Edgar Filing: NANOVIRICIDES, INC.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended December 31, 2011

Commission File Number: 333-148471

NANOVIRICIDES, INC.

(Exact name of Company as specified in its charter)

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

135 Wood Street, Suite 205

West Haven, Connecticut 06516

(Address of principal executive offices and zip code)

(203) 937-6137

( Company’s telephone number, including area code)

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

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

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

Large accelerated filer	£	Accelerated filer	£
Non-accelerated filer	£	Smaller reporting company	S

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

Yes ¨ No S

The number of shares outstanding of the Company's Common Stock as of February 8, 2012 was: 151,484,142.

NanoViricides, Inc.

FORM 10-Q

INDEX

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets at December 31, 2011 (Unaudited) and June 30, 2011	3

Statements of Operations for the Three and Six Months Ended December 31, 2011 and 2010 and for the Period from May 12, 2005 (Inception) through December 31, 2011 (Unaudited).	4

Statement of Stockholders' Equity for the Period from May 12, 2005 (inception) through December 31, 2011	5

Statements of Cash Flows for the Six Months Ended December 31, 2011 and 2010 and for the Period from May 12, 2005 (Inception) through December 31, 2011 (Unaudited).	24

Notes to the Financial Statements (Unaudited)	26

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3. Quantitative and Qualitative Disclosures About Market Risk	40

Item 4. Controls and Procedures	40

PART II OTHER INFORMATION

Item 1. Legal Proceedings	41

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41

Item 3. Defaults Upon Senior Securities	41

Item 4. Mine Safety Disclosures	42

Item 5. Other Information	42

Item 6. Exhibits and Reports on Form 8-K	42

Signatures	43

Certifications

Page 2

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	December 31, 2011 (Unaudited)			June 30, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	12,099,083		$	9,224,023
Prepaid expenses		322,880			332,294
Total current assets		12,421,963			9,556,317
Property and equipment, net		720,281			802,367
Trademark, net		418,986			399,383
TOTAL ASSETS	$	13,561,230		$	10,758,067
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	229,263		$	79,529
Accounts payable – related parties		735,952			462,955
Accrued expenses		48,288			27,173
Derivative Liability		159,489			17,519
TOTAL CURRENT LIABILITIES		1,172,992			587,176
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Series A Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 8,217,500 shares issued and outstanding		8,218			8,218
Series B Convertible Preferred stock, $0.001 par value, 10,000,000 shares designated, 50,000 and 10,000 shares issued and outstanding, respectively		50			10
Common stock, $0.001 par value; 300,000,000 shares authorized; 149,765,873 and 143,548,394 shares issued and outstanding, respectively		149,798			143,582
Additional paid-in capital		37,978,376			33,235,990
Deficit accumulated during the development stage		(25,748,204	)		(23,216,909	)
TOTAL STOCKHOLDERS’ EQUITY		12,388,238			10,170,891
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,561,230		$	10,758,067

See accompanying notes to the financial statements.

Page 3

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended December 31						Six Months Ended December 31,						Period from May 12, 2005 (Inception) through December 31,
	2011			2010			2011			2010			2011
Revenues	$	—		$	—		$	—		$	—		$	—
Operating expenses:
Research and development		1,011,466			1,114,647			1,670,040			1,872,475			15,915,258
Refund credit research and development costs		—			—			—			—			(420,842	)
General and administrative		325,598			384,267			787,675			737,784			9,689,237
Total operating expenses		1,337,064			1,498,914			2,457,715			2,610,259			25,183,653
Loss from operations		(1,337,064	)		(1,498,914	)		(2,457,715	)		(2,610,259	)		(25,183,653	)

Other income (expense):
Interest income		20,355			3,697			9,482			5,690			174,806
Non cash interest on convertible debentures		—			—			—						(73,930	)
Non cash interest expense on beneficial		—			—
Non cash interest expense on beneficial conversion of convertible debentures														(713,079	)
Change in fair market value of derivative liability		(74,610	)		(80,148	)		(83,062	)		(68,288	)		47,652
Total other income (expense)		(54,255	)		(76,451	)		(73,580	)		(62,598	)		(564,551	)

Loss before income taxes		(1,391,319	)		(1,575,365	)		(2,531,295	)		(2,672,857	)		(25,748,204	)
Income tax provision		—			—			—			—			—

Net loss	$	(1,391,319	)	$	(1,575,365	)	$	(2,531,295	)	$	(2,672,857	)	$	(25,748,204	)

Net loss per common share -: basic and diluted	$	(0.009	)	$	(0.01	)	$	(0.017	)	$	(0.02	)

Weighted average shares outstanding: - basic and diluted		147,455,000			138,098,286			145,997,000			136,785,286

See accompanying notes to the financial statements.

Page 4

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

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

Common shares issued May 12, 2005 (Inception)						20,000		$	20		$	-		$	(20	)	$	-		$	-
Share exchange with Edot-com.com Inc., June 1, 2005						(20,000	)		(20	)		-			20						-
Common shares exchanged in reverse acquisition of Edot-com.com Inc., June 1, 2005						80,000,000			80,000			(79,980	)		(20	)					-
Common shares outstanding Edot-com.com Inc., June 1, 2005						20,000,000			20,000			(20,000	)								-
Options granted in connection with reverse acquisition																					-
																					-
Net loss																		(66,005	)		(66,005	)

Balance, June 30, 2005						100,000,000			100,000			(99,980	)		(20	)		(66,005	)		(66,005	)

Discount related to beneficial conversion feature of Convertible debentures, July 13, 2005												5,277									5,277
Legal expenses related private placement of common stock, July 31, 2006												(2,175	)								(2,175	)
Discount related to beneficial conversion feature of Convertible debentures, July 31, 2005												5,302									5,302
Warrants issued to Scientific Advisory Board, August 15, 2005												4,094									4,094
Options issued to officers, September 23, 2005												87,318									87,318
Common shares issued for consulting services valued at $.081 per share, September 30, 2005						2,300,000			2,300			184,000									186,300
Common shares issued for interest on debentures, September 30, 2005						48,177			48			4,267									4,315
Discount related to beneficial conversion feature of Convertible debentures, October 28, 2005												166,666									166,666
Discount related to beneficial conversion feature of Convertible debentures, November 9, 2005												166,667									166,667
Discount related to beneficial conversion feature of Convertible debentures, November 10, 2005												45,000									45,000
Discount related to beneficial conversion feature of Convertible debentures, November 11, 2005												275,000									275,000
Discount related to beneficial conversion feature of Convertible debentures, November 15, 2005												49,167									49,167
Warrants issued to Scientific Advisory Board, November 15, 2005												25,876									25,876
Common shares and warrants issued in connection with private placement of common stock, November 28, 2005						340,000			340			169,660									170,000
Common shares and warrants issued in connection with private placement of common stock, November 29, 2005						300,000			300			149,700									150,000
Common shares and warrants issued in connection with private placement of common stock, November 30, 2005						150,000			150			74,850									75,000

Page 5

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001		Common Stock: Par $0.001				Additional		Stock			Deficit Accumulated During the			Total
	Number of		Number of		Number of				Paid-in		Subscription			Development			Stockholders'
	Shares	Amount	Shares	Amount	Shares		Amount		Capital		Receivable			Stage			Equity
Common shares and warrants issued in connection with private placement of common stock, December 2, 2005						100,000		100		49,900								50,000
Common shares and warrants issued in connection with private placement of common stock, December 6, 2005						850,000		850		424,150								425,000
Common shares issued for legal services valued at $.95 per share, December 6, 2005						20,000		20		18,980								19,000
Common shares and warrants issued in connection with private placement of common stock, December 12, 2005						750,000		750		374,250								375,000
Common shares and warrants issued in connection with private placement of common stock, December 13, 2005						50,000		50		24,950								25,000
Common shares and warrants issued in connection with private placement of common stock, December 14, 2005						50,000		50		24,950								25,000
Common shares issued in connection with debenture offering, December 15, 2005						50,000		50		48,950								49,000
Common shares and warrants issued in connection with private placement of common stock, December 20, 2005						50,000		50		24,950								25,000
Common shares and warrants issued in connection with private placement of common stock, December 29, 2005						50,000		50		24,950								25,000
Common shares and warrants issued in connection with private placement of common stock, December 30, 2005						50,000		50		24,950								25,000
Common shares issued for interest on debentures, December 31, 2005						19,476		20		17,320								17,340
Common shares issued for consulting services valued at $1.46 per share, January 9, 2006						3,425		3		4,998								5,001
Warrants issued to Scientific Advisory Board, February 15, 2006										49,067								49,067
Warrnats issued to Scientific Advisory Board, May 15, 2006										51,048								51,048
Common shares issued for interest on debentures, March 31, 2005						7,921		8		22,184								22,192
Options exercised, May 31, 2006						1,800,000		1,800		88,200								90,000
Common shares and warrants issued in connection with private placement of common stock, June 15, 2006						1,875,000		1,875		1,873,125								1,875,000
Common shares issued for interest on debentures, June 30, 2006						14,426		14		22,424								22,438

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

Balance, June 30, 2006						108,878,425		108,878		4,480,035		(20	)		(3,350,437	)		1,238,456

Common shares issued for interest on debentures, July 31, 2006						5,744		6		7,638								7,644
Common shares issued for conversion of convertible debentures, July 31, 2006						3,333,333		3,333		996,667								1,000,000
Exercise of stock warrants, July 31, 2006						200,000		200		49,800								50,000

Page 6

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001		Common Stock: Par $0.001				Additional		Stock			Deficit Accumulated During the			Total
	Number of		Number of		Number of				Paid-in		Subscription			Development			Stockholders'
	Shares	Amount	Shares	Amount	Shares		Amount		Capital		Receivable			Stage			Equity
Options issued to Scientific Advisory Board, August 15, 2006										30,184								30,184
Options issued to Scientific Advisory Board, November 15, 2006										25,888								25,888
Common shares issued for consulting services valued at $.76 per share, January 3, 2007						216,000		216		163,944								164,160
Options issued to Scientific Advisory Board, February 15, 2007										32,668								32,668
Options issued to Scientific Advisory Board, May 15, 2007										25,664								25,664
Common shares issued for consulting services valued at $1.03 per share, June 12, 2007						752		1		774								775
Common shares issued for consulting services valued at $1.15 per share, June 20, 2007						100,000		100		114,900								115,000
Common shares issued upon warrants conversion, June 20, 2007						930,000		930		619,070								620,000
Common shares issued upon warrants conversion, June 25, 2007						75,000		75		49,925								50,000
Common shares issued upon warrants conversion, June 30, 2007						300,000		300		199,700								200,000
Common shares issued for consulting services valued at $1.06 per share, June 30, 2007						29,890		30		31,770								31,800
Officers' compensation expense										27,062								27,062

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

Balance, June 30, 2007						114,069,144		114,069	$	6,855,689	$	(20	)		(6,469,400	)	$	500,338

Warrants issued to Scientific Advisory Board, August 15, 2007										14,800								14,800
Common shares and warrants issued in connection with private placement of common stock, September 21, 2007						1,500,000		1,500		748,500								750,000
Common shares issued for consulting and legal services valued at $.75 per share, September 30, 2007						25,244		25		18,375								18,400
Common shares and warrants issued in connection with private placement of common stock, October 16, 2007						3,250,000		3,250		1,621,750								1,625,000
Common shares and warrants issued in connection with private placement of common stock, October 16, 2007						250,000		250		124,750								125,000
Collection of stock subscriptions receivable, October 17, 2007												20						20
Warrants issued to Scientific Advisory Board, November 15, 2007										7,200								7,200
Common shares issued for consulting and legal services valued at $.49 per share, December 31, 2007						57,152		57		26,843								26,900
Options issued to officers, January 1, 2008										7,044								7,044

Page 7

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001				Common Stock: Par $0.001				Additional			Stock		Deficit Accumulated During the			Total
	Number of				Number of				Number of				Paid-in			Subscription		Development			Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Receivable		Stage			Equity
Warrants issued to Scientific Advisory Board, February 15, 2008														8,500								8,500
Common shares issued for consulting and legal services valued at $ .45 per share,March 31, 2008										61,546		62		27,838								27,900
Common shares issued for consulting services valued at $.39 per share, April , 2008										27,750		28		10,793								10,821
Warrants issued to Scientific Advisory Board, May 15, 2008														32,253								32,253
Common shares issued for consulting services valued at $1.03 per share, June 30, 2008										29,841		30		27,870								27,900

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

Balance, June 30, 2008		-		-		-		-		119,270,677	$	119,271	$	9,532,205		$	-	$	(9,207,737	)	$	443,739

Common shares issued for consulting and legal services valued at $ 1.22 per share, July 31, 2008										4,098		4		4,996								5,000
Common shares issued for consulting services valued at $1.22 per share, July , 2008										2,295		2		2,798								2,800
Warrants issued to Scientific Advisory Board, August 15, 2008														47,500								47,500
Common shares and warrants issued in connection with private placement of common stock, August 22, 2008										3,136,000		3,136		3,132,864								3,136,000
Common shares issued to settle account payable										150,000		150		149,850								150,000
Payment of Finder's Fee to Biotech														(14,696	)							(14,696	)
Common shares issued in connection with Warrant Conversion, August 22, 2008										125,000		125		106,125								106,250
Common shares issued for legal services valued at $1.24per share, August 31, 2008										4,032		4		4,996								5,000
Common shares issued for consulting services valued at $1.24 per share, August, 2008										2,258		2		2,798								2,800
Common shares issued for legal services valued at $1.00 per share, September 30, 2008										5,000		5		4,995								5,000
Common shares issued for consulting services valued at $1.00 per share, September 30, 2008										5,600		6		5,594								5,600
Common shares issued for consulting and legal services valued at $ .71 per share, October 31, 2008										7,042		7		4,993								5,000
Common shares issued for consulting services valued at $.71 per share, October 31, 2008										7,887		8		5,592								5,600
Warrants issued to Scientific Advisory Board, November 15, 2008														30,500								30,500
Common shares issued for consulting and legal services valued at $ .67 per share, November 30, 2008										7,463		7		4,993								5,000
Common shares issued for consulting services valued at $.67 per share, November 30, 2008										8,358		8		5,592								5,600

Page 8

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001				Common Stock: Par $0.001				Additional		Stock			Deficit Accumulated During the			Total
	Number of				Number of				Number of				Paid-in		Subscription			Development			Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Receivable			Stage			Equity
Common shares issued for consulting and legal services valued at $ .83 per share, December 31, 2008										6,024		6		4,994								5,000
Common shares issued for consulting services valued at $.83 per share, December 31 , 2008										6,747		7		5,593								5,600
Common shares issued for legal services valued at $ .60 per share, January 20, 2009										8,333		8		4,992								5,000
Common shares issued for consulting and legal services valued at $ .78 per share, January 31, 2009										7,463		7		4,992								4,999
Common shares issued for consulting services valued at $.78 per share, January 31, 2009										8,358		8		5,592								5,600
Common shares issued for consulting services valued at $ .70 per share, February 1, 2009										50,000		50		34,950								35,000
Warrants issued to Scientific Advisory Board, February 15, 2009														29,000								29,000
Common shares issued for consulting and legal services valued at $ .71 per share, February 28, 2009										7,042		7		4,992								4,999
Common shares issued for consulting services valued at $.71 per share, February 15, 2009										7,887		8		5,592								5,600
Common shares issued for consulting and legal services valued at $ .67 per share, March 31, 2009										6,410		6		4,994								5,000
Common shares issued for consulting services valued at $.67 per share, March 31 , 2009										7,179		7		5,593								5,600
Common shares issued to acquire equipment valued at $0.79 per share										172,500		173		137,327								137,500
Common shares issued for consulting and legal services valued at $0.69 per share, April 30, 2009										7,205		7		4,993								5,000
Common shares issued for consulting services valued at $.69 per share, April 30, 2009										8,069		8		5,592								5,600
Warrants issued to Scientific Advisory Board, May 15, 2009														30,600								30,600
Common shares issued for consulting and legal services valued at $ .66 per share, May 31, 2009										7,599		8		4,992								5,000
Common shares issued for consulting services valued at $.66 per share, May 31, 2009										8,511		9		5,590								5,599
Common shares issued for consulting services valued at $ .61 per share, June 30, 2009										24,721		25		14,975								15,000
Common shares issued for consulting and legal services valued at $ .56 per share, June 30, 2009										8,961		9		4,991								5,000
Shares issued for consulting services valued at $.56 per share, June 30, 2009										10,038		10		5,590								5,600
Common shares and warrants issued in connection with private placement of common stock, June 30, 2009										150,000		150		74,850								75,000
Common shares and warrants issued in connection with warrant conversion, June 30, 2009										2,050,700		2,051		1,023,299		(100,000	)					925,350

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

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

Page 9

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001		Common Stock: Par $0.001				Additional			Stock		Deficit Accumulated During the	Total
	Number of		Number of		Number of				Paid-in			Subscription		Development	Stockholders'
	Shares	Amount	Shares	Amount	Shares		Amount		Capital			Receivable		Stage	Equity
Collection of stock subscription receivable													100,000			100,000
Common shares issued for consulting and legal services valued at $ .66 per share, July 31, 2009						7,576		8		4,992						5,000
Common shares issued for consulting services valued at $.66 per share, July 31, 2009						8,485		8		5,592						5,600
Warrants issued to Scientific Advisory Board, August 15, 2009										41,400						41,400
Common shares issued for consulting and legal services valued at $ .86 per share, August 31, 2009						6,512		7		4,993						5,000
Common shares issued for consulting services valued at $.86 per share, August 31, 2009						5,814		6		5,594						5,600
Common shares issued for consulting services valued at $ .89 per share, September 30, 2009						6,292		6		5,594						5,600
Common shares issued for consulting and legal services valued at $ .89 per share, September 30, 2009						5,618		6		4,994						5,000
Payment of Finder's Fee										(5,250	)					(5,250	)
Common shares and warrants issued in connection with private placement of common stock, September 30, 2009						2,675,000		2,675		1,334,825						1,337,500
Common shares and warrants issued in connection with warrant conversion, September 30, 2009						3,759,800		3,760		1,876,140						1,879,900
Common shares issued for consulting and legal services valued at $ .57 per share, October 1, 2009						35,088		35		19,965						20,000
Common shares issued for Legal services valued at $56.50 per share, October 26, 2009						12,500		13		7,050						7,063
Warrants issued for commissions, October 26, 2009										3,570						3,570
Common shares issued for consulting and legal services valued at $ .73 per share, October 31, 2009						6,859		7		4,993						5,000
Common shares issued for consulting services valued at $.73 per share, October 31, 2009						7,682		8		5,592						5,600
Common shares issued upon conversion of Warrants, November 10, 2009						10,000		10		1,430						1,440
Warrants issued to Scientific Advisory Board, November 15, 2009										39,600						39,600
Common shares issued in payment of accounts payable, November 25, 2009						32,500		33		25,167						25,200
Common shares issued for consulting and legal services valued at $ .86 per share, November 30, 2009						5,814		6		4,994						5,000
Common shares issued for consulting services valued at $.86 per share, November 30, 2009						9,767		10		8,390						8,400
Common shares issued for consulting services valued at $ .85 per share, December 31, 2009						9,917		10		8,390						8,400
Common shares issued for consulting and legal services valued at $ .85 per share, December 31, 2009						5,903		6		4,994						5,000

Page 10

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of				Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Common shares issued for consulting and legal services valued at $1.043 per share, January 31, 2010												4,794		5		4,995					5,000
Warrants issued to Scientific Advisory Board, February 15, 2010																40,200					40,200
Series A Preferred Shares issued for TheraCour license valued at $.001 par value, February 15, 2010		7,000,000		7,000																	7,000
Common shares issued for consulting services valued at $1.096 per share, February 28, 2010												4,562		5		4,995					5,000
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010												125,000		125		156,125					156,250
Common shares issued for employee stock compensation valued at $1.25 per share, March 3, 2010												125,000		125		156,125					156,250
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		250,000		250												513,573					513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		250,000		250												513,573					513,823
Series A Preferred Shares issued for employee stock compensation, March 3, 2010		93,750		94												192,590					192,684
Common shares issued for consulting and legal servies valued at $1.25 per share, March 3, 2010												1,000		1		1,249					1,250
Common shares issued for consulting services valued at $1.417 per share, March 31, 2010												3,529		4		4,996					5,000
Common shares issued in lieu of payment of accounts payable - All Sciences												39,625		40		31,660					31,700

Common shares issued for consulting and legal services valued at $2.087 per share, April 30, 2010												2,396		2		4,998					5,000
Series B Preferred Shares issued to SeaSide 88, LP, May 12, 2010						500,000			500							4,999,500					5,000,000
Placement Agents Fees related to sale of Convertible Preferred shares, May 12, 2010																(400,000	)				(400,000	)
Legal Fees related to Sale of Convertible Preferred Stock, May 12, 2010																(50,000	)				(50,000	)
Derivative Liability - Issuance of Series B Preferred Shares																(1,787,379	)				(1,787,379	)
Common shares issued for conversion of Series B Preferred Shares at $1.88 per share, May 12, 2010												319,331		319							319
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 12, 2010						(60,000	)		(60	)											(60	)
Derivative Liability - Retirement of Series B Preferred Shares, May 12, 2010																128,053					128,053
Warrants issued to Scientific Advisory Board, May 15, 2010																82,800					82,800
Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, May 26, 2010												398,189		398							398
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 26, 2010						(60,000	)		(60	)											(60	)

Page 11

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock		Deficit Accumulated During the			Total
	Number of				Number of						Number of				Paid-in			Subscription		Development			Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Receivable		Stage			Equity
Dividend paid to Seaside 88, LP, May 26, 2010																(16,877	)							(16,877	)
Common shares issued as Dividend to Seaside 88, LP at $1.64, May 26, 2010												10,300		10		16,867								16,877
Derivative Liability - Retirement of Series B Preferred Shares, May 26, 2010																151,852								151,852
Common shares issued for consulting and legal services valued at $2.083 per share, May 31, 2010												2,400		2		4,998								5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, June 9, 2010												195,000		195		194,805								195,000
Common shares issued for conversion of Series B Preferred Shares at $1.41 per share, June 9, 2010												426,721		427										427
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 9, 2010						(60,000	)		(60	)														(60	)
Dividend paid to Seaside 88, LP, June 9, 2010																(14,575	)							(14,575	)
Common shares issued as Dividend to Seaside 88, LP at $1.41, June 9, 2010												10,366		10		14,565								14,575
Derivative Liability - Retirement of Series B Preferred Shares, June 9, 2010																149,364								149,364
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010												11,300		11		19,989								20,000
Common shares issued for consulting and legal services valued at $1.77 per share, June 9, 2010												2,000		2		3,538								3,540
Common shares issued for conversion of Series B Preferred Shares at $1.59 per share, June 23, 2010												377,905		378										378
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 23, 2010						(60,000	)		(60	)														(60	)
Dividend paid to Seaside 88, LP, June 23, 2010																(12,274	)							(12,274	)
Common shares issued as Dividend to Seaside 88, LP at $1.59, June 23, 2010												7,731		7		12,268								12,275
Derivative Liability - Retirement of Series B Preferred Shares, June 23, 2010																120,254								120,254
Common shares issued for consulting and legal services valued at $1.043 per share, June 30, 2010												2,738		2		4,998								5,000

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

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

Common shares issued for conversion of Series B Preferred Shares at $1.51 per share, July 7, 2010												397,088		397										397
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 7, 2010						(60,000	)		(60	)														(60	)
Dividend paid to Seaside 88, LP, July 7, 2010																(9,973	)							(9,973	)

Page 12

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of		Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares	Amount	Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Common shares issued as dividend to Seaside 88, LP at $1.65 per share, July 7, 2010										6,061		6		9,967					9,973
Derivative liability - retirement of Series B Preferred Shares, July 7, 2010														116,715					116,715
Common shares issued for conversion of Series B Preferred Shares at $1.30 per share, July 21, 2010										463,177		463							463
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 21, 2010				(60,000	)		(60	)											(60	)
Dividend paid to Seaside 88, LP, July 21, 2010														(7,671	)				(7,671	)
Common shares issued as dividend to Seaside 88, LP at $1.32 per share, July 21, 2010										5,794		6		7,665					7,671
Derivative liability - retirement of Series B Preferred Shares, July 21, 2010														113,700					113,700
Common shares issued for consulting and legal services valued at $2.087 per share, July 31, 2010										3,086		3		4,997					5,000
Common shares issued for conversion of Series B Preferred Shares at $1.14 per share, August 4, 2010										526,916		527							527
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010				(60,000	)		(60	)											(60	)
Dividend paid to Seaside 88, LP, August 4, 2010														(5,370	)				(5,370	)
Common shares issued as dividend to Seaside 88, LP, at $1.14 per share, August 4, 2010										4,716		5		5,365					5,370
Derivative liability - retirement of Series B Preferred Shares, August 4, 2010														104,480					104,480
Warrants issued to Scientific Advisory Board, August 15, 2010														45,000					45,000
Common shares issued in conversion of Series B Preferred Shares at $0.99 per share, August 18, 2010										606,367		606							606
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 18, 2010				(60,000	)		(60	)											(60	)
Dividend paid to Seaside 88, LP, August 18, 2010														(3,068	)				(3,068	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per share, August 18, 2010										3,101		3		3,065					3,068
Derivative liability - retirement of Series B Preferred Shares, August 18, 2010														104,795					104,795
Common shares issued for consulting and legal services valued at $1.24 per share, August 31, 2010										4,032		4		4,996					5,000
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 1, 2010										215,332		215							215
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 1, 2010				(20,000	)		(20	)											(20	)
Dividend paid to Seaside 88, LP, September 1, 2010														(767	)				(767	)
Common shares issued as dividend to Seaside 88, LP at $1.00 per share, September 1, 2010										766		1		766					767

Page 13

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of				Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Derivative liability - retirement of Series B Preferred Shares, September 1, 2010																34,841					34,841
Series B Preferred Shares issued to SeaSide 88, LP, September 21, 2010						250,000			250							2,499,750					2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, September 21, 2010																(195,000	)				(195,000	)
Legal fees related to sale of Convertible Preferred Stock, September 21, 2010																(10,000	)				(10,000	)
Derivative liability - issuance of Series B Preferred Shares																(328,086	)				(328,086	)
Common shares issued for conversion of Series B Preferred Shares at $0.93 per share, September 21, 2010												430,015		430							430
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 21, 2010						(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, September 21, 2010																103,012					103,012
Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2010												4,673		5		4,995					5,000
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, October 5, 2010												460,246		460							460
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 5, 2010						(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, on October 5, 2010																(8,055	)				(8,055	)
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, October 5, 2010												9,268		9		8,046					8,055
Derivative liability - Retirement of Series B Preferred Shares, October 5, 2010																103,330					103,330
Common shares issued for conversion of Series B Preferred Shares at $0.88 per share, October 19, 2010												452,965		453							453
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, October 19, 2010						(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, October 19, 2010																(6,521	)				(6,521	)
Common shares issued as dividend to Seaside 88, LP at $0.88 per share, October 19, 2010												7,384		7		6,514					6,521
Derivative liability - Retirement of Series B Preferred Shares, October 19, 2010																69,635					69,635
Common shares issued for consulting and legal services valued at $1.03 per share, October 31, 2010												4,854		5		4,995					5,000
Series A Preferred Shares issued for employee stock compensation, November 1, 2010		30,000		30												53,903					53,933
Common shares issued for conversion of Series B Preferred Shares at $0.87 per share, November 2, 2010												461,313		461							461
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 4, 2010						(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, November 2, 2010																(4,986	)				(4,986	)

Page 14

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of		Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares	Amount	Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Common shares issued as dividend to Seaside 88, LP at $0.87 per share, November 2, 2010										5,751		6		4,980					4,986
Derivative liability - retirement of Series B Preferred Shares, November 2, 2010														69,104					69,104
Warrants issued to Scientific Advisory Board, November 15, 2010														55,800					55,800
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, November 16, 2010										345,817		346							346
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 16, 2010				(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, November 16, 2010														(3,452	)				(3,452	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, November 16, 2010										2,984		3		3,449					3,452
Derivative liability - Retirement of Series B Preferred Shares, November 16, 2010														69,187					69,187
Common shares issued for conversion of Series B Preferred Shares at $1.35 per share, November 30, 2010										310,566		311							311
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, November 30, 2010				(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, November 30, 2010														(1,918	)				(1,918	)
Common shares issued as dividend to Seaside 88, LP at $1.35 per share, November 30, 2010										1,417		1		1,917					1,918
Derivative liability - Retirement of Series B Preferred Shares, November 30, 2010														69,449					69,449
Common shares issued for consulting and legal services valued at $1.46 per share, November 30, 2010										3,425		3		4,997					5,000
Common shares issued for conversion of warrants to Common Stock at $1.00 per share, December 10, 2010										25,000		25		24,975					25,000
Common shares issued as compensation pursuant to S-8 at $1.28 per share, December 10, 2010										50,000		50		63,950					64,000
Common shares issued for conversion of Series B Preferred Shares at $1.10 per share, December 14, 2010										90,840		91							91
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, December 14, 2010				(10,000	)		(10	)											(10	)
Dividend paid to Seaside 88, LP, December 14 2010														(384	)				(384	)
Common shares issued as Dividend to Seaside 88, LP, at $1.10 per share, December 14, 2010										348		-		384					384
Derivative liability - retirement of Series B Preferred Shares, December 14, 2010														17,438					17,438
Series B Preferred Shares issued to SeaSide 88, LP, December 21, 2010				250,000			250							2,499,750					2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, December 21, 2010														(200,000	)				(200,000	)
Common shares issued for consulting and legal services valued at $1.32 per share, December 31, 2010										4,545		5		5,995					6,000

Page 15

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of		Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares	Amount	Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Adjustment												33							33
Common shares issued for conversion of Series B Preferred Shares at $1.16 per share, January 3, 2011										343,796		344							344
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 3, 2011				(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, January 3, 2011														(8,904	)				(8,904	)
Common shares issued as dividend to Seaside 88, LP at $1.16 per share, January 3, 2011										7,653		8		8,896					8,904
Derivative liability - retirement of Series B Preferred Shares, January 3, 2011														73,532					73,532
Common shares issued for conversion of Series B Preferred Shares at $1.26 per share, January 17, 2011										317,965		318							318
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 17, 2011				(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, January 17, 2011														(8,055	)				(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.26 per share, January 17, 2011										6,403		6		8,049					8,055
Derivative liability - retirement of Series B Preferred Shares, January 17, 2011														70,882					70,882
Common shares issued for conversion of Series B Preferred Shares at $1.12 per share, January 31, 2011										356,422		356							356
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, January 31, 2011				(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, January 31, 2011														(6,521	)				(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.24 per share, January 31, 2011										5,271		5		6,516					6,521
Derivative liability - retirement ofSeries B Preferred Shares, January 31, 2011														72,432					72,432
Common shares issued for consulting and legal services valued at $1.47 per share, January 31, 2011										4,087		4		5,996					6,000
Common shares issued for conversion of warrants at $1.00 per share, February 4, 2011										25,000		25		24,975					25,000
Common shares issued for conversion of Series B Preferred Shares at $1.08 per share, February 14, 2011										370,017		370							370
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 14, 2011				(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, February 14, 2011														(4,986	)				(4,986	)
Common shares issued as dividend to Seaside 88, LP, at $1.08 per share, February 14, 2011										4,613		5		4,981					4,986
Derivative liability - retirement of Series B Preferred Shares, February 14, 2011														71,699					71,699
Warrants issued to Scientific Advisory Board, Feburary 15, 2011														54,000					54,000

Page 16

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of				Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Common shares issued for conversion of Series B Preferred Shares at $0.99 per share, February 28, 2011												405,610		406							406
Derivative liability - retirement of Series B Preferred Shares, February 28, 2011																71,490					71,490
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, February 28, 2011						(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, February 28, 2011																(3,452	)				(3,452	)
Common shares issued as dividend to Seaside 88, LP at $0.99 per shares, February 28, 2011												3,500		4		3,448					3,452
Common shares issued for consulting and legal services valued at $1.22 per share, February 28, 2011												4,902		5		5,995					6,000
Common shares issued for employee stock compensation at $1.32 per share, March 3, 2011												125,000		125		158,000					158,125
Common shares issued for employee stock compensation at $1.32 per share, March 3, 2011												125,000		125		158,000					158,125
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		250,000		250												574,331					574,581
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		250,000		250												574,331					574,581
Series A Preferred Shares issued for employee stock compensation, March 3, 2011		93,750		94												215,374					215,468
Common shares issued for conversion of Series B Preferred Shares at $1.09 per share, March 14, 2011												367,274		367							367
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 14, 2011						(40,000	)		(40	)											(40	)
Dividend paid to Seaside 88, LP, March 14, 2011																(1,918	)				(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.09 per shares, March 14, 2011												1,761		2		1,916					1,918
Derivative Liability - Retirement of Series B Preferred Shares, March 14, 2011																70,566					70,566
Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, March 28, 2011												89,986		90							90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, March 28, 2011						(10,000	)		(10	)											(10	)
Dividend paid to Seaside 88, LP, March 28, 2011																(384	)				(384	)
Common shares issued as dividend to Seaside 88, LP, at $1.11 per share, March 28, 2011												345		-		384					384
Derivative liability - retirement of Series B Preferred Shares, March 28, 2011																17,525					17,525
Common shares issued for consulting and legal services valued at $1.28 per share, March 31, 2011												4,680		5		5,995					6,000
Common shares issued for conversion of warrants to common stock at $1.00 per share, April 10, 2011												10,000		10		9,990					10,000
Series B Preferred Shares issued to SeaSide 88, LP, April 18, 2011						250,000			250							2,499,750					2,500,000

Page 17

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of		Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares	Amount	Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Placement Agents fees related to sale of Convertible Preferred shares, April 18, 2011														(160,000	)				(160,000	)
Legal fees related to Sale of Convertible Preferred Stock, April 18, 2011														(25,000	)				(25,000	)
Derivative liability - issuance of Series B Preferred Shares														(429,725	)				(429,725	)
Common shares issued for conversion of Series B Preferred Shares at $1.28 per share, April 18, 2011										312,163		312		(272	)				40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, April 18, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, April 18, 2011														68,756					68,756
Common shares issued for consulting and legal services valued at $1.47 per share, April 30, 2011										4,087		4		5,996					6,000
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, May 2, 2011										339,726		340		(300	)				40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 2, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, May 2, 2011														68,941					68,941
Dividend paid to Seaside 88, LP, May 2, 2011														(8,055	)				(8,055	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per shares, May 2, 2011										6,841		7		8,048					8,055
Warrants issued to Scientific Advisory Board, May 15, 2011														50,400					50,400
Common shares issued for conversion of Series B Preferred Shares at $1.19 per share, May 16, 2011										336,501		337		(297	)				40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 16, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, May 16, 2011														69,194					69,194
Dividend paid to Seaside 88, LP, May 16, 2011														(6,521	)				(6,521	)
Common shares issued as dividend to Seaside 88, LP at $1.20 per shares, May 16, 2011										5,438		5		6,516					6,521
Common shares issued for conversion of Series B Preferred Shares at $1.23 per share, May 30, 2011										326,480		326		(286	)				40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, May 30, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, May 30, 2011														69,464					69,464
Dividend paid to Seaside 88, LP, May 30, 2011														(4,986	)				(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $1.23 per share, May 30, 2011										4,070		4		4,982					4,986
Common shares issued for consulting and legal services valued at $1.47 per share, May 31, 2011										4,087		4		5,996					6,000

Page 18

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001					Additional			Stock		Deficit Accumulated During the			Total
	Number of				Number of						Number of					Paid-in			Subscription		Development			Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount			Capital			Receivable		Stage			Equity
Common shares issued for conversion of Series B Preferred Shares at $1.18 per share, June 13, 2011												339,971		340			(300	)							40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 13, 2011						(40,000	)		(40	)															(40	)
Derivative liability - retirement of Series B Preferred Shares, June 13, 2011																	69,727								69,727
Dividend paid to Seaside 88, LP, June 13, 2011																	(3,452	)							(3,452	)
Common shares issued as Dividend to Seaside 88, LP at $1.18 per share, June 13, 2011												2,934		3			3,449								3,452
Common shares issued for conversion of Series B Preferred Shares at $1.02 per share, June 27, 2011												391,850		392			(352	)							40
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, June 27, 2011						(40,000	)		(40	)															(40	)
Derivative Liability - Retirement of Series B Preferred Share, June 27, 2011																	69,973								69,973
Dividend paid to Seaside 88, LP, June 27, 2011																	(1,918	)							(1,918	)
Common shares issued as Dividend to Seaside 88, LP at $1.10 per share, June 27, 2011												1,741		2			1,916								1,918
Common shares issued for consulting and legal services valued at $1.22 per share, June 30, 2011												4,902		5			5,995								6,000

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

Balance, June 30, 2011		8,217,500		8,218		10,000			10			143,548,394		143,582			33,235,990			-		(23,216,909	)		10,170,891

Adjustment														(33	)		33								-
Common shares issued for conversion of Series B Preferred Shares at $1.11 per share, July 11, 2011												89,986		90											90
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 11, 2011						(10,000	)		(10	)															(10	)
Derivative liability - retirement of Series B Preferred Shares, July 11, 2011																	17,880								17,880
Dividend to Seaside 88, LP, paid on July 11, 2011																	(381	)							(381	)
Common shares issued as dividend to Seaside 88, LP at $1.18 per share, July 11, 2011												345		-			381								381
Series B Preferred Shares issued to SeaSide 88, LP, on July 26, 2011						250,000			250								2,499,750								2,500,000
Placement Agents fees related to sale of Convertible Preferred shares, July 26, 2011																	(150,000	)							(150,000	)
Derivative liability - issuance of Series B Preferred Shares																	(429,768	)							(429,768	)
Legal Fees related to Sale of Convertible Preferred Stock, July 26, 2011																	(6,250	)							(6,250	)
Common shares issued in conversion of Series B Preferred Shares to common stock at $1.18 per share, July 26, 2011												377,800		378											378

Page 19

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of		Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares	Amount	Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, July 26, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, July 26, 2011														68,425					68,425
Common shares issued for consulting and legal services valued at $1.26 per share, July 31, 2011										4,762		5		5,995					6,000
Warrants issued to Scientific Advisory Board, August 15, 2011														56,400					56,400
Common shares issued for conversion of Series B Preferred Shares at $0.92 per share, August 8, 2011										437,187		437							437
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 8, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, August 8, 2011														69,193					69,193
Dividend to Seaside 88, LP, paid on August 8, 2011														(8,055	)				(8,055	)
Common shares issued as Dividend to Seaside 88, LP at $0.98 per share, August 8, 2011										8,205		8		8,047					8,055
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, August 23, 2011										419,829		420							420
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, August 23, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, August 23, 2011														69,351					69,351
Dividend paid to Seaside 88, LP, August 23, 2011														(6,521	)				(6,521	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, August 23, 2011										6,844		7		6,514					6,521
Common shares issued for consulting and legal services valued at $1.14 per share, August 31, 2011										5,263		5		5,995					6,000
Common shares issued for conversion of Series B Preferred Shares at $0.95 per share, September 6, 2011										422,873		423							423
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 6, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Shares, September 6, 2011														69,887					69,887
Dividend paid to Seaside 88, LP, September 6, 2011														(4,986	)				(4,986	)
Common shares issued as Dividend to Seaside 88, LP at $0.95 per share, September 6, 2011										5,264		5		4,981					4,986
Common shares issued in conversion of Series B Preferred Shares at $0.94 per share, September 19, 2011										427,652		428							428
Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, September 19, 2011				(40,000	)		(40	)											(40	)
Derivative liability - retirement of Series B Preferred Share, September 19, 2011														69,970					69,970
Dividend to Seaside 88, LP, paid on September 19, 2011														(3,452	)				(3,452	)

Page 20

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of		Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares	Amount	Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Common shares issued as Dividend to Seaside 88, LP at $0.94 per share, September 19, 2011										3,691		3		3,449					3,452

Common shares issued for consulting and legal services valued at $1.07 per share, September 30, 2011										5,607		6		5,994					6,000

Shares issued in conversion of Series B Preferred Shares to Common Stock at $.78 per share, .001 par value, on October 3, 2011										514,311		514							514

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 3, 2011				(40,000	)		(40	)											(40	)

Derivative Liability - Retirement of Preferred Series B on October 3, 2011														69,496					69,496

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.85 on October 3, 2011										2,270		2		1,916					1,918

Dividend to Seaside 88, LP, paid on October 3, 2011														(1,918	)				(1,918	)

Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on October 17, 2011										144,484		144							144

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on October 17, 2011				(10,000	)		(10	)											(10	)

Derivative Liability - Retirement of Preferred Series B on October 17, 2011														17,790					17,790

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.75 on October 17, 2011										510		1		383					384

Dividend to Seaside 88, LP, paid on October 17, 2011														(384	)				(384	)

Shares issued for consulting and legal services rendered at $0..92 per share on October 31, 2011										6,537		5		5,995					6,000

Series B Preferred Shares issued to SeaSide 88, LP, $.001 par value on November 1, 2011				250,000			250							2,499,750					2,500,000

Placement Agents Fees related to sale of Convertible Preferred shares on November 1, 2011														(160,000	)				(160,000	)

Derivative Liability - Issuance of Preferred Series B														(429,804	)				(429,804	)

Page 21

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001		Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock	Deficit Accumulated During the	Total
	Number of		Number of						Number of				Paid-in			Subscription	Development	Stockholders'
	Shares	Amount	Shares			Amount			Shares		Amount		Capital			Receivable	Stage	Equity
Legal Fees related to Sale of Convertible Preferred Stock November 1, 2011														(25,000	)				(25,000	)
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.78 per share, .001 par value, on November 1, 2011										511,787		512							512

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 2, 2011				(40,000	)		(40	)											(40	)

Derivative Liability - Retirement of Preferred Series B on November 1, 2011														68,297					68,297
Warrants issued to Scientific Advisory Board on November 15, 2011														56,400					56,400
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.69 per share, .001 par value, on November 15, 2011										578,595		579							579

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 15, 2011				(40,000	)		(40	)											(40	)

Derivative Liability - Retirement of Preferred Series B on November 15, 2011														68,411					68,411

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0..73 onNovember 15, 2011										10,311		10		7,469					7,479

Dividend to Seaside 88, LP, paid on November 15, 2011														(7,479	)				(7,479	)

Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.62 per share, .001 par value, on November 29, 2011										642,735		643							643

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on November 29, 2011				(40,000	)		(40	)											(40	)

Derivative Liability - Retirement of Preferred Series B on November 29, 2011														68,591					68,591

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.64 on November 29, 2011										10,139		10		6,511					6,521

Dividend to Seaside 88, LP, paid on November 29, 2011														(6,521	)				(6,521	)

Shares issued for consulting and legal services rendered at $0.81 per share on November 30, 2011										7,373		7		5,993					6,000

Page 22

NanoViricides, Inc.

(A Development Stage Company)

Statement of Stockholders' Equity

For the period from May 12, 2005 (inception) through December 31, 2011

(Unaudited)

	Series A Preferred Stock: Par $0.001				Series B Preferred Stock: Par $0.001						Common Stock: Par $0.001				Additional			Stock		Deficit Accumulated During the			Total
	Number of				Number of						Number of				Paid-in			Subscription		Development			Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Receivable		Stage			Equity
Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.53 per share, .001 par value, on December 13, 2011												751,315		751										751

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 13, 2011						(40,000	)		(40	)														(40	)

Derivative Liability - Retirement of Preferred Series B on December 13, 2011																68,753								68,753

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 13, 2011												8,798		9		4,977								4,986

Dividend to Seaside 88, LP, paid on December 13, 2011																(4,986	)							(4,986	)

Shares issued in conversion of Series B Preferred Shares to Common Stock at $0.51 per share, .001 par value, on December 27, 2011												796,785		797										797

Retirement of Series B Preferred Shares converted into common stock by SeaSide 88, LP, .001 par value on December 27, 2011						(40,000	)		(40	)														(40	)

Derivative Liability - Retirement of Preferred Series B on December 27, 2011																68,965								68,965

Shares issued as Dividend to Seaside 88, LP, .001 par value common stock at $0.57 on December 27, 2011												6,818		7		3,445								3,452

Dividend to Seaside 88, LP, paid on December 27, 2011																(3,452	)							(3,452	)

Shares issued for consulting and legal services rendered at $0.64 per share on December 31, 2011												9,403		9		5,991								6,000

Net loss for the six months ended December 31, 2011																					(2,531,295	)		(2,531,295	)
		8,217,500		8,218		50,000			50			149,765,873		149,764		2,389,589			-		(25,748,204	)		12,388,239

See accompanying notes to the financial statements.

Page 23

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months Ending						For the Period From May 12, 2005 (Inception)
	December 31, 2011			December 31, 2010			Through December 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,531,295	)	$	(2,672,857	)		(25,748,204	)
Adjustments to reconcile net loss to net cash used in operating activities:
Preferred shares issued for license		—			—			7,000
Preferred shares issued as compensation		—			53,935			1,220,330
Common shares and warrants issued for services		36,000			95,000			3,179,494
Warrants granted to scientific advisory board		112,800			100,800			966,841
Amortization of deferred compensation		—			—			121,424
Depreciation and amortization		109,826			105,047			749,194
Change in fair value of derivative liability		(83,063	)		68,288			(213,777	)
Amortization of deferred financing expenses		—			—			51,175
Non cash interest on convertible debentures		—			—			73,930
Non cash interest expense on beneficial conversion feature of convertible debentures		—			—			713,079
Changes in operating assets and liabilities:
Prepaid expenses		9,414			(24,078	)		(314,880	)
Other current assets		—			—			(8,001	)
Deferred expenses		—			—			(2,175	)
Accounts payable		149,734			208,230			573,643
Accounts payable – related parties		272,997			(448,843	)		735,952
Accrued expenses		21,115			53,830			48,288
Accrued payroll to officers and related payroll tax expense		—			12,500			—
Net cash used in operating activities		(1,902,472	)		(2,448,148	)		(17,846,687	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(23,352	)		(106,686	)		(1,440,717	)
Trademark and Patent costs		(23,991	)		(17,810	)		(447,746	)
Net cash used in investing activities		(47,343	)		(132,813	)		(1,888,463	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Series B convertible Preferred Stock		4,824,875			4,595,000			17,284,875
Proceeds from issuance of common stock in connection with the private placement of common stock, net of issuing cost		—			—			11,296,748
Proceeds from exercise of stock options		—			—			90,000
Proceeds from exercise of warrants attached to convertible debentures		—			25,000			3,162,590
Stock subscription received		—			—			20
Net cash provided by financing activities		4,824,875			4,620,000			31,834,233
NET INCREASE IN CASH AND CASH EQUIVALENTS		2,875,060			2,039,039			12,099,083
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		9,224,023			6,955,733
CASH AND CASH EQUIVALENT, ENDING OF PERIOD	$	12,099,083		$	8,994,772		$	12,099,083
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
INTEREST PAID	$	—		$	—		$	—
INCOME TAX PAID	$	—		$	—		$	3,017

See accompanying notes to the financial statements.

Page 24

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited)

	Six months ended December 31,				For the Period From May 12, 2005 (Inception) through
	2011		2010		December 31, 2011
NON-CASH FINANCING AND INVESTING ACTIVITIES
Common stock issued for services	$	36,000	$	95,000	$	11,778,929
Preferred Stock Issued as compensation		—		53,935		2,638,915
Stock options issued to the officers as compensation		—		—		121,424
Stock warrants granted to scientific advisory board		112,800		100,800		1,023,241
Stock warrants granted to brokers		—		—		3,563
Common stock issued for interest on debentures		—		—		73,930
Shares of common stock issued in connection with debenture offering		—		—		49,000
Common stock issued upon conversion of convertible debentures		—		—		1,000,000
Common Stock issued for conversion of Series B Preferred Stock		4,675,327		5,100,000		17,075,327
Common Stock issued for dividends on Series B Preferred Stock		48,137		52,165		204,130
Debt discount related to beneficial conversion feature of convertible debt		—		—		713,079
Stock Warrants Issued in connection with Private Placement		—		—		7,681,578
Common stock issued for accounts payable		—		—		175,020
Common stock issued for equipment		—		—		137,500

See accompanying notes to the financial statements.

Page 25

NANOVIRICIDES, INC.

(A DEVELOPMENT STAGE COMPANY)

December 31, 2011 AND 2010

NOTES TO THE FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization and Nature of Business

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

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

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

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

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

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

On February 15, 2010 the Company executed an Additional License Agreement with TheraCour Pharma, Inc. (“TheraCour”). Pursuant to the Additional License Agreement, the Company was granted exclusive licenses, in perpetuity, for technologies, developed by TheraCour, for the development of drug candidates for the treatment of Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes. As consideration for obtaining these exclusive licenses, we agreed to pay a onetime licensing fee equal to 7,000,000 shares of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock is convertible, only upon sale or merger of the company, or the sale of or license of substantially all of the Company’s intellectual property, into shares of the Company’s common stock at the rate of four shares of common stock for each share of Series A Preferred Stock. The Series A Preferred Stock has a preferred voting preference at the rate of four votes per share. The Preferred Series A do not contain any rights to dividends, have no liquidation preference, and are not to be amended without the holder’s approval. The 7,000,000 shares were valued at the par value of $7,000.

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We focus our research and clinical programs on specific anti-viral therapeutics. We are seeking to add to our existing portfolio of products through our internal discovery and clinical development programs and through an in-licensing strategy. The Company has recently filed a pre-IND application to the US FDA for its clinical candidate NV-INF-1 in the FluCide™ program. This anti-influenza therapeutic candidate is expected to be effective against most if not all types of influenzas including Bird Flu H5N1, Highly Pathogenic Influenzas (HPI/HPAI), Epidemic Influenzas such as the 2009 “swine flu” H1N1/A/2009, and Seasonal Influenzas. To date, the Company does not have any commercialized products.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation – Interim Financial Information

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission for Interim Reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, considered necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. The accompanying financial statements and the information included under the heading “Management’s Discussion and Analysis or Plan of Operation” should be read in conjunction with our company’s audited financial statements and related notes included in our company’s form 10-K for the fiscal year ended June 30, 2011 filed with the SEC on October 13, 2011.

For a summary of significant accounting policies (which have not changed from June 30, 2011), see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011.

Recently Issued Accounting Pronouncements

In May 2011, the FASB issued the FASB Accounting Standards Update No. 2011-04 “Fair Value Measurement” (“ASU 2011-04”). This amendment and guidance are the result of the work by the FASB and the IASB to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards (IFRSs).

This update does not modify the requirements for when fair value measurements apply; rather, they generally represent clarifications on how to measure and disclose fair value under ASC 820, Fair Value Measurement, including the following revisions:

●

An entity that holds a group of financial assets and financial liabilities whose market risk (that is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those risks.

●

In the absence of a Level 1 input, a reporting entity should apply premiums or discounts when market participants would do so when pricing the asset or liability consistent with the unit of account.

●

Additional disclosures about fair value measurements.

The amendments in this Update are to be applied prospectively and are effective for public entity during interim and annual periods beginning after December 15, 2011.

In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05 “ Comprehensive Income” (“ASU 2011-05”), which was the result of a joint project with the IASB and amends the guidance in ASC 220, Comprehensive Income, by eliminating the option to present components of other comprehensive income (OCI) in the statement of stockholders’ equity. Instead, the new guidance now gives entities the option to present all non-owner changes in stockholders’ equity either as a single continuous statement of comprehensive income or as two separate but consecutive statements. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the amendments require entities to present all reclassification adjustments from OCI to net income on the face of the statement of comprehensive income.

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The amendments in this Update should be applied retrospectively and are effective for public entity for fiscal years, and interim periods within those years, beginning after December 15, 2011.

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

Note 3 – Financial Condition

The Company’s financial statements for the interim period ended December 31, 2011 have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company has a deficit accumulated during the development stage. In addition, the Company has not generated any revenues and no revenues are anticipated in the short-term. Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral drugs. The Company has not yet commenced any product commercialization. Such losses are expected to continue for the foreseeable future and until such time, if ever, as the Company is able to attain sales levels sufficient to support its operations. There can be no assurance that the Company will achieve or maintain profitability in the future. As of December 31, 2011 the Company had cash and cash equivalents of $12,099,083.

While the Company continues to incur significant operating losses and has significant capital requirements, the Company has been able to finance its business through sale of its securities (See Note 6). Additionally, subsequent to the reported period, on November 2, 2011, the Company entered into an additional Securities Purchase Agreement (the “Agreement”) with Seaside 88, LP (“Seaside”), relating to the offering and sale (the “Offering”) of up to 500,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) at the purchase price of $10.00 per share (the “Purchase Price”). On November 2, 2011, Seaside purchased an initial 250,000 shares of the Series B Preferred Stock for an aggregate purchase price of $2,500,000 (the “Initial Closing”). On February 8, 2012 Seaside purchased the remaining 250,000 shares of the Series B Preferred Stock for the purchase price of $2,500,000 (the “Subsequent Closing”). The Company has sufficient capital to continue its business, at least, through December 31, 2013, at the current rate of expenditure. The Company therefore would not be considered to have risks relative to its ability to continue as a going concern within the applicable guidelines.

Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral nanomedicines. The Company has not yet commenced any product commercialization. The Company has incurred significant losses from operations since its inception, resulting in a deficit accumulated during the development stage of $25,748,204 at December 31, 2011 and expects recurring losses from operations to continue for the foreseeable future and until such time, if ever, as the Company is able to attain sales levels sufficient to support its operations. There can be no assurance that the Company will achieve or maintain profitability in the future. Despite the Company’s financings in 2011 and 2010 and a cash and cash equivalent balance of $12,099,083 at December 31, 2011, substantial additional financing will be required in future periods. The Company may require additional capital to finance planned and currently unplanned capital costs, and additional staffing requirements during the next twenty four months. The Company believes it can adjust its priorities of drug development and its Plan of Operations as necessary, if it is unable to raise such funds.

Note 4 – Significant Alliances and Related Parties

TheraCour Pharma, Inc.

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

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On February 15, 2010, the Company executed an Additional License Agreement with TheraCour Pharma, Inc. (“TheraCour”). Pursuant to the exclusive Additional License Agreement, the Company was granted exclusive licenses, in perpetuity, for technologies developed by TheraCour for the development of drug candidates for the treatment of Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes. As consideration for obtaining these exclusive licenses, we agreed to pay a onetime licensing fee equal to seven million shares of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock is convertible, only upon sale or merger of the company, or the sale of or license of substantially all of the Company’s intellectual property, into shares of the Company’s common stock at the rate of four shares of common stock for each share of Series A Preferred Stock. The Series A Preferred Stock has a preferred voting preference at the rate of four votes per share. The Preferred Series A do not contain any rights to dividends; have no liquidation preference and are not to be amended without the holders approval. The issuance of the 7,000,000 shares was valued at their par value or $7,000.

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

Development costs charged by and paid to TheraCour were $861,547 and $641,989 for the six months ended December 31, 2011, and 2010, respectively and $5,764,452 since inception. As of December 31, 2011, pursuant to its license agreement, the Company has paid a security advance of $306,160 to and held by TheraCour which is reflected in Prepaid Expenses. No royalties are due TheraCour from the Company’s inception through December 31, 2011.

TheraCour is affiliated with the Company through the common control of it and our Company by Anil Diwan, President, who is a director of each corporation, and owns approximately 70% of the common stock of TheraCour, which itself owns approximately 24.90% of the Common stock of the Company.

TheraCour owns 33,360,000 shares of the Company’s outstanding common stock as of December 31, 2011.

KARD Scientific, Inc.

In June 2005, the Company engaged KARD Scientific to conduct pre clinical animal studies and provide the Company with a full history of the study and final report with the data collected from Good Laboratory Practices (CGLP) style studies. Dr. Krishna Menon, the Company’s Consulting Chief Regulatory Officer, a non executive position, is also an officer and principal owner of KARD Scientific. Lab fees charged by KARD Scientific for services for the six months ended December 31, 2011, and 2010, were $224,280 and $614,052 respectively and $1,576,917 since inception.

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

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

Note 5 - Prepaid Expenses

Prepaid Expenses are summarized as follows:

	December 31, 2011		June 30, 2011
TheraCour Pharma, Inc.	$	306,160	$	306,160
Prepaid Others		16,720		26,134
	$	322,880	$	332,294

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Note 6 – Equity Transactions

On November 2, 2011, the Company entered into an additional Securities Purchase Agreement (the “Agreement”) with Seaside 88, LP (“Seaside”) relating to the offering and sale (the “Offering”) of up to 500,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) at the purchase price of $10.00 per share (the “Purchase Price”). No warrants were issued in connection with this offering. On November 2, 2011, Seaside purchased an initial 250,000 shares of the Series B Preferred Stock for an aggregate purchase price of $2,500,000 (the “Initial Closing”). Also on November 2, 2011 40,000 shares of the Series B Preferred Stock automatically converted into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a conversion price of $0.782 per share.

The Follow-on closing occurred on February 8, 2012 at which Seaside purchased the remaining 250,000 shares of the Series B Preferred Stock for the purchase price of $2,500,000 (the “Subsequent Closing).

The Agreement contains representations and warranties and covenants for each party, which must be true and have been performed at each closing. Additionally, the Company has agreed to indemnify and hold harmless Seaside against certain liabilities in connection with the issuance and sale of the Series B Preferred Stock under the Agreement.

The offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-165221), which was declared effective by the Securities and Exchange Commission on April 29, 2010. The Company, pursuant to Rule 424(b) under the Securities Act of 1933, has filed with the Securities and Exchange Commission a prospectus supplement relating to the offering.

In connection with the offering, pursuant to a placement agency agreement entered into by and between Midtown Partners & Co., LLC (“Midtown”) and the Company, as amended by an Underwriter Agent Agreement Amendment No. 1, dated March 28, 2011 (as amended, the “Placement Agency Agreement”), on November 3, 2011 (the “Placement Agent Agreement”), the Company paid Midtown a cash fee representing 6% of the gross purchase price paid by Seaside for the Series B Preferred Stock, totaling $150,000. In addition, subsequent to the February 8, 2012 follow-on closing (see above), the Company paid Midtown a cash fee representing 6% of the gross purchase price paid by Seaside for the Series B Preferred Stock, totaling $150,000.

During the six months ended December 31, 2011, Seaside converted the following amounts of Series B Preferred Stock into the Company’s Common Stock:

Date of Conversion	Number of Shares of Series B Converted		Conversion Price		Number of Shares of .001 par value Common Stock Issued Pursuant to Conversion		Dividend Conversion Price		Dividend Shares Issued		Total Shares of .001 par value Common Stock Issued to Seaside
07/11/2011		10,000		1.11129		89,986		1.11129		345		90,331
07/26/2011		40,000		1.05876		377,800		—		—		377,800
08/08/2011		40,000		0.91494		437,187		0.98167		8,205		445,392
08/23/2011		40,000		0.95277		419,829		0.95277		6,844		426,673
09/06/2011		40,000		0.94591		422,873		0.94733		5,264		428,137
09/19/2011		40,000		0.93534		427,652		0.93534		3,691		431,343
10/03/2011		40,000		0.77774		514,311		0.84473		2,270		516,581
10/17/2011		10,000		0.69212		144,484		0.75149		510		144,994
11/02/2011		40,000		0.781575		511787		—		—		511,787
11/15/2011		40,000		0.69133		578,595