Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report, including those set forth under Item 1A. "Risk Factors" and under "Forward-Looking Statements" in this Annual Report.

We are a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer immunotherapies based on our Versamune®, Versamune® in combination with our 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 targeted immunotherapies have the potential to overcome the limitations of current immunotherapy approaches through the activation of the right type, quantity and potency of T cells. Versamune®, and Versamune® in combination with PDS01ADC are utilized for treatments in oncology and Infectimune®, for treatments in infectious disease. 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 CD4 helper and CD8 killer T cells, a specific sub-type of T cell that is 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. Based on preclinical studies and recent investigational clinical data, we believe that Versamune® in combination with PDS01ADC may enhance the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and work synergistically to overcome tumor immune suppression.

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.

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.

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 trial 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.

In October 2024, we announced updated data from the IMMUNOCERV Phase 2 clinical trial evaluating PDS0101 with chemoradiation to treat locally advanced cervical cancer presented at the American Society for Radiation Oncology (ASTRO) Annual Meeting 2024.

In March 2025, we announced the initiation of our VERSATILE-003 Phase 3 clinical trial evaluating PDS0101 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 in combination with Hepatic Artery Infusion Pump (HAIP) and systemic therapy met the pre-defined criteria for expansion to stage 2 following positive stage 1 results.

In August 2025, we announced final topline survival data from our VERSATILE-002 Phase 2 trial in head and neck cancer.

In October 2025, we announced our intent to seek expedited approval pathway for PDS0101 in HPV16-positive head and neck cancer based on final VERSATILE-002 trial data showing robust median progression free survival and increased median overall survival.

In December 2025, we announced the scheduling of a type C meeting with the FDA to discuss a proposed accelerated approval pathway for PDS0101 in HPV16-positive recurrent and/or metastatic head and neck cancer. Patients already enrolled prior to the amendment remain on the trial and continue to receive treatment.

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Clinical Candidate Pipeline

VERSATILE-003: PDS0101 + pembrolizumab vs pembrolizumab

In March 2025, we initiated our VERSATILE-003 Phase 3 clinical trial evaluating the combination of PDS0101 in combination with the anti-PD-1 therapy pembrolizumab versus pembrolizumab as a monotherapy. The clinical trial will evaluate the efficacy and safety of this therapeutic combination as a first 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 us, patients whose cancer has returned following initial treatment or spread (metastasized) will be treated with either the combination of PDS0101and pembrolizumab or with pembrolizumab alone, to evaluate if the addition of PDS0101 might improve the efficacy of pembrolizumab alone. Patients in the trial will receive a total of 5 cycles of combination therapy in the context of standard of care pembrolizumab therapy administered every three weeks until disease progression. The primary endpoint of VERSATILE-002 is median overall survival, or mOS, at six months following initiation of treatment. Following discussions with the FDA in December 2025, we amended the trial's protocol, among other modifications, to include progression-free survival (PFS) as an interim primary endpoint of the trial. Patients already enrolled prior to the amendment remain on the trial and continue to receive treatment.

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 us, patients whose cancer has returned following initial treatment or spread will be treated with the combination of PDS0101 and 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 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 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 on 52 patients was presented. The data from the roundtable based on investigator assessment was as follows:

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Highlights from the ICI naïve cohort include:

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24-month overall survival (OS) rate is 74%; published 24-month survival rate of less than 30% for approved ICI.

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12-month OS rate is 80%; published results of 30-50% with approved ICIs.

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Tumor shrinkage seen in 60% (31/52) of patients.

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Confirmed overall response rate ORR is 27% (14/52) to date.

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Median progression-free survival (PFS) is 8.1 months to date; published results of 2-3 months PFS with approved ICIs.

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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.

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60% (33/55) of patients have 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 higher response to Keytruda®).

Highlights from the ICI refractory cohort include:

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The 12-month OS rate is 56%. The published median 12-month OS rate is 17% with no salvage chemotherapy following tumor progression on ICI (ICI Resistant).

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0% (0/21) confirmed ORR suggests that PDS0101's impact on survival does not appear to be dependent on tumor shrinkage.

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4% (1/25) of patients experienced Grade 3 TRAE and 0% (0/21) patients experienced Grade 4 and 5 TRAE.

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:

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:

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 trial in first line treatment in HPV16-positive recurrent/metastatic HNSCC with the double combination of PDS0101 + pembrolizumab.

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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:

In August 2025, we announced final topline survival data from our VERSATILE-002 Phase 2 trial in head and neck cancer.

In October 2020, a Phase 2 IIT was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients. This clinical trial investigated 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 November 2022, data from this trial was included in a poster presentation at the 2022 SITC Annual Meeting which included the following:

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:

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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).

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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.

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In October 2024, we announced updated data from the IMMUNOCERV Phase 2 clinical trial evaluating PDS0101 with chemoradiation to treat locally advanced cervical cancer presented at the American Society for Radiation Oncology (ASTRO) Annual Meeting 2024 which included the following:

Mayo Clinic: PDS0101 Monotherapy and in combination with pembrolizumab

In February 2022, we initiated an Investigator-Initiated Trial (ITT), MC200710, for PDS0101 alone or in combination with the immune checkpoint inhibitor, pembrolizumab, in patients with HPV-positive oropharyngeal cancer (HPV(+)OPSCC) at high risk of recurrence. The trial is being led by Drs. David Routman, Katharine Price, Kathryn Van Abel, and Ashish Chintakuntlawar at Mayo Clinic, a nationally and internationally recognized center of excellence for the treatment of head and neck cancers. We believe that this trial not only broadens our addressable patient population of those affected by the increasing incidence of HPV(+)OPSCC, but also allows us to better understand the activity of PDS0101 alone or in combination with Keytruda® in earlier stages of disease. This trial is currently open for enrollment.

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. This trial will explore whether PDS0101 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).

National Cancer Institute: PDS0101 + PDS01ADC + Bintrafusp Alfa

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

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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

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12-month survival rate in (ICI) resistant patients of 72%

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Median OS in ICI-resistant HPV-positive patients is approximately 20 months; published median OS is 3.4 months

In April 2020, the above-mentioned CRADA between PDS Biotech and the NCI was expanded beyond PDS0101 to include clinical and preclinical development of PDS0103. PDS0103 is an investigational immune therapy owned by us 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 January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0103 and PDS01ADC in colorectal cancer.

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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 ITT Phase 2 trials are currently in progress at the NCI, some of which are outlined below:

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A Phase 2 trial evaluating PDS01ADC in combination with hepatic artery infusion pump (HAIP) and systemic therapy for subjects with metastatic colorectal cancer, intrahepatic cholangiocarcinoma, or metastatic adrenocortical carcinoma

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A Phase 2 trial evaluating ICI naïve and resistant patients with HPV-positive malignancies treated with PDS01ADC, PDS0101 and bintrafusp alfa

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A Phase 2 trial 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

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A Phase 1/2 trial evaluating PDS01ADC in combination with docetaxel in adults with metastatic castration sensitive and castration resistant prostate cancer

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A Phase 1/2 trial evaluating PDS01ADC going forward as a monotherapy in advanced kaposi sarcoma

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A Phase 1/2 trial evaluating PDS01ADC in combination 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 Phase1/2 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 11^th Annual Meeting of the International Cytokine & Interferon Society. The data presented included the following:

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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.

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All doses of the combination were well-tolerated with one patient experiencing Grade 4 neutropenia.

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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).

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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. In January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0103 and PDS01ADC in colorectal cancer.

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Our current clinical pipeline of Versamune® and PDS01ADC based therapies is as follows:

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).

Clinical Development Strategy

Since our inception we have devoted substantially all our resources to developing our Versamune® and Infectimune® platforms, and products derived thereof, as well as PDS01ADC. This includes advancing preclinical programs, conducting clinical trials, manufacturing PDS0101 and PDS01ADC for clinical trials, and providing general and administrative support. We have funded our operations primarily from the issuance of common stock and issuance of debt. We have not generated any product revenue to date. We have never been profitable and have incurred net losses each year since our inception.

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We have never been profitable and have incurred net losses in each year since inception. Our net losses were $34.5 million, and $37.6 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $216.6 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 December 31, 2025, we had $26.7 million in cash and cash equivalents.

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

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, but there are no assurances that we will generate revenue in the future from a combination of research and development payments, product royalties, 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 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 product candidates into and through clinical trials, pursue regulatory approval of our Versamune® 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 product candidates. The probability of successful commercialization of our 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 product candidates.

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

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, legal, business development and support functions. Other general and administrative expenses include travel expenses, professional fees for auditing, tax and legal services and facility-related costs.

Interest Income (Expense), net

Interest income (expense), net consists of interest income earned from bank deposits and interest expense consists of interest paid on outstanding debt plus amortization of the debt discount and interest from capital leases. These amounts will fluctuate based on changes to the interest rate environment.

Critical Accounting Policies

Our accounting policies are more fully described in Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K. 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 reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various market specific and other relevant assumptions 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. We believe that the following discussion 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.

We file U.S. federal income tax returns and New Jersey state tax returns. Our deferred tax assets are primarily comprised of federal and state tax net operating losses and tax credit carryforwards and are recorded using enacted tax rates expected to be in effect in the years in which these temporary differences are expected to be utilized. At December 31, 2025, we had federal net operating loss, or NOLs, carryforwards of approximately $197.4 million, $30 million of which expire at various dates between 2028 and 2037, losses generated in 2018 or later of $167.4 million will carry forward indefinitely. At December 31, 2025, we had federal research and development credit carryforwards of approximately $7.5 million. We may be subject to the net operating loss utilization provisions of Section 382 of the Internal Revenue Code. The effect of an ownership change would be the imposition of an annual limitation on the use of NOL carryforwards attributable to periods before the change. The amount of the annual limitation depends upon our value immediately before the ownership change, changes to our capital during a specified period prior to the change, and the federal published interest rate. Although we have not completed an analysis under Section 382 of the Code, it is likely that the utilization of the NOLs will be limited.

Accrued Clinical Expenses

When preparing our financial statements, we are required to estimate our accrued clinical expenses. This process involves reviewing open contracts and communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost. If we underestimate or overestimate the cost associated with a trial or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. Historically, our estimated accrued clinical expenses have approximated actual expense incurred.

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Stock-based Compensation

We estimate the fair value of our stock-based compensation awards to employees, directors and non-employees using the Black-Scholes option-pricing model, which requires the following assumptions: (1) the expected volatility assumption was changed on January 1, 2023 from using volatilities of a peer group of similar companies in the biotechnology industry whose share prices were publicly available to using the volatility of the Company's historical share price performance over the contractual term of the options, (2) the expected term of the award is based on the simplified method, which is the midpoint between the requisite service period and the contractual term of the option, as we have a limited history of being a public company to develop reasonable expectations about future exercise patterns and employment duration for our options, (3) the risk-free interest rate based on U.S. Treasury notes with a term approximating the expected life of the option and (4) expected dividend yield of 0, since we have never paid cash dividends and have no present intention to pay cash dividends.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

Research and Development Expenses

For the year ended December 31, 2025, general and administrative expenses decreased to approximately $12.5 million compared to approximately $13.8 million for the year ended December 31, 2024. The $1.3 million decrease was primarily attributable to a decrease in personnel costs.

Interest Income (Expense), net

For the year ended December 31, 2025, net interest expense was $4.1 million compared to $2.2 million for the year ended December 31, 2024. The $1.9 million increase in interest expense was primarily due to decreased interest income of $1.3 million and $1.1 million impact from loss on retirement of debt, partially offset by lower debt interest payments.

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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. During 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 year ended December 31, 2025, we sold 0 shares, of common stock with a net value of $0, pursuant to the Sales Agreement and 3,510,732 of common stock with a net value of $4.3 million, pursuant to the New 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. Our 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 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, or 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 February 2025 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.

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On April 30, 2025, we entered into a securities purchase agreement, or the "Securities Purchase Agreement" with certain third party lenders and JGB Collateral LLC, as collateral agent. Pursuant to the Securities Purchase Agreement, 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 were 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. Effective as of 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. During the year ended December 31, 2025, we redeemed an aggregate of $2,500,000 of the principal amount of the Debentures. 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 Securities Purchase Agreement and the Debentures.

In November 2025, we entered into a securities purchase agreement with certain purchasers, pursuant to which we agreed to sell an aggregate of 5,741,000 shares of common stock, pre-funded warrants to purchase up to an aggregate of 59,000 shares of common stock, and common stock warrants to purchase up to an aggregate of 5,800,000 shares of common stock (the "November 2025 Offering"). The offering price per share of common stock was $0.91 and the purchase price of each pre-funded warrant was $0.9099. Each common warrant issued in connection with the November 2025 Offering had an exercise price of $1.00 per share, can be exercised six months after the date of issuance and will expire five years thereafter. Aggregate gross proceeds from the November 2025 Offering were $5.3 million. Net proceeds to the Company from the offering, after deducting the placement agent fees and other estimated offering expenses payable by the Company, were approximately $4.8 million. In addition, in connection with the November 2025 Offering, we entered into a warrant amendment agreement pursuant to which we agreed, effective upon closing of the November 2025 Offering, to amend certain existing warrants to purchase up to an aggregate of 5,948,334 shares of common stock at an exercise price of $1.50 per share, so that the amended warrants will have a reduced exercise price of $1.00 per share effective upon the closing of the November 2025 Offering and will be exercisable beginning on the date that is six (6) months after the closing of the November 2025 Offering. The November 2025 Offering closed on November 12, 2025.

As of December 31, 2025, we had $26.7 million of 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 Annual Report on Form 10-K. 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 require us to maintain minimum cash balances in a deposit account subject to an account control agreement and impose restrictive covenants, as described above. Any of these actions could harm our business, results of operations and prospects.

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Cash flows

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

Net Cash Used in Operating Activities

Net Cash Used in Investing Activities

Net cash used in investing activities for the years ended December 31, 2025 and 2024 was $0 and $29,000, respectively.

Net cash provided by financing activities for the year ended December 31, 2025 and 2024 decreased by $7.4 million primarily due to $19.0 million used for repayment of the Loan and Security Agreement, a $3.5 million increase in loan principal payments, a $18.3 million decrease in proceeds from the issuance of common stock from the Sales Agreement and $0.8 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 $15.0 million increase in proceeds from the issuance of common stock, warrants and pre-funded warrants from the February 2025 Offering and the November 2025 Offering.

Operating Capital Requirements

To date, we have not generated any product revenue. We are unable to predict 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 Annual 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 collaborations, strategic alliances, or license agreements with third parties and/or debt or equity financings, 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 Debentures require us to maintain minimum cash balances in a deposit account subject to an account control agreement and impose restrictive covenants, as described above. 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 audited consolidated financial statements.

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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:

Please see the section titled "Risk Factors" elsewhere in this Annual Report on Form 10-K 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.

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 under U.S. GAAP or under the rules and regulations of the SEC.

We expect to continue to take advantage of some or all of the available exemptions.

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