OGEN 10-K & 10-Q changes, risk factors and insider trading
Oragenics Inc. · NYSE · Pharmaceutical Preparations · CIK 1174940 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We will require additional capital to complete the development of ONP-002 and to operate our business, and we may not be able to obtain such capital on acceptable terms, or at all.”
New heading “There is substantial doubt regarding our ability to continue as a going concern, absent additional capital beyond our current operating horizon.”
New heading “The Certificate of Designation for our Series H Convertible Preferred Stock (the “Series H Preferred Stock”) contains anti-dilution provisions that may result in the reduction of the Conversion Price for the Series H Preferred Stock in the future. This feature may result in an indeterminate number of shares of Common Stock being issued upon conversion.”
New heading “The market price of our Common Stock may never exceed the Conversion Price of the Series H Preferred Stock.”
New heading “The issuance of additional equity securities by us in the future would result in dilution to our existing common shareholders.”
New heading “Future sales of our Common Stock in the public market could cause our stock price to fall.”
Removed heading “Given our current cash position and significant uncertainties related to future funding opportunities and our 2024 financials, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that the financial statements included in this Annual Report were issued.”
Removed heading “Our auditor has expressed substantial doubt about our ability to continue as a going concern and absent additional financing we may be unable to remain a going concern.”
Removed heading “We require additional funding to be able to maintain our current level of operations and to fund the further development of our new ONP-002 product candidate; we may not be able to obtain additional funding.”
Removed heading “We may rely on government funding and collaboration with government entities for our product development, which adds uncertainty to our research and development efforts and may impose requirements that increase the costs of development, commercialization and production of any programs developed under those government-funded programs.”
Removed heading “If Odyssey were to convert all of its Series F Convertible Preferred Stock, they would own more than a majority of our outstanding shares of common stock.”
Largest changes
“Developing and commercializing biopharmaceutical products, including Phase 2 work for our ONP-002 product candidate and conducting nonclinical studies and clinical trials and establishing manufacturing capabilities, and the progress of our efforts to develop and commercialize our product candidates, is expensive, and can cause us to use our limited, available capital resources faster than we currently anticipate. …”see in full comparison
“Our ability to fund our operations is dependent upon funding from grants and/or equity financing. New financing may not be available to us on commercially acceptable terms, or at all. Ongoing litigation may make it more difficult to obtain financing. Also, any collaborations, strategic alliances, and marketing, distribution, or licensing arrangements may require us to give up some or all of our rights to a product candidate, which in some cases may be at less than the full potential value of such rights. …”see in full comparison
“Given our current cash position and significant uncertainties related to future funding opportunities and our 2024 financials, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that the financial statements included in this Annual Report were issued.”see in full comparison
“Our auditor has expressed substantial doubt about our ability to continue as a going concern and absent additional financing we may be unable to remain a going concern.”see in full comparison
“There is substantial doubt regarding our ability to continue as a going concern, absent additional capital beyond our current operating horizon.”see in full comparison
“Developing and commercializing biopharmaceutical products, including Phase 2 work for our ONP-002 product candidate and conducting nonclinical studies and clinical trials and establishing manufacturing capabilities, and the progress of our efforts to develop and commercialize our product candidates, is expensive, and can cause us to use our limited, available capital resources faster than we currently anticipate. Our current cash, cash equivalents and short-term investments are not sufficient to fully implement our business strategy and sustain our operations. …”see in full comparison
Full comparison: every changed paragraph (101)
The
summary below summary of risk factors provides an overview of many of the risks we are exposed to in the normal course of our business activities.
As a result, the below summary risks below do not contain all of the information that may be important to you, and you should read the summary
risks together with the more detailed discussion of risks set forth following this section as well as elsewhere in this Annual Report.
Additional risks, beyond those summarized below or discussed elsewhere in this Annual Report, may apply to our activities or operations
as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate. Consistent
with the foregoing, we are exposed to a variety of risks, including risks associated with the following:
We have incurred significant net losses and negative cash flow in each year since our inception, including net losses of $9.9 million and $10.6 million for the years ended December 31, 2025, and 2024, respectively. As of December 31, 2025, our accumulated deficit was approximately $226 million. We have devoted, and expect to continue to devote, a significant portion of our financial resources to research and development activities, including nonclinical development and planned clinical trials related to ONP-002.
Although we completed a financing transaction in July 2025 that improved our liquidity position, we expect to continue to incur substantial operating losses and negative cash flows for the foreseeable future as we advance the development of ONP-002, including anticipated Phase 2 clinical activities. Based on our lack of revenues, anticipated uses of cash and historical recurring cash losses from operating activity, and cash and cash equivalents as of December 31, 2025, we anticipate that we will be able to fund our operating expenses and capital expenditure requirements through the third quarter of 2026, depending on the timing and scope of our development activities and other strategic decisions. These factors raise substantial doubt regarding our ability to continue as a going concern.
As a result of the numerous risks and uncertainties associated with product development, clinical trials, regulatory approval, and commercialization, we are unable to predict the timing or amount of future expenses or whether, or when, we will be able to generate revenues sufficient to achieve or sustain profitability. If we are unable to raise additional capital on acceptable terms, or at all, we may be required to delay, reduce, or eliminate development programs or otherwise curtail operations, which raises substantial double about our ability to continue as a going concern.
We will require additional capital to complete the development of ONP-002 and to operate our business, and we may not be able to obtain such capital on acceptable terms, or at all.
The development and potential commercialization of biopharmaceutical products is capital intensive and subject to significant uncertainty. Although we completed a financing transaction in July 2025 that improved our liquidity position, we do not expect to generate revenues sufficient to fund our operations for the foreseeable future. As a result, we will need to obtain additional capital to continue nonclinical and clinical development activities for ONP-002, including planned Phase 2 clinical trials, manufacturing activities, regulatory interactions, and general corporate operations.
Our future capital requirements will depend on numerous factors, including the scope and timing of clinical development activities, regulatory requirements, manufacturing activities, and general corporate expenses. We may seek additional funding through equity offerings, debt financing, grants, collaborations, and licensing arrangements, or other strategic transactions. Such financing may not be available on acceptable terms, or at all, and may result in dilution to existing stockholders or impose restrictive covenants on our operations. Additionally, as discussed below, our Series H Preferred Stock contains anti-dilution provisions that will result in further dilution to existing shareholders if we issue securities for less than the Conversion Price of our Series H Preferred Stock, which in turn may make it more difficult for us to raise capital.
If we are unable to obtain additional capital when required, we may be forced to delay, reduce, or eliminate development programs, curtail operations, or take other actions that could materially adversely affect our business, financial condition, and prospects.
There is substantial doubt regarding our ability to continue as a going concern, absent additional capital beyond our current operating horizon.
We have incurred operating losses, have an accumulated deficit, and have historically generated negative cash flows from operations. These conditions initially raised substantial doubt regarding our ability to continue as a going concern.
In July 2025, we completed a financing transaction that improved our liquidity position. Based on our lack of revenues, anticipated uses of cash and historical recurring cash losses from operating activity, and cash and cash equivalents as of December 31, 2025, we anticipate that we will be able to fund our operating expenses and capital expenditure requirements through the third quarter of 2026, depending on the timing and scope of our development activities and other strategic decisions. Our ability to continue as a going concern beyond that period is dependent on our ability to raise additional capital.
Our independent registered public accounting firm included an explanatory paragraph in its audit report for the year ended December 31, 2025, related to these conditions. Our consolidated financial statements do not include any adjustments that might result if we were unable to continue as a going concern.
The Certificate of Designation for our Series H Convertible Preferred Stock (the “Series H Preferred Stock”) contains anti-dilution provisions that may result in the reduction of the Conversion Price for the Series H Preferred Stock in the future. This feature may result in an indeterminate number of shares of Common Stock being issued upon conversion.
The Certificate of Designation for our Series H Preferred Stock contains anti-dilution provisions, which provisions require the lowering of the current $2.50 Conversion Price on any unconverted Series H Preferred Stock to the price of future issuances by us (subject to certain exclusions). If in the future we issue securities for less than the Conversion Price of our Series H Preferred Stock, we will be required to reduce the relevant Conversion Price of any unconverted Series H Preferred Stock, which will result in a greater number of shares of Common Stock being issuable upon conversion, which in turn will have a greater dilutive effect on our shareholders. In addition, as there is no floor price on the Conversion Price, we cannot determine the total number of shares issuable upon conversion. As such, it is possible that we will not have sufficient available shares to satisfy the conversion of the Series H Preferred Stock if we enter into a future transaction that results in the reduction of the Conversion Price. If we do not have sufficient available shares for any Series H Preferred Stock conversions, we will be required to increase our authorized shares, which may not be possible and will be time consuming and expensive. The potential for such Conversion Price adjustments may depress the price of our Common Stock regardless of our business performance, and, as a result, we may find it more difficult to raise additional equity capital while our Series H Preferred Stock is outstanding. Effective as of March 14, 2025, as a result of the Company’s issuance of shares of Common Stock to Dawson James in payment of advisory fees pursuant to an Engagement Agreement dated as of March 14, 2025, at a price of $1.00 per share, the Conversion Price of the Series H Preferred Stock was reduced to $1.00.
We
have incurred significant net losses and negative cash flow in each year since our inception, including net losses of $10.6 million and
$20.7 million for the years ended December 31, 2024, and 2023, respectively. As of December 31, 2024, our accumulated deficit was approximately
$217 million. We have devoted a significant amount of our financial resources to research and development, including our nonclinical
development activities and clinical trials. We expect that the costs associated with our plans to begin Phase 2 work on ONP-002 will
be significant. Additionally, our License Agreements also require the payment of certain recurring and performance-based royalties that
may negatively impact our financial capabilities. In addition, Ladenburg Thalmann has sent us an invoice and demand letter claiming it
is owed $2,500,000 in connection with our purchase of the Neurology Assets (the “Ladenburg Claim”). We strongly disagree
with such claim and have filed a confidential action for arbitration against Ladenburg through FINRA on March 12, 2024, seeking, among
other things, a declaratory action ruling that no such fee is owed, the litigation expenses related thereto will put further strain on
our limited resources. As a result, we expect to continue to incur substantial net losses and negative cash flow for the foreseeable
future. These losses and negative cash flows have had, and will continue to have, an adverse effect on our shareholders’ equity
and working capital. Because of the numerous risks and uncertainties associated with product development and commercialization, we are
unable to accurately predict the timing or amount of substantial expenses or when, or if, we will be able to generate the revenue necessary
to achieve or maintain profitability.
Developing and commercializing biopharmaceutical products, including Phase 2 work for our ONP-002 product candidate and conducting nonclinical studies and clinical trials and establishing manufacturing capabilities, and the progress of our efforts to develop and commercialize our product candidates, is expensive, and can cause us to use our limited, available capital resources faster than we currently anticipate. Our current cash, cash equivalents and short-term investments are not sufficient to fully implement our business strategy and sustain our operations. Our auditor has expressed substantial doubt about our ability to continue as a going concern. We anticipate we will need to raise additional capital in the future to complete the development and commercialization of our product candidates and operate our business. Until we can generate a sufficient amount of product revenue, if ever, we expect to finance future cash needs through public or private equity offerings, debt financings or corporate or government collaboration and licensing arrangements. However, our recently completed Series H Preferred Stock offering and the anti-dilution protection contained in the Series H Preferred Stock’s Certificate of Designation, as well as our auditor’s substantial doubt about our ability to continue as a going concern, may depress the price of our Common Stock regardless of our business performance and may make it more difficult for us to raise or obtain additional financing. Furthermore, even if we are able to obtain additional financing, it may not be on favorable terms and, if such financing is undertaken at a price below the Conversion Price of our Series H Preferred Stock, it will trigger the anti-dilution protection in our Series H Preferred Stock’s Certificate of Designation, as discussed above, which in turn may result in a greater number of shares of Common Stock being issued upon conversion of our Series H Preferred Stock, which in turn will have a greater dilutive effect on our shareholders and may make it more difficult to raise additional capital. If we do not succeed in raising additional funds on acceptable terms, we may be unable to complete existing nonclinical and planned clinical trials or obtain approval of our product candidates from the FDA and other regulatory authorities, and, absent sufficient additional financing, we may be unable to remain a going concern.
The market price of our Common Stock may never exceed the Conversion Price of the Series H Preferred Stock.
The warrants we issued in connection with the Series H Preferred Stock offering (the “Series H Warrants”) become exercisable upon issuance and will expire five years from the date of issuance. The exercise price of the Series H Warrants is $25 per share of Series H Preferred Stock. Upon exercise, a holder will be required to pay us the exercise price per share in cash and in exchange will receive shares of our Series H Preferred Stock with a stated value of $25. Such shares of Preferred Stock are convertible into shares of Common Stock at the Conversion Price of $2.50, subject to adjustment pursuant to the terms of the Series H Preferred Stock. The number of shares of Common Stock into which each share of Preferred Stock is convertible into is determined by dividing the Offering Price by the Conversion Price. Thus, if the Conversion Price is $2.50, each share of Series H Preferred Stock, exclusive of dividends, is convertible into approximately 10 shares of Common Stock. If the market price of our Common Stock is below the Conversion Price, the holder of the Warrant may elect not to exercise the Warrant until the market price of our Common Stock increases. However, the market price of our Common Stock may never exceed the Conversion Price prior to the expiration of the Warrants. As a result, the holders of our Warrants may elect not to ever exercise their Warrants. We will not receive any additional proceeds in connection with unexercised Warrants, which likely will result in our needing to raise additional capital sooner than if some or all of the Warrants are exercised, of which there can be no assurances. Any Warrants not exercised by their date of expiration will expire worthless and we will be under no further obligation to the Warrant holder.
The issuance of additional equity securities by us in the future would result in dilution to our existing common shareholders.
Our Board of Directors has authority, without action or vote of our shareholders, to issue all or a part of our authorized but unissued shares, except where shareholder approval is required by law or the rules of any exchange on which our shares are listed. Any issuance of additional equity securities by us in the future could result in dilution to our existing common shareholders. Such issuances could be made at a price that reflects a discount or a premium to the then-current trading price of our Common Stock. In addition, our business strategy may include expansion through internal growth by acquiring complementary businesses, acquiring or licensing additional products or brands, or establishing strategic relationships with targeted customers and suppliers. In order to do so, or to finance the cost of our other activities, we may issue additional equity securities that could result in further dilution to our existing common shareholders. These issuances would dilute the percentage ownership interest of our existing common shareholders, which would have the effect of reducing their influence on matters on which our shareholders vote and might dilute the book value of our Common Stock.
Future sales of our Common Stock in the public market could cause our stock price to fall.
Sales of a substantial number of shares of our Common Stock, or the perception by the market that those sales could occur, could cause the market price of our Common Stock to decline or could make it more difficult for us to raise funds through the sale of equity in the future. Future issuances of Common Stock could further depress the market for our Common Stock. We expect to continue to incur drug development and selling, general and administrative costs, and to satisfy our funding requirements, we will need to sell additional equity securities, which may include sales of significant amounts of Common Stock to investors, and which Common Stock may be subject to registration rights and warrants with anti-dilutive protective provisions. The sale or the proposed sale of substantial amounts of our Common Stock or other equity securities in the public markets or in private transactions may adversely affect the market price of our Common Stock and our stock price may decline substantially. Our shareholders may experience substantial dilution and a reduction in the price that they are able to obtain upon sale of their shares. Also, new equity securities issued may have greater rights, preferences or privileges than our existing Common Stock. In addition, we have a significant number of shares of restricted stock, stock options and warrants outstanding. The exercise and conversion of such securities will cause additional dilution. Additionally, if we make one or more significant acquisitions in which the consideration includes stock or other securities, our shareholders’ holdings may be significantly diluted. In addition, shareholders’ holdings may also be diluted if we enter into arrangements with third parties permitting us to issue shares of Common Stock in lieu of certain cash payments upon the achievement of milestones.
Developing
and commercializing biopharmaceutical products, including Phase 2 work for our ONP-002 product candidate and conducting nonclinical
studies and clinical trials and establishing manufacturing capabilities, and the progress of our efforts to develop and
commercialize our product candidates, is expensive, and can cause us to use our limited, available capital resources faster than we
currently anticipate. We anticipate that our estimated cash resources of approximately $0.8 million as of December 31, 2024, will be
sufficient to fund our operations as presently structured through the first quarter of 2025. On February 5, 2025 we sold
approximately 7.8 million common shares through our ATM for gross proceeds of approximately $2.8 million before subtracting
commission and legal expenses. In addition, on March 13, 2025, the Company entered into and consummated
a note securities purchase agreement (the “Purchase Agreement”) with a single investor pursuant to which the Company
sold, in a private placement, to the purchaser a promissory note with an aggregate principal amount of $3,000,000 and 1,000,000 shares
of Series G Mirroring Preferred Stock of the Company. The aggregate gross proceeds to the Company were $2,500,000 million, before deducting
placement agent fees and expenses. After the February ATM cash proceeds and the purchase Agreement financing, we anticipate that our estimated cash resources will be
sufficient to fund our operations as presently structured through the third quarter of 2025. We are currently evaluating
cost-saving initiatives, including restructuring that could allow further cash runway through 2025 to the extent such initiatives
are undertaken but there can be no assurances we will be able to implement them. Our auditor has previously expressed substantial
doubt about our ability to continue as a going concern and absent additional financing we may be unable to remain a going concern.
Our actual costs may ultimately vary from our current expectations, which could materially impact our use of capital and our
forecast of the period of time through which our financial resources will be adequate to support our operations. Our current cash,
cash equivalents and short-term investments are not sufficient to fully implement our business strategy and sustain our operations.
Accordingly, we will need to seek additional sources of financing and such additional financing may not be available on favorable
terms, if at all. Until we can generate a sufficient amount of product revenue, if ever, we expect to finance future cash needs
through public or private equity offerings, debt financings or corporate or government collaboration and licensing arrangements. If
we do not succeed in raising additional funds on acceptable terms, we may be unable to complete existing nonclinical and planned
clinical trials or obtain approval of our product candidates from the FDA and other regulatory authorities. We expect capital
outlays and operating expenditures to increase over the next several years as we expand our infrastructure, and research and
development activities. Specifically, we need to raise additional capital to, among other things:
Our
present and future funding requirements will depend on many factors, including:
In
addition, we have previously discontinued and could be forced to discontinue future product development and commercialization of one
or more of our product candidates, curtail or forego sales and marketing efforts, and/or forego licensing attractive business opportunities.
Given
our current cash position and significant uncertainties related to future funding opportunities and our 2024 financials, substantial
doubt exists regarding our ability to continue as a going concern through one year from the date that the financial statements included
in this Annual Report were issued.
Our
ability to fund our operations is dependent upon funding from grants and/or equity financing. New financing may not be available to us
on commercially acceptable terms, or at all. Ongoing litigation may make it more difficult to obtain financing. Also, any collaborations,
strategic alliances, and marketing, distribution, or licensing arrangements may require us to give up some or all of our rights to a
product candidate, which in some cases may be at less than the full potential value of such rights. In addition, the regulatory and commercial
success of our product candidates remains uncertain. If we are unable to obtain additional capital, we will assess our capital resources
and may be required to delay, pivot, reduce the scope of, or eliminate some or all of our operations, or downsize our organization, any
of which may have a material adverse effect on our business, financial condition, results of operations, and ability to operate as a
going concern.
Our
management believes that, given the significance of these uncertainties, substantial doubt exists regarding our ability to continue as
a going concern through one year from the date that these financials statements are issued.
Our
auditor has expressed substantial doubt about our ability to continue as a going concern and absent additional financing we may be unable
to remain a going concern.
In
light of our recurring losses, accumulated deficit and negative cash flow as described in our notes to our audited consolidated financial
statements, the report of our independent registered public accounting firm on our consolidated financial statements for the year ended
December 31, 2024, contained an explanatory paragraph raising substantial doubt about our ability to continue as a going concern. Our
financial statements did not include any adjustments that may have been necessary in the event we were unable to continue as a going
concern. If we are unable to establish to the satisfaction of our independent registered public accounting firm that the net proceeds
from our financing efforts will be sufficient to allow for the removal of this going concern qualification, we may need to significantly
modify our operational plans for us to continue as a going concern. On February 5, 2025 we sold approximately 7.8 million common shares through our ATM for gross proceeds of approximately
$2.8 million before subtracting commission and legal expenses. In addition, on
March 13, 2025, the Company entered into and consummated a note securities purchase agreement (the “Purchase Agreement”)
with a single investor pursuant to which the Company sold, in a private placement, to the purchaser a promissory note with an aggregate
principal amount of $3,000,000 and 1,000,000 shares of Series G Mirroring Preferred Stock of the Company. The aggregate gross proceeds
to the Company were $2,500,000 million, before deducting placement agent fees and expenses. After the February ATM cash proceeds and the
purchase Agreement financing, we anticipate that our estimated cash resources will be sufficient to fund our operations as presently structured
through the third quarter of 2025. Absent sufficient additional financing, we may be
unable to remain a going concern.
We
require additional funding to be able to maintain our current level of operations and to fund the further development of our new ONP-002
product candidate; we may not be able to obtain additional funding.
To
date, we have never developed any product candidate, and we cannot assure investors that we will be able to successfully develop any
drug candidate, including without limitation a drug treatment for mild traumatic brain injury, with our current resources and
capabilities. Because our new ONP-002 concussion drug product candidate is in early stages of development and contemplates nasal
administration it will require extensive pre-clinical and clinical testing, and we will need significant additional funding to
conduct such research and testing. We do not expect to generate revenue from product sales, licensing fees, royalties, milestones,
contract research or other sources of funds in amounts sufficient to fully fund our operations for the foreseeable future, and we
will therefore use our cash resources, and expect to require additional funds, to maintain our existing operations, continue our
research and development programs, commence Phase 2 clinical studies and clinical trials for our ONP-002 product candidate, and to
seek regulatory approvals. Additionally, we expect our operating expenses to increase, both due to additional employment costs and
operating costs required to pursue the development of the Neurology Assets.
We
anticipate seeking such additional funds through a combination of public or private equity or debt financings, as well as potential
collaborations, strategic alliances and marketing, distribution or licensing arrangements and non-dilutive funding from government
and nongovernment funding entities, as well as other sources to further the research, development, manufacturing, testing, and
regulatory approval our concussion drug product. We are unable to provide any assurance or guarantee that additional capital will be
available when needed by our company or that such capital will be available under terms acceptable to our company or on a timely
basis. While we may continue to apply for contracts or grants from academic institutions, nonprofit organizations and governmental
entities, we may not be successful. If adequate funds are not available, we may have to scale back our operations or limit our
research and development activities, which may cause us to grow at a slower pace, or not at all, and our business could be adversely
affected. With limited capital, we have put the research and development of our COVID vaccine program and our lantibiotics program
on hold and have chosen instead to focus the limited capital on the development of ONP-002.
Adequate
additional funding may not be available to us on acceptable terms, if at all. Our ability to raise additional financing depends on many
factors beyond our control, including the state of capital markets, the market price of our common stock and the development or prospects
for development of competitive products by others. If we cannot raise the additional funds required for our anticipated operations or
to support our development efforts, we may be required to delay significantly, reduce the scope of or eliminate one or more of our research
or development programs, downsize our organization, or seek alternative measures to avoid insolvency, including arrangements with collaborative
partners or others that may require us to relinquish rights to certain of our technologies or our concussion drug candidate.
Furthermore,
if we raise additional funds by issuing equity securities, dilution to our existing stockholders could result. Any equity securities
issued also may provide for rights, preferences or privileges senior to those of holders of our common and preferred stock. If we raise
additional funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders
of our common stock, and the terms of the debt securities issued could impose significant restrictions on our operations. Additionally,
future offerings also could have a material and adverse effect on the price of our common stock. If we raise additional funds through
collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or our products
under development or grant licenses on terms that are not favorable to us, which could lower the economic value of those programs to
us. If additional funds are raised through the issuance of equity, convertible debt or similar securities of our company, the percentage
of ownership of our company by our company’s stockholders will be reduced, our company’s stockholders may experience additional
dilution upon conversion, and such securities may have rights or preferences senior to those of our common stock. The preferential rights
granted to the providers of such additional financing may include preferential rights to payments of dividends, super voting rights,
a liquidation preference, protective provisions preventing certain corporate actions without the consent of the fund providers, or a
combination thereof. We are unable to provide any assurance that additional financing will be available on terms favorable to us or at
all.
We
may rely on government funding and collaboration with government entities for our product development, which adds uncertainty to our
research and development efforts and may impose requirements that increase the costs of development, commercialization and production
of any programs developed under those government-funded programs.
Because
we anticipate the resources necessary to develop our new ONP-002 concussion drug candidate will be substantial, we may explore funding
and development collaboration opportunities with the U.S. or foreign governments and their agencies. We have no control or input over
whether an application for grant funding or any other funding will be accepted or approved, in full or in part, and we cannot provide
investors with any assurances that we will receive such funding.
Additionally,
contracts and grants funded by the U.S. or foreign governments and their agencies, contain provisions that reflect the government’s
substantial rights and remedies, many of which are not typically found in commercial contracts, including powers of the government to:
In
addition, government contracts and grants, ordinarily contain additional requirements that may increase our costs of doing business,
reduce our profits, and expose us to liability for failure to comply with these terms and conditions, including the following:
If
we received such grants or agreements, we may not have the right to prohibit the U.S. government from using certain technologies developed
by us, and we may not be able to prohibit third-parties, including our competitors, from using those technologies in providing products
and services to the U.S. government. Further, under such agreements we could be subject to obligations to and the rights of the U.S.
government set forth in the Bayh-Dole Act of 1980, meaning the U.S. government may have rights in certain inventions developed under
these government-funded agreements, including a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for
any governmental purpose. In addition, the U.S. government could have the right to require us to grant exclusive, partially exclusive,
or nonexclusive licenses to any of these inventions to a third party if it determines that: (i) adequate steps have not been taken to
commercialize the invention; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is
necessary to meet requirements for public use under federal regulations, also referred to as “march-in rights.” Although
the U.S. government’s historic restraint with respect to these rights indicates they are unlikely to be used, any exercise of the
march-in rights could harm our competitive position, business, financial condition, results of operations, and prospects. In the event
we would be subject to the U.S. government’s exercise such march-in rights, we may receive compensation that is deemed reasonable
by the U.S. government in its sole discretion, which may be less than what we might be able to obtain in the open market.
Additionally,
the U.S. government requires that any products embodying any invention generated through the use of U.S. government funding be manufactured
substantially in the United States. The manufacturing preference requirement can be waived if the owner of the intellectual property
can show that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would
be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially
feasible. This preference for U.S. manufacturers may limit our ability to contract with non-U.S. manufacturers for products covered by
such intellectual property.
Although
we will need to comply with some of these obligations, not all of the aforementioned obligations may be applicable to us unless and only
to the extent that we receive a government grant, contract or other agreement. However, as an organization, we are relatively new to
government contracting and new to the regulatory compliance obligations that such contracting entails. If we were to fail to maintain
compliance with those obligations, we may be subject to potential liability and to termination of our contracts.
Our
revenue and income potential with regard to the Neurology Assets, in particular the concussion asset, are unproven, and we continue to
develop our strategy for such assets. Our anticipated business model is based on a variety of assumptions based on a growing trend in
the healthcare systems in the United States and many other countries. These assumptions may not reflect the business and market conditions
we actually face. As a result, our operating results could differ materially from those projected under our business model, and our business
model may prove to be unprofitable. The product candidate ONP-002 (the concussion asset) being developed is in its early stages and will
require extensive testing and clinical trials before it is commercialized. There is no guarantee that ONP-002 will be approved for commercial
use. The product candidate ONP-001ONP001 (the potential treatment for Niemann Pick Disease Type C) is in its early stages and will require extensive
extensive testing and clinical trials before it is commercialized. There is no guarantee that ONP-001 will be approved for commercial
use. Further,
we own 50% of the rights to this product candidate, with the other 50% owner by a third party. We anticipate this product
candidate will
be developed through a joint venture with a third party. However, the joint venture with that third party has not been
finalized. If
we fail to obtain marketing authorization for these product candidates, our business, financial condition, and results
of operations
will be materially adversely affected.
The
product candidates included in the Neurology Assets are still in development and we have not obtained authorization from any regulatory
agency to commercially distribute such products in any countrycountry, and we may never obtain such authorizations.
We
currently have no products authorized for commercial distribution in either the United States, Europe or any other country. All of our
product candidates require regulatory clearance or approvals.approval. We cannot begin marketing and selling product candidates until we obtain
applicable authorizations from the applicable regulatory agencies. The process of obtaining regulatory authorization is expensive and
time-consuming and can vary substantially based upon, among other things, the type, complexity and novelty of a product candidate. Changes
in regulatory policy, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted
product application may cause delays in the authorization of a product candidate or rejection of a regulatory application altogether.
Only
a small fraction of biotechnology development programs ultimately resultresults in commercial products or even product candidates and a number
of events could delay our development efforts and negatively impact our ability to obtain regulatory approval for, and to manufacture,
market and sell, a nasally administered vaccine. Additionally, our ability to develop an effective concussion drug will depend on our
ability to work on an accelerated timeline, with uncertain access to financial resources beyond those that we currently possess, and
in competition with a significant number of better-funded and more experienced development companies. Even if a market exists, our concussion
drug product candidate could be found to be ineffective or unsafe, or otherwise fail to receive necessary regulatory clearances. Our
concussion drug product candidate, even if safe and effective, could be difficult to manufacture on a large scale or uneconomical to
market, or our competitors could develop superior products more quickly and efficiently or more effectively market their competing products.
Accordingly, our inability to develop a commercially successful concussion product will materially harm our business.
The
thirdthird-party partyvendors upon whom we rely for the supply of ONP-002 isare our sole source of supply, and the loss of thisthese suppliersuppliers could
significantly significantly
harm our business.
We
do not manufacture or have the capacity to manufacture any of our drug
candidates and have
one manufacturertwo manufacturers as our current partner partners
in the development of synthetic chemistry and manufacturing of the ONP-002 (Molecular Formula:
C20H28O2, Molecular Weight: 300.14 g/mol).ONP-002. Our ability to successfully develop our ONP-002 product candidates,
and to ultimately supply
our commercial products in sufficient quantities sufficient to meet the market demand, depends in part on our ability to
obtain the drug product
and drug substance for our product candidates in accordance with regulatory requirements and in sufficient quantities
for commercialization
and clinical testing. We do not currently have arrangements in place for a redundant or second-source supply of any products or substances
in the event our current supplier ceases their operations or stops offering us sufficient quantities of these materials for any reason.
We
are not certain that our single-source supplier will be able to meet our demand, either because of the nature of our agreement with the
supplier, our limited experience with the supplier or our relative importance as a customer to the supplier. It may be difficult for
us to assess its ability to timely meet our demand in the future based on past performance. While our supplier has generally met our
demand on a timely basis in the past, they may subordinate our needs in the future to their other customers.
Moreover,
if there is a disruption to our third-party manufacturers’manufacturers or suppliers’ relevant operations the supply of ONP-002 and its components
components will be delayed until such manufacturer or supplier restores the affected facilitiesfacilities, or we or they procure alternative manufacturing
facilities or sources of supply. Our ability to progress our pre-clinical and clinical programs could be materially and adversely impacted
if any of the third-party suppliers upon which we rely were to experience a significant business challenge, disruption or failure due
to issues such as financial difficulties or bankruptcy, issues relating to other customers such as regulatory or quality compliance issues,
or other financial, legal, regulatory or reputational issues. Additionally, any damage to or destruction of our third-party manufacturers’manufacturers
or suppliers’ facilities or equipment may significantly impair our ability to manufacture our product candidates on a timely basis.
Establishing
additional or replacement suppliers for drug products and drug substancesubstances used in our product candidates, if required, may not be accomplished
quickly and can take several years, if at all. Furthermore, despite our efforts, we may be unable to procure a replacement suppliersuppliers or
do so on commercially reasonable terms, which could have a material adverse impact upon our business. If we are able to find a replacement
supplier, such replacement supplier would need to be qualified and may require additional regulatory approval, which could result in
further delay. While we seek to maintain adequate inventory of the drug product and drug substance used in our product candidates, any
interruption or delay in the supply of components or materials, or our inability to obtain such drug product and drug substance from
alternate sources at acceptable prices in a timely manner could impede, delay, limit or prevent our development efforts, which could
harm our business, results of operations, financial condition and prospects.
Certain
raw materials required in the manufacture and the formulation of our product candidates are derived from biological sources. Such raw
materials are difficult to procure and may be subject to contamination or recall. Access to and supply of sufficient quantities of raw
materials which meet the technical specifications for the production process is challenging,challenging and often limited to single-source suppliers.
Finding an alternative supplier could take a significant amount of time and involve significant expense due to the nature of the products
and the need to obtain regulatory approvals. If we or our manufacturers are unable to purchase the raw materials necessary for the manufacture
of our product candidates on acceptable terms in a timely manner, at sufficient quality levels, or in adequate quantities, if at all,
our ability to produce sufficient quantities of our products for clinical or commercial requirements would be negatively impacted. A
material shortage, contamination, recall or restriction on the use of certain biologically derived substances or any raw material used
in the manufacture of our products could adversely impact or disrupt manufacturing, which would impair our ability to generate revenues
from the sale of such product candidates, if approved or cleared.
If
Odyssey were to convert all of its Series F Convertible Preferred Stock, they would own more than a majority of our outstanding shares
of common stock.
At
the closing of the Odyssey transaction, we issued 8,000,000 shares of Series F Convertible Preferred Stock to Odyssey, which are convertible
into our common stock on a one-for-one basis. The Series F Convertible Preferred Stock is non-voting, but if Odyssey were to convert
all of its shares of Series F Convertible Preferred Stock into our common stock, they would control the vote of more than a majority
of our outstanding common stock. Such a conversion would likely be considered a change of control under the rules of the NYSE American,
requiring us to apply for and meet the NYSE Americans initial listing standards. We do not currently meet those standards. Accordingly,
our Certificate of Designation creating the Series F Preferred Stock specifies that the remainder of the Series F Convertible Preferred
shares are not convertible until the occurrence of all of the following: (i) Oragenics’ shall have applied for and been approved
for initial listing on the NYSE American or another national securities exchange or shall have been delisted from the NYSE American,
which Oragenics’ does not anticipate undertaking until it meets the NYSE American’s initial listing standards, and (ii) if
required by the rules of the NYSE American, Oragenics’ shareholders shall have approved any change of control that could be deemed
to occur upon the conversion of the Series F Preferred Stock into common stock, based on the fact and circumstances existing at such
time.
If
we are unable to successfully develop our product candidates, our operating results and competitive position could be harmed. Research
and development involvesinvolve a lengthy and complex process, and we may not be successful in our efforts to develop and commercialize our
product candidates. The further development and ultimate commercialization of our Neurology Assets, as well as our other product candidates,
are keys to our strategy.
We
have not manufactured a concussion treatment to date, but if we were to do so, the economic value of such a treatment to us could be limited
limited by such government action or inaction. Various government entities, including the U.S. government, offer, but may not continue
to offer,
incentives, grants and contracts to encourage the research and development of new drug technologies, which may have the effect
of increasing
the number of competitors and/or providing advantages to known competitors. Accordingly, there can be no assurance that
we will be able
to successfully establish a competitive market share for our concussion treatment product candidate.
TheBiotechnology
biotechnology and pharmaceutical industries are subject to intense competition and rapid and significant technological change. We have
many potential
competitors, including major pharmaceutical companies, specialized biotechnology firms, academic institutions, government
agencies and
private and public research institutions. Many of our competitors have significantly greater financial and technical resources, experience
experience and expertise in:
In
order to effectively compete, we will have to make substantial investments in development, testing, manufacturing and sales and marketing
or partner with one or more established companies. We may not be successful in gaining any market share. Our technologies and neurology
product candidates also may be rendered obsolete or non-competitivenoncompetitive as a result of products introduced by our competitors to the marketplace
more rapidly and at a lower cost.
As
we continue our development of product candidates, we intend to either license these product candidates to, or partner with, one or more
major pharmaceutical companies at the earliest possible time in their product development. If we do so, we intend for these licensees
or partners to pay the costs associated with any remaining development work, regulatory submissions, clinical trials and the manufacturing
and marketing of our product candidates. If we are unable to license our product candidates or otherwise partner with third parties,
we will have to fund the costs of our clinical trials ourselves or we will be unable to extract any value from these technologies. We
may also have to establish our own manufacturing facilities and find our own distribution channels. This would greatly increase our future
capital requirementsrequirements, and we cannot assure you that we will be able to obtain the necessary financing to pay these costs. If we are unable
to cover the associated costs or we cannot obtain financing on acceptable terms or at all, our business, financial condition and results
of operations will be materially adversely affected.
Our
dependence on collaborative arrangements with third parties subjects us to a number of risks. These collaborative arrangements may not
be on terms favorable to us. Agreements with collaborative partners typically allow partners significant discretion in electing whether
or not to pursue any of the planned activities. We cannot control the amount and timing of resources our collaborative partners may devote
to products based on the collaboration, and our partners may choose to pursue alternative products. Our partners may not perform their
obligations as expected. Business combinations or significant changes in a collaborative partner’s business strategy may adversely
affect a partner’s willingness or ability to complete its obligations under the arrangement. Moreover, we could become involved
in disputes with our partners, which could lead to delays or termination of the collaborations and time-consuming and expensive litigation
or arbitration. Even if we fulfill our obligations under a collaborative agreement, our partner may be able to terminate the agreement
under certain circumstances. If any collaborative partner were to terminate or breach our agreement with it,it or otherwise fail to complete
its obligations in a timely manner, our chances of successfully commercializing our product candidates would be materially and adversely
affected.
Management's Discussion & Analysis (MD&A)
New heading “Off Balance Sheet Arrangements”
Removed heading “Stock-Based Payment Arrangements”
Removed heading “Investing Activities”
Removed heading “Off-Balance Sheet Arrangements”
Largest changes
“We expect to continue to incur substantial net losses and negative cash flows for the foreseeable future. These losses and negative cash flows have had, and will continue to have, an adverse effect on our shareholders’ equity and working capital. Because of the numerous risks and uncertainties associated with product development and commercialization, we may not be able to continue as a going concern and are unable to accurately predict the timing or amount of substantial expenses or when, or if, we will be able to generate the revenue necessary to achieve or maintain profitability.”see in full comparison
“Based on our lack of revenues, anticipated uses of cash and historical recurring cash losses from operating activity, and cash and cash equivalents as of December 31, 2025, we anticipate that we will be able to fund our operating expenses and capital expenditure requirements through the third quarter of 2026, depending on the timing and scope of our development activities and other strategic decisions. These factors raise substantial doubt regarding our ability to continue as a going concern.”see in full comparison
“The Note was a non-interesting bearing unless an event of a default occurred, at which time interest would accrue at a rate of 20% per annum. The Note was scheduled to mature on the earlier of July 14, 2025, or the closing of any subsequent offering with net proceeds equal to or exceeding all amounts due under the Note.”see in full comparison
“Inflation affects the cost of raw materials, goods, and services that we use. In recent years, inflation has been modest but has recently increased. High energy costs and fluctuations in commodity prices can affect the cost of all raw materials and components. Although we cannot precisely determine the effects of inflation on our business, it is management’s belief that the effects on operating results will not be significant. …”see in full comparison
“These conditions raised substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements included in this Annual report are issued.”see in full comparison
“Our current available cash and cash equivalents provide us with limited liquidity. We believe our existing cash and cash equivalents of $0.8 million at December 31, 2024 will allow us to fund our operating plan through the first quarter of 2025. Subsequent to December 31, 2024, in February 2025, we sold 7.8 million shares of common stock from our ATM program. The gross proceeds before commission and expenses from the February 2025 ATM sales were $2.75 million. …”see in full comparison
Full comparison: every changed paragraph (94)
We
are a development-stage biopharmaceutical company dedicated to the research and development of nasal delivery pharmaceutical medicationstherapies
targeting inneurological neurology
conditions and fighting infectious diseases. OurThe Company is currently focused on advancing the development and commercialization
of its lead product ONP-002candidate, ONP-002. Our lead product, ONP-002, is a fully synthetic, non-naturally occurring neurosteroid, is lipophilic,
and iswe designedbelieve toit can cross the blood-brain barrier with the goal of rapidly reducingeliminating swelling, oxidative stress and inflammation
while while
restoring proper blood flow through gene amplification.
FollowingOur
our December 2023 acquisition of the assets of Odyssey Health, Inc. (“Odyssey”) related to the segment of its business focused
on developing medical products that treat brain related illnesses and diseases (the “Neurology Assets”) our lead product
and focus isare on the development and commercialization of ONP-002 for the treatment of mild traumatic brain injury (“mTBI”
or “Concussion”).
ONP-002ONP-002,
together with our other neurology assets, are referred to dateherein as the Neurology Assets. To date, ONP-002 has been shown to be stable
up to 104 degrees for 18-months.18 months. The drug candidate is spray-dry manufactured into a powder and filled
into thea novel intranasal device. The drug
is then administered through the nasal passage from the device. The novel intranasal device
is lightweight and easy to use in the field.
TheWe
believe the proprietary powder formulation and intranasal administration allows for rapid and direct accessibility to the brain. The
device is breath
propelled and allowsis designed to allow patients to blow into the device which closes the soft palate in the back of the
nasopharynx, preventing the flow
of drug to the lungs or esophagus, minimizes system exposure and side effects, and easilyeffectively crosses
the blood brain barrier. This mechanism is designed to trap ONP-002 in the nasal cavity allowing for more abundant and faster drug availability
in the traumatized
brain.
Stock Sale
In
February 2025, we sold 7.8 million258,849 shares of our common stock pursuant to our ATM agreementAgreement with Dawson James for grossnet proceeds of $2.75
million$2.6 before deducting commission and legal expenses.million. See Note 7 of
Notes to Consolidated Financial Statements for additional information.Statements.
On July 2, 2025, we completed a public offering of 660,000 shares of Series H Convertible Preferred Stock and 660,000 common stock warrants to purchase additional shares of Series H Convertible Preferred Stock, resulting in net proceeds of approximately $15 million. See Note 7 of Notes to Consolidated Financial Statements.
Promissory Note
In March 2025, we issued a $3.0 million promissory note at a 17% original issue discount. After expenses, we received net proceeds of $2.2 million.
On July 2, 2025, the Company repaid in full the $3.0 million promissory note. The repayment was made using a portion of the net proceeds from the Company’s July 2, 2025, public offering of Series H Preferred Shares and warrants. See Note 6 of Notes to Consolidated Financial Statements.
On March 13, 2025, the Company entered into and consummated a note securities
purchase agreement (the “Purchase Agreement”) with a single investor (the “Purchaser”) pursuant
to which the Company sold, in a private placement (the “Offering”), to the Purchaser a promissory note with an aggregate
principal amount of $3,000,000 (the “Note”) and 1,000,000 shares of Series G Mirroring Preferred Stock of the Company
(the “Series G Preferred Stock”). The aggregate gross proceeds to the Company are expected to be $2,500,000 million,
before deducting placement agent fees and expenses. The Company intends to use the net proceeds from the Offering for working capital
and other general corporate purposes. Dawson James Securities, Inc. served as the placement agent in the Offering, pursuant to the terms
of a placement agent agreement dated February 26, 2024 and received 6% of the gross proceeds of the Offering and reimbursement of the
legal fees of its counsel. The Note and Series G Preferred Stock sold in the Offering were issued in a private placement under Section
4(a)(2) of the Securities Act of 1933, as amended (the “Act”), and Regulation D promulgated thereunder and, have not
been registered under the Act, or applicable state securities laws. Accordingly, the Note and Series G Preferred Stock may not be offered
or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements
of the Act and such applicable state securities laws.
We
have incurred significant net losses and negative cash flow in each year since our inception, including net losses of $10.6$9.8 million and
$20.7$10.6 million for the years ended December 31, 20242025, and 20232024 respectively. As of December 31, 2024,2025, our accumulated deficit was $216.8$226.6
million. We expect to continue to incur operating losses and negative cash flows for the foreseeable future as we advance the development
of our product candidates.
WeOur
haveoperating devotedplan arequires significant amountexpenditures of our financial resourcesrelated to research and development,development activities, including our nonclinical developmentstudies activities
and clinical trials. We expect that the costs associated with our plans to begin planned
Phase 2 workclinical ontrials ONP-002for willONP-002, beas significant.well Additionally,
as general and administrative costs necessary to support our Licenseoperations. AgreementsIn alsoaddition, certain
of our license agreements require the payment of certain recurringongoing and performance-basedmilestone-based royaltiesroyalties, thatwhich may negativelyfurther impact our financial
capabilities.liquidity.
These conditions raised substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements included in this Annual report are issued.
Management’s plans to address these conditions include pursuing additional sources of capital, which may consist of equity or debt financings, strategic collaborations, licensing agreements, or other funding alternatives. However, there can be no assurance that such financing will be available on acceptable terms, or at all.
If we are unable to obtain sufficient additional funding when needed, we may be required to delay, reduce, or eliminate certain research and development programs or curtail operations. The consolidated financial statements do not include any adjustments that might result from outcome of this uncertainty.
In
addition, Ladenburg Thalmann has sent us an invoice and demand letter claiming we owe them $2.5 million in connection with our purchase
of the Neurology Assets (the “Ladenburg Claim”). See Item 3. Legal Proceedings for additional information.
We
expect to continue to incur substantial net losses and negative cash flows for the foreseeable future. These losses and negative cash
flows have had, and will continue to have, an adverse effect on our shareholders’ equity and working capital. Because of the numerous
risks and uncertainties associated with product development and commercialization, we may not be able to continue as a going concern
and are unable to accurately predict the timing or amount of substantial expenses or when, or if, we will be able to generate the revenue
necessary to achieve or maintain profitability.
Our
capital requirements for 2025 and beyond will depend on numerous factors, including the success of our commercialization effortsresearch and development efforts,
the progress of our research
ONP-002 program, and development,our the resources we devoteability to developsecure andstrategic partnerships or licensing arrangements to support our technologies and our success in pursuing strategic licensing and
funded product development relationships with external partners.pipeline.
We
expect to incur substantial expenditures to further develop our neurology assets, including increased cost related to research, nonclinical
testing, clinical trials, regulatory submissions, and the ongoing requirements of being a public company. Subject
to our ability to raise
additional capital including through possible joint ventures and/or partnerships,capital, we expectplan to incurcontinue substantial
expendituresadvancing tothe ONP-002 toward Phase II clinical trials and further commercializeIND-enabling or develop our Neurology Assets, including continued increases in costs related to research, nonclinical
testing and clinical trials, as well as costs associated with our capital raising efforts and being a public company.work.
OurTo
planssupport includethese seekingactivities, bothwe may seek additional equity and debt financing,financings, alliancesas orwell otheras partnershipstrategic agreementsalliances, withjoint entitiesventures, interestedlicensing
agreements, in our technologies,
or other business transactionsarrangements that wouldcould generate sufficient resourcescapital to ensure continuation ofsustain our operations and research and development
programs.operations.
As of December 31, 2025, we had $8.4 million in cash and cash equivalents. We believe this capital will allow us to fund our current operating plan through the third quarter of 2026, depending on the timing and scope of our development activities and other strategic decisions.
Additional capital will still be required to complete planned clinical trials, regulatory filings, and any future commercialization efforts. There can be no assurance that such funding will be available on favorable terms, or at all. If we are unable to secure sufficient capital, we may be forced to delay, scale back, or eliminate certain development programs, which would adversely impact our business and strategic objectives.
Our
current available cash and cash equivalents provide us with limited liquidity. We believe our existing cash and cash equivalents of
$0.8 million at December 31, 2024 will allow us to fund our operating plan through the first quarter of 2025. Subsequent to December
31, 2024, in February 2025, we sold 7.8 million shares of common stock from our ATM program. The gross proceeds before commission
and expenses from the February 2025 ATM sales were $2.75 million. Additionally, on March 13, 2025, the Company entered into and consummated
a note securities purchase agreement (the “Purchase Agreement”) with a single investor (the “Purchaser”)
pursuant to which the Company sold, in a private placement (the “Offering”), to the Purchaser a promissory note with
an aggregate principal amount of $3,000,000 (the “Note”) and 1,000,000 shares of Series G Mirroring Preferred Stock
of the Company (the “Series G Preferred Stock”). The aggregate gross proceeds to the Company were $2,500,000 million,
before deducting placement agent fees and expenses. The Company intends to use the net proceeds from the Offering for working capital
and other general corporate purposes. We believe that these additional cash resources will allow us
to fund our operating plan through the third quarter of 2025.
Required
additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required
to reduce the scope of, delay or eliminate some or all of our planned clinical testing, research and development and commercialization
activities, which could harm our business.
The
sale of additional equity or debtconvertible securities maycould result in significant dilution to our existing shareholders. If we raise additional funds
through the issuance
of debt securities or preferred stock, these securitiesinstruments couldmay have rights senior to those of our common stock and could containimpose restrictive covenants
that would restricton our operations.
BecauseDue
of the numerous risks andto uncertainties associated with research,clinical development, regulatory approval timelines, and commercializationpartnership ofnegotiations, we cannot precisely
estimate our product candidates, we are
unable to estimate the exact amounts of our workingfuture capital requirements. OurHowever, futureour funding requirementsneeds will depend on many factors,
including, including but not limited to:
We have based these forward-looking statements on assumptions we believe are reasonable; however, actual results and funding needs may differ materially from our current expectations.
We
have based our estimates on assumptions that may prove to be wrong. We may need to obtain additional funds sooner or in greater amounts
than we currently anticipate.
We
do not manufacture or have the capacity to manufacture
any of our drug candidates and have one manufacturer as our current partner in
the development of synthetic chemistry and manufacturing
of the ONP-002 (Molecular Formula: C20H28O2, Molecular Weight: 300.14 g/mol).ONP-002. Our ability to successfully develop our ONP-002 product candidates,
candidates, and to ultimately supply our commercial products in quantities sufficient to meet the market demand, depends in part on our
ability to
obtain the drug product and drug substance for our product candidates in accordance with regulatory requirements and in sufficient quantities
quantities for commercialization and clinical testing. We do not currently have arrangements in place for a redundant or second-source
supply of any products or substances in the event our current supplier ceases their operations or stops offering us sufficient quantities
of these materials for any reason.
We
are not certain that our single-sourcecurrent supplier
source suppliers will be able to meet our demand, either because of the nature of our agreement with
the supplier,suppliers, our limited experience with the supplier
suppliers or our relative importance as a customer to the supplier.suppliers. It may be difficult
for us to assess itstheir ability to timely meet our demand in
the future based on past performance. While our suppliersuppliers hashave generally
met our demand on a timely basis in the past, they may subordinate
our needs in the future to their other customers.
Other
income (expense) includesconsists localprimarily businessof taxes, as well asincome, interest income and expense, and realized gains and losses related to foreign
currency exchange ratestransactions with our vendors.
Interest income consists of interestis earned on our cash and cash equivalents.equivalents, Thewhich primaryare objective
ofinvested in accordance with our investment policy isfocused on capital
preservation. Interest expense consists primarily of interest and related costs associated with our outstanding indebtedness. To a lesser
extent, other income (expense) may include certain non-operating items, such as local business taxes.
At December 31, 2025, the Company has federal and state tax net operating loss carry forwards of $164,834,118 and $138,451,933, respectively.
At
December 31, 2024, the Company has federal and state tax net operating loss carry forwards of $159,358,389 and $142,594,207, respectively.
The State of Pennsylvania tax net operating loss carryforwards will expire through 2036. Federal and Florida tax net operating loss carryforwards
generated prior
to December 31, 20172017, will expire through 20372038 and are not subject to taxable income limitations. Federal and Florida
tax net operating
loss carryforwards generated subsequent to December 31, 2017, do not expire but may be subject to 80% deduction limitation based upon
pre-NOL deduction taxable income limitation
pursuant to the Tax Cuts and Jobs Act that was enacted on December 22, 2017. The Company also has federal
research and development tax
credit carryforwards of $4,041,694$3,959,813, of which are included as an uncertain tax position. The federal tax credit
carryforward will expire
beginning in 20212022 and continuing through 20432044 unless utilized.
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that a full valuation allowance is required as of December 31, 2025, and 2024.
Utilization
The utilization of the Company’s net operating loss carryforwards and research and development credit carryforwards may
could be subject to a substantial annual limitation
due to ownership change limitations that may have occurred or, could occur in the future in accordance withunder Section 382 of the Internal
Revenue Code of 1986 (“IRC Section 382”) and with Section 383 of the Internal Revenue Code of 1986, as wellamended as(the “Code”),
and similar state tax provisions, due to ownership change limitations that may have occurred previously or that could occur in the future.
provisions. These ownership changes may limit the amount of net operating loss carryforwards and researchother anddeferred developmenttax creditassets carryforwards
that can be utilized annually to offset
future taxable income and taxes,tax, respectively. In general, an ownership change, as defined by
IRC Section 382,382 and 383 of the Code, results from
transactions increasing the ownership of certain stockholders or public groups in the stock of athe corporation
by more than 50 percentagepercent points
over a three-year period. The Company has not completed severalan financingsanalysis sinceof itsan inception, which may
result in aownership change in ownership as defined by IRCunder Section 382, or could result in a change in control in the future. In each period since
our inception, we have recorded a 100% valuation allowance for the full amount of our deferred tax asset, as the realization382 of the deferredCode. To the extent
taxthat asseta study is uncertain.completed Asand aan result,ownership wechange haveis notdeemed recordedto anyoccur, federalthe Company’s net operating losses and tax benefitcredits incould our statements of operations.be
limited.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provision of the Tax Cuts and Jobs Act, modification to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and other implemented through 2027. The bill does not materially impact the Company’s 2025 income tax provision.
For the years ended December 31, 2025, and 2024, the Company incurred $0 and $0, respectively, of additional unrecognized tax benefits that related to research and development credits. The entire amount of this unrecognized tax benefit, if recognized, would result in an increase to the deferred tax asset valuation allowance, and would not have an impact on the effective tax rate.
At
December 31, 2024 and 2023, we included a full valuation allowance against our deferred tax assets of approximately $46,958,449 and $41,166,891,
respectively, as our management believes it is uncertain that they will be fully realized. If we determine in the future that we will
be able to realize all or a portion of our net operating loss carryforwards, an adjustment to our net operating loss carryforwards would
increase net income in the period in which we make such a determination.
Our
discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which
have been
prepared in accordance with the accounting principles generally accepted in the United States (“USU.S. GAAP”). The
preparation of
these financial statements in accordance with US GAAP requires usmanagement to make estimatesestimates, assumptions, and assumptionsjudgements that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and related
disclosures.expenses There are certain critical estimates that we believe require significant judgment induring the preparationreporting of our financial statements.
We consider an accounting estimate to be critical if:period.
We define critical accounting estimates as those estimates that require the use of assumptions or judgements that are inherently uncertain and that could have a material impact on our financial condition or results of operations if actual results differ from those estimates.
While our significant accounting policies are described in the notes to the consolidated financial statements, we believe the following accounting estimates involve a higher degree of judgment and complexity and are therefore considered critical to the preparation of our financial statements:
Actual results could differ from management’s estimates, and such differences could be material to our consolidated financial statement. Management evaluates its estimates and assumptions on an ongoing basis and adjusts them when facts and circumstances change.
We account for stock-based compensation in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”), which require share-based payment transactions with employees and non-employees to be recognized in the financial statements based on the grant-date fair value of the equity awards. The fair value of stock options is typically estimated using the Black-Scholes option-pricing model.
Stock-based compensation expense is recognized over the requisite service period during which the employee or non-employee is required to provide service, unless the award vests immediately. Compensation expense related to stock-based awards is classified within research and development expense or general and administrative expense in the consolidated statements of operations, based on the nature of services provided.
For stock options and other equity awards that include service-based vesting conditions, compensation expense is recognized on a straight-line basis over the vesting period. For performance-based awards that do not include market-based conditions, we recognize compensation expense only when achievement of the applicable performance condition is considered probable. Management uses both quantitative and qualitative factors to assess the probability of achieving such performance conditions.
For awards that include market-based performance conditions, the grant-date fair value is recognized over the derived service period, regardless of whether the market-based condition is ultimately satisfied.
We account for forfeitures of stock-based awards as they occur and record forfeitures as a reduction of stock-based compensation expense.
U.S.
Generally Accepted Accounting Principles (“US GAAP”) requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the financial statements based on their fair values as of the grant date. Stock-based compensation
expense is recorded over the requisite service period in which the grantee provides services to us, to the extent the options do not
vest at the grant date and are subject to forfeiture. For performance-based awards that do not include market-based conditions, we record
share-based compensation expense only when the performance-based milestone is deemed probable of achievement. We utilize both quantitative
and qualitative criteria to judge whether milestones are probable of achievement. For awards with market-based performance conditions,
we recognize the grant-date fair value of the award over the derived service period regardless of whether the underlying performance
condition is met. We account for forfeitures of stock-based awards as a component of compensation expense as the forfeitures occur.
Stock-Based
Payment Arrangements
Generally,
all forms of stock-based payments, including stock option grants and warrants are measured at their fair value on the awards’ grant
date typically using a Black-Scholes Pricing Option Pricing Model. Stock-based compensation awards issued to non-employees for services
rendered are recorded at the fair value of the stock-based payment. The expense resulting from stock-based payments are recorded in research
and development expense or general and administrative expense in the statement of operations, depending on the nature of the services
provided. Stock-based payment expense is recorded over the requisite service period in which the grantee provides services to us. To
the extent the stock option grants or warrants do not vest at the grant date they are subject to forfeiture.
In
December 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, “
Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requiresenhances income tax disclosure requirements by requiring
public entities to disclose consistent categories and greater disaggregation of information in the effective tax rate reconciliation and for income
taxes paid. It also includes certain other amendments to improve the effectivenessdisclosures of income taxtaxes disclosures.paid. The guidance is
effective
for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The accountingCompany pronouncementadopted this guidance for
isthe year ended December 31, 2025, and the adoption did not expected to have a material impact on the Company’s relatedconsolidated financial statements
or elated disclosures.
Effective
January 1, 2023, repurchases are subject to a non-deductible excise tax under the Inflation Reduction Act of 2022 equal
to 1.0% of the fair market value of the shares repurchased, subject to certain limitations. The Company did not have an impact to the
financial condition or results of operations in 2023 as a result of the excise tax.
Grant
revenue
The
decrease in Grant revenue in 2024 compared to 2023 was attributable to awards received for a small business innovation research grant
that expired September 30, 2023.
Research and development expenses were $2.4 million for the year ended December 31, 2025, compared to $4.1 million for the year ended December 31, 2024, representing a decrease of $1.7 million or 41.8%.
The decrease was primarily attributable to reduced nonclinical and contract research activity compared to 2024, which included higher levels of external development work and program wind-down costs associated with discontinued vaccine and antibiotic programs. During 2025, the Company focused on its research and development efforts on advancing ONP-002, which expenditures primarily related to regulatory preparation, manufacturing readiness, and consulting services. While ONP-002 activities continued during 2025, overall laboratory, formulation, and preclinical spending was lower than the prior year. The Company expects research and development expenses to increase in future periods as clinical trial activities advance, and manufacturing of additional ONP-002 clinical material expands.
The
decrease in research and development in 2024 compared to 2023 was mainly attributed to In process research and development expensed
in connection with the acquisition of our concussion asset in 2023 of $10.3 million and decreased development costs. Development
costs associated with the development of our ONP-002 concussion drug in 2024 were $2.8 million compared to development costs
associated with our vaccine product and our lantibiotics program of $1.3 million. Research and development expense in 2024 related to our vaccine product and lantibiotics program are associated with
contract terminations.
General and administrative expenses were $7 million for the year ended December 31, 2025, compared to $6.4 million for the year ended December 31, 2024, representing an increase of $525,464 or 8.1%.
The increase was primarily attributable to a $616,580 increase in patent expenses, as patent-related costs in 2025 were classified within general and administrative expenses whereas a significant portion of such costs had been recorded within research and development in 2024. Investor relations expense increased by $265,004 due to expanded shareholder engagement and capital market activities. Legal and professional fees increased by $146,279 reflecting higher corporate, regulatory, and financing-related costs. These increases were partially offset by a $443,664 decrease in salaries and benefits due to lower headcount, a $38,206 decrease in board compensation, and a $33,285 decrease in public company expenses. Other expenses decreased by $72,711 primarily due to the reclassification of certain costs to travel expense. Insurance and software expenses increased modestly, while travel expense increased by $61,389 reflecting increased business development and investor-related activity.
What changed in the latest 10-Q
Risk Factors
Largest changes
“On May 7, 2026, we announced that we had entered into a Letter of Intent (“LOI”) under which we expect to license from Sigyn Therapeutics, Inc. (“Sigyn”) certain disease indications of CardioDialysis™, a blood purification technology that enables the broad-spectrum clearance of inflammatory and pathogenic molecules from the bloodstream. Under the terms of the proposed license agreement, we would receive an exclusive license from Sigyn to develop and commercialize CardioDialysis™ for the treatment of Traumatic Brain Injury (TBI) and other chronic neurodegenerative diseases. …”see in full comparison
“On May 7, 2026, we announced that we had entered into a Letter of Intent (“LOI”) under which we expect to license from Sigyn Therapeutics, Inc. (“Sigyn”) certain disease indications of CardioDialysis™, a blood purification technology that enables the broad-spectrum clearance of inflammatory and pathogenic molecules from the bloodstream. …”see in full comparison
see in full comparisonInWhileconnectionthewithCompany currently is not pursuing thetransactiontransactions contemplated by the Sigyn LOI, the Sigyn LOI contemplated that wemaywould issue 3,250,000 shares of a new series of our Preferred Stock, convertible into 3,250,000 shares of our Common Stock. Our Board of Directors has authority, without action or vote of our shareholders, to issue all or a part of our authorized but unissued shares, except where shareholder approval is required by law or the rules of any exchange on which our shares are listed. Any issuance of additional equity securities by us in the future in connection with the LOI could result in dilution to our existing common shareholders. Such issuances could be made at a price that reflects a discount or a premium to the then-current trading price of our common stock. These issuances would dilute the percentage ownership interest of our existing common shareholders, which would have the effect of reducing their influence on matters on which our shareholders vote and might dilute the book value of our common stock. The terms of the new series of our preferred stock are subject to further negotiation and may be issued without action or vote of our shareholders, except where shareholder approval may be required by law or the rules of any exchange on which our shares are listed. To the extent wearelaterableelect toconcludepursue the transaction contemplated by the LOI, the issuance of such new series of Preferred Stock convertible into common stock would result in significant dilution to our existing common shareholders. Such issuance could adversely affect the market price of our common stock and impair our ability to raise additional capital through future equity financings.
Full comparison: every changed paragraph (3)
On May 7, 2026, we announced that we had entered into a Letter of Intent (“LOI”) under which we expect to license from Sigyn Therapeutics, Inc. (“Sigyn”) certain disease indications of CardioDialysis™, a blood purification technology that enables the broad-spectrum clearance of inflammatory and pathogenic molecules from the bloodstream. However, as of the date hereof, we are not actively negotiating such license agreement or undertaking any further due diligence regarding CardioDialysis and have paused discussions with Sigyn, choosing instead to continue to focus on ONP-002 and our capital raising efforts. There can be no assurances that we will resume our negotiations with Sigyn or that we will ever enter into any definitive agreements with Sigyn.
On
May 7, 2026, we announced that we had entered into a Letter of Intent (“LOI”) under which we expect to license from Sigyn
Therapeutics, Inc. (“Sigyn”) certain disease indications of CardioDialysis™, a blood purification technology that enables
the broad-spectrum clearance of inflammatory and pathogenic molecules from the bloodstream. Under the terms of the proposed license
agreement, we would receive an exclusive license from Sigyn to develop and commercialize CardioDialysis™ for the treatment of Traumatic
Brain Injury (TBI) and other chronic neurodegenerative diseases. The proposed transaction terms set forth in the LOI include
that: (i) we expect to issue 3,250,000 shares of a new class of restricted preferred stock to Sigyn, convertible, (ii) we
expect to pay a three percent (3%) royalty on revenue from sales of the licensed technology following FDA market clearance, for a period
of six years from the date of first commercial sale per approved indication and country, (iii) the closing is expected to occur
within 90 days from the effective date of the LOI, subject to completion of due diligence, board approvals, an independent third-party
valuation, and other customary closing conditions, and (iv) Sigyn has agreed not to license the CardioDialysis™ technology to third
parties for the proposed Target Markets during the exclusivity period. The LOI is non-binding except for certain provisions including
exclusivity, confidentiality, and governing law. The completion of a definitive agreement remains subject to due diligence satisfactory
to us, board approvals by both companies, NYSE American continued listing compliance, and other customary closing conditions. Although
the LOI provides that certain provisions are binding on the parties, it does not obligate the parties to consummate the proposed transaction.
The consummation of the proposed transaction remains subject to due diligence and the negotiation, execution and delivery of a definitive
license agreement and the satisfaction or waiver of applicable closing conditions. There can be no assurance that any definitive agreements
will be entered into or that the proposed transaction will be consummated on the terms described therein or at all. The closing
of the transaction is subject to various closing conditions, including without limitation the following: (1) due diligence satisfactory
to the Company, (2) both companies shall have obtained its shareholders’ approval; (3) NYSE American continued listing compliance;
and (4) other customary closing conditions. There can be no assurances that the conditions to consummate the transaction contemplated
by the Sigyn LOI will be satisfied or that we will be able to successfully consummate a transaction.
InWhile
connectionthe withCompany currently is not pursuing the transactiontransactions contemplated by the Sigyn LOI, the Sigyn LOI contemplated that we maywould issue
3,250,000 shares of a new series of our Preferred Stock,
convertible into 3,250,000 shares of our Common Stock. Our Board of Directors
has authority, without action or vote of our shareholders,
to issue all or a part of our authorized but unissued shares, except where
shareholder approval is required by law or the rules of any
exchange on which our shares are listed. Any issuance of additional equity
securities by us in the future in connection with the LOI
could result in dilution to our existing common shareholders. Such issuances
could be made at a price that reflects a discount or a premium
to the then-current trading price of our common stock. These issuances
would dilute the percentage ownership interest of our existing
common shareholders, which would have the effect of reducing their influence
on matters on which our shareholders vote and might dilute
the book value of our common stock. The terms of the new series of our preferred
stock are subject to further negotiation and may be
issued without action or vote of our shareholders, except where shareholder approval
may be required by law or the rules of any exchange
on which our shares are listed. To the extent we arelater ableelect to concludepursue the transaction
contemplated by the LOI, the issuance of such new
series of Preferred Stock convertible into common stock would result in significant
dilution to our existing common shareholders.
Such issuance could adversely affect the market price of our common stock and impair our
ability to raise additional capital through
future equity financings.
Management's Discussion & Analysis (MD&A)
Largest changes
“In July of 2026 we submitted our Type B Meeting request to the U.S. Food and Drug Administration (FDA) and followed that with submission of our full briefing dossier. The meeting with the FDA is intended to facilitate FDA guidance on our planned U.S. clinical development program for ONP-002, in support of our Investigational New Drug (IND) application, which remains targeted for submission by the end of 2026.”see in full comparison
Thesee in full comparisondecreaseincrease was primarily driven bylowerhigher patent-related expensesexpenses, which declined byof approximately$422,266$405,000.comparedThistoincreasethe prior-year period. Salaries and benefits also decreased by approximately $83,289 due to reduced headcount. These decreases werewas partially offset byhigherlowerlegalsalaries andprofessionalbenefitsfees, which increased byof approximately$52,621,$135,000reflectingduegreaterto reduceduseheadcounts,oflowerexternalpublicadvisors and consultants, as well as increased investor-relationscompany expenses of approximately$26,351 related to ongoing shareholder communications$76,000, andpublic-companyloweractivities.investor relations expenses of approximately $21,000.
“The increase was primarily driven by higher legal and professional fees of approximately $390,000, reflecting greater use of external advisors and consultants. This increase was substantially offset by lower salaries and benefits of approximately $219,000 due to reduced headcount, lower public company expenses of approximately $74,000, lower insurance expense of approximately $22,000, lower travel expense of approximately $23,000, and lower patent-related expenses of approximately $17,000.”see in full comparison
The LOI is non-binding except for certain provisions including exclusivity, confidentiality, and governing law. The completion of a definitive agreementsee in full comparisonremainswas subject to due diligence satisfactory to us, board approvals by both companies, NYSE American continued listing compliance, and other customary closing conditions. Although the LOI provides that certain provisions are binding on the parties, it does not obligate the parties to consummate the proposed transaction. The consummation of the proposed transaction remains subject to due diligence and the negotiation, execution and delivery of a definitive license agreement and the satisfaction or waiver of applicable closing conditions. As of the date hereof, we are not actively negotiating such license agreement or undertaking any further due diligence regarding CardioDialysis and have paused discussions with Sigyn, choosing instead to continue to focus on ONP-002 and our capital raising efforts. There can be noassuranceassurances that we will resume our negotiations with Sigyn or that we will ever enter into any definitive agreementswillbewithentered into or that the proposed transaction will be consummated on the terms described therein or at all.Sigyn.
see in full comparisonOnAsAprilof20,June 30, 2026, weannouncedhavethatenrolled29patientsparticipants and8have administered 34 study drug doseshave been administeredin our ongoing Phase IIa clinical trial evaluatingONP-002.ONP-002 in concussed patients in Australia. Enrollment is progressing at three sites in Australia; Mackay BaseHospitalHospital,inAlfredQueensland,Health,Australia,andtheRoyalfirstAdelaideactivatedHospital.siteZeroinserious adversetheeventstrial,havewithbeenadditionalreportedsitesacrosscompletingallfinaltreatedactivation steps.participants to date.
“Other income (expense) includes interest expense, and realized gains or losses related to foreign currency exchange rates with our vendors. Interest income reflects earnings on our cash and cash equivalents, which are invested with a primary objective of capital preservation. Interest expense consists of costs associated with our short-term note payable for financing insurance premiums.”see in full comparison
Full comparison: every changed paragraph (39)
These
statements are often, but not always, made through the use of word or phrases such as “believe,” “will,”
“expect,”
“anticipate,” “estimate,” “intend,” “plan,” “would,” and
“would. “TheseThese,” forward-looking
statements are not guarantees of future performance and concern matters that could subsequently differ
materially from those described
in the forward-looking statements. Actual events or results may differ materially from those
discussed in this Quarterly Report on Form
10-Q. Except as may be required by applicable law, we undertake no obligation to update
any forward-looking statements or to reflect
events or circumstances arising after the date of this Report.
We
are a development-stage biopharmaceutical company dedicated to the research and development of nasalnasally deliverydelivered pharmaceutical
therapies therapies
targeting neurological conditions; delivered with our novel and proprietary intranasal drug delivery device. The Company
is currently focused on advancing the development and commercialization
of its lead product candidate, ONP-002. Our lead product,
ONP-002, is a fully synthetic, non-naturally occurring neurosteroid, is lipophilic,
and we believe it can cross the blood-brain
barrier with the goal of rapidly eliminating swelling, oxidative stress and inflammation
while restoring proper blood flow through
gene amplification.
OnAs Aprilof 20,June 30, 2026, we announcedhave thatenrolled 29 patientsparticipants
and 8have administered 34 study drug doses have been administered in our ongoing Phase IIa clinical trial evaluating ONP-002.ONP-002 in concussed patients in Australia.
Enrollment is progressing at
three sites in Australia; Mackay Base HospitalHospital, inAlfred Queensland,Health, Australia,and theRoyal firstAdelaide activatedHospital. siteZero inserious
adverse theevents trial,have withbeen additionalreported sitesacross completingall finaltreated activation
steps.participants to date.
In July of 2026 we submitted our Type B Meeting request to the U.S. Food and Drug Administration (FDA) and followed that with submission of our full briefing dossier. The meeting with the FDA is intended to facilitate FDA guidance on our planned U.S. clinical development program for ONP-002, in support of our Investigational New Drug (IND) application, which remains targeted for submission by the end of 2026.
Traumatic
brain injury represents a significant
neurological condition without an FDA-approved pharmacological treatment. According to the CDC,
an estimated 1.7 to 3.8 million people
in the U.S. experience traumatic brain injuries annually, with sports and recreational activities
among the leading causes.1
Globally, an estimated 69 million individuals sustain traumatic brain injuries each year. Despite
this scale, no pharmacological treatments
have been approved —approved, leaving patients, military personnel, athletes, and families without
FDA-approved effective options beyond
rest and symptom management. If approved by the FDA, ONP-002 would be the first and only pharmacological
standard of care for a global
concussion market projected to reach over $9 billion by 2030.2 Our
Phase IIa trial is designed to enroll 40
patients who meet enrollment criteria based on CT scan findings, presenting symptoms, and emergency
room or hospital admission. Patients
receive first dosing within 12 hours of concussion, followed by continued treatment for up to 30
days. We believe early enrollment activity
reflects both strong site readiness and the significant unmet clinical need in this patient
population.
This
product development plan is an estimate and is subject to change based on funding,additional funding (of which there can be no assurances), technical risks and regulatory
approvals.
Success
in the biopharmaceutical and product development industry relies on the continuous development of novel product candidates. Most product
candidates do not make it past the clinical development stage, as a result of which forces companies tofrequently look externally for innovation. Accordingly,
we expect, from time to time, to seek strategic opportunities through various forms of business development, which can include strategic
alliances, licensing deals, joint ventures, collaborations, equity or debt-based investments, dispositions, mergers, and acquisitions.
We view these business development activities as a necessary component of our strategies, and we seek to enhance shareholder value by
evaluating business development opportunities both within and complementary to our current business, as well as opportunities that may
be new and separate from the development of our existing product candidates.
On
May 7, 2026, we announced that we
had entered into a Letter of Intent (“LOI”) under which we expectexpected to negotiate a license from
with Sigyn Therapeutics, Inc.
(“Sigyn”) pursuant to which we would license certain disease indications of CardioDialysis™,
a blood purification technology that enables the
broad-spectrum clearance of inflammatory and pathogenic molecules from the bloodstream.
Under the terms of the proposed
license agreement, it was anticipated that we would receive an exclusive license from Sigyn to develop
and commercialize CardioDialysis™ for the
treatment of Traumatic Brain Injury (TBI) and other chronic neurodegenerative diseases.
The proposed transaction terms set
forth in the LOI includeincluded that: (i) we would expect to issue 3,250,000 shares of a new class of restricted
preferred stock to
Sigyn, convertible into common shares, (ii) we would expect to pay a three percent (3%) royalty on revenue from sales
of the licensed technology following
FDA market clearance, for a period of six years from the date of first commercial sale per approved
indication and country,
(iii) the closing iswas expected to occur within 90 days from the effective date of the LOI, subject to completion
of due
diligence, board approvals, an independent third-party valuation, and other customary closing conditions, and (iv) Sigyn haswould
agree agreed
not to license the CardioDialysis™ technology to third parties for the proposed Target Markets during the exclusivity
period.
The
LOI is non-binding except for certain provisions
including exclusivity, confidentiality, and governing law. The completion of a definitive
agreement remainswas subject to due diligence satisfactory
to us, board approvals by both companies, NYSE American continued listing compliance,
and other customary closing conditions. Although
the LOI provides that certain provisions are binding on the parties, it does not obligate
the parties to consummate the proposed transaction.
The consummation of the proposed transaction remains subject to due diligence and
the negotiation, execution and delivery of a definitive
license agreement and the satisfaction or waiver of applicable closing conditions.
As of the date hereof, we are not actively negotiating such license agreement or undertaking any further due diligence regarding CardioDialysis
and have paused discussions with Sigyn, choosing instead to continue to focus on ONP-002 and our capital raising efforts. There can be
no assuranceassurances that we will resume our negotiations with Sigyn or that we will ever enter into any definitive agreements
will bewith entered into or that the proposed transaction will be consummated on the terms described therein or at all.Sigyn.
Effective July 1, 2026, the Board of Directors appointed John Spencer, the Company’s Senior Controller, to serve as the Company’s Chief Financial Officer, and, in connection therewith, effective July 1, 2026, the Company entered into an Executive Employment Agreement with Mr. Spencer (the “Employment Agreement”). The Employment Agreement provides for base compensation of $200,000.
As
of MarchJune 31,30, 2026, the Company had no outstanding promissory notes
during the quarter.
During
the three months ending MarchJune 31,30, 2026, there were no significant changes to our significant accounting policies and estimates
as described
in Note 2.1. Significant Accounting Policies included in Part II, Item 8. of our Annual Report on Form 10-K for the
year ended December
31, 2025, which was filed with the SEC on March 16, 2026.
As
of MarchJune 31,30, 2026, we had $6.1$3.9 million in cash and cash equivalents. We believe this capital will allow us to fund our current operating
plan through the end of 2026, depending on the timing and scope of our development activities and other strategic decisions.
We
operate in a single reportable segment, which includes all activities related to the development of our lead product candidate,
ONP-002, ONP-002,
for the treatment of mild traumatic brain injury (concussion). This determination is consistent with how financial
information is reviewed
and evaluated by our Chief OperationExecutive Decision MakerOfficer (“CODMCEO”) and Chief Financial Officer
(“CFO”) for purposes of performance assessment, resource allocation,
and planning.
Our
CODM is currently our Chief Executive OfficerCEO and Chief Financial Officer, whoCFO regularly reviewsreview consolidated net loss and total assets
as key measures in operating decision-making. We do not separately evaluate results by geographic region or product line.
For
the threesix months ended MarchJune 31,30, 2026, and 2025, we did not generate any revenue. Our segment asset measure is reported on the consolidated
balance sheet and total assets.
We
do not currently sell or market any products and did not generate any revenue for the threesix months ended MarchJune 31,30, 2026, and
2025.
For
the three months ended MarchJune 31,30, 2026, research and development (“R&D”) expenses were $645,470,$1.2 million compared to $341,542
$449,679 for the
same period in 2025, representing an increase of $303,928,$726,948, or 88.9%.161.7%.
For the six months ended June 30, 2026, R&D expenses were $1.8 million compared to $791,221 for the same period in 2025, representing an increase of $1,030,876, or 130.3%.
Subject
to our ability to raise additional capital,
the Company expects R&D expenses to increase in future periods as it advances the ONP-002
program, including initiatingthe aongoing Phase IIa
clinical trial in Australia, conducting IND-enabling activities to support aU.S. Phasebased IIbclinical trial in the United States,trials, and scaling manufacturing
of clinical trial material.
For
the three months ended MarchJune 31,30, 2026, general and administrative (“G&A”) expenses were $1,610,457,$1.4 million, compared to $1,684,685$1.3
million for the same period in 2025, representing aan decreaseincrease of $74,228,$151,378, or 4.4%.12.0%.
The
decrease increase was primarily driven by lowerhigher patent-related
expenses expenses, which declined byof approximately $422,266$405,000. comparedThis toincrease the prior-year period. Salaries
and benefits also decreased by approximately $83,289 due to reduced headcount. These decreases werewas partially offset by higherlower legal
salaries and professionalbenefits fees, which increased byof approximately $52,621,$135,000 reflectingdue greaterto
reduced useheadcounts, oflower externalpublic advisors and consultants, as well
as increased investor-relationscompany expenses of approximately $26,351 related to ongoing shareholder communications$76,000, and public-companylower activities.investor relations expenses of approximately $21,000.
For the six months ended June 30, 2026, G&A expenses were $3 million, compared to $2.9 million for the same period in 2025, representing an increase of $77,150, or 2.6%.
The increase was primarily driven by higher legal and professional fees of approximately $390,000, reflecting greater use of external advisors and consultants. This increase was substantially offset by lower salaries and benefits of approximately $219,000 due to reduced headcount, lower public company expenses of approximately $74,000, lower insurance expense of approximately $22,000, lower travel expense of approximately $23,000, and lower patent-related expenses of approximately $17,000.
Other income (expense) includes interest expense, and realized gains or losses related to foreign currency exchange rates with our vendors. Interest income reflects earnings on our cash and cash equivalents, which are invested with a primary objective of capital preservation. Interest expense consists of costs associated with our short-term note payable for financing insurance premiums.
For
the three months ended MarchJune 31,30, 2026, total other incomeincome, net was $32,059,$17,444, compared to total other expenseexpense, net of $190,766$557,833 for the
same period
in 2025. The change was primarily drivenattributable byto a significant decrease in interest expense of approximately $195,400$571,896
resulting relatedfrom tothe repayment of the Company’s short-term financing obligations outstanding during the prior-year
financing activities,period, as
well as an increase in interest income of approximately $30,673$13,233 due to higher average cash and investment balances. These favorable
changes were partially offset by higher foreign currency exchange losses of approximately $9,852 compared to the prior-year
period.
Since
our inception, we have funded our operations primarily through
the sale of equity securities in public and private offerings, debt financing,
and warrantswarrant exercises. As of MarchJune 31,30, 2026, we had an
accumulated deficit of $228.8$231.4 million and have not yet achieved profitability.
We incurred a net loss of $2.2$4.7 million for the threesix months
ended MarchJune 31,30, 2026, and $9.8 million for the year ended December 31, 2025.
We expect to continue incurring significant operating losses
as we advance the development of our Neurology Assets, including ONP-002,
through regulatory and clinical stages toward potential commercialization.
Cash
used in operating activities for the threesix months ended March 31,June
30, 2026, and 2025 was $2.2$4.4 million and $2.1$3.4 million, respectively. In
both periods, cash used in operations primarily reflected the Company’s
net losses adjusted for non-cash charges and changes
in working capital accounts.
For
the threesix months ended MarchJune 31,30, 2026, non-cash adjustments
primarily wereconsisted minimalof and$34,969 includedof stock-based compensation expense ofand $17,386 and
$5,000 of common stock issued for services. In contrast, the prior-year
period included $192,859$771,437 of amortization of debt discount and
closing costscosts, andpartially aoffset by an $86,617 stock-based compensation recapturerecapture,
neither of $86,470, which did not recurrecurred in 2026.
Changes in operating assets and liabilities werealso aimpacted primary driver ofoperating
operating cash flows induring the current period, including a $232,398$53,082 decrease in interest receivable, a $13,361 increase in prepaid expenses and other
current assetsassets, and a $53,082$262,856 increase
in income receivables, partially offset by a $307,267 decrease in accounts payable and accrued expenses, primarily reflecting the timing of vendor
payments.
The
increase in cash used in operating activities year over year
was primarily attributable to thesehigher working capital changesrequirements and the absence
of significant prior-year non-cash financing-related
adjustments, adjustments.partially offset by lower net cash outflows from prepaid expenses.
Net
cash provided by investing activities for the threesix months ended
March 31,June 30, 2026, primarily consisted of proceeds from the maturity of a
short-term certificate of deposit totaling $4,000,000.$4 million. The Company
also recognized $40,876 of interest income associated with this
investment.
There were no comparable investment activities during the three-monthsix months ended
MarchJune 31,30, 2025. The increase in cash inflows reflects the liquidation of short-term investments in the current period as the Company redeployed
cash into operating activities.
Net
cash used in financing activities was $92,004$148,138 for the threesix months ended MarchJune 31,30, 2026, compared to net cash provided by financing activities
of $4,668,328$4.5 million for the same period in 2025.
Financing
activities during the
three six months ended MarchJune 31,30, 2026, primarily consisted of $79,210 in net proceeds from the issuance of common stock, offset by
$171,214$227,348 in repayments of short-term notes payable.payable
and proceeds from issuance of common stock of $79,210.
In
contrast, financing activities forduring the threesix months ended MarchJune 31,30, 2025, were primarily driven by $2.6 million in net proceeds from
the issuance
of common stock and $2.2 million in borrowings under short-term notes payable, partially offset by $195,565$328,528 in repayments
of suchshort-term borrowings.notes payable.
The
year-over-year decrease in financing cash inflows primarily reflects the absence of significant equity raisesfinancing and borrowingborrowings activity induring the current
periodperiod, compared to the prior-year period.
Subsequent to June 30, 2026, the Company renewed its annual commercial insurance program and entered into a premium financing agreement in the ordinary course of business. Under the agreement, approximately $504,664 of insurance premiums were financed and are payable in monthly installments through April 2027.
Inflation
may impact the cost of services and supplies used in our operations,
including professional services, insurance premiums, and research-related
vendor agreements. Increases in wages, employee benefits, and
regulatory compliance costs may continue to exert upward pressure on operating
expenses. However, because we are currently in the development
stage and do not maintain significant manufacturing operations or large-scale
procurement of raw materials, we have not experienced material
inflationary effect on our operating results. For the three-monthsix period
endingmonths Marchended 31,June 30, 2026, and 2025, inflation has not had a material impact
on our results of operations.
OGEN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding OGEN (13F)
None of the 59 investors we track reported a position in their latest 13F.