ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion may contain forward-looking
statements that involve risks and uncertainties. As described under the caption “Cautionary Note Regarding Forward-Looking Statements,”
our actual results could differ materially from those discussed here. Factors that could cause or contribute to such differences include,
but are not limited to, any factors discussed in this section as well as factors described in Part II, Item 1A. “Risk Factors”
and under the caption “Cautionary Note Regarding Forward-Looking Statements.”
Overview
We are a biotechnology company focused on developing
and preparing to commercialize cellular therapies for cancer based upon our proprietary cellulose-based live cell encapsulation technology
we refer to as Cell-in-a-Box®. We are working to advance clinical research and development of new cellular-based therapies
in oncology.
We are engaged preparing for a clinical trial
in LAPC using encapsulated live cells.
On September 1, 2020, we submitted an IND to the
FDA for our planned clinical trial in LAPC. On October 1, 2020, we received notice from the FDA that it had placed our IND on clinical
hold. On October 30, 2020, the FDA sent a letter to us setting forth the reasons for the clinical hold and specific guidance on what we
must do to have the clinical hold lifted.
To address our clinical hold, we assembled a team
of regulatory and scientific experts to respond to the items requested by the FDA. That team has been working to complete the list of
items requested by the FDA. For a complete discussion of what the FDA requires of us and the efforts we have undertaken to lift the clinical
hold, see Item 1. Business under the Section entitled, “Clinical Hold” of this Report.
Private Placement
On May 9, 2023, we entered into a securities purchase
agreement with certain accredited investors, pursuant to which we issued and sold, in a private placement (the “PIPE”), an
aggregate of (i) 35,000 Series B Preferred Shares, initially convertible into up to 8,750,000 shares of common stock at a conversion price
of $4.00 per share, and (ii) warrants (the “PIPE Warrants”) to acquire up to 8,750,000 shares of common stock at an exercise
price of $4.00 per share. Each Series B Preferred Share and accompanying PIPE Warrants were sold together at a combined offering price
of $1,000. The terms of the Preferred Shares are as set forth in the Certificate of Designations of Series B Convertible Preferred Stock
of PharmaCyte Biotech, Inc. (the “Certificate of Designations”), which was filed and became effective with the Secretary of
State of the State of Nevada on May 10, 2023. The PIPE Warrants are immediately exercisable and expire 5 years from issuance.
In connection with the PIPE, we entered into a
registration rights agreement, pursuant to which we filed a Registration Statement on Form S-3 (File No. 333-272569) to register the resale
of the shares underlying the Series B Preferred Shares and the PIPE Warrants. Such Registration Statement was declared effective by the
Commission on September 29, 2023.
The terms of the Preferred Shares are as set forth
in a Certificate of Designations (the “Certificate of Designations”), which was filed with the Secretary of the State of Nevada
on May 10, 2023. The Preferred Shares are convertible into common stock (the “Conversion Shares”) at the election of the holder
at any time at an initial conversion price of $4.00 (the “Conversion Price”). The Conversion Price is subject to customary
adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any
issuances of common stock, or securities convertible, exercisable or exchangeable for common stock, at a price below the then-applicable
Conversion Price (subject to certain exceptions). We are required to settle the Preferred Shares in equal monthly installments, commencing
on November 9, 2023. The amortization payments due upon such redemption are payable, at our election, in cash, or subject to certain limitations,
in shares of common stock valued at the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) a 20% discount to
the average of the three lowest closing prices of our common stock during the thirty trading day period immediately prior to the date
the amortization payment is due or (B) the lower of $0.556 and 20% of the Minimum Price (as defined in Rule 5635 of the Rule of the Nasdaq
Stock Market) on the date of receipt of Nasdaq Stockholder Approval (as defined below); provided that if the amount set forth in clause
B is the lowest effective price, we will be required to pay the amortization payment in cash. We may require holders to convert their
Preferred Shares into Conversion Shares if the closing price of the common stock exceeds $6.00 per share for 20 consecutive trading days
and the daily trading volume of the common stock exceeds 1,000,000 shares per day during the same period and certain equity conditions
described in the Certificate of Designations are satisfied.
The holders of the Preferred Shares are entitled
to dividends of 4% per annum, compounded monthly, which are payable in cash or shares of common stock at our option, in accordance with
the terms of the Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the
Certificate of Designations), the Preferred Shares will accrue dividends at the rate of 15% per annum. The holders of Preferred Shares
have no voting rights on account of the Preferred Shares, other than with respect to certain matters affecting the rights of the Preferred
Shares.
Notwithstanding the foregoing, our ability to
settle conversions and make amortization payments using shares of common stock is subject to certain limitations set forth in the Certificate
of Designations, including a limit on the number of shares that may be issued until the time, if any, that our stockholders have approved
the issuance of more than 19.9% of the our outstanding shares of common stock in accordance with Nasdaq listing standards (the “Nasdaq
Stockholder Approval”). We received Nasdaq Stockholder Approval at its special meeting of stockholders held on August 31, 2023.
Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares
of common stock issuable upon conversion of, or as part of any amortization payment under, the Certificate of Designations or Warrants.
The Certificate of Designations includes certain
Triggering Events (as defined in the Certificate of Designations), including, among other things, the failure to file and maintain an
effective registration statement covering the sale of the holder’s securities registrable pursuant to a registration rights agreement
entered into by us and the Investors simultaneously with the Purchase Agreement and our failure to pay any amounts due to the holders
of the Preferred Shares when due. In connection with a Triggering Event, each holder of Preferred Shares will be able to require us to
redeem in cash any or all of the holder’s Preferred Shares at a premium set forth in the Certificate of Designations.
As of April 30, 2025, all preferred shares were
redeemed and no remaining obligations exist.
Femasys Transaction
On November 14, 2023, we entered into a securities
purchase agreement (the “Femasys Purchase Agreement”) with Femasys Inc. (“Femasys”), pursuant to which we purchased
from Femasys (i) senior unsecured convertible notes (the “Notes”) in an aggregate principal amount of $5,000,000, convertible
into shares of Femasys common stock, par value $0.001 per share (the “Femasys Shares”) at a conversion price of $1.18 per
share, (ii) Series A Warrants (the “Series A Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise
price of $1.18 per share, and (iii) Series B Warrants (the “Series B Warrants” and, together with the Series A Warrants, the
“Femasys Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.475 per share (collectively,
the “Femasys Transaction”).
The Femasys Purchase Agreement contains certain
representations and warranties, covenants and indemnities customary for similar transactions. Pursuant to the Femasys Purchase Agreement,
we have the right to nominate one individual to serve on Femasys’ board of directors (the “Femasys Board”) until the
earlier of (a) when the Company beneficially owns less than 4.99% of the number of Femasys Shares outstanding and (b) the repayment of
the Notes in full (such time, the “Investor Board Seat Fall-Away”). In addition, we agreed to a standstill until the later
of (a) our nominee remaining on the Femasys Board and (b) 12 months after the Investor Board Seat Fall-Away, during which period we may
not, among other things, acquire additional securities of Femasys other than pursuant to the Notes or Femasys Warrants.
The Notes are senior unsecured obligations of
Femasys and accrue interest at a rate of 6.00% per annum, payable annually, in cash or Femasys Shares at Femasys’ option, and mature
two years after the date of issuance. The initial annual interest payment was paid in stock. The Notes are convertible into Femasys Shares
at our election at any time at an initial conversion price of $1.18. The conversion price is subject to customary adjustments for stock
dividends, stock splits, reclassifications and similar corporate events. Femasys agreed in the Femasys Purchase Agreement and the Notes
not to issue or sell any of its equity securities at a price below the then-current conversion price for a period of 18 months after closing,
subject to certain exceptions. During the years ended April 30, 2025 and 2024, the Notes earned $300,000 and $137,500, respectively. On
November 21, 2024, we received a settlement of twelve months of interest in the form of 315,790 shares of Femasys common stock. The fair
value of the shares was measured at April 30, 2025, resulting in an unrealized gain of $66,316.
Beginning six months after issuance, Femasys may
require us to convert our Notes into Femasys Shares if the closing price of the Femasys Shares exceeds $2.36 per share (subject to adjustment
for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 10 consecutive trading days and
the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same period and certain
equity conditions described in the Notes are satisfied.
The Notes provide for certain events of default,
including, among other things, Femasys’ failure to file and maintain an effective registration statement covering the sale of the
securities registrable pursuant to a registration rights agreement and Femasys’ failure to pay any amounts due to us when due. In
connection with an event of default, we will be able to require Femasys to redeem in cash any or all of our Notes at a premium of 115%.
Under the terms of the Notes, Femasys is subject
to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition and investment transactions, the existence
of liens, the repayment of indebtedness, the payment of cash in respect of dividends, distributions or redemptions, and the transfer of
assets, among other matters.
The Series A Warrants are exercisable for Femasys
Shares immediately at an exercise price of $1.18 per share and expire five years from the date of issuance. Femasys has the right to call
the exercise of the Series A Warrants if the closing price of the Femasys Shares exceeds 200% of the exercise price for 10 consecutive
trading days and the daily dollar trading volume of the Femasys Shares exceeds one million dollars ($1,000,000) per day during the same
period and certain equity conditions are satisfied. The Series B Warrants expired on November 21, 2024.
In connection with the Femasys Transaction, we
entered into a registration rights agreement with Femasys, pursuant to which Femasys was required to file a resale registration statement
with the Commission, registering 100% of the shares issuable pursuant to the Notes and the Femasys Warrants.
In connection with the Femasys Transaction, we
entered into a collaboration agreement with Femasys, dated November 14, 2023, whereby, if the Company and Femasys agree to conduct research
activities or enter into a research plan in connection with discussing, evaluating and seeking technology that may be available to in-license
or acquire with a view to enhancing the existing products of Femasys or adding new complementary products, we will establish a joint research
committee with two representatives of Femasys and one representative of the Company to oversee the execution of the research plan and
coordinate research activities.
TNF Transaction
On May 20, 2024, we entered into a securities
purchase agreement (the “TNF Purchase Agreement”) with TNF Pharmaceuticals, Inc. (f/k/a MyMD Pharmaceuticals, Inc.) (“TNF”),
pursuant to which we purchased from TNF (i) shares of TNF’s Series G Convertible Preferred Stock (the “TNF Preferred Shares”),
convertible into 3,854,626 shares of TNF’s common stock, par value $0.001 per share (the “TNF Common Shares”), (ii)
warrants to purchase up to 3,854,626 TNF Common Shares with a five-year term (the “Long-Term Warrants”) and (iii) warrants
to purchase up to 3,854,626 TNF Common Shares with an 18-month term (the “Short-Term Warrants” and, together with the Long-Term
Warrants, the “TNF Warrants”) for an aggregate purchase price of $7,000,000 (the purchase of the TNF Preferred Shares, the
Long-Term Warrants and the Short-Term Warrants, the “TNF Transaction”).
Pursuant to the TNF Purchase Agreement, we have
the right to participate in future sales of TNF’s equity and equity-linked securities until the second anniversary of the closing
or the date on which no TNF Preferred Shares remain outstanding, whichever is earlier. Additionally, we have the right to nominate one
individual to serve on TNF’s board of directors until the Company no longer beneficially owns 20% of the TNF Common Shares on an
as-converted basis.
The terms of the TNF Preferred Shares are as set
forth a certificate of designations (the “TNF Certificate of Designations”), which TNF filed with the Secretary of State for
the State of Delaware on May 21, 2024. The TNF Preferred Shares are convertible into TNF Common Shares at our election at any time at
an initial conversion price of $1.816. The conversion price is subject to customary adjustments for stock dividends, stock splits, reclassifications
and the like, and subject to price-based adjustment in the event of any issuances of TNF Common Shares, or securities convertible, exercisable
or exchangeable for TNF Common Shares, at a price below the then-applicable conversion price (subject to certain exceptions). In April
2025, the conversion price was adjusted to $0.1832 per share as a result of stock option grants. At any time after the issuance date of
the TNF Preferred Shares, TNF has the option to redeem in cash all or any portion of the outstanding TNF Preferred Shares then outstanding
at a premium upon notice to the Company.
Pursuant to the TNF Certificate of Designations,
we will be entitled to dividends of 10% per annum, compounded monthly, which will be payable in cash or in TNF Common Shares at our option.
Upon the occurrence and during the continuance of a Triggering Event (as defined in the TNF Certificate of Designations), the TNF Preferred
Shares will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, we are entitled to receive a dividend make-whole
payment. We will be entitled to vote with holders of the TNF Common Shares on as as-converted basis, with the number of votes to which
we are entitled to be calculated assuming a conversion price of $2.253 per share. TNF’s ability to settle conversions and make dividend
make-whole payments by issuing TNF Common Shares is subject to certain limitations set forth in the TNF Certificate of Designations.
The TNF Certificate of Designations includes certain
triggering events, including, among other things, the failure by TNF to file and maintain an effective registration statement covering
the sale of the securities registrable pursuant to a registration rights agreement and the failure by TNF to pay any amounts to us when
due. In connection with a triggering event, we will be able to require TNF to redeem in cash any or all of its TNF Preferred Shares at
a premium set forth in the TNF Certificate of Designations.
TNF is subject to certain affirmative and negative
covenants regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness, the payment of cash in respect
of dividends (other than dividends pursuant to the TNF Certificate of Designations), distributions or redemptions, and the transfer of
assets, among other matters.
The Long-Term Warrants are exercisable for TNF
Common Shares immediately, at an initial exercise price of $1.816 per share and expire five years from the date of issuance. The Short-Term
Warrants are exercisable for TNF Common Shares immediately, at an initial exercise price of $1.816 per share and expire 18 months from
the date of issuance. The exercise price of each TNF Warrant is subject to customary adjustments for stock dividends, stock splits, reclassifications
and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of TNF Common
Shares or securities convertible, exercisable or exchangeable for TNF Common Shares at a price below the then-applicable exercise price
(subject to certain exceptions). In April 2025, the exercise price for both the Long-Term Warrants and Short-Term Warrants was adjusted
to $0.1832 per share. As a result of the exercise price adjustment, the number of warrant shares attributable to both the Long-Term and
Short-Term Warrants increased to 38,209,611 each.
In connection with the TNF Transaction, we entered
into a registration rights agreement with TNF, pursuant to which TNF was required to file a resale registration statement with the Commission,
registering 200% of the shares issuable pursuant to the TNF Preferred Shares and the TNF Warrants.
Increase in Authorized Shares
On September 6, 2023, pursuant to stockholder
approval received at a special meeting of stockholders, we filed with the Secretary of State of the State of Nevada a Certificate of Change
to our Articles of Incorporation, as amended, to increase the number of authorized shares of common stock from 133,333,334 to 200,000,000.
The Certificate of Change had no impact on the number of authorized shares of preferred stock, which remains at 10,000,000.
Performance Indicators
Non-financial performance indicators used by management
to manage and assess how the business is progressing will include, but are not limited to, the ability to: (i) acquire appropriate funding
for all aspects of our operations; (ii) acquire and complete necessary contracts; (iii) complete activities for producing genetically
modified human cells and having them encapsulated for our preclinical studies and the planned clinical trial in LAPC; (iv) have regulatory
work completed to enable studies and trials to be submitted to regulatory agencies; (v) complete all required tests and studies on the
cells and capsules we plan to use in our clinical trial in patients with LAPC; (vi) ensure completion of the production of encapsulated
cells according to cGMP regulations to use in our planned clinical trial; (vii) complete all of the tasked the FDA requires of us in order
to have the clinical hold lifted; and (viii) obtain approval from the FDA to lift the clinical hold on our IND that we may commence our
planned clinical trial in LAPC.
There are numerous items required to be completed
successfully to ensure our final product candidate is ready for use in our planned clinical trial in LAPC. The effects of material transactions
with related parties, and certain other parties to the extent necessary for such an undertaking, may have substantial effects on both
the timeliness and success of our current and prospective financial position and operating results. Nonetheless, we are actively working
to ensure strong ties and interactions to minimize the inherent risks regarding success. We do not believe there are factors which will
cause materially different amounts to be reported than those presented in this Report. We aim to assess this regularly to provide accurate
information to our shareholders.
Liquidity and Capital Resources
As of April 30, 2025, our cash and cash equivalents
totaled approximately $15.2 million, compared to approximately $50.2 million as of April 30, 2024. Working capital was approximately $19.5
million as of April 30, 2025, and approximately $43 million as of April 30, 2024. The decrease in cash is attributable to our investment
in TNF, the redemption of preferred stock, the repurchase of our common stock pursuant to the Repurchase Programs, recorded as treasury
stock and our operating expenses.
Repurchase Programs
Pursuant to the First Repurchase Program, we may acquire
up to $10 million of our outstanding shares of common stock, as determined by a formula based on the market price of the common stock
and average daily volumes. Pursuant to the Second Repurchase Program, we may acquire up to $10 million of our outstanding shares of common
stock from time to time in open-market transactions, privately negotiated block transactions or other means in accordance with applicable
securities laws. For more information on the Second Repurchase Program, see “Note 13 – Treasury Stock.”
Other Liquidity Matters
We have no other off-balance sheet arrangements
that could have a material current effect or that are reasonably likely to have a material adverse effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
To meet our short and long-term liquidity needs,
we expect to use existing cash balances and a variety of other means. Other sources of liquidity could include additional potential issuances
of debt or equity securities in public or private financings, partnerships, collaborations and sale of assets. Our history of operating
losses and liquidity challenges may make it difficult for us to raise capital on acceptable terms or at all. The demand for the equity
and debt of pharmaceutical companies like ours is dependent upon many factors, including the general state of the financial markets. During
times of extreme market volatility, capital may not be available on favorable terms, if at all. Our inability to obtain such additional
capital could materially and adversely affect our business operations. Our future capital requirements are difficult to forecast and will
depend on many factors, but we believe that our cash on hand will enable us to fund operating expenses for at least the next 12 months
following the issuance of our consolidated financial statements.
Year ended April 30, 2025, compared to year
ended April 30, 2024
Revenue
We had no revenues in the fiscal years ended April
30, 2025, and 2024.
Operating Expenses
Our total operating expenses during the year ended
April 30, 2025 were $4,377,862, representing a decrease of $4,142,146 compared to the year ended April 30, 2024. The decrease is mainly
attributable to decreases in compensation expenses, director fees, impairment of asset, legal and professional and general and administrative
expenses, net of an increase in R&D.
Research and development expenses
R&D expense was $438,416 for the year ended
April 30, 2025, as compared to $407,431 for the year ended April 30, 2024, an increase of $30,985. The increase in cost is primarily due
to entering into an agreement with consultants to conduct additional research into the treatment of pancreatic cancer.
General and administrative expenses
The majority of our operating losses from operations
are from general and administrative expenses. General and administrative expenses consist primarily of costs associated with our overall
operations and with being a public company. These costs include personnel, legal and professional services, insurance, investor relations
and compliance related fees. These expenses were $3,939,446 and $6,112,577, respectively, for the years ended April 30, 2025 and 2024,
a decrease of $2,173,131, or 36%. Compensation expenses decreased by $37,210 to a reduction in accrued vacation. Director fees decreased
by $585,271 due to a reduction in equity compensation and payments made to directors. Investor relations decreased by $198,364 due to
having two stockholder meetings in 2024 and one meeting in 2025. Legal and professional fees decreased by $300,266 primarily due to a
reduction in legal fees relating to non-recurring legal issues. Warrant issuance costs decrease of $913,640 incurred in 2024 were non-recurring
in 2025.
Impairment asset impairment
For the year ended April 30, 2024, we impaired
a license in the amount of $2,000,000.
Other Income (Expenses), Net
Other income, net for the year ended April 30,
2025, was $35,033,912, as compared to other income, net of $8,853,771 in the year ended April 30, 2024. Other income, net for the year
ended April 30, 2025 is attributable to interest income of $1,415,561, changes in fair values of warrant liability of $10,446,000, derivative
liability of $2,184,000, convertible note receivable of $941,000, preferred stock investment – TNF of $5,063,950, and gain on related
party investment – TNF of $21,395,734 and unrealized gain on the fair value of marketable securities of $66,316, less decreases
in the fair value of Femasys warrant asset of $2,091,000, TNF warrant asset of $2,367,684, settlement of legal complaint of $2,019,000
and other expenses of $965. Other income, net for the year ended April 30, 2024 of $8,853,771 is attributable to interest income of $3,398,819,
changes in fair values of warrant liability of $3,343,000, derivative liability of $586,000, convertible note receivable of $1,089,000
and warrant asset of $1,818,000, less loss on write-off of long-term asset of $1,572,193 net of other income of $191,145. Other income
is attributable to recovery of accrued expenses of $195,000 less income taxes and foreign exchange loss. For the years ended April 30,
2025 and 2024, we recorded an asset loss of $0 and $1,572,193, respectively, related to the Company’s investment in SG Austria,
reducing the carrying value of such investment to zero.
Discussion of Operating, Investing and Financing
Activities
The following table presents a summary of our
sources and uses of cash for the years ended April 30, 2025 and 2024.
Effect of currency rate exchange $ (358 ) $ (508 )
Operating Activities:
The cash used in operating activities for the
year ended April 30, 2025 is a result of our net income of $30,656,050, offset by non-cash transactions, change in fair value of
warrant asset in Femasys of $2,091,000 and legal settlement of $1,550,000, stock based compensation of $478,637, legal settlement
warrant liability of $469,000, change in fair value of TNF warrants of $2,367,684, offset by the gain on related party investment of
$(21,395,734) the changes in fair value of warrant liability of $(10,446,000), investment – TNF of $(5,063,950), derivative
liability of $(2,184,000), convertible note receivable of $(941,000), change in unrealized gain of marketable securities of
$(66,316), non-cash interest income of $(300,000), and changes to prepaid expenses, accounts payable, accrued expenses, and accrued
dividends totaling $(193,667).
The cash used in operating activities for the
year ended April 30, 2024 is a result of our net income of $333,763, convertible note receivable of $(1,089,000), changes in fair value
of warrant liability of $(3,343,000), derivative liability of $(586,000), warrant asset – Femasys of $(1,818,000), other non-cash
adjustments of $(195,000) offset by stock based compensation of $674,693, asset impairment of $2,000,000, loss on long term asset of $1,572,193,
and changes to prepaid expenses, accounts payable and accrued expenses of $298,894.
Investing Activities:
The cash used in investing activities for the
year ended April 30, 2025 is mainly attributable to our entry into the TNF Purchase Agreement with a public company operating in the medical
industry, Pursuant to the TNF Purchase Agreement, we purchased (i) 7,000 shares of TNF’s Series G Convertible Preferred Stock (the
“Preferred Shares” or “Series G Preferred Stock”), representing approximately 33% of TNF’s issued and outstanding
share capital on an as-converted basis (and approximately 78% of all shares of Series G Preferred Stock outstanding), at a price of $1.816
per Preferred Share, which are convertible into 3,854,626 shares of Common Stock (as defined below); (ii) warrants to purchase up to 3,854,626
shares of TNF’s Common Stock with a five-year term; and (iii) warrants to purchase up to 3,854,626 shares of TNF’s Common
Stock with a 18-month, for an aggregate purchase price of $7,000,000.
The cash used in investing activities for the
year ended April 30, 2024 is mainly attributable to our entry into a Securities Purchase Agreement (the “Femasys Purchase Agreement”)
with Femasys Inc. (“Femasys”), pursuant to which we purchased from Femasys for a sum of $5,000,000, (i) senior unsecured convertible
notes (the “Femasys Notes”) in an aggregate principal amount of $5,000,000, convertible into shares of Femasys common stock,
par value $0.001 per share (the “Femasys Shares”) at a conversion price of $1.18 per share, (ii) Series A Warrants (the “Series
A Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.18 per share, and (iii) Series
B Warrants (the “Series B Warrants”, together with the Series A Warrants, the “Femasys Warrants,” and, together
with the Notes, the “Femasys Securities”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price
of $1.475 per share. The Series B Warrants expired on November 21, 2024.
Financing Activities:
The cash used in financing activities for the
year ended April 30, 2025 is mainly attributable to the repurchase of common stock of approximately $2,542,000 and redemption of preferred
stock of approximately $22,487,000.The cash used in financing activities for the year ended April 30, 2024 was mainly attributable to
the Repurchase Programs of approximately $28,198,000, redemption of preferred stock of approximately $16,161,000, offset by the cash provided
by proceeds from the issuance of preferred stock of approximately $33,650,000, net of transaction costs.
Critical Accounting Estimates
Our Consolidated Financial Statements are prepared
in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We are required to make assumptions and estimates
about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related
disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management
believes to be relevant at the time our Consolidated Financial Statements are prepared. On a regular basis, management reviews the accounting
policies, assumptions, estimates and judgments to ensure that our Consolidated Financial Statements are presented fairly and in accordance
with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from
our assumptions and estimates, and such differences could be material.
Our significant accounting policies are discussed
in Note 2 of the Notes to our Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data”
of this Report. Management believes that the following accounting estimates are the most critical to aid in fully understanding and evaluating
our reported financial results and require management’s most difficult, subjective or complex judgments resulting from the need
to make estimates about the effects of matters that are inherently uncertain. Management has reviewed these critical accounting estimates
and related disclosures with our Board.
Fair Value of Financial Instruments
Fair value measurements are based upon certain
market assumptions and pertinent information available as of and during the year ended April 30, 2025. The fair value of the bifurcated
embedded derivative related to the convertible preferred stock was estimated using a Monte Carlo simulation model, which uses as inputs
the fair value of our common stock and estimates for the equity volatility and traded volume volatility of our common stock, the time
to maturity of the convertible preferred stock, the risk-free interest rate for a period that approximates the time to maturity, dividend
rate, a penalty dividend rate, and our probability of default. The fair value of the warrant liability was estimated using the Black Scholes
Model which uses as inputs the following weighted average assumptions: dividend yield, expected term in years; equity volatility;
and risk-free interest rate.
In addition, we elect to account for its convertible
note receivable, which meets the required criteria, at fair value at inception and at each subsequent reporting date. Subsequent changes
in fair value, including interest, are recorded as a component of non-operating income (loss) in the consolidated statements of operations.
We estimate the fair value of the convertible note receivable using the income approach, which uses as inputs the fair value of debtor’s
common stock and estimates for the equity volatility and volume volatility of debtor’s common stock, the time to expiration of the
convertible note, the discount rate, the stated interest rate compared to the current market rate, the risk-free interest rate for a period
that approximates the time to expiration, and probability of default. Therefore, the estimate of expected future volatility is based on
the actual volatility of debtor’s common stock and historical volatility of debtor’s common stock utilizing a lookback period
consistent with the time to expiration. The time to expiration is based on the contractual maturity date. The risk-free interest rate
is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal
to the time to expiration. The probability of default is estimated using the S&P Global default rate for companies with a similar
credit rating to debtors. The fair value in our warrant asset investment is estimated using a Monte Carlo simulation model, which uses
as inputs the fair value of the underlying common stock, and estimates for the equity volatility and traded volume volatility of the investee’s
common stock, the risk-free interest rate for a period that approximates the expected life of the warrants, and the expected life of the
warrants.
The fair value of the convertible note receivable
using the income approach, which uses as inputs the fair value of debtor’s common stock and estimates for the equity volatility
and volume volatility of debtor’s common stock, the time to expiration of the convertible note, the discount rate, the stated interest
rate compared to the current market rate, the risk-free interest rate for a period that approximates the time to expiration, and probability
of default. Therefore, the estimate of expected future volatility is based on the actual volatility of debtor’s common stock and
historical volatility of debtor’s common stock utilizing a lookback period consistent with the time to expiration. The time to expiration
is based on the contractual maturity date. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in
effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated
using the S&P Global default rate for companies with a similar credit rating to debtor’s
Fair Value of Long-Lived Assets
We determined that the diabetes licensed asset
technology would likely not prove to be a viable technique for the production of insulin producing cells and the treatment of diabetes.
We believe that a buyer of this technology would ascribe a de minimis value to this asset. Therefore, we determined that there should
be a full impairment of the $2 million carrying value. We determined that research in the treatment of diabetes would no longer be pursued
until the Cell-in-a-Box® use in pancreatic cancer treatment can be substantiated in a clinical trial and a viable cell line is acquired.
We determined that due to the SG Austria financial
position, negative book value and viability make for an inconclusive determination of a specific value range of our minority interest
in SG Austria and the value as of the present time is likely minimal. Therefore, we determined that there should be a full impairment
of the approximately $1.6 million carrying value.
New Accounting Pronouncements Effective in Future Periods
In August 2023, the FASB issued ASU 2023-05 –
Business Combinations – Joint Venture Formations (Subtopic 805-60), which requires public entities that qualify as a joint venture
or corporate joint venture to establish a new basis of accounting upon formation. The guidance is effective for our annual periods beginning
May 1, 2025, and early adoption is permitted. We are evaluating the impact of adoption of this standard on its financial statements and
disclosures but does not expect it to have a material effect on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09
- Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within
their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose
both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items
meet a quantitative threshold. The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received,
by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold.
The guidance is effective for our annual periods beginning May 1, 2025 on a prospective basis, with a retrospective option, and early
adoption is permitted. We are evaluating the impact of adoption of this standard on its financial statements and disclosures but does
not expect it to have a material effect on our consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03
(“ASU 2024-03”), Disaggregation of Income Statement Expenses. The guidance requires additional, disaggregated disclosure about
certain income statement expense line items. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after
December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted, and is required to be
applied prospectively with the option of retrospective application. We are currently evaluating the impact on the consolidated financial
statements and related disclosures.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
We are a smaller reporting company and are not
required to include information called for by this Item 7A.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
Our Consolidated Balance Sheets, as of April 30,
2025 and 2024, and our Consolidated Statements of Operations, Comprehensive Income, Changes in Convertible Preferred Stock and Stockholders
Equity and Cash Flows for each of the years in the years ended April 30, 2025 and April 30, 2024, and associated Notes and Schedules,
together with the reports thereon of our independent registered public accounting firm, are set forth on Item 15 of this Report and are
incorporated by reference herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our Interim Chairman, Interim Chief Executive
Officer and Interim President, as our principal executive officer (“Chief Executive Officer”), and our Chief Financial Officer,
as our principal financial officer (“Chief Financial Officer”), evaluated the effectiveness of our “disclosure controls
and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Exchange Act. Disclosure controls and procedures
are designed to ensure that the information required to be disclosed in the reports that we file or submit to the Commission pursuant
to the Exchange Act are recorded, processed, summarized and reported within the period specified by the Commission’s rules and forms
and are accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions
regarding required disclosures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded
that, as of April 30, 2025, certain of our disclosure controls and procedures were not effective due to the material weaknesses in internal
control over financial reporting. This is described below in Management’s Report on Internal Control over Financial Reporting.
Management’s Report on Internal Controls
over Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal controls over financial reporting as that term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).
Our internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
A material weakness is a deficiency, or a combination
of deficiencies, in internal controls 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 in a timely basis.
Under the supervision and with the participation
of our Chief Executive Officer and our Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal
controls over financial reporting as of April 30, 2025, based on the criteria outlined in Internal Control-Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and identified the following material
weaknesses in internal controls over financial reporting:
Because of these material weaknesses, our Interim
Chief Executive Officer and our Chief Financial Officer concluded that, as of April 30, 2025, our internal controls over financial reporting
were not effective based on the COSO criteria.
We plan to make changes to our procedures and
controls that we believe are reasonably likely to strengthen and materially affect our internal controls over financial reporting.
Prior to the remediation of our material weakness,
there remains risk that the processes and procedures on which we currently rely will fail to be sufficiently effective, which could result
in material misstatement of our financial position or results of operations and require a restatement. Because of the inherent limitations
in all control systems, no evaluation of controls - even where we conclude the controls are operating effectively - can provide absolute
assurance that all control issues, including instances of fraud, if any, have been detected. These inherent limitations include the realities
that judgments in decision making can be faulty, and breakdowns can occur because of simple error or mistake. Additionally, controls can
be circumvented by the individual acts of a person, by collusion of two or more people, or by management override of the controls. The
design of any system of controls also is based in part upon certain assumptions about the likelihood of future events; accordingly, there
can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, our control
systems, as we develop them, may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures
may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur
and not be detected and could be material to our financial statements.
Changes in Internal Controls over Financial
Reporting
There were no changes to our internal control
over financial reporting during the fiscal year ended April 30, 2025, that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.
The Certifications of our Principal Executive
and Principal Financial Officer required in accordance with Rule 13a-14(a) under the Exchange Act and Section 302 of the Sarbanes-Oxley
Act of 2002 (“Certifications”) are attached to this Report. The disclosures set forth in this Item 9A contain information
concerning: (i) the evaluation of our disclosure controls and procedures, and changes in internal control over financial reporting, referred
to in paragraph 4 of the Certifications; and (ii) material weaknesses in the design or operation of our internal control over financial
reporting, referred to in paragraph 5 of the Certifications. The Certifications should be read in conjunction with this Item 9A for a
more complete understanding of the matters covered by the Certifications.
Limitations on the Effectiveness of Disclosure
Controls and Procedures
A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Also, controls can be
circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The
design of any system of controls is also based in part upon certain assumptions about the likelihood of future events. There can be no
assurance that any design will succeed in achieving its stated goals under all potential future conditions.
ITEM 9B. OTHER INFORMATION
During the year ended April 30, 2025, no director
or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,”
as each term is defined in Item 408(a) of Regulation S-K.
On August 8, 2025, we entered into an Executive
Compensation Agreement (the “Silverman Compensation Agreement”) with Joshua N. Silverman Silverman, effective as of January
1, 2025, pursuant to which Mr. Silverman will serve as our Chief Executive Officer, President, and Executive Chairman.
The Silverman Compensation Agreement provides
for an initial three-year term, with automatic one-year renewal periods unless either party provides at least ninety (90) days’
prior written notice of non-renewal. Under the Silverman Compensation Agreement, Mr. Silverman is entitled to an annual base salary of
$375,000, subject to annual review and potential increase by the Compensation Committee. Mr. Silverman is eligible to receive an annual
performance-based bonus. In addition, Mr. Silverman is entitled to receive annual long-term incentive awards under the Company’s
Long Term Incentive Plan with a target annual equity award grant date fair value to equal 300% of Mr. Silverman’s base salary.
In the event of termination without “Cause”
or by Mr. Silverman for “Good Reason” (as such terms are defined in the Silverman Compensation Agreement). Mr. Silverman is
entitled to receive accrued compensation through the termination date, severance equal to two times the sum of his base salary and target
bonus (prorated for the year of termination), payable over 24 months, and accelerated vesting of all unvested equity awards. If such termination
occurs within two years following or six months preceding a “Change in Control” (as defined in the Silverman Compensation
Agreement), Mr. Silverman is entitled to enhanced severance equal to three times the sum of his base salary and target bonus, payable
in a lump sum, and full acceleration of all unvested equity awards.
In the event of Mr. Silverman’s death during
the term of the Silverman Compensation Agreement, his estate is entitled to receive accrued compensation, any unpaid bonus amounts, accelerated
vesting of all unvested equity awards, and any other benefits due under the Company’s benefit plans. In addition, the death benefit
under the Company’s life insurance program, if any, will be paid to his designated beneficiary or estate. If Mr. Silverman’s
employment terminates due to disability, he is entitled to accrued compensation, prorated target bonus, and continued salary payments
for 24 months, along with accelerated vesting of all unvested equity awards and benefits under the Company’s long-term disability
insurance plan, if applicable.
All severance and equity acceleration benefits
are subject to Mr. Silverman’s execution and non-revocation of a general release of claims. The Agreement also includes provisions
regarding confidentiality, non-disparagement, post-employment cooperation, and compliance with Section 409A of the Internal Revenue Code.
Compensation under the Agreement is subject to the Company’s clawback policies as may be required by applicable law or listing standards.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
As of July 18, 2025, our directors and executive
officers are:
Age Position
Carlos A. Trujillo 67 Chief Financial Officer
Jonathan L. Schechter 51 Director
Robert Weinstein 65 Director
Wayne R. Walker 65 Director
Michael M. Abecassis 67 Director
Joshua N. Silverman
Joshua Silverman has served as a director of the
Company since August 2022 and as our Interim Chief Executive Officer, Interim President and Interim Chairman of the Board since October
2022. Mr. Silverman has served as the managing member of Parkfield Funding LLC since August 2016. Mr. Silverman co-founded Iroquois Capital
Management, LLC (“Iroquois”), an investment advisory firm, in 2003 and served as its principal, managing partner and co-chief
investment officer until July 2016. While at Iroquois, he designed and executed complex transactions, structuring and negotiating investments
in both public and private companies and has often been called upon by the companies solve inefficiencies as they relate to corporate
structure, cash flow, and management. From 2000 to 2003, Mr. Silverman served as co-chief investment officer of Vertical Ventures, LLC,
a merchant bank. Prior to forming Iroquois, Mr. Silverman was a director of Joele Frank, a boutique consulting firm specializing in mergers
and acquisitions. Previously, Mr. Silverman served as assistant press secretary to the president of the U.S. Mr. Silverman currently serves
as a director of AYRO, Inc. (Nasdaq: AYRO), Femasys Inc. (Nasdaq: FEMY, TNF Pharmaceuticals, Inc. (Nasdaq: TNFA), TAO Synergies Inc. (formerly
Synaptogenix, Inc.) (Nasdaq: TAOX) and Petros Pharmaceutical, Inc. (Nasdaq: PTPI). He previously served as a director of Marker Therapeutics,
Inc. (Nasdaq: MRKR) from 2016 until 2018 and Protagenic Therapeutics, Inc. (Nasdaq: PTIX) from 2016 to 2022. Mr. Silverman received his
B.A. from Lehigh University in 1992. Mr. Silverman was chosen as a director of the Company because of his experience as an investment
banker, as a management consultant and as a director of numerous public companies.
Jonathan L. Schechter
Jonathan L. Schechter has served as a director
of the Company since August 2022. Mr. Schechter has served as the Director of Investment Banking at Chardan Capital Markets, a full-service
investment bank, since February 2008. He has served as a partner of The Special Equities Group, a division of Dawson James Securities,
Inc., a full-service investment bank specializing in healthcare, biotechnology, technology, and clean-tech sectors, since April 2021.
Mr. Schechter is one of the founding partners of The Special Equities Opportunity Fund, a long-only fund that makes direct investments
in micro-cap companies and has served in this capacity since August 2019. He currently serves on the board of directors of TAO Synergies
Inc. (formerly Synaptogenix, Inc.), (Nasdaq: TAOX), a clinical-stage biopharmaceutical company, and previously served as a director of
DropCar, Inc. He has received formal education in finance and accounting and has extensive experience analyzing and evaluating the financial
statements of public companies. Mr. Schechter earned his A.B. in Public Policy/Political Science from Duke University and his J.D. from
Fordham University School of Law. Mr. Schechter was chosen as a director of the Company because of his lengthy public company, legal and
investment banking experience.
Michael M. Abecassis
Michael M. Abecassis, MD has served as a director
of the Company since July 2017. Since November 2019, Dr. Abecassis has been Dean of the University of Arizona College of Medicine –
Tucson, and following postgraduate training at the University of Toronto, Dr. Abecassis began his professional career as Assistant Professor
of Surgery and Director of Liver Transplantation and Hepatobiliary Surgery at the University of Iowa. In 1992, Dr. Abecassis became Northwestern
University’s Director of Liver Transplantation, where he initiated Northwestern’s liver transplant program. In 2004, Dr. Abecassis
was named Chief of the Division of Transplantation at the Feinberg School of Medicine, and the James Roscoe Miller Distinguished Professor
with Tenure at Feinberg. He then became Founding Director of the Comprehensive Transplant Center at Northwestern in 2009. He was appointed
Dean for Clinical Affairs at the Feinberg School of Medicine in 2008, serving until 2011. Dr. Abecassis received continuous funding from
the National Institutes of Health (“NIH”) for 20+ consecutive years as principal investigator in research studies that include
both laboratory and clinical studies. Dr. Abecassis is a member in good standing of several important professional societies, including
the Society of University Surgeons and the American Surgical Association, and was elected President of the American Society of Transplant
Surgeons from 2010-2011. He has served on the Editorial Boards of major scientific journals related to the fields of Hepato-pancreatico-biliary
(HPB) and transplant surgery. He has served as a member of NIH grant study sections and special emphasis panels relating to both transplantation
and virology. He served as a permanent member of the National Institute of Allergy and Infectious Diseases study section for career development
and training grants. Dr. Abecassis has been a course director for the American Society of Transplant Surgeons Leadership Development Program
for the Advanced Leader Development Program in 2013 at Northwestern’s Kellogg School of Management. He was a voting member of the
Medicare Coverage Advisory Committee and served on the United HealthCare Group Physician Advisory Board on Healthcare Performance and
Quality. Dr. Abecassis has been a member of various local, regional and national regulatory committees and has published seminal papers
on both the regulatory and financial aspects of transplantation, including the Healthcare Reform and the Affordable Care Act. Dr. Abecassis
received his Medical Degree from the University of Toronto in 1983 and was awarded a Master of Business Administration degree from the
Kellogg School of Management at Northwestern University in 2000. Dr. Abecassis was also a co-founder of Transplant Genomics Inc., a company
focused on developing, validating and commercializing molecular biomarkers for transplant rejection, and currently a subsidiary of Eurofins
Diagnostics. Dr. Abecassis was chosen as a director of the Company because of the combination of his clinical training and experience
in HPB diseases (e.g. liver and pancreatic cancer), his research background in related areas, and his experience with the regulatory and
business aspects of translation and commercialization of research efforts.
Robert Weinstein
Robert Weinstein has served as a director of the
Company since November 2022. Mr. Weinstein has served as chief financial officer of TAO Synergies Inc. (formerly Synaptogenix, Inc.) (Nasdaq:
TAOX) since October 2013. In addition, Mr. Weinstein performs work as a consultant for Petros Pharmaceuticals, Inc. (Nasdaq: PTPI). He
has extensive accounting and finance experience, spanning more than 40 years, as a public accountant, investment banker, healthcare private
equity fund principal and chief financial officer. From September 2011 to the present, Mr. Weinstein has also been an independent consultant
for several healthcare companies in the pharmaceutical and biotechnology industries. Mr. Weinstein also serves as a member of the Board
of Directors of XWELL, Inc. (formerly XpresSpa Group, Inc.) (Nasdaq: XWEL), a health and wellness company whose core assets, XpresSpa
and XpresCheck®, is a leading airport retailer of spa services and related health and wellness products. Mr. Weinstein also serves
on the Board of Directors of Oblong, Inc. (Nasdaq: OBLG), a company providing multi-stream collaboration technologies and managed services
for video collaboration and network applications. Mr. Weinstein received his MBA degree in finance and international business from the
University of Chicago Graduate School of Business, is a Certified Public Accountant (inactive), and received his BS degree in accounting
from the State University of New York at Albany. Mr. Weinstein was chosen as a director of the Company because of his public company and
financial expertise.
Wayne R. Walker
Wayne R. Walker has served as a director of the
Company since December 2022. Mr. Walker has over 35 years of experience in corporate governance, turnaround management, corporate restructuring
and bankruptcy matters. In 1998, Mr. Walker founded Walker Nell Partners, Inc., an international business consulting firm, and has served
as its president from its founding to the present. Before founding Walker Nell Partners, Inc., Mr. Walker worked for 15 years at the DuPont
Company in Wilmington, Delaware in the Securities and Bankruptcy group, where he worked in the Corporate Secretary’s office and
served as Senior Counsel. From 2022 to present, Mr. Walker has served as a director of AMMO, Inc. (Nasdaq: POWW), a designer, producer,
and marketer of ammunition products. From December 2020 to the present, Mr. Walker has served as a director of AYRO, Inc. (Nasdaq: AYRO),
a designer and manufacturer of compact, sustainable electric vehicles. From 2018 to the present, Mr. Walker has served as a director of
Wrap Technologies, Inc. (Nasdaq: WRAP), an innovator of modern policing solutions, where he also serves as chairman of the board. From
2018 to the present, Mr. Walker has served as a director of Pitcairn Company and as the Chair of its Compensation Committee. From 2013
to 2014, Mr. Walker served as chairman of the board of directors of BridgeStreet Worldwide, Inc., a global provider of extended corporate
housing. From 2016 to 2018, Mr. Walker served as chairman of the board of directors of Last Call Operating Companies, an owner of various
national restaurants. From 2013 to 2020, Mr. Walker served as chairman of the board of trustees of National Philanthropic Trust, a public
charity. From 2018 to 2020, Mr. Walker served as Vice President of the Board of Education of the City of Philadelphia. From 2020 to the
present, Mr. Walker has served as a director of Petros Pharmaceuticals, Inc. (Nasdaq: PTPI), which focuses on men’s health. Mr.
Walker has also served on the board of directors for numerous other companies and foundations including Seaborne Airlines, Inc., Green
Flash Brewery, Inc., and Eagleville Hospital and Foundation. Mr. Walker has a J.D. from Catholic University (Washington, DC) and a Bachelor
of Arts from Loyola University (New Orleans). He is an attorney licensed by the State Bar of Georgia. He is a member of the State Bar
Association of Georgia, American Bar Association, American Bankruptcy Institute and Turnaround Management Association. Mr. Walker was
chosen as a director of the Company because of his extensive board experience.
Carlos A. Trujillo
Carlos A. Trujillo has been our Chief Financial
Officer since March 2017. He began working for us as an independent contractor in September 2014. In January 2015, Mr. Trujillo became