PDSB

Business Context and Reporting Period

PDS Biotechnology Corporation (PDSB) is a clinical-stage immunotherapy company developing targeted cancer and infectious disease treatments based on its Versamune® and Infectimune® platforms. The company focuses on oncology candidates PDS0101 (HPV-related cancers) and PDS01ADC (IL-12 fused antibody drug conjugate), as well as PDS0103 (MUC1-related cancers). This Form 10-K covers the fiscal year ended December 31, 2025.

Key Financial Metrics

Debt and Liquidity: As of December 31, 2025, the company held senior secured convertible debentures with an aggregate principal amount of approximately $19.7 million (after $2.5 million in redemptions during the year). The company has no product revenue and relies on equity and debt financing.

Material Changes vs. Prior Period

• Reduced Net Loss: Net loss decreased by approximately $3.1 million (8%) compared to 2024, driven by a $3.5 million reduction in R&D expenses and a $1.2 million reduction in G&A expenses.
• Expense Reductions: R&D expenses declined primarily due to decreases in manufacturing costs ($2.5 million) and personnel costs ($1.8 million), partially offset by increased clinical costs. G&A expenses decreased due to lower personnel costs.
• Increased Interest Expense: Net interest expense increased by $1.9 million to $4.1 million, attributed to decreased interest income and a $1.1 million loss on the retirement of prior debt.
• Financing Activity: The company raised approximately $14.8 million in net proceeds from equity offerings in February and November 2025 and issued $22.2 million in senior secured convertible debentures in April 2025, using proceeds to retire prior debt.

Guidance, Outlook, and Risks

Clinical Progress and Outlook:

• VERSATILE-003: Initiated in March 2025, this Phase 3 trial evaluates PDS0101 plus pembrolizumab for HPV16-positive head and neck cancer. In December 2025, the company amended the protocol to include progression-free survival as an interim primary endpoint and scheduled a Type C meeting with the FDA to discuss an expedited approval pathway.
• VERSATILE-002: Final topline survival data announced in August/September 2025 showed a median overall survival (mOS) of 39.3 months for patients with CPS ≥ 1 and 29.5 months for the low-CPS cohort (CPS 1-19), significantly exceeding historical benchmarks for standard-of-care pembrolizumab.
• PDS0103: An IND for a Phase 1 trial in colorectal cancer was submitted in January 2025.

Going Concern Warning: Management has concluded that substantial doubt exists regarding the company's ability to continue as a going concern for at least 12 months from the filing date. This is due to recurring net losses, negative cash flows from operations, and the requirement to maintain minimum cash balances under the terms of the senior secured debentures. Continued operations depend on securing additional financing.

Key Risks:

• Capital Requirements: The company requires significant additional capital to fund clinical trials and operations. Failure to secure financing could force delays or termination of programs.
• Debt Covenants: The debentures require maintaining a cash balance equal to the lesser of $15.0 million or the outstanding principal plus $3.0 million. Breach of this covenant could trigger a default and immediate repayment.
• Nasdaq Compliance: The company received a deficiency letter in February 2026 regarding failure to maintain the $1.00 minimum bid price requirement, with a 180-day grace period to regain compliance.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $26.7 million cash balance against the mandatory $15.0 million minimum cash covenant and projected burn rate for 2026.
• Financing Status: Confirm the status of any new equity or debt financing required to maintain operations and meet debt service obligations.
• Nasdaq Compliance: Monitor the company's ability to regain compliance with the $1.00 minimum bid price requirement within the 180-day grace period to avoid delisting.
• Clinical Trial Data: Review the full data release from the VERSATILE-002 trial and the FDA's response to the proposed expedited pathway for VERSATILE-003.
• Debt Terms: Assess the impact of the senior secured debentures, including the floating interest rate (Prime + 5%) and the potential for forced monthly redemptions up to $500,000.