PDS Biotechnology Corp 10-Q

ITEM 2. 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, 2025 on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 30, 2026. Cautionary Note Regarding Forward-Looking Statements 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: ● the Company’s ability to protect its intellectual property rights; ● the Company’s anticipated capital requirements, including the Company’s anticipated cash runway and the Company’s current expectations regarding its plans for future 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 timing for the Company or its partners to initiate the planned clinical trials for its Versamune® products, including Versamune® HPV (formerly PDS0101) , Versamune® MUC1 (formerly PDS0103), and others, alone or in combination with PDS01ADC, as well as Infectimune® based clinical candidates and the future success of such trials; ● the successful implementation of the Company’s research and development programs and collaborations, including any collaboration trials concerning the Company’s Versamune®, PDS01ADC and Infectimune® based clinical and product candidates 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 clinical and product candidates; ● the 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; ● 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; the acceptance by the market of the Company’s clinical and product candidates, if approved; ● 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 clinical and product candidates; and ● 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 from or related to those listed under Part II, Item 1A. Risk Factors. 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 Biotech,” “the Company,” “we,” “us,” “our” and similar references refer to PDS Biotechnology Corporation, a Delaware corporation, and subsidiary. 19 Index Company Overview We are a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer immunotherapies based on our Versamune®, Versamune® in combination with our IL-12 fused anti-body drug conjugate (ADC) PDS01ADC. In addition, we are developing the Infectimune® T cell-activator in infectious diseases. We believe our investigational targeted immunotherapies have the potential to overcome the limitations of current immunotherapy approaches through the activation of the right type, quantity and potency of T cells. Versamune®, and Versamune® in combination with PDS01ADC are being developed for treatments in oncology and Infectimune® is being developed for treatments in infectious disease. When paired with an antigen, which is a disease-related protein that is recognizable by the immune system, Versamune® and Infectimune® have both been shown to induce, in-vivo, large quantities of high-quality, highly potent polyfunctional CD4 helper and CD8 killer T cells, a specific sub-type of T cell that is more effective at killing infected or target cells. Infectimune® is also designed to promote the induction of disease-specific neutralizing antibodies. PDS01ADC is an investigational tumor targeting IL-12 that we believe may enhance the proliferation, potency and longevity of T cells in the tumor microenvironment. Based on preclinical studies and recent investigational clinical data, we believe that Versamune® in combination with PDS01ADC may enhance the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and work synergistically to overcome tumor immune suppression. Recent Developments In March 2025, we announced the initiation of our VERSATILE-003 Phase 3 clinical trial evaluating PDS0101 in HPV16-positive first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma. In July 2025, we announced that the colorectal cancer cohort of a Phase 2 clinical trial with PDS01ADC in combination with Hepatic Artery Infusion Pump (HAIP) and systemic therapy met the pre-defined criteria for expansion to stage 2 following positive stage 1 results. In August 2025, we announced final topline survival data from our VERSATILE-002 Phase 2 trial in head and neck cancer. In October 2025, we announced our intent to seek expedited approval pathway for PDS0101 in HPV16-positive head and neck cancer based on final VERSATILE-002 trial data showing robust median progression free survival and increased median overall survival of the patients. In December 2025, we announced the scheduling of a type C meeting with the FDA to discuss a proposed accelerated approval pathway for PDS0101 in HPV16-positive recurrent and/or metastatic head and neck cancer. Patients already enrolled in VERSATILE-003 prior to the amendment remain on the trial and continue to receive treatment. In February 2026, we announced the adoption of an amended protocol for our VERSATILE-003 Phase 3 trial incorporating progression free survival (PFS) as a primary endpoint for interim analysis and potential accelerated approval. Clinical Candidate Pipeline VERSATILE-003: PDS0101 + pembrolizumab vs pembrolizumab In March 2025, we initiated our VERSATILE-003 Phase 3 clinical trial evaluating the combination of PDS0101 in combination with the anti-PD-1 therapy pembrolizumab versus pembrolizumab as a monotherapy. The clinical trial will evaluate the efficacy and safety of this therapeutic combination as a first line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection. In this trial, sponsored by us, patients whose cancer has returned following initial treatment or spread (metastasized) will be treated with either the combination of PDS0101and pembrolizumab or with pembrolizumab alone, to evaluate if the addition of PDS0101 might improve the efficacy of pembrolizumab alone. Patients in the trial will receive a total of 5 cycles of combination therapy in the context of standard of care pembrolizumab therapy administered every three weeks until disease progression. The primary endpoint of VERSATILE-003 is median overall survival, or mOS, at six months following initiation of treatment. Following discussions with the FDA in December 2025, we amended the trial’s protocol, among other modifications, to include progression-free survival (PFS) as an interim primary endpoint of the trial. Patients already enrolled prior to the amendment remain on the trial and continue to receive treatment. 20 Index VERSATILE-002: PDS0101 + Keytruda® In November 2020, we commenced 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. Enrollment in stage 2 of 2 for the ICI-naïve arm and the ICI-resistant arms are complete. The clinical trial evaluated the efficacy and safety of this therapeutic combination as a first and second line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection. In this trial sponsored by us, patients whose cancer had returned following initial treatment or spread were 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 received a total of 5 cycles of combination therapy in the context of standard of care Keytruda® therapy administered every three weeks until disease progression. The primary endpoint of VERSATILE-002 is the objective response rate, or ORR, at six months following initiation of treatment. There are two cohorts in the trial. Cohort 1 is for patients who have yet to be treated with an immune checkpoint inhibitor (ICI naïve) and cohort 2 which consists of patients who have failed immune checkpoint inhibitor therapy (ICI resistant). In May 2023, we completed enrollment in the ICI naïve arm. We filed our amended IND with the FDA in the third quarter of 2023. In October 2023, we received feedback from the FDA on the amended IND. In June 2023, an abstract was presented at the 2023 American Society of Clinical Oncology: Abstract number 6012, Safety and Efficacy of Immune Checkpoint Inhibitor (ICI) Naïve Cohort from Study of PDS0101 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. Data on 34 patients was presented. The data from the abstract is as follows: ● Estimated 12-month overall survival rate was 87.1%. Published results are 36-50% with approved ICIs used alone. ● 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. ● A disease control rate (disease stabilization or tumor shrinkage) of 70.6% (24/34) ● Confirmed and unconfirmed objective response rate is 41.2% (14/34 patients), which is identical to the preliminary response rate data previously reported by us at ASCO 2022 (7/17 patients). To date these responses have been confirmed in nine of the 34 patients (26.5%), including one complete response. ● 15/34 patients (44.1%) had stable disease. ● 9/34 patients (26.5%) had progressive disease. ● 4/48 (8.3%) of patients had a Grade 3 treatment-related adverse event (TRAE). 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 PDS0101 in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/ metastatic head and neck cancer. Data on 52 patients was presented. The data from the roundtable based on investigator assessment was as follows: Highlights from the ICI naïve cohort include: ● 24-month overall survival (OS) rate is 74%; published 24-month survival rate of less than 30% for approved ICI. ● 12-month OS rate is 80%; published results of 30-50% with approved ICIs. ● Tumor shrinkage seen in 60% (31/52) of patients. ● Confirmed overall response rate ORR is 27% (14/52) to date. ● Median progression-free survival (PFS) is 8.1 months to date; published results of 2-3 months PFS with approved ICIs. ● 13% (8/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 0% (0/62) experienced Grade 4 or 5 TRAE; published results report 13-17% Grade 3-5 TRAE with approved ICI monotherapy. ● 60% (33/55) of patients have CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (22/55) have CPS score >20 (who generally have a higher response to Keytruda®). 21 Index Highlights from the ICI refractory cohort include: ● The 12-month OS rate is 56%. The published median 12-month OS rate is 17% with no salvage chemotherapy following tumor progression on ICI (ICI Resistant). ● 0% (0/21) confirmed ORR suggests that PDS0101’s impact on survival does not appear to be dependent on tumor shrinkage. ● 4% (1/25) of patients experienced Grade 3 TRAE and 0% (0/21) patients experienced Grade 4 and 5 TRAE. In May 2024, at a virtual key opinion leader event, updated interim data was presented based on a November 30, 2023 cut-off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer. Data from 53 patients was presented. The data from the event based on investigator assessment was as follows: Highlights from the ICI naïve cohort with CPS > 1 included: ● Median overall survival of 30 months; published results for ICIs are 7-18 months. ● Confirmed overall response rate ORR of 34% (18/53) to date; published results for comparable patients receiving treatment with ICIs are less than 20%. ● Confirmed complete responses, partial responses and stable disease according to RECIST v1.1 were seen in 75.5% of patients. ● Median progression-free survival (PFS) of 6.3 months to date; published results of 2-3 months PFS with approved ICIs. ● The combination of PDS0101 and Keytruda® appeared to be well tolerated with 11% (7/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 2% (1/62) experienced Grade 4 or 5 TRAE; published results report 13-17% Grade 3-5 TRAE with approved ICI monotherapy. ● 60% (32/53) of patients had CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (21/53) have CPS score >20 (who generally have a higher response to Keytruda®). In June 2024, we provided a data update from our VERSATILE-002 clinical trial. Interim data was presented based on a May 17, 2024 cut-off. The data update was as follows: ● Median Overall Survival of 30 months, consistent with data presented our key opinion leader event in May of 2024, which was based on a data cut as of November 30, 2023. ● 27 of the censored patients remained alive and were awaiting their next clinical assessment, 6 censored patients had withdrawn consent for further follow-up, and 2 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 survival. In August 2024, we provided an update to our clinical strategy following discussions with the FDA. During the August 2024 update, we announced our intent to initiate a registrational trial in first line treatment in HPV16-positive recurrent/metastatic HNSCC with the double combination of PDS0101 + pembrolizumab. In September 2024, we announced updated data from our VERSATILE-002 Phase 2 clinical trial presented during a poster session at the European Society for Medical Oncology (ESMO) Congress 2024. The data presented was based on a May 17, 2024 data cut-off. The main elements of the update were as follows: ● Median Overall Survival (mOS) was 30 months with a lower 95% confidence interval of 19.7 months; Published mOS for pembrolizumab is 12-18 months ● Objective Response Rate (ORR) of 36% (19/53); Published ORR for pembrolizumab is 19-25% ● Disease Control Rate (DCR) is 77% (41/53) ● 21% (11/53) of patients had deep tumor responses and shrinkage of 90-100% ● 9% (5/53) of patients had a complete response ● Treatment-related adverse events of Grade ≥3 were seen in 9 patients (Grade 3, n=8 and Grade 4, n=1) 22 Index In August 2025, we announced final topline survival data from our VERSATILE-002 Phase 2 trial in head and neck cancer. 53 patients were enrolled in the 1L R/M HNSCC arm of the trial: ● The median overall survival (mOS) is 39.3 months in patients with CPS ≥ 1. The lower limit of the 95% confidence interval is 23.9 months, and the upper limit is not yet estimable. MD Anderson Cancer Center (IMMUNOCERV): PDS0101 + Chemoradiotherapy In October 2020, a Phase 2 IIT was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients. This clinical trial investigated the safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical immunological biomarkers in patients with locally advanced cervical cancer. We believe that Versamune® has strong T cell induction with the potential to enhance efficacy of the current standard of care CRT treatment in this indication with the FDA at this meeting. In November 2022, data from this trial was included in a poster presentation at the 2022 SITC Annual Meeting which included the following: ● 9 of the 17 patients had completed a Day 170 post-treatment positron emission tomography, computed tomography (PET CT) scan to assess the status of the cancer. This included 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 confirmed 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 affirms 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. In October 2023, data demonstrating PDS0101 in combination with standard-of-care (SOC) chemoradiotherapy was associated with a rapid decline in human papillomavirus circulating cell-free DNA (ctHPV-DNA), a potential predictive biomarker of treatment response. The data from the IMMUNOCERV Phase 2 clinical trial was featured in an oral presentation at the American Society for Radiation Oncology Annual Meeting which included the following: ● Earlier and greater proportion of ctDNA clearance with PDS0101 plus chemoradiation (CRT) vs. SOC CRT alone 81.3% clearance after 3 weeks vs. 30.3% with SOC (p=0.0018), and 91.7% of clearance at 5 weeks vs. 53.1% with SOC (p=0.0179). ● Baseline ctDNA levels correlated with the International Federation of Gynecology and Obstetrics (FIGO) stage and lymph node involvement; 100% of patients treated with PDS0101 had cancer that had spread to the lymph nodes. 23 Index In October 2024, we announced updated data from the IMMUNOCERV Phase 2 clinical trial evaluating PDS0101 with chemoradiation to treat locally advanced cervical cancer presented at the American Society for Radiation Oncology (ASTRO) Annual Meeting 2024 which included the following: ● All patients received at least 2 doses of PDS0101. ● Median follow-up was 19 months. ● 36-month overall survival (OS) rate was 84.4%, and 100% for the eight patients who received all five doses of PDS0101. Historical published data show 36-month OS rate with chemoradiation in this population of approximately 64%. ● 36-month progression free survival (PFS) rate was 74.9%, among all patients and 100% for the eight patients who received all five doses of PDS0101. Historical published data show 36-month PFS rate with chemoradiation in this population of approximately 61%. ● Complete metabolic response (CMR) was achieved in 15/17 (88%) patients. ● PDS0101 appeared to be safe and well-tolerated. The most common treatment-related toxicities were injection site reactions in twelve patients (71%). Mayo Clinic: PDS0101 Monotherapy and in combination with pembrolizumab In February 2022, we initiated an Investigator-Initiated Trial (ITT), MC200710, for PDS0101 alone or in combination with the immune checkpoint inhibitor, pembrolizumab, in patients with HPV-positive oropharyngeal cancer (HPV(+)OPSCC) at high risk of recurrence. The trial is being led by Drs. David Routman, Katharine Price, Kathryn Van Abel, and Ashish Chintakuntlawar at Mayo Clinic, a nationally and internationally recognized center of excellence for the treatment of head and neck cancers. We believe that this trial not only broadens our addressable patient population of those affected by the increasing incidence of HPV(+)OPSCC, but also allows us to better understand the activity of PDS0101 alone or in combination with Keytruda® in earlier stages of disease. This trial is currently open for enrollment. In this trial, treatment will be administered before patients proceed to transoral robotic surgery (TORS) with curative intent. Treatment in this setting is referred to as neoadjuvant treatment. PDS0101 has been shown to induce killer T cells that target and kill HPV-positive cancers, either alone or in combination with ICIs in preclinical studies, and in combination in clinical studies of patients with advanced recurrent/metastatic HPV-positive cancers. This trial will explore whether PDS0101 with or without checkpoint inhibition may increase HPV-specific anti-tumor responses, potentially resulting in tumor shrinkage, pathologic regression, and decreases in circulating tumor DNA (ctDNA). National Cancer Institute: PDS0101 + PDS01ADC + Bintrafusp Alfa In November 2023, we released updated interim survival data as follows: ● 75% of immune checkpoint inhibitor (ICI) naïve patients remain alive at 36 months; published median overall survival (OS) in similar patients is 7-11 months ● 12-month survival rate in (ICI) resistant patients of 72% ● Median OS in ICI-resistant HPV-positive patients is approximately 20 months; published median OS is 3.4 months PDS0103 In April 2020, an existing Cooperative Research and Development Agreement (“CRADA”) between PDS Biotech and the NCI was expanded beyond PDS0101 to include clinical and preclinical development of PDS0103. PDS0103 is an investigational immune therapy owned by us and designed to treat cancers associated with the mucin-1, or MUC1, oncogenic protein. These include cancers such as ovarian, breast, colorectal and lung cancers. PDS0103 combines Versamune® with novel highly immunogenic agonist epitopes of MUC1 developed by the NCI and licensed by us. MUC1 is highly expressed in several types of cancer and has been shown to be associated with drug resistance and poor disease prognosis in breast, colorectal, lung and ovarian cancers, for which PDS0103 is being developed. Expression of MUC1 is often associated with poor disease prognosis, due in part to drug resistance. In preclinical studies, and similarly to PDS0101, PDS0103 demonstrated the ability to generate powerful MUC1-specific CD8 killer T cells. In January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0103 and PDS01ADC in colorectal cancer. 24 Index IL-12 Oncology Immunocytokine Pipeline PDS01ADC is a novel investigational IL-12 fused antibody drug conjugate (IgG1), tumor-targeting interleukin 12 (IL-12) immune-cytokine that enhances the proliferation, potency and longevity of T cells in the tumor microenvironment. Together with Versamune® based immunotherapies PDS01ADC works synergistically to overcome tumor immune suppression and to promote a targeted T cell attack against cancers. As with Versamune®, PDS01ADC is given by a simple subcutaneous injection. Clinical data suggests the addition of PDS01ADC to Versamune® based immunotherapies may demonstrate significant disease control in advanced cancer patients by shrinking tumors and/or prolonging life. With the exclusive global license agreement with Merck KGaA, Darmstadt, Germany for PDS01ADC, we believe we have simplified our registrational pathway for the NCI-led triple combination by owning both PDS0101 and PDS01ADC and combining these agents with an FDA approved ICI. PDS01ADC has been designed to overcome the limitations of cytokine therapy as explained above, and based on extensive preclinical studies performed at the NCI evaluating PDS01ADC as a monotherapy and also in combinations with established standard of care treatments for cancer, we believe that PDS01ADC has significant potential as a cytokine therapy independent of Versamune®. Based on the informative preclinical studies, a number of ITT Phase 2 trials are currently in progress at the NCI, some of which are outlined below: ● A Phase 2 trial evaluating PDS01ADC in combination with hepatic artery infusion pump (HAIP) and systemic therapy for subjects with metastatic colorectal cancer, intrahepatic cholangiocarcinoma, or metastatic adrenocortical carcinoma ● A Phase 2 trial evaluating ICI naïve and resistant patients with HPV-positive malignancies treated with PDS01ADC, PDS0101 and bintrafusp alfa ● A Phase 2 trial evaluating T-cell clonality after stereotactic body radiation therapy alone and in combination with the immunocytokine PDS01ADC in localized high and intermediate risk prostate cancer treated with androgen deprivation therapy ● A Phase 1/2 trial evaluating PDS01ADC in combination with docetaxel in adults with metastatic castration sensitive and castration resistant prostate cancer ● A Phase 1/2 trial evaluating PDS01ADC going forward as a monotherapy in advanced kaposi sarcoma ● A Phase 1/2 trial evaluating PDS01ADC in combination with a histone deacetylase (HDAC) inhibitor in ICI-resistant MUC1-positive colon and bladder cancers among others In October 2023, interim safety and immune response data was presented for the first-in-human Phase1/2 clinical trial evaluating PDS01ADC in combination with current SOC chemotherapy, docetaxel, to treat metastatic castration sensitive and castration resistant prostate cancer. The data was featured in an oral presentation at the 11 th Annual Meeting of the International Cytokine & Interferon Society. The data presented included the following: ● Decrease in PSA levels was seen in all patients at all three tested doses of PDS01ADC and 61% of patients had at least a 60% decrease in PSA levels. ● All doses of the combination were well-tolerated with one patient experiencing Grade 4 neutropenia. ● Administration of the combination was associated with decreases in T reg cells and increases in activated natural killer (NK) cells, memory CD8 T cells, proliferating CD4 and CD8 T cells and cytokines INF-γ and Interleukin 10 (IL-10). ● The changes in immune responses with the combination were independent of the PDS01ADC dose. In April 2026, we announced the publication of clinical and immunological biomarker data from Stage 1 of a Phase 2 trial evaluating PDS01ADC in the March 10, 2026 issue of Journal of Clinical Oncology (JCO) Oncology Advances . Key findings from stage 1 of the Phase 2 trial are outlined below: ● Objective response rate by RECIST v1.1: 77.8% (7/9) at six months; in the parallel trial without PDS01ADC, the ORR was 35% (7/20) ● 24-month survival rate: Approximately 85%; in the parallel study without PDS01ADC, the 2-year survival rate was approximately 40% ● Extrahepatic progression-free survival (PFS): median not reached at minimum follow-up of 13.1 months; in the parallel trial without PDS01ADC, the PFS was 8.1 months We are working closely with the NCI to determine the best pathway forward for the prioritized PDS01ADC studies, as well as evaluating the use of PDS01ADC in combination with other Versamune® based clinical candidates. In January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0103 and PDS01ADC in colorectal cancer. At the time of this report, we have not initiated this trial. 25 Index Our current clinical pipeline of Versamune® and PDS01ADC based therapies is as follows: 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. Ted Ross at the University of Georgia to generate broadly protective anti-influenza immune responses across multiple strains of influenza. This data has provided a unique opportunity to highlight Infectimune®’s potentially transformative utility in the development of more broadly effective and longer lasting protective vaccines. Current preventive and prophylactic vaccine approaches and technologies predominantly focus on creating strong induction of antibody responses. However, the induction of T cell responses, in addition to antibody responses, provides more durable and broad protection against infectious diseases. Based on the preclinical data with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu vaccines, we have decided to focus our near-term infectious disease activities to align with the interests of the NIAID Collaborative Influenza Vaccine Innovation Centers (CIVICs) program. This will involve development of a universal seasonal flu vaccine and the potential development of a universal pandemic influenza vaccine based on similar computationally designed antigens as have shown promise with Infectimune®. The preclinical results for Infectimune® based vaccines were published in two separate articles in the peer reviewed journal Viruses in February 2023: 1. preclinical studies demonstrating complete protection against sickness after lethal challenge with live SARS-CoV-2 or influenza viruses (Gandhapudi SK et al. Viruses 2023, 15, 432) and 2. Dramatically enhanced CD4 T cell responses to recombinant influenza proteins compared to leading commercial vaccine adjuvants (Henson TR et al. Viruses 2023, 15, 538). 26 Index Clinical Development Strategy Since our inception we have devoted substantially all our resources to developing our Versamune® and Infectimune® platforms, and products derived thereof, as well as PDS01ADC. This includes advancing preclinical programs, conducting clinical trials, manufacturing PDS0101 and PDS01ADC for clinical trials, and providing general and administrative support. We have funded our operations primarily from the issuance of common stock and issuance of debt. We have not generated any product revenue to date. We have never been profitable and have incurred net losses in each year since inception. Our net losses were $7.3 million, and $8.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $224.0 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 March 31, 2026, we had $21.7 million in cash and cash equivalents. Our future funding requirements will depend on many factors, including the following: ● the timing and costs of our planned and ongoing clinical trials; ● the timing and costs of our planned preclinical studies of our Versamune® platform; ● the outcome, timing and costs of seeking regulatory approvals; ● the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into; ● the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or patent applications or other intellectual property rights; and ● the extent to which we license or acquire other products and technologies. SELECTED FINANCIAL OPERATIONS OVERVIEW Revenue We have not generated any revenues from commercial product sales and do not expect to generate any such revenue in the near future. We may 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 Research and development expenses include employee-related expenses, costs to acquire license rights to use certain technology in our research and development projects, costs of acquiring, developing and manufacturing clinical trial materials, as well as fees paid to consultants and various entities that perform certain research and testing on our behalf. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the Condensed Consolidated Financial Statements as prepaid or accrued expenses. Costs incurred in connection with research and development activities are expensed as incurred. We expect that our research and development expenses will increase significantly over the next several years as we advance our Versamune® and PDS01ADC clinical and product candidates into and through clinical trials, pursue regulatory approval of our Versamune® and PDS01ADC product candidates and prepare for a possible commercial launch, all of which will also require a significant investment in contract research services, manufacturing process validation and inventory related costs. The process of conducting human clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for our clinical 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 commercialization and sale of any of our clinical and product candidates. 27 Index Results of Operations The following table summarizes the results of our operations for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, Increase ( Decrease) 2026 2025 $ Amount % (in thousands) Operating expenses: Research and development expenses $ 3,457 $ 5,831 $ (2,374 ) (41 )% General and administrative expenses 3,064 3,275 (211 ) (6 )% Total operating expenses 6,521 9,106 (2,585 ) (28 )% Loss from operations (6,521 ) (9,106 ) 2,585 (28 )% Interest income (expense), net (828 ) (553 ) (275 ) 50 % Benefit from income taxes - 1,170 (1,170 ) 100 % Net loss and comprehensive loss $ (7,349 ) $ (8,489 ) $ 1,140 (13 )% Research and Development Expenses Research and development (R&D) expenses decreased to $3.5 million for the three months ended March 31, 2026 from $5.8 million for the three months ended March 31, 2025. The decrease of $2.3 million was primarily attributable to a decrease of $1.2 million in clinical trial costs, a decrease of $0.7 million in manufacturing costs, and a decrease of $0.4 million in personnel costs. General and Administrative Expenses General and administrative expenses decreased to $3.1 million for the three months ended March 31, 2026 from $3.3 million for the three months ended March 31, 2025. The decrease of $0.2 million was primarily attributable to a decrease in professional fees. Benefit from Income Taxes Income tax benefit was $0 for the three months ended March 31, 2026 and $1.2 million for the three months ended March 31, 2025. The decrease of $1.2 million was due to us having met the statutory $20 million lifetime cap on total cumulative value of NOLs sold, which makes us ineligible to participate in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss (NOL) program. Liquidity and Capital Resources In August 2024, we entered into an Amended and Restated At Market Issuance Sales Agreement, or the New Sales Agreement, with B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC, with terms that are substantially consistent with those included in the original Sales Agreement. During the three months ended March 31, 2026 and 2025, the Company sold 937,420 shares of common stock and 205,250 shares of common stock for a net value of $0.85 million and $0.3 million, respectively, pursuant to the New Sales Agreement. The New Sales Agreement was terminated on May 1, 2026. 28 Index In August 2022, we entered into a venture loan and security agreement, or the Loan and Security Agreement, with Horizon Technology Finance Corporation, as lender and collateral agent for itself and the other lenders. In total, the Company received $24.6 million in net proceeds under the Loan and Security Agreement. Our indebtedness under the Loan and Security Agreement was satisfied in full and retired in full with a portion of the proceeds received from the Securities Purchase Agreement, as discussed below. In January and February of 2025, 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 tax year 2023. In February 2025, we entered into a securities purchase agreement with certain purchasers, pursuant to which we agreed to sell an aggregate of 6,396,787 shares of common stock, pre-funded warrants to purchase up to an aggregate of 933,334 shares of common stock, and common stock warrants to purchase up to an aggregate of 7,330,121 shares of common stock at a combined purchase price of $1.50 per share and warrant, or the “February 2025 Offering”. Two of our directors participated in the February 2025 Offering and purchased 30,121 shares of common stock in the aggregate at an offering price per share of $1.66 and common stock warrants to purchase 30,121 shares of common stock. The common stock warrants issued to our directors have an exercise price per share of $1.53 but are otherwise identical to the common stock warrants issued to all other participants in the February 2025 Offering. Aggregate gross proceeds from the February 2025 Offering were approximately $11 million. Net proceeds to us from the February 2025 Offering, after deducting the placement agent fees and other estimated offering expenses payable by us, were approximately $10.05 million. The February 2025 Offering closed on February 28, 2025. On April 30, 2025, we entered into a securities purchase agreement, or the “Securities Purchase Agreement” with certain third party lenders and JGB Collateral LLC, as collateral agent. Pursuant to the Securities Purchase Agreement, we agreed to sell (i) senior secured convertible debentures in an aggregate principal amount of $22,222,222 (collectively, the “Debentures”) and (ii) warrants to purchase up to 1,000,000 shares of common stock, for an exercise price of $2.52 per share (collectively, the “Warrants”), subject to adjustments as set forth in the Warrants, for a total purchase price of $20,000,000. Approximately $19 million of the proceeds from the transactions contemplated by the Securities Purchase Agreement were used to satisfy in full and retire our indebtedness under the Loan and Security Agreement. The remaining proceeds from the transactions contemplated by the Securities Purchase Agreement were used for general corporate purposes and transaction expenses. Pursuant to the Debentures, we must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the then-outstanding principal balance of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement. In addition, for as long as any portion of the Debentures remain outstanding, we are generally restricted from: incurring indebtedness; granting or suffering liens on any of our property or assets; amending our organizational documents; repurchasing any of our securities; paying dividends; selling, disposing, licensing or leasing our assets other than in the ordinary course; and other customary restrictive covenants. Effective as of August 28, 2025, the holders of the Debentures may require us to redeem a portion of the Debentures in an amount up to $500,000 per calendar month in the aggregate. During the year ended December 31, 2025 and the three months ended March 31, 2026, the Company redeemed an aggregate of $2.5 million and $1.5 million of the principal amount of the Debentures, respectively. In connection with the Securities Purchase Agreement, on April 30, 2025, we also entered into a Security Agreement (the “Security Agreement”), pursuant to which we and our subsidiary granted, for the benefit of the investors, to secure our obligations under the Securities Purchase Agreement and the Debentures, (i) first priority liens on certain assets, in each case subject to permitted liens described in the Security Agreement. In addition, on April 30, 2025, we and our subsidiary entered into a Subsidiary Guarantee, pursuant to which we and our subsidiary guaranteed all of our obligations under the Securities Purchase Agreement and the Debentures. In November 2025, we entered into a securities purchase agreement with certain purchasers, pursuant to which we agreed to sell an aggregate of 5,741,000 shares of common stock, pre-funded warrants to purchase up to an aggregate of 59,000 shares of common stock, and common stock warrants to purchase up to an aggregate of 5,800,000 shares of common stock (the “November 2025 Offering”). The offering price per share of common stock was $0.91 and the purchase price of each pre-funded warrant was $0.9099. Each common warrant issued in connection with the November 2025 Offering had an exercise price of $1.00 per share, can be exercised six months after the date of issuance and will expire five years thereafter. Aggregate gross proceeds from the November 2025 Offering were $5.3 million. Net proceeds to the Company from the offering, after deducting the placement agent fees and other estimated offering expenses payable by the Company, were approximately $4.8 million. In addition, in connection with the November 2025 Offering, we entered into a warrant amendment agreement pursuant to which we agreed, effective upon closing of the November 2025 Offering, to amend certain existing warrants to purchase up to an aggregate of 5,948,334 shares of common stock at an exercise price of $1.50 per share, so that the amended warrants will have a reduced exercise price of $1.00 per share effective upon the closing of the November 2025 Offering and will be exercisable beginning on the date that is six (6) months after the closing of the November 2025 Offering. The November 2025 Offering closed on November 12, 2025. As of March 31, 2026, we had $21.7 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. 29 Index We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year beyond the filing of this Quarterly Report on Form 10-Q. Our budgeted cash requirements in 2026 and beyond include expenses related to continuing development and clinical studies as well as payments on our debt. We plan to continue to fund our operations and capital funding needs through existing cash and additional equity and/or debt financing. However, we cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or our existing stockholders. We may also enter into government funding programs and consider selectively partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to our stockholders. Incurring debt financing would result in debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market immunotherapies that we would otherwise prefer to develop and market ourselves. In addition, the Debentures require us to maintain minimum cash balances in a deposit account subject to an account control agreement and impose restrictive covenants, as described above. Any of these actions could harm our business, results of operations and prospects. 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 classifications of assets and liabilities that would result if we are unable to continue as a going concern. Cash Flows The following table shows a summary of our cash flows for each of the periods indicated (in thousands): Three Months Ended March 31, 2026 2025 Net cash used in operating activities $ (4,372 ) $ (9,032 ) Net cash provided by financing activities (680 ) 7,321 Net increase (decrease) in cash and cash equivalents $ (5,051 ) $ (1,711 ) Net Cash Used in Operating Activities Net cash used in operating activities was $4.3 million and $9.0 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in net cash used in operating activities of $4.7 million was primarily due to a decrease in the non-cash stock-based compensation expense of $0.1 million and a decrease in issuance of shares in consulting agreements of $0.2 million, offset by a decrease in net loss of $1.1 million, an increase in the amortization of debt discount of $0.2 million and changes in the timing of working capital requirements, including an increase in prepaid expenses and other assets, offset by decreases in accrued expenses and accounts payable. Net Cash Provided by Financing Activities Net cash provided by financing activities for the three months ended March 31, 2026 and 2025 decreased by $8.0 million primarily due to a $7.0 million decrease in proceeds from the issuance of common stock, a decrease in proceeds from the issuance warrants and pre-funded warrants of $3.2 million, offset by a decrease of $1.6 million in loan repayments and $0.5 million in proceeds from issuance of common stock through our at-the-market program. Operating Capital Requirements 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. 30 Index 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. Our budgeted cash requirements in 2026 and beyond include expenses related to continuing development and clinical studies as well as payments on our debt. Until we can generate significant cash from our operations, we expect to continue to fund our operations with available financial resources. These financial resources may not be adequate to sustain our operations. While we intend to finance our cash needs principally through 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 terms of the Debentures allow for the holders to call the outstanding balance of the Debentures if we fail to maintain the minimum cash balances required by the Debentures. 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 available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of our planned clinical trials; ● the effects of health epidemics, pandemics, or outbreaks of infectious diseases, on our business operations, financial condition, results of operations and cash flows; ● the outcome, timing and cost of meeting regulatory requirements established by the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory authorities; ● the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; ● the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us now or in the future; ● the effect of competing technological and market developments; ● the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our products on our own; and ● 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 this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional risks associated with our operations. Purchase Commitments We have no material non-cancelable purchase commitments with service providers as we have generally contracted on a cancelable, purchase order basis. 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. GAAP. 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. 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 three months ended March 31, 2026 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. 31 Index Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. Smaller Reporting Company 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. As a smaller 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. We will continue to take advantage of some or all of the available exemptions.