UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended March 31, 20192020

OR

For the transition period from              to              

Commission file number 000-52091

GEOVAX LABS, INC.

(Exact name of Registrant as specified in its charter)

(678) 384-7220

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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

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

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

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

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

Yes ☐    No ☒

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

As of May 13, 2019, 610,0895, 2020, 13,819,101 shares of the Registrant’s common stock, $.001 par value, were issued and outstanding.

TABLE OF CONTENTS

Page

1.     Description of Business

GeoVax Labs, Inc. (“GeoVax” or the “Company”), is a clinical-stage biotechnology company developing human vaccines and immunotherapies against infectious diseases and cancers using a novel patented Modified Vaccinia Ankara (MVA) Virus-Like Particle (MVA-VLP)(VLP) vaccine platform.platform (GV-MVA-VLP^TM). In this platform, MVA, a large virus capable of carrying several vaccine antigens, expresses proteins that assemble into highly effective VLP immunogens in the person being vaccinated. The MVA-VLP virus replicates to high titers in approved avian cells for manufacturing but cannot productively replicate in mammalian cells. Therefore, the GeoVax MVA-VLP derived vaccines elicit durable immune responses in the host similar to a live attenuated virus, while providing the safety characteristics of a replication-defective vector.

Our current development programs are focused on preventive vaccines against novel coronavirus (COVID-19), Human Immunodeficiency Virus (HIV), Zika Virus, hemorrhagic fever viruses (Ebola, Sudan, Marburg, Lassa), and malaria, as well as therapeutic vaccines for chronic Hepatitis B infections and cancers. We believe our technology and vaccine development expertise are well-suited for a variety of human infectious diseases and we intend to pursue further expansion of our product pipeline.

Our corporate strategy is to improve the health toof patients worldwide by advancing our vaccine platform, using its unique capabilities to design and develop an array of products addressing unmet medical needs in the areas of infectious diseases and oncology. We aimintend to advance products through to human clinical testing, and to seek partnership or licensing arrangements for achieving regulatory approval and commercialization. We also leverage third party resources through government, academic and corporate research collaborations and partnerships for preclinical and clinical testing with multiple government, academic and corporate entities.testing.

Certain of our vaccine development activities have been, and continue to be, financially supported by the U.S. government. This support has been both in the form of research grants and contracts awarded directly to us, as well as indirect support for the conduct of preclinical animal studies and human clinical trials.

We operate in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products require approval from, and are subject to, ongoing oversight by the Food and Drug Administration (FDA) in the United States, by the European Medicines Agency (EMA) in the European Union, and by comparable agencies in other countries. Obtaining approval for a new pharmaceutical product is never certain, may take many years and often involves expenditure of substantial resources. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with one or more potential strategic partners.

GeoVax is incorporated under the laws of the State of Delaware and our principal offices are located in the metropolitan Atlanta, Georgia area.

2.     Basis of Presentation

The accompanying condensed consolidated financial statements at March 31, 20192020 and for the three-month periods ended March 31, 20192020 and 20182019 are unaudited, but include all adjustments, consisting of normal recurring entries, which we believe to be necessary for a fair presentation of the dates and periods presented. Interim results are not necessarily indicative of results for a full year. The financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.2019. We expect our operating results to fluctuate for the foreseeable future; therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods.

As described in Note 12,9, effective April 30, 2019, we enacted a one-for-five hundred reverse stock split of our common stock.stock, and effective January 21, 2020, we further enacted a one-for-two thousand reverse split. The accompanying financial statements, and all share and per share information contained herein, have been retroactively restated to reflect the reverse stock split.splits.

Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of the financial statements. We are devoting substantially all of our present efforts to research and development of our vaccine candidates. We have funded our activities to date from government grants and clinical trial assistance, and from sales of our equity securities. We will continue to require substantial funds to continue these activities.

We believe that our existing cash resources together with our government and collaborative funding commitments, and equity funding commitments discussed in Note 9 will be sufficient to continue our planned operations into the third quarter of 2019.2020. Due to our history of operating losses and our continuing need for capital to conduct our research and development activities, there is substantial doubt concerning our ability to operate as a going concern beyond that date. We are currently exploring sources of capital through additional government grants and corporate collaborations. We also intend to secure additional funds through sales of our equity securities or by other means. Management believes that we will be successful in securing the additional capital required to continue the Company’s planned operations, but that our plans do not fully alleviate the substantial doubt about the Company’s ability to operate as a going concern. Additional funding may not be available on favorable terms or at all. If we fail to obtain additional capital when needed, we will be required to delay, scale back, or eliminate some or all of our research and development programs as well as reduce our general and administrative expenses.

3.     Significant Accounting Policies and Recent Accounting Pronouncements

We disclosed in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 20182019 those accounting policies that we consider significant in determining our results of operations and financial position. Other than as described below, there have been no material changes to, or in the application of, the accounting policies previously identified and described in the Form 10-K.

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases (ASU 2016-02). ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to classify leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to prior guidance for operating leases. We adopted ASU 2016-02 effective January 1, 2019; such adoption had no material impact on our financial statements, given that the noncancelable term of our current lease is less than 12 months (see Note 8).

There have been no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2019,2020, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018,2019, which we expect to have a material impact on our financial statements.

4.     Basic and Diluted Loss Per Common Share

Basic netand diluted loss per common share isare computed usingbased on the weighted-averageweighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of common shares and potentially dilutive common share equivalents outstanding during the period. Potentially dilutive commonoutstanding. Common share equivalents consist of common shares issuable upon conversion of convertible preferred stock, and upon exercise of stock options and stock purchase warrants. CommonAll common share equivalents which potentially could dilute basic earningsare excluded from the computation of diluted loss per share insince the future, andeffect would be anti-dilutive. The weighted average number of common share equivalents which were excluded from the computation of diluted loss per share, as the effect would be anti-dilutive, totaled approximately 589,000970,571 and 446,000295 shares at March 31, 2020 and 2019, and 2018, respectively. See Note 9 for more information concerning our outstanding common share equivalents at March 31, 2020 that could potentially dilute earnings per share in the future.

5.     Property and Equipment

Property and equipment as shown on the accompanying Condensed Consolidated Balance Sheets is composed of the following as of March 31, 20192020 and December 31, 2018:2019:

6.     Accrued Expenses

Accrued expenses as shown on the accompanying Condensed Consolidated Balance Sheets is composed of the following as of March 31, 20192020 and December 31, 2018:2019:

7.     Notes Payable

On February 28, 2018, we entered into a Senior Note Purchase Agreement with Georgia Research Alliance, Inc. (GRA) pursuant to which we issued a five-year Senior Promissory Note (the “GRA Note”) to GRA in exchange for $50,000. The GRA Note bears an annual interest rate of 5%, payable monthly, withmonthly. Future principal repayments beginning in the second year. Principal repayments are expected to be $8,333$8,964 for the remainder of 2019, $12,5002020 $12,487 in 2020, 2021, and$13,126 in 2022, and $2,083$2,252 in 2023. In connection with the GRA Note, we also issued to GRA a five-year warrant to purchase 358 shares of our common stock. Interest expense related to the GRA Note for the three-month periods ended March 31, 2020 and 2019 was $485 and 2018 was $621, and $208, respectively.

On December 27, 2018, we issued short-term non-interest-bearing Term Promissory Notes (the “Term Notes”) to two current investors in exchange for an aggregate of $250,000. In connection with the Term Notes, we also issued to the investors three-year warrants to purchase an aggregate of 20,000 shares of our common stock. In February 2019, the Term Notes were cancelled in exchange for shares of our convertible preferred stock (see Note 9).

8.     Commitments

Lease Agreement

We lease approximately 8,400 square feet of office and laboratory space pursuant to an operating lease which expires on December 31, 2019, with annual extension options through December 31, 2022. Rent expense for the for the three-month periods ended March 31, 2020 and 2019 was $41,539 and 2018 was $40,316, and $39,136, respectively. Future minimum lease payments total $120,949 for the remainder of 2019. Our current intention is to exercise our option to extend$124,616 in 2020, $171,213 in 2021 and $176,356 in 2022, although the lease may be terminated at least for the subsequent one-year renewal period, subject to our landlord’s right to cancel the extension period 90any time by either party with ninety days prior to its commencement.written notice.

Other Commitments

In the normal course of business, we enter into various firm purchase commitments related to production and testing of our vaccine, conduct of research studies, and other activities. As of March 31, 2019,2020, there are approximately $487,000$539,000 of unrecorded outstanding purchase commitments to our vendors and subcontractors, all of which we expect will be due in 2019.2020. We expect this entire amount to be reimbursable to us pursuant to existing government grants.

9.     Stockholders’ Equity

Series B Preferred Stock

AsSummary -- We are authorized to issue up to 10,000,000 shares of our Preferred Stock, $.01 par value, which may be issued in one or more series. The table below presents our issued and outstanding series of preferred stock as of March 31, 2019, there2020 and December 31, 2019. Each series of our outstanding preferred stock has a stated value of $1,000 per share. Further details concerning each series of preferred stock, and the changes in each series during the three months ended March 31, 2020 are 100 shares of ourdiscussed in the sections that follow the table.

Series B Preferred Stock -- Our Series B Convertible Preferred Stock (“Series B Preferred Stock”) outstanding., has rights and privileges as set forth in the pertinent Certificate of Designation of Preferences, Rights and Limitations, including a liquidation preference equal to the stated value per share. The Series B Preferred Stock may be convertedhas no voting rights and is not entitled to a dividend. As of March 31, 2020, there were 100 shares of Series B Preferred Stock outstanding, convertible at any time at the option of the holder into shares of our common stock at a fixed conversion price of $175$350,000 per common share. There were no transactions involving our Series B Preferred Stock during the three months ended March 31, 2020.

Series H Preferred Stock –Our Series H Convertible Preferred Stock (“Series H Preferred Stock”) has rights and privileges as set forth in the pertinent Certificate of Designation of Preferences, Rights and Limitations, including a liquidation preference equal to the stated value per share. The Series H Preferred Stock has no voting rights and is not entitled to a dividend. During the three months ended March 31, 2019,2020, 1,686 shares of Series H Preferred Stock were converted into 9,393,937 shares of our common stock. As of March 31, 2020, there wereare no conversions or other transactions involving ourshares of Series BH Preferred Stock.Stock outstanding.

Series FI Preferred Stock –

On February 18, 2019, we entered into Exchange Agreements (the “Exchange Agreements”) with holders of ourOur Series C and Series E Convertible Preferred Stock, pursuant to which the holders exchanged all shares of Series C and Series E Preferred Stock held by them for an aggregate of 2,763 shares of Series FI Convertible Preferred Stock (“Series FI Preferred Stock”). Each share has rights and privileges as set forth in the pertinent Certificate of Series F Preferred Stock is entitled toDesignation of Preferences, Rights and Limitations, including a liquidation preference equal to its $1,000the stated value per share. The Series I Preferred Stock has no voting rights and is not entitled to a dividend. During the three months ended March 31, 2020, 700 shares of Series H Preferred Stock were converted into 4,087,412 shares of our common stock. As of March 31, 2020, there are no shares of Series I Preferred Stock outstanding

Series J Preferred Stock – On January 24, 2020, we entered into a Securities Purchase Agreement with the purchasers identified therein providing for the issuance and sale to the Purchasers of an aggregate of 300 shares of our Series J Convertible Preferred Stock (“Series G Preferred Stock”) for gross proceeds of $300,000. Our Series J Preferred Stock has rights and privileges as set forth in the pertinent Certificate of Designation of Preferences, Rights and Limitations, including a liquidation preference equal to the stated value per share. The Series J Preferred Stock has no voting rights and is not entitled to a dividend. The Series FJ Preferred Stock is convertible at any time at the option of the holders into shares of our common stock, at a conversion price equal to the lesser of (i) $7.50$2.00 per share and (ii) 90%80% of the volume weighted average price of the common stock during the ten trading days immediately preceding the delivery of a notice of conversion. The Series FJ Preferred Stock contains price adjustment provisions, which may, under certain circumstances reduce the conversion price to match if we sell or grant options to purchase, including rights to reprice, our common stock or common stock equivalents at a price lower than the then conversion price of the Series FJ Preferred Stock. During the three months ended March 31, 2020, there were no conversions of Series J Preferred Stock and 300 shares are outstanding as of March 31, 2020.

Common Stock

During

Reverse Stock Split – Following approval by our shareholders at a meeting held on January and February 2019 (prior to the exchange discussed above), the holders converted 587 shares of Series C Preferred Stock into 78,280 shares3, 2020, on January 21, 2020, we effected a one-for-two thousand reverse split of our common stock. During March 2019 (subsequentstock by the filing of an amendment to our certificate of incorporation with the exchange),State of Delaware.

As discussed under “Preferred Stock” above, during the holders converted 180 shares of Series F Preferred Stock into 40,000 shares of our common stock. As ofthree months ended March 31, 2019, there are no shares of our Series C or Series E Preferred Stock outstanding, and 2,583 shares of our Series F Preferred Stock outstanding.

Series G Preferred Stock

On February 25, 2019,2020, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the purchasers identified therein (the “Purchasers”) providing for sale to the Purchasers of an aggregate of up to 1,000 shares of our Series G Convertible Preferred Stock (“Series G Preferred Stock”) and related warrants for gross proceeds of up to $1.0 million, to be funded at up to three different closings. Each share of Series G Preferred Stock is entitled to a liquidation preference equal to its $1,000 stated value, has no voting rights, and is not entitled to a dividend. The Series G Preferred Stock is convertible at any time at the option of the holders intoissued 13,481,349 shares of our common stock at a conversion price equalpursuant to the lesser of (i) $7.50 per shareconversions our Series H and (ii) 90% of the volume weighted average price of the common stock immediately preceding the delivery of a notice of conversion. The Series G Preferred Stock contains price adjustment provisions, which may, under certain circumstances reduce the conversion price to match if we sell or grant options to purchase, including rights to reprice, our common stock or common stock equivalents at a price lower than the then conversion price of the Series GI Preferred Stock.

AtDuring the first closing, which occurred on February 26, 2019,three months ended March 31, 2020, we issued 500 shares of Series G Preferred Stock in exchange for the payment by the Purchasers of $250,000 in the aggregate, plus the cancellation of Term Notes held by the Purchasers (see Note 7) in the amount of $250,000. At the first closing we also issued the Purchasers Series I Warrants to purchase an aggregate of 33,33410,417 shares of our common stock. stock pursuant to a consulting agreement for which we recognized $6,000 of stock-based compensation expense.

Stock Options

During the three months ended March 31, 2020, there were no transactions involving our stock option plan. As a result of the reverse stock splits enacted in April 2019 and in January 2020, we have made adjustments and retroactive restatements to all of our outstanding stock options such that the balances as of March 31, 2020 are negligible. Therefore, there was no stock-based compensation expense related to our stock option plan recognized in the consolidated statement of operations for the three months ended March 31, 2020.

Stock Purchase Warrants

The following table summarizes our stock purchase warrants have an exercise priceoutstanding as of $7.50 per share, are exercisable six months fromMarch 31, 2020:

All of the issuance date, and have a term of exercise equal to five years from the date they first become exercisable. Theoutstanding warrants contain anti-dilution and price adjustment provisions, which may, under certain circumstances reduce the exercise price to match if we sell or grant options to purchase, including rights to reprice, our common stock or common stock equivalents at a price lower than the then exercise price of the warrants; inwarrants. Such provisions as to the eventSeries G and Series H Warrants apply to the exercise price only, with no effect on the number of such adjustment,shares subject to the warrants. Such provisions as to the Series I Warrants apply to both the exercise price and the number of shares subject to the warrants, so that the number of warrants will also increase sobe increased such that the aggregate exercise price, remainsafter taking into account the same for each warrant.

Within 50decrease in the exercise price, will be equal to 60 days after the first closing, we mayaggregate exercise price prior to the rightadjustment. The Series H Warrants have an additional price adjustment provision requiring a similar adjustment to sell the Purchasers an aggregateexercise price and number of up to $250,000 of Series G Preferred Stock and related warrants at the second closing. Within 110 to120 days after the first closing, we may exercise the right to sell the Purchasers an aggregate of up to $250,000 of Series G Preferred Stock and related warrants at the third closing. At the second and third closings, assuming the sale of all of the Series G Preferred Stock that may be sold at those times, the Purchasers will receive aggregate additional Series I Warrants to purchase up to 66,668 sharesfollowing a reverse stock split of our common stock.

Duringstock; such adjustments occurred in connection with our April 30, 2019 reverse stock split and our January 21, 2020 reverse stock split, which is reflected in the three months ended March 31, 2019, there were no conversions or other transactions involving our Series G Preferred Stock.

Common Stock Transactions

As discussed above, during the three months ended March 31, 2019, we issued 118,280 shares of our common stock pursuant to conversions our Series C and Series F Preferred Stock.

Stock Options

During the three months ended March 31, 2019, there were no transactions involving our stock option plans. As of March 31, 2019, there are 29,441 stock options outstanding ($53.19/share weighted-average exercise price), 13,585 of which are exercisable ($93.92/share weighted-average exercise price).table above.

Stock-Based Compensation Expense

Stock-based compensation expense related to our stock option plans was $26,652$-0- and $23,978$26,652 during the three-month periods ended March 31, 20192020 and 2018,2019, respectively. Stock-based compensation expense related to stock options is recognized on a straight-line basis over the requisite service period for the award and is allocated to research and development expense or general and administrative expense based upon the related employee classification. As of March 31, 2019,2020, there was $183,731 ofno unrecognized compensation expense related to stock options, which we expect to recognize over a weighted average period of 2.0 years.options.

Additionally, during the three-month periods ended March 31, 20192020 and 20182019 we recorded stock-based compensation expense of $126,572$6,000 and $28,571,$126,572, respectively, associated with common stock issued for consulting and financial advisory services. As of March 31, 2019, there was $72,509 of unrecognized stock-based compensation expense associated with these arrangements, which we expect to recognize during the second quarter of 2019.

10.     Income Taxes

Because of our historically significant net operating losses, we have not paid income taxes since inception. We maintain deferred tax assets that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. These deferred tax assets are comprised primarily of net operating loss carryforwards and also include amounts relating to nonqualified stock options and research and development credits. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of our future profitability and our ability to utilize the deferred tax assets. Utilization of operating losses and credits will be subject to substantial annual limitations due to ownership change provisions of Section 382 of the Internal Revenue Code. The annual limitation will result in the expiration of net operating losses and credits before utilization.

11.     Grants and Collaboration Revenue

We receive payments from government entities under our grants from the National Institute of Allergy and Infectious Diseases (NIAID) and from the U.S. Department of Defense in support of our vaccine research and development efforts. We record revenue associated with government grants as the reimbursable costs are incurred. During the three-month periods ended March 31, 20192020 and 2018,2019, we recorded $354,319$654,021 and $216,299,$354,319, respectively, of revenues associated with these grants. As of March 31, 2019,2020, there is an aggregate of $2,525,419$606,944 in approved grant funds available for use during 2019 and 2020.

During the three-month periods ended March 31, 20192020 and 2018,2019, we recorded $9,913$61,956 and $5,000,$9,913, respectively, of revenues associated with research collaboration agreements with several third parties.

12.     Subsequent Events

Preferred Stock TransactionsCARES Act Paycheck Protection Program Loan

On April 26, 2019,17, 2020, we received $250,000 from the sale of 250 shares of our Series G Preferred Stock (see Note 9) and we issued additional Series I Warrants to purchase 33,334 shares of our common stock. During May 2019, holders of our preferred stock converted 94 shares of our Series F Preferred Stock into 53,600 shares of our common stock.

Reverse Stock Split

On April 30, 2019, we effected a one-for-five hundred reverse split of our common stock$170,200 bank loan backed by the filingUnited States Small Business Administration pursuant to the Paycheck Protection Program (PPP) provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan bears an amendmentannual interest rate of one percent and is due April 17, 2022. No payments of principal or interest will be due until 180 days after the disbursement date. Commencing November 17, 2020, monthly payments of $9,578.16 will be due. Amounts due may be prepaid without penalty. We may apply to our certificate of incorporation with the State of Delaware. All share and per sharelender to have the principal amount reduced upon providing qualifying information in our condensed consolidated financial statements and notes that relateregarding eligible expenses to our common stock has been retroactively restated to reflect the reverse stock split.lender.