter into short term financing arrangements for the payment of our annual insurance premiums for our products liability insurance and directors and officers and employment practices insurance.

Products Liability Insurance

The product liability insurance policy has been renewed in subsequent periods without premium financing.

Directors’ and Officers’ Insurance

On July 24, 2020, we entered into a short-term note payable for $413,784 bearing interest at 5.39% to finance a portion of the directors’ and officers’ liability insurance and employment practices liability insurance premiums. Principal and interest payments on this note began August 24, 2020 and were made evenly based on a straight-line amortization over an 11-month period with the final payment being due on June 24, 2021.

Our Outstanding Preferred Stock

During 2017, we issued shares of Series A and Series B Preferred Stock in financing transactions (the “Preferred Stock Financings”). In connection with the Preferred Stock Financings, we filed Certificate of Designations of Preferences, Rights and Limitations of Series A and Series B Preferred Stock with the Secretary of State of the State of Florida, effective May 10, 2017 and November 8, 2017, respectively. Our currently outstanding Series A and Series B Preferred Stock and the amount of common stock that may be issued upon conversion is set forth below:

Preferred Stock Series	Outstanding Shares		Common Stock Equivalents
Series A Preferred		9,417,000		941,701
Series B Preferred		6,600,000		1,320,002

In addition, we issued warrants to purchase an aggregate of (i) 1,064,520 shares of Common Stock to the Series A holders, and (ii) 1,064,518 shares of Common Stock to the Series B holders in connection with the Preferred Stock Financings.

Except as otherwise required by law, the Series A and Series B Preferred Stock have no voting rights. However, as long as any shares of Series A and series B Preferred Stock are outstanding, we shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A and Series B Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series A or Series B Preferred Stock or alter or amend the Certificate of Designation, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A and series B Preferred Stock, (c) increase the number of authorized shares of Series A and Series B Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing. Upon any liquidation, dissolution or winding-up by us, whether voluntary or involuntary that is not a Fundamental Transaction (as defined in the Certificate of Designations), the holders of Series A and Series B Preferred Stock shall be entitled to receive out of the assets, the greater of (i) the product of the number of shares of Series A and Series B Preferred Stock then held by such holder, multiplied by the Original Issue Price; and (ii) the amount that would be payable to such holder in the Liquidation in respect of Common Stock issuable upon conversion of such shares of Series A and Series B Preferred Stock if all outstanding shares of Series A and Series B Preferred Stock were converted into Common Stock immediately prior to the Liquidation. The Series A and Series B Preferred Stock is classified as permanent equity.

Future Capital Requirements

Our capital requirements for 2022 will depend on numerous factors, including the success of our commercialization efforts and of our research and development, the resources we devote to develop and support our technologies and our success in pursuing strategic licensing and funded product development relationships with external partners. Subject to our ability to raise additional capital including through possible joint ventures and/or partnerships, we expect to incur substantial expenditures to further commercialize or develop our technologies including continued increases in costs related to research, nonclinical testing and clinical trials, as well as costs associated with our capital raising efforts and being a public company. We will require substantial funds to conduct research and development and nonclinical and Phase 1 and Phase 2 clinical testing of our licensed, patented technologies and to develop sublicensing relationships for the Phase 2 and 3 clinical testing and manufacture and marketing of any products that are approved for commercial sale. Our plans include seeking both equity and debt financing, alliances or other partnership agreements with entities interested in our technologies, or other business transactions that would generate sufficient resources to ensure continuation of our operations and research and development programs.

Our current available cash and cash equivalent, provide us with limited liquidity. We believe our existing cash and cash will allow us to fund our operating plan through the fourth quarter of 2022. We expect to continue to seek additional funding for our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned clinical testing, research and development and commercialization activities, which could harm our business. The sale of additional equity or debt securities may result in additional dilution to our shareholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations. We also will require additional capital beyond our currently forecasted amounts.

For example, as we seek to move forward with the development of NT-CoV2-1 vaccine candidate and our other product candidates, we will require additional capital. In addition, we continue to pursue other COVID-19 research and development funding opportunities through governmental and nongovernmental sources, as well as potential research collaboration arrangements with academic institutions and other commercial partners. Our ability to advance the development of our NT-CoV2-1 vaccine candidate at our anticipated pace, in accordance with our License agreements, is dependent upon our ability to secure additional capital resources through these funding opportunities or an alternative capital raise, such as an equity or debt financing or other strategic business collaboration. Moreover, the global impact of COVID-19 could further impact our need for additional capital if we experience delays in our anticipated timelines or achievement milestones.

Because of the numerous risks and uncertainties associated with research, development and clinical testing of our product candidates, we are unable to estimate the exact amounts of our working capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

	●	conduct preclinical research for our NT-CoV2-1vaccine product candidate, file an IND with the FDA and, if approved, engage in Phase 1 clinical trials;

	●	identifying and securing clinical sites for the conduct of human trials for our product candidates;

	●	the number and characteristics of the product candidates we pursue;

	●	the scope, progress, results and costs of researching and developing our product candidates, and conducting nonclinical and clinical trials;

	●	the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates;

	●	our ability to maintain current research and development licensing agreements and to establish new strategic partnerships, licensing or other arrangements and the financial terms of such agreements;

	●	our ability to advance our lantibiotic development or achieve milestones under our License agreements and the payment obligations we may have;

	●	the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and

	●	the timing, receipt and amounts of sales of, or royalties on, our products and future products, if any.

We have based our estimates on assumptions that may prove to be wrong. We may need to obtain additional funds sooner or in greater amounts than we currently anticipate. Potential sources of financing include strategic relationships, grants, public or private sales of our shares or debt and other sources. We may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements. We do not have any committed sources of financing at this time, and it is uncertain whether additional funding will be available when we need it on terms that will be acceptable to us, or at all. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of our existing stockholders will be diluted. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations and our business, financial condition and results of operations would be materially harmed.

Critical Accounting Estimates and Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation of consolidated financial statements in accordance with US GAAP requires us to make estimates and assumptions that affect reported amounts a

March 31, 2022

December 31, 2021

Weighted Average Remaining Lease Term In Years

Operating leases

Weighted Average Discount Rate

Operating leases