UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~September 30, 2017~~March 31, 2019

[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from ___________ to ____________

Commission File Number __________________

IMMUNE THERAPEUTICS, INC.

(Exact name of small business issuer as specified in its charter)

Florida

59-3226705

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

~~incorporation or organization)~~

Identification No.)

37 North Orange Ave, Suite ~~607,~~800M, Orlando, FL 32801

(Address of principal executive offices)

888-613-8802

(Issuer’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

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

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

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

	Large Accelerated Filer [ ]		Accelerated Filer [ ]

	Non-Accelerated Filer [ ]		Smaller Reporting Company [X]
			~~Emerging Growth Company [X]~~

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

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

As of ~~November 14, 2017~~May 20, 2019 there were ~~383,532,473~~445,577,799 shares of Common Stock outstanding.

TABLE OF CONTENTS

	PART I – FINANCIAL STATEMENTS

Item 11.	Financial Statements	65

Item 22.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	3021

Item 33.	Quantitative and Qualitative Disclosures About Market Risk	3924

Item 44.	Controls and Procedures	39 24

	PART II – OTHER INFORMATION

~~Item 1~~	~~Legal Proceedings~~	40

~~Item 1A~~	~~Risk Factors~~

Item 21.	Legal Proceedings	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4025

Item 33.	Default upon Senior Securities	4125

Item 4	~~Mine Safety Disclosures~~

~~Item 5~~	~~Other Information~~

~~Item 6~~6.	Exhibits	4227

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained or incorporated by reference in this ~~Quarterly~~Annual Report on Form 10-Q are considered forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) concerning our business, results of operations, economic performance and/or financial condition, based on management’s current expectations, plans, estimates, assumptions and projections. Forward-looking statements are included, for example, in the discussions about:

	●	strategy;

	●	new product discovery and development;

	●	current or pending clinical trials;

	●	our products’ ability to demonstrate efficacy or an acceptable safety profile;

	●	actions by the FDA and other regulatory authorities;

	●	product manufacturing, including our arrangements with third-party suppliers;

	●	product introduction and sales;

	●	royalties and contract revenues;

	●	expenses and net income;

	●	credit and foreign exchange risk management;

	●	liquidity;

	●	asset and liability risk management;

	●	the outcome of litigation and other proceedings;

	●	intellectual property rights and protection;

	●	economic factors;

	●	competition; and

	●	legal risks.

Any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. ~~Forward-looking~~Forward- looking statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “aims,” “plans,” “may,” “could,” “will,” “will continue,” “seeks,” “should,” “predict,” “potential,” “outlook,” “guidance,” “target,” “forecast,” “probable,” “possible” or the negative of such terms and similar expressions. Forward-looking statements are subject to change and may be affected by risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events, except as required by law, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities laws and other applicable laws.

We caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, the forward-looking statements, and therefore you should not place too much reliance on them. These factors include, among others, those described herein, under “Risk Factors” and elsewhere in this Annual Report and in our other public reports filed with the Securities and Exchange Commission. It is not possible to predict or identify all such factors, and therefore the factors that are noted are not intended to be a complete discussion of all potential risks or uncertainties that may affect forward-looking statements. If these or other risks and uncertainties materialize, or if the assumptions underlying any of the forward-looking statements prove incorrect, our actual performance and future actions may be materially different from those expressed in, or implied by, such ~~forward-looking~~forward- looking statements. We can offer no assurance that our estimates or expectations will prove accurate or that we will be able to achieve our strategic and operational goals.

Any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Forward-looking statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “aims,” “plans,” “may,” “could,” “will,” “will continue,” “seeks,” “should,” “predict,” “potential,” “outlook,” “guidance,” “target,” “forecast,” “probable,” “possible” or the negative of such terms and similar expressions. Forward-looking statements are subject to change and may be affected by risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events, except as required by law, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities laws and other applicable laws.

Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events, and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

	●	our lack of operating history;

	●	~~our current and future capital requirements and our ability to satisfy our capital needs;~~

	●	our inability to keep up with industry competition;

	●	interpretations of current laws and the passages of future laws;

	●	acceptance of our business model by investors and our ability to raise capital;

	●	acceptance of our ~~drug discovery~~business model by investors and ~~development activities may not result in products that are approved by the applicable regulatory authorities. Even if~~ our ~~drug candidates do obtain regulatory approval they may never achieve market acceptance or commercial success;~~
		ability to raise capital;
	●	our reliance on key personnel, including our ability to attract and retain scientists;

	●	our reliance on third party manufacturing ~~some of which is outside the United States and may therefore be subject to political, economic and other uncertainties,~~ to supply drugs for clinical trials and sales;

	●	our limited distribution organization with no sales and marketing staff;

	●	our being subject to product liability claims;

	●	our reliance on key personnel, including our ability to attract and retain scientists;

	●	legislation or regulation that may increase the cost of our business or limit our service and product offerings;

	●	risks related to our intellectual property, including our ability to adequately protect intellectual property rights;

	●	risks related to government regulation, including our ability to obtain approvals for the commercialization of some or all of our drug candidates, and ongoing regulatory obligations and continued regulatory review which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements; and

	●	our ability to obtain regulatory approvals in foreign jurisdictions to allow us to market our products internationally.

Moreover, new risks regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the date of this Annual Report. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this Annual Report.

JUMPSTART OUR BUSINESS STARTUPS ACT

We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, ~~2016,~~2018, the last day of our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

As an emerging growth company, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

	●	being permitted to present only two years of audited financial statements and only two years of related “Management’s
		Discussion and Analysis of Financial Condition and Results of Operations” in this annual report;

	●	not being requested to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley Act”);

	●	reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

	●	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We will remain an emerging growth company until the earliest to occur of: (i) our reporting $1 billion or more in annual gross revenues; (ii) the end of fiscal year 2019; (iii) our issuance, in a three year period, of more than $1 billion in non-convertible debt; and (iv) the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million on the last business day of our second fiscal ~~quarter~~quarter.

PART I1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2017			December 31, 2016			March 31, 2019			December 31, 2018
ASSETS

Current Assets:
Cash and cash equivalents	$	22,570		$	74,389		$	5,688		$	5,859
Inventories		214,327			-			82,801			82,801
Total current assets		236,897			74,389			88,489			88,660

Fixed Assets:
Computer equipment, net of accumulated depreciation of $8,445 and $7,888 respectively		2,798			1,850
Computer equipment, net of accumulated depreciation of $10,865 and $10,477 respectively								2,378			2,766
Deposits		200			200			200			200

Total assets	$	239,895		$	76,439		$	91,067		$	91,626

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable	$	2,222,814		$	1,818,605		$	2,021,931		$	2,065,476
Accrued liabilities		2,009,660			3,156,759			3,605,755			3,302,355
Notes payable, net of debt discount		4,361,241			4,225,419			5,479,385			5,187,727

Derivative liability								738,609			786,706
Total current liabilities		8,593,715			9,200,783			11,845,680			11,342,264

Total liabilities		8,593,715			9,200,783			11,845,680			11,342,264

Commitments and Contingencies (Note 11)

Stockholders’ Deficit:
Common stock - par value $0.0001; 500,000,000 shares authorized; 357,140,708 and 250,428,133 shares issued and outstanding respectively		35,714			25,043
Common stock - par value $0.0001; 500,000,000 shares authorized; 445,577,799 and 434,322,574 shares issued and outstanding respectively								45,558			43,433
Additional paid in capital		365,314,385			360,420,026			370,084,346			369,881,037
Stock issuances due		774,226			962,429			35,303			35,303
Prepaid services		(611,663	)		(822,500	)
Accumulated deficit		(369,390,460	)		(365,718,976	)		(389,919,820	)		(381,210,411	)

Deficit attributable to common stockholders		(3,877,798	)		(5,133,978	)		(11,754,613	)		(11,250,638	)
Non-controlling interest		(4,476,022	)		(3,990,366	)
Total stockholders’ deficit		(8,353,820	)		(9,124,344	)		(11,754,613	)		(11,250,638	)
Total liabilities and stockholders’ deficit	$	239,895		$	76,439		$	91,067		$	91,626

The accompanying notes are an integral part of these consolidated financial statements.

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months ended
	March 31, 2019			March 31, 2018
Revenues, net	$	-		$	65,013
Cost of products sold		-			33,172
Gross profit		-			31,841
Operating expenses:
Selling, general and administrative		486,585			638,228
Research and development expense		-			129,191
Stock issued for services G&A		120,000			252,244
Depreciation and amortization expense		387			433
Total operating expenses		606,972			1,020,096

Loss from operations		(606,972	)		(988,255	)

Other income (expense):
Interest expense		(115,209	)		(220,461	)
Gain on Derivative Liability Revaluation		12,772			494,814
Loss on settlement of debt		-			(18,036
Total other income (expense)		(102,437	)		256,317
Net loss	$	(709,409	)	$	(731,938	)
Net loss attributable to non-controlling interest		-			(121,285	)
Net loss attributable to common shareholders		(709,409	)		(610,653	)
Basic loss per share to common shareholders	$	(0.00	)	$	(0.00	)
Weighted average number of shares outstanding		447,626,057			387,621,835

The accompanying notes are an integral part of these condensed consolidated financial statements.

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

~~CONDENSED~~ CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~STOCKHOLDERS’ EQUITY/ (DEFICIT)

~~(Unaudited)~~FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

Three months ended Nine months ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016

Revenues, net $ - $ - $ - $ 3,463

Operating expenses
Selling, general and administrative 620,905 1,031,075 1,842,778 2,864,333
Research and development expense 109,340 247,019 362,110 295,438
Stock issued for services G&A 446,002 1,225,353 1,537,292 4,403,951
Warrant valuation 272,707 187,850 590,605 2,756,404
Depreciation and amortization expense 269 299 557 1,280
Total operating expenses 1,449,223 2,691,596 4,333,342 10,321,406

Loss from operations (1,449,223 ) (2,691,596 ) (4,333,342 ) (10,317,943 )

Other income (expense):
Interest expense (118,878 ) (978,275 ) (822,789 ) (2,331,296 )
Gain/(loss) on settlement of debt (31,741 ) (274,071 ) 998,991 (1,978,754 )
Total other income (expense) (150,619 ) (1,252,346 ) 176,202 (4,310,050 )

Net loss $ (1,599,842 ) $ (3,943,942 ) $ (4,157,140 ) $ (14,627,993 )
Net loss attributable to non-controlling interest (217,574 ) (7,441 ) (485,656 ) (161,490 )
Net loss attributable to common shareholders $ (1,382,268 ) $ (3,936,501 ) $ (3,671,484 ) $ (14,466,503 )

Basic loss per share attributable to common shareholders $ (0.00 ) $ (0.02 ) $ (0.01 ) $ (0.07 )

Weighted average number of shares outstanding 341,109,212 226,843,113 301,844,205 208,399,547

	Common Stock				Additional Paid-in		Stock To Be			Prepaid			Accumulated			Non-Controlling
	Shares		Amount		Capital		Issued			Services			Deficit			Interest			Total

Balance December 31, 2017		386,782,473	$	38,679	$	366,625,144	$	103,226		$	(226,667	)	$	(373,035,183	)	$	(4,608,585	)	$	(11,103,386	)

Issuance of common stock for prepaid services		16,988,640		1,698		612,053		(67,923	)		-			-			-			545,828

Amortization of prepaid services		-		-		-		-			226,667			-			-			226,667

Issuance of common stock for interest expense		200,000		121		8,980		-			-			-			-			9,101

Issuance of common stock in exchange for debt		30,351,461		3,035		668,652		-			-			-			-			671,597

Issuance of Cytocom common stock for cash and exercise of warrants		-		-		240,500		-			-			-			-			240,500

Issuance and modification of common stock warrants		-		-		1,725,798		-			-			-			-			1,725,798

Deconsolidation of Cytocom		-		-		-		-			-			-			5,058,967			5,058,967

Net loss		-		-		-		-			-			(8,175,228	)		(450,382	)		(8,625,610	)

Balance December 31, 2018		434,322,574	$	43,433	$	369,881,037	$	35,303		$	-		$	(381,210,411	)	$	-		$	(11,250,638	)

Issuance of common stock for prepaid services		3,000,000		300		119,700		-			-			-			-			120,000

Issuance of warrants in connection with debt agreement		-		-		23,000		-			-			-			-			23,000

Issuance of common stock in exchange for debt		18,255,225		1,825		60,609		-			-			-			-			62,434

Net loss		-		-		-		-			-			(709,409	)		-			(709,409	)

Balance March 31, 2019		455,577,799	$	45,558	$	370,084,346	$	35,303		$	-		$	(381,919,820	)	$	-		$	(11,754,613	)

The accompanying ~~notes~~footnotes are an integral part of these ~~condensed~~ consolidated financial statements.

~~IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT~~

~~FOR THE PERIOD ENDED SEPTEMBER 30, 2017~~

~~(Unaudited)~~

Common Stock Additional Paid-in Stock To Prepaid Accumulated Non-Controlling
Shares Amount Capital Be Issued Services Deficit Interest Total

Balance December 31, 2016 250,428,133 $ 25,043 $ 360,420,026 $ 962,429 $ (822,500 ) $ (365,718,976 ) $ (3,990,366 ) $ (9,124,344 )

Issuance of common stock for prepaid services 27,245,460 2,725 1,818,276 (494,546 ) (1,060,000 ) - - 266,455

Amortization of prepaid services - - - - 1,270,837 - - 1,270,837

Issuance of common stock for accrued interest 3,787,570 379 201,000 - - - - 201,379

Issuance of common stock in exchange for debt 39,293,111 3,929 1,831,577 56,343 - - - 1,891,849

Issuance of common stock for cash and exercise of warrants 36,386,434 3,638 452,901 250,000 - - - 706,539

Issuance and modification of common stock warrants - - 590,605 - - - - 590,605

Net loss - - - - - (3,671,484 ) (485,656 ) (4,157,140 )

Balance as of September 30, 2017 357,140,708 $ 35,714 $ 365,314,385 $ 774,226 $ (611,663 ) $ (369,390,460 ) $ (4,476,022 ) $ (8,353,820 )

~~The accompanying notes are an integral part of these condensed consolidated financial statement.~~

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended						Three Months Ended
	September 30, 2017			September 30, 2016			March 31, 2019			March 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,157,140	)	$	(14,627,993	)	$	(709,409	)	$	(731,938	)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization		557			1,280
Stock issued, and amortization of stock issued, for prepaid services		1,270,837			2,315,190
Gain on settlement of debt		(998,991	)		1,978,754
Depreciation								387			434
Amortization of debt discount								61,271			100,318
Amortization of stock issued for prepaid services								-			125,000
Stock issued for services		266,456			2,111,259			120,000			127,243
Stock warrant expense		590,605			2,756,404
Stock issued for interest		378			191,750
Amortization of debt discount		60,347			727,612
Accounts receivable write off					2,661
Change in value of derivative								(12,772	)		(494,814	)
Loss on settlement of debt								-			18,036
Stock issued for origination fees and interest expense								-			6,000
Expenses paid by lender								-			54,661

Changes in operating assets and liabilities:
Inventories								(0	)		19,450
Accounts payable		678,162			103,155			210,933			78,199
Accounts receivable					13,536
Accrued liabilities		887,608			2,093,015			303,400			241,595
Inventory		(214,327	)		-

Net cash used in operating activities		(1,615,508	)		(2,333,377	)		(171	)		(455,816	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of computer equipment		(1,505	)
Purchase of computer equipment								-			(1,971	)

Net cash used in investing activities		(1,505	)		-			-			(1,971	)
					-
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of notes payable		(321,846	)		-
Proceeds from sale of stock and exercise of warrants		706,540			200,000			-			50,000
Proceeds from issuance of notes payable		1,180,500			2,132,380			-			423,470

Net cash provided by financing activities		1,565,194			2,332,380			-			473,470
Net decrease in cash		(51,819	)		(997	)

Net increase/(decrease) in cash and cash equivalents								(171	)		15,683
Cash and cash equivalents at beginning of period		74,389			23,149			5,859			14,718
Cash and cash equivalents at end of period	$	22,570		$	22,152		$	5,688		$	30,401

The accompanying notes are an integral part of these condensed consolidated financial statements.

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine months ended
September 30, 2017 September 30, 2016
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for interest $ 29,500 $ 18,667

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Common stock issued for loan expense and interest $ - $ 191,750

Debt discount $ 50,000 $ -

Conversion of debt and accrued interest to common stock $ 3,051,969 $ -

Shares issued for accounts payable and accrued expenses $ 254,738 $ -

Cashless exercise of warrants $ 1,705 $ -

Accounts payable paid directly by lender $ 273,821 $ -

Settlement paid by lender $ 150,000 $ -

Common stock issued for prepaid services $ 266,455 $ 2,088,759

Estimated gain/(loss) on debt conversion $ 215,000 $ -

	Three Months Ended
	March 31, 2019		March 31, 2018
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for interest	$	16,000	$	15,210

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Debt discount	$	23,000	$	125,000

Accrue shares to be issued for debt and accrued interest	$	-	$	108,216

Conversion of debt and accrued interest to common stock	$	27,110	$	-

Settlement of derivative liability	$	-	$	243,199

Reclassification from accounts payable to notes payable	$	254,479	$	-

Reclassification from debt to accounts payable	$	-	$	17,284

Debt settled and reclassed to accrued expenses	$	35,325	$	-

Loss on debt conversion	$	-	$	18,036

The accompanying notes are an integral part of these condensed consolidated financial statements.

Immune Therapeutics, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September 30, 2017~~March 31, 2019

(Unaudited)

1.Organization and Description of Business

Immune Therapeutics, Inc. (the ~~“Company”~~“Company,” “we,” or “our”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”).

On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, we executed a share exchange agreement for the acquisition of all of the outstanding shares of TNI BioTech IP, Inc. On September 4, 2014, a majority of our shareholders approved an amendment to our Amended and Restated Articles of Incorporation, as amended, to change our name to Immune Therapeutics, Inc. We filed our name change amendment with the Secretary of State of Florida on October 27, 2014 changing our name to Immune Therapeutics, Inc.

The Company currently operates out of Orlando, Florida. In July 2012, the Company’s focus turned to acquiring patents that would protect and advance the development of new uses of opioid-related immune- therapies, such as low dose naltrexone (“LDN”) and Methionine [Met5]-enkephalin (“MENK”). The Company’s therapies are believed to stimulate and/or regulate the immune system in such a way that they provide the potential to treat a variety of diseases. We believe our therapies may be able to correct abnormalities or deficiencies in the immune system in diseases such as HIV infection, autoimmune disease, immune disorders, or cancer; all of which can lead to disease progression and life-threatening situations when the immune system is not functioning optimally.

In October 2012, the Company formed TNI BioTech International, Ltd., a BVI company in Tortola, British Virgin Islands, which was set up to allow the Company to market and sell LDN in those countries outside the U.S. in which we have been able to obtain approval to sell the Company’s products.

In August 2013, the Company formed its United Kingdom subsidiary, TNI BioTech, LTD (the “UK Subsidiary”). The UK Subsidiary received approval to be considered a micro, small or medium-sized enterprise (“SME”) with the European Medicines Agency (“EMA”) on August 21, 2013. The designation provides the UK Subsidiary with significant discounts when holding meetings or submitting filings to the EMA. On September 19, 2013, the UK Subsidiary submitted a pre-submission package to the EMA regarding Crohn’s Disease. The EMA granted the UK Subsidiary a meeting that took place on September 27, 2013. The UK Subsidiary is eligible to benefit from the provisions for administrative and financial assistance for SMEs set out in Regulation (EC) No 2049/2005. The Company will ~~determine whether or not to~~ apply to obtain EMA benefits once funding becomes available.

In December 2013, the Company formed a ~~new~~ subsidiary, Cytocom Inc. (“Cytocom”), to focus on conducting LDN and MENK clinical trials in the United States. In December 2014, the Company finalized the distribution of common stock of Cytocom ~~Inc.~~ to its shareholders. As part of the transaction (“Original Agreement”), the Company ~~retained exclusive~~transferred to Cytocom certain of its rights, title and interest in or relating to intellectual property (i) patents, patent applications, and all divisional, continuations and continuations-in-part thereof, together with all reissues, reexaminations, renewals and extensions thereof and all rights to obtain such divisionals, continuations and continuations-in-part, reissues, reexaminations, renewals and extensions, and all ~~international patents, in-country approvals, formulations,~~utility models and statutory invention registrations and any other such analogous rights, (ii) trademarks, ~~manufacturing, marketing, sales,~~service marks, Internet domain names, trade dress, trade styles, logos, trade names, services names, brand names, corporate names, assumed business names and ~~distributions~~general intangibles and other source identifiers of a like nature, together with the goodwill associated with any of the foregoing, and all registrations and applications for registrations thereof, together with all renewals and extensions thereof and all rights to obtain such renewals and extensions, (iii) copyrights, mask work rights, database and design rights, moral rights and rights in ~~emerging nations,~~Internet websites, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection therewith, together with all renewals, continuations, reversions and extensions thereof and all rights to obtain such renewals, continuations, reversions and extensions, and (iv) confidential and proprietary information, including, ~~Africa, Central America, South America, Russia, India, China, Far East,~~trade secrets and know-how.

The ~~Commonwealth of Independent States (former Soviet Union). The~~Original Agreement also granted the Company ~~will continue~~rights to ~~have access~~market Lodonal™ and Met-Enkephalin (“MENK”) in “Emerging Markets,” which included all countries excluding Canada, Italy, Japan, France, Germany, United Kingdom, European Community and the United States. Pursuant to ~~existing clinical data~~the Original Agreement, the Company was required to pay Cytocom a 5% royalty on all sales all ongoing drug development and fees due in connection with the underlying patents until such time as ~~well as any new data generated by~~ Cytocom ~~Inc. during drug development.~~ was funded.

On December 8, 2014, the number of Cytocom ~~Inc.~~ shares of common stock that were issued to our shareholders totaled 113,242,522 shares. In connection with the ~~transaction,~~Original Agreement, Cytocom ~~Inc.~~ issued an additional 140,100,000 shares of its common stock to the Company, which gave the Company a 55.3% stake in Cytocom ~~Inc.~~ on that date. In April 2016, the Board of Directors and a majority of shareholders of Cytocom approved a reverse stock split of Cytocom’s outstanding common stock with one new share of stock for each twenty old shares of common stock. Cytocom effectuated and finalized the reverse split in June 2016.

On May 1, 2018, the Company entered into an amended and restated licensing agreement (the “Restated Agreement”) with Cytocom. The Restated Agreement restates the licensing arrangement between the Company and Cytocom as provided by the Original Agreement. The Restated Agreement grants the Company distribution and marketing rights for Lodonal™ and MENK for humans in Emerging Markets. In addition, the Company has been granted the rights to distribute and market Lodonal™ and MENK for animal use in the United States. The royalty due to Cytocom has been reduced from 5% to 1% of sales and the Company no longer has any ongoing obligations to pay for costs in connection with the assets of Cytocom.

On June 4, 2018, the Company and Cytocom entered into a Stock Purchase Agreement (the “Stock Agreement. Pursuant to the Stock Agreement, the Company cancelled approximately $4,000,000 of debt owed to it by Cytocom in exchange for ten percent (10%) of the issued and outstanding common stock of Cytocom, as calculated on a fully diluted basis. The Restated Agreement was a condition of the Stock Agreement.

At ~~September 30, 2017,~~December 31, 2018, the Company’s equity interest ~~had been further reduced to 10%, by subsequent issuances~~in Cytocom stood at 15.5% of ~~Cytocom~~Cytocom’s common stock issued and outstanding on that date. The Company’s policies with respect to ~~shareholders~~accounting for its equity interest in ~~settlement~~Cytocom is described in Note 2 to the “Notes to the Condensed Consolidated Financial Statements” below (“Summary of ~~notes payable.~~Significant Accounting Policies: Non-Controlling Interest in Consolidated Subsidiaries”).

In March 2014, the Company incorporated Airmed Biopharma Limited, an Irish corporation with an address in Dublin, Ireland, and Airmed Holdings Limited, an Irish company domiciled in Bermuda. The Irish companies were set up to benefit from incentives granted by the Irish government for the establishment of pharmaceutical companies (many of the world’s leading pharmaceutical companies have located in Ireland), and so that the Company could take advantage of Ireland’s status as a member of the European Union and the European Economic Area. An Irish limited liability company enjoys a low corporate income tax rate of 12.5%, one of the lowest in the world. The Irish-domiciled company hopes to qualify for tax incentives for Irish holding/headquartered companies and to benefit from the network of double tax treaties that reduce withholding taxes. TNI BioTech International, Ltd. will manage our international distribution, using product that is manufactured in Ireland and elsewhere.

~~Today, Immune Therapeutics is focused on~~At present, the commercialization of affordable non-toxic immunotherapies focused on the activation and rebalancing of the body’s immune system. We believe that stimulating the body’s immune system remains one of the most promising approaches in the treatment of Cancers, HIV, Autoimmune Diseases, inflammatory conditions and other opportunistic infections for chronic often life-threatening diseases through the mobilization of the body’s immune system in Emerging Nations using existing clinical data.

~~Cytocom Inc,~~Company is a ~~clinical-stage pharmaceutical~~late development-stage biopharmaceutical company focused on the licensing, development and commercialization of innovative prescription medications for humans in Africa, Central and South America, the ~~first affordable non-toxic immunodulator~~Caribbean and China (hereinafter referred to as “Emerging Markets”) and worldwide for ~~the treatment of inflammatory diseases, immune-related disorders,~~animals and ~~cancer and~~companion pet therapeutics. The Company is ~~responsible for the development of our patented therapies with the FDA and EMA.~~

~~As of this date, neither we nor our collaboration partners are~~not permitted to market ~~our drug candidates~~its licensed products in the United States until we receive approval of a New Drug Application from the FDA. Neither we nor our collaboration partners have submitted an application for or received marketing approval for any of our drug candidates. Obtaining approval of an NDA can be a lengthy, expensive and uncertain process.States.

Going Concern

The Company experienced a net loss from operations of $4,333,342, and used cash and cash equivalents for operations in the amount of $1,615,508 during the nine months ended September 30, 2017, resulting in stockholder’s deficit of $8,353,820 at that date.

The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through private equity financings. Management expects operating losses and negative cash flows to continue at more significant levels in the future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its product candidate and the achievement of a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through ~~the sale of products,~~ additional private or public debt or equity offerings and it may ~~also~~ seek additional capital through arrangements with strategic partners or from other sources. Based on the Company’s operating plan, existing working capital at ~~September 30, 2017~~March 31, 2019 was not sufficient to meet the cash requirements to fund planned operations through ~~September 30, 2018~~for the next 12 months without additional sources of cash. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying ~~condensed consolidated~~ financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.

The Company experienced a net loss attributable to common shareholders of $709,409 and used cash and cash equivalents for operations in the amount of $171 during the quarter ended March 31, 2019, resulting in stockholders’ deficit of $11,754,613 at that date.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, ~~2016~~2018 (including the notes thereto) set forth in Form ~~10-K.~~10- K.

We have identified the policies below as critical to our business operations and the understanding of its results of operations. The Company’s senior management has reviewed these critical accounting policies and related disclosures with the Company’s Board of Directors. The impact and any associated risks related to these policies on our business operations are discussed throughout this section where such policies affect our reported and expected financial results.

The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue for the year ended December 31, ~~2016.~~2018. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

Non-Controlling Interest in Consolidated Subsidiaries

Prior to May 1, 2018, the Company consolidated Cytocom. On May 1, 2018, the Company entered into an amended and restated licensing agreement (the “Restated Agreement”) with Cytocom, Inc., in accordance with which the Company no longer has any ongoing obligations to pay for costs in connection with the assets of Cytocom. On June 4, 2018, the Company and Cytocom entered into a Stock Purchase Agreement (the “Stock Agreement”). Pursuant to the Stock Agreement, the Company cancelled approximately $4,000,000 of debt owed to it by Cytocom in exchange for ten percent (10%) of the issued and outstanding common stock of Cytocom, as calculated on a fully diluted basis on June 4, 2018. At March 31, 2019, the Company’s equity interest in Cytocom stood at 15.5% of Cytocom’s common stock issued and outstanding. Accordingly, the Company deconsolidated Cytocom as of May 1, 2018, and accounts for its retained interest in Cytocom under the equity method of accounting, with the Company’s share of Cytocom’s earnings recorded in “loss from equity method investment” in the consolidated statements of operations. As the balance of the Company’s investment in Cytocom has been $0 since December 31, 2018, no losses have been recognized during the quarter ended March 31, 2019.

Revenue Recognition

We recognize revenue on sales to customers and distributors upon satisfaction of our performance obligations when the goods are shipped. For consignment sales, we recognize revenue when the goods are pulled from consignment inventory.

~~In May 2014,~~Sales of Lodonal^TM pills or capsules product are included in revenue when production is sold to a customer in fulfillment of performance obligations under the ~~FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides~~terms of agreed contracts. Performance obligations primarily comprise delivery of product at a ~~single set~~delivery point, as negotiated within each contract. Each quantity of ~~guidelines for revenue recognition~~product sold is separately identifiable and represents a distinct performance obligation to ~~be used across all industries~~which the transaction price is allocated. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Company considers a variety of facts and ~~requires additional disclosures. It is effective for annual and interim reporting periods beginning after December 15, 2017. This standard permits early adoption and permits~~circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of ~~either~~ the ~~retrospective or cumulative effect transition method. We~~product, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title. In each case, the time between delivery and when payments are currently evaluating the potential impact of this standard on our financial position and results of operations, as well as our selected transition method. Based on our preliminary assessment, we believe the new standard willdue is not have a material impact on our consolidated financial position and consolidated results of operations, as we do not expect to change the manner or timing of recognizing revenue on a majority of our revenue transactions once we commence revenue-generating activities.significant.

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and ~~the~~‘the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). ~~This standard will be effective for our interim and annual periods beginning~~On January 1, 2019, ~~and must be~~the Company applied ASU 842 on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. ~~Early adoption is permitted. We are currently evaluating~~At March 31, 2019, we had no leases that fall within the ~~timing of adoption and the potential impact~~scope of this standard. Accordingly, the standard has no impact on our consolidated financial position ~~but we do not expect it to have a material impact on~~or our results of operations.

Use of Estimates

The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates.

Cash, Cash Equivalents, and Short-Term Investments

The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair ~~value.~~value.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of a default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the condensed consolidated balance sheets. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At ~~September 30, 2017,~~March 31, 2019, the Company has no cash balances in excess of insured limits.

Segment and Geographic Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment and does not segment the business for internal reporting or decision making.

Fair Value of Financial Instruments

In accordance with the reporting requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, “~~Financial~~“Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. Cash, cash equivalents and accounts payable are accounted for at cost which approximates fair value due to the relatively short maturity of these instruments. The carrying value of notes payable also approximate fair value since they bear market rates of interest and other terms. None of these instruments are held for trading purposes.

Derivative Financial Instruments

~~Fair Value Measurements~~

~~The~~FASB ASC ~~Topic~~ 820,Fair Value ~~Measurement,~~Measurements~~defines~~ requires bifurcation of certain embedded derivative instruments in certain debt or equity instruments, and measurement at their fair value ~~establishes~~for accounting purposes. A holder redemption feature embedded in the Company’s note payable requires bifurcation from its host instrument and is accounted for as a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time.freestanding derivative.

Inventory

Inventories comprise finished product, raw materials and materials used for packaging. Inventories are stated at the lower of cost or market with cost based on the first-in, first-out (FIFO) method. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in a clinical trials or clinical manufacturing campaigns. Inventory used in marketing activities is charged to selling, general and administrative expense.

Inventory as of March 31, 2019 was valued at $82,801, a decrease of $95,297 or 54% from the inventory balance at the end of March 2018. Inventory at March 31, 2019 was made up primarily of finished pills and related packaging materials. The year-over-year decrease in inventory was due to the shipments of pills during 2018 to Nigeria and to pills used as samples.

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. Depreciation expense for the ~~three months~~periods ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016~~March 31, 2018 was ~~$269~~$387 and ~~$299,~~$433, respectively.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or change in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed by ASC Topic 360-10-05, “~~Property,~~“Property, Plant and ~~Equipment~~.Equipment.” If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value.

Research and Development Costs

Research and development costs are charged to expense as incurred and are typically comprised of salaries and benefits, pre-clinical studies, clinical trial activities, drug development and manufacturing, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf and third-party service fees, including clinical research organizations and investigative sites. Costs for certain development activities, such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as operating expenses.

Income Taxes

The Company follows ASC Topic 740,Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, the Company does not have a liability for unrecognized tax uncertainties.

The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of ~~September 30, 2017,~~March 31, 2019, and ~~2016,~~2018, the Company has not accrued any interest or penalties related to uncertain tax positions.

Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration

The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair value of the Company’s common stock at the date of the agreement.

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC Topic 505-50, “~~Equity-Based~~“Equity-Based Payments to ~~Non-Employees~~.Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete.

~~Non-controlling Interest~~

~~In accordance with ASC Topic 810,~~~~Consolidation~~~~, the Company consolidates Cytocom, Inc. The non-controlling interests in Cytocom represent the interests~~Net Loss per Share of ~~outside shareholders in the equity and results of operations of Cytocom.~~

~~Net Income (Loss) per Share~~Common Stock

Basic net ~~income (loss) per share (“EPS”) is calculated in accordance with Accounting Standards Codification (“ASC”) 260, “Earnings Per Share.” Basic net income or~~ loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of common stock purchase warrants and options outstanding.

~~A calculation~~ For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss ~~per share follows:~~position

For the three months ended
September 30, For the nine months ended
September 30,
2017 2016 2017 2016

Net Profit/(Loss) $ (1,382,268 ) $ (3,936,501 ) $ (3,671,484 ) $ (14,466,503 )
Weighted-average common shares outstanding 341,109,212 226,843,113 301,844,205 208,399,547

Profit/(Loss) per share outstanding
Basic and diluted $ (0.00 ) $ (0.02 ) $ (0.01 ) $ (0.07 )

The Company’s potential dilutive securities which include warrants (as described in Note 8 to the Financial Statements – “Capital Structure – Common Stock and Common Stock Purchase Warrants”) and convertible debt (as described in Note 6 to the Financial Statements – “Notes Payable”), have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

The following shares of potentially dilutive securities have been excluded from the computations of diluted weighted average shares ~~outstanding:~~outstanding as the effect of including such securities would be antidilutive:

As of September 30,
2017 2016
Warrants to purchase Common stock 59,485,667 32,623,908
59,485,667 32,623,908

	March 31, 2019		March 31, 2018
Common Stock Purchase Warrants		282,358,856		126,670,720
Convertible Debt		112,943,167		23,611,111

Recent Accounting Standards

During the quarter ended ~~September 30, 2017,~~March 31, 2019, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

3. ~~Inventory~~

~~The components of inventory are summarized as follows:~~

September 30, 2017 December 31, 2016
Raw materials $ 79,558 $ -
Work in process 134,769 -
Finished goods - -
Total inventory $ 214,327 $ -

4. Fixed Assets

	September 30, 2017			December 31, 2016			March 31, 2019			December 31, 2018
Fixed Assets:							$			$
Computer equipment	$	11,243		$	9,738			13,213			13,213
Less accumulated depreciation		(8,445	)		(7,888	)		(10,835	)		(10,477	)
Fixed assets, net	$	2,798		$	1,850		$	2,378		$	2,766

The Company utilizes the straight-line method for depreciation, using three to five-year depreciable asset lives. Depreciation expense was not material for all periods presented.

4. Investments: Deconsolidation of Cytocom

In accordance with the May 1, 2018 “Restated Agreement” with Cytocom, the Company no longer has any ongoing obligations to pay for costs in connection with the assets of Cytocom. Accordingly, effective May 1, 2018, the Company deconsolidated Cytocom. However, the Company exercises influence through its retained equity interest and through representation on Cytocom’s board of directors. As a result, the Company uses the equity method to account for its retained interest in Cytocom

On May 1, 2018, the Company recorded an equity method investment in Cytocom of $1,189, the par value of Cytocom common stock multiplied by the number of shares owned by the Company, due to the negative equity associated with Cytocom’s underlying financial position. As a result of the continuing losses in Cytocom, the balance of this investment is currently $0.

At March 31, 2019, Cytocom had no significant assets or income.

5. Accrued Liabilities

Accrued expenses and other liabilities consist of the following:

September 30, 2017 December 31, 2016

Accrued payroll to officers and others $ 1,303,258 $ 1,126,261
Accrued interest and penalties - notes payable 594,875 1,902,018
Estimated legal settlement 111,134 128,087
Other accrued liabilities 393 393

Total accrued liabilities $ 2,009,660 $ 3,156,759

	March 31, 2019		December 31, 2018
Accrued payroll to officers and others		2,582,839		2,010,570
Accrued interest and penalties – notes payable		886,859		877,571
Estimated legal settlements		136,057		136,057
Other accrued liabilities		-		15,512
Derivative Liability		738,609		786,706

Total accrued expenses and other liabilities	$	4,344,364	$	3,826,416

6. Notes ~~Payable~~payable

Notes payable consist of the following:

September 30, 2017 December 31, 2016
Promissory note issued July 29, 2014 to Ira Gaines. In 2016, the maturity date on the note was extended to December 1, 2017. The note earns interest at a rate of 18% per annum. $ 100,000 $ 100,000

Promissory notes issued between November 26, 2014 and September 30, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. Notes aggregating $286,000 were in default at September 30, 2017, as the Company was unable to pay installments on those notes on their due dates. No demands for repayment have been made by the lenders. 286,000 286,000

Promissory notes issued between May 1, 2015 and December 31, 2016, and maturing between June 14, 2015 and September 30, 2017. Lenders on loans aggregating $505,994 earn interest at rates between 2% and 18% per annum. On loans aggregating $198,500, interest is payable in a fixed amount not tied to a specific interest rate. Notes aggregating $605,994 were in default at September 30, 2017, as the Company was unable to repay those notes on their due dates. No demands for repayment have been made by the lenders. 704,494 704,494

Promissory notes issued by Cytocom Inc. between April 29, 2015 and December 31, 2015. Lenders earn interest at rates between 5% and 10% per annum. These notes mature on September 30, 2016. At September 30, 2017, the notes were in default, although no demand for repayment has been made by the lenders. 425,000 425,000

Promissory note issued in December 2015. The lender earns interest at a rate of 10% per month. The note is repayable on March 9, 2016.  On April 3, 2017, the Company settled the obligation. - 100,000

Promissory notes issued between May 5, 2016 and June 2, 2016 that mature between October 1, 2016 and January 31, 2017, and include stock conversion features, warrants and original issue debt discounts. The notes were repaid or converted into stock in the quarter ended September 30, 2017. - 554,882

Promissory notes issued to an officer of the Company effective November 3, 2015 and maturing November 3, 2016 for settlement of accrued payroll, bearing interest at 10% per annum and including a stock conversion feature. The Company was unable to repay the note at maturity and the note is in default. 102,737 112,737

Promissory note issued in July 2016. The note was repayable on October 5, 2016 but was extended to December 31, 2016. The note earns interest at 6% per month. The Company was unable to repay the note at maturity and the note is in default. 50,000 50,000

Promissory note issued in July 2016 with an original issue discount of $30,000. Net proceeds were $150,000. The note is repayable on April 7, 2017. $66,000 of the note was converted to stock. The Company was unable to repay the note at maturity and the note is in default. 48,000 180,000

Promissory notes issued in August 2016 for $149,854 as a settlement of amounts owed to a law firm. The notes accrue interest at 5% per annum and are payable in 18 equal monthly installments of $8,641.88. The note was in default on September 30, 2017. 43,209 120,987

Promissory notes issued between July 1, 2016 and December 31, 2016. Lenders earn interest at 2% per annum. The notes mature on September 30, 2017 and are in default. 206,000 256,000

Notes aggregating $1,354,000 issued in the fourth quarter of 2016. The notes accrue interest at 2% per annum and mature between November 1, 2017 and December 31, 2017.  As of November 14, 2017, $750,000 is in default. 1,354,000 1,354,000

Notes aggregating $500,000 issued in the first quarter of 2017. The notes accrue interest at 2% per annum and mature between January 12, 2018 and June 30, 2018.  As of November 14, 2017, $750,000 is in default. 500,000 -

Promissory note issued January 25, 2017. The lenders earn interest at 7% per month. The note matures on July 5, 2017 and is in default. 50,000 -

Notes aggregating $300,000 issued in the second quarter of 2017. The notes accrue interest at 2% per annum and mature between January 12, 2018 and June 30, 2018. 300,000 -

Notes aggregating $191,800 issued in the third quarter of 2017. The notes accrue interest at 2% per annum and mature between June 16, 2018 and September 30, 2018.
191,800 -

Less: Original issue discounts on notes payable and warrants issued with notes. - (18,681 )

Total $ 4,361,241 $ 4,225,419

	March 31, 2019		December 31, 2018
Promissory note issued July 29, 2014 to Ira Gaines. In 2016, the maturity date on the note was extended to December 1, 2017. As of March 31, 2019, the note is in default. The note earns interest at a rate of 18% per annum.	$	100,000	$	100,000

Promissory notes issued between November 26, 2014 and December 31, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. These notes were in default at March 31, 2019, as the Company was unable to pay installments on their due dates.		286,000		286,000

Promissory notes issued between May 1, 2015 and December 31, 2016 and maturing between June 14, 2015 and December 1, 2017. Lenders on loans aggregating $375,994 earn interest at rates between 2% and 18% per annum. On loans aggregating $100,000, interest is payable in a fixed amount not tied to a specific interest rate. The Company was unable to repay the notes at maturity and at March 31, 2019 the note was in default.	725,994	725,994

Promissory notes issued to an officer of the Company effective November 3, 2015 and maturing November 3, 2016 for settlement of accrued payroll, bearing interest at 10% per annum and including a stock conversion feature. The Company was unable to repay the note at maturity and at March 31, 2019 the note was in default.	97,737	97,737

Promissory notes issued between July 1, 2016 and December 31, 2016. Lenders earn interest at 2% per annum. The notes mature on December 31, 2017, and at March 31, 2019 the notes were in default.	206,000	206,000

Notes aggregating $1,350,000 issued in the fourth quarter 2016. The notes accrue interest at 2% per annum and mature between November 1, 2017 and December 31, 2017. As March 31, 2019, the notes were in default.	1,354,000	1,354,000

Notes aggregating $500,000 issued in the first quarter of 2017. The notes accrue interest at 2% per annum and mature between January 12, 2018 and March 31, 2018. At March 31, 2019, the notes were in default.	500,000	500,000

Promissory notes issued January 25, 2017. The lenders earn interest at 7% per month. The notes mature on July 5, 2017, and at March 31, 2019 the notes were in default.	50,000	50,000

Notes aggregating $300,000 issued in the second quarter of 2017. The notes accrue interest at 2% per annum and mature between April 3, 2018 and May 31, 2018. At March 31, 2019, the notes were in default.	300,000	300,000

Notes aggregating $191,800 issued in the third quarter of 2017. The notes accrue interest at 2% per annum and mature between June 16, 2018 and December 31, 2018. At March 31, 2019, the notes were in default.	191,800	191,800

Promissory note from $425,000 was issued in October 2017 with an original issue discount of $70,000. The note is in default, giving the holder an option to convert the note to stock using the lowest value of the Company’s common stock 25 days prior to the conversion. In 2018, The defaults also resulted in certain penalties, as a result of which the principal amount of the note outstanding at March 31, 2019 had increased to $454,032 $27,110 of accrued interest owed on the note has been converted to stock. The Company has accrued a $738,609 derivative liability for the remaining conversion right.	454,032	455,122

Notes aggregating $105,500 issued in the fourth quarter of 2017. The notes accrue interest at 2% per annum. At March 31, 2019, the notes were in default.	105,500	105,500

Notes aggregating $47,975 issued in the first quarter of 2018. The notes accrue interest at 2% per annum and mature between May 2018 and January 2019. At March 31, 2019, These notes were in default	47,975	47,975

Notes aggregating $125,000 issued in the first quarter of 2018. The notes accrue interest between 2% and 12% per annum and mature between April 2018 and June 2018. These notes include warrants between 5,000,000 and 20,000,000 shares with an exercise price of $0.0005. At March 31, 2019 the notes were in default	125,000	125,000

Notes aggregating $65,000 issued in the second quarter of 2018. The notes accrue interest between 2% per annum and mature between July 2018 and October 2018. These notes include warrants between 1,000,000 and 5,000,000 shares with an exercise price of $0.005. At March 31, 2019 the notes were in default	65,000	65,000

Notes aggregating $193,000 issued in the third quarter of 2018. The notes accrue interest at 2% per annum and mature between November 2018 and January 2019. These notes include warrants between 600,000 and 5,000,000 shares with an exercise price of $0.005. At March 31, 2019. $103,000 of these notes were in default		193,000			193,000

Notes aggregating $533,855 issued in the fourth quarter of 2018. The notes accrue interest from 2% to 3.5% per annum and mature between February 2019 and December 2019. These notes include warrants between 200,000 and 39,500,000 shares with an exercise price of $0.005 to $0.04 At March 31, 2019. $379,000 of these notes were in default		533,855			533,855

Notes aggregating $23,000 issued in the first quarter of 2019. The notes accrue interest at 2% per annum and mature during July 2019. These notes include warrants between 4,600,000 shares with an exercise price of $0.005.		23,000			-

Notes aggregating $231,478 issued in the first quarter of 2019. The notes accrue interest at 6% per annum and mature in February 2020.		231,478			-

Less: Original issue discount on notes payable and warrants issued with notes.		(110,986	)		(149,256	)

Total	$	5,479,385		$	5,187,727

As of ~~September 30, 2017,~~March 31, 2019, the Company had accrued ~~$594,875~~$877,570 in unpaid interest and default penalties. During the quarter ended ~~September 30, 2017, 4,694,017~~March 31, 2019, 18,255,225 shares with a fair value of ~~$138,843~~$78,500 were issued ~~or reserved for issuance~~ by the Company for settlement of promissory ~~notes.~~notes totaling $27,710.

7. 7.Derivative Liabilities

As of March 31, 2019, and December 31, 2018 the aggregate fair value of the outstanding derivative liability was $738,609 and $786,706, respectively. The Company estimated the fair value of the derivative liability using the Black-Scholes option pricing model using the following key assumption during the quarter March 31, 2019:

	Three months ended March 31, 2019
Volatility		295.00	%
Risk-free interest rate		2.40	%
Expected dividends		-	%
Expected term		1 year

The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three levels of inputs may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company uses Level 3 inputs to estimate the fair value of its derivative liabilities.

The following schedule summarizes the valuation of financial instruments at fair value in the balance sheet as of March 31, 2019:

	Fair Value Measurements as of March 31, 2019
	Level 1		Level 2		Level 3
Assets
Total assets		-		-		-
Liabilities
Conversion option derivative liability	$	-	$	-	$	738,609

Total liabilities	$	-	$	-	$	738,609

The following table set forth a reconciliation of changes in the fair value of derivative liabilities classified as Level 3 in the fair value hierarchy:

	Significant Unobservable Input (Level 3)
Beginning balance	$	786,706
Change in fair value		(12,772	)
Partial settlements of liability		(35,325	)
Ending balance	$	738,609

8.Capital ~~Structure—~~Structure – Common Stock and ~~Common~~ Stock Purchase Warrants

Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

As of ~~September 30, 2017~~March 31, 2019, and ~~2016,~~2018, the Company was authorized to issue 500,000,000 common shares at a par value of $0.0001 per share.

As of ~~September 30, 2017,~~March 31, 2019, the Company had ~~357,140,708~~455,577,799 shares of common stock outstanding and ~~250,428,133~~434,322,574 outstanding as of December 31, ~~2016.~~2018.

Stock Warrants

In the quarter ended ~~September 30, 2017, there were 2,500,000~~March 31, 2019, 4,600,000 new warrants were issued by the Company.

There were no modifications of the terms of any warrants issued by the Company in the ~~quarters~~quarter ended ~~September 30, 2017~~March 31, 2019 and ~~2016.~~2018.

Following is a summary of outstanding stock warrants at ~~September 30, 2017~~March 31, 2019 and activity during the ~~nine~~three months ~~then~~ ended:

Number of
Shares Exercise
Price Weighted
Average
Price
Warrants as of December 31, 2016 59,191,904 $ 0.03-15.00 $ 0.35

Issued in 2017 36,300,228 $ 0.01-0.20 $ 0.04

Expired and forfeited in 2017 10,703,762 $ 0.01 $ 0.01

Exercised in 2017 25,302,703 $ 0.01 $ 0.01

Warrants as of September 30, 2017 59,485,667 $ 0.01-15.00 $ 0.36

	Number of Shares			Exercise Price		Weighted Average Price
Warrants as of December 31, 2018		281,782,856		$	0.001-3.74	$	0.09

Issued in 2019		4,600,000		$	.005-.005	$	.01

Expired and forfeited		(4,024,000	)	$	0.-2.00	$	1.25

Exercised		-		$	0	$	0

Warrants as of March 31, 2019		282,358,856		$	.001-3.74	$	0.07

Summary of outstanding warrants as of ~~September 30, 2017:~~March 31, 2019:

Expiration Date	Number of Shares		Exercise Price		Remaining Life (years)		Number of Shares		Exercise Price		Remaining Life (years)

Fourth Quarter 2017		350,000	$	1.50-9.00		0.00
First Quarter 2018		127,500	$	15.00		0.25
Second Quarter 2018		33,334	$	15.00		0.50
Third Quarter 2018		250,000	$	1.50		0.75
Fourth Quarter 2018		6,089,166	$	1.00-1.50		1.00
First Quarter 2019		4,024,000	$	0.50-2.00		1.25
Second Quarter 2019		135,000	$	0.07-0.23		1.50		135,000	$	0.50-2.00		0.25
Third Quarter 2019		260,000	$	0.50-1.50		1.75		260,000	$	0.07-0.23		0.50
Fourth Quarter 2019		400,000	$	0.14		2.00		23,222,726	$	0.50-1.50		0.75
Second Quarter 2020		300,000	$	0.50		2.50		300,000	$	0.50		1.25
Fourth Quarter 2020		1,000,000	$	0.20		3.00		1,000,000	$	0.20		1.75
First Quarter 2021		12,600,000	$	0.20		3.25		12,600,000	$	0.20		2.00
Second Quarter 2021		11,150,000	$	0.03-0.20		3.50		5,812,252	$	0.01408-0.20		2.25
Third Quarter 2021		5,016,667	$	0.03-0.20		3.75		5,166,667	$	0.03-0.20		2.50
Fourth Quarter 2021								300,000	$	0.10		2.75
Second Quarter 2022		1,750,000	$	0.20		4.50		1,750,000	$	0.15		3.25
Third Quarter 2022		2,500,000	$	0.01		4.75		2,650,000	$	0.05-0.10		3.50
Fourth Quarter 2022								9,811,422	$	0.08-0.29		3.75
First Quarter 2023								8,000,000	$	0.005-0.04		4.00
Second Quarter 2023		2,000,000	$	0.20		5.50		15,000,000	$	0.005-0.20		4.25
Third Quarter 2023								76,700,000	$	0.005-0.10		4.50
Fourth Quarter 2023								60,243,000	$	0.005		4.75
First Quarter 2024								34,600,000	$	0.005		5.00
Third Quarter 2028								3,000,000	$	0.07		9.50
Second Quarter 2032		11,500,000	$	0.05		14.50		21,807,789	$	0.01-.0679		13.25

								282,358,856	$	0.005-15.00

8. 9.Stock Compensation

Shares Issued for Services

During the ~~quarters~~periods ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, the Company issued ~~1,700,000~~3,000,000 and ~~5,790,910~~2,863,640 shares of common stock respectively for consulting fees. The Company valued these shares at ~~$61,000~~$120,000 and ~~$900,090~~$198,477 respectively, based upon the fair value of the common stock at the dates of the agreements. The consulting fees are amortized over the contract periods, which are typically between 12 and 24 months. The amortization of prepaid services totaled ~~$446,002~~$0 and ~~$1,225,353~~$125,000 for the quarters ended ~~September 30, 2017~~March 31, 2019 and ~~2016. During the nine months ended September 30, 2017 and 2016, the amortization of prepaid services totaled $1,537,292 and $4,403,951.~~2018.

9.10. Income Taxes -– Results of Operations

~~The~~There was no income tax expense reflected in the results of operations for the years ended March 31, 2019 and 2018 because the Company ~~considers~~incurred a net loss in both years.

On December 22, 2018, the ~~likelihood~~President of the United States signed the Tax Cuts and Jobs Act (“U.S. Tax Reform”), which enacts a wide range of changes ~~by tax authorities in its filed~~to the U.S. corporate income tax ~~returns~~system. The impact of U.S. Tax Reform primarily represents the Company’s estimates of revaluing the Company’s U.S. deferred tax assets and ~~recognizes a liability for or discloses potential significant changes that management believes~~liabilities based on the rates at which they are ~~more likely than not~~expected to ~~occur upon examination by tax authorities. Management has not identified any uncertain tax positions~~be recognized in the future. For U.S. federal purposes the corporate statutory income tax ~~returns filed that require recognition or disclosure in the accompanying financial statements. The Company’s income tax returns~~rate was reduced from 35% to 21%, effective for the ~~past three years are subject to examination by~~2018 tax ~~authorities, and may change upon examination.~~

~~For financial reporting purposes, for the nine months ending September 30, 2017 and 2016, income before income taxes includes the following components:~~

September 30, 2017 September 30, 2016
United States $ (4,157,140 ) $ (14,627,993 )
Foreign -
Total $ (4,157,140 ) $ (14,627,993 )

~~The expense (benefit) for income taxes consist of:~~

2017 2016
Current:
Federal $ - $ -
State $ - $ -
Foreign $ - $ -
Total $ - $ -
Deferred and other:
Federal $ - $ -
State $ - $ -
Foreign $ - $ -
$ - $ -
Total tax expense $ - $ -

year.

The Company has recognized no tax benefit for the losses generated for the periods through ~~September 30, 2017.~~March 31, 2019. ASC Topic 740 requires that a valuation allowance be provided if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company’s ability to realize the benefit of its deferred tax asset will depend on the generation of future taxable income. Because the Company has yet to recognize revenue, we believe that athe full valuation allowance should be provided.

~~The Company's~~Our effective tax rate for fiscal years ~~2016~~2019 and ~~2015~~2018 was 0%. ~~The Company's~~Our tax rate can be affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn in jurisdictions. It may also be affected by discrete items that may occur in any given year but are not consistent from year to year.

~~As of December 31, 2016, the Company had estimated federal and state income tax net operating loss (“NOL”) carry-forwards of approximately $79,900,000, which will expire in 2032-2035.~~

~~10.~~11. Licenses and Supply Agreements

Patent and Subsidiary Acquisition

~~The~~In December 2014, the Company ~~entered into a share exchange agreement on April 24, 2012~~transferred to ~~acquire all~~Cytocom certain of the outstanding shares of TNI BioTech IP, Inc. (“TNI IP”), a biotechnology firm incorporated in Florida and formed to acquire patents related to the treatment of cancer and HIV/AIDS and autoimmune diseases, using Met-enkephalin (“MENK”) and Naltrexone (“LDN”). The goal of TNI IP’s management was to enable mankind and civilization to combat fatal diseases by activating and mobilizing the body’s own immune system using TNI IP’s patented use of MENK. The first patents acquired by TNI IP were acquired from Dr. Nicholas P. Plotnikoff and Professor Fengping Shan in 2012. TNI IP was acquired in exchange for 20,250,000 shares of the Company’s common stock, of which 8,000,000 shares were issued to Dr. Plotnikoff for the acquisition of patents and the remaining 12,250,000 shares were issued to the founders of TNI IP in exchange for all of their right,its rights, title and interest in ~~their TNI IP shares. The~~or relating to intellectual property (i) patents, patent applications, and all divisional, continuations and continuations-in-part thereof, together with all reissues, reexaminations, renewals and extensions thereof and all rights to obtain such divisionals, continuations and continuations-in-part, reissues, reexaminations, renewals and extensions, and all utility models and statutory invention registrations and any other such analogous rights, (ii) trademarks, service marks, Internet domain names, trade dress, trade styles, logos, trade names, services names, brand names, corporate names, assumed business names and general intangibles and other source identifiers of a like nature, together with the goodwill ~~arising on~~associated with any of the ~~acquisition of TNI BioTech IP, Inc. was valued at $98,000,000~~foregoing, and all registrations and applications for registrations thereof, together with all renewals and extensions thereof and all rights to obtain such renewals and extensions, (iii) copyrights, mask work rights, database and design rights, moral rights and rights in Internet websites, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection therewith, together with all renewals, continuations, reversions and extensions thereof and all rights to obtain such renewals, continuations, reversions and extensions, and (iv) confidential and proprietary information, including, trade secrets and know-how. Cytocom licensed back to the Company a perpetual, non-exclusive, royalty-free right and license ~~agreements arising from~~to use the ~~acquisition~~assigned intellectual property for veterinary indications and for the marketing rights to emerging markets, access to all clinical data, use of ~~TNI IP were valued at $16,006,000.~~the formulation for LDN and MENK.

InThe Original Agreement also granted the Company rights to market Lodonal™ and Met-Enkephalin (“MENK”) in “Emerging Markets,” which included all countries excluding Canada, Italy, Japan, France, Germany, United Kingdom, European Community and the United States. Pursuant to the Original Agreement, the Company was required to pay Cytocom a 5% royalty on all sales all ongoing drug development and fees due in connection with the share exchange, we entered into a Sale of Technology Agreement with Dr. Nicholas P. Plotnikoff on March 4, 2012, wherein Dr. Plotnikoff agreed to transfer and assign all of his rights, title and interest in: European Patent United Kingdom, Germany, France, Ireland EP 1401471 BI Methods for inducing sustained immune response; Russian Patent Russian Federation patent number 2313364; The Patent Office of the People’s Republic of China, Application No.: 200810165784.8 China Patent CN1015113407 A The Patent Office of the People’s Republic of China ISSN: 1006-2858 CN 21-1349/R; Patent Agencies Government of India Patent, Application number 1627/KOLNP/2003 number 220265 an Enkephalin Peptide Composition; and the US Patent Pending, US Patent Application 10/146.999 e. The Company received all the production formulations and technology designs from Dr. Plotnikoff necessary for the manufacturing, formulation, production and protocols of the MENK treatment of cancer and HIV/AIDS. As consideration for entering into the Sale of Technology Agreement, Dr. Plotnikoff received 8,000,000 shares of common stock, a royalty of a single-digit percentage on all sales of MENK andunderlying patents until such time as Cytocom was ~~granted the position of Non-Executive Chairman of the Board of Directors.~~

At the time of the acquisition, the valuation of goodwill and other intangible assets were determined using the fair market price for the Company’s common stock, which were exchanged for shares of TNI IP. In the fourth quarter of 2012, the Company performed an annual valuation to determine whether any goodwill or intangible assets that had been acquired by the Company were impaired. The result of this valuation was that material impairments were identified. The Company recognized an impairment of the goodwill arising on the acquisition of TNI IP of $98,000,000.

~~Patent License Agreements~~funded.

On ~~August 13, 2012,~~May 1, 2018, the Company ~~signed~~entered into an ~~exclusive License~~amended and restated licensing agreement (the “Restated Agreement”) with Cytocom. The Restated Agreement ~~with Ms. Jacqueline Young (the “Young Agreement”) for~~restates the ~~intellectual property developed by Dr. Bernard Bihari relating to treatments with opioid antagonists such~~licensing arrangement between the Company and Cytocom as naltrexone and Met-enkephalin for a variety of diseases and conditions including malignant lymphoma, chronic lymphocytic leukemia, Hodgkin’s lymphoma, and non-Hodgkin’s lymphoma, chronic herpes virus infections, chronic herpes viral infections such as chronic genital herpes causedprovided by the ~~herpes simplex virus Type 2~~Original Agreement. The Restated Agreement grants the Company distribution and ~~chronic infections due to the Epstein-Barr virus~~marketing rights for Lodonal™ and ~~a treatment method~~MENK for humans ~~infected with HTLV-III (AIDS) virus, including patients clinically diagnosed as suffering from AIDS and those suffering from AIDS-related complex (ARC). The Bihari patents were acquired~~ in exchange for 540,000 shares of the Company’s common stock with a fair value of $972,000 and assumed liabilities of $400,000, which was payable to Ms. Young over a twenty-four month period in equal installments to reimburse her for the costs of a New York City office in accordance with the Young Agreement. The cost of the patent totaled $1,372,000. Additionally, the Company will pay the licensor a royalty payment of 1% of gross sales. Due to the fact that there have been no sales of licensed product to date,Emerging Markets. In addition, the Company has been ~~required, since~~granted the ~~beginning of 2015,~~rights to ~~make a minimum royalty payment of $100,000 annually to the licensor. The Young Agreement is valid~~distribute and market Lodonal™ and MENK for ~~the life of the patents and expires on a country by country basis in each country where patent rights exist, upon the expiration of the last to expire patent in each country or~~animal use in the event the patent in such country is held to be invalid and/or unenforceable (by a court or government body of competent jurisdiction) or admitted to be invalid or unenforceable. Additionally, the Company can cancel the Young Agreement upon 120 days’ written notice and shall pay all royalties and fees that have accrued under the Young Agreement. We have the exclusive rights to the intellectual property; however, Ms. Young retains a right to practice the patents licensed under the Young Agreement solely for noncommercial, academic research purposes.

On December 24, 2012, the Company signed an agreement for the acquisition of patent rights (the “Smith Agreement”) for the intellectual property of Dr. Jill Smith and LDN Research Group, LLC (collectively, the “Licensor Parties”), whose members are Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Moshe Rogosnitzky and orphan drug designation by the FDA to a novel late-stage drug, trademarked “LDN,” for the treatment of Pediatric Crohn’s disease.United States. The patent covers methods and formulations for treatment of the inflammatory and ulcerative diseases of the bowel, using naltrexone in low doses as an opioid antagonist. These patents were acquired in exchange for 300,000 shares of our common stock with a fair value of $2,715,000 and payment of $165,384 (consisting of a $100,000 initial license fee and payment of $65,384 of expenses), which totaled $2,880,384.

The Smith Agreement requires the Company to (i) use commercially reasonable efforts to develop, commercialize, market and sell licensed products in a manner consistent with a business plan, (ii) expend a minimum amount of funds per annum to develop and commercialize licensed products as soon as practicable, (iii) obtain all requisite regulatory approvals needed to use or sell licensed products in the field of use, and (iv) make the first commercial sale of a licensed product by March of 2017. As of September 30, 2017, the Company had not made a commercial sale of licensed product. Under the Smith Agreement, if the licensors determine that the Company has not fulfilled its obligations, they may furnish the Company with written notice of such determination, in which case the Company must either fulfill the obligation or negotiate a mutually acceptable revised commitment. As of the date of the filing of this Form 10-Q, the licensors had not provided any such notice of determination under the agreement.

~~The Company is required to pay an annual license fee, an annual running~~ royalty on net sales of each licensed product or a minimum royalty, whichever is greater, and a sublicense fee on payments received by the Company from sublicensees. The Company has an exclusive, worldwide license to make, have made, use, lease, import, offer for sale and sell licensed products and to use the method under the patent rights. The Smith Agreement will terminate on the expiration or abandonment of the last patent to expire or ten years after the sale of the first licensed product. The Company may terminate the Smith Agreement upon 90 days’ written notice, provided all sublicenses are terminated and all amounts due and owing are paid to the Licensor Parties. The Licensor Parties may terminate the agreement ten days’ after notice to the Company if the Company is ten days late in payment or there is a breach that remains uncured for ten days after written notice of such breach.

The Company is also required to pay milestone payments after substantial achievement of certain milestone events for each licensed product including payment: upon initiation of each Phase III trial; upon positive completion of each Phase III clinical trial of the therapeutic use of an LDN compound in the field of use; when a New Drug Application (“NDA”) is accepted for review by the FDA; and when FDA approval to market the NDA is approved. The Company will issue shares upon reaching certain milestones including upon the first dosing of the first patient in a Phase III clinical trial for each licensed product, upon the first sale of each licensed product, and upon the achievement of a set dollar amount in cumulative sales for each licensed product covered by NDAs.

As part of the Smith Agreement, the Company has the right to apply to the FDA for the transfer of the orphan drug status for the use of naltrexone for the treatment of pediatric Crohn’s disease and ulcerative colitis, the Investigation New Drug Application (“IND”), and the right to acquire the relevant clinical data set from Dr. Jill Smith. Dr. Jill Smith made arrangements to transfer the IND to the Company as well as the relevant clinical data set, and the FDA has acknowledged that the Company is now the sponsor for this IND.

On September 24, 2014, the Company and the Licensor Parties jointly agreed to terminate the Smith Agreement, and in place thereof, have the Licensor Parties grant a similar license in their patent rights to Cytocom ~~Inc. pursuant~~has been reduced from 5% to ~~a Patent License Agreement between the Licensor Parties, Cytocom Inc.~~1% of sales and the Company ~~with substantially similar terms as set forth in the Smith Agreement. Pursuant~~no longer has any ongoing obligations to this agreement, the Company issued 1,000,000 shares of its common stock valued at $270,000, upon execution to the Licensor Parties and the Company guaranteed the obligations of Cytocom Inc. to the Licensor Parties under the agreement.

On January 18, 2013, the Company signed an exclusive licensing agreement with The Penn State Research Foundation to license all of the intellectual property developed by Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr. Jill P. Smithpay for the ~~treatment of cancer titled “Opioid Growth Factor and Cancer” and “Combination Therapy with Opioid Growth Factor and Taxanes for the Treatment of Cancer” (the “Foundation Agreement”).~~

The Foundation Agreement requires the Company to: (a) use commercially reasonable efforts to develop, commercialize, market and sell licensed products in a manner consistent with a business plan; (b) expend a minimum amount of funds per annum to develop and commercialize licensed products as soon as practicable; (c) obtain all requisite regulatory approvals needed to use or sell licensed products in the field of use; and (d) make the first commercial sale of a licensed product by December 31, 2016. As of September 30, 2017, the Company had not made a commercial sale of licensed product. Under the Foundation Agreement, if the licensor determines that the Company has not fulfilled its obligations, it may furnish the Company with written notice of such determination, in which case the Company must either fulfill the obligation or negotiate a mutually acceptable revised commitment. As of the date of the filing of this Form 10-Q, the licensor had not provided any such notice of determination under the agreement.

The Foundation Agreement provides that the Company must pay to the licensor an initial license fee, a license maintenance fee on each anniversary of the effective date of the Foundation Agreement, and an annual running royalty on net sales for each licensed product or a minimum royalty, whichever is greater. In addition, the Company must pay a sublicense fee on payments received by the Company from sublicensees.

The Foundation Agreement also requires the Company to make payments upon the achievement of certain milestone events including: initiation of each Phase II trial; initiation of each Phase III trial; when the NDA is accepted for review by the FDA; and when FDA approval to market is approved. The Company must also issue shares upon certain milestones including upon the first dosing of the first patient in a Phase II clinical trial for each licensed product, upon the first dosing of the first patient in a Phase III clinical trial for each licensed product, upon the first sale of each licensed product, and upon the achievement of a set dollar amount of cumulative sales for each licensed product covered by NDAs.

The Foundation Agreement terminates on the expiration or abandonment of the last patent to expire or become abandoned. The Company may terminate the Foundation Agreement at any time upon 60 days’ prior written notice and ceasing to make and sell all licensed products, the termination of all sublicenses and payment of all monies owed under the Foundation Agreement. The licensor may terminate the agreement 30 days after notice to the Company if the Company is 30 days late in payment or a breach that remains uncured for 45 days after written notice of such breach.

In May of 2013, the Company executed a Patent License Agreement with Professor Fengping Shan (the “Shan Agreement”) pursuant to which it obtained exclusive rights to develop and commercialize the licensed technology. The licensed technology is the intellectual property developed and owned by Professor Shan (i) relating to the treatment of a variety of diseases and conditions with MENK including multiple forms of lymphoma and cancer and (ii) a treatment method for humans infected with the HLTV-III (AIDS) virus including AIDS and AIDS related complex (ARC). The licensed technology includes the methods and formulations for these treatments including all INDs, communications with regulatory agencies, patient data, and letters relating to these treatments. The licensed technology also includes certain patents developed by Professor Shan. Under the Shan Agreement, the Company must issue 500,000 shares to Professor Shan upon final transfer of the licenses, and reimburse Professor Shan for all out of pocket expensescost in connection with the patents. The Company will pay Professor Shan a running royalty on gross sales subject to decreases if third party intellectual property is needed to complete such sale or product. The Shan Agreement lasts for the durationassets of ~~each of the licensed patents however the Company may terminate the Shan Agreement on 120 days’ written notice to Professor Shan.~~

On August 6, 2014, Professor Fengping Shan executed an Assignment pursuant to which he transferred to the Company his entire right, title and interest in and to the licensed patents under the Shan Agreement and CN 201210302259 Application of combination of low-dose naltrexone and methionine-enkephalin to preparation of anti-cancer drug for the consideration of 500,000 shares of common stock valued at $140,000.Cytocom.

~~11.~~12. Commitments and Contingencies

~~Malawi Treatment Facilities~~

On July 14, 2012, GB Oncology and Imaging Group LTD (“GBOIG”) in partnership with the Company signed a letter of intent agreement to collaborate with the Government of Malawi to assist in expanding the treatment of cancer, HIV/AIDS and other infectious diseases.

In December of 2014, the Government of Malawi completed an oncology clinic at the Queen Elizabeth Central Hospital in Blantyre, Malawi for the treatment of cancer and infectious diseases. In 2015, the Company submitted protocols seeking permission from the College of Medicine Research and Ethics Committee of Malawi (“COMREC”) to conduct two trials involving Lodonal™ in Malawi:

a.	The first protocol, submitted jointly with The Jack Brewer Foundation (“JBF Worldwide”), received COMREC approval on November 11, 2015. The protocol covers a 12-month trial for a “Single Visit Approach to Cervical Cancer Prevention.” The approach is designed to deliver a preventive and simple procedure that can be performed in a clinical setting without the use of a laboratory and to allow for immediate treatment of any precancerous lesions utilizing Wallach LL100 Cryosurgical systems. The protocol provides for 50% of the patient group to be put on Lodonal™ to determine if the drug lowers the number of opportunistic infections during the year, and if it can be shown that Lodonal™ increases CD4, CE8, NK and T cell count, which would show that the incidence rates of opportunistic infection could decrease with Lodonal™ and that Lodonal™ could be used as a prophylaxis to prevent substantial HIV-related morbidity in Malawi. COMREC approved the trial in late 2016. Enrollment of study subjects began in late 2016, and the study commenced in January 2017. Due to the fact that enrollment to date in the study has been low, we now expect to reach the target sample size only by the end of 2017. The trial is ongoing with subjects recruited so far, but it cannot be completed until an acceptable sample subject size is reached.

b.	The second protocol, which has not yet been approved, covers a trial using Lodonal™ for the treatment of cancer. The Company has put this trial on hold as it may not be required now that the Company has received approval in Nigeria for in addition to the pending approval in Kenya and Senegal for Lodonal™ for the treatment of cancer.

Distribution Agreements in Nigeria

Effective November 9, 2012, the Company signed an exclusive Distribution Agreement with G-Ex Technologies/St. Maris Pharma and GB Pharma Holdings, LLC for the Federal Republic of Nigeria. The parties have been unable to perform under the agreement because a certificate of free sale was not obtained by the Company until November of 2013, and no extension has been granted.

In October 2013, the Company announced the signing of a Distribution Agreement with AHAR Pharma, a Nigerian company, to market Lodonal™, in Nigeria for the treatment of autoimmune diseases and cancer. AHAR intends to distribute Lodonal™ through a local distributor network, an Internet client base and directly to hospitals, pharmacists and doctors in Nigeria. The first deliveries under the agreement ~~expires~~took place in ~~December~~February 2018. Under the original agreement, the Company is obligated to provide delivery of an initial supply of between 1 million and 1.5 million doses of Lodonal™ product to cover AHAR Pharma’s first-year purchase commitment. Due to the fact that AHAR Pharma failed to meet its contractual purchase obligations, the Company formally issued notice of default under the agreement.

~~In August 2015,~~On April 18, 2018, AHAR Pharma transferred its rights under the ~~Company announced the signing of a letter of intent with GB Pharma/AHAR~~Distribution Agreement to Fidson Healthcare Plc (“Fidson”), and Fidson ~~Healthcare Plc., in terms of which Fidson will promote Lodonal~~^TM~~upon execution of a definitive agreement between the companies and receipt required regulatory approvals to distribute Lodonal~~^TM~~in Nigeria. The Company continues to hold discussions with Fidson for distribution of Lodonal~~^TM ~~in Nigeria under this letter of intent.~~

~~In May 2017, the Company received approval from the National Agency for Food and Drug Administration and Control of Nigeria (“NAFDAC”) to market and distribute Lodonal~~^TM ~~in Nigeria. The approval is for a one-day Immune System Regulator for the management of HIV/AIDS, which is based on the results of the Company’s 90-day bridging trial in Nigeria.~~

~~Under the 2013~~signed an exclusive distribution agreement with ~~AHAR Pharma, after~~ the Company ~~received NAFDAC approval~~ to ~~sell Lodonal~~^TM in Nigeria, AHAR was required to place an initial order for capsules totaling between 1 million and 1.5 million capsules, at $1.00 per capsule. No order was placed. The parties have agreed to amend theirdistribute Lodonal™. There were no shipments under this agreement in this regard, and they expect to close negotiations by the end of November 2017. The Company expects to ship an initial order of 400,000 capsules, commencing before year-end 2017, over a 12-month period in equal quarterly instalments. AHAR has notified the Company that it has opened discussions with a small number of wholesalers for the purchase of Lodonal^TM.

~~In September 2017, the Company became registered under the U.S. Government's System for Award Management to sell Lodonal~~^TM~~to Nigeria through the United States Agency for International Development (“USAID”) and UNAIDS. At the same time, the Company and AHAR filed for regulatory approval of the use of Lodonal~~^TM ~~with the National Agency for the Control of AIDS in Nigeria (“NACA”). Once NACA approves the use of Lodonal~~^TM ~~as a treatment for AIDS, it will be able to purchase Lodonal~~^TM~~directly from the Company and AHAR.~~

In addition to the work with NACA, USAID and UNAIDS, AHAR and the Company are moving forward with applications to NAFDAC to permit the sale of Lodonal™ in Nigeria for additional indications. They expect to submit those applications in the first quarter of ~~2018. Those indications include the use of the drug as an adjunct to treatment of chemotherapy, opportunistic infections and cancer.~~2019.

~~Agreements in Kenya~~

In March 2017, the Company signed a Memorandum of Understanding (“MOU”) for distribution of Lodonal™ in Kenya. The MOU is a three-way distribution agreement between the Company, Kenya-based Omaera Pharmaceuticals Limited, a leading Kenyan pharmaceutical importer and distributor, and GB Pharma Holdings. The MOU sets forth standard terms and conditions for distributing Lodonal™ in Kenya.

~~In April 2017, the Company submitted a New Drug Application (“NDA”) to the Pharmacy and Poison Board (“PPB”) in Kenya for Lodonal~~^TM ~~for the treatment of patients with HIV and cancer, both as a standalone treatment as well as an adjunct treatment, and as an immunomodulator.~~

On August 22, 2017, the Company entered into a Distribution Agreement (the “Agreement”) with TNI BioTech International Ltd. (“TNI”), a wholly-owned subsidiary, and Omaera Pharmaceuticals Ltd. (“Omaera”). Pursuant to the Agreement, Omaera will be the sole distributor of the Company’s Products, as listed in Section 2 of the Agreement, for sale in Kenya. The Products to be distributed by Omaera will be manufactured by Acromax Dominicana, SA. The term of the Agreement began on August 22, 2017 and are to continue for a period of three (3) years, unless earlier terminated.

The Company will have up to 14 calendar days from receipt of a purchase order from Omaera to deliver the requested Products to Omaera. During the first 12 months of the Agreement, Omaera will pay the full amount of each invoice in cash, without any deductions, by means of bank transfer on or before the date of shipment. After the first 12 months of the Agreement, the Company will provide 30 days credit terms from the date of invoice for payment. The Company has the right to vary the credit made available to Omaera, and to restrict supplies, if Omaera fails to make payments in accordance the Agreement.

Pursuant to the Agreement, Omaera is required to purchase a minimum number of pills from the Company for specified periods over the term of the Agreement (the “Minimum Purchase Commitment”). The minimum number of pills required to be purchased by Omaera for each period are as follows:

	●	~~First half of first year 1,080,000 pills~~
	●	~~Second half of first year 3,600,000 pills~~
	●	~~Second year 14,400,000 pills~~
	●	~~Third year 28,800,000 pills~~

If the number of Products purchased by Omaera from the Company does not, in the three-year term beginning on August 22, 2017, or in any of the above-captioned periods, meet the Minimum Purchase Commitment, Omaera shall, at its option, either (a) buy the quantity of Product required to meet that period’s Minimum Purchase Commitment, or (b) pay to the Company the net profit that patent laboratories would have obtained from the sale of that Minimum Purchase Commitment of Product, at the rate specified in Schedule 1 of the Agreement, or a higher rate if to the extent that the Company may have increased the price per pill.

Omaera is required to purchase the Products only from the Company and use its best endeavors to actively distribute and sell the Products in Kenya. To this end, Omaera must recruit a sales and promotion team responsible for meeting the agreed business plan and utilize its marketing personnel to promote selling, distributing and all marketing process of the Company’s Products throughout Kenya. No later than three months from the date of the Agreement, Omaera is required to purchase and hold a minimum of three months stock of the Products on a firm purchase basis throughout the term of the Agreement to meet anticipated market demand.

Upon termination of the Agreement for any reason, Omaera will immediately and at no charge assign or transfer the benefit of the Product Registrations or Registration applications and all associated rights and any other permits, licenses, registrations or applications obtained in respect of the Agreement or the Products to the Company where legally possible, or to another party as the Company in its sole discretion may direct and the parties shall cooperate in every way to achieve such assignment or transfer including without limitation providing all documents related with the Product registrations within three (3) months of the request.

~~The Company continues to await receipt of final regulatory approvals from Kenya’s National AIDS & STI Control Programme (“NASCOP”) to commence distribution of Lodonal~~^TM ~~in Kenya. No purchase orders have been received by the Company from Omaera under the Agreement.~~

Agreements with Hubei Qianjiang Pharmaceutical Company

On October 18, 2012, the Company and Hubei Qianjiang Pharmaceutical Co., Ltd. (“Qianjiang Pharmaceutical”), signed a Venture Cooperation Agreement on New Drug Methionine Enkephalin (the “Venture Agreement”) pursuant to which Qianjiang Pharmaceutical acquired an exclusive license for the production of MENK in China. The Venture Agreement requires that Qianjiang Pharmaceutical conduct drug research and pilot testing for MENK, organize pre-clinical studies, and apply for clinical trials for MENK with the Chinese State Food and Drug Administration. Under the Venture Agreement, Qianjiang Pharmaceutical must open a co-administration account for the development of MENK in China. Qianjiang Pharmaceutical must pay the Company, upon the marketing of MENK products, a half-year amount equaling 6% of its gross sales from MENK of the preceding half year. The Company may cancel the Venture Agreement if Qianjiang Pharmaceutical does not pay expenses for a period exceeding six months or does not commence clinical trials within 12-months after receiving certain approvals. Qianjiang Pharmaceutical may cancel the Venture Agreement if the Company fails to perform its obligations for a period of six months or the failure to receive approval of clinical trials is due to the Company’s MENK technologies. The Venture Agreement was amended on February 24, 2013 to expand the clinical trials from pancreatic to both pancreatic and liver cancer and amended on March 6, 2014 to require Qianjiang Pharmaceutical to commence studies and clinical trials in China and place funds in the co-administration account.

On August 6, 2014, the Company entered into a Supplementary Agreement on New Drug Methionine – Enkephalin Cooperation (the “Amendment”) with Qianjiang Pharmaceutical, amending the Venture Agreement, as amended. The Company and Qianjiang Pharmaceutical executed the Amendment to accelerate clinical trials in both the United States and China and agreed to immediately initiate ~~three month~~three-month Good Laboratory Practice (“GLP”) Toxicology Studies (rat and dog) within 30 days of signing the Amendment. The Amendment requires that the GLP Toxicology Studies Trials are conducted in China in accordance with international standards and standards acceptable to the ~~FDA and that the studies include the following:~~

~~Exploratory Toxicology (nGLP)~~

	●	~~Dose range finding studies~~
	●	~~Different species and methods of administration~~
	●	~~Multiple dosing regimens~~
	●	~~Estimate the response vs. dose given~~

~~Definitive Toxicology (GLP)~~

	●	~~Performed in collaboration with Calvert Laboratories (USA) and MPI/Medicillon (China)~~
	●	~~General toxicology studies~~
	●	~~Different species and methods of administration~~
	●	~~Immunogenicity study with NHPs~~

~~Special Toxicology Studies (planned)~~

Pursuant to the Amendment, Qianjiang Pharmaceutical has made certain funds available from the co-administrative account opened by Qianjiang Pharmaceutical under the Venture Agreement, in accordance with an approved budget and timeline set forth in the Amendment. A portion of these funds are expected to be used by Cytocom to run PK and Dosing trials for MENK in the United States in 2016. The Amendment requires Cytocom and Qianjiang Pharmaceutical to meet with the China State Food and Drug Administration to determine that PK and Dosing Trials completed in the United States will be acceptable. All developments and trials run by Cytocom in the U.S. or the European Union will be used for requesting registration approval in China.FDA.

In February 2013, the Company signed a Strategic Framework Agreement for Cooperation with Qianjiang Pharmaceutical. Under the agreement, the parties will work together to further the development of new products and conduct research and development on the Company’s licensed patented technology. Specifically, the parties aim to co-invest to develop and market products focusing on HIV, cancer and related autoimmune system therapies, develop co-ventured manufacturing facilities in China, and develop co-ventured distribution of the developed products in China and Africa. The agreement does not have a definitive term, as each new agreement resulting from the cooperation will set forth the material terms, including, but not limited to, ~~fees,~~fess, duration and termination therein.

In December of 2016 Qianjiang Pharmaceutical ~~completed~~delivered various documents under the ~~following documents:~~

agreements related to its studies of Exploratory Toxicology (nGLP)

	●	~~Dose range finding studies~~
	●	~~Different species~~ and ~~methods of administration~~
	●	~~Multiple dosing regimens~~
	●	~~Estimate the response vs. dose given~~

Definitive Toxicology (GLP)

	●	~~Performed in collaboration with Calvert Laboratories (USA) and MPI/Medicillon (China)~~
	●	~~General toxicology studies~~
	●	~~Different species and methods of administration~~
	●	~~Immunogenicity study with NHPs~~

. In addition to the pharmacology and toxicology studies, Qianjiang Pharmaceutical and China Peptide completed the formulation and CMC necessary to scale up manufacturing of MENK.

There has been no progress under the agreements in the past 12 months, since a change of ownership of Qianjiang Pharmaceutical in 2017. The Company continues to hold discussions with new management about the future of the agreements.

Contract Manufacturing Agreements

On May 16, 2016, the Company entered into an agreement with Complete Pharmacy and Medical Solutions, LLC (“CPMS”) to compound, package and distribute the LDN tablets, capsules and/or creams in the United States. The initial term of the agreement is three years, with the option to renew for an additional year. The agreement may be terminated by (i) mutual agreement, (ii) in the event of a breach, provided however that if the Company terminates the agreement, the Company will be required to reimburse CPMS for all unused packaging materials for the LDN, which unused packaging materials CPMS will provide to IMUN. If CPMS does not receive and ship at least 1,000 orders (prescriptions) during the term of the agreement, the Company will be required to reimburse CPMS for 100% of the “ramp up costs” (defined as all costs and expenses of labor and materials related to the testing, and required FDA and other governmental documentation/approvals of test data) of providing and producing the LDN, even where the Company cancels/terminates the agreement, which provision shall survive the cancellation/termination of the agreement.

On October 25, 2016, the Company and Acromax Dominicana, SA (“Acromax”), which is based in the Dominican Republic, entered into a contract for manufacturing of LDN tablets, capsules and/or creams (“Agreement”). ~~In accordance with~~Subject to the terms and conditions of the Agreement, Acromax will obtain all necessary licenses and permits to carry out the manufacturing and packaging of LDN in exchange for a fixed fee per tablet plus an additional fee for packaging, shipping and customs clearance. The Agreement has an initial term of five years unless terminated by either party in accordance with ~~its~~the terms.

~~In January 2017, Acromax obtained from the Ministry of Public Health and Social Assistance a Medications and Specialized Pharmaceuticals Registration Certification for Lodonal~~^TM~~, which allows for the manufacture and sale of Lodonal~~^TM ~~in the Dominican Republic and for export. The Ministry also issued a Certificate of Pharmaceutical Product for Nigeria, Kenya, Senegal and Malawi, which will allow for the export of Lodonal~~^TM ~~to those countries where the Company has drug and marketing approval.~~

Operating Leases

At ~~September 30, 2017,~~March 31, 2019, the Company was a party to an agreement to lease office space in Orlando, Florida. ~~Rent~~Rental expense for the ~~quarters~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 was ~~$12,632~~$5,282 and ~~$4,009,~~$4,281 respectively. ~~Rent expense in 2016 reflected a $34,982 reversal of an accrual.~~

~~Legal Proceedings~~

~~None.~~

~~12.~~13. Subsequent Events

~~Settlement Agreement~~

On ~~October 12, 2017,~~April 8, 2019, the Company ~~entered into~~signed a ~~settlement and release~~second amendment to its licensing agreement (the ~~“Release Agreement”~~“Second Amendment”) with ~~Phoenix Fund Management, LLC (“PFM”) and Far East Holdings, LLC (“FEH”) relating to certain claims between~~Cytocom. The Second Amendment confirmed that, as of its effective date (December 31, 2018), the Company and PFM before the Circuit Court of the Eleventh Judicial Circuit (the “Court”), in and for Miami-Dade County, Florida, case No. 2017-003521 CA-01 (the “Lawsuit”). The debt to PFM, the Lawsuit, a previous settlement agreement between PFM and the Company (“3(a)(10) Settlement Agreement”) and the Court’s previous order that the Company pay PFM in the amount of $675,000 through issuance of the Company’s common stock pursuant to the 3(a)(10) Settlement Agreement, was initially disclosed in the Company’s current report filed March 14, 2017.

The Release Agreement memorializes that the $675,000 due PFM has been overpaid by the Company and establishes the responsibilities of the parties henceforth. Pursuant to the Release Agreement, the Company agreed to dismiss all claims filed against PFM, not attempt to impede or frustrate the ability of PFM to deposit, clear or sell its shares of the Company’s stock, and provide any assistance necessary to aid in the deposit and clearance of PFM’s shares. Also pursuant to the Release Agreement, PFM is required to transfer one million (1,000,000) shares of the Company’s stock to ClearTrust, LLC, the Company’s transfer agent (“ClearTrust”), for the shares to be deposited in the Company’s treasury and FEH shall transfer one and half million (1,500,000) shares of the Company’s stock to ClearTrust for the shares to be deposited in the Company’s treasury. Upon the terms and conditions of the Release Agreement being met, each party has agreed to fully release the other party from any claims or complaints, known or unknown, which the party may have had against the other.

~~Securities Purchase and Related Documents~~

On October 25, 2017, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Iliad Research and Trading, L.P., a Utah limited partnership (“Iliad”) whereby the Company agreed to sell and Iliad agreed to purchase the following securities (“Securities”) (i) a convertible promissory note (the “Note”) convertible into common shares of the Company, (ii) a warrant exercisable into 2,656,250 common shares of the Company (the “Warrant”), and (iii) 560,000 newly issued common shares of the Company (the “Origination Shares”). The purchase price for the Securities is $350,000.

~~Pursuant to the Agreement, the Company has agreed to initially reserve 45,000,000 common shares towards issuance~~owned 15.57% of the common shares ~~issuable upon exercise~~issued and outstanding on that date. The Company agreed to assume the obligation to repay all accounts payable obligations and accrued liabilities owed by Cytocom as of the ~~Warrant~~effective date, except those accounts payable obligations and ~~conversion~~accrued liabilities as specified in the Second Amendment. The Company also assumed the obligation to repay all notes payable, together with any interest or fees payable thereon, owed by Cytocom as of the ~~Note. It has~~effective date, except those notes payable obligations, together with any interest or fees payable thereon, as specified in the Second Amendment. The parties further agreed ~~to increase~~that in the ~~reserve in 5,000,000 share increments so that~~event of a change of control of Cytocom, and at the ~~reserve remains at least 3x the number~~option of common shares issuable upon exercise of the Warrant and conversion of the Note. The Company and its transfer agent have executed an irrevocable letter of instruction relating to the reservation of shares pursuant to the Agreement.

~~In addition, should~~Cytocom, the Company ~~offer securities during any period while the Securities are outstanding on better terms than those offered to Iliad pursuant to the Agreement, Iliad or its assign shall~~would have the ~~option~~right to ~~incorporate the preferable terms conversion or exercise of it remaining outstanding Securities. Further, the Agreement contains numerous restrictive covenants relating to, among others,~~purchase outright the Company’s ~~issuance of variable rate securities. The Agreement also contains standard representations and warranties.~~

~~The Warrant issued pursuant~~licensing rights to ~~the Agreement on or around October 25, 2017, may be exercised~~Emerging Markets for ~~a term of five (5) years for a total of up to 2,656,250 shares. The exercise price for each share of common stock~~humans under the ~~Warrant is $0.08, as the same may be adjusted from time to time pursuant to the terms and conditions of this Warrant, including following~~License Agreement at a ~~stock split or dividend. The Warrant holder may elect a “cashless” exercise of the Warrant whereby the holder shall be entitled to receive a number of shares of common stock~~price equal to (i) the excess of the “Current Market Value” (as defined in the Warrant) over the aggregate exercise price of the shares being exercised, divided by (ii) the “Adjusted Price” (the lower of the market price and exercise price, as adjusted).

~~The Company has three days from the date of any exercise of the Warrant to deliver the warrant shares before it incurs substantial late fees not to exceed 200% of~~ the value of the warrant shares being exercised. The Warrant contains a 4.99% ownership limitation whereby the Warrant cannot be exercised if it would cause the holder’s ownership to exceed 4.99% of the Company’s voting stock. This limitation may be increasedthose licensing rights as determined by ~~the holder to 9.99%.~~

The Company issued the Note on or around October 25, 2017 in the principal amount of $425,000. In addition to containing a $70,000 original issuance discount (OID), the Note included $5,000 to cover Iliad’s legal expenses relatingan independent valuator acceptable to the foregoing transactions. No interest will accrue on the principal balance of the Note unless there is a default, at which time, it will be 22%. The Note has a seven (7) month maturity but may be prepaid in full anytime; however, if prepaid within 90 days from issuance, the Company ~~will be required to pay only $400,000 in full satisfaction of the Note.~~

~~The Note holder may convert the principal~~ and interest under the Note to common shares of the Company at a conversion rate of, subject to adjustment, 60% of the lowest intra-day trade price during the period twenty five (25) trading days prior to conversion. The conversion price may be reduced by factors of 5% upon certain events of default.Cytocom.

Upon any enumerated event of default under the Note, the Note holder may declare all amounts under the Note immediately due and payable at a premium based on a formula using the conversion price, outstanding balance and market price of the Company’s common stock. In the alternative, the Note holder may apply a default premium rather than declaring the balance due. In such case the outstanding balance will be increased by the default premium, which is 5% for minor defaults and 15% for major defaults. The premium for major defaults may be applied three times, as may the premium for minor defaults. The Note also contains similar ownership limitations and late fees for failure to timely deliver share certificates as those contained in the Warrant.

The Company issued 26,391,765 shares of common stock between September 30, 2017 and November 14, 2017, of which 5,337,748 shares were for a cashless exercise of a warrant, 3,194,017 shares were for debt conversions and settlements, 4,800,000 shares were for a legal settlement,560,000 shares for a loan origination fee and 12,500,000 shares for cash.

~~Between October 1, 2017 and November 14, 2017, the company received $475,000 in debt financing.~~

~~As of November 14, 2017, the Company had outstanding 383,532,473 shares of common stock.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Forward-Looking Statements and Associated Risks

This section and other parts of this Form 10-Q contain forward-looking statements. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements also can be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in our Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2015~~2018 filed with the Securities and Exchange Commission on ~~May~~April 16, ~~2016~~2019 (the ~~“2015~~“2018 Form ~~10-K/A”~~10-K”) under the heading “Risk Factors”.

The following discussion should be read in conjunction with the ~~2015~~2018 Form ~~10-K/A~~10-K and the consolidated financial statements and notes thereto included elsewhere in this Form 10-Q. All information presented herein is based on the Company’s fiscal calendar. Unless otherwise stated, references in this report to particular years, quarters, months or periods refer to the Company’s fiscal years ended in December and the associated quarters, months, or periods of those fiscal years. Each of the terms the “Company”, “we”, “us” or “our” as used herein refers collectively to Immune Therapeutics, Inc. and its subsidiaries, unless otherwise stated. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

~~General~~

Immune Therapeutics, Inc. (the “Company”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”).

In August 2013, the Company formed its United Kingdom subsidiary, TNI BioTech, LTD (the “UK Subsidiary”). The UK Subsidiary received approval to be considered a micro, small or medium-sized enterprise (“SME”) with the European Medicines Agency (“EMA”) on August 21, 2013. The designation provides the UK Subsidiary with significant discounts when holding meetings or submitting filings to the EMA. On September 19, 2013, the UK Subsidiary submitted a pre-submission package to the EMA regarding Crohn’s Disease. The EMA granted the UK Subsidiary a meeting that took place on September 27, 2013. The UK Subsidiary is eligible to benefit from the provisions for administrative and financial assistance for SMEs set out in Regulation (EC) No 2049/2005. The Company will apply to obtain EMA benefits once funding becomes available.

2013, the Company formed a new subsidiary, Cytocom Inc., to focus on conducting LDN and MENK clinical trials in the United States. In December 2014, the Company finalized the distribution of common stock of Cytocom Inc. to its shareholders. As part of the transaction, the Company retained exclusive rights to all international patents, in-country approvals, formulations, trademarks, manufacturing, marketing, sales, and distributions rights in emerging nations, including Africa, Central America, South America, Russia, India, China, Far East, and The Commonwealth of Independent States (former Soviet Union). The Company will continue to have access to existing clinical data as well as any new data generated by Cytocom Inc. during drug development. On December 8, 2014, the number of Cytocom Inc. shares of common stock that were issued to our shareholders totaled 113,242,522 shares. In connection with the transaction, Cytocom Inc. issued 140,100,000 shares of its common stock to the Company, which gave the Company a 55.3% stake in Cytocom Inc. on that date. In April 2016, the Board of Directors and a majority of shareholders of Cytocom approved a reverse stock split of Cytocom’s outstanding common stock with one new share of stock for each twenty old shares of common stock. Cytocom effectuated and finalized the reverse split in June 2016. At June 30, 2017, the Company’s equity interest had been further reduced to 11.3%, by subsequent issuances of Cytocom common stock to shareholders in settlement of notes payable.

Today, Immune Therapeutics is focused on the commercialization of affordable non-toxic immunotherapies focused on the activation and rebalancing of the body’s immune system. Stimulating the body’s immune system remains one of the most promising approaches in the treatment of Cancers, HIV, Autoimmune Diseases, inflammatory conditions and other opportunistic infections for chronic often life-threatening diseases through the mobilization of the body’s immune system in Emerging Nations using existing clinical data.

Cytocom Inc, is a clinical-stage pharmaceutical company focused on the development of the first affordable non-toxic immunodulator for the treatment of inflammatory diseases, immune-related disorders, and cancer and is responsible for the development of our patented therapies with the FDA and EMA.

As of this date, neither we nor our collaboration partners are permitted to market our drug candidates in the United States until we receive approval of a New Drug Application from the FDA. Neither we nor our collaboration partners have submitted an application for or received marketing approval for any of our drug candidates. Obtaining approval of an NDA can be a lengthy, expensive and uncertain process.

~~Research and Development~~

The Company’s research and development (“R&D”) activities commenced in the third quarter of 2012, the Company having completed the initial acquisition of MENK-related patents required for research in the second quarter of that year. Through 2013 and the first nine months of 2014, we continued to build R&D organization and capabilities focusing primarily on new uses for opioid-related immuno-therapies, such as LDN and MENK. Those activities were suspended at the end of September 2014, due to lack of funding. We expect to be able to resume activities in 2017.

Our R&D priorities include development of IRT-101 or MENK, a small synthetic peptide that is naturally occurring in the body, and IRT-103 LDN, an opioid receptor antagonist. Our pipeline provides two therapies with a wide range of indications that can be pursued. We believe that both molecules have the ability to stimulate the immune system in order to treat a variety of autoimmune diseases including multiple sclerosis, immune disorders such as Crohn’s disease, cancer, and viral infections such as HIV/AIDS.

Three Months Ended ~~September 30, 2017~~March 31, 2019 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2018

~~Revenues~~~~(dollar amounts in thousands)~~

Revenues

We had no$0 revenues from operations for the three months ended ~~September 30, 2017,~~March 31, 2019, compared to $3$65,013 for the three months ended ~~September 30, 2016.~~March 31, 2018. In February 2018, the Company reported the first shipments of Lodonal^TM to Nigeria.

Operating Expenses

Selling, general and administrative

Selling, general and administrative expenses and related percentages for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 were as follows (dollar amounts in thousands):

For the three months ended
September 30,
2017 2016
Selling, general and administrative $ 621 $ 1,031
Increase/(decrease) from prior year $ (410 ) $ 166
Percent increase/(decrease) from prior year (40 )% 19 %

	For the three months ended March 31,
	2019			2018
Selling, general and administrative	$	487		$	638
Decrease from prior year	$	(151	)	$	(28	)
Percent decrease from prior year		(24	)%		(4	)%

For the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, selling, general and administrative expenses were made up as follows (dollar amounts in thousands):

	For the three months ended September 30,				For the three months ended March 31,
	2017		2016		2019		2018
Stock listing and investor relations expenses	$	6	$	-	$	11	$	10
Consulting and contractors		119		161		84		143
Payroll		333		583		235		321
Professional fees		38		37		37		47
Travel		33		107		1		32
Other expenses		92		143		119		85

In the three months ended ~~September 30, 2017,~~March 31, 2019, total cash and cash accruals for selling, general and administrative expense was ~~$621~~$487 compared to ~~$1,031~~$638 for the corresponding period in ~~2016, an~~2018, a decrease of ~~$410~~$151 or ~~40%~~24%. Significant cash items included:

	●	consulting and contractor services obtained to assist the Company in raising capital, manage investor relations, and develop business in new markets, in the amount of ~~$119~~$84 in ~~2017,~~2019, a decrease of ~~$42~~$59 or ~~26%~~41% over the ~~$161~~$143 spent in ~~2016.~~2018. The decrease ~~reflects reduced spending in 2017 FDA discussions to re-open clinical trials~~was the result primarily of the expiration of certain consulting contracts by the end of 2018, and the ~~manufacture~~deconsolidation of ~~products~~Cytocom in May 2018, which eliminated a number of consulting contracts from the ~~USA;~~Company’s books thereafter;

	●	professional fees for legal, tax and accounting services in the amount of ~~$38~~$37 in ~~2017, an increase~~2019, a decrease of $1$10 or 3%21% over the ~~$37~~$47 spent in ~~2016.~~2018. The ~~increase~~decrease was primarily due to ~~costs incurred~~the deconsolidation of Cytocom in ~~2016 to settle outstanding debt obligations and litigation;~~May 2018, which eliminated Cytocom’s legal fees from the Company’s books thereafter;

	●	payroll in the amount of ~~$333~~$235 in ~~2017,~~2019, a decrease of ~~$250~~$86 or ~~43%~~27% over the ~~$583~~$321 spent in ~~2016.~~2018. The decrease reflects ~~lower headcount~~the deconsolidation of Cytocom in ~~2017, and~~May 2018, which eliminated Cytocom’s payroll costs from the ~~costs of stock awards to executives and employees in the third quarter of 2016. There were no stock awards in the third quarter of 2017;~~Company’s books thereafter; and

	●	travel in the amount of ~~$33~~$1 in ~~2017,~~2019, a decrease of ~~$74~~$31 or ~~69%~~97% over the ~~$107~~$32 spent in ~~2016,~~2018, reflecting ~~lower~~decreased travel for investor relations and international sales in 2019, and also the elimination of Cytocom-related travel expenses due to the deconsolidation of Cytocom in ~~Africa.~~May 2018.

Research and development

R&D expenses and related percentages for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 were as follows (dollar amounts in thousands):

	For the three months ended September 30,						For the three months ended March 31,
	2017			2016			2019			2018
Research and development	$	109		$	247		$	-		$	129
Increase from prior year	$	(138	)	$	136
Increase/(decrease) from prior year							$	(129	)	$	10
Percent increase/(decrease) from prior year		(56	)%		122	%		(100	)%		9	%

Expenses for research and development in the three months ended ~~September 30, 2017~~March 31, 2019 decreased by ~~56%~~100% compared to expenses in the same period in ~~2016.~~2018. The decrease ~~reflects a reduction~~was due to the deconsolidation of Cytocom in ~~professional fees (decreased by $19 or 43%) and Africa trial and related travel~~May 2018, which eliminated Cytocom’s R&D expenses ~~(decreased by $137 or 98%), offset by an increase of $18 or 27% in costs for contracted technical services and patent expenses.~~

~~Significant items included:~~

	●	~~payments for contracted technical services, $37 in 2017, an increase of $11 or 42% over the $26 spent in 2016, reflecting timing of accruals for fees owed for research activities;~~

	●	~~payments for professional fees of $26 in 2017, a decrease of $19 or 42% over the $45 spent in 2016, reflecting a decrease in the cost in maintaining patents and licenses worldwide;~~

	●	~~patent expenses of $46 in 2017, a $7 increase over the $39 spent in 2016, reflecting payments for certain rights to use LDN.~~

~~Most of~~from the ~~R&D spending in the third quarter of 2017 was for LDN. In the same period in 2016, 75% of the spending was for the development of LDN; the balance was spent on MENK.~~Company’s books thereafter.

Stock issued for services

The Company periodically receives services from consultants under long-term consulting contracts, in terms of which it issues stock to prepay for the services. In such cases, the Company initially accounts for the full cost of these services as Prepaid Services on its balance sheet, calculated by the number of shares issued multiplied by the share price on the contract date. This amount is then amortized as a cost over the period in which the services are provided to the Company. The Company reports these costs separately from Selling, general and administrative costs, and Research and development costs, to better demonstrate the true costs of Selling, general and administrative activities, and Research and development.

Amortization of amounts recorded as Prepaid Services for stock issued for services G&A and related percentages for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 were as follows (dollar amounts in thousands):

	For the three months ended September 30,						For the three months ended March 31,
	2017			2016			2019			2018
Amortization of prepaid consulting expense G&A	$	446		$	1,225		$	-		$	125
Percentage increase/ (decrease) from prior year		(64	)%		12	%
Percentage decrease from prior year								(100	)%		(74	)%

The decline in expense reflects ~~the decrease in the price of the Company’s stock year over year and~~ the fact that the cost of shares issued for services had been fully amortized in prior years.

The number of shares issued for ~~prepaid~~ consulting services G&A in the three months ending ~~September 30, 2017~~March 31, 2019 was ~~1,700,000 (5,790,910~~3,000,000 (2,863,640 in the corresponding period in ~~2016)~~2018).

Prepaid consulting services G&A in the three months ended ~~September 30, 2017~~March 31, 2019 consisted of the following:

Amortization of cost of stock issued prior to 2017 $ 125
Amortization of cost of stock issued in 2017 $ 321

Amortization of cost of stock issued prior to 2018	$	-
Amortization of cost of stock issued in 2018		-
Amortization of cost incurred for new stock issued in the three months ended March 31, 2019 under consulting contracts entered into in 2019		-

Warrant valuation expense

When the Company sells its stock for cash or settles debt for stock, it periodically issues warrants to acquire additional stock at prices agreed at the date of the original sale. The Company incurs a cost for the rights attached to the warrants, which is calculated using the Black-Scholes Model (see above 7.8. Capital Structure—Common Stock and Common Stock Purchase Warrants.) This expense is reported in the Condensed Consolidated Statements of Operations above as the Warrant valuation expense.

In the three months ended ~~September 30, 2017,~~March 31, 2019, the Company issued ~~2,500,000~~4,600,000 warrants to stockholders at an exercise price of ~~$0.10,~~$0.005, for which it recorded ~~an expense~~a debt discount of ~~$273.~~ $23,000.

In the three months ended ~~September 30, 2016,~~March 31, 2018, the Company issued ~~2,000,000~~42,510,818 warrants to stockholders at an exercise price range of ~~$0.15~~$0.005 to ~~$0.20,~~$12.00, for which it recorded an expense of ~~$188.~~$125,000.

For the three months ended
September 30,
2017 2016
Warrant valuation expense $ 273 $ 188
Percentage increase/(decrease) from prior year 45 )% 404 %

Depreciation and amortization

The Company amortizes the costs incurred to acquire patents and licenses over the period of the related agreements. All of the Company’s patents and licenses ~~had been~~were fully amortized by December 31, 2016.

Depreciation ~~and amortization expenses~~expense for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016 were~~2018 was as follows (dollar amounts in thousands):

	For the three months ended September 30,						For the three months ended March 31,
	2017			2016			2019			2018
Depreciation expense	$	-		$	1		$	-		$	-
Amortization expense	$	-		$	-
Decrease from prior year	$	1		$	(148	)	$	-		$	-
Percentage increase/(decrease) from prior year		(100	)%		(99	)%		-	%		-	%

Interest Expense

Interest expense for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 were as follows (dollar amounts in thousands):

	For the three months ended September 30,						For the three months ended March 31,
	2017			2016			2019			2018
Interest expense	$	119		$	978		$	115		$	220
Decrease from prior year	$	(859	)	$	898		$	(105	)	$	(356	)
Percentage Decrease from prior year		(88	)%		1,124	%
Percentage decrease from prior year								(48	)%		(62	)%

The decrease in interest expense ~~reflects~~was primarily due to (i) the ~~repayment~~deconsolidation of ~~a note on April 3, 2017~~Cytocom in ~~terms~~May 2018, which eliminated Cytocom’s notes payable and related interest expense from the Company’s books thereafter, and (ii) to the conversion in 2018 of ~~which penalty interest~~certain notes payable for common stock of ~~$5,000/day was accrued in~~ the ~~quarter ended September 30, 2016.~~Company.

~~Gain or loss~~Loss on settlement of debt

In three months ended ~~September 30, 2017, certain~~March 31, 2019, there was no gain or loss on settlements by lenders ~~to the Company settled all~~ or ~~a portion~~vendors of any of their notes or accounts payable by converting them to equity. ~~The~~In three months ended March 31, 2018, the Company recorded an expense of ~~$32,~~$18, reflecting the fair value of the shares of common stock issued in exchange for the ~~debt. In three months ended September 30, 2016, the Company recorded an expense of $274, reflecting the fair value of the shares of common stock issued~~debt in ~~exchange for the debt.~~

~~Nine months Ended September 30, 2017 Compared to Nine months Ended September 30, 2016~~

~~Revenues~~~~(dollar amounts in thousands)~~

~~We had no revenues from operations for the nine months ended September 30, 2017, compared to $3 for the nine months ended September 30, 2016.~~

~~Operating Expenses~~

~~Selling, general and administrative~~

~~Selling, general and administrative expenses and related percentages for the nine months ended September 30, 2017 and 2016 were as follows (dollar amounts in thousands):~~

For the nine months ended
September 30,
2017 2016
Selling, general and administrative $ 1,843 $ 2,864
Increase/(decrease) from prior year $ (1,021 ) $ 1,175
Percent increase/(decrease) from prior year (36 )% 70 %

~~For the nine months ended September 30, 2017 and 2016, selling, general and administrative expenses were made up as follows (dollar amounts in thousands):~~

For the nine months ended
September 30,
2017 2016
Stock listing and investor relations expenses $ 94 $ 210
Consulting and contractors 519 645
Payroll 667 1,350
Professional fees 157 173
Travel 102 152
Other expenses 304 334

In the nine months ended September 30, 2017, total cash and cash accruals for selling, general and administrative expense was $1,843 compared to $2,864 for the corresponding period in 2016, a decrease of $1,021 or 36%. Significant cash items included:

	●	consulting and contractor services obtained to assist the Company in raising capital, manage investor relations, and develop business in new markets, in the amount of $519 in 2017, a decrease of $126 or 20% over the $645 spent in 2016. The decrease was the result primarily of the expiration of certain consulting contracts by the end of 2016;

	●	professional fees for legal, tax and accounting services in the amount of $157 in 2017, a decrease of $16 or 9% over the $173 spent in 2016. The decrease was primarily due to a reduction in legal fees, reflecting settlement of litigation in 2016, and lower fees paid for audit and tax services in the first nine months of 2017;

	●	payroll in the amount of $667 in 2017, a decrease of $683 or 51% over the $1,350 spent in 2016. The decrease reflects lower headcount in 2017, lower costs of stock awards to executives and employees in the first half of 2017, $345 in accruals for Cytocom payrolls in 2016 vs. $194 in 2017, and the refund in 2017 of certain payroll taxes paid in the second half of 2016; and

	●	~~travel in the amount of $102 in 2017, a decrease of $50 or 33% over the $152 spent in 2016, reflecting reduced travel in both Africa and the USA.~~

~~Research and development~~

~~R&D expenses and related percentages for the nine months ended September 30, 2017 and 2016 were as follows (dollar amounts in thousands):~~

For the nine months ended
September 30,
2017 2016
Research and development $ 362 $ 295
Increase from prior year $ 67 $ (408 )
Percent increase/(decrease) from prior year 23 % (58 )%

Expenses for research and development in the nine months ended September 30, 2017 increased by 23% compared to expenses in the same period in 2016. The increase reflects a one-time reversal of accrued expenses ($50) in 2016 for the accrued R&D service expenses, and increased fees in 2017 for work with the FDA on treatment of Crohn’s disease in pediatrics and adults.

~~Significant items included:~~

●	~~expenses for contracted technical services, $119 in 2017, a decrease of $141 or 645% over the (22) spent in 2016, reflecting the settlement of payables related to R&D contracted technical services;~~

●	~~payments for contracted services of $18 in 2017, an increase of $19 or 52% over the $37 spent in 2016, related to meetings with the FDA for resumption of trials by Cytocom;~~

●	~~expenses recorded for patent and license payments totaling $146, an increase of $6 or 4% over the $140 recorded in 2016, reflecting timing of accruals under license agreements;~~

●	rent expense of $0 in 2017, an increase of 83 or 100% over the $(83) credit in 2016, reflecting (i) the closure of all R&D offices by the end of 2016 and (ii) the 2016 settlement of a rent dispute with a landlord in Maryland;

●	payments for professional fees of $69 in 2017, an decrease of $3 or 4% over the $72 spent in 2016, reflecting lower fees incurred to protect patent and intellectual property rights worldwide in 2017; and

●	~~Spending on trials of $10 in 2017, a decrease of $135 or 93% over the $145 spent in 2016, reflecting the fact that most of the African trial activity had concluded in 2017.~~

~~Most of the R&D spending in 2017 was for the development of LDN, compared to 75% of spending on LDN in 2016.~~

~~Stock issued for services~~

Amortization of amounts recorded as Prepaid Services for stock issued for services G&A and related percentages for the nine months ended September 30, 2017 and 2016 were as follows (dollar amounts in thousands):

For the nine months ended
September 30,
2017 2016
Amortization of prepaid consulting expense G&A $ 1,537 $ 4,404
Percentage decrease from prior year (65 )% (12 )%

~~The decline in expense reflects the decrease in the price of the Company’s stock year over year and the fact~~ that ~~the cost of shares issued for services had been fully amortized in prior years.~~

~~The number of shares issued for prepaid consulting services G&A in the nine months ending September 30, 2017 was 27,245,460 (29,283,910 in the corresponding period in 2016).~~

~~Prepaid consulting services G&A in the nine months ended September 30, 2017 consisted of the following:~~

Amortization of cost of stock issued prior to 2017 $ 534
Amortization of cost of stock issued in 2017 1,003

~~Warrant valuation expense~~

When the Company sells its stock for cash or settles debt for stock, it periodically issues warrants to acquire additional stock at prices agreed at the date of the original sale. The Company incurs a cost for the rights attached to the warrants, which is calculated using the Black-Scholes Model (see above 6. Capital Structure—Common Stock and Common Stock Purchase Warrants.) This expense is reported in the Condensed Consolidated Statements of Operations above as the Warrant valuation expense.

In the nine months ended September 30, 2017, the Company issued 17,750,000 warrants to stockholders at an exercise price range of $0.05 to $0.20, for which it recorded an expense of $318. In the nine months ended September 30, 2016, the Company issued 25,654,908 warrants to stockholders at an exercise price range of $0..14 to $2.00, for which it recorded an expense of $2,756.

For the nine months ended
September 30,
2017 2016
Warrant valuation expense $ 591 $ 2,756
Percentage increase/(decrease) from prior year (79 )% 7,349 %

~~Depreciation and amortization~~

The Company amortizes the costs incurred to acquire patents and licenses over the period of the related agreements. All of the Company’s patents and licenses had been fully amortized by December 31, 2016.

~~Depreciation and amortization expenses for the nine months ended September 30, 2017 and 2016 were as follows (dollar amounts in thousands):~~

For the nine months ended
September 30,
2017 2016
Depreciation expense $ 1 $ 1
Amortization expense $ - $ -
Decrease from prior year $ - $ (445 )
Percentage increase/(decrease) from prior year - % (99 )%

~~Interest Expense~~

~~Interest expense for the nine months ended September 30, 2017 and 2016 were as follows (dollar amounts in thousands):~~

For the nine months ended
September 30,
2017 2016
Interest expense $ 823 $ 2,331
Decrease from prior year $ (1,508 ) $ 2,182
Percentage decrease from prior year (65 )% 1,464 %

~~The decrease in interest expense reflects the repayment of a note on April 3, 2017 in terms of which penalty interest of $5,000/day was accrued in the nine months ended September 30, 2016.~~

~~Gain or loss on settlement of debt~~

In nine months ended September 30, 2017, certain lenders to the Company settled all or a portion of their notes or accounts payable by converting them to equity. The Company recorded a loss of $999, reflecting the fair value of the shares of common stock issued in exchange for the debt. In nine months ended September 30, 2016, the Company recorded an expense of $1,979, reflecting the fair value of the shares of common stock issued in exchange for debt.period.

Liquidity

Liquidity is measured by our ability to secure enough cash to meet our contractual and operating needs as they arise. We do not anticipate generating sufficient net positive cash flows from our operations to fund the next twelve months. We had cash of ~~$22,570~~$5,688 at ~~September 30, 2017,~~March 31, 2019, compared to ~~$22,152~~$30,401 at ~~September 30, 2016.~~March 31, 2018.

For the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, net cash used in operating activities from operations was ~~$1,615,508~~$171 and ~~$2,333,377,~~$455,816, respectively.

$~~1,505 of cash~~0 was used in investing activities for the ~~nine~~three months ended ~~September 30, 2017 ($nil~~March 31, 2019; $1,971 was used in ~~2016).~~the corresponding period in 2018.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 proceeds from the sale of stock and exercise of stock warrants totaled ~~$706,540~~$0 compared to ~~$200,000~~$50,000 for the corresponding period in ~~2016.~~2018. We ~~also~~ received ~~$1,180,500~~$0 from the issuance of notes payable in ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, compared to ~~$2,132,380~~$468,975 in ~~2016.~~2018. There were ~~$321,846 of~~no loan repayments made in cash in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 ($0 in ~~2016)~~2018).

The Company ~~expects to generate revenues from~~generated no sales in ~~2017.~~the first quarter of 2019. If the Company is unable to generate sufficient cash flows from future sales, or if it does not raise additional working capital to meet all of its operating obligations and expenditures, the Company may have to modify its business plan.

In addition to the cost of its ongoing operations, the Company expects it will incur future research and development expenditures in the next 12 months, ~~through Cytocom. Cytocom plans to conduct Phase II~~for treatments for animals and ~~Phase IIB~~in humans in emerging markets. The Company will need approximately $4 million for clinical trials for these activities in the ~~treatment~~next 12 months. We expect that two-thirds of ~~Crohn’s disease, at an estimated cost of $3,900,000 and $7,500,000 respectively for each phase. If the trials do not commence before the end of 2017, the Company~~this amount will be required to make a payment of $100,000 in December 2017 under its license agreements. In prior years, the Company has been able to raise funds through sales of notes payable to cover this obligation, and it expects to do the same if the payment becomes due in December 2017.spent on trials for animals.

Off-Balance Sheet Arrangements

During the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, we did not engage in any off balance sheet arrangements as defined in item 303(a)(4) of the SEC’s Regulation S-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of our disclosure controls and procedures as defined in Rules 13(a)-15(e) under the Exchange Act. Based on this evaluation, the principal executive officer and principal financial officer concluded that, because of the weakness in internal controls over financial reporting described below, our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Management assessed the effectiveness of the internal controls over financial reporting as of ~~September 30, 2017,~~March 31, 2019, using the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this assessment, our management concluded that, as of ~~September 30, 2017,~~March 31, 2019, the internal controls over financial reporting were not effective. The reportable conditions and material weakness relate to a limited segregation of duties and lack of an audit committee. The limited segregation of duties within our company and the lack of an audit committee are due to the small number of employees. Management has determined that this control deficiency constitutes a material weakness. This material weakness could result in material misstatements of significant accounts and disclosures that would result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. In addition, due to limited staffing, we are not always able to detect minor errors or omissions in reporting.

Going forward, management anticipates that additional staff will be necessary to mitigate these weaknesses, as well as to implement other planned improvements. Additional staff will enable us to document and apply transactional and periodic controls procedures, permit a better review and approval process and improve quality of financial reporting. However, the potential addition of new staff is contingent on obtaining additional financing, and there is no assurance that we will be able to do so.

Limitations on the Effectiveness of Internal Controls

Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The legal proceedings described in Note 11 of the “Notes to the Condensed Consolidated Financial Statements” are incorporated in this “Item 1: Legal Proceedings” by reference.

ITEM 2. SUBSEQUENT EVENTS

On April 8, 2019, the Company signed a second amendment to its licensing agreement (the “Second Amendment”) with Cytocom. The Second Amendment confirmed that, as of its effective date (December 31, 2018), the Company owned 15.57% of the common shares issued and outstanding on that date. The Company agreed to assume the obligation to repay all accounts payable obligations and accrued liabilities owed by Cytocom as of the effective date, except those accounts payable obligations and accrued liabilities as specified in the Second Amendment. The Company also assumed the obligation to repay all notes payable, together with any interest or fees payable thereon, owed by Cytocom as of the effective date, except those notes payable obligations, together with any interest or fees payable thereon, as specified in the Second Amendment. The parties further agreed that in the event of a change of control of Cytocom, and at the option of Cytocom, the Company would have the right to purchase outright the Company’s licensing rights to Emerging Markets for humans under the License Agreement at a price equal to the value of those licensing rights as determined by an independent valuator acceptable to the Company and Cytocom.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In the quarter ended ~~September 30, 2017,~~March 31, 2019, the Company issued a total of ~~24,450,890~~21,255,225 shares of common stock (net of stock ~~cancellations)~~cancellations. 3,063,640 shares of common stock were issued in the same period in 2018). ~~2,287,570~~18,255,225 of those shares were issued to settle amounts owed under notes payable, including accrued and unpaid interest as applicable ~~(21,383,687~~(200,000 in ~~2016)~~2018). ~~1,700,000~~No shares were issued ~~for services provided (5,790,910~~to settle amounts owed to certain of the Company’s vendors and employees (0 in ~~2016)~~2018). ~~20,463,320 shares were issued~~

In total, the Company received $0 as consideration for ~~cash and~~ the exercise of previously-issued warrants (0($0 in ~~2016)~~2018) and $0 for the purchase of common stock ($50,000 in 2018).

The following table lists all securities issued during in the three months ended ~~September 30, 2017~~March 31, 2019 without registering the securities under the Securities Act of 1933, as amended (the “Securities Act”):

Date Description Number Purchaser Proceeds Consideration Exemption
8/16/17 Common Stock Purchase 250,000 Consultant $ Nil Advisory Services Sec. 4(a)(2)

8/16/17 Common Stock Purchase 250,000 Consultant $ Nil Advisory Services Sec. 4(a)(2)

9/15/17 Common Stock Purchase 1,200,000 Consultant $ Nil Advisory Services Sec. 4(a)(2)

7/26/17 Common Stock Purchase 1,500,000 Lender $ Nil Debt Settlement Sec. 4(a)(2)

7/12/17 Common Stock Purchase 787,570 Lender $ Nil Debt Settlement Sec. 4(a)(2)

9/8/17 Common Stock Purchase 2,000,000 Investor $ 28,160 Warrant Exercise S-1 Registration

8/29/17 Common Stock Purchase 2,015,621 Investor $ 28,379 Warrant Exercise S-1 Registration

9/8/17 Common Stock Purchase 2,000,000 Investor $ 50,000 Stock Purchase Agreement Sec. 4(a)(2)

7/13/17 Common Stock Purchase 560,617 Investor $ Nil Cashless Warrant Exercise Sec. 4(a)(2)

9/6/17 Common Stock Purchase 13,887,082 Investor $ Nil Cashless Warrant Exercise Sec. 4(a)(2)

Date

Description

Number

Purchaser

Proceeds

Consideration

Exemption

2/26/2019

Common Stock Purchase

120,000

Consultant

Nil

Advisory Services

Sec. 4(a)(2)

1/31/2019

Common Stock Purchase

18,255,225

Lender

Nil

Debt Settlement

Sec. 4(a)(2)

The issuances of the Company’s securities were completed in private transactions by the Company not involving any public offering pursuant to Section 4(a)(2) and Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). The shares purchased pursuant to the warrant exercises and the shares purchased were issued bearing restrictive legend and may not be resold by the purchasers unless such securities are registered or an exemption from registration is available. The Company determined, based on representations of the investors, that the investors were “accredited investors” as defined under Rule 501(a) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The current portion of notes payable on the Company’s Condensed Consolidated Balance Sheets above contains, at ~~September 30, 2017,~~March 31, 2019, certain promissory notes on which the Company was in arrears on payments of principal as follows: ~~Rich to update table below~~

	1.	~~Repayment~~Promissory note issued July 29, 2014 for $100,000. As of ~~a promissory~~March 31, 2019, the note ~~for $50,000 issued~~is in ~~July 2016.~~default. The ~~lender~~note earns interest at a rate of 6%18% per ~~month. The note is repayable on December 31, 2016. At September 30, 2017, the note was in default, although no demand for repayment has been made by the lender.~~annum.

	2.	~~Payment of principal aggregating $236,000 on certain promissory~~Promissory notes issued between November 26, 2014 and ~~September 30, 2016, to raise up to $2,000,000 in debt, on which lenders~~December 31, 2015. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of 2two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. Notes aggregating $286,000 were in default at March 31, 2019, as the Company was unable to pay installments on those notes on their due dates.

	3.	~~Payment of principal aggregating $605,494 on certain promissory~~Promissory notes issued between May 1, ~~2016~~2015 and ~~September 30,~~December 31, 2016, and maturing between ~~September~~June 14, ~~2016~~2015 and December ~~31, 2016. Interest~~1, 2017. Lenders on loans aggregating $505,994 earn interest at rates between 2% and 18% per annum. On loans aggregating $200,000, interest is payable in a fixed amount not tied to a specific interest rate. Notes aggregating $475,994 were in default at March 31, 2019, as the Company was unable to repay those notes on their due dates.

	4.	~~Repayment~~Promissory notes totaling $97,737 issued to an officer of ~~promissory notes~~the Company effective November 3, 2015 and maturing November 3, 2016 for ~~$102,737 issued in November 2016. The lender earns~~settlement of accrued payroll, bearing interest at ~~a rate of~~ 10% per ~~annum.~~annum and including a stock conversion feature. The ~~note is repayable on November 3, 2016. At September 30, 2017,~~Company was unable to repay the note ~~was~~at maturity and at March 31, 2019 the notes were in ~~default, although no demand for repayment has been made by the lender.~~default.

	5.	~~Repayment~~Promissory notes for $206,000 issued between July 1, 2016 and December 31, 2016 The notes mature on December 31, 2017. Lenders earn an interest rate of ~~a promissory note of $48,000 issued in July 2016.~~2% per annum The ~~original amount of~~Company was unable to repay the note ~~was for $180,000. On 6/29/17, $66,000 of~~at maturity and at March 31, 2019 the ~~principal was converted to stock and on 7/26/17, $66,000 of the principal was converted to stock. At September 30, 2017, the note was~~notes were in ~~default, although no demand for repayment has been made by the lender.~~default.

	6.	~~Repayment of promissory~~ Promissory notes ~~for $43,209~~totaling $1,354,000 issued in ~~August~~the fourth quarter of 2016. The ~~lender earns~~lenders earn interest at ~~a rate of 5%~~2% per ~~annum.~~annum and mature between November 1, 2017 and December 31, 2017. The Company was unable to repay the note at maturity and at March 31, 2019 the notes ~~are payable~~were in ~~18 equal monthly installments of $8,641. The notes are in default, although no demand for repayment has been made by the lender.~~default.

	7.	~~Payment~~Promissory notes aggregating $500,000 issued in the first quarter of ~~principal aggregating $425,000 on certain promissory~~2017. The notes ~~issued by Cytocom Inc. between April 29, 2015 and December 31, 2015. Lenders earn~~accrue interest at ~~rates~~2% per annum and mature between 5%January 12, 2018 and ~~10% per annum. These~~March 31, 2018. The Company was unable to repay the notes ~~matured on September 30, 2016. At September 30, 2017,~~at maturity and at March 31, 2019 the notes were in ~~default, although no demand~~default.

	8.	Promissory note for ~~repayment has been made by~~$50,000 issued January 25, 2017. The lenders earn interest at 7% per month. The note matures on July 15, 2017. The Company was unable to repay the ~~lenders.~~note at maturity and at March 31, 2019 the note was in default.

	9.	Notes aggregating $300,000 issued in the second quarter of 2017. The notes accrue interest at 2% per annum and mature between April 3, 2018 and May 31, 2018. At March 31, 2019, the notes were in default.

	10.	Notes aggregating $191,800 issued in the third quarter of 2017. The notes accrue interest at 2% per annum and mature between June 16, 2018 and December 31, 2018. At March 31, 2019, the notes were in default.

	11.	Notes aggregating $105,500 issued in the fourth quarter of 2017. The notes accrue interest at 2% per annum. At March 31, 2019, the notes were in default.

	12.	Notes aggregating $47,975 issued in the first quarter of 2018. The notes accrue interest at 2% per annum and mature between May 2018 and January 2019. At March 31, 2019, $10,000 of the notes were in default.

	13.	Notes aggregating $125,000 issued in the first quarter of 2018. The notes accrue interest between 2% and 12% per annum and mature between April 2018 and June 2018. These notes include warrants between 5,000,000 and 20,000,000 shares with an exercise price of $0.005. At March 31, 2019, the notes were in default.

	14.	Notes aggregating $65,000 issued in the second quarter of 2018. The notes accrue interest of 2% per annum and mature between July 2018 and October 2018. These notes include warrants between 1,000,000 and 5,000,000 shares with an exercise price of $0.005. At March 31, 2019, the notes were in default.

	15.	Notes aggregating $193,000 issued in the third quarter of 2018. The notes accrue interest at 2% per annum and mature between November 2018 and January 2019. These notes include warrants between 600,000 and 5,000,000 shares with an exercise price of $0.005. At March 31, 2019, the notes were in default.

	16.	Notes aggregating $533,855 issued in the fourth quarter of 2018. The notes accrue interest from 2% to 3.5% per annum and mature between February 2019 and December 2019. These notes include warrants between 200,000 and 39,500,000 shares with an exercise price of $0.005 to $0.04. At March 31, 2019 $419,000 of the notes were in default

At ~~September 30, 2017,~~March 31, 2019, the Company had insufficient cash on hand to repay these notes.

ITEM 6. EXHIBITS

Exhibit Number		Name of Exhibit

~~10.1~~10.59		~~Securities Purchase Agreement and~~Promissory Note ~~with Iliad Research & Trading LP~~ dated ~~October 20, 2017.~~February 27, 2019 to Phoenix Group in the principal amount of $231,478.39.

~~10.2~~10.60		~~Settlement~~Second Amendment to License Agreement by and ~~Mutual Release Agreement with Phoenix Fund Management, LLC dated October 12, 2017.~~

~~10.3~~		~~Distribution Agreement with Omaera Pharmaceuticals Ltd. dated August 22, 2017.~~between: Cytocom Inc. and Immune Therapeutics Inc., signed April 8, 2019.

31.1		Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Immune Therapeutics, Inc.

Date: ~~November 14, 2017~~May 20, 2019	By:	/s/ Noreen Griffin
		Noreen Griffin
		Chief Executive Officer

	Immune Therapeutics, Inc.

Date: ~~November 14, 2017~~May 20, 2019	By:	/s/ Peter Aronstam
		Peter Aronstam
		Chief Financial Officer

	Common Stock				Additional Paid-in		Stock To			Prepaid			Accumulated			Non-Controlling
	Shares		Amount		Capital		Be Issued			Services			Deficit			Interest			Total

Balance December 31, 2016		250,428,133	$	25,043	$	360,420,026	$	962,429		$	(822,500	)	$	(365,718,976	)	$	(3,990,366	)	$	(9,124,344	)

Issuance of common stock for prepaid services		27,245,460		2,725		1,818,276		(494,546	)		(1,060,000	)		-			-			266,455

Amortization of prepaid services		-		-		-		-			1,270,837			-			-			1,270,837

Issuance of common stock for accrued interest		3,787,570		379		201,000		-			-			-			-			201,379

Issuance of common stock in exchange for debt		39,293,111		3,929		1,831,577		56,343			-			-			-			1,891,849

Issuance of common stock for cash and exercise of warrants		36,386,434		3,638		452,901		250,000			-			-			-			706,539

Issuance and modification of common stock warrants		-		-		590,605		-			-			-			-			590,605

Net loss		-		-		-		-			-			(3,671,484	)		(485,656	)		(4,157,140	)

Balance as of September 30, 2017		357,140,708	$	35,714	$	365,314,385	$	774,226		$	(611,663	)	$	(369,390,460	)	$	(4,476,022	)	$	(8,353,820	)

	For the three months ended September 30,						For the nine months ended September 30,
	2017			2016			2017			2016

Net Profit/(Loss)	$	(1,382,268	)	$	(3,936,501	)	$	(3,671,484	)	$	(14,466,503	)
Weighted-average common shares outstanding		341,109,212			226,843,113			301,844,205			208,399,547

Profit/(Loss) per share outstanding
Basic and diluted	$	(0.00	)	$	(0.02	)	$	(0.01	)	$	(0.07	)

	As of September 30,
	2017		2016
Warrants to purchase Common stock		59,485,667		32,623,908
		59,485,667		32,623,908

	September 30, 2017		December 31, 2016
Raw materials	$	79,558	$	-
Work in process		134,769		-
Finished goods		-		-
Total inventory	$	214,327	$	-

	Number of Shares		Exercise Price		Weighted Average Price
Warrants as of December 31, 2016		59,191,904	$	0.03-15.00	$	0.35

Issued in 2017		36,300,228	$	0.01-0.20	$	0.04

Expired and forfeited in 2017		10,703,762	$	0.01	$	0.01

Exercised in 2017		25,302,703	$	0.01	$	0.01

Warrants as of September 30, 2017		59,485,667	$	0.01-15.00	$	0.36

		2017		2016
Current:
Federal	$	-	$	-
State	$	-	$	-
Foreign	$	-	$	-
Total	$	-	$	-
Deferred and other:
Federal	$	-	$	-
State	$	-	$	-
Foreign	$	-	$	-
	$	-	$	-
Total tax expense	$	-	$	-

	For the nine months ended September 30,
	2017			2016
Selling, general and administrative	$	1,843		$	2,864
Increase/(decrease) from prior year	$	(1,021	)	$	1,175
Percent increase/(decrease) from prior year		(36	)%		70	%

Amortization of cost of stock issued prior to 2017		$	534
Amortization of cost of stock issued in 2017			1,003