Note 3- Financial Condition

The Company’s financial statements for the interim period ended March 31, 2016 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 from inception. 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, 2016 the Company had cash and cash equivalents of $25,596,376. The Company’s Series B Convertible Debenture, in the amount of $6 million, matures on February 1, 2017. The holder(s), at their option, may convert some or all of the sum of the principal balance and accrued interest, if any, into a number of restricted shares of common stock of the Company equal to the outstanding balance being converted divided by $3.50. Any principal balance not being converted will be paid in cash on February 1, 2017. The Company has sufficient capital to continue its business, at least, through March 31, 2018, at the current rate of expenditure.

While the Company continues to incur significant operating losses with significant capital requirements, the Company has been able to finance its business through sale of its securities. The Company may require additional capital to finance currently unplanned capital costs and additional staffing requirements, if they arise, during the next 24 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 additional funds.