Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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 condensed consolidated financial statements and the notes to those statements included with this report. In addition to historical information, 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"). Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," and similar expressions are used to identify forward-looking statements, but some forward-looking statements are expressed differently. Many factors could affect our actual results, including those factors described under "Risk Factors" in our Form 10-K for the year ended December 31, 2024 and in Part II Item 1A of this report. These factors, among others, could cause results to differ materially from those presently anticipated by us. You should not rely upon on these forward-looking statements.

Overview

We are a biotechnology company focused on developing personalized immune therapies for cancer. We have developed a platform technology, DCVax®, which uses activated dendritic cells to mobilize a patient's own immune system to attack their cancer.

Our lead product, DCVax®-L, is designed to treat solid tumor cancers in which the tumor can be surgically removed. We have completed a 331-patient international Phase III trial of DCVax-L for Glioblastoma multiforme brain cancer (GBM), published the results in the JAMA Oncology peer reviewed journal, and on December 20, 2023 we submitted a Marketing Authorization Application (MAA) for commercial approval in the U.K. We plan to conduct clinical trials of DCVax-L for other solid tumor cancers in the future, when resources permit. Our second product, DCVax®-Direct, is designed to treat inoperable solid tumors. A 40-patient Phase I trial has been completed, and included treatment of a diverse range of more than a dozen types of cancers. We plan to work on preparations for Phase II trials of DCVax-Direct as resources permit.

During the third quarter of 2025, the Company continued its progress on multiple fronts, including the following.

Management Change. The unexpected passing of the Company's Senior Vice President and General Counsel necessitated a transition period while other personnel took on new and/or additional roles.

MAA Application. Much of the Company's time and resources were devoted to active engagement in the MAA review process. The Company continued to work with large teams of consultants on this process. As is typical, and as the Company has previously stated, the Company does not plan to make any interim announcements while its MAA is going through the regulatory process. The Company plans to announce the results when the regulatory review and decision-making is finished.

Advent Acquisition. The Company negotiated an agreement to acquire Advent BioServices. The negotiations were completed and the acquisition agreement was entered into, with the closing to occur after certain conditions were fulfilled.

Development of the Sawston, UK Facility. The Company and Advent continued refining the design and engineering of the simplified C lab, and continued working with contractors to prepare for the construction works. The Company and Advent also continued working to source key equipment required for the C lab in ways to avoid the 10-12 month procurement backlog. For example, Advent was able to arrange for two major foundational pieces of equipment, which cost nearly $1 million each when purchased new. One of these pieces of equipment had been given up by another biotech company and the other was new; both were obtained for less than half price and without the 10-12 month procurement waiting time.

Manufacturing in the US for In-licensed Technologies. Based upon further assessments of the two candidate GMP manufacturing locations in the US which the Company had previously narrowed down to as finalists, the Company finalized its selection and undertook contract negotiations to secure the selected location and to allocate operational responsibilities. The Company continued the hiring process for personnel with the special types of expertise and prior experience needed for the initial core operating team for this location.

Potential Compassionate Use Programs in the US. The Company continued to explore the potential for expanded access/compassionate use in the US, particularly under state laws. The Company is pursing multiple potential hospital arrangements.

DCVax-Direct Program. The Company developed new DCVax-Direct clinical trial plans to supersede the clinical trials plans for which the IND packages were previously being developed, in order to take account of developments in the field. The manufacturing and product-related portions of the IND packages have already been completed. The Company is continuing its analyses to select additional

treatment elements from the portfolios in-licensed from Roswell Park, Pittsburgh and others to include in the new clinical trial designs (e.g., pre-conditioning regimens before the dendritic cell therapy; booster agents accompanying the dendritic cell therapy; multiple routes of administration).

Litigation Progress. The discovery period continued in the Company's lawsuit against certain market makers. The Company increased its pursuit of documents and information from the defendants, and anticipates further ramping up in the coming months. The Company also added counsel with substantial experience in market manipulation cases. The Company believes that the discovery process may yield very important information, and the Company plans to continue pursuing the case vigorously. See Part II Item 1, Legal Proceedings, below.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses.

On an ongoing basis, we evaluate our estimates and judgments, including those related to derivative liabilities, accrued expenses and stock-based compensation. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.

Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2024. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Results of Operations

Operating costs:

Our operating costs and expenses consist primarily of research and development (R&D) expenses. R&D expenses include clinical trial expenses, and increased costs after completion of a Phase III trial, especially for the extensive preparations, and teams of expert consultants, required for an application for product approval.

In addition to clinical trial and post-trial costs, our operating costs may include ongoing work relating to our DCVax products, including R&D, product characterization, manufacturing process development, quality control process development, and related matters. Additional substantial costs relate to the development and expansion of manufacturing capacity.

Our operating costs also include the costs of preparations for the launch of new or expanded clinical trial programs, such as our anticipated trials of combination treatment regimens. The preparation costs include payments to regulatory consultants, lawyers, statisticians, sites and others, evaluation of potential investigators, the clinical trial sites and the CROs managing the trials and other service providers, and expenses related to institutional approvals, clinical trial agreements (business contracts with sites), training of medical and other site personnel, trial supplies and other.

Our operating costs also include legal and accounting costs in operating the Company.

The foregoing operating costs include the costs for Flaskworks' ongoing operations and intellectual property filings, and the operations of our subsidiaries in the U.K., the Netherlands and Germany.

Research and development:

R&D expenses include costs for substantial external scientific personnel, technical and regulatory advisers, and others, costs of laboratory supplies used in our internal research and development projects, travel, regulatory compliance, and expenditures for preclinical and clinical trial operation and management when we are actively engaged in clinical trials.

Because we are a pre-revenue company, we do not allocate R&D costs on a project basis. We adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and our limited number of financial and personnel resources.

General and administrative:

General and administrative expenses include personnel related salary and benefit expenses, cost of facilities, insurance, travel, legal services, property and equipment and amortization of stock options and warrants.

Three Months Ended September 30, 2025 and 2024

We recognized a net loss of $26.8 million and $19.4 million for the three months ended September 30, 2025 and 2024, respectively.

Research and Development Expense

For the three months ended September 30, 2025 and 2024, research and development expenses were $7.5 million and $8.1 million, respectively. The decrease in 2025 was primarily related to the decrease in manufacturing cost in the Specials-Compassionate Treatment program and stock-based compensation.

General and Administrative Expense

For the three months ended September 30, 2025 and 2024, general and administrative expenses were $7.1 million and $7.0 million, respectively. The expenses were consistent compared to the same period of last year.

Change in Fair Value of Derivatives

We recognized a non-cash loss of $3.3 million and a non-cash loss of $1.6 million for the three months ended September 30, 2025 and 2024, respectively. The non-cash revaluation loss in 2025 was mainly due to the amendment to certain liability classified warrants. The extension of the maturity date of the warrants increased the fair value of the warrants. The non-cash loss in 2024 was primarily due to the change of valuation inputs. The healthcare market yield curve rate that was used in the pricing model was significantly decreased as of September 30, 2024 compared to the value as of June 30, 2024.

Change in Fair Value of Convertible Notes

We recognized a non-cash loss of $15,000 and a non-cash gain of $3.1 million change in fair value of the convertible notes during the three months ended September 30, 2025 and 2024, respectively. The stock price was consistent as of September 30, 2025 and June 30, 2025. The non-cash gain resulted from the decrease of the Company's stock price as of the date of re-measurement compared to the prior period.

Debt Extinguishment

We recognized approximately $4.0 million and $6.8 million debt extinguishment loss during the three months ended September 30, 2025 and 2024 from debt redemptions and debt amendments, respectively. The decrease during the three months ended September 30, 2025 compared to last year was due to the less fluctuation in the stock price.

Loss from Issuance of Debt

During the three months ended September 30, 2025, we recognized an $1.6 million loss from the issuance of three convertible notes, which we elected to account for under the FVO. The estimated fair value of the convertible notes on the issuance date was approximately $5.1 million, which resulted in a loss of $1.6 million calculated at the difference between the aggregate principal amount of $3.5 million and the fair value of these three convertible notes.

Interest Expense

During the three months ended September 30, 2025 and 2024, we recognized interest expense of $2.6 million and $2.1 million, respectively. The increase in interest expense in 2025 was mainly related to an increase in outstanding debt balance.

Foreign currency transaction gain (loss)

During the three months ended September 30, 2025 and 2024, we recognized foreign currency transaction loss of $0.8 million and a gain of $2.8 million, respectively. The gain was due to the strengthening of the British pound sterling relative to the U.S. dollar and vice versa for the loss.

Nine months Ended September 30, 2025 and 2024

We recognized a net loss of $61.6 million and $55.6 million for the nine months ended September 30, 2025 and 2024, respectively.

Research and Development Expense

For the nine months ended September 30, 2025 and 2024, research and development expenses were $23.2 million and $24.4 million, respectively. The decrease in 2025 was primarily related to the decrease in stock-based compensation and offset by increased cost related to MAA application at the MHRA and the resumption of DCVax-Direct production.

General and Administrative Expense

For the nine months ended September 30, 2025 and 2024, general and administrative expenses were $23.9 million and $24.8 million, respectively. The decrease was mainly related to a reduction in stock-based compensation and scientific conference expenses and offset by an increase in legal expenses.

Change in Fair Value of Derivatives

We recognized a non-cash loss of $1.3 million and a non-cash gain of $0.9 million for the nine months ended September 30, 2025 and 2024, respectively. The non-cash revaluation loss in 2025 was mainly due to the amendment to certain liability classified warrants. The extension of the maturity date of the warrants increased the fair value of the warrants. The non-cash gain in 2024 was primarily due to the decrease of our closing stock price as of September 30, 2025 and 2024 compared to December 31, 2024 and 2023.

Change in Fair Value of Convertible Notes

We recognized $6.1 million and $4.6 million non-cash gains from change in fair value of the convertible notes during the nine months ended September 30, 2025 and 2024, respectively. The non-cash gains resulted from the decrease of the Company's stock price.

Debt Extinguishment

We recognized approximately $15.8 million and $9.9 million debt extinguishment loss during the nine months ended September 30, 2025 and 2024 from debt redemptions and debt amendments, respectively. The increase during the nine months ended September 30, 2025 compared to last year was due to multiple amendments on the existing convertible notes.

Loss from Issuance of Debt

During the nine months ended September 30, 2025, we recognized $2.4 million loss from the issuance of certain convertible notes, which we elected to account for under the FVO. The estimated fair value of these convertible notes on the issuance date was approximately $8.9 million, which resulted in a loss of $2.4 million calculated at the difference between the principal amount of $6.5 million and the fair value of these convertible notes.

Interest Expense

During the nine months ended September 30, 2025 and 2024, we recognized interest expense of $6.0 million and $5.3 million, respectively. The increase in interest expense in 2025 was mainly related to an increase in outstanding debt balance.

Foreign currency transaction gain (loss)

During the nine months ended September 30, 2025 and 2024, we recognized foreign currency transaction gain of $4.7 million and $2.0 million, respectively. The gains were due to the strengthening of the British pound sterling relative to the U.S. dollar.

Liquidity and Capital Resources

We have experienced recurring losses from operations since inception. We have not yet established an ongoing source of material revenues and must cover our operating expenses through debt and equity financings to allow us to continue as a going concern. Our ability to continue as a going concern depends on the ability to obtain adequate capital to fund operating losses until we generate adequate cash flows from operations to fund our operating costs and obligations. If we are unable to obtain adequate capital, we could be forced to cease operations.

We depend upon our ability, and will continue to attempt, to secure equity and/or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all. Our management determined that there was substantial doubt about our ability to continue as a going concern for at least one year after the annual consolidated financial statements were issued, and management's concerns about our ability to continue as a going concern within the year following this report persist.

Cash Flow

Operating Activities

During the nine months ended September 30, 2025 and 2024, net cash outflows from operations were approximately $30 million and $36.8 million, respectively. The decrease in cash used in operating activities was primarily attributable to lower payments for clinical trial related expenditures, insurance costs and certain consulting expenditures.

Investing Activities

We spent approximately $0.6 million and $0.9 million in cash for the purchase of additional equipment and design, engineering and preparations for our build-out in Sawston, UK during the nine months ended September 30, 2025 and 2024, respectively. We also provided a short-term loan of approximately $0.3 million to an unrelated third party in the U.K.

Financing Activities

We received approximately $17.3 million and $10.0 million cash from issuance of 78.5 million and 33.5 million shares of common stock during the nine months ended September 30, 2025 and 2024, respectively.

We received approximately $8.2 million of cash from issuance of 0.8 million shares of Series C convertible preferred stock during the nine months ended September 30, 2024.

We received approximately $12.7 million and $9.9 million of cash from issuance of convertible notes to individual lenders during the nine months ended September 30, 2025 and 2024, respectively.

We received approximately $7.0 million of cash from the issuance of a loan from a commercial lender during the nine months ended September 30, 2025. We received approximately $12.0 million of cash from the issuance of a loan from a commercial lender during the nine months ended September 30, 2024.

We received approximately $23,000 and $1.5 million of cash from the exercise of warrants during the nine months ended September 30, 2025 and 2024, respectively.

We received $50,000 from issuance of non-dilutive funding agreements during the nine months ended September 30, 2024.

We made aggregate debt payments of $1.3 million and $1.1 million during the nine months ended September 30, 2025 and 2024, respectively.

Other factors affecting our ongoing funding requirements include the number of staff we employ, the number of sites, number of patients and amount of activity in our clinical trial programs, the costs of further product and process development work relating to our DCVax products, the costs of preparations for Phase II trials, the costs of expansion of manufacturing, and unanticipated developments. The extent of resources available to us will determine which programs can move forward and at what pace.

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

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