Edgar Filing: NANOVIRICIDES, INC.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2013

Commission File Number: 333-148471

NANOVIRICIDES, INC.

(Exact name of Company as specified in its charter)

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

135 Wood Street, Suite 205

West Haven, Connecticut 06516

(Address of principal executive offices and zip code)

(203) 937-6137

(Company’s telephone number, including area code)

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

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

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

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

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

Yes ¨ No x

The number of shares outstanding of the Company's Common Stock as of November 14, 2013 was: 50,028,701.

NanoViricides, Inc.

FORM 10-Q

INDEX

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets at September 30, 2013 (Unaudited) and June 30, 2013	3

Statements of Operations for the Three Months Ended September 30, 2013 and 2012 and for the Period from May 12, 2005 (Inception) through September 30, 2013 (Unaudited)	4

Statements of Cash Flows for the Three Months Ended September 30, 2013 and 2012 and for the Period from May 12, 2005 (Inception) through September 30, 2013 (Unaudited)	5

Statement of Stockholders’ Equity	7

Notes to the Financial Statements (Unaudited)	8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3. Quantitative and Qualitative Disclosures About Market Risk	32

Item 4. Controls and Procedures	33

PART II OTHER INFORMATION

Item 1. Legal Proceedings	35

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3. Defaults Upon Senior Securities	37

Item 4. Mine Safety Disclosures	37

Item 5. Other Information	37

Item 6. Exhibits and Reports on Form 8-K	37

Signatures	38

Certifications

Nanoviricides, Inc.

(A Development Stage Company)

Balance Sheets

	September 30, 2013			June 30, 2013
	(Unaudited)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	19,200,882		$	13,923,245
Prepaid expenses		805,145			598,380
Other current assets		-			-

Total Current Assets		20,006,027			14,521,625

PROPERTY AND EQUIPMENT
Property and equipment		3,779,636			1,505,648
Accumulated depreciation		(1,089,471	)		(1,036,752	)

Property and equipment, net		2,690,165			468,896

TRADEMARK
Trademark		458,954			458,954
Accumulated amortization		(44,114	)		(41,921	)

Trademark, net		414,840			417,033

SECURITY DEPOSIT		2,000,000			1,000,000

Total Assets	$	25,111,032		$	16,407,554

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	408,058		$	263,258
Accounts payable – related parties		1,139,825			710,567
Accrued expenses		319,612			204,359

Total Current Liabilities		1,867,495			1,178,184

Debentures payable		3,603,554			3,468,073
Derivative liability		7,888,736			3,751,645

Total Long Term Liabilities		11,492,290			7,219,718

Total Liabilities		13,359,785			8,397,902

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Series A Convertible Preferred stock, $0.001 par value, 2,990,000 shares designated, 2,990,000 shares issued and outstanding		2,990			2,990
Series B Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 0, and 0 shares issued and outstanding, respectively		-			-
Series C Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 0 and 0 shares issued and outstanding, respectively		-			-
Common stock, $0.001 par value; 85,714,285 shares authorized; 50,028,701 and 47,026,173 shares issued and outstanding, respectively		50,029			47,026
Additional paid-in capital		56,270,792			46,259,420
Deficit accumulated during the development stage		(44,572,564	)		(38,299,784	)

Total Stockholders' Equity		11,751,247			8,009,652

Total Liabilities and Stockholders' Equity	$	25,111,032		$	16,407,554

See accompanying notes to the financial statements

F-3

Nanoviricides, Inc.

(A Development Stage Company)

Statements of Operations

(Unaudited)

							For the Period from
	For the Three Months			For the Three Months			May 12, 2005
	Ended			Ended			(inception) through
	September 30, 2013			September 30, 2012			September 30, 2013
	(Unaudited)			(Unaudited)			(Unaudited)

OPERATING EXPENSES
Research and development	$	1,174,221		$	1,209,818		$	23,978,281
Refund credit research and development costs		-			-			(420,842	)
General and administrative		714,561			381,167			13,729,409

Total operating expenses		1,888,782			1,590,985			37,286,848

LOSS FROM OPERATIONS		(1,888,782	)		(1,590,985	)		(37,286,848	)

OTHER INCOME (EXPENSE):
Interest income, net		9,560			33,303			277,258
Interest expense		(120,986	)		-			(298,024	)
Discount on convertible debentures		(135,481	)		-			(1,123,914	)
Beneficial conversion feature of convertible debentures		-			-			(713,079	)
Change in fair market value of derivatives		(4,137,091	)		(246,273	)		(5,427,957	)

Other income (expense), net		(4,383,998	)		(212,970	)		(7,285,716	)

LOSS BEFORE INCOME TAXES		(6,272,780	)		(1,803,955	)		(44,572,564	)

INCOME TAX PROVISION		-			-			-

NET LOSS	$	(6,272,780	)	$	(1,803,955	)	$	(44,572,564	)

NET LOSS PER COMMON SHARE
- BASIC AND DILUTED:	$	(0.13	)	$	(0.04	)

Weighted average common shares outstanding
- basic and diluted		47,672,029			41,305,842

See accompanying notes to the financial statements

F-4

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the Fiscal Year Ended June 30, 2013, 2012 and 2011

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

Please refer to Form 10K for the fisacal year ended June 30, 2011 filed with SEC on October 13, 2011 for equity transactions occurred prior to June 30, 2009

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

Collection of stock subscription receivable																								100,000						100,000
Common shares issued for consulting and legal services valued at $ .66 per share, July 31, 2009																	7,576		8		4,992									5,000
Common shares issued for consulting services valued at $.66 per share, July 31, 2009																	8,485		8		5,592									5,600
Warrants issued to Scientific Advisory Board, August 15, 2009																					41,400									41,400
Common shares issued for consulting and legal services valued at $ .86 per share, August 31, 2009																	6,512		7		4,993									5,000
Common shares issued for consulting services valued at $.86 per share, August 31, 2009																	5,814		6		5,594									5,600
Common shares issued for consulting services valued at $ .89 per share, September 30, 2009																	6,292		6		5,594									5,600
Common shares issued for consulting and legal services valued at $ .89 per share, September 30, 2009																	5,618		6		4,994									5,000
Payment of Finder's Fee																					(5,250	)								(5,250	)
Common shares and warrants issued in connection with private placement of common stock, September 30, 2009																	2,675,000		2,675		1,334,825									1,337,500
Common shares and warrants issued in connection with warrant conversion, September 30, 2009																	3,759,800		3,760		1,876,140									1,879,900
Common shares issued for consulting and legal services valued at $ .57 per share, October 1, 2009																	35,088		35		19,965									20,000
Common shares issued for Legal services valued at $56.50 per share, October 26, 2009																	12,500		13		7,050									7,063
Warrants issued for commissions, October 26, 2009																					3,570									3,570
Common shares issued for consulting and legal services valued at $ .73 per share, October 31, 2009																	6,859		7		4,993									5,000
Common shares issued for consulting services valued at $.73 per share, October 31, 2009																	7,682		8		5,592									5,600
Common shares issued upon conversion of Warrants, November 10, 2009																	10,000		10		1,430									1,440
Warrants issued to Scientific Advisory Board, November 15, 2009																					39,600									39,600
Common shares issued in payment of accounts payable, November 25, 2009																	32,500		33		25,167									25,200
Common shares issued for consulting and legal services valued at $ .86 per share, November 30, 2009																	5,814		6		4,994									5,000
Common shares issued for consulting services valued at $.86 per share, November 30, 2009																	9,767		10		8,390									8,400
Common shares issued for consulting services valued at $ .85 per share, December 31, 2009																	9,917		10		8,390									8,400
Common shares issued for consulting and legal services valued at $ .85 per share, December 31, 2009																	5,903		6		4,994									5,000
Common shares issued for consulting and legal services valued at $1.043 per share, January 31, 2010																	4,794		5		4,995									5,000
Warrants issued to Scientific Advisory Board, February 15, 2010																					40,200									40,200
Series A Preferred Shares issued for TheraCour license valued at $.001 par value, February 15, 2010		7,000,000		7,000																										7,000
Common shares issued for consulting services valued at $1.096 per share, February 28, 2010																	4,562		5		4,995									5,000
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010																	125,000		125		156,125									156,250
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010																	125,000		125		156,125									156,250
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		250,000		250																	513,573									513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		250,000		250																	513,573									513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		93,750		94																	192,590									192,684
Common shares issued for consulting and legal servies valued at $1.25 per share, March 3, 2010																	1,000		1		1,249									1,250
Common shares issued for consulting services valued at $1.417 per share, March 31, 2010																	3,529		4		4,996									5,000
Common shares issued in lieu of payment of accounts payable - All Sciences																	39,625		40		31,660									31,700

Common shares issued for consulting and legal services valued at $2.087 per share, April 30, 2010																	2,396		2		4,998									5,000
Series B Preferred Shares issued to SeaSide 88, LP, May 12, 2010						500,000			500												4,999,500									5,000,000
Placement Agents Fees related to sale of Convertible Preferred shares, May 12, 2010																					(400,000	)								(400,000	)
Legal Fees related to Sale of Convertible Preferred Stock, May 12, 2010																					(50,000	)								(50,000	)
Derivative Liability - Issuance of Series B Preferred Shares																					(1,787,379	)								(1,787,379	)
Common shares issued for conversion of Series B Preferred Shares at $1.88 per share, May 12, 2010																	319,331		319											319
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 12, 2010						(60,000	)		(60	)																				(60	)
Derivative Liability - Retirement of Series B Preferred Shares, May 12, 2010																					128,053									128,053
Warrants issued to Scientific Advisory Board, May 15, 2010																					82,800									82,800
Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, May 26, 2010																	398,189		398											398
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 26, 2010						(60,000	)		(60	)																				(60	)
Dividend paid to Seaside 88, LP, May 26, 2010																					(16,877	)								(16,877	)
Common shares issued as Dividend to Seaside 88, LP at $1.64, May 26, 2010																	10,300		10		16,867									16,877
Derivative Liability - Retirement of Series B Preferred Shares, May 26, 2010																					151,852									151,852
Common shares issued for consulting and legal services valued at $2.083 per share, May 31, 2010																	2,400		2		4,998									5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, June 9, 2010																	195,000		195		194,805									195,000
Common shares issued for conversion of Series B Preferred Shares at $1.41 per share, June 9, 2010																	426,721		427											427
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 9, 2010						(60,000	)		(60	)																				(60	)
Dividend paid to Seaside 88, LP, June 9, 2010																					(14,575	)								(14,575	)
Common shares issued as Dividend to Seaside 88, LP at $1.41, June 9, 2010																	10,366		10		14,565									14,575
Derivative Liability - Retirement of Series B Preferred Shares, June 9, 2010																					149,364									149,364
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010																	11,300		11		19,989									20,000
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010																	2,000		2		3,538									3,540
Common shares issued for conversion of Series B Preferred Shares at $1.59 per share, June 23, 2010																	377,905		378											378
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 23, 2010						(60,000	)		(60	)																				(60	)
Dividend paid to Seaside 88, LP, June 23, 2010																					(12,274	)								(12,274	)
Common shares issued as Dividend to Seaside 88, LP at $1.59, June 23, 2010																	7,731		7		12,268									12,275
Derivative Liability - Retirement of Series B Preferred Shares, June 23, 2010																					120,254									120,254
Common shares issued for consulting and legal services valued at $1.043 per share, June 30, 2010																	2,738		2		4,998									5,000

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

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

Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, July 7, 2010																	397,088		397											397
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 7, 2010						(60,000	)		(60	)																				(60	)
Dividend paid to Seaside 88, LP, July 7, 2010																					(9,973	)								(9,973	)
Common shares issued as dividend to Seaside 88, LP at $1.65 per share, July 7, 2010																	6,061		6		9,967									9,973
Derivative liability - retirement of Series B Preferred Shares, July 7, 2010																					116,715									116,715
Common shares issued for conversion of Series B Preferred Shares at $1.30 per share, July 21, 2010																	463,177		463											463
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 21, 2010						(60,000	)		(60	)																				(60	)
Dividend paid to Seaside 88, LP, July 21, 2010																					(7,671	)								(7,671	)
Common shares issued as dividend to Seaside 88, LP at $1.32 per share, July 21, 2010																	5,794		6		7,665									7,671
Derivative liability - retirement of Series B Preferred Shares, July 21, 2010																					113,700									113,700
Common shares issued for consulting and legal services valued at $2.087 per share, July 31, 2010																	3,086		3		4,997									5,000
Common shares issued for conversion of Series B Preferred Shares at $1.14 per share, August 4, 2010																	526,916		527											527
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010						(60,000	)		(60	)																				(60	)
Dividend paid to Seaside 88, LP, August 4, 2010																					(5,370	)								(5,370	)
Common shares issued as dividend to Seaside 88, LP, at $1.14 per share, August 4, 2010																	4,716		5		5,365									5,370
Derivative liability - retirement of Series B Preferred Shares, August 4, 2010																					104,480									104,480
Warrants issued to Scientific Advisory Board, August 15, 2010																					45,000									45,000
Common shares issued in conversion of Series B Preferred Shares at $0.99 per share, August 18, 2010																	606,367		606											606
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 18, 2010						(60,000	)		(60	)																				(60	)
Dividend paid to Seaside 88, LP, August 18, 2010																					(3,068	)								(3,068	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per share, August 18, 2010																	3,101		3		3,065									3,068
Derivative liability - retirement of Series B Preferred Shares, August 18, 2010																					104,795									104,795
Common shares issued for consulting and legal services valued at $1.24 per share, August 31, 2010																	4,032		4		4,996									5,000
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 1, 2010																	215,332		215											215
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 1, 2010						(20,000	)		(20	)																				(20	)
Dividend paid to Seaside 88, LP, September 1, 2010																					(767	)								(767	)
Common shares issued as dividend to Seaside 88, LP at $1.00 per share, September 1, 2010																	766		1		766									767
Derivative liability - retirement of Series B Preferred Shares, September 1, 2010																					34,841									34,841
Series B Preferred Shares issued to SeaSide 88, LP, September 21, 2010						250,000			250												2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, September 21, 2010																					(195,000	)								(195,000	)
Legal fees related to sale of Convertible Preferred Stock, September 21, 2010																					(10,000	)								(10,000	)
Derivative liability - issuance of Series B Preferred Shares																					(328,086	)								(328,086	)
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 21, 2010																	430,015		430											430
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 21, 2010						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, September 21, 2010																					103,012									103,012
Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2010																	4,673		5		4,995									5,000
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, October 5, 2010																	460,346		460											460
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 5, 2010						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, on October 5, 2010																					(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, October 5, 2010																	9,268		9		8,046									8,055
Derivative liability - Retirement of Series B Preferred Shares, October 5, 2010																					103,330									103,330
Common shares issued for conversion of Series B Preferred Shares at $0.88 per share, October 19, 2010																	452,965		453											453
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 19, 2010						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, October 19, 2010																					(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $0.88 per share, October 19, 2010																	7,384		7		6,514									6,521
Derivative liability - Retirement of Series B Preferred Shares, October 19, 2010																					69,635									69,635
Common shares issued for consulting and legal services valued at $1.03 per share, October 31, 2010																	4,854		5		4,995									5,000
Series A Preferred Shares issued for employee stock compensation, November 1, 2010		30,000		30																	53,903									53,933
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, November 2, 2010																	461,313		461											461
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, November 2, 2010																					(4,986	)								(4,986	)
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, November 2, 2010																	5,751		6		4,980									4,986
Derivative liability - retirement of Series B Preferred Shares, November 2, 2010																					69,104									69,104
Warrants issued to Scientific Advisory Board, November 15, 2010																					55,800									55,800
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, November 16, 2010																	345,817		346											346
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 16, 2010						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, November 16, 2010																					(3,452	)								(3,452	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, November 16, 2010																	2,984		3		3,449									3,452
Derivative liability - Retirement of Series B Preferred Shares, November 16, 2010																					69,187									69,187
Common shares issued for conversion of Series B Preferred Shares at $1.35 per share, November 30, 2010																	310,566		311											311
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 30, 2010						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, November 30, 2010																					(1,918	)								(1,918	)
Common shares issued as dividend to Seaside 88, LP at $1.35 per share, November 30, 2010																	1,417		1		1,917									1,918
Derivative liability - Retirement of Series B Preferred Shares, November 30, 2010																					69,449									69,449
Common shares issued for consulting and legal services valued at $1.46 per share, November 30, 2010																	3,425		3		4,997									5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, December 10, 2010																	25,000		25		24,975									25,000
Common shares issued as compensation pursuant to S-8 at $1.28 per share, December 10, 2010																	50,000		50		63,950									64,000
Common shares issued for conversion of Series B Preferred Shares at $1.10 per share, December 14, 2010																	90,840		91											91
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, December 14, 2010						(10,000	)		(10	)																				(10	)
Dividend paid to Seaside 88, LP, December 14 2010																					(384	)								(384	)
Common shares issued as Dividend to Seaside 88, LP, at $1.10 per share, December 14, 2010																	348		-		384									384
Derivative liability - retirement of Series B Preferred Shares, December 14, 2010																					17,438									17,438
Series B Preferred Shares issued to SeaSide 88, LP, December 21, 2010						250,000			250												2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, December 21, 2010																					(200,000	)								(200,000	)
Common shares issued for consulting and legal services valued at $1.32 per share, December 31, 2010																	4,545		5		5,995									6,000
Adjustment																			33											33
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, January 3, 2011																	343,796		344											344
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 3, 2011						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, January 3, 2011																					(8,904	)								(8,904	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, January 3, 2011																	7,653		8		8,896									8,904
Derivative liability - retirement of Series B Preferred Shares, January 3, 2011																					73,532									73,532
Common shares issued for conversion of Series B Preferred Shares at $1.26 per share, January 17, 2011																	317,965		318											318
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 17, 2011						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, January 17, 2011																					(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.26 per share, January 17, 2011																	6,403		6		8,049									8,055
Derivative liability - retirement of Series B Preferred Shares, January 17, 2011																					70,882									70,882
Common shares issued for conversion of Series B Preferred Shares at $1.12 per share, January 31, 2011																	356,422		356											356
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 31, 2011						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, January 31, 2011																					(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.24 per share, January 31, 2011																	5,271		5		6,516									6,521
Derivative liability - retirement ofSeries B Preferred Shares, January 31, 2011																					72,432									72,432
Common shares issued for consulting and legal services valued at $1.47 per share, January 31, 2011																	4,087		4		5,996									6,000
Common shares issued for conversion of warrants at $1.00 per share, February 4, 2011																	25,000		25		24,975									25,000
Common shares issued for conversion of Series B Preferred Shares at $1.08 per share, February 14, 2011																	370,017		370											370
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 14, 2011						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, February 14, 2011																					(4,986	)								(4,986	)
Common shares issued as dividend to Seaside 88, LP, at $1.08 per share, February 14, 2011																	4,613		5		4,981									4,986
Derivative liability - retirement of Series B Preferred Shares, February 14, 2011																					71,699									71,699
Warrants issued to Scientific Advisory Board, Feburary 15, 2011																					54,000									54,000
Common shares issued for conversion of Series B Preferred Shares at $0.99 per share, February 28, 2011																	405,610		406											406
Derivative liability - retirement of Series B Preferred Shares, February 28, 2011																					71,490									71,490
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 28, 2011						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, February 28, 2011																					(3,452	)								(3,452	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per shares, February 28, 2011																	3,500		4		3,448									3,452
Common shares issued for consulting and legal services valued at $1.22 per share, February 28, 2011																	4,902		5		5,995									6,000
Common shares issued for employee stock compensation at $1.32 per share, March 3, 2011																	250,000		250		316,000									316,250
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		593,750		594																	1,364,036									1,364,630
Common shares issued for conversion of Series B Preferred Shares at $1.09 per share, March 14, 2011																	367,274		367											367
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 14, 2011						(40,000	)		(40	)																				(40	)
Dividend paid to Seaside 88, LP, March 14, 2011																					(1,918	)								(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.09 per shares, March 14, 2011																	1,761		2		1,916									1,918
Derivative Liability - Retirement of Series B Preferred Shares, March 14, 2011																					70,566									70,566
Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, March 28, 2011																	89,986		90											90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 28, 2011						(10,000	)		(10	)																				(10	)
Dividend paid to Seaside 88, LP, March 28, 2011																					(384	)								(384	)
Common shares issued as dividend to Seaside 88, LP, at $1.11 per share, March 28, 2011																	345		-		384									384
Derivative liability - retirement of Series B Preferred Shares, March 28, 2011																					17,525									17,525
Common shares issued for consulting and legal services valued at $1.28 per share, March 31, 2011																	4,680		5		5,995									6,000
Common shares issued for conversion of warrants to common stock at $1.00 per share, April 10, 2011																	10,000		10		9,990									10,000
Series B Preferred Shares issued to SeaSide 88, LP, April 18, 2011						250,000			250												2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, April 18, 2011																					(160,000	)								(160,000	)
Legal fees related to Sale of Convertible Preferred Stock, April 18, 2011																					(25,000	)								(25,000	)
Derivative liability - issuance of Series B Preferred Shares																					(429,725	)								(429,725	)
Common shares issued for conversion of Series B Preferred Shares at $1.28 per share, April 18, 2011																	312,163		312		(272	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, April 18, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, April 18, 2011																					68,756									68,756
Common shares issued for consulting and legal services valued at $1.47 per share, April 30, 2011																	4,087		4		5,996									6,000
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, May 2, 2011																	339,726		340		(300	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 2, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, May 2, 2011																					68,941									68,941
Dividend paid to Seaside 88, LP, May 2, 2011																					(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per shares, May 2, 2011																	6,841		7		8,048									8,055
Warrants issued to Scientific Advisory Board, May 15, 2011																					50,400									50,400
Common shares issued for conversion of Series B Preferred Shares at $1.19 per share, May 16, 2011																	336,501		337		(297	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 16, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, May 16, 2011																					69,194									69,194
Dividend paid to Seaside 88, LP, May 16, 2011																					(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.20 per shares, May 16, 2011																	5,438		5		6,516									6,521
Common shares issued for conversion of Series B Preferred Shares at $1.23 per share, May 30, 2011																	326,480		326		(286	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 30, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, May 30, 2011																					69,464									69,464
Dividend paid to Seaside 88, LP, May 30, 2011																					(4,986	)								(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $1.23 per share, May 30, 2011																	4,070		4		4,982									4,986
Common shares issued for consulting and legal services valued at $1.47 per share, May 31, 2011																	4,087		4		5,996									6,000
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, June 13, 2011																	339,971		340		(300	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 13, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, June 13, 2011																					69,727									69,727
Dividend paid to Seaside 88, LP, June 13, 2011																					(3,452	)								(3,452	)
Common shares issued as Dividend to Seaside 88, LP at $1.18 per share, June 13, 2011																	2,934		3		3,449									3,452
Common shares issued for conversion of Series B Preferred Shares at $1.02 per share, June 27, 2011																	391,850		392		(352	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 27, 2011						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Series B Preferred Share, June 27, 2011																					69,973									69,973
Dividend paid to Seaside 88, LP, June 27, 2011																					(1,918	)								(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.10 per share, June 27, 2011																	1,741		2		1,916									1,918
Common shares issued for consulting and legal services valued at $1.22 per share, June 30, 2011																	4,902		5		5,995									6,000

Net loss																											(6,477,165	)		(6,477,165	)

Balance, June 30, 2011		8,217,500		8,218		10,000			10			-			-		143,548,494		143,582		33,235,990			-			(23,216,908	)		10,170,891

Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, July 11, 2011																	89,986		90											90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 11, 2011						(10,000	)		(10	)																				(10	)
Derivative liability - retirement of Series B Preferred Shares, July 11, 2011																					17,881									17,881
Dividend to Seaside 88, LP, paid on July 11, 2011																					(381	)								(381	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per share, July 11, 2011																	345		-		381									381
Series B Preferred Shares issued to SeaSide 88, LP, on July 26, 2011						250,000			250												2,499,750									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, July 26, 2011																					(150,000	)								(150,000	)
Derivative liability - issuance of Series B Preferred Shares																					(429,768	)								(429,768	)
Legal Fees related to Sale of Convertible Preferred Stock, July 26, 2011																					(6,250	)								(6,250	)
Common shares issued in conversion of Series B Preferred Shares to common stock at $1.18 per share, July 26, 2011																	377,800		378											378
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 26, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, July 26, 2011																					68,425									68,425
Common shares issued for consulting and legal services valued at $1.26 per share, July 31, 2011																	4,762		5		5,995									6,000
Warrants issued to Scientific Advisory Board, August 15, 2011																					56,400									56,400
Common shares issued for conversion of Series B Preferred Shares at $0.92 per share, August 8, 2011																	437,187		437											437
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 8, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, August 8, 2011																					69,193									69,193
Dividend to Seaside 88, LP, paid on August 8, 2011																					(8,055	)								(8,055	)
Common shares issued as Dividend to Seaside 88, LP at $0.98 per share, August 8, 2011																	8,205		8		8,047									8,055
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, August 23, 2011																	419,829		420											420
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 23, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, August 23, 2011																					69,351									69,351
Dividend paid to Seaside 88, LP, August 23, 2011																					(6,521	)								(6,521	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, August 23, 2011																	6,844		7		6,514									6,521
Common shares issued for consulting and legal services valued at $1.14 per share, August 31, 2011																	5,263		5		5,995									6,000
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, September 6, 2011																	422,873		423											423
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 6, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Shares, September 6, 2011																					69,887									69,887
Dividend paid to Seaside 88, LP, September 6, 2011																					(4,986	)								(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, September 6, 2011																	5,264		5		4,981									4,986
Common shares issued in conversion of Series B Preferred Shares at $0.94 per share, September 19, 2011																	427,652		428											428
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 19, 2011						(40,000	)		(40	)																				(40	)
Derivative liability - retirement of Series B Preferred Share, September 19, 2011																					69,970									69,970
Dividend to Seaside 88, LP, paid on September 19, 2011																					(3,452	)								(3,452	)
Common shares issued as Dividend to Seaside 88, LP at $0.94 per share, September 19, 2011																	3,691		3		3,449									3,452
Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2011																	5,607		6		5,994									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $.78 per share, .001 par value, on October 3, 2011																	514,311		514											514
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 3, 2011						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on October 3, 2011																					69,496									69,496
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.85 on October 3, 2011																	2,270		2		1,916									1,918
Dividend to Seaside 88, LP, paid on October 3, 2011																					(1,918	)								(1,918	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on October 17, 2011																	144,484		144											144
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 17, 2011						(10,000	)		(10	)																				(10	)
Derivative Liability - Retirement of Preferred Series B on October 17, 2011																					17,790									17,790
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.75 on October 17, 2011																	510		1		383									384
Dividend to Seaside 88, LP, paid on October 17, 2011																					(384	)								(384	)
Shares issued for consulting and legal services rendered at $0..92 per share on October 31, 2011																	6,537		5		5,995									6,000
Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on November 1, 2011						250,000			250												2,499,750									2,500,000
Placement Agents Fees related to sale of Convertible Preferred shares on November 1, 2011																					(160,000	)								(160,000	)
Derivative Liability - Issuance of Preferred Series B																					(429,804	)								(429,804	)
Legal Fees related to Sale of Convertible Preferred Stock November 1, 2011																					(25,000	)								(25,000	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.78 per share, .001 par value, on November 1, 2011																	511,787		512											512
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 2, 2011						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on November 1, 2011																					68,297									68,297
Warrants issued to Scientific Advisory Board on November 15, 2011																					56,400									56,400
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on November 15, 2011																	578,595		579											579
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 15, 2011						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on November 15, 2011																					68,411									68,411
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0..73 onNovember 15, 2011																	10,311		10		7,469									7,479
Dividend to Seaside 88, LP, paid on November 15, 2011																					(7,479	)								(7,479	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.62 per share, .001 par value, on November 29, 2011																	642,735		643											643
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 29, 2011						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on November 29, 2011																					68,591									68,591
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on November 29, 2011																	10,139		10		6,511									6,521
Dividend to Seaside 88, LP, paid on November 29, 2011																					(6,521	)								(6,521	)
Shares issued for consulting and legal services rendered at $0.81 per share on November 30, 2011																	7,373		7		5,993									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.53 per share, .001 par value, on December 13, 2011																	751,315		751											751
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 13, 2011						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on December 13, 2011																					68,753									68,753
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 13, 2011																	8,798		9		4,977									4,986
Dividend to Seaside 88, LP, paid on December 13, 2011																					(4,986	)								(4,986	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.51 per share, .001 par value, on December 27, 2011																	796,785		798											798
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 27, 2011						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on December 27, 2011																					68,965									68,965
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 27, 2011																	6,818		7		3,443									3,450
Dividend to Seaside 88, LP, paid on December 27, 2011																					(3,452	)								(3,452	)
Shares issued for consulting and legal services rendered at $0.64 per share on December 31, 2011																	9,403		9		5,991									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $.51 per share, .001 par value, on January 10, 2012																	788,053		788											788
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 10,2012						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on January 10, 2012																					69,222									69,222
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.51 onJanuary 10, 2012																	3,742		4		1,914									1,918
Dividend to Seaside 88, LP, paid on January 10, 2012																					(1,918	)								(1,918	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.48 per share, .001 par value, on January 24, 2012																	208,546		209											209
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 24, 2012						(10,000	)		(10	)																				(10	)
Derivative Liability - Retirement of Preferred Series B on January 24, 2012																					69,883									69,883
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.49 on January 24, 2012																	786				383									384
Dividend to Seaside 88, LP, paid on January 24, 2012																					(384	)								(384	)
Shares issued for consulting and legal services rendered at $0.58 per share on January 31, 2012																	10,367		10		5,990									6,000
Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on February 8, 2012						250,000			250												2,499,750									2,500,000
Placement Agents Fees related to sale of Convertible Preferred shares on February 8, 2012																					(150,000	)								(150,000	)
Derivative Liability - Issuance of Preferred Series B																					(430,283	)								(430,283	)
Legal Fees related to Sale of Convertible Preferred Stock February 8, 2012																					(6,250	)								(6,250	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.56 per share, .001 par value, on February 8, 2012																	717,142		717											717
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 8, 2012						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on February 8, 2012																					68,169									68,169
Warrants issued to Scientific Advisory Board on February 15, 2012																					51,000									51,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on February 22, 2012																	576,062		576											576
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 22, 2012						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on February 22, 2012																					68,424									68,423
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.69 on February 22, 2012																	11,600		12		7,467									7,479
Dividend to Seaside 88, LP, paid on February 22, 2012																					(7,479	)								(7,479	)
Shares issued for consulting and legal services rendered at $0.77 per share on February 29, 2012																	7,767		8		5,992									6,000
Common shares issued for employee stock compensation at $.73 per share, March 3, 2012																	250,000		250		181,624									181,874
Series A Preferred Shares issued for employee stock compensation, March 3, 2012		593,750		594																	633,814									634,408
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.64 per share, .001 par value, on March 07, 2012																	628,289		628											628
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on March 7, 2012						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on March 7, 2012																					68,602									68,602
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on March 7, 2012																	10,242		10		6,511									6,521
Dividend to Seaside 88, LP, paid on March 7, 2012																					(6,521	)								(6,521	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.63 per share, .001 par value, on March 21, 2012																	635,991		636											636
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on March 21, 2012						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on March 21, 2012																					68,862									68,862
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on March 21, 2012																	7,812		8		4,978									4,986
Dividend to Seaside 88, LP, paid on March 21, 2012																					(4,986	)								(4,986	)
Shares issued for consulting and legal services rendered at $0.78 per share on March 31, 2012																	7,728		8		5,992									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $.61 per share, .001 par value, on April 4, 2012																	661,496		661											661
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on April 4, 2012						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on April 4, 2012																					69,098									69,098
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.61 on April 4, 2012																	5,709		6		3,446									3,452
Dividend to Seaside 88, LP, paid on April 4, 2012																					(3,452	)								(3,452	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.51 per share, .001 par value, on April 18, 2012																	785,453		785											785
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on April 18, 2012						(40,000	)		(40	)																				(40	)
Derivative Liability - Retirement of Preferred Series B on April 18, 2012																					69,224									69,224
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.54 on April 18, 2012																	3,579		4		1,914									1,918
Dividend to Seaside 88, LP, paid on April 18, 2012																					(1,918	)								(1,918	)
Shares issued for consulting and legal services rendered at $0.63 per share on April 30, 2012																	9,547		9		5,990									5,999
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.50 per share, .001 par value, on May 2, 2012																	198,354		199											199
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on May 2, 2012						(10,000	)		(10	)																				(10	)
Derivative Liability - Retirement of Preferred Series B on May 2, 2012																					69,892									69,892
Warrants issued to Scientific Advisory Board on May 15, 2012																					47,400									47,400
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.51 on May 2, 2012																	754		1		383									384
Dividend to Seaside 88, LP, paid on May 2, 2012																					(384	)								(384	)
Shares issued for consulting and legal services rendered at $0.67 per share on May 31, 2012																	8,962		9		5,991									6,000
Series C Preferred Shares issued to SeaSide 88, LP, $.001 par value on June 28, 2012												2,500			3						2,499,997									2,500,000
Placement Agents Fees related to sale of Convertible Preferred shares on June 28, 2012																					(150,000	)								(150,000	)
Derivative Liability - Issuance of Preferred Series C																					(1,090,017	)								(1,090,017	)
Legal Fees related to Sale of Convertible Preferred Stock June 28, 2012																					(25,000	)								(25,000	)
Sharees of Series A Preferred issued for legal services rendered		10,000		10																	3,277									3,287
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.49 per share, .001 par value, on June 28, 2012																	298,472		298											298
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on June 28, 2012												(147	)		-															-
Derivative Liability - Retirement of Preferred Series C on June 28, 2012																					63,704									63,704
Series A Preferred Shares issued for employee stock compensation, June 28, 2012		1,050,000		1,050																	344,122									345,172
Shares issued for consulting and legal services rendered at $0.61 per share on June 30, 2012																	9,867		10		5,990									6,000

Net loss for the year ended June 30, 2012																											(6,272,780	)		(6,272,780	)

Balance, June 30, 2012		9,871,250	$	9,872		-		$	-			2,353		$	3		155,612,293	$	155,644	$	43,108,790		$	-		$	(29,489,689	)	$	13,784,620

See accompanying notes to the financial statements

F-5

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through September 30, 2013

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

Common shares issued May 12, 2005 (Inception)																		5,714			6			14			(20	)					-
Share exchange with Edot-com.com Inc., June 1, 2005																		(5,714	)		(6	)		(14	)		20						-
Common shares exchanged in reverse acquisition of Edot-com.com Inc., June 1, 2005																		22,857,143			22,857			(22,837	)		(20	)					-
Common shares outstanding Edot-com.com Inc., June 1, 2005																		5,714,286			5,714			(5,714	)								-
Options granted in connection with reverse acquisition																		-						-									-

Net loss																		-						-						(66,005	)		(66,005	)

Balance, June 30, 2005		-		-		-			-			-			-			28,571,429			28,571			(28,551	)		(20	)		(66,005	)		(66,005	)

Discount related to beneficial conversion feature of Convertible debentures, July 13, 2005																		-						5,277									5,277
Legal expenses related private placement of common stock, July 31, 2006																		-						(2,175	)								(2,175	)
Discount related to beneficial conversion feature of Convertible debentures, July 31, 2005																		-						5,302									5,302
Warrants issued to Scientific Advisory Board, August 15, 2005																		-						4,094									4,094
Options issued to officers, September 23, 2005																		-						87,318									87,318
Common shares issued for consulting services valued at $.081 per share, September 30, 2005																		657,143			657			185,643									186,300
Common shares issued for interest on debentures, September 30, 2005																		13,765			14			4,301									4,315
Discount related to beneficial conversion feature of Convertible debentures, October 28, 2005																		-						166,666									166,666
Discount related to beneficial conversion feature of Convertible debentures, November 9, 2005																		-						166,667									166,667
Discount related to beneficial conversion feature of Convertible debentures, November 10, 2005																		-						45,000									45,000
Discount related to beneficial conversion feature of Convertible debentures, November 11, 2005																		-						275,000									275,000
Discount related to beneficial conversion feature of Convertible debentures, November 15, 2005																		-						49,167									49,167
Warrants issued to Scientific Advisory Board, November 15, 2005																		-						25,876									25,876
Common shares and warrants issued in connection with private placement of common stock, November 28, 2005																		97,143			97			169,903									170,000
Common shares and warrants issued in connection with private placement of common stock, November 29, 2005																		85,715			86			149,914									150,000
Common shares and warrants issued in connection with private placement of common stock, November 30, 2005																		42,857			43			74,957									75,000
Common shares and warrants issued in connection with private placement of common stock, December 2, 2005																		28,571			29			49,971									50,000
Common shares and warrants issued in connection with private placement of common stock, December 6, 2005																		242,857			243			424,757									425,000
Common shares issued for legal services valued at $.95 per share, December 6, 2005																		5,714			6			18,994									19,000
Common shares and warrants issued in connection with private placement of common stock, December 12, 2005																		214,286			214			374,786									375,000
Common shares and warrants issued in connection with private placement of common stock, December 13, 2005																		14,286			14			24,986									25,000
Common shares and warrants issued in connection with private placement of common stock, December 14, 2005																		14,285			14			24,986									25,000
Common shares issued in connection with debenture offering, December 15, 2005																		14,286			14			48,986									49,000
Common shares and warrants issued in connection with private placement of common stock, December 20, 2005																		14,285			14			24,986									25,000
Common shares and warrants issued in connection with private placement of common stock, December 29, 2005																		14,286			14			24,986									25,000
Common shares and warrants issued in connection with private placement of common stock, December 30, 2005.																		14,285			14			24,986									25,000
Common shares issued for interest on debentures, December 31, 2005																		5,565			6			17,334									17,340
Common shares issued for consulting services valued at $1.46 per share, January 9, 2006																		978			1			5,000									5,001
Warrants issued to Scientific Advisory Board, February 15, 2006																		-						49,067									49,067
Warrnats issued to Scientific Advisory Board, May 15, 2006																		-						51,048									51,048
Common shares issued for interest on debentures, March 31, 2005																		2,263			2			22,190									22,192
Options exercised, May 31, 2006																		514,286			515			89,485									90,000
Common shares and warrants issued in connection with private placement of common stock, June 15, 2006																		535,714			536			1,874,464									1,875,000
Common shares issued for interest on debentures, June 30, 2006																		4,122			4			22,434									22,438

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

Balance, June 30, 2006		-		-		-			-			-			-			31,108,121			31,108			4,557,805			(20	)		(3,350,437	)		1,238,456

Common shares issued for interest on debentures, July 31, 2006																		1,641			2			7,642									7,644
Common shares issued for conversion of convertible debentures, July 31, 2006																		952,381			952			999,048									1,000,000
Exercise of stock warrants, July 31, 2006																		57,143			57			49,943									50,000
Options issued to Scientific Advisory Board, August 15, 2006																		-						30,184									30,184
Options issued to Scientific Advisory Board, November 15, 2006																		-						25,888									25,888
Common shares issued for consulting services valued at $.76 per share, January 3, 2007																		61,714			62			164,098									164,160
Options issued to Scientific Advisory Board, February 15, 2007																		-						32,668									32,668
Options issued to Scientific Advisory Board, May 15, 2007																		-						25,664									25,664
Common shares issued for consulting services valued at $1.03 per share, June 12, 2007																		215			-			775									775
Common shares issued for consulting services valued at $1.15 per share, June 20, 2007																		28,572			29			114,971									115,000
Common shares issued upon warrants conversion, June 20, 2007																		265,714			266			619,734									620,000
Common shares issued upon warrants conversion, June 25, 2007																		21,429			21			49,979									50,000
Common shares issued upon warrants conversion, June 30, 2007																		85,714			86			199,914									200,000
Common shares issued for consulting services valued at $1.06 per share, June 30, 2007																		8,540			9			31,791									31,800
Officers' compensation expense																		-						27,062									27,062

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

Balance, June 30, 2007		-		-	$	-			-			-			-			32,591,184			32,592		$	6,937,166		$	(20	)		(6,469,400	)	$	500,338

Warrants issued to Scientific Advisory Board, August 15, 2007																		-						14,800									14,800
Common shares and warrants issued in connection with private placement of common stock, September 21, 2007																		428,571			429			749,571									750,000
Common shares issued for consulting and legal services valued at $.75 per share, September 30, 2007																		7,213			7			18,393									18,400
Common shares and warrants issued in connection with private placement of common stock, October 16, 2007																		928,571			929			1,624,071									1,625,000
Common shares and warrants issued in connection with private placement of common stock, October 16, 2007																		71,428			71			124,929									125,000
Collection of stock subscriptions receivable, October 17, 2007																		-						-			20						20
Warrants issued to Scientific Advisory Board, November 15, 2007																		-						7,200									7,200
Common shares issued for consulting and legal services valued at $.49 per share, December 31, 2007																		16,329			16			26,884									26,900
Options issued to officers, January 1, 2008																		-						7,044									7,044
Warrants issued to Scientific Advisory Board, February 15, 2008																		-						8,500									8,500
Common shares issued for consulting and legal services valued at $ .45 per share,March 31, 2008																		17,585			18			27,882									27,900
Common shares issued for consulting services valued at $.39 per share, April , 2008																		7,929			8			10,813									10,821
Warrants issued to Scientific Advisory Board, May 15, 2008																		-						32,253									32,253
Common shares issued for consulting services valued at $1.03 per share, June 30, 2008																		8,526			9			27,891									27,900

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

Balance, June 30, 2008		-		-		-			-			-			-			34,077,336		$	34,079		$	9,617,397		$	-		$	(9,207,737	)	$	443,739

Common shares issued for consulting and legal services valued at $ 1.22 per share, July 31, 2008																		1,171			1			4,999									5,000
Common shares issued for consulting services valued at $1.22 per share, July , 2008																		656			1			2,799									2,800
Warrants issued to Scientific Advisory Board, August 15, 2008																		-			-			47,500									47,500
Common shares and warrants issued in connection with private placement of common stock, August 22, 2008																		896,000			896			3,135,104									3,136,000
Common shares issued to settle account payable																		42,857			43			149,957									150,000
Payment of Finder's Fee to Biotech																		-			-			(14,696	)								(14,696	)
Common shares issued in connection with Warrant Conversion, August 22, 2008																		35,714			36			106,214									106,250
Common shares issued for legal services valued at $1.24per share, August 31, 2008																		1,152			1			4,999									5,000
Common shares issued for consulting services valued at $1.24 per share, August, 2008																		645			1			2,799									2,800
Common shares issued for legal services valued at $1.00 per share, September 30, 2008																		1,429			1			4,999									5,000
Common shares issued for consulting services valued at $1.00 per share, September 30, 2008																		1,600			2			5,598									5,600
Common shares issued for consulting and legal services valued at $ .71 per share, October 31, 2008																		2,012			2			4,998									5,000
Common shares issued for consulting services valued at $.71 per share, October 31, 2008																		2,254			2			5,598									5,600
Warrants issued to Scientific Advisory Board, November 15, 2008																		-			-			30,500									30,500
Common shares issued for consulting and legal services valued at $ .67 per share, November 30, 2008																		2,132			2			4,998									5,000
Common shares issued for consulting services valued at $.67 per share, November 30, 2008																		2,388			2			5,598									5,600
Common shares issued for consulting and legal services valued at $ .83 per share, December 31, 2008																		1,721			2			4,998									5,000
Common shares issued for consulting services valued at $.83 per share, December 31 , 2008																		1,928			2			5,598									5,600
Common shares issued for legal services valued at $ .60 per share, January 20, 2009																		2,381			2			4,998									5,000
Common shares issued for consulting and legal services valued at $ .78 per share, January 31, 2009																		2,132			2			4,997									4,999
Common shares issued for consulting services valued at $.78 per share, January 31, 2009																		2,388			2			5,598									5,600
Common shares issued for consulting services valued at $ .70 per share, February 1, 2009																		14,286			14			34,986									35,000
Warrants issued to Scientific Advisory Board, February 15, 2009																		-			-			29,000									29,000
Common shares issued for consulting and legal services valued at $ .71 per share, February 28, 2009																		2,012			2			4,997									4,999
Common shares issued for consulting services valued at $.71 per share, February 15, 2009																		2,254			2			5,598									5,600
Common shares issued for consulting and legal services valued at $ .67 per share, March 31, 2009																		1,831			2			4,998									5,000
Common shares issued for consulting services valued at $.67 per share, March 31 , 2009																		2,051			2			5,598									5,600
Common shares issued to acquire equipment valued at $0.79 per share																		49,286			49			137,451									137,500
Common shares issued for consulting and legal services valued at $0.69 per share, April 30, 2009																		2,059			2			4,998									5,000
Common shares issued for consulting services valued at $.69 per share, April 30, 2009																		2,305			2			5,598									5,600
Warrants issued to Scientific Advisory Board, May 15, 2009																		-			-			30,600									30,600
Common shares issued for consulting and legal services valued at $ .66 per share, May 31, 2009																		2,171			2			4,998									5,000
Common shares issued for consulting services valued at $.66 per share, May 31, 2009																		2,432			2			5,596									5,598
Common shares issued for consulting services valued at $ .61 per share, June 30, 2009																		7,063			7			14,993									15,000
Common shares issued for consulting and legal services valued at $ .56 per share, June 30, 2009																		2,560			3			4,997									5,000
Shares issued for consulting services valued at $.56 per share, June 30, 2009																		2,868			3			5,597									5,600
Common shares and warrants issued in connection with private placement of common stock, June 30, 2009																		42,857			43			74,957									75,000
Common shares and warrants issued in connection with warrant conversion, June 30, 2009																		585,914			586			1,024,764			(100,000	)					925,350

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

Balance, June 30, 2009		-		-		-			-			-			-			35,799,845			35,800			14,545,276			(100,000	)		(11,995,535	)		2,485,541

Collection of stock subscription receivable																		-						-			100,000						100,000
Common shares issued for consulting and legal services valued at $ .66 per share, July 31, 2009																		2,165			2			4,998									5,000
Common shares issued for consulting services valued at $.66 per share, July 31, 2009																		2,424			2			5,598									5,600
Warrants issued to Scientific Advisory Board, August 15, 2009																		-			-			41,400									41,400
Common shares issued for consulting and legal services valued at $ .86 per share, August 31, 2009																		1,861			2			4,998									5,000
Common shares issued for consulting services valued at $.86 per share, August 31, 2009																		1,661			2			5,598									5,600
Common shares issued for consulting services valued at $ .89 per share, September 30, 2009																		1,798			2			5,598									5,600
Common shares issued for consulting and legal services valued at $ .89 per share, September 30, 2009																		1,605			2			4,998									5,000
Payment of Finder's Fee																		-			-			(5,250	)								(5,250	)
Common shares and warrants issued in connection with private placement of common stock, September 30, 2009																		764,286			764			1,336,736									1,337,500
Common shares and warrants issued in connection with warrant conversion, September 30, 2009																		1,074,229			1,074			1,878,826									1,879,900
Common shares issued for consulting and legal services valued at $ .57 per share, October 1, 2009																		10,025			10			19,990									20,000
Common shares issued for Legal services valued at $56.50 per share, October 26, 2009																		3,571			4			7,059									7,063
Warrants issued for commissions, October 26, 2009																		-			-			3,570									3,570
Common shares issued for consulting and legal services valued at $ .73 per share, October 31, 2009																		1,960			2			4,998									5,000
Common shares issued for consulting services valued at $.73 per share, October 31, 2009																		2,195			2			5,598									5,600
Common shares issued upon conversion of Warrants, November 10, 2009																		2,857			3			1,437									1,440
Warrants issued to Scientific Advisory Board, November 15, 2009																		-			-			39,600									39,600
Common shares issued in payment of accounts payable, November 25, 2009																		9,286			9			25,191									25,200
Common shares issued for consulting and legal services valued at $ .86 per share, November 30, 2009																		1,661			2			4,998									5,000
Common shares issued for consulting services valued at $.86 per share, November 30, 2009																		2,791			3			8,397									8,400
Common shares issued for consulting services valued at $ .85 per share, December 31, 2009																		2,833			3			8,397									8,400
Common shares issued for consulting and legal services valued at $ .85 per share, December 31, 2009																		1,687			2			4,998									5,000
Common shares issued for consulting and legal services valued at $1.043 per share, January 31, 2010																		1,370			1			4,999									5,000
Warrants issued to Scientific Advisory Board, February 15, 2010																		-			-			40,200									40,200
Series A Preferred Shares issued for TheraCour license valued at $.001 par value, February 15, 2010		2,000,000		2,000														-			-			5,000									7,000
Common shares issued for consulting services valued at $1.096 per share, February 28, 2010																		1,303			1			4,999									5,000
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010																		35,714			36			156,214									156,250
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010																		35,714			36			156,214									156,250
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		71,429		71														-			-			513,752									513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		71,429		71														-			-			513,752									513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		26,786		28														-			-			192,656									192,684
Common shares issued for consulting and legal servies valued at $1.25 per share, March 3, 2010																		286			-			1,250									1,250
Common shares issued for consulting services valued at $1.417 per share, March 31, 2010																		1,008			1			4,999									5,000
Common shares issued in lieu of payment of accounts payable - All Sciences																		11,321			11			31,689									31,700
Common shares issued for consulting and legal services valued at $2.087 per share, April 30, 2010																		685			1			4,999									5,000
Series B Preferred Shares issued to SeaSide 88, LP, May 12, 2010						142,857			143									-			-			4,999,857									5,000,000
Placement Agents Fees related to sale of Convertible Preferred shares, May 12, 2010																		-			-			(400,000	)								(400,000	)
Legal Fees related to Sale of Convertible Preferred Stock, May 12, 2010																		-			-			(50,000	)								(50,000	)
Derivative Liability - Issuance of Series B Preferred Shares																		-			-			(1,787,379	)								(1,787,379	)
Common shares issued for conversion of Series B Preferred Shares at $1.88 per share, May 12, 2010																		91,237			91			228									319
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 12, 2010						(17,143	)		(17	)								-			-			(43	)								(60	)
Derivative Liability - Retirement of Series B Preferred Shares, May 12, 2010																		-			-			128,053									128,053
Warrants issued to Scientific Advisory Board, May 15, 2010																		-			-			82,800									82,800
Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, May 26, 2010																		113,768			113			285									398
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 26, 2010						(17,143	)		(17	)								-			-			(43	)								(60	)
Dividend paid to Seaside 88, LP, May 26, 2010																		-			-			(16,877	)								(16,877	)
Common shares issued as Dividend to Seaside 88, LP at $1.64, May 26, 2010																		2,943			3			16,874									16,877
Derivative Liability - Retirement of Series B Preferred Shares, May 26, 2010																		-			-			151,842									151,842
Common shares issued for consulting and legal services valued at $2.083 per share, May 31, 2010																		686			1			4,999									5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, June 9, 2010																		55,714			55			194,945									195,000
Common shares issued for conversion of Series B Preferred Shares at $1.41 per share, June 9, 2010																		121,920			122			305									427
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 9, 2010						(17,143	)		(17	)								-			-			(43	)								(60	)
Dividend paid to Seaside 88, LP, June 9, 2010																		-			-			(14,575	)								(14,575	)
Common shares issued as Dividend to Seaside 88, LP at $1.41, June 9, 2010																		2,962			3			14,572									14,575
Derivative Liability - Retirement of Series B Preferred Shares, June 9, 2010																		-			-			149,354									149,354
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010																		3,229			3			19,997									20,000
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010																		571			1			3,539									3,540
Common shares issued for conversion of Series B Preferred Shares at $1.59 per share, June 23, 2010																		107,973			108			270									378
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 23, 2010						(17,143	)		(17	)								-			-			(43	)								(60	)
Dividend paid to Seaside 88, LP, June 23, 2010																		-						(12,274	)								(12,274	)
Common shares issued as Dividend to Seaside 88, LP at $1.59, June 23, 2010																		2,209			2			12,272									12,274
Derivative Liability - Retirement of Series B Preferred Shares, June 23, 2010																		-						120,249									120,249
Common shares issued for consulting and legal services valued at $1.043 per share, June 30, 2010																		782			1			4,999									5,000

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

Balance, June 30, 2010		2,169,644		2,170		74,285			75			-			-			38,280,135			38,280			23,217,895	#		-			(16,739,743	)		6,518,677

Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, July 7, 2010																		113,454			113			284									397
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 7, 2010						(17,143	)		(17	)								-						(43	)								(60	)
Dividend paid to Seaside 88, LP, July 7, 2010																		-						(9,973	)								(9,973	)
Common shares issued as dividend to Seaside 88, LP at $1.65 per share, July 7, 2010																		1,731			2			9,971									9,973
Derivative liability - retirement of Series B Preferred Shares, July 7, 2010																		-						116,715									116,715
Common shares issued for conversion of Series B Preferred Shares at $1.30 per share, July 21, 2010																		132,336			132			331									463
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 21, 2010						(17,143	)		(17	)								-						(43	)								(60	)
Dividend paid to Seaside 88, LP, July 21, 2010																		-						(7,671	)								(7,671	)
Common shares issued as dividend to Seaside 88, LP at $1.32 per share, July 21, 2010																		1,655			2			7,669									7,671
Derivative liability - retirement of Series B Preferred Shares, July 21, 2010																		-						113,700									113,700
Common shares issued for consulting and legal services valued at $2.087 per share, July 31, 2010																		882			1			4,999									5,000
Common shares issued for conversion of Series B Preferred Shares at $1.14 per share, August 4, 2010																		150,547			151			376									527
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010						(17,143	)		(17	)								-						(43	)								(60	)
Dividend paid to Seaside 88, LP, August 4, 2010																		-						(5,370	)								(5,370	)
Common shares issued as dividend to Seaside 88, LP, at $1.14 per share, August 4, 2010																		1,347			1			5,369									5,370
Derivative liability - retirement of Series B Preferred Shares, August 4, 2010																		-						104,480									104,480
Warrants issued to Scientific Advisory Board, August 15, 2010																		-						45,000									45,000
Common shares issued in conversion of Series B Preferred Shares at $0.99 per share, August 18, 2010																		173,248			173			433									606
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 18, 2010						(17,143	)		(17	)								-						(43	)								(60	)
Dividend paid to Seaside 88, LP, August 18, 2010																		-						(3,068	)								(3,068	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per share, August 18, 2010																		886			1			3,067									3,068
Derivative liability - retirement of Series B Preferred Shares, August 18, 2010																		-						104,795									104,795
Common shares issued for consulting and legal services valued at $1.24 per share, August 31, 2010																		1,152			1			4,999									5,000
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 1, 2010																		61,523			62			153									215
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 1, 2010						(5,714	)		(6	)								-						(14	)								(20	)
Dividend paid to Seaside 88, LP, September 1, 2010																		-						(767	)								(767	)
Common shares issued as dividend to Seaside 88, LP at $1.00 per share, September 1, 2010																		219			-			767									767
Derivative liability - retirement of Series B Preferred Shares, September 1, 2010																		-						34,841									34,841
Series B Preferred Shares issued to SeaSide 88, LP, September 21, 2010						71,429			71									-						2,499,929									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, September 21, 2010																		-						(195,000	)								(195,000	)
Legal fees related to sale of Convertible Preferred Stock, September 21, 2010																		-						(10,000	)								(10,000	)
Derivative liability - issuance of Series B Preferred Shares																		-						(328,086	)								(328,086	)
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 21, 2010																		122,861			123			307									430
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 21, 2010						(11,429	)		(11	)								-						(29	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, September 21, 2010																		-						103,012									103,012
Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2010																		1,335			1			4,999									5,000
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, October 5, 2010																		131,499			131			329									460
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 5, 2010						(11,429	)		(11	)								-						(29	)								(40	)
Dividend paid to Seaside 88, LP, on October 5, 2010																		-						(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, October 5, 2010																		2,648			3			8,052									8,055
Derivative liability - Retirement of Series B Preferred Shares, October 5, 2010																		-						103,330									103,330
Common shares issued for conversion of Series B Preferred Shares at $0.88 per share, October 19, 2010																		129,419			129			323									452
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 19, 2010						(11,429	)		(11	)								-						(29	)								(40	)
Dividend paid to Seaside 88, LP, October 19, 2010																		-						(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $0.88 per share, October 19, 2010																		2,110			2			6,519									6,521
Derivative liability - Retirement of Series B Preferred Shares, October 19, 2010																		-						69,635									69,635
Common shares issued for consulting and legal services valued at $1.03 per share, October 31, 2010																		1,387			1			4,999									5,000
Series A Preferred Shares issued for employee stock compensation, November 1, 2010		8,571		9														-						53,924									53,933
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, November 2, 2010																		131,804			132			329									461
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010						(11,429	)		(11	)								-						(29	)								(40	)
Dividend paid to Seaside 88, LP, November 2, 2010																		-						(4,986	)								(4,986	)
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, November 2, 2010																		1,643			2			4,984									4,986
Derivative liability - retirement of Series B Preferred Shares, November 2, 2010																		-						69,104									69,104
Warrants issued to Scientific Advisory Board, November 15, 2010																		-						55,800									55,800
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, November 16, 2010																		98,805			99			247									346
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 16, 2010						(11,429	)		(11	)								-						(29	)								(40	)
Dividend paid to Seaside 88, LP, November 16, 2010																		-						(3,452	)								(3,452	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, November 16, 2010																		853			1			3,451									3,452
Derivative liability - Retirement of Series B Preferred Shares, November 16, 2010																		-						69,187									69,187
Common shares issued for conversion of Series B Preferred Shares at $1.35 per share, November 30, 2010																		88,733			89			222									311
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 30, 2010						(11,428	)		(12	)								-						(28	)								(40	)
Dividend paid to Seaside 88, LP, November 30, 2010																		-						(1,918	)								(1,918	)
Common shares issued as dividend to Seaside 88, LP at $1.35 per share, November 30, 2010																		405			-			1,918									1,918
Derivative liability - Retirement of Series B Preferred Shares, November 30, 2010																		-						69,449									69,449
Common shares issued for consulting and legal services valued at $1.46 per share, November 30, 2010																		979			1			4,999									5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, December 10, 2010																		7,143			7			24,993									25,000
Common shares issued as compensation pursuant to S-8 at $1.28 per share, December 10, 2010																		14,286			14			63,986									64,000
Common shares issued for conversion of Series B Preferred Shares at $1.10 per share, December 14, 2010																		25,954			26			65									91
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, December 14, 2010						(2,857	)		(3	)								-						(7	)								(10	)
Dividend paid to Seaside 88, LP, December 14, 2010																		-						(384	)								(384	)
Common shares issued as Dividend to Seaside 88, LP, at $1.10 per share, December 14, 2010																		99			-			384									384
Derivative liability - retirement of Series B Preferred Shares, December 14, 2010																		-						17,438									17,438
Series B Preferred Shares issued to SeaSide 88, LP, December 21, 2010						71,429			71									-						2,499,929									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, December 21, 2010																		-						(200,000	)								(200,000	)
Common shares issued for consulting and legal services valued at $1.32 per share, December 31, 2010																		1,299			1			6,052									6,053
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, January 3, 2011																		98,227			98			246									344
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 3, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Dividend paid to Seaside 88, LP, January 3, 2011																		-						(8,904	)								(8,904	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, January 3, 2011																		2,187			2			8,902									8,904
Derivative liability - retirement of Series B Preferred Shares, January 3, 2011																		-						73,532									73,532
Common shares issued for conversion of Series B Preferred Shares at $1.26 per share, January 17, 2011																		90,847			91			227									318
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 17, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Dividend paid to Seaside 88, LP, January 17, 2011																		-						(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.26 per share, January 17, 2011																		1,829			2			8,053									8,055
Derivative liability - retirement of Series B Preferred Shares, January 17, 2011																		-						70,882									70,882
Common shares issued for conversion of Series B Preferred Shares at $1.12 per share, January 31, 2011																		101,835			102			254									356
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 31, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Dividend paid to Seaside 88, LP, January 31, 2011																		-						(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.24 per share, January 31, 2011																		1,506			2			6,519									6,521
Derivative liability - retirement ofSeries B Preferred Shares, January 31, 2011																		-						72,432									72,432
Common shares issued for consulting and legal services valued at $1.47 per share, January 31, 2011																		1,168			1			5,999									6,000
Common shares issued for conversion of warrants at $1.00 per share, February 4, 2011																		7,143			7			24,993									25,000
Common shares issued for conversion of Series B Preferred Shares at $1.08 per share, February 14, 2011																		105,719			106			269									375
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 14, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Dividend paid to Seaside 88, LP, February 14, 2011																		-						(4,986	)								(4,986	)
Common shares issued as dividend to Seaside 88, LP, at $1.08 per share, February 14, 2011																		1,318			1			4,985									4,986
Derivative liability - retirement of Series B Preferred Shares, February 14, 2011																		-						71,699									71,699
Warrants issued to Scientific Advisory Board, Feburary 15, 2011																		-						54,000									54,000
Common shares issued for conversion of Series B Preferred Shares at $0.99 per share, February 28, 2011																		115,889			116			293									409
Derivative liability - retirement of Series B Preferred Shares, February 28, 2011																		-						71,490									71,490
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 28, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Dividend paid to Seaside 88, LP, February 28, 2011																		-						(3,452	)								(3,452	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per shares, February 28, 2011																		1,000			1			3,451									3,452
Common shares issued for consulting and legal services valued at $1.22 per share, February 28, 2011																		1,401			1			5,999									6,000
Common shares issued for employee stock compensation at $1.32 per share, March 3, 2011																		35,714			36			158,089									158,125
Common shares issued for employee stock compensation at $1.32 per share, March 3, 2011																		35,714			36			158,089									158,125
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		71,428		71														-						574,510									574,581
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		71,428		71														-						574,510									574,581
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		26,786		27														-						215,441									215,468
Common shares issued for conversion of Series B Preferred Shares at $1.09 per share, March 14, 2011																		104,935			105			262									367
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 14, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Dividend paid to Seaside 88, LP, March 14, 2011																		-						(1,918	)								(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.09 per shares, March 14, 2011																		503			1			1,917									1,918
Derivative Liability - Retirement of Series B Preferred Shares, March 14, 2011																		-						70,566									70,566
Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, March 28, 2011																		25,710			26			64									90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 28, 2011						(2,857	)		(3	)								-						(7	)								(10	)
Dividend paid to Seaside 88, LP, March 28, 2011																		-						(384	)								(384	)
Common shares issued as dividend to Seaside 88, LP, at $1.11 per share, March 28, 2011																		99			-			384									384
Derivative liability - retirement of Series B Preferred Shares, March 28, 2011																		-						17,525									17,525
Common shares issued for consulting and legal services valued at $1.28 per share, March 31, 2011																		1,337			1			5,999									6,000
Common shares issued for conversion of warrants to common stock at $1.00 per share, April 10, 2011																		2,857			3			9,997									10,000
Series B Preferred Shares issued to SeaSide 88, LP, April 18, 2011						71,429			71									-						2,499,929									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, April 18, 2011																		-						(160,000	)								(160,000	)
Legal fees related to Sale of Convertible Preferred Stock, April 18, 2011																		-						(25,000	)								(25,000	)
Derivative liability - issuance of Series B Preferred Shares																		-						(429,725	)								(429,725	)
Common shares issued for conversion of Series B Preferred Shares at $1.28 per share, April 18, 2011																		89,189			89			(49	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, April 18, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, April 18, 2011																		-						68,756									68,756
Common shares issued for consulting and legal services valued at $1.47 per share, April 30, 2011																		1,168			1			5,999									6,000
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, May 2, 2011																		97,065			97			(57	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 2, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, May 2, 2011																		-						68,941									68,941
Dividend paid to Seaside 88, LP, May 2, 2011																		-						(8,055	)								(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per shares, May 2, 2011																		1,955			2			8,053									8,055
Warrants issued to Scientific Advisory Board, May 15, 2011																		-						50,400									50,400
Common shares issued for conversion of Series B Preferred Shares at $1.19 per share, May 16, 2011																		96,143			96			(56	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 16, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, May 16, 2011																		-						69,194									69,194
Dividend paid to Seaside 88, LP, May 16, 2011																		-						(6,521	)								(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.20 per shares, May 16, 2011																		1,554			2			6,519									6,521
Common shares issued for conversion of Series B Preferred Shares at $1.23 per share, May 30, 2011																		93,280			93			(53	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 30, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, May 30, 2011																		-						69,464									69,464
Dividend paid to Seaside 88, LP, May 30, 2011																		-						(4,986	)								(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $1.23 per share, May 30, 2011																		1,163			1			4,985									4,986
Common shares issued for consulting and legal services valued at $1.47 per share, May 31, 2011																		1,168			1			5,999									6,000
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, June 13, 2011																		97,135			97			(57	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 13, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, June 13, 2011																		-						69,727									69,727
Dividend paid to Seaside 88, LP, June 13, 2011																		-						(3,452	)								(3,452	)
Common shares issued as Dividend to Seaside 88, LP at $1.18 per share, June 13, 2011																		838			1			3,451									3,452
Common shares issued for conversion of Series B Preferred Shares at $1.02 per share, June 27, 2011																		111,957			112			(72	)								40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 27, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Derivative Liability - Retirement of Series B Preferred Share, June 27, 2011																		-						69,973									69,973
Dividend paid to Seaside 88, LP, June 27, 2011																		-						(1,918	)								(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.10 per share, June 27, 2011																		497			-			1,918									1,918
Common shares issued for consulting and legal services valued at $1.22 per share, June 30, 2011																		1,401			1			5,999									6,000

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

Balance, June 30, 2011		2,347,857		2,348		2,857			3			-			-			41,013,828			41,012			33,344,437			-			(23,216,909	)		10,170,891

Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, July 11, 2011																		25,710			26			64									90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 11, 2011						(2,857	)		(3	)								-						(7	)								(10	)
Derivative liability - retirement of Series B Preferred Shares, July 11, 2011																		-						17,881									17,881
Dividend to Seaside 88, LP, paid on July 11, 2011																		-						(381	)								(381	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per share, July 11, 2011																		99			-			381									381
Series B Preferred Shares issued to SeaSide 88, LP, on July 26, 2011						71,429			71									-						2,499,929									2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, July 26, 2011																		-						(150,000	)								(150,000	)
Derivative liability - issuance of Series B Preferred Shares																		-						(429,768	)								(429,768	)
Legal Fees related to Sale of Convertible Preferred Stock, July 26, 2011																		-						(6,250	)								(6,250	)
Common shares issued in conversion of Series B Preferred Shares to common stock at $1.18 per share, July 26, 2011																		107,943			108			270									378
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 26, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, July 26, 2011																		-						68,425									68,425
Common shares issued for consulting and legal services valued at $1.26 per share, July 31, 2011																		1,361			1			5,999									6,000
Warrants issued to Scientific Advisory Board, August 15, 2011																		-						56,400									56,400
Common shares issued for conversion of Series B Preferred Shares at $0.92 per share, August 8, 2011																		124,911			125			312									437
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 8, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, August 8, 2011																		-						69,193									69,193
Dividend to Seaside 88, LP, paid on August 8, 2011																		-						(8,055	)								(8,055	)
Common shares issued as Dividend to Seaside 88, LP at $0.98 per share, August 8, 2011																		2,345			2			8,053									8,055
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, August 23, 2011																		119,951			120			300									420
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 23, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, August 23, 2011																		-						69,351									69,351
Dividend paid to Seaside 88, LP, August 23, 2011																		-						(6,521	)								(6,521	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, August 23, 2011																		1,955			2			6,519									6,521
Common shares issued for consulting and legal services valued at $1.14 per share, August 31, 2011																		1,504			2			5,998									6,000
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, September 6, 2011																		120,821			121			302									423
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 6, 2011						(11,428	)		(12	)								-						(28	)								(40	)
Derivative liability - retirement of Series B Preferred Shares, September 6, 2011																		-						69,887									69,887
Dividend paid to Seaside 88, LP, September 6, 2011																		-						(4,986	)								(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, September 6, 2011																		1,504			2			4,984									4,986
Common shares issued in conversion of Series B Preferred Shares at $0.94 per share, September 19, 2011																		122,186			122			306									428
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 19, 2011						(11,429	)		(11	)								-						(29	)								(40	)
Derivative liability - retirement of Series B Preferred Share, September 19, 2011																		-						69,970									69,970
Dividend to Seaside 88, LP, paid on September 19, 2011																		-						(3,452	)								(3,452	)
Common shares issued as Dividend to Seaside 88, LP at $0.94 per share, September 19, 2011																		1,055			-			3,452									3,452
Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2011																		1,602			2			5,998									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $.78 per share, .001 par value, on October 3, 2011																		146,946			147			367									514
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 3, 2011						(11,428	)		(12	)								-			-			(28	)								(40	)
Derivative Liability - Retirement of Preferred Series B on October 3, 2011																		-			-			69,496									69,496
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.85 on October 3, 2011																		649			1			1,917									1,918
Dividend to Seaside 88, LP, paid on October 3, 2011																		-			-			(1,918	)								(1,918	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on October 17, 2011																		41,281			41			103									144
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 17, 2011						(2,857	)		(3	)								-			-			(7	)								(10	)
Derivative Liability - Retirement of Preferred Series B on October 17, 2011																		-			-			17,790									17,790
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.75 on October 17, 2011																		146			-			384									384
Dividend to Seaside 88, LP, paid on October 17, 2011																		-			-			(384	)								(384	)
Shares issued for consulting and legal services rendered at $0..92 per share on October 31, 2011																		1,868			2			5,998									6,000
Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on November 1, 2011						71,429			71									-			-			2,499,929									2,500,000
Placement Agents Fees related to sale of Convertible Preferred shares on November 1, 2011																		-			-			(160,000	)								(160,000	)
Derivative Liability - Issuance of Preferred Series B																		-			-			(429,804	)								(429,804	)
Legal Fees related to Sale of Convertible Preferred Stock November 1, 2011																		-			-			(25,000	)								(25,000	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.78 per share, .001 par value, on November 1, 2011																		146,225			146			366									512
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 2, 2011						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on November 1, 2011																		-			-			68,297									68,297
Warrants issued to Scientific Advisory Board on November 15, 2011																		-			-			56,400									56,400
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on November 15, 2011																		165,313			165			414									579
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 15, 2011						(11,428	)		(12	)								-			-			(28	)								(40	)
Derivative Liability - Retirement of Preferred Series B on November 15, 2011																		-			-			68,411									68,411
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0..73 onNovember 15, 2011																		2,946			3			7,476									7,479
Dividend to Seaside 88, LP, paid on November 15, 2011																		-			-			(7,479	)								(7,479	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.62 per share, .001 par value, on November 29, 2011																		183,639			184			459									643
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 29, 2011						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on November 29, 2011																		-			-			68,591									68,591
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on November 29, 2011																		2,897			3			6,518									6,521
Dividend to Seaside 88, LP, paid on November 29, 2011																		-			-			(6,521	)								(6,521	)
Shares issued for consulting and legal services rendered at $0.81 per share on November 30, 2011																		2,107			2			5,998									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.53 per share, .001 par value, on December 13, 2011																		214,661			215			536									751
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 13, 2011						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on December 13, 2011																		-			-			68,753									68,753
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 13, 2011																		2,514			3			4,983									4,986
Dividend to Seaside 88, LP, paid on December 13, 2011																		-			-			(4,986	)								(4,986	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.51 per share, .001 par value, on December 27, 2011																		227,653			228			570									798
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 27, 2011						(11,428	)		(12	)								-			-			(28	)								(40	)
Derivative Liability - Retirement of Preferred Series B on December 27, 2011																		-			-			68,965									68,965
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 27, 2011																		1,948			2			3,448									3,450
Dividend to Seaside 88, LP, paid on December 27, 2011																		-			-			(3,452	)								(3,452	)
Shares issued for consulting and legal services rendered at $0.64 per share on December 31, 2011																		2,687			3			5,997									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $.51 per share, .001 par value, on January 10, 2012																		225,158			225			563									788
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 10, 2012						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on January 10, 2012																		-			-			69,222									69,222
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.51 onJanuary 10, 2012																		1,069			1			1,917									1,918
Dividend to Seaside 88, LP, paid on January 10, 2012																		-			-			(1,918	)								(1,918	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.48 per share, .001 par value, on January 24, 2012																		59,585			60			149									209
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 24, 2012						(2,857	)		(3	)								-			-			(7	)								(10	)
Derivative Liability - Retirement of Preferred Series B on January 24, 2012																		-			-			69,883									69,883
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.49 on January 24, 2012																		225			-			384									384
Dividend to Seaside 88, LP, paid on January 24, 2012																		-			-			(384	)								(384	)
Shares issued for consulting and legal services rendered at $0.58 per share on January 31, 2012																		2,962			3			5,997									6,000
Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on February 8, 2012						71,429			71									-			-			2,499,929									2,500,000
Placement Agents Fees related to sale of Convertible Preferred shares on February 8, 2012																		-			-			(150,000	)								(150,000	)
Derivative Liability - Issuance of Preferred Series B																		-			-			(430,283	)								(430,283	)
Legal Fees related to Sale of Convertible Preferred Stock February 8, 2012																		-			-			(6,250	)								(6,250	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.56 per share, .001 par value, on February 8, 2012																		204,898			205			512									717
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 8, 2012						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on February 8, 2012																		-			-			68,169									68,169
Warrants issued to Scientific Advisory Board on February 15, 2012																		-			-			51,000									51,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on February 22, 2012																		164,589			165			411									576
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 22, 2012						(11,428	)		(12	)								-			-			(28	)								(40	)
Derivative Liability - Retirement of Preferred Series B on February 22, 2012																		-			-			68,423									68,423
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.69 on February 22, 2012																		3,314			3			7,476									7,479
Dividend to Seaside 88, LP, paid on February 22, 2012																		-			-			(7,479	)								(7,479	)
																		-			-			-
Shares issued for consulting and legal services rendered at $0.77 per share on February 29, 2012																		2,219			2			5,998									6,000
Common shares issued for employee stock compensation at $.73 per share, March 3, 2012																		71,429			71			181,803									181,874
Series A Preferred Shares issued for employee stock compensation, March 3, 2012		169,643		169														-			-			634,239									634,408
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.64 per share, .001 par value, on March 07, 2012																		179,511			180			448									628
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on March 7, 2012						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on March 7, 2012																		-			-			68,602									68,602
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on March 7, 2012																		2,926			3			6,518									6,521
Dividend to Seaside 88, LP, paid on March 7, 2012																		-			-			(6,521	)								(6,521	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.63 per share, .001 par value, on March 21, 2012																		181,712			182			454									636
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on March 21, 2012						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on March 21, 2012																		-			-			68,862									68,862
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on March 21, 2012																		2,232			2			4,984									4,986
Dividend to Seaside 88, LP, paid on March 21, 2012																		-			-			(4,986	)								(4,986	)
Shares issued for consulting and legal services rendered at $0.78 per share on March 31, 2012																		2,208			2			5,998									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $.61 per share, .001 par value, on April 4, 2012																		188,999			189			472									661
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on April 4, 2012						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on April 4, 2012																		-			-			69,098									69,098
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.61 on April 4, 2012																		1,631			2			3,450									3,452
Dividend to Seaside 88, LP, paid on April 4, 2012																		-			-			(3,452	)								(3,452	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.51 per share, .001 par value, on April 18, 2012																		224,415			224			561									785
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on April 18, 2012						(11,429	)		(11	)								-			-			(29	)								(40	)
Derivative Liability - Retirement of Preferred Series B on April 18, 2012																		-			-			69,224									69,224
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.54 on April 18, 2012																		1,023			1			1,917									1,918
Dividend to Seaside 88, LP, paid on April 18, 2012																		-			-			(1,918	)								(1,918	)
Shares issued for consulting and legal services rendered at $0.63 per share on April 30, 2012																		2,728			3			5,997									6,000
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.50 per share, .001 par value, on May 2, 2012																		56,673			57			142									199
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on May 2, 2012						(2,857	)		(3	)								-			-			(7	)								(10	)
Derivative Liability - Retirement of Preferred Series B on May 2, 2012																		-			-			69,892									69,892
Warrants issued to Scientific Advisory Board on May 15, 2012																		-			-			47,400									47,400
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.51 on May 2, 2012																		215			-			384									384
Dividend to Seaside 88, LP, paid on May 2, 2012																		-			-			(384	)								(384	)
Shares issued for consulting and legal services rendered at $0.67 per share on May 31, 2012																		2,561			3			5,997									6,000
Series A Preferred Shares amendment of valuation arising from Amendment of certificate of Designation on June 26, 2012																		-			-			-									-
Series C Preferred Shares issued to SeaSide 88, LP, $.001 par value on June 28, 2012												714			1			-			-			2,499,999									2,500,000
Placement Agents Fees related to sale of Convertible Preferred shares on June 28, 2012																		-			-			(150,000	)								(150,000	)
Derivative Liability - Issuance of Preferred Series C																		-			-			(1,090,017	)								(1,090,017	)
Legal Fees related to Sale of Convertible Preferred Stock June 28, 2012																		-			-			(25,000	)								(25,000	)
Sharees of Series A Preferred issued for legal services rendered		2,857		3														-			-			3,284									3,287
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.49 per share, .001 par value, on June 28, 2012																		85,278			85			213									298
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on June 28, 2012												(42	)		-			-			-			-									-
Derivative Liability - Retirement of Preferred Series C on June 28, 2012																		-			-			63,704									63,704
Series A Preferred Shares issued for employee stock compensation, June 28, 2012		300,000		300														-			-			344,872									345,172
Shares issued for consulting and legal services rendered at $0.61 per share on June 30, 2012																		2,814			2			5,997									5,999

Net loss for the year ended June 30, 2012																		-			-			-						(6,207,207	)		(6,207,207	)

Balance, June 30, 2012		2,820,357		2,820		-			-			672			1			44,460,629			44,460			43,227,028			-			(29,424,116	)		13,850,193

Shares issued in conversion of Series C Preferred Shares to Common Stock at $.49 per share, .001 par value, on July 12, 2012																		60,685			61			151									212
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value onJuly 12, 2012												(29	)		-			-			-			-									-
Derivative Liability - Retirement of Preferred Series C on July 12, 2012																		-			-			44,190									44,190
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.49 on JULY 12, 2012																		5,256			5			9,021									9,026
Dividend to Seaside 88, LP, paid on July 12, 2012																		-			-			(9,026	)								(9,026	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.47 per share, .001 par value, on July 26, 2012																		77,535			78			193									271
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on July 26, 2012												(37	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series B on July 26, 2012																		-			-			53,032									53,032
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.47 on July 26, 2012																		5,221			5			8,624									8,629
Dividend to Seaside 88, LP, paid on July 26, 2012																		-			-			(8,629	)								(8,629	)
Shares issued for consulting and legal services rendered at $0.55 per share on July 31, 2012																		3,117			3			5,997									6,000
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.42 per share, .001 par value, on August 8, 2012																		80,270			80			201									281
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on August 8, 2012												(34	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on August 8, 2012																		-			-			51,555									51,555
Warrants issued to Scientific Advisory Board on August 15, 2012																		-			-			40,800									40,800
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.43 on August 8, 2012																		5,391			5			8,133									8,138
Dividend to Seaside 88, LP, paid on August 8, 2012																		-			-			(8,138	)								(8,138	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.48 per share, .001 par value, on August 23, 2012																		164,226			164			411									575
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on August 23, 2012												(79	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on August 23, 2012																		-			-			121,054									121,054
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.43 on August 23, 2012																		4,573			5			7,679									7,684
Dividend to Seaside 88, LP, paid on August 23, 2012																		-			-			(7,684	)								(7,684	)
Shares issued for consulting and legal services rendered at $0.58 per share on August 31, 2012																		2,956			3			5,997									6,000
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.58 per share, .001 par value, on September 5, 2012																		218,039			218			545									763
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on September 5, 2012												(126	)		(1	)		-			-			-									(1	)
Derivative Liability - Retirement of Preferred Series C on September 5, 2012																		-			-			236,481									236,481
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.58 on September 5, 2012																		3,279			3			6,622									6,625
Dividend to Seaside 88, LP, paid on September 5, 2012																		-			-			(6,625	)								(6,625	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.52 per share, .001 par value, on September 19, 2012																		158,096			158			395									553
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on September 19, 2012												(81	)		-			-			-			-									-
Derivative Liability - Retirement of Preferred Series C on September 19, 2012																		-			-			182,575									182,575
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.52 on September 19, 2012																		2,735			3			4,933									4,936
Dividend to Seaside 88, LP, paid on September 19 2012																		-			-			(4,936	)								(4,936	)
Shares issued for consulting and legal services rendered at $0.62 per share on September 30, 2012																		2,765			3			5,997									6,000
Shares issued in conversion of Series C Preferred Shares to Common Stock at $.54 per share, .001 par value, on October 3, 2012																		124,526			125			311									436
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 3, 2012												(67	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on October 3, 2012																		-			-			39,945									39,945
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.54 on October 3, 2012																		2,050			2			3,840									3,842
Dividend to Seaside 88, LP, paid on October 3, 2012																		-			-			(3,842	)								(3,842	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.53 per share, .001 par value, on October 17, 2012																		89,006			89			223									312
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 17, 2012												(47	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on October 3, 2012																		-			-			28,413									28,413
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.53 on October 17, 2012																		1,586			2			2,946									2,948
Dividend to Seaside 88, LP, paid on October 17, 2012																		-			-			(2,948	)								(2,948	)
Shares issued for consulting and legal services rendered at $0.61 per share on October 31, 2012																		4,751			5			9,995									10,000
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.52 per share, .001 par value, on October 31, 2012																		80,385			80			201									281
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 31, 2012												(41	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on October 31, 2012																		-			-			24,955									24,955
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.53 on October 31, 2012																		1,280			1			2,312									2,313
Dividend to Seaside 88, LP, paid on October 31, 2012																		-			-			(2,313	)								(2,313	)
Warrants issued to Scientific Advisory Board on November 15, 2012																		-			-			34,200									34,200
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.43 on November 14, 2012																		1,092			1			1,755									1,756
Dividend to Seaside 88, LP, paid on November 14, 2012																		-			-			(1,756	)								(1,756	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.43 per share, .001 par value, on November 14, 2012																		109,470			109			274									383
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 14, 2012												(47	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on November 14, 2012																		-			-			28,407									28,407
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.44 on November 29, 2012																		734			1			1,120									1,121
Dividend to Seaside 88, LP, paid on November 29, 2012																		-			-			(1,121	)								(1,121	)
Shares issued for consulting and legal services rendered at $0.53 per share on November 30, 2012																		3,774			4			6,996									7,000
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.44 per share, .001 par value, on November 29, 2012																		111,628			112			279									391
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 29, 2012												(49	)					-			-			(1	)								(1	)
Derivative Liability - Retirement of Preferred Series C on November 29, 2012																		-			-			29,302									29,302
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.43 on December 13, 2012																		309			-			468									468
Dividend to Seaside 88, LP, paid on December 13, 2012																		-			-			(468	)								(468	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.43per share, .001 par value, on December 13, 2012																		80,680			81			201									282
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 13, 2012												(35	)		-			-			-			-									-
Derivative Liability - Retirement of Preferred Series C on December 13, 2012																		-			-			20,953									20,953
Series C Preferred Shares issued to SeaSide 88, LP, $.001 par value on December 21, 2012												714						-			-			2,541,872									2,541,872
Placement Agents Fees related to sale of Convertible Preferred shares on December 21, 2012																		-			-			(165,000	)								(165,000	)
Derivative Liability - Issuance of Preferred Series C																		-			-			-									-
Legal Fees related to Sale of Convertible Preferred Stock December 21, 2012																		-			-			(12,500	)								(12,500	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.44 per share, .001 par value, on December 21, 2012																		102,080			102			255									357
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 21, 2012												(45	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on December 21, 2012																		-			-			24,686									24,686
Shares issued for consulting and legal services rendered at $0.50 per share on December 31 , 2012																		4,000			4			6,996									7,000
Shares issued to a Director for services rendered at $0.55 per share on December 31 , 2012																		2,581			3			4,997									5,000
Shares issued in conversion of Series C Preferred Shares to Common Stock at $..41 per share, .001 par value, on January 4, 2013																		99,998			100			250									350
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on january 4, 2013												(41	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on January 4, 2013																		-			-			22,488									22,488
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.41 on Jamuary 4, 2013																		6,259			6			8,986									8,992
Dividend to Seaside 88, LP, paid on January 4,2013																		-			-			(8,992	)								(8,992	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.42 per share, .001 par value, on January 17, 2013																		110,842			111			277									388
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 17, 2013												(47	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on January 17, 2013																		-			-			26,329									26,329
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0..42on January 17, 2013																		5,714			6			8,435									8,441
Dividend to Seaside 88, LP, paid on January 17, 2013																		-			-			(8,441	)								(8,441	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0..42 per share, .001 par value, on January 31, 2013																		78,797			79			197									276
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on January 31, 2013												(32	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on January 31, 2013																		-			-			18,502									18,502
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.41 on January 31, 2013																		5,400			5			7,808									7,813
Dividend to Seaside 88, LP, paid on January 31, 2013																		-			-			(7,813	)								(7,813	)
Shares issued for consulting and legal services rendered at $0.49 per share on January 31, 2013																		4,082			4			6,996									7,000
Shares issued at $0.48 in payment of Debenture interest on February 1, 2013																		571,429			571			664,926									665,497
Warrants issued to Scientific Advisory Board on February 15, 2013																		-			-			31,800									31,800
Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.41 on February 14, 2013																		5,172			5			7,371									7,376
Dividend to Seaside 88, LP, paid on February 14, 2013																		-			-			(7,376	)								(7,376	)
Shares issued in conversion of Series C Preferred Shares to Common Stock at $0.41 per share, .001 par value, on February 14, 2013																		68,875			69			172									241
Retirement of Series C Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on February 14, 2013												(27	)					-			-			-									-
Derivative Liability - Retirement of Preferred Series C on February 14, 2014																		-			-			15,985									15,985
Redemption of Series C Convertible Preferred on February 26, 2013												(522	)								-			(1,714,334	)								(1,714,334	)
Dividend to Seaside 88, LP, paid on February 26, 2013																		-			-			(6,002	)								(6,002	)
Shares issued for consulting and legal services rendered at $0.46per share on February 28, 2013																		4,348			4			6,996									7,000
Derivative Liability - Redemption of Preferred Series C on February 26, 2013																		-			-			42									42
Common shares issued for employee stock compensation at $..48 per share, March 1, 2013																		71,428			71			59,929									60,000
Series A Preferred Shares issued for employee stock compensation, March 1, 2013		169,643		170														-			-			444,874									445,044
Shares issued for consulting and legal services rendered at $0.65 per share on March 31, 2013																		3,077			3			6,997									7,000
Shares issued to a Director for services rendered at $0.53 per share on March 31, 2013																		1,348			2			2,498									2,500
Shares issued for consulting and legal services rendered at $0.48 per share on April 1, 2013																		569			1			959									960
Shares issued for consulting and legal services rendered at $0.49 per share on April 30, 2013																		3,175			3			6,997									7,000
Warrants issued to Scientific Advisory Board on May 15, 2013																		-			-			34,800									34,800
Shares issued for consulting and legal services rendered at $0.46per share on May 31, 2013																		3,333			3			6,997									7,000
Shares issued for consulting and legal services rendered at $0.65 per share on June 30, 2013																		3,030			3			6,993									6,996
Shares issued for Directors fees at $0.70 pershare on June 30, 2013																		4,592			5			11,245									11,250
																																	-
Net loss for the year ended June 30, 2013																					-			-						(8,875,668	)		(8,875,668	)

Balance, June 30, 2013		2,990,000		2,990		-			-			-			-			47,026,173			47,026			46,259,420			-			(38,299,784	)		8,009,652

Shares issued for consulting and legal services rendered at $1.93 per share on July 31, 2013																		3,627			4			6,996									7,000
Warrants issued to Scientific Advisory Board on August 15, 2013																		-			-			106,050									106,050
Shares issued for consulting and legal services rendered at $2.03 per share on August 31, 2013																		3,449			4			6,996									7,000
Common shares and warrants issued in connection with private placement of common stock, September 10, 2013																		2,945,428			2,945			10,306,051									10,308,996
Costs associated with sale of Securities																								(113,696	)								(113,696	)
Warrants issued for commissions, September 10, 2013																		-			-			113,696									113,696
Placement Agents Fees related to sale of Common shares and Warrants on September 10, 2013																		-			-			(618,545	)								(618,545	)
Common shares issued to round up fractional shares resulting from reverse split																		5,940			6			(6	)								-
Common Shares issued in connection with warrant conversion, September 25, 2013																		35,357			35			185,589									185,624
Shares issued for consulting and legal services rendered at $2.17 per share on September 30, 2013																		3,226			3			6,997									7,000
Shares issued for Directors fees at $2.04 pershare on September 30, 2013																		5,501			6			11,244									11,250
																																	-
Net loss for the three months ended September 30, 2013																					-			-						(6,272,780	)		(6,272,780	)

Balance, September 30, 2013		2,990,000		2,990		-			-			-			-			50,028,701			50,029			56,270,792			-			(44,572,564	)		11,751,247

See accompanying notes to the financial statements

F-6

Nanoviricides, Inc.

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)

							For the Period from
	For the Three Months			For the Three Months			May 12, 2005
	Ended			Ended			(inception) through
	September 30, 2013			September 30, 2012			September 30, 2013
	(Unaudited)			(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,272,780	)	$	(1,803,955	)	$	(44,572,564	)

Adjustments to reconcile net loss to net cash used in operating activities
Preferred shares issued for license					-			7,000
Preferred shares issued as compensation					-			2,648,241
Common shares and warrants issued for services		32,250			18,000			3,593,327
Common shares issued for interest								665,497
Warrants granted to scientific advisory board		106,050			40,800			1,312,888
Amortization of deferred compensation					-			121,424
Depreciation		52,719			52,719			1,089,471
Amortization		2,193			2,193			44,113
Change in fair value of derivative liability		4,137,091			246,273			5,427,963
Amortization of deferred financing expenses					-			51,175
Discount convertible debentures		135,481			-			209,411
Beneficial conversion feature of convertible debentures					-			713,079
Changes in operating assets and liabilities:
Prepaid expenses		(206,765	)		(124,167	)		(797,145	)
Other current assets					-			(8,001	)
Deferred expenses					-			(2,175	)
Accounts payable - trade		144,802			146,008			752,440
Accounts payable - related parties		429,258			75,430			1,139,825
Accrued expenses		115,253			1,379			319,610
Accrued payroll to officers and related payroll tax expense					-			-

NET CASH USED IN OPERATING ACTIVITIES		(1,324,448	)		(1,345,320	)		(27,284,421	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Security deposit		(1,000,000	)					(2,000,000	)
Purchase of property and equipment		(2,273,989	)					(3,779,637	)
Purchase of trademark		-						(458,955	)

NET CASH USED IN INVESTING ACTIVITIES		(3,273,989	)		-			(6,238,592	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible debentures								6,000,000
Proceeds from issuance of Convertible Preferred Series B stock, net								19,462,500
Proceeds from issuance of Convertible Preferred Series C stock, net					-			2,835,963
Proceeds from issuance of common stock and warrants in connection with private placements of common stock, net of issuance costs		9,690,450			-			20,987,198
Proceeds from exercise of stock options					-			90,000
Proceeds from exercise of warrants		185,624			-			3,348,214
Collection of stock subscriptions received					-			20

NET CASH PROVIDED BY FINANCING ACTIVITIES		9,876,074			-			52,723,895

NET CHANGE IN CASH		5,277,637			(1,345,320	)		19,200,882

Cash at beginning of period		13,923,245			14,274,985			-

Cash at end of period	$	19,200,882		$	12,929,665		$	19,200,882

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	$	-		$	-		$	-
Income tax paid	$	-		$	-		$	-

NON CASH FINANCING AND INVESTING ACTIVITIES:
Common stock issued for services rendered	$	32,250		$	18,000		$	12,011,052
Common stock for interest
Preferred stock issued as compensation					-			3,621,782
Stock options issued to the officers as compensation					-			121,424
Stock warrants granted to scientific advisory board		106,050			50,800			1,171,288
Stock warrants granted to brokers		113,696			-			117,259
Common stock issued for interest on debentures					-			73,930
Shares of common stock issued in connection with debenture offering					-			49,000
Common stock issued upon conversion of convertible debentures					-			1,000,000
Common stock issued upon conversion of Series B Preferred Stock								20,320,630
Common stock issued upon conversion of Series C Preferred Stock					-			298,472
Common stock issued for dividends on Series B Preferred Stock								234,508
Common stock issued for dividends on Series C Preferred Stock
Debt discount related to beneficial conversion feature of convertible debt					-			713,079
Stock Warrants issued in connection with Private Placement					-			7,681,578
Common stock issued for accounts payable					-			175,020
Common stock issued for equipment					-			137,500

See accompanying notes to the financial statements

F-7

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

September 30, 2013 AND 2012

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization and Nature of Business

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

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

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

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

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

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

On February 15, 2010 the Company executed an Additional License Agreement with TheraCour Pharma, Inc. (“TheraCour”). Pursuant to the Additional License Agreement, the Company was granted exclusive licenses, in perpetuity, for technologies, developed by TheraCour, for the development of drug candidates for the treatment of Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes. As consideration for obtaining these exclusive licenses, we agreed to pay a onetime licensing fee equal to 2,000,000 shares (adjusted for the 3.5 to 1 reverse split) of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock is convertible, only upon sale or merger of the company, or the sale of or license of substantially all of the Company’s intellectual property, into shares of the Company’s common stock at the rate of four shares of common stock for each share of Series A Preferred Stock. The Series A Preferred Stock has a preferred voting preference at the rate of four votes per share. The Preferred Series A do not contain any rights to dividends, have no liquidation preference, and are not to be amended without the holder’s approval. The 2,000,000 shares were valued at the par value of $2,000(adjusted for the reverse split).

F-8

We focus our research and clinical programs on specific anti-viral therapeutics. We are seeking to add to our existing portfolio of products through our internal discovery and clinical development programs and through an in-licensing strategy. The Company has recently held a pre-IND Meeting with the US FDA for its clinical drug candidate NV-INF-1 in the FluCide™ program. The Company is developing this injectable drug (NV-INF-1) for hospitalized patients with severe influenza, including immuno-compromised patients. The Company believes that this drug may also be usable as a single-dose injection in a medical office for less severe cases of influenza. The Company has also developed an oral anti-influenza drug candidate, NV-INF-2, with a very high degree of effectiveness when taken by mouth. This may be the first ever nanomedicine that is orally active. Both of these anti-influenza therapeutic candidates are “broad-spectrum”, i.e. they are expected to be effective against most if not all types of influenzas including Bird Flu H5N1, Highly Pathogenic Influenzas (HPI/HPAI), Epidemic Influenzas such as the 2009 “swine flu” H1N1/A/2009, and Seasonal Influenzas including the recent H3N2 influenza. The Company has already demonstrated that they have significantly superior activity when compared to oseltamivir (Tamiflu®) against two unrelated influenza A subtypes, namely, H1N1 and H3N2 in a highly lethal animal model. Both of these drug candidates can be used as prophylactics to protect at-risk personnel such as health-care workers and immediate family members and caretakers of a patient.

The Company is also developing an anti-HIV drug. The drug candidates in this HIVCide(™) program were found to have effectiveness equal to that of a triple drug HAART cocktail therapy in the standard humanized SCID-hu Thy/Liv mouse model. Moreover, the nanoviricides were long acting. Viral load suppression continued to hold for more than four weeks after stopping HIVCide treatment. The Company believes that the strong effect and sustained effect indicate that an HIVCide can be developed as a single agent that would provide “Functional Cure”from HIV/AIDS. The Company believes that substantially all HIV virus can be cleared upon HIVCide treatment, except the integrated viral genome in latent cells. This would enable discontinuation of treatment until HIV reemerges from the latent reservoir, which may be several months without any drugs. Moreover, the Company believes that the this therapy would also minimize the chances of HIV transmission. The Company is currently optimizing the anti-HIV drug candidates. These drug candidates are effective against both the R5 and X4 subtypes of HIV-1 in cell cultures. The Company believes that these drug candidates are “broad-spectrum”, i.e. they are expected to be effective against most strains and mutants of HIV, and therefore escape of mutants from our drugs is expected to be minimal.

The Company is also developing broad-spectrum eye drops that are expected to be effective against a majority of the viral infections of the external eye. Most of these viral infections are from adenoviruses or from herpesviruses. The Company has shown excellent efficacy of its drug candidates against EKC (adenoviral epidemic kerato-conjunctivitis) in an animal model. In addition, the anti-HSV drug candidates have shown excellent efficacy in cell culture studies. The Company is also developing a skin cream formulation for the treatment of herpes cold sores or genital warts. Further, the Company is also developing a broad-spectrum drug against Dengue viruses that is expected to be useful for the treatment of any of the four major serotypes of dengue viruses, including in severe cases of dengue (DSS) and dengue hemorrhagic fever (DHF). DSS and DHF are thought to be caused by prior antibodies against dengue that a patient’s body creates to fight a second unrelated dengue infection, and the second virus uses these antibodies effectively to hitch a ride into human cells, thereby causing a more severe infection than in naive patients. In addition to these six drugs in development, the Company also has research programs against Rabies virus, Ebola and Marburg viruses, and others. To date, the Company does not have any commercialized products.

F-9

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation – Interim Financial Information

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission for Interim Reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, considered necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. The accompanying financial statements and the information included under the heading “Management’s Discussion and Analysis or Plan of Operation” should be read in conjunction with our company’s audited financial statements and related notes included in our company’s form 10-K for the fiscal year ended June 30, 2013 filed with the SEC on September 30, 2013.

For a summary of significant accounting policies (which have not changed from June 30, 2013), see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options and warrants.

F-10

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

	Potentially Outstanding Dilutive Common Shares
	For the Three Months Ended September 30, 2013		For the Fiscal Year Ended June 30, 2012

Stock options

Stock options issued on September 23, 2005 to the founders of the Company upon formation with an exercise price of $0.10 per share expiring ten (10) years from the date of issuance		535,714		535,714

Sub-total: stock options		535,714		535,714

Warrants

Warrants issued from June 15, 2006 to October 1, 2007 to investors in connection with the Company’s equity financing with an exercise price of $3.50 per share expiring February 28, 2014		513,143		513,143

Warrants issued on August 22, 2008 to investors in connection with the Company’s equity financing with an exercise price of $3.50 per share expiring February 28, 2014		466,486		466,486

Warrants issued from June 15, 2008 through May 15,2010 to SAB for services with an exercise price from $2.45 to $9.38 per share expiring February 28, 2014		211,429		211,429

Warrants issued on June 30, 2009 to investors with an exercise price of $3.50 per share expiring February 28, 2014		568,771		568,771

Warrants issued on September 30, 2009 to investors with an exercise price of $3.50 per share expiring February 28, 2014		1,437,871		1,437,871

Warrants issued from August 16, 2010 to May 15, 2011 to SAB for services with an exercise price ranging from $5.15 to $6.34 per share expiring fiscal year ending June 30, 2015		65,714		65,714

Warrants issued from August 16, 2011 to May 15, 2012 to SAB for services with an exercise price ranging from $2.80 to $4.94 per share expiring fiscal year ending June 30, 2016		68,571		68,571

Warrants issued from August 16, 2012 to May 15, 2013 to SAB for services with an exercise price ranging from $1.89 to $5.88 per share expiring fiscal year ending June 30, 2017		68,571		68,571

Warrants issued on September 10, 2013 to investors with an exercise price of $5.25 per share expiring February 28, 2018 less Warrants exercised on September 25, 2013		2,910,071		-

Warrants issued on August 15, 2013 to SAB for services with an exercise price of $5.17 per share expiring on August 15, 2017		21,000		-

Warrants issued on September 10, 2013 to Placement Agents as commissions		58,910		-
Sub-total: warrants		6,390,537		3,867,699
Total potentially outstanding dilutive common shares		6,926,251		3,936,270

In addition the Company has issued Convertible Debentures, to investors. A portion of the interest required to be paid on the Debentures is payable in restricted shares of the Company’s $0.001 par value common stock or in warrants, according to the terms of the Debenture.

At September 30, 2013 the estimated number of potentially dilutive shares of the Company’s common stock into which these Debentures can be converted is 1,132,000 based upon the Selling price of the Company’s common stock on September 30, 2013. At September 30, 2013 the estimated number of potentially dilutive shares of the Company’s common stock arising from the payment of a portion of the future interest to be paid on the debentures in common shares or warrants is 1,132,000.

F-11

Recently Issued Accounting Pronouncements

In January 2013, the FASB issued ASU No. 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities". This ASU clarifies that the scope of ASU No. 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities." applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013.

In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013.

In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date." This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013.

In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013.

In March 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted.

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

F-12

Note 3 – Financial Condition

The Company’s financial statements for the interim period ended September 30, 2013 have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company has a deficit accumulated during the development stage. In addition, the Company has not generated any revenues and no revenues are anticipated in the short-term. Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral drugs. The Company has not yet commenced any product commercialization. Such losses are expected to continue for the foreseeable future and until such time, if ever, as the Company is able to attain sales levels sufficient to support its operations. There can be no assurance that the Company will achieve or maintain profitability in the future. As of September 30, 2013 the Company had cash and cash equivalents of $19,200,882. The Company has sufficient capital to continue its business, at least, through September 30, 2015, at the current rate of expenditure. The Company therefore would not be considered to have risks relative to its ability to continue as a going concern within the applicable guidelines.

While the Company continues to incur significant operating losses with significant capital requirements, the Company has been able to finance its business through sale of its securities.

On February 1, 2013 the Company consummated an offering (the “Offering”) in the aggregate amount of $6,000,000 for its Unsecured 8% Coupon Series B Convertible Debenture (the “Debentures”) to four equity investors comprised of private, family investment offices and a charitable foundation. The Debentures are due on January 31, 2017 (the “Maturity Date”) and are convertible into restricted shares of the Registrant’s common stock, par value $0.001 per share (the “Common Stock”) at the market price per share of Common Stock on the date of convergence.

On September 9, 2013, the Company entered into a Securities Purchase Agreement (the “Agreement”) with certain purchasers (the “Purchasers”), relating to the offering and sale (the “Offering”) of units (“Units”) at the aggregate purchase price of $3.50 (“Purchase Price”) per Unit, consisting of one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and a warrant to purchase one share of Common Stock (“Warrant”), issuable upon exercise of the Warrant at the exercise price of $5.25 per share (the “Warrant Shares”, collectively with the Units, Common Stock and Warrant, the “Securities”) The Warrants are exercisable immediately and expire five years after issuance. On September 12, 2013, the Company and the Purchasers consummated the purchase and sale of the Securities (the “Closing”), and the Company raised gross proceeds of $10,308,996 before Offering costs of approximately $618,540, which includes placement agent and attorneys’ fees. On September 25, 2013 certain of the warrant holders exercised Warrants to purchase 35,357 shares of common stock at $5.25 per share for a total exercise price of $185,624.25.

As a result of the successful sale of the Company’s Common Shares, management believes that the Company has sufficient cash and cash equivalents to meet its budgeted expenditures through, at least, September 30, 2015 at current rate of expenditures.

Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral nanomedicines. The Company has not yet commenced any product commercialization. The Company has incurred significant losses from operations since its inception, resulting in a deficit accumulated during the development stage of $44,572,564 at September 30, 2013 and expects recurring losses from operations to continue for the foreseeable future and until such time, if ever, as the Company is able to attain sales levels sufficient to support its operations. There can be no assurance that the Company will achieve or maintain profitability in the future. Despite the Company’s financings in 2013 and 2012 and a cash and cash equivalent balance of $19,200,882 at September 30, 2013, substantial additional financing will be required in future periods. The Company may require additional capital to finance planned and currently unplanned capital costs, and additional staffing requirements during the next twenty four months. The Company has, in the past, adjusted its priorities and goals in line with the cash on hand and capital availability. The Company believes it can adjust its priorities of drug development and its Plan of Operations as necessary, if it is unable to raise such additional funds.

F-13

Note 4 – Significant Alliances and Related Parties

TheraCour Pharma, Inc.

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

On February 15, 2010, the Company executed an Additional License Agreement with TheraCour Pharma, Inc. (“TheraCour”). Pursuant to the exclusive Additional License Agreement, the Company was granted exclusive licenses, in perpetuity, for technologies developed by TheraCour for the development of drug candidates for the treatment of Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes. As consideration for obtaining these exclusive licenses, we agreed to pay a onetime licensing fee equal to seven million shares of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock is convertible, only upon sale or merger of the company, or the sale of or license of substantially all of the Company’s intellectual property, into shares of the Company’s common stock at the rate of four shares of common stock for each share of Series A Preferred Stock. The Series A Preferred Stock has a preferred voting preference at the rate of four votes per share. The Preferred Series A do not contain any rights to dividends; have no liquidation preference and are not to be amended without the holders approval. The issuance of the 2,000,000 shares was valued at their par value or $2,000.

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

Development costs charged by and paid to TheraCour were $610,075 and $948,026 for the three months ended September 30, 2013, and 2012, respectively and $9,215,125 since inception. As of September 30, 2013, pursuant to its license agreement, the Company has paid a security advance of $774,008 to and held by TheraCour which is reflected in Prepaid Expenses. No royalties are due TheraCour from the Company’s inception through September 30, 2013.

Anil R. Diwan, President, and a director of the Company, is also a Director and President of TheraCour. Dr. Diwan owns approximately 70% of the common stock of TheraCour, which itself owns approximately 17.79% of the Common stock of the Company.

TheraCour owns 8,333,434 shares of the Company’s outstanding common stock as of September 30, 2013.

KARD Scientific, Inc.

In June 2005, the Company engaged KARD Scientific to conduct preclinical animal studies and provide the Company with a full history of the study and final report with the data collected from Good Laboratory Practices (CGLP) style studies. Dr. Krishna Menon, the Company’s Consulting Chief Regulatory Officer, a non-executive position, is also an officer and principal owner of KARD Scientific. Lab fees charged by KARD Scientific for services for the three months ended September 30, 2013, and 2012, were $247,660 and $561,618 respectively..

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

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

F-14

Note 5 - Prepaid Expenses

Prepaid Expenses are summarized as follows:

	September 30, 2013		June 30, 2013
TheraCour Pharma, Inc.	$	774,008	$	546,783
Prepaid Others		31,137		51,597
	$	805,145	$	598,380

Note 6 – Equity Transactions

In accordance with the Registrant’s reverse stock split on a 1 for 3.5 basis, effective September 10, 2013, the Registrant filed a Certificate of Change to its Articles of Incorporation pursuant to Section 78.209 of the Nevada Revised Statutes (the “Amendment”) on September 3, 2013. The Amendment effectuated a reverse stock split of the Registrant’s common stock, par value $0.001 per share (the “Common Stock”) by simultaneously decreasing the number of the Registrant’s authorized and outstanding capital stock on a basis of 1 for 3.5 shares (the “Split”). Accordingly, upon effectiveness of the Split, the Registrant’s authorized capital stock shall consist of (i) 85,714,285 shares of Common Stock and (ii) 5,714,286 blank check preferred shares, par value $0.001 (the “Preferred Stock”), of which approximately 50,028,701 shares of Common Stock and 2,990,000 shares of Preferred Stock shall be outstanding. All share amounts and per share amounts have been restated to reflect this reverse stock split. In conjunction with the reverse stock split, the Company’s Board of Directors authorized the issuance of 5,940 shares of the Company’s common stock to round up fractional shares resulting from the reverse stock split.

The Registrant elected to effectuate the Split in order that the price of the Common Stock qualify for listing on a national securities exchange. The Amendment was unanimously approved by the Board of Directors so that the Common Stock would comply with such listing requirement

On September 9, 2013, NanoViricides Inc. entered into a Securities Purchase Agreement (the “Agreement”) with certain purchasers (the “Purchasers”), relating to the offering and sale (the “Offering”) of units (“Units”) at the aggregate purchase price of $3.50 (“Purchase Price”) per Unit, consisting of one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and a warrant to purchase one share of Common Stock (“Warrant”), issuable upon exercise of the Warrant at the exercise price of $5.25 per share (the “Warrant Shares”, collectively with the Units, Common Stock and Warrant, the “Securities”) The Warrants are exercisable immediately and expire five years after issuance.

On September 12, 2013, the Company and the Purchasers consummated the purchase and sale of the Securities (the “Closing”), and the Company raised gross proceeds of $10,308,996 before estimated expenses of the Offering of approximately $618,540, which includes placement agent and attorneys’ fees. The Company issued 2,945,428 Units. On September 25, 2013 certain of these Unit Holders exercised 35,357 Warrants to purchase 35,357 shares of the Company’s common stock, par value $0.001 per share, for gross proceeds of $185,624.

The Company estimated the relative fair value of the warrants on the date of grant using the Black-Scholes Option-Pricing Model with the following weighted-average assumptions:

	September 9, 2013

Expected life (year)		5

Expected volatility		78.39	%

Expected annual rate of quarterly dividends		0.00	%

Risk-free rate(s)		1.39	%

The estimated relative fair value of the warrants issued in conjunction with the aforesaid offering was $4,068,343 at the date of issuance using the Black-Scholes Option Pricing Model.

The Offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-184626), which was declared effective by the Securities and Exchange Commission on December 21, 2012. The Company, pursuant to Rule 424(b) under the Securities Act of 1933, has filed with the Securities and Exchange Commission a prospectus supplement relating to the Offering.

In connection with the Offering, pursuant to a Placement Agency Agreement dated September 9, 2013 among Midtown Partners & Co., LLC and Chardan Capital Markets, LLC (collectively, the “Placement Agents”), the Company paid the Placement Agents an aggregate cash fee representing 6% (3% each) of the gross Purchase Price paid by the Purchasers and warrants to purchase an aggregate of 2% (1% each) of the number of shares of Common Stock sold in the Offering (the “Compensation Warrants”) and substantially similar to the Warrants, at an exercise price equal to $5.25 per share. The Compensation Warrants will otherwise comply with FINRA Rule 5110(g)(1) in that for a period of six months after the issuance date of the Compensation Warrants, neither the Compensation Warrants nor any warrant shares issued upon exercise of the compensation warrants shall be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the Closing. Upon issuance of the commission warrants , the company recognized Costs associated with the sale of securities ( a capital item ) of $113,696 and a corresponding increase in additional paid in capital of $113,696.

F-15

On September 25, 2013, the Company’s Common Stock began trading on the NYSE MKT.

Unregistered Securities

In August, 2013, the Scientific Advisory Board (SAB) was granted warrants to purchase 21,000 shares of common stock at $5.17 per share expiring in August ,2017. These warrants were valued at $106,050 and recorded as consulting expense.

In September, 2013, the Company’s Board of Directors authorized the issuance of Warrants to Midtown Partners & Co., LLC and Chardan Capital Markets, LLC (collectively, the “Placement Agents”) to purchase a total of 58,910 shares of common stock at $5.25 per share expiring in September, 2018. These warrants were valued at $113,696 and recorded as Placement Agents Fees related to the sale of Common Shares and Warrants on September 10, 2013.

For the three months ended September 30, 2013, the Company's Board of Directors authorized the issuance of 10,311 shares of its common stock with a restrictive legend for consulting services. The Company recorded an expense of $21,000.

For the three months ended September 30, 2013, the Company's Board of Directors authorized the issuance of 5,501 shares of its common stock with a restrictive legend for Director services. The Company recorded an expense of $11,250.

Note 7 - Commitments and Contingencies

Operating Lease

The Company’s principal executive offices are located at 135 Wood Street, West Haven, Connecticut, and include approximately 7,000 square feet of office and laboratory space at a base monthly rent of $8,695. The term of lease expired on February 28, 2011 and is now on a month-by-month basis.

Total rent expense at 135 Wood Street, West Haven, Connecticut amounted to $26,085 and $26,085 for the three months ended September 30, 2013 and 2012, respectively.

On February 11, 2013, the Company entered into a binding Memorandum of Understanding (“MOU”) with Inno-Haven, LLC, a Connecticut Limited Liability Company (“Inno-Haven”), to lease for a four-year term a 18,000 square foot building located at 1 Controls Drive, Shelton, Connecticut (the “Leased Premises”) to be suitable for laboratory and GMP clean room drug manufacturing. Inno-Haven is controlled by Anil Diwan, the Company’s founder, President and Chairman and controlling shareholder of TheraCour Pharma, Inc., the Company’s principal shareholder (“TheraCour”). The MOU is subject to a definitive lease agreement (the “Lease Agreement”) to be executed upon final determination of the cost of the laboratory and GMP clean room, and which would contain definitive terms regarding rent, taxes, utilities, maintenance and other, similar items. Pursuant to the MOU, the Company has agreed to provide up to $2,000,000 in cash collateral for sums borrowed by Inno-Haven (collectively, the “Loans”) to complete the build-out and renovation of the Leased Premises for the benefit of the Company. The Company agreed to file a registration statement for shares of its restricted Common Stock, provided by TheraCour Pharma, Inc., as additional collateral for any or all of the Loans (the “Registrable Shares”). The Company shall file a registration statement within ninety (90) days of a closing of a Loan (a “Closing”) to cover such Registrable Shares and use its best efforts to have such registration statement declared effective no later than one hundred eighty (180) days following the Closing, and keep such registration statement effective until the termination of the respective collateral agreement. The MOU further provides that, so long as there is no breach of the Lease Agreement by the Company, any distribution of the collateral in accordance with a Loan will first be made from the proceeds of life insurance policies (if applicable), then from the proceeds of the sale of the Registrable Shares, and then, should there be any balance still owing to the lender, from the cash collateral.

F-16

Also on February 11, 2013, pursuant to the provisions of the MOU, the Company transferred $1,000,000 as cash collateral (the “Cash Collateral”) and agreed to register a number of shares of the Company’s Common Stock, which shares were provided by TheraCour Pharma, Inc., equal to $1,000,000 (the “Collateral Shares”) as collateral pursuant to a Loan and Security Agreement entered into between Inno-Haven and a non-affiliated lender (the “Loan Agreement”) for a loan in the principal amount of $2,000,000. On September 17, 2013 The Company transferred the remaining $1,000,000 cash collateral to Inno-Haven. The value of the Collateral Shares shall be determined every three months and, in the event that the current number of shares of the Common Stock is less than $1,000,000, Inno-Haven may deposit, and the Company shall register, additional shares to equal the aforesaid $1,000,000. Alternatively, Inno-Haven may deposit cash equal to the difference between $1,000,000 and the value of the Collateral Shares. Moreover, Inno-Haven is required to obtain a life insurance policy to insure the life of Dr. Diwan in the amount of $2,000,000. If Dr. Diwan dies during the term of the Loan Agreement, the lender shall have the option to demand payment of the balance of the loan, but, shall be repaid first from the proceeds of any life insurance policy (if applicable), then from the proceeds of the sale of the Collateral Shares, and then, should there be any balance still owing to the lender, from the Cash Collateral. As of September 30, 2013 the Company has utilized approximately $1.1 million for specific fixtures and improvements it required.

Total rent expense paid to Inno-Haven during this period amounted to $-0- for the three months ended September 30, 2013 and $-0- since February 11, 2013.

Legal Proceedings

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

F-17

On or about April 13, 2012, the Nevada Agency and Transfer Company, as agent for service of process for the Company in Nevada, was served with a Summons and Complaint in the case entitled Yidam, Ltd. v. Eugene Seymour, Anil Diwan, and NanoViricides, Inc. (Case No. A-12-659535-B) answerable in the Eighth Judicial District Court of the State of Nevada – Clark County (“Court”). The Complaint seeks to compel inspection of the Company’s books and records. On or about May 2, 2012, the Company filed a Demand for Security of Costs. Upon filing of the Demand, proceedings relative to the Company are stayed pending posting of the demanded security (or plaintiff engages in motion practice about the Demand). The Company may seek dismissal of the complaint if plaintiff has not posted the demanded security (or engaged the court). The Complaint further seeks unspecified “injunctive relief” in furtherance of the demand for inspection to which the Company believes it is not entitled. The Complaint, by a holder of less than 1 percent of the common stock of the Company, seeks to, inter alia, inspect documents and records of the company to which it is not entitled and in a form and manner the Company argues is not authorized by statute. On or about July 18, 2012, the Plaintiff moved to amend its answer. On or about August 8, 2012, we filed our opposition to Plaintiff’s Motion to Amend and a Motion to Dismiss the Complaint for failure to state a claim upon which relief can be granted. On or about September 13, 2012 the court granted the Plaintiff’s Motion to Amend. On or about September 17, 2012 the Plaintiff served its “Second Amended Shareholder Derivative Complaint” upon our Counsel in Nevada. As in the prior two complaints that this Plaintiff has filed in this action, the Second Amended Complaint sought to compel inspection of the Company’s books and records, sought injunctive relief, an accounting and alleges breach of Fiduciary by Dr. Seymour and Dr. Diwan. On or about October 11, 2012, we filed a Motion to Dismiss the Second Amended Complaint for failure to state a claim upon which relief can be granted. On or about December 4, 2012, the Court granted the Company’s Motion to Dismiss with respect to Dr. Seymour and Dr. Diwan and ordered the case dismissed as to all claims but the Plaintiff’s request to compel documents required to be maintained by the Company’s registered agent in Nevada pursuant to NRS 78.105. On or about December 26, 2012, the Company provided the Plaintiff with each of the documents to which it is entitled. Management believes that the Plaintiff does not have a legal or good faith basis for inspection or copying of its shareholder’s list and intends to vigorously defend the production thereof. In May, 2013, the Plaintiff filed a motion for permission to file a third amended complaint. The Company subsequently filed a motion to dismiss and for Summary Judgment. The Court denied the Motion to Dismiss and for Summary Judgment and ordered the Plaintiff to file its Third Amended Complaint. On or about July 15, 2013 the Company Petitioned the Nevada Supreme Court for a Writ of Prohibition or Mandamus reversing the trial Court’s denial of Summary Judgment. Thereafter, on or about September 20, 2013, the Nevada Supreme Court denied the Company’s Writ Petition. The Company filed its answer to the Third Amended Complaint, which contains only one cause of action which is identical to the sole cause of action which was not dismissed from the Second Amended Complaint. Specifically, the Third Amended Complaint seeks only to compel production of books and records required to be maintained by the Company’s Registered Agent pursuant to NRS 78.105 Management believes that the Company’s registered Agent has provided the Plaintiff with all documents to which it is entitled pursuant to NRS 78.105 and that this lawsuit has no merit or basis. The Company intends to vigorously defend this lawsuit. Specific monetary damages have not been claimed and as a result no accrual has been made in relation to this litigation.

On or about July 15, 2013 the same Plaintiff that had filed the repetitive complaints in the Nevada action as set forth in the preceding paragraphs (Yidam, Ltd. v. Eugene Seymour, Anil Diwan, and NanoViricides, Inc.) filed a Shareholder Derivative complaint with the United States District Court for the District of Colorado . The Plaintiff asserts the action is a shareholder derivative action and the Company is solely a nominal defendant. The Company maintains that it, as well as the individual defendants, Messrs. Seymour and Diwan, have not been served in the action. However, a default was filed against the Company, which has been vacated. The Complaint alleges that the Company has failed to deliver information requested by the Plaintiff, the identical information the Plaintiff is seeking inspection of in the Nevada action, and that the individual defendants, Messrs. Seymour and Diwan, breached their fiduciary duties to the Company and caused it financial harm. The Plaintiff demands an order to inspect the Company’s records, an order revoking Messrs. Diwan and Seymour from the Board of Directors, equitable relief, and consequential and punitive damages. The Company believes these claims have no merit and the Company intends to defend this action vigorously. The Company intends to move the District Court to dismiss the action in its entirety Though consequential and punitive damages are claimed, no facts have been submitted to support such claim. Management has determined that such claims are specious and not relevant to the Company and no accrual has been made in relation to this litigation.

There are no other legal proceedings against the Company to the best of the Company’s knowledge as of the date hereof and to the Company’s knowledge, no action, suit or proceeding has been threatened against the Company.

Note 8 – Subsequent Events

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

On October 22, 2013, the Company’s filed a Form DEF 14A Notice of Annual Meeting of the Stockholders to be held December 9, 2013 and filing of a Proxy Statement.

F-18

PART I

The following discussion should be read in conjunction with the information contained in the financial statements of the Company and the notes thereto appearing elsewhere herein and in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in the Company's Annual Report on Form 10-K for the year ended June 30, 2013. Readers should carefully review the risk factors disclosed in this Form 10-K and other documents filed by the Company with the SEC.

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

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should,” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

Although these forward-looking statements reflect the good faith judgment of our management, such statements can only be based upon facts and factors currently known to us. Forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. As a result, our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under the caption “Risk Factors.” For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You should not unduly rely on these forward-looking statements, which speak only as of the date on which they were made. They give our expectations regarding the future but are not guarantees. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.

ITEM I: BUSINESS

Organization and Nature of Business

NanoViricides, Inc. is a leading company in the application of nanomedicine technologies to the complex issues of viral diseases. The nanoviricide® technology enables direct attacks at multiple points on a virus particle. It is believed that such attacks would lead to the virus particle becoming ineffective at infecting host cells. Antibodies in contrast attack a virus particle at only a maximum of two attachment points per antibody.

The Company develops its drugs, that we call nanoviricide® using a platform technology. This approach enables rapid development of new drugs against a number of different viruses. A nanoviricide is a “biomimetic” - it is designed to “look like” the cell surface to the virus. To accomplish this, we have developed a polymeric micelle structure composed of PEG and fatty acids, that is designed to create a surface like the cell membrane, with the fatty acids going inside of the micelle. On this surface, we attach, at regular intervals, virus-binding ligands. The virus is believed to be attracted to the nanomicelle by these ligands, and thereby binds to the nanoviricide using the same glycoproteins that it uses for binding to a host cell. Upon such binding, a “lipid mixing” interaction between the lipid envelope of the virus and the nanomicelle is thought to take place, leading to the virus attempting to enter the nanomicelle. Many different kinds of viruses are likely to get destroyed in the process.

We engineer the ligands to “mimic” the same site on the cell surface protein to which the virus binds. These sites do not change no matter how much a given virus mutates. Thus we believe that if a virus so mutates that it is not attacked by our nanoviricide, then it also would not bind to the human host cell receptor effectively and therefore would be substantially reduced in its pathogenicity. Our success at developing broad-spectrum nanoviricides depends upon how successfully we can design decoys of the cell surface receptor as ligands, among other factors.

The Company currently has six drugs in development with very large commercial markets. These include (i) Injectable FluCide™ for hospitalized patients with severe influenza, (ii) Oral FluCide™ for out-patients, (iii) DengueCide™, a broad spectrum nanoviricide designed to attack all types of dengue viruses and expected to be effective in the Severe Dengue Disease syndromes including Dengue Hemorrhagic Fever (DHS) and Dengue Shock Syndrome (DSS), (iv) HIVCide™ for HIV/AIDS, (v) HerpeCide™ for cold sores and genital sores caused by HSV, and (vi) Broad-spectrum Anti-Viral Eye drops for adenoviral and herpesviral infections of the external eye. In addition, the Company has research programs to develop drugs against Rabies virus, Ebola and Marburg viruses, as well as the recent MERS Coronavirus (Middle-East Respiratory Syndrome). The Company also has a technology that we call “ADIF” or “Accurate-Drug-In-Field” technology with which an effective drug can be developed against a novel virus right in the field using stockpiled nanoviricides® precursors. The estimated market size for the current drug candidates is well in excess of $40 Billion worldwide.

We continue to achieve very strong performance in the testing of these drug candidates. All of our biological testing is conducted by third parties.

Of these, our Injectable FluCide is the most advanced. This drug candidate has shown extremely high effectiveness in a lethal influenza infection mouse model against two different types of influenza A virus, namely H1N1 and H3N2. The Company believes that this drug should be effective against most if not all influenza A subtypes, and strains, including the novel H7N9 strain. The Company held a pre-IND Meeting with the US FDA for its clinical drug candidate NV-INF-1 (i.e. Injectable FluCide) in the FluCide program in March 2012. The Company obtained valuable advice and is developing this candidate towards an investigational drug application (“IND”) to the US FDA as well as for similar applications to other international regulatory agencies. The Company recently performed a short preliminary non-GLP study designed to guide the planned GLP Safety and Toxicology studies (“Tox Package”) that are required for an IND filing. On October 7, 2013, the Company announced that in this small animal non-GLP safety/toxicology study of NV-INF-1 drug candidate, even at maximum feasible dosage, the drug was well tolerated and that no adverse events were found at study completion. The Company is awaiting a full report on the chemistry and histology data from this study. These results are consistent with our findings during efficacy studies of this drug candidate in lethally infected mouse models.

The Company is currently performing scale up studies on its FluCide drug candidate in its existing facilities. Upon scale-up, we will be able to produce the quantities of materials we need for the GLP Safety/Toxicology study of the injectable FluCide drug. We intend to begin the GLP Safety/Toxicology study as soon as feasible.

The Company has previously announced that its anti-dengue drug candidate in the DengueCide™ program achieved an unprecedented 50% survival rate in a special mouse model that mimics the most severe dengue disease in humans. This study was performed by Professor Eva Harris at the University of California, Berkeley.

On August 12, 2013, the Company announced that this anti-dengue drug candidate has been awarded an orphan drug designation by the US FDA. Subsequent to this quarterly report, on November 11, 2013, we announced that this anti-dengue drug candidate was also awarded an orphan drug designation by the European Medicines Agency (EMA). These orphan drug designations provide the Company with several financial and other benefits that have now enabled the Company to give a high priority to the development of this drug.

In addition, the Company is developing a flexible, multi-product, pilot manufacturing facility capable of manufacturing any of its drug candidates in c-GMP compliant manner. This facility will be able to provide the cGMP clinical drug substances for its future human clinical studies. (“c-GMP”= current Good Manufacturing Practices, a set of guidelines developed by the US FDA that the manufacture of a drug must adhere to for human clinical trials and future sales. Internationally, there are similar guidelines promoted by local regulatory agencies, and ICH harmonization guidelines promoted by the WHO). A group of private financiers that includes our founder Dr. Anil Diwan has acquired an 18,000 sqft building on 4 acres with possibilities of expansion, in Shelton, CT, via Inno-Haven, LLC, a company formed specifically for that purpose. This building is now undergoing a total renovation to facilitate setting up a modern cGMP drug substance manufacturing facility with injectable drugs capability, as well as supporting analytical and chemistry laboratory facilities.

We have assembled a marquee team of experts to help with the design, engineering, architecture, and construction of this facility. Mr. Andrew Hahn continues to provide overall stewardship for this project. He was formerly Senior Director of Engineering, Pharmaceutical Facilities, Global Engineering, at the Bristol-Myers-Squibb Company Worldwide Medicines Group (BMS). He has almost 30 years of experience in architecture, design and project management in the creation of new and refurbished facilities at Bristol-Myers Squibb Company. Mr. Phil Mader and his firm, MPH Engineering, LLC (“MPH”), continue to help with the overall project management and design engineering of the laboratory and cGMP pilot production facility. Prior to founding MPH, from 2000 to 2007, Phil Mader served as the Senior Capital Project Manager at Bristol-Myers Squibb Company in Wallingford, CT (“BMS”). He was involved in the design, implementation, and commissioning of various biology and chemistry laboratory projects within budget and in a timely manner. Ms. Kathyann Cowles of ID3A, LLC, serves as the Principal Architect. Ms. Cowles, co-founder of Id3A, has over thirty years of experience as a licensed Architect and Senior Project Manager for diverse and complex design and construction projects in the academic, science, technology, corporate and research sectors. This team is working with the expert advice and guidance of the Company’s Scientific Advisor, Dr. Harmon Aronson. Dr. Aronson is a well known cGMP consultant in the pharmaceutical industry, and was formerly Vice President of Quality Management at Biocraft Laboratories, a company that was acquired by Teva Pharmaceuticals.

This renovation project is now in the construction phase. The construction is projected to be completed in the first calendar quarter of 2014. We intend to lease the building from Inno-Haven, LLC. The terms of the lease have not been finalized.

After the construction is completed, we will need to conduct several validation studies and also move our current laboratories to the new facility. In addition, we will need to set up cGMP compliant systems for working in this new facility. We will need to establish the scaled up manufacturing processes of our drug candidates under cGMP guidelines in this facility. Only after that, the Company will be able to make cGMP-like material using the same processes as c-GMP material but prior to undergoing the FDA registration process. Such c-GMP-like product can be used for clinical batches for human clinical studies in several countries around the world. The Company is currently investigating all such options in order to expedite the timeline to entering human clinical trials. The Company intends to contract out clinical batch fulfillments to outside established contract manufacturers.

In August 2012, we announced that we were successful in developing an anti-influenza drug candidate that was orally effective. We believe this may be the very first targeted nanomedicine that is available via the oral route. Oral availability of FluCide would open up a much larger market than the injectable version. The Company intends to continue to develop the injectable version for hospitalized patients. For severe, hospitalized cases of influenza, we are developing a concentrated solution that is administered by “piggy-back” incorporation into the standard IV fluid supplement system that is commonly used in hospitalized patients. In addition, we now plan to develop an oral version for out-patients and later also for pediatric patient populations. This oral version will replace the injectable drug that we were developing out-patients.

In September 2012, we announced that the oral version of FluCide was also highly effective against a different strain of influenza A, namely H3N2, in addition to the influenza strain of H1N1 that we had been using for development, in the same lethal animal challenge model. This is an important indication that our drug candidates against influenza are indeed broad-spectrum, i.e. capable of combating most if not all influenza viruses. We will need to perform animal studies against a few additional strains of influenza viruses in order to substantiate that this drug is indeed a broad-spectrum drug candidate. Additional studies in cell cultures against different strains of influenza are also planned. All of these studies are necessary for filing an IND application.

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

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

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

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

Initially we focused on developing only injectable formulations since these afford the maximum bioavailability of the drug inside the body. We have also developed eye drop solutions against EKC in a very short time frame.

A skin cream appears to be the right formulation for the treatment of oral and genital warts caused by HSV-1 and HSV-2. Last year we had already observed that our drug candidates, in the solution form, were effective in cell cultures against at least two different strains of HSV-1 in two different laboratories. We needed to make skin creams for conducting animal studies and selected different building blocks for our backbone polymer, and built new drugs against HSV this year. The skin cream drug candidates against HSV were developed within a matter of weeks. The formulation development itself took only a few days. In contrast, many drug development companies spend years in formulations development.

We have successfully developed what may be the first ever orally available targeted nanomedicine, in our Flucide program.

We demonstrated that we can rapidly develop different formulations because of the inherent strength of the nanoviricide platform technology. The technology also enables us to develop nasal sprays and bronchial aerosols. We plan to develop the appropriate formulations as necessary.

We have limited our expenditures on socially conscious projects such as “Neglected Tropical Diseases” (NTD’s), and “Bio-defense” projects to the extent that participatory funding from third parties is available. To this end, we attempt to obtain grants and contracts financing from government and non-government sources. We will continue to work on these programs as time and resources permit. In addition, we continue to develop novel technologies such as ADIF™ (“Accurate-Drug-In-Field™”) which may possibly represent one of the best scientific approaches against manmade and natural novel disease agents. Outbreaks of natural novel viral diseases, such as MERS-CoV, SARS-CoV, H7N9 Influenza, and others, will continue to occur. At present, there is no feasible therapeutic intervention for outbreaks of novel viruses, such as new MERS coronavirus outbreak reported recently.

We have added two marquee independent board members to our Board of Directors in May/June, 2013. Dr. Milton Boniuk is the Caroline F. Elles Chair Professor of Ophthalmology, in the Alkek Eye Center at the Baylor College of Medicine, Houston, TX, a practicing ophthalmic surgeon, an astute businessperson, a renowned humanitarian, and a strong investor in and supporter of the Company. To date, he has invested $7M into NanoViricides, Inc., through various entities. Dr. Mukund S. Kulkarni, MBA, PhD, is currently the Chancellor of Penn State University, and continues to be Professor of Finance. Together with Mr. Stanley Glick, Practicing CPA and Chair of our Audit Committee, we now have a majority of independent board members.

We have continued to successfully raise financing. We had previously completed a $6M convertible debentures placement with our prior investors with long positions in February, 2013. In addition, we completed a registered direct offering of approximately $10M on September 9, 2013, after reverse-split of our common stock by a factor of 3.5 old common shares for 1 new common share. With the newly established stock price, subsequently, we met the eligibility criteria for both NASDAQ and NYSE MKT.

On September, 25, 2013, the Company’s common stock began trading on the NYSE MKT exchange under the symbol NNVC. This up-listing from OTC bulletin board was the culmination of a year long effort spearheaded by Dr. Anil R. Diwan, our founder. The Company had announced at its annual meeting on January 16, 2013, that it had undertaken an initiative to improve its corporate governance, build a stronger and independent board of directors, and prepare the Company for uplisting to a major national exchange. The Company studied and evaluated the processes and performance at the major national exchanges and determined that it was in the best interests of our shareholders to uplist to NYSE MKT. Midtown Capital Partners, LLC, and Chardan Capital Markets, LLC advised the Company throughout this process and also served as the joint placement agents for the $10M registered direct offering referenced above.

This uplisting is a major milestone for the Company and an important advance in the Company’s corporate lifecycle.

With this financing, as of September 30, 2013, the Company has a cash and cash equivalents balance of approximately $19M. The Company continues to be frugal in its expenditures, and has successfully held the rate of operational cash expenditures at approximately $1.33M this quarter. We believe we have sufficient funds in hand for more than two years of operations at the current rate of expenditure. More particularly, we believe we have sufficient funds in hand to complete Phase I and Phase IIa human clinical studies for at least one of our drug candidates. This estimate is based on a number of assumptions and cost estimates provided by outside parties. The Company itself does not have the expertise in taking a drug through human clinical trials and as such depends upon outside experts to generate such estimates as well as to help the Company formulate and conduct its drug development programs. As such, these estimates may be grossly in error and there may also be hidden costs that we are not aware of.

We have continued to achieve significant milestones in our drug development activities. All of our drug development programs are presently at pre-clinical stage. We continue to test several drug candidates under each program even though we may achieve extremely strong results with some of the candidates.

Our strategy is to minimize capital expenditure. We therefore rely on third party collaborations for the testing of our drug candidates. We continue to engage with our previous collaborators. In addition, we have engaged Biologics Consulting Group, Inc., to help us with the FDA regulatory submissions. We are also engaged with Australian Biologics Pty, Ltd to help us with clinical trials and regulatory approvals in Australia. We believe that cGMP-like manufactured product is acceptable for entering human clinical trials in Australia.

The Company reports summaries of its studies as the data becomes available to the Company, after analyzing and verifying same, in its press releases.

In July-August 2011, we reported on the anti-HIV studies that were designed to discriminate the comparative effectiveness of different ligands. We reported that our lead anti-HIV candidate achieved anti-HIV efficacy equivalent to a HAART (highly active anti-retroviral therapy) triple drug cocktail in this recently completed animal study. Treatment with this lead anti-HIV nanoviricide reduced HIV levels and protected the human T cells (CD4+/CD8+) to the same extent as treatment with the HAART cocktail. The three drug HAART cocktail used for comparison in this study is one of the combination therapies recommended for initial therapy in humans. No evidence of drug toxicity was observed in the case of nanoviricide drug candidates. We later reported that this lead anti-HIV drug candidate achieved a long term anti-HIV effect with a much shorter dosing regimen and a markedly lower total drug dose than the HAART drug cocktail therapy in a recent animal study. The antiviral effect of the anti-HIV nanoviricide (“HIVCide™”) continued throughout the 48 days of study even though HIVCide dosing was discontinued after only 20 days. The clinical benefit of HIVCide was found to be sustained for at least four weeks after the last drug dose. Treatment with the lead anti-HIV nanoviricide both (1) reduced the HIV viral load and (2) also protected the human T cells (CD4+,CD8+), equally well as compared to treatment with the three-drug HAART cocktail, at 24-days as well as at 48-days, even though the HIVCide treatment was stopped at 20 days. The lead candidate is now undergoing further optimization.

A long and sustained effect of HIVCide would lead to improved patient compliance, which is a sought after goal in HIV therapy. With this new study, we believe that we are close to a “Functional Cure” of HIV wherein the patient can take treatment until the viral load is undetectable and then stop treatment until an episode of virus reawakening occurs.

In September 2011, we announced that we have selected a clinical candidate, now designated NV-INF-1, for FDA submission in our highly successful FluCide™ anti-influenza therapeutics program. The Company is now developing certain additional information on NV-INF-1, with input from its FDA consultants, for the pre-IND application to the FDA. The Company is planning on two separate indications for NV-INF-1: High strength dosage form for hospitalized patients with severe influenza, and a single course therapy for the out-patients with less severe influenza. We are currently working on putting together the FluCide information in a pre-IND application to the US FDA.

In July 2011, we retained the Biologics Consulting Group to help us with our regulatory filings. This led to our pre-IND meeting request to the US FDA in December, 2011, and a pre-IND meeting with the US FDA in March, 2012.

In July 2012, we retained Australian Biologics Pty. Ltd., a regulatory affairs consulting firm, to coordinate the regulatory review and approval to conduct the first human trials in Australia for Flucide™, the Company’s broad-spectrum anti-influenza drug. Australian Biologics will also facilitate clinical trial site(s) selection and development of the clinical trials agreements. Dr. Jim Ackland, the Manager of Australian Biologics Pty, Ltd, has extensive experience in this field. Prior to becoming managing director of this company, he was Vice-President, West Coast and Asia Pacific operations for the Biologics Consulting Group, the Company’s US FDA regulatory affairs consulting group. In the 1990’s, he was the Head of Regulatory Affairs, Vaccines, for the CSL Group in Australia. The CSL Group is a global, specialty biopharmaceutical company that researches, develops, manufactures and markets products to treat and prevent serious human medical conditions.

In August 2012, we reported that oral effectiveness of anti-influenza FluCide drug was demonstrated in a lethal animal model. Certain anti-influenza drug candidates under our FluCide™ program, when given orally, were nearly as effective as when administered as IV injections. Two different anti-influenza drug candidates were tested in Oral vs. IV comparison, and both of them showed similar results that indicated strong oral effectiveness. The results clearly demonstrated that oral administration of both of these FluCide drug candidates resulted in substantially superior animal protection compared to oseltamivir (Tamiflu®), a standard of care for influenza at present. The studies involved the same highly lethal animal model the Company has continued to use for its influenza drug development program.

One of the FluCide drug candidates, when administered orally, enabled the animals to survive as long as 347.4±4.6 hrs. (14.5 days), and when given as an injectable, it allowed the animals to combat the lethal influenza infection for 376.8±7.5 hrs. (15.7 days). Another drug candidate (with a different anti-viral ligand), when given orally, resulted in the animals surviving for as long as 301.3±5.2 hrs. (12.6 days), and when given as a tail-vein injection, for 349.0±3.9 hrs. (14.5 days). For comparison, untreated control animals died in 119.5±1 hrs. (5 days), and oseltamivir (Tamiflu®) treated animals died within just 181.7±4.6 hrs. (7.6 days).

The survival data clearly showed that oral as well as IV administration of FluCide drug candidates was substantially superior to oseltamivir. In addition, they showed that FluCide drug candidates when given orally had substantial efficacy, almost matching the effectiveness of the injectable form given at 0.3X of the oral dosage level.

One of the FluCide drug candidates, when administered orally, resulted in 1.30 log reduction (or 20X reduction) in lung viral load and matched the viral load reduction on the same drug candidate given as an IV injection. Another drug candidate resulted in 1.23 log viral load reduction when given orally and 1.31 log viral load reduction when given as an injectable. In contrast, oseltamivir (Tamiflu®, given orally at 40mg/kg/d) resulted in only 0.6 log viral load reduction (or only 4X reduction) compared to negative controls. These were the results of lung viral load measured at 108 hours post-infection (hpi). Further, at 180 hpi, the lung viral load remained controlled at about the same level as at 108 hpi with the nanoviricide® drug candidates. In contrast, lung viral load in the oseltamivir treated mice increased to the same level as the negative control (infected untreated) animals prior to their death and the oseltamivir group exhibited a survival of only 182±4 hours.

The number of lung plaques and plaque areas (resulting from the influenza virus infection) also were consistent with the data from the lung viral load, and were minimal in the case of the nanoviricide drug candidates whether given as IV or orally. Oseltamivir treatment did not protect the lungs of infected animals anywhere close to the protection afforded by the FluCide drug candidates.

These data clearly demonstrated that both oral and IV treatment with nanoviricide drug candidates protected the lungs of the mice infected with influenza virus equally well. It is also clear that this lung protection was the result of the substantial decrease in the lung viral load. In addition, they show that FluCide drug candidates when given orally had substantial efficacy, almost matching the effectiveness of the injectable form given at 0.3X of the oral dosage level.

In addition to the antiviral effects, the oral FluCide drug candidates also led to generation of a strong antiviral antibody response. Two different anti-influenza drug candidates were tested in Oral vs. IV comparison. One of the FluCide drug candidates, when administered orally, resulted in 1866±90 micro-g/ml-plasma of anti-influenza antibody, and 1258±59 when administered as IV injections. Another FluCide candidate, when given orally, resulted in 1491±37 ug/ml plasma of anti-influenza antibody, and 1151±53 when administered as IV injections. The untreated infected animals had 190±22 ug/ml antibody response, which was the weakest of all, as expected. Of significance, oseltamivir (Tamiflu) resulted in only 950±64 ug/ml level of antibody response, which was far less than the two oral FluCide groups (p-value <0.0003), and also substantially less than the two IV FluCide groups (p-value <0.04). These p-values were determined for a comparison of FluCide groups against the oseltamivir group using the most stringent parameters, viz. two-tailed, paired, t-test. A smaller p-value indicates a greater confidence that the difference in observations cannot be a result of pure chance. These data also indicated that the antibody response was stronger when FluCide was given orally rather than as IV injection.

The generation of a strong antibody response is important. We believe that the strong reduction in viral load caused by FluCide treatment allows the immune system to function normally and generate appropriate antibodies. A strong antibody response implies that the FluCide drug candidates may also be useful as prophylactic therapy of uninfected health care workers and close associates of a patient in addition to treatment of infected patients.

All of these data also clearly demonstrated that both injectable and oral FluCide™ candidates were superior to oral oseltamivir (Tamiflu®, Roche), a current standard of care for influenza, in all parameters evaluated.

No adverse effects were found, indicating that the FluCide dose could be increased further to achieve much greater levels of effectiveness.

The oral FluCide candidate development was the result of chemistry optimization program that the Company has been working on.

In September 2012, we announced that the oral FluCide™ drug candidates demonstrated dramatically improved survival in animals administered a lethal dose of the H3N2 influenza A virus. Animals treated with the oral anti-influenza nanoviricide drug candidates survived for much longer as compared to Tamiflu® treated animals.

In this H3N2 infection study, animals treated with the best of the oral FluCide™ nanoviricide drug candidates survived 15.6 days while the animals treated with oral Tamiflu survived only 9.6 days. The control animals died within 5 days. The Company has previously reported that animals treated with these same oral anti-influenza nanoviricides protected mice infected with the H1N1 influenza A virus and were similarly substantially superior to oral oseltamivir (Tamiflu).

This is the first demonstration of efficacy of the Company’s FluCide drug candidates against a completely unrelated type of influenza A virus (viz. H3N2) in contrast to the H1N1 Influenza A virus that the Company has used for its recent development work leading to its pre-IND application with the US FDA. H3N2 influenza virus is one of the multiple sub-types of influenza A that cause seasonal epidemics. According to the CDC, influenza causes approximately 36,000 deaths every year in the U.S. alone. The Hong Kong Flu pandemic of 1968-1969, which killed an estimated one million people worldwide, was caused by a variant strain of H3N2. The Company believes an orally administered nanoviricide that protect against multiple influenza virus sub-types would be effective in season after season of influenza epidemics. Such a highly effective, broad-spectrum anti-influenza drug is widely anticipated to be highly successful.

The Company believes that the anti-influenza drug candidates it has developed are broad-spectrum, i.e. they should work against most if not all of influenza viruses. This is because, in spite of mutations and antigenic drift, all influenza viruses bind to the same cell surface receptor called sialic acid, and the Company has developed small chemical ligands that mimic this receptor, to attack the influenza viruses. These ligands are chemically attached to the Company’s polymeric micelle backbones that mimic the cell membrane, to create the nanoviricides. The Company has previously shown effectiveness of its very early anti-influenza drug candidates against two different strains of H5N1 Bird Flu virus in cell culture studies. The Company has since then improved the ligands as well as the chemistries as reported from time to time.

The Company intends to develop data about effectiveness of its drug candidates against certain unrelated influenza A viruses using both cell culture studies and animal models in a reasonable manner. These data will be needed as part of the IND application that the Company is working on. An IND application will be required for the Company to enter into human clinical trials.

Previously, in June 2010, the Company reported successful studies in two different cell culture models of dengue virus type 2 infection. These studies were conducted at the Prof. Eva Harris lab at the UC Berkeley. Our results were later confirmed and extended to animal studies.

The Company reported that its anti-Dengue drug candidates demonstrated significant protection in the initial animal survival studies of Dengue virus infection, in an animal study protocol modeled to simulate the ADE syndrome. The best nanoviricide drug candidates demonstrated 50% animal survival in this uniformly lethal mouse model. The studies were performed in the laboratory of Dr. Eva Harris, Professor of Infectious Diseases at the University of California, Berkeley (UC Berkeley).

Based on this data, the Company believes that it is feasible to develop a single nanoviricide drug against all types of dengue viruses that circumvents the primary issue of antibody-dependent enhancement (ADE) of dengue virus infection. ADE is thought to result in severe dengue disease syndromes such as dengue shock syndrome (DSS) and dengue hemorrhagic fever (DHF).

In June, 2010, we also reported that our anti-HIV drug candidates demonstrated efficacy in the recently completed cell culture studies using two distinctly different HIV-1 isolates. These studies were performed in the laboratory of Carol Lackman-Smith at the Southern Research Institute, Frederick, Maryland. These results corroborated our previous findings in Animal Studies. The Company had reported that its best nanoviricide drug candidate against HIV was more than 25 times superior to a three drug combo anti-HIV cocktail based on biomarker test response in all parameters tested. The parameters included improvement in human T cell populations in the animal model and reduction in HIV viral load. The Company has since performed additional studies to optimize the HIV binding ligand and has found ligands that are superior to the one that yielded these strong results. The Company now plans to deploy this new anti-HIV ligand connected to the full strength polymeric micelle that we have also optimized as a new anti-HIV nanoviricide drug candidate. We plan to test this optimized anti-HIV drug candidate in animal studies. Anti-HIV studies are extremely expensive. As such, the Company’s HIVCide program has been slowed down with the current slow financial markets.

In August 2010, we reported that our anti-HSV drug candidates exhibited almost complete inhibition of herpes simplex virus HSV-1 in cell culture studies conducted in Professor Ken Rosenthal lab at the Northeastern Ohio Universities Colleges of Medicine and Pharmacy. These studies employed the H129 strain of herpes simplex virus type 1 (HSV-1). H129 is an encephalitic strain that closely resembles a clinical isolate; it is known to be more virulent than classic HSV-1 laboratory strains.

In March through May 2011, the Company reported that further chemistry optimization led to dramatically improved antiviral efficacy with its optimized FluCide™ drug candidates in its most recent animal study. In the influenza mouse lethal infection model, animals treated with one of the optimized FluCide™ nanoviricide drug candidates survived beyond the stated full duration of study (21 days), and those treated with two additional drug candidates survived almost the full duration of the study. Animals in these three groups survived significantly longer (20.2 to 22.2 days) as compared to the animals treated with Oseltamivir (Tamiflu®) only 8.3 days. In addition, the post-infection treatment with these optimized FluCide™ drug candidates resulted in dramatic reduction in the number of lung lesions that are caused by a lethal influenza virus infection. Four days post virus infection, animals treated with three of the optimized FluCide™ nanoviricide drug candidates exhibited greater than 95% reduction in the number of lung lesions as compared to the infected yet untreated control animals (p-values < 0.001). In contrast, animals treated with Oseltamivir (Tamiflu®, Roche) showed only a 50% reduction. In another significant finding, no increase in the number or size of the lung lesions was observed over the entire duration of the study in the FluCide™-treated animals. This was not the case for the Oseltamivir-treated animals. This demonstrated that treatment with FluCide drug candidates provided clear and strong protection against lung damage caused by the severe influenza infection. In addition, in this study, these optimized FluCide™ drug candidates achieved 1,000-fold reduction in the levels of infectious virus in the lungs of animals with a lethal level of influenza virus infection. The amount of infectious virus in the lungs of the infected animals treated with three of the optimized FluCide™ nanoviricide drug candidates was reduced by greater than 1000-fold as compared to the infected untreated control animals (p-values < 0.001), four days after virus infection. In contrast, animals treated with Oseltamivir (Tamiflu®, Roche) showed less than a 2-fold reduction in lung viral load at the same time point. This indicated a 500-fold greater reduction in viral load by FluCide drug candidates over Oseltamivir. Of great clinical significance is the fact that 2 of the optimized FluCide™ drug candidates maintained this greatly reduced lung viral load at 7, 13 and 19 days after virus infection in this 21 day study. Thus, treatment with the optimized FluCide drug candidates appeared to protect against the complete cycle of infection, virus expansion and spread of infection in the lungs that follows the initial virus infection. This was not the case for the Oseltamivir-treated animals. Animals treated with Oseltamivir (Tamiflu®, Roche) showed less than a 2-fold reduction in lung viral load at 4 days and the viral load was increased at 7 days to the same level as that found in the infected, untreated control animals shortly before their death.

In September 2011, we announced that we have selected a clinical candidate, designated NV-INF-1, for FDA submission in our highly successful FluCide™ anti-influenza therapeutics program. The Company submitted a pre-IND application to the FDA for this clinical candidate and held a pre-IND meeting with the US FDA in March, 2012. In addition, the Company is planning a high strength “piggy-back infusion” dosage form for hospitalized patients with severe influenza. The Company will continue the development of these two drug candidates towards an IND, based on the guidance it received in the first pre- IND meeting.

The studies of biological testing of materials provide information that is relatively easy to understand and therefore readily reported. In addition, we continue to engage in substantial work that is needed for the optimization of synthesis routes and for the chemical characterization of the nanoviricide drug candidates. We also continue to work on improving the drug candidates and the virus binding ligands where necessary. We continue to work on creating the information needed for the development of controlled chemical synthesis procedures that is vital for developing c-GMP manufacturing processes.

We are also making progress in development of our cGMP manufacturing capability. The Company announced in May 2012 that it had appointed Mr. Andrew Hahn to help with the overall design and construction of its laboratory and cGMP pilot production facility. Mr. Hahn recently retired as the Senior Director of Engineering, Pharmaceutical Facilities, Global Engineering, at the Bristol-Myers-Squibb Company Worldwide Medicines Group (BMS). He has almost 30 years of experience in architecture, design and project management in the creation of new and refurbished facilities at Bristol-Myers Squibb Company.

In addition, the Company announced on October 24, 2011, that information about its novel, proprietary anti-virus platform technology has been published in the book “Bionanotechnology II: Global Prospects.” The chapter entitled “Nanoviricides - A Novel Approach to Antiviral Therapeutics” provides an in-depth presentation of the NanoViricides platform technology.

The Company also announced in May 2012 that a fundamental patent, on which the nanoviricides® technology is based, is due to be issued in the USA on May 8, 2012. The US Patent (No. 8,173,764) is granted for "Solubilization and Targeted Delivery of Drugs with Self-Assembling Amphiphilic Polymers." It was issued on May 8, 2012. The patent term is expected to last through October 1, 2028, including anticipated extensions in compensation for time spent in clinical trials. This US Patent has been allowed with a very broad range of claims to a large number of families of chemical structure compositions, pharmaceutical compositions, methods of making the same, and uses of the same. The disclosed structures enable self-assembling, biomimetic nanomedicines. NanoViricides, Inc. holds exclusive, perpetual, worldwide licenses to these technologies for a broad range of antiviral applications and diseases. The other national and regional counterparts of the international Patent Cooperation Treaty (“PCT”) application number PCT/US06/01820, which was filed in 2006,. have issued as a Singapore National Patent Publication, a South African patent, and also as an OAPI regional patent covering Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Republic of Congo, Cote d'Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea Bissau, Mali, Mauritania, Niger, Senegal, and Togo. It has also issued as a granted patent in New Zealand, China, Mexico, and Japan. Estimated expiry dates range nominally from 2026 to 2028 with various extensions accounting for delays in clinical trials. Additional issuances are expected in Europe, and in several other countries around the world.

In addition, the counterparts of the international PCT application PCT/US2007/001607 have issued as a granted patent in New Zealand, OAPI, Pakistan, Australia, South Africa, and Mexico to date. Additional issuances are expected in Europe, USA, and in several other countries around the world. This patent application teaches antivirals based on the TheraCour polymeric micelle technologies, their broad structures and compositions of matter, pharmaceutical compositions, methods of making the same, and their uses. The nominal expiry dates are expected to range from 2027 to 2029.

We have taken an important step towards improving our corporate governance this year. On June 22, 2012, we appointed Mr. Stanley Glick, CPA, as an independent Director of the Company and the Chairman of its Audit Committee. Mr. Glick has over forty years of experience in his long career of providing auditing, accounting, tax, and management advisory services, to clients in various industries. Mr. Glick has been a member of several Boards of Directors for not-for-profit organizations in the Westport, CT area. In particular, he has served as a Director and member of Audit Committee of “A Better Chance” of Westport, CT, from 2000 to 2005. From 1977 until present, Mr. Glick has managed an independent practice as a Certified Public Accountant in Connecticut and New York States. Prior to forming his own CPA firm, Mr. Glick was employed by local and regional CPA firms where he performed and supervised audits and financial reporting. Mr. Glick is a member of the American Institute of Certified Public Accountants, The Connecticut Society of Certified Public Accountants, and the New York State Society of Certified Public Accountants. He holds a Bachelor of Business Administration degree in Accounting from Baruch College of Business (now Baruch College of the City University of New York). Mr. Glick is married and lives in Trumbull, CT.

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

The following discussion should be read in conjunction with the information contained in the consolidated financial statements of the Company and the notes thereto appearing elsewhere herein and in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in the Company's Annual Report on Form 10-K for the year ended June 30, 2013. Readers should carefully review the risk factors disclosed in this Form 10-K and other documents filed by the Company with the SEC.

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

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

Investors are also advised to refer to the information in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or from TheraCour Pharma serves as the foundation for our intellectual property. The Company was granted a worldwide exclusive perpetual license to this technology for several drugs with specific targeting mechanisms in perpetuity for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Rabies, Herpes Simplex Virus (HSV), Influenza and Asian Bird Flu Virus. The Company has entered into an Additional License Agreement with TheraCour granting the Company the exclusive licenses in perpetuity for technologies developed by TheraCour for the additional virus types: Dengue viruses, Japanese Encephalitis virus, West Nile Virus, Viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes, and Ebola/Marburg viruses. The Company may want to add further virus types to its drug pipeline. The Company would then need to negotiate with TheraCour an amendment to the Licensing Agreement to include those of such additional viruses that the Company determines it wants to follow for further development. We are seeking to add to our existing portfolio of products through our internal discovery pre-clinical development programs and through an in-licensing strategy.

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

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

As the Company’s drug candidates progress towards human clinical studies, it has become necessary to enable that they can be produced under “current Good Manufacturing Practices” (cGMP) guidelines of the US FDA, and other applicable international guidelines (such as WHO and ICH guidelines, as well as other country-specific and region-specific guidelines). In the US, the US FDA requires that at least two validated and consistent batches of the drug be produced under cGMP conditions before any human clinical trials can be allowed. Some other countries may allow research product materials for certain phases of human clinical trials. The Company’s management has studied the possibilities of contract manufacturing of its drug candidates over the last several years and has concluded that building a small pilot scale manufacturing facility where the special needs of the manufacture of its nanomedicines can be met is the most appropriate solution. This approach provides the highest level of control over the quality of the materials and also keeps the intellectual property of the Company well protected. Further, to minimize capital costs to the Company, management determined that a separate entity should be allowed to purchase the real estate, renovate, build and maintain the facilities under the Company’s direction and control. Subsequently, a separate entity, Inno-Haven, LLC (“Inno-Haven”), controlled by Anil R. Diwan, the Company’s founder, was created for this purpose. Inno-Haven purchased an 18,000 sq. ft. light manufacturing building on a 4.2 acre land lot in Shelton, Connecticut in August, 2011. The purchase and related costs were financed by Dr. Diwan through his personal savings, and the sale of NanoViricides common stock that he had acquired as a founder, that netted approximately $900,000 after expenses and income taxes. Dr. Diwan disposed of his shares in accordance with a 10b5.1 trading plan which concluded in October, 2011. Inno-Haven has also obtained additional financing from certain other unrelated parties. Inno-Haven intends to obtain additional financing from investors other than Dr. Diwan. Dr. Diwan has also agreed to provide personal guarantees for potential loans and mortgages which could be drawn for the purpose of financing the building and construction costs for the extensive renovation intended.

The Company has agreed to provide Inno-Haven the specifications and plans for the cGMP pilot facility and laboratory and office spaces that are anticipated to be built by renovating the existing building. Subsequently, on February 11, 2013, the Company entered into a binding Memorandum of Understanding (“MOU”) with Inno-Haven, to lease these facilities for a four-year term. The MOU is subject to a definitive lease agreement (the “Lease Agreement”) to be executed upon final determination of the cost of the facilities. Pursuant to the MOU, the Company has agreed to provide up to $2,000,000 in cash collateral for sums borrowed by Inno-Haven (collectively, the “Loans”) to complete the build-out and renovation of the Leased Premises for the benefit of the Company. The Company agreed to file a registration statement for the shares of restricted NNVC Common Stock owned and provided by TheraCour Pharma, Inc., as additional collateral for any or all of the Loans (the “Registrable Shares”). The MOU further provides that, so long as there is no breach of the Lease Agreement by the Company, any distribution of the collateral in accordance with a Loan will first be made from the proceeds of life insurance policies (if applicable), then from the proceeds of the sale of the Registrable Shares, and then, should there be any balance still owing to the lender, from the cash collateral. Also on February 11, 2013, pursuant to the provisions of the MOU, the Company transferred $1,000,000 as cash collateral (the “Cash Collateral”) and agreed to register a number of shares of the Company’s Common Stock, which shares were provided by TheraCour Pharma, Inc., equal to $1,000,000 (the “Collateral Shares”) as collateral pursuant to a Loan and Security Agreement entered into between Inno-Haven and a non-affiliated lender (the “Loan Agreement”) for a loan in the principal amount of $2,000,000. On September 17, 2013, the Company transferred the remaining $1,000,000 cash collateral to Inno-Haven. Moreover, Inno-Haven is required to obtain a life insurance policy to insure the life of Dr. Diwan in the amount of $2,000,000. If Dr. Diwan dies during the term of the Loan Agreement, the lender shall have the option to demand payment of the balance of the loan, but, shall be repaid first from the proceeds of any life insurance policy (if applicable), then from the proceeds of the sale of the Collateral Shares, and then, should there be any balance still owing to the lender, from the Cash Collateral. As of September 30, 2013, the Company had expensed approximately $1.1 million in specific fixtures and improvements required by the Company. Total rent expense paid to Inno-Haven during this period amounted to $-0- for the three months ended September 30, 2013 and $-0- since February 11, 2013.

The Company does not currently have any revenue. All of the Company’s products are in development stage and require successful; development through regulatory processes before commercialization. During the development stage, we have generated funding through the issuances of debt and private placement of common stock and also the sale of our registered securities. The Company does not currently have any long term debt, other than convertible debentures as disclosed earlier. We have not generated any revenues and we may not be able to generate revenues in the near future. We may not be successful in developing our drugs and start selling our products when planned, or we may not become profitable in the future. We have incurred net losses in each fiscal period since inception of our operations.

The Company’s Drug Pipeline

We currently have, in early, active development, (1) an Injectible FluCide™ for hospitalized patients with severe influenza; (2) Oral FluCide™ for outpatient – both of these drug candidates are expected to be active against Epidemic Influenzas including the current novel H1N1/2009 “Swine flu” virus, H5N1 and other Highly Pathogenic Avian Influenzas (H5N, H7N, H9N HPAI, Bird Flu), as well as common seasonal human Influenzas; (3) HIV Cide, a potential “Functional Cure that is active against both the R5 and X4 strains of HIV, (4) Eye drops against viral diseases of the eye such as Epidemic Kerato-Conjunctivitis (EKC) and Herpes Keratitis, (5) HepiCideagainst Herpes virus cold sores and genital Herpes, and (6) DengueCideDengue viruses. In addition, we have research programs against Rabies virus, Ebola/Marburg family of viruses, as well as other Viral hemorrhagic fevers. We also have a research program called ADIF(™) “Accurate-Drug-In-Field”, that we believe is the only way to combat a novel viral threat right in the field before it becomes an epidemic like SARS, bird flu H5N1, Ebola, or other viral outbreak. Adenoviral Epidemic Kerato-Conjunctivitis (EKC) is a severe pink eye disease that may lead to blurry vision in certain patients after recovery. Herpes simplex viral infections cause keratitis of the eye, and severe cases of infection may sometimes necessitate corneal transplants. The Company's ability to achieve progress in the drugs in development is dependent upon available financing and upon the Company's ability to raise capital. The Company will negotiate with TheraCour to obtain licenses for additional viral diseases as necessary. However, there can be no assurance that TheraCour will agree to license these materials to the Company, or to do so on terms that are favorable to the Company.

Research and Development Costs

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

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

Requirement for Additional Capital

As of September 30, 2013, we have a cash and cash equivalent balance of $19.2M that is more than sufficient our operations through more than two years or September 30, 2015, at the Company’s current rate of expenditure.

While we now have the necessary funds based on our current operations to last more than the next 24 months, we anticipate undertaking additional expenditures to accelerate our progress to regulatory submissions. With our current funds we believe that we currently have sufficient funding available to perform Toxicology Package studies, and additional animal efficacy studies, to move at least one of our drug candidates into an Investigational New Drug Application (“IND”) with the US FDA or a similar application with an international regulatory agency, and to conduct Phase I and Phase IIa human clinical trials of at least one of our drug candidates. In order to file an IND application, we also need to enable manufacturing of the drug under US FDA guidelines called cGMP. We estimate that a small, 1kg/batch, production facility would be sufficient to satisfy the Company’s near future needs for supporting the FluCide clinical studies, at least through Phase II. This small batch size requirement is based on the extremely high effectiveness of the influenza clinical candidate observed in animal studies, and therefore must be treated with caution. We intend to enter into lease negotiations with Inno-Haven, LLC (“Inno-Haven”) to enable cGMP manufacture of our drug products. Inno-Haven is managed by its member Dr. Anil R. Diwan, who is our President and Chairman. Inno-Haven raised financing from Dr. Diwan and others, including some earlier investors of NanoViricides, Inc., and is renovating an 18,000 square foot building in Shelton, CT, on a 4.2 acre lot. Dr. Diwan raised additional financing through the sale of his NanoViricides stock that he had obtained as a founder under a 10b5-1 plan that was concluded in October, 2011. Inno-Haven has also raised significant amounts of additional financing through affiliated and un-affiliated parties. A lease agreement has not been completed , but the parties have negotiated a Memorandum of Understanding which will form the basis of the lease terms.

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

We anticipate that we will incur the following additional expenses over the next 24 months.

1. Research and Development of $5,000,000: Planned costs for in-vivo and in-vitro studies for pan-influenza FluCide, Eye nanoviricide, HIVCide, HerpeCide, Dengue, and Ebola/Marburg and Rabies programs.

2. Corporate overhead of $1,500,000: This amount includes budgeted office salaries, legal, accounting, investor relations, public relations, and other costs expected to be incurred by being a public reporting company.

3. Capital costs of $1,500,000: This is the estimated cost for equipment and laboratory improvements.

4. Staffing costs of $1,500,000: This is the estimated cost of hiring additional scientific staff and consulting firms to assist with FDA compliance, material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, and other items related to FDA compliance, as required for development of necessary data for filing an Investigational New Drug with the United States Food and Drug Administration.

In addition the Company anticipates estimated capital costs of $4,000,000 for infrastructure and laboratory facilities for a scaled up research pilot production facility. The Company anticipates that some of this infrastructure funding will be obtained through real estate and industrial loans and related instruments. Further, we estimate approximately $5,000,000 will be needed to take our first drug candidate through Phase I and Phase IIa human clinical trials.

In March, 2010, the Company filed a Form S-3 Shelf Registration with the Securities and Exchange Commission (SEC) for the sale from time to time of up to $40 million of the Company’s securities. The registration statement became effective on April 29, 2010. As of September 30, 2012, the Company had drawn down $22,500,000 of the $40,000,000 S-3 Shelf Registration. In addition, on October 26, 2012, the Company has filed a new S-3 Shelf Registration Statement for $40,000,000 of common stock, preferred stock, warrants, debt securities and units comprised of those securities. Subsequently we combined the unused portion of the prior shelf registration for a total available Shelf Registration of $57,500,000. To date, the Company has drawn down $12,826,498 from this shelf registration. The Company anticipates it will have sufficient access to capital even if it decides to develop FluCide through Phase III on its own. The Company anticipates further draw downs on this S-3 Shelf Registration to fund its additional capital requirements and expenditures as required. If we are unable to obtain additional financing, our business plan will be significantly delayed.

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

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

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

Management intends to use capital and debt financing, as required, to fund the Company’s operations. Management also intends to pursue non-diluting funding sources such as government grants and contracts as well as licensing agreements with other pharmaceutical companies. There can be no assurance that the Company will be able to obtain the additional capital resources necessary to fund its anticipated obligations beyond September 30, 2015. The Company currently has no long term debt other than the convertible debentures as disclosed.

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4. CONTROLS AND PROCEDURES

(a)

Evaluation of disclosure controls and procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our chief executive and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. Disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management has designed our disclosure controls and procedures to provide reasonable assurance of achieving the desired control objectives.

As required by Exchange Act Rule 13a-15(b), we have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and principal financial officer, of the effectiveness of the design and operation of our management, including our principal executive and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2013.

(a) Based upon an evaluation of the effectiveness of disclosure controls and procedures, our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have concluded that as of the end of the period covered by the Annual Report on Form 10-K our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. The Company has established an independent Board of Directors comprising three independent members. Under this Board the Company has established an Audit Committee, a Compensation Committee, a Nomination Committee, and an Executive Committee. The Company has met or exceeded corporate governance standards of the NYSE MKT, a national exchange. Subsequent to the reporting period, on September 25, 2013, the Company’s common stock was listed and began trading on the NYSE MKT.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a- 15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is designed 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 in the United States of America (“GAAP”). We recognize that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2013. To evaluate the effectiveness of our internal control over financial reporting, management used the criteria described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”). Based on its evaluation under the Internal Control - Evaluation Framework, management concluded that our internal control over financial reporting was effective as of June 30, 2013.

Changes in Internal Control Over Financial Reporting

Other than as described above, there were no material changes in our internal control over financial reporting (as defined in Rule 13a- 15(f) under the Exchange Act) that occurred as of September 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

On or about July 15, 2013 the same Plaintiff that had filed the repetitive complaints in the Nevada action as set forth in the preceding paragraph (Yidam, Ltd. v. Eugene Seymour, Anil Diwan, and NanoViricides, Inc.)filed a Shareholder Derivative complaint with the United States District Court for the District of Colorado . The Plaintiff asserts the action is a shareholder derivative action and the Company is solely a nominal defendant. The Company maintains that it, as well as the individual defendants, Messrs. Seymour and Diwan, have not been served in the action. However, a default had been filed against the Company, which has been vacated. The Complaint alleges that the Company has failed to deliver information requested by the Plaintiff, the identical information the Plaintiff is seeking inspection of in the Nevada action, and that the individual defendants, Messrs. Seymour and Diwan, breached their fiduciary duties to the Company and caused it financial harm. The Plaintiff demands an order to inspect the Company’s records, an order revoking Messrs. Diwan and Seymour from the Board of Directors, equitable relief, and consequential and punitive damages. The Company believes these claims have no merit and the Company intends to defend this action vigorously. The Company intends to move the District Court to dismiss the action in its entirety. Though consequential and punitive damages are claimed, no facts have been submitted to support such claim. Management has determined that such claims are specious and not relevant to the Company and no accrual has been made in relation to this litigation.

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

In August, 2013, the Scientific Advisory Board (SAB) was granted warrants to purchase 21,500 shares of common stock at $5.17 per share expiring in August 2017. These warrants were valued at $106,050 and recorded as consulting expense.

The securities described above were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act and Rule 506 of Regulation D promulgated thereunder. The agreements executed in connection with this sale contain representations to support the Registrant’s reasonable belief that the Investor had access to information concerning the Registrant’s operations and financial condition, the Investor acquired the securities for their own account and not with a view to the distribution thereof in the absence of an effective registration statement or an applicable exemption from registration, and that the Investor are sophisticated within the meaning of Section 4(2) of the Securities Act and are “accredited investors” (as defined by Rule 501 under the Securities Act). In addition, the issuances did not involve any public offering; the Registrant made no solicitation in connection with the sale other than communications with the Investor; the Registrant obtained representations from the Investor regarding their investment intent, experience and sophistication; and the Investor either received or had access to adequate information about the Registrant in order to make an informed investment decision. The Company has not utilized an underwriter for an offering of its securities, except in the recent financing completed on September 10, 2013 with various investors, wherein Midtown Partners & Co., LLC and Chardan Capital Markets, LLC (collectively, the “Placement Agents”) were engaged as placement agents for the Company’s securities sold in the offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibit index

Exhibit

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

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

(b) Reports on Form 8-K. During the fiscal quarter ended September 30, 2013, the Company filed the following Current Reports on Form 8-K:

On July 2, 2013, the Company filed a Current Report on Form 8-K disclosing a press release regarding testing of the Registrant’s nanoviricides products by Public Health England (PHE).

On July 18, 2013, the Company filed a Current Report on Form 8-K disclosing the airing of an unsolicited interview of the Registrant’s Chief Executive Officer, Eugene Seymour, MD, MPH on The RedChip Money Report.

On July 19, 2013, the Company filed a Current Report on Form 8-K disclosing a press release regarding an unsolicited interview and certain statements made therein of the Registrant’s Chief Executive Officer, Eugene Seymour, MD, MPH on The RedChip Money Report.

On September 9, 2013, the Company filed a Current Report on Form 8-K disclosing the filing of a Certificate of Change to its Articles of Incorporation pursuant to Section 78.209 of the Nevada Revised Statutes for a reverse stock split on a 1 for 3.5 basis, effective September 10, 2013.

On September 13, 2013, the Company filed a Current Report on Form 8-K disclosing it has entered into a Securities Purchase Agreement with certain purchasers, relating to the offering and sale of units (“Units”) at the aggregate purchase price of $3.50 per Unit, consisting of one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and a warrant to purchase one share of Common Stock (“Warrant”), issuable upon exercise of the Warrant at the exercise price of $5.25 per share; as well as the sale of gross proceeds of $10,308,996 before estimated expenses of the Offering of approximately $668,540, which includes placement agent and attorneys’ fees. The Offering is made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-184626), which was declared effective by the Securities and Exchange Commission on December 21, 2012.

SIGNATURES

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

Dated: November 14, 2013

NANOVIRICIDES, INC.

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

/s/ Meeta Vyas
Name: Meeta Vyas
Title: Chief Financial Officer
(Chief Financial Officer)