[10-Q] Phio Pharmaceuticals Corp. Quarterly Earnings Report
Phio Pharmaceuticals (PHIO) reported Q3 2025 results showing a net loss of $2.392 million on operating expenses of $2.505 million. Cash and cash equivalents were $10.705 million as of September 30, 2025, up from $5.382 million at year-end 2024, reflecting warrant exercises and registered direct offerings.
Subsequent to quarter-end, Phio entered inducement agreements that generated approximately $13.4 million in gross proceeds, with anticipated fees of $1.3 million, and issued new Series A warrants. The company states it believes it has sufficient liquidity for at least 12 months with these proceeds. Shares outstanding were 5,784,770 at September 30, 2025, and 10,764,428 as of November 11, 2025.
R&D expense was $1.181 million in Q3, driven by PH-762 clinical and CMC activity; G&A was $1.324 million. Year-to-date net loss was $6.327 million. In its ongoing Phase 1b trial of intratumoral PH-762, the fifth cohort showed 100% tumor clearance in one patient, >90% in a second, and >50% in a third at Day 36; no dose-limiting toxicities have been observed to date.
- Liquidity improved: approximately $13.4 million gross proceeds after quarter-end; company states 12+ months cash coverage with proceeds.
- None.
Insights
New capital extends runway; PH-762 updates remain early-stage.
Phio ended the quarter with
Operating spend rose with PH-762 development: Q3 R&D was
Clinical signals for PH-762 include Day 36 pathologic responses in the fifth cohort (one 100% clearance; others >
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
Phio Pharmaceuticals Corp.
(Exact name of registrant as specified in its charter)
| | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive office) (Zip code)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | The |
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.
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| | ☒ | Smaller reporting company | | |
| Emerging growth company | |
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 checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 11, 2025, Phio Pharmaceuticals Corp. had
PHIO PHARMACEUTICALS CORP.
FORM 10-Q — QUARTER ENDED September 30, 2025
INDEX
| Part No. |
Item No. |
Description |
Page |
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| I |
FINANCIAL INFORMATION |
3 |
||||
| 1 |
Financial Statements (Unaudited) |
3 |
||||
| Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 |
3 |
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| Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 |
4 |
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| Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 |
5 |
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| Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 |
6 |
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| Notes to Condensed Consolidated Financial Statements |
7 |
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| 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
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| 3 |
Quantitative and Qualitative Disclosures About Market Risk |
25 |
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| 4 |
Controls and Procedures |
25 |
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| II |
OTHER INFORMATION |
26 |
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| 1 |
Legal Proceedings |
26 |
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| 1A |
Risk Factors |
26 |
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| 2 |
Unregistered Sales of Equity Securities and Use of Proceeds |
27 |
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| 3 |
Defaults Upon Senior Securities |
27 |
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| 4 |
Mine Safety Disclosures |
27 |
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| 5 |
Other Information |
27 |
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| 6 |
Exhibits |
28 |
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| Signatures |
30 |
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PART I — FINANCIAL INFORMATION
| ITEM 1. |
FINANCIAL STATEMENTS |
PHIO PHARMACEUTICALS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
| (Unaudited) | ||||||||
| September 30, | December 31, | |||||||
| ASSETS | 2025 | 2024 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Series D Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 issued and outstanding at each of September 30, 2025 and December 31, 2024 | ||||||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized; 5,784,770 and 1,733,717 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
PHIO PHARMACEUTICALS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
(Unaudited)
| Three Months Ended |
Nine Months Ended |
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| September 30, |
September 30, |
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| 2025 |
2024 |
2025 |
2024 |
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| Operating expenses: |
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| Research and development |
$ | $ | $ | $ | ||||||||||||
| General and administrative |
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| Total operating expenses |
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| Operating loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Interest income (expense), net |
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| Other income (expense), net |
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| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Net loss per common share: |
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| Basic and diluted |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Weighted average number of common shares outstanding |
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| Basic and diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
PHIO PHARMACEUTICALS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in thousands, except share data)
(Unaudited)
| Common Stock | Additional | |||||||||||||||||||
| Paid in | Accumulated | |||||||||||||||||||
| For the Three and Nine Months Ended September 30, 2025 | Shares | Amount | Capital | Deficit | Total | |||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||
| Issuance of common stock and warrants, net of offering costs of $1,028 | ||||||||||||||||||||
| Stock-based compensation expense | – | |||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||
| Issuance of common stock and warrants, net of offering costs of $435 | ||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ||||||||||||||||||||
| Shares withheld for payroll taxes | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common Stock | Additional | |||||||||||||||||||
| Paid in | Accumulated | |||||||||||||||||||
| For the Three and Nine Months Ended September 30, 2024 | Shares | Amount | Capital | Deficit | Total | |||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | ||||||||||||||||||||
| Shares withheld for payroll taxes | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Cash-in-lieu of fractional shares for reverse stock split | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Issuance of common stock and warrants, net of offering costs | ||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
PHIO PHARMACEUTICALS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
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| Depreciation and amortization |
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| Amortization of right of use asset |
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| Net gain/loss on disposal of property and equipment |
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| Stock-based compensation |
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| Changes in operating assets and liabilities: |
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| Prepaid expenses and other assets |
( |
) | ||||||
| Accounts payable |
( |
) | ||||||
| Accrued expenses |
( |
) | ||||||
| Lease liability |
( |
) | ||||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| Cash flows from investing activities: |
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| Cash paid for purchase of property and equipment |
( |
) | ||||||
| Net cash used in investing activities |
( |
) | ||||||
| Cash flows from financing activities: |
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| Net proceeds from the exercise of warrants |
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| Net proceeds from the issuance of common stock and warrants |
( |
) | ||||||
| Payments of taxes for net shares settled restricted stock unit issuances |
( |
) | ( |
) | ||||
| Net cash provided by financing activities |
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| Net decrease in cash, cash equivalents and restricted cash |
( |
) | ||||||
| Cash, cash equivalents and restricted cash at the beginning of period |
||||||||
| Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
| 2025 |
2024 |
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| Supplemental disclosure of cash flow information: |
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| Interest paid |
$ | $ | ||||||
See accompanying notes to consolidated financial statements.
PHIO PHARMACEUTICALS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Significant Accounting Policies
Nature of Operations
Phio Pharmaceuticals Corp. (“Phio” or the “Company”) is a clinical stage biopharmaceutical company whose proprietary INTASYL® self-delivering small interfering RNAi(siRNA) technology is designed to make immune cells more effective in killing tumor cells. The Company is developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems. The Company is committed to discovering and developing innovative cancer treatments for patients by creating new pathways toward a cancer-free future.
Phio was incorporated in the state of Delaware in 2011 as RXi Pharmaceuticals Corporation. On November 19, 2018, the Company changed its name to Phio Pharmaceuticals Corp., to reflect its transition from a platform company to one that is fully committed to developing groundbreaking immuno-oncology therapeutics.
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Certain information and footnote disclosures that are included in the Company’s annual consolidated financial statements, but that are not required for interim reporting purposes, have been condensed or omitted. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of results for the periods presented.
These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025 (the “2024 Form 10-K”). Interim results are not necessarily indicative of results for a full year.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MirImmune, LLC. All material intercompany accounts have been eliminated in consolidation.
Segments
The Company operates as one operating segment and all assets are located in the United States.
Reverse Stock Split
Effective July 5, 2024, the Company completed a 1-for-
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas subject to significant estimates and judgment include, among others, those related to the fair value of equity awards, accruals for research and development expenses, useful lives of property and equipment, and the valuation allowance on the Company’s deferred tax assets. On an ongoing basis the Company evaluates its estimates and bases its estimates on historical experience and other relevant assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from these estimates.
Liquidity
The Company has reported recurring losses from operations since its inception and expects to continue to have negative cash flows from operations for the foreseeable future. Historically, the Company’s primary source of funding has been from sales of its securities. The Company’s ability to continue to fund its operations is dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity, or strategic opportunities, in order to maintain its operations. This is dependent on a number of factors, including the market demand or liquidity of the Company’s common stock. There is no guarantee that debt, additional equity or other funding will be available to the Company on acceptable terms, or at all. If the Company fails to obtain additional funding when needed, the Company would be forced to scale back or terminate its operations or seek to merge with or to be acquired by another company.
Based on current cash flow projections, the Company believes it has sufficient cash and cash equivalents, including net proceeds from its November 2025 Financing (as defined below), to meet its current planned obligations for at least 12 months from the date these financial statements are issued. The Company has limited cash resources, has incurred recurring operating losses and negative cash flows from its operations since its inception and has not yet recognized any product revenues. These factors have previously raised doubt about the Company’s ability to continue as a going concern. With the net proceeds from the November 2025 Financing, the Company was able to alleviate such doubt as of the date of the filing of this Quarterly Report on Form 10-Q.
Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents include unrestricted cash accounts, money market investments and highly liquid investment instruments with original maturity of three months or less at the date of purchase.
Other than as set forth above, there have been no material changes to the significant accounting policies disclosed in the Company’s 2024 Form 10-K.
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. In addition to new disclosures associated with the rate reconciliation, the ASU requires information pertaining to taxes paid (net of refunds received) to be disaggregated for federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. The ASU also describes items that need to be disaggregated based on their nature, which is determined by reference to the item’s fundamental or essential characteristics, such as the transaction or event that triggered the establishment of the reconciling item and the activity with which the reconciling item is associated. The ASU eliminates the historic requirement that entities disclose information concerning unrecognized tax benefits having a reasonable possibility of significantly increasing or decreasing in the 12 months following the reporting date. This ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU should be applied on a prospective basis; however, retrospective application is permitted. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires additional disclosure about the specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure requirements but affect where this information appears in the notes to financial statements. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statements.
Recent Tax Legislation
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions and allows immediate expensing of certain domestic research and experimental expenditures under new Section 174A of the Internal Revenue Code. The Company does not expect the impact of the OBBBA to be material to its consolidated financial statements.
2. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities are comprised of the following:
| September 30, |
December 31, |
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| 2025 |
2024 |
|||||||
| Accounts payable trade |
$ | $ | ||||||
| Research and development accruals |
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| Professional fee accrual |
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| Payroll accruals |
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| $ | $ | |||||||
3. Collaboration Agreement
AgonOx, Inc. (“AgonOx”)
In February 2021, the Company entered into a clinical co-development collaboration agreement (the “Clinical Co-Development Agreement”) with AgonOx, a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of the immune response to cancer. Under the Clinical Co-Development Agreement, Phio and AgonOx were working to develop a T cell-based therapy using the Company’s lead product candidate, PH-762, and AgonOx’s “double positive” tumor infiltrating lymphocytes (“DP TIL”) technology. Per the terms of the Clinical Co-Development Agreement, the Company agreed to reimburse AgonOx up to $
In May 2024, the Company terminated the Clinical Co-Development Agreement with AgonOx, effective immediately. Effective as of the date of termination, the Clinical Co-Development Agreement and the continuing obligations of the Company and AgonOx thereunder were terminated in their entirety. The Company is no longer required to provide financial support for the development costs incurred in the Clinical Co-Development Agreement and the Company is no longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology.
The Company paid AgonOx all payment obligations that accrued prior to the termination of the Clinical Co-Development Agreement. Pursuant to the terms of the Clinical Co-Development Agreement, each of the Company and AgonOx were responsible for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial. The Company made the remaining payment of $
The Company did not recognize expense with respect to the Clinical Co-Development Agreement during the three and nine months ended September 30, 2025. During the three and nine months ended September 30, 2024, the Company recognized approximately $
4. Leases
The Company leases space for various corporate and research purposes. It is the Company’s policy to apply the provisions of ASC 842 when accounting for arrangements that meet the criteria to be a lease. The Company calculates the lease liability as the present value of the lease’s cash flows using the interest rate implicit in the lease, if determinable. If the rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate. The incremental borrowing rate is defined as the rate the Company would have to pay to borrow on a collateralized basis over the lease term. The Company has elected the accounting policy election available under ASC 842 to not record a lease liability for leases with a term of less than one year.
From April 2014 to March 2024, the Company leased space that was utilized as its corporate headquarters and primary laboratory. The lease expired on March 31, 2024. On March 1, 2024, the Company commenced a lease for a laboratory facility located at 17 Briden Street, Worcester, Massachusetts. The lease had an original expiration date of August 31, 2024 and was subsequently extended through February 28, 2025. The Company continues to lease the space on a month-to-month basis. Monthly rent is approximately $
Operating lease costs included in operating expense were approximately $
There was
5. Stockholders’ Equity
Financings
May 2024 Financing
On May 16, 2024, the Company entered into a purchase agreement (the “Purchase Agreement”) with Triton Funds LP (“Triton”), pursuant to which the Company agreed to sell, and Triton agreed to purchase, upon the Company’s request in one or more transactions, up to
July 2024 Financing
On July 11, 2024, the Company entered into inducement letter agreements (the “ July 2024 Inducement Letter Agreements”) with certain holders of certain of the Company’s existing warrants to purchase up to an aggregate of
Pursuant to the terms of the July 2024 Inducement Letter Agreements, in the event that the exercise of the existing warrants in the July 2024 Financing would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued the number of shares that would not cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of Common Stock in abeyance. Accordingly, an aggregate of
December 19, 2024 Concurrent Registered Direct Offering and Private Placement
On December 19, 2024, the Company entered into a securities purchase agreement (the “ December 19, 2024 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct offering (the “ December 19, 2024 Registered Direct Offering”) and concurrent private placement (the “ December 19, 2024 Private Placement” and, together with the December 19, 2024 Registered Direct Offering, the “ December 19, 2024 Offerings”). The December 19, 2024 Offerings closed on December 20, 2024. The net proceeds to the Company from the December 19, 2024 Offerings were approximately $
Pursuant to the December 19, 2024 Securities Purchase Agreement, the Company offered and sold in the December 19, 2024 Registered Direct Offering
December 23, 2024 Concurrent Registered Direct Offering and Private Placement
On December 23, 2024, the Company entered into a securities purchase agreement (the “ December 23, 2024 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ December 23, 2024 Registered Direct Offering”) and concurrent private placement (the “ December 23, 2024 Private Placement” and, together with the December 23, 2024 Registered Direct Offering, the “ December 23, 2024 Offerings” and, together with the December 19, 2024 Offerings, the “ December 2024 Offerings”). The December 23, 2024 Offerings closed on December 24, 2024. The net proceeds to the Company from the December 23, 2024 Offerings were approximately $
Pursuant to the December 23, 2024 Securities Purchase Agreement, the Company offered and sold in the December 23, 2024 Registered Direct Offering
In connection with the December 2024 Offerings, the Company agreed to issue to the Placement Agent, or its designees, warrants to purchase up to an aggregate of
January 13, 2025 Concurrent Registered Direct Offering and Private Placement
On January 13, 2025, the Company entered into a securities purchase agreement (the “ January 13, 2025 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ January 13, 2025 Registered Direct Offering”) and concurrent private placement (the “ January 13, 2025 Private Placement” and, together with the January 13, 2025 Registered Direct Offering, the “ January 13, 2025 Offerings”). The January 13, 2025 Offerings closed on January 14, 2025. In addition, the Company issued warrants to the Placement Agent to purchase a total of
Pursuant to the January 13, 2025 Securities Purchase Agreement, the Company offered and sold in the January 13, 2025 Registered Direct Offering
January 14, 2025 Concurrent Registered Direct Offering and Private Placement
On January 14, 2025, the Company entered into a securities purchase agreement (the “ January 14, 2025 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ January 14, 2025 Registered Direct Offering”) and concurrent private placement (the “ January 14, 2025 Private Placement” and together with the January 14, 2025 Registered Direct Offering, the “ January 14, 2025 Offerings”). The January 14, 2025 Offerings closed on January 15, 2025. In addition, the Company issued warrants to the Placement Agent to purchase a total of
Pursuant to the January 14, 2025 Securities Purchase Agreement, the Company offered and sold in the January 14, 2025 Registered Direct Offering
January 16, 2025 Concurrent Registered Direct Offering and Private Placement
On January 16, 2025, the Company entered into a securities purchase agreement (the “ January 16, 2025 Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct public offering (the “ January 16, 2025 Registered Direct Offering”) and concurrent private placement (the “ January 16, 2025 Private Placement” and, together with the January 16, 2025 Registered Direct Offering, the “ January 16, 2025 Offerings” and the January 16, 2025 Offerings, together with the January 13, 2025 Offerings and the January 14, 2025 Offerings, the “ January 2025 Offerings”). The January 16, 2025 Offerings closed on January 17, 2025. In addition, the Company issued warrants to the Placement Agent to purchase a total of
Pursuant to the January 16, 2025 Securities Purchase Agreement, the Company offered and sold in the January 16, 2025 Registered Direct Offering
July 2025 Financing
On July 25, 2025, the Company entered into inducement letter agreements (the “ July 2025 Inducement Letter Agreements”) with certain holders of certain of the Company’s existing warrants to purchase an aggregate of
In addition, the Company issued warrants to the placement agent, H.C. Wainwright & Co., LLC, to purchase up to
Warrants
The Company first assesses warrants that are issued by the Company under the FASB ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) to determine whether the warrants are within the scope of ASC 480. If there are no instances outside of the Company’s control that could require cash settlement, the Company then applies and follows the applicable accounting guidance in the FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Financial instruments are accounted for as either derivative liabilities or equity instruments depending on the specific terms of the agreement. Based on the assessment of the warrants issued by the Company under the guidance in ASC 480 and ASC 815, the warrants issued by the Company have been classified within stockholder’s equity.
During the three months ended September 30, 2025 and 2024, there were
During the three and nine months ended September 30, 2025, there were
The following table summarizes the Company’s outstanding warrants, all of which are classified as equity instruments, at September 30, 2025:
| 2025 | 2024 | |||||||||||||||
| Weighted- | Weighted- | |||||||||||||||
| Average | Average | |||||||||||||||
| Number | Exercise Price | Number | Exercise Price | |||||||||||||
| of Shares | Per Share | of Shares | Per Share | |||||||||||||
| Outstanding at January 1, | $ | $ | ||||||||||||||
| Issued | ||||||||||||||||
| Exercised | ( | ) | ( | ) | ||||||||||||
| Expired | ( | ) | ||||||||||||||
| Outstanding at September 30, | $ | $ | ||||||||||||||
6. Stock-based Compensation
Restricted Stock Units
Restricted stock units (“RSUs”) are issued under the Company’s 2020 Long-Term Incentive Plan (the “2020 Plan”). RSUs are generally subject to the satisfaction of certain service requirements. RSUs granted by the Company to employees generally cliff vest
The following table summarizes the activity of the Company’s RSUs for the nine months ended September 30, 2025:
| Weighted- | ||||||||
| Average | ||||||||
| Grant Date | ||||||||
| Number | Fair Value | |||||||
| of Shares | Per Share | |||||||
| Unvested units at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Unvested units at September 30, 2025 | $ | |||||||
There were
Stock-based compensation expense related to RSUs was $
The aggregate fair value of awards that vested during the nine months ended September 30, 2025 was $
Stock Options
Stock options are available for issuance under the 2020 Plan. Stock options granted by the Company to participants generally vest annually over
The Company uses the Black-Scholes option-pricing model to determine the fair value of all its option grants. The risk-free interest rate used for each grant was based upon the yield on zero-coupon U.S. Treasury securities with a term similar to the expected life of the related option. The Company’s expected stock price volatility assumption is based upon the Company’s own implied volatility. As the Company has limited stock option exercise information, the expected life assumption used for option grants is based upon the simplified method provided for under the FASB ASC Topic 718, “Compensation — Stock Compensation”. The dividend yield assumption is based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends.
The Company did not grant any stock options during the three or nine months ended September 30, 2025 or 2024.
The following table summarizes the activity of the Company’s stock options for the nine months ended September 30, 2025:
| Weighted- | ||||||||||||
| Average | ||||||||||||
| Exercise | Aggregate | |||||||||||
| Number | Price | Intrinsic | ||||||||||
| of Shares | Per Share | Value | ||||||||||
| Balance at December 31, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Forfeited | ||||||||||||
| Expired | ( | ) | ||||||||||
| Balance at September 30, 2025 | $ | $ | ||||||||||
| Exercisable at September 30, 2025 | $ | $ | ||||||||||
Stock-based compensation expense related to stock options for the nine months ended September 30, 2025 and 2024 was $
Compensation Expense Related to Equity Awards
The following table sets forth total stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024, in thousands:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | ||||||||||||
As of September 30, 2025, the total unrecognized compensation cost related to non-vested RSUs was approximately $
7. Net Loss per Common Share
Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per share is computed by dividing the Company’s net loss by the weighted average number of common shares outstanding and the impact of the dilutive effect of potential common stock equivalents, except when the inclusion of such potential common stock equivalents would be anti-dilutive. Dilutive potential common stock equivalents primarily consist of stock options, RSUs and warrants. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented because the impact of these items is generally anti-dilutive during periods of net loss.
The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Stock options |
||||||||
| Unvested RSUs |
||||||||
| Warrants |
||||||||
| Total |
||||||||
8. Segment Information
The Company has one reportable segment and operates as a clinical stage biopharmaceutical company. To date, the Company has yet to generate operating revenues and does not expect to generate any revenue in the foreseeable future. The Company's chief operating decision maker (CODM) is the President and Chief Executive Officer (CEO). The accounting policies of the single segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the single segment and decides how to allocate resources based on net loss as reported on the condensed consolidated statements of operations as net loss. The CODM uses net loss to monitor budget versus actual results and to evaluate overall cash burn of the business. All of the Company’s operations occur within the United States.
The following table presents selected financial information with respect to the Company's single operating segment (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Research and development | ||||||||||||||||
| PH-762 | $ | $ | $ | $ | ||||||||||||
| PH-894 | ||||||||||||||||
| Employee expense, lab supplies and overhead | ||||||||||||||||
| Total research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other income, net | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
9. Subsequent Events
On November 3, 2025, the Company entered into inducement letter agreements (the “ November 2025 Inducement Letter Agreements”) with certain holders of the Company’s existing common stock warrants to exercise such warrants for an aggregate of
Pursuant to the November 2025 Inducement Letter Agreements, in consideration for the exercise of such warrants for cash and the payment of an additional $
The gross proceeds to the Company from the November 2025 Financing are approximately $
Pursuant to the terms of the November 2025 Inducement Letter Agreements, in the event that the exercise of the existing warrants in the November 2025 Financing would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued the number of shares that would not cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of common stock in abeyance. Accordingly, an aggregate of
| ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
In this report, “we,” “our,” “ours,” “us,” “Phio” and the “Company” refers to Phio Pharmaceuticals Corp. and our subsidiary, MirImmune, LLC and the ongoing business operations of Phio Pharmaceuticals Corp. and MirImmune, LLC, whether conducted through Phio Pharmaceuticals Corp. or MirImmune, LLC.
This management’s discussion and analysis of financial condition as of September 30, 2025 and results of operations for the three and nine months ended September 30, 2025 and 2024 should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025 (the “2024 Form 10-K”).
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “intends,” “believes,” “anticipates,” “indicates,” “plans,” “expects,” “suggests,” “may,” “would,” “should,” “potential,” “designed to,” “will,” “ongoing,” “estimate,” “forecast,” “target,” “predict,” “could” and similar references, although not all forward-looking statements contain these words. Forward-looking statements are neither historical facts nor assurances of future performance. These statements are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements as a result of a number of important factors, including, but not limited to:
| ● |
we are dependent on the success of our INTASYL™ technology, and our product candidates based on this technology, which is unproven and may never lead to approved and marketable products; |
| ● |
our product candidates are in an early stage of development and we may fail, experience significant delays, never advance in clinical development or not be successful in our efforts to identify or discover additional product candidates, which may materially and adversely impact our business; |
| ● |
disruptions at the FDA, including due to a reduction in the FDA’s workforce and/or inadequate funding for the FDA, could prevent the FDA from performing normal functions on which our business relies, which could negatively impact our business; |
| ● |
the impact of the government shutdown on our business operation; |
| ● | if we experience delays or difficulties in identifying and enrolling subjects in clinical trials, it may lead to delays in generating clinical data and the receipt of necessary regulatory approvals; | |
| ● |
topline data may not accurately reflect or may materially differ from the complete results of a clinical trial; |
| ● |
we rely upon third parties for the manufacture of the clinical supply for our product candidates; |
| ● |
our business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity; |
| ● |
we are dependent on the patents we own and the technologies we license, and if we fail to maintain our patents or lose the right to license such technologies, our ability to develop new products would be harmed; |
| ● |
we will require substantial additional funds to complete our research and development activities; |
| ● |
future financing may be obtained through, and future development efforts may be paid for by, the issuance of debt or equity, which may have an adverse effect on our stockholders or may otherwise adversely affect our business; |
| ● |
changes in U.S. and international trade policies may adversely impact our business and operating results; |
| ● |
we may not be able to remain compliant with the continued listing requirements of The Nasdaq Capital Market; and |
| ● |
the price of our Common Stock has been and may continue to be volatile. |
Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q speak as of the date hereof and the Company does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this report except as required by law.
Overview
Phio Pharmaceuticals Corp. (“Phio,” “we,” “our” or the “Company”) is a clinical stage biopharmaceutical company whose proprietary INTASYL® self-delivering small interfering RNAi (siRNA) technology is designed to make immune cells more effective in killing tumor cells. We are developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems. We are committed to discovering and developing innovative cancer treatments for patients by creating new pathways toward a cancer-free future.
In 2023, the Company implemented a cost rationalization program driven by its transition from discovery research to product development. This resulted in a decision not to renew the lease for office and laboratory space in Marlborough, Massachusetts, which expired on March 31, 2024. Beginning in April 2024, we have continued operations as a remote business with a laboratory facility in Worcester, Massachusetts. Beginning in January 2024, we rationalized discovery research personnel resulting in an overall headcount reduction by greater than 50%. Expense reductions have been redirected to funding the Phase 1b clinical trial with PH-762.
PH-762
PH-762 is an INTASYL compound designed to reduce the expression of cell death protein 1 (“PD-1”). PD-1 is a protein that inhibits T cells’ ability to kill cancer cells and is a clinically validated target in immunotherapy. Decreasing the expression of PD-1 can thereby increase the capacity of T cells, which protect the body from cancer cells and infections, to kill cancer cells.
Our preclinical studies have demonstrated that direct-to-tumor application of PH-762 resulted in potent anti-tumoral effects and have shown that direct-to-tumor treatment with PH-762 inhibits tumor growth in a dose dependent fashion in PD-1 responsive and refractory models. Importantly, direct-to-tumor administration of PH-762 resulted in activity against distant untreated tumors, indicative of a systemic anti-tumor response. We believe these data further support the potential for PH-762 to provide a strong local immune response without the dose immune-related adverse effects seen with systemic antibody therapy.
Phio's ongoing Phase 1b dose escalation clinical trial (NCT 06014086) is designed to evaluate the safety and tolerability of neoadjuvant use of intratumoral PH-762 in Stages 1, 2 and 4 cutaneous squamous cell carcinoma (cSCC), Stage 4 melanoma, and Stage 4 Merkel cell carcinoma. Per the trial’s protocol, patients receive four injections of PH-762 at weekly intervals and pathologic response is assessed on day 36 after the initial injection of PH-762. To date, pathologic results for the fifth and final cohort are as follows: 100% tumor clearance in one of three patients, > 90% clearance in the second patient, and > 50% clearance in the third patient at Day 36.
To date, a total of 18 patients with cutaneous carcinomas have completed treatment across five dose escalating cohorts in the Phase 1b trial. The cumulative pathologic response in 16 patients with cSCC include six with a complete response (100% clearance), two with a near complete response (> 90% clearance) and two with a partial response (> 50% clearance). A single patient with metastatic Merkel cell carcinoma had a partial response (> 50% clearance). Six patients with cSCC and one patient with metastatic melanoma had a pathologic non-response (< 50% clearance). No patients in the study, however, exhibited clinical progression of disease.
To date, there were no dose-limiting toxicities or clinically relevant treatment-emergent adverse effects in the patients receiving intratumoral PH-762 in this trial. Moreover, PH-762 has been well tolerated in all enrolled patients in each escalating dose cohort. Phio may continue to screen and treat additional patients as part of the fifth cohort.
Due to INTASYL’s ease of administration, we have shown that our compounds can easily be incorporated into current Adoptive Cell Therapy (ACT) manufacturing processes. In ACT, T cells are usually taken from a patient's own blood or tumor tissue, grown in large numbers in a laboratory, and then given back to the patient to help the immune system fight cancer. By treating T cells with our INTASYL compounds while they are being grown in the laboratory, we believe our INTASYL compounds can improve these immune cells to make them more effective in killing cancer. Preclinical data generated in collaboration with AgonOx, Inc. (“AgonOx”), a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of the immune response to cancer, demonstrated that treating AgonOx’s “double positive” tumor infiltrating lymphocytes (“DP TIL”) with PH-762 increased their tumor killing activity by two-fold.
In February 2021, we entered into a clinical co-development collaboration agreement (the “Clinical Co-Development Agreement”) with AgonOx to develop a T cell-based therapy using PH-762 and AgonOx’s DP TIL. Under the Clinical Co-Development Agreement, we had agreed to reimburse AgonOx up to $4 million in expenses incurred to conduct a Phase 1 clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors. We were also eligible to receive certain future development milestones and low single-digit sales-based royalty payments from AgonOx’s licensing of its DP TIL technology.
In May 2024, we terminated the Clinical Co-Development Agreement with AgonOx, effective immediately. Effective as of the date of termination, the Clinical Co-Development Agreement and our and AgonOx’s continuing obligations thereunder were terminated in their entirety. We are no longer required to provide financial support for the development costs incurred in the Clinical Co-Development Agreement and we are no longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology. We paid to AgonOx all payment obligations that accrued prior to the termination of the Clinical Co-Development Agreement. Pursuant to the terms of the Clinical Co-Development Agreement, each of the Company and AgonOx were responsible for its own costs and expenses incurred in connection with the wind-down of the Phase 1 clinical trial. We made the remaining payment of $34,320, which primarily related to accrued obligations for patient fees and other miscellaneous costs as of the date of termination to AgonOx on March 21, 2025. This settled all future obligations to AgonOx.
Prior to the termination of the Clinical Co-Development Agreement with AgonOx, PH-762 treated DP TIL were being evaluated in a Phase 1 clinical trial in the U.S. with up to 18 patients with advanced melanoma and other advanced solid tumors by AgonOx. The primary trial objectives were to evaluate the safety and to study the potential for enhanced therapeutic benefit from the administration of PH-762 treated DP TIL. AgonOx had enrolled three patients. The first two patients were treated with DP TIL only and a third patient was treated with a combination of DP TIL and PH-762. Clinical results for the single patient who received a combination of DP TIL and PH-762 showed tumor size reductions of 65%, 100% and 81%, respectively, in three melanoma lesions.
In July 2025, we entered into a comprehensive drug substance development services agreement with a U.S. manufacturing company pursuant to which the manufacturer will provide analytical and process development and cGMP manufacture of clinical supplies for Phio's lead development compound, PH-762.
PH-894
PH-894 is an INTASYL compound that is designed to silence BRD4, a protein that controls gene expression in both T cells and tumor cells, thereby affecting the immune system as well as the tumor. Intracellular and/or commonly considered “undruggable” targets, such as BRD4, represent a challenge for small molecule and antibody therapies. Therefore, what sets this compound apart is its dual mechanism: PH-894 suppression of BRD4 in T cells results in T cell activation, and suppression of BRD4 in tumor cells results in tumors becoming more sensitive to being killed by T cells.
Preclinical studies conducted have demonstrated that PH-894 resulted in a strong, concentration dependent and durable silencing of BRD4 in T cells and in various cancer cells. Similar to PH-762, preclinical studies have also shown that direct-to-tumor application of PH-894 resulted in potent and statistically significant anti-tumoral effects against distant untreated tumors, indicative of a systemic anti-tumor response. These preclinical data indicate that PH-894 can reprogram T cells and other cells in the tumor microenvironment to provide enhanced immunotherapeutic activity. We have completed the IND-enabling studies and are in the process of finalizing the study reports required for an IND submission with PH-894. As a result of the reprioritization to advance our clinical trial with PH-762 in the U.S., we have elected to defer the IND submission for PH-894.
Patents and Patent Applications
We actively protect our intellectual property and are prosecuting a number of patents and pending patent applications covering our compounds and technologies. We continue to rationalize our intellectual property position to protect our lead clinical candidates in key geographic regions while abandoning patents or applications that do not pertain to INTASYL or are country-specific in regions that are not of strategic geographic focus. A combined summary of these patents and patent applications is set forth below in the following table:
| Pending |
Issued |
||||||
| Applications |
Patents |
||||||
| United States |
9 |
27 |
|||||
| Canada |
2 |
2 |
|||||
| Europe |
5 |
18 |
|||||
| Japan |
4 |
8 |
|||||
| Other Markets |
3 |
4 |
|||||
Our portfolio includes 59 issued patents, 53 of which cover our INTASYL platform, and of those 29 cover immuno-oncology compounds and therapeutic uses. There are 19 patent families broadly covering both the composition and methods of use of our self-delivering INTASYL platform technology and uses of our INTASYL compounds targeting immune checkpoint, cellular differentiation and metabolism targets for ex vivo cell-based cancer immunotherapies. The INTASYL platform patents are scheduled to expire between 2029 and 2038.
Furthermore, there are 23 patent applications, encompassing what we believe to be important new RNAi compounds and their use as therapeutics, chemical modifications of RNAi compounds that improve the compounds’ suitability for therapeutic uses (including delivery) and compounds directed to specific targets (i.e., that address specific disease states). The patents that may issue from these pending patent applications will, if issued, be set to expire between 2029 and 2044, not including any patent term extensions that may be afforded under the Federal Food, Drug, and Cosmetic Act (“FFDCA”) (and the equivalent provisions in foreign jurisdictions) for any delays incurred during the regulatory approval process relating to human drug products (or processes for making or using human drug products).
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate and base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions and could have a material impact on our reported results.
There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our 2024 Form 10-K. For a discussion of our critical accounting policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2024.
Results of Operations
The following data summarizes the results of our operations for the periods indicated, in thousands:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||
| Dollar |
Dollar |
|||||||||||||||||||||||
| Description |
2025 |
2024 |
Change |
2025 |
2024 |
Change |
||||||||||||||||||
| Operating expenses |
$ | 2,505 | $ | 1,590 | $ | 915 | $ | 6,686 | $ | 5,713 | $ | 973 | ||||||||||||
| Operating loss |
$ | (2,505 | ) | $ | (1,590 | ) | $ | (915 | ) | $ | (6,686 | ) | $ | (5,713 | ) | $ | (973 | ) | ||||||
| Net loss |
$ | (2,392 | ) | $ | (1,524 | ) | $ | (869 | ) | $ | (6,327 | ) | $ | (5,524 | ) | $ | (803 | ) | ||||||
Comparison of the Three and Nine Months Ended September 30, 2025 and 2024
Operating Expenses
The following table summarizes our total operating expenses, for the periods indicated, in thousands:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||
| Dollar |
Dollar |
|||||||||||||||||||||||
| Description |
2025 |
2024 |
Change |
2025 |
2024 |
Change |
||||||||||||||||||
| Research and development |
$ | 1,181 | $ | 644 | $ | 537 | $ | 3,141 | $ | 2,658 | $ | 483 | ||||||||||||
| General and administrative |
1,324 | 946 | 378 | 3,545 | 3,055 | 490 | ||||||||||||||||||
| Total operating expenses |
$ | 2,505 | $ | 1,590 | $ | 915 | $ | 6,686 | $ | 5,713 | $ | 973 | ||||||||||||
Research and Development Expenses
Research and development expenses consist primarily of personnel expenses, including salaries, benefits and RSU stock compensation expense for research and development personnel, contract research organization (CRO) clinical trial costs, technology licenses and other expenses associated with preclinical and clinical development activities. Our research and development programs are focused on the development of immuno-oncology therapeutics based on our INTASYL technology. Since we commenced operations, research and development expenses have been a significant portion of our total operating expenses and are expected to constitute the majority of our spending for the foreseeable future.
Research and development expenses for the three months ended September 30, 2025 increased 83% or $500 thousand as compared with the three months ended September 30, 2024. This increase in research and development expenses was primarily driven by a $400 thousand increase in clinical trial costs, chemistry, manufacturing and controls (CMC) costs in connection with advancing our PH-762 program and a $100 thousand increase in R&D employee personnel related costs.
Research and development expenses for the nine months ended September 30, 2025 also increased by 18% or $500 thousand as compared with the nine months ended September 30, 2024. This increase was due to higher $300 thousand increase in R&D clinical and CMC costs in connection with advancing our PH-762 program and $200 thousand increase in R&D employee personnel expenses.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel expenses, including salaries, benefits and RSU stock compensation expense for general and administrative personnel, professional fees for legal, audit, tax consulting services, as well as other general corporate expenses.
General and administrative expenses for the three months ended September 30, 2025 increased 40% or $400 thousand as compared with the three months ended September 30, 2024. The increase in general and administrative expenses was primarily driven by a $200 thousand increase in outsourced professional services related to accounting and legal and $77 thousand increase related to an increase in RSU compensation expense..
General and administrative expenses for the nine months ended September 30, 2025 increased by 16% or $500 thousand as compared with the nine months ended September 30, 2024. This year-to-date increase in general and administrative expenses relates to $300 thousand increase in outsourced professional fees and $200 thousand additional employee personnel costs including accrued bonus and RSU compensation expense.
Liquidity and Capital Resources
Historically, we have primarily funded our operations through the sale of our securities. In the future, we expect to depend on external funding from third parties, such as proceeds from the sale of equity, debt financings or potential strategic opportunities, to support our operations. Since our inception we have incurred operating losses and expect that we will continue to have negative cash flows from our operations and for the foreseeable future. As of September 30, 2025, we had cash and cash equivalents of $10,705,000 as compared with $5,382,000 at December 31, 2024.
The gross proceeds to the Company from the November 2025 Financing are approximately $13.4 million, prior to deducting placement agent fees and offering expenses of an anticipated $1.3 million. The Company expects to raise approximately $12.1 million of which $11.5 million has been received by the Company, with the remainder expected by November 18, 2025.
Based on current cash flow projections, the Company believes it has sufficient cash and cash equivalents, including net proceeds from the November 2025 Financing, to meet our current planned obligations for at least 12 months from the date these financial statements are issued. We have limited cash resources, have incurred recurring operating losses and negative cash flows from our operations since our inception and have not yet recognized any product revenues. These factors have previously raised doubt about the Company's ability to continue as a going concern. With the November 2025 Financing, combined with the net proceeds from the January 2025 and July 2025 Offerings, we were able to alleviate such doubt as of the date of the filing of this Quarterly Report on Form 10-Q.
The following table summarizes our cash flows for the periods indicated, in thousands:
| Nine Months Ended |
||||||||
| September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Net cash used in operating activities |
$ | (5,900 | ) | $ | (5,741 | ) | ||
| Net cash used in investing activities |
(12 | ) | - | |||||
| Net cash provided by financing activities |
11,235 | 2,641 | ||||||
| Net increase (decrease) in cash and cash equivalents |
$ | 5,323 | $ | (3,100 | ) | |||
Net Cash Used in Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2025 increased by $159 thousand as compared to the nine months ended September 30, 2024.
Net Cash Used in Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2025 was approximately $12 thousand as compared to the nine months ended September 30, 2024 where net cash used in investing activities was $0. The increase in net cash used in investing activities was primarily due to computer equipment purchases during the nine months ended September 30, 2025.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2025 was $ 11.2 million as compared to the nine months ended September 30, 2024 where net cash provided by financing activities was $2.6 million. The increase in net cash provided by financing activities was primarily due to the issuance of common stock and warrants, and the exercise of warrants, both as described in Note 3 of the condensed consolidated financial statements.
Contractual Obligations
There have been no material changes to the contractual obligations as disclosed in our 2024 Form 10-K. For a discussion of our critical accounting policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Contractual Obligations” in Part II, Item 7 of our 2024 Form 10-K.
Future Funding Requirements
At September 30, 2025, we had cash and cash equivalents of $10.7 million, which includes aggregate net proceeds of approximately $6.7 million and $2.1 million after deducting fees and estimated offering expenses, from our January 2025 and July 2025 Financings, respectively. As described in our subsequent event disclosure, we expect to receive $12.1 million from our November 2025 Financing, after deducting placement agent fees and offering expenses. We expect that our cash and cash equivalents will enable us to fund our current operating plan for at least 12 months from the date these financial statements are issued. Due to the difficulty and uncertainty associated with the design and implementation of preclinical studies and clinical trials, we will continue to assess our cash and cash equivalents and future funding requirements. However, there is no assurance that additional funding will be achieved and that we will succeed in our future operations. We expect to continue to incur substantial additional operating losses for at least the next several years as we continue to develop our product candidates and seek marketing approval and, subject to obtaining such approval, the eventual commercialization of our product candidates. If we obtain marketing approval for any of our product candidates, we will incur significant sales, marketing and manufacturing expenses. We also expect to continue to incur significant costs to comply with corporate governance, internal controls and similar requirements associated with operating as a public reporting company.
Actual cash requirements could differ from management’s projections due to many factors including additional investments in research and development programs such as PH-894, clinical trial expenses for PH-762, competing technological and market developments, general and administrative expenses, and the costs of any strategic acquisitions and/or development of complementary business opportunities. The amount of additional capital we will require will be influenced by many factors, including, but not limited to:
| ● |
the scope, progress, results, and costs of clinical trials of PH-762; |
| ● |
our expectations regarding the timing and clinical development of PH-762; |
| ● |
whether and to what extent we internally fund, whether and when we initiate, and how we conduct additional pipeline product development programs, including PH-894; |
| ● |
whether and when we are able to enter into strategic arrangements for our product candidates and the nature of those arrangements; |
| ● |
the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing any patent claims; |
| ● |
changes in our operating plan, resulting in increases or decreases in our need for capital; |
| ● |
disruptions at the FDA, including due to a reduction in the FDA’s workforce and/or inadequate funding for the FDA; |
| ● | the impact of the government shutdown on our business operations; | |
| ● |
U.S. and international trade policies; and |
| ● |
our views on the availability, timing, and desirability of raising capital. |
We expect to seek additional funding to sustain our future operations and while we have successfully raised capital in the past, the ability to raise capital in future periods is not assured. We do not know if additional capital will be available when needed or on terms favorable to us or our stockholders. Collaboration, licensing or other agreements may not be available on favorable terms, or at all. If we seek to sell our equity securities, we do not know whether and to what extent we will be able to do so, or on what terms. If available, additional equity financing may be dilutive to stockholders, debt financing may involve restrictive covenants or other unfavorable terms and dilute our existing stockholders’ equity, and funding through collaboration, licensing or other commercial agreements may be on unfavorable terms, including requiring us to relinquish rights to certain of our technologies or products. If adequate financing is not available if and when needed, we may delay, reduce the scope of, or eliminate research or development programs, if any, postpone or cancel the pursuit of product candidates, or otherwise significantly curtail our operations to reduce our cash requirements and extend our capital.
| ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a smaller reporting company, we are not required to provide this information.
| ITEM 4. |
CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report to ensure that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this report, management, with the participation of our Principal Executive Officer and Principal Financial Officer, concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of such date.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ending September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
| ITEM 1. |
LEGAL PROCEEDINGS |
From time to time, we may become a party to various legal proceedings and complaints arising in the ordinary course of business. We are not currently a party to any actual or threatened material legal proceedings of which we are aware.
| ITEM 1A. |
RISK FACTORS |
Other than set forth below, there have been no material changes in our risk factors set forth in “Risk Factors in Part I, “Item 1A”. in our 2024 Form 10-K. The risk factor described therein and set forth below could materially adversely affect our business, financial condition, or results of operations. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including these risks. Additional risks not currently known or currently material to us may also harm our business.
We may not be able to maintain compliance with the continued listing requirements of The Nasdaq Capital Market.
To maintain continued listing on The Nasdaq Capital Market, we must satisfy minimum financial and other requirements.
Nasdaq Listing Rule 5550(a)(2) requires a minimum bid price of at least $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Although the Company is currently in compliance with this requirement, there can be no assurance that we will be able to maintain compliance. We have in the past effected reverse stock splits of our Common Stock in order to regain or maintain compliance with this requirement (most recently on July 5, 2024).
Such a delisting would have an adverse effect on the market liquidity of our securities, decrease the market price of our securities, result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities, and adversely affect our ability to obtain financing for the continuation of our operations. We actively monitor our minimum bid price and will consider any and all options available to us to maintain compliance with Nasdaq Listing Rule 5550(a)(2).
Changes in U.S. and international trade policies may adversely impact our business and operating results.
From time to time, proposals are made to significantly change existing trade agreements and relationships between the U.S. and other countries. In recent years, the U.S. government has implemented substantial changes to U.S. trade policies, including import restrictions, increased import tariffs and changes in U.S. participation in multilateral trade agreements. Because some of our vendors, manufactures and suppliers are located in foreign countries, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies, laws, rules and regulations of the United States or foreign governments, as well as political unrest or unstable economic conditions in foreign countries. The U.S. government has adopted a new approach to trade policy and, in some cases, entered into new trade agreements. Our supply may in the future be subject to increased import tariffs, which could increase our manufacturing costs and could make our products, if successfully developed and approved, less competitive than those of our competitors whose inputs are not subject to such tariffs. We may otherwise experience supply disruptions or delays, and our suppliers may not continue to provide us with clinical supply in our required quantities, to our required specifications and quality levels or at attractive prices. Such disruption could have adverse effects on the development of our product candidates and our business operations.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
No sales or issuances of unregistered securities occurred that have not previously been disclosed in a Current Report on Form 8-K.
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. |
MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5. | OTHER INFORMATION |
Insider Trading Arrangements
During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
| ITEM 6. |
EXHIBITS |
EXHIBIT INDEX
| Exhibit |
Description |
Date |
||
| 3.1 |
|
Amended and Restated Certificate of Incorporation of Phio Pharmaceuticals Corp. |
November 19, 2018 |
|
| 3.2 |
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Phio Pharmaceuticals Corp. |
|
January 14, 2020 |
| 3.3 |
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Phio Pharmaceuticals Corp. |
January 25, 2023 |
||
| 3.4 |
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Phio Pharmaceuticals Corp. |
July 2, 2024 |
||
| 3.5 |
Certificate of Designation of Series D Preferred Stock, dated November 16, 2022. |
November 16, 2022 |
||
| 3.6 |
Amended and Restated Bylaws of Phio Pharmaceuticals Corp. |
May 2, 2022 |
||
| 4.1 |
Form of Warrant. |
September 28, 2018 |
||
| 4.2 |
Form of Warrant. |
April 2, 2020 |
||
| 4.3 |
Form of Common Stock Warrant. |
January 25, 2021 |
||
| 4.4 |
Form of Placement Agent Warrant. |
February 17, 2021 |
||
| 4.5 |
Form of Placement Agent Warrant. |
December 8, 2023 |
||
| 4.6 |
Form of Series C/D Warrant. |
July 12, 2024 |
||
| 4.7 |
Form of Placement Agent Warrant. |
July 12, 2024 |
||
| 4.8 |
Form of Placement Agent Warrant. |
December 20, 2024 |
||
| 4.9 |
Form of Placement Agent Warrant. |
December 26, 2024 |
||
| 4.10 |
Form of Placement Agent Warrant. |
January 14, 2025 |
||
| 4.11 |
Form of Placement Agent Warrant. |
January 15, 2025 |
||
| 4.12 |
Form of Placement Agent Warrant. |
January 17, 2025 |
||
| 4.13 |
Form of Series J/K Warrant | July 30, 2025 | ||
| 4.14 |
Form of Placement Agent Warrant | July 30, 2025 |
||
| 4.15
|
Form of Series A Warrant |
November 6, 2025 |
||
| 4.16 | Form of Placement Agent Warrant* |
|||
| 10.1# |
Form of Inducement Letter Agreement dated November 3, 2025, by and between Phio Pharmaceuticals Corp. and the Holders* | |||
| 10.2# |
|
Separation Agreement and General Release of Claims, dated August 11, 2025, by and between the Company and Robert Infarinato. |
August 14, 2025 | |
| 31.1 |
Sarbanes-Oxley Act Section 302 Certification of Principal Executive Officer.* |
|||
| 31.2 |
Sarbanes-Oxley Act Section 302 Certification of Principal Financial Officer.* |
|||
| 32.1 |
Sarbanes-Oxley Act Section 906 Certification of Principal Executive Officer and Principal Financial Officer.** |
|||
| 101.INS |
Inline XBRL Instance Document.* |
|||
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document.* |
|||
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document.* |
|||
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document.* |
|||
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document.* |
|||
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document.* |
|||
| 104 |
The cover page for this report, formatted in Inline XBRL (included in Exhibit 101).* |
| * |
Filed herewith. |
| ** |
Furnished herewith and not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section or incorporated by reference into any filing under the Securities Act or the Exchange Act. |
| # |
Indicates a management contract or compensatory plan or arrangement. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on November 13, 2025.
| Phio Pharmaceuticals Corp. |
|||
| By: |
/s/ Robert J. Bitterman |
||
| Robert J. Bitterman |
|||
| President and Chief Executive Officer (as Principal Executive Officer) |
|||
| By: |
/s/ Lisa Carson |
||
| Lisa Carson |
|||
| Vice President, Finance & Administration (as Principal Financial Officer) |
|||
FAQ
What was Phio Pharmaceuticals (PHIO) Q3 2025 net loss?
How much cash did PHIO have at quarter-end?
What post-quarter financing did PHIO announce?
How many PHIO shares were outstanding?
What were key Q3 2025 operating expenses for PHIO?
What clinical update did PHIO provide on PH-762?
