UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2022~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission file number 001-37568

	PDS Biotechnology Corporation
	(Exact name of registrant as specified in its charter)

Delaware		26-4231384
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

	~~25B Vreeland~~303A College Road ~~Suite 300, Florham Park,~~East Princeton, NJ ~~07932~~08540
	(Address of principal executive offices)

	(800) 208-3343
	(Registrant’s telephone number)


	(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.00033 per share		PDSB		The Nasdaq ~~Capital~~Stock Market LLC

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.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller ~~Reporting Company~~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 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 November 7, ~~2022~~2023 was ~~28,508,688.~~31,107,763.

PART 1.

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY

Condensed ConsolidatedBalance Sheets

	September 30, 2022			December 31, 2021			September 30, 2023			December 31, 2022
ASSETS	(unaudited)						(unaudited)
Current assets:
Cash and cash equivalents	$	71,642,437		$	65,242,622		$	54,251,387		$	73,820,160
Prepaid expenses and other		2,768,906			1,597,569
Prepaid expenses and other assets								2,587,025			2,660,230
Total current assets		74,411,343			66,840,191			56,838,412			76,480,390

Property and equipment, net		–			86			138,866			-
Financing lease right-to-use assets		269,070			–
Operating lease right-to-use asset		206,346			357,611
Financing lease right-of-use assets								210,543			374,888
Operating lease right-of-use asset								-			152,645

Total assets	$	74,886,759		$	67,197,888		$	57,187,821		$	77,007,923

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,037,390		$	1,309,403		$	5,366,564		$	1,219,287
Accrued expenses		2,428,503			2,187,704			3,732,727			8,313,708
Financing lease obligation-short term		61,273			–			54,537			56,612
Operating lease obligation-short term		313,976			258,924			-			231,429
Total current liabilities		4,841,142			3,756,031			9,153,828			9,821,036

Noncurrent liabilities:
Note payable, net of debt discount		22,909,652			–			23,412,764			23,020,844
Financing lease obligation-long term		77,129			–			137,401			164,013
Operating lease obligation-long term		–			231,430
Total liabilities:	$	27,827,923		$	3,987,461		$	32,703,993		$	33,005,893

STOCKHOLDERS’ EQUITY
Common stock, $0.00033 par value, 75,000,000 shares authorized at September 30, 2022 and December 31, 2021, 28,458,688 shares and 28,448,612 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		9,391			9,387
Common stock, $0.00033 par value, 75,000,000 shares authorized at September 30, 2023 and December 31, 2022, 31,007,763 shares and 30,170,317 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively								10,233			9,956
Additional paid-in capital		129,470,179			123,904,602			158,075,994			145,550,491
Accumulated deficit		(82,420,734	)		(60,703,562	)		(133,602,399	)		(101,558,417	)
Total stockholders’ equity		47,058,836			63,210,427			24,483,828			44,002,030

Total liabilities and stockholders’ equity	$	74,886,759		$	67,197,888		$	57,187,821		$	77,007,923

See accompanying notes to the condensed consolidated financial statements.

Index

PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Operating expenses:
Research and development expenses	$	4,352,987		$	3,687,999		$	13,275,947		$	7,865,249		$	6,448,528		$	4,352,987		$	20,297,066		$	13,275,947
General and administrative expenses		2,926,209			3,274,325			9,575,122			7,252,371			4,071,158			2,926,209			12,341,207			9,575,122
Total operating expenses		7,279,196			6,962,324			22,851,069			15,117,620			10,519,686			7,279,196			32,638,273			22,851,069

Loss from operations		(7,279,196	)		(6,962,324	)		(22,851,069	)		(15,117,620	)		(10,519,686	)		(7,279,196	)		(32,638,273	)		(22,851,069	)

Interest (expenses) income, net:
Interest (expense) income, net		(145,254	)		1,358			(65,008	)		2,617
Interest income (expenses), net
Interest income														739,404			252,073			2,219,399			332,318
Interest expense														(1,068,887	)		(397,327	)		(3,031,129	)		(397,326	)
Interest income (expenses), net														(329,483	)		(145,254	)		(811,730	)		(65,008	)

Loss before income taxes		(7,424,450	)		(6,960,966	)		(22,916,077	)		(15,115,003	)		(10,849,169	)		(7,424,450	)		(33,450,003	)		(22,916,077	)
Benefit for income taxes		–			–			1,198,905			4,516,488			-			-			1,406,021			1,198,905
Net loss and comprehensive loss		(7,424,450	)		(6,960,966	)		(21,717,172	)		(10,598,515	)		(10,849,169	)		(7,424,450	)		(32,043,982	)		(21,717,172	)

Per share information:
Net loss per share, basic and diluted	$	(0.26	)	$	(0.24	)	$	(0.76	)	$	(0.43	)	$	(0.35	)	$	(0.26	)	$	(1.04	)	$	(0.76	)

Weighted average common shares outstanding, basic, and diluted		28,458,688			28,425,850			28,452,997			24,639,299			30,910,520			28,458,688			30,715,458			28,452,997

See accompanying notes to the condensed consolidated financial statements.

Index

PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

Common Stock

Shares
Issued
Amount
Additional
Paid-in
Capital

Accumulated
Deficit

Total
Equity

January 1, 2021
22,261,619 $ 7,346 $ 70,907,315 $ (43,785,085 ) $ 27,129,576
Stock - based compensation expense – – 257,622 – 257,622
Issuance of common stock from 401K match 16,642 – 35,747 – 35,747
Net loss – – – (3,048,618 ) (3,048,618 )
Balance - March 31, 2021
22,278,261 7,346 71,200,684 (46,833,703 ) 24,374,327
Stock based compensation expense – – 441,598 – 441,598
Issuance of common stock from 401K match – 5 (5 ) – –
Issuance of common stock, from exercise of stock options 51,413 17 220,586 – 220,603
Issuances of common stock, net of issuance costs 6,088,235 2,009 48,542,989 – 48,544,998
Net loss – – – (588,931 ) (588,931 )
Balance - June 30, 2021 28,417,909 $ 9,377 $ 120,405,851 $ (47,422,634 ) $ 72,992,594
Stock based compensation expense – – 1,701,763 – 1,701,763
Issuance of common stock, from exercise of stock options 17,158 6 123,501 – 123,507
Net loss – – – (6,960,966 ) (6,960,966 )
Balance - September 30, 2021 28,435,067 $ 9,383 $ 122,231,115 $ (54,383,600 ) $ 67,856,898

	Common Stock
	Shares Issued		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Equity
January 1, 2022		28,448,612	$	9,387	$	123,904,602	$	(60,703,562	)	$	63,210,427
Stock based compensation expense		-		-		1,128,973		-			1,128,973
Issuances of common stock, from exercise of stock options		2,282		1		7,487		-			7,488
Net loss		-		-		-		(8,473,522	)		(8,473,522	)
Balance - March 31, 2022		28,450,894	$	9,388	$	125,041,062	$	(69,177,084	)	$	55,873,366
Stock based compensation expense		-		-		1,348,601		-			1,348,601
Issuances of common stock, from exercise of stock options		7,794		3		22,426		-			22,429
Net loss		-		-		-		(5,819,200	)		(5,819,200	)
Balance - June 30, 2022		28,458,688	$	9,391	$	126,412,089	$	(74,996,284	)	$	51,425,196
Stock based compensation expense		-		-		1,344,349		-			1,344,349
Issuances of warrants		-		-		1,713,714		-			1,713,714
Net loss		-		-		-		(7,424,450	)		(7,424,450	)
Balance - September 30, 2022		28,458,688	$	9,391	$	129,470,179	$	(82,420,734	)	$	47,058,836

	Common Stock													Common Stock
	Shares Issued		Amount		Additional Paid-in Capital			Accumulated Deficit			Total Equity			Shares Issued		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Equity
January 1, 2022		28,448,612	$	9,387	$	123,904,602		$	(60,703,562	)	$	63,210,427
January 1, 2023															30,170,317	$	9,956	$	145,550,491	$	(101,558,417	)	$	44,002,030
Stock based compensation expense															-		-		2,080,319		-			2,080,319
Issuances of common stock from the Sales Agreement, net															553,293		183		4,588,339		-			4,588,522
Net loss															-		-		-		(9,659,918	)		(9,659,918	)
Balance - March 31, 2023															30,723,610	$	10,139	$	152,219,149	$	(111,218,335	)	$	41,010,953
Stock based compensation expense		–		–		1,128,973	��		–			1,128,973			-		-		2,105,538		-			2,105,538
Issuances of common stock, from exercise of stock options		2,282		1		7,487			–			7,488			1,409		1		8,848		-			8,849
Issuance of common stock for consulting agreement															100,000		33		609,967		-			610,000
Issuances of common stock from the Sales Agreement, net															43,169		14		243,729		-			243,743
Net loss		–		–		–			(8,473,522	)		(8,473,522	)		-		-		-		(11,534,895	)		(11,534,895	)
Balance - March 31, 2022		28,450,894		9,388		125,041,062			(69,177,084	)		55,873,366
Balance - June 30, 2023															30,868,188	$	10,187	$	155,187,231	$	(122,753,230	)	$	32,444,188
Stock based compensation expense		–		–		1,348,601			–			1,348,601			-		-		2,073,607		-			2,073,607
Issuances of common stock, from exercise of stock options		7,794		3		22,426			–			22,429
Issuances of common stock from the Sales Agreement, net															139,575		46		815,156		-			815,202
Net loss		–		–		–			(5,819,200	)		(5,819,200	)		-		-		-		(10,849,169	)		(10,849,169	)
Balance - June 30, 2022		28,458,688	$	9,391	$	126,412,089		$	(74,996,284	)	$	51,425,196
Stock based compensation expense		–		–		1,344,349			–			1,344,349
Issuance of warrants		–		–		1,713,741			–			1,713,741
Net loss		–		–		–			(7,424,450	)		(7,424,450	)
Balance - September 30, 2022		28,458,688	$	9,391	$	129,470,179		$	(82,420,734	)	$	47,058,836
Balance - September 30, 2023															31,007,763	$	10,233	$	158,075,994	$	(133,602,399	)	$	24,483,828

See accompanying notes to the condensed consolidated financial statements.

Index

PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY

Condensed ConsolidatedStatements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2023			2022
Cash flows from operating activities:
Net loss	$	(21,717,172	)	$	(10,598,515	)	$	(32,043,982	)	$	(21,717,172	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		3,821,923			2,400,980			6,259,464			3,821,923
Stock-based 401K company common match		–			35,747
Issuance of shares in consulting agreement								610,000			-
Amortization of debt discount		72,722			–			391,920			72,722
Depreciation expense		86			4,406			12,624			86
Operating lease expense		180,772			180,775			160,685			180,772
Finance lease amortization expense		37,417			–
Finance lease depreciation expense								30,297			37,417
Changes in assets and liabilities:
Prepaid expenses and other assets		(1,171,337	)		(99,145	)		73,205			(1,171,337	)
Finance lease right-to-use asset		(306,487	)		–
Finance lease right-of-use asset								-			(306,487	)
Accounts payable		727,987			30,361			4,147,277			727,987
Accrued expenses		240,799			188,524			(4,580,981	)		240,799
Finance lease liabilities		138,402			–			-			138,402
Operating lease liabilities		(205,885	)		(127,804	)		(239,469	)		(205,885	)
Net cash used in operating activities		(18,180,773	)		(7,984,671	)		(25,178,960	)		(18,180,773	)

Cash flows from financing activities:

Proceeds from issuance of note payable		25,000,000			–			-			25,000,000
Payment for debt issuance costs		(449,329	)		–			-			(449,329	)
Proceeds from exercise of stock options		29,917			344,112			8,849			29,917
Payments of finance lease obligations								(46,129	)		-
Proceeds from issuance of common stock, net of issuance costs		–			48,544,998			5,647,467			-
Net cash provided by financing activities		24,580,588			48,889,110			5,610,187			24,580,588

Net increase in cash and cash equivalents		6,399,815			40,904,439			(19,568,773	)		6,399,815
Cash and cash equivalents at beginning of period		65,242,622			28,839,565			73,820,160			65,242,622
Cash and cash equivalents at end of period		71,642,437			69,744,004
Cash and cash equivalents at the end of period							$	54,251,387		$	71,642,437

Supplemental information of cash and non-cash transactions:

Cash paid for interest	$	62,500		$	–		$	3,031,129		$	62,500
Fair value of warrants issued in connection with debt	$	1,713,741		$	–		$	-		$	1,713,741

See accompanying notes to the condensed consolidated financial statements.

Index

PDS BIOTECHNOLOGY CORPORATION AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – Nature of Operations

PDS Biotechnology Corporation, a Delaware corporation ~~including its subsidiary collectively~~ (the “Company” or “PDS Biotech”), is a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies based on ~~the Company’s proprietary~~its Versamune^®, Versamune^® plus our IL12 fused antibody-drug conjugate (ADC) PDS01ADC (formerly PDS0301/M9241) and ~~Infectimune™~~Infectimune^® T ~~cell activating technology platforms.~~cell-activating platforms and PDS01ADC tumor targeting immunocytokine. The ~~Company’s Versamune based products~~Company believes its targeted immunotherapies have ~~demonstrated the~~ potential to overcome the limitations of current ~~immunotherapies~~immunotherapy approaches through the activation of the right type, quantity and potency of T cells. Versamune, and Versamune plus PDS01ADC is for treatments in oncology and Infectimune, for treatments in infectious disease. When paired with an antigen, which is a disease-related protein that is recognizable by ~~inducing,~~ the immune system, Versamune and Infectimune have both been shown to induce, in vivo, large quantities of high-quality, highly potent polyfunctional ~~CD4+~~CD4 helper and ~~CD8+~~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 enhances the proliferation, potency and longevity of T cells in the tumor microenvironment. Versamune plus PDS01ADC enhances the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and works synergistically to overcome tumor immune suppression.

The Company’s immuno-oncology clinical candidates are of potential interest for use as a component of combination clinical candidates (for example, in combination with other leading technologies such as immune checkpoint inhibitors) to provide more effective treatments across a range of advanced cancers. The Company has developed multiple therapies, based on combinations of Versamune and disease-specific antigens, designed to train the immune system to recognize diseased cells and effectively attack and destroy them. The Company continues to advance its pipeline ofis also evaluating our immunotherapies as monotherapies in early-stage disease. PDS Biotech is developing targeted clinical candidates to ~~address a wide range of~~treat several cancers including ~~HPV-positive~~Human Papillomavirus (HPV)-positive cancers, ~~(anal, cervical, head~~melanoma, colorectal, lung, breast and ~~neck, penile, vaginal, vulvar) and breast, colon, lung,~~ prostate ~~and ovarian~~ cancers. The Company’s Infectimune -based vaccines have demonstrated the potential to induce, not only robust and durable neutralizing antibody response, but also powerful T cell responses including long-lasting memory T cell responses. The Company’s infectious disease candidates are of potential interest for use in ~~COVID-19 and~~ universal influenza vaccines.

From the Company’s inception, it has devoted substantially all of its efforts to drug development, business planning, engaging regulatory, manufacturing and other technical consultants, acquiring operating assets, planning and executing clinical trials and raising capital.

Although there is uncertainty related to the anticipated impact of the COVID-19 pandemic on the Company’s future results, management believes the current cash reserves, leave the Company well-positioned to manage the business through this crisis as it continues to unfold. However, the impacts of the COVID-19 pandemic are broad-reaching and continuing and the financial impacts associated with the COVID-19 pandemic are still uncertain.

Note 2 – Summary of Significant Accounting Policies

(A)	Unaudited interim financial statements:

The interim balance sheet at September 30, ~~2022,~~2023, the statements of operations and comprehensive loss and changes in stockholders’ equity and cash flows for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 are unaudited. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of its financial information. The results of operations for the three and nine months ended September 30, ~~2022~~2023 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2022~~2023 or for any other future annual or interim period. The balance sheet as of December 31, ~~2021~~2022 included herein was derived from the audited consolidated financial statements as of that date. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, ~~2021,~~2022, filed by the Company with the SEC in its Annual Report on Form 10-K on March ~~31, 2022.~~28, 2023.

~~Index~~

(B)	Use of estimates:

The preparation of condensed 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 estimate relates to the fair value of securities underlying stock-based compensation.

(C)	Significant risks and uncertainties:

The Company’s operations are subject to a number of factors that may affect its operating results and financial condition. Such factors include, but are not limited to: the clinical and regulatory development of its ~~products,~~clinical candidates, the ~~Company’s~~ ability to preserve its cash resources, the Company’s review of strategic alternatives, the ~~Company’s~~ ability to add ~~product~~clinical candidates to its pipeline, the Company’s intellectual property, the ability to efficiently and effectively conduct its clinical trials, 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, the ~~Company’s~~ ability to raise capital, and the effects of health epidemics, pandemics, or outbreaks of infectious ~~diseases, including the COVID-19 pandemic and its variants.~~
diseases.

Index

The Company currently has no commercially approved products. As such, there can be no assurance that the Company’s future research and development programs will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting its intellectual property.

(D)	Cash equivalents and concentration of cash balance:

The Company considers all highly liquid securities with a maturity weighted average 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 entities that perform certain research 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 trial 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.

(F)	Patent costs:

The Company expenses patent costs as incurred and classifies such costs as general and administrative expenses in the accompanying statements of operations and comprehensive loss.

(G)	Stock-based compensation:

The Company accounts for its stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, directors and non-employees to be recognized as expense in the 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.

~~Index~~

(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 common shares outstanding during the period. For all periods presented, the common shares underlying the stock options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted loss per common share is the same.

The potentially dilutive securities excluded from the determination of diluted loss per share as their effect is antidilutive, are as follows:

As of September 30,

2022

2021

Stock options to purchase Common Stock
4,370,846

2,951,852

Warrants to purchase Common Stock
506,229

197,518

Total
4,877,075

3,149,370

	As of September 30,
	2023		2022
Stock options to purchase Common Stock		5,383,902		4,370,846
Warrants to purchase Common Stock		506,229		506,229
Total		5,890,131		4,877,075

Index

(I)	Income taxes:

The Company provides 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)	Fair value of financial instruments:

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.

(K)

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 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.

Note 3 – Liquidity

As of September 30, ~~2022,~~2023, the Company had ~~$71.6~~$54.3 million of 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 timing of when the Company pays these expenses, as reflected in the change to the Company’s outstanding accounts payable and accrued expenses.

~~In July 2020,~~ Since inception, the Company ~~filed a shelf registration statement, or the 2020 Shelf Registration Statement, with the SEC,~~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 ~~issuance of common stock, preferred stock, warrants, rights,~~foreseeable future and may never become profitable.

The Company funds its operations through equity and/or debt ~~securities and units, which the Company refers to collectively~~financings such as the Shelf Securities, up to an aggregate amount of $100 million. The 2020 Shelf Registration Statement was declared effective on July 31, 2020. The 2020 Registration Statement was terminated upon effectiveness of the 2022 Registration Statement (as discussed below).

In August 2020, the Company sold 6,900,000 shares of its common stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. The Company received gross proceeds of approximately $19.0 million and net proceeds of approximately $17.1 million, after deducting underwriting discounts and offering expenses.following:

In May 2021, the Company received approximately $4.5 million from the net sale of tax benefits through 2019 to an unrelated, profitable New Jersey corporation pursuant the Company’s participation in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss (NOL) program for State Fiscal Year 2020.

In June 2021, the Company completed an underwritten public offering in which it sold 6,088,235 shares of common stock at a public offering price of $8.50 per share pursuant to the 2020 Shelf Registration Statement, which includes 794,117 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. The Company received gross proceeds of approximately $51.7 million and net proceeds of approximately $48.5 million, after deducting underwriting discounts and offering expenses.

In April 2022, the Company received approximately $1.2 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant to the Company’s participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for ~~State Fiscal Year 2021.~~tax year 2020.

In August 2022, the Company filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities, and units, ~~which the Company refers to collectively as the Shelf Securities,~~ up to an aggregate amount of $150 million, $50 million of which covers the offer, issuance and sale by the Company of its common stock under the Sales Agreement (as discussed below). The 2022 Shelf Registration Statement was declared effective on September 2, 2022.

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 may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to ~~$50.0~~$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 may 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 will 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 will pay 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 is not obligated to make any sales of its common stock under the Sales Agreement. The offering of Placement Shares pursuant to the Sales Agreement will 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. For the year ended December 31, 2022, the Company sold 1,238,491 shares of common stock with a net value of $9.9 million pursuant to the Sales Agreement. During the ~~quarter~~three and nine months ended September 30, ~~2022,~~2023, the Company ~~did not sell any~~sold 139,575 and 736,037 shares, respectively, of its common stock with a net value of $0.8 million and $5.6 million, respectively, pursuant to the Sales Agreement.

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. The Loan and Security Agreement provides for the following 6 separate and independent term loans: (a) a term loan in the amount of $7,500,000, or Loan A, (b) a term loan in the amount of $10,000,000, or Loan B, (c) a term loan in the amount of $3,750,000, or Loan C, (d) a term loan in the amount of $3,750,000, or Loan D, (e) a term loan in the amount of $5,000,000, or Loan E, and (f) a term loan in the amount of $5,000,000, or Loan F, (with each of Loan A, Loan B, Loan C, Loan D, Loan E, and Loan F, individually a Loan and, collectively, the Loans). Loan A, Loan B, Loan C, and Loan D were delivered to the Company on August 24, 2022. Loan E and Loan F ~~are~~were uncommitted Loans that ~~may be~~could have been advanced by the lenders upon ~~their discretion~~the parties agreement prior to July 31, 2023 upon the satisfaction of certain conditions. At this time the option to advance Loan E and Loan F has expired and Loan E and Loan F are no longer available to the Company under the Loan and Security Agreement. The Company may only use the proceeds of the Loans for working capital or general corporate purposes. Each Loan matures on the 48-month anniversary following the applicable funding date unless accelerated pursuant to certain events of default. Payments on the principal balance begin on October 1, 2024 and are paid monthly in the succeeding 24 months. The principal balance of each Loan bears a floating interest. The interest rate is calculated initially and, thereafter, each calendar month as the sum of (a) the per annum rate of interest from time to time published in The Wall Street Journal as contemplated by the Loan and Security Agreement, or any successor publication thereto, as the “prime rate” then in effect, plus (b) 5.75%; provided that, in the event such rate of interest is less than 4.00%, such rate shall be deemed to be 4.00% for purposes of calculating the interest rate. Interest is payable on a monthly basis based on each Loan principal amount outstanding the preceding month. The Company, at its option upon at least ten (10) business days’ written notice to the lenders, may prepay all (and not less than all) of the outstanding Loan by simultaneously paying to each lender an amount equal to (i) any accrued and unpaid interest on the outstanding principal balance of the Loans; plus (ii) an amount equal to (A) if such Loan is prepaid on or before the Loan Amortization Date (as defined in the Loan and Security Agreement) applicable to such Loan, 3% of the then outstanding principal balance of such Loan, (B) if such Loan is prepaid after the Loan Amortization Date applicable to such Loan, but on or before the date that is 12 months after such Loan Amortization Date, 2% of the then outstanding principal balance of such Loan, or (C) if such Loan is prepaid more than 12 months after the Loan Amortization Date but prior to the stated maturity date applicable to such Loan, 1% of the then outstanding principal balance of such Loan; plus (iii) the outstanding principal balance of such Loan; plus (iv) all other sums, if any, that shall have become due and payable thereunder. No prepayment premium will be applied to any outstanding balance of any Loan paid on the stated maturity date.

The Loan and Security Agreement contains customary representations, warranties and covenants, including covenants by the Company limiting additional indebtedness, liens, including on intellectual property, guaranties, mergers and consolidations, substantial asset sales, investments and loans, certain corporate changes, transactions with affiliates, and fundamental changes.

In April 2023, the Company received approximately $1.4 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant to the Company’s participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2021.

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 timing of when the Company pays these expenses, as reflected in the change in its outstanding accounts payable and accrued expenses.

Index

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.~~ 10-Q in accordance with ASC 205-40. 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’s budgeted cash requirements in ~~2022~~2023 and beyond include expenses related to continuing development and clinical studies. Based on its available cash resources and cash flow projections as of the date the consolidated financial statements were available for issuance, management believes there are sufficient funds to continue operations and research and development programs for at least one year after the date of this Quarterly Report on Form 10-Q.

~~Index~~

trials. The Company plans to ~~continue to fund~~execute its ~~operations~~operating plan by obtaining additional capital, principally through entering into collaborations, strategic alliances, or license agreements with third parties and/or additional public or private debt and ~~capital funding needs through~~ equity ~~and/or debt financings.~~financing. However, ~~the Company cannot be certain~~there is no assurance that additional capital and/or financing will be available ~~when needed or that,~~to the Company, and even if available, ~~financing~~whether it will be ~~obtained~~ on terms ~~favorable~~acceptable to the Company or its existing ~~stockholders.~~shareholders or in the amounts required. 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 additional 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 ~~unable to raise additional capital~~unsuccessful in securing sufficient ~~amounts or on acceptable terms, we~~financing, it may ~~be required~~need to delay, ~~limit,~~ reduce, or ~~terminate~~eliminate its ~~product~~research and development ~~or future commercialization efforts or~~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.~~itself or cease operations. Any of these actions could harm its business, results of operations and prospects. Failure to obtain adequate financing also may adversely affect the Company’s ability to operate as a going concern.

As a result of these uncertainties, and as its plans are outside of management’s control, 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 among Levels 1, 2, or 3 during ~~2022~~the three and nine months ended September 30, 2023 or ~~2021.~~2022.

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 September 30, 2022: (unaudited)

Cash and cash equivalents
$ 71,642,437 $ 71,642,437 $ – $ –

As of December 31, 2021

Cash and cash equivalents $ 65,242,622 $ 65,242,622 $ – $ –

	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 September 30, 2023: (unaudited)
Cash and cash equivalents	$	54,251,387	$	54,251,387	$	–	$	–

As of December 31, 2022
Cash and cash equivalents	$	73,820,160	$	73,820,160	$	–	$	–

The carrying value of the ~~Loan and Security Agreement~~Note Payable approximated its fair value at September 30, ~~2022~~2023 due to its variable rate.

Note 5 – Leases

Operating Lease:

Effective March 5, 2020, the Company entered into a sublease for approximately 11,200 square feet of office space located at 25B Vreeland Road, Suite 300, Florham Park, NJ. The sublease commenced on May 1, 2020 and will continue for a term of forty (40) months with an option to renew through October 31, 2027. As of ~~September 30, 2022 there are eleven (11) months remaining in~~August 31, 2023 the lease ~~term.~~term has expired and was not renewed. Upon inception of the ~~lease,~~sublease, the Company recognized approximately $0.7 million of a ROU asset and operating lease liabilities. The discount rate used to measure the operating lease liability as of May 1, 2020 was 9.15%. Throughout the period described above, the Company has maintained, and continues to maintain, a month-to-month lease for its research facilities at the Princeton Innovation Center BioLabs located at 303A College Road E, Princeton NJ, 08540.

Index

Supplemental cash flow information related to operating leases is as follows:

As of September 30,
2022
2021

Cash paid for operating lease liabilities

$
205,885

$
127,804

	As of September 30,
	2023		2022

Cash paid for operating lease liabilities	$	239,469	$	205,885

~~Index~~

~~Maturity of the Company’s operating lease liability is as follows:~~

Year ended December 31,
2022 (remaining three months) $ 89,103
2023 239,470
2024 –
2025 –
2026 and after –
Total future minimum lease payments 328,573
Less imputed interest (14,597
)
$ 313,976

Financing Lease:

The Company has financed certain laboratory equipment as follows:

As of September 30,
2022
2021

Cash paid for finance lease liabilities $ 306,487 $ –

	As of September 30,
	2023		2022

Cash paid for finance lease liabilities	$	60,684	$	306,487

Year ended December 31,
2022 (remaining three months) $ 34,916
2023 44,358
2024 35,694
2025 35,694
2026 and after 5,952
Total future minimum lease payments 156,614
Less imputed interest (18,212 )
Remaining lease liability $ 138,402

Maturity of the Company’s financing lease liability is as follows:

Year ended September 30,
2023	$	17,464
2024	$	69,850
2025	$	69,850
2026	$	40,108
2027 and after	$	26,724
Total future minimum lease payments		223,996
Less imputed interest		(32,058	)
Remaining lease liability	$	191,938

The Company entered into ~~three~~four financing leases for laboratory equipment with a total cost of ~~$306,487~~$251,959 with ~~two~~four to ~~four-year~~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 ~~$12,000.~~$6,000. In the nine months ended September 30, 2023, the Company exercised a bargain purchase option, which resulted in recognition of property and equipment of $151,490.

Note 6 – Accrued Expenses

Accrued expenses and other liabilities consist of the following:

As of
September 30, 2022

As of
December 31, 2021

Accrued research and development

$
584,372

$
227,400

Accrued professional fees

415,327

485,400

Accrued compensation

1,189,741

1,458,310

Accrued interest on debt 239,063 –
Accrued rent – 16,594
Total
$
2,428,503

$
2,187,704

	As of September 30, 2023		As of December 31, 2022
Accrued research and development	$	79,910	$	5,645,737
Accrued professional fees		1,570,401		550,259
Accrued compensation		1,785,173		1,837,330
Accrued interest on debt		296,875		280,382
Accrued rent		368		-
Total	$	3,732,727	$	8,313,708

Index

Note 7 – Stock-Based Compensation

~~The Company has three equity compensation plans: the 2009 Stock Option Plan, 2014 Equity Incentive Plan and the 2018 Stock Incentive Plan (the “Plans”).~~

In 2014, the Company’s stockholders approved the 2014 Equity Incentive Plan pursuant to which the Company may grant up to 91,367 shares as ISOs, NQs and restricted stock units (“RSUs”), subject to increases as hereafter described (the “Plan Limit”). In addition, 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 2014 Equity Incentive 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 Plan was amended and restated which removed the annual increase component and was limited to 826,292 shares.

As previously disclosed, on December 8, 2020, the Board of Directors of the Company adopted, subject to stockholder approval, the Second Amended and Restated PDS Biotechnology Corporation 2014 Equity Inventive Plan (the “Restated Plan”), which ~~would amend~~amended and ~~restate~~restated the Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan (the “Current Plan”). At the annual meeting of stockholders on June 17, 2021 the stockholders voted to approve the Restated Plan at the Annual Meeting. The Restated Plan is identical to the Current Plan in all material respects, except as follows: (a) the number of shares of Common Stock authorized for issuance under the Restated Plan will increase from 826,292 shares to 3,339,243 shares, plus the total number of shares that remained available for issuance, that are not covered by outstanding awards issued under the Current Plan, immediately prior to December 8, 2020; and (b) the Restated Plan will terminate on December 7, 2030, unless earlier terminated. On July 14, 2023, the Company’s stockholders approved an amendment to the Current Plan increasing the number of shares of common stock for issuance from 4,165,535 to 6,565,535 shares. As of September 30, ~~2022,~~2023, there were ~~1,303,113~~119,013 shares available for grant under the Restated Plan.

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 September 30, 2023, there were 190,799 shares available for grant under the Restated Plan.

Pursuant to the terms of the Plans, ISOs 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. Unless terminated by the Board, the Plans shall continue to remain effective for a term of ten years or until such time as no further awards may be granted and all awards granted under the Plans are no longer outstanding.

On June 17, 2019, the Board adopted the 2019 Inducement Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of non-qualified stock options. The Inducement Plan 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.

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. The 2019 Inducement Plan is administered by the Compensation Committee of the Board. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, non-qualified stock options under the 2019 Inducement Plan may only be made to an employee who has not previously been an employee or member of the Board (or any parent or subsidiary of the Company), or following a bona fide period of non-employment by the Company (or a parent or subsidiary of the Company), if he or she is granted such non-qualified stock options in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. As of September 30, ~~2022,~~2023, there were ~~285,215~~185,315 shares available for grant under the 2019 Inducement Plan.

The Company’s stock-based compensation expense related to stock options was recognized in operating expense as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022
2021
2022
2021

(unaudited) (unaudited)
Stock-Based Compensation
Research and development

$
493,083

$
596,762

$
1,349,665

$
824,580

General and administrative

851,267

1,105,000

2,472,259

1,576,401

Total

$
1,344,350

$
1,701,762

$
3,821,924

$
2,400,981

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(unaudited)				(unaudited)
Stock-Based Compensation
Research and development	$	782,249	$	493,083	$	2,389,561	$	1,349,664
General and administrative		1,291,358		851,267		3,869,903		2,472,259
Total	$	2,073,607	$	1,344,350	$	6,259,464	$	3,821,923

Index

There were 59,500 and 1,214,000 of options granted during the three and nine month periods ended September 30, 2023, respectively and 87,000 and 1,526,005 of options granted during the three and nine month period ended September 30, 2022, respectively. The fair value of options granted during the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 was estimated using the Black-Scholes option valuation model utilizing the following assumptions. ~~There was 87,000 and 1,526,005 of options granted during the three and nine month periods ended September 30, 2022, respectively.~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022 2021
2022 2021

Weighted
Average

Weighted
Average

Weighted
Average

Weighted
Average

(unaudited) (unaudited)
Volatility

101.43
%

100.16
%

99.56
%

100.58
%
Risk-Free Interest Rate

3.03
%

0.77
%

1.70
%

55.88
%
Expected Term in Years

6.08

6.08

6.41

6.28

Dividend Rate

–

–

–

–

Fair Value of Option on Grant Date

$
2.58

$
11.81

$
4.80

$
7.43

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	Weighted Average			Weighted Average			Weighted Average			Weighted Average
	(unaudited)						(unaudited)
Volatility		150.26	%		101.43	%		142.47	%		99.56	%
Risk-Free Interest Rate		3.92	%		3.03	%		4.04	%		1.70	%
Expected Term in Years		5.59			6.08			6.06			6.41
Dividend Rate		–			–			–			–
Fair Value of Option on Grant Date	$	4.77		$	2.58		$	10.35		$	4.80

The following table summarizes the number of options outstanding and the weighted average exercise price:

Number
of Shares

Weighted
Average
Exercise Price

Weighted Average
Remaining
Contractual
Life in Years

Aggregate
Intrinsic Value

Options outstanding at December 31, 2021

3,163,835

$
5.57

7.90

$
10,839,589

Granted

1,526,005

5.59

Exercised

(10,076
)

2.51

Forfeited and expired

(308,918
)

5.24

Options outstanding at September 30, 2022

4,370,846

$
5.61

7.71

$
1,125,638

Vested and expected to vest at September 30, 2022

4,370,846

$
5.61

7.71

$
1,125,638

Exercisable at September 30, 2022

1,893,907

$
6.01

6.18

$
572,659

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Options outstanding at December 31, 2022		4,171,311		$	5.56		7.89	$	32,779,920
Granted		1,214,000			11.14
Exercised		(1,409	)		-
Forfeited and expired		-			-
Options outstanding at September 30, 2023		5,383,902		$	6.82		7.63	$	4,685,828
Vested and expected to vest at September 30, 2023		5,383,902		$	6.82		7.63	$	4,685,828
Exercisable at September 30, 2023		2,722,797		$	5.72		6.67	$	3,225,309

At September 30, ~~2022~~2023 there was approximately ~~$13,426,873~~$18,568,032 of unamortized stock option compensation expense, which is expected to be recognized over a remaining average vesting period of 32.51 years.

The Company entered into an agreement with DC Consulting for certain consulting services and issued 100,000 shares in connection with the agreement.

Note 8 – Income Taxes

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 income 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 ~~2022~~2023 and there will be no current income tax expense. Additionally, there was a full valuation allowance against the net deferred tax assets as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022. As such, the Company recorded no income tax benefit due to realization uncertainties.

The Company’s U.S. statutory rate is 21%. The primary factor impacting the effective tax rate for the three and nine months ended September 30, ~~2022~~2023 is the anticipated full year operating loss which will require full valuation allowances against any associated net deferred tax assets.

Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax ~~provisions~~positions taken on their income tax returns. The Company has analyzed its tax positions and has concluded that as of September 30, ~~2022,~~2023, 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 not have any unrecognized tax benefits and has not accrued any interest or penalties for the three and nine months ended September 30, ~~2022~~2023 and for the year ended December 31, ~~2021.~~2022.

Index

In accordance with the State of New Jersey’s Technology Business Tax Certificate 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~~$1.4 million and ~~$4.5~~$1.2 million of income tax benefit, net of transaction costs in the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

~~Index~~

Note 9 – Commitments and Contingencies

~~Employment Matters~~

The Company has entered into employment agreements with each of its executive officers. The employment agreements generally provide for, among other things, salary, bonus and severance payments. The employment agreements generally provide for between 12 months and 24 months of severance benefits to be paid to an executive (as well as certain potential bonus, COBRA and equity award benefits), subject to the effectiveness of a general release of claims, if the executive terminates his or her employment for good reason or if the Company terminates the executive’s employment without cause. Such severance payments may be provided 90 ~~days prior to and for as long as~~ 24 months following the effective date of a change in control. The continued provision of severance benefits is conditioned on each executive’s compliance with the terms of the Company’s confidentiality and invention and assignment agreement as well as his or her release of claims.

Rent

For month-to-month arrangements not impacted by the adoption of ASC 842, rent for the three and nine months ended September 30, ~~2022~~2023 was ~~$55,500~~$106,171 and ~~$166,500~~$359,373 respectively, compared to the three and nine months ended September ~~2021~~30, 2022 of ~~$52,000~~$55,500 and ~~$130,493.~~$165,500.

Exclusive License Agreement

In January 2023, we entered into an exclusive global license agreement with Merck KGaA, Darmstadt, Germany 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 sale 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, Darmstadt, Germany 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 that 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, but for which such license would be infringed by making, using or selling the compound.

Legal Proceedings

~~On or about December 27, 2021, Seth Van Voorhees,~~The Company is currently not a party to, and the ~~former Chief Financial Officer~~Company’s property is not currently the subject of, the Company, filed a Demand for Arbitration against the Company with the American Arbitration Association, asserting that he was wrongfully terminated. In his demand, Dr. Van Voorhees contends that his alleged damages are expected to be no less than $3,000,000, plus interest, arbitration costs, attorneys’ fees and punitive damages. In July 2022, the Company and Dr. Van Voorhees entered into a confidential settlement agreement which includes the customary dismissal of action, full release of claims with no admission of liability. There were no any material ~~changes to the Company’s accrued liabilities in connection with this matter.~~

~~While there can be no assurances as to the ultimate outcome of any~~ pending legal proceeding or other loss contingency involving the Company, management does not believe any pending matter will be resolved in a manner that would have a material adverse effect on its financial position, results of operations or cash flows.proceedings. The Company may be involved, from time to time, in ~~additional~~ legal proceedings and claims arising in the ordinary course of ~~its~~ business. Such matters are subject to many uncertainties and outcomes are not 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”).

Term loan Amounts. The Loan and Security Agreement provides for the following six (6) separate and independent term loans: (a) a term loan in the amount of $7,500,000 (“Loan A”), (b) a term loan in the amount of $10,000,000 (“Loan B”), (c) a term loan in the amount of $3,750,000 (“Loan C”), (d) a term loan in the amount of $3,750,000 (“Loan D”), (e) a term loan in the amount of $5,000,000 (“Loan E”), and (f) a term loan in the amount of $5,000,000 (“Loan F”) (with each of Loan A, Loan B, Loan C, Loan D, Loan E, and Loan F, individually a “Loan” and, collectively, the “Loans”). Loan A, Loan B, Loan C, and Loan D were delivered to the Company on August 24, 2022. Loan E and Loan F ~~are~~were uncommitted Loans that ~~may be~~could have been advanced by the Lenders upon ~~their discretion~~the parties agreement prior to July 31, 2023 upon the satisfaction by the Company of certain agreed upon ~~conditions precedents.~~ conditions. At this time the option has expired and Loan E and Loan F are no longer available to the Company under the Loan and Security Agreement. The Company may only use the proceeds of the Loans for working capital or general corporate purposes.

~~Maturity.~~Maturity. Each Loan matures on the 48 month anniversary following the applicable date on which a Loan is made to or on account of the Company under the Loan and Security Agreement (the “Maturity Date”) unless accelerated pursuant to agreed upon events of default. All amounts outstanding under each Loan will be due and payable upon the earlier of the Maturity Date or the acceleration of the loans and commitments upon an event of default.

Index

Interest Rate. The principal balance of each Loan bears a floating interest. The interest rate is calculated initially and, thereafter, each calendar month as the sum of (a) the per annum rate of interest from time to time published in The Wall Street Journal as contemplated by the Loan and Security Agreement, or any successor publication thereto, as the “prime rate” then in effect, plus (b) 5.75%; provided that, in the event such rate of interest is less than 4.00%, such rate shall be deemed to be 4.00% for purposes of calculating the interest rate. Interest is payable on a monthly basis based on each Loan principal amount outstanding the preceding month.

~~Index~~

Amortization. Each Loan shall commence amortization upon the date set forth on the promissory note executed in connection with the respective Loan, upon which the Company is required to commence making equal payments of principal plus accrued interest on the outstanding principal amount of the ~~respect~~respective Loan (the “Loan Amortization Date”), and continuing thereafter on the first business day of each calendar month through the Maturity Date.

Prepayment Premium. The Company may, at its option upon at least ten (10) business days’ written notice to the Lenders, prepay all (and not less than all) of the outstanding Loan by simultaneously paying to each Lender an amount equal to (i) any accrued and unpaid interest on the outstanding principal balance of the Loans; plus (ii) an amount equal to (A) if such Loan is prepaid on or before the Loan Amortization Date applicable to such Loan, three percent (3%) of the then outstanding principal balance of such Loan, (B) if such Loan is prepaid after the Loan Amortization Date applicable to such Loan, but on or before the date that is twelve (12) months after such Loan Amortization Date, two percent (2%) of the then outstanding principal balance of such Loan, or (C) if such Loan is prepaid more than twelve (12) months after the Loan Amortization Date but prior to the stated Maturity Date applicable to such Loan, one percent (1%) of the then outstanding principal balance of such Loan; plus (iii) the outstanding principal balance of such Loan; plus (iv) all other sums, if any, that shall have become due and payable hereunder. No prepayment premium will be applied to any outstanding balance of any Loan paid on the stated Maturity Date.

Security. The Company’s obligations are secured by a security interest in all of the assets of the Company, subject to limited exceptions and excluding the Company’s intellectual property.

Covenants; Representations and Warranties; Other Provisions. The Loan and Security Agreement contains customary representations, warranties and covenants, including covenants by the Company limiting additional indebtedness, liens, including on intellectual property, guaranties, mergers and consolidations, substantial asset sales, investments and loans, certain corporate changes, transactions with affiliates, and fundamental changes.

Default Provisions. The Loan and Security Agreement provides for events of default customary for term loans of this type, including but not limited to non-payment, breaches or defaults in the performance of covenants, insolvency, and bankruptcy by and/or of the Company.

Warrant and Debt Discount. In connection with the Loan and Security Agreement, the Company issued Horizon Technology Finance Corporation and Powerscourt Investments XXV, LP warrants to purchase an aggregate total of 381,625 shares of the Company’s common stock at an initial exercise price of $3.6685 per share. Each warrant is classified as equity and is exercisable at any time for a period beginning on the date of grant and ending on the earlier of (A) 10 years from the date of grant, and (B) the closing of (A) (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Company’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of, in each case, for cash or for marketable securities meeting certain requirements as described in the applicable warrants. The key assumptions used in the Black-Scholes option pricing model were (i) expected term of 10 years, (ii) a risk-free rate of 3.11%, (iii) expected volatility of 93.8%, (iv) and no estimated dividend yield. In addition, the Company incurred third party and lender fees of $~~449,329~~.$449,329 for the nine months ended September 30, 2022. These proceeds were allocated on a basis that approximates the relative fair value method. The fair value of the warrant and fees incurred were recorded as a debt discount and are being recognized as interest expense over the life of the ~~loan~~Loan and Security Agreement using the effective interest method. The unamortized debt discount was $~~3,027,847~~$2,524,736 as of September 30, ~~2022.~~2023. The Company recognized interest expense of $~~374,286~~$1,064,300 and $3,016,572 for the three and nine months ended September 30, ~~2022~~2023 and $~~72,722~~$158,397 and $391,920 was related to the amortization of the debt discount for the three and nine months ended September 30, ~~2022.~~2023.

Note 11 – Retirement Plan

The Company has a 401(k) defined contribution plan for the benefit for all employees and permits voluntary contributions by employees subject to IRS-imposed limitations. The 401(k) employer contributions were ~~$31,515~~$32,861 and ~~$119,232~~$164,631 for the three and nine months ended September 30, ~~2022,~~ 2023, respectively, compared to the three and nine months ended September 30, ~~2021~~2022 of ~~$25,803~~$31,515 and ~~$71,214 respectively.~~$119,232 respectively.

~~Note 12– Subsequent Events~~

~~Subsequent events have been evaluated through the date these financial statements were issued.~~

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, ~~2021~~2022 on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March ~~31, 2022.~~28, 2023.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report ~~on Form 10-Q (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 ~~product~~clinical 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 ~~product~~clinical candidates;

●

the Company’s limited operating history in the Company’s 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 PDS0101, PDS0103, PDS0203 and other Versamuneand Infectimune based ~~products~~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 ~~studies~~trials concerning ~~PDS0101, PDS0203 and other~~the Company’s Versamune and Infectimune based ~~products~~clinical 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 ~~product~~clinical candidates;

●

the success, timing and cost of the Company’s ongoing clinical trials and anticipated clinical trials for the Company’s current ~~product~~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 our ~~product~~clinical candidates;

●

any Company statements about its understanding of ~~product~~clinical candidates’ mechanisms of action and interpretation of preclinical and early clinical results from its clinical development programs and any collaboration ~~studies;~~trials; the acceptance by the market of the Company’s ~~product~~clinical 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 ~~product~~clinical 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 ~~COVID-19 and~~ those listed under Part II, Item 1A. Risk Factors.

Index

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. 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.

~~Index~~

Company Overview

We are a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies based on our ~~proprietary~~ Versamune^®, Versamune^® plus IL12 fused anti-body drug conjugate (ADC) PDS01ADC (formerly PDS0301/M9241) and ~~Infectimune™~~Infectimune^® T ~~cell activating technology platforms. Our Versamune based products~~cell-activating platforms and PDS01ADC tumor targeting immunocytokine. We believe our targeted immunotherapies have ~~demonstrated~~ the potential to overcome the limitations of current ~~immunotherapies~~immunotherapy approaches through the activation of the right type, quantity and potency of T cells. Versamune, and Versamune plus PDS01ADC are utilized for treatments in oncology and Infectimune, for treatments in infectious disease. When paired with an antigen, which is a disease-related protein that is recognizable by ~~inducing,~~the immune system, Versamune and Infectimune have both been shown to induce, in vivo, large quantities of high-quality, highly potent polyfunctional ~~CD4+~~CD4 helper and ~~CD8+~~CD8 killer T cells, a specific sub-type of T cell that is more effective at killing infected or target cells. WeInfectimune is also designed to promote the induction of disease-specific neutralizing antibodies. PDS01ADC is an investigational tumor targeting IL-12 that enhances the proliferation, potency and longevity of T cells in the tumor microenvironment. Versamune plus PDS01ADC enhances the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and works synergistically to overcome tumor immune suppression.

Recent Developments

In December 2022, we executed an exclusive global license agreement with Merck KGaA, Darmstadt, Germany for the tumor targeting IL12 fused antibody drug conjugate, M9241, which joined our pipeline as PDS01ADC. 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 have ~~developed multiple therapies, based on combinations~~resulted in high toxicity and limited therapeutic potential. The proprietary combination of Versamune ~~and disease-specific antigens,~~plus PDS01ADC is designed to ~~train~~overcome tumor immune suppression utilizing a different mechanism from immune checkpoint inhibitors (ICI). The ownership of both assets we believe will streamline the registrational process and its use. The combination of Versamune® and IL-12 to overcome immune ~~system~~suppression is patented by PDS Biotech. In a Phase 2 National Cancer Institute (NCI)-led clinical trial in ICI resistant patients, the combination of PDS0101 and PDS01ADC administered with an investigational bi-functional ICI resulted in a median overall survival of approximately 20 months, which compares favorably to ~~recognize diseased cells and effectively attack and destroy them. We continue to advance our pipeline~~the historical median survival of ~~candidates to address a wide range of cancers including~~3-4 months reported in ICI resistant HPV-positive cancers ~~(anal, cervical,~~when treated with ICIs and best reported median survival to date with systemic therapy of 8.2 months in ICI resistant head and neck penile, vaginal, vulvar) and breast, colon, lung prostate and ovarian cancers. Our Infectimune -based vaccines have demonstrated the potential to induce, not only robust and durable neutralizing antibody response, but also powerful T cell responses including long-lasting memory T cell responses. Our infectious disease candidates are of potential interest for use in universal influenza vaccines.cancer.

In ~~May 2022,~~February 2023, we announced a successful completion of a Type B meeting with the FDA for the triple combination of PDS0101 and PDS01ADC with an FDA-approved immune checkpoint inhibitor for the treatment of recurrent/metastatic, ICI resistant head and neck cancer that ~~two abstracts had been~~is positive for the human papilloma virus (HPV) type 16. In recent interactions with the FDA, we confirmed the required contents of a clinical protocol for the potential registrational trial.

In June 2023, an abstract was presented at the ~~2022~~2023 American Society of Clinical ~~Oncology Annual Meeting:~~Oncology: Abstract number ~~6041,~~6012, Safety and Efficacy of Immune Checkpoint Inhibitor (ICI) Naïve Cohort from Study of PDS0101 ~~a novel type 1 interferon~~ and ~~CD8+ T cell activating immunotherapy~~Pembrolizumab in HPV16-Positive Head and Neck Squamous Cell Carcinoma (HNSCC). The abstract was also selected as one of the featured posters reviewed by an expert panel in the Head and Neck Cancer discussion session.

In September 2023, data on our investigational universal flu vaccine, PDS0202, were presented at the 9^th European Scientific Working Group on Influenza (ESWI) conference. These data demonstrated broad neutralization across multiple influenza strains and provided protection against infection after challenging animals not previously exposed to flu with lethal doses of the pandemic H1N1 flu virus.

Index

In October 2023, data demonstrating PDS0101 in combination with ~~pembrolizumab~~standard-of-care (SOC) chemoradiotherapy was associated with a rapid decline in ~~subjects with recurrent/metastatic HPV16-positive squamous cell carcinoma (HNSCC) and Abstract number 2518,~~human papillomavirus circulating cell-free DNA (ctHPV-DNA), a potential predictive biomarker of treatment response. The data from the IMMUNOCERV Phase ~~II evaluation of~~2 clinical trial were featured in an oral presentation at the American Society for Radiation Oncology Annual Meeting.

In October 2023, updated interim data based on an August 2^nd cut off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 M9241, and bintrafusp alfa with HPV16+ malignancies. Also in May 2022, we announced expansion of our VERSATILE-002 clinical trial into Europe and in June 2022, we announced the U.S. Food and Drug Administration (the “FDA”) had granted Fast Track designation to our lead candidate PDS010 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 was presented. The ~~FDA’s Fast Track designation is designed~~data was presented at a Company-sponsored key opinion leader roundtable.

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 ~~aid~~treat metastatic castration sensitive and castration resistant prostate cancer. The data was featured in an oral presentation at the ~~development and to expedite~~11^th Annual Meeting of the ~~review of drug candidate applications that would potentially treat serious or life-threatening conditions.~~ International Cytokine & Interferon Society.

In ~~order to receive Fast Track designation,~~October 2023, immune response data from a product must also demonstrate the potential to address an unmet medical need. Treatments granted this designation are given the opportunity to have more frequent meetings with the FDA throughout the entire dug development and review process, with the goal of moving promising new drugs more rapidly through the process. It also provides the opportunity to submit sectionspreliminary analysis of a New Drug Application (the “NDA”) on a rolling basis, where the FDA may review portions of the NDA as they are received instead of waiting for the entire NDA submission. In addition, Fast Track designated products are eligible for priority reviewsubset if patients in our VERSATILE-002 Phase 2 clinical trial was presented at the ~~time of NDA or Biologics License Application submission.~~

~~In July 2022, we announced the presentation of universal flu vaccine preclinical data~~European Society for ~~PDS0202 at the 41~~^st ~~American Society of Virology meeting: Abstract number 3733830, Infectimune™ enhances antibodies elicited by COBRA hemagglutinin influenza vaccine.~~Medical Oncology Congress 2023.

In November ~~2022,~~2023, we announced ~~the presentation of~~updated interim survival data from ~~two~~our NCI-led Phase 2 ~~clinical trials~~triple combination study.

In November 2023, preclinical data from our NCI-led trial including PDS0101, PDS01ADC and an HDAC inhibitor in ICI-resistant HPV-16 positive cancer was presented during a poster presentation at the 37Society for Immunotherapy of Cancer 38^th Annual Meeting for the Society of Immunotherapy of Cancer (SITC): Abstract number 674, IMMUNOCERV, an ongoing Phase 2 trial combining PDS0101, an HPV-specific T cell immunotherapy, with chemotherapy and radiation for treatment of locally advanced cervical cancers and abstract number 695, Immune correlates associated with clinical benefit in patients with checkpoint refractory HPV-associated malignancies treated with triple combination immunotherapy.

Our current pipeline of Versamune based targeted immunotherapies and Infectimune based therapies focuses on the use of selected disease-associated antigens that have been demonstrated to be associated with a variety of solid tumors, as well as specific infectious diseases.Meeting.

Clinical Candidate Pipeline

VERSATILE-002: PDS0101 + KEYTRUDA®

In November 2020, our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 in combination with Merck’s anti-PD-1 therapy, ~~KEYTRUDA~~^®KEYTRUDA® (pembrolizumab) which is the FDA-approved standard of care for first-line treatment of recurrent/ metastatic head and neck cancer ~~commenced~~commenced. Enrollment in stage 2 of 2 for the ICI naïve arm and ~~is actively recruiting patients.~~the ICI resistant arms are complete. The clinical trial will evaluate the efficacy and safety of this therapeutic combination as a ~~first-line~~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 PDS Biotech-sponsored trial patients whose cancer has returned ~~or spread~~ following initial treatment or spread will be treated with the combination of PDS0101 and ~~KEYTRUDA®~~KEYTRUDA^® to evaluate if the addition of PDS0101 might improve the efficacy reported in published studies of ~~KEYTRUDA®~~KEYTRUDA^® alone. Patients in the trial will receive 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 –~~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 aan immune checkpoint inhibitor ~~(CPI~~(ICI naïve) and cohort 2 which consists of patients who have failed immune checkpoint inhibitor therapy ~~(CPI refractory)~~(ICI resistant).

~~Index~~

In February 2022, we ~~announced we had~~ achieved the preliminary efficacy milestone of at least four or more objective responses of the first 17 patients in the ~~CPI~~ICI naïve arm ~~which now allows~~that allowed that arm to proceed to full enrollment. We also announced detailed preliminary safety data which showed that the combination is well tolerated without evidence of enhanced or significant toxicity in the first 18 patients in the ~~CPI~~ICI naïve arm. We ~~continue to enroll patients~~have completed enrollment in ~~the first stage~~Stage 1 of the ~~CPI refractory arm.~~ICI resistant arm and we are waiting for sufficient follow up to conduct the futility analysis.

Index

In ~~May~~June 2022, we ~~announced~~presented additional preliminary efficacy and safety data from this trial at the ASCO Annual ~~Meeting.~~Meeting (Weiss J et al. J Clin Oncol 40, 2022 (suppl 16; abstr 6041)). The abstract provided preliminary data on 19 patients (safety) with available imaging data for 17 of the 19 patients (efficacy). Data on 17 patients was presented. Highlights from the abstract were as follows:

●

~~Response~~

Confirmed and unconfirmed response rates thus far*far (tumor shrinkage greater than 30%) seen in 7/17 (41.2%) patients in comparison to the published results of approximately 19% for approved ~~checkpoint inhibitors,~~ICIs, used as monotherapy for recurrent or metastatic head and neck cancer, with 2 of the 7 having complete responses (CR)

●

Stable disease (SD) was reported in 6/17 (35.3%) patients, with 4 of the 6 (67%) experiencing tumor shrinkage of less than 30%

●

Clinical efficacy (ORR*(ORR + SD) was seen in 13/17 (76.5%) patients

●

Progressive/ongoing disease was reported in 4/17 (23.5%) patients

●

Patients had received a median of 4/5 doses of PDS0101 (range 1-5) and 9/35 doses of ~~KEYTRUDA~~^®KEYTRUDA® (range 1-18)

●

There were no treatment-related adverse events greater than or equal to Grade 3 (N=19)

●

No patients required dose interruption or reduction on the combination treatment

●

No patients discontinued the combination treatment

●

At 9 months of follow up (median not yet achieved):

●

Progression free survival (PFS) rate was 55.2%

●

Overall survival (OS) rate was 87.2%

●

noNo control or comparative studies have been conducted between ~~checkpoint inhibitors~~ICIs and PDS0101

In May 2022, we ~~announced the expansion of~~expanded this trial into Europe and in June 2022, as described above, we received Fast Track designation from the US FDA for PDS0101 in combination with pembrolizumab.

In August 2022, ~~we announced~~ our independent Data Monitoring Committee (DMC) met and evaluated data from 43 patients and noted there were no Grade 3 or greater treatment-related adverse events attributed to the combination. The DMC recommended continuing the trial with no modifications.

In October 2022, we announced the results of an end-of-phase 2 meeting with the FDA for PDS0101 in combination with KEYTRUDA^®. We ~~are currently evaluating~~have completed the ~~guidance on~~plan for the ~~key elements of the~~Phase 3 clinical program that will support the submission of a ~~Biologics License Application~~BLA for ~~PDS0101.~~PDS0101 and have submitted to the FDA.

In December 2022, we completed the first stage of enrollment in the ICI resistant arm. Cohort follow-up is in progress that will permit a futility analysis to determine progression to stage 2 enrollment is in progress.

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. Later in October, as part of business development discussions, we received insights from a potential business partners on the Phase 3 clinical protocol. The clinical and medical teams are currently evaluating this feedback and therefore plan to initiate a Phase 3 trial, VERSATILE-003 in the first quarter of 2024.

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 PDS Biotech previously reported 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.

Index

In October 2023, at a key opinion roundtable updated interim data was presented based on an August 2^nd 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 the 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 were 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 ICIs¹.

●

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^®).

Highlights form 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.

National Cancer Institute: PDS0101+ M9241 (now PDS01ADC) +Bintrafusp Alfa

In June 2020, the first patient was dosed under a PDS0101 Cooperative Research and Development Agreement (CRADA), in the NCI led Phase 2 ~~clinical~~investigator-initiated trial evaluating PDS0101 with ~~NHS-IL12 (M9241),~~an IL-12 ADC now PDS01ADC, and M7824 (Bintrafusp alfa), ~~both of~~ which ~~are~~is owned by EMD Serono (Merck KGaA) in patients with ~~advanced/refractory~~advanced HPV-positive cancers who have failed prior treatment. In February 2021, ~~we announced that~~ the NCI’s Phase 2 clinical trial of PDS0101 for the treatment of ~~advanced/refractory~~advanced HPV-positive cancers had achieved its preliminary objective response target in patients naïve to ~~checkpoint~~check point inhibitors which allowed for full enrollment of approximately 20 patients in this group. In addition, based on promising results in the ~~CPI~~ICI naïve arm, the trial was amended to allow enrollment of a separate cohort of ~~checkpoint inhibitor-refractory~~IC -resistant patients for assessment of safety and activity of the triple combination. The trial has been closed for enrollment. Preliminary efficacy assessment of the triple combination in this added group of ~~20 checkpoint inhibitor refractory~~29 ICI resistant patients ishas been completed and evaluation of long-term patient survival ongoing.

Preclinical study results arising from this CRADA were published in the Journal for ImmunoTherapy of Cancer, Immunomodulation to enhance the efficacy of an HPV therapeutic vaccine (Journal for ImmunoTherapy of ~~Cancer 2020;~~Cancer2020;8:e000612. ~~doi:~~Doi:10.1136/ jitc-2020-000612), ~~indicating~~and indicate that PDS0101 generated both HPV-specific T cells and anassociatedantitumor response when used as a monotherapy. When PDS0101 was combined with the two other novel clinical-stage anti-canceragents, Bintrafusp Alfa and M9241 (which is now owned by us and referred to as PDS01ADC), the preclinical data suggested that all three therapeutic agents workedsynergistically to provide superior tumor T cell responses and subsequent tumor regression when compared to any of the agents alone or the 2-component combinations. ~~If the~~The published preclinical data demonstrating powerful activity of the triplecombination ~~is successfully confirmed~~appears to be corroborated in the ~~ongoing~~ Phase 2 trial, and this triple combination could form the basis of a unique platform providing improved cancer treatments across multiple cancers.

Index

In June 2021, at the American Society of Clinical Oncology (ASCO) conference the NCI announced interim data in this trial which included, data in both CPI naïve and refractory patients. In the CPI naïve group 83% (5/6) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease. 100% of the CPI naïve patients were alive at a median duration of 8 months. In the CPI refractory group 42% (5/12) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease. 10/12 (83%) of CPI refractory patients were alive at a median duration of 8 months. An update provided in January 2022 showed as of December 31, 2021, that >40 subjects had been recruited into the trial and 30 HPV16-positive patients had been evaluated. The median survival of all patients (3:1 CPI refractor to naïve) was 12 months and progressing. The historical survival of CPI naïve and CPI refractory advanced HPV-positive cancers when treated with CPI are 7-11 months and 3-4 months, respectively.

In June 2022, at the 2022 ASCO Annual Meeting, wethe NCI provided an update to the preliminary data presented at the 2021 ~~meeting.~~meeting (Strauss J et al. J Clin Oncol 40, 2022 [suppl 16; abstr 2518]). This included data from 30 HPV16-positive patients and highlights were as follows:

●

Objective response (OR = >30% tumor reduction) was seen in 88% (7/8) of patients with ~~checkpoint-naive~~ICI naive disease; 4/7 (57%) patients’ responses are ongoing (median 17 months).

●

With ~~checkpoint refractory~~ICI resistant patients: ~~M9241~~PDS0301 dosing appears to affect response rates, with 5/8 (63%) patients receiving ~~M9241~~PDS0301 at 16.8 mcg/kg achieving an OR compared to 1/14 (7%) patients who received ~~M9241~~PDS0301 at 8 mcg/kg achieving an OR; 4/6 (67%) patients’ responses are ongoing (median 12 months).

●

Tumor reduction was seen in 45% (10/22) of patients with ~~checkpoint-refractory~~ICI resistant disease, including patients receiving high or low dose ~~M9241.~~PDS0301.

●

In ~~checkpoint refractory~~ICI resistant patients treated with high or low dose ~~M9241,~~PDS0301, survival outcomes were similar (p=0.96 by Kaplan Meier analysis). At a median of 12 months of follow up 17/22 (77%) of patients were alive.

●

In ~~checkpoint~~ICI naïve patients 6/8 (75%) were alive at median 17 months of follow up.

●

Similar OR and survival were seen across all types of HPV16-positive cancers.

●

Preliminary safety data: 13/30 (43%) of patients experienced Grade 3 treatment-related adverse events (AEs), and 2/30 patients (7%) experienced Grade 4 AEs. There were no grade 5 treatment-related AEs.

●

~~The study results to date strongly suggest, in agreement with the published preclinical studies, that all 3 drugs contribute to the clinical outcomes.~~

We believe the study results to date strongly suggest, in agreement with the published preclinical studies, that all 3 drugs contribute to the clinical outcomes.

In September 2022, we ~~announced,~~determined, in agreement with the NCI, ~~that~~to select the ~~CPI refractory~~ICI resistant patients ~~had been selected~~ as the preferred treatment group in the on-going PDS0101-based triple combination therapy in advanced HPV-positive cancers and the trial was closed to further enrollment given the ~~CPI refractory~~ICI resistant arm ~~has~~had been fully recruited. We and the NCI hope to meet with the FDA in the coming months to discuss the registrational path forward for the combination therapy as a potential third-line treatment for CPI refractory HPV-positive cancers.

In October 2022, we ~~announced expanded~~presented additional interim data as follows:

●

Survival data: 66% (19/29) of HPV16-positive ~~CPI refractory~~ICI resistant patients in the cohort were alive at a median follow up of 16 ~~months~~months.

●

Safety profile: 48% (24/50) patients experienced Grade 3 treatment-related adverse events (AEs), and 4% (2/50) patients experienced Grade 4 AEs. There were no Grade 3 treatment-related AEs.

●

HPV16-positive ~~CPI~~ICI naïve patients: 75% (6/8) were alive at a median follow up of 25 months and 38% (3/8) of responders had a complete response.

In December 2022, we presented interim data as follows:

●

Median OS was 21 months in 29 checkpoint inhibitor resistant patients who received the triple combination. The reported historical median OS in patients with ICI resistant disease is 3-4 months seen with checkpoint inhibitors and best reported median survival to date with systemic therapy of 8.2 months in ICI resistant head and neck cancer.

●

In ICI naïve subjects, 75% remain alive at a median follow-up of 27 months. As a result, median OS had not yet been reached. Historically median OS for similar patients with platinum experienced ICI naïve disease is 7-11 months.

●

Objective response rate (ORR) in ICI resistant patients who received the optimal dose of the triple combination is 63% (5/8). In current approaches ORR is reported to be less than 10%.

●

ORR in ICI naïve patients with the triple combination is 88%. In current approaches ORR is reported to be less than 25% with FDA-approved ICIs in HPV-positive cancers.

●

Safety data had not changed since October’s update. 48% (24/50) of patients experienced Grade 3 (moderate) treatment-related adverse events (AEs), and 4% (2/50) patients experienced Grade 4 (severe) AEs, compared with approximately 70% of patients receiving the combination of ICIs and chemotherapy reporting Grade 3 and higher treatment-related AEs.

In February 2023, we announced the successful completion of a Type B meeting with the FDA for the combination therapy of PDS0101, PDS01ADC, and an FDA-approved immune checkpoint inhibitor for the treatment of recurrent/metastatic HPV-positive ICI-resistant head and neck cancer. We confirmed the required contents of the trial design for a potential registrational trial of the combination.

Index

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 is 72%

●

Median OS in ICI resistant HPV-positive patients is approximately 20 months; published median OS is 3.4 months

MD Anderson Cancer Center (IMMUNOCERV): PDS0101+ Chemoradiotherapy

In October 2020, ~~a third~~another PDS0101 Phase 2 ~~clinical study~~IIT was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients. This clinical trial is investigating 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. ~~PDS Biotech believes~~We believe that ~~Versamune’s~~Versamune has strong T cell induction ~~has~~with the potential to ~~meaningfully~~ enhance efficacy of the current standard of care CRT treatment in this ~~indication. The enrollment rate in~~indication with the FDA at this ~~trial has been negatively impacted by the COVID-19 pandemic and enrollment is on-going.~~meeting.

~~Index~~

In November 2022, ~~we announced~~ data from this trial was included in a poster presentation ~~being presented~~ at the 2022 SITC Annual Meeting which included the following:

●

9 of the 17 patients ~~have now~~had completed a Day 170 post-treatment Positron Emission Tomography, Computed Tomography (PET CT) scan to assess the status of the cancer. This ~~includes~~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~~

CRT.

●

As previously reported, data confirm PDS0101 treatment activates HPV16-specific ~~CD8+~~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+~~CD8 T cells are important mediators of antigen-specific immunity.

●

The data affirm that PDS0101 activates Type 1 interferon pathway in humans, mimicking the mechanism previously demonstrated in preclinical studies in animal ~~models~~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 were 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.

Mayo Clinic: PDS0101 Monotherapy and in combination with KEYTRUDA^®

In February 2022, we ~~announced~~ ~~the initiation of~~initiated an Investigator-Initiated Trial (ITT), MC200710, for PDS0101 alone or in combination with the immune checkpoint inhibitor, KEYTRUDA^®, 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 ofat Mayo Clinic, a nationally and internationally recognized center of excellence for the treatment of head and neck cancers. We believe that this ~~upcoming~~ 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 ~~CD8+~~ killer T cells that target and kill HPV-positive cancers, either alone or in combination with ~~checkpoint inhibitors~~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).

Our clinical development strategy of combining PDS0101 with standard of care treatment is designed to mitigate risk in our proof-of-concept phase 2 trials. It is also designed to demonstrate the potential for significantly enhanced clinical benefit to patients over the standard of care, without compounding toxicity. If we achieve this goal, we believe that we will have a clear path towards commercialization of PDS0101 in multiple indications. After initial commercial approval, our strategy of combining PDS0101 with standard of care also positions us for rapid market penetration and expansion.

PDS0102

~~Other Versamune~~^®~~-Based Products in Development:~~

PDS0102 is an investigational immunotherapy utilizing tumor-associated and immunologically active T cell receptor gamma alternate reading framed protein (TARP) from the NCI. PDS0102 is designed to treat ~~TARP-positive~~TARP-associated cancers including, acute myeloid leukemia (AML), prostate and breast cancer. In our preclinical work, in the administration of PDS0102, the Versamuine+TARP antigen combination led to the induction of large numbers of ~~polyfunctional~~ tumor targeted killer T cells. In addition, the TARP tumor antigen alone has already been studied at the NCI in men with prostate cancer and been shown to be safe, immunogenic with slowing tumor growth rates (NCT00972309). We are evaluating the next steps in the clinical development of PDS0102 and are seeking nondilutive ~~funding~~financings to ~~progress to human~~move the program into clinical trials.

PDS0103

~~Index~~

~~PDS0103~~

In April 2020, the above mentioned PDS Biotech-NCI CRADA was expanded beyond PDS0101 to include clinical and preclinical development of PDS0103. PDS0103 is an investigational ~~immunotherapy~~immune therapy owned by usPDS Biotech and designed to treat cancers associated with the mucin-1, or ~~MUC-1,~~MUC1, oncogenic protein. These include cancers such as ovarian, breast, colorectal and lung cancers. PDS0103 combines Versamune with novel highly immunogenic agonist epitopes of ~~MUC-1~~MUC1 developed by the NCI and licensed by PDS. PDS0103 is currently in ~~late preclinical development.~~the tech transfer and clinical scale up and manufacturing stage.

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 ~~MUC-1~~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 the first quarter of 2022, we held a pre-IND meeting with the FDA on PDS0103 and we are prepared to submit our IND package inby the first half of ~~2023.~~2024. However, the actual submission date may potentially be impacted by the ~~outcome~~allocation of ~~our meetings with~~resources to initiate the ~~FDA on the timing of a~~ pivotal trial for PDS0101. Our primary goal is commercialization of PDS0101, and allocation of resources to implement an earlier than planned start of a registrational trial may delay PDS0103 initiation.

Our current pipeline of Versamune based therapies is as follows:

Index

IL-12 Oncology Immunocytokine Pipeline

PDS01ADC (formerly known as PDS0301/M9241 and NHS-IL-12 ) is a novel investigational IL12 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:

●

Phase II Study Evaluating ICI Naïve and Resistant Patients with HPV-positive malignancies treated with PDS01ADC, PDS0101 and bintrafusp alfa.

●

A Phase II Study Evaluating T-Cell Clonality After Stereotactic Body Radiation Therapy Alone and in Combination with the Immunocytokine PDS01ADCin Localized High and Intermediate Risk Prostate Cancer Treated with Androgen Deprivation Therapy

●

A Phase I/II Study of PDS01ADC in Combination with Docetaxel in Adults with Metastatic Castration Sensitive and Castration Resistant Prostate Cancer

●

Phase I/II of PDS01ADC going forward as a Monotherapy in Advanced Kaposi Sarcoma

●

Phase I/II of PDS01ADC in Combination of with a Histone Deacetylase (HDAC) Inhibitor in ICI resistant MUC1-positive colon and bladder cancers among others

In October 2023, interim safety and immune response data was presented for the first-in-human Phase1/2 clinical trial evaluating PDS01ADC in combination with current SOC chemotherapy, docetaxel, to treat metastatic castration sensitive and castration resistant prostate cancer. The data was featured in an oral presentation at the 11^th Annual Meeting of the International Cytokine & Interferon Society. Data presented as follows:

●

Decrease in PSA levels was seen in all patients at all three tested doses of PDS0301 and 61% of patients had at least a 60% decrease in PSA levels.

●

All doses of the combination were well-tolerated with one patient experiencing Grade 4 neutropenia.

●

Administration of the combination was associated with decreases in T reg cells and increases in activated natural killer (NK) cells, memory CD8 T cells, proliferating CD4 and CD8 T cells and cytokines INF-γ and Interleukin 10 (IL-10).

●

The changes in immune responses with the combination were independent of the PDS0301 dose.

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.

Index

Our current pipeline of IL12 fused antibody conjugated 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+~~CD8 and ~~CD4+~~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 ~~announced~~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 as well as our COVID-19~~ 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 promising data ~~recently announced~~ with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu vaccines, we have decided to opportunistically 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.

In July 2022, ~~we announced the presentation of~~ universal flu vaccine preclinical data for PDS0202 at the 41^st American Society of Virology meeting: Abstract number 3733830, ~~Infectimune™~~Infectimune enhances antibodies elicited by COBRA hemagglutinin influenza vaccine. We are evaluating the next steps in the clinical development and funding for PDS0202.

The 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).

In September 2023, data on our investigational universal flu vaccine, PDS0202, were presented at the 9^th European Scientific Working Group on Influenza (ESWI) conference. These data demonstrated active neutralization across multiple influenza viruses and provided protection against infection and weight loss after challenging with high doses of H1N1 viruses not previously exposed to flu.

Index

~~Our current pipeline of Versamuneand Infectimune based therapies is as follows:~~

Liquidity

We have never been profitable and have incurred net losses in each year since inception. Our net losses were ~~$21.7~~$32.0 million, and ~~$10.6~~$21.7 million for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. As of September 30, ~~2022,~~2023, we had an accumulated deficit of ~~$82.4~~$133.6 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 September 30, ~~2022,~~2023, we had ~~$71.6~~$54.3 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 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.

~~Index~~

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, licensing fees 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 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 platforms including Versamune based immuno-oncology, orIL12 Fused antibody drug candidates in oncology, and Infectimune based infectious disease candidates into and through clinical trials, pursue regulatory approval of our investigational candidates and prepare for a possible commercial launch, all of which will also require a significant investment in contract and internal manufacturing 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. The probability of successful commercialization of our drug 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 product candidates.

Index

Results of Operations

The following table summarizes the results of our operations for the three months ended September 30, ~~2022~~2023 and ~~2021:~~2022:

Three Months Ended
September 30,
Increase
2022 2021 $ Amount %
(in thousands)
Operating expenses:
Research and development expenses $ 4,353 $ 3,688 $ 665 18 %
General and administrative expenses 2,926 3,274 (348 ) (11 )%
Total operating expenses 7,279 6,962 317 5 %
Loss from operations (7,279 ) (6,962 ) (317 ) 5 %
Interest income (expense), net (145 ) 1 (146 ) (14,600 )%
Net loss and comprehensive loss $ (7,424 ) $ (6,961 ) $ (463 ) 7 %

	Three Months Ended September 30,						Increase (Decrease)
	2023			2022			$ Amount			%
	(in thousands)
Operating expenses:
Research and development expenses	$	6,449		$	4,353		$	2,096			48	%
General and administrative expenses		4,071			2,926			1,145			39	%
Total operating expenses		10,520			7,279			3,241			45	%
Loss from operations		(10,520	)		(7,279	)		(3,241	)		45	%
Interest income (expense), net		(329	)		(145	)		(184	)		127	%
Net loss and comprehensive loss	$	(10,849	)	$	(7,424	)	$	(3,425	)		46	%

Research and Development Expenses

Research and development (R&D) expenses increased to $6.4 million for the three months ended September 30, 2023 from $4.4 million for the three months ended September 30, ~~2022 from $3.7~~2022. The increase of $2.0 million is primarily attributable to an increase of $1.3 million in clinical trials, and $0.7 million in personnel costs, including $0.3 million in non-cash stock-based compensation.

General and Administrative Expenses

General and administrative expenses increased to $4.1 million for the three months ended September 30, 2021. The increase of $0.7 million in 2022 was primarily attributable to an increase of $0.2 million in clinical study and research costs, $0.3 million in personnel costs and $0.4 million in manufacturing services partially offset by a decrease of $0.2 million in professional fees and facilities.

~~General and Administrative Expenses~~

~~General and administrative expenses decreased to~~2023 from $2.9 million for the three months ended September 30, ~~2022 from $3.3 million for the three months ended September 30, 2021.~~2022. The ~~decrease~~increase of ~~$0.4~~$1.2 million is primarily attributable to ~~a decrease~~an increase of $0.7 million in personnel costs, including $0.5 million in ~~personnel, a decrease of $0.1~~non-cash stock-based compensation, and $0.5 million in ~~facilities offset by an increase of $0.2 million in professional fees.~~investor relations costs.

~~Index~~

Comparison of the Nine ~~Months Ended~~months September 30, ~~2022~~2023 and ~~2021~~2022

The following table summarizes the results of our operations for the nine months ~~ended~~ September 30, ~~2022~~2023 and ~~2021:~~2022:

	Nine Months Ended September 30,						Increase (Decrease)						Nine Months Ended September 30,						Increase (Decrease)
	2022			2021			$ Amount			%			2023			2022			$ Amount			%
	(in thousands)												(in thousands)
Operating expenses:
Research and development expenses	$	13,276		$	7,865		$	5,411			69	%	$	20,297		$	13,276		$	7,021			53	%
General and administrative expenses		9,575			7,252			2,323			32	%		12,341			9,575			2,766			29	%
Total operating expenses		22,851			15,117			7,734			51	%		32,638			22,851			9,787			43	%
Loss from operations		(22,851	)		(15,117	)		(7,734	)		51	%		(32,638	)		(22,851	)		(9,787	)		43	%
Interest income (expense), net		(65	)		3			(68	)		(2,267	)%		(812	)		(65	)		(747	)		1,149	%
Benefit from income taxes		1,199			4,516			(3,317	)		(73	)%		1,406			1,199			207			17	%
Net loss and comprehensive loss	$	(21,717	)	$	(10,598	)	$	(11,119	)		105	%	$	(32,044	)	$	(21,717	)	$	(10,327	)		48	%

Research and Development Expenses

Research and development (R&D) expenses increased to $20.3 million for the nine months September 30, 2023 from $13.3 million for the nine months ended September 30, ~~2022 from $7.9 million for the same period in 2021.~~2022. The increase of ~~$5.4~~$7.0 million was primarily attributable to an increase in personnel costs of ~~$1.8~~$2.0 million, ~~of which $0.5~~including $1.0 million ~~was~~in non-cash ~~stock~~stock-based compensation, clinical ~~studies~~trials of ~~$1.5~~$3.4 million, manufacturing ~~and quality~~expenses of ~~$1.9~~$1.4 million and ~~research~~professional fees and ~~consumables~~facilities costs of $0.2 million.

Index

General and Administrative Expenses

General and administrative expenses increased to $12.3 million for the nine months September 30, 2023 from $9.6 million for the nine months ended September 30, ~~2022 from $7.3~~2022. The increase of $2.7 million ~~for the same period in 2021. The $2.3 million increase~~ was primarily attributable to an increase in personnel costs of ~~$1.2~~$2.0 million, ~~of which $0.8~~including $1.4 million ~~was~~in non-cash ~~stock~~stock-based compensation, and ~~professional and legal costs of $1.1 million.~~$0.7 million in investor relations costs.

Benefit from Income Taxes

Income tax benefit was $1.4 million for the nine months ended September 30, 2023 and $1.2 million for the nine months ended September 30, ~~2022 and $4.5 million for the nine months Ended September 30, 2021. A decrease~~2022. The increase of ~~$3.3~~$0.2 million was due to ~~a smaller portion~~an increase in the amount of New Jersey NOL carryforwards sold when compared to the ~~accumulated Net Operating Losses (NOL) through 2020 available for sale.~~comparable period.

Liquidity and Capital Resources

In July 2020, we filed a shelf registration statement, or the 2020 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights, debt securities and units, which we refer to collectively as the Shelf Securities, up to an aggregate amount of $100 million. The 2020 Shelf Registration Statement was declared effective on July 31, 2020. The 2020 Registration Statement was terminated upon effectiveness of the 2022 Registration Statement (as discussed below).

In August 2020, we sold 6,900,000 shares of our common stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. We received gross proceeds of approximately $19.0 million and net proceeds of approximately $17.1 million, after deducting underwriting discounts and offering expenses.

In May 2021, we received approximately $4.5 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 Net Operating Loss (NOL) program for State Fiscal Year 2020.

In June 2021, we sold 6,088,235 shares of common stock at a public offering price of $8.50 per share pursuant to the 2020 Shelf Registration Statement, which includes 794,117 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. We received gross proceeds of approximately $51.7 million and net proceeds of approximately $48.5 million, after deducting underwriting discounts and offering expenses.

~~Index~~

In April 2022, 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 ~~State Fiscal Year~~tax year 2020.

In August 2022, we filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities, and units, ~~which the Company refers to collectively as the Shelf Securities,~~ up to an aggregate amount of $150 million, $50 million of which covers the offer, issuance and sale by ~~the Company~~us of ~~its~~our common stock under the Sales Agreement (as discussed below). The 2022 Shelf Registration Statement was declared effective on September 2, 2022.

In August 2022, we 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 we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to ~~$50.0~~$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 may 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 our common stock. The Agents will use commercially reasonable efforts to sell the Placement Shares from time to time, based upon our instructions (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay 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 also ~~has~~have provided the Agents with customary indemnification and contribution rights. We are not obligated to make any sales of our common stock under the Sales Agreement. The offering of Placement Shares pursuant to the Sales Agreement will 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. ~~During~~For the ~~quarter~~year ended ~~September 30,~~December 31, 2022, we ~~did not sell any~~sold 1,238,491 shares of our common stock with a net value of $9.9 million pursuant to the Sales Agreement. During the three and nine months ended September 30, 2023, we sold 139,575 and 736,037 shares of our common stock with a net value of $0.8 million and $5.7 million, respectively, pursuant to the Sales Agreement.

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. The Loan and Security Agreement provides for the following 6 separate and independent term loans: (a) a term loan in the amount of $7,500,000, or Loan A, (b) a term loan in the amount of $10,000,000, or Loan B, (c) a term loan in the amount of $3,750,000, or Loan C, (d) a term loan in the amount of $3,750,000, or Loan D, (e) a term loan in the amount of $5,000,000, or Loan E, and (f) a term loan in the amount of $5,000,000, or Loan F, (with each of Loan A, Loan B, Loan C, Loan D, Loan E, and Loan F, individually a Loan and, collectively, the Loans). Loan A, Loan B, Loan C, and Loan D were delivered to us on August 24, 2022. Loan E and Loan F ~~are~~were uncommitted Loans that ~~may be~~could have been advanced by the ~~lenders~~Lenders upon ~~their discretion~~the parties agreement prior to July 31, 2023 upon the satisfaction by the Company of certain agreed upon ~~conditions precedent.~~conditions. At this time the option has expired and Loan E and Loan F are no longer available to the Company under the Loan and Security Agreement . We may only use the proceeds of the Loans for working capital or general corporate purposes.

Each Loan matures on the 48-month anniversary following the applicable funding date unless accelerated pursuant to agreed upon events of default. Payments on the principal balance begin on October 1, 2024 and are paid monthly in the succeeding 24 months. The principal balance of each Loan bears a floating interest. The interest rate is calculated initially and, thereafter, each calendar month as the sum of (a) the per annum rate of interest from time to time published in The Wall Street Journal as contemplated by the Loan and Security Agreement, or any successor publication thereto, as the “prime rate” then in effect, plus (b) 5.75%; provided that, in the event such rate of interest is less than 4.00%, such rate shall be deemed to be 4.00% for purposes of calculating the interest rate.

Index

Interest is payable on a monthly basis based on each Loan principal amount outstanding the preceding month. We, at our option upon at least ten (10) business days’ written notice to the lenders, may prepay all (and not less than all) of the outstanding Loan by simultaneously paying to each lender an amount equal to (i) any accrued and unpaid interest on the outstanding principal balance of the Loans; plus (ii) an amount equal to (A) if such Loan is prepaid on or before the Loan Amortization Date (as defined in the Loan and Security Agreement) applicable to such Loan, 3% of the then outstanding principal balance of such Loan, (B) if such Loan is prepaid after the Loan Amortization Date applicable to such Loan, but on or before the date that is 12 months after such Loan Amortization Date, 2% of the then outstanding principal balance of such Loan, or (C) if such Loan is prepaid more than 12 months after the Loan Amortization Date but prior to the stated maturity date applicable to such Loan, 1% of the then outstanding principal balance of such Loan; plus (iii) the outstanding principal balance of such Loan; plus (iv) all other sums, if any, that shall have become due and payable thereunder. No prepayment premium will be applied to any outstanding balance of any Loan paid on the stated maturity date.

In connection with the Loan and Security Agreement, we issued Horizon Technology Finance Corporation and Powerscourt Investments XXV, LP warrants to purchase an aggregate total of 381,625 shares of our common stock at an initial exercise price of $3.6685 per share. Each warrant is classified as equity and is exercisable at any time for a period beginning on the date of grant and ending on the earlier of (A) 10 years from the date of grant, and (B) the closing of (A) (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the our property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of, in each case, for cash or for marketable securities meeting certain requirements as described in the applicable warrants. The key assumptions used in Black-Scholes option pricing model were (i) expected term of 10 years, (ii) a risk-free rate of 3.11%, (iii) expected volatility of 93.8%, and (iv) no estimated dividend yield.

In April 2023, we received approximately $1.4 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 2021.

As of September 30, ~~2022,~~2023, we had ~~$71.6~~$54.3 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.

~~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 on Form 10-Q. Based on such evaluation and our current plans, which are subject to change, management believes that our existing cash and cash equivalents as of September 30, 2022 will be sufficient to satisfy our operating cash needs for at least one year after the filing of this Quarterly Report on Form 10-Q.

We plan to continue to fund our operations and capital funding needs through equity and/or debt financings. 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~~clinical development or future commercialization efforts or grant rights to develop and market immunotherapies that we would otherwise prefer to develop and market ourselves. Any of these actions could harm our business, results of operations and prospects.

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 on Form 10-Q. While we intend to finance our cash needs principally through collaborations, strategic alliances, or license agreements with third parties and/or debt or equity financings, there is no assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. As such, 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 this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Index

Cash Flows

The following table shows a summary of our cash flows for each of the periods indicated (in thousands):

	Nine Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2023			2022
Net cash used in operating activities	$	(18,181	)	$	(7,985	)	$	(25,179	)	$	(18,181	)
Net cash provided by financing activities		24,581			48,889			5,610			24,581
Net increase in cash and cash equivalents	$	6,400		$	40,904		$	(19,569	)	$	6,400

Net Cash Used in Operating Activities

Net cash used in operating activities was ~~$18.2~~$25.2 million and ~~$8.0~~$18.2 million for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The increase in net cash used in operating activities of ~~$10.2~~$7.0 million was primarily due to an increase in net loss of ~~$11.1~~$10.3 million, anreduced by the increase in the non-cash stock-based compensation expense of $2.4 million, offset by changes in the timing of working capital requirements, including changes in prepaid expenses ~~of $1.1 million,~~ and ~~an increase in finance right to use asset of $0.3 million, offset by an increase in stock compensation of $1.4 million, an increase in amortization of debt discount of $0.1 million,~~other assets, accrued expenses and anaccounts payable. The increase in accounts payable, specifically, is primarily the result of ~~$0.7 million.~~a dispute with a certain vendor and we are working towards resolving this dispute.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2023 was due to the receipt of net proceeds of $5.6 million due to the sale of common stock under the Sales Agreement. Net cash provided by financing activities for the nine months ended September 30, 2022 was primarily due to the receipt of net proceeds of $24.6 million due to ~~a note payable.~~the Venture Loan.

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 ~~tablet~~ vaccine candidates, and begin to commercialize any approved vaccine candidates. We are subject to all of the risks incident to the development of new products, and may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business. We expect to incur additional costs associated with operating as a public company and anticipate that we will need substantial additional funding in connection with our continuing operations.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the filing of this Quarterly Report. Our budgeted cash requirements in ~~2022~~2023 and beyond include expenses related to continuing development and clinical studies. We believe that our existing cash and cash equivalents as of September 30, 2022 are sufficient to continue operations and research and development programs for at least one year after the date of this Quarterly Report. 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 collaborations, strategic alliances, or license agreements with third parties and/or debt or equity financings, there is no assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. As such, 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.

Index

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

●

the initiation, progress, timing, costs and results of our planned clinical trials;

●

the effects of health epidemics, pandemics, or outbreaks of infectious diseases, ~~including the recent COVID-19 pandemic,~~ 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 ~~product~~clinical candidates, if approved, for commercial sale.

Please see the section titled “Risk Factors” elsewhere in the Quarterly Report and Annual Report 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 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 reported revenue generated and 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 nine months ended September 30, ~~2022~~2023 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~

~~Index~~

~~Operations and Liquidity~~

While the potential economic impact brought by and over the duration of the COVID-19 pandemic may be difficult to assess or predict, the COVID-19 pandemic has resulted in significant disruption of global financial markets, which could in the future negatively affect our liquidity. In addition, a recession or market volatility resulting from the COVID-19 pandemic could affect our business. We have taken proactive, aggressive action throughout the COVID-19 pandemic to protect the health and safety of our ~~employees~~ ~~and expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business. We may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees.~~ ~~Given the nature and type of our short-term investments, we do not believe that the COVID-19 pandemic will have a material impact on our current investment liquidity.~~

~~Outlook and Impact of COVID-19 on our Business~~

In December 2019, a novel (new) coronavirus known as SARS-CoV-2 was first detected in Wuhan, Hubei Province, People’s Republic of China, causing outbreaks of the coronavirus disease, known as COVID-19, that has now spread globally. On January 30, 2020, the World Health Organization (WHO) declared COVID-19 a public health emergency. The Secretary of Health and Human Services declared a public health emergency on January 31, 2020, under section 319 of the Public Health Service Act (42 U.S.C. 247d), in response to the COVID-19 outbreak. On March 11, 2020, the WHO declared COVID-19 a pandemic and on March 13 the President declared a national emergency in response to the pandemic. The full impact of the COVID-19 pandemic is unknown and rapidly evolving. The COVID-19 pandemic has and could continue to negatively affect our liquidity and operations. To date, two of the three recently initiated PDS0101 clinical trials were delayed, specifically as a result of the adverse impact the COVID-19 pandemic has had on clinical trial operations for cancer indications in the United States. The FDA issued and since updated guidance to assist sponsors in assuring the safety of trial participants, maintaining compliance with Good Clinical Practice (GCP) and minimizing risks to trial integrity. Clinical trial sites have implemented institution-specific measures securing the safety of patients and staff to ensure the integrity of the trials in the face of the ongoing pandemic. All three studies have since been initiated despite the pandemic challenges; however, the evolving COVID-19 pandemic has impacted the pace of enrollment in clinical trials in general and we may be negatively affected with our trials. COVID-19 related travel and other restrictions may also impact the potential for on-site monitoring visiting and audits and inspections by us, third parties, and regulators. There may be shortages of site personnel and equipment necessary for the timely completion of our trials. We are providing support to address these challenges, but these mitigation measures may not overcome the obstacles that the pandemic has wrought which continue to impede progress of clinical trials.

Although there is uncertainty related to the anticipated impact of the COVID-19 pandemic on our future results, we believe our current cash reserves, leave us well-positioned to manage our business through this crisis as it continues to unfold. However, the impacts of the COVID-19 pandemic are broad-reaching and continuing and the financial impacts associated with the COVID-19 pandemic are still uncertain.2022.

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

As of January 1, 2021, we ~~are~~were no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. However, we remain 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.

Index

ITEM 3:

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

~~The primary objectives~~

Interest Rate Risk

We are exposed to market risks in the ordinary course of our ~~investment activities~~business and from changes in the interest rate on our debt borrowings. These market risks are principally limited to ~~ensure liquidity and to preserve principal, while at the same time maximizing the income we receive from our cash and marketable securities without significantly increasing risk.~~interest rate fluctuations. As of September 30, ~~2022, we had~~2023, our cash equivalents consisted of ~~$71.6 million that were held in a non-interest-bearing money operating account~~bank deposits and ~~an institutional U.S. Treasury~~ money market ~~fund.~~accounts and our debt is a variable interest rate instrument. Our primary exposure to market risk is interest ~~rate~~income sensitivity, which is affected by changes in the general level of U.S. interest rates. The primary objective of our investment activities is to preserve principal and liquidity while maximizing income without significantly increasing risk. We do not enter into investments for trading or speculative purposes. Due to the short-term ~~maturities~~nature of our ~~cash equivalents~~investment portfolio and ~~the low risk profile of our investments,~~debt agreement, we do not believe ~~that~~ an immediate 100 basis point ~~change~~increase in interest rates would have a material effect on the fair market value of our portfolio, and, accordingly, we do not expect our operating results or cash ~~equivalents. To minimize~~flows to be materially affected by a sudden change in market interest rates.

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 risk in the future, we intend to maintain our portfolio of cash equivalents and short-term investments in institutional market funds that are comprised of U.S. Treasury and Treasury backed repurchase agreements.three months ended September 30, 2023.

ITEM 4:4.

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 September 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~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 September 30, ~~2022~~2023 contained in this Quarterly Report on Form 10-Q.

ITEM 1A.

RISK FACTORS

With the exception of the risk ~~factors~~factor noted below, there have been no material changes from our risk factors as previously reported in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. 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, ~~2021~~2022 filed on March ~~31, 2022,~~28, 2023, including our financial statements and related notes contained therein, and the additional information in the other reports we file with the Securities and Exchange Commission. 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.

Index

We have identified conditions and events that raise substantial doubt regarding our ability to continue as a going concern.

We have incurred net losses and utilized cash in operations since inception. In addition, as of September 30, 2023, we had approximately $54.3 million in cash and cash equivalents, and during the nine months ended September 30, 2023, we used $18.2 million of cash in operations and expect to continue to incur significant cash outflows and incur future additional losses to execute our operating plan. While we intend to finance our cash needs principally through collaborations, strategic alliances, or license agreements with third parties and/or debt or equity financings, there is no assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. Due to the uncertainty in securing additional funding, and the insufficient amount of cash and cash equivalents as of September 30, 2023, we have concluded that substantial doubt exists about our ability to continue as a going concern within one year after the date of the filing of this Quarterly Report. If we are ~~currently operating~~unsuccessful in securing sufficient financing, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations.

Our unaudited condensed consolidated financial statements included in this Quarterly Report have been prepared on a ~~period~~going concern basis under which an entity is able to realize its assets and satisfy its liabilities in the ordinary course of ~~economic uncertainty~~business. The unaudited condensed consolidated financial statements do not give effect to any adjustments relating to the carrying values and ~~capital markets disruption, which has been significantly impacted by geopolitical instability, an ongoing military conflict between Russia~~classification of assets and ~~Ukraine, and record inflation.~~ liabilities that would be necessary should we be unable to continue as a going concern within one year after the date that the financial statements are issued.

Our ~~business, financial condition and results of~~future operations ~~could be materially adversely affected by any negative impact~~are dependent upon the successful entry into collaborations, strategic alliances, or license agreements with third parties and/or on the ~~global economy~~identification and ~~capital markets resulting from~~successful completion of equity or debt financing and the ~~conflict~~achievement of profitable operations at an indeterminate time in ~~Ukraine, geopolitical tensions,~~the future. There can be no assurances that we will be successful in completing these collaborations or ~~record inflation.~~alliances, equity or debt financing or in achieving profitability. As such, there can be no assurance that we will be able to continue as a going concern.

We are exposed to the risk of changes in social, geopolitical, legal, and economic conditions. The global economy has been, and may continue to be, negatively impacted by Russia’s invasion of Ukraine. As a result of Russia’s invasion of Ukraine, the United States, the European Union, the United Kingdom, and other G7 countries, among other countries, have imposed substantial financial and economic sanctions on certain industry sectors and parties in Russia. Broad restrictions on exports to Russia have also been imposed. These measures include: (i) comprehensive financial sanctions against major Russian banks; (ii) additional designations of Russian individuals with significant business interests and government connections; (iii) designations of individuals and entities involved in Russian military activities; and (iv) enhanced export controls and trade sanctions limiting Russia’sSubstantial doubt about our ability to ~~import various goods.~~

~~Although the length~~continue as a going concern may materially and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit markets, as well as supply chain interruptions, which has contributed to record inflation globally. In addition, the ongoing Russian military actions and the resulting sanctions could continue to adversely affect the ~~global economy~~price per share of our common stock, and ~~financial markets and lead to instability and lack of liquidity in capital markets, potentially making~~ it may be more difficult for us to obtain ~~additional funds. We are continuing~~financing. If potential collaborators decline to ~~monitor inflation, the situation~~do business with us or potential investors decline to participate in ~~Ukraine and global capital markets and assessing its potential impact on our business.~~

~~Although,~~any future financings due to date, our business has not been materially impacted by the ongoing military conflict between Russian and Ukraine, geopolitical tensions, or record inflation, it is impossible to predict the extent to which our operations will be impacted in the short and long term, or the ways in which such matters may impact our business. The extent and duration of the conflict in Ukraine, geopolitical tensions, record inflation and resulting market disruptions are impossible to predict but could be substantial. Any such disruptions may also magnify the impact of other risks described in our Annual Report on Form 10-K for the year ended December 31, 2021.

~~Our results of operations and liquidity needs could be materially affected by market fluctuations and general economic conditions.~~

Our results of operations could be materially affected by economic conditions generally, both in the United States and elsewhere around the world. Concerns over inflation, energy costs, geopolitical issues, and the availability and cost of credit have in the past and may continue to contribute to increase volatility and diminished expectations of the economy and markets going forward. Market upheavals may have an adverse effect on us. In the event of a market downturn, our results of operations could be adversely affected. Our future cost of equity or debt capital and access to the capital markets could be adversely affected, and our stock price could decline. There may be disruption or delay in the performance of our third-party contractors and suppliers. If our contractors, suppliers and partners are unable to satisfy their contractual obligations, our business could suffer.

~~Index~~

Our operating activities may be restricted as a result of covenants related to the outstanding indebtedness under our venture loan and security agreement with Horizon and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our business.

In August 2022, we entered into a Venture Loan and Security Agreement, or the Loan Agreement, for separate term loans of up to an aggregate amount of $35.0 million, with Horizon Technology Finance Corporation, or Horizon, in its capacity as a lender and collateral agent for itself and the other financial institutions that from time to time become parties to the Loan Agreement, collectively referred to as the Lenders, secured by a by a security interest in all of our respective rights, title, interests, claims and demands in, to and under all of our respective properties and other assets, subject to limited exceptions and excluding our intellectual property. The Loan Agreement contains various covenants that limitconcerns, our ability to ~~engage in specified types of transactions. These covenants limit~~increase our ability to, among other things, sell, transfer, lease or dispose of certain assets; incur indebtedness; encumber or permit liens on certain assets; make certain investments; make certain restricted payments, including paying dividends on, or repurchasing or making distributions with respect to, our common stock; and enter into certain transactions with affiliates. Our businesscash position may be adversely affected by these restrictions on our ability to operate our business. A breach of any of the covenants under the Loan Agreement could result in a default. Upon the occurrence of an event of default, the Lenders could elect to declare all amounts outstanding, if any, to be immediately due and payable. If there are any amounts outstandinglimited. The perception that ~~we are unable to repay, the Lenders could proceed against the collateral granted to them to secure such indebtedness.~~

~~We will require additional capital to fund our operations, and if we fail to obtain necessary financing,~~ we may not be able to ~~complete the development and commercialization of~~continue as a going concern may cause others to choose not to deal with us due to concerns about our ~~Versamune and Infectimune based products.~~

~~We expect~~ability to ~~spend substantial amounts to complete the development of, seek regulatory approvals for and commercialize PDS0101. Even with~~meet our current cash reserves, we will require substantial additional capital to complete the development and potential commercialization of PDS0101 and the development of other Versamune and Infectimune based products.contractual obligations. If we are unable to ~~raise capital~~continue as a going concern, you could lose all or ~~find appropriate partnering or licensing collaborations or other nondilutive financing, when needed or on acceptable terms, if at all, we could be forced to delay, reduce or eliminate one or more~~part of your investment in our development programs or any future commercialization efforts. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our development efforts.Company.

Based upon our current operating plan, we believe that our cash reserves will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this report. Our estimate as to what we will be able to accomplish is based on assumptions that may prove to be inaccurate, and we could exhaust our available capital resources sooner than is currently expected. Because the length of time and activities associated with successful development of PDS0101 is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

●

~~initiation the, progress, timing, costs and results of our planned clinical trials;~~

●

~~the outcome, timing and cost of meeting regulatory requirements established by the FDA 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 any 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 PDS0101 on our own; and~~

●

~~the initiation, progress, timing and results of the commercialization of PDS0101, if approved, for commercial sale.~~

Additional funding may not be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of PDS0101 or potentially discontinue operations.

~~Index~~

Raising additional funds by issuing securities may cause dilution to existing stockholders and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.

We expect that significant additional capital will be needed in the future to continue our planned operations. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, strategic alliances and license and development agreements in connection with any collaborations.

In February 2020, we completed an underwritten public offering, in which we sold 10,000,000 shares of common stock at a public offering price of $1.30 per share. The shares sold included 769,230 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price. We received gross proceeds of approximately $13 million and net proceeds of approximately $11.9 million after deducting underwriting discounts and commissions. In July 2020, we filed a shelf registration statement, or the 2020 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights, debt securities and units, which we refer to collectively as the Shelf Securities, up to an aggregate amount of $100 million. The 2020 Shelf Registration Statement was declared effective on July 31, 2020. The 2020 Registration Statement was terminated upon effectiveness of the 2022 Registration Statement (as discussed below). On August 13, 2020, we sold 6,900,000 shares of our common stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. We received gross proceeds of approximately $19.0 million and net proceeds of approximately $17.1 million, after deducting underwriting discounts and offering expenses. In June 2021, we completed an underwritten public offering in which we sold 6,088,235 shares of common stock at a public offering price of $8.50 per share pursuant to the 2020 Shelf Registration Statement, which includes 794,117 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. We received gross proceeds of approximately $51.7 million and net proceeds of approximately $48.5 million, after deducting underwriting discounts and offering expenses.

In August 2022, we filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities, and units up to an aggregate amount of $150 million, $50 million of which covers the offer, issuance and sale by the Company of its common stock under the Sales Agreement (as discussed below). The 2022 Shelf Registration Statement was declared effective on September 2, 2022. In August 2022, we 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 we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to $50.0 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 may 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 our common stock. The Agents will use commercially reasonable efforts to sell the Placement Shares from time to time, based upon our instructions (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay 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 also has provided the Agents with customary indemnification and contribution rights. We are not obligated to make any sales of our common stock under the Sales Agreement. The offering of Placement Shares pursuant to the Sales Agreement will 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. We have not sold any shares of our common stock pursuant to the Sales Agreement.

To the extent that we raise additional capital by issuing equity securities, our existing stockholders’ ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends, creating liens, redeeming our stock or making investments.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or Versamune Products or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, or through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties on acceptable terms, we may be required to delay, limit, reduce or terminate our PDS0101 development or future commercialization efforts or grant rights to develop and market other Versamune and Infectimune products that we would otherwise develop and market.

~~Index~~

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 September 30, 2022.~~None

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

~~None.~~During the quarter ended September 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

Index

ITEM 6.

EXHIBITS

~~Index~~

EXHIBIT INDEX

Exhibit Number		Exhibit Description
10.1*10.1+		~~Form of Warrant issued under the Venture Loan~~Third Amended and ~~Security Agreement, dated August 24, 2022.~~

10.2*		Venture Loan and Security Agreement, dated August 24, 2022, by and among Horizon Technology Finance Corporation, as a lender and collateral agent, Powerscourt Investments XXV, LP, as a lender, PDS Operating Corporation, as a guarantor, andRestated PDS Biotechnology Corporation ~~as borrower.~~

~~10.3~~		~~At Market Issuance Sales Agreement dated August 24, 2022 by and between PDS Biotechnology Corporation, B. Riley Securities, Inc., and BTIG, LLC~~2014 Equity Incentive Plan (incorporated by reference to ~~Exhibit 1.2 to~~ the ~~Registration Statement~~Registrant’s Current Report on Form ~~S-3~~8-K filed ~~by PDS Biotechnology Corporation~~with the Securities and Exchange Commission on ~~August 24, 2022, Reg. No. 333-267041)~~July 17, 2023).

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*		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*		XBRL Taxonomy Extension Schema Document

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)

**+	~~Certain portions of the Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.~~Indicates management compensatory plan or arrangement.

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

November 14, ~~2022~~2023	By:	/s/ Frank Bedu-Addo
		Frank Bedu-Addo
		President and Chief Executive Officer
		(Principal Executive Officer)


November 14, ~~2022~~2023	By:	/s/ Matthew Hill
		Matthew Hill
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

			Page
Part I — Financial Information

	Item 1.	Financial Statements (Unaudited):

		Condensed Consolidated Balance Sheets	3

		Condensed Consolidated Statements of Operations and Comprehensive Loss	4

		Condensed Consolidated Statements of Changes in Stockholders’ Equity	5

		Condensed Consolidated Statements of Cash Flows	6

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3033

	Item 4.	Controls and Procedures	30 33

Part II — Other Information			31 33

	Item 1.	Legal Proceedings	31 33

	Item 1A.	Risk Factors	31 33

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

	Item 3.	Defaults Upon Senior Securities	34

	Item 4.	Mine Safety Disclosures	34

	Item 5.	Other Information	34

	Item 6.	Exhibits	3435

EXHIBIT INDEX			35

SIGNATURES			36

Year ended December 31,
2022 (remaining three months)	$	89,103
2023		239,470
2024		–
2025		–
2026 and after		–
Total future minimum lease payments		328,573
Less imputed interest		(14,597	)
	$	313,976

Year ended December 31,
2022 (remaining three months)	$	34,916
2023		44,358
2024		35,694
2025		35,694
2026 and after		5,952
Total future minimum lease payments		156,614
Less imputed interest		(18,212	)
Remaining lease liability	$	138,402

	As of September 30, 2022		As of December 31, 2021
Accrued research and development	$	584,372	$	227,400
Accrued professional fees		415,327		485,400
Accrued compensation		1,189,741		1,458,310
Accrued interest on debt		239,063		–
Accrued rent		–		16,594
Total	$	2,428,503	$	2,187,704

	Three Months Ended September 30,						Increase
	2022			2021			$ Amount			%
	(in thousands)
Operating expenses:
Research and development expenses	$	4,353		$	3,688		$	665			18	%
General and administrative expenses		2,926			3,274			(348	)		(11	)%
Total operating expenses		7,279			6,962			317			5	%
Loss from operations		(7,279	)		(6,962	)		(317	)		5	%
Interest income (expense), net		(145	)		1			(146	)		(14,600	)%
Net loss and comprehensive loss	$	(7,424	)	$	(6,961	)	$	(463	)		7	%