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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 87 added, 54 removed, 294 unchanged (32% of the section changed)

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This management’s discussion and analysis

of financial condition as of March 31, 2025 and results of operations for the three months ended March 31, 2025 and 2024 should be read

in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024,

which was filed with the Securities and Exchange Commission (the “ SEC ”) on March 31, 2025 (the “2024 Form 10-K”).

of financial condition as of June 30, 2025 and results of operations for the three and six months ended June 30, 2025 and 2024 should

be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31,

2024, which was filed with the Securities and Exchange Commission (the “ SEC ”) on March 31, 2025 (the “ 2024

Form 10-K ”).

This report contains forward-looking statements

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or may otherwise adversely affect our business;

· disruptions at the FDA, including due to a

reduction in the FDA’s workforce and/or inadequate funding for the FDA;

· changes in U.S.

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Food and Drug Administration.

A Safety Monitoring Committee (SMC) reviewed data from the first, second and third dose cohorts treated with PH-762 and, in each case,

recommended escalation to the next dose concentration.

To date, a total of 10 patients with cutaneous carcinomas have been treated in

Cohorts 1, 2 and 3.

These cohorts included 9 patients with cutaneous squamous cell carcinoma (cSCC) and 1 patient with metastatic melanoma.

At Day 36 (planned tumor excision), of the 9 patients with cSCC, 4 patients had a pathologic complete response (100% tumor clearance).

One patient had a near complete response (>90% clearance) and 1 patient had a partial response (>50% clearance).

The other 3 cSCC

patients and one metastatic melanoma patient had a pathologic non-response (< 50% clearance).

A Safety Monitoring Committee (SMC) reviewed data from the first, second, third and fourth dose cohorts treated with PH-762 and, in each

case, recommended escalation to the next dose concentration.

To date, a total of 15 patients with cutaneous carcinomas have been treated

in Cohorts 1, 2, 3 and 4.

These cohorts included 13 patients with cutaneous squamous cell carcinoma (cSCC), one patient with metastatic

melanoma and one patient with metastatic Merkel cell carcinoma.

At Day 36 (planned tumor excision), of the 13 patients with cSCC, five

patients had a pathologic complete response (100% tumor clearance).

One patient had a near complete response (>90% clearance) and one

patient had a partial response (>50% clearance).

The other six cSCC patients and one metastatic melanoma patient had a pathologic non-response

(< 50% clearance).

The Merkel cell patient had a partial response (> 50% clearance).

Patients with pathologic complete response

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escalating dose cohort.

The fourth cohort is currently enrolling patients, and we expect to complete enrollment in the trial in the third

quarter of 2025.Given our intention to focus our efforts and resources on our U.S.

clinical trial with PH-762, we have completed the winding

down process for our first-in-human clinical trial for PH-762 in France, which was limited to the treatment of patients with metastatic

Safety data from the initial cohort of three patients in the French clinical trial were evaluated by a data monitoring committee

in the first quarter of 2023.

The safety data review disclosed no dose-limiting toxicity, and no drug-related severe or serious adverse

On June 25, 2025, we announced that the SMC recommended dose escalation to the fifth cohort in our Phase 1b clinical

The fifth cohort is currently enrolling patients, and we expect to complete enrollment in the trial in the third quarter of 2025.

Due to INTASYL’s

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operations for the periods indicated, in thousands:

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses

Operating loss

Comparison of the Three Months Ended March 31, 2025 and 2024

Comparison of the Three Months Ended June 30, 2025 and 2024

Operating Expenses

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Three Months Ended

Six Months Ended

Research and development

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portion of our total operating expenses and are expected to constitute the majority of our spending for the foreseeable future.

Research and development (R&D)

expenses for the three months ended June 30, 2025 increased 24% as compared with the three months ended June 30, 2024.

The increase in

research and development expenses was primarily driven by an $81,000 increase in pass-through costs in connection with higher patient

enrollment, a $53,000 increase in consultant fees, and an increase in salary-related costs of $70,000.

Research and development expenses

for the three months ended March 31, 2025 decreased 23% as compared with the three months ended March 31, 2024.

The decrease in research

and development expenses was primarily driven by a $106,000 decrease in salary-related costs and a $94,000 decrease in consulting expense.

for the six months ended June 30, 2025 decreased 3% as compared with the six months ended June 30, 2024.

The Company considers this to

be an immaterial fluctuation.

General and Administrative Expenses

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General and administrative

expenses for the three months ended March 31, 2025 decreased 7% as compared with the three months ended March 31, 2024.

expenses for the three months ended June 30, 2025 increased 18% as compared with the three months ended June 30, 2024.

The increase in

general and administrative expenses was primarily driven by a $185,000 increase in salary-related costs for new hires.

General and administrative

expenses for the six months ended June 30, 2025 increased 5% as compared with the six months ended June 30, 2024.

The Company considers

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the foreseeable future.

At March 31, 2025, we had cash and cash equivalents of $13,278,000 as compared with $5,382,000 at December 31,

At June 30, 2025, we had cash and cash equivalents of $10,775,000 as compared with $5,382,000 at December 31,

In July 2025, the Company

entered into inducement letter agreements (the “ July 2025 Inducement Letter Agreements ”) with certain holders of certain

of the Company’s existing warrants to purchase an aggregate of 928,596 shares of the Company’s common stock.

existing warrants were originally issued in December 2024 and January 2025, having exercise prices between $2.00 and $3.00 per

Warrants to purchase 100,000 shares of common stock at the existing exercise price of $2.00 per share were exercised at their

existing exercise price of $2.00 per share, and warrants to purchase 828,596 shares of common stock were exercised at a reduced exercise

price of $2.485 per share.

Pursuant to the July 2025 Inducement Letter Agreements, in consideration for the immediate exercise of

such warrants for cash and the payment of an additional $0.125 per New Warrant (as defined below), or an aggregate of $232,149 for all

New Warrants, the Company agreed to issue new unregistered five-year term Series J warrants (the “ Series J Warrants ”)

to purchase an aggregate of up to 318,596 shares of common stock at an exercise price of $2.485 and new unregistered 24-month

term Series K warrants (the “ Series K Warrants ” and, together with the Series J Warrants, the “ New Warrants ”)

to purchase an aggregate of up to 1,538,596 shares of common stock at an exercise price of $2.485 (the “ July 2025 Financing ”).

In addition, the Company issued warrants to the placement agent, H.C.

Wainwright & Co., LLC, to purchase up to 69,645 shares

of common stock (the “ Placement Agent Warrants ”).

7,500 of the Placement Agent Warrants issued have an exercise price

of $2.8125 per share of Common Stock and a term of five years, 16,395 of the Placement Agent Warrants issued have an exercise price of

$3.4188 per share of Common Stock and a term of five years, and 45,750 of the Placement Agent Warrants issued have an exercise price

of $3.4188 per share of Common Stock and a term of twenty-four months.

The net proceeds to the Company from the July 2025 Financing are

approximately $2,200,000, after deducting placement agent fees and offering expenses.

We have limited cash resources,

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our cash flows for the periods indicated, in thousands:

Three Months Ended

Six Months Ended

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net Cash Used in Operating Activities

Net cash used in operating

activities for the three months ended March 31, 2025 decreased 37% as compared to the three months ended March 31, 2024.

This was primarily

due to a decrease in net loss of $385,000, and a decrease of $350,000 of cash outflows driven by a reduction in prepaid expenses and a

comparative increase in operating liabilities during the three months ended March 31, 2025.

activities for the six months ended June 30, 2025 increased 1% as compared to the six months ended June 30, 2024.

The Company considers

this to be an immaterial fluctuation.

Net Cash Used in Investing Activities

Net cash used in investing

activities for the three months ended March 31, 2025 was approximately $2,000 as compared to the three months ended March 31, 2024 where

net cash used in investing activities was $0.

activities for the six months ended June 30, 2025 was approximately $5,000 as compared to the six months ended June 30, 2024 where net

cash used in investing activities was $0.

The increase in net cash used in investing activities was primarily due to computer equipment

purchases during the three months ended March 31, 2025.

Net Cash Flow Provided by Financing Activities

purchases during the six months ended June 30, 2025.

Net Cash Provided by Financing Activities

Net cash provided by financing

activities for the three months ended March 31, 2025 was approximately $9,173,000 as compared to the three months ended March 31, 2024

where net cash used in financing activities was $4,000.

The increase in net cash provided by financing activities was primarily due to

the issuance of common stock and warrants, and the exercise of warrants, both as described in Note 2 of the condensed consolidated financial

activities for the six months ended June 30, 2025 was approximately $9,213,000 as compared to the six months ended June 30, 2024 where

net cash used in financing activities was $4,000.

The increase in net cash provided by financing activities was primarily due to the issuance

of common stock and warrants, and the exercise of warrants, both as described in Note 2 of the condensed consolidated financial statements.

Contractual Obligations

Details of our

obligations under the Clinical Co-Development Agreement with our former collaboration partner AgonOx can be found in Note 2 of the

condensed consolidated financial statements.

Outside of the above, there have been no material changes to the contractual

obligations as disclosed in our 2024 Form 10-K.

For a discussion of our critical accounting policies and estimates, refer to

“ Management’s Discussion and Analysis of Financial Condition and Results of Operations - Contractual

Obligations ” in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2024.

There have been no material

changes to the contractual obligations as disclosed in our 2024 Form 10-K.

For a discussion of our critical accounting policies and estimates,

refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations - Contractual Obligations ”

in Part II, Item 7 of our 2024 Form 10-K.

Future Funding Requirements

At March 31, 2025, we had

cash and cash equivalents of $13,278,000, which includes aggregate net proceeds of approximately $6,700,000, after deducting fees

and estimated offering expenses, from our January 2025 Financings.

We expect that our cash and cash equivalents will enable us to fund

our current operating plan into the second quarter of 2026.

At June 30, 2025, we had cash

and cash equivalents of $10,775,000, which includes aggregate net proceeds of approximately $6,700,000, after deducting fees and

estimated offering expenses, from our January 2025 Financings.

We expect that our cash and cash equivalents will enable us to fund our

current operating plan into the second quarter of 2026.

Due to the difficulty and uncertainty associated with the design and implementation

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or decreases in our need for capital;

· disruptions at the FDA, including due to a reduction

in the FDA’s workforce and/or inadequate funding for the FDA;

and international trade policies;

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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