10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File No. 000-16929

SOLIGENIX, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	41-1505029
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
29 EMMONS DRIVE, SUITE B-10 PRINCETON, NJ	08540
(Address of principal executive offices)	(Zip Code)

	(609) 538-8200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	SNGX	The Nasdaq Capital Market
Common Stock Purchase Warrants	SNGXW	The Nasdaq Capital Market

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

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

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of May 8, 2020, 26,576,676 shares of the registrant’s common stock (par value, $.001 per share) were outstanding.

SOLIGENIX, INC.

Index

	Description	Page
Part I	FINANCIAL INFORMATION
Item 1	Consolidated Financial Statements
	Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019	1
	Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019 (unaudited)	2
	Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2020 and 2019 (unaudited)	3
	Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2020 and March 31, 2019 (unaudited)	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4	Controls and Procedures	38
Part II	OTHER INFORMATION
Item 1A	Risk Factors	39
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 5	Other Information	39
Item 6	Exhibits	40
SIGNATURES		41

i

PART I - FINANCIAL INFORMATION

ITEM 1 - Financial Statements

Soligenix, Inc. and Subsidiaries

Consolidated Balance Sheets

	March 31,			December 31,
	2020			2019
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	7,203,376		$	5,420,708
Contracts and grants receivable		841,368			1,018,835
Research and development incentives receivable		415,932			444,043
Income tax receivable		836,893			-
Prepaid expenses and other current assets		271,879			609,739
Total current assets		9,569,448			7,493,325
Security deposit		22,757			22,757
Office furniture and equipment, net		38,123			36,093
Deferred issuance costs		21,894			39,324
Intangible assets, net		12,908			19,699
Right-of-use lease assets		90,821			125,412
Research and development incentives receivable		56,850			-
Other assets		34,873			38,750
Total assets	$	9,847,674		$	7,775,360
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	2,870,672		$	2,735,442
Accrued expenses		3,326,356			3,157,386
Accrued compensation		43,690			298,173
Lease liabilities - current		88,180			121,075
Total current liabilities		6,328,898			6,312,076
Non-current liabilities:
Lease liabilities, net of current		4,150			6,149
Total liabilities		6,333,048			6,318,225
Commitments and contingencies
Shareholders’ equity:
Preferred stock, 350,000 shares authorized; none issued or outstanding		-			-
Common stock, $.001 par value; 50,000,000 shares authorized; 25,778,431 shares and 1,753,124 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		25,778			21,753
Additional paid-in capital		186,624,561			177,006,004
Accumulated other comprehensive loss		(28,767	)		(45,010	)
Accumulated deficit		(183,106,946	)		(175,525,612	)
Total shareholders’ equity		3,514,626			1,457,135
Total liabilities and shareholders’ equity	$	9,847,674		$	7,775,360

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

1

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Three Months Ended March 31, 2020 and 2019

(Unaudited)

	2020			2019
Revenues:
Contract revenue	$	845,185		$	639,558
Grant revenue		79,367			505,230
Total revenues		924,552			1,144,788
Cost of revenues		(829,506	)		(927,924	)
Gross profit		95,046			216,864
Operating expenses:
Research and development		2,700,171			1,642,718
General and administrative		868,667			874,209
Research and development expense - milestone		5,000,000			-
Total operating expenses		8,568,838			2,516,927
Loss from operations		(8,473,792	)		(2,300,063	)
Foreign currency transaction (loss)/gain		(23,232	)		5,007
Interest income		21,947			44,753
Research and development incentives		56,850			-
Net loss before income taxes		(8,418,227	)		(2,250,303	)
Income tax benefit		836,893			610,676
Net loss	$	(7,581,334	)	$	(1,639,627	)
Basic and diluted net loss per share	$	(0.32	)	$	(0.09	)
Basic and diluted weighted average common shares outstanding		23,404,920			18,078,951

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

2

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Loss

For the Three Months Ended March 31, 2020 and 2019

(Unaudited)

	2020			2019
Net loss	$	(7,581,334	)	$	(1,639,627	)
Other comprehensive loss:
Foreign currency translation adjustments		16,243			649
Comprehensive loss	$	(7,565,091	)	$	(1,638,978	)

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

3

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

For the Three Months Ended March 31, 2020 and 2019

(Unaudited)

	Common Stock				Additional Paid-In			Accumulated other comprehensive			Accumulated
	Shares		Par Value		Capital			loss			Deficit			Total
Balance, December 31, 2019		21,753,124	$	21,753	$	177,006,004		$	(45,010	)	$	(175,525,612	)	$	1,457,135
Issuance of common stock pursuant to FBR At Market Issuance Sales Agreement		1,732,115		1,732		3,987,494			-			-			3,989,226
Issuance costs associated with FBR At Market Issuance Sales Agreement		-		-		(174,721	)		-			-			(174,721	)
Issuance of common stock for milestone		1,956,182		1,956		4,998,044			-			-			5,000,000
Issuance of common stock to vendor		30,000		30		58,970			-			-			59,000
Exercise of common stock options		2,189		2		-			-			-			2
Exercise of warrants		304,821		305		685,079			-			-			685,384
Share-based compensation expense		-		-		63,691			-			-			63,691
Foreign currency translation adjustment		-		-		-			16,243			-			16,243
Net loss		-		-		-			-			(7,581,334	)		(7,581,334	)
Balance, March 31, 2020		25,778,431	$	25,778	$	186,624,561		$	(28,767	)	$	(183,106,946	)	$	3,514,626

	Common Stock				Additional Paid-In			Accumulated other comprehensive			Accumulated
	Shares		Par Value		Capital			loss			Deficit			Total
Balance, December 31, 2018		17,682,839	$	17,683	$	172,436,176		$	(3,669	)	$	(166,170,020	)	$	6,280,170
Issuance of common stock pursuant to FBR At Market Issuance Sales Agreement		446,369		446		522,137			-			-			522,583
Issuance costs associated with FBR At Issuance Market Sales Agreement		-		-		(19,382	)		-			-			(19,382	)
Issuance of common stock to vendor		60,000		60		57,540			-			-			57,600
Share-based compensation expense		-		-		79,573			-			-			79,573
Foreign currency translation adjustment		-		-		-			649			-			649
Net loss		-		-		-			-			(1,639,627	)		(1,639,627	)
Balance, March 31, 2019		18,189,208	$	18,189	$	173,076,044		$	(3,020	)	$	(167,809,647	)	$	5,281,566

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

4

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Three Months Ended March 31,

(Unaudited)

	2020			2019
Operating activities:
Net loss	$	(7,581,334	)	$	(1,639,627	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation		17,646			11,920
Non-cash lease expenses		32,731			29,652
Share-based compensation		63,691			79,573
Issuance of common stock for milestone		5,000,000			-
Issuance of common stock for services		59,000			57,600
Change in operating assets and liabilities:
Contracts and grants receivable		177,467			96,358
Prepaid expenses and other current assets		337,492			(54,139	)
Research and development incentives receivable		(56,850	)		-
Income tax receivable		(836,893	)		(610,676	)
Operating lease liability		(33,084	)		(29,230	)
Deferred revenue		-			104,963
Accounts payable and accrued expenses		379,544			(75,336	)
Accrued compensation		(254,483	)		(264,360	)
Total adjustments		4,886,261			(653,676	)
Net cash used in operating activities		(2,695,073	)		(2,293,303	)
Investing activities:
Purchases of office furniture and equipment		(7,147	)		-
Net cash used in investing activities		(7,147	)		-
Financing activities:
Proceeds from issuance of common stock pursuant to FBR At Market Issuance Sales Agreement		3,989,226			522,583
Costs associated with FBR At Market Issuance Sales Agreement		(157,291	)		(15,729	)
Proceeds from the exercise of warrants		685,384			-
Principal repayment - financing lease		(1,810	)		(1,638	)
Net cash provided by financing activities		4,515,509			505,216
Effect of exchange rate on cash and cash equivalents		(30,621	)		4,641
Net increase (decrease) in cash and cash equivalents		1,782,668			(1,783,446	)
Cash and cash equivalents at beginning of period		5,420,708			8,983,717
Cash and cash equivalents at end of period	$	7,203,376		$	7,200,271
Supplemental information:
Cash paid for lease liabilities:
Operating lease	$	35,650		$	34,875
Financing lease	$	2,136		$	2,136
Non-cash investing and financing activities:
Deferred issuance costs reclassified to additional-paid-in capital	$	17,430		$	3,653
Issuance of stock options, cash exercise price received December 2019	$	1,882		$	-
Present value of right-of-use assets and lease liabilities recognized on January 1, 2019	$	-		$	255,962
Accrued software development cost	$	-		$	30,690
Deferred issuance costs included in accounts payable	$	-		$	3,148

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

5

Soligenix, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Nature of Business

Basis of Presentation

Soligenix, Inc. (the “Company”) is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. The Company maintains two active business segments: Specialized BioTherapeutics (formerly “BioTherapeutics”) and Public Health Solutions (formerly “Vaccines/BioDefense”).

The Company’s Specialized BioTherapeutics business segment is developing a novel photodynamic therapy (SGX301) utilizing topical synthetic hypericin activated with safe visible fluorescent light for the treatment of cutaneous T-cell lymphoma (“CTCL”), its first-in-class innate defense regulator technology, dusquetide (SGX942) for the treatment of oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis (SGX201).

The Company’s Public Health Solutions business segment includes active development programs for RiVax^®, its ricin toxin vaccine candidate and SGX943, a therapeutic candidate for antibiotic resistant and emerging infectious disease. The development of the vaccine program is currently supported by the heat stabilization technology, known as ThermoVax^®, under existing and on-going government contract funding. With the government contract from the National Institute of Allergy and Infectious Diseases (“NIAID”), the Company will attempt to advance the development of RiVax^® to protect against exposure to ricin toxin.

The Company generates revenues under government grants primarily from the National Institutes of Health (“NIH”) and government contracts from NIAID. The Company is currently developing RiVax^® under a NIAID contract of up to $21.2 million over six years, and a one-year NIH grant of $150,000 in support of its SGX942 pediatric program. In addition, the Company has a subcontract of approximately $700,000 from a NIAID grant over five years for its thermostabilization technology, and a Defense Threat Reduction Agency subcontract of approximately $600,000 over three years for SGX943. The Company will continue to apply for additional government funding.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development of new technological innovations, dependence on key personnel, protections of proprietary technology, compliance with the United States (“U.S.”) Food and Drug Administration (the “FDA”) regulations, and other regulatory authorities, litigation, and product liability. Results for the three months ended March 31, 2020 are not necessarily indicative of results that may be expected for the full year.

Liquidity

In accordance with Accounting Standards Codification 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of March 31, 2020, the Company had an accumulated deficit of $183,106,946. During the three months ended March 31, 2020, the Company incurred a net loss of $7,581,334 and used $2,695,073 of cash in operating activities. The Company expects to continue to generate losses in the foreseeable future. The Company’s liquidity needs will be largely determined by the budgeted operational expenditures incurred in regards to the progression of its product candidates. The Company’s plans to meet its liquidity needs primarily include its ability to control the timing and spending on its research and development programs and raising additional funds through potential partnership and/or financings. Based on the Company’s approved operating budget, current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, and proceeds available from the FBR Sales Agreement, management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next 12 months from issuance of the financial statements.

6

As of March 31, 2020, the Company had cash and cash equivalents of $7,203,376 as compared to $5,420,708 as of December 31, 2019, representing an increase of $1,782,668 or 33%. As of March 31, 2020, the Company had working capital of $3,240,550 as compared to working capital of $1,181,249 as of December 31, 2019, representing an increase of $2,041,871 or 173%. The increase in cash and working capital was primarily related to the management of the Company’s expenses, utilization of the FBR Sales Agreement and warrant exercises during the three months ended March 31, 2020.

Management’s business strategy can be outlined as follows:

● Following positive primary endpoint topline analysis for the Phase 3 clinical trial of SGX301, as well as further statistically significant improvement in response rates with longer treatment (12 weeks compared to 6 weeks), continue to explore partnership and commercialization while pursuing New Drug Application filing;

● Following positive interim analysis, complete enrollment and report final results in the Company’s pivotal Phase 3 clinical trial of SGX942 for the treatment of oral mucositis in head and neck cancer;

● Continue development of RiVax^® in combination with the Company’s ThermoVax^® technology to develop a new heat stable vaccine in biodefense with NIAID funding support;

● Continue to apply for and secure additional government funding for each of the Company’s Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements;

● Pursue business development opportunities for the Company’s pipeline programs, as well as explore merger/acquisition strategies; and

● Acquire or in-license new clinical-stage compounds for development.

The Company’s plans with respect to its liquidity management include, but are not limited to, the following:

● The Company has up to $1.96 million in active government contract and grant funding still available as of March 31, 2020, to support its associated research programs through 2020 and beyond, provided the federal agencies exercise all options and do not elect to terminate the contracts or grants for convenience. The Company plans to submit additional contract and grant applications for further support of its programs with various funding agencies.

● The Company has continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expects to continue to do so for the foreseeable future.

● The Company will continue to pursue Net Operating Loss (“NOL”) sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if available.

● The Company plans to pursue potential partnerships for pipeline programs, however, there can be no assurances that it can consummate such transactions.

● The Company has up to $8.9 million remaining from the FBR Sales Agreement as of May 8, 2020 under the prospectus supplement filed April 10, 2020.

● The Company will explore and evaluate all funding options through financial stimulus packages afforded by both the federal and state governments based on the current outbreak of the SARS-CoV-2, the pathogen responsible for COVID-19.

● The Company may seek additional capital in the private and/or public equity markets, to continue its operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. The Company is evaluating additional equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing.

7

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.

Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: Specialized BioTherapeutics and Public Health Solutions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Contracts and Grants Receivable

Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.

Intangible Assets

One of the most significant estimates or judgments that the Company makes is whether to capitalize or expense patent and license costs. The Company makes this judgment based on whether the technology has alternative future uses, as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 730, Research and Development. Based on this consideration, the Company capitalizes payments made to legal firms that are engaged in filing and protecting rights to intellectual property and rights for its current products in both the domestic and international markets. The Company believes that patent rights are one of its most valuable assets. Patents and patent applications are a key component of intellectual property, especially in the early stage of product development, as their purchase and maintenance gives the Company access to key product development rights from Soligenix’s academic and industry partners. These rights can also be sold or sub-licensed as part of its strategy to partner its products at each stage of development as the intangible assets have alternative future use. The legal costs incurred for these patents consist of work associated with filing new patents designed to protect, preserve and maintain the Company’s rights, and perhaps extend the lives of the patents. The Company capitalizes such costs and amortizes intangibles on a straight-line basis over their expected useful life – generally a period of 11 to 16 years.

The Company did not capitalize any patent related costs during the three months ended March 31, 2020 and 2019.

Website Development Costs

In February 2019, Altamont Pharmaceutical Holdings, LLC (“Altamont”), a company which owns 5% or more of the Company’s shares of common stock, signed a service agreement with a third-party vendor to re-develop the Company’s website. Upon completion of the project at the end of June 2019, the Company capitalized the related website development costs of $46,500 in accordance with FASB Codification ASC 350-50 “Accounting for Web Site Development Costs”, which was reported in other assets in the accompanying consolidated balance sheets. Beginning in the three months ended September 30, 2019, the Company started amortizing the website development costs on a straight-line basis over three years, the estimated useful life of the website. The Company will also review its capitalized website development costs periodically for impairment. Website amortization expense for the three months ended March 31, 2020 was $3,877 and accumulated amortization was $11,627 as of March 31, 2020.

8

Impairment of Long-Lived Assets

Office furniture and equipment, website development costs and intangible assets with finite lives are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.

The Company did not record any impairment of long-lived assets for the three months ended March 31, 2020 or 2019.

Fair Value of Financial Instruments

FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on March 31, 2020. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

● Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

● Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, contracts and grants receivable, tax receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued compensation approximate their fair value based on the short-term nature of these instruments.

9

Revenue Recognition

The Company’s revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs. Purchased in-process research and development expense represents the value assigned or paid for acquired research and development for which there is no alternative future use as of the date of acquisition.

Share-Based Compensation

Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.

From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of stock options, restricted stock, deferred stock and unrestricted stock to our employees and non-employees (including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515). However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect a Securities Act of 1933, as amended (the “Securities Act”) restrictive legend. Stock compensation expense for equity-classified awards to nonemployees is measured on the date of grant and is recognized when the services are performed.

The fair value of options issued during the three months ended March 31, 2020 and 2019 was estimated using the Black-Scholes option-pricing model and the following assumptions:

● a dividend yield of 0%;

● an expected life of 4 years;

● volatility of 77.08% - 78.96% for 2020 and 91.71% - 92.93% for 2019

● risk free interest rates ranging from 1.38% - 1.66% for 2020 and 2.48% - 2.50% for 2019

The fair value of each option grant made during the three months ended March 31, 2020 and 2019 was estimated on the date of each grant using the Black-Scholes option pricing model and recognized as share-based compensation expense ratably over the option vesting periods, which approximates the service period.

Foreign Currency Transactions and Translation

In 2018, the Company changed the status of a wholly owned subsidiary in the United Kingdom (“UK”) from inactive to active and incurred expenditures in multiple currencies including the U.S. dollar, the British Pound and the Euro to fund its clinical trial operations in the UK and select countries in Europe. In accordance with FASB ASC 830 Foreign Currency Matters, the UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with related transaction gains or losses included in net income. On a quarterly basis, the financial statements of the UK subsidiary are translated into U.S. dollars and consolidated into the Company’s financials, with related translation adjustments reported as a cumulative translation adjustment (“CTA”), which is a component of accumulated other comprehensive loss. During the three months ended March 31, 2020 and 2019, the Company recognized a foreign currency transaction loss of $23,232 and a foreign currency transaction gain of $5,007, respectively, in the accompanying consolidated statements of operations.

.

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Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax benefit of $836,893 and $610,676 from the sale of New Jersey NOL carryforwards during the three months ended March 31, 2020 and 2019, respectively. The Company recognizes accrued interest and penalties associated with uncertain tax positions, if any, as part of the income tax provision. There were no tax related interest and penalties recorded for the three months ended March 31, 2020 or 2019. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at March 31, 2020 and December 31, 2019.

Research and Development Incentive Income and Receivable

The Company recognized other income from United Kingdom research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The small or medium sized enterprise (“SME”) research and development tax relief program supports companies that seek to research and develop an advance in their field and is governed through legislative law by HM Revenue & Customs as long as specific eligibility criteria are met.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the SME research and development tax relief program described above. At each period end management estimates the refundable tax offset available to the Company based on available information at the time. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. As a result, amounts realized under the SME R&D tax relief scheme are recorded as a component of other income.

The following table shows the change in the UK research and development incentives receivable from December 31, 2019 to March 31, 2020:

	Long-term		Current
Balance at December 31, 2019	$	-	$	444,043
UK research and development incentives		56,850		-
Foreign currency translation		-		(28,111	)
Balance at March 31, 2020	$	56,850	$	415,932

Reclassifications

Certain amounts in the statement of operations for the three months ended March 31, 2019 were reclassified to conform to the current year presentation.

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Earnings Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results for each period presented.

The following table summarizes potentially dilutive adjustments to the number of common shares which were excluded from the diluted calculation because their effect would be anti-dilutive due to the losses in each period:

	For the Quarter  Ended March 31, 2020		For the Quarter Ended March 31, 2019
Common stock purchase warrants		5,886,817		6,303,643
Stock options		1,564,622		1,085,595
Total		7,451,439		7,389,238

The weighted average exercise price of the Company’s warrants and stock options outstanding at March 31, 2020 were $2.93 and $3.68 per share, respectively, and at March 31, 2019 were $3.09 and $5.04 per share, respectively.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and, stock options and the useful life of intangibles that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and presentation.

Note 3. Intangible Assets

The following is a summary of intangible assets which consists of licenses and patents:

	Cost		Accumulated Amortization		Net Book Value
March 31, 2020
Licenses	$	462,234	$	449,326	$	12,908
Patents		1,893,185		1,893,185		-
Total	$	2,355,419	$	2,342,511	$	12,908
December 31, 2019
Licenses	$	462,234	$	442,535	$	19,699
Patents		1,893,185		1,893,185		-
Total	$	2,355,419	$	2,335,720	$	19,699

Amortization expense was $6,791 for each of the three months ended March 31, 2020 and 2019.

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Based on the balance of licenses and patents at March 31, 2020, future amortization expense through December 31, 2020 is expected to be $12,908. 

License fees and royalty payments are expensed as incurred, as the Company does not attribute any future benefits of such payments.

Note 4. Leases

The Company classifies a lease for its office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey and a lease for a copier machine in the office as an operating lease and a financing lease, respectively, and records related right-of-use lease assets and lease liabilities accordingly. As of March 31, 2020, the Company’s consolidated balance sheet included a right-of-use lease asset of $79,657 for the office space and $11,164 for the copier machine. Lease liabilities in the Company’s consolidated balance sheet included corresponding lease liabilities of $80,475 and $11,855, respectively. During the three months ended March 31, 2020, the Company recognized lease expense of $35,297 for the operating lease, in addition to amortization expense of $1,861 and interest expense of $327 for the financing lease in the Company’s consolidated statement of operations. During the three months ended March 31, 2019, the Company recognized lease expense of $35,297 for the operating lease, in addition to amortization expense of $1,861 and interest expense of $498 for the financing lease in the Company’s consolidated statement of operations.

The following represents a reconciliation of contractual lease cash flows to the right-of-use lease assets and liabilities recognized in the financial statements:

	Operating Lease		Financing Lease
Right-of-use lease asset:
Right-of-use lease asset, January 1, 2020	$	112,387	$	13,025
Less: reduction/amortization		32,730		1,861
Right-of-use lease asset, March 31, 2020	$	79,657	$	11,164
Lease liability:
Lease liability, January 1, 2020	$	113,559	$	13,665
Less: repayments		33,084		1,810
Lease liability, March 31, 2020	$	80,475	$	11,855
Lease expenses for the three months ended March 31, 2020:
Lease expense	$	35,297	$	-
Amortization expense		-		1,861
Interest expense		-		327
Total	$	35,297	$	2,188
Contractual cash payments for the remaining lease term as of March 31, 2020:
2020	$	83,183	$	6,408
2021		-		6,408
Total	$	83,183	$	12,816
Remaining lease term (months) as of March 31, 2020		7		18

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Note 5. Accrued Expenses

The following is a summary of the Company’s accrued expenses:

	March 31, 2020		December 31, 2019
Clinical trial expenses	$	3,197,269	$	3,020,030
Other		129,087		137,356
Total	$	3,326,356	$	3,157,386

Note 6. Income Taxes

The Company had gross NOLs at December 31, 2019 of approximately $107,767,000 for federal tax purposes, approximately $16,180,000 for state tax purposes and approximately $815,000 for foreign tax purposes. Federal losses generated in 2018 or later will carry forward indefinitely. In addition, the Company has $8,315,000 of various tax credits which expire from 2020 to 2037. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code (“IRC”) Section 382. IRC Section 382 limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points. In addition, the NOL carry forwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is likely that the utilization of the NOLs may be substantially limited.

The Company and one or more of its subsidiaries files income tax returns in the U.S. Federal jurisdiction, and various state and local jurisdictions. During March 2020 and 2019, in accordance with the State of New Jersey’s Technology Business Tax Certificate Program, which allowed certain high technology and biotechnology companies to sell unused NOL carry forwards to other New Jersey-based corporate taxpayers, the Company sold New Jersey NOL carry forwards, resulting in the recognition of $836,893 and $610,676 of income tax benefit, net of transaction costs, respectively. The Company has not yet sold its 2019 New Jersey NOLs but may be able to do so in the future. There can be no assurance as to the continuation or magnitude of this program in the future. 

Note 7. Shareholders’ Equity

Preferred Stock

The Company has 350,000 shares of preferred stock authorized, none of which are issued or outstanding.

Common Stock

The following items represent transactions in the Company’s common stock for the three months ended March 31, 2020:

● On January 8, 2020, the Company issued 2,189 shares of common stock as a result of an option exercises. The exercise price of the option was $0.86 per share. The cash exercise price for those shares was received in December 2019.

● The Company issued a vendor 10,000 shares of common stock with a fair value of $1.68 per share on January 8, 2020, another 10,000 shares of common stock with a fair value of $2.25 per share on February 10, 2020 and another 10,000 shares of common stock with a fair value of $1.97 per share on March 12, 2020, in each case as partial consideration for its service performed. The shares were fully vested on the date of grant and resulted in the recognition of $59,000 of expense during the three months ended March 31, 2020.

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● On February 20, 2020, the Company issued 206 shares of common stock as a result of a cashless exercise of warrants. The exercise price of the warrants was $2.50.

● On March 23, 2020, the Company issued 1,956,182 shares of common stock for payment on an achieved milestone. The fair value of the shares was $2.56 per share based upon a formula set forth in the asset purchase agreement.

● During the three months ended March 31, 2020, the Company issued 304,615 shares of common stock as a result of warrant exercises. The exercise price of the warrants was $2.25 per share.

● During the three months ended March 31, 2020, the Company sold 1,732,115 shares of common stock pursuant to the FBR Sales Agreement at a weighted average price of $2.30 per share.

The issuances of the Company’s common stock to vendors and as a result of option exercises described above were issued under the 2015 Plan and are registered on a Registration Statement on Form S-8. However, as shares of common stock are not covered by a reoffer prospectus, the certificates evidencing such shares reflect a Securities Act restrictive legend.

The issuances of the Company’s common stock (a) as a result of warrant exercises described above, other than upon cashless exercise, were registered on a Registration Statement on Form S-1, (b) for payment on an achieved milestone described above were registered on a Registration Statement on Form S-3 and (c) pursuant to the FBR Sales Agreement described above were registered on a Registration Statement on Form S-3.

The Company’s common stock issued as a result of the cashless exercise of the warrants described above were exempt from registration pursuant to Section 3(a)(9) of the Securities Act.

FBR At Market Issuance Sales Agreement

On August 11, 2017, the Company entered into the FBR Sales Agreement to sell shares of the Company’s common stock from time to time, through an “at-the-market” equity offering program under which FBR acts as sales agent. Under the FBR Sales Agreement, the Company sets the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales may be requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The FBR Sales Agreement provides that FBR is entitled to compensation for its services in an amount equal to 3% of the gross proceeds from the sale of shares sold under the FBR Sale Agreement. The Company has no obligation to sell any shares under the FBR Sales Agreement, and may suspend solicitation and offers under the FBR Sales Agreement at any time.

Sales of common stock made pursuant to the FBR Sales Agreement, if any, will be made pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-217738) filed on May 5, 2017 with the SEC, the base prospectus filed as part of such registration statement, and any prospectus supplements. The shares sold pursuant to the FBR Sales Agreement have been and will be issued pursuant to General Instruction I.B.6 of Form S-3, which permits the Company to sell shelf securities in a public primary offering with a value not exceeding one-third of the average market value of the Company’s voting and non-voting common equity held by non-affiliates in any 12-month period as long as the aggregate market value of the Company’s outstanding voting and non-voting common equity held by non-affiliates is less than $75 million.

On August 11, 2017, the Company filed a prospectus supplement for the sale of up to $4.8 million of shares of common stock pursuant to the FBR Sales Agreement, and the Company sold an aggregate of approximately $1 million of shares thereunder. On October 3, 2018, the Company filed an updated prospectus supplement with the U.S. Securities and Exchange Commission (the “SEC”) and may offer and sell shares of the Company’s common stock pursuant to the FBR Sales Agreement having an aggregate offering price of up to $9.0 million, from time to time. The prospectus supplement filed on October 3, 2018, superseded the prospectus supplement dated August 11, 2017, and no additional shares will be offered or sold pursuant to the prospectus supplement dated August 11, 2017. On April 10, 2020, the Company filed an updated prospectus supplement with the SEC and may offer and sell shares of the Company’s common stock pursuant to the FBR Sales Agreement having an aggregate offering price of up to $10.2 million, from time to time. The prospectus supplement filed on April 10, 2020, supersedes the prospectus supplement dated October 3, 2018, and no additional shares will be offered or sold pursuant to the prospectus supplement dated October 3, 2018. As of May 8, 2020, there was $8.9 million available for the sale of common stock under the FBR Sales Agreement.

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Note 8. Related Party Transaction

In February 2019, Altamont, a company which owns 5% or more of the Company’s shares of common stock, signed a service agreement with a third-party vendor to re-develop the Company’s website. Upon completion of the project at the end of June 2019, the Company issued 78,338 shares of common stock of the Company, including 65,493 shares with a fair value of $46,500 to Altamont as reimbursement for the website development costs incurred by Altamont on behalf of the Company. In accordance with FASB ASC 350-50 “Accounting for Web Site Development Cost”, the Company has capitalized the value of these shares as website development costs of $46,500, which was included in other assets with a carrying value of $34,873, net of amortization, in the accompanying consolidated balance sheet as of March 31, 2020. The balance of 12,845 shares with a fair value of $9,120 was issued to Altamont as consideration for its contractual investor relation and web hosting services, and is being amortized over the term of the service agreement. During the three months ended March 31, 2020, $2,280 was expensed, aggregate amortization was $8,850 and the remaining balance of $270 is included in prepaid expenses and other current assets as of March 31, 2020.

Note 9. Commitments and Contingencies

Contractual Obligations

The Company has commitments of approximately $475,000 as of March 31, 2020 for several licensing agreements with consultants and universities. Additionally, the Company has collaboration and license agreements, which upon clinical or commercialization success, may require the payment of milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur.

The Company currently leases approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey pursuant to a lease that was amended in October 2017 and expires in October 2020. This office space currently serves as the Company’s corporate headquarters. The rent is currently $11,883 per month, or approximately $23.00 per square foot, which rate will continue for the remainder of the lease.

On September 3, 2014, the Company entered into an asset purchase agreement with Hy Biopharma, Inc. (“Hy Biopharma”) pursuant to which the Company acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product. As consideration for the assets acquired, the Company paid $275,000 in cash and issued 184,912 shares of common stock with a fair value based on the Company’s stock price on the date of grant of $3,750,000. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in the Company’s research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S.

On March 20, 2020, the Company filed a prospectus supplement covering the offer and sale of up to 1,956,182 shares of the Company’s common stock which were issued to Hy Biopharma. The Company was required to issue the shares to Hy Biopharma as payment following the achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of SGX301 being successful in the treatment of CTCL. The number of shares of the Company’s common stock issued to Hy Biopharma was calculated using an effective price of $2.56 per share, based upon a formula set forth in the asset purchase agreement, for total expense of $5 million.

Provided all future success-oriented milestones are attained, the Company will be required to make additional payments of up to $5.0 million, if and when achieved. Payments will be payable in restricted securities of the Company provided they do not exceed 19.9% ownership of the Company’s outstanding stock.

In January 2020, the Company’s Board of Directors authorized the amendment of Dr. Schaber’s employment agreement to increase the number of shares of the Company’s common stock from 5,000 to 500,000 issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by its Board of Directors whereby, directly or indirectly, a majority of its capital stock or a majority of its assets are transferred from the Company and/or its stockholders to a third party.

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As a result of the above agreements, the Company has the following contractual obligations:

Year	Research and Development		Property and Other Leases		Total
April 1 through December 31, 2020	$	75,000	$	89,591	$	164,591
2021		100,000		6,408		106,408
2022		100,000		-		100,000
2023		100,000		-		100,000
2024		100,000		-		100,000
Total	$	475,000	$	95,999	$	570,999

Contingencies

Based on the current outbreak of the Coronavirus SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions to the Company’s operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.

The future impact of the outbreak is highly uncertain and cannot be predicted, and the Company cannot provide any assurance that the outbreak will not have a material adverse impact on the Company’s operations or future results or filings with regulatory health authorities. The extent of the impact to the Company, if any, will depend on future developments, including actions taken to contain the coronavirus.

Note 10. Operating Segments

The Company maintains two active operating segments: Specialized BioTherapeutics and Public Health Solutions. Each segment includes an element of overhead costs specifically associated with its operations, with its corporate shared services group responsible for support functions generic to both operating segments.

	Three Months Ended March 31,
	2020			2019
Revenues
Public Health Solutions	$	908,807		$	680,353
Specialized BioTherapeutics		15,745			464,435
Total	$	924,552		$	1,144,788
Loss from Operations
Public Health Solutions	$	(158,502	)	$	(9,011	)
Specialized BioTherapeutics		(7,357,853	)		(1,335,557	)
Corporate		(957,437	)		(955,495	)
Total	$	(8,473,792	)	$	(2,300,063	)
Amortization and Depreciation Expense
Public Health Solutions	$	7,303		$	4,402
Specialized BioTherapeutics		3,070			4,677
Corporate		7,273			2,841
Total	$	17,646		$	11,920
Other Income, Net
Specialized BioTherapeutics	$	33,618		$	5,007
Corporate		21,947			44,753
Total	$	55,565		$	49,760
Share-Based Compensation
Public Health Solutions	$	9,465		$	5,196
Specialized BioTherapeutics		25,289			20,908
Corporate		28,937			53,469
Total	$	63,691		$	79,573

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	As of		As of
	March 31,		December 31,
	2020		2019
Identifiable Assets
Public Health Solutions	$	813,121	$	1,018,673
Specialized BioTherapeutics		64,351		41,705
Corporate	$	8,970,202	$	6,714,982
Total	$	9,847,674	$	7,775,360

Note 11. Subsequent Events

Sales Pursuant to FBR At Market Issuance Sales Agreement

From April 1, 2020 through May 8, 2020, the Company issued 798,245 shares of common stock pursuant to the FBR Sales Agreement at a weighted average price of $1.64 per share for total proceeds of $1,308,948.

CARES Act Loan

On April 13, 2020, the Company was advised that one of its principal banks, JP Morgan, had approved a $417,830 loan (the “Loan”) under the Paycheck Protection Program (“PPP”) pursuant to the Coronavirus Aid, Relief and Economic Security Act that was signed into law on March 27, 2020.

As a U.S. small business, the Company has qualified for the PPP, which allows businesses and nonprofits with fewer than 500 employees to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the business disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes, including payroll, benefits, rent and utilities.

The Loan, has a term of two years, is unsecured, and is guaranteed by the Small Business Administration. The Loan bears interest at a fixed rate of one percent per annum, with the first six months of interest and principal deferred. Some or all of the Loan may be forgiven if at least 75 percent of the Loan proceeds are used by the Company to cover payroll costs, including benefits and if the Company maintains its employment and compensation within certain parameters during the eight-week period following the Loan origination date and complies with other relevant conditions. The Company intends to use the proceeds for purposes consistent with the PPP and expects to meet the conditions for forgiveness of the Loan.

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ITEM 2 – Management’s Discussion and Analysis OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information to explain our results of operations and financial condition. You should also read our unaudited consolidated interim financial statements and their notes included in this Form 10-Q, and our audited consolidated financial statements and their notes, Risk Factors and other information included in our Annual Report on Form 10-K for the year ended December 31, 2019. We provide addresses to internet sites solely for the information to investors. We do not intend any addresses to be active links or to otherwise incorporate the contents of any website into this report.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current expectations about our future results, performance, prospects and opportunities. These forward-looking statements are not guarantees of future performance and are subject to significant risks, uncertainties, assumptions and other factors, which are difficult to predict and may cause actual results to differ materially from those expressed in, or implied by, any forward-looking statements. The forward-looking statements within this report may be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “may,” “would,” “will” and other similar expressions. However, these words are not the exclusive means of identifying these statements. Statements that are not historical facts are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections for our business and the industry and markets related to our business and are forward-looking statements.

Actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important factors which may affect these actual outcomes and results include, without limitation:

● uncertainty as to whether our product candidates will be sufficiently safe and effective to support regulatory approvals;

● uncertainty inherent in developing vaccines, and manufacturing and conducting preclinical and clinical trials of vaccines;

● our ability to obtain future financing or funds when needed, either through the raising of capital, the incurrence of convertible or other indebtedness or through strategic financing or commercialization partnerships;

● that product development and commercialization efforts will be reduced or discontinued due to difficulties or delays in clinical trials or a lack of progress or positive results from research and development efforts;

● maintenance and progression of our business strategy;

● the possibility that our products under development may not gain market acceptance;

● our expectations about the potential market sizes and market participation potential for our product candidates may not be realized;

● our expected revenues (including sales, milestone payments and royalty revenues) from our product candidates and any related commercial agreements of ours may not be realized;

● the ability of our manufacturing partners to supply us or our commercial partners with clinical or commercial supplies of our products in a safe, timely and regulatory compliant manner and the ability of such partners to timely address any regulatory issues that have arisen or may in the future arise; and

● competition existing today or that may arise in the future, including the possibility that others may develop technologies or products superior to our products;

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● the effect that global pathogens could have on financial markets, materials sourcing, patients, governments and population (e.g. COVID-19); and

● other factors, including those “Risk Factors” set forth under Part II, Item 1A. “Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2019.

Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances occurring subsequent to the filing of this Form 10-Q with the United States Securities and Exchange Commission (“the SEC”) or for any other reason. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the SEC that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.

Our Business Overview

We are a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. We maintain two active business segments: Specialized BioTherapeutics (formerly “BioTherapeutics”) and Public Health Solutions (formerly “Vaccines/BioDefense”).

Our Specialized BioTherapeutics business segment is developing a novel photodynamic therapy (SGX301) utilizing topical synthetic hypericin activated with safe visible fluorescent light for the treatment of cutaneous T-cell lymphoma (“CTCL”), our first-in-class innate defense regulator technology, dusquetide (SGX942) for the treatment of oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal (“GI”) disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis (SGX201).

Our Public Health Solutions business segment includes active development programs for RiVax^®, our ricin toxin vaccine candidate and SGX943, our therapeutic candidate for antibiotic resistant and emerging infectious disease. The development of our vaccine programs currently is supported by our heat stabilization technology, known as ThermoVax^®, under existing and on-going government contract funding. With the government contract from the National Institute of Allergy and Infectious Diseases (“NIAID”), we will attempt to advance the development of RiVax^® to protect against exposure to ricin toxin. 

An outline of our business strategy follows:

● Following positive primary endpoint topline analysis for the Phase 3 clinical trial of SGX301, as well as further statistically significant improvement in response rates with longer treatment (12 weeks compared to 6 weeks), continue to explore partnership and commercialization while pursuing New Drug Application (“NDA”)  filing;

● Following positive interim analysis, complete enrollment and report final results in our pivotal Phase 3 clinical trial of SGX942 for the treatment of oral mucositis in head and neck cancer;

● Continue development of RiVax^® in combination with our ThermoVax^® technology to develop a new heat stable vaccine in biodefense with NIAID funding support;

● Continue to apply for and secure additional government funding for each of our Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements;

● Pursue business development opportunities for our pipeline programs, as well as explore merger/acquisition strategies; and

● Acquire or in-license new clinical-stage compounds for development.

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Corporate Information

We were incorporated in Delaware in 1987 under the name Biological Therapeutics, Inc. In 1987, we merged with Biological Therapeutics, Inc., a North Dakota corporation, pursuant to which we changed our name to “Immunotherapeutics, Inc.” We changed our name to “Endorex Corp.” in 1996, to “Endorex Corporation” in 1998, to “DOR BioPharma, Inc.” in 2001, and finally to “Soligenix, Inc.” in 2009. Our principal executive offices are located at 29 Emmons Drive, Suite B-10, Princeton, New Jersey 08540 and our telephone number is (609) 538-8200.

Our Product Candidates in Development

The following tables summarize our product candidates under development:

Specialized BioTherapeutics Product Candidates*

Soligenix Product Candidate	Therapeutic Indication	Stage of Development
SGX301	Cutaneous T-Cell Lymphoma	Phase 2 trial completed; demonstrated significantly higher response rate compared to placebo; Phase 3 trial completed; demonstrated statistical significance in primary endpoint in March 2020 and demonstrated continued improvement in treatment response with extended treatment in April 2020; additional extended treatment and follow-up outcomes pending throughout 2020
SGX942	Oral Mucositis in Head and Neck Cancer	Phase 2 trial completed; demonstrated significant response compared to placebo with positive long-term (12 month) safety also reported; Phase 3 clinical trial enrolled first patient in December 2017, with positive interim analysis received in August 2019; final results expected in the fourth quarter of 2020
SGX203†	Pediatric Crohn’s disease	Phase 1/2 clinical trial completed; efficacy data, pharmacokinetic (PK)/pharmacodynamic (PD) profile and safety profile demonstrated; Phase 3 clinical trial initiation contingent upon additional funding, such as through partnership
SGX201†	Acute Radiation Enteritis	Phase 1/2 clinical trial completed; safety profile and preliminary efficacy demonstrated; further clinical development contingent upon additional funding, such as through partnership

Public Health Solutions*†

ThermoVax®	Thermostability of vaccines for Ricin toxin, Ebola, Marburg and SARS-CoV-2 (COVID-19) viruses	Pre-clinical
RiVax®	Vaccine against Ricin Toxin Poisoning	Phase 1a and 1b trials completed, safety and neutralizing antibodies for protection demonstrated; Phase 1c trial initiated December 2019, closed January 2020
SGX943	Therapeutic against Emerging Infectious Diseases	Pre-clinical

* Timelines subject to potential disruption due to COVID-19 outbreak.

† Contingent upon continued government contract/grant funding or other funding source.

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Specialized BioTherapeutics Overview

SGX301 – for Treating Cutaneous T-Cell Lymphoma

SGX301 is a novel, first-in-class, photodynamic therapy that utilizes safe visible light for activation. The active ingredient in SGX301 is synthetic hypericin, a photosensitizer which is topically applied to skin lesions and then activated by fluorescent light 16 to 24 hours later. Hypericin is also found in several species of Hypericum plants, although the drug used in SGX301 is chemically synthesized by a proprietary manufacturing process and not extracted from plants. Importantly, hypericin is optimally activated with visible light thereby avoiding the negative consequences of ultraviolet light. Other light therapies using UVA or UVB light can result in serious adverse effects including secondary skin cancers.

Combined with photoactivation, in clinical trials synthetic hypericin has demonstrated significant anti-proliferative effects on activated normal human lymphoid cells and inhibited growth of malignant T-cells isolated from CTCL patients. In both settings, it appears that the mode of action is an induction of cell death in a concentration as well as a light dose-dependent fashion. These effects appear to result, in part, from the generation of singlet oxygen during photoactivation of hypericin.

Hypericin is one of the most efficient known generators of singlet oxygen, the key component for phototherapy. The generation of singlet oxygen induces necrosis and apoptosis in adjacent cells. The use of topical synthetic hypericin coupled with directed visible light results in generation of singlet oxygen only at the treated site. We believe that the use of visible light (as opposed to cancer-causing ultraviolet light) is a major advance in photodynamic therapy. In a published Phase 2 clinical study in CTCL, after six weeks of twice weekly therapy, a majority of patients experienced a statistically significant (p<0.04) improvement with SGX301 whereas the placebo was ineffective: 58.3% compared to 8.3%, respectively.

SGX301 has received Orphan Drug designation as well as Fast Track designation from the United States (“U.S.”) Food and Drug Administration (“FDA”). The Orphan Drug Act is intended to assist and encourage companies to develop safe and effective therapies for the treatment of rare diseases and disorders. In addition to providing a seven-year term of market exclusivity for SGX301 upon final FDA approval, Orphan Drug designation also positions us to be able to leverage a wide range of financial and regulatory benefits, including government grants for conducting clinical trials, waiver of FDA user fees for the potential submission of an NDA for SGX301, and certain tax credits. In addition, Fast Track is a designation that the FDA reserves for a drug intended to treat a serious or life-threatening condition and one that demonstrates the potential to address an unmet medical need for the condition. Fast Track designation is designed to facilitate the development and expedite the review of new drugs. For instance, should events warrant, we will be eligible to submit a NDA for SGX301 on a rolling basis, permitting the FDA to review sections of the NDA prior to receiving the complete submission. Additionally, NDAs for Fast Track development programs ordinarily will be eligible for priority review. SGX301 for the treatment of CTCL also was granted Orphan Drug designation from the European Medicines Agency (“EMA”) Committee for Orphan Medical Products and Promising Innovative Medicine (“PIM”) designation from the Medicines and Healthcare Products Regulatory Agency (“MHRA”) in the United Kingdom (“UK”).

In August 2018, the U.S. Patent Office granted us a patent titled “Systems and Methods for Producing Synthetic Hypericin” for the unique proprietary process manufacturing the highly purified form of synthetic hypericin, the active pharmaceutical ingredient in SGX301.

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In October 2019, U.S. Patent Office allowed the divisional patent application titled “Systems and Methods for Producing Synthetic Hypericin”. The allowed claims are directed to unique, proprietary methods to produce a novel, highly purified form of synthetic hypericin. This new divisional claim set expands on the previous issued claims in the parent U.S. patent.

In April 2020, the European patent office granted the divisional patent application titled "Formulations and Methods of Treatment of Skin Conditions" (No. 2932973). The granted claims are directed to the therapeutic use of synthetic hypericin in the treatment of CTCL. This new patent expands on our comprehensive patent estate, which includes protection on the composition of the purified synthetic hypericin, methods of synthesis and therapeutic methods of use in both CTCL and psoriasis, and is being pursued worldwide.

Based on the positive and previously published Phase 2 results, we initiated our pivotal Phase 3 clinical study of SGX301 for the treatment of CTCL during December 2015. This trial, referred to as the “FLASH” study (Fluorescent Light Activated Synthetic Hypericin), aims to evaluate the response to SGX301 as a skin directed therapy to treat early stage CTCL. We have completed patient enrollment with approximately 35 CTCL centers across the U.S. participating in this pivotal trial. The Phase 3 protocol is a highly powered, double-blind, randomized, placebo-controlled, multicenter trial that enrolled 169 subjects (166 evaluable). The trial consists of three treatment cycles, each of eight weeks duration. Treatments are administered twice weekly for the first six weeks and treatment response is determined at the end of the eighth week. In the first treatment cycle, approximately 66% of subjects receive SGX301 and 33% receive placebo treatment of their index lesions. In the second cycle, all subjects receive SGX301 treatment of their index lesions, and in the third cycle, all subjects receive SGX301 treatment of all of their lesions. The majority of subjects enrolled to date have elected to continue into the third optional, open-label cycle of the study. We continue to work closely with the Cutaneous Lymphoma Foundation, as well as the National Organization for Rare Disorders. Subjects are followed for an additional six months after their last evaluation visit. The primary efficacy endpoint is assessed on the percentage of patients in each of the two treatment groups (i.e., SGX301 and placebo) achieving a partial or complete response of the treated lesions, defined as a ≥ 50% reduction in the total Composite Assessment of Index Lesion Disease Severity (“CAILS”) score for three index lesions at the Cycle 1 evaluation visit (Week 8) compared to the total CAILS score at baseline. Other secondary measures assess treatment response including duration, degree of improvement, time to relapse and safety.

During September 2017, the National Cancer Institute (“NCI”), part of the National Institutes of Health (“NIH”) awarded us a Small Business Innovation Research (“SBIR”) grant of approximately $1.5 million over two years to support the conduct of our pivotal, Phase 3, randomized, double-blind, placebo-controlled study evaluating SGX301 (synthetic hypericin) as a treatment for CTCL. This grant has been exhausted as of December 2019.

During October 2018, an Independent Data Monitoring Committee (“DMC”) completed an unblinded interim analysis with data from approximately 100 subjects, including an assessment of the Phase 3 FLASH study’s primary efficacy endpoint. The DMC provided a positive recommendation to randomize approximately 40 additional subjects into the trial to maintain the rigorous assumption of 90% statistical power for the primary efficacy endpoint. No safety concerns were reported by the DMC based on the interim analysis.

Positive primary endpoint analysis for the Phase 3 study for SGX301 was completed in March 2020. The study enrolled 169 patients (166 evaluable) randomized 2:1 to receive either SGX301 (116 patients) or placebo (50 patients) and demonstrated a statistically significant treatment response (p=0.04) in the CAILS primary endpoint assessment at 8 weeks for Cycle 1. A total of 16% of the patients receiving SGX301 achieved at least a 50% reduction in their index lesions compared to only 4% of patients in the placebo group at 8 weeks. SGX301 treatment in the first cycle was safe and well tolerated.

During April 2020, analysis of the second open-label treatment cycle (“Cycle 2”) was completed, showing that continued treatment with SGX301 twice weekly for an additional 6 weeks (12 weeks total) increased the positive response rate to 40% (p<0.0001 compared to placebo and p<0.0001 compared to 6-weeks treatment). After the subsequent additional 6-week treatment, the response rate in patients receiving a total of 12 weeks treatment increased two and a half-fold. Treatment responses were assessed at Week 8 (after 6 weeks of treatment) and at week 16 (after 12 weeks of treatment). A positive response was defined as an improvement of at least 50% in the CAILS for three index lesions evaluated in both Cycles 1 and 2. The data continues to indicate that SGX301 is safe and well tolerated.

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We estimate the potential worldwide market for SGX301 is in excess of $250 million for all applications, including the treatment of CTCL. This potential market information is a forward-looking statement, and investors are urged not to place undue reliance on this statement. While we have determined this potential market size based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.

Cutaneous T-Cell Lymphoma

CTCL is a class of non-Hodgkin’s lymphoma (“NHL”), a type of cancer of the white blood cells that are an integral part of the immune system. Unlike most NHLs, which generally involve B-cell lymphocytes (involved in producing antibodies), CTCL is caused by an expansion of malignant T-cell lymphocytes (involved in cell-mediated immunity) normally programmed to migrate to the skin. These skin-trafficking malignant T-cells migrate to the skin, causing various lesions to appear that may change shape as the disease progresses, typically beginning as a rash and eventually forming plaques and tumors. Mycosis fungoides (“MF”) is the most common form of CTCL. It generally presents with skin involvement only, manifested as scaly, erythematous patches. Advanced disease with diffuse lymph node and visceral organ involvement is usually associated with a poorer response rate to standard therapies. A relatively uncommon sub-group of CTCL patients present with extensive skin involvement and circulating malignant cerebriform T-cells, referred to as Sézary syndrome. These patients have substantially graver prognoses (expected five-year survival rate of 24%), than those with MF (expected five-year survival rate of 88%).

CTCL mortality is related to stage of disease, with median survival generally ranging from about 12 years in the early stages to only 2.5 years when the disease has advanced. There is currently no FDA-approved drug for front-line treatment of early stage CTCL. Treatment of early-stage disease generally involves skin-directed therapies. One of the most common unapproved therapies used for early-stage disease is oral 5 or 8-methoxypsoralen (“Psoralen”) given with ultraviolet A (“UVA”) light, referred to as PUVA, which is approved for dermatological conditions such as disabling psoriasis not adequately responsive to other forms of therapy, idiopathic vitiligo and skin manifestations of CTCL in persons who have not been responsive to other forms of treatment. Psoralen is a mutagenic chemical that interferes with DNA causing mutations and other malignancies. Moreover, UVA is a carcinogenic light source that when combined with the Psoralen, results in serious adverse effects including secondary skin cancers; therefore, the FDA requires a Black Box warning for PUVA.

CTCL constitutes a rare group of NHLs, occurring in about 4% of the approximate 500,000 individuals living with NHL. We estimate, based upon review of historic published studies and reports and an interpolation of data on the incidence of CTCL, that it affects over 20,000 individuals in the U.S., with approximately 2,800 new cases seen annually.

Dusquetide

Dusquetide (research name: SGX94) is an innate defense regulator (“IDR”) that regulates the innate immune system to simultaneously reduce inflammation, eliminate infection and enhance tissue healing.

Dusquetide is based on a new class of short, synthetic peptides known as IDRs. It has a novel mechanism of action in that it modulates the body’s reaction to both injury and infection and is both simultaneously anti-inflammatory and anti-infective. IDRs have no direct antibiotic activity but modulate host responses, increasing survival after infections with a broad range of bacterial Gram-negative and Gram-positive pathogens including both antibiotic sensitive and resistant strains, as well as accelerating resolution of tissue damage following exposure to a variety of agents including bacterial pathogens, trauma and chemo- or radiation-therapy. IDRs represent a novel approach to the control of infection and tissue damage via highly selective binding to an intracellular adaptor protein, sequestosome-1, also known as p62, which has a pivotal function in signal transduction during activation and control of the innate defense system. Preclinical data indicate that IDRs may be active in models of a wide range of therapeutic indications including life-threatening bacterial infections as well as the severe side-effects of chemo- and radiation-therapy. Additionally, due to selective binding to p62, dusquetide may have potential anti-tumor action.

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Dusquetide has demonstrated efficacy in numerous animal disease models including mucositis, colitis, skin infection and other bacterial infections and has been evaluated in a double-blind, placebo-controlled Phase 1 clinical trial in 84 healthy volunteers with both single ascending dose and multiple ascending dose components. Dusquetide was shown to have a good safety profile and be well-tolerated in all dose groups when administered by IV over 7 days and was consistent with safety results seen in pre-clinical studies. We believe that market opportunities for dusquetide include, but are not limited to, oral and GI mucositis, acute Gram-positive bacterial infections (e.g., methicillin resistant Staphylococcus aureus (MRSA)), acute Gram-negative infections (e.g., acinetobacter, melioidosis), and acute radiation syndrome.

SGX942 – for Treating Oral Mucositis in Head and Neck Cancer

SGX942 is our product candidate containing our IDR technology, dusquetide, targeting the treatment of oral mucositis in head and neck cancer patients. Oral mucositis in this patient population is an area of unmet medical need where there are currently no approved drug therapies. Accordingly, we received Fast Track designation for the treatment of oral mucositis as a result of radiation and/or chemotherapy treatment in head and neck cancer patients from the FDA. In addition, dusquetide has been granted PIM designation in the UK by the MHRA for the treatment of severe oral mucositis in head and neck cancer patients receiving chemoradiation therapy. The U.S. Patent and Trademark Office and the European Patent Office granted us the patent titled “Novel Peptides and Analogs for Use in the Treatment of Oral Mucositis” on August 16, 2016 and January 23, 2019, respectively. The newly issued patent claims therapeutic use of dusquetide and related IDR analogs, and adds to composition of matter claims for dusquetide and related analogs that have been granted in the U.S. and worldwide.

We initiated a Phase 2 clinical study of SGX942 for the treatment of oral mucositis in head and neck cancer patients in December of 2013. We completed enrollment in this trial in the second half of 2015, and in December 2015 released positive preliminary results. In this Phase 2 proof-of-concept clinical study that enrolled 111 patients, SGX942, at a dose of 1.5 mg/kg, successfully reduced the median duration of severe oral mucositis by 50%, from 18 days to 9 days (p=0.099) in all patients and by 67%, from 30 days to 10 days (p=0.040) in patients receiving the most aggressive chemoradiation therapy for treatment of their head and neck cancer. The p-values met the prospectively defined statistical threshold of p<0.1 in the study protocol. A less severe occurrence of oral mucositis, ulcerative oral mucositis (defined as oral mucositis with a WHO score ≥2 corresponding to the occurrence of overt ulceration in the mouth), was also monitored during the study. In the patients receiving the most aggressive chemoradiation therapy, the median duration of oral mucositis was found to decrease from 65 days in the placebo treated patients to 51 days in the patients treated with SGX942 1.5 mg/kg (p=0.099).

In addition to identifying the best dose of 1.5 mg/kg, this study achieved all objectives, including increased incidence of “complete response” of tumor at the one month follow-up visit (47% in placebo vs. 63% in SGX942 at 1.5 mg/kg). Decreases in mortality and decreases in infection rate were also observed with SGX942 treatment, consistent with the preclinical results observed in animal models.

SGX942 was found to be generally safe and well tolerated, consistent with the safety profile observed in the prior Phase 1 study conducted in 84 healthy volunteers. The long-term (12 month) follow-up data was consistent with the preliminary positive safety and efficacy findings. While the placebo population experienced the expected 12-month survival rate of approximately 80%, as defined in the Surveillance, Epidemiology, and End Results statistics 1975-2012 from the National Cancer Institute, the SGX942 1.5 mg/kg treatment group reported a 12-month survival rate of 93% (7% mortality in the SGX942 1.5 mg/kg group compared to 19% in the placebo group). Similarly, tumor resolution (complete response) at 12 months was better in the SGX942 1.5 mg/kg treatment group relative to the placebo population (80% in the 1.5 mg/kg group compared to 74% in the placebo group). Moreover, in the patients receiving chemotherapy every third week, the SGX942 1.5 mg/kg treatment group had a tumor resolution rate (complete response) of 82% throughout the 12 months following chemoradiation therapy, while the placebo group experienced a 64% complete response rate. The long-term follow-up results from the Phase 2 study are reviewed in “Dusquetide: Reduction in Oral Mucositis associated with Enduring Ancillary Benefits in Tumor Resolution and Decreased Mortality in Head and Neck Cancer Patients” published online in Biotechnology Reports and available at the following link: https://doi.org/10.1016/j.btre.2017.05.002. In addition to safety, evaluations of other secondary efficacy endpoints, such as the utilization of opioid pain medication, indicated that the SGX942 1.5mg/kg treatment group had a 40% decrease in the use of opioids at the later stage of the treatment phase of the trial, when oral mucositis is usually most severe and expected to increase pain medication use. This was in contrast to the placebo group, which demonstrated a 10% increase in use of opioids over this same period. Data from this Phase 2 trial was published online in the Journal of Biotechnology. The publication also delineates the supportive nonclinical data in this indication, demonstrating consistency in the qualitative and quantitative biological response, including dose response, across the nonclinical and clinical data sets. The results are available at the following link: https://www.sciencedirect.com/science/article/pii/S0168165616315668?via%3Dihub.

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On September 9, 2016, we and SciClone Pharmaceuticals, Inc. (“SciClone”) entered into an exclusive license agreement, pursuant to which we granted rights to SciClone to develop, promote, market, distribute and sell SGX942 in defined territories. Under the terms of the license agreement, SciClone will be responsible for all aspects of development, product registration and commercialization in the territories, having access to data generated by us. In exchange for exclusive rights, SciClone will pay us royalties on net sales, and we will supply commercial drug product to SciClone on a cost-plus basis, while maintaining worldwide manufacturing rights.

We have received clearance from the FDA to advance the pivotal Phase 3 protocol for SGX942 in the treatment of oral mucositis in patients with head and neck cancer receiving chemoradiation therapy. Additionally, we have received positive Scientific Advice from the EMA for the development of SGX942 as a treatment for oral mucositis in patients with head and neck cancer. The Scientific Advice from the EMA indicates that a single, double-blind, placebo-controlled, multinational, Phase 3 pivotal study, if successful, in conjunction with the Phase 2 dose-ranging study, is generally considered sufficient to support a marketing authorization application (“MAA”) to the EMA for potential licensure in Europe. The advice also provided several suggestions to strengthen the study design and data collection that were integrated into the final protocol. Scientific Advice is offered by the EMA to stakeholders for clarification of questions arising during development of medicinal products. The scope of Scientific Advice is limited to scientific issues and focuses on development strategies rather than pre-evaluation of data to support an MAA. Scientific Advice is legally non-binding and is based on the current scientific knowledge which may be subject to future changes.

We are working with leading oncology centers, a number of which participated in the Phase 2 study, to advance this Phase 3 clinical trial referred to as the “DOM–INNATE” study (Dusquetide treatment in Oral Mucositis – by modulating INNATE immunity). Based on the positive and previously published Phase 2 results (Study IDR-OM-01), the pivotal Phase 3 clinical trial (Study IDR-OM-02) is a highly powered, double-blind, randomized, placebo-controlled, multinational trial that will seek to enroll approximately 285 subjects with squamous cell carcinoma of the oral cavity and oropharynx who are scheduled to receive a minimum total cumulative radiation dose of 55 Gy fractionated as 2.0-2.2 Gy per day with concomitant cisplatin chemotherapy given as a dose of 80-100 mg/m² every third week. Subjects are randomized to receive either 1.5 mg/kg SGX942 or placebo given twice a week during and for two weeks following completion of chemoradiation therapy (“CRT”). The primary endpoint for the study is the median duration of severe oral mucositis, which is assessed by oral examination at each treatment visit and then through six weeks following completion of CRT. Oral mucositis is evaluated using the WHO Grading system. Severe oral mucositis is defined as a WHO Grade of ≥3. Subjects are followed for an additional 12 months after the completion of treatment.

During July 2017, we initiated our pivotal Phase 3 study with a controlled roll-out of U.S. study sites, followed by the addition of European centers in 2018. Approximately 50 U.S. and European oncology centers are participating in this pivotal Phase 3 study.

During September 2017, the National Institute of Dental and Craniofacial Research (“NIDCR”), part of the NIH, awarded us a SBIR grant of approximately $1.5 million over two years to support the conduct of our Phase 3, multinational, randomized, double-blind, placebo-controlled study evaluating SGX942 (dusquetide) as a treatment for severe oral mucositis in patients with head and neck cancer receiving CRT. This grant has been exhausted as of August 2019.

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On April 9, 2019, the U.S. Patent Office issued a new patent No. 10,253,068 titled “Novel Peptides for Treating and Preventing Immune-Related Disorders, Including Treating and Preventing Infection by Modulating Innate Immunity” for our dusquetide related analogs.

In April 2019, the Paediatric Committee of the EMA approved our Paediatric Investigation Plan (“PIP”) for SGX942, a prerequisite for filing a Marketing Authorization Application (“MAA”) for any new medicinal product in Europe. The EMA also agreed that we may defer conducting the PIP until successful completion of our ongoing pivotal Phase 3 clinical trial of SGX942, which allows us to file the adult indication MAA prior to completion of the PIP.

During August 2019, an independent DMC completed an unblinded interim analysis with data from approximately 90 subjects, including an assessment of the Phase 3 DOM-INNATE study’s primary efficacy endpoint. The DMC provided a positive recommendation to randomize approximately 70 additional subjects into the trial to maintain the rigorous assumption of 90% statistical power for the primary efficacy endpoint. No safety concerns were reported by the DMC based on the interim analysis. We currently anticipate final top-line results during the fourth quarter 2020.

In August 2019, the NIDCR, part of the NIH, awarded us a Phase 1 SBIR grant of approximately $150,000 to support the evaluation of SGX942 (dusquetide) in pediatric indications. This award will facilitate the assessment of SGX942 safety in juvenile animals, supporting future studies in pediatric populations, including oral mucositis indications in pediatric patients undergoing stem cell transplants and treatments for head and neck cancer.

In February 2020, the Japanese Patent Office has granted the patent titled "Novel Peptides and Analogs for Use in the Treatment of Oral Mucositis." This allowance builds on similar intellectual property in the U.S., New Zealand, Australia and Singapore and patent applications pending in other jurisdictions worldwide. The new claims cover therapeutic use of dusquetide (active ingredient in SGX942) and related IDR analogs, and add to composition of matter claims for dusquetide and related analogs that have been granted in the U.S. and worldwide.

We estimate the potential worldwide market for SGX942 is in excess of $500 million for all applications, including the treatment of oral mucositis. This potential market information is a forward-looking statement, and investors are urged not to place undue reliance on this statement. While we have determined this potential market size based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.

Oral Mucositis

Mucositis is the clinical term for damage done to the mucosa by anticancer therapies. It can occur in any mucosal region, but is most commonly associated with the mouth, followed by the small intestine. We estimate, based upon our review of historic studies and reports, and an interpolation of data on the incidence of mucositis, that mucositis affects approximately 500,000 people in the U.S. per year and occurs in 40% of patients receiving chemotherapy. Mucositis can be severely debilitating and can lead to infection, sepsis, the need for parenteral nutrition and narcotic analgesia. The GI damage causes severe diarrhea. These symptoms can limit the doses and duration of cancer treatment, leading to sub-optimal treatment outcomes.

The mechanisms of mucositis have been extensively studied and have been linked to the interaction of chemotherapy and/or radiation therapy with the innate defense system. Bacterial infection of the ulcerative lesions is regarded as a secondary consequence of dysregulated local inflammation triggered by therapy-induced cell death, rather than as the primary cause of the lesions.

We estimate, based upon our review of historic studies and reports, and an interpolation of data on the incidence of oral mucositis, that oral mucositis is a subpopulation of approximately 90,000 patients in the U.S., with a comparable number in Europe. Oral mucositis almost always occurs in patients with head and neck cancer treated with radiation therapy (greater than 80% incidence of severe mucositis) and is common in patients undergoing high dose chemotherapy and hematopoietic cell transplantation, where the incidence and severity of oral mucositis depends greatly on the nature of the conditioning regimen used for myeloablation.

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Oral BDP

Oral BDP (beclomethasone 17,21-dipropionate) represents a first-of-its-kind oral, locally acting therapy tailored to treat GI inflammation. BDP has been marketed in the U.S. and worldwide since the early 1970s as the active pharmaceutical ingredient in a nasal spray and in a metered-dose inhaler for the treatment of patients with allergic rhinitis and asthma. Oral BDP is specifically formulated for oral administration as a single product consisting of two tablets. One tablet is intended to release BDP in the upper sections of the GI tract and the other tablet is intended to release BDP in the lower sections of the GI tract.

Based on its pharmacological characteristics, oral BDP may have utility in treating other conditions of the GI tract having an inflammatory component. We are planning to pursue development programs for the treatment of pediatric Crohn’s disease, acute radiation enteritis and GI acute radiation syndrome pending further grant funding. We are also exploring the possibility of testing oral BDP for local inflammation associated with ulcerative colitis, among other indications. 

In July 2019, the European Patent Office issued two patents, both titled “Topically Active Steroids for use in Radiation and Chemotherapeutic Injury”, following the expiration of the objection period. The new patents (#2,373,160 and #2,902,031) claim use of oral beclomethasone 17,21-dipropionate (BDP) for treatment of damage to the GI tract as a result of acute radiation injury, including total body irradiation in the accidental or biodefense context.

We estimate the potential worldwide market for oral BDP is in excess of $500 million for all applications, including the treatment of pediatric Crohn’s disease. This potential market information is a forward-looking statement, and investors are urged not to place undue reliance on this statement. While we have determined this potential market size based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.

SGX203 – for Treating Pediatric Crohn’s Disease

SGX203 is a two tablet delivery system of BDP specifically designed for oral use that allows for administration of immediate and delayed release BDP throughout the small bowel and the colon. The FDA has given SGX203 Orphan Drug designation as well as Fast Track designation for the treatment of pediatric Crohn’s disease. We will pursue a pivotal Phase 3 clinical trial of SGX203 for the treatment of pediatric Crohn’s disease contingent upon additional funding, such as through partnership funding support.

Pediatric Crohn’s Disease

Crohn’s disease causes inflammation of the GI tract. Crohn’s disease can affect any area of the GI tract, from the mouth to the anus, but it most commonly affects the lower part of the small intestine, called the ileum. The swelling caused by the disease extends deep into the lining of the affected organ. The swelling can induce pain and can make the intestines empty frequently, resulting in diarrhea. Because the symptoms of Crohn’s disease are similar to other intestinal disorders, such as irritable bowel syndrome and ulcerative colitis, it can be difficult to diagnose. People of Ashkenazi Jewish heritage have an increased risk of developing Crohn’s disease.

Crohn’s disease can appear at any age, but it is most often diagnosed in adults in their 20s and 30s. However, approximately 30% of people with Crohn’s disease develop symptoms before 20 years of age. We estimate, based upon our review of historic published studies and reports, and an interpolation of data on the incidence of pediatric Crohn’s disease, that pediatric Crohn’s disease is a subpopulation of approximately 80,000 patients in the U.S. with a comparable number in Europe. Crohn’s disease tends to be both severe and extensive in the pediatric population and a relatively high proportion (approximately 40%) of pediatric Crohn’s patients have involvement of their upper GI tract.

Crohn’s disease presents special challenges for children and teens. In addition to bothersome and often painful symptoms, the disease can stunt growth, delay puberty, and weaken bones. Crohn’s disease symptoms may sometimes prevent a child from participating in enjoyable activities. The emotional and psychological issues of living with a chronic disease can be especially difficult for young people.

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SGX201 – for Preventing Acute Radiation Enteritis

SGX201 is a delayed-release formulation of BDP specifically designed for oral use. In 2012, we completed a Phase 1/2 clinical trial testing SGX201 in prevention of acute radiation enteritis. Patients with rectal cancer scheduled to undergo concurrent radiation and chemotherapy prior to surgery were randomized to one of four dose groups. The objectives of the study were to evaluate the safety and maximal tolerated dose of escalating doses of SGX201, as well as the preliminary efficacy of SGX201 for prevention of signs and symptoms of acute radiation enteritis. The study demonstrated that oral administration of SGX201 was safe and well tolerated across all four dose groups. There was also evidence of a potential dose response with respect to diarrhea, nausea and vomiting and the assessment of enteritis according to National Cancer Institute Common Terminology Criteria for Adverse Events for selected GI events. In addition, the incidence of diarrhea was lower than that seen in published historical control data in this patient population. This program was supported in part by a $500,000 two-year SBIR grant awarded by the NIH. We continue to work with our Radiation Enteritis medical advisors to identify additional funding opportunities to support the clinical development program.

We have received Fast Track designation from the FDA for SGX201 for acute radiation enteritis.

Acute Radiation Enteritis

External radiation therapy is used to treat most types of cancer, including cancer of the bladder, uterine, cervix, rectum, prostate, and vagina. During delivery of treatment, some level of radiation will also be delivered to healthy tissue, including the bowel, leading to acute and chronic toxicities. The large and small bowels are very sensitive to radiation and the larger the dose of radiation the greater the damage to normal bowel tissue. Radiation enteritis is a condition in which the lining of the bowel becomes swollen and inflamed during or after radiation therapy to the abdomen, pelvis, or rectum. Most tumors in the abdomen and pelvis need large doses, and almost all patients receiving radiation to the abdomen, pelvis, or rectum will show signs of acute enteritis.

Patients with acute enteritis may have nausea, vomiting, abdominal pain and bleeding, among other symptoms. Some patients may develop dehydration and require hospitalization. With diarrhea, the GI tract does not function normally, and nutrients such as fat, lactose, bile salts, and vitamin B12 are not well absorbed.

Symptoms will usually resolve within two to six weeks after therapy has ceased. Radiation enteritis is often not a self-limited illness, as over 80% of patients who receive abdominal radiation therapy complain of a persistent change in bowel habits. Moreover, acute radiation injury increases the risk of development of chronic radiation enteropathy, and overall 5% to 15% of the patients who receive abdominal or pelvic irradiation will develop chronic radiation enteritis.

We estimate, based upon our review of historic published studies and reports, and an interpolation of data on the treatment courses and incidence of cancers occurring in the abdominal and pelvic regions, there to be over 100,000 patients annually in the U.S., with a comparable number in Europe, who receive abdominal or pelvic external beam radiation treatment for cancer, and these patients are at risk of developing acute and chronic radiation enteritis.

Public Health Solutions Overview

ThermoVax^® – Thermostability Technology

ThermoVax^® is a novel method for thermostabilizing vaccines with a variety of adjuvants, resulting in a single vial which can be reconstituted with water for injection immediately prior to use.

One of the adjuvants utilized in ThermoVax^® is aluminum salts (known colloquially as Alum). Alum is the most widely employed adjuvant technology in the vaccine industry.

The value of ThermoVax^® lies in its potential ability to eliminate the need for cold chain production, transportation, and storage for Alum-adjuvanted vaccines. This would relieve the high costs of producing and maintaining vaccines under refrigerated conditions. Based on historical reports from the World Health Organization and other scientific reports, we believe that a meaningful proportion of vaccine doses globally are wasted due to excursions from required cold chain temperature ranges. This is due to the fact that many vaccines need to be maintained either between 2 and 8 degrees Celsius (”C”), frozen below -20 degrees C, or frozen below -60 degrees C, and even brief excursions from these temperature ranges usually necessitates the destruction of the product or the initiation of costly stability programs specific for the vaccine lots in question. ThermoVax^® has the potential to facilitate easier storage and distribution of strategic national stockpile vaccines for ricin exposure in emergency settings.

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ThermoVax^® development specifically in the context of an Alum adjuvant was supported pursuant to our $9.4 million NIAID grant enabling development of thermo-stable ricin (RiVax^®) and anthrax vaccines. Proof-of-concept preclinical studies with ThermoVax^® indicate that it is able to produce stable vaccine formulations using adjuvants, protein immunogens, and other components that ordinarily would not withstand long temperature variations exceeding customary refrigerated storage conditions. These studies were conducted with our Alum-adjuvanted ricin toxin vaccine, RiVax^® and our Alum-adjuvanted anthrax vaccine. Each vaccine was manufactured under precise lyophilization conditions using excipients that aid in maintaining native protein structure of the key antigen. When RiVax^® was kept at 40 degrees C (104 degrees Fahrenheit) for up to one year, all of the animals vaccinated with the lyophilized RiVax^® vaccine developed potent and high titer neutralizing antibodies. In contrast, animals that were vaccinated with the liquid RiVax^® vaccine kept at 40 degrees C did not develop neutralizing antibodies and were not protected against ricin exposure. The ricin A chain is extremely sensitive to temperature and rapidly loses the ability to induce neutralizing antibodies when exposed to temperatures higher than 8 degrees C. When the anthrax vaccine was kept for up to 16 weeks at 70 degrees C, it was able to develop a potent antibody response, unlike the liquid formulation kept at the same temperature. Moreover, we also have demonstrated the compatibility of our thermostabilization technology with other secondary adjuvants such as TLR-4 agonists.

We also entered into a collaboration agreement with Axel Lehrer, PhD of the Department of Tropical Medicine, Medical Microbiology and Pharmacology, John A. Burns School of Medicine, University of Hawaiʻi at Manoa (“UH Manoa”) and Hawaii Biotech, Inc. (“HBI”) to develop a heat stable subunit Ebola vaccine. Dr. Lehrer, a co-inventor of the Ebola vaccine with HBI, has shown proof of concept efficacy with subunit Ebola vaccines in non-human primates. The most advanced Ebola vaccines involve the use of vesicular stomatitis virus and adenovirus vectors – live, viral vectors which complicate the manufacturing, stability and storage requirements. Dr. Lehrer’s vaccine candidate is based on highly purified recombinant protein antigens, circumventing many of these manufacturing difficulties. Dr. Lehrer and HBI have developed a robust manufacturing process for the required proteins. Application of ThermoVax^® may allow for a product that can avoid the need for cold chain distribution and storage, yielding a vaccine ideal for use in both the developed and developing world. This agreement has expired in accordance with its terms.

During September 2017, we announced we will be participating in a NIAID Research Project (R01) grant awarded to UH Manoa for the development of a trivalent thermostabilized filovirus vaccine (including protection against Zaire ebolavirus, Sudan ebolavirus and Marburg Marburgvirus), with our awarded funding of approximately $700,000 over five years. Previous collaborations demonstrated the feasibility of developing a heat stable subunit Ebola vaccine. Under the terms of the subaward, we will continue to support vaccine formulation development with our proprietary vaccine thermostabilization technology, ThermoVax^®. Ultimately, the objective is to produce a thermostable trivalent filovirus vaccine for protection against Ebola and related diseases, allowing worldwide distribution without the need for cold storage. Based on current U.S. government needs, efforts have recently been expanded to focus on a monovalent or bivalent vaccine to specifically address Marburg marburgvirus.

On December 21, 2010, we executed a worldwide exclusive license agreement with the University of Colorado (“UC”) for certain patents relating to ThermoVax^® in all fields of use. In April 2018, the UC delivered a notice of termination of our license agreement based upon our failure to achieve one of the development milestones: initiation of the Phase 1 clinical trial of the heat stabilization technology by March 31, 2018. After negotiating with the UC, we and the UC agreed to extend the termination date to October 31, 2018 in order to allow us time to agree upon a potential agreement that would allow us to keep the rights to, and to continue to develop, the heat stabilization technology or a product candidate containing the heat stabilization technology in our field of use.

On October 31, 2018, in a series of related transactions, (a) we and the UC agreed to terminate the original license agreement, (b) the UC and VitriVax, Inc. (“VitriVax”) executed a worldwide exclusive license agreement for the heat stabilization technology for all fields of use, and (c) we and VitriVax executed a worldwide exclusive sublicense agreement for the heat stabilization technology for use in the fields of ricin and Ebola vaccines. We paid a $100,000 sublicense fee on the effective date of the sublicense agreement. To maintain the sublicense we are obliged to pay a minimum annual royalty of $20,000 until first commercial sale of a sublicensed product, upon which point, we shall pay an earned royalty of 2% of net sales subject to a minimum royalty of $50,000 each year. We are also required to pay royalty on any sub-sublicense income based on a declining percentage of all sub-sublicense income calculated within the contractual period until reaching a minimum of 15% after two years. In addition, we are required to pay VitriVax milestone fees of: (a) $50,000 upon initiation of a Phase 2 clinical trial of the sublicensed product, (b) $200,000 upon regulatory approval of a sublicensed product, and (c) $1 million upon achieving $10 million in aggregate net sales of a sublicensed product in the U.S. or equivalent. To date none of these milestones have been met.

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On February 7, 2019, European Journal of Pharmaceutics and Biopharmaceutics published a scientific article demonstrating the successful thermostabilization of an Alum-adjuvanted Ebola subunit vaccine candidate.

On July 31, 2019, we and our collaborators presented two posters on the trivalent vaccine program. The first poster outlined the stability of the lyophilized formulations of the Ebola virus glycoprotein upon lyophilization and storage at temperatures as high as 40 degrees C (104 degrees F) and identified potential stability assays. The second poster further demonstrated the ability to co-lyophilize multiple antigens in the presence of an emulsion forming adjuvant, facilitating the development of a thermostable trivalent vaccine.

On March 11 2020, we entered into a research collaboration with the Axel Lehrer, PhD of the Department of Tropical Medicine, Medical Microbiology and Pharmacology, John A. Burns School of Medicine, UH Manoa to further expand the filovirus collaboration to investigation of potential coronavirus vaccines, including for SARS-CoV-2 (causing COVID-19). This research collaboration will utilize the technology platform developed in the search for filovirus vaccines and will use well-defined surface glycoprotein(s) from one or more coronaviruses, which are expected to be protective for COVID-19.

On April 16, 2020, we obtained an exclusive worldwide license for CoVaccine HT^TM, a novel vaccine adjuvant, from BTG Specialty Pharmaceuticals ("BTG"), a division of Boston Scientific Corporation, for the fields of coronavirus infection (including SARS-CoV-2, the cause of COVID-19), and pandemic flu. CoVaccine HT^TM is a novel adjuvant, which has been shown to enhance both cell-mediated and antibody-mediated immunity. We and our collaborators, including UH Manoa and Dr. Axel Lehrer, have successfully demonstrated the utility of CoVaccine HT^TM in the development of our heat stable filovirus vaccine program, with vaccine candidates against Ebola and Marburg virus disease. Given this previous success, CoVaccine HT^TM will potentially be an important component of our vaccine technology platform currently being assessed for use against coronaviruses including SARS-CoV-2, the cause of COVID-19. The license agreement was executed between us and Protherics Medicines Development, one of the companies that make up the BTG specialty pharmaceutical business, which owns the CoVaccine HT^TM intellectual property.

RiVax^® – Ricin Toxin Vaccine

RiVax^® is our proprietary vaccine candidate being developed to protect against exposure to ricin toxin and if approved, would be the first ricin vaccine. The immunogen in RiVax^® induces a protective immune response in animal models of ricin exposure and functionally active antibodies in humans. The immunogen consists of a genetically inactivated ricin A chain subunit that is enzymatically inactive and lacks residual toxicity of the holotoxin. RiVax^® has demonstrated statistically significant (p < 0.0001) preclinical survival results, providing 100% protection against acute lethality in an aerosol exposure non-human primate model (Roy et al, 2015, Thermostable ricin vaccine protects rhesus macaques against aerosolized ricin: Epitope-specific neutralizing antibodies correlate with protection, PNAS USA 112:3782-3787), and has also been shown to be well tolerated and immunogenic in two Phase 1 clinical trials in healthy volunteers. Results of the first Phase 1 human trial of RiVax^® established that the immunogen was safe and induced antibodies that we believe may protect humans from ricin exposure. The antibodies generated from vaccination, concentrated and purified, were capable of conferring immunity passively to recipient animals, indicating that the vaccine was capable of inducing functionally active antibodies in humans. The outcome of this study was published in the Proceedings of the National Academy of Sciences (Vitetta et al., 2006, A Pilot Clinical Trial of a Recombinant Ricin Vaccine in Normal Humans, PNAS, 103:2268-2273). The second trial which was completed in September 2012 and was sponsored by University of Texas Southwestern Medical Center (“UTSW”), evaluated a more potent formulation of RiVax^® that contained an Alum adjuvant. The results of the Phase 1b study indicated that Alum-adjuvanted RiVax^® was safe and well tolerated, and induced greater ricin neutralizing antibody levels in humans than adjuvant-free RiVax^®. The outcomes of this second study were published in the Clinical and Vaccine Immunology (Vitetta et al., 2012, Recombinant Ricin Vaccine Phase 1b Clinical Trial, Clin. Vaccine Immunol. 10:1697-1699). We have adapted the original manufacturing process for the immunogen contained in RiVax^® for thermostability and large scale manufacturing and recent studies have confirmed that the thermostabilized RiVax^® formulation enhances the stability of the RiVax^® antigen, enabling storage for at least 1 year at temperatures up to 40°C (104 °F). The program will pursue approval via the FDA “Animal Rule” since it is not possible to test the efficacy of the vaccine in a clinical study which would expose humans to ricin. Uniform, easily measured and species-neutral immune correlates of protection that can be measured in humans and animals, and are indicative of animal survival to subsequent ricin challenge, are central to the application of the “Animal Rule”. Recent work has identified such potential correlates of immune protection in animals and work to qualify and validate these approaches is continuing, with the goal of utilizing these assays in a planned Phase 1/2 clinical trial with the thermostable RiVax^® formulation. During September 2018, we published an extended stability study of RiVax^®, showing up to 100% protection in mice after 12 months storage at 40°C (104 °F) as well as identification of a potential in vitro stability indicating assay, critical to adequately confirming the long-term shelf life of the vaccine. We have entered into a collaboration with IDT Biologika GmbH to scale-up the formulation/filling process and continue development and validation of analytical methods established at IDT to advance the program. We also have initiated a development agreement with Emergent BioSolutions, Inc. to implement a commercially viable, scalable production technology for the RiVax^® drug substance protein antigen.

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The development of RiVax^® has been sponsored through a series of overlapping challenge grants, UC1, and cooperative grants, U01, from the NIH, granted to us and to UTSW where the vaccine originated. The second clinical trial was supported by a grant from the FDA’s Office of Orphan Products to UTSW. To date, we and UTSW have collectively received approximately $25 million in grant funding from the NIH for the development of RiVax^®. In September 2014, we entered into a contract with the NIH for the development of RiVax^® pursuant to which we have been awarded an additional $21.2 million of funding in the aggregate. The development agreements with Emergent BioSolutions and IDT are specifically funded under this NIH contract.

In 2017, NIAID exercised options to fund additional animal efficacy studies and good manufacturing practices compliant RiVax^® bulk drug substance and finished drug product manufacturing, which is required for the conduct of future preclinical and clinical safety and efficacy studies. The exercised options provide us with approximately $4.5 million in additional non-dilutive funding, bringing the total amount awarded to date under this contract to $21.2 million, of which $1.1 million is still available. The total award of up to $21.2 million will support the preclinical, manufacturing and clinical development activities necessary to advance heat stable RiVax^® with the FDA. In addition to the ongoing funding of $21.2 million for the development of RiVax^®, biomarkers for RiVax^® testing have been successfully identified, facilitating potential approval under the FDA Animal Rule.

During December 2019, we initiated a third Phase 1 double-blind, placebo-controlled, randomized study in eight healthy adult volunteer subjects designed to evaluate the safety and immunogenicity of RiVax^® utilizing ThermoVax^®. During January 2020, we suspended the study after the manufacturer of the drug substance notified us that, after release of the final drug product to us, the manufacturer identified that the active drug substance tested outside the established specification parameters. Two subjects had received doses as part of the study before the manufacturer provided this notice. Those two subjects will continue to be monitored and data captured in accordance with the study protocol; however, they will not receive further doses of study drug. A clinical safety report will be generated at study completion.

During April 2020, we received notification from NIAID that they would not be exercising the final contract option to support the conduct of a Phase 1/2 clinical study in healthy volunteers. As a result, the total contract award will not exceed $21.2 million.

RiVax^® has been granted Orphan Drug designation as well as Fast Track designation by the FDA for the prevention of ricin intoxication. In addition, RiVax^® has also been granted Orphan Drug designation in the European Union from the EMA Committee for Orphan Medical Products.

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Assuming development efforts are successful for RiVax^®, we believe potential government procurement contract(s) could reach as much as $200 million. This potential procurement contract information is a forward-looking statement, and investors are urged not to place undue reliance on this statement. While we have determined this potential procurement contract value based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.

As a new chemical entity, an FDA approved RiVax^® vaccine has the potential to qualify for a biodefense Priority Review Voucher (“PRV”). Approved under the 21st Century Cures Act in late 2016, the biodefense PRV is awarded upon approval as a medical countermeasure when the active ingredient(s) have not been otherwise approved for use in any context. PRVs are transferable and can be sold, with sales in recent years in excess of $100 million. When redeemed, PRVs entitle the user to an accelerated review period of nine months, saving a median of seven months review time as calculated in 2009. However, FDA must be advised 90 days in advance of the use of the PRV and the use of a PRV is associated with an additional user fee ($2.2 million for fiscal year 2020).

Ricin Toxin

Ricin toxin can be cheaply and easily produced, is stable over long periods of time, is toxic by several routes of exposure and thus has the potential to be used as a biological weapon against military and/or civilian targets. As a bioterrorism agent, ricin could be disseminated as an aerosol, by injection, or as a food supply contaminant. The potential use of ricin toxin as a biological weapon of mass destruction has been highlighted in a Federal Bureau of Investigation Bioterror report released in November 2007 titled Terrorism 2002-2005, which states that “Ricin and the bacterial agent anthrax are emerging as the most prevalent agents involved in WMD investigations” (http://www.fbi.gov/stats-services/publications/terrorism-2002-2005/terror02_05.pdf). In recent years, Al Qaeda in the Arabian Peninsula has threatened the use of ricin toxin to poison food and water supplies and in connection with explosive devices. Domestically, the threat from ricin remains a concern for security agencies. In April 2013, letters addressed to the U.S. President, a Senator and a judge tested positive for ricin. As recently as October 2018, an envelope addressed to President Trump was suspected to contain this potent and potentially lethal toxin, which was subsequently confirmed to contain pieces of castor beans used to make ricin.

The Centers for Disease Control and Prevention has classified ricin toxin as a Category B biological agent. Ricin works by first binding to glycoproteins found on the exterior of a cell, and then entering the cell and inhibiting protein synthesis leading to cell death. Once exposed to ricin toxin, there is no effective therapy available to reverse the course of the toxin. The recent ricin threat to government officials has heightened the awareness of this toxic threat. Currently, there is no FDA approved vaccine to protect against the possibility of ricin toxin being used in a terrorist attack, or its use as a weapon on the battlefield nor is there a known antidote for ricin toxin exposure.

SGX943 – for Treating Emerging and/or Antibiotic-Resistant Infectious Diseases

SGX943 is an IDR, containing the same active ingredient as SGX942. Dusquetide is a fully synthetic, 5-amino acid peptide with high aqueous solubility and stability. Extensive in vivo preclinical studies have demonstrated enhanced clearance of bacterial infection with SGX943 administration. SGX943 has shown efficacy against both Gram-negative and Gram-positive bacterial infections in preclinical models, independent of whether the bacteria is antibiotic-resistant or antibiotic-sensitive.

The innate immune system is responsible for rapid and non-specific responses to combat bacterial infection. Augmenting these responses represents an alternative approach to treating bacterial infections. In animal models, IDRs are efficacious against both antibiotic-sensitive and antibiotic-resistant infections, both Gram-positive and Gram-negative bacteria, and are active irrespective of whether the bacteria occupies a primarily extracellular or intracellular niche. IDRs are also effective as stand-alone agents or in conjunction with antibiotics. An IDR for the treatment of serious bacterial infections encompasses a number of clinical advantages including:

● Treatment when antibiotics are contraindicated, such as:

o before the infectious organism and/or its antibiotic susceptibility is known; or

o in at-risk populations prior to infection.

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● An ability to be used as an additive, complementary treatment with antibiotics, thereby:

o enhancing efficacy of sub-optimal antibiotic regimens (e.g., partially antibiotic-resistant infections);

o enhancing clearance of infection, thereby minimizing the generation of antibiotic resistance (e.g., in treating melioidosis); and

o reducing the required antibiotic dose, again potentially minimizing the generation of antibiotic resistance.

● An ability to modulate the deleterious consequences of inflammation in response to the infection, including the inflammation caused by antibiotic-driven bacterial lysis; and

● Being unlikely to generate bacterial resistance since the IDR acts on the host, and not the pathogen.

Importantly, systemic inflammation and multi-organ failure is the ultimate common outcome of not only emerging and/or antibiotic-resistant infectious diseases, but also of most biothreat agents (e.g., Burkholderia pseudomallei), indicating that dusquetide would be applicable not only to antibiotic-resistant infection, but also to biothreat agents, especially where the pathogen is not known and/or has been engineered for enhanced antibiotic resistance.

In May 2019, we were awarded a Defense Threat Reduction Agency (“DTRA”) subcontract of approximately $600,000 over three years to participate in a biodefense contract for the development of medical countermeasures against bacterial threat agents. As of March 31, 2020, there was negligible revenue earned or expense incurred related to the DTRA subcontract.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses, and related disclosure of contingent assets and liabilities. We evaluate these estimates and judgments on an on-going basis.

Revenue Recognition

Our revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when we incur reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs. Purchased in-process research and development expense represents the value assigned or paid for acquired research and development for which there is no alternative future use as of the date of acquisition.

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Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and stock options and the useful life of intangibles that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.

Material Changes in Results of Operations

Three Months Ended March 31, 2020 Compared to March 31, 2019

For the three months ended March 31, 2020, we had a net loss of $7,581,334 as compared to a net loss of $1,639,627 for the same period in the prior year, representing an increase in the net loss of $5,941,707 or 362%. This increase in net loss was primarily the result of the issuance of $5,000,000 of common stock as a milestone payment to Hy Biopharma triggered by the successful Phase 3 clinical trial of SGX301 for the treatment of CTCL and increased research and development spending primarily attributable to higher clinical trial site and patient fees.

Our revenues and associated costs incurred relate to the government contracts and grants awarded in support of RiVax^®, our ricin toxin vaccine candidate, grants received to support the development of SGX943 for treatment of emerging and/or antibiotic-resistant infectious diseases, ThermoVax^®, our thermostabilization technology, and the assessment of SGX942 safety in juvenile animals.. For the three months ended March 31, 2020, we had revenues of $924,552 as compared to $1,144,788 for the same period in the prior year, representing a decrease of $220,236 or 19%. We also incurred costs related to those revenues for the three months ended March 31, 2020 and 2019 of $829,506 and $927,924, respectively, representing a decrease of $98,418 or 11%. As a result, our gross profit for the three months ended March 31, 2020 was $95,046 or 10% of revenues, as compared to $216,864 or 19% of revenues for the same period in 2019, representing a decrease of $121,818 or 56%. The decreases in revenues and gross profit were primarily the result of two grants with higher gross margins expiring during the three months ended March 31, 2020 that were active for the three months ended March 31, 2019.

Research and development expenses were $2,700,171 for the three months ended March 31, 2020 as compared to $1,642,718 for the same period in 2019, representing an increase of $1,057,453 or 64%. The increase in research and development spending for the three months ended March 31, 2020 was primarily attributable to higher clinical trial site and patient fees incurred during the period ended March 31, 2020 compared to the same period in 2019.

General and administrative expenses were $868,667 for the three months ended March 31, 2020, as compared to $874,209 for the same period in 2019, representing a decrease of $5,542 or 1%.

Research and development expense - milestone expense was $5,000,000 for the three months ended March 31, 2020. The expense was due to the issuance of 1,956,182 shares of common stock to Hy Biopharma following the achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of SGX301 being successful in the treatment of CTCL. No milestones were achieved during the three months ended March 31, 2019.

Interest income for the three months ended March 31, 2019 was $21,947 as compared to $44,753 for the same period in 2019, representing a decrease of $22,806 or 51%. The decrease is due to lower interest and dividend rates on our cash and cash equivalents investments for the three months ended March 31, 2020 as compared to the same period in 2019.

Financial Condition

Cash and Working Capital

As of March 31, 2020, we had cash and cash equivalents of $7,203,376 as compared to $5,420,708 as of December 31, 2019, representing an increase of $1,782,668 or 33%. As of March 31, 2020, we had working capital of $3,240,550 as compared to working capital of $1,181,249 as of December 31, 2019, representing an increase of $2,059,301 or 174% in working capital. The increase in cash and working capital was primarily related to proceeds received from the increased use of the FBR Sales Agreement and the warrant exercises completed during the three months ended March 31, 2020.

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Based on our current rate of cash outflows, cash on hand, proceeds from government contract and grant programs and proceeds available from the FBR Sales Agreement, management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next twelve months from issuance of the financial statements.

Our plans with respect to our liquidity management include, but are not limited to, the following:

● We have up to $1.96 million in active government contract funding still available as of March 31, 2020 to support our associated research programs through 2020 and beyond, provided the federal agencies exercise all options and do not elect to terminate the contracts for convenience. We plan to submit additional contract and grant applications for further support of our programs with various funding agencies.

● We have continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expect to continue to do so for the foreseeable future.

● We will continue to pursue NOL sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if the program is available.

● We plan to pursue potential partnerships for pipeline programs, however, there can be no assurances that we can consummate such transactions.

● We have up to $8.9 million remaining from the FBR Sales Agreement as of May 8, 2020 under the prospectus supplement updated April 10, 2020.

● We will explore and evaluate all funding options through financial stimulus packages afforded by both the federal and state governments based on the current outbreak of the SARS-CoV-2, the pathogen responsible for COVID-19.

● We may seek additional capital in the private and/or public equity markets, pursue government contracts and grants as well as business development activities, to continue our operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. We are currently evaluating additional equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there can be no assurances that we can consummate such a transaction, or consummate a transaction at favorable pricing.

Expenditures

Under our budget and based upon our existing product development agreements and license agreements pursuant to letters of intent and option agreements, we expect our total research and development expenditures for the next 12 months to be approximately $7.3 million before any contract or grant reimbursements, of which $5.8 million relates to the Specialized BioTherapeutics business and $1.5 million relates to the Public Health Solutions business. We anticipate contract and grant reimbursements in the next 12 months of approximately $1.9 million to offset research and development expenses in both the Specialized BioTherapeutics and the Public Health Solutions business segments. 

The table below details our costs for research and development by program and amounts reimbursed for the three months ended March 31:

	2020		2019
Research & Development Expenses
RiVax® and ThermoVax® Vaccines	$	247,802	$	33,938
SGX942 (Dusquetide)		1,302,280		1,119,805
SGX301		1,057,737		404,981
Other		92,352		83,994
Total	$	2,700,171	$	1,642,718
Reimbursed under Government Contracts and Grants
RiVax® and ThermoVax® Vaccines	$	786,288	$	620,716
SGX942 (Dusquetide)		43,218		165,599
SGX301		-		141,809
Total	$	829,506	$	927,924
Grand Total	$	3,529,677	$	2,570,642

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Contractual Obligations

We have licensing fee commitments of approximately $475,000 as of March 31, 2020 for several licensing agreements with entities, consultants and universities. Additionally, we have collaboration and license agreements, which upon clinical or commercialization success may require the payment of milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur.

We currently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey pursuant to a lease that was amended in October 2017 and expires in October 2020. This office space currently serves as our corporate headquarters. The rent is currently $11,883 per month, or approximately $23.00 per square foot, which rate will continue for the remainder of the lease. Our office space is sufficient to satisfy our current needs.

On September 3, 2014, we entered into an asset purchase agreement with Hy Biopharma, Inc. (“Hy Biopharma”) pursuant to which we acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product. As consideration for the assets acquired, we initially paid $275,000 in cash and issued 184,912 shares of common stock with a fair value based upon our stock price on the date of grant of $3,750,000. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in our research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S.

On March 20, 2020, we filed a prospectus supplement covering the offer and sale of up to 1,956,182 shares of our common stock which were issued to Hy Biopharma. We were required to issue the shares to Hy Biopharma as payment following the achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of SGX301 being successful in the treatment of CTCL. The number of shares of our common stock issued to Hy Biopharma was calculated using an effective price of $2.56 per share, based upon a formula set forth in the asset purchase agreement.

Provided the final success-oriented milestone is attained, we will be required to make a payment of up to $5.0 million, if and when achieved. The potential future payment will be payable in our common stock not to exceed 19.9% of our outstanding stock.

In January 2020, our Board of Directors authorized an amendment to Dr. Schaber’s employment agreement to increase the number of shares of common stock from 5,000 to 500,000, issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by our Board of Directors whereby, directly or indirectly, a majority of our capital stock or a majority of our assets are transferred from us and/or our stockholders to a third party. 

As a result of the above agreements, we have future contractual obligations as follows:

Year	Licensing Fees		Property and Other Leases		Total
April 1 through December 31, 2020	$	75,000	$	89,591	$	164,591
2021		100,000		6,408		106,408
2022		100,000		-		100,000
2023		100,000		-		100,000
2024		100,000		-		100,000
Total	$	475,000	$	95,999	$	570,999

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Contingencies

Based on the current outbreak of the Coronavirus SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions in our operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.

The future impact of the outbreak is highly uncertain and cannot be predicted, and we cannot provide any assurance that the outbreak will not have a material adverse impact on our operations or future results or filings with regulatory health authorities. The extent of the impact, if any, we will depend on future developments, including actions taken to contain the coronavirus.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because the majority of our investments are in short-term marketable securities, in addition to the foreign exchange rate fluctuations related to our foreign currency transactions. We do not have any derivative financial instruments. Due to the nature of our short-term investments, we believe that we are not subject to any material market risk exposure.

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the possible controls and procedures.

Our management has evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer, has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls

There was no change in our internal control over financial reporting identified in connection with the evaluation of such internal controls that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

38

PART II - OTHER INFORMATION.

ITEM 1A – RISK FACTORS

Our business faces significant risks. These risks include those disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. If any of the events or circumstances described in the referenced risks actually occur, our business, financial condition or results of operations could be materially adversely affected and such events or circumstances could cause our actual results to differ materially from the results contemplated by the “forward-looking” statements contained in this report. These risks should be read in conjunction with the other information set forth in this Quarterly Report as well as in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in our periodic reports on Form 10-Q and Form 8-K. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business, financial condition and results of operations. We do not undertake to update any of the “forward-looking” statements or to announce the results of any revisions to these “forward-looking” statements, except as required by law.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES

On February 20, 2020, we issued 206 shares of common stock as a result of a cashless exercise of warrants. The exercise price of the warrants was $2.50 per share.

We believe the shares issued were exempt from registration pursuant to Section 3(a)(9) of the Securities Act, as securities issued in an exchange by the issuer with its existing security holder exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

ITEM 5 – OTHER INFORMATION

On May 13, 2020, the Company’s Board of Directors approved an amendment (the “Amendment”) to the Company’s Amended and Restated By-laws (the “Bylaws”) to add forum selection provisions as a new Section 10.7 of the Bylaws.

Under new Section 10.7, unless the Company consents otherwise, the Court of Chancery of the State of Delaware will be the exclusive forum for any litigation consisting of derivative actions, actions asserting a breach of fiduciary duty, actions under the Delaware General Corporation Law and actions asserting claims under the internal affairs doctrine.

Further, Section 10.7 provides that, unless the Company consents otherwise, the federal district courts of the United States of America will be the exclusive forum for any litigation asserting a claim under the Securities Act of 1933, as amended. In addition, Section 10.7 stipulates that any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company will be deemed to have notice of and consented to the provisions of Section 10.7.

The Amendment was intended by the Board of Directors to update and modernize the Company’s by-laws. The Board of Directors believes, among other things, that adoption of the forum selection provisions should benefit the Company and its stockholders by allowing the Company to reduce litigation costs in the event of the identified litigation by avoiding litigating similar or identical claims in multiple jurisdictions. In addition, the forum selection provisions would allow the Company to litigate matters relating to Delaware corporate law and the internal affairs of the Company in Delaware courts, which have particular expertise in the subject matters.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 3.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

39

ITEM 6 – EXHIBITS

EXHIBIT NO	DESCRIPTION
3.1	Amendment to Amended and Restated By-laws of Soligenix, Inc.
31.1	Certification of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002).
31.2	Certification of Chief Financial Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002).
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Taxonomy Presentation Linkbase

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SOLIGENIX, INC.
May 15, 2020	By	/s/ Christopher J. Schaber
		Christopher J. Schaber, PhD
		President and Chief Executive Officer
		(Principal Executive Officer)
May 15, 2020	By	/s/ Jonathan Guarino
		Jonathan Guarino
		Chief Financial Officer, Senior Vice President, and Corporate Secretary
		(Principal Financial and Accounting Officer)

41

EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
3.1	Amendment to Amended and Restated By-laws of Soligenix, Inc.
31.1	Certification of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002).
31.2	Certification of Chief Financial Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002).
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Taxonomy Presentation Linkbase

42

EX-3.1

Exhibit 3.1

AMENDMENT

TO

AMENDED AND RESTATED BY-LAWS

OF

SOLIGENIX, INC.

(adopted on May 13, 2020)

This Amendment (this “Amendment”) to the Amended and Restated By-laws (the “By-laws”) of Soligenix, Inc. (formerly known as DOR Biopharma, Inc.), a Delaware corporation (the “Corporation”), is made pursuant to Article XI of the By-laws and Article V of the Corporation’s Second Amended and Restated Certificate of Incorporation, as amended through the date of adoption of this Amendment.

1.Amendment. The By-laws are hereby amended by inserting a new Section 10.7 at the end of Article X to read as follows:

SECTION 10.7. FORUM SELECTION. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim governed by the internal affairs doctrine.

Further, unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 10.7 of Article X.

2.Effect. Except as hereby amended, the Bylaws of the Corporation shall remain in full force and effect.

* * * * *

CERTIFICATE OF THE SECRETARY

The undersigned, Jonathan Guarino, Chief Financial Officer, Senior Vice President and Corporate Secretary of the Corporation, hereby certifies, on behalf of the Corporation and not in his individual capacity, that:

1.       I am the duly elected and acting Chief Financial Officer, Senior Vice President and Corporate Secretary of the Corporation.

2.       The foregoing amendment to the Amended and Restated By-laws of the Corporation was adopted by Written Consent of the Board of Directors effective as of May 13, 2020.

By:	/s/ Jonathan Guarino
Name:	Jonathan Guarino
Title:	Chief Financial Officer, Senior Vice President and Corporate Secretary

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Christopher J. Schaber, Ph.D., certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of the Soligenix, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 15, 2020	By:	/s/ Christopher J. Schaber
		Christopher J. Schaber, PhD President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Jonathan Guarino, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of the Soligenix, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 15, 2020	By:	/s/ Jonathan Guarino
		Jonathan Guarino Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Form 10-Q of Soligenix, Inc. (the “Company”) for the fiscal quarter ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 15, 2020	By:	/s/ Christopher J. Schaber
		Christopher J. Schaber, PhD President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Form 10-Q of Soligenix, Inc. (the “Company”) for the fiscal quarter ended March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 15, 2020	By:	/s/ Jonathan Guarino
		Jonathan Guarino Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities:
Net loss	$ (7,581,334)	$ (1,639,627)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation	17,646	11,920
Non-cash lease expenses	32,731	29,652
Share-based compensation	63,691	79,573
Issuance of common stock for milestone	5,000,000
Issuance of common stock for services	59,000	57,600
Change in operating assets and liabilities:
Contracts and grants receivable	177,467	96,358
Prepaid expenses and other current assets	337,492	(54,139)
Research and development incentives receivable	(56,850)
Income tax receivable	(836,893)	(610,676)
Operating lease liability	(33,084)	(29,230)
Deferred revenue		104,963
Accounts payable and accrued expenses	379,544	(75,336)
Accrued compensation	(254,483)	(264,360)
Total adjustments	4,886,261	(653,676)
Net cash used in operating activities	(2,695,073)	(2,293,303)
Investing activities:
Purchases of office furniture and equipment	(7,147)
Net cash used in investing activities	(7,147)
Financing activities:
Proceeds from issuance of common stock pursuant to FBR At Market Issuance Sales Agreement	3,989,226	522,583
Costs associated with FBR At Market Issuance Sales Agreement	(157,291)	(15,729)
Proceeds from the exercise of warrants	685,384
Principal repayment - financing lease	(1,810)	(1,638)
Net cash provided by financing activities	4,515,509	505,216
Effect of exchange rate on cash and cash equivalents	(30,621)	4,641
Net increase (decrease) in cash and cash equivalents	1,782,668	(1,783,446)
Cash and cash equivalents at beginning of period	5,420,708	8,983,717
Cash and cash equivalents at end of period	7,203,376	7,200,271
Cash paid for lease liabilities:
Operating lease	35,650	34,875
Financing lease	2,136	2,136
Non-cash investing and financing activities:
Deferred issuance costs reclassified to additional-paid-in capital	17,430	3,653
Issuance of stock options, cash exercise price received December 2019	1,882
Present value of right-of-use assets and lease liabilities recognized on January 1, 2019		255,962
Accrued software development cost		30,690
Deferred issuance costs included in accounts payable		$ 3,148

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, shares authorized	350,000	350,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	25,778,431
Common stock, shares outstanding	25,778,431	1,753,124

XML

Operating Segments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Summary of segmental information
Revenues	$ 924,552	$ 1,144,788
Loss from Operations	(8,473,792)	(2,300,063)
Amortization and Depreciation Expense	17,646	11,920
Other Income, Net	55,565	49,760
Share-Based Compensation	63,691	79,573
Identifiable Assets	9,847,674		$ 7,775,360
Public Health Solutions [Member]
Summary of segmental information
Revenues	908,807	680,353
Loss from Operations	(158,502)	(9,011)
Amortization and Depreciation Expense	7,303	4,402
Share-Based Compensation	9,465	5,196
Identifiable Assets	813,121		1,018,673
Specialized BioTherapeutics [Member]
Summary of segmental information
Revenues	15,745	464,435
Loss from Operations	(7,357,853)	(1,335,557)
Amortization and Depreciation Expense	3,070	4,677
Other Income, Net	33,618	5,007
Share-Based Compensation	25,289	20,908
Identifiable Assets	64,351		41,705
Corporate [Member]
Summary of segmental information
Loss from Operations	(957,437)	(955,495)
Amortization and Depreciation Expense	7,273	2,841
Other Income, Net	21,947	44,753
Share-Based Compensation	28,937	$ 53,469
Identifiable Assets	$ 8,970,202		$ 6,714,982

XML

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

	Cost		Accumulated Amortization		Net Book Value
March 31, 2020
Licenses	$	462,234	$	449,326	$	12,908
Patents		1,893,185		1,893,185		-
Total	$	2,355,419	$	2,342,511	$	12,908
December 31, 2019
Licenses	$	462,234	$	442,535	$	19,699
Patents		1,893,185		1,893,185		-
Total	$	2,355,419	$	2,335,720	$	19,699

XML

Operating Segments (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Schedule of operating segments

	Three Months Ended March 31,
	2020			2019
Revenues
Public Health Solutions	$	908,807		$	680,353
Specialized BioTherapeutics		15,745			464,435
Total	$	924,552		$	1,144,788
Loss from Operations
Public Health Solutions	$	(158,502	)	$	(9,011	)
Specialized BioTherapeutics		(7,357,853	)		(1,335,557	)
Corporate		(957,437	)		(955,495	)
Total	$	(8,473,792	)	$	(2,300,063	)
Amortization and Depreciation Expense
Public Health Solutions	$	7,303		$	4,402
Specialized BioTherapeutics		3,070			4,677
Corporate		7,273			2,841
Total	$	17,646		$	11,920
Other Income, Net
Specialized BioTherapeutics	$	33,618		$	5,007
Corporate		21,947			44,753
Total	$	55,565		$	49,760
Share-Based Compensation
Public Health Solutions	$	9,465		$	5,196
Specialized BioTherapeutics		25,289			20,908
Corporate		28,937			53,469
Total	$	63,691		$	79,573

	As of		As of
	March 31,		December 31,
	2020		2019
Identifiable Assets
Public Health Solutions	$	813,121	$	1,018,673
Specialized BioTherapeutics		64,351		41,705
Corporate	$	8,970,202	$	6,714,982
Total	$	9,847,674	$	7,775,360

XML

Summary of Significant Accounting Policies (Details Textual)	3 Months Ended
	Mar. 31, 2020 USD ($) Segment $ / shares	Mar. 31, 2019 USD ($) $ / shares	Dec. 31, 2019 USD ($)
Summary of Significant Accounting Policies (Textual)
Number of operating segments | Segment	2
Income tax benefit	$ 836,893	$ 610,676
Foreign currency transaction loss and gain	23,232	$ 5,007
Foreign currency translation loss as cumulative translation adjustment	(28,767)		$ (45,010)
Website amortization expense	3,877
Website accumulated amortization	$ 11,627
Stock Option [Member]
Summary of Significant Accounting Policies (Textual)
Weighted average exercise price, outstanding options | $ / shares	$ 3.68	$ 5.04
Dividend yield	0.00%
Expected term	4 years
Stock option vesting, description	Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.
Website development cost	$ 46,500
Warrant [Member]
Summary of Significant Accounting Policies (Textual)
Weighted average exercise price, outstanding warrants | $ / shares	$ 2.93	$ 3.09
Maximum [Member]
Summary of Significant Accounting Policies (Textual)
Intangible assets, estimated useful life	16 years
Maximum [Member] | Stock Option [Member]
Summary of Significant Accounting Policies (Textual)
Volatility rate	78.96%	92.93%
Risk-free interest rate	1.66%	2.50%
Minimum [Member]
Summary of Significant Accounting Policies (Textual)
Intangible assets, estimated useful life	11 years
Minimum [Member] | Stock Option [Member]
Summary of Significant Accounting Policies (Textual)
Volatility rate	77.08%	91.73%
Risk-free interest rate	1.38%	2.48%

XML

Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 6. Income Taxes

The Company had gross NOLs at December 31, 2019 of approximately $107,767,000 for federal tax purposes, approximately $16,180,000 for state tax purposes and approximately $815,000 for foreign tax purposes. Federal losses generated in 2018 or later will carry forward indefinitely. In addition, the Company has $8,315,000 of various tax credits which expire from 2020 to 2037. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code ("IRC") Section 382. IRC Section 382 limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points. In addition, the NOL carry forwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is likely that the utilization of the NOLs may be substantially limited.

The Company and one or more of its subsidiaries files income tax returns in the U.S. Federal jurisdiction, and various state and local jurisdictions. During March 2020 and 2019, in accordance with the State of New Jersey's Technology Business Tax Certificate Program, which allowed certain high technology and biotechnology companies to sell unused NOL carry forwards to other New Jersey-based corporate taxpayers, the Company sold New Jersey NOL carry forwards, resulting in the recognition of $836,893 and $610,676 of income tax benefit, net of transaction costs, respectively. The Company has not yet sold its 2019 New Jersey NOLs but may be able to do so in the future. There can be no assurance as to the continuation or magnitude of this program in the future.

XML

Operating Segments

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Operating Segments

Note 10. Operating Segments

The Company maintains two active operating segments: Specialized BioTherapeutics and Public Health Solutions. Each segment includes an element of overhead costs specifically associated with its operations, with its corporate shared services group responsible for support functions generic to both operating segments.

	Three Months Ended March 31,
	2020			2019
Revenues
Public Health Solutions	$	908,807		$	680,353
Specialized BioTherapeutics		15,745			464,435
Total	$	924,552		$	1,144,788
Loss from Operations
Public Health Solutions	$	(158,502	)	$	(9,011	)
Specialized BioTherapeutics		(7,357,853	)		(1,335,557	)
Corporate		(957,437	)		(955,495	)
Total	$	(8,473,792	)	$	(2,300,063	)
Amortization and Depreciation Expense
Public Health Solutions	$	7,303		$	4,402
Specialized BioTherapeutics		3,070			4,677
Corporate		7,273			2,841
Total	$	17,646		$	11,920
Other Income, Net
Specialized BioTherapeutics	$	33,618		$	5,007
Corporate		21,947			44,753
Total	$	55,565		$	49,760
Share-Based Compensation
Public Health Solutions	$	9,465		$	5,196
Specialized BioTherapeutics		25,289			20,908
Corporate		28,937			53,469
Total	$	63,691		$	79,573

	As of		As of
	March 31,		December 31,
	2020		2019
Identifiable Assets
Public Health Solutions	$	813,121	$	1,018,673
Specialized BioTherapeutics		64,351		41,705
Corporate	$	8,970,202	$	6,714,982
Total	$	9,847,674	$	7,775,360

XML

Commitments and Contingencies (Details)	Dec. 31, 2019 USD ($)
Summary of future contractual obligations
2020	$ 164,591
2021	106,408
2022	100,000
2023	100,000
2024	100,000
Total	570,999
Research and Development [Member]
Summary of future contractual obligations
2020	75,000
2021	100,000
2022	100,000
2023	100,000
2024	100,000
Total	475,000
Property and Other Leases [Member]
Summary of future contractual obligations
2020	89,591
2021	6,408
2022
2023
2024
Total	$ 95,999

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Accrued Expenses (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Clinical trial expenses	$ 3,197,269	$ 3,020,030
Other	129,087	137,356
Total	$ 3,326,356	$ 3,157,386

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Intangible Assets (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Summary of intangible assets
Cost	$ 2,355,419	$ 2,355,419
Accumulated Amortization	2,342,511	2,335,720
Net Book Value	12,908	19,699
Licenses [Member]
Summary of intangible assets
Cost	462,234	462,234
Accumulated Amortization	449,326	442,535
Net Book Value	12,908	19,699
Patents [Member]
Summary of intangible assets
Cost	1,893,185	1,893,185
Accumulated Amortization	1,893,185	1,893,185
Net Book Value

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Accrued Expenses

3 Months Ended

Mar. 31, 2020

Payables and Accruals [Abstract]

Accrued Expenses

Note 5. Accrued Expenses

The following is a summary of the Company's accrued expenses:

	March 31, 2020		December 31, 2019
Clinical trial expenses	$	3,197,269	$	3,020,030
Other		129,087		137,356
Total	$	3,326,356	$	3,157,386

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 9. Commitments and Contingencies

Contractual Obligations

The Company has commitments of approximately $475,000 as of March 31, 2020 for several licensing agreements with consultants and universities. Additionally, the Company has collaboration and license agreements, which upon clinical or commercialization success, may require the payment of milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur.

The Company currently leases approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey pursuant to a lease that was amended in October 2017 and expires in October 2020. This office space currently serves as the Company's corporate headquarters. The rent is currently $11,883 per month, or approximately $23.00 per square foot, which rate will continue for the remainder of the lease.

On September 3, 2014, the Company entered into an asset purchase agreement with Hy Biopharma, Inc. ("Hy Biopharma") pursuant to which the Company acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma's synthetic hypericin product. As consideration for the assets acquired, the Company paid $275,000 in cash and issued 184,912 shares of common stock with a fair value based on the Company's stock price on the date of grant of $3,750,000. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in the Company's research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S.

On March 20, 2020, the Company filed a prospectus supplement covering the offer and sale of up to 1,956,182 shares of the Company's common stock which were issued to Hy Biopharma. The Company was required to issue the shares to Hy Biopharma as payment following the achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of SGX301 being successful in the treatment of CTCL. The number of shares of the Company's common stock issued to Hy Biopharma was calculated using an effective price of $2.56 per share, based upon a formula set forth in the asset purchase agreement, for total expense of $5 million.

Provided all future success-oriented milestones are attained, the Company will be required to make additional payments of up to $5.0 million, if and when achieved. Payments will be payable in restricted securities of the Company provided they do not exceed 19.9% ownership of the Company's outstanding stock.

In January 2020, the Company's Board of Directors authorized the amendment of Dr. Schaber's employment agreement to increase the number of shares of the Company's common stock from 5,000 to 500,000 issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by its Board of Directors whereby, directly or indirectly, a majority of its capital stock or a majority of its assets are transferred from the Company and/or its stockholders to a third party.

As a result of the above agreements, the Company has the following contractual obligations:

Year	Research and Development		Property and Other Leases		Total
April 1 through December 31, 2020	$	75,000	$	89,591	$	164,591
2021		100,000		6,408		106,408
2022		100,000		-		100,000
2023		100,000		-		100,000
2024		100,000		-		100,000
Total	$	475,000	$	95,999	$	570,999

Contingencies

Based on the current outbreak of the Coronavirus SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions to the Company's operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.

The future impact of the outbreak is highly uncertain and cannot be predicted, and the Company cannot provide any assurance that the outbreak will not have a material adverse impact on the Company's operations or future results or filings with regulatory health authorities. The extent of the impact to the Company, if any, will depend on future developments, including actions taken to contain the coronavirus.

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Income Taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Income Taxes (Textual)
NOL for Federal tax		$ 107,767,000
NOL for State tax		16,180,000
NOL for Foreign tax		815,000
Various tax credits, amount		$ 8,315,000
Period of expiration of various tax credits	Expire from 2020 to 2037.
Net operating loss carry forwards, limitations on use, description	Limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points.
NOL carryforwards	$ 836,893		$ 610,676

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Intangible Assets (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2020
Intangible Assets (Textual)
Amortization expense	$ 6,791
Forecast [Member]
Intangible Assets (Textual)
Future annual amortization expense		$ 12,908

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Commitments and Contingencies (Details Textual)		1 Months Ended	3 Months Ended
	Sep. 03, 2014 USD ($) shares	Jan. 31, 2020 USD ($)	Mar. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) ft²
Commitments and Contingencies (Textual)
Commitments related to agreements				$ 475,000
Maximum payment for commitment milestones	$ 10,000,000		$ 7,900,000
Office lease amendment date			October 2017
Percentage for royalties			0.00%
Office rent amount, Nov. 1, 2019				$ 11,883
Office rent amount Nov. 1, 2019, per square foot			23.00
Cash paid to acquire Hy Biopharma intangible asset	$ 275,000
Shares issued in connection with Hy BioPharma asset purchase agreement | shares	184,912		5,000,000
Common stock price per share | $ / shares			$ 2.56
Fair value of shares issued in connection with Hy BioPharma asset purchase	$ 3,750,000		$ 1,956,182
Maximum percentage of Hy BioPharma ownership of Soligenix outstanding stock	19.90%
Office space | ft²				6,200
Maximum [Member]
Commitments and Contingencies (Textual)
Authorized shares to be issued to Dr. Schaber immediately prior to the completion of a transaction		$ 500,000
Minimum [Member]
Commitments and Contingencies (Textual)
Authorized shares to be issued to Dr. Schaber immediately prior to the completion of a transaction		$ 5,000

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Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance at Dec. 31, 2018	$ 17,683	$ 172,436,176	$ (3,669)	$ (166,170,020)	$ 6,280,170
Balance, Shares at Dec. 31, 2018	17,682,839
Issuance of common stock pursuant to FBR At Market Issuance Sales Agreement	$ 446	$ 522,137			$ 522,583
Issuance of common stock pursuant to FBR At Market Issuance Sales Agreement, shares	446,369
Issuance costs associated with FBR At Market Issuance Sales Agreement, shares		(19,382)			(19,382)
Issuance of restricted common stock to vendors	$ 60	$ 57,540			$ 57,600
Issuance of restricted common stock to vendors, shares	60,000
Share-based compensation expense		79,573			79,573
Foreign currency translation adjustment			649		649
Net loss				(1,639,627)	(1,639,627)
Balance at Mar. 31, 2019	$ 18,189	173,076,044	(3,020)	(167,809,647)	5,281,566
Balance, Shares at Mar. 31, 2019	18,189,208
Balance at Dec. 31, 2019	$ 21,753	177,006,004	(45,010)	(175,525,612)	1,457,135
Balance, Shares at Dec. 31, 2019	21,753,124
Issuance of common stock in public financing, net of underwriting discount					78,338
Issuance of common stock pursuant to FBR At Market Issuance Sales Agreement	$ 1,732	3,987,494			3,989,226
Issuance of common stock pursuant to FBR At Market Issuance Sales Agreement, shares	1,732,115
Issuance costs associated with FBR At Market Issuance Sales Agreement		(174,721)			(174,721)
Issuance of common stock for milestone	$ 1,956	4,998,044			5,000,000
Issuance of common stock for milestone, shares	1,956,182
Issuance of restricted common stock to vendors	$ 30	58,970			59,000
Issuance of restricted common stock to vendors, shares	30,000
Exercise of common stock options	$ 2				2
Exercise of common stock options, Shares	2,189
Exercise of warrants	$ 305	685,079			685,384
Exercise of warrants, shares	304,821
Share-based compensation expense		63,691			63,691
Foreign currency translation adjustment			16,243		16,243
Net loss				(7,581,334)	(7,581,334)
Balance at Mar. 31, 2020	$ 25,778	$ 186,624,561	$ (28,767)	$ (183,106,946)	$ 3,514,626
Balance, Shares at Mar. 31, 2020	25,778,431

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Consolidated Balance Sheets - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 7,203,376	$ 5,420,708
Contracts and grants receivable	841,368	1,018,835
Research and development incentives receivable	415,932	444,043
Income tax receivable	836,893
Prepaid expenses and other current assets	271,879	609,739
Total current assets	9,569,448	7,493,325
Security deposit	22,757	22,757
Office furniture and equipment, net	38,123	36,093
Deferred issuance costs	21,894	39,324
Intangible assets, net	12,908	19,699
Right-of-use lease assets	90,821	125,412
Research and development incentives receivable	56,850
Other assets	34,873	38,750
Total assets	9,847,674	7,775,360
Current liabilities:
Accounts payable	2,870,672	2,735,442
Accrued expenses	3,326,356	3,157,386
Accrued compensation	43,690	298,173
Lease liabilities - current	88,180	121,075
Total current liabilities	6,328,898	6,312,076
Non-current liabilities:
Lease liabilities, net of current	4,150	6,149
Total liabilities	6,333,048	6,318,225
Commitments and contingencies
Shareholders' equity:
Preferred stock, 350,000 shares authorized; none issued or outstanding
Common stock, $.001 par value; 50,000,000 shares authorized; 25,778,431 shares and 1,753,124 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	25,778	21,753
Additional paid-in capital	186,624,561	177,006,004
Accumulated other comprehensive loss	(28,767)	(45,010)
Accumulated deficit	(183,106,946)	(175,525,612)
Total shareholders' equity	3,514,626	1,457,135
Total liabilities and shareholders' equity	$ 9,847,674	$ 7,775,360

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Operating Segments (Details Textual)	3 Months Ended
	Mar. 31, 2020 Segment
Operating Segments (Textual)
Number of operating segments	2

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Summary of Significant Accounting Policies (Details 1) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Dilutive adjustments to the number of common shares
Total	7,451,439	7,389,238
Common stock purchase warrants [Member]
Dilutive adjustments to the number of common shares
Total	5,886,817	6,303,643
Stock options [Member]
Dilutive adjustments to the number of common shares
Total	1,564,622	1,085,595

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Schedule of potentially dilutive adjustments to the weighted average number of common shares excluded from the calculation

	For the Quarter  Ended March 31, 2020		For the Quarter Ended March 31, 2019
Common stock purchase warrants		5,886,817		6,303,643
Stock options		1,564,622		1,085,595
Total		7,451,439		7,389,238

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of future contractual obligations

Year	Research and Development		Property and Other Leases		Total
April 1 through December 31, 2020	$	75,000	$	89,591	$	164,591
2021		100,000		6,408		106,408
2022		100,000		-		100,000
2023		100,000		-		100,000
2024		100,000		-		100,000
Total	$	475,000	$	95,999	$	570,999

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Related Party Transaction (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) shares
Related Party Transaction (Textual)
Common stock shares, including | shares	65,493
Common stock issued, value	$ 78,338
Capitalized the website development costs	46,500
Hosting services	2,280
Other assets	34,873
Prepaid expenses and other current assets	$ 270
Investor [Member]
Related Party Transaction (Textual)
Shares issued for investor relation and web hosting services | shares	12,845
Shares issued for investor relation and web hosting services, value	$ 9,120
Altamont Pharmaceutical Holdings, LLC [Member]
Related Party Transaction (Textual)
Capitalized the website development costs	$ 46,500
Percentage of ownership	5.00%

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Leases (Details Textual)	3 Months Ended
	Mar. 31, 2020 USD ($)
Leases (Textual)
Leases, description	The Company's consolidated balance sheet included a right-of-use lease asset of $79,657 for the office space and $11,164 for the copier machine. Lease liabilities in the Company's consolidated balance sheet included corresponding lease liabilities of $80,475 and $11,855, respectively. During the three months ended March 31, 2020, the Company recognized lease expense of $35,297 for the operating lease, in addition to amortization expense of $1,861 and interest expense of $327 for the financing lease in the Company's consolidated statement of operations.
Operating Lease expense	$ 35,297
Amortization expense	1,861
Financing Interest expense	$ 498

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Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 3. Intangible Assets

The following is a summary of intangible assets which consists of licenses and patents:

	Cost		Accumulated Amortization		Net Book Value
March 31, 2020
Licenses	$	462,234	$	449,326	$	12,908
Patents		1,893,185		1,893,185		-
Total	$	2,355,419	$	2,342,511	$	12,908
December 31, 2019
Licenses	$	462,234	$	442,535	$	19,699
Patents		1,893,185		1,893,185		-
Total	$	2,355,419	$	2,335,720	$	19,699

Amortization expense was $6,791 for each of the three months ended March 31, 2020 and 2019.

Based on the balance of licenses and patents at March 31, 2020, future amortization expense through December 31, 2020 is expected to be $12,908. 

License fees and royalty payments are expensed as incurred, as the Company does not attribute any future benefits of such payments.

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Shareholders' Equity

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Note 7. Shareholders' Equity

Preferred Stock

The Company has 350,000 shares of preferred stock authorized, none of which are issued or outstanding.

Common Stock

The following items represent transactions in the Company's common stock for the three months ended March 31, 2020:

● On January 8, 2020, the Company issued 2,189 shares of common stock as a result of an option exercises. The exercise price of the option was $0.86 per share. The cash exercise price for those shares was received in December 2019.

● The Company issued a vendor 10,000 shares of common stock with a fair value of $1.68 per share on January 8, 2020, another 10,000 shares of common stock with a fair value of $2.25 per share on February 10, 2020 and another 10,000 shares of common stock with a fair value of $1.97 per share on March 12, 2020, in each case as partial consideration for its service performed. The shares were fully vested on the date of grant and resulted in the recognition of $59,000 of expense during the three months ended March 31, 2020.

● On February 20, 2020, the Company issued 206 shares of common stock as a result of a cashless exercise of warrants. The exercise price of the warrants was $2.50.

● On March 23, 2020, the Company issued 1,956,182 shares of common stock for payment on an achieved milestone. The fair value of the shares was $2.56 per share based upon a formula set forth in the asset purchase agreement.

● During the three months ended March 31, 2020, the Company issued 304,615 shares of common stock as a result of warrant exercises. The exercise price of the warrants was $2.25 per share.

● During the three months ended March 31, 2020, the Company sold 1,732,115 shares of common stock pursuant to the FBR Sales Agreement at a weighted average price of $2.30 per share.

The issuances of the Company's common stock to vendors and as a result of option exercises described above were issued under the 2015 Plan and are registered on a Registration Statement on Form S-8. However, as shares of common stock are not covered by a reoffer prospectus, the certificates evidencing such shares reflect a Securities Act restrictive legend.

The issuances of the Company's common stock (a) as a result of warrant exercises described above, other than upon cashless exercise, were registered on a Registration Statement on Form S-1, (b) for payment on an achieved milestone described above were registered on a Registration Statement on Form S-3 and (c) pursuant to the FBR Sales Agreement described above were registered on a Registration Statement on Form S-3.

The Company's common stock issued as a result of the cashless exercise of the warrants described above were exempt from registration pursuant to Section 3(a)(9) of the Securities Act.

FBR At Market Issuance Sales Agreement

On August 11, 2017, the Company entered into the FBR Sales Agreement to sell shares of the Company's common stock from time to time, through an "at-the-market" equity offering program under which FBR acts as sales agent. Under the FBR Sales Agreement, the Company sets the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales may be requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The FBR Sales Agreement provides that FBR is entitled to compensation for its services in an amount equal to 3% of the gross proceeds from the sale of shares sold under the FBR Sale Agreement. The Company has no obligation to sell any shares under the FBR Sales Agreement, and may suspend solicitation and offers under the FBR Sales Agreement at any time.

Sales of common stock made pursuant to the FBR Sales Agreement, if any, will be made pursuant to the Company's effective shelf registration statement on Form S-3 (File No. 333-217738) filed on May 5, 2017 with the SEC, the base prospectus filed as part of such registration statement, and any prospectus supplements. The shares sold pursuant to the FBR Sales Agreement have been and will be issued pursuant to General Instruction I.B.6 of Form S-3, which permits the Company to sell shelf securities in a public primary offering with a value not exceeding one-third of the average market value of the Company's voting and non-voting common equity held by non-affiliates in any 12-month period as long as the aggregate market value of the Company's outstanding voting and non-voting common equity held by non-affiliates is less than $75 million.

On August 11, 2017, the Company filed a prospectus supplement for the sale of up to $4.8 million of shares of common stock pursuant to the FBR Sales Agreement, and the Company sold an aggregate of approximately $1 million of shares thereunder. On October 3, 2018, the Company filed an updated prospectus supplement with the U.S. Securities and Exchange Commission (the "SEC") and may offer and sell shares of the Company's common stock pursuant to the FBR Sales Agreement having an aggregate offering price of up to $9.0 million, from time to time. The prospectus supplement filed on October 3, 2018, superseded the prospectus supplement dated August 11, 2017, and no additional shares will be offered or sold pursuant to the prospectus supplement dated August 11, 2017. On April 10, 2020, the Company filed an updated prospectus supplement with the SEC and may offer and sell shares of the Company's common stock pursuant to the FBR Sales Agreement having an aggregate offering price of up to $10.2 million, from time to time. The prospectus supplement filed on April 10, 2020, supersedes the prospectus supplement dated October 3, 2018, and no additional shares will be offered or sold pursuant to the prospectus supplement dated October 3, 2018. As of May 8, 2020, there was $8.9 million available for the sale of common stock under the FBR Sales Agreement.

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Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Note 11. Subsequent Events

Sales Pursuant to FBR At Market Issuance Sales Agreement

From April 1, 2020 through May 8, 2020, the Company issued 798,245 shares of common stock pursuant to the FBR Sales Agreement at a weighted average price of $1.64 per share for total proceeds of $1,308,948.

CARES Act Loan

On April 13, 2020, the Company was advised that one of its principal banks, JP Morgan, had approved a $417,830 loan (the "Loan") under the Paycheck Protection Program ("PPP") pursuant to the Coronavirus Aid, Relief and Economic Security Act that was signed into law on March 27, 2020.

As a U.S. small business, the Company has qualified for the PPP, which allows businesses and nonprofits with fewer than 500 employees to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the business disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes, including payroll, benefits, rent and utilities.

The Loan, has a term of two years, is unsecured, and is guaranteed by the Small Business Administration. The Loan bears interest at a fixed rate of one percent per annum, with the first six months of interest and principal deferred. Some or all of the Loan may be forgiven if at least 75 percent of the Loan proceeds are used by the Company to cover payroll costs, including benefits and if the Company maintains its employment and compensation within certain parameters during the eight-week period following the Loan origination date and complies with other relevant conditions. The Company intends to use the proceeds for purposes consistent with the PPP and expects to meet the conditions for forgiveness of the Loan.

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Contract revenue	$ 845,185	$ 639,558
Grant revenue	79,367	505,230
Total revenues	924,552	1,144,788
Cost of revenues	(829,506)	(927,924)
Gross profit	95,046	216,864
Operating expenses:
Research and development	2,700,171	1,642,718
General and administrative	868,667	874,209
Research and development expense - milestone	5,000,000
Total operating expenses	8,568,838	2,516,927
Loss from operations	(8,473,792)	(2,300,063)
Foreign currency transaction (loss)/gain	(23,232)	5,007
Interest income	21,947	44,753
Research and development incentives	56,850
Net loss before income taxes	(8,418,227)	(2,250,303)
Income tax benefit	836,893	610,676
Net loss	$ (7,581,334)	$ (1,639,627)
Basic and diluted net loss per share	$ (0.32)	$ (0.09)
Basic and diluted weighted average common shares outstanding	23,404,920	18,078,951

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Nature of Business

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

Note 1. Nature of Business

Basis of Presentation

Soligenix, Inc. (the "Company") is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. The Company maintains two active business segments: Specialized BioTherapeutics (formerly "BioTherapeutics") and Public Health Solutions (formerly "Vaccines/BioDefense").

The Company's Specialized BioTherapeutics business segment is developing a novel photodynamic therapy (SGX301) utilizing topical synthetic hypericin activated with safe visible fluorescent light for the treatment of cutaneous T-cell lymphoma ("CTCL"), its first-in-class innate defense regulator technology, dusquetide (SGX942) for the treatment of oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate ("BDP") for the prevention/treatment of gastrointestinal disorders characterized by severe inflammation, including pediatric Crohn's disease (SGX203) and acute radiation enteritis (SGX201).

The Company's Public Health Solutions business segment includes active development programs for RiVax^®, its ricin toxin vaccine candidate and SGX943, a therapeutic candidate for antibiotic resistant and emerging infectious disease. The development of the vaccine program is currently supported by the heat stabilization technology, known as ThermoVax^®, under existing and on-going government contract funding. With the government contract from the National Institute of Allergy and Infectious Diseases ("NIAID"), the Company will attempt to advance the development of RiVax^® to protect against exposure to ricin toxin.

The Company generates revenues under government grants primarily from the National Institutes of Health ("NIH") and government contracts from NIAID. The Company is currently developing RiVax^® under a NIAID contract of up to $21.2 million over six years, and a one-year NIH grant of $150,000 in support of its SGX942 pediatric program. In addition, the Company has a subcontract of approximately $700,000 from a NIAID grant over five years for its thermostabilization technology, and a Defense Threat Reduction Agency subcontract of approximately $600,000 over three years for SGX943. The Company will continue to apply for additional government funding.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development of new technological innovations, dependence on key personnel, protections of proprietary technology, compliance with the United States ("U.S.") Food and Drug Administration (the "FDA") regulations, and other regulatory authorities, litigation, and product liability. Results for the three months ended March 31, 2020 are not necessarily indicative of results that may be expected for the full year.

Liquidity

In accordance with Accounting Standards Codification 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of March 31, 2020, the Company had an accumulated deficit of $183,106,946. During the three months ended March 31, 2020, the Company incurred a net loss of $7,581,334 and used $2,695,073 of cash in operating activities. The Company expects to continue to generate losses in the foreseeable future. The Company's liquidity needs will be largely determined by the budgeted operational expenditures incurred in regards to the progression of its product candidates. The Company's plans to meet its liquidity needs primarily include its ability to control the timing and spending on its research and development programs and raising additional funds through potential partnership and/or financings. Based on the Company's approved operating budget, current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, and proceeds available from the FBR Sales Agreement, management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next 12 months from issuance of the financial statements.

As of March 31, 2020, the Company had cash and cash equivalents of $7,203,376 as compared to $5,420,708 as of December 31, 2019, representing an increase of $1,782,668 or 33%. As of March 31, 2020, the Company had working capital of $3,240,550 as compared to working capital of $1,181,249 as of December 31, 2019, representing an increase of $2,041,871 or 173%. The increase in cash and working capital was primarily related to the management of the Company's expenses, utilization of the FBR Sales Agreement and warrant exercises during the three months ended March 31, 2020.

Management's business strategy can be outlined as follows:

● Following positive primary endpoint topline analysis for the Phase 3 clinical trial of SGX301, as well as further statistically significant improvement in response rates with longer treatment (12 weeks compared to 6 weeks), continue to explore partnership and commercialization while pursuing New Drug Application filing;

● Following positive interim analysis, complete enrollment and report final results in the Company's pivotal Phase 3 clinical trial of SGX942 for the treatment of oral mucositis in head and neck cancer;

● Continue development of RiVax^® in combination with the Company's ThermoVax^® technology to develop a new heat stable vaccine in biodefense with NIAID funding support;

● Continue to apply for and secure additional government funding for each of the Company's Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements;

● Pursue business development opportunities for the Company's pipeline programs, as well as explore merger/acquisition strategies; and

● Acquire or in-license new clinical-stage compounds for development.

The Company's plans with respect to its liquidity management include, but are not limited to, the following:

● The Company has up to $1.96 million in active government contract and grant funding still available as of March 31, 2020, to support its associated research programs through 2020 and beyond, provided the federal agencies exercise all options and do not elect to terminate the contracts or grants for convenience. The Company plans to submit additional contract and grant applications for further support of its programs with various funding agencies.

● The Company has continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expects to continue to do so for the foreseeable future.

● The Company will continue to pursue Net Operating Loss ("NOL") sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if available.

● The Company plans to pursue potential partnerships for pipeline programs, however, there can be no assurances that it can consummate such transactions.

● The Company has up to $8.9 million remaining from the FBR Sales Agreement as of May 8, 2020 under the prospectus supplement filed April 10, 2020.

● The Company will explore and evaluate all funding options through financial stimulus packages afforded by both the federal and state governments based on the current outbreak of the SARS-CoV-2, the pathogen responsible for COVID-19.

● The Company may seek additional capital in the private and/or public equity markets, to continue its operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. The Company is evaluating additional equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing.

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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Schedule of right-of-use lease assets and liabilities

	Operating Lease		Financing Lease
Right-of-use lease asset:
Right-of-use lease asset, January 1, 2020	$	112,387	$	13,025
Less: reduction/amortization		32,730		1,861
Right-of-use lease asset, March 31, 2020	$	79,657	$	11,164
Lease liability:
Lease liability, January 1, 2020	$	113,559	$	13,665
Less: repayments		33,084		1,810
Lease liability, March 31, 2020	$	80,475	$	11,855
Lease expenses for the three months ended March 31, 2020:
Lease expense	$	35,297	$	-
Amortization expense		-		1,861
Interest expense		-		327
Total	$	35,297	$	2,188
Contractual cash payments for the remaining lease term as of March 31, 2020:
2020	$	83,183	$	6,408
2021		-		6,408
Total	$	83,183	$	12,816
Remaining lease term (months) as of March 31, 2020		7		18

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Nature of Business (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Nature of Business (Textual)
Cash and cash equivalents	$ 7,203,376	$ 7,200,271	$ 5,420,708	$ 8,983,717
Net change in cash and cash equivalent	$ 1,782,668	(1,783,446)
Percentage change in cash and cash equivalent	33.00%
Cash in operations	$ (2,695,073)	(2,293,303)
Working capital	1,181,249		1,181,249
Accumulated deficit	(183,106,946)		$ (175,525,612)
Increase in cash and cash equivalents	$ 2,041,871
Increase in working capital, percentage	173.00%
Net loss	$ (7,581,334)	$ (1,639,627)
Remaining from FBR sales agreement, description	The Company has up to $8.9 million remaining from the FBR Sales Agreement as of May 8, 2020 under the prospectus supplement filed April 10, 2020.
Contracts from NIH and NIAID, description	The Company is currently developing RiVax® under a NIAID contract of up to $21.2 million over six years, and a one-year NIH grant of $150,000 in support of its SGX942 pediatric program. In addition, the Company has a subcontract of approximately $700,000 from a NIAID grant over five years for its thermostabilization technology, and a Defense Threat Reduction Agency subcontract of approximately $600,000 over three years for SGX943.
Government contract and grant funding available	$ 1,960,000

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.

Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: Specialized BioTherapeutics and Public Health Solutions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Contracts and Grants Receivable

Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.

Intangible Assets

One of the most significant estimates or judgments that the Company makes is whether to capitalize or expense patent and license costs. The Company makes this judgment based on whether the technology has alternative future uses, as defined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 730, Research and Development. Based on this consideration, the Company capitalizes payments made to legal firms that are engaged in filing and protecting rights to intellectual property and rights for its current products in both the domestic and international markets. The Company believes that patent rights are one of its most valuable assets. Patents and patent applications are a key component of intellectual property, especially in the early stage of product development, as their purchase and maintenance gives the Company access to key product development rights from Soligenix's academic and industry partners. These rights can also be sold or sub-licensed as part of its strategy to partner its products at each stage of development as the intangible assets have alternative future use. The legal costs incurred for these patents consist of work associated with filing new patents designed to protect, preserve and maintain the Company's rights, and perhaps extend the lives of the patents. The Company capitalizes such costs and amortizes intangibles on a straight-line basis over their expected useful life – generally a period of 11 to 16 years.

The Company did not capitalize any patent related costs during the three months ended March 31, 2020 and 2019.

Website Development Costs

In February 2019, Altamont Pharmaceutical Holdings, LLC ("Altamont"), a company which owns 5% or more of the Company's shares of common stock, signed a service agreement with a third-party vendor to re-develop the Company's website. Upon completion of the project at the end of June 2019, the Company capitalized the related website development costs of $46,500 in accordance with FASB Codification ASC 350-50 "Accounting for Web Site Development Costs", which was reported in other assets in the accompanying consolidated balance sheets. Beginning in the three months ended September 30, 2019, the Company started amortizing the website development costs on a straight-line basis over three years, the estimated useful life of the website. The Company will also review its capitalized website development costs periodically for impairment. Website amortization expense for the three months ended March 31, 2020 was $3,877 and accumulated amortization was $11,627 as of March 31, 2020.

Impairment of Long-Lived Assets

Office furniture and equipment, website development costs and intangible assets with finite lives are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.

The Company did not record any impairment of long-lived assets for the three months ended March 31, 2020 or 2019.

Fair Value of Financial Instruments

FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on March 31, 2020. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

● Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

● Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, contracts and grants receivable, tax receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued compensation approximate their fair value based on the short-term nature of these instruments.

Revenue Recognition

The Company's revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs. Purchased in-process research and development expense represents the value assigned or paid for acquired research and development for which there is no alternative future use as of the date of acquisition.

Share-Based Compensation

Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.

From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed under the Company's 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan provides for the grant of stock options, restricted stock, deferred stock and unrestricted stock to our employees and non-employees (including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515). However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect a Securities Act of 1933, as amended (the "Securities Act") restrictive legend. Stock compensation expense for equity-classified awards to nonemployees is measured on the date of grant and is recognized when the services are performed.

The fair value of options issued during the three months ended March 31, 2020 and 2019 was estimated using the Black-Scholes option-pricing model and the following assumptions:

● a dividend yield of 0%;

● an expected life of 4 years;

● volatility of 77.08% - 78.96% for 2020 and 91.71% - 92.93% for 2019

● risk free interest rates ranging from 1.38% - 1.66% for 2020 and 2.48% - 2.50% for 2019

The fair value of each option grant made during the three months ended March 31, 2020 and 2019 was estimated on the date of each grant using the Black-Scholes option pricing model and recognized as share-based compensation expense ratably over the option vesting periods, which approximates the service period.

Foreign Currency Transactions and Translation

In 2018, the Company changed the status of a wholly owned subsidiary in the United Kingdom ("UK") from inactive to active and incurred expenditures in multiple currencies including the U.S. dollar, the British Pound and the Euro to fund its clinical trial operations in the UK and select countries in Europe. In accordance with FASB ASC 830 Foreign Currency Matters, the UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with related transaction gains or losses included in net income. On a quarterly basis, the financial statements of the UK subsidiary are translated into U.S. dollars and consolidated into the Company's financials, with related translation adjustments reported as a cumulative translation adjustment ("CTA"), which is a component of accumulated other comprehensive loss. During the three months ended March 31, 2020 and 2019, the Company recognized a foreign currency transaction loss of $23,232 and a foreign currency transaction gain of $5,007, respectively, in the accompanying consolidated statements of operations.

.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company's current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax benefit of $836,893 and $610,676 from the sale of New Jersey NOL carryforwards during the three months ended March 31, 2020 and 2019, respectively. The Company recognizes accrued interest and penalties associated with uncertain tax positions, if any, as part of the income tax provision. There were no tax related interest and penalties recorded for the three months ended March 31, 2020 or 2019. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at March 31, 2020 and December 31, 2019.

Research and Development Incentive Income and Receivable

The Company recognized other income from United Kingdom research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The small or medium sized enterprise ("SME") research and development tax relief program supports companies that seek to research and develop an advance in their field and is governed through legislative law by HM Revenue & Customs as long as specific eligibility criteria are met.

Management has assessed the Company's research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the SME research and development tax relief program described above. At each period end management estimates the refundable tax offset available to the Company based on available information at the time. As the tax incentives may be received without regard to an entity's actual tax liability, they are not subject to accounting for income taxes. As a result, amounts realized under the SME R&D tax relief scheme are recorded as a component of other income.

The following table shows the change in the UK research and development incentives receivable from December 31, 2019 to March 31, 2020:

	Long-term		Current
Balance at December 31, 2019	$	-	$	444,043
UK research and development incentives		56,850		-
Foreign currency translation		-		(28,111	)
Balance at March 31, 2020	$	56,850	$	415,932

Reclassifications

Certain amounts in the statement of operations for the three months ended March 31, 2019 were reclassified to conform to the current year presentation.

Earnings Per Share

Basic earnings per share ("EPS") excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results for each period presented.

The following table summarizes potentially dilutive adjustments to the number of common shares which were excluded from the diluted calculation because their effect would be anti-dilutive due to the losses in each period:

	For the Quarter  Ended March 31, 2020		For the Quarter Ended March 31, 2019
Common stock purchase warrants		5,886,817		6,303,643
Stock options		1,564,622		1,085,595
Total		7,451,439		7,389,238

The weighted average exercise price of the Company's warrants and stock options outstanding at March 31, 2020 were $2.93 and $3.68 per share, respectively, and at March 31, 2019 were $3.09 and $5.04 per share, respectively.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and, stock options and the useful life of intangibles that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and presentation.

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Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net loss	$ (7,581,334)	$ (1,639,627)
Other comprehensive loss:
Foreign currency translation adjustments	16,243	649
Comprehensive loss	$ (7,565,091)	$ (1,638,978)

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Subsequent Events (Details) - Subsequent Event [Member] - USD ($)	1 Months Ended
	May 08, 2020	Apr. 13, 2020
Subsequent Events (Textual)
Weighted average price per share	$ 1.64
Common stock exercise warrants, Share	798,245
Bank loan		$ 417,830
Loan bears fixed interest rate		1.00%
Paycheck protection program, description		The Company has qualified for the PPP, which allows businesses and nonprofits with fewer than 500 employees to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the business disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes, including payroll, benefits, rent and utilities.
Loan forgiven percent		75.00%
Total proceeds	$ 1,308,948

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 08, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	SOLIGENIX, INC.
Entity Central Index Key	0000812796
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Fiscal Period Focus	Q1
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,576,676
Entity File Number	000-16929
Entity Interactive Data Current	Yes
Entity Incorporation, State Country Code	DE

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Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2020

Payables and Accruals [Abstract]

Schedule of accrued expenses

	March 31, 2020		December 31, 2019
Clinical trial expenses	$	3,197,269	$	3,020,030
Other		129,087		137,356
Total	$	3,326,356	$	3,157,386

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Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2020 USD ($)
Current [Member]
Option Indexed to Issuer's Equity [Line Items]
Balance, opening	$ 444,043
UK research and development incentives
Foreign currency translation	(28,111)
Balance, closing	415,932
Long-term Debt [Member]
Option Indexed to Issuer's Equity [Line Items]
Balance, opening
UK research and development incentives	56,850
Foreign currency translation
Balance, closing	$ 56,850

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Shareholders' Equity (Details) - USD ($)			1 Months Ended			3 Months Ended
	Aug. 11, 2017	May 05, 2017	Mar. 23, 2020	Feb. 20, 2020	Jan. 31, 2020	Mar. 31, 2020	May 08, 2020	Mar. 12, 2020	Feb. 10, 2020	Jan. 08, 2020	Dec. 31, 2019
Shareholders' Equity (Textual)
Preferred stock, shares authorized						350,000					350,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stoc, shares issued						25,778,431
Common stock purchase agreement with FBR, description	The Company filed a prospectus supplement for the sale of up to $4.8 million of shares of common stock pursuant to the FBR Sales Agreement, and the Company sold an aggregate of approximately $1 million of shares thereunder. On October 3, 2018, the Company filed an updated prospectus supplement with the U.S. Securities and Exchange Commission (the "SEC") and may offer and sell shares of the Company's common stock pursuant to the FBR Sales Agreement having an aggregate offering price of up to $9.0 million, from time to time. The prospectus supplement filed on October 3, 2018, superseded the prospectus supplement dated August 11, 2017.
Fair value of share						$ 2.56
Grant value						$ 59,000
FBR Sales Agreement [Member]
Shareholders' Equity (Textual)
Common stock purchase agreement with FBR, description	The FBR Sales Agreement provides that FBR is entitled to compensation for its services in an amount equal to 3% of the gross proceeds from the sale of shares sold under the FBR Sale Agreement.	The shares sold pursuant to the FBR Sales Agreement have been and will be issued pursuant to General Instruction I.B.6 of Form S-3, which permits the Company to sell shelf securities in a public primary offering with a value not exceeding one-third of the average market value of the Company's voting and non-voting common equity held by non-affiliates in any 12-month period as long as the aggregate market value of the Company's outstanding voting and non-voting common equity held by non-affiliates is less than $75 million.
Common stock shares sold						1,732,115
Weighted average price per share					$ 2.30
FBR Sales Agreement [Member] | Subsequent Event [Member]
Shareholders' Equity (Textual)
Common stock value under sale agreement							$ 8,900,000
Common Stock [Member]
Shareholders' Equity (Textual)
Common stoc, shares issued			304,615
Common stock, shares issued option exercised										2,189
Common stock exercise price										$ 0.86
Common stock shares issued to vendors								10,000	10,000	10,000
Common stock for payment on achieved milestone			1,956,182
Fair value of share			$ 2.56					$ 1.97	$ 2.25	$ 1.68
Common stock issued as a result of warrant exercises				206
Warrants issued to purchase shares						304,615
Warrants exercise price				$ 2.50		$ 2.25

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Leases (Details)	3 Months Ended
	Mar. 31, 2020 USD ($)
Operating Lease [Member]
Right-of-use lease asset:
Right-of-use lease asset, begining	$ 112,387
Less: reduction/amortization	32,730
Right-of-use lease asset, ending	79,657
Lease liability:
Lease liability,	113,559
Less: repayments	33,084
Lease liability,	80,475
Lease expenses for the three months ended
Lease expense	35,297
Amortization expense
Interest expense
Total	35,297
Contractual cash payments for the remaining lease term
2020	83,183
2021
Total	$ 83,183
Remaining lease term	7 months
Financing Lease [Member]
Right-of-use lease asset:
Right-of-use lease asset, begining	$ 13,025
Less: reduction/amortization	1,861
Right-of-use lease asset, ending	11,164
Lease liability:
Lease liability,	13,665
Less: repayments	1,810
Lease liability,	11,855
Lease expenses for the three months ended
Lease expense
Amortization expense	1,861
Interest expense	327
Total	2,188
Contractual cash payments for the remaining lease term
2020	6,408
2021	6,408
Total	$ 12,816
Remaining lease term	18 months

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.

Operating Segments

Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: Specialized BioTherapeutics and Public Health Solutions.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Contracts and Grants Receivable

Contracts and Grants Receivable

Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.

Intangible Assets

Intangible Assets

One of the most significant estimates or judgments that the Company makes is whether to capitalize or expense patent and license costs. The Company makes this judgment based on whether the technology has alternative future uses, as defined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 730, Research and Development. Based on this consideration, the Company capitalizes payments made to legal firms that are engaged in filing and protecting rights to intellectual property and rights for its current products in both the domestic and international markets. The Company believes that patent rights are one of its most valuable assets. Patents and patent applications are a key component of intellectual property, especially in the early stage of product development, as their purchase and maintenance gives the Company access to key product development rights from Soligenix's academic and industry partners. These rights can also be sold or sub-licensed as part of its strategy to partner its products at each stage of development as the intangible assets have alternative future use. The legal costs incurred for these patents consist of work associated with filing new patents designed to protect, preserve and maintain the Company's rights, and perhaps extend the lives of the patents. The Company capitalizes such costs and amortizes intangibles on a straight-line basis over their expected useful life – generally a period of 11 to 16 years.

The Company did not capitalize any patent related costs during the three months ended March 31, 2020 and 2019.

Website Development Costs

Website Development Costs

In February 2019, Altamont Pharmaceutical Holdings, LLC ("Altamont"), a company which owns 5% or more of the Company's shares of common stock, signed a service agreement with a third-party vendor to re-develop the Company's website. Upon completion of the project at the end of June 2019, the Company capitalized the related website development costs of $46,500 in accordance with FASB Codification ASC 350-50 "Accounting for Web Site Development Costs", which was reported in other assets in the accompanying consolidated balance sheets. Beginning in the three months ended September 30, 2019, the Company started amortizing the website development costs on a straight-line basis over three years, the estimated useful life of the website. The Company will also review its capitalized website development costs periodically for impairment. Website amortization expense for the three months ended March 31, 2020 was $3,877 and accumulated amortization was $11,627 as of March 31, 2020.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Office furniture and equipment, website development costs and intangible assets with finite lives are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.

The Company did not record any impairment of long-lived assets for the three months ended March 31, 2020 or 2019.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on March 31, 2020. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

● Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

● Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, contracts and grants receivable, tax receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued compensation approximate their fair value based on the short-term nature of these instruments.

Revenue Recognition

Revenue Recognition

The Company's revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs. Purchased in-process research and development expense represents the value assigned or paid for acquired research and development for which there is no alternative future use as of the date of acquisition.

Share-Based Compensation

Share-Based Compensation

Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.

From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed under the Company's 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan provides for the grant of stock options, restricted stock, deferred stock and unrestricted stock to our employees and non-employees (including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515). However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect a Securities Act of 1933, as amended (the "Securities Act") restrictive legend. Stock compensation expense for equity-classified awards to nonemployees is measured on the date of grant and is recognized when the services are performed.

The fair value of options issued during the three months ended March 31, 2020 and 2019 was estimated using the Black-Scholes option-pricing model and the following assumptions:

● a dividend yield of 0%;

● an expected life of 4 years;

● volatility of 77.08% - 78.96% for 2020 and 91.71% - 92.93% for 2019

● risk free interest rates ranging from 1.38% - 1.66% for 2020 and 2.48% - 2.50% for 2019

The fair value of each option grant made during the three months ended March 31, 2020 and 2019 was estimated on the date of each grant using the Black-Scholes option pricing model and recognized as share-based compensation expense ratably over the option vesting periods, which approximates the service period.

Foreign Currency Transactions and Translation

Foreign Currency Transactions and Translation

In 2018, the Company changed the status of a wholly owned subsidiary in the United Kingdom ("UK") from inactive to active and incurred expenditures in multiple currencies including the U.S. dollar, the British Pound and the Euro to fund its clinical trial operations in the UK and select countries in Europe. In accordance with FASB ASC 830 Foreign Currency Matters, the UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with related transaction gains or losses included in net income. On a quarterly basis, the financial statements of the UK subsidiary are translated into U.S. dollars and consolidated into the Company's financials, with related translation adjustments reported as a cumulative translation adjustment ("CTA"), which is a component of accumulated other comprehensive loss. During the three months ended March 31, 2020 and 2019, the Company recognized a foreign currency transaction loss of $23,232 and a foreign currency transaction gain of $5,007, respectively, in the accompanying consolidated statements of operations.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company's current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax benefit of $836,893 and $610,676 from the sale of New Jersey NOL carryforwards during the three months ended March 31, 2020 and 2019, respectively. The Company recognizes accrued interest and penalties associated with uncertain tax positions, if any, as part of the income tax provision. There were no tax related interest and penalties recorded for the three months ended March 31, 2020 or 2019. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at March 31, 2020 and December 31, 2019.

Research and Development Incentive Income and Receivable

Research and Development Incentive Income and Receivable

The Company recognized other income from United Kingdom research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The small or medium sized enterprise ("SME") research and development tax relief program supports companies that seek to research and develop an advance in their field and is governed through legislative law by HM Revenue & Customs as long as specific eligibility criteria are met.

Management has assessed the Company's research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the SME research and development tax relief program described above. At each period end management estimates the refundable tax offset available to the Company based on available information at the time. As the tax incentives may be received without regard to an entity's actual tax liability, they are not subject to accounting for income taxes. As a result, amounts realized under the SME R&D tax relief scheme are recorded as a component of other income.

The following table shows the change in the UK research and development incentives receivable from December 31, 2019 to March 31, 2020:

	Long-term		Current
Balance at December 31, 2019	$	-	$	444,043
UK research and development incentives		56,850		-
Foreign currency translation		-		(28,111	)
Balance at March 31, 2020	$	56,850	$	415,932

Earnings Per Share

Earnings Per Share

Basic earnings per share ("EPS") excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results for each period presented.

The following table summarizes potentially dilutive adjustments to the number of common shares which were excluded from the diluted calculation because their effect would be anti-dilutive due to the losses in each period:

	For the Quarter  Ended March 31, 2020		For the Quarter Ended March 31, 2019
Common stock purchase warrants		5,886,817		6,303,643
Stock options		1,564,622		1,085,595
Total		7,451,439		7,389,238

The weighted average exercise price of the Company's warrants and stock options outstanding at March 31, 2020 were $2.93 and $3.68 per share, respectively, and at March 31, 2019 were $3.09 and $5.04 per share, respectively.

Reclassifications

Reclassifications

Certain amounts in the statement of operations for the three months ended March 31, 2019 were reclassified to conform to the current year presentation.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and, stock options and the useful life of intangibles that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and presentation.

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Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

Note 4. Leases

The Company classifies a lease for its office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey and a lease for a copier machine in the office as an operating lease and a financing lease, respectively, and records related right-of-use lease assets and lease liabilities accordingly. As of March 31, 2020, the Company's consolidated balance sheet included a right-of-use lease asset of $79,657 for the office space and $11,164 for the copier machine. Lease liabilities in the Company's consolidated balance sheet included corresponding lease liabilities of $80,475 and $11,855, respectively. During the three months ended March 31, 2020, the Company recognized lease expense of $35,297 for the operating lease, in addition to amortization expense of $1,861 and interest expense of $327 for the financing lease in the Company's consolidated statement of operations. During the three months ended March 31, 2019, the Company recognized lease expense of $35,297 for the operating lease, in addition to amortization expense of $1,861 and interest expense of $498 for the financing lease in the Company's consolidated statement of operations.

The following represents a reconciliation of contractual lease cash flows to the right-of-use lease assets and liabilities recognized in the financial statements:

	Operating Lease		Financing Lease
Right-of-use lease asset:
Right-of-use lease asset, January 1, 2020	$	112,387	$	13,025
Less: reduction/amortization		32,730		1,861
Right-of-use lease asset, March 31, 2020	$	79,657	$	11,164
Lease liability:
Lease liability, January 1, 2020	$	113,559	$	13,665
Less: repayments		33,084		1,810
Lease liability, March 31, 2020	$	80,475	$	11,855
Lease expenses for the three months ended March 31, 2020:
Lease expense	$	35,297	$	-
Amortization expense		-		1,861
Interest expense		-		327
Total	$	35,297	$	2,188
Contractual cash payments for the remaining lease term as of March 31, 2020:
2020	$	83,183	$	6,408
2021		-		6,408
Total	$	83,183	$	12,816
Remaining lease term (months) as of March 31, 2020		7		18

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Related Party Transaction

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

Related Party Transaction

Note 8. Related Party Transaction

In February 2019, Altamont, a company which owns 5% or more of the Company's shares of common stock, signed a service agreement with a third-party vendor to re-develop the Company's website. Upon completion of the project at the end of June 2019, the Company issued 78,338 shares of common stock of the Company, including 65,493 shares with a fair value of $46,500 to Altamont as reimbursement for the website development costs incurred by Altamont on behalf of the Company. In accordance with FASB ASC 350-50 "Accounting for Web Site Development Cost", the Company has capitalized the value of these shares as website development costs of $46,500, which was included in other assets with a carrying value of $34,873, net of amortization, in the accompanying consolidated balance sheet as of March 31, 2020. The balance of 12,845 shares with a fair value of $9,120 was issued to Altamont as consideration for its contractual investor relation and web hosting services, and is being amortized over the term of the service agreement. During the three months ended March 31, 2020, $2,280 was expensed, aggregate amortization was $8,850 and the remaining balance of $270 is included in prepaid expenses and other current assets as of March 31, 2020.