Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended January 31, 20192020

or

For the transition period from __________ to __________

Commission file number333-68008

PHARMACYTE BIOTECH, INC.

(Exact name of registrant as specified in its charter)

23046 Avenida de la Carlota, Suite 600, Laguna Hills, CA 92653

(Address of principal executive offices)

(917) 595-2850

(Registrant’s telephone number, including area code)

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. Yesx ☒ Noo ☐

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 (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yesx ☒ Noo ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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. (Check one)

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.o ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ Nox ☒

As of March 14, 2019,13, 2020 the registrant had 1,126,904,5051,481,471,172 outstanding shares of common stock, with a par value of $0.0001 per share.

PHARMACYTE BIOTECH, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 20192020

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

PHARMACYTE BIOTECH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

See accompanying Notes to Condensed Consolidated Financial Statements.

PHARMACYTE BIOTECH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – NATURE OF BUSINESS

PharmaCyte Biotech, Inc. (“Company”) is a biotechnology company focused on developing and preparing to commercialize cellular therapies for cancercertain solid tumor cancers and diabetes based upon a proprietary cellulose-based live cell encapsulation technology known as “Cell-in-a-Box^®.” The Company intends to use the Cell-in-a-Box^®technology is intended to be used as a platform upon which treatmentstherapies for several types of cancer, including locally advanced, inoperable, non-metastatic pancreatic cancer (“LAPC”), and Type 1 and insulin-dependent Type 2 diabetes will beare being developed.

The Company is developing therapies for pancreatic and other solid tumor cancers involvingcancerous tumors by using genetically engineered live human cells that are capable of converting a cancer prodrug into its cancer-killing form, by encapsulating those cells using the encapsulation of live cells placedCell-in-a-Box^®technology and placing those capsules in the bodyblood supply as close as possible to enable the activationcancerous tumor. In this way, when the cancer prodrug is administered to a patient with a particular type of cancer-killing drugs atcancer that may be affected by the sourceactive form of the cancer. prodrug, the killing of the patient’s tumor may be optimized.

The Company is alsohas been examining ways to exploit the benefits of the Cell-in-a-Box^® encapsulation technology to develop therapies for cancer that involve prodrugs based upon certain constituents of theCannabis plant; these constituents are of the class of compounds known as “cannabinoids.” Until the IND involving LAPC has been submitted to the FDA, the Company will not be spending any further resources developing this program.

In addition, the Company has been involved in preclinical studies to determine if its cancer therapy can slow the production and/or accumulation of malignant ascites fluid in the abdomen that often accompanies the growth of several types of abdominal cancers. Until the IND involving LAPC has been submitted to the FDA, the Company will not be spending any further resources developing this program.

Finally, the Company has been developing a therapy for Type 1 diabetes and insulin-dependent Type 2 diabetes based upon the encapsulation using the Cell-in-a-Box^® technology, of a human liver cell line genetically engineered to produce, store and secrete insulin at levels in proportion to the levels of blood sugar in the human body. The Company is also working on an alternative route to bring a biological treatment for diabetes into the clinic. The Company is exploring the possibility of encapsulating human insulin-producing isletstem cells or stemand islet cells and transplanting them into a diabetic patient. In addition, the Company is examining ways to exploit the benefitsAll three types of cells will be encapsulated using the Cell-in-a-Box^® encapsulation technology. Each method is designed to function as a bio-artificial pancreas for purposes of insulin production. Until the IND involving LAPC has been submitted to the FDA, the Company will not be spending any further resources developing this program.

The Cell-in-a-Box^® capsules are largely composed of cellulose (cotton) and are bio-inert in the human body. The Cell-in-a-Box encapsulation technology potentially enables genetically engineered live human cells to develop therapies for cancer based uponbe used as miniature factories. The technology results in the constituentsformation of pin-head sized cellulose-based porous capsules in which genetically modified live human cells can be encapsulated and maintained. They are protected from environmental challenges, such as the sheer forces associated with bioreactors, passage through catheters and needles, etc., enabling greater growth and production of theCannabis plant, known as “Cannabinoids.” end-product.

Cancer Therapy

Targeted Chemotherapy

Targeted Chemotherapy

The Company is usingseeking to utilize the Cell-in-a-Box^®encapsulation technology to develop a therapy for certain solid cancerous tumors through a form of targeted chemotherapy. For pancreatic cancer, the Company is encapsulating genetically engineered live human cells that produce an enzyme designed to convert the prodrug ifosfamide into its cancer-killing form. The capsules containing these cells will be implanted in a patient in the blood supply to the pancreas as near as possible to the pancreas tumor.tumor in the pancreas. The cancer prodrug ifosfamide will then be given intravenously at one-third the normal dose. In this way, ita very low dose (1 g/m²). It is believed that the ifosfamide will be converted at the site of the tumor in addition to the liver where it is normally converted. The Company believes placement of the Cell-in-a-Box^®capsules nearin close proximity to the tumor enables the production of optimal concentrations of the “cancer-killing” form of ifosfamide at the site of the tumor. The cancer-killing metabolite of ifosfamide has a short half-life, which the Company believes will result in little to no collateral damage to other organs inside effects from the body.chemotherapy.

Pancreatic Cancer Therapy for LAPC

The Company believes that aA critical unmet medical need exists for patients with locally advanced, inoperable non-metastatic pancreatic cancer (“LAPC”)LAPC whose tumor in the pancreas tumor no longer responds after 4-6 months of treatment with either Abraxane^® plus gemcitabine or the 4-drug combination known as FOLFIRINOX (both combinations are the current standards of care)care for pancreatic cancer). The Company believes thatWe believe these patients have no effective treatment alternative once their tumor no longer respondstumors stop responding to these therapies. Two of the most commonly used treatments for such patients are 5-fluorouiracil (“5-FU”) or capecitabine (a prodrug of 5-FU) plus radiation (chemoradiation therapy). Both treatments are only marginally effective in treating the tumor in the pancreas and result in serious side effects. More recently, radiation treatment alone is being used at some cancer centers in the United States (“U.S.”). The Company is developing a therapy comprised of Cell-in-a-Box^® encapsulated live cells implanted nearas close as possible to the cancerous tumor in a patient’s pancreas tumor followed by treatment with low doses of the cancer prodrug ifosfamide.ifosfamide administered intravenously. The Company believes that its treatment can serve as a “consolidation therapy” with the current standards of care for patients with LAPC and thus address this critical unmet medical need.

The Company is currently working on an Investigational New Drug Application (“IND”)Subject to submit toapproval by the U.S. Food and Drug Administration (“FDA”) to begin a clinical trial with patients who have LAPC. Subject to the FDA’s acceptance of the IND following submission to the FDA,, the Company plans to commence a clinical trial involving patients with LAPC whose tumors have ceased to respond to either Abraxane^® plus gemcitabine or FOLFIRINOX after 4-6 months of treatment. The Company had a Pre-Investigational New Drug Application meeting (“Pre-IND meeting”) with the Center for Biologics Evaluation and Research of the FDA (“CBER”) in January 2017. At that Pre-IND meeting, the FDA communicated its agreement with certain aspects of the Company’s clinical development plan, charged the Company with completing numerous tasks and provided the Company with the guidance on the tasks the Company believes is needed to complete a successful IND, although no assurance can be given whether the FDA will approve the Company’s IND for LAPC once it is submitted to the FDA. Since the pre-IND meeting, the Company has completed the Cell-in-a-Box^®engineering runs and manufacturing production runs along with most of the studies intended to provide data necessary for the completion of the Company’s IND for LAPC.

The Company is continuing to work on projects related to its planned IND submission for LAPC. Among other things, this work includes completion of each Module within the IND, the Investigator’s Brochure, the Pharmacy Manual, the Protocol for the LAPC clinical trial, a container closure integrity test of the hypothesis articulated above.Company’s clinical trial product that will be conducted over the course of two years, a pyrogenicity test, preparation of the angiography guidelines for implantation of the encapsulated cells for use in the LAPC clinical trial and a two-year stability study of the Company’s clinical trial product. The work also includes preparation of a Drug Master File, drafting change history related to the manufacturing process that existed when the preclinical studies were conducted compared to the current manufacturing process for the Company’s clinical trial would take placeproduct and publication of the IND in concert with the Company’s U.S. Agent for the FDA. The Company will need to raise additional funds to complete preparation of its IND submission to the FDA for the treatment of LAPC.

The plan is to initially conduct the LAPC trial in the U.S. with possible study sites in Europe.

Europe at a later date.

Malignant Ascites FluidCannabinoid Therapy to Treat Cancer

The Company plans to use cannabinoids, constituents of theCannabis plant, to develop therapies for cancer, with the initial target of brain cancer. The Company is focusing on developing specific therapies based on carefully chosen molecules rather than using complexCannabis extracts.

To further itsCannabis therapy development plans, the Company entered a Research Agreement with the University of Northern Colorado. The initial goal of the research was to develop methods for the identification, separation and quantification of constituents ofCannabis (some of which are prodrugs) that may be used in combination with the Cell-in-a-Box^®technology to treat cancer. This has been accomplished.

Further research has been conducted to identify the appropriate cell type that can convert the selected cannabinoid prodrugs into metabolites with anticancer activity. Once identified, the genetically modified cells that will produce the appropriate enzyme to convert the selected prodrugs will be encapsulated using the Company’s Cell-in-a-Box^® technology. The encapsulated cells and cannabinoid prodrugs identified by these studies will then be combined and used for future studies to evaluate their anticancer effectiveness.

Malignant Ascites Fluid Therapy

The Company has also been developing a therapy to delay the production and accumulation of malignant ascites fluid that results from many types of abdominal tumors. Malignant ascites fluid is secreted by abdominal tumors into the abdomen after the tumors have reached a certain stage of growth. This fluid contains cancer cells that can seed and form new tumors throughout the abdomen. This fluid accumulates in the abdominal cavity, causing swelling of the abdomen, severe breathing difficulties and extreme pain.

Once an abdominal tumor reaches a certain stage of development, it produces malignant ascites in the abdominal cavity. Malignant ascites fluid must be removed by paracentesis (a clinical procedure in which a needle is inserted into the peritoneal cavity and ascites fluid is removed) on a periodic basis. This procedure is painful and costly. There is no therapy that the Company is aware of that prevents or delays the production and accumulation of malignant ascites fluid.

The Company has been involved in a series of preclinical studies conducted by Translational Drug Development (“TD2”), an early stage CRO specializing in oncology, to determine if the combination of Cell-in-a-Box^® encapsulated cells plus ifosfamide therapy can delay the production and accumulation of malignant ascites fluid. The data from the TD2 studies indicated that the treatment might play a role in the rate of malignant ascites fluid production and accumulation, but the conclusions were difficult to interpret with certainty. As a result, the Company plans to conduct another preclinical study in Germany to determine if its conclusions from the TD2 studies are valid. If the preclinicalthis European study in Germany is deemed successful and the Company receives approval to do so from the FDA,shows positive results, the Company plans to seek approval from the FDA to conduct a Phase 1 clinical trial in the U.S. to determine if its therapy for pancreatic cancer can prevent or delay the production and accumulation of malignant ascites fluid. It also plans to have additional study sites in Europe if the Company receives approval to do so from the European Medicines Agency.

Diabetes Therapy

Bio-Artificial Pancreas for Diabetes

The Company plans to develop a therapy for Type 1 diabetes and insulin-dependent Type 2 diabetes. The Company is attempting to develophas been developing a therapy that involves encapsulation of human liver cells that have been genetically engineered to produce, store and release insulin on demand at levels in proportion to the levels of blood sugar (glucose) in the human body. The Company is also exploring the possibility of encapsulating human-insulin producingusing genetically modified stem cells and natural, human insulin-producing cells (beta islet cells) and/or insulin-producing stem cells.to treat Type 1 diabetes and insulin-dependent Type 2 diabetes. All three types of cells will be encapsulated using the Cell-in-a-Box^® encapsulation technology. The goal for the three approaches is to develop a bio-artificial pancreas for purposes of insulin production for diabetics who are insulin dependent. After appropriate animal testing has been completed successfully, completed, the Company willplans to seek the FDA’s approval to transplant encapsulated insulin-producing cells into diabetic patients. The goal for these approaches is to develop a bio-artificial pancreas for purposes of insulin production for diabetics who are insulin dependent.

Cannabis Therapy

Cannabinoids

The Company plans to use Cannabinoids (chemical constituents of theCannabis plant) to develop therapies for cancer, with the initial target being brain cancer. The Company is focusing on developing specific therapies based on carefully chosen molecules rather than using complexCannabisextracts. Targeted cannabinoid-based chemotherapy utilizing the Cell-in-a-Box^® technology offers a “green” approach to treating solid-tumor malignancies. Here, the methodology of placing the encapsulated cells in close proximity to the tumor so that a cancer prodrug can be activated near the site of the cancerous tumor mimics the Company’s efforts with LAPC except that in this case the cancer prodrug will be Cannabinoid-derived.

To further itsCannabis therapy development plans, the Company entered into a Research Agreement with the University of Northern Colorado. The initial goal of the ongoing research was to develop methods for the identification, separation and quantification of constituents ofCannabis (some of which are prodrugs) that may be used in combination with the Cell-in-a-Box^®technology to treat cancer; this has been accomplished. Subsequent studies have been undertaken to identify the appropriate cell type that can convert the selected Cannabinoid prodrugs into metabolites with anticancer activity. Once identified, the genetically modified cells that will produce the appropriate enzyme to convert that prodrug will be encapsulated using the Cell-in-a-Box^® technology. The encapsulated cells and Cannabinoid prodrugs identified by these studies will then be combined and used for future studies to evaluate their anticancer effectiveness.insulin-dependent.

Company Background and Material Agreements

The Company is a Nevada corporation incorporated in 1996. In 2013, the Company restructured its operations to focus on biotechnology. The restructuring resulted in the Company focusing all its efforts upon the development of a novel, effective and safe way to treat various types of cancer and diabetes. On January 6, 2015, the Company changed its name from Nuvilex, Inc. to PharmaCyte Biotech, Inc. to reflect the nature of its business.business in the biotechnology sector.

In 2011, the Company entered into an Asset Purchase Agreement (“SG Austria APA”) with SG Austria Private Limited (“SG Austria APA”Austria”) to purchase 100% of the assets and liabilities of SG Austria Private Limited (“SG Austria”).Austria. Austrianova Singapore Pte. Ltd. (“Austrianova”) and Bio Blue Bird AG (“Bio Blue Bird”), then wholly-owned subsidiaries of SG Austria, were to become wholly-owned subsidiaries of the Company on the condition that the Company pay SG Austria $2.5 million and 100,000,000 shares of the Company’s common stock of the Company’s common stock.(“Common Stock”). The Company was to receive 100,000 shares of common stock of Austrianova and nine bearer shares of Bio Blue Bird representing 100% of the ownership of Bio Blue Bird.

Through two addenda to the SG Austria APA, the closing date of the SG Austria APA was extended twice by agreement between the parties.

In June 2013, the Company and SG Austria entered a Third Addendum to the SG Austria APA (“Third Addendum”). The Third Addendum changed materially the transaction contemplated by the SG Austria APA. Under the Third Addendum, the Company acquired 100% of the equity interests in Bio Blue Bird and received a 14.5% equity interest in SG Austria. In addition, the Company received nine bearer shares of Bio Blue Bird to reflect its 100% ownership of Bio Blue Bird. The Company paid: (i) $500,000 to retire all outstanding debt of Bio Blue Bird; and (ii) $1.0 million to SG Austria. The Company also paid SG Austria $1,572,193 in exchange for the 14.5% equity interest inof SG Austria. The Third Addendum required SG Austria to return the 100,000,000 shares of common stockCommon Stock held by SG Austria and for the Company to return the 100,000 shares of common stock of Austrianova held by the Company.Company held.

Effective as of the same date of the Third Addendum, the parties entered into a Clarification Agreement to the Third Addendum (“Clarification Agreement”) to clarify and include certain language that was inadvertently left out ofomitted from the Third Addendum. Among other things, the Clarification Agreement confirmed that the Third Addendum granted the Company an exclusive, worldwide license to use, with a right to sublicense, the Cell-in-a-Box^® encapsulation technology for the development of treatments for cancer and use of Austrianova’s Cell-in-a-Box^®trademark and its associated technology.

With respect to Bio Blue Bird, Bavarian Nordic A/S (“Bavarian Nordic”) and GSF-Forschungszentrum für Umwelt u. Gesundheit GmbH (collectively, “Bavarian Nordic/GSF”) and Bio Blue Bird entered into the Bavarian Nordic/GSF License Agreement in July 2005 whereby Bio Blue Bird was granted a non-exclusive license to further develop, make or have made (including services under contract for Bio Blue Bird or a sub-licensee), by Contract Manufacturing Organizations, Contract Research Organizations, Consultants, Logistics Companies or others,products to treat cancer, obtain marketing approval, sell and offer for sale those products using the clinical data generated from the second pancreatic cancer clinical trial which contained proprietary information from the 1^st Interim Analysis of the trial that used the cells and capsules developed by Bavarian Nordic/GSF (then known as “CapCells”) or otherwise use the. The licensed patent rights related thereto into this information and technology pertain to the countries in which patents had been granted.granted to Bavarian Nordic/GSF.

Bavarian Nordic/GSF and Bio Blue Bird amended the Bavarian Nordic License Agreement in December 2006 to reflect: (i) the license granted was exclusive; (ii) the royalty rate was increased from 3% to 4.5%; (iii) Bio Blue Bird assumed the patent prosecution expenses;expenses for the existing patents; and (iv) it was made clear that the license wouldwill survive as a license granted by one of the licensors if the other licensor rejectedrejects performance under the Bavarian Nordic License Agreement due to any actions or declarations of insolvency.

In June 2013, the Company acquired from Austrianova an exclusive, worldwide license to use the Cell-in-a-Box^® technology and trademark for the development of a therapy for Type 1 and insulin-dependent Type 2 diabetes (“Diabetes Licensing Agreement”).

In October 2014, the Company entered into an exclusive, worldwide license agreement (“Melligen Cell License Agreement”) with the University of Technology Sydney (“UTS”) in Australia to use insulin-producing genetically engineered human liver cells developed by UTS to treat Type 1 diabetes and insulin-dependent Type 2 diabetes. These cells, named “Melligen,” were testedThe Company plans to develop a therapy for diabetes by UTS in mice and shown to produce insulin in direct proportion toencapsulating the amount of glucose in their surroundings. In those studies, when Melligen cells were transplanted into immunosuppressed diabetic mice,using the blood glucose levels of the mice became normal.Cell-in-a-Box^® encapsulation technology.

In December 2014, the Company acquired from Austrianova an exclusive, worldwide license to use the Cell-in-a-Box^® technology in combination with genetically modified non-stem cell lines which are designed to activate Cannabinoidcannabinoid prodrug molecules for development of therapies for diseases and their related symptoms using of the Cell-in-a-Box^® technology and trademark (“Cannabis Licensing Agreement”). This allows the Company to develop a therapy to treat some solid cancers through encapsulation of genetically modified cells designed to convert Cannabinoids to their cancer killing form using the Cell-in-a-Box^®technology. The Company paid Austrianova $2.0 million to secure this license.

In July 2016, the Company entered into a Binding Memorandum of Understanding with Austrianova (“Austrianova MOU”). Pursuantpursuant to the Austrianova MOU,which Austrianova will actively work with the Company to seek an investment partner or partners who will finance clinical trials and further develop products for the Company’s therapytherapies for cancer, in exchange for which the Company, Austrianova and any future investment partner or partners will each receive a portionshare of the net revenue of the sales from the parties’ cancer products.sale of products in designated territories.

In

Effective October 1, 2016, the partiesCompany and Bavarian Nordic/GSF amended the Bavarian Nordic/GSF License Agreement toto: (i) include the right to: (i)to import; (ii) reflect ownership and notification of improvements; (ii)(iii) clarify which provisions survive expiration or termination of the Bavarian Nordic/GSF License Agreement; (iii)(iv) provide rights to Bio Blue Bird to the clinical data after expiration of the licensed patent rights; and (iv)(v) change the notice address and recipients of Bio Blue Bird.

In August 2017, the Company entered into a Binding Term Sheet with SG Austria and Austrianova (“Binding Term Sheet”) pursuant to which the parties reached an agreement to amend certain provisions in the SG Austria APA, the Diabetes Licensing Agreement the Cannabis Licensing Agreement and the Vin-de-Bona Consulting Agreement (defined below).

In May 2018 and pursuant to the Binding Term Sheet, the Company entered into agreements with SG Austria and Austrianova to amend certain provisions of the SG Austria APA, the Diabetes Licensing Agreement, the Cannabis Licensing Agreement and the Vin-de-Bona Consulting Agreement required by the Binding Term Sheet (“Binding Term Sheet Amendments”). The Binding Term Sheet Amendments provide that the Company’s obligation to make milestone payments to Austrianova will beare eliminated in their entirety under the Cannabis License Agreement and the Diabetes License Agreement, as amended. The Binding Term Sheet Amendments also provide that the Company’s obligation to make milestone payments to SG Austria pursuant to the SG Austria APA, as amended and clarified, will beis eliminated in theirits entirety. One of the Binding Term Sheet Amendments also provides that the scope of the Diabetes License Agreement will beis expanded to include all cell types and cell lines of any kind or description now or later identified, including, but not limited to, primary cells, mortal cells, immortal cells and stem cells at all stages of differentiation and from any source specifically designed to produce insulin for the treatment of diabetes.

In addition, one of the Binding Term Sheet Amendments provides that the Company will havehas a 5-year right of first refusal from August 30, 2017 in the event that Austrianova chooses to sell, transfer or assign at any time during this period the Cell-in-a-Box^® tradename and its Associated Technologies; provided, however, that the Associated Technologies subject to the right of first refusal do not include Bac-in-a-Box^®. Additionally,, which relates to encapsulation of probiotic bacteria and yeast for stomach acid protection and ambient storage. Also, for a period of one year from August 30, 2017 one of the Binding Term Sheet Amendments provides that Austrianova will not solicit, negotiate or entertain any inquiry regarding the potential acquisition of the Cell-in-a-Box^®encapsulation technology and its Associated Technologies.

The Binding Term Sheet Amendments further provide that the royalty payments on gross sales as specified in the SG Austria APA, the Cannabis License Agreement and the Diabetes License Agreement will be changed to 4%. They also provide that the royalty payments on amounts received by the Company from sublicensees’ gross sales under the same agreements will be changed to 20% of the amount received by the Company’s sublicensees, provided, however,that in the event the amounts received by the Company from sublicensees is 4% or less of sublicensees’ gross sales, Austrianova or SG Austria (as the case may be) will receive 50% of what the Company receives up to 2%. In addition, Austrianova or SG Austria (as the case may be) will receive 20% of any amount the Company receives over a 4% royalty payment from sublicensees.

The Binding Term Sheet Amendments also provide that Austrianova will receive 50% of any other financial and non-financial consideration received from the Company’s sublicensees of the Cell-in-a-Box^® technology.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying Condensed Consolidated Financial Statements as of January 31, 20192020 and for the three and nine months ended January 31, 20192020 and 20182019 are unaudited. These unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Regulation S-X of the U.S. Securities and Exchange Commission (“Commission”) and with the instructions to this Quarterly Report on Form 10-Q.10-Q (“Report”). Accordingly, they do not include all the information and Notes required by U.S. GAAP for complete Condensed Consolidated Financial Statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended January 31, 20192020 are not necessarily indicative of the results that may be expected for the fiscal year ending April 30, 2019.2020. The Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended April 30, 20182019 and the Notes thereto included in the Company’s Annual Report on Form 10-K for the period ended April 30, 20182019 (“Form 10-K”) the Company filed with the Commission.

The Condensed Consolidated Balance Sheet as of April 30, 2018January 31, 2020 contained hereinin this Report has been derived from the audited Consolidated Financial Statements as of April 30, 20182019 but does not include all disclosures required by U.S. GAAP.

Principles of Consolidation and Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. The Company operates independently and through four wholly-ownedwholly owned subsidiaries: (i) Bio Blue Bird; (ii) PharmaCyte Biotech Europe Limited; (iii) PharmaCyte Biotech Australia Pty. Ltd.; and (iv) Viridis Biotech, Inc. and are prepared in accordance with U.S. GAAP and the rules and regulations of the Commission. Intercompany balances and transactions are eliminated. The Company’s 14.5% investment in SG Austria is presented on the cost method of accounting.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates these estimates including those related to fair values of financial instruments, intangible assets, fair value of stock-based awards, income taxes and contingent liabilities, among others. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s condensed consolidated financial statements; accordingly,statements. Therefore, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company’s condensed consolidated financial position and results of operations.

Intangible Assets

The Financial Accounting Standards Board ("FASB") standard on goodwill and other intangible assets prescribes a two-step process for impairment testing of goodwill and indefinite-lived intangibles, which is performed annually, as well as when an event triggering impairment may have occurred. The first step tests for impairment, while the second step, if necessary, measures the impairment. The Company has elected to perform its annual analysis at the end of its fiscal reporting year.

The Company’s intangible assets are licensing agreements related to the use the Cell-in-a-Box^®technologyTrademark and Associated Technologies for the treatment of cancer of $1,549,427 and the Diabetes Licensing Agreement related to the use of the Cell-in-a-Box^®Trademark and Associated Technologies for the treatment of diabetes license forof $2,000,000 for an aggregate total of $3,549,427.

These intangible assets have an indefinite life; therefore, they are not amortizable.

The Company concluded that there was no impairment of the carrying value of the intangibles for the nine months ended January 31, 20192020 and 2018.2019.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be fully recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. No impairment was identified or recorded during the nine months ended January 31, 20192020 and 2018.2019.

Fair Value of Financial Instruments

For certain of the Company’s non-derivative financial instruments, including cash, accounts payable and accrued expenses, the carrying amount approximates fair value due to the short-term maturities of these instruments.

Accounting Standards Codification ("ASC") Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the condensed consolidated balance sheets for current liabilities qualify as financial instruments and are a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

The Company follows ASC subtopic 820-10, Fair Value Measurements and Disclosures and ASC subtopic 825-10, Financial Instruments, which permit entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on the Company's financial position, results of operations or cash flows. The carrying value of cash, accounts payable and accrued expenses, as reflected in the condensed consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments.

Income Taxes

Deferred taxes are calculated using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

A valuation allowance is provided for deferred income tax assets when, in management’s judgment, based upon currently available information and other factors, it is more likely than not that all or a portion of such deferred income tax assets will not be realized. The determination of the need for a valuation allowance is based on an on-going evaluation of current information including, among other things, historical operating results, estimates of future earnings in different taxing jurisdictions and the expected timing of the reversals of temporary differences. The Company believes the determination to record a valuation allowance to reduce a deferred income tax asset is a significant accounting estimate because it is based on, among other things, an estimate of future taxable income in the U.S. and certain other jurisdictions, which is susceptible to change and may or may not occur, and because the impact of adjusting a valuation allowance may be material. In determining when to release the valuation allowance established against the Company’s net deferred income tax assets, the Company considers all available evidence, both positive and negative. Consistent with the Company’s policy, and because of the Company’s history of operating losses, the Company does not currently recognize the benefit of all its deferred tax assets, including tax loss carry forwards, which may be used to offset future taxable income. The Company continually assesses its ability to generate sufficient taxable income during future periods in which deferred tax assets may be realized. When the Company believes it is more likely than not that it will recover its deferred tax assets, the Company will reverse the valuation allowance as an income tax benefit in the statements of operations.

The U.S. GAAP method of accounting for uncertain tax positions utilizes a two-step approach to evaluate tax positions. Step one, recognition, requires evaluation of the tax position to determine if based solely on technical merits it is more likely than not to be sustained upon examination. Step two, measurement, is addressed only if a position is more likely than not to be sustained. In step two, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not to be realized upon ultimate settlement with tax authorities. If a position does not meet the more likely than not threshold for recognition in step one, no benefit is recorded until the first subsequent period in which the more likely than not standard is met,met. When this occurs, the issue is resolved with the taxing authority or the statute of limitations expires. Positions previously recognized are derecognized when the Company subsequently determines the position no longer is more likely than not to be sustained. Evaluation of tax positions, their technical merits and measurements using cumulative probability are highly subjective management estimates. Actual results could differ materially from these estimates.

On December 22, 2017, the U.S. enacted the “Tax Cuts and Jobs Act” (“Tax Act”), which made significant changes to U.S. federal income tax law affecting the Company. Set forth below is a discussion of certain provisions of the Tax Act and the Company's assessment of the impact of such provisions on its financial statements.

Effective January 1, 2018, the Company's U.S. income will be taxed at a 21% (subject to IRC Section 15 blended rate provisions) down from the 35 percent federal corporate rate. ASC 740-10-25-47 requires the Company to recognize the effect of this rate change on its deferred tax assets and liabilities in the period the tax rate change is enacted. As a result, the Company has concluded this will cause the Company's net deferred taxes to be remeasured at the new lower tax rate. The Company maintains a full valuation allowance on its U.S. net deferred tax assets. Deferred tax asset remeasurement (tax expense) will bewas offset by a net decrease in valuation allowance, resultingthat resulted in no impact on the Company's income tax expense.

Research and Development

Research and development (“R&D”) expenses consist of costs incurred for direct and overhead-related research expenses and are expensed as incurred. Costs to acquire technologies, including licenses, that are utilized in research and developmentR&D and that have no alternative future use are expensed when incurred. Technology developed for use in the Company’s product candidates is expensed as incurred until technological feasibility has been established.

ResearchR&D expenses for the three and development costsnine months ended January 31, 2020 were $113,296 and $203,566, respectively, and for the three and nine months ended January 31, 2019 were approximately $59,000,$59,144 and $442,000, respectively, and for the three and nine months ended January 31, 2018 $803,000 and $1,746,000,$442,039, respectively.

Stock-Based Compensation

The Company recognizes stock-based compensation expense for only those awards ultimately expected to vest on a straight-line basis over the requisite service period of the award, net of an estimated forfeiture rate.award. The Company estimates the fair value of stock options using a Black-Scholes-Merton valuation model. This model which requires the input of highly subjective assumptions, including the option's expected term and stock price volatility. In addition, judgment is also required in estimating the number of stock-based awards that are expected to be forfeited. Forfeitures are estimated based on historical experience at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The assumptions used in calculating the fair value of share-based payment awards represent management's best estimates, but these estimates involve inherent uncertainties and the application of management's judgment. Thus, if factors change and the Company uses different assumptions, itsthe stock-based compensation expense could be materially different in the future.

Effective August 1, 2018, the Company early adopted ASU 2018-07Compensation - Stock Compensation (Topic 718): - Improvements to Nonemployee Share-Based Payment Accounting, which simplified the guidance for accounting for nonemployee share-based payment transactions for acquiring goods and services from nonemployees.

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains most of its cash balance at a financial institution located in California. AccountsThe Company’s account at this institution areis insured by the Federal Deposit Insurance Corporation up to $250,000. Uninsured balances aggregated approximately $307,000$0 and $772,000$127,000 at January 31, 20192020 and April 30, 2018,2019, respectively. The Company has not experienced any losses in such accounts.from this account. Management believes it is not exposed to any significant credit risk on cash.

Foreign Currency Translation

The Company translates the financial statements of its foreign subsidiarysubsidiaries from the local (functional) currencies to U.S. dollars in accordance with FASB ASC 830,Foreign Currency Matters. All assets and liabilities of the Company’s foreign subsidiaries are translated at the Company’s quarter-end exchange rates, while revenue and expenses are translated at average exchange rates prevailing during the fiscal year.period. Adjustments for foreign currency translation fluctuations are excluded from net loss and are included in other comprehensive income. Gains and losses on short-term intercompany foreign currency transactions are recognized as incurred.

Going Concern

The Company'saccompanying condensed consolidated financial statements arehave been prepared using U.S. GAAP applicable toassuming that the Company will continue as a going concern which contemplatesconcern; however, the realizationfollowing conditions raise substantial doubt about the Company's ability to do so. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and liquidationclassifications of liabilities inthat may result should the normal course of business.Company be unable to continue as a going concern. As of January 31, 2019,2020, the Company hashad an accumulated deficit of $98,892,427$103,107,876 and incurred a net loss for the nine months ended January 31, 20192020 of $2,928,284.$3,076,505. The Company requires substantial additional capital to finance its planned business operations and expects to incur operating losses in future periods due to the expenses related to the Company’s core businesses. The Company has not realized any revenue since it commenced doing business in the biotechnology sector, and there can be no assurance that it will be successful in generating revenues in the future in this sector. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

For the nine months ended January 31, 2019,2020, funding was provided by investors to maintain and expand the Company’s operations. Sales of the Company’s common stockCommon Stock were made under the Registration Statement on Form S-3 filed on September 13, 2017 (“S-3”) allowing for offerings of up to $50 million dollars in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (“Securities Act”) or transactions structured as a public offering of a distinct block or blocks of shares (“Block Trades”) of the shares of the Company’s common stock.Common Stock. During the nine-month period endingended January 31, 2019,2020, the Company continued to acquire funds through the Company’s S-3 pursuant to which the placement agent sells shares of common stockCommon Stock in Block Trades in a program which is structured to provide up to $25 million dollars to the Company less certain commissions. From May 1, 2018 through January 31, 2019commissions pursuant to the Company raised capital of approximately $1.9 million in Block Trade transactions. The Company plans to continue selling securities using the S-3. Also, the Company has the ability to reduce the research and development expenses significantly should further funding be delayed.

Management determined that these plans alleviate substantial doubt about the Company’s ability to continue as a going concern. The Company believes the cash on hand at January 31,

On August 13, 2019, the abilityCompany no longer met the eligibility requirements to use the S-3 to raise capital, and the Company ceased to use the S-3 to raise capital after that date. In late January 2020, the Company became eligible to use the S-3.

From May 1, 2019 through at-the-market sales andAugust 12, 2019 the Company raised capital of approximately $884,000 in Block Trades, salesTrade transactions net of registered andcommissions. During the quarter ended January 31, 2020, the Company raised $450,000 through the sale of unregistered shares of its common stock and any public offerings of common stockCommon Stock in whichprivate placement transactions. Subsequent to January 31, 2020, the Company may engageraised additional capital in will provide sufficientthe amount of $65,000 through the sale of unregistered shares of its Common Stock in private placement transactions and $186,000 net of commissions, in Block Trades pursuant to the S-3.

The Company plans to continue to sell registered securities using the S-3 to raise capital to meetfund operations and R&D expenses until it files its Annual Report on Form 10-K for the Company’s capital requirements andfiscal year ended April 30, 2020 with the Commission, at which time it believes the S-3 will no longer be available to fund the Company’s operations through March 30, 2020.use to raise capital.

Recent Accounting Pronouncements

The amendments in ASU 2018-02 ASC Topic 220:Income Statement – Reporting Comprehensive Incomeprovide financial statement preparers with an option to reclassify stranded tax effects within Accumulated Other Comprehensive Income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The amendments in ASC Topic 220 are effective for public business entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. While early application is permitted, including adoption in an interim period,On May 1, 2019, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

ASUadopted Accounting Standards Update (“ASU”) No. 2016-02,Leases “Leases (Topic 842), allows” which requires the recognition of leaseright-of-use (“ROU”) assets and lease liabilities by lessees for thoseon the consolidated balance sheet. This ASU retains a distinction between finance leases classified asand operating leases, under previous US GAAP. Theand the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous guidance relatedcurrent accounting literature. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Update 2016-02 is effective for annual reporting periods beginning after December 15, 2018,Company elected the available practical expedients on adoption. Adoption of the new standard resulted in an immaterial amount of total lease liabilities and early adoption is permitted. The adoptionROU assets of this standard is not expected to have a material impact on the Company’s condensed consolidated financial statements.as of May 1, 2019.

The Company does not anticipate any material impact on its condensed consolidated financial statements upon the adoption of the following accounting pronouncements issued during 2016, 20172018 and 2018:2019: (i) ASU 2018-19,ASC Topic 326: Codification Improvements to Financial Instruments; and (ii) ASU No. 2016-13,Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments; (iii) .

ASU No. 2016-15,2019-12,StatementSimplifying the Accounting for Income Taxes ("ASU 2019-12"), was issued in December 2019. Under ASU 2019-12, the accounting for income taxes is simplified by eliminating certain exceptions and implementing additional requirements which result in a more consistent application of Cash Flows (Topic 230): ClassificationASC 740. The Company is currently in the process of Certain Cash Receipts and Cash Payments.evaluating the impact of adopting ASU 2019-12 in 2021, but it does not expect it to have a material impact on our condensed consolidated financial statements.

NOTE 3 – PREFERRED STOCKACCRUED EXPENSES

The Company has authorized 10,000,000 shares of preferred stock, with a par value of $0.0001, of which 13,500 shares have been designated as “Series E Convertible Preferred Stock.” ThereAccrued expenses at January 31, 2020 and April 30, 2019 are no outstanding shares of preferred stock or Series E Convertible Preferred Stock. The Series E Convertible Preferred Stock has the following material features:summarized below:

NOTE 4 – COMMON STOCK TRANSACTIONS

A summary of the Company’s non-vested restricted stock activityCommon Stock transactions and related weighted average grant date fair value information for the nine months ended January 31, 2020 and 2019 is set forth below:

In July 2017, the Company issued 4,200,000 shares of restricted Common Stock to three consultants pursuant to consulting agreements. The terms of two of the agreements were for twelve months and one agreement was for eighteen months. The shares vest monthly over a twelve-month to eighteen-month period and were subject to the consultants providing services under their respective agreements with the Company. The Company recorded a non-cash consulting expense in the amount of $0 and $0 for the three and nine months ended January 31, 2020, respectively, and $11,200 and $73,800 for the three and nine months ended January 31, 2019, respectively. There were no unvested shares remaining related to such consulting agreements as of January 31, 2020 and 2018 are as follows:2019, respectively.

During the nine months ended January 31, 2019, the Company issued 1,950,000 shares of restricted Common Stock to two consultants pursuant to consulting agreements. The terms of these two consulting agreements were for twelve months. The shares vest monthly over a twelve-month period and are subject to the consultants providing services under their respective consulting agreement. An additional agreement with one of the consultants required 500,000 shares vest upon issuance. The Company recorded a non-cash consulting expense in the amount of $0 and $12,816 for the three and nine months ended January 31, 2020, respectively, and $24,230 and $67,084 for the three and nine months ended January 31, 2019, respectively. There were zero and 562,500 unvested shares of Common Stock remaining related to these consulting agreements as of January 31, 2020 and 2019, respectively.

In April 2019, two consultants were issued 2,500,000 shares of restricted Common Stock pursuant to their respective consulting agreement. The term of the agreements is for twelve months which covered prior and current periods. The shares vest monthly over a twelve-month period and are subject to the consultant providing services under their respective consulting agreement. The Company recorded a non-cash consulting expense in the amount of $0 and $11,910 for the three and nine months ended January 31, 2020. There were zero unvested shares as of January 31, 2020.

During the nine months ended January 31, 2020, the four independent directors of the Company’s Board of Directors (“Board”) were issued 2,000,000 shares of restricted Common Stock pursuant to their respective Director Letter Agreement (“DLA”) with the Company. relating to their services for the prior year. The terms of each DLA is for twelve months. The shares vest on the directors’ anniversary date of their respective DLA. The Company recorded a non-cash expense of $0 and $19,212 for the three and nine months ended January 31, 2020, respectively. There were zero unvested shares of Common Stock remaining related to these DLAs as of January 31, 2020.

During the nine months ended January 31, 2020, a consultant was issued 500,000 shares of restricted Common Stock pursuant to his consulting agreement with the Company. The term of the consulting agreement is for twelve months which covered prior and current periods. The shares vest monthly over a twelve-month period and are subject to the consultant providing services under his consulting agreement. The Company recorded a non-cash consulting expense in the amount of $0 and $17,350 for the three and nine months ended January 31, 2020, respectively.

In April 2019, the Company awarded 6,600,000 shares of common stockrestricted Common Stock to officers as part of their respective executive compensation agreementsagreement for 2017.2019. These shares vest monthly over a twelve-month period and are subject to them continuing service under the agreements.their respective executive compensation agreement. During the three and nine months ended January 31, 2019,2020, the Company recorded a non-cash compensation expense in the amount of $0$69,438 and $0, respectively, and during the three and nine months ended January 31, 2018, the Company recorded non-cash compensation of $114,400 and $457,600,$278,891, respectively. AsThere were zero unvested shares as of January 31, 2019, there were no unvested shares.2020.

During the nine months ended January 31, 2018, the Company issued 1,750,000 shares of common stock to2020, four independent directors of the Company’s Board were issued 2,000,000 shares of Directors (“Board”)restricted Common Stock pursuant to Board compensation agreements. The terms oftheir respective DLA with the agreements are for twelve months.Company. Each share issuance under a DLA covers a twelve-month period. The shares vestedvest upon issuancethe appointment of a director pursuant to a DLA. The DLA is automatically renewed and a new grant of shares of Common Stock occurs upon on the anniversary date of each DLA. The Company recorded a non-cash expense of $0$18,998 and $0$46,433 for the three and nine months ended January 31, 2019, respectively, and $25,038 and $50,947 for the three and nine months ended January 31, 2018,2020, respectively. AsThere were zero unvested shares remaining related to a DLA as of January 31, 2019, there were no unvested shares.2020.

During the nine months ended January 31, 2018, the Company2020, a consultant was issued 4,200,0002,000,000 shares of common stockrestricted Common Stock pursuant to three consultants. The terms of twohis services as the Chairman of the agreements are for twelve monthsCompany’s Medical and one agreement is for eighteen months.Scientific Advisory Board over a four-year period. This share issuance covered prior and current periods. The shares vest monthly over a twelve-month to eighteen-month period andupon issuance are subject to the consultantsconsultant providing services underto the agreements.Company. The Company recorded a non-cash consulting expense in the amount of $11,200$0 and $73,800$11,851 for the three and nine months ended January 31, 2019, respectively, and $69,840 and $150,630 for the three and nine months ended January 31, 2018,2020, respectively. AsThere were zero unvested shares remaining related to his compensation agreements as of January 31, 2019, there were no unvested shares.

The Company awarded 6,600,000 shares of common stock to officers as part of their compensation agreements for 2018. These shares vest monthly over a twelve-month period and are subject to them continuing service under the agreements. During the three and nine months ended January 31, 2019, the Company recorded a non-cash compensation expense in the amount of $61,380 and $245,520, respectively. As of January 31, 2019, there were no unvested shares.2020.

During the nine months ended January 31, 2019, the Company2020, five consultants were issued 1,950,0002,200,000 shares of common stockrestricted Common Stock pursuant to two consultants.their respective consulting agreement with the Company. The terms of two of the agreements are for twelve months. The shares vest monthly over a twelve-month period and are subject to the consultantsconsultant providing services under the agreements. An additional agreement requiredconsultant’s respective consulting agreement. The Company recorded a non-cash consulting expense in the amount of $26,092 and $46,895 for the three and nine months ended January 31, 2020, respectively. There were 750,000 unvested shares remaining related to these consulting agreements as of January 31, 2020.

During the nine months ended January 31, 2020, a consultant was issued 500,000 shares of restricted Common Stock pursuant to his services as the Company’s Chairman of its Medical and Scientific Advisory Board over a twelve-month period. The shares vest upon issuance. The Company recorded a non-cash consulting expense in the amount of $24,230$4,600 and $67,084$6,133 for the three and nine months ended January 31, 2019,2020, respectively. As

In January 2020, the Company awarded 6,600,000 shares of restricted Common Stock to officers as part of their executive compensation agreements for 2020. These shares vest monthly over a twelve-month period and are subject to them continuing service under their respective executive compensation agreement. During the three and nine months ended January 31, 2020, the Company recorded a non-cash compensation expense in the amount of $30,800 and $30,800, respectively. There were 6,050,000 unvested shares remaining related to the executive compensation agreements as of January 31, 2019, there were 562,500 unvested2020.

During the nine months ended January 31, 2020, the Company entered into three stock subscription agreements resulting in the sale and issuance of ninety million (90 million) shares of restricted Common Stock. The Company received $450,000 from the sale of these shares.

All shares described above were issued without registration under the Securities Act in reliance upon the exemption afforded by Section 4(a)(2) of the Securities Act and Regulation D.Act.

During the nine months ended January 31, 20192020 and 2018,2019, the Company sold and issued approximately 111.7 million136.7 and 62.4111.7 million shares of common stock,registered Common Stock, respectively, at prices ranging from approximately $0.01 to $0.08$0.03 per share as Block Trades pursuant to the Company’s S-3. Net of underwriting discounts, legal, accounting and other offering expenses, the Company received net proceeds of approximately $1.9 million$884,000 and $1.8$1.9 million from the sale of these shares for the nine months ended January 31, 2020 and 2019, and 2018, respectively, and $465,000 and $0 duringrespectively.  

On October 30, 2019, the three months ended JanuaryCompany issued one share of its Series A Preferred Stock to its Chief Executive Officer as described in detail in Note 11 – Preferred Stock. On October 31, 2019, and 2018, respectively.the Board passed a resolution recommending to shareholders that they approve the amendment of the Company’s articles of incorporation to increase the number of authorized shares of the Company’s common stock by 1,000,000,000 from 1,490,000,000 to 2,490,000,000 shares.  Subsequently, on October 31, 2019, by a written consent executed by holders of a majority of the voting power of the Company’s outstanding stock, the Company’s stockholders approved such an amendment. On October 31, 2019 such amendment was filed with the Secretary of State of the State of Nevada. 

A summary of the Company’s non-vestedunvested restricted stock activity and related weighted average grant date fair value information for the nine months ended January 31, 20192020 are as follows:

NOTE 5 – STOCK OPTIONS AND WARRANTS

Stock Options

As of January 31, 2019,2020, the Company had 96,450,00094,650,000 outstanding stock options to its directors and officers (collectively, “Employee Options”) and consultants (“Non-Employee(collectively, “Non-Employee Options”).

During the nine months ended January 31, 20192020 and 2018,2019, the Company granted 011,000,000 and 10,750,000zero Employee Options, respectively. During the nine months ended January 31, 2020, 25,000,000 options expired.

The fair value of the Employee Options at the date of grant was estimated using the Black-Scholes-Merton option-pricing model, based on the following weighted average assumptions:

During the nine months ended January 31, 2019 and 2018, the Company granted Non-Employee Options of 1,200,000 and 5,400,000, respectively.

The fair value of the Non-Employee Options was estimated using the Black-Scholes-Merton option-pricing model, based on the following weighted average assumptions:

The Company’s computation of expected volatility is based on the historical daily volatility of its publicly traded stock.Common Stock. For stock option grants issued during the nine months ended January 31, 20192020 and 2018,2019, the Company used a calculated volatility for each grant. The Company currently lacks adequate information about thepotential exercise behavior. The Companybehavior and has determined the expected term assumption usingunder the simplified method provided for under ASC 718. This method718, which averages the contractual term of the Company’s stock options of five years with the average vesting term of two and one-half years for an average of three years. The dividend yield assumption of zero is based upon the fact the Company has never paid cash dividends and presently has no intention of paying cash dividends. The risk-free interest rate used for each grant is equal to the U.S. Treasury rates in effect at the time of the grant for instruments with a similar expected life.

During the nine months ended January 31, 2020 and 2019, the Company granted 1,200,000 and 1,200,000 Non-Employee Options, respectively. During the three months ended January 31, 2020 and 2019, the Company granted zero and zero Non-Employee Options, respectively.

Non-Employee Option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. Effective August 1, 2018 the Company adopted ASU 2018-07 early using the modified retrospective transition approach. The Company determined that there was no transition adjustment upon adoption of ASU 2018-07. The Company issued 1,200,000 stock options to a non-employee during the nine months ended January 31, 2019. The value of thesethe options was determined as of the grant date using the Black-Scholes-Merton option-pricing model and compensation expense is being recognized over the service period.

A summary of the Company’s stock option activity and related information for the nine months ended January 31, 20192020 are shown below: