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

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

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

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

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 to13(a) of the Exchange Act: ☐

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

As of ~~November 22, 2021,~~May 16. 2022, there were ~~15,575,294~~17,493,237 shares of the registrant’s common stock outstanding.

	September 30, 2021			December 31, 2020
	(Unaudited)						March 31, 2022			December 31, 2021
ASSETS
Current assets
Cash	$	151		$	1		$	40		$	76
Prepaid expenses								130			120
Total current assets		151			1			170			196
Total assets	$	151		$	1		$	170		$	196
LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities
Accounts payable	$	2,287		$	2,257		$	2,287		$	2,309
Due to related party		4			4
Due to related parties								76			46
Accrued expenses		2,874			2,112			3,467			3,110
Accrued dividends		5,211			4,083			5,841			5,477
Term loan		5,677			5,677			5,677			5,677
Convertible notes payable, net		862			641			1,151			986
Derivative liability		3,475			—			7,169			7,697
Total current liabilities		20,390			14,774			25,668			25,302
Total liabilities		20,390			14,774			25,668			25,302
Commitments and contingencies (Note 7)		-
Commitments and contingencies (Note 9)								-			-
Stockholders’ deficit
Preferred stock, $0.01 par value; 100,000 shares authorized Series C convertible preferred stock, $0.01 par value; 1,200 shares designated; 100 shares issued and outstanding as of September 30, 2021, and December 31, 2020. ($510,000 liquidation preference)		—			—
Series D convertible preferred stock, $0.01 par value; 220 shares designated; 40 shares issued and outstanding as of September 30, 2021, and December 31, 2020. ($12,000 liquidation preference)		—			—
Series E convertible preferred stock, $0.01 par value; 3,500 shares designated; 3,400 and 3,458 shares issued and outstanding as of September 30, 2021, and December 31, 2020. ($17,000,000 liquidation preference)		—			—
Series F convertible preferred stock, $0.01 par value; 2,200 shares designated; 361 shares issued and outstanding as of September 30, 2021, and December 31, 2020. ($1,805,000 liquidation preference)		—			—
Series G convertible preferred stock, $0.01 par value, 6,000 shares designated; 0 shares outstanding as of September 30, 2021, and December 31, 2020.		—			—
Common stock, $0.006 par value; 180,000,000 shares authorized, 14,485,438 and 11,112,709 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively		87			67
Preferred stock, $0.01 par value; 100,000 shares authorized								—			—
Series C convertible preferred stock, $0.01 par value; 1,200 shares authorized; 100 shares issued and outstanding as of March 31, 2022 and December 31, 2021. ($510,000 liquidation preference)								—			—
Series D convertible preferred stock, $0.01 par value; 220 shares authorized; 40 shares issued and outstanding as of March 31, 2022 and December 31, 2021. ($12,000 liquidation preference)								—			—
Series E convertible preferred stock, $0.01 par value; 3,500 shares authorized; 3,326 shares issued and outstanding as of March 31, 2022 and December 31, 2021. ($21,948,470 liquidation preference)								—			—
Series F convertible preferred stock, $0.01 par value; 2,200 shares authorized; 358 shares issued and outstanding as of March 31, 2022 and December 31, 2021. ($2,313,603 liquidation preference)								—			—
Series G convertible preferred stock, $0.01 par value; $5,000 liquidation preference; 6,000 shares authorized; 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021.								—			—
Preferred stock
Common stock, $0.006 par value; 180,000,000 shares authorized, 17,493,237 and 16,998,836 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively								105			102
Additional paid-in capital		30,647			29,772			27,852			27,809
Accumulated deficit		(50,973	)		(44,612	)		(53,455	)		(53,017	)
Total stockholders’ deficit		(20,239	)		(14,773	)		(25,498	)		(25,106	)
Total liabilities and stockholders’ deficit	$	151		$	1		$	170		$	196

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

~~CONDENSED~~ CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS’ ~~EQUITY (DEFICIT)~~DEFICIT

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

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

FOR THE ~~THREE~~YEARS ENDED DECEMBER 31, 2021 AND ~~NINE MONTHS ENDED SEPTEMBER 30, 2021~~

Note 1 – ~~Nature of~~Organization and Business Operations ~~Basis of Presentation and Significant Accounting Policies~~

Adhera Therapeutics, Inc. and its wholly-owned subsidiaries, MDRNA Research, Inc. (“MDRNA”), Cequent Pharmaceuticals, Inc. (“Cequent”), Atossa Healthcare, Inc. (“Atossa”), and IThenaPharma, Inc. (“IThena”) (collectively “Adhera,” or the “Company”), is an emerging specialty biotech company that, to the extent that resources and opportunities become available, is strategically evaluating its focus including a return to a drug discovery and development company.

Previously, the Company was a commercially focused entity that leveraged innovative distribution models and technologies to improve the quality of care for patients in the United States suffering from chronic and acute diseases with a focus on fixed dose combination therapies in hypertension. On January 4, 2021, the licensor terminated the licensing agreement for the product candidate.

On July 28, 2021, ~~the Company~~we as licensee and Melior Pharmaceuticals II, LLC entered into an exclusive license agreement for the development, commercialization and exclusive license of MLR-1019. MLR-1019 is being developed as a new class of therapeutic for Parkinson’s disease (PD) and is, to the best of ~~the Company’s~~our knowledge, the only drug candidate today to address both movement and non-movement aspects of PD. Under the Agreement, ~~the Company was~~we were granted an exclusive license to use the MP Patents and know-how to develop products in consideration for cash payments upon meeting certain performance milestones as well as a royalty of 5% of gross sales. ~~In October 2021, the company commenced the manufacturing of drug product for use in the development of MLR-1019.~~

On August ~~24,~~20, 2021, ~~the Company~~we as licensee entered into an exclusive license agreement with Melior Pharmaceuticals I, Inc. for the development, commercialization and exclusive license of ~~Melior’s~~ MLR-1023. MLR-1023 is being developed as a novel therapeutic for Type 1 diabetes.

On October 20, 2021, ~~the Company~~we as licensee expanded the exclusive licensing agreement with Melior Pharmaceuticals I, Inc. to include two additional clinical indications for ~~Melior’s~~ Non-Alcoholic Steatohepatitis (NASH) and pulmonary inflammation.

To the extent that resources have been available, the Company has continued to work with its advisors in an effort to restructure our company and to identify potential strategic transactions to enhance the value of our company as such opportunities arise, including potential transactions and capital raising initiatives involving the ~~Melior~~assets relating to our legacy RNA interference programs, as well as business combination transactions ~~described above.~~with operating companies. There can be no assurance that the Company will be successful ~~in raising~~at identifying any such transactions, that it will continue to have sufficient ~~capital~~resources to ~~meet its obligations under the Melior license agreements.~~actively attempt to identify such transactions, or that such transactions will be available upon terms acceptable to us or at all. If the Company does not complete any significant strategic transactions, or raise substantial additional capital, ~~to develop and commercialize repay its indebtedness which is~~ in ~~default or restructure~~ the ~~indebtedness,~~near future, it is likely that the Company will discontinue all operations and seek bankruptcy protection.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions pursuant to the rules and regulations of the Securities and Exchange ~~Commission.~~Commission (the “SEC”). Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. This quarterly report should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. The information furnished in this ~~report~~Report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the ~~Nine~~three months ended ~~September 30, 2021,~~March 31, 2022, are not necessarily indicative of the results for the year ending December 31, ~~2021~~2022 or for any future period.

The ~~condensed~~ consolidated financial statements include the accounts of Adhera Therapeutics, Inc. and the wholly-owned subsidiaries, Ithena, Cequent, MDRNA, and Atossa, and eliminate any inter-company balances and transactions. All wholly-owned subsidiaries of Adhera Therapeutics, Inc. are inactive.

The accompanying ~~condensed~~ consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As of ~~September 30, 2021,~~March 31, 2022, the Company had cash and cash equivalents of approximately $~~151,000~~ 40,000and has negative working capital of approximately $~~20.2~~25.5 million.

The Company has incurred recurring losses and negative cash flows from operations since inception and has funded its operating losses through the sale of common stock, preferred stock, warrants to purchase common stock, convertible notes and secured promissory notes. The Company incurred a net loss of approximately $~~4.7~~74,000 ~~million~~ for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022 and used cash in operating activities of approximately $216,000. The Company had an accumulated deficit of approximately $~~51.0~~ 53.5 million as of ~~September 30, 2021.~~March 31, 2022.

In addition, to the extent that the Company continues its business operations, the Company anticipates that it will continue to have negative cash flows from operations, at least into the near future. However, the Company cannot be certain that it will be able to obtain such funds required for its our operations at terms acceptable to usthe Company or at all. General market conditions, as well as market conditions for companies in ~~our~~the Company’s financial and business position, as well as the ongoing ~~issue~~issues arising from the COVID-19 pandemic, the Ukraine war and inflation and the Federal Reserve interest rate increases in response, may make it difficult for usthe Company to seek financing from the capital markets, and the terms of any financing may adversely affect the holdings or the rights of ~~our~~its stockholders. If the Company is unable to obtain additional financing in the future, there may be a negative impact on the financial viability of the Company. The Company plans to increase working capital by managing its cash flows and expenses, divesting development assets and raising additional capital through private or public equity or debt financing. There can be no assurance that such financing or partnerships will be available on terms which are favorable to the Company or at all. While management of the Company believes that it has a plan to fund ongoing operations, there is no assurance that its plan will be successfully implemented. Failure to raise additional capital through one or more financings, divesting development assets or reducing discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this ~~report.~~Report. The ~~condensed~~ consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties.

~~Certain reclassifications have been made~~The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to ~~prior periods consolidated statements~~be cash equivalents. As of ~~operations including adjustments related to~~March 31, 2022, the ~~adoption of ASU No. 2020-06, Debt—Debt~~Company had approximately $40,000 in cash.

The Company deposits its cash with ~~Conversion~~major financial institutions and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) to conform to current period presentation. These reclassifications had no material effect on prior periods consolidated net loss or stockholders’ deficit.may at times exceed the federally insured limit. At March 31, 2022, the Company’s cash balance did not exceed the federal insurance limit.

The preparation of the accompanying ~~condensed~~ consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Significant areas requiring the use of management estimates include accruals related to our operating activity including legal and other consulting expenses, the fair value of non-cash equity-based issuances, the fair value of derivative liabilities, and the valuation allowance on deferred tax assets. Actual results could differ materially from such estimates under different assumptions or circumstances.

The Company considers the fair value of cash, accounts payable, debt, and accrued expenses not to be materially different from their carrying value. These financial instruments have short-term maturities. We follow authoritative guidance with respect to fair value reporting issued by the Financial Accounting Standards Board (“FASB”) for financial assets and liabilities, which defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

As of ~~September 30, 2021,~~March 31, 2022, the Company measured conversion features on outstanding convertible notes and warrants as a derivative liability using significant unobservable prices that are based on little or no verifiable market data, which is Level 3 in the fair value hierarchy, resulting in a fair value estimate of approximately $~~3.5~~ 7.2million. The value of the derivative liability as of ~~September 30, 2021~~March 31, 2022, was determined by using the binomial lattice model using the following inputs: ~~0.09~~% risk free rate of 1.63% to 2.45%, volatility of ~~404~~244.5% to 309.03% and time to maturity of zero to 0 0.88~~- .~~18 years. There were 0liabilities or assets measured at fair value on a non-recurring basis as of ~~September 30, 2021, and there were~~ 0~~liabilities or assets measured at fair value on a reoccurring or non-recurring basis as of December~~March 31, ~~2020.~~2022.

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding equity instruments.

In accordance with ASC Topic 470-20-25, when the Company issues debt with warrants, the Company treats the relative fair value of the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the consolidated statements of operations. The offset to the contra-liability is recorded as additional paid in capital in the Company’s consolidated balance sheets if the warrants are not treated as a derivative. The Company determines the fair value of the warrants using the Black-Scholes Option Pricing Model (“Black-Scholes”),the binomial model or the Monte Carlo Method based upon the underlying conversion features of the debt and then computes and records the relative fair value as a debt discount. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations.

When the Company issues debt with a conversion feature, it first ~~assess~~assesses whether the conversion feature meets the requirements to be accounted for as stock settled debt. If it does not meet ~~that~~those requirements then it is assessed on whether the conversion feature should be bifurcated and treated as a derivative liability, as follows: a) one or more underlyings, typically the price of our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own stock; and b) classified in stockholders’ equity in its statement of financial position.

Prior to the Company’s adoption of ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) on January 1, 2021, if the conversion feature was not treated as a derivative, the Company assessed whether it is a beneficial conversion feature (“BCF”). A BCF exists if the effective conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible and is recorded as additional paid in capital and as a debt discount in the consolidated balance sheets. The Company amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the consolidated statements of operations. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations.

If the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional debt.

In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles-Goodwill and Other (Topic 350) (“ASU 2017-04”), which will simplify the goodwill impairment calculation by eliminating Step 2 from the current goodwill impairment test. The new standard does not change how a goodwill impairment is identified. The Company will continue to perform its quantitative goodwill impairment test by comparing the fair value of its reporting unit to its carrying amount, but if the Company is required to recognize a goodwill impairment charge, under the new standard, the amount of the charge will be calculated by subtracting the reporting unit’s fair value from its carrying amount. Under the current standard, if the Company is required to recognize a goodwill impairment charge, Step 2 requires it to calculate the implied value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination and the amount of the charge is calculated by subtracting the reporting unit’s implied fair value of goodwill from the goodwill carrying amount. The standard was effective January 1, 2020. The adoption of ASU 2017-04 did not have a material impact on the Company’s historical consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which will simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts on an entity’s own equity. Specifically, the new standard will remove the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It will also remove certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and will simplify the diluted earnings per share calculation for convertible instruments. ASU 2020-06 will be effective January 1, 2022, for the Company and may be applied using a full or modified retrospective approach. Early adoption is permitted, but no earlier than January 1, 2021, for the Company. The Company adopted ASU No. 2020-06 on January 1, 2021. Management determined such adoption did not have a material impact on the overall stockholders’ equity (deficit) in the Company’s consolidated financial statements.

In May 2021, FASB issued ASU 2021-04: Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40), to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in ASU 2021-04 provide the following guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic:

An entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option to compensate for goods or services in accordance with the guidance in Topic 718, Compensation—Stock Compensation. In a multiple-element transaction (for example, one that includes both debt financing and equity financing), the total effect of the modification should be allocated to the respective elements in the transaction.

The amendments in ASU 2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt the amendments in ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal ~~year that includes that interim period.~~year. The adoption by the Company ~~is evaluating the impact~~as of ~~the revised guidance and believes that it will~~January 1, 2022 did not have a significant impact on its financial statements.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. Potentially dilutive securities which include outstanding warrants, stock options, convertible notes and preferred stock have been excluded from the computation of diluted net loss per share as their effect would be anti-dilutive. For all periods presented, basic and diluted net loss were the same.

The following table presents the computation of net loss per share (in thousands, except share and per share data):

(in thousands except share and per share data)													2022			2021
	2021			2020			2021			2020			March 31,
	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
(in thousands except share and per share data)													2022			2021
Numerator
Net loss	$	(3,739	)	$	(539	)	$	(4,682	)	$	(3,283	)	$	(74	)	$	(428	)
Dividends		(406	)		(388	)		(1,679	)		(1,153	)
Preferred stock dividends														(364	)		(882	)
Net Loss allocable to common stockholders	$	(4,145	)	$	(927	)	$	(6,361	)	$	(4,436	)	$	(438	)	$	(1,310	)
Denominator
Weighted average common shares outstanding used to compute net loss per share, basic and diluted		12,986,391			10,869,530			11,742,315			10,869,530			17,179,188			11,187,531
Net loss per share of common stock, basic and diluted
Net loss per share	$	(0.32	)	$	(0.09	)	$	(0.54	)	$	(0.41	)
Net loss per share, basic and diluted													$	(0.03	)	$	(0.12	)

~~Potentially dilutive securities not included in the calculation~~The following number of shares have been excluded from diluted net ~~loss per common share because to do so~~(loss) since such inclusion would be ~~anti-dilutive are as follows:~~anti-dilutive:

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

As of March 31, 2022, the Company’s fully diluted common stock equivalents exceeded the 180,000,000 shares currently authorized.

The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and non-employees, including stock options, in the statements of operations.

For stock options issued, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised if and when a forfeiture becomes probable.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, 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 effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates.

As of March 31, 2022, and December 31, 2021 prepaid expenses totaled approximately $130,000 and $120,000, respectively and included prepaid manufacturing expenses for the Company’s clinical development candidate MLR recorded on the accompanying balance sheet.

During 2019, the Company entered into term loan subscription agreements with certain accredited investors, pursuant to which the Company issued secured promissory notes ~~(the “Notes”)~~ in the aggregate principal amount of approximately $5.7 ~~million.~~million (collectively, the “2019 Term Loans”). The Company paid $707,000in debt issuance costs which was recorded as a debt discount to be amortized as interest expense over the term of the loan using the straight-line method.

The ~~Notes accrue~~promissory notes accrued interest at a rate of 12% per annum. Interest is payable quarterly with the first interest payment to be made on December 28, 2019, and each subsequent payment every three months thereafter.

~~The unpaid principal balance of the Notes, plus accrued and unpaid interest thereon, matured on~~ ~~June 28, 2020. The Notes are secured by a first lien and security interest on all the assets of the Company and certain of its wholly owned subsidiaries.~~

On December 28, 2019, the Company defaulted on the initial interest payment on the loan and the interest rate per annum increased to the default rate of 15%.

The unpaid principal balance of the notes, plus accrued and unpaid interest thereon, matured on June 28, 2020. The notes were secured by a first lien and security interest on all the assets of the Company and certain of its wholly owned subsidiaries. On June 28, 2020, the Company defaulted on the maturity date principal payment.

In June 26, 2021, the holders of the 2019 Term Loans agreed to subordinate their lien and security interest in the assets of the Company and its subsidiaries as set forth in the Security Agreement dated June 28, 2019 to the holders of the June 2021 convertible notes.

The Company recognized approximately $~~215,000~~210,000 ~~and $986,000~~ ~~in interest expense related to Notes for the three and nine months ended September 30, 2020, including $~~0 ~~and $347,000~~ ~~related to the amortization of debt issuance costs. The Company recognized approximately $215,000~~ ~~and $637,000~~in interest expense related to the Notes for the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022 and March 31, 2021. As of ~~September 30, 2021,~~March 31, 2022, the debt discount and issuance costs for this term loan were fully amortized.

As of ~~September 30, 2021,~~March 31, 2022, the Company had approximately $~~1.8~~2.2 million of accrued interest on the ~~Notes~~notes included in accrued expenses and remains in default on the repayment of approximately $5.7 million in principal and $2.2 million in accrued interest on the ~~Notes.~~2019 Term Loans.

The following table summarizes the Company’s outstanding convertible notes as of ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020:~~2021:

(in thousands)	September 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Convertible Notes	$	1,296		$	720		$	1,756		$	1,516
Unamortized discounts		(434	)		(79	)
Unamortized discounts and fees								(605	)		(530	)
Convertible Notes Payable	$	862		$	641		$	1,151		$	986

~~Five~~Ten convertible notes with outstanding principal of approximately $~~788,000~~1.5 million were in default as of ~~the issuance date of this report.~~March 31, 2022.

On February 5, 2020, the Company entered into a Securities Purchase Agreement with accredited investors and issued the investors, (i) original issue discount Convertible Promissory Notes ~~(the “Convertible Notes”),~~ with a principal of $550,500 issued at a 10% original issue discount, for a total purchase price of $499,950, and (ii) warrants to purchase up to such number of shares of the common stock of the Company as is equal to the product obtained by multiplying 1.75 by the quotient obtained by dividing (A) the principal amount of the Notes by (B) the then applicable conversion price of the Notes. This results in a variable quantity of warrants at any point in time due to the variable conversion price of the Notes. (See Note 7)

The ~~maturity date was~~ Convertible Notes matured on August 5, ~~2020. Interest shall accrue~~2020. Prior to default, interest accrued to the Holders on the aggregate unconverted and then outstanding principal amount of the Notes at the rate of 10%per annum, calculated on the basis of a 360-day year and accrues daily. On June 15, 2020, the Company defaulted on certain covenants in the 2020 term loan and the interest rate reset to the default rate of 18%.

~~On or after May 5, 2020, until~~Until the Convertible Notes are no longer outstanding, the Convertible Notes are convertible, in whole or in part, at any time, and from time to time, into shares of Common Stock at the option of the noteholder. The conversion price is the lower of: (i) $0.50per share of Common Stock and (ii) 70%of the volume weighted average price of the Common Stock on the trading market on which the Common Stock is then listed or quoted for trading for the prior ten (10) trading days (as adjusted for stock splits, stock combinations and similar events); provided, that if the Notes are not prepaid on or before May 5, 2020, then the conversion price shall be the lower of (x) 60%of the conversion price as calculated above or (y) $0.05~~(as~~ (as adjusted for stock splits, stock combinations and similar events). The conversion price of the Convertible Notes shall also be adjusted as a result of subsequent equity sales by the Company, with customary exceptions.

The exercise price of the Warrants shall be equal to the conversion price of the Convertible Notes, provided, that on the date that the Convertible Notes are no longer outstanding, the exercise price shall be fixed at the conversion price of the Convertible Notes on such date, with the exercise price of the Warrants thereafter (and the number of shares of Common Stock issuable upon the exercise thereof) being subject to adjustment as set forth in the Warrants. The warrants have a 5-year term.

The Company recorded a discount related to the Warrants of approximately $322,000, which includes an allocation of ~~OID~~original issue discount (“OID”) and issue costs of $30,000 and $53,000 based on the relative fair value of the instruments as determined by using the Monte-Carlo simulation model. The Company also recorded the remaining debt discount related to the convertible debt OID of approximately $21,000and debt issuance costs of $38,000using the relative fair value method to be amortized as interest expense over the term of the loan using the straight-line method. Total discounts recorded were $~~380,593~~.

~~On June 15, 2020, the Company defaulted on certain covenants in the 2020 term loan and the interest rate reset to the default rate of~~ ~~18%~~.

~~The Company recognized $31,000~~ ~~and $86,000~~ ~~in interest expense related to the notes for the three and nine months ended September 30, 2020, respectively including $7,000~~ ~~and $38,000~~ ~~related to the amortization of debt issuance costs. The Company amortized $67,000~~ ~~and $343,000~~ ~~of debt discount for the three and nine months ended September 30, 2020, respectively. The Company recognized~~ approximately $~~25,000~~ 381,000~~and $75,000~~ in interest expense related to the notes for the three and Nine months ended September 30, 2021, respectively. As of September 30, 2021, the debt discounts for this Convertible Note were fully amortized..

On March 19, 2021, the holder of the Convertible Note converted $25,900of interest into 518,000shares of common stock.

On July 29, 2021, the holder of the Convertible Note converted $27,500of interest into 550,000shares of common stock.

On August 16, 2021, the holder of the Convertible Note converted $25,000of principal and interest into 500,000shares of common stock.

On September 13, 2021, the holder of the Convertible Note converted $32,500of principal and interest into 650,000shares of common stock.

On October 4, 2021, the holder of the Convertible Note converted $26,250 of principal and interest into 525,000 shares of common stock.

On November 29, 2021, the holder of the Convertible Note converted $31,150 of principal and interest into 623,012 shares of common stock.

The total note principal and interest converted during the ~~nine months~~year ended ~~September 30,~~December 31, 2021, was $~~110,900~~168,300 and ~~2,218,000~~3,366,012 common shares issued were valued at fair value based on the quoted trading prices on the conversion dates aggregating approximately $~~379,422~~554,000 resulting onin a loss on debt extinguishment of $~~268,522~~386,000. In addition, derivative fair value of $~~91,890~~245,000 relating to the portion of the Note converted was settled resulting in gain on extinguishment of approximately $~~91,890~~245,000. The net loss on extinguishment was approximately $~~176,632~~141,000. ~~The total shares issued upon conversion during the nine months ended September 30, 2021, was $2,218,000~~.

On January 27, 2022, the conversion price of the notes and warrants was adjusted to be the lower of (x) 60% of the conversion price as calculated above or (y) $0.039 as a result of issuance of common stock for a convertible note conversion.

For the ~~quarter~~three months ended ~~September 30,~~March 31, 2022, and March 31, 2021, the Company ~~reclassified the warrant and conversion feature on the note from equity and~~ recognized approximately $~~2.0~~25,000 ~~million as a derivative liability on~~in interest expense related to the ~~accompanying balance sheet.~~

As of ~~September 30, 2021,~~March 31, 2022, the Company had accrued interest on the February 2020 Convertible Note of approximately $~~90,000~~126,000.

As of ~~September 30, 2021,~~March 31, 2022, the Company remains in default on the repayment of remaining principal of $~~499,615~~457,359 and accrued interest on the February 2020 Convertible Notes. Upon demand for repayment at the election of the holder, the holder of the Convertible Note is due 140% of the aggregate of outstanding principal, interest, and other expenses due in respect of this Convertible Note. The 40% premium will be recorded once a demand occurs.

On June 26, 2020, the Company issued to an existing investor in the Company a 10%original issue discount Senior Secured Convertible Promissory Note with a principal of $58,055, for a purchase price of $52,500, net of the original issue discount of ~~$5,555~~$5,555. The Convertible Note matured on December 26, ~~2020. Interest accrues~~2020. Prior to default, interest accrued on the aggregate unconverted and then outstanding principal amount of the Note at the rate of 10%per annum, calculated on the basis of a 360-day year. The Company incurred approximately $14,000in debt issuance costs. On August 5, 2020, the Company defaulted on certain covenants in the loan and the interest rate reset to the default rate of 18%.

The Note is convertible, in whole or in part, into shares of common stock of the Company at the option of the noteholder at a conversion price of $0.02~~(as~~ (as adjusted for stock splits, stock combinations and similar events); provided, that if an event of default has occurred under the Note, then the conversion price shall be 65%of the lowest closing bid price of the Company’s common stock as reported on its principal trading market for the twenty consecutive trading day period ending on (and including) the trading day immediately preceding the date on which the conversion notice was delivered. The conversion price shall also be adjusted for subsequent equity sales by the Company. Because the share price on the commitment date was in excess of the conversion price, the Company recorded a beneficial conversion feature of $50,000related to this note that was credited to additional paid in capital and reduced the carrying amount. At the commitment date, the actual intrinsic value of the beneficial conversion feature was approximately $203,000. The discount recorded is being amortized to interest expense over the life of the loan using the straight-line method.

The obligations of the Company under the Note are secured by a senior lien and security interest in all of the assets of the Company and certain of its wholly-owned subsidiaries pursuant to the terms and conditions of a Security Agreement dated June 26, 2020 by the Company in favor of the noteholder. In connection with the issuance of the Note, the holders of the secured promissory notes that the Company issued to select accredited investors between June 28, 2019 and August 5, 2019 in the aggregate principal amount of approximately $5.7 million agreed to subordinate their lien and security interest in the assets of the Company and its subsidiaries as set forth in the Security Agreement dated June 28, 2019 that such holders entered into with the Company and its subsidiaries to the security interest granted to the holder of the Note.

~~For~~On January 27, 2022, the ~~three and nine months ended September 30, 2020,~~conversion price of the ~~Company recognized approximately $9,000~~ ~~and $10,000~~ ~~in interest expense including $7,000~~ ~~and $8,000~~ ~~related~~note was adjusted to the ~~amortization~~lower of ~~debt~~65% of the lowest closing bid price of the Company’s common stock as reported on its principal trading market for the twenty consecutive trading day period ending on (and including) the trading day immediately preceding the date on which the conversion notice was delivered or $0.039 as a result of issuance ~~costs, respectively. For the three and nine months ended September 30, 2020, the Company recognized $28,000~~ ~~and $30,000~~ ~~related to the amortization~~ of ~~debt discount.~~common shares for a convertible note conversion.

~~On August 5, 2020, the Company defaulted on certain covenants in the loan and the interest rate reset to the default rate of~~ ~~18%~~.

For the ~~three~~three-month period ended March 31, 2022, and ~~nine months ended September 30,~~March 31, 2021, the Company recognized approximately $~~3,000~~ 2,600~~and $8,000~~ in interest ~~expense~~ related to the ~~note, respectively.~~note. As of ~~September 30, 2021,~~March 31, 2022, the debt discount and issuance costs for the ~~loan~~note were fully amortized.

As of ~~September 30, 2021,~~March 31, 2022, the Company remains in default on the repayment of principal of $58,055and approximately $~~13,000~~ 18,000in accrued interest on the notes. Upon demand for repayment at the election of the holder, the holder of the note is due 140%of the aggregate of outstanding principal, interest, and other expenses due in respect of this Note. The 40% premium will be recorded once a demand ~~occurs.~~occurs.

On October 30, 2020, the Company issued to an existing investor in and lender to the Company a 10% original issue discount senior secured convertible promissory note with a principal of $111,111, for a purchase price of $100,000. The note is convertible into shares of common stock of the Company at the option of the noteholder at a conversion price of $0.07 (as adjusted for stock splits, stock combinations and similar events); provided, that if an event of default has occurred under the Note, then the conversion price shall be 70% of then conversion price. The conversion price of the notes is subject to anti-dilution price protection and on March 19, 2021, the conversion price of the notes was adjusted to $0.05per ~~share.~~share as a result of subsequent equity sales by the Company.

The obligations of the Company under the note are secured by a senior lien and security interest in all of the assets of the Company.

The Company recorded approximately $9,000 in debt issuance cost to be amortized over the life of the loan using the straight-line method.

The interest rate on the note was 10% per annum, calculated on the basis of a 360-day year. On April 30, 2021, the note matured and the Company defaulted on the note and the interest rate on the loan reset to 18%.

Additionally, the Company issued the noteholder 1,587,301warrants to purchase the Company’s common stock at $0.08per share subject to certain adjustments as defined in the agreement. Until the Notes are no longer outstanding, the warrants have full-ratchet protection, are exercisable for a period of five years, and contain customary exercise limitations. On March 19, 2021, the exercise price of the warrants was adjusted to $0.05and the Company issued an additional ~~634,919~~ 952,379warrants to the note holder. The Company recorded approximately $57,000 as a deemed dividend upon the repricing based upon the change in fair value of the warrants using a binomial valuation model. The Company used a risk-free rate of 0.16%, volatility of 262.27%, and expected term of 0.92years in calculating the fair value of the warrants.

The Company recorded a discount related to the warrants of approximately $66,000, including a discount of $6,000 and issuance costs of $5,000 based on the relative fair value of the instruments as determined by using the Black-Scholes valuation model. The Company recorded a beneficial conversion feature of $45,000 related to the note that was credited to additional paid in capital and reduced the carrying amount. The discount recorded is being amortized to interest expense over the life of the loan using the straight-line method. At the commitment date, the actual intrinsic value of the beneficial conversion feature was approximately $69,000. The Company also recorded a debt discount related to the convertible debt of approximately $5,000 and debt issuance cost of $4,000 using the relative fair value method to be amortized as interest expense over the term of the loan using the straight-line method.

On January 27, 2022, the exercise price of the notes and warrants was adjusted from the default conversion price of $0.049 to $0.039 as a result of a convertible note exercise and the Company issued an additional 716,320 warrants to the note holder.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, the Company recognized approximately $5,000 in interest expense for the note. For the three months ended March 31, 2021, the Company recognized approximately $~~5,000~~ ~~and $15,600~~4,700 in interest expense including $0 ~~and $2,600~~1,900 related to the amortization of debt issuance costs, respectively. For the ~~three and nine-month~~three-month period ended ~~September 30,~~March 31, 2021, the Company recognized $057,000 ~~and $79,000~~ ~~and~~ related to the amortization of debt discount. As of ~~September 30, 2021,~~March 31, 2022, the debt discount and issuance costs for the ~~loan~~note were fully amortized. ~~No interest expense or debt discount was recognized for the same period of 2020.~~

~~During the quarter ended September 30, 2021, the Company reclassified the warrant and conversion feature on the note from equity and recognized approximately $76,000~~ ~~as a derivative liability on the accompanying balance sheet.~~

As of ~~September 30, 2021,~~March 31, 2022, the Company has outstanding principal of $111,111 and accrued interest on the note of approximately $~~13,000~~24,000.

As of ~~September 30, 2021,~~March 31, 2022, the Company remains in default on the repayment of principal and interest on the notes. Upon demand for repayment at the election of the holder, the holder of the note is due 125% of the aggregate of outstanding principal, interest, and other expenses due in respect of this Note. The 25% premium will be recorded once a demand occurs

On January 31, 2021, the Company issued to an existing investor in and lender to the Company a 10% original issue discounted Senior Secured Convertible Promissory Note with a principal of $52,778, for a purchase price of $47,500, net of original issue discount of $5,278.. The Note iswas convertible into shares of common stock of the Company at the option of the noteholder at a conversion price of $0.07 (as adjusted for stock splits, stock combinations and similar events); provided, that if an event of default has occurred under the Note, then the conversion price shall be 70% of the then conversion price. The conversion price of the notes is subject to anti-dilution price protection and will be adjusted upon subsequent equity sales by the Company.

The obligations of the Company under the Note are secured by a senior lien and security interest in all assets of the Company.

Additionally, the Company issued to the investor 753,968warrants to purchase the Company’s common stock at an exercise price of $0.08per share subject to certain adjustments as defined in the agreement. Until the Notes are no longer outstanding, the warrants have full-ratchet protection, are exercisable for a period of five years, and contain customary exercise limitations. On March 19, 2021, the exercise price of the warrants was adjusted to $0.05and the Company issued an additional ~~301,592~~ 452,372warrants to the note holder. The Company recorded approximately $27,000as a deemed dividend upon the repricing based upon the change in fair value of the warrants using a binomial valuation model. The Company used a risk-free rate of ~~0.16~~0.16%%, volatility of ~~262.27~~262.27%%, and expected term of 0.97years in calculating the fair value of the warrants.

The Company recorded approximately $2,000 in debt issuance cost to be amortized over the life of the loan using the straight-line method.

The interest rate on the note was 10% per annum, calculated on the basis of a 360-day year. On July 31, 2021, the note matured and the Company defaulted on the note and the interest rate on the loan reset to the default rate of 18% per annum.

The Company recorded a discount related to the warrants of approximately $32,000, which includes an allocated original issue discount, of $3,000and allocated issuance costs of $1,000based on the relative fair value of the instruments as determined by using the Black-Scholes valuation model. The assumptions used in the Black-Scholes model were a risk-free rate of 0.45%, volatility of 240.83%, and an expected term of one yearin calculating the fair value of the warrants.

The Company also recorded a debt discount related to the convertible debt of approximately $2,000remaining original issue discount and remaining debt issuance cost of $1,000using the relative fair value method to be amortized as interest expense over the term of the loan using the straight-line method.

Total discounts recorded including the original issue discount ~~wer~~were approximately $35,000..

For the ~~three and nine-month periods~~year ended ~~September 30,~~March 31, 2021, the Company recognized approximately $~~2,900~~ ~~and $5,700~~1,200 in interest expense including approximately $~~100~~ ~~and $700~~300 related to the amortization of debt issuance costs, respectively. For the ~~three and nine-month~~three-month period ended ~~September 30,~~March 31, 2021, the Company recognized $~~5,600~~ ~~and $34,000~~18,000 related to the amortization of debt discount. NoFor three months ended March 31, 2022, the Company recognized approximately $2,400 in interest ~~expense or debt discount was recognized for the same period of 2020.~~

expense. As of ~~September 30, 2021, the Company has outstanding principal of $52,778~~ ~~on the note, has recorded approximately $5,000~~ ~~of accrued interest. As of September 30, 2021,~~March 31, 2022, the debt discount and issuance costs on the note were fully amortized.

As of ~~September 30, 2021,~~March 31, 2022, the Company has outstanding principal of $52,778 on the note and has recorded approximately $9,000 of accrued interest included in accrued expenses on the accompanying balance sheet.

As of March 31, 2022, the Company remains in default on the repayment of principal and accrued interest on the notes. Upon demand for repayment at the election of the holder, the holder of the note is due 125%of the aggregate of outstanding principal, interest, and other expenses due in respect of this Note. The 25% premium will be recorded once a demand occurs

On April 12, 2021, the Company issued to an accredited investor in and lender to the Company a 10%original issue discounted Senior Secured Convertible Promissory Note with a principal amount of $66,667, for a purchase price of $60,000net of an original discount of $6,667. Additionally, the Company issued to the investor 800,000five-year warrants to purchase the Company’s common stock at an exercise price of $0.095per share. The warrants have full ratchet protection.

The note matured on October 12, 2021,, ~~Interest accrues~~ Prior to default, interest accrued on the aggregate unconverted and then outstanding principal amount of the note at the rate of 10%per annum, calculated on-the-basis of a 360-day year. On October 12, 2021, the Company defaulted on the note and the interest rate on the note reset to 18% per annum.

The Note is convertible, in whole or in part, at any time, and from time to time, into shares of the common stock of the Company at the option of the noteholder at a conversion price of $0.075 (as adjusted for stock splits, stock combinations and similar events); provided, that if an event of default has occurred under the Note, then the conversion price shall be 70% of the then conversion price. The conversion price shall also be adjusted upon subsequent equity sales by the Company. The obligations of the Company under the Note are secured by a senior lien and security interest in all assets of the Company.

The Company recorded a discount related to the warrants of approximately $34,000, which includes approximately $3,700of OID discount allocated under the relative fair value method, and a remaining discount related to the OID of $3,000based on the relative fair value of the instruments. The fair value of the warrants on which the relative fair value is based was determined by using the Black-Scholes valuation model. The assumptions used in the Black-Scholes model were a risk-free rate of 0.89%, volatility of 240.64%, and an expected term of one yearin calculating the fair value of the warrants.

On June 25, 2021, the exercise price of the warrants was adjusted to $0.075 and the Company issued an additional ~~88,893~~213,333 warrants to the note holder. The Company recorded approximately $11,000 as a deemed dividend upon the repricing based upon the change in fair value of the warrants using a binomial valuation model. The Company used a risk-free rate of 0.92%, volatility of 247.52%, and expected term of 0.96 years in calculating the fair value of the warrants.

On November 4, 2021, the Company issued 153,227 shares of common stock upon a cashless exercise of 250,000 warrants issued with the April 2021 Convertible Note.

On November 30, 2021, the exercise price of the warrants was adjusted to $0.05 based on a note conversion at $0.05 and the Company issued an additional 131,667 warrants to the note holder.

On January 27, 2022, the exercise price of the note and warrants was adjusted from the default conversion price of $0.0525 to $0.039 based on a convertible note conversion at $0.039 and the Company issued an additional 322,949 warrants to the note holder.

For the three ~~and nine-month period~~months ended ~~September 30, 2021,~~March 31, 2022, the Company recognized approximately $~~19,000~~ ~~and $35,000, respectively related to the amortization of debt discount. For the three and nine-month periods ended September 30, 2021, the Company recognized approximately $1,700~~ ~~and $3,200~~3,000 in interest expense ~~respectively.~~for the notes. No interest expense or debt discount was recognized for the same period of ~~2020.~~2021. As of March 31, 2022, the debt discounts and issuance costs on the note were fully amortized.

As of ~~September 30, 2021,~~March 31, 2022, the Company has recorded $66,667of principal and approximately $~~2,400~~ 9,100~~of unamortized debt discount and $3,200~~ of accrued interest for the note on the accompanying balance sheet.

~~On October 12, 2021,~~As of March 31, 2022, the Company ~~defaulted~~remains in default on the ~~note~~repayment of principal and ~~the~~accrued interest ~~rate~~ on the ~~note reset to~~ ~~18%~~ ~~per annum.~~notes. Upon ~~default, and upon~~ demand for repayment at the election of the holder, the holder of the note is due 125%of the aggregate of outstanding principal, interest, and other expenses due in respect of this ~~note.~~Note. The 25% premium will be recorded once a demand occurs

On June 25, 2021, the Company issued to an accredited investor in and lender to the Company a 5% original issue discounted Senior Secured Convertible Promissory Note with a principal amount of $66,500, for a purchase price of $63,000, net of an original issue discount of $3,500. Additionally, the Company issued to the investor 800,000 three-year warrants to purchase the Company’s common stock at an exercise price of $0.095 per share. Upon subsequent down-round equity sales by the Company, the number of shares issuable upon exercise of the Warrant shall be proportionately adjusted such that the aggregate ~~Exercise Price~~exercise price of this Warrant shall remain $76,000 which is a full ratchet price protection ~~provision~~provision.

The note matures on June 25, 2022, or such earlier date as the note is required or permitted to be repaid. Interest shall accrue on the aggregate unconverted and then outstanding principal amount of the note at the rate of 10% per annum, calculated on the basis of a 365-day year.

The Note iswas convertible, in whole or in part, at any time, and from time to time, into shares of the common stock of the Company at the option of the noteholder at a conversion price of $0.075 ~~(as~~(as adjusted for stock splits, stock combinations and similar events); provided, however that in the event, the Company’s Common Stock trades below ~~$0.08~~ $0.08 per share for more than three (3) consecutive trading days, the ~~Holder~~holder of this Note is entitled, at its option, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company’s common stock at a price for each share of Common Stock equal to 65%of the lowest trading price of the Common Stock for the twenty prior trading days including the day upon which a Notice of Conversion is received. The conversion discount, look back period and other terms of the Note will be adjusted on a ratchet basis if the Company offers a more favorable conversion discount, prepayment rate, interest rate, (whether through a straight discount or in combination with an original issue discount), look back period or other more favorable term to another party for any financings while this Note is in effect

The obligations of the Company under the Note are secured by a senior lien and security interest in all assets of the Company.

The ~~company~~Company also issued 47,547shares of common stock as a commission fee to the investment banker. The fair value of the common stock which was approximately $5,040was recorded as debt issuance expense.

Due to the variability in the conversion price of the Note the embedded conversion option has been bifurcated and reflected as a derivative liability with an initial fair value of $102,823 with $87,039 charged to derivative expense and $15,784 recorded as a debt discount.

Total discounts recorded were $66,500. The Company recorded an original issue discount of $3,500, a discount of $9,300for issuance costs, a discount related to the warrants of approximately $37,916and a discount related to the derivative of $15,784based on the relative fair value of the instruments. The warrant fair value on which the relative fair value was based was determined by using a simple binomial lattice model. The assumptions used in the model were a risk-free rate of ~~0.48%~~0.48%, volatility of 302.11%, and an expected term of 0.60years in calculating the fair value of the warrants.

On August 11, 2021, the exercise price of the warrants was adjusted to $0.075 and the Company issued an additional 213,333 warrants to the note holder. The Company recorded approximately $25,000 as a deemed dividend upon the repricing based upon the change in fair value of the warrants using a binomial valuation model. The Company used a risk-free rate of 0.81, volatility of 209%, and expected term of 0.57 years in calculating the fair value of the warrants.

On October 27, 2021, the Company and the institutional investor who holds the convertible promissory note agreed to extend the maturity date of the note by six months to December 25, 2022 for no consideration.

On November 30, 2021, the exercise price of the warrants was adjusted to $0.05 based on a note conversion at $0.05 and the Company issued an additional 506,667 warrants to the note holder.

On January 27, 2022, the holder of the June 25, 2021, convertible note converted $9,500 of principal and $421 of interest at $0.039 per share into 254,401 shares of common stock that were valued at fair value based on the quoted trading prices on the conversion dates aggregating approximately $28,000 resulting in a loss on debt extinguishment of $18,000. In addition, derivative fair value of $23,000 relating to the portion of the Note converted was settled resulting in a gain on extinguishment of approximately $23,000. The net gain on extinguishment was approximately $5,000. In addition, the conversion price of the warrants issued with the notes were adjusted to $0.039 per share and the Company issued an additional 428,718 warrants to the holder of the note.

For the three ~~and nine-month period~~months ended ~~September 30, 2021,~~March 31, 2022, the Company recognized approximately $~~13,000~~9,800 ~~and $18,000~~related to the amortization of debt ~~discount. For both the three~~discounts and ~~nine-month periods ended September 30, 2021, the Company recognized~~ approximately $~~4,000~~3,500 in interest ~~expense.~~expense related to the note. No interest expense or debt discount was recognized for the same period of ~~2020.~~2021.

At ~~September 30, 2021,~~March 31, 2022, the Company has recorded $~~66,500~~57,000 of outstanding principal and approximately $~~4,000~~8,800 of accrued interest and $~~49,000~~28,900 of unamortized discount and issuance expenses.

On August 11, 2021, the Company entered into a Securities Purchase Agreement with an accredited institutional investor pursuant to which the Company issued to the investor its Original Issue Discount Secured Convertible Promissory Note in the principal amount of $220,500and warrants to purchase 800,000shares of the common stock of the Company for which the Company received consideration of $210,000net of an original ~~issued~~issue discount of $10,500. In addition, the Company entered into a Registration Rights Agreement with the investor and issued the investor 100,000common shares as a commitment fee.

The note matures one year from issuance and absent an event of default provides for an interest rate of 10% per annum, payable at maturity, and is convertible into common stock of the Company at a price of $0.075 per share, subject to anti-dilution adjustments in the event of certain corporate events as set forth in the Note, provided that if the average closing price of the Company’s common stock during any three consecutive trading days is below $0.08, the conversion price shall be reduced to 65% of the lowest trading price during the 20 consecutive trading days immediately preceding the conversion date. On November 9, 2021, the Company defaulted on certain covenants in the note and the interest rate on the note reset to 24% per annum.

In addition to customary anti-dilution adjustments the Note provides, subject to certain limited exceptions, that if the Company issues any common stock or common stock equivalents, as defined in the Note, at a per share price lower than the conversion price then in effect, the conversion price will be reduced to the per share price at which such shares or common share equivalents were sold.

The ~~Warrants~~warrants are initially exercisable for a period of three years at a price of $0.095per share, subject to customary anti-dilution adjustments upon the occurrence of certain corporate events as set forth in the ~~Warrant.~~warrant.

The Company also issued 140,000shares of common stock to the investment banker as a commission on the note.

Due to the variability in the conversion price of the Note the embedded conversion option has been bifurcated and reflected as a derivative liability with an initial fair value of $340,893 with $234,388 charged to derivative expense and $106,505 recorded as a debt discount.

The Company recorded a total debt discount of $220,500including an original issue discount of $10,500, a discount related to the warrants of approximately $56,454a discount related to issuance costs of $30,000and a discount related to the issuance of common stock of approximately $17,041, and a $106,505discount related to the initial derivative value of the embedded conversion feature on the note all based on the relative fair value of the instruments,

The fair value of the warrants on which the relative fair value was based was determined by using a simple binomial lattice model. The assumptions used in the model were a risk-free rate of 0.81%, volatility of 253%, and an expected term of one yearin calculating the fair value of the warrants. The discounts are being amortized over the term of the convertible note.

On November 30, 2021, the exercise price of the warrants was adjusted to $0.05 based on a note conversion at $0.05 and the Company issued an additional 720,000 warrants to the note holder.

On January 27, 2022, the conversion price of the notes was adjusted to the lower of $0.039 per share, or provided that if the average closing price of the Company’s common stock during any three consecutive trading days is below $0.08, the conversion price shall be reduced to 65% of the lowest trading price during the 20 consecutive trading days immediately preceding the conversion date. In addition, the exercise price of the warrant was adjusted to $0.039 per share and the Company issued an additional 428,718 warrants to the holder of the note. Both the conversion price of the note and warrants were adjusted as a result of a convertible note exercise at $0.039 per share.

For the three ~~and nine-month period~~months ended ~~September 30, 2021,~~March 31, 2022, the Company recognized approximately $~~30,810~~ 54,400~~for~~ related to the amortization of ~~the~~ debt ~~discount. For both the three~~discount and ~~nine-month periods ended September 30, 2021, the Company recognized~~ approximately $~~3,000~~ 12,400in interest ~~expense.~~expense related to the note. No interest expense or debt discount was recognized for the same period of 2021.

At ~~September 30, 2021,~~March 31, 2022, the Company has remaining $220,500of outstanding principal and approximately $~~3,000~~ 28,200of accrued interest and $~~190,000~~ 79,700of unamortized discount.

On August 17, 2021, the Company entered into a Securities Purchase Agreement with an accredited institutional investor pursuant to which the Company issued to the ~~Buyer~~investor its Original Issue Discount Secured Convertible Promissory Note in the principal amount of $220,500 and warrants to purchase 800,000 shares of the common stock of the Company for which the Company received consideration of $210,000 net of original discount of ~~$10,500~~$10,500. In addition, the Company entered into a Registration Rights Agreement with the ~~Buyer~~investor and issued the ~~Buyer~~investor 100,000 common shares as a commitment fee.

The note matures one year from issuance and provides for an interest rate of 10% per annum, payable at maturity, and is convertible into common stock of the Company at a price of $0.075 per share, subject to anti-dilution adjustments in the event of certain corporate events as set forth in the Note, provided that if the average closing price of the Company’s common stock during any three consecutive trading days is below ~~$0.08,~~$0.08, the conversion price shall be reduced to 65% of the lowest trading price during the 20 consecutive trading days immediately preceding the conversion date. The embedded conversion option will be treated as a bifurcated derivative liability.

The Warrants are initially exercisable for a period of three years at a price of $0.095 per share, subject to customary anti-dilution adjustments upon the occurrence of certain corporate events as set forth in the Warrant

The Company incurred approximately $30,000in debt issuance costs. The Company also issued 112,601shares of common stock to the investment banker as a commission on the note.

Due to the variability in the conversion price of the Note, the embedded conversion option has been bifurcated and reflected as a derivative liability with an initial fair value of $398,404 with $297,833 charged to derivative expense and $100,571 recorded as a debt discount.

The Company recorded a total debt discount of $220,500 including an original issue discount of $10,500, a discount related to the warrants of approximately $62,220 a discount related to issuance costs of $30,000 a discount related to the issuance of common stock of approximately $17,209, and a $100,571 discount related to the initial derivative value of the embedded conversion feature on the Note all based on the relative fair value of the instruments.

The fair value of the warrants on which the relative fair value was based was determined by using a simple binomial lattice model. The assumptions used in the model were a risk-free rate of ~~0.77~~0.77%%, volatility of ~~254~~254%%, and an expected term of one year in calculating the fair value of the warrants. The discounts are being amortized over the life of the convertible note.

On October 27, 2021, the Company and the institutional investor who holds the promissory note agreed to extend the maturity date the notes by six months to February 17, 2023 for no consideration.

On November 15, 2021, the Company defaulted on certain covenants in the note and the interest rate on the note reset to 24% per annum.

On November 30, 2021, the exercise price of the warrants was adjusted to $0.05 based on a note conversion at $0.05 and the Company issued an additional 720,000 warrants to the note holder.

For the three months ended March 31, 2022, the Company recognized approximately $34,700 related to the amortization of debt discount and $12,400 in interest expense related to the note. No interest expense or debt discount was recognized for the same period of 2021.

At March 31, 2022, the Company has recorded $220,500 of outstanding principal and approximately $~~3,000~~27,800 of accrued interest and $~~193,000~~123,200 of unamortized discount and issuance expenses.

On October 4, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor pursuant to which the Company issued the Buyer a 10% Convertible Redeemable Note in the principal amount of $131,250 and a three-year warrant to purchase 476,190 shares of common stock of the Company for which the Company received proceeds of $110,000. In addition, the Company entered into a Registration Rights Agreement with the investor and issued the investor 59,523 common shares as a commitment fee.

The Note is due October 4, 2022. The Note provides for interest at the rate of 10% per annum, payable in seven equal monthly payments beginning on August 15, 2022 through the maturity date. The Note is convertible into shares of common stock at any time following the date of cash payment at the Buyer’s option at a conversion price of $0.075 per share, subject to certain adjustments.

The Warrants are exercisable for three-years from October 4, 2021, at an exercise price of $0.095 per share, subject to certain adjustments, which exercise price may be paid on a cashless basis. The aggregate exercise price is $45,238.

The Company incurred approximately $15,000 in debt issuance costs. The Company also issued 43,459 shares of common stock to the investment banker as a commission on the note.

Due to the lack of authorized shares, the embedded conversion option has been bifurcated and reflected as a derivative liability with an initial fair value of $564,943 with $487,052 charged to derivative expense and $77,891 recorded as a debt discount.

The Company recorded a total debt discount of $131,250 including an original issue discount of $6,250, a discount related to issuance costs of $15,000, a discount related to the issuance of common stock of $32,109, and a $77,891 discount related to the initial derivative value of the embedded conversion feature on the Note all based on the relative fair value of the instruments. The discounts are being amortized over the life of the convertible note.

On January 2, 2022, the Company defaulted on certain covenants contained in the October 4, 2021, convertible note and the interest rate reset to 16%.

On January 27, 2022, the exercise price of the note was adjusted to $0.039 based on a convertible note conversion at $0.039.

For the three months ended March 31, 2022, the Company recognized approximately $32,400 related to the amortization of debt discount and approximately $5,000 in interest expense related to the note. No interest expense or debt discount was recognized for the same period of 2021.

At March 31, 2022, the Company has recorded $131,250 of outstanding principal and approximately $8,200 of accrued interest and $66,900 of unamortized discount and issuance expenses.

On October 7, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor pursuant to which the Company issued the investor a 10% Convertible Redeemable Note in the principal amount of $131,250 and a three-year warrant to purchase 476,190 shares of common stock of the Company for which the Company received proceeds of $110,000. In addition, the Company entered into a Registration Rights Agreement with the investor and issued the investor 59,523 common shares as a commitment fee and an additional 52,632 shares as a commission to the broker.

The Note is due October 7, 2022. The Note provides for interest at the rate of 10% per annum, payable at maturity. The Note was convertible into shares of common stock at any time following the date of cash payment at the investor’s option at a conversion price of $0.075 per share, subject to certain adjustments.

The Warrants are exercisable for three-years from October 7, 2021, at an exercise price of $0.095 per share, subject to certain adjustments, which exercise price may be paid on a cashless basis. The aggregate exercise price is $45,238.

Due to the lack of authorized shares, the embedded conversion option has been bifurcated and reflected as a derivative liability with an initial fair value of $564,184 with $487,667 charged to derivative expense and $76,517 recorded as a debt discount.

The Company recorded a total debt discount of $131,250 including an original issue discount of $6,250, a discount related to issuance costs of $15,000, a discount related to the issuance of common stock of approximately $33,483, and a $76,517 discount related to the initial derivative value of the embedded conversion feature on the Note all based on the relative fair value of the instruments. The discounts are being amortized over the life of the convertible note.

On January 5, 2022, the Company defaulted on certain covenants contained in the October 7, 2021, convertible note and the interest rate reset to 16%.

On January 27, 2022, the exercise price of the note was adjusted to $0.039 based on a convertible note conversion at $0.039.

For the three months ended March 31, 2022, the Company recognized approximately $32,400 related to the amortization of debt discounts and approximately $5,000 in interest expense related to the note. No interest expense or debt discount was recognized for the same period of 2021.

At March 31, 2022, the Company has recorded $131,250 of outstanding principal and approximately $8,100 of accrued interest and $68,000 of unamortized discount and issuance expenses.

On March 15, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor pursuant to which the Company issued the investor a 10% Convertible Note in the principal amount of $250,000 for a purchase price of $200,000 reflecting a $50,000 original issue discount. The Company received total consideration of $180,000 after debt issuance costs of $20,000. In addition, the Company issued 50,000 shares of common stock as a commitment fee to the investor. The Company also issued 200,000 shares to the broker as a commission on the sale.

The Note provides for guaranteed interest at the rate of 10% per annum for the 12 months from and after the original issue date of the Note for an aggregate guaranteed interest of $25,000, all of which guaranteed interest shall be deemed earned as of the date of the note. The principal amount and the guaranteed interest shall be due and payable in seven equal monthly payments each, $39,285.71, commencing on August 15, 2022, and continuing on the 15th day of each month until paid in full not later than March 15, 2023, the maturity date.

The Note is convertible into shares of common stock at any time following any event of default at the investor’s option at a conversion price of ninety percent (90%) per share of the lowest per-share trading price of the Company; stock during the ten trading day periods before the conversion, subject to certain adjustments.

The Company recorded a total debt discount of $250,000 including an original issue discount of $50,000, a discount related to issuance costs of $34,384, a discount related to the issuance of common stock of approximately $3,596 and a $162,020 discount related to the initial derivative value of the embedded conversion feature on the Note all based on the relative fair value of the instruments. The discounts are being amortized over the life of the convertible note.

For the three months ended March 31, 2022, the Company recognized approximately $11,600 related to the amortization of debt discounts and approximately $25,000 in interest expense related to the note that was deemed earned as of the date of issuance. No interest expense or debt discount was recognized for the same period of 2021.

At March 31, 2022, the Company has recorded $250,000 of outstanding principal $25,000 of accrued interest and $238,400 of unamortized discount and issuance expenses.

In connection with the issuance of the unrelated party convertible notes (collectively referred to as “Notes”) and warrants (collectively referred to as “Warrants”), discussed above, the Company determined that the terms of certain Notes and Warrants contain an embedded conversion ~~option~~options to be accounted for as derivative liabilities due to the holder having the potential to gain value upon conversion and provisions which includes events not within the control of the Company. Due to the fact that the number of shares of common stock issuable exceed the Company’s authorized share limit as of March 31, 2022, the equity environment was tainted and all convertible debentures and warrants were included in the value of the derivative. In accordance with ASC 815-40 –Derivatives and Hedging – Contracts in an Entity’s Own Stock, the embedded conversion ~~option~~options contained in the Notes and the Warrants were accounted for as derivative liabilities at the date of issuance or on the reclassification date and shall be adjusted to fair value through earnings at each reporting date. The fair value of the embedded conversion options and the warrants was determined using the Binomial Lattice valuation model. At the end of each period and on note conversion date or repayment or on the warrant exercise date, the Company revalues the derivative liabilities resulting from the embedded option.

During the ~~nine months~~three month period ended ~~September 30, 2021,~~March 31, 2022, in connection with the issuance of the Notes, ~~and Warrants,~~ on the initial measurement dates, the fair values of the embedded conversion ~~options~~option of approximately $~~842,120~~271,000 was recorded as derivative liabilities of which $~~222,860~~163,000 was allocated as a debt discount and $~~619,260~~108,000 as derivative expense.

At the end of the period, the Company revalued the embedded conversion option derivative liabilities. In connection with the initial valuations and these revaluations, the Company recorded a ~~loss~~gain from the initial and change in the derivative liabilities fair value of approximately $~~3.1~~776,000 ~~million~~ for the ~~nine months~~three-month period ended ~~September 30,~~March 31, 2021.

During the ~~nine~~three months period ended ~~September 30, 2021,~~March 31, 2022, the fair value of the derivative liabilities was estimated at issuance and at ~~the September 30, 2021,~~March 31, 2022, using the Binomial Lattice valuation model with the following assumptions:

Schedule of Fair Value of Derivative Liabilities Estimated Issuance and Valuation Mode

~~For~~Other than the ~~three and nine-month period ended September 30, 2021,~~effect on the ~~Company~~derivative valuation recognized ~~approximately~~in operations, there was no accounting effect to the ratchet adjustments of certain convertible notes to reduce the conversion price to $~~27,000~~ 0.039~~for~~ in January 2022 since all of the ~~amortization of debt discount. For both~~embedded conversion options in the ~~three and nine-month periods ended September 30, 2021, the Company recognized approximately $3,000~~ ~~in interest expense.~~convertible notes were treated as derivatives.

As a result of the Asset Purchase Agreement that the Company entered into with Symplmed Pharmaceuticals LLC in June 2017, Symplmed assigned to the Company an Amended and Restated License and Commercialization Agreement with Les Laboratories Servier, pursuant to which the Company has the exclusive right to manufacture, have manufactured, develop, promote, market, distribute and sell Prestalia® in the U.S. (and its territories and possessions).

~~On January 4, 2021, the licensor terminated the licensing agreement with the Company for the commercialization of Prestalia®.~~

~~NaN~~ ~~royalties were paid for the three or nine-month periods ended September 30, 2020, or 2021.~~

In 2010, the Company entered into an asset purchase agreement with Novosom Verwaltungs GmbH (“Novosom”), pursuant to which the Company acquired intellectual property for Novosom’s SMARTICLES-based liposomal delivery system. In May 2018, the Company issued to Novosom ~~51,988~~ ~~shares of our common stock, with a fair value of $75,000~~, as additional consideration pursuant to the Asset Purchase Agreement. Such shares were due to Novosom as a result of the receipt by our company of a license fee under the License Agreement that we entered into with Lipomedics Inc. in February 2017. On December 23, 2019, Novosom repurchased the acquired intellectual property for $~~45,000~~ ~~of which $20,000~~ ~~was payable upon execution of the agreement and $25,000~~ ~~was to be paid upon the Company’s achievement of certain performance obligations by September 30, 2020.~~

~~The Company recognized $5,000~~ ~~and $45,000~~ ~~as other income from the agreement for the three and nine-month periods ended September 30, 2020, respectively.~~

On March 16, 2018, the Company entered into an exclusive sublicensing agreement for certain intellectual property rights to its DiLA2 delivery system. The agreement included an upfront payment of $200,000 and future additional consideration for sales and development milestones. The upfront fee was contingent upon the Company obtaining a third-party consent to the agreement within ninety days of execution. As of ~~September 30, 2021, and December~~March 31, ~~2020,~~2022, the Company had not obtained consent for the sublicense and has classified the upfront payment it had previously recorded as an accrued liability on its balance sheet.

The Company and other related entities have had a commonality of ownership and/or management control, and as a result, the reported operating results and/or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous.

The Company had a Master Services Agreement (“MSA”) with Autotelic Inc., a related party that is partly owned by one of the Company’s former Board members and executive officers, namely Vuong Trieu, Ph.D., effective November 15, 2016. The MSA stated that Autotelic Inc. would provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid on its behalf. Dr. Trieu resigned as a director of our company effective October 1, 2018. The Company and Autotelic Inc. agreed to terminate the MSA effective October 31, 2018.

An unpaid balance for previous years services performed under the agreement of approximately $4,000is included in due to related party in the accompanying consolidated balance sheets at ~~September 30, 2021,~~March 31, 2022, and December 31, 2020.

In addition, as of March 31, 2022, and December 31, 2021, the Company owed various officers and directors approximately $72,000 and $42,000, respectively for services rendered which is included as due to related party on the accompanying balance sheet.

Adhera has authorized 100,000 shares of preferred stock for issuance and has designated 1,000 shares as Series B Preferred Stock (“Series B Preferred”) and 90,000 shares as Series A Junior Participating Preferred Stock (“Series A Preferred”). ~~NaN~~No shares of Series A Preferred or Series B Preferred are outstanding. In March 2014, Adhera designated 1,200 shares as Series C Convertible Preferred Stock (“Series C Preferred”). In August 2015, Adhera designated 220 shares as Series D Convertible Preferred Stock (“Series D Preferred”). In April 2018, Adhera designated 3,500 shares of Series E Convertible Preferred Stock (“Series E Preferred”). In July 2018, Adhera designated 2,200 shares of Series F Convertible Preferred Stock (“Series F Preferred”). In December 2019, Adhera designated 6,000 shares of Series G Convertible Preferred Stock (“Series G Preferred”). The Company plans to file a certificate of elimination with respect to the Series A Preferred and Series B ~~stock~~Preferred and a certificate of decrease with respect to each of its Series C, D and F Preferred stock. As of March 31, 2022, the Company had not filed the certificate of elimination. Each subsequent designated series of preferred stock has liquidation preference over the previous series.

Each share of Series C Preferred has a stated value of $5,000 per share, has a $5,100 liquidation preference per share, has voting rights of 666.67 votes per share, and is convertible into shares of common stock at a conversion price of $7.50 per share.

As of ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, 100 shares of Series C Preferred ~~stock~~ were outstanding.

Each share of Series D Preferred has a stated value of $5,000 per share, has a liquidation preference of $300per share, has voting rights of 1,250 votes per share and is convertible into shares of common stock at a conversion price of $4.00 per share. The Series D Preferred has a 5%5% stated dividend rate when, and if declared by the Board of Directors, is not redeemable and has voting rights on an as-converted basis.

As of ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, 40 shares of Series D Preferred were outstanding.

The Series E Preferred Stock has a stated value of $5,000 per share and accrues 8%8% dividends per annum that are payable in cash or stock at the Company’s discretion. The Series E Preferred has voting rights, dividend rights, liquidation preferences, conversion rights at the option of the holder and anti-dilution rights. Series E Preferred stock is convertible into shares of common stock at $0.50. Anti-dilution price protection on Series E Preferred stock expired on February 10, 2020. Warrants issued with Series E Convertible Preferred Stock have anti-dilution price protection, are exercisable for a period of five years, and contain customary exercise limitations.

On March 19, 2021, the exercise price of the Series E warrants was adjusted from $0.50 to $0.05 per share upon the conversion of $25,900 debt for 518,000 shares common stock. The Company recorded approximately $390,000 as a deemed dividend based upon the change in fair value of the Series E Preferred stock warrants using a binomial valuation model. The Company used a risk-free rate of ~~0.16%~~0.16%, volatility of 262.27%, and expected term of .41 to .43 years in calculating the fair value of the warrants.

As of May 17, 2021, the three-year anniversary of the closing of the Series E Preferred stock offering, all outstanding Series E Preferred stock may be converted by the Company into common stock upon written notification being provided by the Company to stockholders. As of March 31, 2022, the Company has not provided notice of conversion to the holders of the Series E Preferred stock.

On June 8, 2021, an investor converted 8 shares of Series E Preferred and accrued dividends of approximately $10,000 into 101,010 shares of common stock. In addition, the Company issued 53,571 shares of common stock to the investor for a cashless exercise of 75,000 warrants.

On July 30, 2021, ~~and~~an investor converted 50 shares of Series E Preferred stock with a state value of $250,000 into 500,000 shares of common stock.

On October 4, 2021, the Company issued 255,540 shares of common stock upon the conversion of 20 shares Series E Preferred stock including accrued dividends of $27,770.

On October 5, 2021, the Company issued 385,414 shares of common stock upon the conversion of 30 shares of Series E Preferred stock including accrued dividends of $42,707.

On October 8, 2021, the Company issued 51,414 shares of common stock upon the conversion of 4 shares of Series E Preferred stock including accrued dividends of $5,707.

On October 12, 2021, the Company issued 64,312 shares of common stock upon the conversion of 5 shares of Series E Preferred stock including accrued dividends of $7,156.

On November 23, 2021, the Company issued 193,299 shares of common stock upon the conversion of 15 shares of Series E Preferred stock including accrued dividends of $21,649.

On January 27, 2022, the exercise price of the Series E warrants was adjusted to $0.039 per share as a result of a convertible note exercise at $0.039 per share.

As of ~~September 30, 2021,~~March 31, 2022, the Company had a total of 30,405,600 warrants issued with Series E Preferred stock outstanding. The warrants expire in ~~2023.~~2023 and have an exercise price of $0.039.

The Company had accrued dividends on the Series E Preferred stock of approximately $~~4,756,000~~ 5.3 million and $~~3.7~~ 5.0million, as of ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, respectively.

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there were ~~3,400~~3,326 ~~and~~ ~~3,458~~ Series E shares ~~outstanding, respectively.~~outstanding.

The Series F Preferred Stock has a stated value of $5,000 per share and accrues 8%8% dividends per annum that are payable in cash or stock at the Company’s discretion. The Series F Preferred has voting rights, dividend rights, liquidation preferences, conversion rights at the holders option and anti-dilution rights. Series F Preferred stock is convertible into shares of common stock at $0.50. Anti-dilution price protection on Series F Preferred stock expired on February 10, 2020. ~~The Series F Preferred stock includes a mandatory conversion feature on November 9, 2021, which is the~~ ~~three-year~~ ~~anniversary of the closing of the issuance.~~ Warrants issued with Series F Convertible Preferred Stock have anti-dilution price protection, are exercisable for a period of five years, and contain customary exercise limitations.

On October 30, 2019, the Company repurchased 20 shares of Series F Convertible Preferred Stock including accrued and unpaid dividends and warrants to purchase 150,000 shares of common stock for $100,000 from our former CEO pursuant to an amendment to the settlement agreement dated April 4, 2019. The Company also committed to purchase from such officer the remaining Series F Convertible Preferred Stock and related warrants held by such officer for $100,000 by not later than March 1, 2020. As of ~~September 30,~~December 31, 2021, the Company had not repurchased the remaining shares.

On March 19, 2021, the exercise price of the Series F warrants was adjusted from $0.50 to $0.05 upon the conversion of $25,900 of debt for 518,000 shares of common stock. The Company recorded approximately $31,000 as a deemed dividend based upon the change in fair value of the Series F Preferred stock using a binomial valuation model. The Company used a risk-free rate of 0.16%, volatility of 262.27%, and an expected term of .46 to .53 years in calculating the fair value of the warrants.

On October 15, 2021, the Company issued 37,043 shares of common stock upon the conversion of 3 shares of Series F Preferred stock and including total accrued dividends of $3,521.

As of ~~September 30,~~November 9, 2021, the three-year anniversary of the closing of the Series F Preferred stock offering, all outstanding Series F Preferred stock may be converted by the Company into common stock upon written notification being provided by the Company to stockholders. As of December 31, 2021, the Company has not provided notice of conversion to the holders of the Series F Preferred stock.

As of December 31, 2021, the Company had a total of 3,088,500 Series F Preferred stock warrants outstanding. The warrants expire in 2023.

The Company had accrued dividends on the Series F Preferred stock of approximately $~~455,000~~523,000 and $~~347,000~~448,000, as of ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, respectively.

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there were ~~361~~358 Series F Preferred shares outstanding.

The Series G Preferred Stock has a stated value of $5,000 per share and accrues 8%8% dividends per annum that are payable in cash or stock at the Company’s discretion. The Series G Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights. Series G Preferred stock is convertible into shares of common stock at $0.50.

As of ~~September 30, 2021, no~~March 31, 2022, 0 Series G Preferred Stock has been issued by the Company.

~~On March 19, 2021, the Company issued~~ ~~518,000~~ ~~unregistered shares of common stock to the holder of the January 2020 convertible note for conversion of $25,900~~ ~~in accrued interest.~~

On June 8, 2021, an investor converted 8 shares of Series E Preferred and accrued dividends of approximately $10,000 into 101,010 shares of common stock. ~~In addition,~~

On June 8, 2021, the Company issued 53,571 shares of common stock to the investor for a cashless exercise of 75,000 warrants.

On July 30, 2021, and investor converted 50shares of Series E Preferred stock with a stated value of $250,000into 500,000shares of common stock.

On August 11, 2021, the Company issued 100,000shares of common stock to a convertible note investor as a commitment fee which was valued at itits relative fair value of $56,464.

On August 18, 2021, the Company issued 100,000shares of common stock to a convertible note investor as a commitment fee which was valued at its relative fair value of $62,220.

On September 22, 2021, the Company issued 300,148shares of common stock to an investment banker for commissions due under a banking agreement. The shares were recorded at their relative fair value of approximately $39,290.

On October 4, 2021, the Company issued 255,540 shares of common stock upon the conversion of 20 shares Series E Preferred stock including accrued dividends of $27,770.

On October 4, 2021, the Company issued 59,523 shares of common stock to a convertible note investor as a commitment fee which was valued at its relative fair value of $10,859.

On October 5, 2021, the Company issued 385,414 shares of common stock upon the conversion of 30 shares of Series E Preferred stock including accrued dividends of $42,707.

On October 8, 2021, the Company issued 51,414 shares of common stock upon the conversion of 4 shares of Series E Preferred stock including accrued dividends of $5,707.

On October 8, 2021, the Company issued 59,523 shares of common stock to a convertible note investor as a commitment fee which was valued at its relative fair value of $12,233.

On October 15, 2021, the Company issued 37,043 shares of common stock upon the conversion of 3 shares of Series F Preferred stock including accrued dividends of $3,521

On November 4, 2021, the Company issued 153,227 shares of common stock upon a cashless exercise of 250,000 warrants issued with the April 2021 Convertible Note.

On December 6, 2021, the Company issued 96,091 shares of common stock to an investment banker for commissions due under a banking agreement. The shares were recorded at their relative fair value of approximately $18,745.

During the ~~three-month~~twelve-month period ending ~~September 30,~~December 31, 2021, the company issued ~~1.7~~ 3,366,012million common shares upon the conversion of $~~50,855~~98,141 principal and $~~34,155~~70,160 of accrued interest on the February 2020 convertible note.

The common shares issued upon conversions of ~~convertible notes~~the note for the ~~nine months~~period ended ~~September 30,2021~~December 31, 2021 were valued at fair value based on the quoted trading prices on the conversion dates aggregating approximately $~~379,422~~554,000 resulting in a loss on debt extinguishment of approximately $386,000.

On January 27, 2022, the Company issued 254,401 shares of common stock upon the conversion of $9,500 principal and $422 of interest on the June 2021 convertible note that were valued at fair value based on the quoted trading prices on the conversion dates aggregating approximately $28,000 resulting in a loss on debt extinguishment of $~~268,522~~18,000. In addition, derivative fair value of $23,000 relating to the portion of the Note converted was settled resulting in a gain on extinguishment of approximately $23,000. The net gain on extinguishment was approximately $5,000.

On March 15, 2022, the Company issued 50,000 shares of common stock to a convertible note investor as a commitment fee which was valued at its relative fair value of $3,596.

On March 15, 2022, the Company issued 200,000 shares of common stock to an investment banker for commissions due under a banking agreement for issuance of a convertible note. The shares were recorded at their fair value of approximately $14,384.

As of ~~September 30, 2021,~~March 31, 2022, there were ~~61,306,350~~79,316,071 common stock warrants outstanding, with a weighted average exercise price of $~~0.07~~0.05 per share, ~~and~~with annual expirations as follows:

~~60,957,617~~Warrants outstanding as of March 31, 2022, included78,014,958 price adjustable warrants.

~~A total~~The intrinsic value of ~~343,750~~ 79,316,071warrants ~~expired during the period. There were~~ ~~75,000~~ ~~Series E warrants exercised~~ as of ~~September 30, 2021~~March 31, 2022, was approximately $2.7 million.

As discussed in Note 2 above, the Company has issued convertible notes and warrants with variable conversion provisions. The conversion terms of the convertible notes are variable based on ~~a cashless basis.~~certain factors, such as the future price of the Company’s common stock and various default provisions related to the payment of the notes in Company stock. The number of shares of common stock to be issued under the convertible notes and warrants is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is therefore, indeterminate. Due to the fact that the number of shares of common stock issuable exceed the Company’s authorized share limit as of March 31, 2022, the equity environment was tainted and all convertible debentures and warrants were included in the value of the derivative as of that date. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the warrants were recorded as derivative liabilities. On March 31, 2022, the Company evaluated all outstanding warrants to determine whether these instruments are tainted and, due to reasons discussed above, all warrants outstanding were considered tainted and were therefore, accounted for as derivative liabilities.

Other than the effect on the derivative valuation recognized in operations, there was no accounting effect to the ratchet adjustments of certain warrants to reduce the conversion price to $0.039 in January 2022 since all of the embedded conversion options in the warrants were treated as derivatives.

The following table summarizes stock option activity for the ~~Nine months~~three-month period ended ~~September 30, 2021.~~March 31, 2022:

Schedule of ~~Share-based Payment~~Share Based Payments Arrangement, Option Activity

No stock options were granted during the three-month period ended March 31, 2022.

The following table summarizes additional information on the Company’s stock options outstanding ~~as of September 30, 2021.~~at March 31, 2022:

Schedule of ~~Share-based~~Share Based Payment Arrangement, Option, Exercise Price Range

~~During the nine months ended September 30, 2021, the Company granted no stock options.~~

~~Total expense related to stock options was approximately $8,000~~ ~~for the nine months ended September 30, 2020, respectively.~~ No ~~stock-based compensation expense was recognized for the nine-month period ended September 30, 2021.~~

As of ~~September 30, 2021,~~March 31, 2022, the Company had no unrecognized compensation expense related to unvested stock options. Total expense related to stock options was 0 and approximately $8,000 for the three-month periods ended March 31, 2022 and 2021, respectively.

As of ~~September 30, 2021,~~March 31, 2022, the intrinsic value of ~~stock~~ options outstanding or exercisable was ~~zero.~~zero there were no options outstanding with an exercise price less than $0.07, the per share closing market price of our common stock at that date.

Because of the nature of the Company’s business, it is subject to claims and/or threatened legal actions, which arise out of the normal course of business. As of the date of this filing, the Company is not aware of any pending lawsuits against it, its officers or directors.

The Company does not own or lease any real property or facilities that are material to its current business operations. If the Company continues its business operations, the Company may seek to lease facilities in order to support its operational and administrative needs.

On October 30, 2019, the Company repurchased 20 shares of Series F Convertible Preferred Stock including accrued and unpaid dividends and warrants to purchase 150,000 shares of common stock for $100,000 from our former CEO pursuant to an amendment to the settlement agreement dated April 4, 2019. The Company also committed to purchase from such officer the remaining Series F Convertible Preferred Stock and related warrants held by such officer for $100,000 by not later than March 1, 2020. As of ~~September 30, 2021,~~March 31, 2022, the Company had not repurchased the remaining shares.

On July 28, 2021, the Company and Melior Pharmaceuticals II, LLC (“MP”) entered into an exclusive license agreement for the development, commercialization and exclusive license of MLR-1019. MLR-1019 is being developed as a new class of therapeutic for Parkinson’s disease (PD) and is, to the best of the Company’s knowledge, the only drug candidate today to address both movement and non-movement aspects of PD. Under the Agreement, the Company was granted an exclusive license to use ~~the MP~~MP’s Patents and know-how to develop products in consideration for cash payments up to approximately $~~21,750,000~~21.8 million upon meeting certain performance milestones, as well as a royalty of 5%5% of gross sales.

The license terminates upon the last expiration of the patents licensed by the Company, which is presently 2034 subject extensions and renewals of any of such patents. If the Company fails to ~~get~~have its common stock listed on Nasdaq or the NYSE (an “Uplisting Event”) within 12 months after the Company receives a Clinical Trial Authorization from the European Medicines Agency, then the Company’s commercial license and rights for using MP’s data shall terminate. Additionally, if the Company has completed the necessary steps to ~~affect~~effect an Uplisting Event, the Company will have the option to purchase ~~the~~ all rights held by MP on the MLR-1019 licensed products in consideration for ~~10%~~10% of the outstanding shares of the Company’s common stock (immediately post Uplisting Event) and ~~2.5%~~2.5% royalty of future gross product sales.

As of ~~September 30, 2021,~~March 31, 2022, no performance milestones had been ~~met.~~met under the agreement.

On August 24, 2021, the Company as licensee entered into an exclusive license agreement with Melior Pharmaceuticals I, Inc. for the development, commercialization and exclusive license of Melior’s MLR-1023. MLR-1023 is being developed as a novel therapeutic for Type 1 diabetes.

Under the Agreement, the Company was granted an exclusive license to use the MP Patents and know-how to develop products in consideration for cash payments up to approximately $~~21,750,000~~21.8 million upon meeting certain performance milestones, as well as a tiered royalty of 8-~~12%~~12% of gross sales.

Under the original terms of the agreement if the Company ~~fails~~failed to raise $4.0 million dollars within 120 days of the Effective Date then the License ~~shall~~would immediately terminate unless, by 120 Days Adhera was in the process of completing transactions to complete the fundraising then an additional 30 Days would be provided to allow for the completion of the raise.

On October 20, 2021, the Company expanded the exclusive licensing agreement with Melior Pharmaceuticals I, Inc. to include two additional clinical indications for Non-Alcoholic Steatohepatitis (NASH) and pulmonary inflammation.

On November 17, 2021, Melior Pharmaceuticals I, Inc. extended the Company’s timeline from 120 days to 180 days from the effective of the agreement for the Company to raise $4.0 million dollars unless, by 180 Days Adhera is in the process of completing transactions to complete the fundraising then an additional 30 Days shall be provided to allow for the completion of required ~~fundraising.~~fundraising.

On February 16, 2022, an addendum to the licensing agreement dated August 4, 2021, was executed by the Company and Melior Pharmaceuticals I, Inc, extending the requirement by the Company to raise $4.0 million dollars to June 16, 2022.

As of March 31, 2022, no performance milestones had been met under the agreement.

~~Except for the events discussed below, there were no subsequent events that required recognition or disclosure.~~

On ~~October 4, 2021,~~April 19, 2022, a majority of the noteholders (the “Purchasers”) of the secured non-convertible promissory notes of the Company issued ~~525,000~~ ~~shares~~between June 18, 2019, and August 5, 2019 which matured on August 5, 2020 consented to forbear collection efforts until September 30, 2022. Accordingly, the collateral agent for the note holders in consideration of ~~common stock~~the signed noteholder agreements agreed to forbear all notes outstanding. The agreement to forbear was subject to the closing of a private placement transaction resulting in at least $2 million in gross proceeds to the Company, which occurred on May 11, 2022, upon the ~~conversion of $26,250~~ ~~of principal and interest on the January 2020 convertible note.~~

~~On July 30, 2021, the Company defaulted under the Secured Convertible Promissory Note from January 2021 and the interest rate on the note reset to~~ 18%.closing described below.

~~On October 4, 2021, the Company issued~~ ~~255,540~~ ~~shares of common stock upon the conversion of~~ 20 ~~shares Series E Preferred stock and accrued dividends.~~

On ~~October 15, 2021, the Company issued~~ ~~37,043~~ ~~shares of common stock upon the conversion of~~ 3 ~~shares of Series F Preferred stock and accrued dividends.~~

~~On October 7, 2021,~~May 11, 2022, the Company entered into a Securities Purchase Agreement ~~(“SPA”~~(the “SPA”) with ~~an institutional investor pursuant to which~~investors (the “Purchasers”) whereby the Company issued the ~~Buyer a~~ 10~~% Convertible Redeemable Note~~Purchasers Original Issue Discount Promissory Notes in the aggregate principal amount of $~~131,250~~2,222,222, net of an original issue discount of $222,222(the “Notes”) for a purchase price of $2,000,000 and a ~~three-year warrant~~warrants to purchase ~~476,190~~22,222,218 shares of the Company’s common stock (the “Warrants”), pursuant to the terms and conditions of the ~~Company for which the~~SPA and secured by a Security Agreement as described below. The Company received total consideration of $~~110,000~~1,712,000 after debt issuance costs of $288,000. ~~In addition,~~The Notes are convertible and the ~~Company issued~~ ~~59,523~~ ~~shares of common stock as a commitment fee to the Buyer.~~

~~The Note is due~~ ~~October 5, 2022. The Note provides for guaranteed interest at the rate of~~ 10~~% per annum, payable at maturity. The Note is convertible~~Warrants are exercisable into shares of common stock at conversion and exercise prices of $0.04 per share. The company will record a debt discount related to the original issue discount and debt issuance costs and will evaluate the note and warrant terms for derivative accounting treatment.

The Notes are due on the earliest to occur of (i) the 12 month anniversary of the original issuance date of the Notes, or May 11, 2023, (ii) a financing transaction which results in the Company’s common stock being listed on a national securities exchange, and (iii) an event of default. If an event of default occurs before the Company’s common stock is listed on a national securities exchange, the event of default would require a 125% of the outstanding principal, accrued interest and other amounts owing thereon. The Notes bear interest at 8% per annum, subject to an increase to 15% in case of an event of default as provided for therein. In addition, at any time ~~following~~before the 12 month anniversary of the date of issuance of the Notes, the Company may, upon five days’ prior written notice to the Purchaser, prepay all of the then outstanding principal amount of the Notes for cash ~~payment~~in an amount equal to the sum of 105% of all amounts due and owing hereunder, including all accrued and unpaid interest.

The Warrants are exercisable for a 66 month period (five year and six months) ending November 11, 2027, at ~~the Buyer’s option at a conversion~~an exercise price of $~~0.075~~0.04 per share, subject to certain adjustments.

The ~~Warrants~~Company’s obligations under the Notes are ~~exercisable for~~ ~~three-years from October 5, 2021, at an exercise price of $0.095~~ ~~per share, subject to certain adjustments, which exercise price may be paid~~secured by a first priority lien on ~~a cashless basis. The aggregate exercise price is $45,238.05. The company will record a debt discount related to the relative fair value~~all of the ~~warrants.~~

~~On October 13, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with an institutional investor pursuant to which the Company issued the Buyer a~~ 10~~% Convertible Redeemable Note in the principal amount of $131,250~~ ~~and a~~ ~~three-year warrant to purchase~~ ~~476,190~~ ~~shares of common stock~~assets of the Company ~~for which~~and its wholly-owned subsidiaries pursuant to a Security Agreement, dated May 11, 2022 (the “Security Agreement”) by and among the Company, ~~received consideration of $110,000. In addition,~~its wholly-owned subsidiaries, the ~~Company issued~~ ~~59,523~~ ~~shares of common stock~~Purchasers, and the lead investor as ~~a commitment fee to~~ the ~~Buyer.~~collateral agent.

~~The Note is due~~ ~~October 7, 2022. The Note provides for guaranteed interest at the rate of~~ 10~~% per annum, payable at maturity. The Note is convertible into shares of common stock at any time following the date of cash payment at the Buyer’s option at a conversion price of $0.075~~ ~~per share, subject to certain adjustments.~~

~~The Warrants are exercisable for~~ ~~three-years from October 7, 2021, at an exercise price of $0.095~~ ~~per share, subject to certain adjustments, which exercise price may be paid on a cashless basis. The aggregate exercise price is $45,238.05. The company will record a debt discount related to the relative fair value of the warrants.~~

~~On October 27, 2021, the Company and the institutional investor who holds two convertible promissory notes agreed to extend the maturity date of each of the Notes by six months. The $220,500~~ ~~Note issued in August 2021 had its maturity date extended to~~ ~~February 17, 2023, and the $66,500~~ ~~Note issued in June 2021 had its maturity date extended to December 25, 2022.~~

~~On November 4, 2021, the Company issued~~ ~~153,227~~ ~~shares of common stock upon a cashless exercise of~~ ~~250,000~~ ~~warrants issued with the April 2021 Convertible Note.~~

~~Item~~ITEM 2. ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect management’s current views with respect to future events and financial performance including meeting our obligations under the Melior license agreement and our liquidity. The following discussion should be read in conjunction with the financial statements and related notes and the Risk Factors contained in our Annual Report on Form 10-K, for the year ended December 31, ~~2020,~~2021, as filed with the Securities and Exchange Commission (“SEC”) on April ~~7, 2021.~~15, 2022. Forward-looking statements are projections in respect of future events or financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology.

Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform them to actual results, new information, future events or otherwise, except as otherwise required by securities and other applicable laws.

The following factors, among others, could cause our or our industry’s future results to differ materially from historical results or those anticipated:

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in our Annual Report on Form 10-K, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. We are under no duty to update any forward-looking statements after the date of this report to conform these statements to actual results.

As used in this quarterly report and unless otherwise indicated, the terms “we,” “us,” “our” or the “Company” refer to Adhera Therapeutics, Inc., a Delaware corporation. and its wholly-owned subsidiaries, MDRNA Research, Inc., Cequent Pharmaceuticals, Inc., Atossa Healthcare, Inc., and IthenaPharma, Inc. Unless otherwise specified, all amounts are expressed in United States dollars. Our common stock is currently ~~listed~~quoted on the ~~OTC Pink Market,~~OTCQB, under the symbol “ATRX.”

We are an emerging specialty biotech company that, to the extent that resources and opportunities become available, is strategically evaluating its focus including a return to a drug discovery and development company.

On July 28, 2021, we as licensee and ~~Melior Pharmaceuticals II, LLC~~MP2 as licensor entered into an exclusive license agreement for the development, commercialization and exclusive license of MLR-1019. MLR-1019 is being developed as a new class of therapeutic for Parkinson’s disease (PD) and is, to the best of our knowledge, the only drug candidate today to address both movement and non-movement aspects of PD. Under the Agreement, we were granted an exclusive license to use the MP Patents and know-how to develop products in consideration for cash payments upon meeting certain performance milestones as well as a royalty of 5% of gross sales.

On August 24, 2021, we as licensee entered into an exclusive license agreement with ~~Melior Pharmaceuticals I, Inc.~~MP1 for the development, commercialization and exclusive license of ~~MLR-1023.~~ MLR-1023 ~~is being developed~~ as a novel therapeutic for Type 1 diabetes.

On October 20, 2021, we as licensee expanded the ~~an exclusive~~MLR-1023 licensing agreement with Melior Pharmaceuticals I, Inc. to include two additional clinical indications for Non-Alcoholic Steatohepatitis (NASH) and pulmonary inflammation.

To the extent that resources have been available, we have continued to work with ~~its~~our advisors in an effort to restructure our ~~company~~Company and to identify potential strategic transactions, including the Melior transaction described above to enhance the value of the ~~company.~~Company. Because of our substantial unpaid debt, if we do not raise substantial additional capital in the ~~immediate~~near future, it is likely that the ~~company~~Company will discontinue all operations ~~and~~or seek bankruptcy protection.

Comparison of the Three Months Ended ~~September 30, 2021~~March 31, 2022 to the Three Months Ended ~~September 30, 2020~~March 31, 2021

Our operating expenses for the three months ended ~~September 30,~~March 31, 2022, and 2021 ~~and 2020~~ are summarized as follows:

~~For the three months ended September 30, 2021, sales and marketing expense decreased by approximately $20,000 as compared to the three months ended September 30, 2020.~~ Sales and marketing expenses for the three months ended ~~September 30, 2020, and September 30,~~March 31, 2021 were primarily related to storage and ~~other related~~destruction costs incurred for Prestalia® inventory. No sales and marketing expenses were incurred for the three- month period ended March 31, 2022.

General and administrative expense increased by approximately ~~$58,000~~$159,000 for the three months ended ~~September 30, 2021,~~March 31, 2022, as compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The increase was primarily due to an increase in public company fees including legal expenses and fees paid for ~~investor relation services.~~director and officer insurance.

Interest expense for the three months ended ~~September 30, 2021~~March 31, 2022 increased by ~~$6,000~~$68,000 compared to the three months ended ~~September 30, 2020~~March 31, 2021 primarily due to ~~an increase in interest as a result of~~ an increase in our outstanding convertible notes. ~~Other income~~The derivative liability for the ~~three months~~quarter ended ~~September 30, 2020, was~~March 31, 2022 decreased by $667,000 as a result of ~~fees received from release~~a decrease in the fair value of ~~certain intellectual property rights in 2019 from a third-party vendor~~our. convertible notes and ~~fees received from the cancellation of a contractual obligation with a third-party vendor. The increase of $2,968 for derivative expense was due to conversion features and~~ warrants ~~on convertible notes~~ that were classified as a derivative on our balance sheet as of ~~September 30, 2021.~~ March 31, 2022. The ~~loss~~gain on extinguishment of debt was due to the conversion of principal and interest on our outstanding convertible notes.

~~Comparison~~ The increase of ~~the Nine Months Ended September 30, 2021, to the Nine Months Ended September 30, 2020~~

~~Our operating expenses~~$100,000 for ~~the Nine months ended September 30, 2021, and 2020 are summarized as follows:~~

For the three months ended September 30, 2021, sales and marketing expense decreased by approximately $801,000 as compared to the nine months ended September 30, 2020. Sales and marketing expenses for the nine months ended September 30, 2020 were primarily related to regulatory costs incurred for maintaining the Prestalia® NDA including approximately $679,000 of PFUFA fees. No such costs were incurred for the same period of 2021.

General and administrative expense decreased by approximately $601,000 for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020. The decrease was primarily due to a reduction in personnel related expenses and public company fees including legal expenses and insurance for the nine months ended September 30, 2021 as compared to the same period of 2020.

~~Interest expense for the nine months ended September 30, 2021, decreased by $333,000 compared to the nine months ended September 30, 2020 primarily due to a decrease in~~ the amortization of debt ~~issuance costs for our term notes. The amortization of debt discount decreased by $143,000 primarily~~discounts was due to the maturity of our outstanding convertible notes. Other income for the nine months ended September 30, 2020, was a result of fees received from release of certain intellectual property rights in 2019 from a third-party vendor and fees received from the cancellation of a contractual obligation with a third-party vendor. Thean increase in ~~derivative expense was due to conversion features on a~~our convertible notes that were classified as a derivative on our balance sheet as of September 30, 2021. The loss on extinguishment of debt was due to the conversion of principal and interest on our outstanding convertible notes.outstanding.

(in thousands)	September 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Current assets	$	151		$	1		$	170		$	196
Current liabilities		(20,390	)		(14,774	)		(25,668	)		(25,302	)
Working capital deficit	$	(20,239	)	$	(14,773	)	$	(25,498	)	$	(25,106	)

Negative working capital as of ~~September 30, 2021,~~March 31, 2022, was approximately ~~$20.2~~$25.5 million as compared to negative working capital of approximately ~~$14.8~~$25.1 million as of December 31, ~~2020.~~2021. The decrease in working capital is primarily related to an increase in current liabilities of approximately ~~$3.5 million~~$366,000 including approximately ~~$1.1 million~~$364,000 in accrued dividends, ~~$762,000~~$357,000 of accrued expenses including accrued interest, an increase in our convertible notes of $165,000 net of discounts and ~~$3.5 million~~a decrease of 528,000 for a derivative liability related to our convertible notes.

Net cash used in operating activities was approximately ~~$369,000~~$216,000 during the ~~nine~~three months ended ~~September 30,~~March 31, 2022. This was primarily due to our net operating loss of approximately $74,000, partially offset by a $667,000 gain related to a decrease in the fair value of our outstanding derivative liability for our convertible notes and warrants, non-cash interest expense related to term loan and outstanding convertible notes of $311,000, non-cash amortization of debt discount of $175,000 and other changes in operating assets and liabilities of approximately $44,000.

Net cash used in operating activities was approximately $46,000 during the three months ended March 31, 2021. This was primarily due to our net operating loss of approximately ~~$4.6 million,~~$428,000, partially offset by ~~to our derivative expense of approximately $3.1 million,~~ non-cash interest expense related to our term loans of ~~$749,000, non-cash~~$241,000, amortization of debt discount and fees of ~~$230,000~~$77,000 and other changes in operating assets and liabilities including an increase in accounts payable and accrued expenses of approximately ~~$102,000.~~

Net cash used in operating activities was approximately $0.5 million during the nine months ended September 30, 2020. This was primarily due to our net loss of approximately $3.3 million, partially offset by non-cash interest expense related to our term loans of approximately $1.5 million and other changes in operating assets and liabilities including an increase in accounts payable and accrued expenses of approximately $1.0 million.

There was no cash used in or provided by investing activities for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, or ~~September 30, 2020.~~March 31, 2021.

Net cash provided by financing activities for the ~~nine~~three months ended ~~September 30,~~March 31, 2022, and 2021 ~~and 2020~~ was approximately ~~$519,000~~$180,000 and ~~$448,000,~~$46,000, respectively from the issuance of convertible promissory notes, net of issuance costs to certain accredited ~~investors, net of issuance costs~~investors.

WeWhile we recently raised $1.7 million, net of issuance costs as described in the next paragraph, we will need to raise ~~immediate~~ additional operating capital in the near future to maintain our operations and to realize our business plan. Without additional sources of cash and/or the deferral, reduction, or elimination of significant planned expenditures, we will not have the cash resources to continue as a going concern thereafter.

WeIn May 2022, we closed a private placement offering of $2,222,222 of convertible notes and 2,222,220 warrants and received $1.7 million in net proceeds. The notes come due upon the earliest to occur of (i) the 12 month anniversary of the original issuance date of the Notes, or May 11, 2023, (ii) a financing transaction which results in the Company’s common stock being listed on a national securities exchange, and (iii) an event of default, in which case the amount payable could be increased to 125% of the outstanding balance if our common stock is not listed on a national securities exchange at the time of such event of default. See “Item 5. Other Information” in this Report for more information on the recent financing.

Including the proceeds received from the financing, we do not have sufficient funds to meet our working capital needs for the next 12 months. We will require ~~immediate~~ additional funds in the near future to continue our business. Historically, we have raised additional capital to supplement our commercialization, clinical development and operational expenses. We are currently seeking to raise additional capital on the same terms as the May 11, 2022 offering. We will need to raise additional funds required, ~~through equity financing, debt financing, strategic alliances or other sources,~~ which may result in further dilution in the equity ownership of our shares. There can be no assurance that additional financing will be available when needed or, if available, that it can be obtained on commercially reasonable terms. Failure to raise additional capital through one or more financings, divesting development assets or reducing discretionary spending could have a material adverse effect on our ability to achieve our intended business objectives. These factors raise substantial doubt about our ability to continue as a going concern.

As of ~~September 30, 2021,~~March 31, 2022, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of ~~SEC~~ Regulation S-K.

Our significant accounting policies are more fully described in the notes to our financial statements included herein for the period ended ~~September 30, 2021,~~March 31, 2022, and in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Any new and recently adopted accounting pronouncements are more fully described in Note 1 to our financial statements included herein for the period ended ~~September 30, 2021.~~March 31, 2022.

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this ~~report.~~Report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, our disclosure controls and procedures were not effective due to the material weakness(es) in internal control over financial reporting described below.

Management assessed the effectiveness of our internal control over financial reporting as of ~~September 30, 2021,~~March 31, 2022, based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting as of ~~September 30, 2021,~~March 31, 2022, was not effective.

A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses:

Providing funds are available, management plans to implement measures designed to ensure that control deficiencies, contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:

We will continue to reassess our plans to remedy our internal control deficiencies in light of our personnel structure and our financial condition. We hope that such measures will lead to an improvement in the timely preparation of financial reports and strengthen our segregation of duties at our company. We are committed to developing a strong internal control environment, and we believe that the remediation efforts that we will implement will result in significant improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. However, our significant working capital deficiency may delay remediation.

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended ~~September 30, 2021,~~March 31, 2022, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Currently, there is no material litigation pending against our company. From time to time, we may become a party to litigation and subject to claims incident to the ordinary course of our business.

An investment in our common stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 (the “Annual Report”), as filed with the SEC on April ~~7, 2021,~~15, 2022, in addition to other information contained in those documents and reports that we have filed with the SEC pursuant to the Securities Act and the Exchange Act since the date of the filing of the Annual Report, including, without limitation, this Quarterly Report on Form 10-Q, in evaluating our company and its business before purchasing shares of our common stock. Our business, operating results and financial condition could be adversely affected due to any of those risks.

~~The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.~~

~~If we are unable to successfully commercialize MLR-1019 or any of our other product candidates and are unable to make milestone payments, our result of operations would be adversely affected.~~

We recently entered into an exclusive license agreement with Melior Pharmaceuticals II, LLC to develop and commercialize MLR-1019 as a new class of therapeutics for Parkinson’s Disease. Upon MLR-1019 meeting certain milestones, the Company is required to make payments which aggregate approximately $21.75 million. We currently do not have enough capital to meet any milestone and cannot assure you will be successful in raising the $250,000 we need to attempt to meet the first milestone. If any milestone is met, we can provide you with no assurance that we will be able to raise capital in order to fund that milestone. If the drug candidate fails to meet any of the milestones and therefore is unable to be commercialized, we will receive no benefits from this license. In any such event, our results of operations will suffer and we may need to cease operations. Additionally, ~~MLR–1019 may be classified as a controlled substance in the United States which may have an adverse effect on our future revenues if we are able to commercialize it in the United States.~~

~~None.~~The Company issued Notes and Warrants as described in “Item 5. Other Information,” which description is incorporated herein by reference. The issuances of the Notes and the Warrants were exempt from registration under Section 4(a)(2) and/or Rule 506 of Regulation D as promulgated by the SEC under of the Securities Act of 1933, as transactions by an issuer not involving any public offering.

~~None.~~On May 11, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”) with investors (the “Purchasers”) whereby the Company issued the Purchasers Original Issue Discount Promissory Notes in the aggregate principal amount of $2,222,222 (the “Notes”) and warrants to purchase 2,222,220 shares of the Company’s common stock (the “Warrants”), pursuant to the terms and conditions of the SPA and secured by a Security Agreement. The Notes are convertible and the Warrants are exercisable into shares of common stock at conversion and exercise prices of $0.04 per share.

The Notes are due on the earliest to occur of (i) the 12 month anniversary of the original issuance date of the Notes, or May 11, 2023, (ii) a financing transaction which results in the Company’s common stock being listed on a national securities exchange, and (iii) an event of default. If an event of default occurs before the Company’s common stock is listed on a national securities exchange, the event of default would require a 125% of the outstanding principal, accrued interest and other amounts owing thereon. The Notes bear interest at 8% per annum, subject to an increase to 15% in case of an event of default as provided for therein. In addition, at any time before the 12 month anniversary of the date of issuance of the Notes, the Company may, upon five days’ prior written notice to the Purchaser, prepay all of the then outstanding principal amount of the Notes for cash in an amount equal to the sum of 105% of all amounts due and owing hereunder, including all accrued and unpaid interest.

The Warrants are exercisable for a five year and six month period ending November 11, 2027, at an exercise price of $0.04 per share, subject to certain adjustments.

The Company’s obligations under the Notes are secured by a first priority lien on all of the assets of the Company and its wholly-owned subsidiaries pursuant to a Security Agreement, dated May 11, 2022 (the “Security Agreement”) by and among the Company, its wholly-owned subsidiaries, the Purchasers, and the lead investor as the collateral agent.

The foregoing description of the terms of the SPA, the Notes, the Warrants, and the Security Agreement, and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the form of SPA, the form of Note, the form of Warrant, and the form of Security Agreement, a copy of which is filed as Exhibits 10.2, 10.3, 10.4, and 10.5 respectively, to this Quarterly Report on Form 10-Q and are incorporated herein by reference.

Copies of this Report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our shareholders who make a written request to our Corporate Secretary at Adhera Therapeutics, Inc., 8000 Innovation Parkway, Baton Rouge, Louisiana 70820.

Pursuant to 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.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐☒	Smaller reporting company	☒

		Emerging Growth Company	☐

		Page

PART I - FINANCIAL INFORMATION

ITEM 1	Financial Statements (unaudited)	3

	~~Condensed~~ Consolidated Balance Sheets as of ~~September 30, 2021~~March 31,2022 (unaudited) and December 31, ~~2020~~2021	3

	~~Condensed~~ Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022, and 2021 ~~and 2020~~ (unaudited)	4

	~~Condensed~~ Consolidated Statements of Stockholders’ ~~Equity (Deficit)~~Deficit for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022, and 2021 ~~and 2020~~ (unaudited)	5

	~~Condensed~~ Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2022, and 2021 ~~and 2020~~ (unaudited)	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2534

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	3038

ITEM 4.	Controls and Procedures	3038

PART II - OTHER INFORMATION

ITEM 1.	Legal Proceedings	3139

ITEM 1A.	Risk Factors	3139

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3139

ITEM 3.	Defaults on Senior Securities	3240

ITEM 4.	Mine Safety Disclosures	3240

ITEM 5.	Other Information	3240

ITEM 6.	Exhibits	3240

SIGNATURES		3342


	For the Three-Months ended						For the Nine-Months Ended
	September 30,						September 30,
	2021			2020			2021			2020

Operating expenses
Sales and marketing	$	-		$	20		$	17		$	818
General and administrative		232			174			454			1,055
Total operating expenses		231			194			471			1,873
Loss from operations		(231	)		(194	)		(471	)		(1,873	)
Other income (expense)
Interest expense		(261	)		(255	)		(749	)		(1,082	)
Other Income		-			5			-			45
Loss on extinguishment of debt		(177	)		-			(177	)		-
Derivative expense		(2,968	)		-			(3,055	)		-
Amortization of debt discount		(101	)		(95	)		(230	)		(373	)
Total other income (expense)		(3,507	)		(345	)		(4,211	)		(1,410	)
Net loss		(3,739	)		(539	)		(4,682	)		(3,283	)
Dividends		(406	)		(388	)		(1,679	)		(1,153	)
Net Loss Applicable to Common Stockholders	$	(4,145	)	$	(927	)	$	(6,361	)	$	(4,436	)
Net loss per share – Common Stockholders - basic and diluted	$	(0.32	)	$	(0.09	)	$	(0.54	)	$	(0.41	)
Weighted average shares outstanding - basic and diluted		12,986,391			10,869,530			11,742,315			10,869,530


	Series C Preferred Stock				Series D Preferred Stock				Series E Preferred Stock				Series F Preferred Stock				Common Stock				Additional Paid-in			Accumulated
	Number		Par Value		Number		Par Value		Number		Par Value		Number		Par Value		Number		Par Value		Capital			Deficit			Total
Balance, December 31, 2019		100		-		40		-		3,478		-		361		-		10,869,530		65		29,375			(39,327	)		(9,887	)
Accrued and deemed dividend
Issuance of common stock for convertible note and interest conversion
Issuance of common stock for convertible note and interest conversion, shares
Issuance of warrants with convertible notes
Issuance of common stock for cashless exercise of warrants
Issuance of common stock for cashless exercise of warrants, shares
Issuance of common stock for Series E conversion
Issuance of common stock for Series E conversion, shares
Accrued dividend		-		-		-		-		-		-		-		-		-		-		-			(383	)		(383	)
Issuance of warrants and common stock with convertible notes -
Issuance of warrants and common stock with convertible notes -, shares
Benefical conversion feature - convertible notes
Issuance of common stock for convertible note and interest conversion
Issuance of common stock for convertible note and interest conversion, shares
Reclassification of derivative
Issuance of warrants with notes payable		-		-		-		-		-		-		-		-		-		-		239			-			239
Share based compensation		-		-		-		-		-		-		-		-		-		-		36			-			36
Net loss		-		-		-		-		-		-		-		-		-		-		-			(1,838	)		(1,838	)
Balance, March 31, 2020		100		-		40		-		3,478		-		361	$	-		10,869,530		65	$	29,650		$	(41,548	)	$	(11,833	)
Accrued dividend		-		-		-		-		-		-		-		-		-		-		-			(382	)		(382	)
Benefical conversion feature - convertible notes		-		-		-		-		-		-		-		-		-		-		50			-			50
Share based compensation		-		-		-		-		-		-		-		-		-		-		(26	)		-			(26	)
Net loss		-		-		-		-		-		-		-		-		-		-		-			(906	)		(906	)
Balance, June 30, 2020		100		-		40		-		3,478		-		361	$	-		10,869,530		65	$	29,674		$	(42,836	)	$	(13,097	)
Accrued dividend		-		-		-		-		-		-		-		-		-		-		-			(388	)		(388	)
Share based compensation		-		-		-		-		-		-		-		-		-		-		(2	)		-			(2	)
Net loss		-		-		-		-		-		-		-		-		-		-		-			(539	)		(539	)
Balance, September 30, 2020		100		-		40		-		3,478		-		361	$	-		10,869,530		65	$	29,672		$	(43,763	)	$	(14,026	)


	For the Nine Months ended September 30,
	2021			2020

Cash Flows Used in Operating Activities:
Net loss	$	(4,682	)	$	(3,283	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share based compensation		-			8
Loss on debt extinguishment		177			-
Amortization of debt discount		230			765
Derivative expense		3,055			-
Changes in operating assets and liabilities:
Prepaid expenses and other assets		-			316
Accounts payable		30			850
Accrued interest		749			689
Accrued expenses		72			157

Net Cash Used in Operating Activities		(369	)		(498	)

Cash Flows Provided By Financing Activities:
Proceeds from notes payable, net or original issue discounts		591			553
Notes payable issuance costs		(72	)		(105	)
Net Cash Provided by Financing Activities		519			448
Net (decrease) in cash		150			(50	)
Cash – Beginning of Period		1			50
Cash - End of Period	$	151		$	-

Supplementary Cash Flow Information:

Non-cash Investing and Financing Activities:
Dividends	$	1,679		$	1,153
Conversion of Series E to common stock		4			-
Beneficial conversion feature on issuance notes payable		-			50
Cashlesss exercise of Series E warrants		4			-
Issuance of common stock for conversion of convertible debt		111			-
Debt discounts for issuance costs, warrants and derivatives		473			239

	2022			2021
	For the Three-Months Ended March 31,
	2022			2021
Operating expenses
Sales and marketing	$	—		$	9
General and administrative		260			101
Total operating expenses		260			110
Loss from operations		(260	)		(110	)
Other income (expense)
Interest expense		(311	)		(243	)
Initial and change in fair value of derivative liability		667			—
Gain on extinguishment of debt		5			—
Amortization of debt discount		(175	)		(75	)
Total other income (expense)		186			(318	)
Net loss		(74	)		(428	)
Accrued and deemed dividends		(364	)		(882	)
Net Loss Applicable to Common Stockholders	$	(438	)	$	(1,310	)
Net loss per share - Common Stockholders, basic and diluted	$	(0.03	)	$	(0.12	)
Weighted average shares outstanding, basic and diluted		17,179,188			11,187,531

	2022			2021
	For the Three-Months Ended March 31,
	2022			2021
Cash Flows Used in Operating Activities:
Net loss	$	(74	)	$	(428	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and fees		175			77
Accrued interest expense		311			241
Derivative expense		(667	)		—
Gain on debt extinguishment		(5	)		—
Changes in operating assets and liabilities:
Prepaid expenses		(10	)		—
Accounts payable		8			(2	)
Accrued expenses		46			66
Net Cash Used in Operating Activities		(216	)		(46	)
Cash Flows Provided by Financing Activities:
Proceeds from notes payable, net of original issue discounts		200			48
Notes payable issuance costs		(20	)		(2	)
Net Cash Provided by Financing Activities		180			46
Net increase (decrease) in cash		(36	)		—
Cash – Beginning of Year		76			1
Cash - End of Year	$	40		$	1
Supplementary Cash Flow Information:
Non-cash Investing and Financing Activities:
Cash paid for interest		—			—
Cash paid for taxes		—			—
Debt discounts for issuance costs, warrants and derivatives		18			28
Beneficial conversion feature		—			19
Issuance of common stock for conversion of convertible notes		28			26
Accrued and deemed dividends		364			882

Level 1:	Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:	Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:	Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
	Fair Value Measurements at March 31, 2022
	Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Derivative liability	$	-	$	-	$	7,169	$	7,169
Total	$	-	$	-	$	7,169	$	7,169

(In thousands)	Warrants			Notes			Total
	Three-Months Ended March 31, 2022
(In thousands)	Warrants			Notes			Total
Balance at December 31, 2021	$	5,336		$	2,361		$	7,697
Initial valuation of derivative liabilities included in debt discount		—			163			163
Initial valuation of derivative liabilities included in derivative expense		—			108			108
Reclassification of derivative liabilities loss to gain on debt extinguishment		—			(23	)		(23	)
Change in fair value included in derivative expense		(103	)		(673	)		(776	)
Balance at March 31, 2022	$	5,233		$	1,936		$	7,169


	Nine months Ended September 30, 2021
(In thousands)	Warrants		Notes			Total
Balance at December 31, 2020	$	—	$	—		$	—
Initial valuation of derivative liabilities included in debt discount		—		223			223
Initial valuation of derivative liabilities included in derivative expense		—		619			619
Reclassification of derivative liabilities to gain on debt extinguishment		—		(92	)		(92	)
Reclass from Additional paid-in capital		46		244			290
Change in fair value included in derivative expense		361		2,074			2,435
Balance at September 30, 2021	$	407	$	3,068		$	3,475

1.	An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument.

2.	An entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as follows:

	a.	For a modification or an exchange that is a part of or directly related to a modification or an exchange of an existing debt instrument or line-of-credit or revolving-debt arrangements (hereinafter, referred to as a “debt” or “debt instrument”), as the difference between the fair value of the modified or exchanged written call option and the fair value of that written call option immediately before it is modified or exchanged. Specifically, an entity should consider:

		ii.	An increase (but not a decrease) in the fair value of the modified or exchanged written call option in calculating the third-party costs in accordance with Subtopic 470-50.

	b.	For all other modifications or exchanges, as the excess, if any, of the fair value of the modified or exchanged written call option over the fair value of that written call option immediately before it is modified or exchanged.

	a.	A financing transaction to raise equity. The effect should be recognized as an equity issuance cost in accordance with the guidance in Topic 340, Other Assets and Deferred Costs.

	b.	A financing transaction to raise or modify debt. The effect should be recognized as a cost in accordance with the guidance in Topic 470, Debt, and Topic 835, Interest.

	c.	Other modifications or exchanges that are not related to financings or compensation for goods or services or other exchange transactions within the scope of another Topic. The effect should be recognized as a dividend. For entities that present EPS in accordance with Topic 260, that dividend should be an adjustment to net income (or net loss) in the basic EPS calculation.

	2022		2021
	Three-Months Ended March 31,
	2022		2021
Stock options outstanding		380,000		387,550
Convertible notes		53,901,211		18,785,631
Warrants		79,316,071		62,532,312
Series C Preferred Stock		66,667		66,667
Series D Preferred Stock		50,000		50,000
Series E Preferred Stock		43,896,887		42,737,413
Series F Preferred Stock		4,627,203		4,374,978
Total		182,238,039		128,934,551

Dividend rate	0	%
Term (in years)	~~0.01~~0.0 to 10.88 year
Volatility	~~247%~~245% to ~~412~~309	%
Risk-free interest rate	~~0.07%~~1.28% to ~~0.87~~2.45	%

Warrant Summary:
	Shares		2023		2024		2025		2026
Series E Preferred		30,405,600		30,405,600
Series F Preferred		3,088,500		3,088,500
Convertible Notes		27,463,517				1,013,333		22,905,731		3,544,453
Other		348,733		10,080		335,452		3,201
Total Warrants		61,306,350		33,504,180		1,348,785		22,908,932		3,544,453

Warrant Expiry Summary:
	Shares		2023		2024		2025		2026
Issued with Series E Preferred Stock		30,405,600		30,405,600		—		—		—
Issued with Series F Preferred Stock		3,088,500		3,088,500		—		—		—
Issued with Convertible Notes (CVN)		45,473,238		—		2,901,098		25,660,167		6,911,974
Other		348,733		10,080		335,452		3,201		—
Total Warrants		79,316,071		33,504,180		3,236,550		35,663,368		6,911.974

Warrant Rollforward	Shares
Warrants as of December 31, 2021		74,625,139
Issued as a result of price adjustments on CVN		2,665,663
Variable quantity of warrants related to February 2020 note		2,025,259
Warrants as of March 31, 2022		79,316,071

	Options Outstanding
	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2020		391,350		$	0.58
Options granted		—			0
Options expired / forfeited		(3,800	)		2.60
Outstanding, September 30, 2021		387,550			0.99
Exercisable, September 30, 2021		387,550		$	0.99

	Options Outstanding
	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2021		384,050		$	0.97
Options expired / forfeited		(4,050	)		1.70
Outstanding, March 31, 2022		380,000			0.98
Exercisable, March 31, 2022		380,000		$	0.98

		Options Outstanding				Options Exercisable
	Range of Exercise Prices	Number Outstanding	Weighted- Average Remaining Contractual Life (Years)		Weighted Average Exercise Price	Number Exercisable		Weighted Average Exercise Price
$	0.98 - $1.00	383,500	1.57	$	0.98	383,500	$	0.98
$	1.70	4,050	.27	$	1.70	4,050	$	1.70

	Totals	387,550	1.56	$	0.99	387,550	$	0.99

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.98		380,000		1.09	$	0.98		380,000	$	0.98
Totals		380,000		1.09	$	0.98		380,000	$	0.98

	●	our ability to obtain additional funding for our company, whether pursuant to a capital raising transaction arising from the sale of our securities, a strategic transaction or otherwise;

	●	our ability to satisfy our disclosure obligations under the Securities Exchange Act of 1934, as amended, and to maintain the registration of our common stock thereunder; and

	●	our ability to attract and retain qualified officers, directors, employees and consultants as necessary.

	●	the cost of our research and development programs may be higher than expected, and there is no assurance that such efforts will be successful in a timely manner or at all.

	Three Months Ended
	September 30, 2021		September 30, 2020		Increase/ (Decrease)
(in thousands)
Sales and marketing	$	-	$	20	$	(20	)
General and administrative expenses		232		174		58
Total operating expenses	$	232	$	194	$	38

	Three Months Ended
	September 30, 2021			September 30, 2020			Increase/ (Decrease)
(in thousands)
Interest expense	$	(261	)	$	(255	)	$	6
Other income		-			5			5
Loss on extinguishment of debt		(177	)		-			177
Derivative expense		(2,968	)		-			2,968
Amortization of debt discount		(101	)		(95	)		6
Total other expense, net	$	(3,507	)	$	(345	)	$	3,162

	Three Months Ended
(in thousands)	March 31, 2022			March 31, 2021			Increase/ (Decrease)
Interest expense	$	(311	)	$	(243	)	$	68
Gain on extinguishment of debt		5			-			(5	)
Initial and change in derivative liability		667			-			(667	)
Amortization of debt discount		(175	)		(75	)		100
Total other income (expense)	$	186		$	(318	)	$	(504	)

	Nine Months Ended
	September 30, 2021		September 30, 2020		Increase/ (Decrease)
(in thousands)
Sales and marketing	$	17	$	818	$	(801	)
General and administrative expenses		454		1,055		(601	)
Total operating expenses	$	471	$	1,873	$	(1,402	)

	●	Inadequate segregation of duties consistent with control ~~objectives;~~objectives, and lack of monitoring controls as the Company does not have any employees and a single individual serves as both the principal executive officer, the principal financial officer and the principal accounting officer;

	●	Lack of qualified accounting personnel to prepare and report financial information in accordance with GAAP;

	●	Lack of a separate Audit Committee of the Board of Directors; and

	●	Lack of documentation on policies and procedures that are critical to the accomplishment of financial reporting objectives.

	●	Identifying gaps in our skills base and the expertise of our ~~staff required~~personnel necessary to meet the financial reporting requirements of a public ~~company including the need for outsourced expertise; and~~company;

	●	~~Continuing to develop~~Developing written policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and ~~procedures.~~procedures; and

	●	Establishing a separate Audit Committee of the Board of Directors.

Exhibit		Incorporated by Reference			Filed or Furnished
No.	Exhibit Description	Form	Date	Number	Herewith
3.1	Restated Certificate of Incorporation of the Registrant dated July 20, 2005	8-K	7/20/05	3.1
3.1(a)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated June 10, 2008	8-K	6/10/08	3.1
3.1(b)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated July 21, 2010	8-K	7/21/10	3.1
3.1(c)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated July 18, 2011	8-K	7/14/11	3.1
3.1(d)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated December 22, 2011	8-K	12/22/11	3.1
3.1(e)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant, dated August 1, 2017	8-K	8/1/17	3.1
3.1(f)	Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Registrant, dated October 4, 2018	8-K	10/4/18	3.1
3.1(g)	Certificate of Designation, Rights and Preferences of Series A Junior Participating Preferred Stock dated January 17, 2007	8-K	1/19/07	3.1
3.1(h)	Amended Designation, Rights, and Preferences of Series A Junior Participating Preferred Stock, dated June 10, 2008	8-K	6/10/08	3.2
3.1(i)	Certificate of Designations or Preferences, Rights and Limitations of Series B Preferred Stock dated December 22, 2011	8-K	12/22/11	3.1
3.1(j)	Certificate of Designation of Rights, Preferences and Privileges of Series C Convertible Preferred Stock	8-K	3/7/14	3.1
3.1(k)	Certificate of Designation of Rights, Preferences and Privileges of Series D Convertible Preferred Stock	8-K	8/5/15	3.1

3.1(l)	Certificate of Designation of Preferences, Rights and Limitations of the Series E Convertible Preferred Stock of the Registrant	8-K	4/16/18	3.1
3.1(m)	Certificate of Designation of Preferences, Rights and Limitations of the Series F Convertible Preferred Stock of the Registrant	8-K	7/11/18	3.1
3.2	Amended and Restated Bylaws of the Registrant dated August 21, 2012	10-K	10/10/12	3.7
4.1	Form of Convertible Redeemable Promissory Note issued by Adhera Therapeutics, Inc. to select accredited investors on March 15, 2022	10-K	4/15/22	4.21
10.1	Addendum to License Agreement Adhera Therapeutics, Inc. and Melior Pharmaceuticals I, LLC dated August 20, 2021 dated February 16, 2022	10-K	4/15/22	10.12
10.2	Form of Securities Purchase Agreement issued by Adhera Therapeutics, Inc. to select accredited investors on March 15, 2022	10-K	4/15/22	10.16
10.3	Form of Securities Purchase Agreement dated May 11, 2022*				Filed
10.4	Form of Senior Secured Original Issue Discount Promissory Note dated May 11, 2022				Filed
10.5	Form of Warrant dated May 11, 2022				Filed
10.6	Form of Security Agreement dated May 11, 2022*				Filed

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002				Filed
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				Furnished***
101.INS	XBRL Instance Document				Filed
101.SCH	XBRL Taxonomy Extension Schema Document				Filed
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				Filed
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				Filed
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				Filed
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				Filed

~~Exhibit No.~~+		~~Description~~

~~4.1~~		Form of Convertible Promissory Note issued by Adhera Therapeutics, Inc. to select accredited investors on January 31, 2021 (filed as Exhibit 4.1 to our Current Report on Form 8-K dated February 9, 2021, and incorporated herein by reference).

~~4.2~~		Form of Common Stock Purchase Warrants issued by Adhera Therapeutics, Inc. to select accredited investors on January 31, 2021 (filed as Exhibit 4.2 to our Current Report on Form 8-K dated February 9, 2021, and incorporated herein by reference)

~~4.3~~		Form of Convertible Promissory Note issued by Adhera Therapeutics, Inc. to select accredited investors on April 12, 2021 (filed as Exhibit 4.1 to our Current Report on Form 8-K dated April 23, 2021, and incorporated herein by reference).

~~4.4~~		Form of Common Stock Purchase Warrants issued by Adhera Therapeutics, Inc. to select accredited investors on April 12, 2021 (filed as Exhibit 4.2 to our Current Report on Form 8-K dated April 23, 2021, and incorporated herein by reference)

~~4.5~~		Form of Convertible Promissory Note issued by Adhera Therapeutics, Inc. to select accredited investors on June 25, 2021. (filed as Exhibit 4.5 to our Current Report on Form 10-Q dated August 23, 2021, and incorporated herein by reference)

~~4.6~~		Form of Common Stock Purchase Warrants issued by Adhera Therapeutics, Inc. to select accredited investors on June 25, 2021. (filed as Exhibit 4.6 to our Current Report on Form 10-Q dated August 23 ,2021, and incorporated herein by reference)

~~4.7~~		Form of Convertible Promissory Note issued by Adhera Therapeutics, Inc. to select accredited investors on August 12, 2021 (filed as Exhibit 4.1 to our Current Report on Form 8-K dated August 18, 2021, and incorporated herein by reference).

~~4.8~~		Form of Common Stock Purchase Warrants issued by Adhera Therapeutics, Inc. to select accredited investors on August 12, 2021 (filed as Exhibit 4.2 to our Current Report on Form 8-K dated August 18 , 2021, and incorporated herein by reference)

~~4.9~~		Form of Convertible Promissory Note issued by Adhera Therapeutics, Inc. to select accredited investors on August 18, 2021 (filed as Exhibit 4.1 to our Current Report on Form 8-K dated August 24, 2021, and incorporated herein by reference).

~~4.10~~		Form of Common Stock Purchase Warrants issued by Adhera Therapeutics, Inc. to select accredited investors on August 18, 2021 (filed as Exhibit 4.2 to our Current Report on Form 8-K dated August 24, 2021, and incorporated herein by reference)

~~10.1~~		Form of Securities Purchase Agreement issued by Adhera Therapeutics, Inc. to select accredited investors on August 18, 2021 (filed as Exhibit 10.1 to our Current Report on Form 8-K dated August 24, 2021, and incorporated herein by reference)

~~31.1~~		~~Certification of Principal Executive and Principal Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. (1)~~

~~32.1~~		~~Certification of Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)~~

~~101INS~~		~~Inline XBRL Instance Document (1)~~

~~101SCH~~		~~Inline XBRL Taxonomy Extension Schema Document (1)~~

~~101CAL~~		~~Inline XBRL Taxonomy Extension Calculation Linkbase Document (1)~~

~~101DEF~~		~~Inline XBRL Taxonomy Extension Definition Linkbase Document (1)~~

~~101LAB~~		~~Inline XBRL Taxonomy Extension Label Linkbase Document (1)~~

~~101PRE~~		~~Inline XBRL Taxonomy Extension Presentation Linkbase Document (1)~~

~~104~~		~~Cover Page Interactive Data File (embedded within the Inline XBRL document)~~

~~(1)~~		~~Filed herewith.~~

~~(2)~~		~~Furnished herewith.~~Management contract or compensatory plan or arrangement.