NANOVIRICIDES INC

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Note 1 – Organization and Nature of Business

NanoViricides, Inc. (the “Company”) is a clinical stage nano-biopharmaceutical company specializing in the discovery, development, and commercialization of drugs to combat viral infections using its unique and novel nanomedicines technology. NanoViricides possesses its own facility that supports research and development and drug discovery, drug candidate optimization, cGMP-compliant drug substance manufacturing, cGMP-compliant manufacturing and packaging of drug products for human clinical trials, and early commercialization. The Company has several drugs in various stages of development.

NanoViricides, Inc. is domiciled under the laws of the State of Delaware, with its principal operations located in the State of Connecticut. The Company’s fiscal year begins on July 1 st and ends on the next June 30 th of the calendar year. The Company operates inone reportable business segment.

The Company devotes substantially all its activity to advancing research and development, including efforts in connection with clinical trials. The Company’s lead drug candidate is the active pharmaceutical ingredient (API) NV-387. NV-387 is a broad-spectrum antiviral drug that has demonstrated strong activity in lethal lung infection animal model studies and is being developed to treat Coronavirus, RSV, Influenza and even an Orthopoxvirus model for Smallpox and MPox. The Company plans on developing NV-387 first as a treatment of RSV infection in pediatric patients.

At present, NV-387 is in a Phase Ia/Ib human clinical trial for safety and tolerability in healthy subjects for the treatment of COVID-19, sponsored by our licensee and collaborator in India, Karveer Meditech Privale Limited (“KMPL”). All subjects have been discharged and follow-up visits have been completed as of approximately the end of December 2023. As topline results of this clinical trial, there were no reported adverse events at all doses studied, and there were no drop-outs either, observations that are indicative of tolerability of the API NV-387. These results are consistent with the results of safety/tolerability studies in animals conducted in support of the clinical trial application. The Company is awaiting the final study report from this clinical trial for further regulatory advancement of NV-387 into a Phase II clinical trial.

The Company is now working on developing the necessary datasets, documentation, and clinical trial pathway and trial designs, for a Phase II clinical trial application for the use of NV-387 for the treatment of RSV infection, as the Phase Ia/Ib study progresses into the data analysis phase.

On August 14, 2024, the WHO declared a Public Health Emergency of International Concern (PHEIC) regarding the expanding epidemic of MPox infections in Central Africa. There is no drug currently available for the treatment of MPox. NV-387 has been found to possess activity against orthopoxvirus infection in animal model studies, making it a viable candidate for clinical trial as a treatment for MPox infection under the MEURI (“Monitored Emergency Use of Unregistered and Investigational Interventions”) WHO protocol. The Company is now in the process of defining a clinical protocol for such a Phase II clinical trial with its collaborators in preparation for a clinical trial application to the appropriate regulatory agency.

Subsequent to the MPOx and RSV Phase II clinical trials that are at high priority, the Company plans on expanding the indications of NV-387 to other respiratory viral infections including Influenzas, Coronaviruses, and others.

Additionally, the Company has previously developed a clinical drug candidate, NV-HHV-1 formulated as skin cream, for the treatment of Shingles. The Company plans on taking NV-HHV-1 into human clinical trials, and further develop the HerpeCide™ program after the Phase II clinical trial of NV-387 for RSV, MPox, and possibly for multiple other indications, including Influenzas. In the HerpeCide program alone, the Company has drug candidates against at least five indications at different stages of development. The Company’s drug candidates against HSV-1 “cold sores” and HSV-2 “genital herpes” are in advanced pre-clinical studies and are expected to follow the shingles drug candidate into human clinical trials. In addition, the Company has drug candidates against HIV/AIDS, Dengue, Ebola/Marburg, and other viruses.

The Company’s drugs are based on several patents, patent applications, provisional patent applications, and other proprietary intellectual property held by TheraCour Pharma, Inc. (“TheraCour”), a related party substantially owned by Dr. Anil Diwan, to which the Company has broad, exclusive licenses. The licenses are to entire fields and not limited to specific compounds. In all, the Company has exclusive, worldwide licenses for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Herpes Simplex Virus (HSV-1 and HSV-2), Influenza and Asian Bird Flu Virus, Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis virus, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes (restated), Varicella Zoster Virus (“VZV”) infections (i.e. Shingles and Chickenpox), and SARS-CoV-2 infections.

Additionally, on September 23, 2024, the Company signed a Memorandum of Understanding (“MoU”) for all antivirals drug development with TheraCour whereby it has obtained a right of first refusal (ROFR) for all antiviral drug developments from TheraCour. This MoU expands the Company’s abilities to opportunistically and rapidly develop novel drugs to treat viral infections of public health importance, even for those viruses that don’t exist today and cannot be predicted. The MoU has also formalized the process of development of drugs for unlicensed viral indications leading later to appropriate license agreements. There was no compensation paid to or due to TheraCour as a result of this MoU. The Parties have also agreed in this MoU that any cash milestone payments related to development activities, that are awardable, will become payable only upon the Company having sufficient revenue, thus extending the provisions previously incorporated in the Amendment to the COVID License Agreement, to all present and future license agreements.

In all cases, the discovery of ligands and polymer materials as well as formulations, the chemistry and chemical characterization, as well as process development and related work will be performed by TheraCour, a related party substantially owned by Dr. Anil Diwan, under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed. Upon commercialization, NanoViricides will pay 15% of net sales to TheraCour. Milestone payments were made or are specified in certain of the license agreements, details of which have been disclosed at the time the agreements were entered into. The Company negotiates and licenses specific verticals of therapeutic applications from TheraCour if promising drug candidates are found in early research and development against a virus target. TheraCour has not denied any such licenses when requested.

The Company has out-licensed NV-CoV-2 and NV-CoV-2-R for further clinical drug development and commercialization in the territory of India to KMPL, a company of which Dr. Anil Diwan is a passive investor and advisor. KMPL has sponsored the NV-CoV-2 into Phase Ia/Ib human clinical trial, to study the safety and tolerability of the NV-CoV-2 Oral Syrup and NV-CoV-2 Oral Gummies formulations of the API NV-387 in healthy human subjects, described earlier. The clinical trial drug products, NV-CoV-2 Oral Syrup, and NV-CoV-2 Oral Gummies, were manufactured at the Company’s Shelton campus. Under the agreement with KMPL, the Company will pay for the expenses of the clinical trials, and in return will benefit from having the data and reports made available for regulatory filings in other territories of the world. Upon commercialization, the Company will receive royalties from KMPL equal to 70% of sales net of costs to unaffiliated third parties.

Note 2 – Liquidity and Going Concern

The Company’s condensed financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. As reflected in the condensed financial statements, the Company has an accumulated deficit at September 30, 2024 of approximately $142.5 million and a net loss of approximately $3.1 million and net cash used in operating activities of approximately $2.6 million for the three months then ended. In addition, the Company has not generated any revenues andno revenues are anticipated in the foreseeable future. Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral drugs. The Company has not yet commenced any product commercialization. Such losses are expected to continue for the foreseeable future and until such time, if ever, as the Company is able to attain sales levels sufficient to support its operations. There can be no assurance that the Company will achieve or maintain profitability in the future.

As of September 30, 2024, the Company had available cash and cash equivalents of approximately $3.9 million. The Company’s liabilities at September 30, 2024 were approximately $1,633,000 including accounts payable of approximately $713,000 payable to third parties, accounts payable to TheraCour of approximately $637,000, and accrued expenses of approximately $283,000. Management believes that the Company’s cash and cash equivalents balance of approximately $3.9 million, additional capital raised of approximately $631,000, net of offering expenses, by ATM sales of our common stock from October 1, 2024 through November 7, 2024, and the Company’s existing resources, including availability under its $3 million line of credit will not be sufficient to fund the Company’s planned operations and expenditures for at least 12 months from the date of the filing of this Form 10-Q. As a result substantial doubt exists about the Company’s ability to continue as a going concern.

The Company believes that it has several important milestones, including data from and final reports from the Phase Ia/Ib human clinical trial for the Company’s broad-spectrum, antiviral drug NV-387. This Phase Ia/Ib human clinical trial is for evaluating the safety and tolerability of two oral formulations of NV-387, namely (i) NV-CoV-2 Oral Gummies, and (ii) NV-387 Oral Syrup, as described elsewhere, with COVID as the indication. The safety and tolerability data from this clinical trial is expected to be applicable as Phase Ia/Ib data for other indications of NV-387 as well, including RSV, MPOX, Influenza and others. Additional milestones include Pre-IND and IND filing to the US FDA for RSV and clinical trial application for Phase II clinical trial of NV-387 for the treatment of RSV infection in adults with the goal towards further regulatory advancement and approval of NV-387 for the treatment of pediatric RSV infection. Additionally, the Company believes that NV-387 qualifies for a Phase II clinical trial for the treatment of MPOX infection in Central African nations under the MEURI protocol of WHO because there is no other treatment available for this epidemic that is declared by the WHO as a public health emergency of international concern (MEURI = Monitored Emergency Use of Unregistered and Investigational Interventions.). We plan on initiating the Phase II study for MPOX as soon as feasible if the Company receives the appropriate regulatory clearances. Additionally, the Company continues toward developing the Pre-IND and IND applications for a Phase IIa clinical trial of NV-387 for the treatment of RSV infection in adults, to be followed by a Phase IIb/III clinical trial of NV-387 for the treatment of RSV infection in hospitalized pediatric patients. To this end, the Company is also evaluating the possibility of a Phase IIa clinical trial of a RSV Infection Challenge in Humans.

Management believes that as these milestones are achieved, the Company would likely experience improvement in the liquidity of the Company’s stock, and such improvement, if any, would enhance the Company’s ability to raise funds on the public markets at terms that may be favorable to the terms offered at present.

Management is actively exploring additional required funding through non-dilutive grants and contracts, partnering, debt or equity financing pursuant to its plan. There is no assurance that we will be successful in obtaining sufficient financing on terms acceptable to us to fund continuing operations.

Management believes that it has on-going access to the capital markets including the “At-The-Market” (ATM) agreement with EF Hutton, the Sales Agent.

There can be no assurance that the Company’s plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates. The Company will need to raise additional capital to fund its long-term operations and research and development plans including human clinical trials for its various drug candidates until it generates revenue that reaches a level sufficient to provide self-sustaining cash flows. There can be no assurance that the Company will be able to raise the necessary capital or that it will be on acceptable terms. The accompanying financial statements do not include any adjustments that may result from the outcome of such unidentified uncertainties.

Note 3 - Summary of Significant Accounting Policies

Basis of Presentation – Interim Financial Information

The accompanying unaudited interim condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission for Interim Reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed financial statements furnished reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, considered necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. The accompanying condensed financial statements and the information included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the Company’s audited financial statements and related notes included in the Company’s Form 10-K for the fiscal year ended June 30, 2024 filed with the SEC on September 27, 2024.

The June 30, 2024 year-end balance sheet data in the accompanying interim condensed financial statements was derived from the audited financial statements.

For a summary of significant accounting policies, see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 filed on September 27, 2024.

Net Loss per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options, warrants and convertible preferred stock.

The following table shows the number of potentially outstanding dilutive common shares excluded from the diluted net loss per common share calculation, as they were anti-dilutive:

The Company has 903,216 shares of Series A preferred stock outstanding as of September 30, 2024. Only in the event of a “change of control” of the Company each Series A preferred share is convertible to 3.5 shares of its new common stock. A “change of control” is defined as an event in which the Company’s shareholders become 60% or less owners of a new entity as a result of a change of ownership, merger or acquisition of the Company or the Company’s intellectual property. In the absence of a change of control event, the Series A preferred stock is not convertible into common stock, and does not carry any dividend rights or any other financial effects. At September 30, 2024, the number of potentially dilutive shares of the Company’s common stock into which these Series A preferred shares can be converted into is 3,161,257, and is not included in diluted earnings per share since the shares are contingently convertible only upon a change of control.

Recently Issued Accounting Pronouncements

The Company considers the applicability and Impact of all Accounting Standard Updates (“ASU’s”). ASU’s not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s financial statements.

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities (PBEs) to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The requirements of ASU 2024-03 apply to all public business entities. The ASU requires disaggregated disclosure of income statement expenses for public business entities (PBEs). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for all PBEs for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. While the Company is currently evaluating the adoption impact of this ASU on its financial statements, the preliminary assessment is that the adoption of this standard is not expected to have a material effect on the Company’s financial statements and the Company’s disclosures.

ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures. The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). Additionally, the ASU requires all entities to disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as individual jurisdictions where income taxes paid are equal to or greater than 5 percent of total income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 31, 2024. Early adoption is permitted and this ASU should be applied on a prospective basis. While the Company is currently evaluating the adoption impact of this ASU on its financial statements, the preliminary assessment is that the adoption of this standard is not expected to have a material effect on the Company’s financial statements and the Company’s disclosures.

ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The requirements of this update require disclosure of significant segments expenses and increase the frequency of segment reporting to interim periods. The ASU is

effective for all public companies for fiscal years beginning after December 15, 2023 and for interim period beginning after December 15, 2024. Early adoption is permitted and is applicable to all periods presented in the financial statements unless retrospective application is impracticable. While the Company is currently evaluating the adoption impact of this ASU on its financial statements, the preliminary assessment is that the adoption of this standard is not expected to have a material effect on the Company’s financial statements and the Company’s disclosures.

Note 4 - Related Party Transactions

Related Parties

Related parties with whom the Company had transactions are:

License Milestone Fee – Related Party

On September 7, 2021, the Company entered into a COVID-19 License Agreement (the “ TheraCour–Nanoviricides COVID License Agreement”) to use, promote, offer for sale, import, export, sell and distribute drugs that treat COVID-19 infections, using TheraCour’s proprietary as well as patented technology and intellectual property. Pursuant to such license agreement, the Board of Directors authorized the issuance of 100,000 fully vested shares of the Company’s Series A preferred stock as a license milestone payment and recorded an expense to research and development of $935,088 for the year ended June 30, 2022. On April 20, 2023, the Company was notified that the Company’s licensee, KMPL was authorized to enter into Phase 1a/1b clinical trials of its COVID, NV-CoV-2 Oral Syrup and its NV-CoV-2 Oral Gummies after satisfying the conditions of a conditional authorization received on or about January 27, 2023. Pursuant to the TheraCour–Nanoviricides COVID License Agreement a milestone payment of 50,000 fully vested shares of the Company’s Series A preferred stock was issue as a license milestone payment and recorded as an expense to research and development of approximately $157,000 for the year ended June 30, 2023 representing the fair value of the shares on the date of grant. On June 19, 2023, the Company was notified that the Company’s licensee, KMPL had commenced volunteer recruitments for Phase 1a/1b clinical trials of the NV-CoV-2 Oral Syrup and NV-CoV-2 Oral Gummies. Pursuant to the TheraCour–Nanoviricides COVID License Agreement a milestone payment of $1,500,000 became due 5 days thereafter and was recorded as a non-current liability and research and development expense.

On July 19, 2023, the Company entered into an agreement with TheraCour, to accept the Company’s unsecured convertible promissory note (the “Note”) in payment of the milestone award. The Note accrues simple interest at the rate of 12% per annum and is due and payable on January 19, 2025, the maturity date. The principal of the Note is convertible, at TheraCour’s option, into 331,859 shares of the Company’s Series A preferred stock, par value $0.00001 at the conversion price, specified as the fair value of the Series A shares on July 19, 2023 in the terms and conditions contained within the promissory Note. Interest of $36,493 was accrued under the Note for the period June 19, 2023 to September 30, 2023. On October 27, 2023 TheraCour exercised its right to convert the principal of the July 19, 2023 convertible promissory note into 331,859 shares of the Company’s Series A preferred stock. TheraCour cancelled all of the accrued interest on the Note totaling $49,808 which has been reported as a capital transaction credit to additional paid in capital for the year ended June 30, 2024. Total interest incurred under the Note for the year ended June 30, 2024 was $49,808.

On February 12, 2024, the Company entered into an Amendment to the COVID License Agreement with TheraCour dated September 7, 2021, whereby any further cash milestone payments that would be earned upon milestone event would only become payable upon the Company having sufficient revenues, with only a portion of revenues to be used for satisfying such milestone payments.

Line of Credit - Related Party

On November 13, 2023, the Company’s President and CEO, Dr. Anil R. Diwan, entered into a Line of Credit Agreement whereby Dr. Diwan agreed to provide a standby Line of Credit to the Company in the maximum amount of $2,000,000. All amounts outstanding under the Line of Credit, including principal, accrued interest and other fees and charges, will be due and payable on December 31, 2024. Amounts drawn down under the Line of Credit shall bear interest at a fixed rate of 12%. Advancements under the Line of Credit will be collateralized by an Open End Mortgage Deed on the Company’s real property at 1 Controls Drive, Shelton, Connecticut and a Chattel Mortgage (U.C.C - 1 filing) against the Company’s equipment and fixtures. Any draw down under the Line of Credit requires the approval of the Company’s Board of Directors. On February 12, 2024 the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil R. Diwan, signed an Extension Agreement which extended the maturity of the Company’s Line of Credit from December 31, 2024 to December 31, 2025.

On September 23, 2024 and becoming effective as of September 20, 2024, the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil R. Diwan, signed an Amendment Agreement which increased the available line of credit from $2,000,000 to $3,000,000, and extended the maturity of the Company’s Line of Credit from December 31, 2025 to March 31, 2026. There wereno other amendments to the original Line of Credit. The Company has not drawn against the Line of Credit facility as of September 30, 2024.

Note 5 - Property and Equipment

Property and equipment, stated at cost, less accumulated depreciation consisted of the following:

Depreciation expense for the three months ended September 30, 2024 and 2023 was $193,546 and $187,057, respectively.

Note 6 – Intangible Assets

Intangible assets, net consists of the following:

Amortization expense amounted to $2,067 and $2,067 for the three months ended September 30, 2024 and 2023, respectively.

NanoViricides, Inc.’s intangible assets include acquired licenses and capitalized patent costs representing legal fees associated with filing patent applications. Intangible assets with finite lives, licenses and patent costs, are amortized using the straight- line method over the estimated economic lives of the assets, which range from seventeen totwenty years. The Company’s intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

Intangible assets determined to have indefinite useful lives, primarily patent costs, are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate the asset may be impaired. The Company accounts for patent costs in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 350-30,General Intangibles Other than Goodwill. The Company will begin amortizing the patent costs when they are brought to the market or otherwise commercialized.

The Company does assess the recoverability of intangible assets with indefinite lives annually in the fourth quarter of each fiscal year, or more often if indicators warrant, by determining whether the fair value of each of the intangible assets, as a unit, supports its carrying value. In accordance with ASC 350, each year the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of each license is less than its carrying amount as a basis for determining whether it is necessary to complete quantitative impairment assessments.

Note 7 – Accrued expenses

Accrued expenses consisted of the following:

Note 8 - Equity Transactions

On April 15, 2024, the Company entered into a new ATM sales agreement with. E.F. Hutton Securities, the Sales Agent, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agent, shares of common stock having an aggregate offering price of up to $50 million. From July 1, 2024 through September 30 2024 the Company sold 893,006 shares of common stock at an average price of approximately $1.98 per share. The shares were issued pursuant to a prospectus supplement dated May 5, 2023 and filed with the Securities and Exchange Commission on May 5, 2023 in connection with the Company’s shelf registration statement on Form S-3, as amended (File No. 333-271706, which became effective on May 22, 2023). The net proceeds to the Company from the offering was approximately $1,710,000 after placement agent fees and other estimated offering expenses.

The Company accounted for the proceeds of the ATM Offering, approximately, as follows:

As of July 1, 2024 the Company and Dr. Anil Diwan entered into an extension of his employment agreement for a period ofone year from July 1, 2024 through June 30, 2025 under the same general terms and conditions. The Company granted Dr. Anil Diwan an award of 10,204 shares of the Company’s Series A preferred stock. The shares shall be vested in quarterly installments of 2,551 shares on September 30, 2024, December 31, 2024, March 31, 2025 and June 30, 2025 and are subject to forfeiture. The Company recognized non-cash compensation expense related to the issuance of the Series A preferred stock of $12,458 for the three months ended September 30, 2024. The balance of $37,375 will be recognized as the remaining 7,653 shares vest and service is rendered for the remaining nine months ended June 30, 2025.

For the three months ended September 30, 2024, the Company’s Board of Directors authorized the issuance of 387 of fully vested shares of its Series A preferred stock for employee compensation. The Company recorded expense of $1,950 for the three months ended September 30, 2024 related to this issuance.

There is currently no market for the shares of Series A preferred stock and they can only be converted into shares of common stock upon a change of control of the Company as more fully described in the Certificate of Designation. The Company, therefore, estimated the fair value of the Series A preferred stock granted to various employees and others on the date of grant. The conversion of the shares is triggered by a change of control. The fair value of the Series A Convertible preferred stock at each issuance was estimated based upon the price of the Company’s common stock after an application for a reasonable discount for lack of marketability.

The Scientific Advisory Board was granted in August 2024 fully vested warrants to purchase 286 shares of common stock with an exercise price of $2.35 per share expiring in August 2028. The fair value of the warrants was $229 for the three months ended September 30, 2024 and was recorded as consulting expense.

The Company estimated the fair value of the warrants granted to the Scientific Advisory Board on the date of grant using the Black-Scholes Option-Pricing Model with the following assumptions:

For the three months ended September 30, 2024, the Company’s Board of Directors authorized the issuance of 19,713 fully vested shares of the Company’s common stock with a restrictive legend for consulting services. The Company recorded an expense of $34,500 for the three months ended September 30, 2024, which is reflective of the fair value of the common stock on the dates of issuance.

For the three months ended September 30, 2024, the Company’s Board of Directors authorized the issuance of 6,039 fully vested shares of its common stock with a restrictive legend for director services. The Company recorded an expense of $11,250 for the three months ended September 30, 2024, which is reflective of the fair value of the common stock on the dates of issuance.

Note 9 - Common Stock Warrants

Of the outstanding warrants at September 30, 2024,1,715 expire in fiscal year ending June 30, 2025,2,288 expire in fiscal year ending June 30, 2026,1,144 warrants expire in the fiscal year ending June 30, 2027,1,144 warrants expire in the fiscal year ending June 30, 2028, and 286 warrants expire in the fiscal year ending June 30, 2029.

Note 10 - Commitments and Contingencies

Legal Proceedings

From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including proceedings for which we have insurance coverage. There are no pending legal proceedings against the Company to the best of the Company’s knowledge as of the date hereof and to the Company’s knowledge no action, suit or proceeding has been threatened against the Company that we believe will have a material adverse effect to our business, financial position, results of operations, or liquidity.

Employment Agreements

As discussed in Note 8, as of July 1, 2024, the Company and Dr. Diwan, the Company’s President and Chief Executive Officer, executed an extension of his employment agreement for a period ofone year from July 1, 2024 through June 30, 2025 under the same general terms and conditions. The Company granted Dr. Anil Diwan an award of 10,204 shares of the Company’s Series A preferred stock. The shares will be deemed partially vested in quarterly installments following the grant date and fully vested on June 30, 2025.

As of July 1, 2024, the Company’s Board of Directors approved the extension of the agreement with Meeta Vyas, Chief Financial Officer of the Company. The Company and Meeta Vyas signed an extension of the agreement for a period ofone year from July 1, 2024 through June 30, 2025 under the same general terms and conditions as the current agreement.

License Agreements

The Company is dependent upon its license agreements with TheraCour (See Notes 1 and 4). If the Company lost the right to utilize any of the proprietary information that is the subject of the TheraCour license agreement on which it depends, the Company will incur substantial delays and costs in development of its drug candidates. On November 1, 2019, the Company entered into a VZV License Agreement with TheraCour for an exclusive license for the Company to use, promote, offer for sale, import, export, sell and distribute products for the treatment of VZV derived indications. Process development and related work will be performed by TheraCour under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed.

On September 7, 2021, the Company entered into a COVID-19 License Agreement to use, promote, offer for sale, import, export, sell and distribute drugs that treat COVID-19 infections, using TheraCour’s proprietary as well as patented technology and intellectual property. The discovery of ligands and polymer materials as well as formulations, the chemistry and chemical characterization, as well as process development and related work will be performed by TheraCour under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed.

On March 27, 2023 the Company entered into a license agreement with KMPL wherein the Company granted to KMPL a limited, non-transferable, exclusive license for the use, sale, or offer of sale in India of the Company’stwo clinical test drug candidates titled as NV-CoV-2 and NV-CoV-2-R for the treatment of COVID in patients in India. KMPL has engaged in further drug development in India including sponsoring of drug candidates for human clinical trials in India and has acted as clinical trials manager for such clinical trials. KMPL shall provide NanoViricides with all reports of the clinical trials and the Company can use such reports for further advancement of the drug candidates with regulatory authorities outside India. In consideration, KMPL will receive a customary clinical trials manager fee of thirty percent (30%) of such costs and applicable taxes. Upon commercial sales of any resulting approved drugs, KMPL will pay the Company a royalty of seventy (70%) percent of the final invoiced sales to unaffiliated third parties.

On February 12, 2024, the Company entered into an Amendment to the COVID License Agreement with TheraCour dated September 7, 2021, whereby any further cash milestone payments that would be earned upon milestone event would only become payable upon the Company having sufficient revenues, with only a portion of revenues to be used for satisfying such milestone payments.

On September 23, 2024 and effective as of September 20, 2024, the Company entered into a “Memorandum of Understanding for All Antivirals Drug Development” (the MoU) with TheraCour that granted to the Company, a limited, non-assignable, non-sublicensable, exclusive Right of First Refusal to License to any antiviral drugs in development or to be developed by TheraCour for research and development purposes only, for all as-yet unlicensed viral infection treatment indications. The MoU also clarified the roles and responsibilities of the Parties and essentially codified the process that the parties have adopted since inception. The MoU further codified the treatment of all future milestone payments arising from any current or future license agreements to TheraCour to be consistent with the principles adopted in the February 12, 2024 Amendment to the COVID-19 License Agreement.

Note 11 – Subsequent Events

As discussed at Note 8 to the financial statements, on April 15, 2024, the Company entered into a sales agreement with. E.F. Hutton Securities (now EF Hutton, LLC), the Sales Agent, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agents, shares of common stock At-the-Market or ATM Offering. From October 1, 2024 through November 7, 2024 the Company sold 431,108 shares of common stock at an average price of approximately $1.51 per share. The shares were issued pursuant to a prospectus supplement dated May 5, 2023 and filed with the Securities and Exchange Commission on May 5, 2023 in connection with the Company’s shelf registration statement on Form S-3, as amended File No. 333-271706, which became effective on May 22, 2023. The net proceeds to the Company from the offering from October 1, 2024 through November 7, 2024 was approximately $631,000 after placement agent fees and other estimated offering expenses.