PDS Biotechnology (PDSB) cuts R&D spend but warns on going concern, cash at $5.6M
Rhea-AI Filing Summary
PDS Biotechnology Corporation reported a net loss of $17.1 million for the six months ended June 30, 2026, similar to the prior-year period, with no product revenue as a clinical-stage company. Operating expenses declined to $13.0 million from $16.7 million, driven by lower clinical trial, manufacturing, and personnel costs, partially offset by higher stock-based compensation.
Liquidity is tight: cash and cash equivalents were $5.6 million versus $26.7 million at year-end 2025, and total assets of $8.8 million are below total liabilities of $12.4 million, resulting in negative stockholders’ equity of $3.6 million. Management disclosed that substantial doubt exists about the company’s ability to continue as a going concern over the next 12 months.
The company refinanced its capital structure, fully redeeming $22.2 million of senior secured convertible debentures in June 2026 at 103% of principal plus interest, recognizing a significant loss on extinguishment, and issuing a new $6.0 million promissory note bearing 10% interest along with equity warrants. Strategically, PDS Biotech is prioritizing its tumor-targeted IL-12 immunocytokine PDS0301 and has stopped internal investment in PDS0101, including discontinuation of the VERSATILE-003 Phase 3 trial, while seeking partnerships for any further PDS0101 development.
Positive
- $22.2 million of senior secured convertible debentures were fully redeemed in June 2026, removing a large secured, convertible overhang and associated future interest obligations from the capital structure.
- Operating expenses fell to $13.0 million from $16.7 million year over year for the six months ended June 30, 2026, reflecting reduced clinical trial, manufacturing, and personnel spending and moderating the operating loss.
Negative
- Cash and cash equivalents declined to $5.6 million from $26.7 million at December 31, 2025, while net cash used in operating activities was $7.2 million for the six months, indicating limited runway.
- Stockholders’ equity turned negative, falling from $9.3 million at year-end 2025 to a deficit of $3.6 million at June 30, 2026, with total liabilities exceeding total assets.
- Management concluded that substantial doubt exists about the company’s ability to continue as a going concern for at least 12 months, given ongoing losses, limited cash, and debt obligations.
- Net interest expense increased to $4.1 million for the six months ended June 30, 2026, including a $2.7 million loss on extinguishment of debt, significantly adding to the overall net loss.
- The company discontinued its Phase 3 VERSATILE-003 trial and ceased internal investment in PDS0101, representing a setback for that late-stage asset and narrowing the internally funded clinical pipeline.
Filing Explained
The financing adds a $6,000,000 debt maturity and a 2,158,274-share warrant; the $50,000,000 ATM is capacity, not shares already sold.
The June 2026 financing is reported as completed: on
The June sales agreement is an at-the-market program, which permits gradual sales into the market. Its stated ceiling is
The warrant is a right to purchase 2,158,274 shares at an exercise price of
The filing’s anchored resolution points are the note’s
Key Figures
Net loss (six months): $17,099,631
Cash and cash equivalents: $5,596,254
Total operating expenses: $13,017,821
+5 more
8 metrics
Net loss (six months)
$17,099,631
Net loss and comprehensive loss for the six months ended June 30, 2026
Cash and cash equivalents
$5,596,254
Balance at June 30, 2026, down from $26,711,969 at December 31, 2025
Total operating expenses
$13,017,821
Six months ended June 30, 2026 versus $16,729,109 in 2025
Stockholders’ equity
$(3,579,739)
Equity deficit at June 30, 2026 versus $9,251,833 at December 31, 2025
Senior secured convertible debentures
$22,200,000
Aggregate principal amount fully redeemed in June 2026 at 103% of principal
Promissory Note principal
$6,000,000
Issued June 15, 2026 to YA II PN, Ltd., bearing 10% interest, maturing June 15, 2027
Net cash used in operating activities
$7,164,155
Cash flows from operating activities for the six months ended June 30, 2026
Shares outstanding
55,971,338
Common shares outstanding as of August 6, 2026
Key Terms
going concern, at-the-market offering, senior secured convertible debentures, Promissory Note, +2 more
6 terms
going concern financial
"substantial doubt exists about the Company’s ability to continue as a going concern"
Going concern is the accounting assumption that a company will keep operating and meeting its obligations for the foreseeable future. The phrase matters most when a company or its auditors disclose substantial doubt about it, a formal warning that the business may not have enough resources to continue without raising money, restructuring, or selling assets. That language in a filing or press release signals elevated financial risk.
at-the-market offering financial
"with respect to an at-the-market offering program pursuant to which the Company may offer"
An at-the-market offering is a method companies use to sell new shares of stock directly into the open market over time, rather than all at once. This allows them to raise money gradually, similar to selling small pieces of a product instead of a large batch. For investors, it means the company can access funding more flexibly, but it may also increase the supply of shares and influence the stock’s price.
senior secured convertible debentures financial
"sell senior secured convertible debentures in an aggregate principal amount of $22.2 million"
A senior secured convertible debenture is a loan instrument that behaves like a bond: the lender has a top-priority claim on the company’s assets if things go wrong (senior and secured) and also holds the right to swap the debt for shares of the company at a set price (convertible). It matters to investors because it combines lower risk from collateral and repayment priority with potential upside from converting into stock, while also creating possible future share dilution for existing shareholders.
Promissory Note financial
"agreed to issue and sell to the Investor a promissory note in an aggregate principal amount"
A promissory note is a written IOU in which one party promises to pay a specific sum, often with interest, to another party by a set date or on demand. Investors care because it functions like a loan: it creates a legal claim on future cash flows, carries credit and timing risk, and can affect valuation or liquidity—think of it as a formal, tradable promise to be repaid that can be assessed like any other debt investment.
performance-based restricted stock units financial
"The Company granted 800,000 performance-based restricted stock units in June 2025."
Performance-based restricted stock units are a type of employee equity award that converts into company shares only if predefined financial or operational targets are met over a set period. Think of it like a bonus check that becomes stock only when specific goals are hit; it ties pay to results, aligning managers’ incentives with shareholders. Investors care because these awards affect future share count, executive incentives, and signal how management’s success will be measured and rewarded.
fair value hierarchy financial
"FASB ASC 820, Fair Value Measurement, specifies a hierarchy of valuation techniques"
FAQ
How much cash did PDSB have as of June 30, 2026, and how does this compare to year-end 2025?
PDS Biotechnology reported $5.6 million in cash and cash equivalents at June 30, 2026, down from $26.7 million at December 31, 2025. The decline reflects $7.2 million of operating cash burn and significant debt-related cash outflows.
What was PDSB’s net loss for the six months ended June 30, 2026?
For the six months ended June 30, 2026, PDS Biotechnology recorded a net loss of $17.1 million, slightly improved from a $17.9 million loss in the prior-year period. Lower research and development and general and administrative expenses drove most of the modest improvement.
Does PDS Biotechnology (PDSB) have a going concern warning?
Yes. Management concluded that substantial doubt exists about PDS Biotechnology’s ability to continue as a going concern for at least 12 months. The assessment reflects recurring losses, limited cash of $5.6 million, and debt obligations including a new $6.0 million promissory note.
What major debt actions did PDSB take in 2026?
In June 2026, PDS Biotechnology fully redeemed $22.2 million of senior secured convertible debentures at 103% of principal plus accrued interest, and issued a new $6.0 million promissory note bearing 10% interest, along with a warrant for 2,158,274 common shares.
Which drug programs are currently prioritized in PDSB’s pipeline?
PDS Biotechnology is prioritizing PDS0301, its tumor-targeted IL-12 immunocytokine, including development in colorectal cancer and other indications. The company has ceased internal investment in PDS0101 and discontinued the VERSATILE-003 Phase 3 trial, seeking external partnerships for further PDS0101 work.
How did PDSB’s research and development spending change year over year?
Research and development expenses decreased to $6.7 million for the six months ended June 30, 2026, from $10.0 million in the prior-year period. The $3.3 million reduction was mainly due to lower clinical trial, manufacturing, and personnel costs, partly offset by higher stock-based compensation.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2026
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________ to _____________
Commission file number 001-37568
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Securities registered pursuant to Section 12(b) of the Act:
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The
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth
company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer ☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of the registrant’s Common Stock, par value $0.00033 per share, outstanding as of August 6, 2026 was 55,971,338 .
PDS BIOTECHNOLOGY CORPORATION
FORM 10-Q FOR THE QUARTER ENDED June 30, 2026
INDEX
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Part I — Financial Information
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Item 1.
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Financial Statements (Unaudited):
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Condensed Consolidated Balance Sheets
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Condensed Consolidated Statements of Operations and Comprehensive Loss
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Condensed Consolidated Statements of Changes in Stockholders’ Equity
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Condensed Consolidated Statements of Cash Flows
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Notes to Condensed Consolidated Financial Statements
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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Part II — Other Information
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities
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Item 4.
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Mine Safety Disclosures
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Other Information
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EXHIBIT INDEX
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SIGNATURES
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Index
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PART 1.
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FINANCIAL INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS
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PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY
Condensed Consolidated
Balance Sheets
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June 30, 2026
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December 31, 2025
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ASSETS
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(unaudited)
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Current assets:
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Cash and cash equivalents
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Prepaid expenses and other assets
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Noncurrent assets:
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Property and equipment, net
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Financing lease right-to-use assets
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Total assets
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$
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$
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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$
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Accrued expenses
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Current portion of debt
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Financing lease obligation-short term
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Total current liabilities
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Noncurrent liabilities:
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Debt, net of debt discount
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Financing lease obligation-long term
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Total liabilities
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$
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Commitments and contingencies (Note 9)
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STOCKHOLDERS’ EQUITY
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Common stock, $
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Additional paid-in capital
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Accumulated deficit
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Total stockholders’ equity
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Total liabilities and stockholders’ equity
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See accompanying notes to the condensed consolidated financial statements.
3
Index
PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of
Operations and
Comprehensive Loss
(Unaudited)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2026
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2025
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2026
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2025
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Operating expenses:
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Research and development expenses
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General and administrative expenses
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Total operating expenses
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Loss from operations
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Interest income (expenses), net
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Interest expense
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Weighted average common shares outstanding, basic, and diluted
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See accompanying notes to the condensed consolidated financial statements.
4
Index
PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Changes in
Stockholders’ Equity
(Unaudited)
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Issued
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Issuance of pre-funded warrants
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Exercise of pre-funded warrants
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Net loss
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Balance - March 31, 2025
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$
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(
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Stock-based compensation expense
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Issuance of common stock from at-the-market program, net
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| Issuances of common stock, net of issuance costs | ||||||||||||||||||||
| Issuance of warrants | - | |||||||||||||||||||
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Exercise of pre-funded warrants
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Net loss
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-
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(
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(
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Balance - June 30, 2025
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$
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$
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$
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(
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Common Stock
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Additional | |||||||||||||||||||
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Shares
Issued
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Amount
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Paid-in
Capital
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Accumulated
Deficit
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Total Equity
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January 1, 2026
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$
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Stock-based compensation expense
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-
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Issuance of common stock from at-the-market program, net
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Net loss
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-
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(
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(
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Balance - March 31, 2026
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$
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$
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$
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(
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$
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Stock-based compensation expense
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-
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Issuance of common stock from at-the-market program, net
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| Issuance of warrants |
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Net loss
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-
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(
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(
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Balance - June 30, 2026
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$
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$
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$
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(
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)
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$
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(
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)
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See accompanying notes to the condensed consolidated financial statements.
5
Index
PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements
of
Cash Flows
(Unaudited)
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Six Months Ended June 30,
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2026
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2025
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Cash flows from operating activities:
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Net loss
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$
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(
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$
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(
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||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Stock-based compensation expense
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Amortization of debt discount
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Changes in assets and liabilities:
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Prepaid expenses and other assets
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(
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Accounts payable
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Accrued expenses
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(
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Net cash used in operating activities
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(
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(
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Proceeds from issuance of pre-funded warrants
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Proceeds from exercise of pre-funded warrants
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Proceeds from issuance of warrants
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Payments of finance lease obligations
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( |
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Loan principal payment
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(
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( |
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Loan repayment
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( |
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) | ||||
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Net proceeds from issuance of debt
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Proceeds from issuance of common stock from at-the-market program, net of issuance costs
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Proceeds from issuance of common stock, net of issuance costs
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Net cash (used)/provided by financing activities
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( |
) |
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|||||
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Net increase in cash and cash equivalents
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(
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)
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(
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)
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||||
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Cash and cash equivalents at beginning of period
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|
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||||||
| Cash and cash equivalents at the end of period | $ | $ | ||||||
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Supplemental information of cash and non-cash transactions:
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||||||||
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Cash paid for interest
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$
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$
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||||
See accompanying notes to the condensed consolidated financial statements.
6
Index
PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 – Nature of Operations
PDS Biotechnology Corporation, a Delaware corporation (the “Company” or “PDS Biotech”), is a
clinical-stage biotechnology company focused on developing PDS0301 (formerly PDS01ADC), a tumor-targeted IL-12 immunocytokine designed to modify the tumor microenvironment and enhance the activity and durability of
anti-cancer therapies. The Company’s current development strategy prioritizes PDS0301, including its development in colorectal cancer and evaluation in other combinations and as a monotherapy.
The Company also develops its proprietary Versamune® platform for treatments in oncology and
Infectimune® for treatments in infectious diseases. The most advanced Versamune® drug candidate, PDS0101, has been evaluated in multiple clinical trials with promising results, and the Company seeks to further the
development of PDS0101 through strategic partnerships. In August 2026, the Company discontinued its Phase 3 trial with PDS0101 in HPV16-positive recurrent/metastatic head and neck cancer.
Note 2 – Summary of Significant Accounting
Policies
| (A) |
Unaudited interim financial statements:
|
The unaudited financial
statements for all periods presented are referred to as “Condensed Consolidated Financial Statements”, and have been prepared by the Company in United States (“U.S.”) dollars and in accordance with U.S. generally accepted accounting
principles (“U.S. GAAP”) for interim financial reporting and pursuant to the rules and regulations for reporting on Form 10-Q, which do not conform in all respects to the requirements of U.S. GAAP for annual financial statements.
Accordingly, certain information and disclosures required by U.S. GAAP for complete Consolidated Financial Statements are not included herein. Accordingly, these notes to the unaudited Condensed Consolidated Financial Statements should be
read in conjunction with the audited consolidated financial statements prepared in accordance with U.S. GAAP that are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities
and Exchange Commission (“SEC”) on March 30, 2026. The unaudited Condensed Consolidated Financial Statements have been prepared using accounting policies that are consistent with the policies used in preparing the Company’s audited
consolidated financial statements for the year ended December 31, 2025. The unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of
operations for the interim periods. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year or for any other subsequent interim period.
| (B) |
Use of estimates:
|
The preparation of consolidated financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of expenses at the date of the consolidated financial statements and during the
reporting periods, and to disclose contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates. The most significant estimates relate to the fair value of warrants
issued in connection with equity and/or debt financings and the fair value of securities underlying stock-based compensation.
| (C) |
Significant risks and uncertainties:
|
The Company’s operations are subject to a number of factors that may affect its operating results and
financial condition. Such factors include, but are not limited to: the clinical and regulatory development of its products, the Company’s ability to preserve its cash resources, the
Company’s ability to add product candidates to its pipeline, risks related to the Company’s intellectual property, the Company’s ability to complete clinical trials necessary to obtain regulatory product licenses, competition from
products manufactured and sold or being developed by other companies, the price of, and demand for, Company products if approved for sale, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing
agreements for its products, and the Company’s ability to raise capital.
7
Index
The Company currently has no commercially approved
products. As such, there can be no assurance that the Company’s future research and development programs will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to
regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants
and obtaining and protecting its intellectual property.
| (D) |
Cash equivalents and concentration of cash balance:
|
The Company considers all highly liquid securities with a
maturity of less than three months to be cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits.
| (E) |
Research and development:
|
Costs incurred in connection with research and development
activities are expensed as incurred. These costs include licensing fees to use certain technology in the Company’s research and development projects as well as fees paid to consultants and vendors that perform certain research activities and
testing on behalf of the Company.
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 about their actual costs incurred. Payments for
these activities are based on the terms of the individual arrangements, which may differ from the timing and pattern of costs incurred.
| (F) |
Patent costs:
|
The Company expenses patent costs as incurred and
classifies such costs as general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss.
| (G) |
Stock-based compensation:
|
The Company accounts for its stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, directors and non-employees to be recognized as expense in the Condensed Consolidated Statements of Operations and
Comprehensive Loss based on their grant date fair values. In order to determine the fair value of stock options on the date of grant, the Company uses the Black-Scholes option-pricing model. Inherent in this model are assumptions related to
expected stock-price volatility, option term, risk-free interest rate and dividend yield. While the risk-free interest rate and dividend yield are less subjective assumptions that are based on factual data derived from public sources, the expected stock-price volatility and option term
assumptions require a greater level of judgment. The Company expenses the fair value of its stock-based compensation awards to employees and directors on a straight-line basis over the requisite service period, which is generally the
vesting period. The Company recognizes forfeitures as they occur.
| (H) |
Net loss per common share:
|
Basic and diluted net loss per common share is determined
by dividing net loss attributable to common stockholders by the weighted average number of common stock shares and pre-funded warrants outstanding during the period. Shares of common stock into which the pre-funded warrants may be exercised are
considered outstanding for the purposes of computing net loss per share because the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date. For all periods presented, the
common stock shares underlying the stock options and warrants have been excluded from the calculation because their effect would be antidilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted loss
per common share is the same.
The potentially dilutive securities excluded from the
determination of diluted loss per share as their effect is antidilutive, are as follows:
|
As of June 30,
|
||||||||
|
2026
|
2025
|
|||||||
|
Stock options to purchase common stock
|
|
|
||||||
| Performance-based restricted stock units |
||||||||
|
Warrants to purchase common stock
|
|
|
||||||
|
Total
|
|
|
||||||
8
Index
| (I) |
Income taxes:
|
The Company makes provision for deferred income taxes under the asset and liability method, which requires deferred tax
assets and liabilities to be recognized for the future tax consequences attributable to net operating loss carryforwards and for differences between the financial statement carrying amounts and the respective tax bases of assets and
liabilities. Deferred tax assets are reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized.
| (J) |
Convertible debentures and embedded derivative evaluation:
|
The Company accounts for its convertible debentures in accordance with ASC Subtopic 470-20, Debt–Debt with Conversion and Other Options, ASC Subtopic 815-40, Derivatives and Hedging–Contracts in Entity’s Own Equity and ASU 2020-06, Accounting
for Convertible Instruments and Contracts in an Entity’s Own Equity. The Company evaluates the terms of its debt instruments to determine if any identified embedded features, including embedded conversion options or redemption
features, are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where a host instrument contains more than one embedded derivative instrument, including a conversion option, that is
required to be bifurcated, the bifurcated derivative instruments would be accounted for as a single, compound derivative instrument. Any identified and bifurcated embedded derivatives are initially recorded at fair value and are revalued at
each reporting date with changes in the fair value reported as non-operating income or expense.
|
(K)
|
Warrants to
acquire common stock:
|
The Company accounts for common stock warrants as either equity classified or liability classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and
Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants
meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a
circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding.
|
(L)
|
Fair value of financial instruments:
|
FASB ASC 820, Fair Value Measurement, specifies a hierarchy of
valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market
assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The three levels of the fair value hierarchy are as follows:
| ● |
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the
measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
|
| ● |
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g.,
quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models
or other valuation methodologies.
|
| ● |
Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using
pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.
|
9
Index
|
(M)
|
Leases:
|
The Company determines if an arrangement is a lease at inception and recognizes the lease in accordance with ASC 842, Leases (“ASC 842”). Both financing and operating leases are
included in right-of-use (“ROU”) assets, lease obligation-short term and lease obligation-long term in the Company’s Condensed Consolidated Balance Sheets. ROU assets represent the right to use an underlying asset for the lease term and
lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over
the lease term. The Company determines the portion of the lease liability that is current as the difference between the calculated lease liability at the end of the current period and the lease liability that is projected 12 months from
the current period.
|
(N)
|
New accounting standards:
|
Recently Adopted Accounting Pronouncements
In December 2023,
the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosures of specific categories in the rate
reconciliation, additional information for reconciling items that meet a quantitative threshold and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15,
2024. The Company adopted this ASU for the annual period
ended December 31, 2025. Refer to our income tax disclosure in Note 8 – Income Taxes for more information.
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.
The new guidance requires a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the
consolidated statements of operations and comprehensive loss. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December
15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with
Customers (Topic 606). The new guidance amendments add a new scope exception in ASC 815 for certain contracts and clarifies the accounting for share-based payments to a customer. The amendments in this update are
effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact that the new
guidance will have on its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). The new guidance amendment removes all references to a prescriptive and sequential software
development method, also referred to as “project stages” throughout Subtopic 350-40, and specifies new requirements for determining when to begin capitalization of capitalizable project costs. The amendment in this update is
effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact that the new
guidance will have on its consolidated financial statements.
Note 3 – Liquidity and Capital Resources
As of June 30, 2026, the Company
had $5.6 million in cash and cash equivalents. The Company’s primary uses of cash are to fund operating expenses, primarily research
and development expenditures. Cash used to fund operating expenses is impacted by the level of activities undertaken, as well as the timing of when the Company pays these expenses, as reflected in the change to the Company’s outstanding accounts payable and accrued expenses. Since inception, the Company has experienced net losses and negative cash flows from operations each fiscal year.
The Company has no revenues and expects to continue to incur operating losses for the foreseeable future and may never become profitable.
10
Index
The Company funds its operations through equity and/or debt financings such as the following:
In August 2022, the Company entered into an At Market Issuance Sales Agreement, or the Sales Agreement, with B. Riley Securities,
Inc. and BTIG, LLC, each an Agent and collectively the Agents, with respect to an at-the-market offering program under which the Company could offer and sell, from time to time at its sole discretion, shares of its common stock, having an
aggregate offering price of up to $50 million, or the Placement Shares, through or to the Agents, as sales agents or principals.
Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, the Agents could sell the Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of
the Securities Act of 1933, as amended, including, without limitation, sales made through The Nasdaq Capital Market or on any other existing trading market for the Company’s common stock. The Agents were to use commercially reasonable
efforts to sell the Placement Shares from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company paid 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 the Company has also provided the Agents with customary indemnification and contribution rights. The Company was not obligated to make
any sales of its common stock under the Sales Agreement. The offering of Placement Shares pursuant to the Sales Agreement was to terminate upon the earlier of (i) the sale of all Placement Shares subject to the Sales Agreement or (ii)
termination of the Sales Agreement in accordance with its terms.
In August 2024, the Company 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. The New Sales Agreement superseded and replaced the Sales Agreement.
During the three and six months ended June 30, 2026, the Company sold 0 shares and 937,420 shares, respectively, of its common stock with a
net value of $0 million and $0.8
million, respectively, pursuant to the New Sales Agreement. During the three and six months ended June 30, 2025, the Company sold 960,511
and 1,165,861 shares, respectively, of its common stock with a net value of $1.5 and $1.8 million, respectively, pursuant to the New
Sales Agreement. The New Sales Agreement was terminated on May 1, 2026.
In August 2022, the Company 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. The Company’s 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 2025, the Company received approximately $1.2 million from the net sale of tax
benefits to two unrelated, profitable New Jersey corporations pursuant to its participation in the New Jersey Technology
Business Tax Certificate Transfer NOL program for tax year 2023.
In February 2025, the Company entered into a securities purchase agreement with certain purchasers, pursuant to which the Company 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 (the “February 2025 Offering”). Two of the Company’s 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 the Company’s 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 the Company from the February 2025 Offering, after deducting the placement agent fees and other estimated offering expenses payable by the
Company, were approximately $10.05 million. The placement agent fees and offering expenses were accounted for as a reduction of
additional paid in capital. The February 2025 Offering closed on February 28, 2025.
In April 2025, the Company 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 Company agreed to sell (i) senior secured convertible debentures in an aggregate principal amount of $22.2 million (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 $20.0
million. Approximately $19 million of the proceeds from the transactions contemplated by the Securities Purchase Agreement, were
used to satisfy in full and retire the Company’s indebtedness under the Loan and Security Agreement.
On April 30, 2026, the Company delivered a redemption notice pursuant to which it irrevocably elected to prepay, for
cash, all of the outstanding principal amount under each of the Debentures issued pursuant to the Securities Purchase Agreement. On June 15, 2026, the Company paid the applicable redemption amount, equal to 103 % of the principal amount outstanding plus all accrued and unpaid interest and all other amounts payable thereunder, and, upon such payment,
each Debenture was redeemed in full and is of no further force or effect.
11
Index
In November 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”). The November 2025 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. The November 2025 Offering closed on November 12, 2025.
On April 30, 2026, the Company entered into a securities purchase agreement (the “April 2026 Securities Purchase
Agreement”) with YA II PN, LTD., a Cayman Islands exempt limited company (the “Investor”). Pursuant to the securities purchase agreement, the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from the
Company (i) a promissory note in an aggregate principal amount of $6,000,000 (the “Promissory Note”) and (ii) a warrant to purchase
up to 2,158,274 shares of common stock of the Company, par value $0.00033 per share, at an exercise price of $1.1824 per share, subject to
adjustments (the “Warrant”). In addition, on June 15, 2026, in connection with the transactions contemplated by the April 2026 Securities Purchase Agreement, the Company issued the Promissory Note and the Warrant to the Investor, the Company
and the Investor entered into the Registration Rights Agreement and PDS Operating Corporation, a Delaware corporation and wholly owned subsidiary of the Company and the Investor entered into a guaranty agreement.
On June 15, 2026, the Company entered into a Sales Agreement (the “June 2026 Sales Agreement”) with Yorkville Securities,
LLC, an affiliate of the Investor (“Yorkville Securities”), and B. Riley Securities, Inc. (“B. Riley Securities,” each of Yorkville Securities and B. Riley Securities individually an “Agent” and collectively, the “Agents”), with terms that
are substantially consistent with those included in the New Sales Agreement, with respect to an “at-the-market” offering program pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its Common
Stock (the “Placement Shares”) having an aggregate offering price of up to $50,000,000 through or to the Agents, as sales agents or
principals. Yorkville Securities is an affiliate of the Investor. The issuance and sale, if any, of the Placement Shares by the Company under the June 2026 Sales Agreement will be made pursuant to the Company’s registration statement on Form
S-3 (File No. 333-289942), which was declared effective by the SEC on April 28, 2026, and a prospectus supplement relating to the Placement Shares filed with the SEC. During the three months ended June 30, 2026, the Company sold 106,153 shares of common stock for a net value of $0.10
million, pursuant to the June 2026 Sales Agreement.
Going Concern
The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its
ability to continue as a going concern within one year after the filing of this Quarterly Report on Form 10-Q in accordance with ASC Subtopic 205-40, Going Concern. Since inception, the Company has experienced net losses and negative cash
flows from operations each fiscal year. The Company has no revenues and expects to continue to incur operating losses for the foreseeable future and may never become profitable. In addition, the Promissory Note allows for the lenders to
accelerate repayment of its outstanding balance.
The Company’s estimated cash requirements in 2026 and beyond include expenses related to continuing development and clinical trials as well as
payments on its debt. The Company plans to execute its operating plan by obtaining additional capital, principally through issuance of equity through separate offerings or an at-the-market facility, issuance of debt, or by entering into
collaborations, strategic alliances, or license agreements with third parties. However, there is no assurance that sufficient additional capital and/or financing will be available to the Company, and even if available, whether it will be on
terms acceptable to the Company or its existing shareholders. The Company may also enter into government funding programs and consider selectively partnering for clinical development and commercialization. The sale of additional equity would
result in dilution to the Company’s 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 its
operations. If the Company is unsuccessful in securing sufficient financing, it may need to delay, reduce, or eliminate its research and development programs, which could adversely affect its business prospects, grant rights to third parties
to develop and market immunotherapies that the Company would otherwise prefer to develop and market itself, or cease operations entirely. Any of these actions could harm its business, results of operations and prospects. Failure to obtain
adequate financing may also adversely affect the Company’s ability to operate as a going concern.
As a result of these uncertainties, the Company has concluded that substantial doubt exists about the Company’s 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 the Company was unable to continue as a going concern.
12
Index
Note 4 – Fair Value of Financial Instruments
There were no transfers between Levels 1, 2, or 3 during
the three months ended June 30, 2026 or 2025.
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
|
Total
|
Quoted Prices in
Active Markets
(Level 1)
|
Quoted Prices in
Inactive Markets
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
|||||||||||||
|
As of June 30, 2026: (unaudited)
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
As of December 31, 2025
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The carrying value of the Promissory Note approximated its fair value as of June 30, 2026 due to its term being less than one year from the balance sheet date.
Note 5 – Leases
Operating Lease:
The Company maintains a month-to-month lease for its research facilities at the Princeton Innovation Center BioLabs
located at 303A College Road E, Princeton NJ, 08540.
Financing Lease:
The Company has financed certain
laboratory equipment as follows:
|
As of June 30,
|
||||||||
|
2026
|
2025
|
|||||||
|
Cash paid for finance lease liabilities
|
$
|
|
$
|
|
||||
Maturity of the Company’s financing lease liabilities is as follows:
|
Year ended December 31,
|
||||
|
2026
|
$ |
|
||
|
2027 and after
|
|
|||
|
Total future minimum lease payments
|
|
|||
|
Less imputed interest
|
(
|
)
|
||
|
Remaining lease liability
|
$
|
|
||
The Company entered into four
financing leases for laboratory equipment with a total cost of $251,959 with to five-year terms and a capitalized interest rate of
9.15 %. Each of the lease agreements include a bargain purchase option to acquire the equipment at the end of the lease term. The
aggregate monthly payments are approximately $3 ,000.
13
Index
Note 6 – Accrued Expenses
Accrued expenses consist of the following:
|
As of
June 30, 2026
|
As of
December 31, 2025
|
|||||||
|
Accrued research and development
|
$
|
|
$
|
|
||||
|
Accrued professional fees
|
|
|
||||||
|
Accrued compensation
|
|
|
||||||
| Accrued interest on debt | ||||||||
| Accrued rent | ||||||||
|
Total
|
$
|
|
$
|
|
||||
Note 7 – Stock-Based Compensation
In 2014, the Company’s stockholders approved the 2014
Equity Incentive Plan (the “Original Plan”) pursuant to which the Company may grant up to 91,367 shares as incentive stock options
(“ISOs”), non-qualified stock options (“NQs”) and restricted stock units (“RSUs”), subject to increases as hereafter described (the “Plan Limit”). In addition, the Original Plan contained an evergreen provision pursuant to which, on January
1, 2015, and each January 1 thereafter and prior to the termination of the 2014 Equity Incentive Plan, pursuant to the terms of the Original Plan, the Plan Limit was and shall be increased by the lesser of (x) 4 % of the number of shares of Common Stock outstanding as of the immediately preceding December 31 and (y) such lesser number as the Board of
Directors may determine in its discretion. In March 2019, the Board adopted and the Company’s stockholders approved the Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan (the “Prior Plan”) which amended and
restated the Original Plan in order to remove the evergreen provision and provide for an aggregate of 826,292 shares authorized
for issuance under the Prior Plan.
On December 8, 2020,
the Board adopted and on June 17, 2021, the stockholders approved, the Second Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan (the “Restated Plan”), which amended and restated the Prior Plan. The Restated
Plan is identical to the Prior Plan in all material respects, except (a) the number of shares of Common Stock authorized for issuance under the Restated Plan was increased from 826,292 shares to 4,165,535 shares, plus the total number of
shares that remained available for issuance, that were not covered by outstanding awards issued under the Prior Plan, immediately prior to December 8, 2020; and (b) the Prior Plan was amended to terminate on December 7, 2030, unless
earlier terminated.
On May 19, 2023, the Board adopted, subject to stockholder approval, the Third Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan (the “Third Restated Plan”). At the 2023 annual
meeting of stockholders held on July 14, 2023, the stockholders approved the Third Restated Plan, which amended and restated the Restated Plan to increase the total amount of shares authorized for issuance thereunder. The Third Restated Plan is identical to the Restated Plan in all material respects, except, the number of shares of Common Stock authorized for issuance under the Third
Restated Plan increased from 4,165,535 to 6,565,535 .
On April 28, 2025, the Company’s Board adopted and on June 11, 2025, the stockholders approved, an amendment to the Third Restated Plan, which amendment increased the total amount of shares authorized for issuance under
the Third Restated Plan to the sum of (i) 4,165,535 shares of Common Stock, which was the total number of shares of common
stock authorized for issuance under the Restated Plan, plus (ii) 2,400,000 shares of common stock, which reflects the additional shares of common stock authorized by the Board under the Third Restated Plan
as of its effective date, plus (iii) 3,144,049 shares of common
stock that were approved at the Company’s 2025 Annual Meeting of Stockholders. As of June 30, 2026, there were 1,042,902 shares available for grant under the Third Restated Plan.
Pursuant to the terms of the Third Restated Plan, stock options have a term of ten years from the date of grant or such shorter term as may be provided in the option agreement. Unless specified otherwise in an individual option agreement, ISOs generally vest over a
four-year period.
In 2018, the Company’s stockholders
approved the 2018 Stock Incentive Plan pursuant to which the Company may grant up to 558,071 shares as (i) Stock Options, (ii)
Stock Appreciation Rights, (iii) Restricted Stock, (iv) Preferred Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based Awards. As of June 30, 2026, there were 190,799 shares available for grant under the 2018 Stock Incentive Plan.
14
Index
On June 17, 2019, the Board adopted the 2019 Inducement Plan (the “Inducement Plan”). On December 8, 2020, the Company amended the
Inducement Plan solely to increase the total number of shares of common stock reserved for issuance under the Inducement Plan from 200,000
shares to 500,000 shares. On May 17, 2022, the Company further amended the Inducement Plan solely to increase the total number
of shares of Common Stock reserved for issuance under the Inducement Plan from 500,000 shares to 1,100,000 shares. On January 22, 2024, the Company further amended the Inducement Plan solely to increase the total number of shares of Common
Stock reserved for issuance under the Inducement Plan from 1,100,000 shares to 2,100,000 shares. The Inducement Plan provides
for the grant of NQs. The Inducement Plan, and each amendment thereto, was recommended for approval by the Compensation Committee of the Board and subsequently approved and adopted by the Board without stockholder approval pursuant to Rule
5635(c)(4) of the Nasdaq Listing Rules.
The Inducement Plan is administered by the Compensation Committee of the Board. In accordance with Rule 5635(c)(4) of the Nasdaq
Listing Rules, NQs under the Inducement Plan may only be granted to
persons who have not previously been an employee of the Company or member of the Board of Directors of the Company (or subsidiary of the Company), and such grant is an inducement material to his or her entering into employment with the
Company or its subsidiary. As of June 30, 2026, there were 1,087,407 shares available for grant under the Inducement Plan.
The following table summarizes the components of stock-based compensation expense in the Condensed Consolidated Statements of Operations and
Comprehensive Loss for the three and six months ended June 30, 2026 and
2025:
|
Three Months Ended June 30,
|
Six Months ended June 30,
|
|||||||||||||||
|
2026
|
2025
|
2026
|
2025
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
Stock-Based Compensation
|
||||||||||||||||
|
Research and development
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||
|
General and administrative
|
|
|
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The Company granted options to purchase 2,833,162 shares during the six month period ended June 30, 2026. The fair value of options granted during the six months ended June 30, 2026 was estimated using the Black-Scholes option
valuation model.
|
Number
of Shares
|
Weighted Average
Exercise Price
|
|||||||
|
Options outstanding at December 31, 2025
|
|
$ | ||||||
|
Granted
|
|
|||||||
|
Exercised
|
|
|||||||
|
Forfeited and expired
|
(
|
)
|
||||||
|
Options outstanding at June 30, 2026
|
|
$ |
||||||
|
Vested and expected to vest at June 30, 2026
|
|
$ | ||||||
|
Exercisable at June 30, 2026
|
|
$ | ||||||
As of June 30, 2026, the Company had approximately $6,312,925 of unamortized stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of 1.25 years.
The Company granted 800,000 performance-based restricted stock units in June 2025. All performance-based restricted stock units were unvested as of June 30, 2026 and no
15
Index
Note 8 – Income Taxes
The Company records a valuation allowance against its deferred tax
assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. In assessing the realizability of the net deferred tax assets, the Company considers all relevant positive and
negative evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the
generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. The Company expects to have a loss for 2026 and therefore there will be no current income tax expense. The Company recorded a full valuation allowance against the net deferred tax assets as of June 30,
2026 and December 31, 2025. Consequently, the Company recorded no income tax benefit due to realization uncertainties.
The Company is subject to a U.S. federal statutory income tax rate of 21
Entities are required to evaluate, measure, recognize and disclose any uncertain income tax positions taken on their
income tax returns. The Company has analyzed its tax positions and has concluded that as of June 30, 2026, there were no uncertain positions. The Company’s U.S. federal and state net operating losses have occurred since its inception and as such, tax years subject to potential tax examination could apply from that date
because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities. The Company did no no
In accordance with the State of
New Jersey’s Technology Business Tax Certificate Transfer (NOL) Program, which allows certain high technology and biotechnology companies to sell unused NOL carryforwards to other New Jersey-based corporate taxpayers, the Company sold New
Jersey NOL carryforwards, resulting in the recognition of $1.2 million of income tax benefit, net of transaction costs in the
six months ended June 30, 2025. There were no New Jersey NOL carryforwards sold during the six months ended June 30, 2026 due
to the Company having met the statutory $20 million lifetime cap on total cumulative value of NOLs sold, which makes the
Company ineligible to participate in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss (NOL) program for 2025 and beyond.
Note 9 – Commitments and Contingencies
Rent
For month-to-month arrangements not impacted by the adoption of ASC 842, rent for the three and six months ended
June 30, 2026 was $61,200 and $122,400
respectively, compared to the three and six months ended June 30, 2025 of $64,200 and $129,900 , respectively.
Exclusive License Agreement
In December 2022, the Company entered into an exclusive global license agreement with Merck KGaA, Darmstadt, Germany (“Merck KGaA”) for the tumor targeting IL 12 fused antibody drug conjugate, M9241 (the “Merck KGaA License Agreement”). Pursuant
to the Merck KGaA License Agreement, the Company agreed to make (i) development and first commercial sales milestone payments totaling up to $11
million upon the achievement of certain milestones, including the dosing of the fifth patient in a Phase 3 trial of the clinical candidate and first commercial sale of the product for a first and second indication in a major market, and (ii) up
to $105 million upon achieving certain aggregate sales levels of the product.
The Company also agreed to pay Merck KGaA a royalty of 10 % on aggregate net sales of product as specified in the Merck KGaA License Agreement on a product-by-product and country-by-country basis until the later of: (i) ten years after the first commercial sale of a product in a given country; and (ii) the expiration or invalidation of the licensed patents covering
the compound or product in such country. The royalty rate is subject to reduction in the event that a product is not covered by a valid patent claim, a biosimilar to the compound or the product comes on the market in a particular country, or if
the Company obtains a license to any intellectual property owned or controlled by a third-party which, but for such license would be infringed by making, using or selling the compound.
16
Index
Legal Proceedings
The Company is currently not a party to, and the Company’s property is not currently the subject of, any material pending legal proceedings that, if determined adversely to the Company, would individually or taken together have a material adverse
effect on the Company’s business, financial position, results of operations or cash flows. The Company may be involved, from time to time, in legal proceedings and
claims arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes that may not be predictable with assurance.
Note 10 – Venture Loan and Security Agreement
In August 2022, the Company entered into a Venture Loan and Security Agreement (the “Loan and Security Agreement”) with
Horizon Technology Finance Corporation, as a lender and collateral agent for itself and the other Lenders (in such capacity, the “Collateral Agent”), and
the other persons party thereto from time to time as lenders (“Lenders”). The Company’s indebtedness under the Loan and Security Agreement was retired and
satisfied in full with a portion of the proceeds received from the Securities Purchase Agreement, as discussed in Note 11 below.
The Company recognized zero 277,859 and $1,206,035 for the three and six months ended June 30, 2025, respectively; and zero 82,329
and $354,907 , for the three and six months ended June 30, 2025, respectively.
During the three months ended June 30, 2025, the Company recognized $1,107,005 of interest expense associated with extinguishment of debt recorded under the Loan and Security Agreement.
Note 11 – Convertible Debentures
On April 30, 2025, the Company entered into a Securities Purchase Agreement with certain third-party lenders and JGB Collateral
LLC, as collateral agent (the “Securities Purchase Agreement”). Pursuant to the Securities Purchase Agreement, the Company agreed to issue and sell (i) senior secured convertible debentures (“Debentures”) in an aggregate principal amount of $22.2 million which is convertible into shares of the Company’s common stock, according to the terms, conditions, and limitations outlined in the
Securities Purchase Agreement and (ii) warrants to purchase up to 1,000,000 shares of the Company’s common stock, for an exercise price of
$2.52 per share (the “Warrants”), subject to adjustments as set forth in the warrants, for a total purchase price of $20.0 million.
On April 30, 2026, the Company delivered a redemption notice pursuant to which it irrevocably elected to
prepay all of the outstanding principal amount under each of the Debentures, issued pursuant to that certain Securities Purchase Agreement by and among the Company, each of the buyers that are parties thereto and JGB Collateral LLC, a Delaware
limited liability company, as collateral agent, dated as of April 30, 2025, for cash. On June 15, 2026, the Company paid the applicable redemption amount, equal to 103 % of the principal amount outstanding plus all accrued and unpaid interest and all other amounts payable thereunder, and, upon such payment, each Debenture was redeemed in full and is of
no further force or effect.
For the three and six months ended June 30, 2026, the Company recognized interest expense of $623,289 and $1,636,779 . For the three
and six months ended June 30, 2026, the Company amortized $265,549 and $714,386 of the debt discount, and as of June 30, 2026, had a remaining debt discount balance of $0 .
For the three and six months ended June 30, 2025, the Company recognized interest expense of $757,257 278,862 3,778,566 .
During the three months ended June 30, 2026, the Company recognized $2,660,781 of interest expense associated with extinguishment of debt recorded under the Debentures.
17
Index
Note 12 – Promissory Note
On June 15, 2026, the Company issued a promissory note to YA II PN, Ltd. with an aggregate
principal amount of $6,000,000 and a warrant to purchase up to 2,158,274 shares of common stock of the Company, par value $0.00033
per share, at an exercise price of $1.1824 per share, subject to adjustments, for gross proceeds of $5.76 million. The promissory note bears interest at 10 % per annum and matures on June 15, 2027.
For the three and six months ended June 30, 2026, the Company recognized interest expense of $26,667 zero 1,677,500 .
Note 13 – Retirement Plan
The Company has a 401(k) defined contribution plan for the benefit of all employees and permits voluntary contributions by employees, subject to IRS-imposed limitations, which are matched by the Company. The 401(k) employer contributions
were $48,575 and $103,943
for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025 of $51,293
and $116,833 , respectively.
Note 14 – Segment Reporting
In accordance with FASB ASC Topic 280, Segment Reporting, the Company has determined that
it operates as a reportable segment, developing a growing pipeline of targeted immunotherapies
designed to overcome the limitations of current immunotherapy. The financial results of the Company’s operations are managed and reported to the Chief Executive Officer who is considered the Company’s chief operating decision maker
(CODM), on a consolidated basis.
The CODM assesses performance and allocates resources based on the Company’s consolidated statements of operations and key components and processes
of the Company’s operations are managed centrally. Segment asset information is not used by the CODM to allocate resources.
As a reportable segment
entity, the Company’s segment performance measure is net income / (loss) attributable to shareholders. Significant segment expenses, as provided to the CODM, are presented below:
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
|
2026
|
2025
|
2026 |
2025 |
|||||||||||||
|
Segment expenses
|
||||||||||||||||
|
Salaries and Benefits
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Professional fees
|
|
|
||||||||||||||
|
General administrative expenses
|
|
|
||||||||||||||
|
Clinical development expenses
|
|
|
||||||||||||||
|
Other development expenses
|
|
|
||||||||||||||
|
Total operating and segment expenses
|
$
|
|
$ | $ | $ | |||||||||||
|
Interest income
|
|
|
||||||||||||||
|
Interest expense
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
|
Benefit from income taxes
|
|
|
||||||||||||||
|
Segment and consolidated net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
18
Index
| 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 recent strategic refocus to prioritize the development of PDS0301 and to discontinue the VERSATILE-003 Phase 3 clinical trial of
PDS0101 may not achieve the anticipated benefits and involves significant risks and uncertainties;
|
| ● |
the Company’s ability to protect its intellectual 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 PDS0301 (formerly PDS01ADC);
|
| ● |
the Company’s ability to successfully secure partnership(s) for the further development of its PDS0101 program;
|
| ● |
the Company may not be able to identify, negotiate, or consummate strategic partnerships or other externally funded opportunities for the continued
development of PDS0101, and any such partnerships may not be on favorable terms;
|
| ● |
the Company may expend its limited resources to pursue PDS0301 and fail to capitalize on other product candidates or indications that may be more
profitable or for which there is a greater likelihood of success;
|
| ● |
the discontinuation of the VERSATILE-003 Phase 3 trial and the Company’s limited cash resources may further impact the Company’s ability to continue
as a going concern;
|
| ● |
the successful implementation of the Company’s research and development programs and collaborations, including any collaboration trials concerning the Company’s
PDS0301,Versamune® 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 biotechnology company focused on developing PDS0301, a tumor-targeted IL-12 immunocytokine designed to
modify the tumor microenvironment and enhance the activity and durability of anti-cancer therapies. Our current development strategy prioritizes PDS0301, including its development in colorectal cancer and evaluation in other indications.
We also develop our proprietary Versamune® platform for
treatments in oncology and Infectimune® for treatments in infectious diseases. Our most advanced Versamune® drug candidate, PDS0101, was evaluated in multiple clinical trials and we seek to further the development of PDS0101 through strategic
partnerships.
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. PDS0301, Versamune®, and Versamune® in combination with PDS0301 are being developed for
treatments in oncology and Infectimune® is being developed for treatments in infectious disease. PDS0301 is an investigational tumor
targeting IL-12 that we believe may enhance the proliferation, potency and longevity of T cells in the tumor microenvironment.
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 PDS0301 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.
In August 2026, we announced a strategic refocus to prioritize PDS0301, our tumor-targeted IL-12 immunocytokine, as our lead
development program. As part of this strategic update, we announced our plan to cease further internal investments in PDS0101, including the discontinuation of the VERSATILE-003 Phase 3 trial, and our intention to pursue strategic partnerships or other externally funded opportunities for the continued development of PDS0101.
Clinical Candidate Pipeline
IL-12 Oncology Immunocytokine Pipeline
PDS0301 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 PDS0301 works synergistically to overcome tumor immune suppression and to promote a
targeted T cell attack against cancers. As with Versamune®, PDS0301 is given by a simple subcutaneous injection. Clinical data suggests the addition of PDS0301 to Versamune® based immunotherapies may demonstrate significant disease control in
advanced cancer patients by shrinking tumors and/or prolonging life.
20
Index
PDS0301 has been designed to overcome the limitations of cytokine therapy as explained above, and based on extensive preclinical studies performed
at the NCI evaluating PDS0301 as a monotherapy and also in combinations with established standard of care treatments for cancer, we believe that PDS0301 has significant potential as a cytokine therapy. 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 PDS0301 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 PDS0301, PDS0101 and bintrafusp alfa
|
| ● |
A Phase 2 trial evaluating T-cell clonality after stereotactic body radiation therapy alone and in combination with the immunocytokine PDS0301 in localized
high and intermediate risk prostate cancer treated with androgen deprivation therapy
|
| ● |
A Phase 1/2 trial evaluating PDS0301 in combination with docetaxel in adults with metastatic castration sensitive and castration resistant prostate cancer
|
| ● |
A Phase 1/2 trial evaluating PDS0301 going forward as a monotherapy in advanced kaposi sarcoma
|
| ● |
A Phase 1/2 trial evaluating PDS0301 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 PDS0301 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 11th 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 PDS0301 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 PDS0301 dose.
|
In April 2026, we announced the publication of clinical and immunological biomarker
data from Stage 1 of a Phase 2 trial evaluating PDS0301 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 PDS0301, the ORR was 35% (7/20)
|
| ● |
24-month survival rate: Approximately 85%; in the parallel study without PDS0301, 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 PDS0301, the PFS was 8.1
months
|
We are working closely with the NCI to determine the
best pathway forward for the prioritized PDS0301 studies. In January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0301 and PDS0103 in colorectal cancer. At the time of this Quarterly
Report, we have not initiated this trial.
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 was designed to 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) were 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 received 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 was 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.
In August 2026, we announced the discontinuation of the trial.
21
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 was the objective
response rate, or ORR, at six months following initiation of treatment. There were two cohorts in the trial. Cohort 1 was for patients who have yet to be treated with
an immune checkpoint inhibitor (ICI naïve) and cohort 2 which consisted of patients who had 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®).
|
22
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)
|
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.
|
23
Index
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. 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.
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.
|
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 12/17 (71%) patients.
|
24
Index
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 was 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.
In this trial, treatment was 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 explored
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 + PDS0301 + 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 PDS0301 and PDS0103 in colorectal cancer. At the time of this Quarterly Report, we have not initiated this trial.
25
Index
Our current clinical pipeline of PDS0301 and Versamune® based therapies:
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 the potentially transformative
utility of Infectimune® 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®.
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 PDS0301. This includes advancing preclinical programs, conducting clinical trials, manufacturing PDS0101 and PDS0301 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 $17.1 million, and $17.9
million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $233.7 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and
development programs and from general and administrative costs associated with these operations.
As of June 30, 2026, we had $5.6 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 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 PDS0301 product candidate into and through clinical trials, pursue regulatory approval of our Versamune® and PDS0301 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
Comparison of the Three months June 30, 2026 and 2025
The following table summarizes the results of our operations for the three months ended June 30, 2026 and 2025:
|
Three Months Ended
June 30,
|
Increase ( Decrease)
|
|||||||||||||||
|
2026
|
2025
|
$ Amount
|
%
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Research and development expenses
|
$
|
3,266
|
$
|
4,213
|
$
|
(947
|
)
|
(22
|
)%
|
|||||||
|
General and administrative expenses
|
3,231
|
3,410
|
(179
|
)
|
(5
|
)%
|
||||||||||
|
Total operating expenses
|
6,497
|
7,623
|
(1,126
|
)
|
(15
|
)%
|
||||||||||
|
Loss from operations
|
(6,497
|
)
|
(7,623
|
)
|
1,126
|
(15
|
)%
|
|||||||||
|
Interest income (expense), net
|
(3,254
|
)
|
(1,811
|
)
|
(1,443
|
)
|
80
|
%
|
||||||||
|
Net loss and comprehensive loss
|
$
|
(9,751
|
)
|
$
|
(9,434
|
)
|
$
|
(317
|
)
|
3
|
%
|
|||||
Research and Development Expenses
Research and development (R&D) expenses decreased to $3.3 million for the three months ended June 30, 2026 from $4.2 million for the
three months ended June 30, 2025. The decrease of $0.9 million was primarily attributable to a decrease of $1.0 million in clinical trial costs, a decrease of $0.4 million in manufacturing costs, and a decrease of $0.2 million in personnel costs,
partially offset by an increase of $0.7 million in stock-based compensation expense.
General and Administrative Expenses
General and administrative expenses decreased to $3.2 million for the three months ended June 30, 2026 from $3.4 million for the three months
ended June 30, 2025. The decrease of $0.2 million was primarily attributable to a decrease in professional fees.
Comparison of the Six months June 30, 2026 and 2025
The following table summarizes the results of our operations for the six months ended June 30, 2026 and 2025:
|
Six Months Ended
June 30,
|
Increase (Decrease)
|
|||||||||||||||
|
2026
|
2025
|
$ Amount
|
%
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Research and development expenses
|
$
|
6,723
|
$
|
10,044
|
$
|
(3,321
|
)
|
(33
|
)%
|
|||||||
|
General and administrative expenses
|
6,295
|
6,685
|
(390
|
)
|
(6
|
)%
|
||||||||||
|
Total operating expenses
|
13,018
|
16,729
|
(3,711
|
)
|
(22
|
)%
|
||||||||||
|
Loss from operations
|
(13,018
|
)
|
(16,729
|
)
|
3,711
|
(22
|
)%
|
|||||||||
|
Interest income (expense), net
|
(4,082
|
)
|
(2,364
|
) |
(1,718
|
)
|
73
|
%
|
||||||||
|
Benefit from income taxes
|
-
|
1,170
|
(1,170
|
)
|
(100
|
)%
|
||||||||||
|
Net loss and comprehensive loss
|
$
|
(17,100
|
)
|
$
|
(17,923
|
)
|
$
|
823
|
(5
|
)%
|
||||||
Research and Development Expenses
Research and development expenses decreased to $6.7 million for the six months ended June 30, 2026 from $10.0 million for the six months ended
June 30, 2025. The decrease of $3.3 million was primarily attributable to a decrease of $2.1 million in clinical trial costs, a decrease of $1.2
million manufacturing and quality costs, a decrease of $0.5 million in personnel costs, partially offset by an increase of $0.5 million in stock-based compensation expense.
28
Index
General and Administrative Expenses
General and administrative expenses decreased to $6.3 million for the six months ended June 30, 2026 from $6.7 million for the six
months ended June 30, 2025. The decrease of $0.4 million was primarily
attributable to a decrease in professional fees.
Benefit from Income Taxes
Income tax benefit was zero for the six months ended June 30, 2026 and $1.2 million for the six months ended June 30, 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 continue
participation 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 and six months ended June 30, 2026, we sold 0 shares and 937,420 shares, respectively, of common stock with a net value of $0 million and $0.8 million, respectively, 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 common stock with a net value of $1.5 and $1.8 million, respectively, pursuant to the New Sales Agreement. The New Sales Agreement was terminated on May 1, 2026.
In June 2026, we entered into a Sales Agreement, or the
June 2026 Sales Agreement with Yorkville Securities, LLC and B. Riley Securities, Inc., with terms that are substantially consistent with those included in the New Sales Agreement. During the three and six months ended June 30, 2026, we
sold 0 shares and 937,420 shares, respectively, of our common stock with a net value of $0 million and $0.8 million, respectively, 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 and $1.8 million, respectively, pursuant to the New Sales Agreement. The New Sales Agreement was
terminated on May 1, 2026.
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. On April 30, 2026, the Company delivered a redemption notice
pursuant to which it irrevocably elected to prepay, for cash, all of the outstanding principal amount under each of the Debentures issued pursuant to the Securities Purchase Agreement. On June 15, 2026, the Company paid the applicable redemption
amount, equal to 103% of the principal amount outstanding plus all accrued and unpaid interest and all other amounts payable thereunder, and, upon such payment, each Debenture was redeemed in full and is of no further force or effect.
29
Index
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.
On April 30, 2026, we entered into a securities purchase agreement (the “April 2026 Securities Purchase Agreement”) with YA II PN, LTD., a
Cayman Islands exempt limited company (the “Investor”). Pursuant to the securities purchase agreement, we agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company (i) a promissory note in an aggregate principal
amount of $6,000,000 (the “Promissory Note”) and (ii) a warrant to purchase up to 2,158,274 shares of our Common Stock, par value $0.00033 per share, at an exercise price of $1.1824 per share, subject to adjustments (the “Warrant”). In addition, on
June 15, 2026, in connection with the transactions contemplated by the April 2026 Securities Purchase Agreement, we issued the Promissory Note and the Warrant to the Investor, we and the Investor entered into the Registration Rights Agreement and PDS
Operating Corporation, a Delaware corporation and wholly owned subsidiary of the Company and the Investor entered into a Guaranty Agreement.
On June 15, 2026, we entered into a Sales Agreement (the “June 2026 Sales Agreement”) with Yorkville Securities, LLC, an affiliate of
the Investor (“Yorkville Securities”), and B. Riley Securities, Inc. (“B. Riley Securities,” each of Yorkville Securities and B. Riley Securities individually an “Agent” and collectively, the “Agents”), with respect to an “at-the-market” offering
program pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our Common Stock (the “Placement Shares”) having an aggregate offering price of up to $50,000,000 through or to the Agents, as sales agents or
principals. During the three months ended June 30, 2026, the Company sold 106,153 shares of common stock for a net value of $0.10 million, pursuant to the June 2026 Sales
Agreement.
As of June 30, 2026, we had $5.6 million in cash and cash equivalents. Our primary uses of cash are to fund operating expenses, primarily
research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to
continue as a going concern within one year 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. 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.
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Index
Cash Flows
The following table shows a summary of our cash flows for each of the periods indicated (in thousands):
|
Six Months Ended
June 30,
|
||||||||
|
2026
|
2025
|
|||||||
|
Net cash used in operating activities
|
$
|
(7,164
|
)
|
$
|
(18,133
|
)
|
||
|
Net cash (used)/provided by financing activities
|
(13,952
|
)
|
8,317
|
|||||
|
Net decrease in cash and cash equivalents
|
$
|
(21,116
|
)
|
$
|
(9,816
|
)
|
||
Net Cash Used in Operating Activities
Net cash used in operating activities was $7.2 million and
$18.1 million for the six months ended June 30, 2026 and 2025, respectively. The decrease in net cash used in operating activities of $10.9 million was primarily due to a net increase of $2.0 million in the amortization of debt discount and
loss on retirement of debt, an increase in stock-based compensation expense of $0.6 million, and changes in the timing of working capital. These changes were partially offset by a decrease in net loss of $0.8 million and a decrease in the issuance of
shares in consulting agreement of $0.2 million.
Net Cash Used in Financing Activities
Net cash used in financing activities was $13.9 million for the six months ended June 30, 2026, compared to net cash provided by financing
activities of $8.3 million for the six months ended June 30, 2025. The $22.2 million change was primarily due to a decrease in proceeds from the issuance of common stock of $7.0 million, a decrease in proceeds from the issuance of warrants and
pre-funded warrants of $2.1 million, and a decrease in proceeds from the issuance of debt of $14.9 million, partially offset by a decrease in loan principal payments and loan repayments of $2.6 million and a decrease in net proceeds from the issuance
of common stock under the at-the-market offering program of $0.8 million.
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.
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.
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.
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Index
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 six months ended June 30, 2026 from those
disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
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.
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| ITEM 3: |
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
Interest Rate Risk
We are exposed to market related changes in interest rates. As of June 30, 2026, our cash equivalents consisted of bank deposits and
money market accounts. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Historically, the net impact of fluctuations in interest rates have not been material
to us.
Inflation Risk
Inflation generally affects us by increasing our cost of labor and pricing of contracts. We do not believe that inflation has had a
material effect on our business, financial condition, or results of operations during the three months ended June 30, 2026.
| ITEM 4: |
CONTROLS AND PROCEDURES
|
Evaluation of Disclosure Controls and Procedures
An evaluation was carried out, under the supervision of and with the participation of our management, including our Chief Executive
Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15 (e)) under the Securities Exchange Act of 1934, or the Exchange Act, as of the end of the period covered
by this report. Based on the evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that the information required to be disclosed by us in the reports
we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act)
identified in connection with the evaluation identified above that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| PART II. |
OTHER INFORMATION
|
| ITEM 1. |
LEGAL PROCEEDINGS
|
The information in Note 9 to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form
10-Q is incorporated herein by reference. There are no matters which constitute material pending legal proceedings to which we are a party other than those incorporated into this item by reference from Note 9 to our Condensed Consolidated Financial
Statements for the quarter ended June 30, 2026 contained in this Quarterly Report on Form 10-Q.
| ITEM 1A. |
RISK FACTORS
|
With the exception of the risk factors noted below, there have been no material changes from our risk factors as previously reported in
our Annual Report on Form 10-K for the year ended December 31, 2025. However, any investment in our business involves a high degree of risk. Before making an investment decision, you should carefully consider the information we include in this
Quarterly Report on Form 10-Q, including our unaudited interim Condensed Consolidated Financial Statements and accompanying notes, our Annual Report on Form 10-K for the year ended December 31, 2025 filed on March 30, 2026, including the risk factors
and our financial statements and related notes contained therein, and the additional information in the other reports we file with the Securities and Exchange Commission, including, without limitation, the risk factors previously disclosed in our prior
quarterly reports on Form 10-Q filed during this fiscal year. These risks may result in material harm to our business and our financial condition and results of operations. In this event, the market price of our common stock may decline and you could
lose part or all of your investment. Additional risks that we currently believe are immaterial may also impair our business operations. Our
business, financial conditions and future prospects and the trading price of our common stock could be harmed as a result of any of these risks.
33
Index
We are required to meet the Nasdaq Capital Market’s continued listing requirements and other Nasdaq rules, and if we
fail to meet such rules and requirements, we may be subject to delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell our common
stock.
We are required to meet the continued listing requirements
of the Nasdaq Capital Market and other Nasdaq rules, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price and certain other corporate governance requirements. The
continued listing standards of Nasdaq applicable to the Nasdaq Capital Market require, among other things, that the minimum price of a listed company’s stock be at or above $1.00. If the minimum bid price is below $1.00 for a period of more than 30
consecutive trading days, the listed company will fail to be in compliance with Nasdaq’s listing rules and, if the listed company does not regain compliance within an 180-day grace period, it may be subject to delisting. In order to regain
compliance, the bid price of the listed company’s common stock must close at a price of at least $1.00 per share for a minimum of 10 consecutive trading days within an 180-day grace period. In addition, in July 2026 Nasdaq approved a new rule requiring listed companies to maintain a minimum market value of listed securities (MVLS) of $5 million. If our MVLS falls below this threshold for 30 consecutive
business days, we may be subject to delisting proceedings. On July 30, 2026, we received a deficiency letter from Nasdaq notifying us that, for the last 30 consecutive business days, the closing bid price for our common stock was below the minimum
$1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). The letter also indicated that, pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we would be afforded 180 calendar days to regain
compliance with the bid price requirement. There can be no assurance that we will regain compliance with the minimum bid price requirement or, if we do so, that we will maintain compliance with the minimum bid price requirement or any other Nasdaq
listing standards.
Pursuant to the Promissory Note (as defined below), if we fail to cure the minimum bid price requirement within seventy-five (75) calendar days of receipt of the deficiency letter, or the Special Amortization Event, then commencing with the next installment date and each successive installment date
for so long as any Special Amortization Event is continuing, we will be required to pay to the Investor (as defined below) (i) the principal amount of $2,000,000 (or the outstanding principal if less than such amount), and such increased amount shall
be (x) payable in lieu of, and not in addition to, the installment principal amount that would otherwise be payable on such installment date and (y) applied against future installment principal amounts in reverse chronological order), (ii) the
payment premium in respect of such increased installment principal amount, and (iii) accrued and unpaid interest hereunder as of such installment date.
If we fail to regain compliance with the minimum bid price requirement or other Nasdaq listing standards, our common stock will be subject
to delisting. Delisting from Nasdaq could adversely affect our ability to raise additional financing through the public or private sale of equity securities, would significantly affect the ability of investors to trade our securities and would
negatively affect the value and liquidity of our common stock. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development
opportunities. Delisting from the Nasdaq Capital Market could also cause us to pursue eligibility for trading of these securities on other markets or exchanges, including the over-the-counter (OTC) BB or QB markets, or on the OTC “pink sheets.” In such
case, our stockholders’ ability to trade, or obtain quotations of the market value of our common stock would be severely limited because of lower trading volumes and transaction delays. These factors could contribute to lower prices and larger spreads
in the bid and ask prices of our securities. There can be no assurance that our securities, if delisted from the Nasdaq Capital Market in the future, would be listed on a national securities exchange, a national quotation service, the OTC markets or
the pink sheets. Delisting from the Nasdaq Capital Market would also result in negative publicity, make it more difficult for us to raise additional capital, cause us to lose eligibility to register the sale or resale of our shares on Form S-3 and the
automatic exemption from registration under state securities laws for exchange-listed securities, adversely affect the market liquidity of our securities, decrease securities analysts’ coverage of us or diminish investor, supplier and employee
confidence.
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Index
Our recent strategic refocus to
prioritize the development of PDS0301, to cease further internal investments in PDS0101 and to discontinue the VERSATILE-003 Phase 3 clinical trial may not achieve the anticipated benefits and involves significant risks and uncertainties.
In August 2026, we announced a strategic refocus to prioritize PDS0301, our tumor-targeted IL-12 immunocytokine, as our lead development
program. As part of this refocus, we ceased further internal investments in PDS0101 and discontinued the VERSATILE-003 Phase 3 clinical trial evaluating PDS0101 in
combination with pembrolizumab in HPV16-positive first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma, and we announced our intention to pursue strategic partnerships or other externally funded opportunities for the continued development of PDS0101. This strategic refocus involves significant risks, including but not limited to the following:
| ● |
the clinical data supporting PDS0301 in metastatic colorectal cancer is based on Phase 2 results, and future clinical trials, including the planned randomized Phase 2b
trial, may not replicate or confirm these results;
|
| ● |
we may not be successful in advancing PDS0301 through a randomized Phase 2b development program on the timeline or within the budget we anticipate;
|
| ● |
the reallocation of resources away from PDS0101 may result in a loss of value for our PDS0101 program if we are unable to secure a strategic partnership on favorable terms, or at all;
|
| ● |
we may have expended significant resources on the PDS0101 program, including the VERSATILE-003 trial, that will not result in any direct commercial benefit to us;
|
| ● |
our strategic refocus narrows the breadth of our clinical pipeline, which increases our dependence on the success of PDS0301;
|
| ● |
the discontinuation of the VERSATILE-003 trial may negatively affect our relationships with clinical trial investigators, trial participants, or collaborators; and
|
| ● |
our stockholders, potential investors, or potential partners may view the strategic refocus unfavorably, which could adversely affect the market price of our common stock
and our ability to raise capital.
|
We have become substantially more dependent on the success of PDS0301 and the
failure of PDS0301 could disproportionately impact the success of our business. If the anticipated benefits of this strategic refocus are not realized, our business, financial condition, results of operations, and prospects could be
materially and adversely affected.
We may not be able to identify, negotiate, or consummate strategic partnerships or other externally funded
opportunities for the continued development of PDS0101, and any such partnerships may not be on favorable terms.
As part of our strategic refocus, we intend to pursue strategic partnership or other externally funded opportunities for PDS0101.
Establishing strategic partnerships is difficult and time-consuming. Our discussions with potential partners may not lead to the establishment of partnerships on favorable terms, if at all. We face significant competition in seeking appropriate
partners, and potential partners may evaluate alternative immunotherapies for similar indications that may be available or more attractive than PDS0101. In addition, a potential partner’s evaluation of PDS0101 may be adversely affected by our decision
to discontinue the VERSATILE-003 trial.
Whether we reach a definitive agreement for a partnership will depend, among other things, upon the potential partner’s assessment of
the Versatile-002 Phase 2 clinical data generated to date, the design and results of any further clinical trials necessary for approval, the potential market for
PDS0101, the costs and complexities of completing development and commercialization, the competitive landscape, and the existence of alternative product candidates. If we are unable to establish a strategic partnership for PDS0101 on acceptable
terms, or at all, the potential value of the PDS0101 program may diminish, and we may not recoup the significant investment we have made in the program. To the extent that we enter into partnership, licensing, or other arrangements, we may have to
relinquish valuable rights to PDS0101, including future revenue streams, or grant licenses on terms that may not be favorable to us.
35
Index
We may expend our limited resources to pursue PDS0301 and fail to capitalize on other product candidates or
indications that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and managerial resources, our decision to prioritize PDS0301 as our lead development program means that
we will allocate substantially all of our development resources toward the advancement of PDS0301 in metastatic colorectal cancer and other solid tumors. As a result, we may forego or delay pursuit of opportunities with PDS0101 or other product
candidates that later prove to have greater commercial potential or a greater likelihood of success. Our resource allocation decisions may cause us to fail to timely capitalize on viable commercial products or profitable market opportunities. If we do
not accurately evaluate the commercial potential or target market for PDS0301, or if PDS0301 does not demonstrate the safety and efficacy we expect in future clinical trials, we will have further narrowed our development pipeline without achieving
meaningful clinical or commercial progress. Our spending on the PDS0301 development program may not yield any commercially viable products.
The discontinuation of the VERSATILE-003 Phase 3 trial and our limited cash resources may further impact our ability
to continue as a going concern.
As of June 30, 2026, we had $5.6 million in cash and cash equivalents, and we have concluded that substantial doubt exists about our
ability to continue as a going concern. The discontinuation of the VERSATILE-003 trial, combined with our strategic refocus on PDS0301, may increase investor uncertainty regarding our prospects and make it more difficult to obtain financing on
acceptable terms, or at all. Our ability to advance PDS0301 through its planned Phase 2b clinical trial and to maintain operations is dependent upon our ability to raise additional capital. If we are unable to raise capital or secure a strategic
partnership for PDS0101 that provides non-dilutive funding, we may be required to delay, reduce, or terminate our PDS0301 development program or potentially cease operations. Any inability to continue as a going concern would have a material adverse
effect on our stockholders, and you could lose all or part of your investment in the Company.
We have a limited operating history and have never generated any product revenue.
We have no products approved for sale. We are a clinical-stage biopharmaceutical company with a limited operating history. Our
operations to date have been limited to organizing our company and developing the Versamune® platform and related immunotherapy product candidates that incorporate the technology of our Versamune® platform. We have not yet successfully completed a
large-scale, pivotal clinical trial, obtained marketing approval, manufactured Versamune® at commercial scale, or conducted sales and marketing activities that will be necessary to successfully commercialize our Versamune® product candidates. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of
successfully developing and commercializing immunotherapies.
Our product candidates will require additional clinical development, evaluation of clinical, preclinical and manufacturing activities,
marketing approval in multiple jurisdictions, substantial investment and significant marketing efforts before we generate any revenues from product sales. We are not permitted to market or promote any of our product candidates before we receive
marketing approval from the FDA and comparable foreign regulatory authorities, and we may never receive such marketing approvals.
Our ability to generate revenue and achieve and maintain profitability will depend upon our ability to successfully complete the
development of our oncology products and to obtain the necessary regulatory approvals. We have never generated any product revenue and have no immunotherapy
candidate in late-stage clinical development or approved for commercial sale.
36
Index
Even if we receive regulatory approval for sale of PDS0301,
our Versamune® products or Infectimune® products, we do not know when we
will begin to generate revenue from PDS0301 or other products, if at all. Our ability to generate revenue depends on a number of factors, including our ability to:
| ● |
set and obtain an acceptable price for PDS0301 or Versamune® products, and obtain coverage and adequate reimbursement from third-party payors;
|
| ● |
establish sales, marketing, manufacturing and distribution systems;
|
| ● |
add operational, financial and management information systems and personnel, including personnel to support our clinical, manufacturing and planned future clinical
development and commercialization efforts and operations as a public company;
|
| ● |
develop manufacturing capabilities for bulk materials and manufacture commercial quantities of PDS0301 or Versamune® products at acceptable cost levels;
|
| ● |
achieve broad market acceptance of PDS0301 and other Versamune® products, Versamune® in combination with PDS0301 or Infectimune® based-products in the medical community and with third-party payors and consumers;
|
| ● |
attract and retain an experienced management and advisory team;
|
| ● |
launch commercial sales of PDS0301, Versamune® products, Versamune®
in combination with PDS0301 and other oncology products, and Infectimune® based-products, whether alone or in collaboration with others; and
|
| ● |
maintain, expand and protect our intellectual property portfolio.
|
Because of the numerous risks and uncertainties associated with immunotherapy development and manufacturing, we are unable to predict
the timing or amount of increased development expenses, or when we will be able to achieve or maintain profitability, if at all. Our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or FDA, or
comparable non-U.S. regulatory authorities, to perform studies or clinical trials in addition to those we currently anticipate. Even if PDS0301 is approved for commercial sale, we anticipate incurring significant costs associated with the commercial
launch of and the related commercial-scale manufacturing requirements for PDS0301, Versamune® or Infectimune® products. If we cannot successfully execute on any of the factors listed above, our business may not succeed, and your investment will be adversely affected.
We have incurred significant losses since our inception and expect to continue to incur significant losses for the
foreseeable future and may never achieve or maintain profitability.
We have never generated any product revenues and expect to continue to incur substantial and increasing losses as we continue to develop
PDS0301, Versamune® products, Versamune® in combination with PDS0301 and
Infectimune® products. None of our products have been approved for marketing in the United States and may never receive such approval. As a result, we are uncertain when or if we will achieve profitability and, if so, whether we will be able to
sustain it. Our ability to generate revenue and achieve profitability is dependent on our ability to complete development, obtain necessary regulatory approvals, and have our products manufactured and successfully marketed. We cannot assure you that
we will be profitable even if we successfully commercialize PDS0301, Versamune® or
Infectimune® based products. If we successfully obtain regulatory approval to market any product, our revenues will be dependent, in part, upon the size of the
markets in the territories for which regulatory approval is received, the number of competitors in such markets for the approved indication, and the price at which we can offer our products. If the indication approved by regulatory authorities is
narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of our products, even if approved. Even if we do achieve profitability, we
may not be able to sustain or increase profitability on a quarterly or annual basis. If we fail to become and remain profitable the market price of our common stock and our ability to raise capital and continue operations will be adversely affected.
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Index
We expect research and development expenses to increase significantly for PDS0301 if we initiate the planned Phase 2b trial. In addition, even if we obtain regulatory approval, significant sales and marketing expenses will be required to commercialize our products. As a result, we expect to continue
to incur significant and increasing operating losses and negative cash flows for the foreseeable future. These losses have had and will continue to have an adverse effect on our financial position and working capital. As of December 31, 2025 and 2024,
we had an accumulated deficit of $216.6 and $182.1 million, respectively.
We are dependent on the success of our
PDS0301, Versamune® and Infectimune® products, which are still in clinical development, and if our PDS0301, Versamune® and
Infectimune® products do not receive regulatory approval or are not successfully commercialized, our business may be harmed.
PDS0301 is in mid clinical development, and as a consequence, it is too early to determine whether our products will ever be approved for
commercial sale or be marketable. We expect that a substantial portion of our efforts and expenditures over the next few years will be devoted to PDS0301. Accordingly, our business currently depends heavily on the successful development, regulatory
approval and commercialization of PDS0301. PDS0301 may not receive regulatory approval or be successfully commercialized even if regulatory approval is received. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution
of PDS0301 is and will remain subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries that each have differing regulations. We are not permitted to market PDS0301 in the United States until
it receives approval of a biologics license application, or BLA, from the FDA, or in any foreign countries until it receives the requisite approval from such countries. To date, we have only completed Phase 2 clinical trials for certain applications of
PDS0301. As a result, we have not submitted a BLA to the FDA or comparable applications to other regulatory authorities and do not expect to be in a position to do so for the foreseeable future. Obtaining approval of a BLA is an extensive, lengthy,
expensive and inherently uncertain process, and the FDA may delay, limit or deny approval of PDS0301 for many reasons, including:
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we may not be able to demonstrate that PDS0301 is safe and effective to the satisfaction of the FDA;
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the FDA may not agree that the completed Phase 2 clinical trials of PDS0301 satisfy the FDA’s requirements and may require us to conduct additional testing;
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the results of our future clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;
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the FDA may disagree with the number, design, size, conduct or implementation of one or more of our clinical trials;
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the contract research organizations, or CROs, that we retain to conduct clinical trials may take actions outside of our control that materially and adversely impact our
clinical trials;
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the FDA may not find the data from our preclinical studies and clinical trials sufficient to demonstrate that the clinical and other benefits of PDS0301 outweigh the
safety risks;
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the FDA may disagree with our interpretation of data from our preclinical studies and clinical trials;
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the FDA may not accept data generated at our clinical trial sites;
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if our BLA is reviewed by an advisory committee, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may
recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;
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the FDA may require development of a risk evaluation and mitigation strategy, or REMS, as a condition of approval;
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the FDA may identify deficiencies in our manufacturing processes or facilities; or
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the FDA may change its approval policies or adopt new regulations.
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Index
We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not
be able to complete the development and commercialization of PDS0301, Versamune®
and Infectimune® based products.
We expect to spend substantial amounts to complete the development of, seek regulatory approvals for and commercialize PDS0301. Even with
our current cash reserves, we will require substantial additional capital to complete the development and potential commercialization of PDS0301 and the development of other Versamune® and Infectimune® based products. If we are unable to raise capital
or find appropriate partnering or licensing collaborations or other nondilutive financing, when needed or on acceptable terms, if at all, we could be forced to delay, reduce or eliminate one or more of our development programs or any future
commercialization efforts. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our development efforts.
Our estimate as to what we will be able to accomplish is based on assumptions that may prove to be inaccurate, and we could exhaust our
available capital resources sooner than is currently expected. Because the length of time and activities associated with successful development of PDS0301 is highly uncertain, we are unable to estimate the actual funds we will require for development
and any approved marketing and commercialization activities. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:
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the initiation, progress, timing, costs and results of our planned clinical trials;
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the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;
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the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
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the cost of defending potential intellectual property disputes, including any patent infringement actions brought by third parties against us now or in the future;
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the effect of competing technological and market developments;
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the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize PDS0301 on our own; and
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the initiation, progress, timing and results of the commercialization of PDS0301, if approved, for commercial sale.
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Additional funding may not be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts
or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of PDS0301 or potentially discontinue operations.
Raising additional funds by issuing securities may cause dilution to existing stockholders and raising funds through
lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.
We expect our expenses to increase in connection with our planned operations. Although we believe we will reduce expenses in the near term from historical levels, such expenses will begin to increase as the planned Phase 2 PDS0301 clinical trial is initiated. Until such time, if ever, as we can
generate substantial revenues from the sale of drugs, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements. To the extent that we raise
additional capital through the sale of equity or convertible debt securities, ownership interests in our securities may be diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that
could adversely affect the rights of our common stockholders. In addition, debt financing, if available, would result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific
actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business. In addition, securing financing could require a
substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product
candidates.
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Index
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third
parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or Versamune® products or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through
equity or debt financings when needed, or through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties on acceptable terms, we may be required to delay, limit, reduce or terminate our PDS0301
development or future commercialization efforts or grant rights to develop and market Versamune® and Infectimune® products that we would otherwise develop and market.
Our operating activities may be restricted as a result of covenants related to the outstanding indebtedness issued
pursuant to the transactions contemplated by that certain securities purchase agreement with YA II PN, LTD, and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our
business.
On April 30, 2026, the Company entered into a securities purchase agreement, or the April 2026 Securities Purchase Agreement, with YA II
PN, LTD., a Cayman Islands exempt limited company, or the Investor. Pursuant to the April 2026 Securities Purchase Agreement, the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company (i) a promissory
note, or the Promissory Note, in an aggregate principal amount of $6,000,000, and (ii) a warrant to purchase up to 2,158,274 shares of common stock of the Company, par value $0.00033 per share, at an exercise price of $1.1824 per share, subject to
adjustments.
Additionally, until the Promissory Note has been repaid in full, without the prior written consent of the Investor, we shall not, and
shall not permit any of our subsidiaries to, directly or indirectly (A) enter into, create, incur, assume, guarantee or suffer to exist any indebtedness with customary exceptions for Permitted Indebtedness (as defined in the April 2026 Purchase
Agreement), and (B) enter into, create, incur, assume or suffer to exist any lien on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom with customary exceptions
for Permitted Liens (as defined in the April 2026 Purchase Agreement).
In addition, for as long as the Promissory Note remains outstanding, we are generally restricted from entering into any agreement,
arrangement or transaction in or of which the terms thereof would materially restrict, materially delay, conflict with or materially impair the ability of the Company to perform its obligations under the Promissory Note or amending any material term of
its organizational documents so as to adversely affect any rights of the Investor.
The Promissory Note also sets forth certain customary events of default after which the Promissory Note may be declared immediately due
and payable, including certain types of bankruptcy or insolvency events of default involving the Company and its significant subsidiaries.
A breach of any of the covenants under the Promissory Note could result in a default under the Promissory Note. Upon the occurrence of an
event of default under the Promissory Note, the Investor could elect to declare all amounts outstanding, if any, to be immediately due and payable.
If we fail to obtain or maintain adequate
coverage and reimbursement for PDS0301, our
ability to generate revenue could be limited.
The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford
expensive treatments. Sales of any of PDS0301 that receive marketing approval will depend substantially, both in the United States and internationally, on the extent to which the costs of PDS0301 will be paid by health maintenance, managed care,
pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only on a
limited basis, we may not be able to successfully commercialize PDS0301. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain adequate pricing that will allow it to realize a
sufficient return on our investment.
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Index
Outside the United States, international operations are generally subject to extensive governmental price controls and other market
regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada and other countries may cause us to price PDS0301 on less favorable terms than we currently anticipate. In many countries, particularly the countries
of the European Union, the prices of medical products are subject to varying price control mechanisms as part of national health systems. In these countries, pricing negotiations with governmental authorities can take considerable time after the
receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of PDS0301 to other available therapies. In general, the
prices of products under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for products, but monitor and control company profits. Additional foreign price controls or other changes
in pricing regulation could restrict the amount that we are able to charge for PDS0301. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to
generate commercially reasonable revenues and profits.
Moreover, increasing efforts by governmental and third-party payors, in the United States and internationally, to cap or reduce healthcare
costs may cause such organizations to limit both coverage and level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for PDS0301. We expect to experience pricing pressures in connection with
the sale of PDS0301 due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and
surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products into the healthcare market.
The IRA, was recently signed into law by President Biden, which makes significant changes to how drugs are covered and paid for under the
Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, and
government price-setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028. We have evaluated, and will continue to evaluate, the effect of the IRA on our business. At this time, we do not expect the IRA to
have a material effect on our financial position.
Throughout 2025, the U.S. federal government pursued multiple initiatives aimed at tying U.S. drug prices to those paid in certain other
developed countries through a “Most‑Favored‑Nation”, or MFN, pricing framework. These actions included a 2025 Executive Order entitled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” in which CMS was instructed to create
plans to impose MFN pricing on drug manufacturers. Following the Executive Order, CMS advanced three MFN-based payment models through the Center for Medicare and Medicaid Innovation : the “Global Benchmark for Efficient Drug Pricing”, which would
implement a new, mandatory drug rebate program tied to MFN pricing for select drugs in Medicare Part B and is proposed to go into effect on October 1, 2026; “Guarding U.S. Medicare Against Rising Drug Costs”, which would implement a similar mandatory
drug rebate program for select drugs in Medicare Part D and is proposed to go into effect on January 1, 2027; and “GENErating cost Reductions for U.S. Medicaid”, launched in January 2026, under which manufacturers who choose to participate in the model
would pay MFN-based supplemental rebates under the Medicaid program in exchange for standardized coverage criteria in participating states. These models are likely to face legal and operational challenges, and the implementation of these models remains
uncertain. In parallel to these CMS initiatives, several major pharmaceutical manufacturers have entered into voluntary agreements with the U.S. federal government to provide discounted prices aligned to MFN prices on certain of the manufacturers’
drugs to the Medicaid program and direct to patients.
We will need to expand our organization and may experience difficulties in doing so which could disrupt operations.
Our future financial performance and our ability to commercialize PDS0301 and compete effectively will depend, in part, on our ability
to effectively manage any future growth. We may have operational difficulties in connection with identifying, hiring and integrating new personnel. Expanding our
organization could require significant capital expenditures which we may not be able to sustain and may divert financial resources from other projects, such as the development of PDS0301. If we are unable to effectively expand our organization, we may not be able to implement our business strategy.
Many of the other pharmaceutical companies that we compete against for qualified personnel and consultants have greater financial and
other resources, different risk profiles and a longer history in the industry than us. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality
candidates and consultants than what it has to offer. If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can select and develop PDS0301 and our business will be limited.
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Index
Our business and operations would suffer, and could be negatively affected, in the event of system failures or
cyberattacks.
Our computer systems and those of our service providers, including our CROs, are vulnerable to damage from computer viruses, unauthorized
access, natural disasters, terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in our or their operations, it could result in a material disruption of our development programs. For
example, the loss of preclinical or clinical trial data from completed, ongoing or planned trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any
disruption or security breach were to result in a loss of or damage to data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of PDS0301 could be
delayed.
A cyberattack or similar incident could occur and result in information theft, data corruption, operational disruption, damage to our
reputation or financial loss. Our industry has become increasingly dependent on digital technologies to conduct certain development and financial activities. Our technologies, systems, networks, or other proprietary information, and those of our
vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other
information, or could otherwise lead to the disruption of our business operations. Cyberattacks are becoming more sophisticated and certain cyber incidents, such as surveillance, may remain undetected for an extended period and could lead to
disruptions in critical systems or the unauthorized release of confidential or otherwise protected information. These events could lead to financial loss from remedial actions, loss of business, disruption of operations, damage to our reputation or
potential liability. Our systems and insurance coverage for protecting against cybersecurity risks may not be sufficient. Further, as cyberattacks continue to evolve, we may be required to expend significant additional resources to continue to modify
or enhance our protective measures or to investigate and remediate any vulnerability to cyberattacks.
Clinical trials are very expensive, time-consuming, difficult to design and implement and involve an uncertain
outcome, and if they fail to demonstrate safety and efficacy to the satisfaction of the FDA, or similar regulatory authorities, we will be unable to commercialize Versamune®, PDS0301 and Infectimune® based products.
PDS0301 is still in clinical development and will require additional clinical testing before we are prepared to submit a BLA for
regulatory approval for any indication or for any other treatment regime. We cannot predict with any certainty if or when we might submit a BLA for regulatory approval for PDS0301 or Versamune® based products or whether any such BLAs will be approved by the FDA. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.
For instance, the FDA may not agree with our proposed endpoints for any clinical trial we propose, which may delay the commencement of our clinical trials. The clinical trial process is also time-consuming. We estimate that the clinical trials we
need to conduct to be in a position to submit BLAs for PDS0301 will take several years to complete. We cannot predict the timeline for review of submissions to any regulatory authorities or when any of our product candidates will receive marketing
approval, if at all. The timeline for regulatory approval can be affected by a variety of factors, including, budget and funding levels, agency staffing, and statutory, regulatory and policy changes.
Furthermore, failure can occur at any stage of the trials, and we could encounter problems that cause us to abandon or repeat clinical
trials. In later stages of clinical trials, PDS0301 may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials, and the results of current clinical trials of PDS0301
therefore may not be predictive of the results of our continued or planned Phase 2 and 3 trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse
safety profiles, notwithstanding promising results in earlier stages of clinical trials.
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Index
Moreover, preclinical and clinical data are often susceptible to multiple interpretations and analyses. Many companies that have believed
their immunotherapies performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. Success in preclinical testing and early clinical trials does not ensure that later
clinical trials, which involve many more subjects and different indications than we have studied in Phase 2 clinical trials to date, and the results of later clinical trials may not replicate the results of prior clinical trials and preclinical
testing. In particular, the small number of patients in our planned early clinical trials may make the results of these trials less predictive of the outcome of later clinical trials.
Product development costs will also increase if we experience delays in testing or in receiving marketing approvals. We do not know
whether any clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize
PDS0301, could allow our competitors to bring products to market before we do, and could impair our ability to successfully commercialize PDS0301, any of which may harm our business and results of operations.
Enrollment and retention of subjects in clinical trials is an expensive and time-consuming process and could be made
more difficult or rendered impossible by multiple factors outside our control.
We may encounter delays in enrolling, or be unable to enroll, a sufficient number of participants to complete any of our clinical trials.
Once enrolled, we may be unable to retain a sufficient number of participants to complete any of our trials. Late-stage clinical trials of PDS0301 or other agents may require the enrollment and retention of large numbers of subjects. Subject enrollment
and retention in clinical trials depends on many factors, including the size of the subject population, the nature of the trial protocol, the existing body of safety and efficacy data with respect to the study drug, the number and nature of competing
treatments and ongoing clinical trials of competing drugs for the same indication, patients’ and clinicians’ perceived risks and benefits of the product candidate under study the proximity of subjects to clinical sites and the eligibility criteria for
the study.
Furthermore, any negative results we may report in clinical trials of PDS0301 may make it difficult or impossible to recruit and retain
participants in other clinical trials of PDS0301. Delays or failures in planned subject enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop PDS0301, or could render
further development impractical. In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will be
limited in our ability to compel their actual performance in compliance with applicable regulations. Enforcement actions brought against these third parties may cause further delays and expenses related to our clinical development programs.
Our inability to enroll and retain a sufficient number of patients for our clinical trials would result in significant delays or may
require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, which would cause the value of our company to decline and limit our ability to
obtain additional financing.
We face substantial competition in the development and commercialization of cancer therapies, including therapies that may compete directly with PDS0301 or reduce the
need for therapies designed to modify the tumor microenvironment.
The biotechnology and pharmaceutical industries are highly competitive and subject to rapid and significant technological change. We
face competition from pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations, many of which have substantially greater financial, technical, manufacturing, clinical
development, regulatory and commercial resources than we do.
Our current development strategy prioritizes PDS0301, our investigational tumor-targeted interleukin-12 (IL-12) immunocytokine. PDS0301
is designed to deliver IL-12 preferentially to the tumor microenvironment and thereby enhance anti-tumor immune activity while limiting systemic exposure. We face, and expect to continue to face, competition from companies developing other approaches
intended to improve the therapeutic index of IL-12 and other potent cytokines, including tumor-targeted cytokines, conditionally activated cytokines, engineered cytokines, cytokine fusion proteins, intratumorally administered agents and other
approaches designed to localize or regulate cytokine activity.
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Index
PDS0301 may also compete with a substantially broader and rapidly evolving range of oncology therapies. These include immune checkpoint
inhibitors, antibody-drug conjugates, bispecific and multispecific antibodies, RAS and KRAS pathway inhibitors, radiopharmaceuticals, cell therapies and other targeted and immune-based therapies. Many of these therapeutic classes are advancing
rapidly, and new agents and combinations may become standards of care in indications in which we may seek to develop PDS0301.
Our strategy contemplates the potential development of PDS0301 in combination with other cancer therapies. Accordingly, changes in
standards of care may both create potential development opportunities and present competitive risks. New therapies or combinations may demonstrate greater efficacy, improved durability, greater convenience, lower toxicity or lower cost than treatment
approaches incorporating PDS0301. In addition, improvements in existing or emerging therapies could reduce the clinical need for an additional agent intended to modify the tumor microenvironment or otherwise limit the patient populations for which
PDS0301 could ultimately be developed.
The competitive landscape for colorectal cancer, prostate cancer and other solid tumors in which we may evaluate PDS0301 is particularly
dynamic. Numerous companies are developing new targeted agents, bispecific antibodies, antibody-drug conjugates and other treatment modalities, including therapies directed at molecularly defined patient populations. Because the standards of care in
these indications may change substantially during the time required to complete clinical development of PDS0301, the clinical development strategy, potential combination partners, patient populations and regulatory pathways that appear attractive
today may become less attractive or commercially viable in the future.
Some of our competitors have greater experience conducting large and complex clinical trials, obtaining regulatory approvals,
manufacturing biologic products and commercializing oncology therapies. Competitors may also obtain regulatory approval for their product candidates before we obtain approval for PDS0301, develop products that are more effective or better tolerated,
establish intellectual property positions that limit our ability to develop or commercialize our product candidates, or enter into strategic collaborations with third parties that could otherwise be potential development or commercialization partners
for us.
Our ability to compete successfully will depend on numerous factors, including the safety, efficacy and durability of PDS0301; our
ability to demonstrate clinical benefit in appropriately designed trials; our ability to identify appropriate indications and combination strategies; the timing and scope of regulatory approvals, if any; our ability to obtain and maintain
intellectual property protection; our ability to secure sufficient capital and strategic partnerships; and the commercial acceptance of PDS0301 if approved. If competing therapies are approved more rapidly, demonstrate superior clinical outcomes or
safety, become more widely adopted, or otherwise alter the applicable standard of care, our ability to successfully develop, obtain regulatory approval for or commercialize PDS0301 could be materially and adversely affected.
Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of
capital for investment in these industries. Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, drugs that are more effective or less costly than PDS0301 or Versamune® and Infectimune® based products.
We will face competition from other drugs currently approved or that will be approved in the future for the treatment of the other cancers
and infectious diseases we are currently targeting. Therefore, our ability to compete successfully will depend largely on our ability to:
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develop and commercialize immunotherapies that are superior to other alternatives in the market;
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demonstrate through our clinical trials that PDS0301 is differentiated from existing and future therapies;
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attract qualified scientific, immunotherapy development and commercial personnel;
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obtain additional patent or other proprietary protection for PDS0301 or
Versamune® and Infectimune®-based products;
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obtain required regulatory approvals;
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obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third-party payors; and
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successfully develop and commercialize, independently or with collaborators, new applications for PDS0301 or immunotherapies.
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The availability of our competitors’ immunotherapies and other treatments could limit the demand, and the price we are able to charge, for
PDS0301. The inability to compete with existing or subsequently introduced immunotherapies and other treatments would have an adverse impact on our business, financial condition and prospects.
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Index
Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to license novel
compounds that could make PDS0301 less competitive. In addition, any new immunotherapy that competes with an approved treatment must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price
competition and to be commercially successful. Accordingly, our competitors may succeed in obtaining patent protection, discovering, developing, receiving the FDA’s approval for or commercializing medicines before we do, which would have an adverse
impact on our business and results of operations.
PDS0301 may cause adverse effects or have other properties that could delay or prevent its regulatory approval or
limit the scope of any approved label or market acceptance.
Adverse events caused by PDS0301 could cause reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or
halt clinical trials and could result in the denial of regulatory approval. If clinical trials for PDS0301 report an unacceptable frequency or severity of adverse events, our ability to obtain regulatory approval for PDS0301 may be negatively impacted.
Furthermore, if PDS0301 is approved and then causes serious or unexpected side effects, a number of potentially significant negative
consequences could result, including:
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regulatory authorities may withdraw their approval of PDS0301 or impose restrictions on its distribution or other risk management measures;
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regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;
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we may be required to change the way PDS0301 is administered or to conduct additional clinical trials;
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we could be sued and held liable for injuries sustained by patients;
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we could elect to discontinue the sale of PDS0301;
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our entire Versamune® and Infectimune®-based pipeline could be then put at risk; and
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our reputation may suffer.
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Any of these events could prevent us from achieving or maintaining market acceptance of PDS0301 and could substantially increase the costs
of commercialization.
In addition, if any of our product candidates are associated with adverse events or undesirable side effects or have properties that are
unexpected, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. We, or any
future collaborators, may abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a
risk-benefit perspective. Drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, results of
operations, financial condition and prospects significantly.
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able
to commercialize, or will be delayed in commercializing, PDS0301, and our ability to generate revenue will be impaired.
PDS0301 and the activities associated with its development and commercialization, including their design, testing, manufacture, safety,
efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries.
Failure to obtain marketing approval for PDS0301 will prevent us from commercializing our products. We have not received approval to market PDS0301 from regulatory authorities in any jurisdiction. We have only limited experience in filing and
supporting the applications necessary to gain marketing approvals and expect to rely on contract research organizations to assist us in this process. Securing regulatory approval requires the submission of extensive preclinical and clinical data and
supporting information to the various regulatory authorities for each therapeutic indication to establish the safety and efficacy of PDS0301. Securing regulatory approval also requires the submission of information about the product manufacturing
process, and inspection of manufacturing facilities by, the relevant regulatory authority. PDS0301 may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics
that may preclude it from obtaining marketing approval or prevent or limit commercial use.
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Index
The process of obtaining marketing approvals, both in the United States and elsewhere, is expensive, may take many years and can vary
substantially based upon a variety of factors. We cannot assure you that we will ever obtain any marketing approvals in any jurisdiction. Changes in marketing approval policies during the development period, changes in or the enactment of additional
statutes or regulations or changes in regulatory review for each submitted product application may cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion in the
approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical or other studies, and clinical trials. In addition, varying interpretations of the data obtained from
preclinical testing and clinical trials could delay, limit or prevent marketing approval of PDS0301. Additionally, any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the
approved product not commercially viable.
We rely, and intend to continue to rely, on third parties to conduct our clinical trials and perform some of our
research and preclinical studies. If these third parties do not satisfactorily carry out their contractual duties, fail to comply with applicable regulatory requirements or do not meet expected deadlines, our development programs may be delayed or
subject to increased costs or we may be unable to obtain regulatory approval, each of which may have an adverse effect on our business, financial condition, results of operations and prospects.
There is no guarantee that any CROs, clinical trial investigators or other third parties on which we rely will devote adequate time and
resources to our development activities or perform as contractually required or in accordance with applicable laws and regulations. If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory
requirements, otherwise perform in a substandard manner, or terminate their engagements with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated. If any of our clinical
trial sites terminate for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trial unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or
impossible. In addition, certain of our scientific advisors or consultants who receive compensation from us are clinical trial investigators for our clinical trial. Although we believe our existing relationships are within the FDA’s guidelines, if
these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the
applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any marketing application we submit by the FDA. Any such delay or rejection could prevent
us from commercializing PDS0301 or any other product candidates.
Even if we obtain FDA approval in the United States, we may never obtain approval for or commercialize PDS0301 in any
other jurisdiction, which would limit our ability to realize each product’s full market potential.
In order to market PDS0301 in a particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on
a country-by-country basis regarding safety and efficacy. Approval by the FDA in the United States does not ensure approval by regulatory authorities in other countries or jurisdictions.
In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory
approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional testing and validation and additional administrative review periods. Seeking foreign regulatory
approval could result in difficulties and costs for us and require additional preclinical studies or clinical trials that could be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the
introduction of PDS0301 in those countries. PDS0301 is not approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with
regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced.
46
Index
Even if we obtain regulatory approval, we will still face extensive ongoing regulatory requirements, and PDS0301 and
other candidates may face future development and regulatory difficulties.
Marketing of PDS0301, if approved, along with the manufacturing processes, post- approval clinical data, labeling, packaging,
distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for PDS0301, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and other regulatory
authorities. These requirements include submissions of safety, efficacy and other post-marketing information and reports, establishment of registration and drug listing requirements, continued compliance with current Good Manufacturing Practice, or
cGMP, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and current Good Clinical
Practice, or cGCP requirements for any clinical trials that we conduct post-approval. Even if marketing approval of PDS0301 is granted, the approval may be subject to limitations on the indicated uses for which PDS0301 may be marketed or to the
conditions of approval. If PDS0301 receives marketing approval, an accompanying label may limit the approved use of the product(s), which could limit sales.
We may agree to or the FDA may impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the
safety and/or efficacy of PDS0301. The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA
imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we promote or otherwise market PDS0301 for indications other than those for which it is approved, we may be subject to certain enforcement actions.
Violations of the Federal Food, Drug, and Cosmetic Act relating to the promotion of prescription biopharmaceutical products may lead to FDA enforcement actions and investigations alleging violations of federal and state health care fraud and abuse
laws, as well as state consumer protection laws.
In addition, later discovery of previously unknown adverse events or other problems with PDS0301, manufacturers or manufacturing
processes, or failure to comply with regulatory requirements, may yield various results, including:
| ● |
restrictions on manufacturing PDS0301;
|
| ● |
restrictions on the labeling or marketing of PDS0301;
|
| ● |
restrictions on distribution or use of PDS0301;
|
| ● |
requirements to conduct post-marketing studies or clinical trials;
|
| ● |
suspension of any of our ongoing clinical trials;
|
| ● |
warning letters;
|
| ● |
withdrawal of PDS0301 from the market;
|
| ● |
refusal to approve pending applications or supplements to approved applications that we submit;
|
| ● |
recalls of PDS0301;
|
| ● |
fines, restitution or disgorgement of profits or revenues;
|
| ● |
suspension or withdrawal of marketing approvals;
|
| ● |
refusal to permit the import or export of PDS0301;
|
| ● |
seizures of PDS0301; or
|
| ● |
injunctions or the imposition of civil or criminal penalties.
|
47
Index
Even if PDS0301 receives licensure, it may fail to achieve market acceptance by physicians, patients, third-party
payors or others in the medical community necessary for commercial success.
If PDS0301 receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party
payors and others in the medical community. If PDS0301 does not achieve an adequate level of acceptance, we may not generate significant revenues and become profitable. The degree of market acceptance, if approved for commercial sale, will depend on a
number of factors, including but not limited to:
| ● |
the efficacy and potential advantages compared to alternative treatments;
|
| ● |
effectiveness of sales and marketing efforts;
|
| ● |
the cost of treatment in relation to alternative treatments;
|
| ● |
our ability to offer PDS0301 for sale at competitive prices;
|
| ● |
the convenience and ease of administration compared to alternative treatments;
|
| ● |
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
|
| ● |
the willingness of the medical community to offer customers PDS0301 in addition to or in the place of other immunotherapies;
|
| ● |
the strength of marketing and distribution support;
|
| ● |
the availability of third-party coverage and adequate reimbursement;
|
| ● |
whether the product is designated under physician and other provided treatment guidelines as a first, second, or third line therapy;
|
| ● |
the prevalence and severity of any side effects; and
|
| ● |
any restrictions on the use of PDS0301 together with other medications.
|
Because we expect sales of PDS0301, if approved, to generate substantially all of our revenues for the foreseeable future, the failure of
PDS0301 to achieve market acceptance would harm our business and could require us to seek additional financing sooner than we otherwise plan.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on
product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and managerial resources, we are initially developing our product candidates PDS0301 and the other
Versamune® and Infectimune® based products. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may
cause us to fail to timely capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially
viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements
in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
48
Index
Product liability lawsuits against us could cause us to incur substantial liabilities and could limit the
commercialization of PDS0301.
We face an inherent risk of product liability exposure related to the testing of PDS0301 in human clinical trials and will face an even
greater risk if we commercially sell any products that we may develop after approval. Regardless of merit or eventual outcome, liability claims may result in:
| ● |
decreased demand for PDS0301 or other immunotherapies that we may develop;
|
| ● |
injury to our reputation and significant negative media attention;
|
| ● |
withdrawal of clinical trial participants;
|
| ● |
significant costs to defend any related litigation;
|
| ● |
substantial monetary awards to trial subjects or patients;
|
| ● |
loss of revenue; and
|
| ● |
the inability to commercialize any products we may develop.
|
If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration
with third parties, we may not be successful in commercializing PDS0301 and other product candidates, if approved.
We do not have any infrastructure for the sales, marketing or distribution of PDS0301 or other product candidates, and the cost of
establishing and maintaining such an organization may exceed the cost-effectiveness of doing so. In order to market PDS0301 or other product candidates, we must build our sales, distribution, marketing, managerial and other non-technical capabilities
or make arrangements with third parties to perform these services. To achieve commercial success for PDS0301 or other product candidates, we will need either our own, or a third party’s, sales and marketing organization. There are significant expenses
and risks involved with creating teams for, or contracting for, sales, marketing and distribution capabilities. Any failure or delay in the development of our sales, marketing and distribution capabilities, either internally or in collaboration with
third parties, could delay the launch of PDS0301 or other product candidates, which would adversely affect commercialization.
We may be competing with many companies that currently have extensive and well-funded marketing and sales operations. Without an internal
team or the support of a third-party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.
49
Index
If we obtain approval to commercialize
PDS0301 or other product candidates outside
of the United States, a variety of risks associated with international operations could harm our business.
If PDS0301 or other product candidates is approved for commercialization, we may enter into agreements with third parties to market them
in certain jurisdictions outside the United States. We expect that we will be subject to additional risks related to international operations or entering into international business relationships, including:
| ● |
different regulatory requirements for drug approvals and rules governing drug commercialization in foreign countries;
|
| ● |
reduced protection for intellectual property rights;
|
| ● |
unexpected changes in tariffs, trade barriers and regulatory requirements;
|
| ● |
economic weakness, including inflation, or political instability in particular foreign economies and markets;
|
| ● |
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
|
| ● |
foreign reimbursement, pricing and insurance regimes;
|
| ● |
foreign taxes;
|
| ● |
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another
country;
|
| ● |
workforce uncertainty in countries where labor unrest is more common than in the United States;
|
| ● |
potential noncompliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010 and similar anti-bribery and anticorruption laws in other jurisdictions;
|
| ● |
shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
|
| ● |
business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
|
We have no prior experience in these areas. In addition, there are complex regulatory, tax, labor and other legal requirements imposed by
both the European Union and many of the individual countries in Europe with which we will need to comply.
Recently enacted and future healthcare legislation, regulations, and policy initiatives may increase the difficulty
and cost for us to obtain marketing approval of and commercialize PDS0301 or other product candidates and affect the prices we may obtain and our profitability.
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes
regarding the healthcare system that could, among other things, prevent or delay marketing approval of PDS0301 and our other product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell PDS0301 and other
product candidates.
For example, in March 2010, the Affordable Care Act, or ACA, was enacted to broaden access to health insurance, reduce or constrain the
growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without
specifically ruling on the constitutionality of the Act. Prior to the Supreme Court’s decision, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining
health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining
Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how other healthcare reform
measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the ACA will impact health care laws and regulations or our business.
50
Index
As another example, the Drug Supply Chain Security Act imposes obligations on manufacturers of prescription biopharmaceuticals in finished
dosage forms for commercial distribution. We have not yet adopted the significant measures that will be required to comply with this law. We are not sure whether additional legislative changes will be enacted, or whether the current regulations,
guidance or interpretations will be changed, or what the impact of such changes on our business, if any, may be.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts
that federal and state governments will pay for immunotherapies, which could result in reduced demand for PDS0301 and other product candidates or additional pricing pressures.
We have no manufacturing, sales, marketing or distribution capability and we must rely upon third parties for such.
We currently have agreements with various third-party manufacturing facilities for production of our products for research and
development and testing purposes. We depend on third-party manufacturers to supply our preclinical and clinical materials and will be reliant on a third-party manufacturer to produce PDS0301 on a commercial scale, should that product receive
regulatory approval. Third-party manufacturers must be able to meet our deadlines and adhere to quality standards and specifications. Our predominant reliance on third parties for the manufacture of PDS0301 and our Versamune® and Infectimune® based
products creates a dependency that could severely disrupt our research and development, clinical testing, and sales and marketing efforts if the source of such supply proves to be unreliable or unavailable. There is no assurance that any third-party
manufacturers will be able to meet commercialized scale production requirements in a timely manner or in accordance with applicable standards or cGMP.
We expect to rely on third-party manufacturers or third-party collaborators for the manufacture of our product candidates for commercial
supply of any of our product candidates for which we or any of our future collaborators obtain marketing approval. We may be unable to establish any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to
establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:
| ● |
the possible failure of the third party to manufacture our product candidate according to our schedule, or at all, including if our third-party contractors give greater
priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them;
|
| ● |
the possible termination or nonrenewal of agreements by our third-party contractors at a time that is costly or inconvenient for us;
|
| ● |
the possible breach by the third-party contractors of our agreements with them;
|
| ● |
the failure of third-party contractors to comply with applicable regulatory requirements;
|
| ● |
the possible failure of the third party to manufacture our product candidates according to our specifications;
|
| ● |
the possible mislabeling of clinical supplies, potentially resulting in issues including the wrong dose amounts being supplied or active drug or placebo not being
properly identified;
|
| ● |
the possibility of clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to
commercial vendors in a timely manner, resulting in lost sales; and
|
| ● |
the possible misappropriation of our proprietary information, including our trade secrets and know-how.
|
The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA or the EMA pursuant to
inspections that will be conducted after we submit our BLA to the FDA or our MAA to the EMA. We do not have complete control over all aspects of the manufacturing process of, and are dependent on, our contract manufacturing partners for compliance with
cGMP regulations for manufacturing both active drug substances and finished drug products. Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States. If our contract
manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable foreign regulatory bodies, they will not be able to secure and/or maintain marketing approval for
their manufacturing facilities. In addition, we do not have complete control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA, the EMA or a comparable foreign
regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our
ability to develop, obtain marketing approval for or market our product candidates, if approved.
51
Index
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed
on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or drugs, operating restrictions and criminal prosecutions, any of which could
significantly and adversely affect supplies of our product candidates and harm our business and results of operations.
Any drugs that we may develop may compete with other product candidates and drugs for access to manufacturing facilities. There are a
limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.
Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval.
We do not currently have arrangements in place for redundant supply of the components of our product candidates. If our current contract
manufacturer cannot perform as agreed, we may be required to replace that manufacturer. Although we believe that there are several potential alternative manufacturers who could manufacture our product candidates, we may incur added costs and delays in
identifying and qualifying any such replacement.
Our current and anticipated future dependence upon others for the manufacture of our product candidates or drugs may adversely affect our
future profit margins and our ability to commercialize any drugs that receive marketing approval on a timely and competitive basis.
We intend to rely on third parties to conduct, supervise and monitor our clinical trials, and if those third parties
perform in an unsatisfactory manner, it may harm our business.
We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and we expect to have
limited influence over their actual performance.
We intend to rely upon CROs to monitor and manage data for our clinical programs and we do expect to be able to exert direct control over
all aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not
relieve us of our regulatory responsibilities.
We and our CROs will be required to comply with the Good Laboratory Practices and GCPs, which are regulations and guidelines enforced by
the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for our products. The
Regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed
unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a
sufficient number of subjects, we may be required to repeat clinical trials, which would delay the regulatory approval process.
Our CROs will not be our employees, and we will not be able to exert direct control over whether or not they devote sufficient time and
resources to our future clinical and preclinical programs. These CROs may also have relationships with other commercial entities, including our competitors, for whom
they may also be conducting clinical trials, or other drug development activities which could harm our competitive position, or as to which they could prioritize their activities to other products over activities related to our products. We face the
risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret protection and allow our potential competitors to access and exploit our proprietary technology. If our CROs do not
successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory
requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize PDS0301. As a result, our financial results and the commercial
prospects for PDS0301 would be harmed, our costs could increase, and our ability to generate revenues could be delayed.
If our relationship with these CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on
commercially reasonable terms. Switching or adding additional CROs involves substantial cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can
materially impact our ability to meet our desired clinical development timelines. Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that
these delays or challenges will not have an adverse impact on our business, financial condition and prospects.
52
Index
If we are unable to establish or manage strategic collaborations in the future, our revenue and drug development may
be limited.
Our strategy may include potential reliance upon strategic collaborations for marketing and commercialization of PDS0301 or Versamune® products. We also rely on strategic collaborations for research, development, marketing and commercialization for our products. We have also been heavily
reliant upon third-party outsourcing for our clinical trials execution and production of drug supplies for use in clinical trials.
Establishing strategic collaborations is difficult and time-consuming. Our discussions with potential collaborators may not lead to the
establishment of collaborations on favorable terms, if at all. We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the
collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the likelihood of
approval by the FDA or similar regulatory authorities outside the United States, the potential market for PDS0301 or Versamune® products, the costs and complexities of
manufacturing and delivering PDS0301 or Versamune® products to patients, the potential of competing products, the existence of uncertainty with respect to our
ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally. The collaborator may also consider alternative immunotherapies for similar
indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for PDS0301 or Versamune® products.
Our current collaborations, as well as any future new collaborations, may never result in the successful development or commercialization
of PDS0301 or Versamune® and Infectimune® products or the generation of sales revenue. To the extent that we have entered or will enter into co-promotion or other
collaborative arrangements, PDS0301 or Versamune® products revenues are likely to be lower than if we directly marketed and sold any products that we develop.
Management of our relationships with our collaborators will require:
| ● |
significant time and effort from our management team;
|
| ● |
financial funding to support said collaboration;
|
| ● |
coordination of our research and development programs with the research and development priorities of our collaborators; and
|
| ● |
effective allocation of our resources to multiple projects.
|
If we continue to enter into research and development collaborations, our success will in part depend on the performance of our
collaborators. We will not directly control the amount or timing of resources devoted by our collaborators to activities related to PDS0301 or Versamune® products.
Our collaborators may not commit sufficient resources to our research and development programs or the commercialization, marketing or distribution of PDS0301 or
Versamune® products. If any collaborator fails to commit sufficient resources, our preclinical or clinical development programs related to this collaboration could be delayed or terminated. Also, our collaborators may pursue existing or other
development-stage products or alternative technologies in preference to those being developed in collaboration with us. If we fail to make required milestone or royalty payments to our collaborators or to observe other obligations in our agreements
with them, our collaborators may have the right to terminate those agreements. Additionally, our collaborators may seek to renegotiate agreements we have entered into, or may disagree with us about the terms and implementation of these agreements. If
collaborators disagree with us about the terms or implementation of our agreements, we may face legal claims that may involve considerable expense and could negatively affect our financial results.
53
Index
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
On April 30, 2026, the Company entered into a securities purchase agreement (the “April 2026 Securities Purchase Agreement”) with YA II PN, LTD., a Cayman
Islands exempt limited company (the “Investor”). Pursuant to the securities purchase agreement, the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company (i) a promissory note in an aggregate principal
amount of $6,000,000 (the “Promissory Note”) and (ii) a warrant to purchase up to 2,158,274 shares of common stock of the Company, par value $0.00033 per share, at an exercise price of $1.1824 per share, subject to adjustments (the “Warrant”). The
issuance of the Promissory Note and Warrant was exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof.
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
None.
| ITEM 4. |
MINE SAFETY DISCLOSURES
|
Not applicable.
| ITEM 5. |
OTHER INFORMATION
|
| ITEM 6. |
EXHIBITS
|
54
Index
EXHIBIT INDEX
|
Exhibit
Number
|
Exhibit Description
|
|
|
1.1
|
Sales Agreement, dated June 15, 2026, by and among PDS Biotechnology Corporation, Yorkville Securities, LLC and B. Riley Securities, Inc. (filed as
Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on June 15, 2026, and incorporated by reference herein
|
|
|
4.1
|
Form of Promissory Note (YA II PN, Ltd.) (filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on May 14, 2026, and incorporated
by reference herein)
|
|
|
4.2
|
Form of Warrant (YA II PN, Ltd.) filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed on May 14, 2026, and incorporated by
reference herein)
|
|
|
10.1
|
Securities Purchase Agreement by and between PDS Biotechnology Corporation and YA II PN, Ltd., dated as of April 30, 2026 (filed as Exhibit 10.1 to
the Company’s Current Report on Form 8-K filed on June 15, 2026, and incorporated by reference herein)
|
|
|
10.2
|
Form of Registration Rights Agreement (YA II PN, Ltd.) (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 14, 2026,
and incorporated by reference herein)
|
|
|
10.3
|
Form of Guaranty Agreement (YA II PN, Ltd.) (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 14, 2026, and
incorporated by reference herein)
|
|
|
31.1*
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2*
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1*
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(furnished herewith).
|
|
|
32.2*
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(furnished herewith).
|
|
|
101.INS*
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the
Inline XBRL document.
|
|
|
101.SCH*
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.
|
| * |
Filed herewith (unless otherwise noted as being furnished herewith)
|
| + |
Pursuant to Item 601(a)(5) of Regulation S-K, schedules have been omitted and will be furnished on a supplemental basis to the Securities and Exchange Commission upon
request.
|
55
Index
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
|
PDS Biotechnology Corporation
|
||
|
August 13, 2026
|
By:
|
/s/ Frank Bedu-Addo
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Frank Bedu-Addo, Ph.D.
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||
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President and Chief Executive Officer
(Principal Executive Officer)
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August 13, 2026
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By:
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/s/ Lars Boesgaard
|
|
Lars Boesgaard
|
||
|
Chief Financial Officer
|
||
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(Principal Financial and Accounting Officer)
|
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