What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-13 · 219 added, 191 removed, 431 unchanged (49% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis

of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial

statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited financial statements and notes thereto of the Company as of and for the year ended December 31, 2024 on

Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 27, 2025.

The following discussion and analysis of

our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial

10-K, filed with the Securities and Exchange Commission, or SEC, on March 27, 2025.

Cautionary Note Regarding Forward-Looking Statements

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equity financings;

the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its clinical and product candidates, and

the risks that raising such additional capital may restrict the Company’s operations or require the Company to relinquish rights to the Company’s technologies or clinical and product candidates;

the Company’s limited operating history in the current line of business, which makes it difficult to evaluate the Company’s prospects, the Company’s business plan or

the likelihood of the Company’s successful implementation of such business plan;

the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its clinical and product candidates, and the

risks that raising such additional capital may restrict the Company’s operations or require the Company to relinquish rights to the Company’s technologies or clinical and product candidates;

the Company’s limited operating history in the current line of business, which makes it difficult to evaluate the Company’s prospects, the Company’s business plan or the

likelihood of the Company’s successful implementation of such business plan;

the timing for the Company or its partners to initiate the planned clinical trials for

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th e success, timing and cost of the Company’s ongoing clinical trials and anticipated

clinical trials for the Company’s current clinical candidates, including statements regarding the timing of initiation, pace of enrollment and completion of the trials (including our ability to fully fund our disclosed clinical trials,

which assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences and data reported in an abstract, and receipt of interim results (including, without limitation, any preclinical results

or data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;

assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences and data reported in an abstract, and receipt of interim results (including, without limitation, any preclinical results or

data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;

expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of the Company’s clinical and product candidates;

any Company statements about its understanding of clinical and product candidates’ mechanisms of action and interpretation of preclinical and early clinical results

from its clinical development programs and any collaboration trials;

any Company statements about its understanding of clinical and product candidates’ mechanisms of action and interpretation of preclinical and early clinical results from

its clinical development programs and any collaboration trials;

the acceptance by the market of the Company’s clinical and product candidates, if approved;

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Risk Factors.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future

financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or

implied by these forward-looking statements.

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.

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,”

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We believe that our proprietary combinations of Versamune®

and PDS01ADC together with immune checkpoint inhibitors or other standards of care, may enhance the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and work synergistically to

inhibit or treat cancer.

or treat cancer.

Recent Developments

In March 2025, we announced the initiation of our VERSATILE-003 Phase 3 clinical trial evaluating PDS0101 (Versamune® HPV) in

HPV16-positive first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma.

In July 2025, we announced that the colorectal cancer cohort of a phase 2 clinical trial with PDS01ADC met the pre-defined criteria

for expansion to stage 2 following positive stage 1 results.

In March 2025, we announced the initiation of our VERSATILE-003 Phase 3 clinical trial evaluating PDS0101 (Versamune® HPV) in HPV16-positive

first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma.

In July 2025, we announced that the colorectal cancer cohort of a phase 2 clinical trial with PDS01ADC met the pre-defined criteria for

expansion to stage 2 following positive stage 1 results.

In August 2025, we announced final topline survival data from our VERSATILE-002 Phase 2 trial evaluating PDS0101 in HPV16-positive

first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma.

In September 2025, we announced final topline survival data for the low-CPS patient population from our VERSATILE-002 Phase 2 trial

evaluating PDS0101 in HPV16-positive first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma.

In October 2025, we announced that we have requested a meeting with the FDA to seek an expedited pathway for our VERSATILE-003 Phase 3

clinical trial, based on a proposed amendment to the trial’s design to include progression-free survival as an early primary endpoint, in addition to median overall survival.

We also announced a temporary pause to VERSATILE-003 during the FDA’s review

of the proposed changes to the trial’s design.

Clinical Candidate Pipeline

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PDS0101 (Versamune® HPV) + pembrolizumab

The clinical trial is designed to enroll a total of 351 patients with approximately 234 patients receiving the combination treatment

of Versamune® HPV and pembrolizumab, and approximately 117 patients receiving pembrolizumab alone.

The clinical trial is designed to enroll a total of 351 patients with approximately 234 patients receiving the combination treatment of

PDS0101 and pembrolizumab, and approximately 117 patients receiving pembrolizumab alone.

Generally, the patient treatment protocol is identical to that of VERSATILE-002, described below, enrolling only ICI naïve patients.

patients in the trial will receive a total of 5 cycles of combination therapy, with standard of care pembrolizumab therapy administered every three weeks until disease progression.

As such, patients in the

trial will receive a total of 5 cycles of combination therapy, with standard of care pembrolizumab therapy administered every three weeks until disease progression.

The clinical trial’s primary endpoint is median overall survival.

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rate, duration of response and progression free survival.

Furthermore, the clinical trial design includes two interim data readouts estimated at approximately 6 months following full

enrollment and 18 months following full enrollment, respectively.

Furthermore, the clinical trial design includes two interim data readouts estimated at approximately 6 months following full enrollment

and 18 months following full enrollment, respectively.

Final readout from the trial is expected approximately 24 months following full enrollment.

See above for our October 2025 request to amend the trial’s design.

VERSATILE-002:

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The clinical trial will evaluate the efficacy and safety of this therapeutic combination as a first and second line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection.

In this trial sponsored by PDS Biotech, patients whose cancer has returned following initial treatment or spread will be treated with

the combination of PDS0101 and Keytruda® to evaluate if the addition of PDS 0101 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.

In this trial sponsored by PDS Biotech, patients whose cancer has returned following initial treatment or spread will be treated with the

combination of PDS0101 and Keytruda® to evaluate if the addition of PDS 0101 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.

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Abstract number 6012, Safety and Efficacy of Immune Checkpoint Inhibitor (ICI) Naïve Cohort from Study of Versamune® HPV and Pembrolizumab in HPV16-Positive Head and Neck Squamous Cell Carcinoma (HNSCC).

The abstract was also selected as one of the featured posters to be reviewed by an expert panel in the Head and Neck Cancer discussion session.

abstract was also selected as one of the featured posters to be reviewed by an expert panel in the Head and Neck Cancer discussion session.

Data on 34 patients was presented.

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Median progression-free survival was 10.4 months (95% CI 4.2, 15.3).

Published results are median PFS of 2-3 months for approved ICIs when used as monotherapy in

patients with similar PD-L1 levels.

Published results are median PFS of 2-3 months for approved ICIs when used as monotherapy in patients

with similar PD-L1 levels.

A disease control rate (disease stabilization or tumor shrinkage) of 70.6% (24/34)

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No Grade 4 or higher TRAEs were observed.

In October 2023, at a key opinion roundtable updated interim data was presented based on an August 2, 2023 cut-off from our

VERSATILE-002 Phase 2 clinical trial evaluating the combination of Versamune® HPV in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head

and neck cancer.

In October 2023, at a key opinion roundtable updated interim data was presented based on an August 2, 2023 cut-off from our VERSATILE-002

Phase 2 clinical trial evaluating the combination of Versamune® HPV in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck

Data on 52 patients was presented.

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In May 2024, at a virtual key opinion leader event, updated interim data was presented based on a November 30, 2023 cut-off from our

VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and

Data from 53 patients was presented.

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patients had been lost to follow-up, and 18 patients had died.

The lower limit of the 95% confidence interval is 19.7 months, and the upper limit is not yet estimable, as the majority of patients continue to be followed for

The lower limit of the 95% confidence interval is 19.7 months, and the upper limit is not yet estimable, as the majority of patients continue to be followed for survival.

In August 2024, we provided an update to our clinical strategy following discussions with the FDA.

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Treatment-related adverse events of Grade ≥3 were seen in 9 patients (Grade 3, n=8 and Grade 4, n=1)

In June 2025, we announced publication of an abstract at the American Society of Clinical Oncology (ASCO) Annual Meeting with updated

data from VERSATILE-002.

In June 2025, we announced publication of an abstract at the American Society of Clinical Oncology (ASCO) Annual Meeting with updated data

from VERSATILE-002.

Main elements of the update were as follows:

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21.8 months for patients with CPS 1-19

See above for our announcements of final topline data made in August and September of 2025.

National Cancer Institute:

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

In addition, based on promising results in the ICI naïve arm, the trial was amended to allow enrollment of a separate cohort of IC -resistant patients for assessment of safety and activity of the triple combination.

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

The trial has been closed

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response when used as a monotherapy.

When PDS0101 was combined with the two other novel clinical-stage anti-cancer agents, Bintrafusp Alfa and M9241 (which is now

owned by us and referred to as PDS01ADC), the preclinical data suggested that all three therapeutic agents worked synergistically to provide superior tumor T cell

responses and subsequent tumor regression when compared to any of the agents alone or the 2-component combinations.

When PDS0101 was combined with the two other novel clinical-stage anti-cancer agents, Bintrafusp Alfa and M9241 (which is now owned

by us and referred to as PDS01ADC), the preclinical data suggested that all three therapeutic agents worked synergistically to provide superior tumor T cell responses

and subsequent tumor regression when compared to any of the agents alone or the 2-component combinations.

The published preclinical data demonstrating powerful activity of the triple combination appears to be corroborated in the Phase 2 trial, and this triple combination could form the basis of a unique platform providing improved cancer treatments across multiple cancers.

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MD Anderson Cancer Center (IMMUNOCERV):

+ Chemoradiotherapy

In October 2020, a Phase 2 Investigator Initiated Trial (IIT) was initiated with The University of Texas MD Anderson Cancer Center and

is actively recruiting patients.

This clinical trial is investigating the safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical immunological biomarkers in

patients with locally advanced cervical cancer.

PDS0101 + Chemoradiotherapy

In October 2020, a Phase 2 Investigator Initiated Trial (IIT) was initiated with The University of Texas MD Anderson Cancer Center and is

actively recruiting patients.

with locally advanced cervical cancer.

We believe that Versamune® has strong T cell induction with the potential to enhance efficacy of the current standard of care CRT treatment in this indication with the FDA at this meeting.

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SOC CRT alone (81.3% clearance after 3 weeks vs.

30.3% with SOC

(p=0.0018), and 91.7% of clearance at 5 weeks vs.

30.3% with SOC (p=0.0018),

and 91.7% of clearance at 5 weeks vs.

53.1% with SOC (p=0.0179).

Baseline ctDNA levels correlated with the International Federation of Gynecology and Obstetrics (FIGO) stage and lymph node involvement;

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In this trial, treatment will be administered before patients proceed to transoral robotic surgery (TORS) with curative intent.

Treatment in this setting is referred to as neoadjuvant treatment.

PDS0101 has been shown to induce killer T cells that target and kill HPV-positive cancers, either alone or in combination with ICIs in preclinical studies, and in combination in

clinical studies of patients with advanced recurrent/metastatic HPV-positive cancers.

The trial will explore whether Versamune®HPV with or without checkpoint inhibition may increase HPV-specific anti-tumor responses, potentially resulting in tumor

shrinkage, pathologic regression, and decreases in circulating tumor DNA (ctDNA).

in this setting is referred to as neoadjuvant treatment.

PDS0101 has been shown to induce killer T cells that target and kill HPV-positive cancers, either alone or in combination with ICIs in preclinical studies, and in combination in clinical studies

of patients with advanced recurrent/metastatic HPV-positive cancers.

The trial will explore whether 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).

PDS0103 (Versamune® MUC1)

In April 2020, the above mentioned CRADA between PDS Biotech and the NCI was expanded beyond PDS0101 (Versamune® HPV) to include

clinical and preclinical development of PDS0103.

In April 2020, the above mentioned CRADA between PDS Biotech and the NCI was expanded beyond PDS0101 (Versamune® HPV) to include clinical

and preclinical development of PDS0103.

PDS0103 is an investigational immune therapy owned by PDS Biotech and designed to treat cancers associated with the mucin-1, or MUC1, oncogenic protein.

These include cancers such as ovarian, breast,

colorectal and lung cancers.

These include cancers such as ovarian, breast, colorectal

and lung cancers.

PDS0103 combines Versamune® with novel highly immunogenic agonist epitopes of MUC1 developed by the NCI and licensed by us.

MUC1 is highly expressed in several types of cancer and has been shown to be associated with drug resistance and poor disease prognosis

in breast, colorectal, lung and ovarian cancers, for which PDS0103 is being developed.

MUC1 is highly expressed in several types of cancer and has been shown to be associated with drug resistance and poor disease prognosis in

breast, colorectal, lung and ovarian cancers, for which PDS0103 is being developed.

Expression of MUC1 is often associated with poor disease prognosis, due in part to drug resistance.

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colorectal cancer.

PDS0102 is an investigational immunotherapy utilizing tumor-associated and immunologically active T cell receptor gamma alternate

reading framed protein (TARP) from the NCI.

PDS0102 is an investigational immunotherapy utilizing tumor-associated and immunologically active T cell receptor gamma alternate reading

framed protein (TARP) from the NCI.

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

In our preclinical work, in the administration of PDS0102, the Versamune®+TARP

antigen combination led to the induction of large numbers of tumor targeted killer T cells.

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

slowing tumor growth rates (NCT00972309).

In our preclinical work, in the administration of PDS0102, the Versamune®+TARP antigen

combination led to the induction of large numbers of tumor targeted killer T cells.

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

tumor growth rates (NCT00972309).

IL-12 Oncology Immunocytokine Pipeline

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Intermediate Risk Prostate Cancer Treated with Androgen Deprivation Therapy

A Phase 1/2 Study of PDS01ADC in Combination with Docetaxel in Adults with Metastatic Castration Sensitive and Castration Resistant Prostate

A Phase 1/2 Study of PDS01ADC in Combination with Docetaxel in Adults with Metastatic Castration Sensitive and Castration Resistant Prostate Cancer

Phase 1/2 of PDS01ADC going forward as a Monotherapy in Advanced Kaposi Sarcoma

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

Our net losses were $ 17.9 million, and $18.9 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $200.

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

administrative costs associated with these operations.

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

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

Our net losses were $26.9 million, and $29.7

million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $209.0 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 September 30, 2025, we had $26.2 million in cash and cash equivalents.

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

the timing and costs of our planned and ongoing clinical trials;

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Infectimune® Development Strategy

We believe that the key differentiating attributes of the Infectimune® platform technology are strong induction of CD8 and CD4 T cells

as well as antibodies which can be leveraged to improve treatment and preventive options in several infectious disease indications.

In January 2022, we presented preclinical data on our universal flu program sponsored by the National Institute of

Allergy and Infectious Disease (NIAID) demonstrating the potential of the Infectimune® technology with computationally designed influenza proteins developed by the laboratory of Dr.

We believe that the key differentiating attributes of the Infectimune® platform technology are strong induction of CD8 and CD4 T cells as

well as antibodies which can be leveraged to improve treatment and preventive options in several infectious disease indications.

In January 2022, we presented preclinical data on our universal flu program sponsored by the National Institute of Allergy

and Infectious Disease (NIAID) demonstrating the potential of the Infectimune® technology with computationally designed influenza proteins developed by the laboratory of Dr.

Ted Ross at the University of Georgia to generate broadly protective

anti-influenza immune responses across multiple strains of influenza.

This data has provided a unique opportunity to highlight Infectimune®’s potentially transformative utility in the development of more broadly effective and longer lasting

protective vaccines.

This data has provided a unique opportunity to highlight Infectimune®’s potentially transformative utility in the development of more broadly effective and longer lasting protective

Current preventive and prophylactic vaccine approaches and technologies predominantly focus on creating strong induction of antibody responses.

However, the induction of T cell responses, in addition to antibody responses,

provides more durable and broad protection against infectious diseases.

Based on the preclinical data with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective

flu vaccines, we have decided to focus our near-term infectious disease activities to align with the interests of the NIAID Collaborative Influenza Vaccine Innovation Centers (CIVICs) program.

However, the induction of T cell responses, in addition to antibody responses, provides more

durable and broad protection against infectious diseases.

Based on the preclinical data with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu

vaccines, we have decided to focus our near-term infectious disease activities to align with the interests of the NIAID Collaborative Influenza Vaccine Innovation Centers (CIVICs) program.

This will involve development of a universal seasonal flu

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Viruses 2023, 15, 432) and 2.

Dramatically enhanced CD4 T cell responses

to recombinant influenza proteins compared to leading commercial vaccine adjuvants (Henson TR et al.

Dramatically enhanced CD4 T cell responses to

recombinant influenza proteins compared to leading commercial vaccine adjuvants (Henson TR et al.

Viruses 2023, 15, 538).

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We have not generated any revenues from commercial product sales and do not expect to generate any such revenue in the near future.

may generate revenue in the future from a combination of research and development payments, license fees and other upfront payments or milestone payments.

generate revenue in the future from a combination of research and development payments, license fees and other upfront payments or milestone payments.

Research and Development Expenses

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The process of conducting human clinical trials necessary to obtain regulatory approval is costly and time consuming.

succeed in achieving marketing approval for our clinical and product candidates.

The probability of successful commercialization of our clinical and product candidates may be affected by numerous factors, including clinical data obtained in future

trials, competition, manufacturing capability and commercial viability.

We may never succeed

in achieving marketing approval for our clinical and product candidates.

The probability of successful commercialization of our clinical and product candidates may be affected by numerous factors, including clinical data obtained in future trials,

competition, manufacturing capability and commercial viability.

As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the

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Results of Operations

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

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

Three Months Ended

September 30,

Increase (Decrease)

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Interest income (expense), net

Benefit from income taxes

Net loss and comprehensive loss

Research and Development Expenses

Research and development (R&D) expenses decreased to

$4.2 million for the three months ended June 30, 2025 from $4.5 million for the three months ended June 30, 2024 .

The decrease of $0.3 million was primarily attributable to a decrease of $0.4 million in manufacturing costs, a decrease of $0.9 million in personnel costs, offset by an increase of $1.0 million in clinical trial costs

Research and development

(R&D) expenses decreased to $ 4.6 million for the three months ended September 30, 2025 from $ 6 .

8 million for the three months ended September 30, 2024 .

The decrease of $ 2 .

was primarily attributable to a decrease of $ 1 .

9 million in manufacturing costs,

a decrease of $0.

1 million in personnel costs and a decrease of $0.2 million in clinical trial costs.

General and Administrative Expenses

General and administrative expenses decreased to $3.

4 million for the three months ended June 30, 202 5 from $4.2 million for the three months ended June 30, 202 4 .

The decrease of $0.8 million was primarily attributable to a decrease of $0.4 million in personnel costs and $0.4 million in professional fees.

General and administrative expenses increased to $3.

6 million for the three months ended September 30, 2025 from $ 3 .

4 million for the three months ended September 30, 202 4 .

The increase of $0.

2 million was primarily attributable to a n increase of $0.

6 million in professional fees, partially offset by a decrease of $0.4 million in personnel costs .

Benefit from Income Taxes

Income tax benefit was $0 for the three months ended June 30, 2025 and $0.9 million for the three months ended June 30, 2024.

decrease of $0.9 million was due to the timing of proceeds received from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant to the Company’s participation in the New Jersey Technology Business Tax Certificate

Transfer Net Operating Loss (NOL) Program.

The tax benefit of $1.2 million was received in March 2025 and reflected as an income tax benefit for the three months ended March 31, 2025.

Comparison of the Six months June 30, 2025 and 2024

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

Six Months Ended

Income tax benefit was $0 for the three months ended September 30, 2025 and 2024.

Comparison of the Nine months September 30, 2025 and 2024

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

Nine Months Ended

September 30,

Increase (Decrease)

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Research and Development Expenses

Research and development expenses decreased to $ 10.

0 million for the six months ended June 30, 2025 from $11.2 million for the six months ended

June 30, 2024 .

The decrease of $1.2 million was primarily attributable to a decrease of $0.5 million manufacturing and quality costs, a decrease of $1.1 million

in personnel costs offset by an increase of $0.4 million in clinical trial costs.

Research and development expenses decreased to $ 14.6 million for the nine months ended September 30, 2025 from $1 8 .

0 million for the nine months ended September 30, 2024 .

The decrease of $ 3 .

4 million was primarily attributable to a decrease of $ 2 .

4 million in manufacturing and quality costs and a decrease of $1.2 million in personnel costs, partially offset by an increase of $0.

2 million in clinical trial costs.

General and Administrative Expenses

General and administrative expenses decreased to $6.7 million for the six months ended June 30, 202 5 from $7.6 million for the six months

ended June 30, 202 4 .

The decrease of $0.9 million was primarily attributable to a decrease of $0.5 million in personnel costs and $0.4 million in professional fees.

General and administrative expenses decreased to $ 10 .

million for the nine months ended September 30, 2025 from $ 10 .

9 million for the

nine months ended September 30, 202 4 .

The decrease of $0.

7 million was primarily attributable to a decrease of $0.

9 million in personnel costs, partially

offset by an increase of $0.

2 million in professional fees.

Benefit from Income Taxes

Income tax benefit was $1.2 million for the six months ended June 30, 2025 and $0.9 million for the six months ended June 30, 2025.

increase of $0.3 million was due to an increase in the amount of New Jersey NOL carryforwards sold when compared to the comparable period.

The New Jersey Economic Development Authority (NJEDA), Technology Business Tax Certificate Transfer (NOL)

program has a lifetime cap of $20 million per business.

Income tax benefit was $1.2 million for the nine months ended September 30, 2025 and $0.9 million for the nine months ended September

The increase of $0.3 million was due to an increase in the amount of New Jersey NOL carryforwards sold.

The New Jersey Economic Development Authority

(NJEDA), Technology Business Tax Certificate Transfer (NOL) program has a lifetime cap of $20 million per business.

We have reached the cap and we will no longer be eligible to participate in the program.

Liquidity and Capital Resources

In August 2022, we filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of

common stock, preferred stock, warrants, rights, debt securities, and units, up to an aggregate amount of $150 million, approximately $97 million of which covers the offer, issuance and sale by us of our common stock under the Sales Agreement and the

New Sales Agreement (as discussed below).

In August 2022, we filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of common

stock, preferred stock, warrants, rights, debt securities, and units, up to an aggregate amount of $150 million, approximately $97 million of which covers the offer, issuance and sale by us of our common stock under the Sales Agreement and the New

Sales Agreement (as discussed below).

The 2022 Shelf Registration Statement was declared effective on September 2, 2022.

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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).

will pay the Agents a commission equal to three percent (3%) of the gross sales proceeds of any Placement Shares sold through the Agents under the Sales Agreement, and we have also provided the Agents with customary indemnification and contribution

pay the Agents a commission equal to three percent (3%) of the gross sales proceeds of any Placement Shares sold through the Agents under the Sales Agreement, and we have also provided the Agents with customary indemnification and contribution rights.

We are not obligated to make any sales of our common stock under the Sales Agreement.

The offering of Placement Shares pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all Placement Shares subject to the

Sales Agreement or (ii) the termination of the Sales Agreement in accordance with its terms.

The offering of Placement Shares pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all Placement Shares subject to the Sales

Agreement or (ii) the termination of the Sales Agreement in accordance with its terms.

In August 2024, we entered into an Amended and Restated At Market Issuance Sales Agreement, or the New Sales Agreement, with B.

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shares of common stock for a net value of $19.5 million pursuant to the Sales Agreement and 1,108,105 shares of common stock for a net value of $3.2 million pursuant to the New Sales Agreement.

During the three and six months ended June 30, 2025, we sold 960,511 and 1,165,861 shares, respectively, of our common stock with a net

value of $1.5 million and $1.8 million, respectively, pursuant to the New Sales Agreement.

During the three and six months ended June 30, 2024, we sold 0 and 3,428,681 shares, respectively, of its common stock with a net value of $0 and $19.5

During the three and nine months ended September 30, 2025, we sold 1,072,080 and 2,237,941 shares, respectively, of its common stock with

a net value of $1.3 million and $3.0 million, respectively, pursuant to the New Sales Agreement.

During the three and nine months ended September 30, 2024, we sold 0 and 3,428,681 shares, respectively, of its common stock with a net value of $0 and

$19.4 million, respectively, pursuant to the Sales Agreement.

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Agreement was satisfied in full and retired in full with a portion of the proceeds received from the Securities Purchase Agreement, as discussed below.

In April 2024, we received approximately $0.9 million from the net sale of tax benefits to an unrelated, profitable New Jersey

corporation pursuant to its participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2022.

In April 2024, we received approximately $0.9 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation

pursuant to its participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2022.

In January and February of 2025, we received approximately $1.2 million from the net sale of tax benefits to an unrelated, profitable

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The February 2025 Offering closed on February 28, 2025.

On April 30, 2025, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain third party

lenders and JGB Collateral LLC, as collateral agent.

Pursuant to the Securities Purchase Agreement, the we agreed to sell (i) senior secured convertible debentures in an aggregate principal amount of $22,222,222 (collectively, the “Debentures”) and

(ii) warrants to purchase up to 1,000,000 shares of common stock, for an exercise price of $2.52 per share (collectively, the “Warrants”), subject to adjustments as set forth in the Warrants, for a total purchase price of $20,000,000.

Approximately

$19 million of the proceeds from the transactions contemplated by the Securities Purchase Agreement were used to satisfy in full and retire our indebtedness under the Loan and Security Agreement.

The remaining proceeds from the transactions

contemplated by the Securities Purchase Agreement will be used for general corporate purposes and transaction expenses.

Pursuant to the Debentures, we must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the

then-outstanding principal balance of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement.

On April 30, 2025, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain third party lenders

and JGB Collateral LLC, as collateral agent.

Pursuant to the Securities Purchase Agreement, we agreed to sell (i) senior secured convertible debentures in an aggregate principal amount of $22,222,222 (collectively, the “Debentures”) and (ii) warrants

to purchase up to 1,000,000 shares of common stock, for an exercise price of $2.52 per share (collectively, the “Warrants”), subject to adjustments as set forth in the Warrants, for a total purchase price of $20,000,000.

Approximately $19 million of

the proceeds from the transactions contemplated by the Securities Purchase Agreement were used to satisfy in full and retire our indebtedness under the Loan and Security Agreement.

The remaining proceeds from the transactions contemplated by the

Securities Purchase Agreement will be used for general corporate purposes and transaction expenses.

Pursuant to the Debentures, we must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the then-outstanding principal

balance of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement.

In addition, for as long as any portion of the Debentures remain outstanding, we are generally restricted from:

incurring indebtedness;

granting or suffering liens on any of our property or assets;

or suffering liens on any of our property or assets;

amending our organizational documents;

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paying dividends;

selling, disposing, licensing or leasing our assets other than in the

ordinary course;

and other customary restrictive covenants.

Beginning on August 28, 2025, the holders of the Debentures may require us to redeem a portion of the Debentures in an amount up to $500,000 per calendar month in the aggregate by providing

written notice to us.

In connection with the Securities Purchase Agreement, on April 30, 2025, we also entered into a Security Agreement (the “Security Agreement”), pursuant to which we and our subsidiary granted, for the benefit of the investors, to

secure our obligations under the Securities Purchase Agreement and the Debentures, (i) first priority liens on certain assets, in each case subject to permitted liens described in the Security Agreement.

In addition, on April 30, 2025, we and our

subsidiary entered into a Subsidiary Guarantee, pursuant to which we and our subsidiary guaranteed all of our obligations under the JGB Purchase Agreement and the Debentures.

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

selling, disposing, licensing or leasing our assets other than in the ordinary course;

and other customary

restrictive covenants.

Effective as of August 28, 2025, the holders of the Debentures may require us to redeem a portion of the Debentures in an amount up to $500,000 per calendar month in the aggregate by providing written notice to us.

three months ended September 30, 2025, we redeemed an aggregate of $1,000,000 of the principal amount of the Debentures.

In connection with the Securities Purchase Agreement, on April 30, 2025, we also entered into a Security Agreement (the “Security

Agreement”), pursuant to which we and our subsidiary granted, for the benefit of the investors, to secure our obligations under the Securities Purchase Agreement and the Debentures, (i) first priority liens on certain assets, in each case subject to

permitted liens described in the Security Agreement.

In addition, on April 30, 2025, we and our subsidiary entered into a Subsidiary Guarantee, pursuant to which we and our subsidiary guaranteed all of our obligations under the JGB Purchase Agreement

and the Debentures.

On November 11, 2025, the Company entered into a securities purchase agreement with certain purchasers, pursuant to which the

Company agreed to sell an aggregate of 5,741,000 shares of common stock, pre-funded warrants to purchase up to an aggregate of 59,000 shares of common stock, and common stock warrants to purchase up to an aggregate of 5,800,000 shares of common

stock (the “November 2025 Offering”).

Net proceeds from the November 2025 Offering were approximately $4.8 million.

As of September 30, 2025, we had $26.2 million in cash and cash equivalents.

Our primary uses of cash are to fund operating expenses,

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develop and market ourselves.

In addition, the Debentures allow for the lenders to call the outstanding balance of the Debentures if we fail to maintain minimum cash balances outlined in the Debentures.

In addition, the Debentures allow for the lenders to call the outstanding balance of the Debentures if we fail to maintain the minimum cash balances outlined in the Debentures.

Any of these actions could harm our

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Failure to obtain adequate financing also may adversely affect our ability to operate as a going concern.

As a result of these uncertainties, we have concluded that substantial doubt exists about our ability to continue as a going concern for

a period of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated Financial Statements.

As a result of these uncertainties, we have concluded that substantial doubt exists about our ability to continue as a going concern for a

period of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated Financial Statements.

The unaudited Condensed Consolidated Financial Statements do not include any adjustments to the carrying amounts and

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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

Nine Months Ended

September 30,

Net cash used in operating activities

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Net Cash Used in Operating Activities

Net cash used in operating activities was $18.1 million and $18.8 million for the six months ended June 30, 2025 and 2024,

respectively.

Net cash used in operating activities was $24.0 million and

$26.8 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in net cash used in operating activities of $2.8 million was primarily due to a decrease in non-cash stock-based compensation expense of $2.3

million offset by a decrease in net loss of $ 1.0 million and changes in the timing of working capital requirements, including changes in prepaid expenses and other

assets, accrued expenses and accounts payable.

million offset by a decrease in the net loss of $2.7 million, an increase in the amortization of debt discount of $0.2 million, an increase in the loss on retirement of debt of $0.8 million and changes in the timing of working capital requirements,

including changes in prepaid expenses and other assets, accounts payable and accrued expenses.

Net Cash Used in Investing Activities

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

Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was $0 and $29,000, respectively.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2025 and 2024 decreased by $11.7 million primarily due to a

$22.8 million decrease in proceeds due to the repayment of the Loan and Security Agreement, a $17.7 million decrease in proceeds from the issuance of common stock from the Sales Agreement, a $0.5 million decrease in proceeds from the exercise of

Net cash provided by financing activities for the nine months ended September 30, 2025 and 2024 decreased by $11.4 million primarily due

to a $23.8 million decrease in proceeds due to the repayment of the Loan and Security Agreement, a $16.4 million decrease in proceeds from the issuance of common stock from the Sales Agreement, a $0.6 million decrease in proceeds from the exercise of

stock options, offset by a $19.2 million increase in proceeds from the Securities Purchase Agreement and a $10.2 million increase in proceeds from the issuance of common stock, warrants and pre-funded warrants from the February 2025 Offering.

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To date, we have not generated any product revenue.

We do not know when, or if, we will generate any product revenue and we do not

expect to generate significant product revenue unless and until we obtain regulatory approval and commercialize one of our current or future product candidates.

We anticipate that we will continue to generate losses for the foreseeable future, and we

expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products.

We are subject to all of the risks incident to the development of new

products, and may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business.

We expect to incur additional costs associated with operating as a public company and anticipate that we will

need substantial additional funding in connection with our continuing operations.

We do not know when, or if, we will generate any product revenue and we do not expect

to generate significant product revenue unless and until we obtain regulatory approval and commercialize one of our current or future product candidates.

We anticipate that we will continue to generate losses for the foreseeable future, and we expect

the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products.

We are subject to all of the risks incident to the development of new products, and

may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business.

We expect to incur additional costs associated with operating as a public company and anticipate that we will need substantial

additional funding in connection with our continuing operations.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to

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While we intend to finance our cash needs

principally through equity or debt financings, collaborations, strategic alliances, or license agreements with third parties, there is no assurance that new financing will be available to us on commercially acceptable terms or in the amounts

required, if at all.

In addition, the securities Purchase Agreement allows for the lenders to call the outstanding balance of the term loans if we fail to maintain the minimum cash balances outlined in the Securities Purchase Agreement.

concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated Financial Statements.

We have concluded that

substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated Financial Statements.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our

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the initiation, progress, timing and results of our commercialization of our clinical and product candidates, if approved, for commercial sale.

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

our operations.

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

Purchase Commitments

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Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements,

which have been prepared in accordance with U.S.

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 Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

As described in Note 2, the

preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as

well as the expenses incurred during the reporting periods.

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

judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

As described in Note 2, the preparation of

these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the expenses

incurred during the reporting periods.

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

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

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

Actual results may differ from these estimates under

different assumptions or conditions.

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

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

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2025 from

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

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, 2025 from

those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

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We are a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.

We will cease to

be a smaller reporting company if we have a non-affiliate public float in excess of $250 million and annual revenues in excess of $100 million, or a non-affiliate public float in excess of $700 million, determined on an annual basis.

We will cease to be

a smaller reporting company if we have a non-affiliate public float in excess of $250 million and annual revenues in excess of $100 million, or a non-affiliate public float in excess of $700 million, determined on an annual basis.

reporting company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not smaller reporting companies.

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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