What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-18 compared with 2025-05-15 · 315 added, 257 removed, 386 unchanged (60% of the section changed)

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achieved full enrollment of 41 patients in October 2023.

In the first quarter of 2025, we

announced that our Phase IIb clinical trial achieved its primary endpoint with statistical significance .

believe the efficacy results, combined with the favorable safety profile and the unmet clinical need, support the potential for regulatory

We plan to request a Type B or Type C FDA meeting in the second quarter of 2025 to discuss the data and the path to a Biologics

In June 2025, we participated in a Type D meeting with the FDA and subsequently

received positive written feedback regarding the design and endpoints of our Phase IIb trial of OST-HER2 to support a potential Biologics

License Application (BLA).

Subject to positive FDA feedback, we plan to submit a BLA with the FDA for approval to market the drug candidate

shortly thereafter.

Based on this feedback, we have submitted a Breakthrough Therapy Designation request and, subject to continued

positive regulatory guidance, plan to submit a BLA for OST-HER2 following our End of Phase 2 meeting with the FDA, anticipated in the

third quarter of 2025.

Upon success in gaining regulatory approval from the FDA with OST-HER2 in Osteosarcoma, we intend to evaluate

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for OST-tADC in Osteosarcoma and other solid tumors.

No new treatments have been

approved by the FDA for human Osteosarcoma for more than 40 years.

In humans, Osteosarcoma is an extremely rare cancer that primarily

affects children, teenagers and young adults generally under 40 years of age.

We are not aware of any competing adjuvant therapy

for Osteosarcoma to be tested in children that is further along in the development process than OST-HER2.

This disease is difficult to

The standard of care following first line therapies is simply to screen and wait for possible recurrence/metastasis, or the

development of secondary malignant growths at a distance from a primary site of cancer.

Studies published in the Journal of Clinical Oncology,

“Osteosarcoma Relapse After Combined Modality Therapy:

An Analysis of Unselected Patients in the Cooperative Osteosarcoma Study

Group (COSS),” by Kempf-Bielack B., et al.

(January 2005), and “Second and Subsequent Recurrences of Osteosarcoma:

Presentation,

Treatment, and Outcomes of 249 Consecutive Cooperative Osteosarcoma Study Group Patients,” by Bielack S., et al.

(February 2009),

reported that recurrence/metastasis happens in approximately half of all patients within 12 to 18 months following initial remittance.

For those patients that experience recurrence, metastasis is typically to the lungs and brain, with survival rates of approximately 13%

over the next year, according to these studies.

Recent Developments

PIPE Financing

On December 24, 2024, we

entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with certain institutional and accredited investors

(collectively, the “Purchasers”), substantially all of whom are existing stockholders of our company, pursuant to which we

agreed to issue and sell to the Purchasers immediately separable units (the “Units”), with each Unit being comprised of (i)

one share of Series A Senior Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), and

(ii) a warrant to purchase one share of common stock (each, a “Series A Warrant” and such shares, the “Warrant Shares”),

at a price per Unit of $4.00, for aggregate gross proceeds of not less than $6 million and not more than $10 million (the “PIPE

At two closings occurring on December 31, 2024 and January 14, 2025, we issued to the PIPE investors an aggregate of

(i) 1,775,750 shares of Series A Preferred Stock and (ii) Series A Warrants initially exercisable into 1,775,750 shares of common stock.

The gross proceeds from the Private Placement, before deducting transaction fees and other estimated Private Placement expenses, were

approximately $7,103,000.

December 24, 2024, we entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with certain institutional

and accredited investors (collectively, the “Purchasers”), substantially all of whom were existing

stockholders of our company, pursuant to which we agreed to issue and sell to the Purchasers immediately separable units (the “Units”),

with each Unit being comprised of (i) one share of Series A s enior c onvertible

p referred s tock

(“Series A Preferred Stock”) and (ii) a warrant to purchase one share

of common stock (each, a “Series A Warrant” and such shares, the “Warrant Shares”), at a price per Unit of $4.00,

for aggregate gross proceeds of not less than $6 million and not more than $10 million (the “PIPE Financing”).

At two closings

occurring on December 31, 2024 and January 14, 2025, we issued to the PIPE investors an aggregate of (i) 1,775,750 shares of Series A

Preferred Stock and (ii) Series A Warrants initially exercisable into 1,775,750 shares of common stock.

The gross proceeds from the PIPE

Financing , before deducting transaction fees and other estimated PIPE

Financing expenses, were approximately $7,103,000.

Capital Markets, a division of Arcadia Securities, LLC (“Brookline”), acted as exclusive placement agent for the issuance

and sale of the securities in the PIPE Financing.

We agreed to pay Brookline

an aggregate cash fee (the “Cash Fee”) equal to (i) 7% of the gross proceeds received by us from

the sale of the securities in the PIPE Financing to Purchasers other than certain Purchasers identified on a schedule thereto (“Reduced

Fee Purchasers”) plus (ii) 3% of the gross proceeds received by us from

the sale of the securities in the PIPE Financing to Reduced Fee Purchasers, plus expenses;

provided that Ceros Financial Services, Inc.,

Brookline’s selected dealer for the PIPE Financing (“Ceros”) , is

entitled to up to 33.3% of the Cash Fee.

addition, we agreed to pay Brookline or its designee a fee in the form

of warrants to purchase shares of common stock (the “Agent Warrants”).

The Agent Warrants are initially exercisable into a

number of shares of common stock equal to (i) 7% of the number of shares of common stock initially issuable pursuant to the shares of

Series A Preferred Stock issued to Purchasers other than Reduced Fee Purchasers in the PIPE Financing plus (ii) 3% of the number of shares

of common stock initially issuable pursuant to the shares of Series A Preferred Stock issued to the Reduced

Fee Purchasers in the PIPE Financing;

provided that, Ceros is entitled to up to 33.3% of the Agent Warrants.

The terms of the Agent Warrants

are substantially similar to the terms of the Series A Warrants.

At two closings occurring on December 31, 2024 and January 14, 2025,

(i) Brookline received an aggregate cash fee of $159,685 and the right to receive Agent Warrants initially exercisable for an aggregate

of 39,918 shares of common stock, and (ii) Ceros received an aggregate cash fee of $79,723 and the right to receive Agent Warrants initially

exercisable for an aggregate of 19,930 shares of common stock.

The PIPE Purchase Agreement

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by the affirmative vote of a majority of the votes cast by our stockholders at the Special Meeting.

The PIPE Purchase Agreement

restricts us from issuing additional shares of common stock, or securities convertible into or exercisable or exchangeable for shares

of common stock during the period beginning from the closing until the later of (x) six months from the closing and (y) April 9, 2025,

and restricts us from entering into variable rate transactions at any time the Purchasers hold Series A Warrants, subject to certain exceptions.

In connection with the PIPE

Financing, we entered into a Registration Rights Agreement, dated December 31, 2024, with the Purchasers, pursuant to which we agreed

to use reasonable best efforts to, by no later than January 31, 2025, submit to the SEC a registration statement covering the resale of

a number of shares of common stock underlying the Series A Preferred Stock and the Series A Warrants issued pursuant to the PIPE Purchase

Agreement equal to 300% of the shares of common stock initially issuable thereunder, and to use commercially reasonable efforts to cause

such registration statement to be declared effective by the SEC within 45 days thereafter.

Brookline Capital Markets,

a division of Arcadia Securities, LLC (“Brookline”), acted as exclusive placement agent for the issuance and sale of the securities

in the PIPE Financing.

Pursuant to the terms of a letter agreement, dated December 27, 2024, between the Company and Brookline (the “Placement

Agency Agreement”), the Company agreed to pay Brookline an aggregate cash fee (the “Cash Fee”) equal to (i) 7% of the

gross proceeds received by the Company from the sale of the securities in the PIPE Financing to Purchasers other than certain Purchasers

identified on a schedule thereto (“Reduced Fee Purchasers”) plus (ii) 3% of the gross proceeds received by the Company from

the sale of the securities in the PIPE Financing to Reduced Fee Purchasers, plus expenses;

provided that Ceros Financial Services, Inc.,

Brookline’s selected dealer for the PIPE Financing (“Ceros”) is entitled to up to 33.3% of the Cash Fee.

In addition, the Company

agreed to pay Brookline or its designee a fee in the form of warrants to purchase shares of common stock (the “Agent Warrants”).

The Agent Warrants are initially exercisable into a number of shares of common stock equal to (i) 7% of the number of shares of common

stock initially issuable pursuant to the shares of Series A Preferred Stock issued to Purchasers other than Reduced Fee Purchasers in

the PIPE Financing plus (ii) 3% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred

Stock issued Reduced Fee Purchasers in the PIPE Financing;

provided that, Ceros is entitled to up to 33.3% of the Agent Warrants.

terms of the Agent Warrants are substantially similar to the terms of the Series A Warrants.

At two closings occurring on December 31,

2024 and January 14, 2025, (i) Brookline received an aggregate cash fee of $159,685 and the right to receive Agent Warrants initially

exercisable for an aggregate of 39,918 shares of common stock, and (ii) Ceros received an aggregate cash fee of $79,723 and the right

to receive Agent Warrants initially exercisable for an aggregate of 19,930 shares of common stock.

Shortly following the second closing,

we issued Brookline’s Agent Warrants and Ceros’ Agent Warrants to their respective designees in accordance with their instructions.

Each of the holders of the Agent Warrants is affiliated with a broker-dealer regulated by the Financial Industry Regulatory Authority,

These selling stockholders acquired their respective securities in the ordinary course of such selling stockholder’s business

and, at the time of the acquisition of the shares to be resold pursuant to this prospectus, the selling stockholders had no agreements

or understandings, directly or indirectly, with any person to distribute them.

Our Acquisition of HER2 and Lm -Related

Our Acquisition of HER2 and Lm-Related Assets

On April 9, 2025, pursuant

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Ayala Pharmaceuticals, Inc., a Delaware corporation formerly known as Advaxis, Inc.

(“Ayala”), we completed the previously

announced acquisition of the Lm -based immune-oncology programs and related intellectual property assets (the “HER2 Assets”)

The HER2 Assets include two investigational new drug (IND) filings with the FDA:

(“Ayala”), we completed the acquisition

of the Lm -based immune-oncology programs and related intellectual property assets (the “HER2 Assets”) from Ayala.

HER2 Assets include two investigational new drug (IND) filings with the FDA:

(i) ADXS-503 for non-small cell lung cancer;

and (ii) ADXS-504 for prostate cancer.

and (ii) ADXS-504

for prostate cancer.

In consideration for the

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(ii) $100,000 to a third party on behalf of Ayala on the closing date;

and (iii) $7,500,000 worth of shares of the

our common stock, or 4,774,637 shares based on the volume-weighted average price of the Company’s common stock over the 30 trading

days immediately preceding the closing date (the “Ayala Consideration Shares”).

and (iii) $7,500,000 worth of shares of our

common stock, or 4,774,637 shares based on the volume-weighted average price of the Company’s common stock over the 30 trading days

immediately preceding the closing date (the “Ayala Consideration Shares”).

Because the issuance of the

Ayala Consideration Shares would require us to issue more than 19.99% of our outstanding common stock immediately prior to such issuance

(the “NYSE Ownership Limitation”), we issued to Ayala (i) 2,164,215 shares of common stock (the “Ayala Initial Shares”),

and (ii) a warrant to purchase 2,166,381 shares of common stock (the “Ayala Warrant” and the shares of common stock issuable

thereunder, the “Ayala Warrant Shares”).

Once we obtain stockholder approval in accordance with NYSE American LLC Company

Guide Section 713, we will subsequently issue to Ayala the remaining 444,041 shares of common stock (the “Ayala Additional Consideration

Shares”), except that, if at that time, the number of shares of common stock beneficially owned by Ayala would exceed 9.99% of the

number of shares of our common stock then outstanding, Ayala has the right to require us to issue, in lieu of such shares, a warrant to

purchase 444,041 on substantially the same terms of the Ayala Warrant.

In connection with the issuance

of the Ayala Consideration Shares (including the Ayala Warrant Shares and the Ayala Additional Consideration Shares), we entered into

a registration rights agreement with Ayala, requiring us to file one or more registration statements, as necessary, to register under

the Securities Act the resale of such shares no later than 75 days after the closing of the transaction.

Ayala Consideration Shares would have required us to issue more than 19.99% of our outstanding common stock immediately prior to such

issuance (the “NYSE Ownership Limitation”), we issued to Ayala (i) 2,164,215 shares of common stock, and (ii) a warrant to

purchase 2,166,381 shares of common stock (the “Ayala Warrant” and the shares of common stock issuable thereunder, the “Ayala

Warrant Shares”).

Once we obtain stockholder approval in accordance with NYSE American LLC Company Guide Section 713, we will subsequently

issue to Ayala the remaining 444,041 shares of common stock (the “Ayala Additional Consideration Shares”), except that, if

at that time, the number of shares of common stock beneficially owned by Ayala would exceed 9.99% of the number of shares of our common

stock then outstanding, Ayala has the right to require us to issue, in lieu of such shares, a warrant to purchase 444,041 on substantially

the same terms of the Ayala Warrant.

Ayala entered into a lock-up

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the closing of the transaction.

Warrant Exercise Inducement

and Exchange Offer

On July 11, 2025, we completed

a final closing of a warrant exercise inducement and exchange offer (the “Offering”).

The Offering was made to holders (the

“Holders”) of certain of our existing warrants to purchase shares of our common stock, having a then current exercise price

of $1.12 per share, originally issued to the Holders pursuant to the PIPE Purchase Agreement (the “Existing Warrants”), during

the period beginning on June 20, 2025 and ending at 5:00 p.m., Eastern time, on July 10, 2025 (the “Inducement Period”).

During the Inducement Period,

we entered into inducement offer letter agreements (the “Inducement Letters”) with the Holders of Existing Warrants, pursuant

to which the Holders agreed to exercise for cash their Existing Warrants to purchase an aggregate of 3,764,995 shares of our common stock

in consideration of our agreement to issue new warrants (the “New Warrants”) to purchase up to an aggregate of 3,764,995 shares

of our common stock (the “New Warrant Shares”) at an exercise price of $3.00 per share, subject to adjustment as provided

The New Warrants are immediately exercisable from the date of issuance and have a term of exercise of five years from such date.

We engaged an SEC registered

broker dealer and FINRA member (the “Solicitation Agent”) to act as our exclusive warrant solicitation agent in connection

with the Offering and agreed to pay the Solicitation Agent a cash fee equal to 5.0% of the total gross cash proceeds received from the

exercise by the Holders of their Existing Warrants during the Inducement Period.

We also agreed to pay the Solicitation Agent up to $15,000

for its reasonable legal and other expenses.

The gross proceeds to us

from the Offering, before deducting transaction fees and other estimated Offering expenses, were approximately $4,216,794.

use the net proceeds to support U.S.

and international regulatory and pre-commercial efforts aimed at securing marketing authorizations

for OST-HER2 in the prevention or delay of recurrent, fully resected, pulmonary metastatic osteosarcoma, advance strategic alternatives

for our OS Animal Health subsidiary, close out and report on our OST-504 (previously ADXS-504) prostate cancer study, initiate AI-driven

next-generation tADC product candidate modeling and for general corporate purposes.

We also agreed to file a

registration statement on Form S-3 (or other appropriate form, including on Form S-1, if we are not then eligible to register securities

on Form S-3) (the “Resale Registration Statement”) providing for the resale of the shares of common stock issued or issuable

upon exercise of the New Warrants, within 30 calendar days of the final closing, and to use commercially reasonable efforts to have such

Resale Registration Statement declared effective by the SEC within 60 calendar days (or within 90 calendar days in case of “full

review” of the Resale Registration Statement by the SEC) following the initial filing of such Resale Registration Statement and

to keep the Resale Registration Statement effective at all times until the earlier of (i) the time no holder of the New Warrants owns

any New Warrants or New Warrant Shares and (ii) the Delegend Date (as defined in the Inducement Letters).

Critical Accounting Policies and Estimates

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instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting

Series A Warrants issued in connection with the Purchase Agreement are recognized as a derivative liability in accordance with ASC 815.

We recognize the warrant instruments as a liability at fair value and adjust the instruments to fair value at each reporting period.

liability is subject to re-measurement at each balance sheet date until exercised or reclassified, and any change in fair value is recognized

in our consolidated statements of operations.

The fair value of the Series A Warrants was measured using a Binomial simulation model.

The determination of the fair value of the warrant liability may be subject to change as more current information becomes available, and,

accordingly, the actual results could differ significantly.

The revaluation would result in material changes in fair value on a period

by period basis.

We have determined that the fair value of the warrant liability was a critical accounting estimate.

The Series A Warrants issued in connection with the Purchase Agreement

are recognized as a derivative liability in accordance with ASC 815.

We recognize the warrant instruments as a liability at fair value

and adjust the instruments to fair value at each reporting period.

The liability is subject to re-measurement at each balance sheet date

until exercised or reclassified, and any change in fair value is recognized in our consolidated statements of operations.

The fair value

of the Series A Warrants was measured using a Binomial simulation model.

The determination of the fair value of the warrant liability

may be subject to change as more current information becomes available, and accordingly, the actual results could differ significantly.

The derivative warrant liability is classified as non-current liabilities as their liquidation is not reasonably expected to require the

use of current assets or require the creation of current liabilities.

Components of Our Results of Operations

did not recognize revenues for the three months ended March 31, 2025 and 2024.

did not recognize revenues for the six months ended June 30, 2025 and 2024.

Operating Expenses.

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discovery efforts, and the development of our product candidates, which include:

● personnel-related costs, including

salaries, benefits and stock-based compensation expense, for employees engaged in research and development functions;

● expenses incurred in connection

with our research programs, including under agreements with third parties, such as consultants and contractors and CROs;

● the cost of developing and

scaling our manufacturing process and manufacturing drug substance and drug product for use in our research and preclinical and clinical

studies, including under agreements with third parties, such as consultants and contractors and contract development and manufacturing

organizations (CDMOs);

● the cost of laboratory supplies

and research materials.

personnel-related costs, including salaries, benefits and stock-based compensation expense, for employees engaged in research and development functions;

expenses incurred in connection with our research programs, including under agreements with third parties, such as consultants and contractors and CROs;

the cost of developing and scaling our manufacturing process and manufacturing drug substance and drug product for use in our research and preclinical and clinical studies, including under agreements with third parties, such as consultants and contractors and contract development and manufacturing organizations (CDMOs);

the cost of laboratory supplies and research materials.

We track our direct external

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General and administrative expenses also include professional fees for

legal, patent, consulting, investor and public relations and accounting and audit services.

legal, consulting, investor and public relations and accounting and audit services.

We anticipate that our general

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The cumulative

accrued dividend as of March 31, 2025 and December 31, 2024 were $375,000 and $375,000, respectively.

accrued dividend as of June 30, 2025 and December 31, 2024 were $375,000 and $375,000, respectively.

The Series A preferred stock

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the deferred tax assets due to the uncertainty of realizing the benefits of the net deferred tax asset.

Our issuances of common stock

have resulted in ownership changes as defined by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”)

however, we have not conducted a Section 382 study to date.

It is likely that a future analysis may result in the conclusion that

a substantial portion, or perhaps substantially all, of our NOL carryforwards and R&D tax credit carryforwards will expire due to

the limitations of Sections 382 and 383 of the Code.

As a result, the utilization of the carryforwards may be limited, and a portion of

the carryforwards may expire unused.

Our issuances of common stock have resulted in ownership changes as

defined by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”);

however, we have not conducted

a Section 382 study to date.

It is likely that a future analysis may result in the conclusion that a substantial portion, or perhaps

substantially all, of our NOL carryforwards and R&D tax credit carryforwards will expire due to the limitations of Sections 382 and

383 of the Code.

As a result, the utilization of the carryforwards may be limited, and a portion of the carryforwards may expire unused.

We are subject to U.S.

federal tax examinations by tax authorities for the year 2021 due to

the fact that NOL carryforwards exist going back to 2019 that may be utilized on a current or future year tax return.

federal tax examinations by tax authorities for the year 2021 due to the fact that NOL carryforwards exist

going back to 2019 that may be utilized on a current or future year tax return.

Deferred Offering Costs.

Deferred offering costs consisted of legal, accounting, printing and filing fees that we capitalized, which will be offset against

the gross proceeds from our initial public offering.

Deferred offering costs consisted of legal, accounting, printing and

filing fees that we capitalized, which were offset against the gross proceeds from our initial public offering.

Results of Operations

Three Months Ended March 31, 2025 Compared

to Three Months Ended March 31, 2024

The following table summarizes

our results of operations for the three months ended March 31, 2025 and 2024:

Three and Six Months Ended June 30, 2025

Compared to Three and Six Months Ended June 30, 2024

The following table summarizes our results of operations for the three

and six months ended June 30, 2025 and 2024:

OPERATING EXPENSES

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TOTAL OTHER INCOME/EXPENSE

$ (3,876,859 )

$ (1,458,992 )

Research and Development

Research and development expenses were approximately $1.3 million for the three months ended March 31, 2025 compared

to approximately $0.4 million for the three months ended March 31, 2024.

This increase was primarily due to an increase in vendor

expenses associated with our Phase IIb clinical trial and a decrease in vendor expenses associated with out OST-tADC platform technology.

The following table summarizes our research and development expenses for the three months ended March 31, 2025 and 2024:

As of March 31,

Research and development expenses were approximately $3.8 million

for the six months ended June 30, 2025 compared to approximately $0.8 million for the six months ended June 30, 2024.

This increase

was primarily due to an increase in vendor expenses associated with our Phase IIb clinical trial, as we compile data to submit to

various governmental agencies, and a decrease in vendor expenses associated with out OST-tADC platform technology.

Research and development

expenses were approximately $2.5 million for the three months ended June 30, 2025 compared to approximately $0.4 million for

the three months ended June 30, 2024.

This increase was primarily due to an increase in vendor expenses associated with our Phase IIb

clinical trial, as we compile data to submit to various governmental agencies, and a decrease in vendor expenses associated with out OST-tADC

platform technology.

The following table summarizes

our research and development expenses for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Total research and development expenses

For the three months ended

March 31, 2025 and 2024, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and

For the six months ended

June 30, 2025 and 2024, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and

staff payroll fees.

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OST-tADC related direct research and development expenses were approximately $0.0 million and $0.0 million for the

three months ended March 31, 2025 and 2024, respectively.

six months ended June 30, 2025 and 2024, respectively.

For the three months ended

June 30, 2025 and 2024, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and

staff payroll fees.

In 2025, such expenses were primarily lab fees and related clinical support of approximately $0.6 million attributed

to our Phase IIb clinical trial preparation, and advisor fees of $1.4 million, as we completed IND-enabling studies.

OST-tADC related

direct research and development expenses were approximately $0.0 million and $0.0 million for the three months ended June 30,

2025 and 2024, respectively.

General and Administrative

General and administrative expenses for the three months ended March 31, 2025 were approximately $3.7 million compared

to $0.3 million for the three months ended March 31, 2024.

These expenses were primarily attributed to marketing costs and advisory

fees associated with the PIPE Financing and equity line of credit.

General and administrative expenses for the six months ended June 30, 2025 were approximately $6.0 million compared

to $0.7 million for the six months ended June 30, 2024.

These expenses were primarily attributed to marketing and investor relations

costs and advisory fees associated with the PIPE Financing and equity line of credit.

General and administrative

expenses for the three months ended June 30, 2025 were approximately $2.3 million compared to $0.4 million for the three months

ended June 30, 2024.

These expenses were primarily attributed to marketing and investor relations costs and advisory fees associated with

the PIPE Financing and equity line of credit.

Interest Expense.

expense for the three months ended March 31, 2025 was approximately $0 million compared to $0.8 million for the three months ended March

The Series A preferred stock

coupon dividend requirement of $31,250 for the three months ended March 31, 2024 represents an expense that terminated during the period

ended March 31, 2024 upon the conversion of our old Series A preferred shares into shares of our common stock.

We issued Series A convertible

preferred stock and detachable warrants on December 31, 2024 and January 14, 2025.

The adjustment of the fair value of the warrant liability

was $1.1 million and $0 million for the three months ended March 31, 2025 and 2024, respectively.

expense for the six months ended June 30, 2025 was approximately $0.0 million compared to $1.6 million for the six months ended June 30,

Interest expense for the

three months ended June 30, 2025 was approximately $0.0 million compared to $0.8 million for the three months ended June 30, 2024.

Change in Fair Value

The Series A preferred stock coupon dividend requirement of $31,250

for the six months ended June 30, 2024 represents an expense that terminated during the period ended March 31, 2024 upon the conversion

of our old Series A preferred shares into shares of our common stock.

We issued Series A convertible preferred stock and detachable warrants

on December 31, 2024 and January 14, 2025.

The adjustment of the fair value of the warrant liability was $1.4 million and $0.0 million for

the six months ended June 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

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on the successful development and eventual commercialization of our product candidates.

For the three months ended March 31, 2025 and

For the six months ended June 30, 2025 and 2024,

we reported a net loss of approximately $8.4 million and $3.0 million, respectively, and had an accumulated deficit of approximately

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losses for the foreseeable future.

As of March 31, 2025 and

December 31, 2024, we had cash of approximately $3.0 million and $5.5 million, respectively.

We have funded our operations to date

primarily from the sale of our convertible notes and Series A securities in our private placements, as well as the sale of our common

stock in our initial public offering, which have provided total gross proceeds of $34.6 million as of March 31, 2025.

We believe that

the net proceeds from our private placements and initial public offering, together with our existing cash, will enable us to fund our

operating expenses and capital expenditure requirements for the next nine to 12 months.

The following table summarizes

our sources and uses of cash for each of the periods presented:

For the three months ended June 30, 2025 and 2024, we reported a net loss of approximately $4.5 million

and $1.6 million, respectively.

As of June 30, 2025 and December 31, 2024, we had cash of approximately

$2.8 million and $5.5 million, respectively.

We have funded our operations to date primarily from the sale of our convertible notes

and Series A securities in our private placements and cash exercises of our warrants, as well as the sale of our common stock in our initial

public offering, which have provided total gross proceeds of $37.1 million as of June 30, 2025.

We believe that the net proceeds from

our private placements and initial public offering, together with our existing cash, will enable us to fund our operating expenses and

capital expenditure requirements for the next nine to 12 months.

The following table summarizes our sources and uses of cash for the

six months ended June 30, 2025 and 2024:

(In thousands)

Cash used in operating activities

Cash provided by investing activities

Cash used in investing activities

Cash provided by financing activities

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Operating Activities

During the three months ended

March 31, 2025 and 2024, operating activities used approximately $3.4 million and $.6 million of cash, respectively, resulting from our

net loss of approximately $3.9 million and $1.5 million, respectively, offset by net non-cash charges of approximately $0.7 million and

$0.6 million, respectively, partially offset by net cash (used in) provided by changes in our operating assets and liabilities of approximately

$(0.3) million and $0.2 million, respectively.

Net cash provided by changes in our operating assets and liabilities

for the three ended March 31, 2025 and 2024 consisted primarily of an increase (decrease) in accounts payable of approximately $(0.05)

million and $0.04 million, respectively, an increase (decrease) in accrued interest of approximately $0 million and $0.25 million, respectively,

and a change in accrued payroll of approximately $(0.1) million and $(0.05) million, respectively.

The change in accrued expenses of approximately

$(0.15) million and $(0.0) million was a significant portion of the use.

During the six months ended June 30, 2025 and 2024, operating activities

used approximately $5.9 million and $1.5 million of cash, respectively, resulting from our net loss of approximately $8.4 million and

$3.0 million, respectively, offset by net non-cash charges of approximately $1.4 million and $1.1 million, respectively, partially offset

by net cash provided by changes in our operating assets and liabilities of approximately $1.2 million and $0.4 million, respectively.

Net cash provided by changes

in our operating assets and liabilities for the six months ended June 30, 2025 and 2024 consisted primarily of an increase (decrease)

in accounts payable of approximately $1.1 million and $(0.05) million, respectively, an increase in accrued interest of approximately

$0.0 million and $0.5 million, respectively, and a change in prepaid expenses of approximately $0.4 million and $(0.0) million, respectively.

The change in accrued expenses of approximately $(0.15) million and $0.3 million was a portion of the use.

Non-cash charges for the

three months ended March 31, 2025 and 2024 were primarily the result of the changes in the fair value of our warrant liability combined

with our common stock shares issued for service and our stock-based compensation of approximately $0.7 million and $0.6 million, respectively.

Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods

were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.

six months ended June 30, 2025 and 2024 were primarily the result of the changes in the fair value of our warrant liability of $(1.4)

million and $0.0 million, respectively, combined with our common stock shares issued for service and our stock-based compensation of approximately

$2.7 million and $0.0 million, respectively.

Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses

and other current assets in all periods were generally due to growth in our business, the advancement of our research programs and the

timing of vendor invoicing and payments.

Investing Activities

During the three months ended

March 31, 2025 and 2024, net cash used by investing activities was approximately $0.2 million and $0 million, respectively.

During the six months ended June 30, 2025 and 2024, net cash used in

investing activities was approximately $0.4 million and $0.0 million, respectively.

Financing Activities

For the three months ended

March 31, 2025 and 2024, net cash provided by financing activities was approximately $1.1 million and $0.7 million, respectively.

For the six months ended June 30, 2025 and 2024, net cash provided

by financing activities was approximately $3.5 million and $1.6 million, respectively.

For the six months ended June 30, 2025, we saw

funds raised from our Series A securities offering of $1.1 million and our warrant inducement exercise offering of $2.5 million.

Convertible Notes.

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of BlinkBio, in exchange for the entry into the license agreement.

On March 15, 2021, the principal and unpaid accrued interest of

$100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed to

BlinkBio stockholders.

The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited the

price a noteholder must pay in a convertible note-to-common stock conversion occurrence.

On February 9, 2024, the 1,302,082 shares

of our Series A preferred stock were converted into 651,041 shares of common stock (on a post-split basis).

On March 15, 2021, the principal and unpaid accrued interest

of $100,000 of the BlinkBio Convertible Note converted into 1,302,082 shares of our Series A preferred stock and then distributed

to BlinkBio stockholders.

The BlinkBio Convertible Note had a conversion capitalization ceiling of $19.2 million, which limited

the price a noteholder must pay in a convertible note-to-common stock conversion occurrence.

On February 9, 2024, the 1,302,082

shares of our Series A preferred stock were converted into 651,041 shares of common stock (on a post-split basis).

May 2021, we received the first of two tranches from TEDCO’s Rural & Underserved Business Recovery from Impact of

Covid-19 (RUBRIC) Grant in the amount of $50,000.

In October 2021, we received the second tranche of $50,000, which brought the total

reimbursable grant amount to $100,000.

We are obligated to report on and pay to TEDCO 3% of their quarterly revenues for a five-year

period following the reward date.

In October 2021, we received the second tranche of $50,000, which brought the

total reimbursable grant amount to $100,000.

We are obligated to report on and pay to TEDCO 3% of their quarterly revenues for a

five-year period following the reward date.

Income from grants and investments are not considered revenues.

Royalties due to TEDCO are capped at

150% of the amount of the award, or $150,000.

We have the option to eliminate the quarterly royalty obligation by making an advance payment

prior to the end of the five-year period, in which case, we will receive a 10% reduction of the royalty cap percentage for each year prior

to the expiration of the five-year reimbursement period that the grant is repaid in full.

If we cease to meet eligibility requirements

at any time, the reimbursement obligation will become due to TEDCO immediately;

however, the discount for meeting the obligation will

Royalties due to TEDCO are

capped at 150% of the amount of the award, or $150,000.

We have the option to eliminate the quarterly royalty obligation by making an

advance payment prior to the end of the five-year period, in which case, we will receive a 10% reduction of the royalty cap percentage

for each year prior to the expiration of the five-year reimbursement period that the grant is repaid in full.

If we cease to meet eligibility

requirements at any time, the reimbursement obligation will become due to TEDCO immediately;

however, the discount for meeting the obligation

will still apply.

PIPE Financing

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pay Brookline or its designees a fee in the form of the Agent Warrants.

Warrants are initially exercisable into a number of shares of common stock equal to (i) 7% of the number of shares of common stock initially

issuable pursuant to the shares of Series A Preferred Stock issued to Purchasers other than Reduced Fee Purchasers in the PIPE Financing

plus (ii) 3% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred Stock issued Reduced

Fee Purchasers in the PIPE Financing;

provided that, Ceros is entitled to up to 33.3% of the Agent Warrants.

The terms of the Agent Warrants

are substantially similar to the terms of the Series A Warrants.

At two closings occurring on December 31, 2024 and January 14, 2025,

(i) Brookline received an aggregate cash fee of $159,685 and 39,918 Agent Warrants, and (ii) Ceros received an aggregate cash fee of $79,723

and 19,930 Agent Warrants.

The Agent Warrants are initially exercisable into a number of

shares of common stock equal to (i) 7% of the number of shares of common stock initially issuable pursuant to the shares of Series A Preferred

Stock issued to Purchasers other than Reduced Fee Purchasers in the PIPE Financing plus (ii) 3% of the number of shares of common stock

initially issuable pursuant to the shares of Series A Preferred Stock issued Reduced Fee Purchasers in the PIPE Financing;

provided that,

Ceros is entitled to up to 33.3% of the Agent Warrants.

The terms of the Agent Warrants are substantially similar to the terms of the

Series A Warrants.

At two closings occurring on December 31, 2024 and January 14, 2025, (i) Brookline received an aggregate cash fee of

$159,685 and 39,918 Agent Warrants, and (ii) Ceros received an aggregate cash fee of $79,723 and 19,930 Agent Warrants.

Warrant Exercise Inducement and Exchange

On July 11, 2025, we completed

the final closing of the Offering.

During the Inducement Period, we entered into Inducement Letters with the Holders of Existing Warrants,

pursuant to which the Holders agreed to exercise for cash their Existing Warrants to purchase an aggregate of 3,764,995 shares of our

common stock in consideration of our agreement to issue New Warrants to purchase up to an aggregate of 3,764,995 shares of our common

stock at an exercise price of $3.00 per share, subject to adjustment as provided therein.

The New Warrants are immediately exercisable

from the date of issuance and have a term of exercise of five years from such date.

We engaged an SEC registered

broker dealer and FINRA member (the “Solicitation Agent”) to act as our exclusive warrant solicitation agent in connection

with the Offering and agreed to pay the Solicitation Agent a cash fee equal to 5.0% of the total gross cash proceeds received from the

exercise by the Holders of their Existing Warrants during the Inducement Period.

We also agreed to pay the Solicitation Agent up to $15,000

for its reasonable legal and other expenses.

The gross proceeds to us from the Offering, before deducting transaction

fees and other estimated Offering expenses, were approximately $4,216,794.

We intend to use the net proceeds to support U.S.

and international

regulatory and pre-commercial efforts aimed at securing marketing authorizations for OST-HER2 in the prevention or delay of recurrent,

fully resected, pulmonary metastatic osteosarcoma, advance strategic alternatives for our OS Animal Health subsidiary, close out and report

on our OST-504 (previously ADXS-504) prostate cancer study, initiate AI-driven next-generation tADC product candidate modeling and for

general corporate purposes.

Contractual Obligations and Other Commitments

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candidate (OST-HER2).

The agreement was subsequently amended in April 2021 to modify the payment amounts for Milestones 2 and 3 listed

in the table below.

Under the terms of the amended agreement, we are required to pay to Advaxis (i) a one-time, non-refundable payment

of $1,550,000 (the “License Commencement Payment”) and (ii) certain amounts based on the achievement of the milestones

described in the payment schedule below.

As of March 31, 2025, we paid to Advaxis a total of $2,925,000, consisting of (i) the License

Commencement Payment for Milestone 1 and (ii) $1,375,000 for Milestone 2.

Payments towards the License

Commencement Payment have been recorded as licensing expenses in our Statements of Operations and Comprehensive Loss for the year ended

December 31, 2022.

We expect to achieve Milestone 3 in 2025.

The payment schedule for milestones and corresponding payment amounts

is set forth below.

The agreement was subsequently amended in April 2021 to modify the payment amounts for Milestones 2 and 3

listed in the table below.

Under the terms of the amended agreement, we are required to pay to Advaxis (i) a one-time, non-refundable

payment of $1,550,000 (the “License Commencement Payment”) and (ii) certain amounts based on the achievement of the

milestones described in the payment schedule below.

For the six months ended June 30, 2025 and for the year ended December 31, 2024,

no payments were made.

A $400,000 payment was made to Ayala, together with payment of stock consideration, in connection with our purchase

of the HER2 Assets on April 9, 2025, terminating this license agreement.

The payment schedule for milestones and corresponding payment

amounts were as set forth below.

Milestone Bearing Event

OST has secured funding of at least $2,337,500, in the aggregate (paid)

The earlier to

(A) OST having secured at least $8,000,000, in the aggregate, or (B) completion of the first Clinical Trial

The earlier to occur of:

(A) OST having secured at least $8,000,000, in the aggregate, or (B) completion of the first Clinical Trial (paid)

The earlier to occur of:

(A) receipt of Regulatory Approval from the FDA for the First Indication of the first Licensed Product or (B) initiation of the first Registrational Trial of the first Licensed Product in the Field

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OST-HER2 program as follows:

Elimination of $3,500,000 payment owed to Ayala upon the

first filing of a BLA approval for OST-HER2 with the FDA.

Elimination of a total of $16,500,000 in OST-HER2 related

sales milestone payments owed to Ayala made up of the following payments:

Elimination of $3,500,000 payment owed to Ayala upon the first filing of a BLA approval for OST-HER2 with the FDA.

Elimination of a total of $16,500,000 in OST-HER2 related sales milestone payments owed to Ayala made up of the following payments:

$1,500,000 owed upon reaching cumulative sales of $20,000,000;

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$10,000,000 owed upon reaching cumulative sales of $100,000,000.

The reduction in total royalty consideration owed on OST-HER2

related sales from 10% of net sales owed to Ayala to 1.5% of net sales owed under the Penn License.

The royalty consideration of 1.5%

of net sales owed to University of Pennsylvania going forward will apply to sales related to:

The reduction in total royalty consideration owed on OST-HER2 related sales from 10% of net sales owed to Ayala to 1.5% of net sales owed under the Penn License.

The royalty consideration of 1.5% of net sales owed to University of Pennsylvania going forward will apply to sales related to:

OST-HER2-related sales;

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ADXS-504-related sales;

● Sales related to any new immunotherapy drug candidates created

from the Lm platform during the term of our license with the University of Pennsylvania.

Sales related to any new immunotherapy drug candidates created from the Lm platform during the term of our license with the University of Pennsylvania.

In addition, we have agreed

to pay an annual fee to the Trustees of the University of Pennsylvania.

In April 2025, the Company paid a fee of $266,317 for the six

months ended June 30, 2025 for the period from April 9, 2025 through April 8, 2026.

August 2020, we entered into a licensing agreement with BlinkBio, Inc., a privately-held developer of drug conjugate therapies designed

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reductions on such royalty, and (iii) certain amounts based on the achievement of the milestones described in the payment schedule

As of March 31, 2025, we

had paid the Up-Front Fee.

The payment schedule for milestones and corresponding payment amounts is set forth below.

As of June 30, 2025, we had paid the Up-Front Fee.

The payment schedule

for milestones and corresponding payment amounts is set forth below.

Milestone Bearing Event

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George Clinical.

June 2020, we entered into a services agreement, as amended, with George Clinical, Inc., a clinical contract research organization.

Pursuant to this agreement, we engaged George Clinical to use its clinical research services for our study entitled “An Open Label,

Phase 2 Study of Maintenance Therapy with OST-HER2 after Resection of Recurrent Osteosarcoma.” Under the terms of the agreement,

we are required to pay to George Clinical certain fees described in the fee schedule below.

The total new budget under the agreement is

approximately $2,436,928.

For the three months ended March 31, 2025 and 2024, we paid $0 and $86,687, respectively, to George Clinical.

These payments have been recorded as research and development expenses in our Statement of Operations and Comprehensive Loss.

schedule for certain fees and corresponding payment amounts is set forth below.

June 2020, we entered into a services agreement, as amended, with

George Clinical, Inc., a clinical contract research organization.

Pursuant to this agreement, we engaged George Clinical to use its clinical

research services for our study entitled “An Open Label, Phase 2 Study of Maintenance Therapy with OST-HER2 after Resection

of Recurrent Osteosarcoma.” Under the terms of the agreement, we are required to pay to George Clinical certain fees described in

the fee schedule below.

The total new budget under the agreement is approximately $2,436,928.

For the six months ended June 30, 2025 and

2024, we paid $0 and $86,687, respectively, to George Clinical.

These payments have been recorded as research and development expenses

in our Statement of Operations and Comprehensive Loss.

The fee schedule for certain fees and corresponding payment amounts is set forth

George Clinical Payment Schedule

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The PTC Fee Advance will be used to offset the first few months of invoices payable.

As of March 31, 2025, the balance due

to George Clinical was $148,587.

As of June 30, 2025 and 2024, the balance

due to George Clinical was $0 and $663,622, respectively.

The services agreement has terminated on its terms.

Biolacuna Ltd

We have contracted with Biolacuna

Ltd, a global life sciences advisory firm, to assist with the following agencies requirements to register OST-HER2 and gain approval of

its use in the respective regions:

Medicines Agency (EMA, Europe);

Evaluation Board (MEB, Netherlands);

and Healthcare products Regulatory Agency (MHRA, United Kingdom);

Food and Drug Administration (FDA, United States).

For the six months ended June 30, 2025, we paid

$459,485 in consulting fees, with accounts payable as of June 30, 2025 of $1,118,343.

Off-Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis