PDS Biotechnology (PDSB) posts Q1 2026 loss and plans costly debt redemption
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
PDS Biotechnology reported another quarterly loss as it continues to fund its cancer and infectious disease immunotherapy pipeline with no product revenue. For the three months ended March 31, 2026, net loss was $7.3 million, improving from $8.5 million a year earlier, mainly because research and development spending fell to $3.5 million from $5.8 million. General and administrative costs eased slightly to $3.1 million.
Cash and cash equivalents were $21.7 million at March 31, 2026, down from $40.0 million a year earlier, after using $4.4 million in operating cash during the quarter and making $1.5 million of principal payments on senior secured convertible debentures. Total assets were $24.7 million and stockholders’ equity declined to $3.9 million, with an accumulated deficit of $224.0 million.
The company reiterates that it has no revenues, expects ongoing operating losses, and faces restrictive covenants on its $22.2 million debentures, including minimum cash requirements. Management concludes that these conditions raise substantial doubt about its ability to continue as a going concern over the next 12 months. Subsequent to quarter-end, PDS agreed to issue a $6.0 million promissory note with attached warrants and plans to redeem all outstanding debentures for cash in June 2026, subject to closing conditions.
Positive
- None.
Negative
- None.
Insights
Lower R&D spend narrows loss, but cash runway and debt risk dominate.
PDS Biotechnology modestly improved its quarterly loss as R&D fell to $3.5 million from $5.8 million, reflecting slower or more focused development activity. General and administrative expenses were relatively stable at $3.1 million, keeping total operating costs at $6.5 million.
Liquidity is the key concern. Cash of $21.7 million must support ongoing trials while the company services senior secured convertible debentures originally sized at $22.2 million, carrying an effective annual interest rate of about 24.1% and strict minimum cash covenants. Management explicitly states that these factors create substantial doubt about continuing as a going concern.
Subsequent steps—entering a $6.0 million promissory note with attached warrants and planning to prepay all remaining debentures at 103% of principal plus interest around June 12, 2026—aim to reshape the capital structure. How quickly operating cash burn evolves in upcoming quarters, and whether financing closes as expected, will be central to future disclosures.
Key Figures
Net loss: $7,349,056
Cash and cash equivalents: $21,660,496
Cash used in operations: $4,371,646
+5 more
8 metrics
Net loss
$7,349,056
Three months ended March 31, 2026
Cash and cash equivalents
$21,660,496
Balance at March 31, 2026
Cash used in operations
$4,371,646
Operating cash flows, three months ended March 31, 2026
Research and development expense
$3,457,032
Three months ended March 31, 2026
General and administrative expense
$3,064,055
Three months ended March 31, 2026
Senior secured convertible debentures principal
$22,200,000
Original aggregate principal amount issued April 30, 2025
Effective interest rate on debentures
24.1%
As of March 31, 2026
Shares outstanding
55,815,653 shares
Common stock outstanding as of May 7, 2026
Key Terms
going concern, senior secured convertible debentures, at-the-market offering program, performance-based restricted stock units, +2 more
6 terms
going concern financial
"substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least 12 months"
A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.
senior secured convertible debentures financial
"the Company agreed to sell (i) senior secured convertible debentures in an aggregate principal amount of $22.2 million"
at-the-market offering program financial
"an at-the-market offering program under which the Company could offer and sell, from time to time, shares of its common stock"
An at-the-market offering program lets a company sell newly issued shares directly into the open market at current trading prices through a broker, rather than issuing a large block of stock all at once. It matters to investors because it provides the company a flexible way to raise cash over time, which can dilute existing shares gradually and affect earnings per share and stock price depending on how much and when shares are sold—think of it as a faucet the company can open or close to add supply to the market.
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 based on whether the inputs to those valuation techniques are observable or unobservable."
Investigational New Drug application regulatory
"In January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0103 and PDS01ADC in colorectal cancer."
An investigational new drug application is a formal request made to regulatory authorities to begin testing a new medication in humans. It is a critical step in the drug development process, as approval indicates the drug has passed initial safety checks and can be studied further. For investors, this signals that a potential new treatment is progressing through its early testing stages, which can impact the company's future growth prospects.
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 March 31, 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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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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Emerging growth company
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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 May 7, 2026 was 55,815,653 .
PDS BIOTECHNOLOGY CORPORATION
FORM 10-Q FOR THE QUARTER ENDED March 31, 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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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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Part II — Other Information
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Item 1.
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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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Mine Safety Disclosures
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Item 5.
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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
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March 31, 2026
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December 31, 2025
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ASSETS
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Financing lease right-to-use assets
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Total assets
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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Accrued expenses
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Financing lease obligation-short term
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Noncurrent liabilities:
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Note payable, 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 11)
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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 March 31,
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Operating expenses:
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Research and development expenses
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Loss from operations
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Interest expense
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Interest income (expenses), net
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Net loss and comprehensive loss
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Per share information:
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Net loss per share, basic and diluted
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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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Common Stock
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Shares
Issued
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Amount
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Additional
Paid-in Capital
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Accumulated
Deficit
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Total
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January 1, 2025
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Stock-based compensation expense
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Issuance of common stock for consulting agreement
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Balance - March 31, 2025
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Shares
Issued
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Amount
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Additional
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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Stock-based compensation expense
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Issuance of common stock for consulting agreement
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Issuance of common
stock from at-the-market program, net
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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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-
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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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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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Three Months Ended March 31,
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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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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation expense
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Finance lease depreciation expense
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Changes in assets and liabilities:
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Prepaid expenses and other assets
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Accounts payable
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Accrued expenses
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Net cash used in operating activities
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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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Loan principal repayment
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Proceeds from issuance of common stock from at-the-market program, net of issuance costs
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Net cash provided by financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of period
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Supplemental information of cash and non-cash transactions:
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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 immunotherapy company developing a growing pipeline of molecularly targeted immunotherapies designed to overcome the limitations of current immunotherapy and
vaccine technologies. The Company develops proprietary platforms designed to train and enable the immune system to attack and destroy disease; Versamune®, and Versamune® in combination with PDS01ADC for treatments in oncology and Infectimune® for treatments in infectious diseases. When paired with an
antigen, which is a disease-related protein that is recognizable by the immune system, Versamune® and Infectimune® have both been shown to induce, in-vivo, large quantities of high-quality, highly potent polyfunctional CD4 helper and CD8 killer T cells, a specific sub-type of T cell that is more effective at killing infected or target cells. PDS01ADC is a
novel investigational tumor-targeting fusion protein of Interleukin 12 that enhances the proliferation, potency, infiltration and longevity of T cells in the tumor microenvironment and is therefore designed to overcome the
limitations of cytokine therapy which today has resulted in high toxicity and limited therapeutic potential. Infectimune® is also designed to promote the
induction of disease-specific neutralizing antibodies. The Company’s immuno-oncology product candidates are of potential interest for use as a component of combination product candidates (for example, in combination with
other therapies such as immune checkpoint inhibitors) to provide more effective treatments across a range of advanced and/or refractory cancers. The Company is also evaluating its immunotherapies as monotherapies in
early-stage disease. The Company is developing targeted product candidates to treat several cancers, including Human Papillomavirus (HPV) associated cancers, melanoma, colorectal, lung, breast and prostate cancers. The
Company’s infectious disease candidate is of potential interest for use in universal influenza vaccines.
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:
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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:
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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:
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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:
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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:
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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:
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As of March 31,
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2026
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2025
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Stock options to purchase common stock
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| Performance-based restricted stock units |
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Warrants to purchase common stock
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Total
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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 March 31, 2026, the
Company had $21.7 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.
The Company funds its operations through equity and/or debt financings such as the following:
10
Index
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 months ended March 31, 2026, the Company sold 937,420 shares of common
stock for a net value of $0.85 million pursuant to the New Sales Agreement and during the three months ended March 31, 2025,
the Company sold 205,350 shares of common stock for a net value of $0.3 million, pursuant to the New Sales Agreement. The New Sales Agreement was terminated on May 1, 2026 in connection with the transactions described in Note 14 – Subsequent
Events.
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. The remaining proceeds from the transactions contemplated by the Securities Purchase
Agreement were used for general corporate purposes and transaction expenses. Pursuant to the Debentures, the Company must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the then-outstanding principal balance of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement. In addition, for as long as any portion of the Debentures remain outstanding, the
Company is generally restricted from: incurring indebtedness; granting or suffering liens on any of its property or assets; amending its organizational documents; repurchasing any of its securities; paying dividends; selling,
disposing, licensing or leasing its assets other than in the ordinary course; and other customary restrictive covenants. Effective as of August 28, 2025, the holders of the Debentures may require the Company to redeem a portion of
the Debentures in an amount not to exceed $0.5 million per calendar month until the Debentures are repaid in full. During
the year ended December 31, 2025 and the three months ended March 31, 2026, the Company redeemed an aggregate of $2.5
million and $1.5 million of the principal amount of the Debentures, respectively. In connection with the Securities
Purchase Agreement, on April 30, 2025, the Company also entered into a Security Agreement (the “Security Agreement”), pursuant to which the Company and its subsidiary granted, for the benefit of the investors, to secure its
obligations under the Securities Purchase Agreement and the Debentures, a first priority lien on certain assets, in each case subject to permitted liens described in the Security Agreement. In addition, on April 30, 2025, the
Company and its subsidiary entered into a Subsidiary Guarantee, pursuant to which the Company’s subsidiary guaranteed all of the Company’s obligations under the Securities Purchase Agreement and the Debentures.
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.
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 Debentures allow for the lenders to
call the outstanding balance of the Debentures if the Company fails to maintain the minimum cash balances outlined in the Debentures.
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.
Note 4 – Fair Value of Financial Instruments
There were no transfers between Levels 1, 2, or 3 during
the three months ended March 31, 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 March 31, 2026: (unaudited)
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
As of December 31, 2025
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The carrying value of the Debentures approximated their fair value as of March
31, 2026 due to their variable interest rate.
12
Index
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 March 31,
|
||||||||
|
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 $6 ,000.
Note 6 – Accrued Expenses
Accrued expenses consist of the following:
|
As of
March 31, 2026
|
As of
December 31, 2025
|
|||||||
|
Accrued research and development
|
$
|
|
$
|
|
||||
|
Accrued professional fees
|
|
|
||||||
|
Accrued compensation
|
|
|
||||||
| 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.
13
Index
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 March 31, 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 March 31, 2026, there were 190,799 shares available for grant under the 2018 Stock Incentive Plan.
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 March 31, 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 months ended March 31, 2026 and 2025:
| Three Months Ended March 31, |
||||||||
|
2026
|
2025
|
|||||||
| (unaudited) |
||||||||
|
Research and development
|
$ |
|
$ |
|
||||
|
General and administrative
|
|
|
||||||
|
Total
|
$ |
|
$ |
|
||||
14
Index
The Company granted options to purchase 2,833,162 shares during the three month period ended March 31,
2026. No options to purchase shares were granted during the three month period ended March 31, 2025. The fair value of options
granted during the three months ended March 31, 2026 was estimated using the Black-Scholes option valuation model.
The following table summarizes stock option activity for three months ended March 31, 2026:
|
Number
of Shares
|
Weighted Average
Exercise Price
|
|||||||
|
Options outstanding at December 31, 2025
|
|
$ |
||||||
|
Granted
|
|
|||||||
|
Exercised
|
|
|||||||
|
Forfeited and expired
|
(
|
)
|
||||||
|
Options outstanding at March 31, 2026
|
|
$ |
||||||
|
Vested and expected to vest at March 31, 2026
|
|
$ |
||||||
|
Exercisable at March 31, 2026
|
|
$ |
||||||
As of March 31, 2026, the Company had approximately $7,438,979 of unamortized stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of 1.34 years.
The Company granted 800,000 performance-based restricted stock units in June 2025. All performance-based
restricted stock units were unvested as of March 31, 2026 and no stock-based compensation expense was recognized, as it was not probable that the performance condition will be met under ASC 718. The fair
value of performance-based restricted stock units was determined as the closing price of the Company’s common stock on the grant date.
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 March 31, 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 %. The primary factor impacting the effective tax rate for the three months ended March 31,
2026 is the anticipated full year operating loss which will require a full valuation allowance against any associated net deferred tax assets.
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 March 31, 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
three months ended March 31, 2025. There were no New Jersey NOL carryforwards sold during the three months ended March 31,
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 in 2025.
15
Index
Note 9 – Commitments and Contingencies
Rent
For month-to-month arrangements not subject to ASC 842, rent for the three months ended March 31, 2026 and 2025 was $61,200 and $65,700 , 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.
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.
For the three months ended March 31, 2026 and 2025, the Company recognized interest expense of $0 and $928,177 , respectively,
in connection with the Loan and Security Agreement of which $0 and $272,578 , respectively, was related to the amortization of the debt discount.
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.
The Debentures mature on April 30, 2028 , unless earlier redeemed, repurchased, or converted. The coupon rate on the Debentures is the
plus 5.0 %, provided that if the prime rate would be less than 6.0 %, the coupon rate under the Debentures will be 6.0 % plus 5.0 %. The term of the Debentures allows the lenders, at their own discretion, to require monthly principal payments of up to $0.5 million starting August 28, 2025 until the Debentures are repaid in full. The lenders exercised this right on August 28, 2025 and principal
payments in an aggregate amount of $2.5 million were made for the year ended December 31, 2025 and principal payments in an aggregate
amount of $1.5 million were made for the three months ended March 31, 2026.
16
Index
The Debentures are convertible, at the option of
the lenders, into the Company’s shares of common stock, if fully converted at the initial principal amount, at a conversion price of $2.52
per share, to 8,818,340 shares of common stock. The conversion price is subject to adjustment in the event of (i) stock dividends
and splits, (ii) reclassification of shares, and (iii) certain fundamental transactions, including but not limited to a merger or consolidation, the sale or lease of all or substantially all of the Company’s assets, a tender or exchange offer
for 50 % or more of the Company’s common stock, a reorganization or recapitalization, or a business combination or stock purchase
agreement where another entity acquires more than 50 % of the outstanding common stock of the Company. The Debentures do not have any
price protection or price reset provisions with respect to the future issuance of securities.
The Debentures include certain embedded features that resulted in a compound embedded derivative that was
bifurcated from the host instrument, which included: (i) a contingent prepayment option exercisable by the Company, (ii) a holder-initiated prepayment option upon a permitted disposition, (iii) a premium repayment feature upon an event of
default, and (iv) a contingent interest feature upon an event of default. The compound embedded derivative was ascribed a de minimis fair value upon issuance, as the Company assessed that the probability of the underlying contingent events
occurring, which would trigger a payment under these features, was remote. As of both December 31, 2025 and March 31, 2026, the Company determined that the fair value of the compound embedded derivative continued to be de minimis.
The Debentures are subject to customary events of default, including, but not limited to: (i) failure to make
payments of principal or interest; (ii) breach of covenants or representations; (iii) certain events of bankruptcy or insolvency; (iv) cross-defaults to other material indebtedness; (v) failure to deliver conversion shares in a timely manner;
(vi) delisting of the Company’s common stock; and (vii) the occurrence of a material adverse effect. Upon the occurrence of an event of default, the outstanding principal amount of the Debentures, interest and other amounts owed as a result of
the event of default, shall become immediately due and payable in cash.
Pursuant to the Debentures, the Company must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the then-outstanding principal balance of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement. In addition, for as long as any portion of the Debentures remain outstanding, the Company is
generally restricted from: incurring indebtedness; granting or suffering liens on any of its property or assets; amending its organizational documents; repurchasing any of its securities; paying dividends; selling, disposing, licensing or
leasing its assets other than in the ordinary course; and other customary restrictive covenants. The Company also entered into a Security Agreement (the “Security Agreement”), pursuant to which the Company and its subsidiary granted, for the
benefit of the investors, to secure its obligations under the Securities Purchase Agreement and the Debentures, (i) first priority liens on certain assets, in each case subject to permitted liens described in the Security Agreement. In
addition, the Company and its subsidiary entered into a Subsidiary Guarantee, pursuant to which the Company and its subsidiary guaranteed all of its obligations under the Securities Purchase Agreement and the Debentures.
In connection with the Securities Purchase Agreement, the Company also issued Warrants to purchase an aggregate
total of 1,000,000 shares of the Company’s common stock at an initial exercise price of $2.52 per share. Each Warrant is classified as equity, in accordance with ASC 815-40, and is exercisable at any time for a period beginning on the date of issuance and
ending 10 years from the date of issuance. The key assumptions used in the Black-Scholes option pricing model were (i) expected
term of 10 years, (ii) a risk-free rate of 4.17 %, (iii) expected volatility of 83.5 %, (iv) and no estimated dividend yield. The fair value of the Warrants was recorded as a discount and is being recognized as interest expense over the life of the Debentures using the
effective interest method.
The Warrants also include a separate provision whereby the exercisability of the common stock warrants may be
limited if, upon exercise, the holder would beneficially own more than 4.99 % (or, at the election of the holder, 9.99 %) of the outstanding common stock immediately after exercise. This threshold is subject to the holder’s rights under the Warrants to increase
such percentage upon at least 61 days’ prior notice from the Warrant holder to the Company.
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.
Issuance costs for the Debentures of $762,116 were recorded as a debt discount. As of March 31, 2026, the effective annual interest rate of the Debentures was approximately 24.1 %.
For the three months ended March 31, 2026, the Company recognized interest expense of $1,013,490 . For the three months ended March 31, 2026 the Company amortized $448,837 of the debt discount, and as of March 31, 2026, had a remaining debt discount balance of $2,409,663 .
17
Index
Note 12 – 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 Company’s matching contributions to the 401(k) plan were $55,368 and $65,540 for the three months ended March 31, 2026 and 2025, respectively.
Note 13 – 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:
|
Year Ended March 31,
|
||||||||
|
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
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Note 14 – Subsequent Events
On April 30, 2026, the Company entered into a 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
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. In addition, at or prior to the closing of the transactions contemplated by the securities purchase agreement, the Company will
enter into a Sales Agreement with Yorkville Securities, LLC (“Agent”), as sales agent, with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its
Common Stock through or to the Agent, as sales agent or principal. The transaction contemplated by the securities purchase agreement is expected to close
on or around June 12, 2026, subject to the satisfaction of certain closing conditions.
Also 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. The prepayment amount for each
Debenture will be equal to 103 % of the principal amount outstanding on June 12, 2026, plus all accrued and unpaid interest under
each Debenture on the redemption date.
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 ability to protect its intellectual property rights;
|
| ● |
the Company’s anticipated capital requirements, including the Company’s anticipated cash runway and the Company’s current expectations regarding its plans for future equity financings;
|
| ● |
the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its clinical and product candidates, and the risks that raising such additional
capital may restrict the Company’s operations or require the Company to relinquish rights to the Company’s technologies or clinical and product candidates;
|
| ● |
the Company’s limited operating history in the current line of business, which makes it difficult to evaluate the Company’s prospects, the Company’s business plan or the likelihood of the Company’s
successful implementation of such business plan;
|
| ● |
the timing for the Company or its partners to initiate the planned clinical trials for its Versamune® products, including Versamune® HPV (formerly
PDS0101), Versamune® MUC1 (formerly PDS0103), and others, alone or in combination with PDS01ADC, as well as Infectimune® based clinical candidates and the future success of such trials;
|
| ● |
the successful implementation of the Company’s research and development programs and collaborations, including any collaboration trials concerning the Company’s Versamune®, PDS01ADC and Infectimune® based
clinical and product candidates and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the Company’s clinical and product
candidates;
|
| ● |
the success, timing and cost of the Company’s ongoing clinical trials and anticipated clinical trials for the Company’s current clinical candidates, including statements regarding the timing of initiation,
pace of enrollment and completion of the trials (including our ability to fully fund our disclosed clinical trials, which assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences
and data reported in an abstract, and receipt of interim results (including, without limitation, any preclinical results or data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;
|
| ● |
expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of the Company’s clinical and product candidates;
|
| ● |
any Company statements about its understanding of clinical and product candidates’ mechanisms of action and interpretation of preclinical and early clinical results from its clinical development programs
and any collaboration trials; the acceptance by the market of the Company’s clinical and product candidates, if approved;
|
| ● |
the timing of and the Company’s ability to obtain and maintain U.S. Food and Drug Administration or other regulatory authority approval of, or other action with respect to, the Company’s clinical and
product candidates; and
|
| ● |
other factors, including legislative, regulatory, political and economic developments not within the Company’s control, including unforeseen circumstances or other disruptions to normal business operations
arising from or related to those listed under Part II, Item 1A. Risk Factors.
|
Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise
these forward-looking statements for any reason, whether as a result of new information, future events or otherwise.
In this Quarterly Report, unless otherwise stated or the context otherwise indicates, references to “PDS Biotech,” “the Company,” “we,” “us,” “our” and similar references
refer to PDS Biotechnology Corporation, a Delaware corporation, and subsidiary.
19
Index
Company Overview
We are a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer immunotherapies based on our Versamune®, Versamune® in combination with our
IL-12 fused anti-body drug conjugate (ADC) PDS01ADC. In addition, we are developing the Infectimune® T cell-activator in infectious diseases.
We believe our investigational targeted immunotherapies have the potential to overcome the limitations of current immunotherapy approaches through the activation of the
right type, quantity and potency of T cells. Versamune®, and Versamune® in combination with PDS01ADC are being developed for treatments in oncology and Infectimune® is being developed for treatments in infectious disease. When paired with an
antigen, which is a disease-related protein that is recognizable by the immune system, Versamune® and Infectimune® have both been shown to induce, in-vivo, large quantities of high-quality, highly
potent polyfunctional CD4 helper and CD8 killer T cells, a specific sub-type of T cell that is more effective at killing infected or target cells. Infectimune® is also designed to promote the induction of disease-specific neutralizing
antibodies. PDS01ADC is an investigational tumor targeting IL-12 that we believe may enhance the proliferation, potency and longevity of T cells in the tumor microenvironment. Based on preclinical studies and recent investigational clinical
data, we believe that Versamune® in combination with PDS01ADC may enhance the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and work synergistically to overcome tumor immune
suppression.
Recent Developments
In March 2025, we announced the initiation of our VERSATILE-003 Phase 3 clinical trial evaluating PDS0101 in HPV16-positive first-line treatment of recurrent/metastatic head and neck squamous
cell carcinoma.
In July 2025, we announced that the colorectal cancer cohort of a Phase 2 clinical trial with PDS01ADC in combination with Hepatic Artery Infusion Pump (HAIP) and systemic therapy met the
pre-defined criteria for expansion to stage 2 following positive stage 1 results.
In August 2025, we announced final topline survival data from our VERSATILE-002 Phase 2 trial in head and neck cancer.
In October 2025, we announced our intent to seek expedited approval pathway for PDS0101 in HPV16-positive head and neck cancer based on final VERSATILE-002 trial data showing robust median
progression free survival and increased median overall survival of the patients.
In December 2025, we announced the scheduling of a type C meeting with the FDA to discuss a proposed accelerated approval pathway for PDS0101 in HPV16-positive recurrent and/or metastatic head
and neck cancer. Patients already enrolled in VERSATILE-003 prior to the amendment remain on the trial and continue to receive treatment.
In February 2026, we announced the adoption of an amended protocol for our VERSATILE-003 Phase 3 trial incorporating progression free survival (PFS) as a primary endpoint for interim analysis and
potential accelerated approval.
Clinical Candidate Pipeline
VERSATILE-003: PDS0101 + pembrolizumab vs pembrolizumab
In March 2025, we initiated our VERSATILE-003 Phase 3 clinical trial evaluating the combination of PDS0101 in combination with the anti-PD-1 therapy pembrolizumab versus pembrolizumab as a
monotherapy. The clinical trial will evaluate the efficacy and safety of this therapeutic combination as a first line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16)
infection.
In this trial, sponsored by us, patients whose cancer has returned following initial treatment or spread (metastasized) will be treated with either the combination of PDS0101and pembrolizumab or
with pembrolizumab alone, to evaluate if the addition of PDS0101 might improve the efficacy of pembrolizumab alone. Patients in the trial will receive a total of 5 cycles of combination therapy in the context of standard of care pembrolizumab
therapy administered every three weeks until disease progression. The primary endpoint of VERSATILE-003 is median overall survival, or mOS, at six months following initiation of treatment. Following discussions with the FDA in December 2025, we
amended the trial’s protocol, among other modifications, to include progression-free survival (PFS) as an interim primary endpoint of the trial. Patients already enrolled prior to the amendment remain on the trial and continue to receive
treatment.
20
Index
VERSATILE-002: PDS0101 + Keytruda®
In November 2020, we commenced our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is
the FDA-approved standard of care for first-line treatment of recurrent/ metastatic head and neck cancer. Enrollment in stage 2 of 2 for the ICI-naïve arm and the ICI-resistant arms are complete. The clinical trial evaluated the efficacy and
safety of this therapeutic combination as a first and second line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection.
In this trial sponsored by us, patients whose cancer had returned following initial treatment or spread were treated with the combination of PDS0101 and Keytruda®
to evaluate if the addition of PDS0101 might improve the efficacy reported in published studies of Keytruda® alone. Patients in the trial received a total of 5 cycles of combination therapy in the
context of standard of care Keytruda® therapy administered every three weeks until disease progression. The primary endpoint of VERSATILE-002 is the objective response rate, or ORR, at six months
following initiation of treatment. There are two cohorts in the trial. Cohort 1 is for patients who have yet to be treated with an immune checkpoint inhibitor (ICI naïve) and cohort 2 which consists of
patients who have failed immune checkpoint inhibitor therapy (ICI resistant).
In May 2023, we completed enrollment in the ICI naïve arm. We filed our amended IND with the FDA in the third quarter of 2023. In October 2023, we received feedback from
the FDA on the amended IND.
In June 2023, an abstract was presented at the 2023 American Society of Clinical Oncology: Abstract number 6012, Safety and Efficacy of Immune
Checkpoint Inhibitor (ICI) Naïve Cohort from Study of PDS0101 and Pembrolizumab in HPV16-positive Head and Neck Squamous Cell Carcinoma (HNSCC). The abstract was also selected as one of the featured posters to be reviewed by an expert panel in
the Head and Neck Cancer discussion session. Data on 34 patients was presented. The data from the abstract is as follows:
| ● |
Estimated 12-month overall survival rate was 87.1%. Published results are 36-50% with approved ICIs used alone.
|
| ● |
Median progression-free survival was 10.4 months (95% CI 4.2, 15.3). Published results are median PFS of 2-3 months for approved ICIs when used as monotherapy in patients with similar PD-L1 levels.
|
| ● |
A disease control rate (disease stabilization or tumor shrinkage) of 70.6% (24/34)
|
| ● |
Confirmed and unconfirmed objective response rate is 41.2% (14/34 patients), which is identical to the preliminary response rate data previously reported by us at ASCO 2022 (7/17 patients). To date these responses have been confirmed
in nine of the 34 patients (26.5%), including one complete response.
|
| ● |
15/34 patients (44.1%) had stable disease.
|
| ● |
9/34 patients (26.5%) had progressive disease.
|
| ● |
4/48 (8.3%) of patients had a Grade 3 treatment-related adverse event (TRAE). No Grade 4 or higher TRAEs were observed.
|
In October 2023, at a key opinion roundtable updated interim data was presented based on an August 2, 2023 cut-off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in combination
with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/ metastatic head and neck cancer. Data on 52 patients was presented. The data from the roundtable based on
investigator assessment was as follows:
Highlights from the ICI naïve cohort include:
| ● |
24-month overall survival (OS) rate is 74%; published 24-month survival rate of less than 30% for approved ICI.
|
| ● |
12-month OS rate is 80%; published results of 30-50% with approved ICIs.
|
| ● |
Tumor shrinkage seen in 60% (31/52) of patients.
|
| ● |
Confirmed overall response rate ORR is 27% (14/52) to date.
|
| ● |
Median progression-free survival (PFS) is 8.1 months to date; published results of 2-3 months PFS with approved ICIs.
|
| ● |
13% (8/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 0% (0/62) experienced Grade 4 or 5 TRAE; published results report 13-17% Grade 3-5 TRAE with approved ICI monotherapy.
|
| ● |
60% (33/55) of patients have CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (22/55) have CPS score >20 (who generally have a higher response to Keytruda®).
|
21
Index
Highlights from the ICI refractory cohort include:
| ● |
The 12-month OS rate is 56%. The published median 12-month OS rate is 17% with no salvage chemotherapy following tumor progression on ICI (ICI Resistant).
|
| ● |
0% (0/21) confirmed ORR suggests that PDS0101’s impact on survival does not appear to be dependent on tumor shrinkage.
|
| ● |
4% (1/25) of patients experienced Grade 3 TRAE and 0% (0/21) patients experienced Grade 4 and 5 TRAE.
|
In May 2024, at a virtual key opinion leader event, updated interim data was presented based on a November 30, 2023 cut-off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in
combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer. Data from 53 patients was presented. The data from the event
based on investigator assessment was as follows:
Highlights from the ICI naïve cohort with CPS > 1 included:
| ● |
Median overall survival of 30 months; published results for ICIs are 7-18 months.
|
| ● |
Confirmed overall response rate ORR of 34% (18/53) to date; published results for comparable patients receiving treatment with ICIs are less than 20%.
|
| ● |
Confirmed complete responses, partial responses and stable disease according to RECIST v1.1 were seen in 75.5% of patients.
|
| ● |
Median progression-free survival (PFS) of 6.3 months to date; published results of 2-3 months PFS with approved ICIs.
|
| ● |
The combination of PDS0101 and Keytruda® appeared to be well tolerated with 11% (7/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 2% (1/62) experienced Grade 4 or 5 TRAE; published results report 13-17%
Grade 3-5 TRAE with approved ICI monotherapy.
|
| ● |
60% (32/53) of patients had CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (21/53) have CPS score >20 (who generally have a higher response to Keytruda®).
|
In June 2024, we provided a data update from our VERSATILE-002 clinical trial. Interim data was presented based on a May 17, 2024 cut-off. The data update was as follows:
| ● |
Median Overall Survival of 30 months, consistent with data presented our key opinion leader event in May of 2024, which was based on a data cut as of November 30, 2023.
|
| ● |
27 of the censored patients remained alive and were awaiting their next clinical assessment, 6 censored patients had withdrawn consent for further follow-up, and 2 patients had been lost to follow-up, and 18 patients had died.
|
| ● |
The lower limit of the 95% confidence interval is 19.7 months, and the upper limit is not yet estimable, as the majority of patients continue to be followed for survival.
|
In August 2024, we provided an update to our clinical strategy following discussions with the FDA. During the August 2024 update, we announced our intent to initiate a registrational trial in first line treatment in
HPV16-positive recurrent/metastatic HNSCC with the double combination of PDS0101 + pembrolizumab.
In September 2024, we announced updated data from our VERSATILE-002 Phase 2 clinical trial presented during a poster session at the European Society for Medical Oncology (ESMO) Congress 2024. The data presented was
based on a May 17, 2024 data cut-off. The main elements of the update were as follows:
| ● |
Median Overall Survival (mOS) was 30 months with a lower 95% confidence interval of 19.7 months; Published mOS for pembrolizumab is 12-18 months
|
| ● |
Objective Response Rate (ORR) of 36% (19/53); Published ORR for pembrolizumab is 19-25%
|
| ● |
Disease Control Rate (DCR) is 77% (41/53)
|
| ● |
21% (11/53) of patients had deep tumor responses and shrinkage of 90-100%
|
| ● |
9% (5/53) of patients had a complete response
|
| ● |
Treatment-related adverse events of Grade ≥3 were seen in 9 patients (Grade 3, n=8 and Grade 4, n=1)
|
22
Index
In August 2025, we announced final topline survival data from our VERSATILE-002 Phase 2 trial in head and neck cancer. 53 patients were enrolled in the 1L R/M HNSCC arm of the trial:
| ● |
The median overall survival (mOS) is 39.3 months in patients with CPS ≥ 1. The lower limit of the 95% confidence interval is 23.9 months, and the upper limit is not yet estimable.
|
MD Anderson Cancer Center (IMMUNOCERV): PDS0101 + Chemoradiotherapy
In October 2020, a Phase 2 IIT was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients. This clinical trial investigated the
safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical immunological biomarkers in patients with locally advanced cervical cancer. We believe that Versamune®
has strong T cell induction with the potential to enhance efficacy of the current standard of care CRT treatment in this indication with the FDA at this meeting.
In November 2022, data from this trial was included in a poster presentation at the 2022 SITC Annual Meeting which included the following:
| ● |
9 of the 17 patients had completed a Day 170 post-treatment positron emission tomography, computed tomography (PET CT) scan to assess the status of the cancer. This included 78% (7/9) of treated patients
with advanced cervical cancer (FIGO stage III or IV).
|
| ● |
100% (9/9) of patients treated with the combination of PDS0101 and CRT had an objective response.
|
| ● |
89% (8/9) of patients treated with the combination of PDS0101 and CRT demonstrated a complete response (CR) on Day 170 by PET CT. One patient who received 3 of the 5 scheduled doses of PDS0101 showed signs
of residual disease. One patient who had a CR died from an event unrelated to either their underlying disease or treatment.
|
| ● |
1-year disease-free survival and 1-year overall survival of 89% (8/9) in patients treated with the combination of PDS0101 and CRT.
|
| ● |
As previously reported, data confirmed PDS0101 treatment activates HPV16-specific CD8 T cells. This increase was not seen in patients who did not receive PDS0101. The increase in HPV16-specific T cells
generated by the treatment is positively correlated with tumor cell death, suggesting cytotoxic CD8 T cells are important mediators of antigen-specific immunity.
|
| ● |
The data affirms that PDS0101 activates Type 1 interferon pathway in humans, mimicking the mechanism previously demonstrated in preclinical studies in animal models.
|
| ● |
Toxicity of PDS0101 remains limited to low-grade local injection site reactions.
|
In October 2023, data demonstrating PDS0101 in combination with standard-of-care (SOC) chemoradiotherapy was associated with a rapid decline in human papillomavirus circulating cell-free DNA
(ctHPV-DNA), a potential predictive biomarker of treatment response. The data from the IMMUNOCERV Phase 2 clinical trial was featured in an oral presentation at the American Society for Radiation Oncology Annual Meeting which included the
following:
| ● |
Earlier and greater proportion of ctDNA clearance with PDS0101 plus chemoradiation (CRT) vs. SOC CRT alone 81.3% clearance after 3 weeks vs. 30.3% with SOC (p=0.0018), and 91.7% of clearance at 5 weeks vs. 53.1% with SOC (p=0.0179).
|
| ● |
Baseline ctDNA levels correlated with the International Federation of Gynecology and Obstetrics (FIGO) stage and lymph node involvement; 100% of patients treated with PDS0101 had cancer that had spread to the lymph nodes.
|
23
Index
In October 2024, we announced updated data from the IMMUNOCERV Phase 2 clinical trial evaluating PDS0101 with chemoradiation to treat locally advanced cervical cancer presented at the American
Society for Radiation Oncology (ASTRO) Annual Meeting 2024 which included the following:
| ● |
All patients received at least 2 doses of PDS0101.
|
| ● |
Median follow-up was 19 months.
|
| ● |
36-month overall survival (OS) rate was 84.4%, and 100% for the eight patients who received all five doses of PDS0101. Historical published data show 36-month OS rate with chemoradiation in this population
of approximately 64%.
|
| ● |
36-month progression free survival (PFS) rate was 74.9%, among all patients and 100% for the eight patients who received all five doses of PDS0101. Historical published data show 36-month PFS rate with
chemoradiation in this population of approximately 61%.
|
| ● |
Complete metabolic response (CMR) was achieved in 15/17 (88%) patients.
|
| ● |
PDS0101 appeared to be safe and well-tolerated. The most common treatment-related toxicities were injection site reactions in twelve patients (71%).
|
Mayo Clinic: PDS0101 Monotherapy and in combination with pembrolizumab
In February 2022, we initiated an Investigator-Initiated Trial (ITT), MC200710, for PDS0101 alone or in combination with the immune checkpoint inhibitor, pembrolizumab, in
patients with HPV-positive oropharyngeal cancer (HPV(+)OPSCC) at high risk of recurrence. The trial is being led by Drs. David Routman, Katharine Price, Kathryn Van Abel, and Ashish Chintakuntlawar at Mayo Clinic, a nationally and internationally
recognized center of excellence for the treatment of head and neck cancers. We believe that this trial not only broadens our addressable patient population of those affected by the increasing incidence of HPV(+)OPSCC, but also allows us to better
understand the activity of PDS0101 alone or in combination with Keytruda® in earlier stages of disease. This trial is currently open for enrollment.
In this trial, treatment will be administered before patients proceed to transoral robotic surgery (TORS) with curative intent. Treatment in this setting is referred to as
neoadjuvant treatment. PDS0101 has been shown to induce killer T cells that target and kill HPV-positive cancers, either alone or in combination with ICIs in preclinical studies, and in combination in clinical studies of patients with advanced
recurrent/metastatic HPV-positive cancers. This trial will explore whether PDS0101 with or without checkpoint inhibition may increase HPV-specific anti-tumor responses, potentially resulting in tumor shrinkage, pathologic regression, and
decreases in circulating tumor DNA (ctDNA).
National Cancer Institute: PDS0101 + PDS01ADC + Bintrafusp Alfa
In November 2023, we released updated interim survival data as follows:
| ● |
75% of immune checkpoint inhibitor (ICI) naïve patients remain alive at 36 months; published median overall survival (OS) in similar patients is 7-11 months
|
| ● |
12-month survival rate in (ICI) resistant patients of 72%
|
| ● |
Median OS in ICI-resistant HPV-positive patients is approximately 20 months; published median OS is 3.4 months
|
PDS0103
In April 2020, an existing Cooperative Research and Development Agreement (“CRADA”) between PDS Biotech and the NCI was expanded beyond PDS0101 to include clinical and preclinical development of
PDS0103. PDS0103 is an investigational immune therapy owned by us and designed to treat cancers associated with the mucin-1, or MUC1, oncogenic protein. These include cancers such as ovarian, breast, colorectal and lung cancers. PDS0103 combines
Versamune® with novel highly immunogenic agonist epitopes of MUC1 developed by the NCI and licensed by us.
MUC1 is highly expressed in several types of cancer and has been shown to be associated with drug resistance and poor disease prognosis in breast, colorectal, lung and ovarian cancers, for which
PDS0103 is being developed. Expression of MUC1 is often associated with poor disease prognosis, due in part to drug resistance. In preclinical studies, and similarly to PDS0101, PDS0103 demonstrated the ability to generate powerful MUC1-specific
CD8 killer T cells.
In January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0103 and PDS01ADC in colorectal cancer.
24
Index
IL-12 Oncology Immunocytokine Pipeline
PDS01ADC is a novel investigational IL-12 fused antibody drug conjugate (IgG1), tumor-targeting interleukin 12 (IL-12) immune-cytokine that enhances the proliferation,
potency and longevity of T cells in the tumor microenvironment. Together with Versamune® based immunotherapies PDS01ADC works synergistically to overcome tumor immune suppression and to promote a targeted T cell attack against cancers. As with
Versamune®, PDS01ADC is given by a simple subcutaneous injection. Clinical data suggests the addition of PDS01ADC to Versamune® based immunotherapies may demonstrate significant disease control in advanced cancer patients by shrinking tumors
and/or prolonging life.
With the exclusive global license agreement with Merck KGaA, Darmstadt, Germany for PDS01ADC, we believe we have simplified our registrational pathway for the NCI-led triple combination by
owning both PDS0101 and PDS01ADC and combining these agents with an FDA approved ICI. PDS01ADC has been designed to overcome the limitations of cytokine therapy as explained above, and based on extensive preclinical studies performed at the NCI
evaluating PDS01ADC as a monotherapy and also in combinations with established standard of care treatments for cancer, we believe that PDS01ADC has significant potential as a cytokine therapy independent of Versamune®. Based on the informative
preclinical studies, a number of ITT Phase 2 trials are currently in progress at the NCI, some of which are outlined below:
| ● |
A Phase 2 trial evaluating PDS01ADC in combination with hepatic artery infusion pump (HAIP) and systemic therapy for subjects with metastatic colorectal cancer, intrahepatic cholangiocarcinoma, or metastatic adrenocortical carcinoma
|
| ● |
A Phase 2 trial evaluating ICI naïve and resistant patients with HPV-positive malignancies treated with PDS01ADC, PDS0101 and bintrafusp alfa
|
| ● |
A Phase 2 trial evaluating T-cell clonality after stereotactic body radiation therapy alone and in combination with the immunocytokine PDS01ADC in localized high and intermediate risk prostate cancer treated with androgen deprivation
therapy
|
| ● |
A Phase 1/2 trial evaluating PDS01ADC in combination with docetaxel in adults with metastatic castration sensitive and castration resistant prostate cancer
|
| ● |
A Phase 1/2 trial evaluating PDS01ADC going forward as a monotherapy in advanced kaposi sarcoma
|
| ● |
A Phase 1/2 trial evaluating PDS01ADC in combination with a histone deacetylase (HDAC) inhibitor in ICI-resistant MUC1-positive colon and bladder cancers among others
|
In October 2023, interim safety and immune response data was presented for the first-in-human Phase1/2 clinical trial evaluating PDS01ADC in combination with current SOC chemotherapy,
docetaxel, to treat metastatic castration sensitive and castration resistant prostate cancer. The data was featured in an oral presentation at the 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 PDS01ADC and 61% of patients had at least a 60% decrease in PSA levels.
|
| ● |
All doses of the combination were well-tolerated with one patient experiencing Grade 4 neutropenia.
|
| ● |
Administration of the combination was associated with decreases in T reg cells and increases in activated natural killer (NK) cells, memory CD8 T cells, proliferating CD4 and CD8 T cells and cytokines INF-γ and Interleukin 10
(IL-10).
|
| ● |
The changes in immune responses with the combination were independent of the PDS01ADC dose.
|
In April 2026, we announced the publication of clinical and immunological biomarker data from Stage 1 of a Phase 2 trial evaluating PDS01ADC in the March 10, 2026 issue of Journal of Clinical Oncology (JCO) Oncology Advances. Key findings from stage 1 of the Phase 2 trial are outlined below:
| ● |
Objective response rate by RECIST v1.1: 77.8% (7/9) at six months; in the parallel trial without PDS01ADC, the ORR was 35% (7/20)
|
| ● |
24-month survival rate: Approximately 85%; in the parallel study without PDS01ADC, the 2-year survival rate was approximately 40%
|
| ● |
Extrahepatic progression-free survival (PFS): median not reached at minimum follow-up of 13.1 months; in the parallel trial without PDS01ADC, the PFS was 8.1 months
|
We are working closely with the NCI to determine the best pathway forward for the prioritized PDS01ADC studies, as well as evaluating the use of PDS01ADC in combination with other Versamune®
based clinical candidates. In January 2025, we submitted an investigational new drug application to the FDA for a Phase 1 trial with PDS0103 and PDS01ADC in colorectal cancer. At the time of this report, we
have not initiated this trial.
25
Index
Our current clinical pipeline of Versamune® and PDS01ADC based therapies is as follows:
Infectimune® Development Strategy
We believe that the key differentiating attributes of the Infectimune® platform technology are strong induction of CD8 and CD4 T cells as well as antibodies which can be
leveraged to improve treatment and preventive options in several infectious disease indications. In January 2022, we presented preclinical data on our universal flu program sponsored by the National Institute of Allergy and Infectious Disease
(NIAID) demonstrating the potential of the Infectimune® technology with computationally designed influenza proteins developed by the laboratory of Dr. Ted Ross at the University of Georgia to generate broadly protective anti-influenza immune
responses across multiple strains of influenza. This data has provided a unique opportunity to highlight Infectimune®’s potentially transformative utility in the development of more broadly effective and longer lasting protective vaccines.
Current preventive and prophylactic vaccine approaches and technologies predominantly focus on creating strong induction of antibody responses. However, the induction of T cell responses, in addition to antibody responses, provides more durable
and broad protection against infectious diseases.
Based on the preclinical data with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu vaccines, we have decided to focus
our near-term infectious disease activities to align with the interests of the NIAID Collaborative Influenza Vaccine Innovation Centers (CIVICs) program. This will involve development of a universal seasonal flu vaccine and the potential
development of a universal pandemic influenza vaccine based on similar computationally designed antigens as have shown promise with Infectimune®.
The preclinical results for Infectimune® based vaccines were published in two separate articles in the peer reviewed journal Viruses in February 2023: 1. preclinical studies
demonstrating complete protection against sickness after lethal challenge with live SARS-CoV-2 or influenza viruses (Gandhapudi SK et al. Viruses 2023, 15, 432) and 2. Dramatically enhanced CD4 T cell responses to recombinant influenza proteins
compared to leading commercial vaccine adjuvants (Henson TR et al. Viruses 2023, 15, 538).
26
Index
Clinical Development Strategy
Since our inception we have devoted substantially all our resources to developing our Versamune® and Infectimune® platforms, and products derived thereof, as well as
PDS01ADC. This includes advancing preclinical programs, conducting clinical trials, manufacturing PDS0101 and PDS01ADC for clinical trials, and providing general and administrative support. We have funded our operations primarily from the
issuance of common stock and issuance of debt. We have not generated any product revenue to date.
We have never been profitable and have incurred net losses in each year since inception. Our net losses were $7.3 million, and $8.5 million for the three months ended March
31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $224.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from
general and administrative costs associated with these operations.
As of March 31, 2026, we had $21.7 million in cash and cash equivalents.
Our future funding requirements will depend on many factors, including the following:
| ● |
the timing and costs of our planned and ongoing clinical trials;
|
| ● |
the timing and costs of our planned preclinical studies of our Versamune® platform;
|
| ● |
the outcome, timing and costs of seeking regulatory approvals;
|
| ● |
the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into;
|
| ● |
the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or patent applications or other
intellectual property rights; and
|
| ● |
the extent to which we license or acquire other products and technologies.
|
SELECTED FINANCIAL OPERATIONS OVERVIEW
Revenue
We have not generated any revenues from commercial product sales and do not expect to generate any such revenue in the near future. We may generate revenue in the future from
a combination of research and development payments, license fees and other upfront payments or milestone payments.
Research and Development Expenses
Research and development expenses include employee-related expenses, costs to acquire license rights to use certain technology in our research and development projects, costs
of acquiring, developing and manufacturing clinical trial materials, as well as fees paid to consultants and various entities that perform certain research and testing on our behalf. Costs for certain development activities, such as clinical
trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred. Payments for these
activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the Condensed Consolidated Financial Statements as prepaid or accrued expenses. Costs incurred in
connection with research and development activities are expensed as incurred.
We expect that our research and development expenses will increase significantly over the next several years as we advance our Versamune® and PDS01ADC clinical and product
candidates into and through clinical trials, pursue regulatory approval of our Versamune® and PDS01ADC product candidates and prepare for a possible commercial launch, all of which will also require a significant investment in contract research
services, manufacturing process validation and inventory related costs.
The process of conducting human clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for
our clinical and product candidates. The probability of successful commercialization of our clinical and product candidates may be affected by numerous factors, including clinical data obtained in future trials, competition, manufacturing
capability and commercial viability. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of
any of our clinical and product candidates.
27
Index
Results of Operations
The following table summarizes the results of our operations for the three months ended March 31, 2026 and 2025:
|
Three Months Ended
March 31,
|
Increase ( Decrease)
|
|||||||||||||||
|
2026
|
2025
|
$ Amount
|
%
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Research and development expenses
|
$
|
3,457
|
$
|
5,831
|
$
|
(2,374
|
)
|
(41
|
)%
|
|||||||
|
General and administrative expenses
|
3,064
|
3,275
|
(211
|
)
|
(6
|
)%
|
||||||||||
|
Total operating expenses
|
6,521
|
9,106
|
(2,585
|
)
|
(28
|
)%
|
||||||||||
|
Loss from operations
|
(6,521
|
)
|
(9,106
|
)
|
2,585
|
(28
|
)%
|
|||||||||
|
Interest income (expense), net
|
(828
|
)
|
(553
|
)
|
(275
|
)
|
50
|
%
|
||||||||
|
Benefit from income taxes
|
-
|
1,170
|
(1,170
|
)
|
100
|
%
|
||||||||||
|
Net loss and comprehensive loss
|
$
|
(7,349
|
)
|
$
|
(8,489
|
)
|
$
|
1,140
|
(13
|
)%
|
||||||
Research and Development Expenses
Research and development (R&D) expenses decreased to $3.5 million for the three months ended March 31, 2026 from $5.8 million for the three months ended March 31, 2025. The decrease of $2.3 million was primarily attributable to a decrease
of $1.2 million in clinical trial costs, a decrease of $0.7 million in manufacturing costs, and a decrease of $0.4 million in personnel costs.
General and Administrative Expenses
General and administrative expenses decreased to $3.1 million for the three months ended March 31, 2026 from $3.3 million for the three months ended March 31, 2025. The decrease of $0.2 million
was primarily attributable to a decrease in professional fees.
Benefit from Income Taxes
Income tax benefit was $0 for the three months ended March 31, 2026 and $1.2 million for the three months ended March 31, 2025. The decrease of $1.2 million was due to us
having met the statutory $20 million lifetime cap on total cumulative value of NOLs sold, which makes us ineligible to participate in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss (NOL) program.
Liquidity and Capital Resources
In August 2024, we entered into an Amended and Restated At Market Issuance Sales Agreement, or the New Sales Agreement, with B.
Riley Securities, Inc. and H.C. Wainwright & Co., LLC, with terms that are substantially consistent with those included in the original Sales Agreement. During the three months ended March 31, 2026 and 2025, the Company sold 937,420 shares
of common stock and 205,250 shares of common stock for a net value of $0.85 million and $0.3 million, respectively, pursuant to the New Sales Agreement. The New Sales
Agreement was terminated on May 1, 2026.
28
Index
In August 2022, we entered into a venture loan and security agreement, or the Loan and Security Agreement, with Horizon Technology Finance Corporation, as lender and
collateral agent for itself and the other lenders. In total, the Company received $24.6 million in net proceeds under the Loan and Security Agreement. Our indebtedness under the Loan and Security Agreement was satisfied in full and retired in
full with a portion of the proceeds received from the Securities Purchase Agreement, as discussed below.
In January and February of 2025, we received approximately $1.2 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant our
participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2023.
In February 2025, we entered into a securities purchase agreement with certain purchasers, pursuant to which we agreed to sell an aggregate of 6,396,787 shares of common
stock, pre-funded warrants to purchase up to an aggregate of 933,334 shares of common stock, and common stock warrants to purchase up to an aggregate of 7,330,121 shares of common stock at a combined purchase price of $1.50 per share and warrant,
or the “February 2025 Offering”. Two of our directors participated in the February 2025 Offering and purchased 30,121 shares of common stock in the aggregate at an offering price per share of $1.66 and common stock warrants to purchase 30,121
shares of common stock. The common stock warrants issued to our directors have an exercise price per share of $1.53 but are otherwise identical to the common stock warrants issued to all other participants in the February 2025 Offering. Aggregate
gross proceeds from the February 2025 Offering were approximately $11 million. Net proceeds to us from the February 2025 Offering, after deducting the placement agent fees and other estimated offering expenses payable by us, were approximately
$10.05 million. The February 2025 Offering closed on February 28, 2025.
On April 30, 2025, we entered into a securities purchase agreement, or the “Securities Purchase Agreement” with certain third party lenders and JGB Collateral LLC, as
collateral agent. Pursuant to the Securities Purchase Agreement, we agreed to sell (i) senior secured convertible debentures in an aggregate principal amount of $22,222,222 (collectively, the “Debentures”) and (ii) warrants to purchase up to
1,000,000 shares of common stock, for an exercise price of $2.52 per share (collectively, the “Warrants”), subject to adjustments as set forth in the Warrants, for a total purchase price of $20,000,000. Approximately $19 million of the proceeds
from the transactions contemplated by the Securities Purchase Agreement were used to satisfy in full and retire our indebtedness under the Loan and Security Agreement. The remaining proceeds from the transactions contemplated by the Securities
Purchase Agreement were used for general corporate purposes and transaction expenses. Pursuant to the Debentures, we must at all times maintain a cash balance equal to the lesser of (a) $15.0 million and (b) the then-outstanding principal balance
of the Debentures plus $3.0 million, in a deposit account subject to an account control agreement. In addition, for as long as any portion of the Debentures remain outstanding, we are generally restricted from: incurring indebtedness; granting or
suffering liens on any of our property or assets; amending our organizational documents; repurchasing any of our securities; paying dividends; selling, disposing, licensing or leasing our assets other than in the ordinary course; and other
customary restrictive covenants. Effective as of August 28, 2025, the holders of the Debentures may require us to redeem a portion of the Debentures in an amount up to $500,000 per calendar month in the aggregate. During the year ended December
31, 2025 and the three months ended March 31, 2026, the Company redeemed an aggregate of $2.5 million and $1.5 million of the principal amount of the Debentures, respectively. In connection with the Securities Purchase Agreement, on April 30,
2025, we also entered into a Security Agreement (the “Security Agreement”), pursuant to which we and our subsidiary granted, for the benefit of the investors, to secure our obligations under the Securities Purchase Agreement and the Debentures,
(i) first priority liens on certain assets, in each case subject to permitted liens described in the Security Agreement. In addition, on April 30, 2025, we and our subsidiary entered into a Subsidiary Guarantee, pursuant to which we and our
subsidiary guaranteed all of our obligations under the Securities Purchase Agreement and the Debentures.
In November 2025, we entered into a securities purchase agreement with certain purchasers, pursuant to which we agreed to sell an aggregate of 5,741,000 shares of common stock, pre-funded
warrants to purchase up to an aggregate of 59,000 shares of common stock, and common stock warrants to purchase up to an aggregate of 5,800,000 shares of common stock (the “November 2025 Offering”). The offering price per share of common stock
was $0.91 and the purchase price of each pre-funded warrant was $0.9099. Each common warrant issued in connection with the November 2025 Offering had an exercise price of $1.00 per share, can be exercised six months after the date of issuance and
will expire five years thereafter. Aggregate gross proceeds from the November 2025 Offering were $5.3 million. Net proceeds to the Company from the offering, after deducting the placement agent fees and other estimated offering expenses payable
by the Company, were approximately $4.8 million. In addition, in connection with the November 2025 Offering, we entered into a warrant amendment agreement pursuant to which we agreed, effective upon closing of the November 2025 Offering, to amend
certain existing warrants to purchase up to an aggregate of 5,948,334 shares of common stock at an exercise price of $1.50 per share, so that the amended warrants will have a reduced exercise price of $1.00 per share effective upon the closing of
the November 2025 Offering and will be exercisable beginning on the date that is six (6) months after the closing of the November 2025 Offering. The November 2025 Offering closed on November 12, 2025.
As of March 31, 2026, we had $21.7 million in cash and cash equivalents. Our primary uses of cash are to fund operating expenses, primarily research and development
expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
29
Index
We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within
one year beyond the filing of this Quarterly Report on Form 10-Q. Our budgeted cash requirements in 2026 and beyond include expenses related to continuing development and clinical studies as well as payments on our debt.
We plan to continue to fund our operations and capital funding needs through existing cash and additional equity and/or debt financing. However, we cannot be certain that
additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or our existing stockholders. We may also enter into government funding programs and consider selectively partnering for
clinical development and commercialization. The sale of additional equity would result in additional dilution to our stockholders. Incurring debt financing would result in debt service obligations, and the instruments governing such debt could
provide for operating and financing covenants that would restrict our operations. If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may be required to delay, limit, reduce, or terminate our product
development or future commercialization efforts or grant rights to develop and market immunotherapies that we would otherwise prefer to develop and market ourselves. In addition, the Debentures require us to maintain minimum cash balances in a
deposit account subject to an account control agreement and impose restrictive covenants, as described above. Any of these actions could harm our business, results of operations and prospects.
As a result of these uncertainties, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of the
issuance of these unaudited Condensed Consolidated Financial Statements. The unaudited Condensed Consolidated Financial Statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that would
result if we are unable to continue as a going concern.
Cash Flows
The following table shows a summary of our cash flows for each of the periods indicated (in thousands):
|
Three Months Ended
March 31,
|
||||||||
|
2026
|
2025
|
|||||||
|
Net cash used in operating activities
|
$
|
(4,372
|
)
|
$
|
(9,032
|
)
|
||
|
Net cash provided by financing activities
|
(680
|
)
|
7,321
|
|||||
|
Net increase (decrease) in cash and cash equivalents
|
$
|
(5,051
|
)
|
$
|
(1,711
|
)
|
||
Net Cash Used in Operating Activities
Net cash used in operating activities was $4.3 million and $9.0 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in net
cash used in operating activities of $4.7 million was primarily due to a decrease in the non-cash stock-based compensation expense of $0.1 million and a decrease in issuance of shares in consulting agreements of $0.2 million, offset by
a decrease in net loss of $1.1 million, an increase in the amortization of debt discount of $0.2 million and changes in the timing of working capital requirements, including an increase in prepaid expenses and other assets, offset by decreases in
accrued expenses and accounts payable.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2026 and 2025 decreased by $8.0 million primarily
due to a $7.0 million decrease in proceeds from the issuance of common stock, a decrease in proceeds from the issuance warrants and pre-funded warrants of $3.2
million, offset by a decrease of $1.6 million in loan repayments and $0.5 million in proceeds from issuance of common stock through our at-the-market program.
Operating Capital Requirements
To date, we have not generated any product revenue. We do not know when, or if, we will generate any product revenue and we do not expect to generate significant product
revenue unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as
we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the risks incident to the development of new products, and may encounter
unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business. We expect to incur additional costs associated with operating as a public company and anticipate that we will need substantial
additional funding in connection with our continuing operations.
30
Index
We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our
ability to continue as a going concern within one year after the filing of this Quarterly Report. Our budgeted cash requirements in 2026 and beyond include expenses related to continuing development and clinical studies as well as payments on
our debt. Until we can generate significant cash from our operations, we expect to continue to fund our operations with available financial resources. These financial resources may not be adequate to sustain our operations. While we intend to
finance our cash needs principally through equity or debt financings, collaborations, strategic alliances, or license agreements with third parties, there is no assurance that new financing will be available to us on commercially acceptable
terms or in the amounts required, if at all. In addition, the terms of the Debentures allow for the holders to call the outstanding balance of the Debentures
if we fail to maintain the minimum cash balances required by the Debentures.
We have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least 12 months from the date of the issuance of these
unaudited Condensed Consolidated financial statements.
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner
than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future
funding requirements will depend on many factors, including, but not limited to:
| ● |
the initiation, progress, timing, costs and results of our planned clinical trials;
|
| ● |
the effects of health epidemics, pandemics, or outbreaks of infectious diseases, on our business operations, financial condition, results of operations and cash flows;
|
| ● |
the outcome, timing and cost of meeting regulatory requirements established by the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory
authorities;
|
| ● |
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
|
| ● |
the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us now or in the future;
|
| ● |
the effect of competing technological and market developments;
|
| ● |
the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our products on our own; and
|
| ● |
the initiation, progress, timing and results of our commercialization of our clinical and product candidates, if approved, for commercial sale.
|
Please see the section titled “Risk Factors” elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional
risks associated with our operations.
Purchase Commitments
We have no material non-cancelable purchase commitments with service providers as we have generally contracted on a cancelable, purchase order basis.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance
with U.S. GAAP. Our accounting policies are more fully described in Note 2 to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. As described in Note 2, the preparation of these financial statements
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the expenses incurred during the
reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ from these estimates under different assumptions or conditions. We
believe that the discussion in our management’s discussion and analysis addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require
management’s most difficult, subjective and complex judgments.
There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026 from those disclosed in our Annual Report on Form 10-K for the
year ended December 31, 2025.
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Index
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Smaller Reporting Company
We are a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. We will cease to be a smaller reporting company if we
have a non-affiliate public float in excess of $250 million and annual revenues in excess of $100 million, or a non-affiliate public float in excess of $700 million, determined on an annual basis. As a smaller reporting company, we are permitted
and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not smaller reporting companies. We will continue to take advantage of some or all of the available exemptions.
| ITEM 3: |
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
Interest Rate Risk
We are exposed to market related changes in interest rates. As of March 31, 2026, our cash equivalents consisted of bank deposits and money market accounts. Additionally, the principal balance
under our Debentures bears a floating interest pegged to the prime rate. 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 March 31, 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 March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Index
| 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 March 31, 2026 contained in this Quarterly Report on Form 10-Q.
| ITEM 1A. |
RISK FACTORS
|
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.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
There were no unregistered sales of the Company’s equity securities during the three months ended March 31, 2026.
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
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None.
| ITEM 4. |
MINE SAFETY DISCLOSURES
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Not applicable.
| ITEM 5. |
OTHER INFORMATION
|
| ITEM 6. |
EXHIBITS
|
33
Index
EXHIBIT INDEX
|
Exhibit
Number
|
Exhibit Description
|
|
|
4.1*
|
Form of Promissory Note (YA II PN, Ltd.)
|
|
|
4.2*
|
Form of Warrant (YA II PN, Ltd.)
|
|
|
10.1*
|
Securities Purchase Agreement by and between PDS Biotechnology
Corporation and YA II PN, Ltd., dated as of April 30, 2026
|
|
|
10.2*
|
Form of Registration Rights Agreement (YA II PN, Ltd.)
|
|
|
10.3*
|
Form of Guaranty Agreement (YA II PN, Ltd.)
|
|
|
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.
|
34
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
|
||
|
May 14, 2026
|
By:
|
/s/ Frank Bedu-Addo
|
|
Frank Bedu-Addo, Ph.D.
|
||
|
President and Chief Executive Officer
|
||
|
(Principal Executive Officer)
|
||
|
May 14, 2026
|
By:
|
/s/ Lars Boesgaard
|
|
Lars Boesgaard
|
||
|
Chief Financial Officer
|
||
|
(Principal Financial and Accounting Officer)
|
||
35
FAQ
What was PDSB’s net loss for the quarter ended March 31, 2026?
PDS Biotechnology reported a net loss of $7.3 million for the quarter ended March 31, 2026. This compares with a $8.5 million net loss a year earlier, reflecting reduced research and development spending and slightly lower general and administrative expenses.
How much cash did PDSB have as of March 31, 2026?
As of March 31, 2026, PDS Biotechnology held $21.7 million in cash and cash equivalents. During the quarter it used $4.4 million in operating cash and made $1.5 million of principal payments on its senior secured convertible debentures.
What are PDSB’s main operating expenses in the latest quarter?
PDS Biotechnology’s primary operating expenses were $3.5 million in research and development and $3.1 million in general and administrative costs for the quarter ended March 31, 2026. Total operating expenses were $6.5 million, down from $9.1 million in the prior-year period.
Why did PDSB issue a going concern warning in its Q1 2026 report?
Management concluded substantial doubt exists about PDS Biotechnology’s ability to continue as a going concern due to recurring losses, no revenues, limited cash, and obligations under senior secured convertible debentures, including minimum cash requirements and restrictive covenants that could accelerate repayment on adverse developments.
What debt does PDSB have outstanding under its senior secured convertible debentures?
PDS Biotechnology originally issued $22.2 million in senior secured convertible debentures. By March 31, 2026 it had redeemed $4.0 million of principal in total, leaving a reduced balance subject to a high effective interest rate and ongoing monthly redemption rights for lenders.
What subsequent financing and debt actions did PDSB disclose after March 31, 2026?
On April 30, 2026, PDS Biotechnology agreed to issue a $6.0 million promissory note with warrants and to establish a new at-the-market facility. It also delivered notice to prepay all remaining debentures in cash at 103% of principal plus accrued interest around June 12, 2026.