Part I -- FINANCIAL INFORMATION

Item 1     Financial Statements

GEOVAX LABS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying notes to condensed consolidated financial statements.

GEOVAX LABS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

See accompanying notes to condensed consolidated financial statements.

GEOVAX LABS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

(Unaudited)

See accompanying notes to consolidated

Supplemental disclosure of cash flow information:non-cash financing activities:

During the ninethree months ended September 30, 2017, 178March 31, 2019, 1,563 shares of Series C Convertible Preferred Stock and 1,200 shares of Series E Convertible Preferred Stock were exchanged for 2,763 shares of Series F Convertible Preferred Stock, 250 shares of Series G Convertible Preferred Stock were issued in exchange for cancellation of $250,000 of term notes payable, 587 shares of Series C Convertible Preferred Stock were converted into 11,862,00078,280 shares of common stock, and 180 shares of Series F Convertible Preferred Stock were converted into 40,000 shares of common stock. During the ninethree months ended September 30, 2016, 132March 31, 2018, 450 shares of Series CD Convertible Preferred Stock were converted into 1,400,00060,000 shares of common stock (Note 8).

stock.

See accompanying notes to condensed consolidated financial statements.

GEOVAX LABS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30March 31, 201719

(unaudited)

GeoVax Labs, Inc. (“GeoVax” or the “Company”), is a clinical-stage biotechnology company developing human vaccines and immunotherapies against infectious diseases and cancers using oura novel patented Modified Vaccinia Ankara Virus-Like Particle (MVA-VLP) vaccine platform. In this platform, MVA, a large virus capable of carrying several vaccine antigens, expresses proteins that assemble into highly effective VLP immunogens in the person being vaccinated. The MVA-VLP virus replicates to high titers in approved avian cells for manufacturing but cannot productively replicate in mammalian cells. Therefore, the GeoVax MVA-VLP derived vaccines elicit durable immune responses in the host similar to a live attenuated virus, while providing the safety characteristics of a replication-defective vector.

Our current development programs are focused on preventive vaccines against Human Immunodeficiency Virus (HIV), Zika Virus, hemorrhagic fever viruses (Ebola, Sudan, Marburg, Lassa), and malaria, as well as therapeutic vaccines for chronic Hepatitis B infections and cancers. We believe our technology and vaccine development expertise are well-suited for a variety of human infectious diseases and we intend to pursue further expansion of our product pipeline.

Our corporate strategy is to improve health to patients worldwide by advancing our vaccine platform, using its unique capabilities to design and develop an array of products addressing unmet medical needs in the areas of infectious diseases and oncology. We aim to advance products through to human clinical testing, and to seek partnership or licensing arrangements for achieving regulatory approval and commercialization. We also leverage third party resources through collaborations and partnerships for preclinical and clinical testing with multiple government, academic and corporate entities.

Certain of ourour vaccine development activities have been, and continue to be, financially supported by the U.S. government. This support has been both in the form of research grants and contracts awarded directly to us, as well as indirect support for the conduct of preclinical animal studies and human clinical trials.

We operate in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products require approval from, and are subject to, ongoing oversight by the Food and Drug Administration (FDA) in the United States, by the European Medicines Agency (EMA) in the European Union, and by comparable agencies in other countries. Obtaining approval for a new pharmaceutical product is never certain, may take many years and often involves expenditure of substantial resources. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with one or more potential strategic partners.

GeoVax is incorporated under the laws of the State of Delaware and our principal offices are located in Smyrna,the metropolitan Atlanta, Georgia (metropolitan Atlanta area).area.

The accompanying condensed consolidated financial statements at September 30, 2017March 31, 2019 and for the three-month and nine-month periods ended September 30, 2017March 31, 2019 and 20162018 are unaudited, but include all adjustments, consisting of normal recurring entries, which we believe to be necessary for a fair presentation of the dates and periods presented. Interim results are not necessarily indicative of results for a full year. The financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016.2018. We expect our operating results to fluctuate for the foreseeable future; therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods.

As described in Note 12, effective April 30, 2019, we enacted a one-for-five hundred reverse stock split of our common stock. The accompanying financial statements, and all share and per share information contained herein, have been retroactively restated to reflect the reverse stock split.

Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of the financial statements. We are devoting substantially all of our present efforts to research and development of our vaccine candidates. We have funded our activities to date from government grants and clinical trial assistance, and from sales of our equity securities. We will continue to require substantial funds to continue these activities.

We believe that our existing cash resources, and government funding commitments, and equity funding commitments discussed in Note 9 will be sufficient to continue our planned operations into the firstthird quarter of 2018.2019. Due to our history of operating losses and our continuing need for capital to conduct our research and development activities, there is substantial doubt concerning our ability to operate as a going concern beyond that date. We are currently exploring sources of capital through additional government grants and contracts.corporate collaborations. We also intend to seeksecure additional funds through sales of our equity securities exercise of currently outstanding stock purchase warrants, or by other means. Management believes that we will be successful in securing the additional capital required to continue the Company’s planned operations, but that our plans do not fully alleviate the substantial doubt about the Company’s ability to operate as a going concern. Additional funding may not be available on favorable terms or at all. If we fail to obtain additional capital when needed, we will be required to delay, scale back, or eliminate some or all of our research and development programs as well as reduce our general and administrative expenses.

We disclosed in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 20162018 those accounting policies that we consider significant in determining our results of operations and financial position. ThereOther than as described below, there have been no material changes to, or in the application of, the accounting policies previously identified and described in the Form 10-K.

In MarchFebruary 2016, the Financial Accounting Standards Board (“FASB”)(FASB) issued Accounting Standards Update 2016-09,No. 2016-02, ImprovementsLeases (ASU 2016-02). ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to Employee Share-Based Payment Accounting (“ASU 2016-09”), which amends Accounting Standards Codification Topic 718, Compensation – Stock Compensation. ASU 2016-09a contract (i.e. lessees and lessors). The new standard requires lessees to classify leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an attempt to simplify several aspectseffective interest method or on a straight-line basis over the term of the accountinglease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for stock-based payment transactions, including the income tax consequences, classificationall leases with a term of awards as either equitygreater than 12 months regardless of their classification. Leases with a term of 12 months or liabilities, and classification on the statement of cash flows.less will be accounted for similar to prior guidance for operating leases. We adopted ASU 2016-092016-02 effective January 1, 2017;2019; such adoption had no material impact on our financial statements.statements, given that the noncancelable term of our current lease is less than 12 months (see Note 8).

In May 2017, the FASB issued Accounting Standards Update 2017-09, Scope of Modification Accounting (“ASU 2017-09”), which amends Accounting Standards Codification Topic 718, Compensation – Stock Compensation. ASU 2017-09 is an attempt to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. ASU 2017-09 is effective for the Company beginning January 1, 2018. We are currently evaluating the impact of the adoption of ASU 2017-09 on our financial statements.

In July 2017, the FASB issued Accounting Standards Update 2017-11, (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”), which amends Accounting Standards Codification Topic 260, Earnings Per Share, Topic 480, Distinguishing Liabilities from Equity, and Topic 815, Derivatives and Hedging. ASU 2017-11 changes the classification of certain equity-linked financial instruments (or embedded features) with down round features, and clarifies existing disclosure requirements for equity-classified instruments. ASU 2017-11 is effective for the Company beginning January 1, 2019. We are currently evaluating the impact of the adoption of ASU 2017-11 on our financial statements.

ThereThere have been no other recent accounting pronouncements or changes in accounting pronouncements during the ninethree months ended September 30, 2017,March 31, 2019, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016,2018, which we expect to have a material impact on our financial statements.

Basic net loss per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of common shares and potentiallypotentially dilutive common share equivalents outstanding during the period. Potentially dilutive common share equivalents consist of convertible preferred stock, stock options and stock purchase warrants. Common share equivalents which potentially could dilute basic earnings per share in the future, and which were excluded from the computation of diluted loss per share, as the effect would be anti-dilutive, totaled approximately 277.5 million589,000 and 73.1 million446,000 shares at September 30, 2017March 31, 2019 and 2016,2018, respectively.

Property and equipment as shown on the accompanying Condensed Consolidated Balance Sheets is composed of thethe following as of September 30, 2017March 31, 2019 and December 31, 2016:2018:

Accrued expenses as shown on the accompanying Condensed Consolidated Balance Sheets is composed of the following as of September 30, 2017March 31, 2019 and December 31, 2016:2018:

8.     Commitments

Lease Agreement

We lease approximately 8,4008,400 square feet of office and laboratory space pursuant to an operating lease which expires on December 31, 2019, with annual extension options through December 31, 2022. Rent expense for the for the three-month periods ended March 31, 2019 and 2018 with an additional 12-month renewal option. As of September 30, 2017, our futurewas $40,316 and $39,136, respectively. Future minimum lease payments total $194,543, $37,998$120,949 for the remainder of which will be payable during 2017 and $156,545 in 2018.2019. Our current intention is to exercise our option to extend the lease at least for the subsequent one-year renewal period, subject to our landlord’s right to cancel the extension period 90 days prior to its commencement.

Other Commitments

In the normal course of business, we may enter into various firm purchase commitments related to production and testing of our vaccine, products, conduct of our clinical trials,research studies, and other research-related activities. As of September 30, 2017, we hadMarch 31, 2019, there are approximately $79,000$487,000 of unrecorded outstanding purchase commitments to our vendors and subcontractors, all of which we expect will be paid during 2017.due in 2019. We expect this entire amount to be reimbursable to us pursuant to currently outstandingexisting government grants (See Note 10).grants.

Government Grants and Contracts

We receive payments from government entities under our grants and contracts withfrom the National Institute of Allergy and Infectious Diseases (NIAID) and from the U.S. Department of Defense in support of certain of our vaccine research and development efforts. We record revenue associated with government grants and contracts as the reimbursable costs are incurred. During the three-month and nine-month periods ended September 30, 2017,March 31, 2019 and 2018, we recorded $247,994$354,319 and $800,866,$216,299, respectively, of revenues associated with these grants and contracts, as compared to $440,106 and $653,986, respectively, for the comparable periods of 2016.grants. As of September 30, 2017,March 31, 2019, there is an aggregate of $744,769$2,525,419 in approved grant and contract funds available for use.use during 2019 and 2020.

During the three-month periods ended March 31, 2019 and 2018, we recorded $9,913 and $5,000, respectively, of revenues associated with research collaboration agreements with several third parties.

Collaboration Revenue

In March 2017, we entered into a clinical trial collaboration agreement with American Gene Technologies International, Inc. (“AGT”) whereby AGT intends to conduct a phase 1 human clinical trial investigating our combined technologies as a functional cure for HIV infection. In connection with the agreement, during the second quarter of 2017 AGT paid to us a non-refundable fee of $95,000, which we recorded as collaboration revenue during the nine-month period ended September 30, 2017.

During October 2017, we issued 8,000,000 shares of our common stock pursuant to the conversion of 120 shares of our Series C Preferred Stock. During October and November 2017 we issued 5,000,000 shares of our common stock pursuant to the exercise of stock purchase warrants for net proceeds of $75,000.

FORWARD LOOKING STATEMENTS

In addition to historical information, the informationinformation included in this Form 10-Q contains forward-looking statements. Forward-looking statements involve numerous risks and uncertainties, including but not limited to the risk factors set forth under the heading “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2016,2018, and should not be relied upon as predictions of future events. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as ‘‘believes,’’ ‘‘expects,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘seeks,’’ ‘‘approximately,” ‘‘intends,’’ ‘‘plans,’’ ‘‘pro forma,’’ ‘‘estimates,’’ or ‘‘anticipates’’ or other variations thereof or comparable terminology, or by discussions of strategy, plans, or intentions. Such forward-looking statements are necessarily dependent on assumptions, data, or methods that may be incorrect or imprecise and may be incapable of being realized. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

Readers are cautioned not to place undue reliance on forward-looking statements, which reflect our management’smanagement’s analysis only. We assume no obligation to update forward-looking statements.

Overview

GeoVax is a clinical-stage biotechnology company developing human vaccines against infectious diseases and cancer using a novel patented Modified Vaccinia Ankara-Virus Like Particle (MVA-VLP) vector vaccine platform. In this platform, MVA, a large virus capable of carrying several vaccine antigens, expresses highly effectiveproteins that assemble into VLP immunogens in the person being vaccinated. The platform elicitsGeoVax MVA-VLP derived vaccines elicit durable immune responses in the host similar to a live-attenuated virus, while providing the safety characteristics of a replication-defective vector.

Our current development programs are focused on preventive vaccines against HIV, Zika Virus, hemorrhagichemorrhagic fever viruses (Ebola, Sudan, Marburg, and Lassa), and malaria, as well as therapeutic vaccines for chronic Hepatitis B infections and cancers. AllOur most advanced vaccine program is focused on the clade B subtype of our potential products areHIV prevalent in preclinical researchthe larger commercial markets of the Americas, Western Europe, Japan and development phases, with the exception of our preventive HIV vaccine, whichAustralia; this program is currently inundergoing human clinical trials.

Our corporate strategy is to advance and protectimprove the health of patients worldwide by advancing our patented vaccine platform, and useusing its unique capabilities to design and develop an array of products.products addressing unmet medical needs in the areas of infectious diseases and oncology. We aimintend to advance products through to human clinical testing, and to seek partnership or licensing arrangements for commercialization. We will also leverage third party resources through government, academic and corporate research collaborations and partnerships for preclinical and clinical testing. Our current collaborators include National Institute of Allergy and Infectious Diseases (NIAID), HIV Vaccines Trial Network (HVTN), Centers for Disease Control and Prevention (CDC), United States Army Research Institute of Infectious Disease (USAMRIID), University of Pittsburgh, Georgia State University Research Foundation, University of Maryland, Peking University, Burnet Institute, American Gene Technologies International, Inc., and ViaMune, Inc.

We have not generated any revenues from the sale of any of oursuch products, and we do not expect to generate any such revenues for at least the next several years. Our product candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing. All product candidates that we advance to clinical testing will require regulatory approval prior to commercial use and will require significant costs for commercialization. We may not be successful in our research and development efforts, and we may never generate sufficient product revenue to be profitable.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on the accompanying unaudited condensedour consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates and adjusts the estimates as necessary. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant

For a description of critical accounting policies are summarizedthat affect our significant judgments and estimates used in the preparation of our financial statements, refer to Item 7 in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 to our consolidated financial statements includedConsolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016. We believe the following2018. There have been no significant changes to our critical accounting policies affectfrom those disclosed in our more significant judgments and estimates used in the preparation of our financial statements:2018 Annual Report.

Revenue RecognitionRecent Accounting Pronouncements

We recognize revenueInformation regarding recent accounting pronouncements is contained in accordance with the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, as amended by Staff Accounting Bulletin No. 104, Revenue Recognition, (“SAB 104”). SAB 104 provides guidance in applying U.S. generally accepted accounting principles (“GAAP”) to revenue recognition issues, and specifically addresses revenue recognition for upfront, nonrefundable fees received in connection with research collaboration agreements. Historically, our revenue has consisted primarily of grant and contract funding received from NIAID. Revenue from these arrangements is approximately equalNote 3 to the costs incurred and is recorded as income as the related costs are incurred.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which creates a new Topic, Accounting Standards Codification Topic 606. The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that an entity should recognize revenue when it transfers promised goods or services to customerscondensed consolidated financial statements, included in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for the Company beginning in 2018 and allows for either full retrospective adoption or modified retrospective adoption. We are currently evaluating the impact of the adoption of ASU 2014-09 on our financial statements.

Stock-Based Compensation

We account for stock-based transactions in which the Company receives services from employees, directors or others in exchange for equity instruments based on the fair value of the award at the grant date. Compensation cost for awards of common stock is estimated based on the price of the underlying common stock on the date of issuance. Compensation cost for stock options or warrants is estimated at the grant date based on each instrument’s fair value as calculated by the Black-Scholes option pricing model. We recognize stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period for the award.this Quarterly Report.

Liquidity and Capital Resources

Historically, our primaryOur principal uses of cash have beenare to finance our researchresearch and development activities. Since inception, we have funded these activities primarily from government grants and clinical trial assistance, and from sales of our equity securities. At September 30, 2017,March 31, 2019, we had cash and cash equivalents of $343,826$175,985 and total assets of $495,635,$472,644, as compared to $454,030$259,701 and $610,217,$642,064, respectively, at December 31, 2016.2018. At September 30, 2017,March 31, 2019, we had a working capital deficit of $285,401,$1,196,467, compared to positive working capital of $174,532$1,005,127 at December 31, 2016.2018. Our current liabilities at September 30, 2017March 31, 2019 and December 31, 2018 include $598,411$1,360,337 and $1,220,179, respectively of accrued management salaries and director fees, payment of which is continuing to be deferred.still being deferred as discussed further below.

Net cash used in operating activities was $1,240,021$317,361 and $1,577,678$381,573 for the nine-monththree-month periods ended September 30, 2017March 31, 2019 and 2016,2018, respectively. Generally, the variances between periods are due to fluctuations in our net losses, offset by non-cash charges such as depreciation and stock-based and deferred compensation expense, and by net changes in our assets and liabilities. Our net losses generally fluctuate based on expenditures for our research activities, partially offset by government grant revenues. As of September 30, 2017,March 31, 2019, there is $744,769$2,525,419 in approved grant funds available for use during the remainder of 20172019 and through June 30, 2018.2020. Of this amount, we expect that approximately $1,247,273 will be used by us to reimburse third parties who will provide services covered by these grants. See the table with further details under “Results of Operations – Grant and Collaboration Revenues” below.below for additional details concerning our government grants.

NIAIDMembers of our executive management team and our board of directors have deferred receipt of portions of their salaries and fees in order to help conserve the Company’s cash resources. As of March 31, 2019, the accumulated deferrals totaled $1,360,337. We expect the ongoing deferrals of approximately $34,000 per month for the management salaries and approximately $38,000 per quarter for the board of director fees to continue until such time as a significant financing event (as determined by the board of directors) is consummated. The method selected for addressing these accumulated deferrals could have an adverse effect on our liquidity.

The National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), has funded the costs of conducting all of our human clinical trials (Phase 1 and Phase 2a) to date for our preventive HIV vaccines, with GeoVax incurring certain costs associated with manufacturing the clinical vaccine supplies and other study support. NIAID iswill also currently fundingfund the cost of an ongoinga planned Phase 1 trial (HVTN 114), which is investigating the effect of adding a “protein boost” component132) to our vaccine. Concurrently, a preclinical study in non-human primates (funded by a NIAID grant) is evaluating two additional proteins specifically chosen as boosting agents for GOVX-B11, and planning is underway for a Phase 1 trial tofurther evaluate the safety and immunogenicity of these proteinsadding “protein boost” components to our vaccine, GOVX-B11. We expect HVTN 132 to commence patient enrollment in humans. Based onmid-2019. Additionally, we are party to a collaboration with American Gene Technologies International, Inc. (AGT) whereby AGT intends to conduct a Phase 1 human clinical trial with our combined technologies, with the results fromultimate goal of developing a functional cure for HIV infection; we expect that AGT will begin the phase 1 trial during the second half of 2019. We are also currently in discussions with two other consortiums for the use of our vaccine in similar efforts toward developing a cure for HIV infection; we expect one or both of these studies we expect NIAID may then be ready to support a large phase 2b efficacy trial. In July 2016, NIAID awarded us a contract of up to $7.8 million for the production of the DNA vaccine component of GOVX-B11, which is intended for usebegin in advanced clinical trials.late 2019 or early 2020.

Net cash used in investing activities was $4,350$4,272 and $-0- for the nine-monththree-month periods ended September 30, 2017March 31, 2019 and 2016,2018, respectively. Our investing activities have consisted predominantly of capital expenditures.

Net cash provided by financing activities was $1,134,167 $237,917 and $1,028,426$640,000 for the nine-monththree-month periods ended September 30, 2017March 31, 2019 and 2016,2018, respectively. DuringNet cash provided by financing activities during the nine-month2018 period ended September 30, 2017,relates to the sale by us of shares of our Series E convertible preferred stock ($590,000) and our issuance of a five-year Senior Promissory Note (the “GRA Note”) to the Georgia Research Alliance, Inc. for $50,000. The GRA Note bears an annual interest rate of 5%, payable monthly, with principal repayments beginning in the second year. Net cash provided by financing activities during the 2019 period relates to the sale by us of shares of our Series G convertible preferred stock for net proceeds of $240,000 (see discussion below) and $2,083 in repayments toward the GRA Note.

On February 25, 2019, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the purchasers identified therein (the “Purchasers”) providing for sale to the Purchasers of an aggregate of up to 1,000 shares of our Series G Convertible Preferred Stock (“Series G Preferred Stock”) and related warrants for gross proceeds of up to $1.0 million, to be funded at up to three different closings. At the first closing, which occurred on February 26, 2019, we issued 500 shares of Series G Preferred Stock in exchange for the payment by the Purchasers of $250,000 in the aggregate ($240,000 after deducting certain expenses of the Purchasers), plus the cancellation of Term Notes held by the Purchasers in the amount of $250,000. At the first closing we also issued the Purchasers Series I Warrants to purchase an aggregate of 33,334 shares of our common stock were exercisedstock. At the second closing, which occurred on April 26, 2019, we issued an additional 250 shares of Series G Preferred Stock in exchange for the payment by the Purchasers of $250,000 in the aggregate. At the second closing we also issued the Purchasers additional Series I Warrants to purchase an aggregate net proceeds of $154,167. During May 2017, we sold33,334 shares of our common stock. Within 110 to120 days after the first closing, we may exercise the right to sell the Purchasers an aggregate of up to $250,000 of Series D convertible preferred stockG Preferred Stock and related warrants at the third closing. At the third closing, assuming the sale of all of the Series G Preferred Stock that may be sold at that time, the Purchasers will receive aggregate additional Series I Warrants to certain institutional investors for net proceedspurchase up to 33,334 shares of $980,000.our common stock.

As of September 30, 2017,March 31, 2019, we had an accumulated deficit of $37.4 million. Weapproximately $41.2 million, and we expect for the foreseeable future we will continue to operate at a loss. The amount of the accumulated deficit will continue to increase, as it will be expensive to continue our research and development efforts. We will continue to requirehave received a “going concern” opinion from our independent registered public accountants reflecting substantial fundsdoubt about our ability to continue our activities and cannot predict the outcome of our efforts.as a going concern. We believe that our existing cash resources, combined with funding from existing NIHgovernment grants and clinical trial support, and committed sources of equity capital will be sufficient to fund our planned operations into the firstthird quarter of 2018.2019. We will require additional funds to continue our planned operations beyond that date. We are currently seeking sources of capital through additional government grant programs and clinical trial support, and we may alsoplan to conduct additional offerings of our equity securities. However, additionalAdditional funding may not be available on favorable terms or at all and if we fail to obtain additional capital when needed, we may be required to delay, scale back, or eliminate some or all of our research and development programs as well as reduce our general and administrative expenses.

On April 15, 2019, our stockholders approved, and on April 30, 2019 we implemented, a one-for-five hundred reverse split of our common stock, which is intended to not only improve the marketability of our stock, but also to provide additional shares of authorized common stock available to meet our equity financing needs. The reverse stock split is also intended to help us meet the minimum price requirements for listing our common stock on the Nasdaq Capital Market, should that be a condition to completing any of the financing options we may contemplate. The reverse stock split ratio was chosen in part to support a higher stock price per share than the lower ratios in the range approved by our stockholders. There can be no assurance the necessary minimum price requirements will be met.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that are likely or reasonably likely to have a material effect on our financial condition or results of operations.

Contractual Obligations

The table below summarizes our contractual obligations as of March 31, 2019, aggregated by type (in thousands). Our contractual obligations represent future cash commitments and liabilities under agreements with third parties and exclude contingent liabilities for which we cannot reasonably predict future payment. Additionally, the expected timing of payment of the obligations presented below is estimated based on current information. Timing of payments and actual amounts paid may be different depending on the timing of receipt of goods or services or changes to agreed-upon terms or amounts for some obligations.

As of September 30, 2017,March 31, 2019, except as disclosed in the table above, we had noncancelable lease obligations andno other material firm purchase obligations totaling approximately $274,000, as compared to approximately $457,000 at December 31, 2016. Approximately $79,000 of the purchaseor commitments at September 30, 2017 relate to subcontracts associated with our government grants, which we expect will be fully reimbursed to us pursuant to those grants. We havefor capital expenditures and no committed lines of credit and noor other committed funding or long-term debt.debt, with the exception of the note payable to GRA ($47,917 remaining principal balance at March 31, 2019). We have employment agreements with our senior management team,executive officers, each of which may be terminated with 30 daysno more than 90 days’ advance written notice. TherePursuant to existing technology license agreements, we may be required to make potential future milestone and royalty payments which are contingent upon the occurrence of future events. Such events include development milestones, regulatory approvals and product sales. Because the achievement of these milestones is currently neither probable nor reasonably estimable, the contingent payments have not been no other material changes toincluded in the table presentedabove or recorded in our Annual Report on Form 10-K for the year ended December 31, 2016.financial statements.

Results of Operations

Net Loss

We recorded a net loss of $588,757$701,454 for the three monthsthree-month period ended September 30, 2017,March 31, 2019, as compared to $464,200$621,813 for the three monthsthree-month period ended September 30, 2016. For the nine months ended September 30, 2017, we recorded a net loss of $1,653,979, as compared to $2,336,314 for the nine months ended September 30, 2016.March 31, 2018. Our net losses will typically fluctuate due to the timing of activities and related costs associated with our vaccine research and development activities and our general and administrative costs, as described in more detail below.

Grantand CollaborationRevenues

During the three-month and nine-month periodsthree-month period ended September 30, 2017,March 31, 2019, we recorded grant and collaboration revenues of $247,994 and $895,866, respectively,$364,232, as compared to $440,106 and $653,986, respectively,$221,299 during the comparable periodsperiod of 2016.2018.

Grant Revenues – Our grantgrant revenues relate to grants and contracts from NIAIDagencies of the U.S. government in support of our vaccine development activities. We record revenue associated with these grants as the related costs and expenses are incurred. The difference in our grant revenues from period to period is dependent upon our expenditures for activities supported by the grants and fluctuates based on the timing of the expenditures. Additional detail concerning our grant revenues and the remaining funds available for use as of September 30, 2017March 31, 2019 is presented in the table below.

Collaboration Revenues – In March 2017, we entered into a collaboration with American Gene Technologies International, Inc. (AGT) whereby AGT intendsaddition to conduct a Phase 1 human clinical trial with our combined technologies, with the goal of developing a functional cure for HIV infection. The cost of the clinical trial will be borne by AGT. The primary objectives of the trial will be to assess the safety and efficacy of the therapy, with secondary objectives to assess the immune responses as a measure of efficacy. In exchange for use of our vaccine product in the clinical trial, AGT paid us a fee of $95,000 which we receivedgrant revenues above, during the second quarterthree-months ended March 31, 2019 and 2018, we recorded $9,913 and $5,000 of 2017revenue associated with several research collaborations with third parties. These amounts primarily represent amounts paid to us by the other parties for materials and which is recorded as revenue in the nine-month period ended September 30, 2017. No commercial rights or licenses have yet been granted to AGT.other costs associated with joint studies.

Research and Development Expenses

During the three-month and nine-month periods ended September 30, 2017, we recordedOur research and development expense of $498,200expenses were $555,718 and $1,568,093, respectively, as compared to $683,939$486,994 for the three-month periods ended March 31, 2019 and $1,519,519, respectively, during the comparable periods of 2016.2018, respectively. Research and development expense for the three-month and nine-monththese periods of 2017 includes stock-based compensation expense of $6,513$11,319 and $19,775$10,951, respectively as compared to $5,894 and $17,681, respectively, for the comparable periods of 2016 (see discussion under “Stock-Based Compensation Expense” below).

Our research and development expenses can fluctuate considerably on a period-to-period basis, depending on our need for vaccine manufacturing by third parties, the timing of expenditures related to our government grants, from NIAID, the timing of costs associated with any clinical trials being funding directly by us, and other factors. The overall variance in researchResearch and development expenseexpenses increased by $68,724, or 14%, from the 2016 periods2018 period to 2017 is2019 primarily attributabledue to the timing and amount of costs associated with research subcontracts supported byexpenditures related to our grants from NIAID.government grants. Our research and development costs do not include costs incurred by the HVTNHIV Vaccine Trials Network (HVTN) in conducting clinical trials of our preventive HIV vaccines; those costs are funded directly to the HVTN by NIAID.

We do not disclose our research and development expenses by project, since our employees’ time is spread across multiple programs and our laboratory facility is used for multiple vaccine candidates. We track the direct cost of research and development expenses related to government grant revenue by the percentage of assigned employees’ time spent on each grant and other direct costs associated with each grant. Indirect costs associated with grants are not tracked separately but are applied based on a contracted overhead rate negotiated with the NIH. Therefore, the recorded revenues associated with government grants approximates the costs incurred. We believe that additional project-by-project information would not form a reasonable basis for disclosure to our investors.

We do not provide forward-looking estimates of costs and time to complete our research programs due to the many uncertainties associated with vaccine development. Due to these uncertainties, our future expenditures are likely to be highly volatile in future periods depending on the outcomes of the trials and studies. As we obtain data from pre-clinical studies and clinical trials, we may elect to discontinue or delay vaccine development programs to focus our resources on more promising vaccine candidates. Completion of preclinical studies and human clinical trials may take several years or more, but the length of time can vary substantially depending upon several factors. The duration and the cost of future clinical trials may vary significantly over the life of the project because of differences arising during development of the human clinical trial protocols, including the number of patients that ultimately participate in the clinical trial; the duration of patient follow-up that seems appropriate in view of the results; the number of clinical sites included in the clinical trials; and the length of time required to enroll suitable patient subjects.

General and Administrative Expenses

During the three-month and nine-month periods ended September 30, 2017, we recordedOur general and administrative expense of $340,143expenses were $510,064 and $985,001, respectively, as compared to $220,707$357,228 for the three-month periods ended March 31, 2019 and $1,472,030, respectively, during the comparable periods of 2016.2018, respectively. General and administrative costs include officers’ salaries, legal and accounting costs, patent costs, and other general corporate expenses. General and administrative expense for the three-month and nine-month periods of 2017 includeincludes stock-based compensation expense of $7,920$141,905 and $23,760, respectively; as compared to $22,822 and $508,206, respectively,$41,598 for the comparable2019 and 2018 periods, of 2016respectively (see discussion under “Stock-Based Compensation Expense” below). Excluding stock-based compensation expense, general and administrative expenses were $332,223$368,159 and $961,241 during$315,630 for the three-month and nine-month periods ended September 30, 2017, respectively, as compared to $197,885March 31, 2019 and $963,824, respectively during the comparable periods of 2016.2018, respectively. The overall varianceincrease in general and administrative expense from the 2016 periods2018 to 20172019 is partially attributable in part to the timing of patent costs. Also, during the three months ended September 30, 2017, we incurred additional costs associated with the conduct of a special meeting of stockholders, which contributed to the increase as compared to the same period of 2016.investment banking arrangements, investor relations activities, and travel. We expect that our general and administrative costs may increase in the future in support of expanded research and development activities and other general corporate activities.

Stock-Based Compensation Expense

For the three-month and nine-month periods ended September 30, 2017March 31, 2019 and 2016,2018, the components of stock-based compensation expense were as follows:

In general, stock-based compensation expense is allocated to research and development expense or general and administrative expense according to the classification of cash compensation paid to the employee, consultant or director to whom the stock compensation was granted. For the three month and nine monththree-month periods ended September 30, 2017March 31, 2019 and 2016,2018, stock-based compensation expense was allocated as follows:

Other IncomIncomee (Expense)

Interest income for the three-month and nine-monththree-month periods ended September 30, 2017March 31, 2019 and 2018 was $1,592$1,224 and $3,249, respectively, as compared to $340 and $1,249, respectively, for comparable periods of 2016.$1,318, respectively. The variances between periods are primarily attributable to cash available for investment and interest rate fluctuations. Interest expense for the three-month periods ended March 31, 2019 and 2018 was $1,128 and $208, respectively, related to the GRA Note and financing costs associated with insurance premiums.

Not applicable.

Evaluation of disclosure controls and procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that the information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (Exchange Act), is (1) recorded, processed, summarized,, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to management, including the Chief Executive Officer and Principal Financial and Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.

Our management has carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and our Principal Financial and Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in internal control over financial reporting

There was no change in our internal control over financial reporting that occurred during the three months ended September 30, 2017March 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

PART II -- OTHER INFORMATION

None.None.

For information regarding factors that could affect our results of operations, financial condition or liquidity, see the risk factors discussed under “Risk“Risk Factors” in Item 1A of our most recent Annual Report on Form 10-K. See also “Forward-Looking Statements,” included in Item 2 of this Quarterly Report on Form 10-Q. There have been no material changes from the risk factors previously disclosed in our most recent Annual Report on Form 10-K.

None not previously disclosed on Form 8-K.

None.None.

Not applicable

During the period covered by this report, there was no information required to be disclosed by us in a Current Report on Form 8-K that was not so reported, nor were there any material changes to the procedures by which our security holders may recommend nominees to our board of directors.

The exhibits filed with this report are set forth on the exhibit index following the signature page and are incorporated by reference in their entirety into this item.item.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

EXHIBIT INDEX

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