Note 9 – Commitments and Contingencies

Scientific Advisory Board

On February 1, 2021, the Company formed the Scientific Advisory Board to (i) provide strategic advice and make recommendations to the Board regarding current and planned research and development programs, (ii) advise the Board regarding the scientific merit of technology or products involved in licensing and acquisition opportunities and (iii) provide strategic advice to the Board regarding emerging science and technology issues and trends. During the years ended December 31, 2021 and 2020, the Company incurred costs of $174,000 and $0, respectively. These expenses are included in Research and Development Expenses on the Consolidated Statement of Comprehensive Loss.

COVID-19

In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China and has reached multiple other countries, resulting in government-imposed quarantines, travel restrictions and other public health safety measures, including in the United States and India. On March 12, 2020, the WHO declared COVID-19 to be a global pandemic. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of COVID-19 have had and may continue to have an adverse effect on the global markets and global economy. Such government-imposed precautionary measures may have been relaxed in certain countries or states, but there is no assurance that more strict measures will not be put in place again due to a resurgence in COVID-19 cases.

The ultimate impact of the global COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on the Company’s business, vaccine development efforts, healthcare systems or the global economy as a whole. However, the effects have had and will likely continue to have a material impact on the Company’s operations, liquidity and capital resources, and the Company will continue to monitor the COVID-19 situation closely.

In response to public health directives and orders, the Company has implemented and continues to maintain work-from-home policies for many of the Company’s employees and temporarily modified the Company’s operations to comply with applicable social distancing recommendations. The effects of the orders and the Company’s related adjustments in its business are likely to negatively impact productivity, disrupt its business and delay the Company’s timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on its ability to conduct its business in the ordinary course. Similar health directives and orders are affecting third parties with whom we do business. Further, restrictions on the Company’s ability to travel, stay-at-home orders and other similar restrictions on its business have limited and may continue to limit its ability to support its operations.

MYMD PHARMACEUTICALS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 9 – Commitments and Contingencies, continued

Severe and/or long-term disruptions in the Company’s operations will negatively impact the Company’s business, operating results and financial condition in other ways as well. Specifically, the Company anticipates that the stress of COVID-19 on healthcare systems generally around the globe will negatively impact regulatory authorities and the third parties that the Company may engage in connection with the development and testing of its product candidates.

The anticipated economic consequences of the COVID-19 pandemic have adversely impacted financial markets, resulting in high share price volatility, reduced market liquidity, and substantial declines in the market prices of the shares of most publicly traded companies, including MyMD. Volatile or declining markets for equities could adversely affect the Company’s ability to raise capital when needed through the sale of shares of common stock or other equity securities. Should these market conditions persist when the Company needs to raise capital, and if the Company is able to sell shares of its common stock under then prevailing market conditions, it might have to accept lower prices for its shares and issue a larger number of shares than might have been the case under better market conditions, resulting in significant dilution of the interests of the Company’s shareholders.

Litigation and Settlements

Litigation Related to the Merger with MYMD Florida

Between January 22, 2021 and March 18, 2021, nine alleged MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.) stockholders filed separate actions in the state and federal courts of New York, New Jersey, and Pennsylvania against MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.) and the members of its board of directors, respectively captioned as follows: (i) Douglas McClain v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 650497/2021 (Sup. Ct., N.Y. Cty.); (ii) Owen Murphy v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 650545/2021 (Sup. Ct., N.Y. Cty.); (iii) Sue Gee Cheng v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 1:21-cv-01110 (S.D.N.Y.); (iv) Danny Lui v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. GLO-C-000006-21 (N.J. Super. Ct., Ch. Div.); (v) Alan Misenheimer v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 1:21-cv-02310 (D.N.J.); (vi) Robert Wilhelm v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 1:21-cv-04616 (D.N.J.); (vii) Adam Franchi v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 1:21-cv-04696 (D.N.J.); (viii) Cody McBeath v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 2:21-cv-01151 (E.D. Pa.); and (ix) Ray Craven v. MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.), et al., No. 1:21-cv-05762 (D.N.J.) (collectively, the “MYMD Merger Complaints”). The Lui action is styled as a putative class action brought on behalf of the plaintiff and other similarly situated stockholders, while the other eight actions are brought solely on behalf of the individual stockholders. The MYMD Merger Complaints generally assert that MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.) and its board of directors failed to disclose allegedly material information in the joint proxy and consent solicitation statement/prospectus and seek an order enjoining or unwinding the consummation of the Merger Agreement and awarding damages.

As reflected on page 61 of the Company’s Amendment No. 1 to Form S-4, Registration No. 333-252181, filed on March 19, 2021 (the “Amended S-4”), each of the nine MYMD Merger Complaints sought an order enjoining or unwinding consummation of the Merger Agreement on the basis of alleged material omissions in the Company’s preliminary S-4 filed on January 15, 2021. The Amended S-4 contains, among other things, supplemental disclosures addressing these purported material omissions. Prior to the April 15, 2021 special meeting of MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.)’s stockholders to approve the proposed merger, none of the plaintiffs sought to enjoin the transaction, which was approved at the special meeting. As of November 11, 2021, all of the Merger Complaints have been voluntarily dismissed.

Raymond Akers Actions

On April 14, 2021, Raymond F. Akers, Jr., Ph.D. filed a lawsuit against MyMD Pharmaceuticals, Inc. (p/k/a Akers Biosciences, Inc.) in the Superior Court of New Jersey, Law Division, Gloucester County (the “First Raymond Akers Action”). Mr. Akers asserts one common law whistleblower retaliation claim against the Company.

On September 23, 2021, the Court granted MyMD Pharmaceutical, Inc.’s (“MyMD”) Motion to Dismiss Plaintiff’s Amended Complaint and dismissed Plaintiff’s Amended Complaint.  The Court indicated that Mr. Akers is “free to file another complaint, however, tort-based ‘Pierce’ allegations, and/or CEPA claims are barred by the statute of limitations.”

On March 1, 2022, Mr. Akers filed a second action against MyMD in the Superior Court of New Jersey, Law Division, Gloucester County (the “Second Raymond Akers Action”) again asserting one common law whistleblower retaliation claim against the Company. The Company believes that the Second Raymond Akers Action is without merit and, moreover, was filed against the Court’s specific admonition that Plaintiff does not attempt to circumvent the statute of limitations.

All legal fees incurred were expensed as and when incurred.