NOTE 4 – INVESTMENT IN DEBT AND EQUITY SECURITIES

INVESTMENT IN FEMASYS SECURITIES

On November 14, 2023, the Company entered into a Securities Purchase Agreement (the “Femasys Purchase Agreement”) with Femasys Inc. (“Femasys”), pursuant to which it agreed to purchase from Femasys for a sum of $5,000,000, (i) senior unsecured convertible notes (the “Femasys Notes”) in an aggregate principal amount of $5,000,000, convertible into shares of Femasys common stock, par value $0.001 per share (the “Femasys Shares”) at a conversion price of $1.18 per share, (ii) Series A Warrants (the “Series A Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.18 per share, and (iii) Series B Warrants (the “Series B Warrants”, together with the Series A Warrants, the “Femasys Warrants,” and, together with the Notes, the “Femasys Securities”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.475 per share (collectively, the “Investment”). The Femasys Notes accrue interest at 6.0% per annum, payable annually, and mature two years after the date of issuance. The Femasys Warrants expire five years from the date of issuance.

Pursuant to the terms of the Femasys Purchase Agreement, the Company’s Chief Executive Officer was appointed to the Femasys board of directors.

The convertible note receivable is not traded in active markets and the fair value was determined using a Monte Carlo simulation. The convertible note receivable is accounted for as available-for-sale debt securities based on “Level 3” inputs, which consist of unobservable inputs and reflect management’s estimates of assumptions that market participants would use in pricing the asset. The Company elected the fair value option for the Femasys Notes, therefore, holding gains and losses are included within change in fair value of the notes in the unaudited condensed consolidated statement of operations. The Femasys Warrants are accounted for as an equity security and are valued using a Monte Carlo simulation based on “Level 3” inputs, which consist of unobservable inputs and reflect management’s estimates of assumptions that market participants would use in pricing the asset, recorded at fair value with subsequent changes included within change in fair value of the warrants in the unaudited condensed consolidated statement of operations.

During the three months ended July 31, 2025 and 2024, the Company recognized interest income of $75,000 and $75,000, respectively, from the Femasys Note. As of July 31, 2025 and April 30, 2025, the Company has accrued interest receivable of $212,500 and $137,500, respectively.

As of July 31, 2025, the fair value of the Femasys Note was approximately $4,608,000, using the following assumptions: stock price of $0.83, time to expiration of 0.29 years, interest rate of 6.0%, discount rate of 16.4%, risk free rate of 4.39%, equity volatility of 64.0% and probability of default of 7.7%.

As of July 31, 2025, the fair value of the Femasys Series A Warrants was approximately $1,846,000 and was determined utilizing the following assumptions: Femasys stock price of $0.83, exercise price of $1.18, risk free rate of 3.90%, equity volatility of 88.0% and remaining term of 3.29 years.

The Company recognized the Femasys Note and Femasys Warrants based on their respective fair values as of April 30, 2025 of $3,696,000 and $3,061,000, respectively. Subsequent changes in the fair value of the Femasys Note and Femasys Warrants are recognized in earnings, at each reporting date. During the three months ended July 31, 2025, the Company recognized a gain for change in fair value of the convertible note receivable of $912,000 and a loss for change in fair value of the warrant asset of $1,215,000. See Note 12 – Fair value Measurements for further information.

Below is a summary of activity for the Femasys Note and Femasys Warrants as of July 31, 2025:

MARKETABLE SECURITIES

On November 21, 2024, the Company received from the Femasys Notes a payment in Femasys common stock for interest income in the amount of $300,000. The interest income payment was based on the Femasys average stock price on that date of $0.95, therefore, the Company received 315,790 common stock shares valued at $366,316 on April 30, 2025. As of July 31, 2025, the current market value of the Femasys common stock shares was $0.83 that generated an unrealized loss of $104,463.

Cost and fair value of marketable equity securities at July 31, 2025 are as follows:

The fair value of equity securities has been measured on a recurring basis using Level 1 inputs, which are based on unadjusted quoted market prices within active markets. There have been no changes in valuation approaches or techniques and related inputs.

INVESTMENT IN TNF PHARMACEUTICALS, INC.

On May 20, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with a public company operating in the medical industry, MyMD Pharmaceuticals, Inc. which subsequently changed its name to TNF Pharmaceuticals, Inc., (“TNF”). Pursuant to the SPA, the Company purchased (i) 7,000 shares of TNF’s Series G Convertible Preferred Stock (the “Series G Preferred Shares” or “Series G Preferred Stock”), representing approximately 33% of TNF’s issued and outstanding share capital on an as-converted basis (and approximately 78% of all shares of Series G Preferred Stock outstanding), at a price of $1.816 per Series G Preferred Share, which are convertible into 3,854,626 shares of Common Stock (as defined below); (ii) warrants to purchase up to 3,854,626 shares of TNF’s Common Stock with a five-year term (“TNF Series G Long-Term Warrant”); and (iii) warrants to purchase up to 3,854,626 shares of TNF’s Common Stock with a 18-month term (“TNF Series G Short-Term Warrant”) (collectively, the “TNF Series G warrants”), for an aggregate purchase price of $7,000,000. In April 2025, TNF issued securities that caused changes to the original terms of the Series G Preferred Stock. The conversion and exercises prices were adjusted to $0.1832 per Series G Preferred Share, the number of TNF Series G Long-Term Warrants were adjusted to purchase 38,209,611 shares of TNF Common Stock and the number of TNF Series G Short-Term Warrants were adjusted to purchase 38,209,611 shares of TNF Common Stock.

Pursuant to the SPA, the Company has the right to participate in future sales of TNF’s equity and equity-linked securities until the second anniversary of the Closing or the date on which no Series G Preferred Shares remain outstanding, whichever is earlier. Additionally, the Company has the right to nominate one individual to serve on TNF’s board of directors until PharmaCyte no longer beneficially owns at least 20% of TNF’s common stock on an as-converted basis. The Company’s Chief Executive Officer serves on the board of directors of TNF.

The Company has determined that TNF is a VIE, since TNF does not have sufficient equity at risk to finance its own operations without additional subordinated financial support. However, the Company has determined that it is not the primary beneficiary of TNF. Furthermore, Series G Preferred Stock is not considered in substance common stock, and as such, the equity method of accounting does not apply. The Company recorded its investment in Series G Preferred Stock at its fair value as the Company did not elect the measurement alternative to account for the investment at cost less impairment. Subsequent changes in fair value of the Series G Preferred Stock are recognized in earnings at each reporting period. The fair value of the Series G Preferred Stock was estimated utilizing a Monte Carlo simulation.

The TNF Series G Warrants were determined to meet the definition of a derivative and were required to be recorded at fair value in accordance with ASC 815. Subsequent changes in the fair value of the TNF Series G Warrants are recognized in earnings, at each reporting date. The issuance date fair value of the TNF Series G Warrants was determined utilizing the Black Scholes Merton Method.

The Series G Preferred Stock shares include a 10% dividend, the Company has elected to receive the shares as Payment in Kind (“PIK”). As of July 31, 2025, and April 30, 2025 the Company owned 8,381, including accrued dividend of 1,381 shares, and 7,831 Series G Preferred Stock shares, respectively.

During the three months ended July 31, 2025, the Company recognized a loss for the change in fair value of the Series G Preferred Stock of approximately $2,839,000. The approximately $19,635,000 fair value of the Series G Preferred Stock was estimated utilizing a Monte Carlo simulation with the following assumptions on July 31, 2025: TNF stock price of $0.11, price floor of $0.36, expected time to settlement of 5.00 years, dividend rate of 10%, discount market interest rate of 18.0%, risk free rate of 3.96%, equity volatility of 110.0% and probability of default of 47%. The Company recognized a loss related to the change in the TNF Series G Warrants fair value of approximately $4,832,000. The approximately $3,786,000 fair value of the TNF Series G Warrants was determined utilizing the Black Scholes Merton Method with the following assumptions on July 31, 2025: TNF stock price of $0.11, exercise price of $0.18, risk free rate of 3.84%-4.29%, equity volatility of 120.0%-160.0% and remaining term of 0.32-3.81 years.

Below is a summary of activity for the Series G Preferred Stock as of July 31, 2025:

Below is a summary of activity for the TNF Warrants as of July 31, 2025: