Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the financial condition and results of operations of OS Therapies Incorporated ("OS Therapies," the "Company," "we," "our" or "us") should be read in conjunction with the consolidated financial statements and notes thereto appearing in Part I, Item 1 of this report. In the following discussions, most percentages and dollar amounts have been rounded to aid presentation, and, accordingly, all amounts are approximations.

Cautionary Note Regarding Forward-Looking Statements

This report contains "forward-looking statements" (within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical information. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, the words "seek," "estimate," "expect," "anticipate," "project," "plan," "contemplate," "plan," "continue," "intend," "believe" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. We believe there is a reasonable basis for our expectations and beliefs, but there can be no assurance that we will realize our expectations or that our beliefs will prove to be correct.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Examples of risks and uncertainties that could cause actual results to differ materially from historical performance and any forward-looking statements include, but are not limited to, the risks described under the section below titled "Risk Factors" and in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 31, 2026, as well as any subsequent filings with the SEC.

There may be other factors of which we are currently unaware or which we currently deem immaterial that may cause our actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.

We make available through our Internet website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports and other filings made by us with the SEC, as soon as practicable after we electronically file such reports and filings with the SEC. Our website address is www.ostherapies.com. The information contained on our website is not incorporated by reference into this report.

Overview

We are a clinical stage biopharmaceutical company focused on the identification, development and commercialization of treatments for Osteosarcoma (OS) and other solid tumors. Our mission is to address the significant need for new treatments in cancers of the bone in children and young adults. Osteosarcoma is an extremely challenging and often aggressive cancer that has particular treatment challenges due to its location, changing genotypes and high metastases rates. We are currently seeking to answer the call for new treatments that will prevent metastasis and the recurrence of metastases with our lead core product candidate OST-HER2 (also known as OST31-164), a cancer immunotherapy product candidate that produces a cellular immune response against the cancer antigen HER2.

In 2021, we opened a clinical study to produce data for the U.S. Food and Drug Administration (FDA) to evaluate the safety and efficacy of OST-HER2 in patients after resection of recurrent Osteosarcoma, which achieved full enrollment of 41 patients in October 2023. In the first quarter of 2025, we announced that our Phase IIb clinical trial achieved its primary endpoint with statistical significance. In October 2025, we announced final two-year overall survival data from the Phase IIb trial, in which 75% (27 of 36 evaluable patients) of OST-HER2-treated patients achieved two-year overall survival from the most recent pulmonary resection, compared with 60% in historical control patients (p = 0.034). OST-HER2 was observed to be well-tolerated in the study. In January 2026, we announced positive immune biomarker data from the Phase IIb trial indicating that activation of immune blood biomarkers in the interferon gamma pathway correlated with, and was predictive of, overall survival, distinguishing long-term survivors (≥ two years) from short-term survivors (< one year). These biomarker findings are based on exploratory analyses and have not been validated as surrogate endpoints for clinical benefit. In May 2026, we announced that the Phase IIb trial demonstrated a statistically significant overall survival benefit at the 2.5-year timepoint, with 75% overall survival in OST-HER2-treated patients compared with 47% in pooled historical control patients (p = 0.003). No new patient deaths were reported in the OST-HER2-treated group between the two-year and 2.5-year analyses.

We have engaged in ongoing regulatory interactions with the FDA, the United Kingdom Medicines and Healthcare products Regulatory Agency (MHRA), and the European Medicines Agency (EMA) regarding the clinical and biomarker data for OST-HER2 in recurrent, fully resected pulmonary metastatic Osteosarcoma. We anticipate submitting the clinical Biologics License Application (BLA) module following an expected Type C meeting with the FDA in the September 2026 and completing conditional Marketing Authorization Application (MAA) submissions to both the MHRA and the EMA in the first quarter of 2027. We also anticipate releasing additional biomarker data in October 2026 to further characterize immune pathway activation and its relationship to clinical outcomes. We expect to initiate confirmatory clinical studies in October 2026 in support of conditional approval pathways. If OST-HER2 receives approval under the FDA's Accelerated Approval Program prior to September 30, 2029, we would become eligible to receive a Priority Review Voucher under the Rare Pediatric Disease Designation Program.

Upon success in gaining regulatory approval from the FDA with OST-HER2 in Osteosarcoma, we intend to evaluate OST-HER2's potential use, both alone and in combination with HER2 targeting antibodies such as Herceptin®, in other solid tumors including breast, esophageal and lung cancers. OST-HER2 has potential uses in both the prevention of metastases in solid tumors, and therapeutically against HER2-expressing solid tumors treated with HER targeting antibodies.

We also own rights to an OST-Tunable Drug Conjugate (OST-tADC) platform, a next generation antibody-drug conjugate (ADC) silicone dioxide linker technology. "Tunable" is a term used in drug development that refers to the properties that can be influenced by chemical modifications, and "antibody-drug conjugate" or ADC is a term used to describe a drug made up of a monoclonal antibody attached to a cytotoxic payload, or a highly active and toxic pharmaceutical molecule, through chemical linkers. The ADC links an antibody that can home in on a targeted tumor to deploy the cytotoxic payload or toxic agent against the tumor. Furthering our founding mission, we intend to investigate clinical indications for OST-tADC in Osteosarcoma and other solid tumors.

Recent Developments

2026 Registered Direct Offering

On April 2, 2026, we completed a registered direct offering, pursuant to which we offered and sold to accredited investors an aggregate of 2,505,073 shares of our common stock and, in lieu thereof, pre-funded warrants to purchase up to 1,250,893 shares of our common stock, and accompanying common warrants to purchase up to 3,755,966 shares of our common stock (the "2026 Registered Direct Offering"). The combined purchase price for each share and common warrant in the 2026 Registered Direct Offering was $1.40, and the purchase price for each pre-funded warrant and common warrant in the 2026 Registered Direct Offering was $1.399, which was equal to the per share and common warrant purchase price, minus $0.001. We received net proceeds from the 2026 Registered Direct Offering of approximately $4.8 million. We are using the net proceeds to fund clinical development activities, including ongoing and planned clinical trials, advance our research and development programs, as well as for working capital and other general corporate purposes.

Upon consummation of the 2026 Registered Direct Offering, the 10.0% original issue discount unsecured convertible promissory notes in an aggregate principal amount of $2,200,000 issued in connection with our bridge financing in March 2026, together with all accrued and unpaid interest thereon, automatically converted into an aggregate of 1,576,311 shares of our common stock and warrants to purchase up to 1,576,311 shares of our common stock. The warrants were issued on the same terms as the common warrants issued in the 2026 Registered Direct Offering.

In connection with the 2026 Registered Direct Offering, Ceros Financial Services, Inc. ("Ceros") acted as our exclusive placement agent. We paid Ceros a cash fee equal to 7.0% of the gross proceeds raised in the 2026 Registered Direct Offering. We also reimbursed Ceros up to $70,000 for its reasonable and documented out-of-pocket accountable expenses and up to $20,000 for its non-accountable expenses. We also issued to Ceros's designees warrants to purchase up to an aggregate of 187,798 shares of our common stock. The placement agent warrants have an exercise price of $1.54 per share, are exercisable beginning September 2, 2026 and expire five years from April 2, 2026.

Termination of Prior Sales Agreement

On August 8, 2025, we entered into an at market issuance sales agreement with B. Riley Securities, Inc. and JonesTrading Institutional Services LLC (the "Prior Sales Agreement"), pursuant to which we could offer and sell shares of our common stock having an aggregate offering price of up to $18,000,000. Effective as of July 28, 2026, we terminated the Prior Sales Agreement. At the time of termination, we had sold an aggregate of 282,679 shares of our common stock for aggregate gross proceeds of approximately $530,162 under the Prior Sales Agreement and the related prospectus supplement dated August 25, 2025 (the "Prior Prospectus Supplement"), and approximately $17,469,838 remained unsold thereunder. No further shares of our common stock may or will be offered or sold under the Prior Sales Agreement or the Prior Prospectus Supplement.

Leonite Secured Financing

On June 30, 2026, we, together with our wholly owned subsidiaries, entered into a securities purchase agreement (the "Leonite SPA") with Leonite Fund I, LP ("Leonite") and related transaction documents, pursuant to which we issued and sold to Leonite, in a private placement (the "Leonite Private Placement"), a senior secured convertible promissory note in an aggregate principal amount of up to $10,000,000 (the "Leonite Note"). As additional consideration for Leonite's purchase of the Leonite Note, we issued to Leonite (i) 275,000 shares of our common stock (the "Leonite Commitment Shares") and (ii) a five-year warrant to purchase up to 1,750,000 shares of our common stock (the "Leonite Warrant") an initial exercise price of $2.85 per share, subject to adjustment as provided therein.

Pursuant to the Leonite SPA, Leonite agreed to purchase the Leonite Note in one or more tranches, in an aggregate principal amount of up to $10,000,000. Each funded tranche was subject to an original issue discount of 7.5%, which was included in the principal amount of the Leonite Note and was earned only upon the funding of such tranche. On July 2, 2026, Leonite funded the initial tranche in the principal amount of $1,600,000 (less $35,000 retained by Leonite for legal fees and expenses).

The Leonite Note was secured by a continuing first-priority security interest in substantially all of our and our subsidiaries' existing and after-acquired assets, subject to certain exclusions, including intellectual property assets. Notwithstanding such exclusions, the collateral included accounts, payment intangibles and other rights to payment arising from the sale, license or other disposition of intellectual property.

Leonite Settlement

On July 31, 2026, we, together with our wholly owned subsidiaries, entered into the Leonite Settlement Agreement, pursuant to which we paid Leonite $1,900,000 in cash (the "Settlement Payment") and issued to Leonite 500,000 shares of our common stock (the "Settlement Shares") on August 3, 2026 and August 6, 2026, respectively, in full and complete satisfaction of all amounts outstanding under the Leonite Note and the other transaction documents related to the Leonite Private Placement (the "Leonite Settlement").

On August 2, 2026, in connection with the Leonite Settlement, we issued to an accredited investor a bridge convertible promissory note in the principal amount of $2,200,000 (the "August Bridge Note") for a purchase price of $2,190,000 (the "August Bridge Financing"). The August Bridge Note did not bear interest and was scheduled to mature on September 1, 2026, unless earlier converted by the holder. Upon the initial closing of a private offering by us of original issue discount promissory notes in an aggregate principal amount of up to $10,000,000, the outstanding principal amount of the August Bridge Note would automatically convert into the securities issued in such offering on the same terms as the other purchasers in the offering.

In accordance with the terms of the August Bridge Note, we used the proceeds from the August Bridge Financing to fund the Settlement Payment.

The closing of the Leonite Settlement occurred on August 6, 2026, effective as of which closing: (i) the Leonite Note and all amounts outstanding thereunder were deemed fully paid, satisfied, discharged and cancelled, and all conversion rights thereunder terminated; (ii) the Leonite Warrant terminated and was cancelled in its entirety, unexercised; (iii) the Leonite Commitment Shares were surrendered by Leonite to us for cancellation; (iv) the Leonite SPA, the related security agreement and all other transaction documents entered into in connection with the Leonite Private Placement terminated and ceased to be of any further force or effect, including all rights of Leonite under the participation rights, rights of first refusal, future financing rights, disclosure rights relating to future financings, rollover rights and registration rights provisions of the Leonite SPA; and (v) all security interests, liens, pledges and other collateral granted to or for the benefit of Leonite were automatically, unconditionally and irrevocably released, terminated and discharged, and all assets assigned to Leonite by OS Therapies UK Ltd., our wholly owned subsidiary ("OSUK"), including value-added tax repayments and research and development tax relief claims, reverted to OSUK free and clear of any claim or lien of Leonite.

2026 OID Secured Note Financing

On August 10, 2026, we, together with our wholly owned subsidiaries, entered into a securities purchase agreement (the "2026 OID Secured Note SPA") with the purchasers signatory thereto, pursuant to which we agreed to issue and sell to such purchasers, in a private placement (the "August Private Placement"), senior secured convertible promissory notes in an aggregate subscription amount of up to $10,000,000 (each, a "Secured Note" and, collectively, the "Secured Notes"), consisting of (i) an initial tranche with an aggregate subscription amount of up to $5,000,000 (the "First Tranche") and (ii) a second tranche with an aggregate subscription amount of up to $5,000,000 (the "Second Tranche" and, together with the First Tranche, the "Tranches," and each, a "Tranche"). Each Secured Note purchased pursuant to the 2026 OID Secured Note SPA will be issued with an original issue discount equal to 7.5% of the principal amount of such Secured Note (the "OID").

Pursuant to the 2026 OID Secured Note SPA, each purchaser may subscribe for one or more units (each, a "Unit") at a purchase price of $100,000 per Unit, consisting of (i) a Secured Note in the principal amount of $108,108.11, reflecting the applicable OID, (ii) 30,000 shares of our common stock or, in lieu thereof, pre-funded warrants to purchase up to 30,000 shares of our common stock, and (iii) five-year warrants to purchase up to 30,000 shares of our common stock.

On August 10, 2026, we consummated the closing of the First Tranche (the "Initial Closing"), pursuant to which the purchasers purchased an aggregate of $5,000,000 of Units (inclusive of the August Bridge Note conversion described below), and we issued to such purchasers (i) Secured Notes in an aggregate principal amount of $5,405,405.42, (ii) an aggregate of 600,000 shares of our common stock, (iii) pre-funded warrants to purchase up to an aggregate of 900,000 shares of our common stock and (iv) warrants to purchase up to an aggregate of 1,500,000 shares of our common stock.

At the Initial Closing, the August Bridge Note automatically converted, in accordance with the terms of the 2026 OID Secured Note SPA, into (i) a Secured Note in the principal amount of $2,378,378.38, (ii) a pre-funded warrant to purchase up to 660,000 shares of our common stock and (iii) a warrant to purchase 660,000 shares of our common stock. Upon such conversion, the August Bridge Note was automatically terminated, cancelled and satisfied in full.

The Secured Notes bear interest at a rate of 9.0% per annum, payable monthly in arrears. Interest accrues on each Secured Note from the date the applicable Tranche is funded by the applicable purchaser (the "advance date"). Notwithstanding any conversion, prepayment, repayment or acceleration of the Secured Notes prior to the expiration of 12 months following the applicable advance date, the holder is entitled to receive a minimum amount of interest equal to one full year of interest calculated at the applicable interest rate on the original principal amount of such Tranche. Each Tranche of the Secured Notes matures on the date that is nine months following the applicable advance date. Each Secured Note is convertible, at the holder's option, in whole or in part, into shares of our common stock at a conversion price of $2.05 per share, subject to adjustment as provided therein. Subject to the terms of the applicable Secured Note, a conversion of such Secured Note may be effected at any time from and after the date that is 90 days following the applicable advance date for the applicable Tranche.

The Secured Notes are secured by a continuing first-priority security interest in substantially all of the existing and after-acquired assets of our company and our subsidiaries, subject to certain exclusions, including intellectual property assets. Notwithstanding such exclusions, the collateral includes accounts, payment intangibles and other rights to payment arising from the sale, license or other disposition of intellectual property.

The warrants issued in connection with the First Tranche have an exercise price of $2.85 per share, subject to adjustment as provided therein, and are exercisable in whole or in part at any time from the issuance date through August 10, 2031. Any warrants issued in connection with the Second Tranche will have an exercise price per share equal to 190% of the closing price of our common stock on the applicable closing date of the Second Tranche and will be exercisable in whole or in part for a period of five years following such date.

On August 6, 2026, we engaged Ceros to act as our exclusive placement agent in connection with the August Private Placement. We agreed to pay Ceros a cash fee equal to 5.0% of the aggregate subscription amount paid by the purchasers for Units purchased in each Tranche. We also agreed to pay Ceros a non-accountable expense fee of $60,000 upon consummation of the Initial Closing and to reimburse Ceros for its reasonable out-of-pocket expenses incurred in connection with any subsequent closing, subject to a maximum aggregate reimbursement of $25,000.

We also agreed to issue to Ceros or its designees five-year warrants to purchase a number of shares of our common stock equal to 5% of the aggregate number of shares of common stock issuable upon exercise of the warrants issued in the August Private Placement, at an exercise price equal to 110% of the applicable warrant exercise price. In connection with the Initial Closing, we issued to Ceros's designees placement agent warrants to purchase up to an aggregate of 75,000 shares of our common stock at an exercise price of $3.14 per share, subject to adjustment as provided therein.

We intend to use the net proceeds of the August Private Placement to fund clinical development and regulatory activities, as well as for working capital and other general corporate purposes.

Pursuant to the 2026 OID Secured Note SPA, we have agreed to prepare and file with the SEC, within 30 days following August 10, 2026, a registration statement covering the resale by the purchasers of their respective shares of our common stock issued and issuable upon conversion of the Secured Notes and exercise of the warrants and pre-funded warrants issued in the Initial Closing. We have agreed to use commercially reasonable efforts to cause such registration statement to be declared effective by the SEC no later than 120 days following August 10, 2026, and to keep such registration statement continuously effective until the earlier of (i) the date on which all such registrable securities have been sold and (ii) the date on which all such registrable securities may be sold without restriction or volume limitations pursuant to Rule 144. We have also agreed, within 30 days following each subsequent closing, to file such amendments, supplements or post-effective amendments to the registration statement as may be necessary to include additional registrable securities issued or issuable pursuant to the 2026 OID Secured Note SPA in connection with such subsequent closing.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that, in management's view, are most important to the portrayal of a company's financial condition and results of operations and most demanding on their calls on judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this annual report. There were no critical accounting policies and estimates as of June 30, 2026.

Components of Our Results of Operations

Revenue. We did not recognize revenues for the six months ended June 30, 2026 and 2025.

Operating Expenses. Our operating expenses are comprised primarily of research and development expenses (including licensing costs) and general and administrative expenses.

Research and Development Expenses. Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:

●

personnel-related costs, including salaries, benefits and stock-based compensation expense, for employees engaged in research and development functions;

	●	expenses incurred in connection with our research programs, including under agreements with third parties, such as consultants and contractors and CROs;
	●	costs incurred in obtaining technology licenses and asset purchases are charged to licensing costs if the technology licensed has not reached technological feasibility which includes manufacturing, clinical, intellectual property and/or regulatory success which has no alternative future use. The licenses purchased by us require substantial completion of research and development and regulatory and marketing approval efforts in order to reach technological feasibility;

●

the cost of developing and scaling our manufacturing process and manufacturing drug substance and drug product for use in our research and preclinical and clinical studies, including under agreements with third parties, such as consultants and contractors and contract development and manufacturing organizations (CDMOs); and

●

the cost of laboratory supplies and research materials.

We track our direct external research and development expenses on a program-by-program basis. These consist of costs that include fees, reimbursed materials, and other costs paid to consultants, contractors, CDMOs, and CROs in connection with our preclinical, clinical and manufacturing activities. We do not allocate employee costs, costs associated with our discovery efforts, and facilities expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple programs and, as such, are not separately classified.

We expect that our research and development expenses will increase substantially as we advance OST-HER2 and OST-tADC into clinical development and expand our discovery, research and preclinical activities.

We were able to apply for refunds of UK value-added tax ("VAT") by filing VAT returns in April 2026 and August 2026. Prior to obtaining our VAT number, we were unable to recognize a receivable for the VAT and, accordingly, the VAT was included in research and development ("R&D") expenses in 2025 and the first quarter of 2026. Upon obtaining our VAT number and becoming eligible to file VAT returns, we recognized the accumulated VAT as a refund receivable and recorded a reduction to R&D expenses of $1.96 million in the second quarter of 2026.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include professional fees for legal, consulting, investor and public relations and accounting and audit services.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our product candidates. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.

Interest Expense. Interest expense comprises accretion of interest on the Bridge Notes as well as amortization of related debt issuance costs.

Income Taxes. Since our inception, we have not recognized income tax benefits for the net operating losses ("NOLs") incurred or the R&D tax credits generated each year due to uncertainty regarding the realization of these benefits.

As of December 31, 2025 and 2024, we had federal NOLs of $33,561,091 and $22,236,580, respectively. Our 2019 NOL carryforward of $292,144 will expire in tax years through 2037. NOLs generated in tax years 2020 and later may carry forward indefinitely; however, the deductibility of such NOLs is subject to certain limitations under the Code. Accordingly, we have established a full valuation allowance to offset our deferred tax assets due to uncertainty regarding the realization of these benefits.

Our issuances of common stock have resulted in ownership changes as defined by Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"); however, we have not yet performed a formal Section 382 study, and it is possible that a future analysis in 2026 could conclude that a substantial portion, or potentially all, of our NOL and R&D tax credit carryforwards may be limited or rendered unusable under Sections 382 and 383 of the Code. As a result, a portion of these carryforwards could expire unused. We are subject to U.S. federal tax examinations for the year 2021, given that NOL carryforwards from 2019 and subsequent years may be applied to current or future tax returns.

Results of Operations

Three and Six Months Ended June 30, 2026 Compared to Three and Six Months Ended June 30, 2025

The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025:

		Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
OPERATING EXPENSES
Research and development		$	6,074,436			$	2,499,498			$	13,426,159			$	3,808,653
General and administrative			2,501,176				2,339,230				5,317,391				6,029,561
Loss from operations			(8,575,612	)			(4,838,728	)			(18,743,550	)			(9,838,214	)
OTHER (EXPENSE) INCOME
Interest income			46				64				91				130
Interest expense			(5,581	)			-				(80,925	)			-
Non-operating expenses			(51,239	)			-				(204,833	)			-
Change in fair value of warrant liability			-				302,042				-				1,424,603
TOTAL OTHER (EXPENSE) INCOME			(56,774	)			302,106				(285,667	)			1,424,733
NET LOSS			(8,632,386	)			(4,536,622	)			(19,029,217	)			(8,413,481	)

Research and Development Expenses. Research and development expenses were approximately $13.4 million for the six months ended June 30, 2026, compared to approximately $3.8 million for the six months ended June 30, 2025. This increase was primarily due to an increase in vendor expenses associated with our Phase IIb clinical trial, as we compiled data to submit to various governmental agencies. The increase was partially offset by the recognition of a $1.96 million VAT receivable in the second quarter of 2026. We determined that the input VAT associated with our UK subsidiary was realizable and, upon obtaining our VAT number and becoming eligible to file VAT returns, recognized the accumulated VAT as a receivable, resulting in a corresponding reduction in R&D expenses.

Research and development expenses were approximately $6.0 million for the three months ended June 30, 2026, compared to approximately $2.5 million for the three months ended June 30, 2025. This increase was primarily due to an increase in vendor expenses associated with our Phase IIb clinical trial, as we compiled data to submit to various governmental agencies. The increase was partially offset by the recognition of a $1.96 million VAT receivable in the second quarter of 2026. We determined that the input VAT associated with our UK subsidiary was realizable and, upon obtaining our VAT number and becoming eligible to file VAT returns, recognized the accumulated VAT as a receivable, resulting in a corresponding reduction in R&D expenses.

The following table summarizes our research and development expenses for the three and six months ended June 30, 2026 and 2025:

		Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)		2026				2025				2026				2025
Direct research and development expenses by program:
OST-HER2		$	5,550			$	2,133			$	12,378			$	3,054
Unallocated research and development expenses:
Personnel-related			524				367				1,048				755
Total research and development expenses		$	6,074			$	2,500			$	13,426			$	3,809

For the six months ended June 30, 2026 and 2025, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and staff payroll costs. In 2026, such expenses consisted primarily of lab fees and related clinical support of approximately $0.15 million attributable to preparation for our Phase IIb clinical trial, advisor fees of approximately $12.2 million, and legal costs of approximately $0.0 million, compared to 2025, when such expenses consisted primarily of lab fees and related clinical support of approximately $0.9 million attributable to preparation for our Phase IIb clinical trial, advisor fees of approximately $1.9 million, and legal costs of approximately $0.1 million.

For the three months ended June 30, 2026 and 2025, the direct research and development expenses related to OST-HER2 were primarily lab fees, vendor expenses and staff payroll costs. In 2026, such expenses consisted primarily of lab fees and related clinical support of approximately $0.1 million attributable to preparation for our Phase IIb clinical trial and advisor fees of approximately $5.5 million, compared to 2025, when such expenses consisted primarily of lab fees and related clinical support of approximately $0.6 million attributable to preparation for our Phase IIb clinical trial and advisor fees of approximately $1.4 million.

General and Administrative Expenses. General and administrative expenses were approximately $5.3 million for the six months ended June 30, 2026, compared to approximately $6.0 million for the six months ended June 30, 2025. These expenses were primarily attributable to marketing and investor relations costs, advisory fees and other compensation-related expenses.

General and administrative expenses were approximately $2.5 million for the three months ended June 30, 2026, compared to approximately $2.3 million for the three months ended June 30, 2025. These expenses were primarily attributable to marketing and investor relations costs, advisory fees and other compensation-related expenses.

Interest Expense. Interest expense was approximately $0.1 million for the six months ended June 30, 2026, compared to $0.0 million for the six months ended June 30, 2025. Interest expense in 2026 primarily related to the amortization of debt issuance costs and accretion of interest on our March 2026 bridge convertible notes.

Interest expense was approximately $0.1 million for the three months ended June 30, 2026, compared to $0.0 million for the three months ended June 30, 2025. Interest expense in 2026 primarily related to the amortization of debt issuance costs and accretion of interest on our March 2026 bridge convertible notes.

Non-Operating Expense. Non-operating expense was approximately $0.2 million for the six months ended June 30, 2026, compared to $0.0 million for the six months ended June 30, 2025, and related to losses on foreign currency transactions.

Non-operating expense was approximately $0.1 million for the three months ended June 30, 2026, compared to $0.0 million for the three months ended June 30, 2025, and related to losses on foreign currency transactions.

Change in Fair Value of Warrant. The Series A warrants issued in connection with our PIPE financing in December 2024 and January 2025 were reclassified from liability to equity in April 2025. As a result, there was no change in the fair value of the warrant liability for the six months ended June 30, 2026, compared to a $1.4 million adjustment to the fair value of the warrant liability for the six months ended June 30, 2025. For the three months ended June 30, 2026 and 2025, there was no change in the fair value of the warrant liability and a $0.3 million adjustment to the fair value of the warrant liability, respectively.

Liquidity and Capital Resources

Operating Losses

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates. For the six months ended June 30, 2026 and 2025, we reported a net loss of approximately $19.0 million and $8.4 million, respectively, and had an accumulated deficit of approximately $86.2 million and $67.2 million, respectively. We expect to incur significant expenses at an increasing rate and increasing operating losses for the foreseeable future.

As of June 30, 2026 and December 31, 2025, we had cash of approximately $0.2 million and $0.3 million, respectively. To date, we have primarily funded our operations through the sale of our securities in public offerings and private placements and through warrant exercise inducement and exchange transactions, generating total gross proceeds of approximately $52.3 million as of June 30, 2026. On August 10, 2026, we issued certain of our securities and received net proceeds of approximately $4.7 million in the August Private Placement, with the potential to receive an additional $5.0 million, if needed. However, our recurring losses and negative cash flows from operations since inception, together with cash of approximately $0.2 million as of June 30, 2026, were not sufficient to fund our operations for at least 12 months from the date these consolidated financial statements are issued. These conditions raise substantial doubt about our ability to continue as a going concern. Management's plans to address these conditions include the August Private Placement, other equity or debt financings and managing operating expenditures.

Cash Flows

The following table summarizes our sources and uses of cash for the six months ended June 30, 2026 and 2025:

		Six Months Ended June 30,
(In thousands)		2026				2025
Cash used in operating activities		$	(10,097	)		$	(5,802	)
Cash used in investing activities			-				(466	)
Cash provided by financing activities			10,032				3,537
Net increase (decrease) in cash		$	(65	)		$	(2,731	)

Operating Activities

During the six months ended June 30, 2026 and 2025, operating activities used approximately $10.1 million and $5.8 million of cash, respectively, resulting from our net loss of approximately $19.0 million and $8.4 million, respectively, offset by net non-cash charges of approximately $3.4 million and $1.5 million, respectively, partially offset by net cash provided by changes in our operating assets and liabilities of approximately $5.5 million and $1.2 million, respectively.

Net cash provided by changes in our operating assets and liabilities for the six months ended June 30, 2026 and 2025 consisted primarily of an increase in accounts payable of approximately $7.1 million and $1.0 million, respectively, and an increase (decrease) in accrued expenses of approximately $1.8 million and $(0.1) million, respectively.

Non-cash charges for the six months ended June 30, 2026 and 2025 were primarily the result of the changes in the fair value of our warrant liability of $0 and $1.4 million, respectively, combined with our stock-based compensation of approximately $2.8 million and $1.8 million, respectively. Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in all periods were generally due to growth in our business, the advancement of our research programs and the timing of vendor invoicing and payments.

Investing Activities

During the six months ended June 30, 2026 and 2025, net cash used in investing activities was approximately $0.0 million and $(0.5) million, respectively.

Financing Activities

For the six months ended June 30, 2026 and 2025, net cash provided by financing activities was approximately $10.0 million and $3.5 million, respectively. For six months ended June 30, 2026, we raised proceeds from our warrant inducement exercise offering of $3.4 million, from the Bridge Financing of $1.8 million, and from the 2026 Registered Direct Offering of $4.8 million. 

2026 Registered Direct Offering. On April 2, 2026, we completed the 2026 Registered Direct Offering, pursuant to which we offered and sold to accredited investors an aggregate of 2,505,073 shares of our common stock and, in lieu thereof, pre-funded warrants to purchase up to 1,250,893 shares of our common stock, and accompanying common warrants to purchase up to 3,755,966 shares of our common stock. The combined purchase price for each share and common warrant in the 2026 Registered Direct Offering was $1.40, and the purchase price for each pre-funded warrant and common warrant in the 2026 Registered Direct Offering was $1.399, which was equal to the per share and common warrant purchase price, minus $0.001. We received net proceeds from the 2026 Registered Direct Offering of approximately $4.8 million. We are using the net proceeds to fund clinical development activities, including ongoing and planned clinical trials, advance our research and development programs, as well as for working capital and other general corporate purposes.

In connection with the 2026 Registered Direct Offering, Ceros acted as our exclusive placement agent. We paid Ceros a cash fee equal to 7.0% of the gross proceeds raised in the 2026 Registered Direct Offering. We also reimbursed Ceros up to $70,000 for its reasonable and documented out-of-pocket accountable expenses and up to $20,000 for its non-accountable expenses. We also issued to Ceros's designees warrants to purchase up to an aggregate of 187,798 shares of our common stock. The placement agent warrants have an exercise price of $1.54 per share, are exercisable beginning September 2, 2026 and expire five years from April 2, 2026.

Leonite Secured Financing and Settlement. On June 30, 2026, we entered into the Leonite SPA and related transaction documents, pursuant to which we issued and sold to Leonite, in the Leonite Private Placement, the Leonite Note in an aggregate principal amount of up to $10,000,000, 275,000 Leonite Commitment Shares and the Leonite Warrant to purchase up to 1,750,000 shares of our common stock at an initial exercise price of $2.85 per share, subject to adjustment as provided therein. On July 2, 2026, Leonite funded the initial tranche in the principal amount of $1,600,000 (less $35,000 retained by Leonite for legal fees and expenses).

On August 6, 2026, we consummated the Leonite Settlement, pursuant to which we paid Leonite $1,900,000 in cash and issued to Leonite 500,000 Settlement Shares in full and complete satisfaction of all amounts outstanding under the Leonite Note and the other transaction documents related to the Leonite Private Placement.

In connection with the Leonite Settlement, we issued to an accredited investor the August Bridge Note in the principal amount of $2,200,000 for a purchase price of $2,190,000. In accordance with the terms of the August Bridge Note, we used the proceeds from the August Bridge Financing to fund the Settlement Payment.

Effective as of the closing of the Leonite Settlement: (i) the Leonite Note and all amounts outstanding thereunder were deemed fully paid, satisfied, discharged and cancelled, and all conversion rights thereunder terminated; (ii) the Leonite Warrant terminated and was cancelled in its entirety, unexercised; (iii) the Leonite Commitment Shares were surrendered by Leonite to us for cancellation; (iv) the Leonite SPA, the related security agreement and all other transaction documents entered into in connection with the Leonite Private Placement terminated and ceased to be of any further force or effect, including all rights of Leonite under the participation rights, rights of first refusal, future financing rights, disclosure rights relating to future financings, rollover rights and registration rights provisions of the Leonite SPA; and (v) all security interests, liens, pledges and other collateral granted to or for the benefit of Leonite were automatically, unconditionally and irrevocably released, terminated and discharged, and all assets assigned to Leonite by OSUK, including value-added tax repayments and research and development tax relief claims, reverted to OSUK free and clear of any claim or lien of Leonite.

2026 OID Secured Note Financing. On August 10, 2026, we consummated the Initial Closing of the August Private Placement, pursuant to which the purchasers thereto purchased an aggregate of $5,000,000 of Units (inclusive of the August Bridge Note conversion described below), and we issued to such purchasers (i) Secured Notes in an aggregate principal amount of $5,405,405.42, (ii) an aggregate of 600,000 shares of our common stock, (iii) pre-funded warrants to purchase up to an aggregate of 900,000 shares of our common stock and (iv) warrants to purchase up to an aggregate of 1,500,000 shares of our common stock.

At the Initial Closing, the August Bridge Note automatically converted, in accordance with the terms of the 2026 OID Secured Note SPA, into (i) a Secured Note in the principal amount of $2,378,378.38, (ii) a pre-funded warrant to purchase up to 660,000 shares of our common stock and (iii) a warrant to purchase 660,000 shares of our common stock. Upon such conversion, the August Bridge Note was automatically terminated, cancelled and satisfied in full.

In connection with the August Private Placement, Ceros acted as our exclusive placement agent. We paid Ceros a cash fee of $250,000 in connection with the Initial Closing. We also paid Ceros a non-accountable expense fee of $60,000 upon consummation of the Initial Closing. As additional consideration, we issued to Ceros's designees placement agent warrants to purchase up to an aggregate of 75,000 shares of our common stock at an exercise price of $3.14 per share, subject to adjustment as provided therein.

We intend to use the net proceeds of the August Private Placement to fund clinical development and regulatory activities, as well as for working capital and other general corporate purposes.

Contractual Obligations and Other Commitments

We enter into contracts in the normal course of business with our CDMOs, CROs and other third parties to support preclinical research studies and testing and other development activities. These contracts are generally cancellable by us. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation.

License Obligations

BlinkBio. In August 2020, we entered into a licensing agreement with BlinkBio, Inc., a privately held developer of drug conjugate therapies designed to facilitate the treatment of cancer. Pursuant to this agreement, BlinkBio granted a license to us that allows us to utilize BlinkBio's proprietary technology to develop, manufacture and commercialize certain of our products. BlinkBio granted us an exclusive license for tunable drug conjugates that are directed towards, binds to or modifies the folate receptor alpha and a co-exclusive license for tunable drug conjugates that are directed towards, binds to or modifies any target other than the folate receptor alpha, such as HER2.

Under the terms of the agreement, we are required to pay to BlinkBio (i) an upfront, non-refundable, non-creditable license fee of $300,000 (the "Up-Front Fee"), (ii) a royalty of 6% of net sales of our products that were made using BlinkBio's proprietary technology, subject to potential reductions on such royalty, and (iii) certain amounts based on the achievement of the milestones described in the payment schedule below.

As of June 30, 2026, we had paid the Up-Front Fee. The payment schedule for milestones and corresponding payment amounts is set forth below.

Milestone Bearing Event				Milestone Payment
1.		License Fee to utilize proprietary technology (paid)			Up-front fee + $2.4 million Convertible Note
2.		Commencement of a toxicology study commenced pursuant to Good Laboratory Practices (under 21 CFR Part 58), such that any resulting positive data would be admissible to applicable Regulatory Authorities to support an IND (commonly referred to as "GLP-Tox")		$	375,000
3.		Completion of a Phase I Clinical Trial		$	1,500,000
4.		Completion of a Phase IIb Clinical Trial		$	2,500,000
5.		Filing of an NDA, BLA or MAA registration (or the equivalent in any other territory around the world)		$	6,000,000
6.		Regulatory Approval in the first of the United States, within the European Union or within the United Kingdom		$	12,000,000

We are required to make the above cash payments to BlinkBio within 30 days of the achievement of each milestone with respect to the first product to attain each such milestone, except that the first milestone only applies to our first product candidate. The aggregate amount of payments relating to milestones 2 through 6 payable thereunder cannot exceed $22,375,000.

Biolacuna Ltd. We have contracted with Biolacuna Ltd, a global life sciences advisory firm, to assist with the following agencies requirements to register OST-HER2 and gain approval of its use in the respective regions:

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European Medicines Agency (EMA, Europe);

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Medicines Evaluation Board (MEB, Netherlands);

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Medicines and Healthcare products Regulatory Agency (MHRA, United Kingdom); and

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U.S. Food and Drug Administration (FDA, United States).

For the six months ended June 30, 2026 and 2025, we incurred consulting fee expenses of $14,357,276 and $459,485, respectively, which included refundable VAT expenses. As of June 30, 2026, accounts payable related to consulting fees and VAT totaled $12,998,803 and $7,323,386, respectively.

University of Pennsylvania. On April 9, 2025, we acquired from Ayala the HER2 Assets. Pursuant to the terms of the HER2 Purchase Agreement, the amended and restated development, license and supply agreement with Advaxis terminated. In connection with the acquisition of the HER2 Assets, we were assigned by Ayala a license agreement with the Trustees of the University of Pennsylvania covering the use of HER2 construct patents. Under the terms of the license agreement, we are required to pay an annual license fee to the Trustees of the University of Pennsylvania. In April 2025, we paid a fee of $266,317 for the year ended December 31, 2025. In addition, we are obligated to pay a royalty equal to 1.5% of net sales related to:

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OST-HER2-related sales;

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ADXS-503-related sales;

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ADXS-504-related sales; and

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Sales related to any new immunotherapy drug candidates created from the Lm platform during the term of such licensing agreement.

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.

Recent Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to Notes to the Consolidated financial statements appearing elsewhere in this report.

The JOBS Act

The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to avail ourselves of the extended transition period for complying with new or revised financial accounting standards.

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the date on which we are deemed to be a "large accelerated filer" under the rules of the SEC with at least $700.0 million of outstanding equity securities held by non-affiliates; (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years; or (iv) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering.