Part I -- FINANCIAL INFORMATION

Item 1         Financial Statements

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 CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

See accompanying notes to consolidated financial statements.

Supplemental disclosure of non-cash financing activities:

During the threesix months ended March 31,June 30, 2021, we issued 145,866 shares of common stock were issued upon the cashless exercise of 188,668 stock purchase warrants.

See accompanying notes to condensed consolidated financial statements.warrants, and $172,056 of principal and accrued interest was extinguished upon loan forgiveness by the lender.

GEOVAX LABS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,June 30, 2022

(unaudited)

1.         DescriptionNature of Business

GeoVax Labs, Inc. (“GeoVax” or, headquartered in the “Company”),Atlanta, Georgia metropolitan area, is a clinical-stage biotechnology company incorporated under the laws of the State of Delaware. GeoVax Labs, Inc. and its wholly owned subsidiary, GeoVax, Inc., a Georgia corporation, are collectively referred to as “GeoVax” or the “Company”.

The Company is focused on developing immunotherapies and vaccines against infectious diseases and cancers using novel vector vaccine platforms. GeoVax’s product pipeline includes ongoing human clinical trials in COVID-19 and head and neck cancer. Additional research and development programs include preventive vaccines against Zika Virus, hemorrhagic fever viruses (Ebola, Sudan, Marburg, and Lassa) and malaria, as well as immunotherapies for solid tumors.

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

2.         BasisSummary of PresentationSignificant Accounting Policies

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, 2021 those accounting policies that we consider significant in determining our results of operations and financial position. During the six months ended June 30, 2022, there have been no material changes to, or in the application of, the accounting policies previously identified and described in the Form 10-K.

Basis of Presentation –The accompanying condensed consolidated financial statements at March 31, 2022 include the accounts of GeoVax Labs, Inc. and for the three-month periods ended March 31, 2022 and 2021GeoVax, Inc. All intercompany transactions have been eliminated in consolidation. The financial statements are unaudited, but include all adjustments, consisting of normal recurring entries, which we believe to be necessary for a fair presentation of the dates andinterim 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, 2021. 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.

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 businessbusiness. As of the date these financial statements are issued, the Company expects its existing cash and cash equivalents to be sufficient to fund its operations for at least the next twelve-month period following months. Since inception, the issue dateCompany’s activities have consisted primarily of these consolidated financial statements. We are devoting substantially all of our present efforts toperforming research and development of our vaccineto advance its technologies. The Company expects to continue to generate operating losses in the foreseeable future and immunotherapy candidates. We expectwill require additional funding to incur future net losses and require substantial funds as we continue ourits research and development activities. Our transition to profitability will be dependent upon, among other things, the successful development and commercialization of our product candidates. We may never achieve profitability or positive cash flows, and unless and until we do, we will continue to need to raise additional funding. We have funded our activities to date from sales of our equity securities, government grants and clinical trial assistance, and corporate and academic collaborations. We intend to fund our future operations through additional private and/or public offerings of debt or equity securities. In addition, weThe Company may seek additional capitalfunds through government grants, arrangements withfurther equity financings, debt financings, collaborations, strategic partners,alliances and marketing, distribution or from other sources. There can be no assurance that we will be able to raise additional funds or achieve or sustain profitability or positive cash flows from operations. licensing arrangements.

3.Significant Accounting Policies and Recent Accounting Pronouncements

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, 2021 those accounting policies that we consider significant in determining our results of operations and financial position. – During the threesix months ended March 31,June 30, 2022, there have been no material changes to, or in the application of, the accounting policies previously identified and described in the Form 10-K, and there have been no other recentnew accounting pronouncements or changes in accounting pronouncements which we expect to have a material impact on our financial statements.

4.3.         Basic and Diluted Loss Per Common ShareBalance Sheet Components

Basic and diluted loss per common share are computed based onPrepaid Expenses – Prepaid expenses consist of the weighted average number of common shares outstanding. The Company’s potentially dilutive securities, which include stock options and stock purchase warrants, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive. The potentially dilutive securities excluded from the computation of diluted net loss per share totaled 6,846,415 and 3,395,635 shares at March 31, 2022 and 2021, respectively.following:

5.Property and Equipment

– Property and equipment as shown on the accompanying Condensed Consolidated Balance Sheets is composedconsist of the following asfollowing:

Other Assets – Other assets consist of the following:

Accrued Expenses – Accrued expenses consist of the following:

Other Liabilities – Other liabilities were $2,000,000 at March 31,June 30, 2022 and December 31, 2021:2021 and consist of the noncurrent portion of accrued technology license fees.

6.Accrued Expenses

Accrued expenses as shown on the accompanying Condensed Consolidated Balance Sheets are composed of the following as of March 31, 2022 and December 31, 2021:

7.4.         Commitments

Operating Lease

–We lease approximately 8,400 square feet of office and laboratory space pursuant to an operating lease which expires on December 31, 2022. Rent expense for the three-month and six-month periods ended March 31,June 30, 2022 and 2021was $44,089 and $88,178, respectively, as compared to $42,803 respectively.and $85,607, respectively, for the same periods of 2021. Future minimum lease payments total $132,267$88,178 in 2022, although the lease may be terminated at any time by either party with ninety days written notice.

License Agreements

–We have entered into license agreements with City of Hope, PNP Therapeutics, Inc., University of Alabama at Birmingham, Southern Research Institute, Emory University, and with the U.S. Department of Health and Human Services (HHS), as represented by National Institute of Allergy and Infectious Diseases (NIAID), an institute of the National Institutes of Health (NIH), for various technologies and patent rights associated with our product development activities. These agreements may contain provisions for upfront payments, milestone fees due upon the achievement of selected development and regulatory events, minimum annual royalties or other fees, and royalties based on future net sales. Aggregate unrecorded future minimum payments under these agreements (excluding milestone and royalty payments due upon contingent future events) are approximately $149,000$124,200 in 2022, $128,000$127,500 in 2023, $128,000$127,500 in 2024, $28,000$27,500 in 2025 and $28,000$27,500 in 2026.

Other Commitments

–In the normal course of business, we enter into various firm purchase commitments and other contractual obligations related to production and testing of our vaccine,product candidates, conduct of clinical trials and preclinical research studies, and other activities. As of March 31,June 30, 2022, there are approximately $2.2 million$1,082,000 of unrecorded outstandingnoncancelable purchase commitments to our vendors and subcontractors, allthe majority of which we expect will be due in 2022.

8.5.         Stockholders’ Equity

January 2022 Private Placement – On January 19, 2022, we closed a private placement of 707,484 shares of common stock, a pre-funded warrant to purchase 2,360,000 shares of common stock for a nominal exercise price per share (the “Pre-Funded“Jan 2022 Pre-Funded Warrant”), and a warrant to purchase up to 3,067,484 shares of common stock at an exercise price of $3.26 per share (the “Common“Jan 2022 Common Warrant”). Net proceeds after deducting placement agent commissions and other offering expenses were approximately $9.2 million. During March 2022, the Jan 2022 Pre-Funded Warrant was exercised in full, for nominal net proceeds.full. The Jan 2022 Common Warrant is currently exercisable and will expire on February 10, 2027.

May 2022 Private Placement – On May 27, 2022, we closed a private placement of 1,050,000 shares of common stock, pre-funded warrants to purchase an aggregate of 11,071,214 shares of common stock for a nominal exercise price per share (the “May 2022 Pre-Funded Warrants”), and preferred investment options to purchase up to an aggregate of 12,121,214 shares of common stock at an exercise price of $1.65 per share (the “May 2022 Preferred Investment Options”). Net proceeds after deducting placement agent commissions and other offering expenses were approximately $18.5 million.

The May 2022 Pre-Funded Warrants were exercised as to 1,980,304 shares concurrent with the closing and during June 2022 an aggregate of 3,690,910 additional shares were exercised, leaving 5,400,000 of the May 2022 Pre-Funded Warrants outstanding at June 30, 2022. The remaining May 2022 Pre-Funded Warrants were fully exercised during July 2022 (see Note 9).

As of June 30, 2022, the May 2022 Preferred Investment Options are currently exercisable (subject to certain common stock ownership restrictions contained in the warrant agreements) and expire as to 3,030,304 shares on May 27, 2027 and as to 9,090,910 shares on May 29, 2028. During August 2022, 3,030,304 of the May 2022 Preferred Investment Options were exercised for cash (see Note 9).

Other Common Stock Transactions – During the six months ended June 30, 2022, we issued 68,500 shares of restricted common stock pursuant to a consulting agreement.

Stock Options–We have a stock-based incentive plan (the “2020 Plan”) pursuant to which our Board of Directors may grant stock options and other stock-based awards to our employees, directors and consultants. A total of 1,500,000 shares of our common stock are reserved for issuance pursuant to the 2020 Plan. During the threesix months ended March 31,June 30, 2022, there were 0 stock option transactions related to the 2020 Plan. As of March 31,June 30, 2022, there are 962,300 stock options outstanding, with a weighted-average exercise price of $3.18 per share and a weighted-average remaining term of 9.18.8 years.

Stock Purchase Warrants – AsThe table below presents summary information about our warrants outstanding as of March 31, 2022, June 30, 2022.there are 5,884,115 stock purchase warrants outstanding with a weighted-average exercise price of $4.23 per share and a weighted-average remaining term of 4.2 years.

9.6.         Stock-Based Compensation Expense

Stock-based compensation expense related to stock option grants was $190,191 and $56,190 during the three-month periods ended March 31, 2022 and 2021, respectively. Stock-based compensation expense related to stock options is recognized on a straight-line basis over the requisite service period for the award and is allocated to research and development expense or general and administrative expense based upon the classification of the individual to whom the award is granted. As of MarchJune 31,30, 2022, there is $1,229,953$1,039,762 of unrecognized compensation expense that we expect to recognize over a weighted-average period of 2.11.9 years.

During the three-month periods ended March 31, 2022 and 2021 we recorded stock-based compensation expenseWe also have issued shares of $14,960 and $20,600, respectively, associated withrestricted common stock issued for consultingto consultants and financial advisory services.recognize the related expense over the terms of the related agreements. As of March 31,June 30, 2022, there is $4,987$60,000 recorded as a prepaid expense for these arrangements, which will be recognized as expense during 2022over the term of the related agreement.

10.Income TaxesThe following table summarizes our total stock-based compensation expense:

Because of our historically significant net operating losses, we have not paid income taxes since inception. We maintain deferred tax assets that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. These deferred tax assets are comprised primarily of net operating loss carryforwards and also include amounts relating to nonqualified stock options and research and development credits. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of our future profitability and our ability to utilize the deferred tax assets. Utilization of operating losses and credits will be subject to substantial annual limitations due to ownership change provisions of Section 382 of the Internal Revenue Code. The annual limitation may result in the expiration of net operating losses and credits before utilization.

11.Grant Revenue

We receive payments from government entities under grants from the National Institute of Allergy and Infectious Diseases (NIAID) and from the U.S. Department of Defense in support of our vaccine research and development efforts. We record revenue associated with government grants as the reimbursable costs are incurred. During the three-month periods ended March 31, 2022 and 2021, we recorded $81,526 and $110,417, respectively, of revenue associated with these grants.

7.Net Loss Per Share

Basic and diluted loss per common share are computed based on the weighted average number of common shares outstanding, including the May 2022 Pre-Funded Warrants outstanding at June 30, 2022. The Company’s additional potentially dilutive securities, which include stock options and stock purchase warrants, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive. The securities that could potentially dilute basic earnings per share in the future and that have been excluded from the computation of diluted net loss per share totaled 18,967,629 and 3,395,635 shares at June 30, 2022 and 2021, respectively.

8.Income Taxes

No provision for income taxes was recorded in either of the six-month periods ended June 30, 2022 and 2021. The Company remains in a cumulative loss position with a full valuation allowance recorded against its net deferred income tax assets as of June 30, 2022.

9.Subsequent Events

During July 2022, we issued 75,000 shares of restricted common stock to a consultant and will recognize the related expense of $60,750 over the term of the related agreement.

During July 2022, we issued an aggregate of 5,400,000 shares of common stock upon the exercise of the May 2022 Pre-Funded Warrants. Subsequent to these exercises, NaN of the May 2022 Pre-Funded Warrants remain outstanding.

During August 2022, we issued an aggregate of 3,030,304 shares of common stock upon the partial exercise of the May 2022 Preferred Investment Options, with gross cash proceeds to us of $5,000,000. Subsequent to these exercises, 9,090,910 of the May 2022 Preferred Investment Options remain outstanding.

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

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto and other disclosures included in this Quarterly Report on Form 10-Q (this “Report”), and our audited financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on March 9, 2022.

Forward-Looking Statements

Information included in this Report contains 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 (the “Exchange Act”). Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “will” and similar expressions to identify forward-looking statements. All statements in this Report, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, intentions, expectations and objectives could be forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. We operate in a highly competitive, highly regulated and rapidly changing environment and our business is constantly evolving. Therefore, it is likely that new risks will emerge, and that the nature and elements of existing risks will change, over time. It is not possible for management to predict all such risk factors or changes therein, or to assess either the impact of all such risk factors on our business. We assume no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report.

Overview

GeoVax is a clinical-stage biotechnology company developing immunotherapies and vaccines against infectious diseases and cancers using novel vector vaccine platforms. GeoVax’s product pipeline includes ongoing human clinical trials in COVID-19 and head and neck cancer. Additional research and development programs include preventive vaccines against Zika Virus, hemorrhagic fever viruses (Ebola, Sudan, Marburg, and Lassa) and malaria, as well as immunotherapies for solid tumors.

Our programs are in various stages of development, the most significant of which are summarized below:

Our corporate goal is to advance, protect and exploit our differentiated vaccine/immunotherapy technologies leading to the successful development of preventive and therapeutic vaccines. Our strategy is to advance products through to human clinical testing, potentially seeking 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.

Financial Overview

Revenues

Our grant revenues relate to grants and contracts from agencies 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. We have not generated any revenues from the sale of the products we are developing, and we do not expectproduct sales to generate any such revenues for at least the next several years.date. 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.

Results of Operations

The following table summarizes our results of operations for the three-month periods ended March 31, 2022 and 2021:

Grant Revenues

Our grant revenues relate to grants and contracts from agencies 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 following table summarizes our grant revenues for the three-month periods ended March 31, 2022 and 2021:

Grant revenues decreased by $28,891 (26%) for the three-month period ended March 31, 2022 compared to the three-month period ended March 31, 2021, attributable to the differing mix of active grants as shown in the table above, as well as the timing of expenditures related to such grants. As of March 31, 2022, all approved grant funds have been utilized.

Research and Development Expensesdevelopment expenses

Since our inception, we have focused and we continue to focus significant resources on our research and development activities, including developing our vector platform and analytical testing methods, conducting preclinical studies, developing manufacturing processes, and conducting clinical trials. Research and development costs are expensed as incurred and consist primarily of the following:

We track our external research and development costs on a program-by-program basis. We do not track our internal research and development expenses on a program-by-program basis as they primarily relate to shared costs deployed across multiple projects under development.

Our research and development expenses can fluctuate considerably on a period-to-period basis, depending on the timing of expenditures related to our government grants and other research projects, and other factors.basis. We do not discloseexpect our research and development expenses by project, sinceto increase substantially in the future as we advance our employees’existing and future product candidates into and through clinical trials and pursue regulatory approval. The process of conducting the necessary clinical studies to obtain regulatory approval is costly and time-consuming. Clinical trials generally become larger and more costly to conduct as they advance into later stages.

At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of any product candidates that we develop from our programs. We are also unable to predict when, if ever, material net cash inflows will commence from sales of product candidates we develop, if at all. This is spread across multiple programsdue to the numerous risks and our laboratory facility is used for multipleuncertainties associated with developing product candidates. We track the direct cost

General and administrative expenses

Our general and administrative expenses consist primarily of researchpersonnel costs in our executive, finance and investor relations, business development and administrative functions, including stock-based compensation. Other general and administrative expenses include consulting fees, professional service fees for accounting and legal services, lease expenses related to government grant revenue by the percentage of assigned employees’ time spent on each grantour offices, insurance premiums, intellectual property costs incurred in connection with filing and prosecuting patent applications, depreciation and other direct costs associatedcosts. We expect our general and administrative expenses to continue to increase in the future as we expand our operating activities and prepare for potential commercialization of our current and future product candidates, increase our headcount and investor relations activities and maintain compliance with each grant. Indirect costs associated with grants are not tracked separately but are applied based on a contracted overhead rate negotiated withrequirements of Nasdaq and the granting agency. Therefore, the recorded revenues associated with government grants approximate the costs incurred.

ResearchSecurities and development expenses increased by $727,761 (121%) for the three-month period ended March 31, 2022 versus the 2021 comparable period. Research and development expense for the three-month periods ended March 31, 2022 and 2021 includes stock-based compensation expense of $54,292 and $21,468, respectively, associated with employee stock options, reflecting an increase of $32,824 (see discussion under “Stock-Based Compensation Expense” below). The remaining increase of $694,937 relates primarily to higher personnel costs (including the use of external consultants), costs of manufacturing materials for use in clinical trials, and a generally higher level of activity.Exchange Commission.

General and Administrative Expenses

For the three-month periods ended March 31, 2022, general and administrative expenses increased by $107,314 (10%) versus the 2021 comparable period. General and administrative expense for the three-month periods ended March 31, 2022 and 2021 included stock-based compensation expense of $150,859 and $55,322, respectively, reflecting an increase of $95,537 (see discussion under “Stock-Based Compensation Expense” below).

Stock-Based Compensation Expense

The table below shows the components of stock-based compensation expense for the three-month periods ended March 31, 2022 and 2021.

Our stock option grants to employees generally vest over a three-year period from the date of grant. For members of our Board of Directors the vesting period is one year, effective with grants made during 2021. Stock-based compensation expense is recognized on a straight-line basis over the requisite vesting period for stock option grants or service period for stock awards to consultants. Such expense is allocated to research and development expense or general and administrative expense according to the classification the employee, consultant or director to whom the stock compensation was granted.

Stock option expense increased by $134,001 for the three-month period ended March 31, 2022 versus the 2021 comparable period. The increase is primarily due to the prorated expense associated with the 2021 year-end stock option grants. As of March 31, 2022, there is $1,229,953 of unrecognized expense related to stock options that we expect to recognize over a weighted-average period of 2.1 years.

Other Income (Expense)

Interest income for the three-month periods ended March 31, 2022 and 2021 was $527 and $2,053, respectively. Interest expense for the three-month periods ended March 31, 2022 and 2021 was $-0- and $755, respectively.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with 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.

For a description of critical accounting policies that require significant judgments and estimates during 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 contained in our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes to our critical accounting policies from those disclosed in our 2021 Annual Report.

Recent Accounting Pronouncements–Information regarding recent accounting pronouncements is contained in Note 32 to the condensed consolidated financial statements, included in this Quarterly Report.

Liquidity and Capital ResourcesOff-Balance Sheet Arrangements

From inception through MarchWe 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, other than the operating lease for our office and laboratory space.

Results of Operations

The following tables summarize our results of operations for the three-month and six-month periods ended June 30, 2022 and 2021:

Grant Revenues

The following table summarizes our grant revenues for the three-month and six-month periods ended June 30, 2022 and 2021:

Total grant revenues decreased by $79,708 (100%) for the three-month period ended June 30, 2022 and by $108,599 (57%) for the six-month period ended June 30, 2022, versus the comparable 2021 periods, attributable to the differing mix of active grants as shown in the table above, as well as the timing of expenditures related to such grants. As of June 30, 2022, all grant funds approved for direct use by GeoVax have been utilized.

Research and Development Expenses

For the three-month and six-month periods ending June 30, 2022, research and development expenses increased by $474,342 (57%) and $1,202,103 (84%), respectively, versus the comparable 2021 periods. The overall increase during the 2022 periods relates primarily to higher personnel costs (including the use of external consultants), costs of conducting clinical trials for GEO-CM04S1 and Gedeptin, costs of manufacturing materials for use in our clinical trials, and a generally higher level of activity. Research and development expense for the three-month and six-month periods of 2022 included stock-based compensation expense of $54,293 and $108,585, respectively; as compared to $21,468 and $42,936, respectively, for the comparable 2021 periods.

General and Administrative Expenses

For the three-month and six-month periods ending June 30, 2022, general and administrative expenses increased by $201,812 (28%) and $309,126 (17%), respectively, versus the comparable 2021 periods. The overall increase during the 2022 periods relates primarily to higher personnel costs (including the use of external consultants), patent costs and travel expenses. General and administrative expense for the three-month and six-month periods of 2022 included stock-based compensation expense of $152,885 and $303,744, respectively; as compared to $65,295 and $120,617, respectively, for the comparable periods of 2021.

Other Income (Expense)

Interest income for the three-month and six-month periods ended June 30, 2022 was $789 and $1,316, respectively, as compared to $1,068 and $3,121, respectively, for comparable periods of 2021. The variances between periods are primarily attributable to cash available for investment and interest rate fluctuations.

No interest expense was recorded during the three-month and six-month periods ended June 30, 2022. Interest expense for the three-month and six-month periods ended June 30, 2021 was $531 and $1,286, respectively.

During the three-month and six-month periods ended June 30, 2021, we recorded a $172,056 one-time gain on debt extinguishment associated with the forgiveness of the principal and accrued interest related to our Paycheck Protection Program (PPP) loan.

Liquidity, Capital Resources and Cash Flows

The following tables summarize our liquidity and capital resources as of June 30, 2022 and December 31, 2021, and our cash flows for the six-month periods ended June 30, 2022 and 2021:

Operating Activities – Net cash used in operating activities of $8,166,818 for the six months ended June 30, 2022, was primarily due to our net loss of $4,669,214, as adjusted by non-cash items such as depreciation expense and stock-based compensation expense, and by changes in our working capital accounts. Net cash used in operating activities of $2,879,566 for the six months ended June 30, 2021, was primarily due to our net loss of $2,876,811, also adjusted by non-cash charges such as depreciation and stock-based compensation expense, and by changes in our working capital accounts.

Investing Activities – Net cash used in investing activities was $82,383 and $19,929 for the six-month periods ended June 30, 2022 and 2021, respectively, and relates primarily to purchases of laboratory equipment.

Financing Activities – Net cash provided by financing activities was $27,727,785 for the six-month period ended June 30, 2022, consisting of net proceeds from a private placement of our common stock and warrants as described in Note 5 to the condensed consolidated financial statements, included in this Quarterly Report. Net cash provided by financing activities was $12,554,212 for the six-month period ended June 30, 2021, consisting primarily of (i) net proceeds of $9,408,920 from a public offering of our common stock, (ii) $3,174,156 of net proceeds from the exercise of warrants, and (iii) $27,864 in principal repayments in retirement of a note payable.

Funding Requirements

We have no products approved for commercial sale. We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of and commercialize our product candidates. We do not know when, or if, this will occur. As of June 30, 2022, we have an accumulated net lossesdeficit of approximately $66.8$69 million and we expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. We have funded our operations to date primarily from sales of our equity securities and from government grants and clinical trial assistance.

The following tables summarize our liquidity and capital resources as of March 31, 2022 and December 31, 2021, and our cash flows for the three-month periods ended March 31, 2022 and 2021:

Operating Activities – Net cash used in operating activities of $4,333,240 for the three months ended March 31, 2022, was primarily due to our net loss of $2,427,515, offset by non-cash items such as depreciation expense and stock-based compensation expense, and by changes in our working capital accounts. Net cash used in operating activities of $1,621,027 for the three months ended March 31, 2021, was primarily due to our net loss of $1,562,778, offset by non-cash charges such as depreciation and stock-based compensation expense, and by changes in our working capital accounts.

Investing Activities – Net cash used in investing activities was $62,186 and $-0- for the three-month periods ended March 31, 2022 and 2021, respectively, and relates to purchases of laboratory equipment.

Financing Activities – Net cash provided by financing activities was $9,229,272 for the three-month period ended March 31, 2022, consisting of net proceeds from a private placement of our common stock and warrants. Net cash provided by financing activities was $12,580,013 for the three-month period ended March 31, 2021, consisting of (i) net proceeds of $9,408,920 from a public offering of our common stock, (ii) $3,174,156 of net proceeds from the exercise of warrants, and (iii) $3,063 in principal repayments toward a note payable to the Georgia Research Alliance, Inc. (the “GRA Note”); the GRA Note has now been fully repaid.

Funding Requirements and Sources of Capital

Our primary uses of capital are for personnel costs, costs of conducting clinical trials, manufacturing costs for materials used in clinical trials, third-party research services, laboratory and related supplies, technology license fees, legal and other regulatory expenses, and general overhead costs. We expect these costs will continue to be the primary operating capital requirements for the near future.

Our future expenditures are likely to be highly volatile in future periods depending on the outcomes of our clinical trials and preclinical studies. We expect our research and development costs to increase as we continue development of our various programs and as we move toward later stages of development, especially with regard to the ongoing clinical trials. We have entered into license agreements with City of Hope, PNP Therapeutics, Inc., University of Alabama at Birmingham, Southern Research Institute, Emory University, and with the U.S. Department of Health and Human Services (HHS), as represented by National Institute of Allergy and Infectious Diseases (NIAID), an institute of the National Institutes of Health (NIH),trials for various technologies and patent rights associated with our product development activities. These agreements may contain provisions for upfront payments, milestone fees due upon the achievement of selected development and regulatory events, minimum annual royalties or other fees, and royalties based on future net sales. Aggregate unrecorded future minimum payments under these agreements (excluding milestone and royalty payments due upon contingent future events) are approximately $149,000 in 2022, $128,000 in 2023, $128,000 in 2024, $28,000 in 2025 and $28,000 in 2026.

Our research and development expenditures during 2022 and beyond will increase significantly as a result of the Gedeptin and GEO-CM04S1 clinical programs.CEO-CM04S1. We do not provide forward-looking estimates of costs and time to complete our research programs due to the many uncertainties associated with biotechnology research and 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 certain development programs to focus our resources on more promising product 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 length of time required to enroll suitable patient subjects, the number of patients that ultimately participate in the clinical trial, the duration of patient follow-up, and the number of clinical sites included in the clinical trials.

Gedeptin is currently undergoing a Phase 1/2 clinical trial (NCT03754933) for treatment of patients with advanced head and neck cancer. The initial stage of the study (10 patients) is being funded by the FDA pursuant to its Orphan Products Clinical Trials Grants Program. We may seek additional sources of capital through government and quasi-government grant programs and clinical trial support, although there can be no assurance any such funds will be obtained.

We expect that our general and administrative costs mayexpenses to increase during the remainder of 2022 and beyondcommensurately in support of expanded research and development activities and other general corporate activities.efforts.

We believeAs of the date of this Quarterly Report, we expect our existing cash and cash equivalents will be sufficient to meet our anticipated cash requirements into the second quarter of 2023. However, our forecast of the period of time through which our financial resources will be adequate to supportfund our operations is a forward-looking statement that involves risks and uncertainties and isover at least the next twelve months.

We have based our projections of operating capital requirements on assumptions that may prove to be wrong; actual results could vary materially. Weincorrect, and we may need to obtain additional fundsuse our available capital resources sooner than planned or in greater amounts than we currently anticipate. The actual amount of funds weexpect. Our future capital requirements will need to operate is subject todepend on many factors, some of which include but are beyond our control. These factors include not limited to:

We will need to continue to raise additional capital to support our future operating activities, including progression of our development programs, preparation for commercialization, and other operating costs. Financing strategies we may pursue include, but are not limited to, the public or private sale of equity, debt financings or funds from other capital sources, such as government funding, collaborations, strategic alliances or licensing arrangements with third parties. There can be no assurances additional capital will be available to secure additional financing, or if available, that it will be sufficient to meet our needs on favorable terms. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development of one or more of our product candidates.

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, other than the operating lease for our office and laboratory space.

Item 3         Quantitative and Qualitative Disclosures About Market Risk

Not applicable to smaller reporting companies.

Item 4         Controls and Procedures

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 or 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

As a result of a material weakness surrounding the Company’s interpretation of a non-routine transaction discovered during management’s assessment of the Company’s internal controls and procedures over financial reporting as of December 31, 2021, during the three months ended March 31, 2022, management modified its internal controls procedures to include a more comprehensive review process of non-routine transactions. There were no other significant changes in our internal control over financial reporting that occurred during the three months ended March 31,June 30, 2022 that have materially affected, or are 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

Item 1        Legal Proceedings

None.

Item 1A     Risk Factors

For information regarding factors that could affect our results of operations, financial condition or liquidity, see the risk factors discussed under “Risk Factors” in Item 1A of our most recent Annual Report on Form 10-K. See also “Forward-Looking Statements,” included in Part I - Item 2 of this Quarterly Report on Form 10-Q. There have been noAs a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A concerning any material changes from the risk factors previously disclosed in our most recent Annual Report on Form 10-K.

Item 2        Unregistered Sales of Equity Securities and Use of Proceeds

Effective as of May 1, 2022, we renewed our agreement with Content Carnivores, LLC for an additional one-year period. In connection with the renewal, in May 2022, we issued 68,500 shares of our common stock to Content Carnivores, LLC as a restricted stock award under our 2020 Stock Incentive Plan with a value at that date of $72,000. The Company relied on an exemption from the registration requirements of the Securities Act afforded by Section 4(a) (2) thereof and Rule 506 of Regulation D.

There were no other sales of unregistered securities during the period covered by this report that have not previously been reported on Form 8-K.

Item 3        Defaults Upon Senior Securities

None.

Item 4        Mine Safety Disclosures

Not applicable.

Item 5        Other Information

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.

Item 6Exhibits

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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.