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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-08 · 299 added, 226 removed, 236 unchanged (69% of the section changed)

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange

Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning the Company and other matters.

These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of

operations or financial condition, or otherwise, based on current beliefs of the Company’s management, as well as assumptions made by, and information currently available to, management.

Forward-looking statements generally include statements that

are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend,” “forecast,”

“guidance”, “outlook” and other similar expressions among others.

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements (including within the meaning of Section 21E of the United States Securities

Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning the Company and other matters.

These statements may discuss goals, intentions and expectations as to future plans, trends, events,

results of operations or financial condition, or otherwise, based on current beliefs of the Company’s management, as well as assumptions made by, and information currently available to, management.

Forward-looking statements generally include

statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend,”

“forecast,” “guidance”, “outlook” and other similar expressions among others.

Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance.

Actual results could

differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation:

results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation:

the Company’s ability to protect its intellectual property rights;

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Infectimune based products and the future success of such trials;

the successful implementation of the Company’s research and development programs and collaborations, including any collaboration studies concerning PDS0101, PDS0203 and other Versamune and Infectimune based products

and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the Company’s product candidates;

products and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the Company’s product candidates;

the success, timing and cost of the Company’s ongoing clinical trials and anticipated clinical trials for the Company’s current product candidates, including statements regarding the timing of initiation, pace of

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the timing of and the Company’s ability to obtain and maintain U.S.

Food and Drug Administration or other regulatory authority approval of, or other

action with respect to, the Company’s product candidates;

the timing of and the Company’s ability to obtain and maintain U.S.

Food and Drug Administration or other regulatory authority approval of, or other

action with respect to, the Company’s product candidates;

Food and Drug Administration or other regulatory authority approval of, or other action with respect to, the Company’s product candidates;

other factors, including legislative, regulatory, political and economic developments not within the Company’s control, including unforeseen circumstances or other disruptions to normal business operations arising

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Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown

risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.Given these

uncertainties, you should not place undue reliance on these forward-looking statements.

Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, whether as a result of new information,

future events or otherwise.

In this Quarterly Report, unless otherwise stated or the context otherwise indicates, references to “PDS,” “the Company,” “we,” “us,” “our” and similar references refer to PDS

Biotechnology Corporation, a Delaware corporation.

these uncertainties, you should not place undue reliance on these forward-looking statements.

Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, whether as a result of new

information, future events or otherwise.

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

PDS Biotechnology Corporation, a Delaware corporation.

Company Overview

We are a clinical-stage immunotherapy company developing a growing pipeline of molecularly targeted cancer and infectious disease immunotherapies based on our proprietary Versamune ® and Infectimune™ T cell activating technology platforms.

We are a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies based on our proprietary Versamune ® and Infectimune™ T cell activating technology platforms.

Our Versamune based products have demonstrated the potential to overcome the limitations of current

immunotherapies by inducing, in vivo, large quantities of high-quality, highly potent polyfunctional CD4+ helper and CD8+ killer T-cells.

We have developed multiple therapies, based on combinations of

Versamune and disease-specific antigens, designed to train the immune system to recognize diseased cells and effectively attack and destroy them.

We continue to advance its pipeline of candidates to address a wide range of cancers including

HPV16-associated cancers (anal, cervical, head and neck, penile, vaginal, vulvar) and breast, colon, lung prostate and ovarian cancers.

Our Infectimune -based vaccines have demonstrated the potential to induce, not only robust and durable

neutralizing antibody response, but also powerful T cell responses including long-lasting memory T cell responses.

Our infectious disease candidates are of potential interest for use in COVID-19 and universal influenza vaccines.

immunotherapies by inducing, in vivo, large quantities of high-quality, potent polyfunctional CD4+ helper and CD8+ killer T cells.

We have developed multiple therapies, based on combinations of Versamune

and disease-specific antigens, designed to train the immune system to recognize diseased cells and effectively attack and destroy them.

We continue to advance our pipeline of candidates to address a wide range of cancers including HPV-positive

cancers (anal, cervical, head and neck, penile, vaginal, vulvar) and breast, colon, lung prostate and ovarian cancers.

Our Infectimune -based vaccines have demonstrated the potential to induce, not only robust and durable neutralizing antibody

response, but also powerful T cell responses including long-lasting memory T cell responses.

Our infectious disease candidates are of potential interest for use in universal influenza vaccines.

In May 2022, we announced that two abstracts had been presented at the 2022 American Society of Clinical Oncology Annual Meeting:

Abstract number 6041, PDS0101 a novel type 1

interferon and CD8+ T-cell activating immunotherapy in combination with pembrolizumab in subjects with recurrent/metastatic HPV16-positive squamous cell carcinoma (HNSCC) and Abstract number 2518, Phase II evaluation of the combination of PDS0101,

M9241, and bintrafusp alfa with HPV16+ malignancies.

interferon and CD8+ T cell activating immunotherapy in combination with pembrolizumab in subjects with recurrent/metastatic HPV16-positive squamous cell carcinoma (HNSCC) and Abstract number 2518, Phase II evaluation of the combination of

PDS0101, M9241, and bintrafusp alfa with HPV16+ malignancies.

Also in May 2022, we announced expansion of our VERSATILE-002 clinical trial into Europe and in June 2022, we announced the U.S.

Food and Drug Administration (the “FDA”) had granted Fast Track

designation to our lead candidate PDS010 in combination with Merck’s anti-PD-1 therapy, KEYTRUDA® (PEMBROLIZUMAB).

The FDA’s Fast Track designation is designed to aid in the development and to expedite the review of drug candidate applications that

would potentially treat serious or life-threatening conditions.

Food and Drug Administration (the “FDA”) had granted

Fast Track designation to our lead candidate PDS010 in combination with Merck’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab).

The FDA’s Fast Track designation is designed to aid in the development and to expedite the review of drug candidate

applications that would potentially treat serious or life-threatening conditions.

In order to receive Fast Track designation, a product must also demonstrate the potential to address an unmet medical need.

Treatments granted this designation are given the

opportunity to have more frequent meetings with the FDA throughout the entire dug development and review process, with the goal of moving promising new drugs more rapidly through the process.

It also provides the opportunity to submit sections of a

New Drug Application (the “NDA”) on a rolling basis, where the FDA may review portions of the NDA as they are received instead of waiting for the entire NDA submission.

In addition, Fast Track designated products are eligible for priority review at

the time of NDA or Biologics License Application submission.

Treatments granted this designation are

given the opportunity to have more frequent meetings with the FDA throughout the entire dug development and review process, with the goal of moving promising new drugs more rapidly through the process.

It also provides the opportunity to submit

sections of a New Drug Application (the “NDA”) on a rolling basis, where the FDA may review portions of the NDA as they are received instead of waiting for the entire NDA submission.

In addition, Fast Track designated products are eligible for

priority review at the time of NDA or Biologics License Application submission.

In July 2022, we announced the presentation of universal flu vaccine preclinical data for PDS0202 at the 41 st

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Abstract number 3733830, Infectimune™ enhances antibodies elicited by COBRA hemagglutinin influenza vaccine.

Our current pipeline of Versamune based targeted immunotherapies and Infectimune based therapies focuses on the use of selected disease-associated antigens that have been demonstrated

to be associated with a variety of solid tumors, as well as specific infectious diseases.

In November 2022, we announced the presentation of data from two Phase 2 clinical trials at the 37 th

Annual Meeting for the Society of Immunotherapy of Cancer (SITC):

Abstract number 674, IMMUNOCERV, an ongoing Phase 2 trial combining PDS0101, an HPV-specific T cell immunotherapy, with chemotherapy and radiation for treatment of locally advanced

cervical cancers and abstract number 695, Immune correlates associated with clinical benefit in patients with checkpoint refractory HPV-associated malignancies treated with triple combination immunotherapy.

Our current pipeline of Versamune based targeted immunotherapies and Infectimune based therapies focuses on the use of selected disease-associated antigens that have been

demonstrated to be associated with a variety of solid tumors, as well as specific infectious diseases.

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 and is actively recruiting patients.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 PDS Biotech-sponsored trial, patients whose cancer has returned or spread following initial treatment, will be able to avoid chemotherapy and take this combination of two

immunotherapy drugs.

Enrolling patients with more functional immune systems that have not been compromised by extensive chemotherapy may allow improved efficacy of the combination.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 that are yet to be treated with a checkpoint inhibitor (CPI naïve) and cohort 2 which consists of

patients that have failed checkpoint inhibitor therapy (CPI refractory).

In February 2022, we announced we had achieved the preliminary efficacy milestone of at least four or more objective responses of the first 17 patients in the CPI naïve arm which now allows that arm

to proceed to full enrollment.

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 PDS Biotech-sponsored trial patients whose cancer has returned or spread following initial treatment 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 a checkpoint inhibitor (CPI naïve) and cohort 2 which consists of patients who have failed

checkpoint inhibitor therapy (CPI refractory).

In February 2022, we announced we had achieved the preliminary efficacy milestone of at least four or more objective responses of the first 17 patients in the CPI naïve arm which now allows that arm to proceed to full

We also announced detailed preliminary safety data which showed that the combination is well tolerated without evidence of enhanced or significant toxicity in the first 18 patients in the CPI naïve arm.

We continue to

enroll patients in the first stage of the CPI refractory arm.

In May 2022, we announced preliminary efficacy and safety data from this trial at the ASCO Annual Meeting.

The abstract provided preliminary data on 19 patients (safety) with available imaging data

for 17 of the 19 patients (efficacy).

We continue to enroll patients in

the first stage of the CPI refractory arm.

In May 2022, we announced additional preliminary efficacy and safety data from this trial at the ASCO Annual Meeting.

The abstract provided preliminary data on 19 patients (safety) with available imaging data for 17 of

the 19 patients (efficacy).

Highlights from the abstract were as follows:

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In May 2022, we announced the expansion of this trial into Europe and in June 2022, as described above, we received Fast Track designation for PDS0101 in combination with pembrolizumab.

In August 2022, we announced our independent Data Monitoring Committee (DMC) met and evaluated data from 43 patients and noted there were no Grade 3 or greater treatment-related adverse events attributed to the

The DMC recommended continuing the trial with no modifications.

In October 2022, we announced an end-of-phase 2 meeting with the FDA for PDS0101 in combination with KEYTRUDA ® .

We are currently

evaluating the guidance on the key elements of the clinical program that will support the submission of a Biologics License Application for PDS0101.

National Cancer Institute:

PDS0101+ M9241 +Bintrafusp Alfa

In June 2020, the first patient was dosed under a PDS0101 Cooperative Research and Development Agreement (CRADA), in NCI, led Phase 2 clinical trial evaluating PDS0101 with NHS-IL12

(M9241), and M7824 (Bintrafusp Alfa), both of which are owned by EMD Serono (Merck KGaA) in patients with advanced/refractory HPV-associated cancers who have failed prior treatment.

In February 2021, we announced that the NCI’s Phase 2 clinical

trial of PDS0101 for the treatment of advanced/refractory HPV-associated cancers achieved its preliminary objective response target in patients naïve to checkpoint inhibitors which allowed for full enrollment of approximately 20 patients in this

group.In addition, based on promising results in the CPI naïve arm, the trial was amended to allow enrollment of a separate cohort of checkpoint inhibitor-refractory patients for assessment of safety and activity of the triple combination.

Preliminary efficacy assessment of the triple combination in this added group of 20 checkpoint inhibitor refractory patients is ongoing.The NCI recently achieved the intended enrollment objective of 30 patients in the CPI refractory arm of the

trial.The trial has enrolled 45 patients and we plan to continue enrollment in the trial until the total enrollment of 56 patients is achieved.

Preclinical study results arising from this CRADA were recently published in the Journal for ImmunoTherapy of Cancer, Immunomodulation to enhance

the efficacy of an HPV therapeutic vaccine (Journal for ImmunoTherapy of Cancer 2020;8:e000612.

In June 2020, the first patient was dosed under a PDS0101 Cooperative Research and Development Agreement (CRADA), in NCI, led Phase 2 clinical trial evaluating PDS0101 with

NHS-IL12 (M9241), and M7824 (Bintrafusp alfa), both of which are owned by EMD Serono (Merck KGaA) in patients with advanced/refractory HPV-positive cancers who have failed prior treatment.

In February 2021, we announced that the NCI’s Phase 2

clinical trial of PDS0101 for the treatment of advanced/refractory HPV-positive cancers had achieved its preliminary objective response target in patients naïve to checkpoint inhibitors which allowed for full enrollment of approximately 20

patients in this group.

In addition, based on promising results in the CPI naïve arm, the trial was amended to allow enrollment of a separate cohort of checkpoint inhibitor-refractory patients for assessment of safety and activity of the triple

Preliminary efficacy assessment of the triple combination in this added group of 20 checkpoint inhibitor refractory patients is ongoing.

Preclinical study results arising from this CRADA were published in the Journal for ImmunoTherapy of Cancer, Immunomodulation to enhance the

efficacy of an HPV therapeutic vaccine (Journal for ImmunoTherapy of Cancer 2020;8:e000612.

doi:10.1136/ jitc-2020-000612) , indicating that PDS0101 generated both HPV-specific T cells and an

associated antitumor response when used as a monotherapy.When PDS0101 was combined with two other novel clinical-stage anti-cancer agents, Bintrafusp Alfa and M9241, the preclinical data suggested that all three therapeutic agents worked

synergistically to provide superior tumor T-cell responses and subsequent tumor regression when compared to any of the agents alone or the 2-component combinations.If the published preclinical data demonstrating powerful activity of the triple

associated antitumor response when used as a monotherapy.

When PDS0101 was combined with two other novel clinical-stage anti-cancer agents, Bintrafusp Alfa and M9241, the preclinical data suggested that all three therapeutic agents worked

synergistically to provide superior tumor T cell responses and subsequent tumor regression when compared to any of the agents alone or the 2-component combinations.

If the published preclinical data demonstrating powerful activity of the triple

combination is successfully confirmed in the ongoing Phase 2 trial, this triple combination could form the basis of a unique platform providing improved cancer treatments across multiple cancers.

In June 2021, at the American Society of Clinical Oncology (ASCO) conference the NCI announced interim data in this trial which included, data in both CPI naïve and refractory

patients.In the CPI naïve group 83% (5/6) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease.100% of the CPI naïve patients were alive at a median duration of 8 months.In the CPI

refractory group 42% (5/12) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease.10/12 (83%) of CPI refractory patients were alive at a median duration of 8 months.An update provided in

January 2022 showed as of December 31, 2021, that >40 subjects had been recruited into the trial and 30 HPV16-positive patients had been evaluated.The median survival of all patients (3:1 CPI refractor to naïve) was 12 months and progressing.The

historical survival of CPI naïve and CPI refractory advanced HPV-associated cancers when treated with CPI are 7-11 months and 3-4 months respectively.

In June 2022, at the 2022 ASCO Annual Meeting, we provided an update to the preliminary data presented at the 2021 meeting, this included data from 30 patients and highlights were

In the CPI naïve group 83% (5/6) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease.

100% of the CPI naïve patients were alive at a median duration of 8 months.

CPI refractory group 42% (5/12) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease.

10/12 (83%) of CPI refractory patients were alive at a median duration of 8 months.

provided in January 2022 showed as of December 31, 2021, that >40 subjects had been recruited into the trial and 30 HPV16-positive patients had been evaluated.

The median survival of all patients (3:1 CPI refractor to naïve) was 12 months and

The historical survival of CPI naïve and CPI refractory advanced HPV-positive cancers when treated with CPI are 7-11 months and 3-4 months, respectively.

In June 2022, at the 2022 ASCO Annual Meeting, we provided an update to the preliminary data presented at the 2021 meeting.

This included data from 30 patients and highlights were

Objective response (OR = > 30% tumor reduction) was seen in 88% (7/8) of patients with checkpoint-naive disease;

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The study results to date strongly suggest, in agreement with the published preclinical studies, that all 3 drugs contribute to the clinical outcomes.

In September 2022, we announced, in agreement with the NCI, that the CPI refractory patients had been selected as the preferred treatment group in the on-going PDS0101-based

triple combination therapy in advanced HPV-positive cancers and the trial was closed to further enrollment given the CPI refractory arm has been fully recruited.

We and the NCI hope to meet with the FDA in the coming months to discuss the

registrational path forward for the combination therapy as a potential third-line treatment for CPI refractory HPV-positive cancers.

In October 2022, we announced expanded interim data as follows:

Survival data:

66% (19/29) of HPV16-positive CPI refractory patients in the cohort were alive at a median follow up of 16 months

Safety profile:

48% (24/50) patients experienced Grade 3 treatment-related adverse events (AEs), and 4% (2/50) patients experienced Grade 4 AEs.

There were no Grade 3 treatment-related AEs.

HPV16-positive CPI naïve patients:

75% (6/8) were alive at a median follow up of 25 months and 38% (3/8) of responders had a complete response.

MD Anderson Cancer Center (IMMUNOCERV):

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In October 2020, a third PDS0101 Phase 2 clinical study was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients.

This clinical trial

is investigating the safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical immunological biomarkers in patients with locally advanced cervical cancer.

believes that Versamune’s strong T-cell induction has the potential to meaningfully enhance efficacy of the current standard of care CRT treatment in this indication.

The enrollment rate in this trial has been negatively impacted by the COVID-19

pandemic and enrollment is on-going.

This clinical

trial is investigating the safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical immunological biomarkers in patients with locally advanced cervical cancer.

PDS Biotech believes that Versamune’s strong T cell induction has the potential to meaningfully enhance efficacy of the current standard of care CRT treatment in this indication.

The enrollment rate in this trial has been negatively impacted by

the COVID-19 pandemic and enrollment is on-going.

In November 2022, we announced data from this trial was included in a poster presentation being presented at the 2022 SITC Annual Meeting which included the following:

9 of the 17 patients have now completed a Day 170 post-treatment Positron Emission Tomography, Computed Tomography (PET CT) scan to assess the status of the cancer.

This includes 78% (7/9) of treated patients with

advanced cervical cancer (FIGO stage III or IV).

100% (9/9) of patients treated with the combination of PDS0101 and CRT had an objective response.

89% (8/9) of patients treated with the combination of PDS0101 and CRT demonstrated a complete response (CR) on Day 170 by PET CT.

One patient who received 3 of the 5 scheduled doses of PDS0101 showed signs of

residual disease.

One patient who had a CR died from an event unrelated to either their underlying disease or treatment.

1-year disease-free survival and 1-year overall survival of 89% (8/9) in patients treated with the combination of PDS0101 and CRT

As previously reported, data confirm PDS0101 treatment activates HPV16-specific CD8+ T cells.

This increase was not seen in patients who did not receive PDS0101.

The increase in HPV16-specific T cells generated

by the treatment is positively correlated with tumor cell death, suggesting cytotoxic CD8+ T cells are important mediators of antigen-specific immunity.

The data affirm that PDS0101 activates Type 1 interferon pathway in humans, mimicking the mechanism previously demonstrated in preclinical studies in animal models

Toxicity of PDS0101 remains limited to low-grade local injection site reactions.

PDS0101 Monotherapy and in combination with KEYTRUDA

In February 2022 we announced the initiation of an Investigator-Initiated Trial (ITT), MC200710, for PDS0101 alone or in combination with the checkpoint

inhibitor, KEYTRUDA ® , in patients with HPV-associated oropharyngeal cancer (HPV(+)OPSCC) at high risk of recurrence.The trial is being led by Drs.

inhibitor, KEYTRUDA ® , in patients with HPV-positive oropharyngeal cancer (HPV(+)OPSCC) at high risk of recurrence.

The trial is being led by Drs.

David Routman,

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We believe that this upcoming 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.

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 checkpoint inhibitors in preclinical studies, and in combination in clinical studies of patients with advanced

recurrent/metastatic HPV-associated 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

PDS0101 has been shown to induce CD8+ killer T cells that target and kill HPV-positive cancers, either alone or in combination with checkpoint inhibitors 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).

Our clinical development strategy of combining PDS0101 with standard of care treatment is designed to mitigate risk in our proof-of-concept phase 2 trials.It is also designed to

Our clinical development strategy of combining PDS0101 with standard of care treatment is designed to mitigate risk in our proof-of-concept phase 2 trials.

It is also designed to

demonstrate the potential for significantly enhanced clinical benefit to patients over the standard of care, without compounding toxicity.

If we achieve this goal, we believe that we will have a clear path towards commercialization of PDS0101 in

multiple indications.After initial commercial approval, our strategy of combining PDS0101 with standard of care also positions us for rapid market penetration and expansion.

multiple indications.

After initial commercial approval, our strategy of combining PDS0101 with standard of care also positions us for rapid market penetration and expansion.

Other Versamune ® -Based Products in Development:

PDS0102 is an investigational immunotherapy utilizing tumor-associated and immunologically active T cell receptor gamma alternate reading framed protein (TARP) from the NCI.

is designed to treat TARP-associated cancers including, acute myeloid leukemia (AML), prostate and breast cancer.

In our preclinical work, the administration of PDS0102, the Versamuine+TARP antigen combination led to the induction of large numbers

of polyfunctional tumor targeted killer T-cells.

In addition, the TARP tumor antigen alone has already been studied at the NCI in men with prostate cancer and been shown to be safe, immunogenic with slowing tumor growth rates (NCT00972309).

evaluating the next steps in the clinical development of PDS0102 and are seeking nondilutive financings to progress to human trials.

In April 2020, the above mentioned, PDS-NCI CRADA was expanded beyond PDS0101 to include clinical and preclinical development of PDS0103.PDS0103 is an investigational immunotherapy

owned by us and designed to treat cancers associated with the mucin-1, or MUC-1, oncogenic protein.These include cancers such as ovarian, breast, colorectal and lung cancers.

PDS0103 combines Versamune with novel highly immunogenic agonist epitopes

of MUC-1 developed by the NCI and licensed by PDS.

PDS0102 is designed to treat TARP-positive cancers including, acute myeloid leukemia (AML), prostate and breast cancer.

In our preclinical work, the administration of PDS0102, the Versamuine+TARP antigen combination led to the induction of large

numbers of polyfunctional tumor targeted killer T cells.

In addition, the TARP tumor antigen alone has already been studied at the NCI in men with prostate cancer and been shown to be safe, immunogenic with slowing tumor growth rates

(NCT00972309).

We are evaluating the next steps in the clinical development of PDS0102 and are seeking nondilutive funding to progress to human trials.

In April 2020, the above mentioned, PDS Biotech-NCI CRADA was expanded beyond PDS0101 to include clinical and preclinical development of PDS0103.

PDS0103 is an investigational

immunotherapy owned by us and designed to treat cancers associated with the mucin-1, or MUC-1, oncogenic protein.

These include cancers such as ovarian, breast, colorectal and lung cancers.

PDS0103 combines Versamune with novel highly

immunogenic agonist epitopes of MUC-1 developed by the NCI and licensed by PDS.

PDS0103 is currently in late preclinical development.

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 MUC-1 is often associated with poor disease prognosis, due in part to drug resistance.

cancers, for which PDS0103 is being developed.

Expression of MUC-1 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 the first quarter of 2022, we held a pre-IND meeting with the FDA on PDS0103 and have been planning to submit our IND package in the fourth quarter of 2022.

However, the actual submission date may

potentially be impacted by the outcome of our meetings with the FDA on the timing of a pivotal trial for PDS0101.

Our primary goal is commercialization of PDS0101, and allocation of resources to implement an earlier than planned start may delay

PDS0103 initiation by a few months.

powerful MUC1-specific CD8 killer T cells.

In the first quarter of 2022, we held a pre-IND meeting with the FDA on PDS0103 and prepared to submit our IND package in the first half of 2023.

However, the actual submission date may potentially be

impacted by the outcome of our meetings with the FDA on the timing of a pivotal trial for PDS0101.

Our primary goal is commercialization of PDS0101, and allocation of resources to implement an earlier than planned start of a registrational trial

may delay PDS0103 initiation.

Infectimune Development Strategy

We believe that the key differentiating attributes of the Infectimune platform technology are strong induction of CD8+ and CD4+ T-cells as well as antibodies which can be leveraged

to improve treatment and preventive options in several infectious disease indications.In January 2022 we announced 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 as well as our COVID-19 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.

Earlier announced preclinical studies performed at the University of Kentucky on a potential COVID-19 vaccine indicate that the vaccine elicits the induction of highly active and

potent virus-specific CD8 killer and CD4 helper T-cells within 14 days of treatment.The study also showed induction of the long-lasting virus-specific memory T-cells necessary for longer term protection.A 30-45-fold increase in COVID-19 specific

T-cells was observed by day 14 when compared to the vaccine without Versamune.These preclinical studies also indicated induction of strong anti-SARS-CoV-2 neutralizing antibodies within 14 days, with a 20-25-fold increase when compared to the

vaccine without Versamune.

The peer-reviewed scientific publication “ A Newcastle Disease Virus (NDV) Expressing a Membrane-Anchored Spike as a Cost-Effective Inactivated

SARS-CoV-2 Vaccine” by Sun et al.

Vaccines ( 2020, volume 8, issue 4, page 771 ) also provides strong rationale for clinical development of an Infectimune

based COVID-19 vaccine to maximize the full breadth of immune responses induced against SARS-CoV-2.

This research conducted at the Mount Sinai Icahn School of Medicine, NY, indicated that there is powerful antibody induction by Versamune against

SARS-CoV-2 at low antigen doses suggesting potential for an effective antigen dose sparing COVID-19 vaccine.These data are based on preclinical studies combining our Infectimune technology with an inactivated Newcastle disease virus

(NDV)/SARS-CoV-2 vaccine (NDV vaccine) developed at Mount Sinai.

Based on the highly promising data recently announced with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu vaccines, we have

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 announced 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 as well as our COVID-19 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 promising data recently announced with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu vaccines, we have

decided to opportunistically 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 also potential development of a universal pandemic influenza vaccine based on similar computationally designed antigens as have shown promise with Infectimune.

We had out-licensed the Covid-19 vaccine (PDS0203) to the Brazilian company Farmacore for development in Latin America.Initial financial support for the program had been provided by

the Brazilian government for preclinical development.

On February 22, 2021, we and Farmacore announced that Blanver Farmoquímica e Farmacêutica S.A joined their efforts (collectively the “Consortium”) to develop and commercialize a novel COVID-19

vaccine in Latin America.

The progression of the Farmacore development program was delayed in the fourth quarter of 2021.After a review of the program by PDS and Farmacore, the agreement with Farmacore was extended for six months to May 31, 2022 to

provide additional time for Farmacore to commence manufacturing and scale up of drug product for use in clinical trials and any necessary process development work.

We have evaluated the progress of the program and as described above have determined

to strategically focus our near-term efforts on the development of universal flu vaccines.

The licensing agreement with Farmacore expired on May 31, 2022.

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.

In July 2022, we announced the presentation of universal flu vaccine preclinical data for PDS0202 at the 41 st

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We have never been profitable and have incurred net losses in each year since inception.

Our net losses were $14.3 million, and $3.6 million for the six months ended June 30, 2022 and

2021, respectively.

As of June 30, 2022, we had an accumulated deficit of $75.0 million.

Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and

administrative costs associated with these operations.

As of June 30, 2022, we had $53.0 million in cash and cash equivalents.

Our net losses were $21.7 million, and $10.6 million for the nine months ended September 30,

2022 and 2021, respectively.

As of September 30, 2022, we had an accumulated deficit of $82.4 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 September 30, 2022, we had $71.6 million in cash and cash equivalents.

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

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Research and Development Expenses

Research and development expenses include employee-related expenses, licensing fees 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.

Research and development expenses include employee-related expenses, licensing fees 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 based immuno-oncology or Infectimune based

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Results of Operations

The following table summarizes the results of our operations for the three months ended June 30, 2022 and 2021:

The following table summarizes the results of our operations for the three months ended September 30, 2022 and 2021:

Three Months Ended

September 30,

(in thousands)

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Loss from operations

Interest income, net

Benefit from income taxes

Interest income (expense), net

Net loss and comprehensive loss

Research and Development Expenses

Research and development (R&D) expenses increased to $3.8 million for the three months ended June 30, 2022 from $2.8 million for the three months ended June 30, 2021.

increase of $1.0 million in 2022 was primarily attributable to an increase of $0.4 million in clinical study and research costs, $0.7 million in personnel costs and $0.1 million in facilities partially offset by a decrease of $0.2 million in

manufacturing services.

Research and development (R&D) expenses increased to $4.4 million for the three months ended September 30, 2022 from $3.7 million for the three months ended September 30, 2021.

The increase of $0.7 million in 2022 was primarily attributable to an increase of $0.2 million in clinical study and research costs, $0.3 million in personnel costs and $0.4 million in manufacturing services partially offset by a decrease of $0.2

million in professional fees and facilities.

General and Administrative Expenses

General and administrative expenses increased to $3.3 million for the three months ended June 30, 2022 from $2.3 million for the three months ended June 30, 2021.

The increase of

$1.0 million is primarily attributable to an increase of $0.8 million in personnel costs and $0.2 million in legal fees.

Benefit from Income Taxes

Income tax benefit was $1.2 million for the three months ended June 30, 2022 and $4.5 million for the three months ended June 30, 2021.

A decrease of $3.3 million was due to a smaller

portion of the accumulated Net Operating Losses (NOL) through 2020 available for sale.

Comparison of the Six Months Ended June 30, 2022 and 2021

The following table summarizes the results of our operations for the six months ended June 30, 2022 and 2021:

Six Months Ended

General and administrative expenses decreased to $2.9 million for the three months ended September 30, 2022 from $3.3 million for the three months ended September 30, 2021.

decrease of $0.4 million is primarily attributable to a decrease of $0.5 million in personnel, a decrease of $0.1 million in facilities offset by an increase of $0.2 million in professional fees.

Comparison of the Nine Months Ended September 30, 2022 and 2021

The following table summarizes the results of our operations for the nine months ended September 30, 2022 and 2021:

Nine Months Ended

September 30,

Increase (Decrease)

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Loss from operations

Interest income, net

Interest income (expense), net

Benefit from income taxes

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Research and Development Expenses

Research and development (R&D) expenses increased to $8.9 million for the six months ended June 30, 2022 from $4.2 million for the same period in 2021.

The increase of $4.7

million was primarily attributable to an increase in personnel costs of $1.5 million, clinical studies of $1.3 million, manufacturing and quality of $1.5 million, research and regulatory studies $0.3 million and facilities $0.1 million.

Research and development (R&D) expenses increased to $13.3 million for the nine months ended September 30, 2022 from $7.9 million for the same period in 2021.

The increase of $5.4 million was

primarily attributable to an increase in personnel costs of $1.8 million of which $0.5 million was non-cash stock compensation, clinical studies of $1.5 million, manufacturing and quality of $1.9 million, and research and consumables $0.2 million.

General and Administrative Expenses

General and administrative expenses increased to $6.6 million for the six months ended June 30, 2022 from $4.0 million for the same period in 2021.

The $2.6 million increase was

primarily attributable to an increase in personnel costs of $1.7 million, legal costs of $0.8 million and marketing costs of $0.1 million.

General and administrative expenses increased to $9.6 million for the nine months ended September 30, 2022 from $7.3 million for the same period in 2021.

The $2.3 million increase

was primarily attributable to an increase in personnel costs of $1.2 million of which $0.8 million was non-cash stock compensation, and professional and legal costs of $1.1 million.

Benefit from Income Taxes

Income tax benefit was $1.2 million for the six months ended June 30, 2022 and $4.5 million for the six months ended June 30, 2021.

A decrease of $3.3 million was due to a smaller

portion of the accumulated Net Operating Losses (NOL) through 2020 available for sale.

Income tax benefit was $1.2 million for the nine months ended September 30, 2022 and $4.5 million for the nine months Ended September 30, 2021.

A decrease of $3.3 million was due to

a smaller portion of the accumulated Net Operating Losses (NOL) through 2020 available for sale.

Liquidity and Capital Resources

In July 2019, we entered into a common stock purchase agreement, or the Aspire Purchase Agreement, with Aspire Capital pursuant to which, we have the right, in our sole discretion,

to present Aspire Capital Fund, LLC, or Aspire Capital, with a purchase notice, directing Aspire Capital (as principal) to purchase up to 100,000 shares of our common stock per business day, in an aggregate amount of up to $20.0 million of our

common stock, or the Purchased Shares, over the term of the Aspire Purchase Agreement.

The Aspire Purchase Agreement expired in January 2022, and no capital was raised under the Aspire Purchase Agreement.

In July 2020, we filed a shelf registration statement, or the 2020 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights,

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The 2020 Shelf Registration Statement was declared effective on July 31, 2020.

The 2020 Registration Statement was

terminated upon effectiveness of the 2022 Registration Statement (as discussed below).

In August 2020, we sold 6,900,000 shares of our common stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000

shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions.

We received gross proceeds of approximately $19.0 million and net proceeds of

approximately $17.1 million, after deducting underwriting discounts and offering expenses.

In May 2021, we received approximately $4.5 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant our participation in the New Jersey

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approximately $48.5 million, after deducting underwriting discounts and offering expenses.

Approximately $29,300,000 of Shelf Securities remain available for future sale under the 2020 Shelf Registration Statement.

In April 2022, we received approximately $1.2 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant the Company’s participation in

the New Jersey Technology Business Tax Certificate Transfer NOL program for State Fiscal Year 2020.

As of June 30, 2022, we had $53.0 million in cash and cash equivalents.

Our primary uses of cash are to fund operating expenses, primarily research and development expenditures.

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.

In April 2022, we received approximately $1.2 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant our participation in the New

Jersey Technology Business Tax Certificate Transfer NOL program for State Fiscal Year 2020.

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, which the Company refers to collectively as the Shelf Securities, up to an aggregate amount of $150 million, $50 million of which covers the offer, issuance and sale by the Company of its common stock under the 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 $50.0 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 also has 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) termination of

the Sales Agreement in accordance with its terms.

During the quarter ended September 30, 2022, we did not sell any shares of our common stock pursuant to the Sales Agreement.

In August 2022, we entered into a venture loan and security agreement, or the Loan and Security Agreement, with Horizon Technology Finance Corporation, as lender and collateral

agent for itself and the other lenders.

The Loan and Security Agreement provides for the following 6 separate and independent term loans:

(a) a term loan in the amount of $7,500,000, or Loan A, (b) a term loan in the amount of $10,000,000, or

Loan B, (c) a term loan in the amount of $3,750,000, or Loan C, (d) a term loan in the amount of $3,750,000, or Loan D, (e) a term loan in the amount of $5,000,000, or Loan E, and (f) a term loan in the amount of $5,000,000, or Loan F, (with each

of Loan A, Loan B, Loan C, Loan D, Loan E, and Loan F, individually a Loan and, collectively, the Loans).

Loan A, Loan B, Loan C, and Loan D were delivered to us on August 24, 2022.

Loan E and Loan F are uncommitted Loans that may be advanced

by the lenders upon their discretion prior to July 31, 2023 upon the satisfaction of certain agreed upon conditions precedent.

We may only use the proceeds of the Loans for working capital or general corporate purposes.

Each Loan matures on the

48-month anniversary following the applicable funding date unless accelerated pursuant to agreed upon events of default.

The principal balance of each Loan bears a floating interest.

The interest rate is calculated initially and, thereafter,

each calendar month as the sum of (a) the per annum rate of interest from time to time published in The Wall Street Journal as contemplated by the Loan and Security Agreement, or any successor publication thereto, as the “prime rate” then in

effect, plus (b) 5.75%;

provided that, in the event such rate of interest is less than 4.00%, such rate shall be deemed to be 4.00% for purposes of calculating the interest rate.

Interest is payable on a monthly basis based on each Loan principal amount outstanding the preceding month.

We, at our option upon at least ten (10) business days’ written notice

to the lenders, may prepay all (and not less than all) of the outstanding Loan by simultaneously paying to each lender an amount equal to (i) any accrued and unpaid interest on the outstanding principal balance of the Loans;

plus (ii) an amount

equal to (A) if such Loan is prepaid on or before the Loan Amortization Date (as defined in the Loan and Security Agreement) applicable to such Loan, 3% of the then outstanding principal balance of such Loan, (B) if such Loan is prepaid after the

Loan Amortization Date applicable to such Loan, but on or before the date that is 12 months after such Loan Amortization Date, 2% of the then outstanding principal balance of such Loan, or (C) if such Loan is prepaid more than 12 months after the

Loan Amortization Date but prior to the stated maturity date applicable to such Loan, 1% of the then outstanding principal balance of such Loan;

plus (iii) the outstanding principal balance of such Loan;

plus (iv) all other sums, if any, that shall have become due and payable thereunder.

No prepayment premium will be applied to any outstanding balance of any Loan paid on the stated maturity date.

As of September 30, 2022, we had $71.6 million in cash and cash equivalents.

Our primary uses of cash are to fund operating expenses, primarily research and development

expenditures.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year

after the filing of this Quarterly Report on Form 10-Q.Based on such evaluation and our current plans, which are subject to change, management believes that our existing cash and cash equivalents as of June 30, 2022 will be sufficient to satisfy our

operating cash needs for at least one year after the filing of this Quarterly Report on Form 10-Q.

after the filing of this Quarterly Report on Form 10-Q.

Based on such evaluation and our current plans, which are subject to change, management believes that our existing cash and cash equivalents as of September 30, 2022 will be sufficient to

satisfy our operating cash needs for at least one year after the filing of this Quarterly Report on Form 10-Q.

We plan to continue to fund our operations and capital funding needs through equity and/or debt financings.

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

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash used in operating activities

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net increase in cash and cash equivalents

Net Cash Used in Operating Activities

Net cash used in operating activities was $12.3 million and $2.9 million for the six months ended June 30, 2022 and 2021,

respectively.

The increase in net cash used in operating activities of $9.4 million was primarily due to an increase in net loss of $10.7 million, an increase in prepaid expenses of $0.5

million, an increase in stock compensation of $1.8 million, a decrease in accounts payable of $0.4 million, partially offset by an increase in accrued expenses of $0.4 million.

Net cash used in operating activities was $18.2 million and $8.0 million for the nine months ended September 30, 2022 and 2021 , respectively.

The increase in net cash used in operating activities of $10.2 million was primarily due to an increase

in net loss of $11.1 million, an increase in prepaid expenses of $1.1 million, and an increase in finance right to use asset of $0.3 million, offset by an increase in stock compensation of $1.4 million, an increase in amortization of debt discount

of $0.1 million, and an increase in accounts payable of $0.7 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2022 of $0.03 million was due to the receipt of net proceeds from the exercise of stock options.

Net cash provided by financing activities for the six months ended June 30, 2021 was primarily due to the receipt of net proceeds of $48.5 million due to the issuance of common stock.

Net cash provided by financing activities for the nine months ended September 30, 2022 was primarily due to the receipt of net proceeds of $24.6 million due to a note payable.

Operating Capital Requirements

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after the filing of this Quarterly Report.

Our budgeted cash requirements in 2022 and beyond include expenses related to continuing development and clinical studies.We believe that our existing cash and cash equivalents as of June 30, 2022 are

sufficient to continue operations and research and development programs for at least one year after the date of this Quarterly Report.

Our budgeted cash requirements in 2022 and beyond include expenses related to continuing development and clinical studies.

We believe that our existing cash and cash equivalents as of September 30, 2022

are sufficient to continue operations and research and development programs for at least one year after the date of this Quarterly Report.

Until we can generate significant cash from our operations, we expect to continue to fund our operations with

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Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S.

Our accounting policies are more fully described in Note 2 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.As described in Note 2, the preparation of these financial statements requires us to make

Our accounting policies are more fully described in Note 2 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

As described in Note 2, the preparation of these financial statements requires us to make

estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred

during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value

of assets and liabilities that are not readily apparent from other sources.

value of assets and liabilities that are not readily apparent from other sources.

Estimates are assessed each period and updated to reflect current information.

Actual results may differ from these estimates under different assumptions or conditions.

believe that the discussion in our management’s discussion and analysis addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require

management’s most difficult, subjective and complex judgments.

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2022 from those disclosed in our Annual Report on Form 10-K for the year

ended December 31, 2021.

Actual results may differ from these estimates under different assumptions or

We believe that the discussion in our management’s discussion and analysis addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations

and require management’s most difficult, subjective and complex judgments.

There have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2022 from those disclosed in our Annual Report on Form 10-K for the

year ended December 31, 2021.

Operations and Liquidity

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In addition, a recession or market volatility resulting from the COVID-19 pandemic could affect our business.

We have taken proactive,

aggressive action throughout the COVID-19 pandemic to protect the health and safety of our employees and expect to continue to implement these measures until we determine

that the COVID-19 pandemic is adequately contained for purposes of our business.

W e may take further actions as government authorities require or recommend or as we determine to be in the best interests of our

We have taken

proactive, aggressive action throughout the COVID-19 pandemic to protect the health and safety of our employees and expect to continue to implement these measures until we

determine that the COVID-19 pandemic is adequately contained for purposes of our business.

W e may take further actions as government authorities require or recommend or as we determine to be in the best

interests of our employees.

Given the nature and type of our short-term investments, we do not believe that the COVID-19 pandemic will have a material impact on our current investment liquidity.

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On March 11, 2020, the WHO declared COVID-19 a pandemic and on March 13 the President declared a national emergency in response to the pandemic.

full impact of the COVID-19 pandemic is unknown and rapidly evolving.

The COVID-19 pandemic has and could continue to negatively affect the Company’s liquidity and operations.To date, two of the three recently initiated PDS0101 clinical trials were

The full impact of the COVID-19 pandemic is unknown and rapidly evolving.

The COVID-19 pandemic has and could continue to negatively affect our liquidity and operations.

To date, two of the three recently initiated PDS0101 clinical trials were

delayed, specifically as a result of the adverse impact the COVID-19 pandemic has had on clinical trial operations for cancer indications in the United States.

The FDA issued and since updated guidance to assist sponsors in assuring the safety of

trial participants, maintaining compliance with Good Clinical Practice (GCP) and minimizing risks to trial integrity.Clinical trial sites have implemented institution-specific measures securing the safety of patients and staff to ensure the integrity

of the trials in the face of the ongoing pandemic.

trial participants, maintaining compliance with Good Clinical Practice (GCP) and minimizing risks to trial integrity.

Clinical trial sites have implemented institution-specific measures securing the safety of patients and staff to ensure the

integrity of the trials in the face of the ongoing pandemic.

All three studies have since been initiated despite the pandemic challenges;

however, the evolving COVID-19 pandemic has impacted the pace of enrollment in clinical trials in general and we may be

negatively affected with our trials.

however, the evolving COVID-19 pandemic has impacted the pace of enrollment in clinical trials in general and

we may be negatively affected with our trials.

COVID-19 related travel and other restrictions may also impact the potential for on-site monitoring visiting and audits and inspections by us, third parties, and regulators.

There may be shortages of site

personnel and equipment necessary for the timely completion of our trials.

We are providing support to address these challenges, but these mitigation measures may not overcome the obstacles that the pandemic has wrought which continue to impede

progress of clinical trials.

There may be shortages of

site personnel and equipment necessary for the timely completion of our trials.

We are providing support to address these challenges, but these mitigation measures may not overcome the obstacles that the pandemic has wrought which continue to

impede progress of clinical trials.

Although there is uncertainty related to the anticipated impact of the COVID-19 pandemic on our future results, we believe our current cash reserves, leave us well-positioned to

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However, the impacts of the COVID-19 pandemic are broad-reaching and continuing and the financial impacts associated with the COVID-19 pandemic are still uncertain.

As previously stated, we licensed Versamune to Farmacore in Brazil to develop PDS0203;

a vaccine for the prevention of COVID-19.The Secretary for Research and Scientific Training of

The Ministry of Science, Technology and Innovation of Brazil provided a commitment to fund up to approximately US$60 million to support the clinical development and commercialization of a Versamune based COVID-19 vaccine in Brazil.

received confirmation of the availability of financial resources within the MCTI to support the clinical development and commercialization of a Versamune based COVID-19 vaccine in Brazil.

Clinical development and commercialization of a Versamune

based COVID-19 vaccine in Brazil has not been initiated.

Due to delays in the program, in the fourth quarter of 2021, we met with Farmacore and performed a detailed program review.As the result of that review, we extended the contract with Farmacore

for six months through May 31, 2022.We have evaluated the progress of the program and have determined to strategically focus on PDS0202 universal flu vaccine.

The licensing agreement with Farmacore expired on May 31, 2022.

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