Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the financial statements of Genelux Corporation (Genelux, Company, we, us, or our) and accompanying notes included in this Quarterly Report on Form 10-Q (Quarterly Report) and the financial statements and accompanying notes thereto for the year ended December 31, 2025 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K, for the fiscal year ended December 31, 2025. See also "Special Note Regarding Forward-Looking Statements" included in this Quarterly Report.

Company Overview

Genelux is a late clinical-stage biopharmaceutical company focused on developing next-generation oncolytic viral immunotherapies for patients suffering from aggressive and/or difficult-to-treat tumor types. Our clinical and preclinical product candidates are intended to selectively kill tumor cells and induce a robust immune response against a patient's tumor neoantigens. Importantly, our oncolytic immunotherapy product candidates are "off-the-shelf" personalized immunotherapies. In other words, while we administer the same virus product to different patients, the cellular immune response generated is expected to be specific to the unique neoantigens in that patient. Our lead product candidate, Olvi-Vec (olvimulogene nanivacirepvec), is a proprietary, modified strain of the vaccinia virus (VACV), a stable DNA virus with a large engineering capacity.

Employing our proprietary selection technology and discovery and development platform (CHOICE), we have developed an extensive library of isolated and engineered oncolytic VACV immunotherapeutic product candidates. These provide potential utility in multiple tumor types in both the monotherapy and combination therapy settings, via physician-preferred administration techniques, including regional (e.g., intraperitoneal), local and systemic (e.g., intravenous) delivery routes. Informed by our CHOICE platform and supported by extensive clinical and preclinical data, we believe we have the capacity to develop a pipeline of treatment options to address high unmet medical needs for those patients with insignificant or unsatisfactory responses to standard-of-care therapies, including chemotherapies.

Our operations have focused on organizing and staffing our company, business planning, raising capital, acquiring and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates and undertaking preclinical and clinical studies and manufacturing. We do not have any products approved for sale and have not generated any revenue from product sales.

Since inception, we have incurred significant operating losses. Our net losses were $18.4 million and $14.9 million for the six months ended June 30, 2026, and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $301.9 million. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

We will not generate revenue from commercially approved product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

As a result, we will require substantial additional funding to support our continuing operations and to pursue our growth strategy. Until we generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, which may include sales under the ATM Agreement, debt and/or other sources, such as milestone payments, royalties or other payments or funding from existing or potential collaboration agreements, strategic alliances, licensing arrangements and other arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all. Failure to raise capital or enter into such agreements as and when needed, could have a material adverse effect on our business, results of operations and financial condition.

In January 2026, we completed an underwritten offering of 6,666,667 shares of our common stock at an offering price of $3.00 per share. The net proceeds received from the offering were $18.5 million, after deducting underwriting discounts and commissions and offering expenses payable by us. In the second quarter of 2026, we sold 120,087 shares of our common stock to an existing stockholder under an "at-the-market" offering program pursuant to our sales agreement (ATM Agreement) with TD Securities (USA) LLC. The net proceeds received from such sales were $0.3 million after deducting discounts and commissions and other offering expenses.

Due to the funds received through these sales under the ATM Agreement and the offering, we had stockholders' equity of $16.1 million at June 30, 2026. We expect our cash, cash equivalents, restricted cash and marketable securities, totaling $18.7 million at June 30, 2026, to last into the first quarter of 2027.

Recent Developments

Publication

In June 2026, we announced the publication of translational and clinical findings from our Phase 1b/2 VIRO-15 trial of Olvi-Vec-primed immunochemotherapy in heavily pretreated patients with platinum-resistant/refractory ovarian cancer. The data were presented in Gynecologic Oncology Reports, a peer-reviewed journal. The publication reports data from translational analyses conducted as part of the Phase 1b/2 VIRO-15 study in patients with PRROC, evaluating the biological effects of Olvi-Vec on the tumor microenvironment and its impact on clinical response and survival. The clinical results are consistent with preclinical results generated by us with Olvi-Vec showing in vitro viral permissivity and tumor vulnerability and the effect of Olvi-Vec primed immunochemotherapy in a mouse model of platinum-resistant ovarian cancer.

ATM Sales

In the second quarter of 2026, we sold 120,087 shares of our common stock to an existing stockholder under an "at-the-market" offering program pursuant to the ATM Agreement. The net proceeds received from such sales were $0.3 million, after deducting commissions.

Results of Operations

Net Sales

No revenue was recognized during the six months ended June 30, 2026 and 2025, respectively.

Operating Expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts and preclinical and clinical studies under our research programs, which include:

	●	employee-related expenses, including salaries, benefits, and stock-based compensation for our research and development personnel;
	●	costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on our behalf;
	●	costs of manufacturing drug product and drug supply related to our current or future product candidates;
	●	costs of conducting preclinical studies and clinical trials of our product candidates;
	●	consulting and professional fees related to research and development activities, including equity-based compensation to non-employees;
	●	costs of maintaining our laboratory, including laboratory supplies and non-capital equipment used in our preclinical studies;
	●	costs related to compliance with clinical regulatory requirements; and
	●	facility costs and other allocated expenses, which include rent and maintenance of facilities, insurance, depreciation, and other supplies.

Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed. Significant judgment and estimates are made in determining the accrued expense balances at the end of any reporting period.

The successful development of our product candidates is highly uncertain. We cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if they are approved. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:

	●	the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;
	●	establishing an appropriate safety profile;
	●	successful enrollment in and completion of clinical trials;
	●	whether our product candidates show safety and efficacy in our clinical trials;
	●	receipt of marketing approvals from applicable regulatory authorities;
	●	establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
	●	obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

	●	commercializing product candidates, if and when approved, whether alone or in collaboration with others; and
	●	continued acceptable safety profile of the products following any regulatory approval.

A change in the outcome of any of these variables with respect to the development of our current and future product candidates would significantly change the costs and timing associated with the development of those product candidates.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase significantly for the foreseeable future as we commence and conduct clinical trials and continue the development of our current and future product candidates. However, we do not believe that it is possible at this time to accurately project expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

General and Administrative Expenses

General and administrative expenses include salaries and other compensation-related costs, including stock-based compensation, for personnel in executive, finance, business development, operations and administrative roles. Other significant costs include professional service and consulting fees, including legal fees relating to intellectual property and corporate matters, accounting and recruiting fees and fees paid to consultants engaged to supplement our personnel as well as insurance, travel, and office-related costs not included in research and development expenses.

We anticipate that our general and administrative expenses will increase in the future as our business expands to support expected growth in research and development activities, including our future clinical programs. These increases are expected to result primarily from higher personnel-related costs associated with hiring additional personnel and increased fees paid to outside service providers, among other expenses. We also anticipate incurring additional expenses associated with operating as a public company, including audit, legal, regulatory and tax-related costs to comply with the rules and regulations of the U.S. Securities and Exchange Commission (the SEC), and listing standards applicable to companies listed on a national securities exchange, increased director and officer insurance premiums, and investor relations costs. In addition, if we obtain regulatory approval for any of our product candidates and do not enter into a third-party commercialization collaboration, we expect to incur significant additional costs related to establishing sales, marketing and distribution capabilities.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the periods indicated (in thousands):

		Three Months Ended June 30,
		2026				2025				Change
Revenue		$	-			$	-			$	-
Operating expenses:
Research and development			6,508				4,758				1,750
General and administrative			3,137				3,034				103
Total operating expenses			9,645				7,792				1,853
Operating loss			(9,645	)			(7,792	)			(1,853	)
Other income:
Interest income			127				224				(97	)
Bond accretion income			47				112				(65	)
Total other income			174				336				(162	)
Net loss		$	(9,471	)		$	(7,456	)		$	(2,015	)

Research and Development (R&D) Expenses

The following table summarizes our research and development expenses for the periods indicated (in thousands):

		Three Months Ended June 30,
		2026				2025				Change
Employee compensation and related expenses		$	1,179			$	1,034			$	145
Stock compensation, including the cost of stock options and restricted stock grants			875				612				263
Manufacturing and laboratory materials and other expenses			127				442				(315	)
Manufacturing quality services			104				378				(274	)
Clinical and regulatory expenses			4,031				2,000				2,031
Facility-related expenses, including depreciation			121				192				(71	)
Consulting expenses and contract labor			62				97				(35	)
Other expenses			9				3				6
Total research and development expenses		$	6,508			$	4,758			$	1,750

R&D expenses increased by $1.8 million for the three months ended June 30, 2026, over the same period in 2025. The increase was primarily driven by clinical and regulatory expenses relating to increased clinical trial costs associated with our Phase 3 On Prime/GOG-3076 registration trial.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the following periods indicated (in thousands):

		Three Months Ended June 30,
		2026				2025				Change
Employee compensation and related expenses		$	890			$	877			$	13
Stock compensation, including the cost of stock options and restricted stock grants			1,398				870				528
Professional services			402				558				(156	)
Facility-related expenses			49				102				(53	)
Insurance expenses			178				219				(41	)
Consulting and contract labor expenses			82				118				(36	)
Other expenses			138				290				(152	)
Total general and administrative expenses		$	3,137			$	3,034			$	103

General and administrative expenses increased by $0.1 million for the three months ended June 30, 2026 over the same period in 2025 primarily as a result of an increase of $0.5 million in stock compensation partially offset by $0.3 million reduction in professional services and other expenses.

Other Income

Other income was $0.2 million and $0.3 million for the three months ended June 30, 2026 and 2025, respectively. There was a decrease of $0.1 million in 2026 primarily due to lower bond accretion income.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the following periods indicated (in thousands):

		Six Months Ended
		June 30,
		2026				2025				Change
Revenues		$	-			$	-			$	-
Operating expenses:
Research and development			12,286				9,456				2,830
General and administrative			6,530				6,152				378
Total operating expenses			18,816				15,608				3,208
Loss from operations			(18,816	)			(15,608	)			(3,208	)
Other income:
Interest income			300				408				(108	)
Bond Accretion Income			117				252				(135	)
Total other income			417				660				(243	)
Net loss		$	(18,399	)		$	(14,948	)		$	(3,451	)

Research and Development (R&D) Expenses

The following table summarizes our research and development expenses for the following periods indicated (in thousands):

		Six Months Ended June 30, 2026				Six Months Ended June 30, 2025				Change
Employee compensation and related expenses		$	2,385			$	1,864			$	521
Stock compensation, including the cost of stock options and restricted stock grants			1,690				1,107				583
Manufacturing and laboratory materials and other expenses			327				840				(513	)
Manufacturing quality services			478				737				(259	)
Clinical and regulatory expenses			7,059				4,344				2,715
Facility-related expenses, including depreciation			243				362				(119	)
Consulting expenses and contract labor			92				196				(104	)
Other expenses			12				6				6
Total research and development expenses		$	12,286			$	9,456			$	2,830

R&D expenses increased by $2.8 million for the six months ended June 30, 2026, over the same period in 2025. The increase was primarily driven by clinical and regulatory expenses relating to our Phase 3 On Prime/GOG-3076 registration trial in 2026.

General and Administrative Expenses

The table below summarizes our general and administrative expenses for the following periods indicated (in thousands):

		Six Months Ended June 30, 2026				Six Months Ended June 30, 2025				Change
Employee compensation and related expenses		$	1,805			$	1,593			$	212
Stock compensation, including the cost of stock options and restricted stock grants			2,365				1,907				458
Professional services			1,240				1,451				(211	)
Facility-related expenses			135				183				(48	)
Insurance expenses			450				442				8
Consulting and contract labor expenses			232				192				40
Other expenses			303				384				(81	)
Total general and administrative expenses		$	6,530			$	6,152			$	378

General and administrative expenses increased by $0.4 million for the six months ended June 30, 2026 over the same period in 2025 primarily as a result of a $0.5 million increase in stock compensation partially offset by $0.2 million decrease of professional services.

Other Income

Other income was $0.4 million and $0.7 million for the six months ended June 30, 2026, and 2025, respectively. The decrease of $0.3 million in 2026 is primarily due to lower bond accretion income.

Liquidity and Capital Resources

The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, we have experienced recurring losses from operations since inception and incurred a net loss of $18.4 million and cash used in operations of $12.5 million during the six months ended June 30, 2026. These factors raise substantial doubt about our ability to continue as a going concern. In addition, our independent registered public accounting firm has included an explanatory paragraph in their report with respect to the uncertainty that accompanies our audited financial statements as of and for the year ended December 31, 2025. Our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our development strategies. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

As of June 30, 2026, we had cash, cash equivalents, restricted cash and marketable securities of $18.7 million. Apart from payment and reimbursement obligations of our licensing partner, Newsoara HYK Biopharmaceuticals Co., Ltd. (Newsoara), under a license agreement with Newsoara, we do not have any committed external source of funds or other support for our developmental efforts. Until we can generate sufficient product revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, which may include sales under our ATM Agreement, debt financings and/or other capital sources such as milestone payments, royalties or other payments or funding from existing or potential collaborations, strategic alliances, licensing arrangements and other arrangements. Based on our research and development plans, we expect that our existing cash, cash equivalents, restricted cash and marketable securities will fund our planned operations into the first quarter of 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. In addition, because the design and outcome of our anticipated and any future clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of Olvi-Vec or any future product candidates. Our existing cash balance may not be sufficient to complete the development of Olvi-Vec or any other product candidate.

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing, or grant unfavorable terms in future licensing agreements.

Cash Flows

The following table sets forth the primary sources and uses of cash for each of the periods presented below:

		Six Months Ended June 30,
		2026				2025
		(in thousands)
Cash Flow from:
Operating activities		$	(12,503	)		$	(12,494	)
Investing activities			(2,571	)			856
Financing activities			18,925				9,619
Net increase (decrease) in cash, cash equivalents and restricted cash		$	3,851			$	(2,019	)
Cash, cash equivalents and restricted cash at end of period		$	9,184			$	6,546

During the six months ended June 30, 2026, cash flow used in operating activities was $12.5 million, which consisted of a net loss of $18.4 million, partially offset by non-cash expense of stock compensation of $4.0 million and increase in accrued expenses of $2.6 million. Cash used in investing activities was $2.6 million, which was primarily attributable to manufacturing facility enhancements and related equipment for $2.5 million and net purchases of marketable securities of $0.1 million. Cash provided by financing activities of $18.9 million was related to cash received from sale of common stock. See "Stockholders' Equity" in Note 9 to our condensed financial statements in Part I.

During the six months ended June 30, 2025, cash flow used in operating activities was $12.5 million, which consisted of a net loss of $14.9 million and the non-cash expense of stock-related compensation of $3.0 million partially offset by an increase in prepaid expenses of $0.6 million. Cash provided by investing activities amounted to $0.9 million, which was primarily attributable to net maturities of marketable securities of $1.0 million. Cash provided by financing activities of $9.6 million was related to cash received from sale of common stock of $9.6 million. See "Stockholders' Equity" in Note 9 to our unaudited interim condensed financial statements in Part I. Item 1 "Financial Statements" in this Quarterly Report for additional information.

Equity Financings

Common Stock Issued for Cash Under ATM Agreement

In the second quarter of 2026, we sold 120,087 shares of our common stock to an existing stockholder under our ATM Agreement. The net proceeds received from such sales were $0.3 million, after deducting discounts and commissions and other offering expenses.

Common Stock Issued for Cash Upon Closing of the Company's Public Offering

In January 2026, we completed an underwritten offering of 6,666,667 shares of our common stock at an offering price of $3.00 per share. The net proceeds received from the offering were $18.5 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue our research and development, initiate and conduct preclinical studies and clinical trials, and seek marketing approval for our current and any of our future product candidates. In addition, if we obtain marketing approval for any of our current or our future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution, which costs we may seek to offset through entry into collaboration agreements with third parties. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, limit reduce or eliminate our research and development programs or future commercialization efforts.

We believe that our existing cash, cash equivalents, restricted cash and marketable securities will fund our planned operations into the first quarter of 2027. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on a number of factors, including:

	●	the costs of conducting preclinical studies and clinical trials;
	●	the costs of manufacturing;
	●	the scope, progress, results and costs of discovery, preclinical development, laboratory testing, and clinical trials for product candidates we may develop, if any;
	●	the costs, timing, and outcome of regulatory review of our product candidates;
	●	our ability to establish and maintain collaborations on favorable terms, if at all;
	●	the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;
	●	the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
	●	the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;
	●	the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;
	●	our headcount growth and associated costs as we expand our business operations and research and development activities;
	●	the costs of operating as a public company; and
	●	the impact of geopolitical and macroeconomic events, including future bank failures, new or increased tariffs, funding shortages as governmental and regulatory agencies on which we rely, geopolitical tensions between the United States and China, the Russia/Ukraine conflict, conflicts in the Middle East and global pandemics on U.S. and global economic conditions including changes in monetary and fiscal policy, United States political developments and other sources of instability that may affect our ability to access capital on acceptable terms, if at all.

We anticipate needing to obtain further funding to achieve our business objectives beyond such date.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through public or private equity offerings, which may include sales under the ATM Agreement, debt financings, and/or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our common stockholders' ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of our common stockholders. Additional debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

If we raise funds through potential collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Critical Accounting Policies

This Management's Discussion and Analysis of Financial Condition and Results of Operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheets and the reported amounts of expenses during the reporting periods. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances at the time such estimates are made. Actual results may differ materially from our estimates and judgments under different assumptions or conditions. We periodically review our estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in our financial statements prospectively from the date of the change in estimate.

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. Our critical accounting policies are described in Part II. Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates" in our Annual Report. There were no material changes to these accounting policies during the six months ended June 30, 2026.

Recent Accounting Pronouncements

For a discussion of our material changes in recent accounting pronouncements, see "Recent Accounting Pronouncements" in Note 2 to our unaudited interim condensed financial statements in Part I. Item 1 "Financial Statements" in this Quarterly Report for additional information.

Emerging Growth Company Status

As an "emerging growth company," the Jumpstart Our Business Startups Act of 2012 permits us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to "opt out" of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.