NANOVIRICIDES, INC. - Quarter Report: 2012 March (Form 10-Q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2012

Commission File Number: 333-148471

NANOVIRICIDES, INC.

(Exact name of Company as specified in its charter)

NEVADA		76-0674577
(State or other jurisdiction)		(IRS Employer Identification No.)
of incorporation or organization)

135 Wood Street, Suite 205

West Haven, Connecticut 06516

(Address of principal executive offices and zip code)

(203) 937-6137

( Company’s telephone number, including area code)

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

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

Indicate by check mark whether the Company is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	¨

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

The number of shares outstanding of the Company's Common Stock as of May 17, 2012 was: 155,285,345.

NanoViricides, Inc.

FORM 10-Q

INDEX

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets at March 31, 2012 (Unaudited) and June 30, 2011		3

Statements of Operations for the Three Months and Nine Months Ended March 31, 2012 and 2011 and for the Period from May 12, 2005 (Inception) through March 31, 2012 (Unaudited)		4

Statements of Cash Flows for the Nine Months Ended March 31, 2012 and 2011 and for the Period from May 12, 2005 (Inception) through March 31, 2012 (Unaudited)		5

Statement of Stockholders’ Equity		7

Notes to the Financial Statements (Unaudited)		8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3. Quantitative and Qualitative Disclosures About Market Risk		26

Item 4. Controls and Procedures		26

PART II OTHER INFORMATION

Item 1. Legal Proceedings		28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		28

Item 3. Defaults Upon Senior Securities		29

Item 4. Mine Safety Disclosures		29

Item 5. Other Information		29

Item 6. Exhibits and Reports on Form 8-K		29

Signatures		30

Certifications

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	March 31, 2012 (Unaudited)			June 30, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	12,984,397		$	9,224,023
Prepaid expenses		295,749			332,294
Total current assets		13,280,146			9,556,317
Property and equipment, net		667,561			802,367
Trademark, net		428,001			399,383
TOTAL ASSETS	$	14,375,708		$	10,758,067
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	209,016		$	79,529
Accounts payable – related parties		384,929			462,955
Accrued expenses		50,987			27,173
Derivative liability		159,138			17,519
TOTAL CURRENT LIABILITIES		804,070			587,176
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Series A Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 8,811,250 and 8,217,500 shares issued and outstanding, respectively		8,811			8,218
Series B Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 90,000 and 10,000 shares issued and outstanding, respectively		90			10
Common stock, $0.001 par value; 300,000,000 shares authorized; 153,630,000 and 143,548,394 shares issued and outstanding, respectively		153,662			143,582
Additional paid-in capital		41,189,132			33,235,990
Deficit accumulated during the development stage		(27,780,057	)		(23,216,909	)
TOTAL STOCKHOLDERS’ EQUITY		13,571,638			10,170,891
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	14,375,708		$	10,758,067

See accompanying notes to the financial statements.

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,						Period from May 12, 2005 (Inception) through March 31,
	2012			2011			2012			2011			2012
Revenues	$	—		$	—		$	—		$	—		$	—
Operating expenses:
Research and development		1,582,705			1,652,309			3,252,745			3,524,784			17,497,963
Refund credit research and development costs		—			42,265			—			42,265			(420,842	)
General and administrative		494,080			863,083			1,281,755			1,600,867			10,183,317
Total operating expenses		2,076,785			2,557,657			4,534,500			5,167,916			27,260,438
Loss from operations		(2,076,785	)		(2,557,657	)		(4,534,500	)		(5,167,916	)		(27,260,438	)

Other income (expense):
Interest income		30,801			882			40,283			6,572			205,607
Non cash interest on convertible debentures		—			—			—			—			(73,930	)
Non cash interest expense on beneficial conversion of convertible debentures		—			—			—			—			(713,079	)
Change in fair market value of derivative liability		14,131			10,088			(68,931	)		(58,200	)		61,783
Total other income (expense)		44,932			10,970			(28,648	)		(51,628	)		(519,619	)

Loss before income taxes		(2,031,853	)		(2,546,687	)		(4,563,148	)		(5,219,544	)		(27,780,057	)
Income tax provision		—			—			—			—			—

Net loss	$	(2,031,853	)	$	(2,546,687	)	$	(4,563,148	)	$	(5,219,544	)	$	(27,780,057	)

Net loss per common share: - basic and diluted	$	(0.013	)	$	(0.02	)	$	(0.031	)	$	(0.04	)

Weighted average common shares outstanding: - basic and diluted		151,556,920			140,222,753			147,890,395			137,995,662

See accompanying notes to the financial statements.

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months Ended						For the Period From May 12, 2005 (Inception) Through March 31,
	March 31, 2012			March 31, 2011			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(4,563,148	)	$	(5,219,544	)		(27,780,057	)
Adjustments to reconcile net loss to net cash used in operating activities:
Preferred shares issued for license		—			—			7,000
Preferred shares issued as compensation		634,408			1,418,565			1,854,738
Common shares and warrants issued for services		235,875			429,250			3,379,369
Warrants granted to scientific advisory board		163,800			154,800			1,017,841
Amortization of deferred compensation		—			—			121,424
Depreciation and amortization		164,739			157,880			804,107
Change in fair value of derivative liability		(68,961	)		58,200			(199,675	)
Amortization of deferred financing expenses		—			—			51,175
Non cash interest on convertible debentures		—			—			73,930
Non cash interest expense on beneficial conversion feature of convertible debentures		—			—			713,079
Changes in operating assets and liabilities:
Prepaid expenses		36,545			(15,070	)		(287,749	)
Other current assets		—			42,265			(8,001	)
Deferred expenses		—			—			(2,175	)
Accounts payable		129,487			198,217			553,396
Accounts payable – related parties		(78,026	)		(754,015	)		384,929
Accrued expenses		23,814			(114,209	)		50,987
Accrued payroll to officers and related payroll tax expense		—			(22,917	)		—
Net cash used in operating activities		(3,321,467	)		(3,666,578	)		(19,265,649	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(23,352	)		(131,107	)		(1,440,717	)
Trademark and Patent costs		(35,199	)		(39,657	)		(458,954	)
Net cash used in investing activities		(58,552	)		(170,764	)		(1,899,671	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Series B convertible Preferred Stock		7,140,362			4,595,000			19,600,362
Proceeds from issuance of common stock in connection with the private placement of common stock, net of issuing cost		—			—			11,296,748
Proceeds from exercise of stock options		—			—			90,000
Proceeds from exercise of warrants attached to convertible debentures		—			50,000			3,162,590
Stock subscription received		—			—			20
Net cash provided by financing activities		7,140,362			4,645,000			34,149,718
NET INCREASE IN CASH AND CASH EQUIVALENTS		3,760,374			807,658			12,984,397
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		9,224,023			6,955,733			—
CASH AND CASH EQUIVALENT, ENDING OF PERIOD	$	12,984,397		$	7,763,391		$	12,984,397
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
INTEREST PAID	$	—		$	—		$	—
INCOME TAX PAID	$	—		$	—		$	3,017

See accompanying notes to the financial statements.

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited)

	Nine months ended March 31,				For the Period From May 12, 2005 (Inception) through March 31,
	2012		2011		2012
NON-CASH FINANCING AND INVESTING ACTIVITIES
Common stock issued for services	$	54,000	$	429,250	$	11,796,929
Preferred Stock Issued as compensation		—		1,418,565		2,638,915
Stock options issued to the officers as compensation		—		—		121,424
Stock warrants granted to scientific advisory board		163,800		154,800		1,074,241
Stock warrants granted to brokers		—		—		3,563
Common stock issued for interest on debentures		—		—		73,930
Shares of common stock issued in connection with debenture offering		—		—		49,000
Common stock issued upon conversion of convertible debentures		—		—		1,000,000
Common Stock issued for conversion of Series B Preferred Stock		6,275,327		—		18,675,327
Common Stock issued for dividends on Series B Preferred Stock		69,425		77,481		225,418
Debt discount related to beneficial conversion feature of convertible debt		—		—		713,079
Stock Warrants Issued in connection with Private Placement		—		—		7,681,578
Common stock issued for accounts payable		—		—		175,020
Common stock issued for equipment		—		—		137,500

See accompanying notes to the financial statements.

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through September 30, 2011

(Unaudited)

																							Deficit
																							Accumulated
	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001						Additional			Stock			During the			Total
	Number of				Number of						Number of						Paid-in			Subscription			Development			Stockholders'
	Shares		Amount		Shares			Amount			Shares			Amount			Capital			Receivable			Stage			Equity

Common shares issued May 12, 2005 (Inception)												20,000		$	20		$	-		$	(20	)	$			$	-
Share exchange with Edot-com.com Inc., June 1, 2005												(20,000	)		(20	)		-			20						-
Common shares exchanged in reverse acquisition of Edot-com.com Inc., June 1, 2005												80,000,000			80,000			(79,980	)		(20	)					-
Common shares outstanding Edot-com.com Inc., June 1, 2005												20,000,000			20,000			(20,000	)								-
Options granted in connection with reverse acquisition																											-
																											-
Net loss																								(66,005	)		(66,005	)

Balance, June 30, 2005												100,000,000			100,000			(99,980	)		(20	)		(66,005	)		(66,005	)

Discount related to beneficial conversion feature of Convertible debentures, July 13, 2005																		5,277									5,277
Legal expenses related private placement of common stock, July 31, 2006																		(2,175	)								(2,175	)
Discount related to beneficial conversion feature of Convertible debentures, July 31, 2005																		5,302									5,302
Warrants issued to Scientific Advisory Board, August 15, 2005																		4,094									4,094

Options issued to officers, September 23, 2005																		87,318									87,318
Common shares issued for consulting services valued at $.081 per share, September 30, 2005												2,300,000			2,300			184,000									186,300
Common shares issued for interest on debentures, September 30, 2005												48,177			48			4,267									4,315
Discount related to beneficial conversion feature of Convertible debentures, October 28, 2005																		166,666									166,666
Discount related to beneficial conversion feature of Convertible debentures, November 9, 2005																		166,667									166,667
Discount related to beneficial conversion feature of Convertible debentures, November 10, 2005																		45,000									45,000
Discount related to beneficial conversion feature of Convertible debentures, November 11, 2005																		275,000									275,000
Discount related to beneficial conversion feature of Convertible debentures, November 15, 2005																		49,167									49,167
Warrants issued to Scientific Advisory Board, November 15, 2005																		25,876									25,876
Common shares and warrants issued in connection with private placement of common stock, November 28, 2005												340,000			340			169,660									170,000
Common shares and warrants issued in connection with private placement of common stock, November 29, 2005												300,000			300			149,700									150,000
Common shares and warrants issued in connection with private placement of common stock, November 30, 2005												150,000			150			74,850									75,000
Common shares and warrants issued in connection with private placement of common stock, December 2, 2005												100,000			100			49,900									50,000
Common shares and warrants issued in connection with private placement of common stock, December 6, 2005												850,000			850			424,150									425,000
Common shares issued for legal services valued at $.95 per share, December 6, 2005												20,000			20			18,980									19,000
Common shares and warrants issued in connection with private placement of common stock, December 12, 2005												750,000			750			374,250									375,000
Common shares and warrants issued in connection with private placement of common stock, December 13, 2005												50,000			50			24,950									25,000
Common shares and warrants issued in connection with private placement of common stock, December 14, 2005												50,000			50			24,950									25,000
Common shares issued in connection with debenture offering, December 15, 2005												50,000			50			48,950									49,000
Common shares and warrants issued in connection with private placement of common stock, December 20, 2005												50,000			50			24,950									25,000
Common shares and warrants issued in connection with private placement of common stock, December 29, 2005												50,000			50			24,950									25,000
Common shares and warrants issued in connection with private placement of common stock, December 30, 2005.												50,000			50			24,950									25,000
Common shares issued for interest on debentures, December 31, 2005												19,476			20			17,320									17,340
Common shares issued for consulting services valued at $1.46 per share, January 9, 2006												3,425			3			4,998									5,001
Warrants issued to Scientific Advisory Board, February 15, 2006																		49,067									49,067
Warrnats issued to Scientific Advisory Board, May 15, 2006																		51,048									51,048
Common shares issued for interest on debentures, March 31, 2005												7,921			8			22,184									22,192

Options exercised, May 31, 2006												1,800,000			1,800			88,200									90,000
Common shares and warrants issued in connection with private placement of common stock, June 15, 2006												1,875,000			1,875			1,873,125									1,875,000
Common shares issued for interest on debentures, June 30, 2006												14,426			14			22,424									22,438

Net loss																								(3,284,432	)		(3,284,432	)

Balance, June 30, 2006												108,878,425			108,878			4,480,035			(20	)		(3,350,437	)		1,238,456

Common shares issued for interest on debentures, July 31, 2006												5,744			6			7,638									7,644
Common shares issued for conversion of convertible debentures, July 31, 2006												3,333,333			3,333			996,667									1,000,000

Exercise of stock warrants, July 31, 2006												200,000			200			49,800									50,000
Options issued to Scientific Advisory Board, August 15, 2006																		30,184									30,184
Options issued to Scientific Advisory Board, November 15, 2006																		25,888									25,888
Common shares issued for consulting services valued at $.76 per share, January 3, 2007												216,000			216			163,944									164,160
Options issued to Scientific Advisory Board, February 15, 2007																		32,668									32,668

Options issued to Scientific Advisory Board, May 15, 2007																		25,664									25,664
Common shares issued for consulting services valued at $1.03 per share, June 12, 2007												752			1			774									775
Common shares issued for consulting services valued at $1.15 per share, June 20, 2007												100,000			100			114,900									115,000
Common shares issued upon warrants conversion, June 20, 2007												930,000			930			619,070									620,000
Common shares issued upon warrants conversion, June 25, 2007												75,000			75			49,925									50,000
Common shares issued upon warrants conversion, June 30, 2007												300,000			300			199,700									200,000
Common shares issued for consulting services valued at $1.06 per share, June 30, 2007												29,890			30			31,770									31,800

Officers' compensation expense																		27,062									27,062

Net loss																								(3,118,963	)		(3,118,963	)

Balance, June 30, 2007					$							114,069,144			114,069		$	6,855,689		$	(20	)		(6,469,400	)	$	500,338

Warrants issued to Scientific Advisory Board, August 15, 2007																		14,800									14,800
Common shares and warrants issued in connection with private placement of common stock, September 21, 2007												1,500,000			1,500			748,500									750,000
Common shares issued for consulting and legal services valued at $.75 per share, September 30, 2007												25,244			25			18,375									18,400
Common shares and warrants issued in connection with private placement of common stock, October 16, 2007												3,250,000			3,250			1,621,750									1,625,000
Common shares and warrants issued in connection with private placement of common stock, October 16, 2007												250,000			250			124,750									125,000
Collection of stock subscriptions receivable, October 17, 2007																					20						20
Warrants issued to Scientific Advisory Board, November 15, 2007																		7,200									7,200
Common shares issued for consulting and legal services valued at $.49 per share, December 31, 2007												57,152			57			26,843									26,900

Options issued to officers, January 1, 2008																		7,044									7,044
Warrants issued to Scientific Advisory Board, February 15, 2008																		8,500									8,500
Common shares issued for consulting and legal services valued at $ .45 per share,March 31, 2008												61,546			62			27,838									27,900
Common shares issued for consulting services valued at $.39 per share, April , 2008												27,750			28			10,793									10,821
Warrants issued to Scientific Advisory Board, May 15, 2008																		32,253									32,253
Common shares issued for consulting services valued at $1.03 per share, June 30, 2008												29,841			30			27,870									27,900

Net loss																								(2,738,337	)		(2,738,337	)

Balance, June 30, 2008		-		-		-			-			119,270,677		$	119,271		$	9,532,205		$	-		$	(9,207,737	)	$	443,739

Common shares issued for consulting and legal services valued at $ 1.22 per share, July 31, 2008												4,098			4			4,996									5,000
Common shares issued for consulting services valued at $1.22 per share, July , 2008												2,295			2			2,798									2,800
Warrants issued to Scientific Advisory Board, August 15, 2008																		47,500									47,500
Common shares and warrants issued in connection with private placement of common stock, August 22, 2008												3,136,000			3,136			3,132,864									3,136,000
Common shares issued to settle account payable												150,000			150			149,850									150,000

Payment of Finder's Fee to Biotech																		(14,696	)								(14,696	)
Common shares issued in connection with Warrant Conversion, August 22, 2008												125,000			125			106,125									106,250
Common shares issued for legal services valued at $1.24per share, August 31, 2008												4,032			4			4,996									5,000
Common shares issued for consulting services valued at $1.24 per share, August, 2008												2,258			2			2,798									2,800
Common shares issued for legal services valued at $1.00 per share, September 30, 2008												5,000			5			4,995									5,000
Common shares issued for consulting services valued at $1.00 per share, September 30, 2008												5,600			6			5,594									5,600
Common shares issued for consulting and legal services valued at $ .71 per share, October 31, 2008												7,042			7			4,993									5,000
Common shares issued for consulting services valued at $.71 per share, October 31, 2008												7,887			8			5,592									5,600
Warrants issued to Scientific Advisory Board, November 15, 2008																		30,500									30,500
Common shares issued for consulting and legal services valued at $ .67 per share, November 30, 2008												7,463			7			4,993									5,000
Common shares issued for consulting services valued at $.67 per share, November 30, 2008												8,358			8			5,592									5,600
Common shares issued for consulting and legal services valued at $ .83 per share, December 31, 2008												6,024			6			4,994									5,000
Common shares issued for consulting services valued at $.83 per share, December 31 , 2008												6,747			7			5,593									5,600
Common shares issued for legal services valued at $ .60 per share, January 20, 2009												8,333			8			4,992									5,000
Common shares issued for consulting and legal services valued at $ .78 per share, January 31, 2009												7,463			7			4,992									4,999
Common shares issued for consulting services valued at $.78 per share, January 31, 2009												8,358			8			5,592									5,600
Common shares issued for consulting services valued at $ .70 per share, February 1, 2009												50,000			50			34,950									35,000
Warrants issued to Scientific Advisory Board, February 15, 2009																		29,000									29,000
Common shares issued for consulting and legal services valued at $ .71 per share, February 28, 2009												7,042			7			4,992									4,999
Common shares issued for consulting services valued at $.71 per share, February 15, 2009												7,887			8			5,592									5,600
Common shares issued for consulting and legal services valued at $ .67 per share, March 31, 2009												6,410			6			4,994									5,000
Common shares issued for consulting services valued at $.67 per share, March 31 , 2009												7,179			7			5,593									5,600
Common shares issued to acquire equipment valued at $0.79 per share												172,500			173			137,327									137,500
Common shares issued for consulting and legal services valued at $0.69 per share, April 30, 2009												7,205			7			4,993									5,000
Common shares issued for consulting services valued at $.69 per share, April 30, 2009												8,069			8			5,592									5,600
Warrants issued to Scientific Advisory Board, May 15, 2009																		30,600									30,600
Common shares issued for consulting and legal services valued at $ .66 per share, May 31, 2009												7,599			8			4,992									5,000
Common shares issued for consulting services valued at $.66 per share, May 31, 2009												8,511			9			5,590									5,599
Common shares issued for consulting services valued at $ .61 per share, June 30, 2009												24,721			25			14,975									15,000
Common shares issued for consulting and legal services valued at $ .56 per share, June 30, 2009												8,961			9			4,991									5,000
Shares issued for consulting services valued at $.56 per share, June 30, 2009												10,038			10			5,590									5,600
Common shares and warrants issued in connection with private placement of common stock, June 30, 2009												150,000			150			74,850									75,000
Common shares and warrants issued in connection with warrant conversion, June 30, 2009												2,050,700			2,051			1,023,299			(100,000	)					925,350

Net loss																								(2,787,798	)		(2,787,798	)

Balance, June 30, 2009		-		-		-			-			125,299,457			125,299			14,455,778			(100,000	)		(11,995,535	)		2,485,542

Collection of stock subscription receivable																					100,000						100,000
Common shares issued for consulting and legal services valued at $ .66 per share, July 31, 2009												7,576			8			4,992									5,000
Common shares issued for consulting services valued at $.66 per share, July 31, 2009												8,485			8			5,592									5,600
Warrants issued to Scientific Advisory Board, August 15, 2009																		41,400									41,400
Common shares issued for consulting and legal services valued at $ .86 per share, August 31, 2009												6,512			7			4,993									5,000
Common shares issued for consulting services valued at $.86 per share, August 31, 2009												5,814			6			5,594									5,600
Common shares issued for consulting services valued at $ .89 per share, September 30, 2009												6,292			6			5,594									5,600
Common shares issued for consulting and legal services valued at $ .89 per share, September 30, 2009												5,618			6			4,994									5,000

Payment of Finder's Fee																		(5,250	)								(5,250	)
Common shares and warrants issued in connection with private placement of common stock, September 30, 2009												2,675,000			2,675			1,334,825									1,337,500
Common shares and warrants issued in connection with warrant conversion, September 30, 2009												3,759,800			3,760			1,876,140									1,879,900
Common shares issued for consulting and legal services valued at $ .57 per share, October 1, 2009												35,088			35			19,965									20,000
Common shares issued for Legal services valued at $56.50 per share, October 26, 2009												12,500			13			7,050									7,063

Warrants issued for commissions, October 26, 2009																		3,570									3,570
Common shares issued for consulting and legal services valued at $ .73 per share, October 31, 2009												6,859			7			4,993									5,000
Common shares issued for consulting services valued at $.73 per share, October 31, 2009												7,682			8			5,592									5,600
Common shares issued upon conversion of Warrants, November 10, 2009												10,000			10			1,430									1,440
Warrants issued to Scientific Advisory Board, November 15, 2009																		39,600									39,600
Common shares issued in payment of accounts payable, November 25, 2009												32,500			33			25,167									25,200
Common shares issued for consulting and legal services valued at $ .86 per share, November 30, 2009												5,814			6			4,994									5,000
Common shares issued for consulting services valued at $.86 per share, November 30, 2009												9,767			10			8,390									8,400
Common shares issued for consulting services valued at $ .85 per share, December 31, 2009												9,917			10			8,390									8,400
Common shares issued for consulting and legal services valued at $ .85 per share, December 31, 2009												5,903			6			4,994									5,000
Common shares issued for consulting and legal services valued at $1.043 per share, January 31, 2010												4,794			5			4,995									5,000
Warrants issued to Scientific Advisory Board, February 15, 2010																		40,200									40,200
Series A Preferred Shares issued for TheraCour license valued at $.001 par value, February 15, 2010		7,000,000		7,000																							7,000
Common shares issued for consulting services valued at $1.096 per share, February 28, 2010												4,562			5			4,995									5,000
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010												125,000			125			156,125									156,250
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010												125,000			125			156,125									156,250
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		250,000		250														513,573									513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		250,000		250														513,573									513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		93,750		94														192,590									192,684
Common shares issued for consulting and legal servies valued at $1.25 per share, March 3, 2010												1,000			1			1,249									1,250
Common shares issued for consulting services valued at $1.417 per share, March 31, 2010												3,529			4			4,996									5,000
Common shares issued in lieu of payment of accounts payable - All Sciences												39,625			40			31,660									31,700

Common shares issued for consulting and legal services valued at $2.087 per share, April 30, 2010												2,396			2			4,998									5,000
Series B Preferred Shares issued to SeaSide 88, LP, May 12, 2010						500,000			500									4,999,500									5,000,000
Placement Agents Fees related to sale of Convertible Preferred shares, May 12, 2010																		(400,000	)								(400,000	)
Legal Fees related to Sale of Convertible Preferred Stock, May 12, 2010																		(50,000	)								(50,000	)

Derivative Liability - Issuance of Series B Preferred Shares																		(1,787,379	)								(1,787,379	)
Common shares issued for conversion of Series B Preferred Shares at $1.88 per share, May 12, 2010												319,331			319												319
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 12, 2010						(60,000	)		(60	)																	(60	)
Derivative Liability - Retirement of Series B Preferred Shares, May 12, 2010																		128,053									128,053
Warrants issued to Scientific Advisory Board, May 15, 2010																		82,800									82,800
Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, May 26, 2010												398,189			398												398
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 26, 2010						(60,000	)		(60	)																	(60	)
Dividend paid to Seaside 88, LP, May 26, 2010																		(16,877	)								(16,877	)
Common shares issued as Dividend to Seaside 88, LP at $1.64, May 26, 2010												10,300			10			16,867									16,877
Derivative Liability - Retirement of Series B Preferred Shares, May 26, 2010																		151,852									151,852
Common shares issued for consulting and legal services valued at $2.083 per share, May 31, 2010												2,400			2			4,998									5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, June 9, 2010												195,000			195			194,805									195,000
Common shares issued for conversion of Series B Preferred Shares at $1.41 per share, June 9, 2010												426,721			427												427
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 9, 2010						(60,000	)		(60	)																	(60	)

Dividend paid to Seaside 88, LP, June 9, 2010																		(14,575	)								(14,575	)
Common shares issued as Dividend to Seaside 88, LP at $1.41, June 9, 2010												10,366			10			14,565									14,575
Derivative Liability - Retirement of Series B Preferred Shares, June 9, 2010																		149,364									149,364
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010												11,300			11			19,989									20,000
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010												2,000			2			3,538									3,540
Common shares issued for conversion of Series B Preferred Shares at $1.59 per share, June 23, 2010												377,905			378												378
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 23, 2010						(60,000	)		(60	)																	(60	)

Dividend paid to Seaside 88, LP, June 23, 2010																		(12,274	)								(12,274	)
Common shares issued as Dividend to Seaside 88, LP at $1.59, June 23, 2010												7,731			7			12,268									12,275
Derivative Liability - Retirement of Series B Preferred Shares, June 23, 2010																		120,254									120,254
Common shares issued for consulting and legal services valued at $1.043 per share, June 30, 2010												2,738			2			4,998									5,000

Net loss																								(4,744,208	)		(4,744,208	)

Balance, June 30, 2010		7,593,750		7,594		260,000			260			133,980,471			133,981			23,116,612			-			(16,739,743	)		6,518,704

Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, July 7, 2010												397,088			397												397
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 7, 2010						(60,000	)		(60	)																	(60	)

Dividend paid to Seaside 88, LP, July 7, 2010																		(9,973	)								(9,973	)
Common shares issued as dividend to Seaside 88, LP at $1.65 per share, July 7, 2010												6,061			6			9,967									9,973
Derivative liability - retirement of Series B Preferred Shares, July 7, 2010																		116,715									116,715
Common shares issued for conversion of Series B Preferred Shares at $1.30 per share, July 21, 2010												463,177			463												463
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 21, 2010						(60,000	)		(60	)																	(60	)

Dividend paid to Seaside 88, LP, July 21, 2010																		(7,671	)								(7,671	)
Common shares issued as dividend to Seaside 88, LP at $1.32 per share, July 21, 2010												5,794			6			7,665									7,671
Derivative liability - retirement of Series B Preferred Shares, July 21, 2010																		113,700									113,700
Common shares issued for consulting and legal services valued at $2.087 per share, July 31, 2010												3,086			3			4,997									5,000
Common shares issued for conversion of Series B Preferred Shares at $1.14 per share, August 4, 2010												526,916			527												527
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010						(60,000	)		(60	)																	(60	)

Dividend paid to Seaside 88, LP, August 4, 2010																		(5,370	)								(5,370	)
Common shares issued as dividend to Seaside 88, LP, at $1.14 per share, August 4, 2010												4,716			5			5,365									5,370
Derivative liability - retirement of Series B Preferred Shares, August 4, 2010																		104,480									104,480
Warrants issued to Scientific Advisory Board, August 15, 2010																		45,000									45,000
Common shares issued in conversion of Series B Preferred Shares at $0.99 per share, August 18, 2010												606,367			606												606
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 18, 2010						(60,000	)		(60	)																	(60	)

Dividend paid to Seaside 88, LP, August 18, 2010																		(3,068	)								(3,068	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per share, August 18, 2010												3,101			3			3,065									3,068
Derivative liability - retirement of Series B Preferred Shares, August 18, 2010																		104,795									104,795
Common shares issued for consulting and legal services valued at $1.24 per share, August 31, 2010												4,032			4			4,996									5,000
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 1, 2010												215,332			215												215
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 1, 2010						(20,000	)		(20	)																	(20	)

Dividend paid to Seaside 88, LP, September 1, 2010																		(767	)								(767	)
Common shares issued as dividend to Seaside 88, LP at $1.00 per share, September 1, 2010												766			1			766									767
Derivative liability - retirement of Series B Preferred Shares, September 1, 2010																		34,841									34,841
Series B Preferred Shares issued to SeaSide 88, LP, September 21, 2010						250,000			250									2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, September 21, 2010																		(195,000	)								(195,000	)
Legal fees related to sale of Convertible Preferred Stock, September 21, 2010																		(10,000	)								(10,000	)

Derivative liability - issuance of Series B Preferred Shares																		(328,086	)								(328,086	)
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 21, 2010												430,015			430												430
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 21, 2010						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, September 21, 2010																		103,012									103,012
Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2010												4,673			5			4,995									5,000
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, October 5, 2010												460,246			460												460
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 5, 2010						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, on October 5, 2010																		(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, October 5, 2010												9,268			9			8,046									8,055
Derivative liability - Retirement of Series B Preferred Shares, October 5, 2010																		103,330									103,330
Common shares issued for conversion of Series B Preferred Shares at $0.88 per share, October 19, 2010												452,965			453												453
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 19, 2010						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, October 19, 2010																		(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $0.88 per share, October 19, 2010												7,384			7			6,514									6,521
Derivative liability - Retirement of Series B Preferred Shares, October 19, 2010																		69,635									69,635
Common shares issued for consulting and legal services valued at $1.03 per share, October 31, 2010												4,854			5			4,995									5,000
Series A Preferred Shares issued for employee stock compensation, November 1, 2010		30,000		30														53,903									53,933
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, November 2, 2010												461,313			461												461
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, November 2, 2010																		(4,986	)								(4,986	)
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, November 2, 2010												5,751			6			4,980									4,986
Derivative liability - retirement of Series B Preferred Shares, November 2, 2010																		69,104									69,104
Warrants issued to Scientific Advisory Board, November 15, 2010																		55,800									55,800
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, November 16, 2010												345,817			346												346
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 16, 2010						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, November 16, 2010																		(3,452	)								(3,452	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, November 16, 2010												2,984			3			3,449									3,452
Derivative liability - Retirement of Series B Preferred Shares, November 16, 2010																		69,187									69,187
Common shares issued for conversion of Series B Preferred Shares at $1.35 per share, November 30, 2010												310,566			311												311
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 30, 2010						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, November 30, 2010																		(1,918	)								(1,918	)
Common shares issued as dividend to Seaside 88, LP at $1.35 per share, November 30, 2010												1,417			1			1,917									1,918
Derivative liability - Retirement of Series B Preferred Shares, November 30, 2010																		69,449									69,449
Common shares issued for consulting and legal services valued at $1.46 per share, November 30, 2010												3,425			3			4,997									5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, December 10, 2010												25,000			25			24,975									25,000
Common shares issued as compensation pursuant to S-8 at $1.28 per share, December 10, 2010												50,000			50			63,950									64,000
Common shares issued for conversion of Series B Preferred Shares at $1.10 per share, December 14, 2010												90,840			91												91
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, December 14, 2010						(10,000	)		(10	)																	(10	)

Dividend paid to Seaside 88, LP, December 14 2010																		(384	)								(384	)
Common shares issued as Dividend to Seaside 88, LP, at $1.10 per share, December 14, 2010												348			-			384									384
Derivative liability - retirement of Series B Preferred Shares, December 14, 2010																		17,438									17,438
Series B Preferred Shares issued to SeaSide 88, LP, December 21, 2010						250,000			250									2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, December 21, 2010																		(200,000	)								(200,000	)
Common shares issued for consulting and legal services valued at $1.32 per share, December 31, 2010												4,545			5			5,995									6,000
Adjustment															33												33
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, January 3, 2011												343,796			344												344
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 3, 2011						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, January 3, 2011																		(8,904	)								(8,904	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, January 3, 2011												7,653			8			8,896									8,904
Derivative liability - retirement of Series B Preferred Shares, January 3, 2011																		73,532									73,532
Common shares issued for conversion of Series B Preferred Shares at $1.26 per share, January 17, 2011												317,965			318												318
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 17, 2011						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, January 17, 2011																		(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.26 per share, January 17, 2011												6,403			6			8,049									8,055
Derivative liability - retirement of Series B Preferred Shares, January 17, 2011																		70,882									70,882
Common shares issued for conversion of Series B Preferred Shares at $1.12 per share, January 31, 2011												356,422			356												356
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 31, 2011						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, January 31, 2011																		(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.24 per share, January 31, 2011												5,271			5			6,516									6,521
Derivative liability - retirement ofSeries B Preferred Shares, January 31, 2011																		72,432									72,432
Common shares issued for consulting and legal services valued at $1.47 per share, January 31, 2011												4,087			4			5,996									6,000
Common shares issued for conversion of warrants at $1.00 per share, February 4, 2011												25,000			25			24,975									25,000
Common shares issued for conversion of Series B Preferred Shares at $1.08 per share, February 14, 2011												370,017			370												370
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 14, 2011						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, February 14, 2011																		(4,986	)								(4,986	)
Common shares issued as dividend to Seaside 88, LP, at $1.08 per share, February 14, 2011												4,613			5			4,981									4,986
Derivative liability - retirement of Series B Preferred Shares, February 14, 2011																		71,699									71,699
Warrants issued to Scientific Advisory Board, Feburary 15, 2011																		54,000									54,000
Common shares issued for conversion of Series B Preferred Shares at $0.99 per share, February 28, 2011												405,610			406												406
Derivative liability - retirement of Series B Preferred Shares, February 28, 2011																		71,490									71,490
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 28, 2011						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, February 28, 2011																		(3,452	)								(3,452	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per shares, February 28, 2011												3,500			4			3,448									3,452
Common shares issued for consulting and legal services valued at $1.22 per share, February 28, 2011												4,902			5			5,995									6,000
Common shares issued for employee stock compensation at $1.32 per share, March 3, 2011												125,000			125			158,000									158,125
Common shares issued for employee stock compensation at $1.32 per share, March 3, 2011												125,000			125			158,000									158,125
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		250,000		250														574,331									574,581
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		250,000		250														574,331									574,581
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		93,750		94														215,374									215,468
Common shares issued for conversion of Series B Preferred Shares at $1.09 per share, March 14, 2011												367,274			367												367
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 14, 2011						(40,000	)		(40	)																	(40	)

Dividend paid to Seaside 88, LP, March 14, 2011																		(1,918	)								(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.09 per shares, March 14, 2011												1,761			2			1,916									1,918
Derivative Liability - Retirement of Series B Preferred Shares, March 14, 2011																		70,566									70,566
Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, March 28, 2011												89,986			90												90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 28, 2011						(10,000	)		(10	)																	(10	)

Dividend paid to Seaside 88, LP, March 28, 2011																		(384	)								(384	)
Common shares issued as dividend to Seaside 88, LP, at $1.11 per share, March 28, 2011												345			-			384									384
Derivative liability - retirement of Series B Preferred Shares, March 28, 2011																		17,525									17,525
Common shares issued for consulting and legal services valued at $1.28 per share, March 31, 2011												4,680			5			5,995									6,000
Common shares issued for conversion of warrants to common stock at $1.00 per share, April 10, 2011												10,000			10			9,990									10,000
Series B Preferred Shares issued to SeaSide 88, LP, April 18, 2011						250,000			250									2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, April 18, 2011																		(160,000	)								(160,000	)
Legal fees related to Sale of Convertible Preferred Stock, April 18, 2011																		(25,000	)								(25,000	)

Derivative liability - issuance of Series B Preferred Shares																		(429,725	)								(429,725	)
Common shares issued for conversion of Series B Preferred Shares at $1.28 per share, April 18, 2011												312,163			312			(272	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, April 18, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, April 18, 2011																		68,756									68,756
Common shares issued for consulting and legal services valued at $1.47 per share, April 30, 2011												4,087			4			5,996									6,000
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, May 2, 2011												339,726			340			(300	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 2, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, May 2, 2011																		68,941									68,941

Dividend paid to Seaside 88, LP, May 2, 2011																		(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per shares, May 2, 2011												6,841			7			8,048									8,055
Warrants issued to Scientific Advisory Board, May 15, 2011																		50,400									50,400
Common shares issued for conversion of Series B Preferred Shares at $1.19 per share, May 16, 2011												336,501			337			(297	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 16, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, May 16, 2011																		69,194									69,194

Dividend paid to Seaside 88, LP, May 16, 2011																		(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.20 per shares, May 16, 2011												5,438			5			6,516									6,521
Common shares issued for conversion of Series B Preferred Shares at $1.23 per share, May 30, 2011												326,480			326			(286	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 30, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, May 30, 2011																		69,464									69,464

Dividend paid to Seaside 88, LP, May 30, 2011																		(4,986	)								(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $1.23 per share, May 30, 2011												4,070			4			4,982									4,986
Common shares issued for consulting and legal services valued at $1.47 per share, May 31, 2011												4,087			4			5,996									6,000
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, June 13, 2011												339,971			340			(300	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 13, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, June 13, 2011																		69,727									69,727

Dividend paid to Seaside 88, LP, June 13, 2011																		(3,452	)								(3,452	)
Common shares issued as Dividend to Seaside 88, LP at $1.18 per share, June 13, 2011												2,934			3			3,449									3,452
Common shares issued for conversion of Series B Preferred Shares at $1.02 per share, June 27, 2011												391,850			392			(352	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 27, 2011						(40,000	)		(40	)																	(40	)
Derivative Liability - Retirement of Series B Preferred Share, June 27, 2011																		69,973									69,973

Dividend paid to Seaside 88, LP, June 27, 2011																		(1,918	)								(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.10 per share, June 27, 2011												1,741			2			1,916									1,918
Common shares issued for consulting and legal services valued at $1.22 per share, June 30, 2011												4,902			5			5,995									6,000

Net loss																								(6,477,166	)		(6,477,166	)

Balance, June 30, 2011		8,217,500		8,218		10,000			10			143,548,394			143,582			33,235,990			-			(23,216,909	)		10,170,891

																											-
Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, July 11, 2011												89,986			90												90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 11, 2011						(10,000	)		(10	)																	(10	)
Derivative liability - retirement of Series B Preferred Shares, July 11, 2011																		17,880									17,880

Dividend to Seaside 88, LP, paid on July 11, 2011																		(381	)								(381	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per share, July 11, 2011												345			-			381									381
Series B Preferred Shares issued to SeaSide 88, LP, on July 26, 2011						250,000			250									2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, July 26, 2011																		(150,000	)								(150,000	)

Derivative liability - issuance of Series B Preferred Shares																		(429,768	)								(429,768	)
Legal Fees related to Sale of Convertible Preferred Stock, July 26, 2011																		(6,250	)								(6,250	)
Common shares issued in conversion of Series B Preferred Shares to common stock at $1.18 per share, July 26, 2011												377,800			378												378
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 26, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, July 26, 2011																		68,425									68,425
Common shares issued for consulting and legal services valued at $1.26 per share, July 31, 2011												4,762			5			5,995									6,000
Warrants issued to Scientific Advisory Board, August 15, 2011																		56,400									56,400
Common shares issued for conversion of Series B Preferred Shares at $0.92 per share, August 8, 2011												437,187			437												437
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 8, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, August 8, 2011																		69,193									69,193

Dividend to Seaside 88, LP, paid on August 8, 2011																		(8,055	)								(8,055	)
Common shares issued as Dividend to Seaside 88, LP at $0.98 per share, August 8, 2011												8,205			8			8,047									8,055
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, August 23, 2011												419,829			420												420
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 23, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, August 23, 2011																		69,351									69,351

Dividend paid to Seaside 88, LP, August 23, 2011																		(6,521	)								(6,521	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, August 23, 2011												6,844			7			6,514									6,521
Common shares issued for consulting and legal services valued at $1.14 per share, August 31, 2011												5,263			5			5,995									6,000
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, September 6, 2011												422,873			423												423
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 6, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Shares, September 6, 2011																		69,887									69,887

Dividend paid to Seaside 88, LP, September 6, 2011																		(4,986	)								(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, September 6, 2011												5,264			5			4,981									4,986
Common shares issued in conversion of Series B Preferred Shares at $0.94 per share, September 19, 2011												427,652			428												428
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 19, 2011						(40,000	)		(40	)																	(40	)
Derivative liability - retirement of Series B Preferred Share, September 19, 2011																		69,970									69,970

Dividend to Seaside 88, LP, paid on September 19, 2011																		(3,452	)								(3,452	)
Common shares issued as Dividend to Seaside 88, LP at $0.94 per share, September 19, 2011												3,691			3			3,449									3,452
Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2011												5,607			6			5,994									6,000

Shares issued in conversion of Series B Preferred Shares to Common Stock at $.78 per share, .001 par value, on October 3, 2011												514,311			514												514

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 3, 2011						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on October 3, 2011																		69,496									69,496

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.85 on October 3, 2011												2,270			2			1,916									1,918

Dividend to Seaside 88, LP, paid on October 3, 2011																		(1,918	)								(1,918	)

Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on October 17, 2011												144,484			144												144

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 17, 2011						(10,000	)		(10	)																	(10	)

Derivative Liability - Retirement of Preferred Series B on October 17, 2011																		17,790									17,790

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.75 on October 17, 2011												510			1			383									384

Dividend to Seaside 88, LP, paid on October 17, 2011																		(384	)								(384	)

Shares issued for consulting and legal services rendered at $0..92 per share on October 31, 2011												6,537			5			5,995									6,000

Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on November 1, 2011						250,000			250									2,499,750									2,500,000

Placement Agents Fees related to sale of Convertible Preferred shares on November 1, 2011																		(160,000	)								(160,000	)

Derivative Liability - Issuance of Preferred Series B																		(429,804	)								(429,804	)

Legal Fees related to Sale of Convertible Preferred Stock November 1, 2011																		(25,000	)								(25,000	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.78 per share, .001 par value, on November 1, 2011												511,787			512												512

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 2, 2011						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on November 1, 2011																		68,297									68,297
Warrants issued to Scientific Advisory Board on November 15, 2011																		56,400									56,400
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on November 15, 2011												578,595			579												579

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 15, 2011						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on November 15, 2011																		68,411									68,411

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0..73 onNovember 15, 2011												10,311			10			7,469									7,479

Dividend to Seaside 88, LP, paid on November 15, 2011																		(7,479	)								(7,479	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.62 per share, .001 par value, on November 29, 2011												642,735			643												643

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 29, 2011						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on November 29, 2011																		68,591									68,591

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on November 29, 2011												10,139			10			6,511									6,521

Dividend to Seaside 88, LP, paid on November 29, 2011																		(6,521	)								(6,521	)

Shares issued for consulting and legal services rendered at $0.81 per share on November 30, 2011												7,373			7			5,993									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.53 per share, .001 par value, on December 13, 2011												751,315			751												751

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 13, 2011						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on December 13, 2011																		68,753									68,753

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 13, 2011												8,798			9			4,977									4,986

Dividend to Seaside 88, LP, paid on December 13, 2011																		(4,986	)								(4,986	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.51 per share, .001 par value, on December 27, 2011												796,785			798												798

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 27, 2011						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on December 27, 2011																		68,965									68,965

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 27, 2011												6,818			7			3,443									3,450

Dividend to Seaside 88, LP, paid on December 27, 2011																		(3,452	)								(3,452	)

Shares issued for consulting and legal services rendered at $0.64 per share on December 31, 2011												9,403			9			5,991									6,000

Shares issued in conversion of Series B Preferred Shares to Common Stock at $.51 per share, .001 par value, on January 10, 2012												788,053			788												788

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 10,2012						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on January 10, 2012																		69,222									69,222

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.51 onJanuary 10, 2012												3,742			4			1,914									1,918

Dividend to Seaside 88, LP, paid on January 10, 2012																		(1,918	)								(1,918	)

Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.48 per share, .001 par value, on January 24, 2012												208,546			209												209

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 24, 2012						(10,000	)		(10	)																	(10	)

Derivative Liability - Retirement of Preferred Series B on January 24, 2012																		69,883									69,883

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.49 on January 24, 2012												786						383									384

Dividend to Seaside 88, LP, paid on January 24, 2012																		(384	)								(384	)

Shares issued for consulting and legal services rendered at $0.58 per share on January 31, 2012												10,367			10			5,990									6,000

Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on February 8, 2012						250,000			250									2,499,750									2,500,000

Placement Agents Fees related to sale of Convertible Preferred shares on February 8, 2012																		(150,000	)								(150,000	)

Derivative Liability - Issuance of Preferred Series B																		(430,283	)								(430,283	)

Legal Fees related to Sale of Convertible Preferred Stock February 8, 2012																		(6,250	)								(6,250	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.56 per share, .001 par value, on February 8, 2012												717,142			717												717

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 8, 2012						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on February 8, 2012																		68,169									68,169
Warrants issued to Scientific Advisory Board on February 15, 2012																		51,000									51,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on February 22, 2012												576,062			576												576

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 22, 2012						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on February 22, 2012																		68,424									68,423

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.69 on February 22, 2012												11,600			12			7,467									7,479

Dividend to Seaside 88, LP, paid on February 22, 2012																		(7,479	)								(7,479	)

Shares issued for consulting and legal services rendered at $0.77 per share on February 29, 2012												7,767			8			5,992									6,000

Common shares issued for employee stock compensation at $.73 per share, March 3, 2012												125,000			125			90,812									90,937

Common shares issued for employee stock compensation at $.73 per share, March 3, 2012												125,000			125			90,812									90,937

Series A Preferred Shares issued for employee stock compensation, March 3, 2012		250,000		250														266,869									267,119

Series A Preferred Shares issued for employee stock compensation, March 3, 2012		250,000		250														266,869									267,119

Series A Preferred Shares issued for employee stock compensation, March 3, 2012		93,750		93														100,076									100,169

Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.64 per share, .001 par value, on March 07, 2012												628,289			628												628

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on March 7, 2012						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on March 7, 2012																		68,602									68,602

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on March 7, 2012												10,242			10			6,511									6,521

Dividend to Seaside 88, LP, paid on March 7, 2012																		(6,521	)								(6,521	)

Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.63 per share, .001 par value, on March 21, 2012												635,991			636												636

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on March 21, 2012						(40,000	)		(40	)																	(40	)

Derivative Liability - Retirement of Preferred Series B on March 21, 2012																		68,862									68,862

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on March 21, 2012												7,812			8			4,978									4,986

Dividend to Seaside 88, LP, paid on March 21, 2012																		(4,986	)								(4,986	)

Shares issued for consulting and legal services rendered at $0.78 per share on March 31, 2012
												7,728			8			5,992									6,000
Net loss for the nine months ended March 31, 2012
																								(4,563,148	)		(4,563,148	)
		8,811,250		8,811		90,000			90			153,630,000			153,662			41,189,132			-			(27,780,057	)		13,571,638

See accompanying notes to the financial statements

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

MARCH 31, 2012 AND 2011

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization and Nature of Business

NanoViricides, Inc. was incorporated under the laws of the State of Colorado on July 25, 2000 as Edot-com.com, Inc. and was organized for the purpose of conducting internet retail sales. On April 1, 2005, Edot-com.com, Inc. was incorporated under the laws of the State of Nevada for the purpose of re-domiciling the Company as a Nevada corporation. On May 12, 2005, the corporations were merged and Edot-com.com, Inc., the Nevada corporation, became the surviving entity.

On June 1, 2005, Edot-com.com, Inc. (“ECMM”) acquired Nanoviricide, Inc., a privately owned Florida corporation (“NVI”), pursuant to an Agreement and Plan of Share Exchange (the “Exchange”). Nanoviricide, Inc. was incorporated under the laws of the State of Florida on May 12, 2005.

Pursuant to the terms of the Exchange, ECMM acquired NVI in exchange for an aggregate of 80,000,000 newly issued shares of ECMM common stock resulting in an aggregate of 100,000,000 shares of ECMM common stock issued and outstanding. NVI then became a wholly-owned subsidiary of ECMM. The ECMM shares were issued to the NVI shareholders on a pro rata basis, on the basis of 4,000 shares of the Company’s common stock for each share of NVI common stock held by such NVI shareholder at the time of the Exchange.

As a result of the Exchange transaction, the former NVI stockholders held approximately 80% of the voting capital stock of the Company immediately after the Exchange. For financial accounting purposes, this acquisition was a reverse acquisition of the Company by NVI, under the purchase method of accounting, and was treated as a recapitalization with NVI as the acquirer. Accordingly, the financial statements have been prepared to give retroactive effect to May 12, 2005 (date of inception), of the reverse acquisition completed on June 1, 2005, and represent the operations of NVI.

On June 28, 2005, NVI was merged into its parent ECMM and the separate corporate existence of NVI ceased. Effective on the same date, Edot-com.com, Inc. changed its name to NanoViricides, Inc. and its stock symbol to “NNVC”, respectively. The Company is considered a development stage company at this time.

NanoViricides, Inc. (the “Company”), is a nano-biopharmaceutical company whose business goals are to discover, develop and commercialize therapeutics to advance the care of patients suffering from life-threatening viral infections. We are a development stage company with several drugs in various stages of early development. Our drugs are based on several patents, patent applications, provisional patent applications, and other proprietary intellectual property held by TheraCour Pharma, Inc. (“TheraCour”), to which we have the necessary exclusive licenses in perpetuity. The first agreement we executed with TheraCour Pharma on September 1, 2005, gave us an exclusive, worldwide license 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), Influenza and Asian Bird Flu Virus.

On February 15, 2010 the Company executed an Additional License Agreement with TheraCour Pharma, Inc. (“TheraCour”). Pursuant to the Additional License Agreement, the Company was granted exclusive licenses, in perpetuity, for technologies, developed by TheraCour, for the development of drug candidates for the treatment of Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes. As consideration for obtaining these exclusive licenses, we agreed to pay a onetime licensing fee equal to 7,000,000 shares of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock is convertible, only upon sale or merger of the company, or the sale of or license of substantially all of the Company’s intellectual property, into shares of the Company’s common stock at the rate of four shares of common stock for each share of Series A Preferred Stock. The Series A Preferred Stock has a preferred voting preference at the rate of four votes per share. The Preferred Series A do not contain any rights to dividends, have no liquidation preference, and are not to be amended without the holder’s approval. The 7,000,000 shares were valued at the par value of $7,000.

We focus our research and clinical programs on specific anti-viral therapeutics. We are seeking to add to our existing portfolio of products through our internal discovery and clinical development programs and through an in-licensing strategy. The Company has recently filed a pre-IND application to the US FDA for its clinical candidate NV-INF-1 in the FluCide™ program. This anti-influenza therapeutic candidate is expected to be effective against most if not all types of influenzas including Bird Flu H5N1, Highly Pathogenic Influenzas (HPI/HPAI), Epidemic Influenzas such as the 2009 “swine flu” H1N1/A/2009, and Seasonal Influenzas. To date, the Company does not have any commercialized products.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation – Interim Financial Information

The accompanying unaudited interim 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 8 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 financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which 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 financial statements and the information included under the heading “Management’s Discussion and Analysis or Plan of Operation” should be read in conjunction with our company’s audited financial statements and related notes included in our company’s form 10-K for the fiscal year ended June 30, 2011 filed with the SEC on October 13, 2011.

For a summary of significant accounting policies (which have not changed from June 30, 2011), see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011.

Recently Issued Accounting Pronouncements

FASB Accounting Standards Update No. 2011-05

In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05 “Comprehensive Income” (“ASU 2011-05”), which was the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income, by eliminating the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance now gives entities the option to present all non-owner changes in stockholders’ equity either as a single continuous statement of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the amendments require entities to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.

The amendments in this Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within those years, beginning after December 15, 2011.

FASB Accounting Standards Update No. 2011-08

In September 2011, the FASB issued the FASB Accounting Standards Update No. 2011-08 “Intangibles—Goodwill and Other: Testing Goodwill for Impairment” (“ASU 2011-08”). This Update is to simplify how public and nonpublic entities test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.

The guidance is effective for interim and annual periods beginning on or after December 15, 2011. Early adoption is permitted.

FASB Accounting Standards Update No. 2011-10

In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-10 “Property, Plant and Equipment: Derecognition of in Substance Real Estate-a Scope Clarification” (“ASU 2011-09”). This Update is to resolve the diversity in practice as to how financial statements have been reflecting circumstances when parent company reporting entities cease to have controlling financial interests in subsidiaries that are in substance real estate, where the situation arises as a result of default on nonrecourse debt of the subsidiaries.

The amended guidance is effective for annual reporting periods ending after June 15, 2012 for public entities. Early adoption is permitted.

FASB Accounting Standards Update No. 2011-11

In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.

The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.

FASB Accounting Standards Update No. 2011-12

In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-12 “Comprehensive Income: Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). This Update is a deferral of the effective date pertaining to reclassification adjustments out of accumulated other comprehensive income in ASU 2011-05. FASB is to going to reassess the costs and benefits of those provisions in ASU 2011-05 related to reclassifications out of accumulated other comprehensive income. Due to the time required to properly make such a reassessment and to evaluate alternative presentation formats, the FASB decided that it is necessary to reinstate the requirements for the presentation of reclassifications out of accumulated other comprehensive income that were in place before the issuance of Update 2011-05.

All other requirements in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011.

Other Recently Issued, but Not Yet Effective Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Note 3 – Financial Condition

The Company’s financial statements for the interim period ended March 31, 2012 have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company has a deficit accumulated during the development stage. In addition, the Company has not generated any revenues and no revenues are anticipated in the short-term. 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 March 31, 2012 the Company had cash and cash equivalents of $12,984,397. The Company does not currently have any long term debt. The Company has sufficient capital to continue its business, at least, through March 31, 2014, at the current rate of expenditure. The Company therefore would not be considered to have risks relative to its ability to continue as a going concern within the applicable guidelines.

While the Company continues to incur significant operating losses and has significant capital requirements, the Company has been able to finance its business through the sale of its securities (See Note 6). On November 2, 2011, the Company entered into an Securities Purchase Agreement (the “Agreement”) with Seaside 88, LP (“Seaside”), relating to the offering and sale (the “Offering”) of up to 500,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) at the purchase price of $10.00 per share (the “Purchase Price”). On November 2, 2011, Seaside purchased an initial 250,000 shares of the Series B Preferred Stock for an aggregate purchase price of $2,500,000 (the “Initial Closing”). On February 8, 2012 Seaside purchased the remaining 250,000 shares of the Series B Preferred Stock for the purchase price of $2,500,000 (the “Subsequent Closing”). The Company has sufficient capital to continue its business, at least, through March 31, 2014, at the current rate of expenditure. The Company therefore would not be considered to have risks relative to its ability to continue as a going concern within the applicable guidelines.

Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral nanomedicines. The Company has not yet commenced any product commercialization. The Company has incurred significant losses from operations since its inception, resulting in a deficit accumulated during the development stage of $27,780,057 at March 31, 2012 and expects recurring losses from operations 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. Despite the Company’s financings in 2011 and 2010 and a cash and cash equivalent balance of $12,984,397 at March 31, 2012, substantial additional financing will be required in future periods. The Company may require additional capital to finance planned and currently unplanned capital costs, and additional staffing requirements during the next twenty four months. The Company has, in the past, adjusted its priorities and goals in line with the cash on hand and capital availability. The Company believes it can adjust its priorities of drug development and its Plan of Operations as necessary, if it is unable to raise such additional funds.

Note 4 – Significant Alliances and Related Parties

TheraCour Pharma, Inc.

Pursuant to an Exclusive License Agreement we entered into with TheraCour Pharma, Inc., (TheraCour), the Company was granted exclusive licenses in perpetuity for technologies developed by TheraCour for the virus types: HIV, HCV, Herpes, Asian (bird) flu, Influenza and rabies. In consideration for obtaining this exclusive license, we agreed: (1) that TheraCour can charge its costs (direct and indirect) plus no more than 30% of direct costs as a Development Fee and such development fees shall be due and payable in periodic installments as billed, (2) we will pay $25,000 per month for usage of lab supplies and chemicals from existing stock held by TheraCour, (3) we will pay $2,000 or actual costs, whichever is higher for other general and administrative expenses incurred by TheraCour on our behalf, (4) make royalty payments (calculated as a percentage of net sales of the licensed drugs) of 15% to TheraCour Pharma, Inc. and (5) agreed that TheraCour Pharma, Inc. retains the exclusive right to develop and manufacture the licensed drugs. TheraCour Pharma, Inc. agreed that it will manufacture the licensed drugs exclusively for NanoViricides, and unless such license is terminated, will not manufacture such product for its own sake or for others.

On February 15, 2010, the Company executed an Additional License Agreement with TheraCour Pharma, Inc. (“TheraCour”). Pursuant to the exclusive Additional License Agreement, the Company was granted exclusive licenses, in perpetuity, for technologies developed by TheraCour for the development of drug candidates for the treatment of Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes. As consideration for obtaining these exclusive licenses, we agreed to pay a onetime licensing fee equal to seven million shares of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock is convertible, only upon sale or merger of the company, or the sale of or license of substantially all of the Company’s intellectual property, into shares of the Company’s common stock at the rate of four shares of common stock for each share of Series A Preferred Stock. The Series A Preferred Stock has a preferred voting preference at the rate of four votes per share. The Preferred Series A do not contain any rights to dividends; have no liquidation preference and are not to be amended without the holders approval. The issuance of the 7,000,000 shares was valued at their par value or $7,000.

TheraCour Pharma, Inc. may terminate these licenses upon a material breach by us as specified in the agreement.

Development costs charged by and paid to TheraCour were $1,359,100 and $876,860 for the nine months ended March 31, 2012, and 2011, respectively and $6,262,005 since inception. As of March 31, 2012, pursuant to its license agreement, the Company has paid a security advance of $256,284 to and held by TheraCour which is reflected in Prepaid Expenses. No royalties are due TheraCour from the Company’s inception through March 31, 2012.

Anil R. Diwan, President, and a director of the Company, is also a Director and President of TheraCour. Dr. Diwan owns approximately 70% of the common stock of TheraCour, which itself owns approximately 21.71% of the Common stock of the Company.

TheraCour owns 33,360,000 shares of the Company’s outstanding common stock as of March 31, 2012.

KARD Scientific, Inc.

In June 2005, the Company engaged KARD Scientific to conduct preclinical animal studies and provide the Company with a full history of the study and final report with the data collected from Good Laboratory Practices (CGLP) style studies. Dr. Krishna Menon, the Company’s Consulting Chief Regulatory Officer, a non-executive position, is also an officer and principal owner of KARD Scientific. Lab fees charged by KARD Scientific for services for the nine months ended March 31, 2012, and 2011, were $336,420 and $719,462 respectively, and $1,689,057 since inception.

KARD Scientific Inc. of Beverly, Massachusetts, is currently our primary vendor for animal model study design and performance. KARD operates its own facilities in Beverly, Massachusetts.

NanoViricides has a fee for service arrangement with KARD. We do not have an exclusive arrangement with KARD; we do not have a contract with KARD; any work to be performed by KARD must be commissioned by the executive officers of NanoViricides; and we retain all intellectual property resulting from the services by KARD.

Note 5 - Prepaid Expenses

Prepaid Expenses are summarized as follows:

	March 31, 2011		June 30, 2011
TheraCour Pharma, Inc.	$	256,284	$	306,160
Prepaid Others		39,465		26,134
	$	295,749	$	332,294

Note 6 – Equity Transactions

On November 2, 2011, the Company entered into an additional Securities Purchase Agreement (the “Agreement”) with Seaside 88, LP (“Seaside”) relating to the offering and sale (the “Offering”) of up to 500,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) at the purchase price of $10.00 per share (the “Purchase Price”). No warrants were issued in connection with this offering. On November 2, 2011, Seaside purchased an initial 250,000 shares of the Series B Preferred Stock for an aggregate purchase price of $2,500,000 (the “Initial Closing”). Also on November 2, 2011, 40,000 shares of the Series B Preferred Stock automatically converted into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a conversion price of $0.782 per share.

The Follow-on closing occurred on February 8, 2012 at which time Seaside purchased the remaining 250,000 shares of the Series B Preferred Stock for the purchase price of $2,500,000 (the “Subsequent Closing).

The Agreement contains representations and warranties and covenants for each party, which must be true and have been performed at each closing. Additionally, the Company has agreed to indemnify and hold harmless Seaside against certain liabilities in connection with the issuance and sale of the Series B Preferred Stock under the Agreement.

The offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-165221), which was declared effective by the Securities and Exchange Commission on April 29, 2010. The Company, pursuant to Rule 424(b) under the Securities Act of 1933, has filed with the Securities and Exchange Commission a prospectus supplement relating to the offering.

In connection with the offering, pursuant to a placement agency agreement entered into by and between Midtown Partners & Co., LLC (“Midtown”) and the Company, as amended by an Underwriter Agent Agreement Amendment No. 1, dated March 28, 2011 (as amended, the “Placement Agency Agreement”), on November 3, 2011 (the “Placement Agent Agreement”), the Company paid Midtown a cash fee representing 6% of the gross purchase price paid by Seaside for the Series B Preferred Stock, totaling $150,000. The Company also paid a one-time legal expenses fee of $ 25,000 To Midtown on November 3, 2011. In addition, subsequent to the February 8, 2012 follow-on closing (see above), the Company paid Midtown a cash fee representing 6% of the gross purchase price paid by Seaside for the Series B Preferred Stock, totaling $150,000.

During the nine months ended March 31, 2012, Seaside converted the following amounts of Series B Preferred Stock into the Company’s Common Stock:

Date of Conversion	Number of Shares of Series B Converted		Conversion Price		Number of Shares of .001 par value Common Stock Issued Pursuant to Conversion		Dividend Conversion Price		Dividend Shares Issued		Total Shares of .001 par value Common Stock Issued to Seaside
07/11/2011		10,000		1.11129		89,986		1.11129		345		90,331
07/26/2011		40,000		1.05876		377,800		—		—		377,800
08/08/2011		40,000		0.91494		437,187		0.98167		8,205		445,392
08/23/2011		40,000		0.95277		419,829		0.95277		6,844		426,673
09/06/2011		40,000		0.94591		422,873		0.94733		5,264		428,137
09/19/2011		40,000		0.93534		427,652		0.93534		3,691		431,343
10/03/2011		40,000		0.77774		514,311		0.84473		2,270		516,581
10/17/2011		10,000		0.69212		144,484		0.75149		510		144,994
11/02/2011		40,000		0.781575		511787		—		—		511,787
11/15/2011		40,000		0.69133		578,595		0.72539		10,311		588,906
11/29/2011		40,000		0.62234		642,735		0.64311		10,139		652,874
12/13/2011		40,000		0.5324		751,315		0.56678		8,798		760,113
12/27/2011		40,000		0.50635		796,785		0.50635		6,818		803,603
01/10/2012		40,000		0.50758		788,053		0.50758		3,742		791,795
01/24/2012		10,000		0.47951		208,546		0.48773		786		209,322
02/08/2012		40,000		0.55777		717,142		0.00000		-		717,142
02/22/2012		40,000		0.69437		576,062		0.69437		11,600		587,662
03/07/2012		40,000		0.63665		628,289		0.63665		10,242		638,531
03/21/2012		40,000		0.62894		635,991		0.63827		7,812		643,803

Unregistered Securities

In August, 2011, the Scientific Advisory Board (SAB) was granted warrants to purchase 60,000 shares of common stock at $1.41 per share expiring in February ,2015. These warrants were valued at $56,400 and recorded as consulting expense.

In November, 2011, the Scientific Advisory Board (SAB) was granted warrants to purchase 60,000 shares of common stock at $.948 per share expiring in November, 2015. These warrants were valued at $56,400 and recorded as consulting expense.

In February, 2012, the Scientific Advisory Board (SAB) was granted warrants to purchase 60,000 shares of common stock at $1.09 per share expiring in February, 2016. These warrants were valued at $51,000 and recorded as consulting expense.

For the nine months ended March 31, 2012, the Company's Board of Directors authorized the issuance of 64,807 shares of its common stock with a restrictive legend for consulting services. The Company recorded an expense of $54,000.

Note 7 - Commitments and Contingencies

Operating Lease

The Company’s principal executive offices are located at 135 Wood Street, West Haven, Connecticut, and include approximately 7,000 square feet of office and laboratory space at a base monthly rent of $7,311. The term of lease expired on February 28, 2011 and is now on a month-by-month basis.

Total rent expense amounted to $87,767 and $75,395 for the nine months ended March 31, 2012 and 2011, respectively.

Legal Proceedings

On or around December 22, 2011, the Connecticut Secretary of the State, as agent for service of process for the Company, was served with a Summons and Complaint in the case entitled David F. Gencarelli, Esq. d/b/a Gencarelli Group v. Nanoviricides, Inc. (Case No. 2011-CA-006555-B) filed in the Superior Court for the district of Columbia Civil Division. The Complaint for breach of contract, unjust enrichment, and quantum merit claims unpaid legal fees of $77,601.00 Management believes that the lawsuit has no merit or basis and intends to defend the lawsuit vigorously, and as a result no accrual has been made in relation to this litigation.

On or around January 18, 2012, the Nevada Agency and Transfer Company, as agent for service of process for the Company in Nevada, was served with a Summons and Complaint in the case entitled Yidam, Ltd. v. Eugene Seymour, Anil Diwan, and Nanoviricides, Inc. (Case No. A-12-654437-B) answerable in the Eighth Judicial District Court of the State of Nevada – Clark County (“Court”). The Complaint seeks to compel inspection of the Company’s books and records. On or about February 14, 2012, we filed a Motion to Dismiss the Complaint for failure to state a claim upon which relief can be granted. The Complaint further seeks unspecified “injunctive relief” in furtherance of the demand for inspection to which it is not entitled. The Complaint by a holder of less than 1 percent of the common stock of the Company seeks to, inter alia, inspect documents and records of the company to which it is not entitled and in a form and manner the Company argues is not authorized by statute. Management believes that this lawsuit has no merit or basis and intends to vigorously defend it. Monetary damages have not been claimed and as a result no accrual has been made in relation to this litigation. On April 9, 2012, the Court dismissed the Complaint for failure to state a Claim for which relief could be granted.

On or around April 13, 2012, the Nevada Agency and Transfer Company, as agent for service of process for the Company in Nevada, was served with a Summons and Complaint in the case entitled Yidam, Ltd. v. Eugene Seymour, Anil Diwan, and Nanoviricides, Inc. ((Case No. A-12-659535-B) answerable in the Eighth Judicial District Court of the State of Nevada – Clark County (“Court”). The Complaint seeks to compel inspection of the Company’s books and records. On or about May 2, 2012, we filed a Demand for Security of Costs. Upon filing of the Demand, proceedings relative to the Company are stayed pending posting of the demanded security (or plaintiff engages in motion practice about the Demand). 30 days (+3 for mailing) from service, the Company may seek dismissal of the complaint if plaintiff has not posted the demanded security (or engaged the court). The Company will have 10 days after service of notice of posting within which to answer or otherwise respond to the complaint. The Complaint further seeks unspecified “injunctive relief” in furtherance of the demand for inspection to which it is not entitled. The Complaint, by a holder of less than 1 percent of the common stock of the Company, seeks to, inter alia, inspect documents and records of the company to which it is not entitled and in a form and manner the Company argues is not authorized by statute. Management believes that this lawsuit has no merit or basis and intends to vigorously defend it. Monetary damages have not been claimed and as a result no accrual has been made in relation to this litigation

Note 8 – Subsequent Events

Management has evaluated all events that occurred after the balance sheet date through the date when these financial statements were issued to determine if they must be reported. The Management of the Company has determined that there was a reportable subsequent event to be disclosed as follows:

On May 8, 2012, the United States Patent and Trademark Office granted Patent No. 8,173,764 for "Solubilization and Targeted Delivery of Drugs with Self-Assembling Amphiphilic Polymers" to the inventors Anil R. Diwan, PhD, Jayant G. Tatake, PhD, and Ann L. Onton, all of who are among the founders of NanoViricides, Inc. The patents have been assigned to AllExcel, Inc., the Company at which the ground-breaking work was performed. AllExcel, Inc. has contractually transferred this intellectual property to TheraCour Pharma, Inc.

NanoViricides, Inc. holds exclusive worldwide licenses to these technologies for a broad range of antiviral applications and diseases that include All Influenzas including Asian Bird Flu Virus, Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Herpes Simplex Virus (HSV), Dengue viruses, Rabies virus, Ebola/Marburg viruses, Japanese Encephalitis virus, as well as viruses causing viral

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

The following discussion should be read in conjunction with the information contained in the consolidated financial statements of the Company and the notes thereto appearing elsewhere herein and in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in the Company's Annual Report on Form 10-K for the year ended June 30, 2011. Readers should carefully review the risk factors disclosed in this Form 10-K and other documents filed by the Company with the SEC.

As used in this report, the terms "Company", "we", "our", "us" and "NNVC" refer to NanoViricides, Inc., a Nevada corporation.

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "NNVC believes," "management believes" and similar language. The forward-looking statements are based on the current expectations of NNVC and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report. Actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.

Investors are also advised to refer to the information in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.

Management’s Plan of Operation

The Company’s drug development business model was formed in May 2005 with a license to the patents and intellectual property held by TheraCour Pharma, Inc., that enabled creation of drugs engineered specifically to combat viral diseases in humans. This exclusive, perpetual, world-wide license from TheraCour Pharma serves as the foundation for our intellectual property. The Company was granted a worldwide exclusive perpetual license to this technology for several drugs with specific targeting mechanisms in perpetuity for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Rabies, Herpes Simplex Virus (HSV), Influenza and Asian Bird Flu Virus. The Company has entered into an Additional License Agreement with TheraCour granting the Company the exclusive licenses in perpetuity for technologies developed by TheraCour for the additional virus types: Dengue viruses, Japanese Encephalitis virus, West Nile Virus, Viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes, and Ebola/Marburg viruses. The Company may want to add further virus types to its drug pipeline. The Company would then need to negotiate with TheraCour an amendment to the Licensing Agreement to include those of such additional viruses that the Company determines it wants to follow for further development. We are seeking to add to our existing portfolio of products through our internal discovery pre-clinical development programs and through an in-licensing strategy.

The Company intends to perform the regulatory filings and own all the regulatory licenses for the drugs it is currently developing. The Company will develop these drugs in part via subcontracts to TheraCour Pharma, Inc., the exclusive source for these nanomaterials. The Company may manufacture these drugs itself, or under subcontract arrangements with external manufacturers that carry the appropriate regulatory licenses and have appropriate capabilities. The Company intends to distribute these drugs via subcontracts with distributor companies or in partnership arrangements. The Company plans to market these drugs either on its own or in conjunction with marketing partners. The Company also plans to actively pursue co-development, as well as other licensing agreements with other Pharmaceutical companies. Such agreements may entail up-front payments, milestone payments, royalties, and/or cost sharing, profit sharing and many other instruments that may bring early revenues to the Company. Such licensing and/or co-development agreements may shape the manufacturing and development options that the company may pursue. There can be no assurance that the Company will be able to enter into co-development or other licensing agreements.

To date, we have engaged in organizational activities; developing and sourcing compounds and preparing nano-materials; and experimentation involving preclinical studies using cell cultures and animals. Several of the Company’s drug candidates have shown excellent levels of efficacy and preliminary safety in animal studies in many different animal models against many different viruses. The Company determined that its anti-Influenza program, “FluCide™”, was the most advanced and obtained and held a pre-IND meeting with the US FDA for the same on March 29, 2012. The Company believes it has gained valuable guidance from the FDA that enables us to develop and execute a product development plan for our anti-influenza drug candidate with the goal of filing an Investigational New Drug (IND) application to the US FDA, and similar applications in other countries in the world.

As the Company’s drug candidates progress towards human clinical studies, it has become necessary to enable that they can be produced under “current Good Manufacturing Practices” (cGMP) guidelines of the US FDA, and other applicable international guidelines (such as WHO and ICH guidelines, as well as other country-specific and region-specific guidelines). In the US, the US FDA requires that at least two validated and consistent batches of the drug be produced under cGMP conditions before any human clinical trials can be allowed. Some other countries may allow research product materials for certain phases of human clinical trials. The Company’s management has studied the possibilities of contract manufacturing of its drug candidates over the last several years and has concluded that building a small pilot scale manufacturing facility where the special needs of the manufacture of its nanomedicines can be met is the most appropriate solution. This approach provides the highest level of control over the quality of the materials and also keeps the intellectual property of the Company well protected. Further, to minimize capital costs to the Company, management determined that a separate entity should be allowed to purchase the real estate, renovate, build and maintain the facilities under the Company’s direction and control. Some of the original investors of NanoViricides, Inc. had shown interest in obtaining a controlling share in such a separate entity. However, as of now these parties have not engaged into financing this entity, citing the extremely low rate of return on this potentially high risk investment. A separate entity, Inno-Haven, LLC (“Inno-Haven”), controlled by Anil R. Diwan, the Company’s founder, was created for this purpose. Inno-Haven purchased an 18,000 sq. ft. light manufacturing building on a 4.2 acre land lot in Shelton, Connecticut in August, 2011. The purchase and related costs were financed by Dr. Diwan through his personal savings, and the saleof NanoViricides common stockthat he had acquired as a founder, that netted approximately $900,000 after expenses and income taxes. The 10b(5) plan was concluded in October, 2011. Inno-Haven has also obtained additional financing from certain other parties. Inno-Haven intends to obtain additional financing from investors other than Dr. Diwan. Dr. Diwan has also agreed to provide personal guarantees for possible loans and mortgages that would be drawn for the purpose of financing the building and construction costs for the extensive renovation intended.

The Company has agreed to provide Inno-Haven the specifications and plans for the cGMP pilot facility and laboratory and office spaces that are anticipated to be built by renovating the existing building. As of date, the Company does not have a lease or other written contract agreement with Inno-Haven other than an intent, and the Company is not bound to execute on this plan if it can find a superior alternative.

We have generated funding through the issuances of debt and private placement of common stock (see Item 5 Recent Sales of Unregistered Securities), and also the sale of our registered securities. The Company does not currently have any long term debt. We have not generated any revenues and we may not be able to generate revenues in the near future. We may not be successful in developing our drugs and start selling our products when planned, or we may not become profitable in the future. We have incurred net losses in each fiscal period since inception of our operations.

Collaborative Agreements and Contracts

On December 23, 2005, the Company signed a Memorandum of Understanding (MOU) with the National Institute of Hygiene and Epidemiology in Hanoi (NIHE), a unit of the Vietnamese Government’s Ministry of Health. This Memorandum of Understanding calls for cooperation in the development and testing of certain nanoviricides. The parties agreed that NanoViricides will retain all intellectual property rights with respect to any resulting product and that the initial target would be the development of drugs against H5N1 (avian influenza). NIHE thereafter requested that we develop a drug for rabies, a request to which we agreed. The initial phase of this agreement called first for laboratory testing, followed by animal testing of several drug candidates developed by the Company. Preliminary laboratory testing of FluCide™-I, AviFluCide™ -and AviFluCide-HP™ were successfully performed at the laboratories of the National Institute of Hygiene and Epidemiology in Hanoi (NIHE), against both clade 1 and clade 2 of H5N1 virus isolated in Vietnam. Successful animal testing of RabiCide™, the company’s anti-rabies drug, was performed in Vietnam during the first half of 2007, and reproducibly repeated in 2008. Rabies testing can safely be done at their BSL2 facility. The H5N1 animal testing requires a BSL3 (biological safety laboratory level 3) laboratory. NIHE has acquired a BSL3 animal testing capacity during 2008. While the MOU provides for a final agreement between the Company and NIHE, we have not yet discussed a “final agreement” with NIHE and continue to work under the existing MOU. There are no financial obligations or responsibilities for either the Company or NIHE pursuant to the provisions of the MOU.

We have finalized execution of a Materials Cooperative Research and Development Agreement (M-CRADA) with the Centers for Disease Control and Prevention (CDC), Atlanta, GA in July, 2008. This agreement was initiated based on our success against Rabies in the animal studies conducted at NIHE Vietnam. Preliminary animal studies against Rabies were expected to start in the last quarter of calendar year 2009 or first quarter of calendar year 2010. The Company has lowered the priority of this program during the recent economic crisis in order to employ our resources most effectively. Subsequent to the agreement execution, the Company has supplied certain materials to CDC for testing. This testing, if successful, is expected to expand to involve potential use of nanoviricides as (1) a post- infection therapeutic drug against rabies, possibly in conjunction with a rabies vaccine, and (2) a post-exposure prophylactic drug against rabies, to replace costly human or monoclonal antibodies, possibly in conjunction with a rabies vaccine. To date, there is no effective post-infection therapeutic against rabies. Post-exposure prophylaxis market has been estimated to be as much $300M to $500M worldwide.

We have finalized a Materials Transfer Agreement (MTA) with the United States Army Institute of Infectious Diseases (USAMRIID) to develop antiviral agents against Ebola, Marburg and other hemorrhagic viruses in October 2007. Preliminary studies began in February, 2008. Certain nanoviricides candidates were found to be highly successful against Ebola virus in pre-clinical cell culture studies. Ebola virus is known to produce, in vivo, a soluble decoy protein that is a portion of its surface glycoprotein. If the nanoviricides that were successful in the in vitro studies bind to the decoy protein portion of the Ebola virus envelope, then we would expect that the nanoviricides would be neutralized in vivo by the decoy protein. We are therefore developing novel ligands that would potentially bind to the Ebola virus glycoprotein portion that is known to be not a part of the decoy protein. The MTA was extended for another year in October, 2009 to continue these studies. The Company has lowered the priority of this program following the economic crisis of 2008-2009 in order to employ our resources most effectively.

We have finalized an agreement with a Medical Institute to perform animal studies of our eye drop formulation of nanoviricides against viral EKC (viral Epidemic Kerato-conjunctivitis) in March, 2008. The first EKC-Cide™ animal study was completed in June, 2008. The study indicated that the best nanoviricide drug candidate showed excellent clearance of clinical signs of the disease, viz. redness of the eye as well as sticky exudates, in a short time after treatment.

On May 6, 2009, the Company entered into a Clinical Study Agreement with THEVAC, LLC, a company affiliated with the Emerging Technology Center of the Louisiana State University. At present, TheVac is performing biological testing of anti-herpes nanoviricides. TheVac is conducting studies on the effect of anti-herpes nanoviricide drug candidates against herpes cold sores and genital herpes in cell culture models. In addition, TheVac is also conducting studies on the effect of anti-herpes nanoviricides drug candidates in a mouse model of herpes keratitis. Professor Gus Kousoulas and his team at Louisiana State University have validated and published on this animal model extensively in peer-reviewed scientific journals.

On February 16, 2010, the Company announced that it had signed a research and development agreement with Dr. Eva Harris’s laboratory at the University of California, Berkeley (UC Berkeley). Under this agreement, Dr. Harris and coworkers will evaluate the effectiveness of nanoviricides® drug candidates against various dengue viruses. Cell culture models as well as in vivo animal studies will be employed for testing the drug candidates. Dr. Eva Harris is a Professor of Infectious Diseases at UC Berkeley. She is a leading researcher in the field of dengue. Her group has developed a unique animal model for dengue virus infection and disease that effectively emulates the pathology seen in humans. In particular, the critical problem of dengue virus infection, called “Antibody-Dependent Enhancement” (ADE), is reproduced in this animal model. When a person who was previously infected with one serotype of dengue virus is later infected by a different serotype, the antibodies produced by the immune system can lead to increased severity of the second dengue infection, instead of controlling it. ADE thus can lead to severe dengue disease or dengue hemorrhagic fever (DHF).

On May 13, 2010, the Company announced that it had entered into a Research and Development Agreement with Professor Ken Rosenthal Lab at NEOUCOM (now called NEOMED). Professor Rosenthal has developed in vitro or cell culture based tests for identifying the effectiveness of antiviral agents against HSV. He has also developed a skin lesion mouse model for HSV infection. Dr. Rosenthal has been involved in the evaluation of HSV vaccines as well as anti-HSV drugs. His laboratory has developed an improved mouse model of skin-infection with HSV to follow the disease progression. This model has been shown to provide highly uniform and reproducible results. A uniform disease pattern including onset of lesions and further progression to zosteriform lesions is observed in all animals in this model. This uniformity makes it an ideal model for comparative testing of various drug candidates. Dr. Rosenthal is a professor of microbiology, immunology and biochemistry at Northeastern Ohio Universities Colleges of Medicine and Pharmacy (NEOUCOM). He is a leading researcher in the field of herpes viruses. His research interests encompass several aspects of how herpes simplex virus (HSV) interacts with the host to cause disease. His research has addressed how HSV infects skin cells and examined viral properties that facilitate its virulence and ability to cause encephalitis. In addition, Dr. Rosenthal has also been studying a viral protein that makes the HSV more virulent by helping the virus to take over the cellular machinery to make copies of its various parts, assemble these parts together into virus particles and release the virus to infect other cells. He is also researching how the human host immune response works against HSV for the development of protective and therapeutic vaccines.

On August 16, 2010, the Company reported that its anti-Herpes drug candidates demonstrated significant efficacy in the recently completed cell culture studies in Dr. Rosenthal Lab at NEOUCOM. Several of the anti-Herpes nanoviricides® demonstrated a dose-dependent maximal inhibition of Herpes virus infectivity in a cell culture model. Almost complete inhibition of the virus production was observed at clinically usable concentrations. These studies employed the H129 strain of herpes simplex virus type 1 (HSV-1). H129 is an encephalitic strain that closely resembles a clinical isolate; it is known to be more virulent than classic HSV-1 laboratory strains. The H129 strain will be used in subsequent animal testing of nanoviricides.

On May 17, 2010, the Company announced that it had signed a research and development agreement with the University of California, San Francisco (UCSF), for the testing of its anti-HIV drug candidates. Cheryl Stoddart, PhD, Assistant Professor in the UCSF Division of Experimental Medicine, will be the Principal Investigator. The Company plans to continue its anti-HIV in vitro (cell culture) testing program at the Southern Research Institute in Frederick, MD. The Company also plans to continue its anti-HIV in vivo (animal model) testing program at KARD Scientific, MA. The animal model for HIV, the SCID-hu mouse model is a complex and expensive model. Due to budgetary constraints, our anti-HIV program had to be slowed down in the last few years.

Subsequent Events.

On April 2, 2012, the Company announced that its previously announced pre-IND Meeting was held with the USFDA on March 29th, 2012, as scheduled. This pre-IND meeting focused on FluCide™, designated as NV-INF-1, the Company’s novel anti-influenza drug. The Company received US FDA comments and exchanged a list of questions with the US FDA prior to the Meeting. The Company believes that the US FDA has given us a good roadmap for advancing towards an IND application.

On May 7, 2012, the Company announced that a fundamental patent, on which the Nanoviricides® technology is based, was due to be issued in the USA on May 8, 2012. The US Patent (No. 8,173,764) is granted for "Solubilization and Targeted Delivery of Drugs with Self-Assembling Amphiphilic Polymers." The patent term is expected to last through October 1, 2026, including an anticipated extension, with the possibility of further extensions in compensation for time spent in clinical trials.

This US Patent has been allowed with a very broad range of claims to a large number of families of chemical structure compositions, pharmaceutical compositions, methods of making the same, and uses of the same. The disclosed structures enable self-assembling, biomimetic nanomedicines. NanoViricides, Inc. holds exclusive, perpetual, worldwide licenses to these technologies for a broad range of antiviral applications and diseases.

Based on international PCT application number WO 2007/1084126, which was filed in 2006, corresponding patents have also been issued in Mexico, New Zealand, South Africa, and as a regional (OAPI) patent valid in sixteen other African states. Additional issuances are expected in Europe, and in several other countries around the world.

On May 8, 2012 the United States Patent and Trademark Office granted Patent No. 8,173,764 for "Solubilization and Targeted Delivery of Drugs with Self-Assembling Amphiphilic Polymers" to the inventors Anil R. Diwan, PhD, Jayant G. Tatake, PhD, and Ann L. Onton, all of who are among the founders of NanoViricides, Inc. The patents have been assigned to AllExcel, Inc., the Company at which the ground-breaking work was performed. AllExcel, Inc. has contractually transferred this intellectual property to TheraCour Pharma, Inc.

Additional patents have also been filed to protect portions of the proprietary intellectual property on which the licenses from TheraCour to NanoViricides are based.

On May 14, 2012, the Company announced that it has retained Mr. Andrew Hahn as a consultant to help with the overall design and construction of its laboratory and cGMP pilot production facility. This facility will be built by renovating an existing 18,000 sq. ft. light manufacturing plant on a 4.2 acre lot in Shelton, CT, as previously announced. Mr. Hahn will help the Company in the overall design, architecture, engineering, and construction of the whole facility that includes the cGMP facility, laboratories, and office spaces. Mr. Hahn recently retired as the Senior Director of Engineering, Pharmaceutical Facilities, Global Engineering, at the Bristol-Myers-Squibb Company Worldwide Medicines Group (BMS). He has almost 30 years of experience in architecture, design and project management in the creation of new and refurbished facilities at Bristol-Myers Squibb Company.

Of importance to the Company’s project, he was responsible for the worldwide design and construction of pharmaceutical plants, pilot plants and clinical supply facilities as well as research laboratories and offices while at BMS. Mr. Hahn holds a BA in Architecture from Princeton University. His responsibilities at BMS included overall management of facilities engineering, design, construction, and validation initiatives, overall project planning and management, as well as team-building and staff training in various aspects from architectural and engineering challenges to project management issues.

The Company has previously announced the acquisition of the Shelton light industrial building that will house the cGMP pilot production plant, research laboratories and offices, by a separate real-estate holding company called Inno-Haven, LLC. The cGMP pilot plant is being designed to produce sufficient quantities of the drug needed for human clinical trials for each of the various nanoviricides® drug candidates as they advance into the clinical pipeline. This cGMP plant is not intended for the commercial production of drugs for sale. The Company believes that as its drugs progress through the human clinical trials, it will be able to license or partner further drug development and commercialization activities to another pharmaceutical company. There can be no assurance that the Company will be able to enter into co-development or other licensing agreements.

The Company’s Drug Pipeline

Management believes that it has achieved significant milestones in the development of a number of antiviral nanoviricide drug candidates. We now have high efficacy lead drug candidates against five commercially important diseases, namely, (1) All Influenza viruses (FluCide-I™), (2) HIV (HIVCide-I™), (3) Nanoviricide Eye Drops for Viral Infections of the External Eye, (4) a nanoviricide against Herpes “Cold Sores” and genital herpes, and (5) Dengue viruses. Further, the Company has identified highly active nanoviricide drug candidates against Ebola/Marburg, and against Rabies. In addition, the Company has also established the technology feasibility for (a) broad-spectrum nanoviricides, and (b) Just-in-Time ADIF(™) technology; both of which are well suited for stockpiling to defend against known as well as novel infectious diseases.

We continue to achieve significant success in our drug development programs.

Our anti-Influenza drug candidate - Flucide

On March 29, 2012, the Company held a pre-IND Meeting with the US FAD for NV-INF-1, its anti-Influenza clinical drug candidate in the FluCide™ program. The Company had filed a pre-IND meeting request to the US FDA on December 5, 2011. On January 31, 2012, the Company announced that it had submitted the pre-IND Briefing Documents regarding FluCide to the US FDA. The Company plans to seek two different indications for this drug candidate: (1) uncomplicated out-patient influenza, and (2) hospitalized patients presenting with influenza-like-illness (ILI). The Company received US FDA comments and exchanged a list of questions with the US FDA prior to the pre-IND Meeting. The Company believes that the US FDA has given us a good roadmap for advancing towards an IND application. The Company now intends to undertake the extensive “CMC” (The Chemical, Manufacturing and Controls) studies , safety-toxicology studies as well as additional animal efficacy studies as necessary.

This anti-influenza therapeutic candidate is expected to be effective against most if not all types of influenzas including Bird Flu H5N1, Highly Pathogenic Influenzas (HPI/HPAI), Epidemic Influenzas such as the 2009 “swine flu” H1N1/A/2009, and Seasonal Influenzas.

The Company believes that a single-dose therapy, readily administered when the patient first visits the clinic, is likely for out-patient influenza cases. For hospitalized influenza patients, the Company is developing a drug solution that would be piggy-backed onto the customary IV-fluid treatment. These projections are based on our anti-influenza studies in a small animal (mouse) model.

On January 31, 2012, the Company announced that it had submitted the pre-IND Briefing Documents regarding FluCide to the US FDA. The Company plans to seek two different indications for this drug candidate: (1) uncomplicated out-patient influenza, and (2) hospitalized patients presenting with influenza-like-illness (ILI).

The Company has successfully completed its candidate optimization program against influenzas resulting in drug candidates that are as much as 1,000 times more effective than oseltamivir (Tamiflu®) in reducing lung viral load in lethally H1N1-infected animals and several other observed parameters. With the extremely high efficacy levels of our anti-influenza drug candidates, we were able to combine our multiple influenza drug programs and formulate a single Pan-Influenza drug program, FluCide™, last year. We optimized the drug candidates in the FluCide program this year and were pleasantly surprised to achieve even greater levels of effectiveness, while the drug still appears to be as safe as in previous studies. One of these highly effective drug candidates was nominated as the clinical drug candidate, NV-INF-1. The Company also has several back-up clinical quality candidates for influenza therapy that have resulted from this program.

These FluCide studies were conducted by Dr. Krishna Menon, PhD, VMD, MRCS, at KARD Scientific, MA. One million virus particles of Influenza A Strain A/WS/33 (H1N1) were aspirated directly into the lungs of mice. The same quantity of virus infection was repeated at 22 hrs. This influenza model was designed to be uniformly fatal in 100% of the infected, untreated animals within 5 days after infection. Treatment with the FluCide candidates and Tamiflu® (Roche) commenced 24 hours after the first viral infection. The duration of study was set at 21 days in the protocol. It was extended in order to properly evaluate the longest surviving animals. This is a lethality-based model in which all of the untreated animals die within 5 days, and all of the animals treated with 40mg/kg oseltamivir (oral) die within 8 days. Test animals survived the full duration of the study upon treatment with our Flucide^TMdrug candidate, indicating an extremely high level of effectiveness against the Influenza virus.

These FluCide drug candidates were also found to offer significant protection against devastating lung lesions in this lethal influenza infection animal study.

We have reported that post-infection treatment with its optimized FluCide™ drug candidates resulted in dramatic reduction in the number of lung lesions that are caused by a lethal influenza virus infection. Four days post virus infection, animals treated with three of the optimized FluCide™ nanoviricide drug candidates exhibited greater than 95% reduction in the number of lung lesions as compared to the infected yet untreated control animals (p-values < 0.001). In contrast, animals treated with Oseltamivir (Tamiflu®, Roche) showed only a 50% reduction. In another significant finding, no increase in the number or size of the lung lesions was observed over the entire duration of the study in the FluCide™ treated animals. This was not the case for the Oseltamivir-treated animals. This demonstrated that treatment with FluCide drug candidates provided clear and strong protection against lung damage caused by the severe influenza infection.

In addition, we also found that these FluCide™ drug candidates led to significant reduction in the damaging white blood cell presence in lung tissue in the same study. These optimized FluCide™ drug candidates resulted in significant reduction in lung tissue presence of leukocytes, and in particular, that of eosinophils in a lethal influenza infection animal model.

Eosinophil expansion occurs in response to a viral infection, and is indicative of a viral infection. Various white blood cells (leukocytes) also increase in response to a viral infection. These phenomena are part of the normal immune response. In severe influenza cases, it is thought that patients can go into a stage called “cytokine storm syndrome”. This may be thought of as an all-out attack by an expanded army of white blood cells in response to an uncontrolled viral infection. In an attempt to control the viral infection, the immune system attacks the infected cells as well as nearby normal cells. This can lead to severe lung damage that may rapidly become fatal.

We observed that the reduced white blood cell and eosinophil counts were consistent with the dramatic reduction in lung lesions that we had found to occur upon FluCide treatment in lethally influenza infected animals.

We also found that treatment with the FluCide™ drug candidates resulted in a 1000-fold reduction of influenza viral load in the lungs of animals infected with lethal dose of influenza virus in this study.

The amount of infectious virus in the lungs of the infected animals treated with three of the optimized FluCide™ nanoviricide drug candidates was reduced by greater than 1000-fold as compared to the infected untreated control animals (p-values < 0.001), four days after virus infection. In contrast, animals treated with Oseltamivir (Tamiflu®, Roche) showed less than a 2-fold reduction in lung viral load at the same time point. This indicated a >1,000-fold greater reduction in viral load by FluCide drug candidates >700x by a third drug candidate over Oseltamivir.

Of great clinical significance is the fact that two of the optimized FluCide™ drug candidates maintained this greatly reduced lung viral load at 7, 13 and 19 days after virus infection in this 21 day study. Thus, treatment with FluCide drug candidates appeared to protect against the complete cycle of infection, virus expansion and spread of infection in the lungs that follows the initial virus infection. This was not the case for the oseltamivir-treated animals. Animals treated with Oseltamivir (Tamiflu®, Roche) showed less than a 2-fold reduction in lung viral load at 4 days and the viral load was increased at 7 days to the same level as that found in the infected, untreated control animals shortly before their death.

The Company had previously reported 18.3 days mean survival, in conjunction with a thirty-fold (30X) lung viral load reduction, with its then best anti-influenza drug candidate in the same animal model. After that, our FluCide program progressed to process chemistry optimizations that were expected to provide additional benefits in terms of efficacy and safety improvements. We have reported that these improvements have led to animal survival over the full defined 21 day duration of study for one drug candidate, with two additional drug candidates close behind the top candidate, at 20.2 and 20.4 days, along with a 1,000X reduction in the lung viral load, indicating the success of our process chemistry optimizations.

Based on this information, the Company has declared a clinical drug candidate against Influenza that the Company believes is on course for further development towards an IND submission to the FDA. The Company has filed a pre-IND Meeting application to the FDA. Subsequently, the Company has submitted the necessary pre-IND Briefing documents regarding its clinical candidate for influenza, NV-INF-1, to the FDA, on January 31, 2012.

A single dose therapy of normal influenza infection appears to be feasible with this anti-influenza nanoviricide clinical candidate. This can be easily administered by a medical officer when the patient goes for the first clinical visit. The Company believes that in most instances no follow-on treatment would be necessary. This expectation is based on the following results from its animal studies: (1) the extremely high treatment effectiveness in inhibiting the cycle of infection, virus expansion and spread of infection and, (2) the significantly long lasting effects of the drug treatment after the drug is discontinued.

For severe, hospitalized cases of influenza, we are developing a concentrated solution that is administered by “piggy-back” incorporation into the standard IV fluid supplement system that is commonly used in hospitalized patients.

Our anti HIV/Aids drug candidate – HIVCide.

We also reported the results of our recent anti-HIV drug development study in the standard humanized mouse model in the HIVCide program. In this model, the immune system of the mouse is replaced by human immune system. Then HIV infection is given. HIV infects the human immune system. The antivirals are then given and tested for their effect on the interaction of HIV with the implanted human immune system. In the previous anti-HIV study, we had found that three different unoptimized anti-HIV nanoviricides exhibited extremely strong effectiveness that was equal to or better than a three drug HAART cocktail (highly effective antiretroviral treatment) in this animal model. We have since developed better optimized ligands to attack the HIV virus particle. In order to find the best ligand, we reduced the amount of ligand attached to the polymer chain in this new study. We believe that we were able to select the best nanoviricide anti-HIV ligand in the new study, which appears to be better than all the ligands tested in the previous study. This new nanoviricide’s effect was still equal to or better than the same three drug HAART cocktail, although we had expected a reduced effect.

What is more, the new anti-HIV nanoviricide drug candidate continued to maintain HIV-1 viral load suppression for at least 28 days after last drug dosing in this recent study. So we believe that an intermittent therapy against HIV/AIDS is feasible with nanoviricides. We believe that such a therapy would allow patients to achieve nominally HIV-free status, and have a normal life, for long periods without drugs. We are now further optimizing the HIVCide drug candidates. In effect, we believe that HIVCide would enable a “functional cure” for HIV, although much work needs to be done as this program matures into a clinical candidate.

Our HIVCide studies were conducted by Dr. Krishna Menon, PhD, VMD, MRCS, at KARD Scientific, MA.

Nanoviricide technology is built on the TheraCour® polymeric micelle platform technology. The design of these materials is like building blocks. We can select components to achieve desired effects. This tailor-made customizability has many implications. It allows us to (1) rapidly create a new drug against a different virus; (2) rapidly develop a drug with desired length of time for which its effect should persist in the human body; (3) quickly develop new drugs with different routes of administration; among many other benefits.

We had always suspected that the polymeric nature of nanoviricides would enable a long drug effectiveness time frame, thus enabling infrequent dosing. We have indications now that this is very likely true, from both FluCide™ and HIVCide™ programs. We have observed sustained antiviral effects for a long time after last drug administration in various animal model studies.

Infrequent dosing would translate into ease of patient compliance. Patient compliance is a major issue for all antiviral drug therapies, and particularly for HIV/AIDS.

We have been able to develop drugs using many different routes of administration with very little development time and effort.

Other drug candidates:

In addition to the declared clinical candidate for Influenza, and the anti-HIV drug candidates discussed above, the Company continues to work on pre-clinical studies towards the optimization of drug candidates against HSV, Dengue, and external eye viral diseases. In addition, nanoviricides against Rabies, Ebola/Marburg, Hepatitis C Virus (HCV), and several other viral diseases are at various early stages of research and development and involve a substantial amount of uncertainty as to the development of these drug candidates. Many of these drug programs are expected to result in clinical drug candidates against the respective viral diseases. Thus the Company has a very broad pipeline that is expected to continue to fuel its growth for several years to come.

The Company has limited experience with pharmaceutical drug development. Thus, our budget estimates are not based on experience, but rather based on advice given by our associates and consultants. As such these budget estimates may not be accurate. In addition, the actual work to be performed is not known at this time, other than a broad outline, as is normal with any scientific work. As further work is performed, additional work may become necessary or change in plans or workload may occur. Such changes may have an adverse impact on our estimated budget. Such changes may also have an adverse impact on our projected timeline of drug development.

The Company is currently engaged in developing a pilot-scale manufacturing capability. The manufacturing portion of the facility will eventually need to be certified by the FDA in order for the Company to produce experimental materials that can be used in human clinical trials. It is preferable to use the same quality of materials for pharmaco-kinetic, pharmaco-dynamic and toxicology studies, although the materials for these pre-IND studies do not need to be manufactured in a cGMP-certified facility. These three sets of studies must be completed prior to the Company filing an IND with the FDA to begin the human safety and efficacy trials (Phase I, II and III).

The Company has not yet performed detailed safety profile studies to be included in a “Tox Package” for submission to the FDA for any of our drug candidates. Our studies regarding safety of the various nanoviricide drug candidates to date have been preliminary and of a limited nature. However, the nanoviricides have been well tolerated with no overt adverse effects observed even in animals treated for more than 7 weeks. Management’s beliefs are based on results of pre-clinical cell culture studies and in vivo animal studies using mice.

The Company thus has a strong and growing drug pipeline to take us several years into the future. The Company already has technologies in development that promise to yield even better drugs against various diseases as the drugs we are developing now approach their product end of lifecycle.

It should be noted that all of our studies to date were preliminary. Thus, the evidence we have developed is indicative, but not considered confirmative, of the capabilities of the nanoviricides technology's potential.

Research and Development Costs

The Company does not maintain separate accounting line items for each project in development. The Company maintains aggregate expense records for all research and development conducted. Because at this time all of the Company’s projects share a common core material, the Company allocates expenses across all projects at each period-end for purposes of providing accounting basis for each project. Project costs are allocated based upon labor hours performed for each project.

The Company has signed several cooperative research and development agreements with different agencies and institutions The Company expects to enter into additional cooperative agreements with other governmental and non-governmental, academic, or commercial, agencies, institutions, and companies. There can be no assurance that a final agreement may be achieved and that the Company will execute any of these agreements. However, should any of these agreements materialize, the Company will implement a system to track these costs by project and account for these projects as customer-sponsored activities and show these project costs separately.

Requirement for Additional Capital

As of March 31, 2012, we have a cash and cash equivalent balance of $12,984,397 which will be sufficient to fund our operations through more than two years or March 31, 2014, at the Company’s current rate of expenditure.

While we now have the necessary funds based on our current operations to last more than the next 24 months, we anticipate undertaking additional expenditures to accelerate our progress to regulatory submissions. With the recent $5M raise in this reported period, we believe that we currently have sufficient funding available to perform Toxicology Package studies, and additional animal efficacy studies, to move at least one of our drug candidates into an Investigational New Drug Application (“IND”) with the US FDA. In order to file an IND application, we also need to enable manufacturing of the drug under US FDA guidelines called cGMP. We estimate that a small, 1kg/batch, production facility would be sufficient to satisfy the Company’s near future needs for supporting the FluCide clinical studies, at least through Phase II. This small batch size requirement is based on the extremely high effectiveness of the influenza clinical candidate observed in animal studies, and therefore must be treated with caution. We intend to enter into lease negotiations with Inno-Haven, LLC (“Inno-Haven”) to enable cGMP manufacture of our drug products. Inno-Haven is managed by its member Dr. Anil R. Diwan, who is our President and Chairman. Inno-Haven raised financing from Dr. Diwan and others, including some earlier investors of NanoViricides, Inc., and has purchased an 18,000 square foot building in Shelton, CT, on a 4 acre lot, enabling future expansion of operations. Dr. Diwan raised additional financing through the sale of his NanoViricides stock that he had obtained as a founder under a 10b5-1 plan that was concluded in October, 2011. Inno-Haven plans to raise the balance of financing through applicable and available loan programs such as the SBA-guaranteed bank loans and mortgages, the State of Connecticut programs for development of high tech industry, and additional investors. No lease agreement has been drawn up and the terms of lease have not yet been negotiated.

We anticipate that as we file an IND application, we may need an additional $10M to $15M to take one of our drug candidates through certain phases of human clinical trials. Further additional funding, if available, will allow us to move our other drug candidates towards IND filings. These additional funds will be needed to pay for additional personnel, increased subcontract costs related to the expansion and further development of our drug pipeline, and for additional capital and operational expenditures required to file IND applications. We will accelerate our business plans provided that we can obtain such additional funding. We believe that we currently have adequate financing for our current business plan of operations.

We anticipate that we will incur the following expenses over the next 18 months.

1. Research and Development of $6,700,000: Planned costs for IND-enabling studies for pan-influenza drug candidate, in-vivo and in-vitro studies for pan-influenza FluCide, Eye nanoviricide, HIVCide, HerpeCide, Dengue and Ebola/Marburg, and Rabies programs.

2. Corporate overhead of $1,250,000: This amount includes budgeted office salaries, legal, accounting, investor relations, public relations, and other costs expected to be incurred by being a public reporting company.

3. Capital costs of $2,000,000: This is the estimated cost for equipment and laboratory improvements.

4. Staffing costs of $2,000,000: This is the estimated cost of hiring additional scientific staff and consulting firms to assist with FDA compliance, material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, and other items related to FDA compliance, as required for development of necessary data for filing an Investigational New Drug Application (IND) with the United States Food and Drug Administration.

In March, 2010, the Company filed a Form S-3 Shelf Registration with the Securities and Exchange Commission (SEC) for the sale from time to time of up to $40 million of the Company’s securities. The registration statement became effective on April 29, 2010. As of March 31, 2012, the Company has drawn down $20,000,000 of the $40,000,000 S-3 Shelf Registration. The Company anticipates further draw downs on this S-3 Shelf Registration to fund its additional capital requirements and expenditures as required. If we are unable to obtain additional financing, our business plan will be significantly delayed.

We believe that our current work-plan will lead us to obtain certain information about the safety and efficacy of some of the drugs under development in animal models. If our studies are not successful, we will have to develop additional drug candidates and perform further studies. If our studies are successful, then we expect to be able to undertake further studies in animal models to obtain necessary data regarding the pharmaco-kinetic and pharmaco-dynamic profiles of our drug candidates. We believe these data will then enable us to file an Investigational New Drug (IND) application, towards the goal of obtaining FDA approval for testing the drugs in human patients.

Most pharmaceutical companies expect 4 to 10 years of study to be required before a drug candidate reaches the IND stage. We believe that because we are working in the infectious agents area, our studies will have objective response end points, and most of our studies will be of relatively short durations. Our business plan is based on these assumptions. If we find that we have underestimated the time duration of our studies, or we have to undertake additional studies, due to various reasons within or outside of our control, this will grossly and adversely impact both our timelines and our financing requirements.

Management intends to use capital and debt financing, as required, to fund the Company’s operations. Management also intends to pursue non-diluting funding sources such as government grants and contracts as well as licensing agreements with other pharmaceutical companies. There can be no assurance that the Company will be able to obtain the additional capital resources necessary to fund its anticipated obligations beyond March 31, 2014. The Company currently has no long term debt.

The Company is considered to be a development stage company and will continue in the development stage until it generates revenues from the sales of its products or services.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. We currently have no foreign operations and are not exposed to foreign currency fluctuations. Our primary exposure to market risk is interest rate risk associated with our short term cash equivalent investments, which the Company deems to be non-material. The Company does not have any financial instruments held for trading or other speculative purposes and does not invest in derivative financial instruments, interest rate swaps or other investments that alter interest rate exposure. The Company does not have any credit facilities with variable interest rates.

ITEM 4. CONTROLS AND PROCEDURES

(a)

Evaluation of disclosure controls and procedures.

Based upon an evaluation of the effectiveness of disclosure controls and procedures, our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) were not effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2011. To evaluate the effectiveness of our internal control over financial reporting, management used the criteria described in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO Framework”). Based on its evaluation under the Internal Control - Evaluation Framework, due to the material weakness described above, management concluded that our internal control over financial reporting was not effective as of March 31, 2012. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis by the Board in the normal course of their duties. See, AUDITOR’S OPINION PARAGRAPH BELOW.

The material weakness relates to a lack of a functioning audit committee and a lack of outside directors on the Company’s Board of Directors. We intend to initiate measures to remediate the identified material weakness by establishing a formal audit committee and the appointment of additional outside directors, one or more of whom may be appointed to a fully functioning audit committee.

The Company’s annual report on Form 10-K, as amended, includes an attestation report of our registered public accounting firm regarding internal control over financial reporting. The final paragraph of the Auditor’s Report states:

“Also in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2011 and 2010 and the results of its operations and its cash flows for the fiscal years then ended and for the period from May 12, 2005 (inception) through June 30, 2011 in conformity with accounting principles generally accepted in the United States of America.”

Although its By-laws provide for the appointment of one, the Company is not yet required to have an Audit Committee as a result of the fact that our common stock is not considered a “listed security” as defined in Rule 10A-3 of the Exchange Act. However, the Company is in the process of addressing this issue by establishing an Audit Committee, and has initiated an active search for qualified, independent directors for the audit committee, including one or more members with financial expertise.

Changes in internal control over financial reporting.

Other than as described above, there were no material changes in our internal control over financial reporting (as defined in Rule 13a- 15(f) under the Exchange Act) that occurred as of March 31 ,2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be a party to legal proceedings in the ordinary course of our business in addition to those described below. We do not, however, expect such other legal proceedings to have a material adverse effect on our business, financial condition or results of operations.

On or around December 22, 3011, the Connecticut Secretary of the State, as agent for service of process for the Company, was served with a Summons and Complaint in the case entitled David F. Gencarelli, Esq. d/b/a Gencarelli Group v. Nanoviricides, Inc. (Case No. 2011-CA-006555-B) filed in the Superior Court for the district of Columbia Civil Division. The Complaint for breach of contract, unjust enrichment, and quantum meruit claims unpaid legal fees of $77,601.00. On January 20, 2012, the case was removed to the United States District Court for the District of Columbia and the Company filed an Answer denying the claim and setting forth additional affirmative defenses and a counterclaim for legal fees. .Management believes that this lawsuit has no merit or basis and intends to defend the lawsuit vigorously, and as a result no accrual has been made in relation to this litigation.

On or around January 18, 2012, the Nevada Agency and Transfer Company, as agent for service of process for the Company in Nevada, was served with a Summons and Complaint in the case entitled Yidam, Ltd. v. Eugene Seymour, Anil Diwan, and NanoViricides, Inc. (Case No. A-12-654437-B) answerable in the Eighth Judicial District Court of the State of Nevada – Clark County (“Court”). The Complaint seeks to compel inspection of the Company’s books and records. On or about February 14, 2012, we filed a Motion to Dismiss the Complaint for failure to state a claim upon which relief can be granted. The Complaint further seeks unspecified “injunctive relief” in furtherance of the demand for inspection to which it is not entitled. The Complaint by a holder of less than 1 percent of the common stock of the Company seeks to, inter alia, inspect documents and records of the company to which it is not entitled and in a form and manner the Company argues is not authorized by statute. Management believes that this lawsuit has no merit or basis and intends to vigorously defend it. Monetary damages have not been claimed and as a result no accrual has been made in relation to this litigation. On April 9, 2012, the Court dismissed the Complaint for failure to state a Claim for which relief could be granted.

On or around April 13, 2012, the Nevada Agency and Transfer Company, as agent for service of process for the Company in Nevada, was served with a Summons and Complaint in the case entitled Yidam, Ltd. v. Eugene Seymour, Anil Diwan, and Nanoviricides, Inc. ((Case No. A-12-659535-B) answerable in the Eighth Judicial District Court of the State of Nevada – Clark County (“Court”). The Complaint seeks to compel inspection of the Company’s books and records. On or about May 2, 2012 we filed a Demand for Security of Costs. Upon filing of the Demand, proceedings relative to the Company are stayed pending posting of the demanded security (or plaintiff engages in motion practice about the Demand). 30 days (+3 for mailing) from service, the Company may seek dismissal of the complaint if plaintiff has not posted the demanded security (or engaged the court). the Company will have 10 days after service of notice of posting within which to answer or otherwise respond to the complaint The Complaint further seeks unspecified “injunctive relief” in furtherance of the demand for inspection to which it is not entitled. The Complaint, by a holder of less than 1 percent of the common stock of the Company, seeks to, inter alia, inspect documents and records of the company to which it is not entitled and in a form and manner the Company argues is not authorized by statute. Management believes that this lawsuit has no merit or basis and intends to vigorously defend it. Monetary damages have not been claimed and as a result no accrual has been made in relation to this litigation

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

In February, 2012, the Scientific Advisory Board (SAB) was granted warrants to purchase 60,000 shares of common stock at $1.09 per share expiring in February , 2016.

For the three months ended March 31, 2012, the Company's Board of Directors authorized the issuance of 25,862 shares of its common stock with a restrictive legend to an unrelated party for consulting services.

The securities described above were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act and Rule 506 of Regulation D promulgated thereunder. The agreements executed in connection with this sale contain representations to support the Registrant’s reasonable belief that the Investor had access to information concerning the Registrant’s operations and financial condition, the Investor acquired the securities for their own account and not with a view to the distribution thereof in the absence of an effective registration statement or an applicable exemption from registration, and that the Investor are sophisticated within the meaning of Section 4(2) of the Securities Act and are “accredited investors” (as defined by Rule 501 under the Securities Act). In addition, the issuances did not involve any public offering; the Registrant made no solicitation in connection with the sale other than communications with the Investor; the Registrant obtained representations from the Investor regarding their investment intent, experience and sophistication; and the Investor either received or had access to adequate information about the Registrant in order to make an informed investment decision. The Company has not utilized an underwriter for an offering of its securities, except in the recent financing completed on February 8, 2012, with Seaside 88, LP, wherein Midtown Capital Partners, LLC were engaged as placement agent for the Company’s securities sold in the offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibit index

Exhibit

31.1		Certification of Chief Executive and Interim Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.

32.1		Certification of Chief Executive Officer and Interim Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K. During the fiscal quarter ended March 31, 2012, the Company filed the following Current Reports on Form 8-K:

On February 9, 2012,the Registrant filed a Current Report on Form 8-K disclosing that on February 8, 2012, Seaside 88, LP (“Seaside”), Seaside purchased 250,000 shares of the Registrant’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) at the purchase price of $10.00 per share (the “Purchase Price”) for an aggregate purchase price of $2,500,000. The Registrant also disclosed 40,000 shares of Series B Preferred Stock automatically converted into shares of the Registrant’s common stock, par value $0.001 per share (the “Common Stock”) on February 8, 2012 and 40,000 shares (or such lesser number that remains unconverted) shall convert every fourteen (14) days thereafter.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 17, 2012

NANOVIRICIDES, INC.

/s/ Eugene Seymour, MD
Name: Eugene Seymour, M.D.
Title: Chief Executive Officer and Interim
Chief Financial Officer and Director
(Principal Executive Officer and Principal Financial Officer)

/s/ Anil Diwan
Name: Anil Diwan
Title: President and Chairman of the Board of Directors