PDS Biotechnology Corp: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2024 on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 27, 2025.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning the Company and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the Company’s management, as well as assumptions made by, and information currently available to, management. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend,” “forecast,” “guidance”, “outlook” and other similar expressions among others. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation:

• the Company’s ability to protect its intellectual property rights;
• the Company’s anticipated capital requirements, including the Company’s anticipated cash runway and the Company’s current expectations regarding its plans for future equity financings;
• the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its clinical and product candidates, and the risks that raising such additional capital may restrict the Company’s operations or require the Company to relinquish rights to the Company’s technologies or clinical and product candidates;
• the Company’s limited operating history in the current line of business, which makes it difficult to evaluate the Company’s prospects, the Company’s business plan or the likelihood of the Company’s successful implementation of such business plan;
• the timing for the Company or its partners to initiate the planned clinical trials for its Versamune® products, including PDS0101 (Versamune® HPV), PDS0103 (Versamune® MUC1), and others, alone or in combination with PDS01ADC, as well as Infectimune® based clinical candidates and the future success of such trials;
• the successful implementation of the Company’s research and development programs and collaborations, including any collaboration trials concerning the Company’s Versamune®, PDS01ADC and Infectimune® based clinical and product candidates and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the Company’s clinical and product candidates;
• the success, timing and cost of the Company’s ongoing clinical trials and anticipated clinical trials for the Company’s current clinical candidates, including statements regarding the timing of initiation, pace of enrollment and completion of the trials (including our ability to fully fund our disclosed clinical trials, which assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences and data reported in an abstract, and receipt of interim results (including, without limitation, any preclinical results or data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;
• expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of the Company’s clinical and product candidates;
• any Company statements about its understanding of clinical and product candidates’ mechanisms of action and interpretation of preclinical and early clinical results from its clinical development programs and any collaboration trials; the acceptance by the market of the Company’s clinical and product candidates, if approved;
• the timing of and the Company’s ability to obtain and maintain U.S. Food and Drug Administration or other regulatory authority approval of, or other action with respect to, the Company’s clinical and product candidates; and
• other factors, including legislative, regulatory, political and economic developments not within the Company’s control, including unforeseen circumstances or other disruptions to normal business operations arising from or related to those listed under Part II, Item 1A. Risk Factors.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, whether as a result of new information, future events or otherwise.

In this Quarterly Report, unless otherwise stated or the context otherwise indicates, references to “PDS Biotech,” “the Company,” “we,” “us,” “our” and similar references refer to PDS Biotechnology Corporation, a Delaware corporation.

Company Overview

We are a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies based on our Versamune® T cell activator and Versamune® in combination with our interleukin 12 (IL-12) fused anti-body drug conjugate (ADC), PDS01ADC. In addition, we are developing the Infectimune® T cell-activator in infectious diseases.

We believe our investigational targeted immunotherapies have the potential to overcome limitations of current immunotherapy approaches through effective conversion of the immune suppressive tumor to an immunogenic microenvironment in addition to the induction of the right type, potency and quantity of tumor-targeting killer (CD8) T cells. Our Versamune® immunotherapies and Versamune® in combination with PDS01ADC, are being developed for treatments in oncology, and Infectimune® is being developed for preventive vaccines against infectious agents. When paired with an antigen, which is a disease-related protein that is recognizable by the immune system, Versamune® and Infectimune® have both been shown to induce, in vivo, large quantities of high-quality, highly potent polyfunctional disease-specific CD4 helper and CD8 killer T cells, a specific sub-type of T cell that has shown potential to be more effective at killing infected or target cells. Infectimune® is also designed to promote the induction of disease-specific neutralizing antibodies. PDS01ADC is an investigational tumor targeting IL-12 that we believe may enhance the proliferation, potency and longevity of T cells in the tumor microenvironment and reduces the prevalence of immune suppressive cells and components within the tumor. We believe that our proprietary combinations of Versamune® and PDS01ADC together with immune checkpoint inhibitors or other standards of care, may enhance the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and work synergistically to inhibit or treat cancer.

Recent Developments

In March 2025, we announced the initiation of our VERSATILE-003 Phase 3 clinical trial evaluating PDS0101 (Versamune® HPV) in HPV16-positive first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma.

In July 2025, we announced that the colorectal cancer cohort of a phase 2 clinical trial with PDS01ADC met the pre-defined criteria for expansion to stage 2 following positive stage 1 results.

Clinical Candidate Pipeline

VERSATILE-003: PDS0101 (Versamune® HPV) + pembrolizumab

The clinical trial is designed to enroll a total of 351 patients with approximately 234 patients receiving the combination treatment of Versamune® HPV and pembrolizumab, and approximately 117 patients receiving pembrolizumab alone. Generally, the patient treatment protocol is identical to that of VERSATILE-002, described below, enrolling only ICI naïve patients. As such, patients in the trial will receive a total of 5 cycles of combination therapy, with standard of care pembrolizumab therapy administered every three weeks until disease progression.

The clinical trial’s primary endpoint is median overall survival. Secondary endpoints are objective response rate, disease control rate, duration of response and progression free survival.

Furthermore, the clinical trial design includes two interim data readouts estimated at approximately 6 months following full enrollment and 18 months following full enrollment, respectively. Final readout from the trial is expected approximately 24 months following full enrollment.

VERSATILE-002: PDS0101 + Keytruda®

In November 2020, our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is the FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer commenced. Enrollment in stage 2 of 2 for the ICI naïve arm and the ICI resistant arms are complete. The clinical trial will evaluate the efficacy and safety of this therapeutic combination as a first and second line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection.

In this trial sponsored by PDS Biotech, patients whose cancer has returned following initial treatment or spread will be treated with the combination of PDS0101and Keytruda® to evaluate if the addition of PDS0101 might improve the efficacy reported in published studies of Keytruda® alone. Patients in the trial will receive a total of 5 cycles of combination therapy in the context of standard of care Keytruda® therapy administered every three weeks until disease progression. The primary endpoint of VERSATILE-002 is the objective response rate, or ORR, at six months following initiation of treatment. There are two cohorts in the trial. Cohort 1 is for patients who have yet to be treated with an immune checkpoint inhibitor (ICI naïve) and cohort 2 which consists of patients who have failed immune checkpoint inhibitor therapy (ICI resistant).

In May 2023, we completed enrollment in the ICI naïve arm. We filed our amended IND with the FDA in the third quarter of 2023. In October 2023, we received feedback from the FDA on the amended IND.

In June 2023, an abstract was presented at the 2023 American Society of Clinical Oncology: Abstract number 6012, Safety and Efficacy of Immune Checkpoint Inhibitor (ICI) Naïve Cohort from Study of Versamune® HPV and Pembrolizumab in HPV16-Positive Head and Neck Squamous Cell Carcinoma (HNSCC). The abstract was also selected as one of the featured posters to be reviewed by an expert panel in the Head and Neck Cancer discussion session. Data on 34 patients was presented. The data from the abstract is as follows:

• Estimated 12-month overall survival rate was 87.1%. Published results are 36-50% with approved ICIs used alone.
• Median progression-free survival was 10.4 months (95% CI 4.2, 15.3). Published results are median PFS of 2-3 months for approved ICIs when used as monotherapy in patients with similar PD-L1 levels.
• A disease control rate (disease stabilization or tumor shrinkage) of 70.6% (24/34)
• Confirmed and unconfirmed objective response rate is 41.2% (14/34 patients), which is identical to the preliminary response rate data PDS Biotech previously reported at ASCO 2022 (7/17 patients). To date these responses have been confirmed in nine of the 34 patients (26.5%), including one complete response.
• 15/34 patients (44.1%) had stable disease.
• 9/34 patients (26.5%) had progressive disease.
• 4/48 (8.3%) of patients had a Grade 3 treatment-related adverse event (TRAE). No Grade 4 or higher TRAEs were observed.

In October 2023, at a key opinion roundtable updated interim data was presented based on an August 2, 2023 cut-off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of Versamune® HPV in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer. Data on 52 patients was presented. The data from the roundtable based on investigator assessment was as follows:

Highlights from the ICI naïve cohort included:

• 24-month overall survival (OS) rate of 74%; published 24-month survival rate of less than 30% for approved ICI.
• 12-month OS rate of 80%; published results of 30-50% with approved ICIs.
• Tumor shrinkage seen in 60% (31/52) of patients.
• Confirmed overall response rate ORR of 27% (14/52) to date.
• Median progression-free survival (PFS) of 8.1 months to date; published results of 2-3 months PFS with approved ICIs.
• 13% (8/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 0% (0/62) experienced Grade 4 or 5 TRAE; published results report 13-17% Grade 3-5 TRAE with approved ICI monotherapy.
• 60% (33/55) of patients had CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (22/55) have CPS score ≥20 (who generally have a stronger response to Keytruda®).

In May 2024, at a virtual key opinion leader event, updated interim data was presented based on a November 30, 2023 cut-off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer. Data from 53 patients was presented. The data from the event based on investigator assessment was as follows:

Highlights from the ICI naïve cohort with CPS > 1 included:

• Median overall survival of 30 months; published results for ICIs are 7-18 months.
• Confirmed overall response rate ORR of 34% (18/53) to date; published results for comparable patients receiving treatment with ICIs are less than 20%.
• Confirmed complete responses, partial responses and stable disease according to RECIST v1.1 were seen in 75.5% of patients.
• Median progression-free survival (PFS) of 6.3 months to date; published results of 2-3 months PFS with approved ICIs.
• The combination of PDS0101and Keytruda® appeared to be well tolerated with 11% (7/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 2% (1/62) experienced Grade 4 or 5 TRAE; published results report 13-17% Grade 3-5 TRAE with approved ICI monotherapy.
• 60% (32/53) of patients had CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (21/53) have CPS score ≥20 (who generally have a higher response to Keytruda®).

During the May 2024 event, we also announced an updated clinical strategy with a two-part registrational trial focused on the double combination of Versamune® HPV + pembrolizumab, accompanied by an investigation of the triple combination of PDS0101 + PDS01ADC + pembrolizumab as a first line treatment in HPV16-positive recurrent/metastatic HNSCC.

In June 2024, we provided a data update from our VERSATILE-002 clinical trial. Interim data was presented based on a May 17, 2024 cut-off. The data update was as follows:

• Median Overall Survival of 30 months, consistent with data presented our key opinion leader event in May of 2024, which was based on a data cut as of November 30, 2023.
• 27 of the censored patients remained alive and were awaiting their next clinical assessment, 6 censored patients had withdrawn consent for further follow-up, and 2 patients had been lost to follow-up, and 18 patients had died.
• The lower limit of the 95% confidence interval is 19.7 months, and the upper limit is not yet estimable, as the majority of patients continue to be followed for survival.

In August 2024, we provided an update to our clinical strategy following discussions with the FDA. During the August 2024 update, we announced our intent to initiate a registrational study in first line treatment in HPV16-positive recurrent/metastatic HNSCC with the double combination of PDS0101 + pembrolizumab.

In September 2024, we announced updated data from our VERSATILE-002 Phase 2 clinical trial presented during a poster session at the European Society for Medical Oncology (ESMO) Congress 2024. The data presented was based on a May 17, 2024 data cut-off. The main elements of the update were as follows:

• Median Overall Survival (mOS) was 30 months with a lower 95% confidence interval of 19.7 months; Published mOS for pembrolizumab is 12-18 months
• Objective Response Rate (ORR) of 36% (19/53); Published ORR for pembrolizumab is 19-25%
• Disease Control Rate (DCR) is 77% (41/53)
• 21% (11/53) of patients had deep tumor responses and shrinkage of 90-100%
• 9% (5/53) of patients had a complete response
• Treatment-related adverse events of Grade ≥3 were seen in 9 patients (Grade 3, n=8 and Grade 4, n=1)

In June 2025, we announced publication of an abstract at the American Society of Clinical Oncology (ASCO) Annual Meeting with updated data from VERSATILE-002. Main elements of the update were as follows:

• Median Overall Survival (mOS) was 30.0 months overall; 39.9 months for patients with CPS≥20; 26.1 months for patients with CPS 1-19.
• Median Progression Free Survival (mPFS) was 6.3 months overall; 14.1 months for patients with CPS≥20; 5.1 months for patients with CPS 1-19
• Objective Response Rate (ORR) was 35.8% overall; 47.6% for patients with CPS≥20; 28.1% for patients with CPS 1-19
• Tumor shrinkage of 90-100% was 20.8% overall; 28.6% for patients with CPS≥20; 15.6% for patients with CPS 1-19
• Disease Control Rate (DCR) was 77.4% overall; 81.0% for patients with CPS≥20; 75.0% for patients with CPS 1-19
• Median Duration of Response (DoR) was 21.8 months overall; not yet estimable for patients with CPS≥20; 21.8 months for patients with CPS 1-19

National Cancer Institute: PDS0101 + PDS01ADC +Bintrafusp Alfa

In June 2020, the first patient was dosed under a Cooperative Research and Development Agreement (CRADA), in the NCI led Phase 2 investigator-initiated trial evaluating PDS0101 with PDS01ADC, and M7824 (Bintrafusp alfa), which is owned by EMD Serono (Merck KGaA) in patients with advanced HPV-positive cancers who have failed prior treatment. In February 2021, the NCI’s Phase 2 clinical trial of PDS0101 for the treatment of advanced HPV-positive cancers had achieved its preliminary objective response target in patients naïve to check point inhibitors which allowed for full enrollment of approximately 20 patients in this group. In addition, based on promising results in the ICI naïve arm, the trial was amended to allow enrollment of a separate cohort of IC -resistant patients for assessment of safety and activity of the triple combination. The trial has been closed for enrollment. Preliminary efficacy assessment of the triple combination in this added group of 29 ICI resistant patients has been completed and evaluation of long-term patient survival is ongoing.

Preclinical study results arising from this CRADA were published in the Journal for ImmunoTherapy of Cancer, Immunomodulation to enhance the efficacy of an HPV therapeutic vaccine (Journal for ImmunoTherapy of Cancer2020;8:e000612. Doi:10.1136/ jitc-2020-000612), and indicate that PDS0101 generated both HPV-specific T cells and an associated antitumor response when used as a monotherapy. When PDS0101 was combined with the two other novel clinical-stage anti-cancer agents, Bintrafusp Alfa and M9241 (which is now owned by us and referred to as PDS01ADC), the preclinical data suggested that all three therapeutic agents worked synergistically to provide superior tumor T cell responses and subsequent tumor regression when compared to any of the agents alone or the 2-component combinations. The published preclinical data demonstrating powerful activity of the triple combination appears to be corroborated in the Phase 2 trial, and this triple combination could form the basis of a unique platform providing improved cancer treatments across multiple cancers.

In February 2023, we announced the completion of a Type B meeting with the FDA for the combination therapy of PDS0101, PDS01ADC, and an FDA-approved immune checkpoint inhibitor for the treatment of recurrent/metastatic HPV-positive ICI-resistant head and neck cancer. We confirmed the required contents of the trial design for a potential registrational trial of the combination.

In November 2023, we released updated interim survival data as follows:

• 75% of immune checkpoint inhibitor (ICI) naïve patients remain alive at 36 months; published median overall survival (OS) in similar patients is 7-11 months
• 12-month survival rate in (ICI) resistant patients of 72%
• Median OS in ICI resistant HPV-positive patients of approximately 20 months; published median OS is 3.4 months

In February 2025, we announced the publication of clinical results in the Journal of the American Medical Association (JAMA) Oncology:

• Median Overall Survival (mOS) of 42.4 months in immune checkpoint inhibitor naïve patients; Historical published result is 7-12 months
• Continued survival in the cohort of HPV16-positive immune checkpoint inhibitor naïve patients - mOS not yet reached
• Median OS of 17 months in HPV16-positive immune checkpoint inhibitor resistant patients; Historically published result is 3-4 months
• Significant tumor shrinkage with confirmed objective response rate (ORR) of 75% in HPV16-positive immune checkpoint inhibitor naïve patients; Historically published result is 11-24%

MD Anderson Cancer Center (IMMUNOCERV): PDS0101 + Chemoradiotherapy

In October 2020, a Phase 2 Investigator Initiated Trial (IIT) was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients. This clinical trial is investigating the safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical immunological biomarkers in patients with locally advanced cervical cancer. We believe that Versamune® has strong T cell induction with the potential to enhance efficacy of the current standard of care CRT treatment in this indication with the FDA at this meeting.

In October 2023, data demonstrating PDS0101 in combination with standard-of-care (SOC) chemoradiotherapy was associated with a rapid decline in human papillomavirus circulating cell-free DNA (ctHPV-DNA), a potential predictive biomarker of treatment response. The data from the IMMUNOCERV Phase 2 clinical trial was featured in an oral presentation at the American Society for Radiation Oncology Annual Meeting which included the following:

• Earlier and greater proportion of ctDNA clearance with PDS0101 plus chemoradiation (CRT) vs. SOC CRT alone (81.3% clearance after 3 weeks vs. 30.3% with SOC (p=0.0018), and 91.7% of clearance at 5 weeks vs. 53.1% with SOC (p=0.0179).
• Baseline ctDNA levels correlated with the International Federation of Gynecology and Obstetrics (FIGO) stage and lymph node involvement; 100% of patients treated with PDS0101 had cancer that had spread to the lymph nodes.

Mayo Clinic: PDS0101 (Versamune® HPV) Monotherapy and in combination with Keytruda®

In February 2022, we initiated an IIT, MC200710, for PDS0101 alone or in combination with the immune checkpoint inhibitor, Keytruda®, in patients with HPV-positive oropharyngeal cancer (HPV(+) OPSCC) at high risk of recurrence. The trial is conducted by the Mayo Clinic, a nationally and internationally recognized center of excellence for the treatment of head and neck cancers. We believe that this trial allows us to better understand the activity of PDS0101 alone or in combination with Keytruda® in earlier stages of disease.

In this trial, treatment will be administered before patients proceed to transoral robotic surgery (TORS) with curative intent. Treatment in this setting is referred to as neoadjuvant treatment. PDS0101 has been shown to induce killer T cells that target and kill HPV-positive cancers, either alone or in combination with ICIs in preclinical studies, and in combination in clinical studies of patients with advanced recurrent/metastatic HPV-positive cancers. The trial will explore whether Versamune®HPV with or without checkpoint inhibition may increase HPV-specific anti-tumor responses, potentially resulting in tumor shrinkage, pathologic regression, and decreases in circulating tumor DNA (ctDNA).

PDS0103 (Versamune® MUC1)

In April 2020, the above mentioned CRADA between PDS Biotech and the NCI was expanded beyond PDS0101 (Versamune® HPV) to include clinical and preclinical development of PDS0103. PDS0103 is an investigational immune therapy owned by PDS Biotech and designed to treat cancers associated with the mucin-1, or MUC1, oncogenic protein. These include cancers such as ovarian, breast, colorectal and lung cancers. PDS0103 combines Versamune® with novel highly immunogenic agonist epitopes of MUC1 developed by the NCI and licensed by us.

MUC1 is highly expressed in several types of cancer and has been shown to be associated with drug resistance and poor disease prognosis in breast, colorectal, lung and ovarian cancers, for which PDS0103 is being developed. Expression of MUC1 is often associated with poor disease prognosis, due in part to drug resistance. In preclinical studies, and similarly to PDS0101, PDS0103 demonstrated the ability to generate powerful MUC1-specific CD8 killer T cells.

In March 2025, we announced FDA clearance of our IND application for the combination of PDS0103 and PDS01ADC in treatment of metastatic colorectal cancer.

PDS0102

PDS0102 is an investigational immunotherapy utilizing tumor-associated and immunologically active T cell receptor gamma alternate reading framed protein (TARP) from the NCI. PDS0102 is designed to treat TARP-associated cancers including acute myeloid leukemia (AML), prostate and breast cancer. In our preclinical work, in the administration of PDS0102, the Versamune®+TARP antigen combination led to the induction of large numbers of tumor targeted killer T cells. In addition, the TARP tumor antigen alone has already been studied at the NCI in men with prostate cancer and has been shown to be safe, and immunogenic with slowing tumor growth rates (NCT00972309).

IL-12 Oncology Immunocytokine Pipeline

PDS01ADC is a novel investigational IL-12 fused antibody drug conjugate (IgG1), tumor-targeting interleukin 12 (IL-12) immune-cytokine that enhances the proliferation, potency and longevity of T cells in the tumor microenvironment. Together with Versamune® based immunotherapies, PDS01ADC works synergistically to overcome tumor immune suppression and to promote a targeted T cell attack against cancers. As with Versamune®, PDS01ADC is given by a simple subcutaneous injection. Clinical data suggests the addition of PDS01ADC to Versamune® based immunotherapies may demonstrate significant disease control in advanced cancer patients by shrinking tumors and/or prolonging life.

With the exclusive global license agreement with Merck KGaA, Darmstadt, Germany for PDS01ADC, we believe we have simplified our registrational pathway for the NCI-led triple combination by owning both PDS0101 and PDS01ADC and combining these agents with an FDA approved ICI. PDS01ADC has been designed to overcome the limitations of cytokine therapy as explained above, and based on extensive preclinical studies performed at the NCI evaluating PDS01ADC as a monotherapy and also in combinations with established standard of care treatments for cancer, we believe that PDS01ADC has significant potential as a cytokine therapy independent of Versamune®. Based on the informative preclinical studies, a number of IIT Phase 2 trials are currently in progress at the NCI, some of which are outlined below:

• Phase 2 Study Evaluating ICI Naïve and Resistant Patients with HPV-positive malignancies treated with PDS01ADC, PDS0101 and bintrafusp alfa.
• A Phase 2 Study Evaluating T-Cell Clonality After Stereotactic Body Radiation Therapy Alone and in Combination with the Immunocytokine PDS01ADC in Localized High and Intermediate Risk Prostate Cancer Treated with Androgen Deprivation Therapy
• A Phase 1/2 Study of PDS01ADC in Combination with Docetaxel in Adults with Metastatic Castration Sensitive and Castration Resistant Prostate Cancer
• Phase 1/2 of PDS01ADC going forward as a Monotherapy in Advanced Kaposi Sarcoma
• Phase 1/2 of PDS01ADC in Combination of with a Histone Deacetylase (HDAC) Inhibitor in ICI resistant MUC1-positive colon and bladder cancers among others

In October 2023, interim safety and immune response data was presented for the first-in-human Phase 1/2 clinical trial evaluating PDS01ADC in combination with current SOC chemotherapy, docetaxel, to treat metastatic castration sensitive and castration resistant prostate cancer. The data was featured in an oral presentation at the 11th Annual Meeting of the International Cytokine & Interferon Society. The data presented included the following:

• Decrease in PSA levels was seen in all patients at all three tested doses of PDS01ADC and 61% of patients had at least a 60% decrease in PSA levels.
• All doses of the combination were well-tolerated with one patient experiencing Grade 4 neutropenia.
• Administration of the combination was associated with decreases in T reg cells and increases in activated natural killer (NK) cells, memory CD8 T cells, proliferating CD4 and CD8 T cells and cytokines INF-γ and Interleukin 10 (IL-10).
• The changes in immune responses with the combination were independent of the PDS01ADC dose.

We are working closely with the NCI to determine the best pathway forward for the prioritized PDS01ADC studies, as well as evaluating the use of PDS01ADC in combination with other Versamune® based clinical candidates.

Current Clinical Pipeline of Versamune®, and PDS01ADC Based Therapies

We have never been profitable and have incurred net losses in each year since inception. Our net losses were $17.9 million, and $18.9 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $200.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with these operations.

As of June 30, 2025, we had $31.9 million in cash and cash equivalents.

Our future funding requirements will depend on many factors, including the following:

• the timing and costs of our planned and ongoing clinical trials;
• the timing and costs of our planned preclinical studies of our Versamune® platform;
• the outcome, timing and costs of seeking regulatory approvals;
• the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into;
• the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or patent applications or other intellectual property rights; and
• the extent to which we license or acquire other products and technologies.

Infectimune® Development Strategy

We believe that the key differentiating attributes of the Infectimune® platform technology are strong induction of CD8 and CD4 T cells as well as antibodies which can be leveraged to improve treatment and preventive options in several infectious disease indications. In January 2022, we presented preclinical data on our universal flu program sponsored by the National Institute of Allergy and Infectious Disease (NIAID) demonstrating the potential of the Infectimune® technology with computationally designed influenza proteins developed by the laboratory of Dr. Ted Ross at the University of Georgia to generate broadly protective anti-influenza immune responses across multiple strains of influenza. This data has provided a unique opportunity to highlight Infectimune®’s potentially transformative utility in the development of more broadly effective and longer lasting protective vaccines. Current preventive and prophylactic vaccine approaches and technologies predominantly focus on creating strong induction of antibody responses. However, the induction of T cell responses, in addition to antibody responses, provides more durable and broad protection against infectious diseases.

Based on the preclinical data with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu vaccines, we have decided to focus our near-term infectious disease activities to align with the interests of the NIAID Collaborative Influenza Vaccine Innovation Centers (CIVICs) program. This will involve development of a universal seasonal flu vaccine and the potential development of a universal pandemic influenza vaccine based on similar computationally designed antigens as have shown promise with Infectimune®.

The preclinical results for Infectimune® based vaccines were published in two separate articles in the peer reviewed journal Viruses in February 2023: 1. preclinical studies demonstrating complete protection against sickness after lethal challenge with live SARS-CoV-2 or influenza viruses (Gandhapudi SK et al. Viruses 2023, 15, 432) and 2. Dramatically enhanced CD4 T cell responses to recombinant influenza proteins compared to leading commercial vaccine adjuvants (Henson TR et al. Viruses 2023, 15, 538).

In September 2023, preclinical data on our investigational universal flu vaccine, PDS0202, was presented at the 9th European Scientific Working Group on Influenza (ESWI) conference. This data demonstrated active neutralization across multiple influenza viruses in animals and provided protection against infection and weight loss after challenging with high doses of H1N1 viruses when they were not previously exposed to flu.

SELECTED FINANCIAL OPERATIONS OVERVIEW

Revenue

We have not generated any revenues from commercial product sales and do not expect to generate any such revenue in the near future. We may generate revenue in the future from a combination of research and development payments, license fees and other upfront payments or milestone payments.

Research and Development Expenses

Research and development expenses include employee-related expenses, costs to acquire license rights to use certain technology in our research and development projects, costs of acquiring, developing and manufacturing clinical trial materials, as well as fees paid to consultants and various entities that perform certain research and testing on our behalf. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the Condensed Consolidated Financial Statements as prepaid or accrued expenses. Costs incurred in connection with research and development activities are expensed as incurred.

We expect that our research and development expenses will increase significantly over the next several years as we advance our Versamune® and PDS01ADC clinical and product candidates into and through clinical trials, pursue regulatory approval of our Versamune® and PDS01ADC product candidates and prepare for a possible commercial launch, all of which will also require a significant investment in contract research services, manufacturing process validation and inventory related costs.

The process of conducting human clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for our clinical and product candidates. The probability of successful commercialization of our clinical and product candidates may be affected by numerous factors, including clinical data obtained in future trials, competition, manufacturing capability and commercial viability. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our clinical and product candidates.

Results of Operations

The following table summarizes the results of our operations for the three months ended June 30, 2025 and 2024:

(in thousands)

Research and Development Expenses

Research and development (R&D) expenses decreased to $4.2 million for the three months ended June 30, 2025 from $4.5 million for the three months ended June 30, 2024. The decrease of $0.3 million was primarily attributable to a decrease of $0.4 million in manufacturing costs, a decrease of $0.9 million in personnel costs, offset by an increase of $1.0 million in clinical trial costs

General and Administrative Expenses

General and administrative expenses decreased to $3.4 million for the three months ended June 30, 2025 from $4.2 million for the three months ended June 30, 2024. The decrease of $0.8 million was primarily attributable to a decrease of $0.4 million in personnel costs and $0.4 million in professional fees.

Benefit from Income Taxes

Income tax benefit was $0 for the three months ended June 30, 2025 and $0.9 million for the three months ended June 30, 2024. The decrease of $0.9 million was due to the timing of proceeds received from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant to the Company’s participation in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss (NOL) Program. The tax benefit of $1.2 million was received in March 2025 and reflected as an income tax benefit for the three months ended March 31, 2025.

Comparison of the Six months June 30, 2025 and 2024

The following table summarizes the results of our operations for the six months ended June 30, 2025 and 2024:

(in thousands)

26

Research and Development Expenses

Research and development expenses decreased to $10.0 million for the six months ended June 30, 2025 from $11.2 million for the six months ended June 30, 2024. The decrease of $1.2 million was primarily attributable to a decrease of $0.5 million manufacturing and quality costs, a decrease of $1.1 million in personnel costs offset by an increase of $0.4 million in clinical trial costs.

General and Administrative Expenses

General and administrative expenses decreased to $6.7 million for the six months ended June 30, 2025 from $7.6 million for the six months ended June 30, 2024. The decrease of $0.9 million was primarily attributable to a decrease of $0.5 million in personnel costs and $0.4 million in professional fees.

Benefit from Income Taxes

Income tax benefit was $1.2 million for the six months ended June 30, 2025 and $0.9 million for the six months ended June 30, 2025. The increase of $0.3 million was due to an increase in the amount of New Jersey NOL carryforwards sold when compared to the comparable period. The New Jersey Economic Development Authority (NJEDA), Technology Business Tax Certificate Transfer (NOL) program has a lifetime cap of $20 million per business. We have reached the cap and we will no longer be eligible to participate in the program.

Liquidity and Capital Resources

In August 2022, we filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities, and units, up to an aggregate amount of $150 million, approximately $97 million of which covers the offer, issuance and sale by us of our common stock under the Sales Agreement and the New Sales Agreement (as discussed below). The 2022 Shelf Registration Statement was declared effective on September 2, 2022.

In August 2022, we entered into an At Market Issuance Sales Agreement, or the Sales Agreement, with B. Riley Securities, Inc. and BTIG, LLC, each an Agent and collectively the Agents, with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to $50 million, or the Placement Shares, through or to the Agents, as sales agents or principals. Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, the Agents may sell the Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended, including, without limitation, sales made through The Nasdaq Capital Market or on any other existing trading market for our common stock. The Agents will use commercially reasonable efforts to sell the Placement Shares from time to time, based upon our instructions (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay the Agents a commission equal to three percent (3%) of the gross sales proceeds of any Placement Shares sold through the Agents under the Sales Agreement, and we have also provided the Agents with customary indemnification and contribution rights. We are not obligated to make any sales of our common stock under the Sales Agreement. The offering of Placement Shares pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all Placement Shares subject to the Sales Agreement or (ii) the termination of the Sales Agreement in accordance with its terms. In August 2024, we entered into an Amended and Restated At Market Issuance Sales Agreement, or the New Sales Agreement, with B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC, with terms that are substantially consistent with those included in the original Sales Agreement. The New Sales Agreement superseded and replaced the Sales Agreement. For the year ended December 31, 2024, we sold 3,428,681 shares of common stock for a net value of $19.5 million pursuant to the Sales Agreement and 1,108,105 shares of common stock for a net value of $3.2 million pursuant to the New Sales Agreement.

During the three and six months ended June 30, 2025, we sold 960,511 and 1,165,861 shares, respectively, of our common stock with a net value of $1.5 million and $1.8 million, respectively, pursuant to the New Sales Agreement. During the three and six months ended June 30, 2024, we sold 0 and 3,428,681 shares, respectively, of its common stock with a net value of $0 and $19.5 million, respectively, pursuant to the Sales Agreement.

In August 2022, we entered into a venture loan and security agreement, or the Loan and Security Agreement, with Horizon Technology Finance Corporation, as lender and collateral agent for itself and the other lenders. In total, the Company received $24.6 million in net proceeds under the Loan and Security Agreement. The Company’s indebtedness under the Loan and Security Agreement was satisfied in full and retired in full with a portion of the proceeds received from the Securities Purchase Agreement, as discussed below.

In April 2024, we received approximately $0.9 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant to its participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2022.

In January and February of 2025, we received approximately $1.2 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant our participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2023.

In February 2025, we entered into a securities purchase agreement with certain purchasers, pursuant to which we agreed to sell an aggregate of 6,396,787 shares of common stock, pre-funded warrants to purchase up to an aggregate of 933,334 shares of common stock, and common stock warrants to purchase up to an aggregate of 7,330,121 shares of common stock at a combined purchase price of $1.50 per share and warrant (the “February 2025 Offering”). Two of our directors participated in the February 2025 Offering and purchased 30,121 shares of common stock in the aggregate at an offering price per share of $1.66 and common stock warrants to purchase 30,121 shares of common stock. The common stock warrants issued to our directors have an exercise price per share of $1.53, but are otherwise identical to the common stock warrants issued to all other participants in the February 2025 Offering. Aggregate gross proceeds from the February 2025 Offering were approximately $11 million. Net proceeds to us from the offering, after deducting the placement agent fees and other estimated offering expenses payable by us, were approximately $10.05 million. The February 2025 Offering closed on February 28, 2025.

On April 30, 2025, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain third party lenders and JGB Collateral LLC, as collateral agent. Pursuant to the Securities Purchase Agreement, the we agreed to sell (i) senior secured convertible debentures in an aggregate principal amount of $22,222,222 (collectively, the “Debentures”) and (ii) warrants to purchase up to 1,000,000 shares of common stock, for an exercise price of $2.52 per share (collectively, the “Warrants”), subject to adjustments as set forth in the Warrants, for a total purchase price of $20,000,000. Approximately $19 million of the proceeds from the transactions contemplated by the Securities Purchase Agreement were used to satisfy in full and retire our indebtedness under the Loan and Security Agreement. The remaining proceeds from the transactions contemplated by the Securities Purchase Agreement will be used for general corporate purposes and transaction expenses. Pursuant to the Debentures, we must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the then-outstanding principal balance of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement. In addition, for as long as any portion of the Debentures remain outstanding, we are generally restricted from: incurring indebtedness; granting or suffering liens on any of our property or assets; amending our organizational documents; repurchasing any of our securities; paying dividends; selling, disposing, licensing or leasing our assets other than in the ordinary course; and other customary restrictive covenants. Beginning on August 28, 2025, the holders of the Debentures may require us to redeem a portion of the Debentures in an amount up to $500,000 per calendar month in the aggregate by providing written notice to us. In connection with the Securities Purchase Agreement, on April 30, 2025, we also entered into a Security Agreement (the “Security Agreement”), pursuant to which we and our subsidiary granted, for the benefit of the investors, to secure our obligations under the Securities Purchase Agreement and the Debentures, (i) first priority liens on certain assets, in each case subject to permitted liens described in the Security Agreement. In addition, on April 30, 2025, we and our subsidiary entered into a Subsidiary Guarantee, pursuant to which we and our subsidiary guaranteed all of our obligations under the JGB Purchase Agreement and the Debentures.

As of June 30, 2025, we had $31.9 million in cash and cash equivalents. Our primary uses of cash are to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year beyond the filing of this Quarterly Report on Form 10-Q. Our budgeted cash requirements in 2025 and beyond include expenses related to continuing development and clinical studies as well as payments on our debt.

We plan to continue to fund our operations and capital funding needs through existing cash and additional equity and/or debt financing. However, we cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or our existing stockholders. We may also enter into government funding programs and consider selectively partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to our stockholders. Incurring debt financing would result in debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market immunotherapies that we would otherwise prefer to develop and market ourselves. In addition, the Debentures allow for the lenders to call the outstanding balance of the Debentures if we fail to maintain minimum cash balances outlined in the Debentures. Any of these actions could harm our business, results of operations and prospects. Failure to obtain adequate financing also may adversely affect our ability to operate as a going concern.

As a result of these uncertainties, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated Financial Statements. The unaudited Condensed Consolidated Financial Statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that would result if we are unable to continue as a going concern.

Cash Flows

The following table shows a summary of our cash flows for each of the periods indicated (in thousands):

Net Cash Used in Operating Activities

Net cash used in operating activities was $18.1 million and $18.8 million for the six months ended June 30, 2025 and 2024, respectively. The decrease in net cash used in operating activities of $0.7 million was primarily due to a decrease in non-cash stock-based compensation expense of $1.7 million offset by a decrease in net loss of $1.0 million and changes in the timing of working capital requirements, including changes in prepaid expenses and other assets, accrued expenses and accounts payable.

Net Cash Used in Investing Activities

Net cash used in investing activities for the six months ended June 30, 2025 and 2024 was $0, respectively.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2025 and 2024 decreased by $11.7 million primarily due to a $22.8 million decrease in proceeds due to the repayment of the Loan and Security Agreement, a $17.7 million decrease in proceeds from the issuance of common stock from the Sales Agreement, a $0.5 million decrease in proceeds from the exercise of stock options, offset by a $19.2 million increase in proceeds from the Securities Purchase Agreement and a $10.2 million increase in proceeds from the issuance of common stock, warrants and pre-funded warrants from the February 2025 Offering.

Operating Capital Requirements

To date, we have not generated any product revenue. We do not know when, or if, we will generate any product revenue and we do not expect to generate significant product revenue unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the risks incident to the development of new products, and may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business. We expect to incur additional costs associated with operating as a public company and anticipate that we will need substantial additional funding in connection with our continuing operations.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the filing of this Quarterly Report. Our budgeted cash requirements in 2025 and beyond include expenses related to continuing development and clinical studies as well as payments on our debt. Until we can generate significant cash from our operations, we expect to continue to fund our operations with available financial resources. These financial resources may not be adequate to sustain our operations. While we intend to finance our cash needs principally through equity or debt financings, collaborations, strategic alliances, or license agreements with third parties, there is no assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. In addition, the securities Purchase Agreement allows for the lenders to call the outstanding balance of the term loans if we fail to maintain the minimum cash balances outlined in the Securities Purchase Agreement. We have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated Financial Statements.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

• the initiation, progress, timing, costs and results of our planned clinical trials;
• the effects of health epidemics, pandemics, or outbreaks of infectious diseases, on our business operations, financial condition, results of operations and cash flows;
• the outcome, timing and cost of meeting regulatory requirements established by the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory authorities;
• the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
• the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us now or in the future;
• the effect of competing technological and market developments;
• the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our products on our own; and
• the initiation, progress, timing and results of our commercialization of our clinical and product candidates, if approved, for commercial sale.

Please see the section titled “Risk Factors” elsewhere in the Quarterly Report and Annual Report for additional risks associated with our operations.

Purchase Commitments

We have no material non-cancelable purchase commitments with service providers as we have generally contracted on a cancelable, purchase order basis.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. Our accounting policies are more fully described in Note 2 to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. As described in Note 2, the preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ from these estimates under different assumptions or conditions. We believe that the discussion in our management’s discussion and analysis addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2025 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Smaller Reporting Company

We are a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. We will cease to be a smaller reporting company if we have a non-affiliate public float in excess of $250 million and annual revenues in excess of $100 million, or a non-affiliate public float in excess of $700 million, determined on an annual basis. As a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not smaller reporting companies. We will continue to take advantage of some or all of the available exemptions.

Interest Rate Risk

We are exposed to market related changes in interest rates. As of June 30, 2025, our cash equivalents consisted of bank deposits and money market accounts. Additionally, the aggregate principal balance under the Debentures bears a floating interest pegged to the prime rate. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Historically, the net impact of fluctuations in interest rates have not been material to us.

Inflation Risk

Inflation generally affects us by increasing our cost of labor and pricing of contracts. We do not believe that inflation has had a material effect on our business, financial condition, or results of operations during the six months ended June 30, 2025.

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out, under the supervision of and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15 (e)) under the Securities Exchange Act of 1934, or the Exchange Act, as of the end of the period covered by this report. Based on the evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that the information required to be disclosed by us in the reports we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) identified in connection with the evaluation identified above that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

With the exception of the risk factors noted below, there have been no material changes from our risk factors as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2024. However, any investment in our business involves a high degree of risk. Before making an investment decision, you should carefully consider the information we include in this Quarterly Report on Form 10-Q, including our unaudited interim Condensed Consolidated Financial Statements and accompanying notes, our Annual Report on Form 10-K for the year ended December 31, 2024 filed on March 27, 2025, including the risk factors and our financial statements and related notes contained therein, and the additional information in the other reports we file with the Securities and Exchange Commission, including, without limitation, the risk factors previously disclosed in our prior quarterly reports on Form 10-Q filed during this fiscal year. These risks may result in material harm to our business and our financial condition and results of operations. In this event, the market price of our common stock may decline and you could lose part or all of your investment. Additional risks that we currently believe are immaterial may also impair our business operations. Our business, financial conditions and future prospects and the trading price of our common stock could be harmed as a result of any of these risks.

We have identified conditions and events that raise substantial doubt regarding our ability to continue as a going concern.

We have incurred net losses and utilized cash in operations since inception. We believe that with the receipt of the net proceeds from the transactions contemplated by that certain securities purchase agreement dated April 30, 2025, between us and certain accredited investors and JGB Collateral LLC, as collateral agent for the investors, or the JGB Purchase Agreement, together with our existing cash and cash equivalents, and after taking into account the minimum cash covenant pursuant to the terms of the JGB Purchase Agreement, based on our current business plan we will be able to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025. Based on recurring losses from operations incurred since inception, the expectation of continued operating losses and the need to raise additional capital to finance our future operations, we have determined that there is substantial doubt about our ability to continue as a going concern within 12 months from the date of this Quarterly Report. We will continue to seek to raise additional capital, but without additional financing we may not be able to continue as a going concern.

Our future operations are dependent upon the successful entry into collaborations, strategic alliances, or license agreements with third parties and/or on the identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing these collaborations or alliances, equity or debt financing or in achieving profitability. As such, there can be no assurance that we will be able to continue as a going concern.

Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult for us to obtain financing. If potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations. If we are unable to continue as a going concern, you could lose all or part of your investment.

Our operating activities may be restricted as a result of covenants related to the outstanding indebtedness issued pursuant to the transactions contemplated by that certain securities purchase agreement with JGB, and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our business.

In April 2025, we entered into the JGB Purchase Agreement for the sale of (i) Senior Secured Convertible Debentures, or the Debentures, in an aggregate principal amount of $22,222,222 and (ii) warrants to purchase up to 1,000,000 shares of our common stock, for an exercise price of $2.52 per share. Beginning on August 28, 2025, the holders of Debentures may require us to redeem a portion of the Debentures of up to $500,000 in the aggregate per calendar month by providing written notice to us. To secure our obligations under the JGB Purchase Agreement and the Debentures, we granted the investors a first priority lien on substantially all of our assets, including intellectual property, or the Collateral.

Under the Debentures, we must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the then-outstanding principal balance of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement. In addition, for as long as any portion of the Debentures remain outstanding, we are generally subject to covenants restricting us from: incurring indebtedness; granting or suffering liens on any of our property or assets; amending our organizational documents; repurchasing any of our securities; paying dividends; selling, disposing, licensing or leasing our assets other than in the ordinary course; and other customary restrictive covenants.

A breach of any of the covenants under the Debentures could result in a default under the Debentures. Upon the occurrence of an event of default under the Debentures, the investors could elect to declare all amounts outstanding, if any, to be immediately due and payable. If there are any amounts outstanding that we are unable to repay, the investors could proceed against the Collateral granted to it to secure such indebtedness.

We are currently operating in a period of global economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical conflicts, natural and man-made disasters, global health emergencies and uncertainties in regulatory developments and legislative actions, which could adversely affect our business, financial condition and results of operations.

Our results of operations could be adversely affected by general conditions in the global economy, uncertainty from political conditions and changing regulations, and disruption of global financial markets that may result in a recession or market correction. The financial markets and the global economy may be adversely affected by the current or anticipated impact of war, terrorism and geopolitical conflicts, including in Russia and Ukraine, the Middle East and other areas. Sanctions and enhanced export controls imposed by the United States and other countries in response to such conflicts may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.

Changes in regulations and policies by the new U.S. administration and the resulting political and economic uncertainty in the United States may also impact us, the financial markets and the global economy. For example, in April 2025, increased tariffs were imposed on all countries and individualized “reciprocal” higher tariffs on certain countries with which the United States has the largest trade deficits, with the highest tariffs imposed on imports from China. China and other countries responded by announcing retaliatory tariffs on U.S. imports. A few days later, the tariffs imposed on most countries were reduced to 10 percent, with the exception of China, for a period of 90 days to allow trade negotiations with those countries. It is unclear whether the tariff increases with China will continue to escalate. The tariff increases have significantly disrupted the global markets and may significantly escalate tensions between the U.S. and other countries, especially China. The extent of the impact that such tariffs, trade policies, or new legislation or regulations will have on our business specifically, or on the U.S. market and global economy generally, are uncertain and in the long term, unpredictable, and could adversely affect our business, financial condition, and results of operations. The continued impact of these tariffs may impair our plans for further drug development in the U.S. market as well as our ability to generate revenues.

The current U.S. administration has recently issued regulations to restrict direct and indirect investment by U.S. persons into companies with specified connections to China that use specific technologies of concern. Such changes in the regulations and policies by the current U.S. administration and the resulting political and economic uncertainty materially impact our operations and those of our third-party service providers and reduce our ability to access capital, which could negatively affect our liquidity and adversely affect our business and the value of our common stock. The new U.S. administration may also enact other new regulations or policies that affect trade with China or otherwise impact the pharmaceutical industry by enacting laws to restrict U.S. pharmaceutical companies from contracting with Chinese companies on the development, research or manufacturing of pharmaceutical products. In April 2025, the U.S. Department of Commerce initiated national security investigations into the importation of pharmaceuticals and pharmaceutical ingredients pursuant to Section 232 of the Trade Expansion Act of 1962, which could result in the imposition of new tariffs on imports within the pharmaceutical industry. Further, in April 2025, an executive order to lower prescription drug prices was signed. The details of such proposed regulations and policies are unclear and the final terms and impact remain uncertain, and may pose long-term risks to our business.

In addition, natural and man-made disasters and global health emergencies, including pandemics and epidemics, may adversely affect the financial markets and global economy, increase inflation and result in significant business disruptions. We and our third-party services providers could be subject to the impact of natural or man-made disasters and other business disruptions, which include, but are not limited to, hurricanes, flooding, typhoons, tornados, wildfires and fires, drought, extreme heat, earthquakes, water shortages, blizzards and other extreme weather conditions, resulting in significant damage to our facilities, inventory or equipment, which could disrupt, delay or curtail our operations. Such business disruptions may also heighten the risk of power outages, telecommunications, transportation or other infrastructure failure, cybersecurity incidents or physical security breaches. The cost of insurance has increase significantly, including as a result of the impact of climate change and inflation, and we may not be able to obtain sufficient coverage at a reasonable cost to protect us against losses from such disasters and unforeseen events.

The volatile business environment or continued unpredictable and unstable market conditions may result in further deterioration of the equity and credit markets, significant volatility in commodity prices, as well as supply chain interruptions and result in an economic downturn, which would make any equity or debt financing more difficult, costly and dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay, limit, reduce, or terminate our product development or future commercialization efforts.

Although our business has not been materially impacted by the tariffs adopted to date or adverse effects of geopolitical events, natural or man-made disasters or other business disruptions to date, such matters may affect our business in the future and it is impossible to predict the extent to which our operations, or those of our suppliers and manufacturers, will be impacted in the short and long term, or the ways in which such matters may impact our business. The extent and duration of such adverse geopolitical events, natural or man-made disasters or other business disruptions and actual or perceived political or economic instability and resulting market disruptions are impossible to predict but could be substantial. Any such disruptions may also magnify the impact of other risks described herein.

The political and economic environment in the United States could materially impact our business operations and financial performance, and uncertainty surrounding the potential legal, regulatory and policy changes by a new U.S. presidential administration may directly affect us and the global economy.

The political and economic environment in the United States and elsewhere has resulted in and will continue to result in some uncertainty. Changing regulatory policies because of the changing political environment could impact our regulatory and compliance costs and future revenues, all of which could materially and adversely affect our business, financial condition and operating results. For example, significant layoffs or turnover at FDA could affect the FDA’s ability to respond to regulatory filings. Failure to adapt to or comply with evolving regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital and our stock price.

Further, the new U.S. administration and congressional seat turnover may result in increased regulatory and economic uncertainty. Changes in federal policy by the executive branch and regulatory agencies may occur over time through the new presidential administration’s and/or Congress’s policy and personnel changes, which could lead to changes involving the level of oversight and focus on the pharmaceutical industry; however, the nature, timing and economic and political effects of such potential changes remain highly uncertain. Any future changes in federal and state laws and regulations, as well as the interpretation and implementation of such laws and regulations, could affect us in substantial and unpredictable ways. At this time, it is unclear what laws, regulations and policies may change and whether future changes or uncertainty surrounding future changes will adversely affect our operating environment and therefore our business, financial condition and results of operations.