UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2025

 

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

 

For the transition period from ___________ to ___________

 

GENELUX CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware		001-41599		77-0583529
(State or other jurisdiction of incorporation or organization)		Commission File Number		(IRS Employee Identification No.)

 

2625 Townsgate Road, Suite 230, Westlake Village, California 91361

(Address of Principal Executive Offices)

 

(805) 267-9889

(Registrant’s telephone number, including area code)

 

 

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

 

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

 

Title of each class registered:		Trading symbol:		Name of each exchange on which registered:
Common Stock, par value $0.001 per share		GNLX		The Nasdaq Stock Market LLC (Nasdaq Capital Market)

 

Securities registered under Section 12(g) of the Exchange Act: None

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

 

Large Accelerated Filer ☐	Non-Accelerated Filer ☒
Accelerated Filer ☐	Smaller Reporting Company ☒
	Emerging Growth Company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

 

The number of shares issued and outstanding of each of the issuer’s classes of common equity as of October 30, 2025 was 38,051,771.

 

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of the federal securities laws made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

 

Forward-looking statements contained in this Quarterly Report include statements regarding:

 

	●	the timing, progress and results of clinical studies for our product candidates, including the development of our only product candidate, Olvi-Vec;
	●	the timing, scope and likelihood of regulatory filings and approvals, including final regulatory approval of our product candidates;
	●	the potential benefits and market opportunity for our product candidates and CHOICE platform;
	●	expectations regarding the size, scope and design of clinical studies;
	●	our manufacturing, commercialization, and marketing plans and strategies;
	●	our plans to hire additional personnel and our ability to attract and retain such personnel;
	●	our estimates of the number of patients who suffer from the diseases we are targeting and potential growth in our target markets;
	●	our expectations regarding the approval and use of our product candidates;
	●	our competitive position and the development and impact of competing therapies that are or may become available;
	●	expectations regarding future events under collaboration and licensing agreements, including potential future payments, as well as our plans and strategies for entering into further collaboration and licensing agreements;
	●	our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;
	●	the rate and degree of market acceptance and clinical utility of product candidates we may develop;
	●	our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
	●	our future financial performance;
	●	the period over which we estimate our existing cash, cash equivalents, restricted cash and investments will be sufficient to fund our future operations;
	●	our expected use of net proceeds from our financing transactions;
	●	the impact of laws and regulations;
	●	the impact of geopolitical and macroeconomic factors; and
	●	other risks and uncertainties, including those described under Part II, Item 1A, “Risk Factors” in this Quarterly Report.

 

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2024 (the “Annual Report”) and in this Quarterly Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. You should, however, review the factors and risks we describe in the reports we will file from time to time with the U.S. Securities and Exchange Commission (the “SEC”) after the date of this Quarterly Report.

 

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report, and while we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.

 

 

GENELUX CORPORATION

FORM 10-Q

SEPTEMBER 30, 2025

TABLE OF CONTENTS

 

PART I— FINANCIAL INFORMATION		3
Item 1.	Condensed Financial Statements	3
	Condensed Balance Sheets	3
	Condensed Statements of Operations and Comprehensive Loss	4
	Condensed Statements of Stockholders’ Equity	5
	Condensed Statements of Cash Flows	6
	Notes to Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
PART II— OTHER INFORMATION		30
Item 1	Legal Proceedings	30
Item 1A	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
SIGNATURES		42

 

 

PART I—FINANCIAL INFORMATION

 

Item 1: Condensed Financial Statements

 

Genelux Corporation
Condensed Balance Sheets

(in thousands, except per share amounts)

 

		September 30,				December 31,
		2025				2024
		(unaudited)
ASSETS
Current Assets:
Cash, cash equivalents and restricted cash		$	4,692			$	8,565
Short-term investments			16,223				22,330
Prepaid expenses and other current assets			637				653
Total Current Assets			21,552				31,548
Property and equipment, net			1,794				1,316
Right of use assets			1,518				1,760
Other assets			123				92
Total Other Assets			3,435				3,168
Total Assets		$	24,987			$	34,716
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses		$	3,987			$	5,570
Accrued payroll and payroll taxes			785				1,004
Lease liabilities, current portion			354				329
Total Current Liabilities			5,126				6,903
Lease liabilities, long-term portion			1,270				1,539
Total Liabilities			6,396				8,442
Commitments and Contingencies (Note 8)			-
Stockholders’ Equity:
Common stock, par value $0.001, 200,000,000 shares authorized; 38,046,778 and 34,728,140 shares issued and outstanding, respectively			38				35
Treasury stock, 433,333 shares, at cost			(433	)			(433	)
Additional paid-in capital			293,269				278,001
Accumulated other comprehensive income			8				64
Accumulated deficit			(274,291	)			(251,393	)
Total Stockholders’ Equity			18,591				26,274
Total Liabilities and Stockholders’ Equity		$	24,987			$	34,716

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

Genelux Corporation
Condensed Statements of Operations and Comprehensive Loss

(in thousands, except share amounts)

(unaudited)

 

		2025				2024				2025				2024
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
Revenue		$	-			$	-			$	-			$	8
Operating expenses:
Research and development			4,741				4,051				14,197				12,478
General and administrative			3,453				2,890				9,605				9,478
Total operating expenses			8,194				6,941				23,802				21,956
Loss from operations			(8,194	)			(6,941	)			(23,802	)			(21,948	)
Other income:
Interest income			175				222				583				499
Bond accretion income			69				252				321				556
Total other income, net			244				474				904				1,055
Net loss		$	(7,950	)		$	(6,467	)		$	(22,898	)		$	(20,893	)
Loss per share - Basic and Diluted		$	(0.21	)		$	(0.19	)		$	(0.62	)		$	(0.69	)
Weighted-average shares outstanding
- Basic and Diluted			37,893,314				34,532,355				36,867,607				30,405,615
Other comprehensive loss:
Net unrealized gain (loss) on investments			5				135				(56	)			110
Comprehensive loss		$	(7,945	)		$	(6,332	)		$	(22,954	)		$	(20,783	)

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

Genelux Corporation
Condensed Statements of Stockholders’ Equity

(in thousands, except share   amounts)

(unaudited)

 

		Shares				Amount				Shares				Amount				Capital				Income (Loss)				Deficit				Total
		Common Stock								Treasury Stock								Additional Paid-in				Accumulated Other Comprehensive				Accumulated
		Shares				Amount				Shares				Amount				Capital				Income (Loss)				Deficit				Total
Balance at December 31, 2024			34,728,140			$	35				(433,333	)		$	(433	)		$	278,001			$	64			$	(251,393	)		$	26,274
Stock compensation			-				-				-				-				1,423				-				-				1,423
Unrealized loss on investments			-				-				-				-				-				(35	)							(35	)
Fair value of vested restricted stock units			-				-				-				-				103				-				-				103
Issuance of common shares for cash and warrants, net of costs			3,000,000				3				-				-				9,550				-				-				9,553
Cost of stock option modifications and repricing			-				-				-				-				6				-				-				6
Issuance of common stock upon exercise of stock options			5,000				-				-				-				14				-				-				14
Net loss during the three months ended March 31, 2025			-				-				-				-				-				-				(7,492	)			(7,492	)
Balance at March 31, 2025			37,733,140			$	38				(433,333	)		$	(433	)		$	289,097			$	29			$	(258,885	)		$	29,846
Stock compensation			-				-				-				-				1,290				-				-				1,290
Unrealized loss on investments			-				-				-				-				-				(26	)			-				(26	)
Fair value of vested restricted stock units			-				-				-				-				185				-				-				185
Cost of stock option modifications and repricing			-				-				-				-				7				-				-				7
Common stock issued under equity award plans			25,876				-				-				-				52				-				-				52
Net loss during the three months ended June 30, 2025			-				-				-				-				-				-				(7,456	)			(7,456	)
Balance, June 30, 2025			37,759,016			$	38				(433,333	)		$	(433	)		$	290,631			$	3			$	(266,341	)		$	23,898
Stock compensation			287,762				-				-				-				1,623				-				-				1,623
Unrealized gain on investments			-				-				-				-				-				5				-				5
Fair value of vested restricted stock units			-				-				-				-				291				-				-				291
Cost of stock option repricing			-				-				-				-				724				-				-				724
Net loss during the three months ended September 30, 2025			-				-				-				-				-				-				(7,950	)			(7,950	)
Balance, September 30, 2025			38,046,778			$	38				(433,333	)		$	(433	)		$	293,269			$	8			$	(274,291	)		$	18,591

 

		Common Stock								Treasury Stock								Additional Paid-in				Accumulated Other Comprehensive				Accumulated
		Shares				Amount				Shares				Amount				Capital				Income (Loss)				Deficit				Total
Balance, December 31, 2023			26,788,986			$	27				(433,333	)		$	(433	)		$	241,389			$	14			$	(221,524	)		$	19,473
Stock compensation			-				-				-				-				1,489				-				-				1,489
Unrealized loss on investments			-				-				-				-				-				(19	)			-				(19	)
Fair value of vested restricted stock units			131,267				-				-				-				989				-				-				989
Issuance of common shares for cash and warrants, net of costs			76,487				-				-				-				688				-				-				688
Cost of stock option modifications and repricing			-				-				-				-				314				-				-				314
Net loss during the three months ended March 31, 2024			-				-				-				-				-				-				(7,850	)			(7,850	)
Balance, March 31, 2024			26,996,740			$	27				(433,333	)		$	(433	)		$	244,869			$	(5	)		$	(229,374	)		$	15,084
Stock compensation			-				-				-				-				1,298				-				-				1,298
Unrealized loss on investments			-				-				-				-				-				(6	)			-				(6	)
Fair value of vested restricted stock units			-				-				-				-				136				-				-				136
Cost of stock option modifications and repricing			-				-				-				-				6				-				-				6
Issuance of common shares for cash and warrants, net of costs			7,500,000				8				-				-				27,670				-				-				27,678
Common stock issued under equity award plans			15,902				-				-				-				49				-				-				49
Net loss during the three months ended June 30, 2024			-				-				-				-				-				-				(6,576	)			(6,576	)
Balance, June 30, 2024			34,512,642			$	35				(433,333	)		$	(433	)		$	274,028			$	(11	)		$	(235,950	)		$	37,669
Balance			34,512,642			$	35				(433,333	)		$	(433	)		$	274,028			$	(11	)		$	(235,950	)		$	37,669
Stock compensation			-				-				-				-				1,521				-				-				1,521
Unrealized gain on investments			-				-				-				-				-				135				-				135
Unrealized gain (loss) on investments			-				-				-				-				-				135				-				135
Fair value of vested restricted stock units			25,543				-				-				-				227				-				-				227
Cost of stock option modifications and repricing			-				-				-				-				6				-				-				6
Net loss during the three months ended September 30, 2024			-				-				-				-				-				-				(6,467	)			(6,467	)
Net loss			-				-				-				-				-				-				(6,467	)			(6,467	)
Balance, September 30, 2024			34,538,185			$	35				(433,333	)		$	(433	)		$	275,782			$	124			$	(242,417	)		$	33,091
Balance			34,538,185			$	35				(433,333	)		$	(433	)		$	275,782			$	124			$	(242,417	)		$	33,091

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

Genelux Corporation
Condensed Statements of Cash Flows

(in thousands)

(unaudited)

 

		2025				2024
		Nine Months Ended
		September 30,
		2025				2024
Cash Flows from operating activities
Net loss		$	(22,898	)		$	(20,893	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense			184				178
Net amortization of premiums and discounts on short-term investments			(188	)			(556	)
Right-of-use asset			242				498
Stock compensation			4,336				4,308
Fair value of restricted stock units			578				1,352
Cost of stock option modifications and repricing			738				326
Changes in operating assets and liabilities:
Prepaid expenses and other assets			(13	)			(568	)
Accounts payable and accrued expenses			(1,587	)			340
Accrued payroll and payroll taxes			(217	)			(1,431	)
Lease liability			(244	)			(480	)
Net cash used in operating activities			(19,069	)			(16,926	)
Cash Flows from investing activities
Purchases of property and equipment			(662	)			(285	)
Purchase of investments			(18,261	)			(28,520	)
Proceeds from maturities of investments			24,500				14,000
Net cash provided by (used in) investing activities			5,577				(14,805	)
Cash Flows from financing activities
Proceeds from common stock issued for Company equity award			52				49
Proceeds from the exercise of stock options			14				688
Proceeds from common stock issued			9,553				27,678
Net cash provided by financing activities			9,619				28,415
Net decrease in cash, cash equivalents and restricted cash			(3,873	)			(3,316	)
Cash, cash equivalents and restricted cash
Beginning of period			8,565				9,418
End of period		$	4,692			$	6,102
Supplemental non-cash financing disclosures:
Unrealized (loss) gain on investments		$	(56	)		$	110
Accrual of other receivable			-				330

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

Genelux Corporation
Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share amounts and per share data)

 

NOTE 1 – BASIS OF PRESENTATION

 

Organization and Operations

 

Genelux Corporation (“Genelux” or the “Company”), a Delaware corporation, incorporated on September 4, 2001, is a late clinical-stage biopharmaceutical company located in Westlake Village, California. The Company is focused on developing a pipeline of next-generation oncolytic viral immunotherapies for patients suffering from aggressive and/or difficult-to-treat solid tumor types.

 

Liquidity and Capital Resources

 

The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has experienced recurring losses from operations since inception and incurred a net loss of $22.9 million and used cash in operations of $19.1 million during the nine months ended September 30, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2024 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its strategies. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

As of September 30, 2025, the Company had $4.7 million in cash, cash equivalents and restricted cash ($1.0 million in restricted cash) and $16.2 million in short-term investments. The Company plans to fund its development activities as cash resources allow. The Company does not expect to become profitable until it can generate significant revenue from product sales, if ever. Unless and until such time, the Company expects to finance its operations through a combination of public or private equity offerings and debt financing, which may include sales of shares of Company common stock under the Sales Agreement entered into with Guggenheim Securities, LLC in February 2024, or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. Based on its research and development plans, the Company expects that its existing cash, cash equivalents, restricted cash and investments will fund its planned operations into the third quarter of 2026. The Company has based this estimate on assumptions that may prove to be wrong, and the Company could exhaust its available capital resources sooner than it expects. In addition, due to the inherent uncertainties in the design and outcomes of its ongoing and future clinical trials, the Company is unable to reasonably estimate the actual costs required to successfully complete the development and commercialization of Olvi-Vec or any other product candidates. The Company’s current cash resources may be insufficient to fund the completion of development for Olvi-Vec or any additional product candidates.

 

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in case of equity financing, or require the Company to grant terms that are not favorable to the Company in future licensing agreements.

 

Basis of Presentation

 

The interim condensed financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial information. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed financial statements should be read in conjunction with the financial statements and notes thereto contained in the Annual Report.

 

 

In the opinion of management, all material adjustments of a normal recurring nature have been made to present fairly to the Company’s financial position as of September 30, 2025. Operating results and cash flows for the nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

There have been no changes to the significant accounting policies disclosed in the Annual Report.

 

Cash Equivalents, and Restricted Cash

 

The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition as cash equivalents. As of September 30, 2025 and December 31, 2024, cash equivalents were comprised of money market funds that totaled $1.8 million and $7.6 million, respectively.

 

At September 30. 2025, there was $1.0 million restricted cash that is held as a refundable security deposit for an equipment lease (see Note 7). At December 31, 2024, there was no restricted cash.

 

Investments

 

The Company’s short-term investments are classified as available-for-sale and are carried at fair value, with the unrealized gains and non-credit related losses reported as a component of accumulated other comprehensive loss and included in stockholders’ equity. Realized gains and losses and declines in value determined to be other than temporary are based on the specific identification method and are included as a component of other income (expense), net in the Statements of Operations and Comprehensive Loss. There were no realized gains or losses during the nine months ended September 30, 2025 and 2024. Bonds with maturity dates subsequent to September 30, 2026, are classified as long-term investments, while bonds with maturity dates on or before September 30, 2026, are classified as short-term investments.

 

Comprehensive Loss

 

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with shareholders. For the nine months ended September 30, 2025 and 2024, comprehensive loss included $56 and $110, of unrealized loss and gain on short-term investments, net of tax, respectively.

 

Recent Accounting Pronouncements

 

In November 2024, Financial Accounting Standards Board (“FASB”) issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation and amortization expense for each caption on the income statement where such expenses are included. The update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on its financial statement disclosures.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. This ASU requires public companies with a single reportable segment to provide all disclosures required under ASC 280. In addition, this ASU requires public companies to include in interim reports all disclosures related to a reportable segment’s profit or loss and assets that are currently required in annual reports. While ASU implements further segment disclosure requirements, it does not change how an entity identifies its operating or reportable segments and it will have no impact on the Company’s condensed financial condition, results of operations or cash flows. This ASU is applicable to the Company’s Annual Report on Form 10-K for the year ending December 31, 2025, and subsequent interim periods. Early adoption is permitted, and the Company has elected to adopt the standard in its Annual Report.

 

 

NOTE 3 – LICENSE AGREEMENTS

 

In September 2021, the Company entered into a License Agreement (as amended, the “Newsoara License”) with Newsoara BioPharma Co. Ltd. (“Newsoara”) pursuant to which it granted Newsoara an exclusive license to research, develop, commercialize or exploit (i) any and all oncolytic viruses that are controlled by the Company, including Olvi-Vec but excluding V-VET1 (licensed viruses); (ii) any pharmaceutical product in final form that is comprised of or contains the licensed viruses as an active ingredient (licensed products); (iii) any virus developed by or behalf of Newsoara that (a) has a vaccinia virus backbone; (b) is not disclosed or covered by any of the Company’s patents; and (c) includes modifications (as compared to the licensed viruses) of a gene function with therapeutic intent (derived molecules); and (iv) any pharmaceutical product in final form that is comprised of or contains derived molecule as an active ingredient (derived products), in each case in mainland China, Taiwan, Hong Kong and Macau (the “Newsoara Territory”) in the field of human diagnostic, prophylactic and therapeutic uses (the “Newsoara Field”). The license granted to Newsoara is royalty bearing for licensed products and royalty free for derived products. Under the Newsoara License, Newsoara also granted the Company an exclusive and royalty bearing license to develop, commercialize and exploit outside the Newsoara Territory any derived products developed by Newsoara.

 

Under the terms of the Newsoara License and to date, we have received from Newsoara an aggregate of $11.0 million ($5.0 million as an upfront payment and $6.0 million as a milestone payment) associated with the Newsoara License. Newsoara is obligated to pay us additional development and commercial milestone payments up to $160.5 million in the aggregate upon the occurrence of certain development, regulatory and commercial milestones by the licensed products, and royalties on net sales of the licensed products in the mid-single-digit to mid-teens percentage range (the “Newsoara Royalty”). The Newsoara Royalty term, with respect to a licensed product and each region in the Newsoara Territory, is the period beginning on the date of first commercial sale of such licensed product in such region and ending on the last to occur of: (a) the expiration of the last to expire patent controlled by the Company (including any applicable patent term extension) in such region that contains either (i) an issued valid claim that covers the licensed product (including the licensed virus contained therein, and including the composition of matter and method of making and using thereof) or (ii) a pending valid claim that covers the sequence of the licensed virus contained therein; (b) the 10th anniversary of the first commercial sale of such licensed product in such region; and (c) the expiration of all regulatory exclusivity for such licensed product in such region. If the Company, at its discretion, elects to develop and commercialize outside the territory any derived product developed by Newsoara, the Company is required to make certain milestone and royalty payments to Newsoara.

 

Pursuant to the Newsoara License, Newsoara is required to use commercially reasonable efforts to research, develop, manufacture and commercialize the licensed products in the Newsoara Territory in the Newsoara Field and is solely responsible for all costs and expenses incurred in connection with such activities. In addition, Newsoara is required to use commercially reasonable efforts to conduct a multi-center Phase 2 clinical trial for Olvi-Vec in NSCLC using clinical sites in the United States and China, which is the VIRO-25 clinical trial. Newsoara is generally obligated under the Newsoara License to fund the costs of the VIRO-25 clinical trial in the United States and China. In November 2023, the Company and Newsoara agreed that the Company would engage a clinical research organization (“CRO”) to conduct certain start-up activities for the trial in the United States only, with Newsoara to reimburse the Company for the costs and expenses. Pursuant to a letter of understanding (the “LOU”), in September 2025, the Company agreed with Newsoara that the CRO would conduct additional study activities beyond startup for the VIRO-25 clinical trial in the United States and Newsoara would reimburse the Company for costs and expenses related to such additional activities; however, Newsoara is permitted to defer reimbursement of the foregoing costs and expenses until the earlier of: (i) completion of its next round of financing, or (ii) December 31, 2026.

 

In November 2022, the Company entered into a Clinical Supply Agreement with Newsoara to manufacture and supply Olvi-Vec for Newsoara’s clinical trials in the Newsoara Territory. The Company is responsible for supplying Olvi-Vec at its own costs of manufacturing.

 

NOTE 4 - FAIR VALUE MEASUREMENTS

 

The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The Company’s valuation techniques and inputs used to measure fair value and the definitions of the three levels (Level 1, Level 2, and Level 3) of the fair value hierarchy are disclosed in Note 2 - Summary of Significant Accounting Policies of Part IV, “Item 15. Exhibits and Financial Statements Schedules” of its Annual Report.

 

 

The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruptions, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2, or from Level 2 to Level 3. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer. As of September 30, 2025, and December 31, 2024, the Company did not have any financial assets based on Level 3 measurements.

 

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company.

 SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS 

		Level 1				Level 2				Level 3				Total
		September 30, 2025
		Level 1				Level 2				Level 3				Total
Cash equivalents:
Money market funds		$	1,783			$	-			$	-			$	1,783
Short-term investments:
US Government Agency bonds			-				2,766				-				2,766
US Treasury bonds			-				13,457				-				13,457
Total Cash equivalents and Short-term investments		$	1,783			$	16,223			$	-			$	18,006

 

		Level 1				Level 2				Level 3				Total
		December 31, 2024
		Level 1				Level 2				Level 3				Total
Cash equivalents:
Money market funds		$	7,578			$	-			$	-			$	7,578
Short-term investments:
US Government Agency bonds			-				8,927				-				8,927
US Treasury bonds			-				13,403				-				13,403
Short-term investments			-				13,403				-				13,403
Total Cash equivalents and Short-term investments		$	7,578			$	22,330			$	-			$	29,908

 

The underlying securities in the money market funds held by the Company are all government backed securities.

 

Cash equivalents consisted of money market funds at September 30, 2025 and December 31, 2024. Money market funds were valued by the Company using quoted prices in active markets for identical securities, which represent a Level 1 measurement within the fair value hierarchy. U.S. Government Agency bonds and U.S. Treasury bonds are government backed securities representing a Level 2 measurement.

 

 

NOTE 5 – INVESTMENTS

 

The Company’s investments by type, consisted of the following:

 SCHEDULE OF AVAILABLE FOR SALE INVESTMENTS 

		As of September 30, 2025
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
US Government Agency bonds		$	13,452			$	5			$	-			$	13,457
US Treasury bonds			2,764				2				-				2,766
		$	16,216			$	7			$	-			$	16,223

 

		As of December 31, 2024
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
US Government Agency bonds		$	8,910			$	17			$	-			$	8,927
US Treasury bonds			13,358				45				-				13,403
		$	22,268			$	62			$	-			$	22,330

 

As of September 30, 2025 and December 31, 2024, all available-for-sale securities consisted of investments that mature within one year.

 

No credit-related losses or impairments have been recognized on the Company’s investments in available-for-sale securities during the nine months ended September 30, 2025 and 2024.

 

NOTE 6 – BALANCE SHEET ACCOUNTS

 

Property and Equipment

 

The following table summarizes the Company’s major classes of property and equipment:

 SCHEDULE OF PROPERTY AND EQUIPMENT 

		September 30, 2025				December 31, 2024
Furniture and office equipment		$	148			$	148
Laboratory equipment			2,908				2,869
Computer equipment			127				127
Leasehold improvements			557				1,856
Construction in progress			1,922				-
Property and equipment, gross			5,662				5,000
Less: accumulated depreciation and amortization			(3,868	)			(3,684	)
Property and equipment, net		$	1,794			$	1,316

 

Depreciation expense for each of the three months ended September 30, 2025 and 2024 was $61 and $56, respectively. Depreciation expense for each of the nine months ended September 30, 2025 and 2024 was $184 and $178, respectively.

 

Construction in progress is related to developments of the Company’s manufacturing and laboratory facilities in San Diego, California.

 

Accrued Expense

 

As of September 30, 2025, and December 31, 2024, a total of $0.8 million and $1.0 million, respectively, was owed to the Company’s employees for current accrued payroll and payroll taxes, and other compensation related benefits.

 

 

NOTE 7 – LEASES

 

Westlake Village, California: The Company leases 4,050 square feet of office space located at 2625 Townsgate Road for its corporate headquarters. The lease expires on July 14, 2027. The lease contains an option to renew for two additional five-year terms and first right of refusal for certain additional space at the same premises. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of September 30, 2025.

 

San Diego, California: The Company leases 6,755 square feet of office and research and development laboratory space located at 6365 Marindustry Drive. The lease expires on October 31, 2030. The lease contains an option to renew for one five-year term. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of September 30, 2025.

 

The Company also leases 7,569 square feet of manufacturing space located at 6335 Marindustry Drive, in which the lease expires on October 31, 2030. The lease contained an option to renew for one additional five-year term.

 

Equipment lease - San Diego facility

 

On September 4, 2025, the Company entered into written agreements (“Equipment Agreements”), whereby the Company agreed to acquire certain equipment through a financing arrangement structured as a capital lease. Lease commencement will occur when the equipment is made available to the Company, which is the final onsite installation date and is expected to be approximately 12 months after the execution of the Equipment Agreements, or approximately September 2026. Upon commencement, the lease term will be 60 months (“Initial Term”), with future lease payments up to an approximately $6.2 million. The Company has the right to terminate the lease without cause at the end of the Initial Term or any term thereafter upon 90 days prior written notice without incurring penalties or interest.

 

As of September 30, 2025, no right-of-use asset or liability has been recognized in the financial statements, as the Company does not have possession of the equipment. The Equipment Agreements also include a refundable security deposit, equal to $1.0 million as of September 30, 2025, which is classified as restricted cash on the Company’s condensed balance sheet.

 

The components of lease assets and liabilities along with their classification on the Company’s condensed balance sheets were as follows:

 SCHEDULE OF COMPONENTS OF LEASE ASSETS AND LIABILITIES 

Lease Assets and Liabilities		Classification		September 30, 2025				December 31, 2024
Operating lease assets		Right-of-use assets		$	1,518			$	1,760
Current operating lease liabilities		Lease liabilities			354				329
Non-current operating lease liabilities		Lease liabilities, net of current portion			1,270				1,539

 

 SCHEDULE OF LEASE COST

		2025				2024				2025				2024
		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Lease Cost Classification
Research and development		$	29			$	30			$	80			$	96
General and administrative expense			12				13				37				40
Lease cost			12				13				37				40

 

The following table presents maturities of operating lease liabilities on an undiscounted basis as of September 30, 2025:

 SCHEDULE OF MATURITIES LEASE LIABILITIES 

Year		Amounts
2025 (remainder)		$	112
2026			454
2027			403
2028			330
2029			312
2030			135
Total		$	1,746
Less imputed interest		$	122
Total Operating lease liabilities (include current portion)		$	1,624

 

 

Other Leases

 

In November 2019, the Company entered into a short-term lease agreement for one of its office facilities, which was subsequently extended until December 2022 and is currently on a month-to-month basis. Rent expense was de minimis during the nine months ended September 30, 2025 and 2024, respectively.

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

Legal Proceedings

 

From time to time, the Company may be subject to various claims and legal proceedings in the ordinary course of business. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount is reasonably estimable, the Company will accrue liability for the estimated loss. There were no contingent liabilities recorded as of September 30, 2025.

 

NOTE 9 – STOCKHOLDERS’ EQUITY

 

The following table summarizes the Company’s shares of preferred stock and common stock:

 SCHEDULE OF PREFERRED STOCK AND COMMON STOCK 

						Shares
		Par Value				Authorized				Issued				Outstanding
As of September 30, 2025
Preferred Stock			0.001				10,000,000				-				-
Common Stock			0.001				200,000,000				38,046,778				38,046,778
As of December 31, 2024
Preferred Stock			0.001				10,000,000				-				-
Common Stock			0.001				200,000,000				34,728,140				34,728,140

 

The Company’s Amended and Restated Certificate of Incorporation authorizes the Company to issue up to 200,000,000 shares of its common stock. Holders of shares of common stock have full voting rights, one vote for each share held of record. Shareholders are entitled to receive dividends as may be declared by the Company’s board of directors (the “Board”) out of funds legally available therefore and share pro rata in any distributions to shareholders upon liquidation. Shares of common stock do not include conversion, pre-emptive or subscription rights. All outstanding shares of common stock are fully paid and non-assessable. As of September 30, 2025, and December 31, 2024, there were 38,046,778 and 34,728,140 shares of common stock issued and outstanding, respectively.

 

In March 2025, the Company completed an underwritten offering of 3,000,000 shares of its common stock at an offering price of $3.50 per share. The Company received net proceeds of $9.6 million from the offering, after deducting discounts and commissions and offering expenses payable by the Company.

 

The Company also agreed to issue the underwriter a warrant to purchase 120,000 shares of the Company’s common stock at an exercise price of $4.20 per share and which may be exercised until March 25, 2030, subject to certain terms and conditions.

 

NOTE 10 – STOCK BASED COMPENSATION

 

In August 2009, the Board approved the adoption of the 2009 Equity Incentive Plan (the “2009 Plan”). No shares are available for grant under the 2009 Plan.

 

In September 2018, the Board approved the adoption of the 2019 Equity Incentive Plan (the “2019 Plan”). No shares are available for grant under the 2019 Plan.

 

 

In June 2022, the Board approved the adoption of the 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan provides for the grant of incentive stock options (“ISOs”) to employees, including employees of any parent or subsidiary, and for the grant of non-qualified stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance awards and other forms of stock awards to employees, directors, and consultants, including employees and consultants of its affiliates. The 2022 Plan is a successor to the 2019 Plan. The aggregate number of shares of the Company’s common stock initially reserved for issuance under the 2022 Plan is 2,800,000 shares. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2022 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2024 and continuing through and including January 1, 2032, in an amount equal to 5% of the total number of shares of its common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Board. In January 2025, the number of shares available to be issued under the 2022 Plan automatically increased by 1,729,664 shares, as determined by the 2022 Plan. As of September 30, 2025, the total number of shares reserved for issuance was 2,276,375.

 

In September 2023, the Board approved the adoption of the Company’s 2023 Inducement Plan (the “Inducement Plan”) to reserve 1,000,000 shares of the Company’s common stock to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company as an inducement material to the individual’s entry into employment with the Company. The Inducement Plan provides for the grant of NSOs, stock appreciation rights, restricted stock awards, RSUs, performance-based cash and stock awards, and other stock-based awards. The terms and conditions of the Inducement Plan are substantially similar to the Company’s stockholder-approved 2022 Plan.

 

In June 2025, the Board approved an amendment of the Inducement Plan to increase the maximum aggregate number of shares of Common Stock issuable by 1,000,000. As of September 30, 2025, the total number of shares reserved for issuance was 1,133,700.

 

The following table presents a summary of awards outstanding:

 SCHEDULE OF AWARDS OUTSTANDING

		2009 Plan				2019 Plan				2022 Plan				Inducement Plan				Total
		September 30, 2025
		2009 Plan				2019 Plan				2022 Plan				Inducement Plan				Total
Stock options			1,555,037				1,637,562				2,663,481				954,300				6,810,380
RSUs			-				-				1,246,462				-				1,246,462
Total awards outstanding			1,555,037				1,637,562				3,909,943				954,300				8,056,842

 

The following table summarizes stock-based compensation expenses included in operating expenses:

 SCHEDULE OF STOCK-BASED COMPENSATION EXPENSES

		2025				2024				2025				2024
		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
General and administrative		$	1,650			$	1,119			$	3,560			$	3,676
Research and development			985				636				2,092				2,310
Total stock-based compensation expenses		$	2,635			$	1,755			$	5,652			$	5,986

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Stock Options		$	2,346			$	1,528			$	5,074			$	4,635
RSUs			289				227				578				1,351
Total stock-based compensation expenses		$	2,635			$	1,755			$	5,652			$	5,986

 

Restricted Stock Units (“RSUs”)

 

In August 2025, under its 2022 Plan, the Board approved the granting to certain employees a total of 821,213 RSUs (the “Employee RSUs”). The Employee RSUs vest over four years and had an aggregate fair value of $2.9 million on the date of grant.

 

 

In addition, in August 2025, under its 2022 Plan, and pursuant to the Company’s Non-Employee Director Compensation Policy, the Board received automatic annual grants totaling 89,132 RSUs (the “Board RSUs”). The Board RSUs vest on the earlier of the first anniversary from the date of grant or the date of the next annual stockholders meeting. The Board RSUs expire ten years from the date of grant and had an aggregate fair value of $0.3 million on the date of grant.

 

The following table summarizes the activity of the Company’s RSUs:

 SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY

		Number of Restricted Shares				Weighted Average Grant Date Fair Value
Outstanding, December 31, 2024			621,364			$	3.06
Granted			960,472				3.55
Vested			(287,762	)			4.99
Forfeited			(46,362	)			2.29
Outstanding, September 30, 2025			1,247,712			$	4.12

 

As of September 30, 2025, $1.0 million of unamortized stock compensation expense remains.

 

Stock Options Awards

 

Option exercise prices are set forth in the grant notice, without commission or other charge, provided however, that the price per share of the shares subject to the option shall not be less than the greater of (i) 100% of the fair market value of a share of stock on the grant date, or (ii) with respect to awards under the 2019 Plan or 2022 Plan, 110% of the fair market value of a share of stock on the grant date in the case of a Participant then owning more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company. Options to employees, directors and consultants generally vest and become exercisable over a period not exceeding four years. Options typically expire ten years after the date of grant.

 

The Company’s policy is to recognize compensation cost for awards with only service conditions on a straight- line basis over the requisite service period for the entire award. Additionally, the Company’s policy is to issue new shares of common stock to satisfy stock option exercises. The Company applied fair value accounting for all share-based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model.

 

In January 2025, under its Inducement Plan, the Board approved the granting of an option to its Chief Financial Officer to purchase 275,000 shares of common stock with an exercise price of $3.95 per share. The option vests over four years, expires ten years from the date of grant and had a fair value of $0.9 million on the date of grant.

 

In July 2025, under its Inducement Plan, the Board approved the granting of an option to its General Counsel to purchase 270,000 shares of common stock with an exercise price of $2.83 per share. The option vests over four years, expires ten years from the date of grant and had a fair value of $0.6 million on the date of grant.

 

In August 2025, under its 2022 Plan, the Board approved the granting of long-term incentive compensation totaling 1,069,825 options to certain employees of common stock with the exercise price of $3.64 per share. The options vest over four years and expire ten years from the date of grant. All grants had an aggregate fair value of $3.3 million on the date of grant.

 

In August 2025, under its 2022 Plan, and pursuant to the Company’s Non-Employee Director Compensation Policy, the Board received automatic annual grants totaling 114,304 options of common stock with the exercise price of $3.64 per share. The options vest on the earlier of the first anniversary or the date of the next annual stockholders meeting and expire ten years from the date of grant. These grants had an aggregate fair value of $0.3 million on the date of grant.

 

 

In September 2025, the Board approved a reduction in the exercise prices of certain stock options held by employees to purchase shares of the Company’s common stock under the Company’s 2022 Plan, 2019 Plan and 2009 Plan that had exercise prices greater than $5.00 per share. The exercise price for such options was reduced to $3.33 per share, which is the closing price of the common stock on September 1, 2025, the effective date of the reduction. The total cost of the repricing was $1.3 million, of which $0.7 million was recorded as of September 30, 2025. The remainder of the cost will be recorded over the future vesting periods of the options.

 

During the nine months ended September 30, 2024, under its 2022 Plan, the Board approved the granting of options to certain employees to purchase 233,376 shares of common stock with exercise prices of $1.96 and $7.44 per share. The options vest over four years, expire ten years from the date of grant and had an aggregate fair value of $0.4 million on the date of grant.

 

In September 2022, the Board approved a stock option repricing whereby the exercise price of previously granted and unexercised options held by certain employees, directors and key advisers with exercise prices between $9.00 and $10.50 per share, was adjusted to $6.00 per share, the closing price of the Company’s initial public offering. The total cost of the repricing was $2.73 million, of which $2.72 million was recorded as of December 31, 2024, and the remaining was recorded during the nine months ended September 30, 2025.

 

The assumptions used for the options granted during the period are as follows:

 SCHEDULE OF ASSUMPTIONS USED FOR OPTIONS GRANTED 

		Nine Months Ended September 30,
		2025				2024
Exercise prices		$2.83 - $3.64				$1.96 - $7.44
Expected dividend yield			-				-
Expected volatility			100	%			100	%
Risk-free interest rate			3.7	%			4.2	%
Expected term of options			5.5 - 7.00				5.5 - 6.0

 

The table below summarizes the Company’s stock option activities for the nine months ended September 30, 2025:

 SCHEDULE OF STOCK OPTION ACTIVITY 

		Number of Shares Subject to Outstanding Options				Weighted Average Exercise Price (Per share)				Weighted Average Remaining Contractual Terms (in Years)				Aggregate Intrinsic Value
Outstanding at December 31, 2024			5,375,321			$	8.82				5.66				94
Granted			1,794,129				3.03
Cancelled			(154,894	)			9.96
Exercised			(5,000	)			2.75
Expired			(199,176	)			6.08
Outstanding at September 30, 2025			6,810,380			$	6.23				6.74				3,261
Vested and exercisable, September 30, 2025			4,212,337			$	7.92				4.24				-
Unvested, September 30, 2025			2,598,043

 

As of September 30, 2025, unvested stock option expense of $13.0 million remained and will be amortized over the remaining vesting period, through January 2029.

 

 

Stock Warrants

 

The table below summarizes the Company’s warrants activities for the nine months ended September 30, 2025:

 SCHEDULE OF WARRANTS ACTIVITIES

		Number of Warrant Shares				Exercise Price Range Per Share				Weighted Average Exercise Price
Outstanding, December 31, 2024			7,897,975			$	3.00 - $9.00			$	5.32
Granted			120,000				4.20				4.20
Cancelled			-				-				-
Exercised			-				-				-
Expired			-				-				-
Outstanding, September 30, 2025			8,017,975			$	3.00 – 9.00			$	5.30
Vested and exercisable, September 30, 2025			8,017,975			$	3.00 – 9.00			$	5.30

 

In March 2025, the Company agreed to issue the underwriter for its secondary public offering a warrant to purchase 120,000 shares of the Company’s common stock at an exercise price of $4.20 per share and which may be exercised until March 25, 2030, subject to certain terms and conditions.

 

There is $0.2 million intrinsic value for warrant shares outstanding at September 30, 2025.

 

Employee Stock Purchase Plan

 

The Company’s 2022 Employee Stock Purchase Plan (“ESPP”) permits eligible employees to purchase Company shares on an after-tax basis in an amount between 1% and 15% of their earnings: (i) on May 16th of each year at a 15% discount of the fair market value of the Company’s common stock on November 17th of the previous year or May 16th of the then-current year, whichever is lower, and (ii) on November 15th of each year at a 15% discount of the fair market value of the Company’s common stock on May 17th or November 15th of the then-current year, whichever is lower. The ESPP includes an “evergreen” feature, which provides that an additional number of shares of common stock will automatically be added to the shares authorized for issuance under the ESPP on January 1st of each year, beginning on January 1, 2024 and ending on (and including) January 1, 2032. The number of shares added each calendar year will equal the lesser of 1% of the Company’s common stock outstanding on December 31st of the preceding calendar year or 2,100,000 or a lesser number as determined by the Board. During the nine months ended September 30, 2025, 25,876 shares of common stock were purchased for an aggregate purchase price of $52 under the ESPP, and as of September 30, 2025, 1,234,128 shares remain authorized and available for issuance.

 

NOTE 11– NET LOSS PER SHARE

 

Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of outstanding common shares during the period. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued.

 

The basic and diluted shares outstanding were the same, as potentially dilutive shares were considered anti-dilutive. The potentially dilutive securities consisted of the following:

 SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

		2025				2024
		September 30,
		2025				2024
Stock options			6,810,380				4,862,492
Stock warrants			8,017,975				7,897,975
Restricted stock units			1,247,712				212,774
Total			16,076,067				12,973,241

 

 

NOTE 12 – SEGMENT INFORMATION

 

The Company operates as a single One reportable segment as a clinical stage biopharmaceutical company. The Company’s current focus is on developing oncolytic immunotherapies for the treatment of cancer. Segment profit or loss is measured as the net loss reported in the Company’s condensed statements of operations and comprehensive loss.

 

The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”). The CODM evaluates performance, allocates resources and conducts planning and forecasting using financial information as presented in the condensed statements of operations. In addition, the CODM reviews research and development expenses by program.

 

The table below details the Company’s revenues and expenses and reconciles those amounts to the Company’s net loss as computed under GAAP in the statements of operations and comprehensive loss:

 SCHEDULE OF SEGMENT INFORMATION

		2025				2024
		Three Months Ended September 30,
		2025				2024
Revenue		$	-			$	-
Less:
Research and development, excluding salaries			2,852				2,515
Salaries			904				901
Insurance			214				260
Stock-based compensation			2,635				1,754
Operating expenses			1,102				563
Other income			243				474
Net Loss		$	(7,950	)		$	(6,467	)

 

		2025				2024
		Nine Months Ended September 30,
		2025				2024
Revenue		$	-			$	8
Less:
Research and development, excluding salaries			9,337				7,452
Salaries			2,767				2,715
Insurance			646				735
Stock-based compensation			5,652				5,986
Operating expenses			3,592				2,958
Other income			904				1,055
Net Loss		$	(22,898	)		$	(20,893	)

 

 

 

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

 

The following discussion and analysis should be read in conjunction with the financial statements of Genelux Corporation (“Genelux,” “Company,” “we,” “us”, or “our”) and accompanying notes included in this Quarterly Report on Form 10-Q (“Quarterly Report”) and the financial statements and accompanying notes thereto for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K as amended, for the fiscal year ended December 31, 2024. See also “Special Note Regarding Forward-Looking Statements” included in this Quarterly Report.

 

Company Overview

 

Genelux is a late clinical-stage biopharmaceutical company focused on developing a pipeline of next-generation oncolytic viral immunotherapies for patients suffering from aggressive and/or difficult-to-treat solid tumor types. Our clinical and preclinical product candidates are intended to selectively kill tumor cells and induce a robust immune response against a patient’s tumor neoantigens. Importantly, our oncolytic immunotherapy product candidates are “off-the-shelf” personalized immunotherapies. In other words, while we administer the same virus product to different patients, the cellular immune response generated is expected to be specific to the unique neoantigens in that patient. Our product candidate, Olvi-Vec (olvimulogene nanivacirepvec), is a proprietary, modified strain of the vaccinia virus (“VACV”), a stable DNA virus with a large engineering capacity.

 

Employing our proprietary selection technology and discovery and development platform (“CHOICE”), we have developed an extensive library of isolated and engineered oncolytic VACV immunotherapeutic product candidates. These provide potential utility in multiple tumor types in both the monotherapy and combination therapy settings, via physician-preferred administration techniques, including regional (e.g., intraperitoneal), local and systemic (e.g., intravenous) delivery routes. Informed by our CHOICE platform and supported by extensive clinical and preclinical data, we believe we have the capacity to develop a pipeline of treatment options to address high unmet medical needs for those patients with insignificant or unsatisfactory responses to standard-of-care therapies, including chemotherapies.

 

Our operations have focused on organizing and staffing our company, business planning, raising capital, acquiring and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates and undertaking preclinical and clinical studies and manufacturing. We do not have any products approved for sale and have not generated any revenue from product sales.

 

Since inception, we have incurred significant operating losses. Our net losses were $22.9 million and $20.9 million for the nine months ended September 30, 2025, and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $274.3 million. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

 

We will not generate revenue from commercially approved product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

 

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings and debt financings, which may include sales of shares of Company common stock under the Sales Agreement entered into with Guggenheim Securities, LLC in February 2024 (“ATM Sales”), or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all. Our failure to raise capital or enter into such agreements as, and when, needed could have a material adverse effect on our business, results of operations and financial condition.

 

 

During the year ended December 31, 2023, we closed our initial public offering (“IPO”) and two PIPE transactions and received $37.8 million of net proceeds from these transactions. During the year ended December 31, 2024, we closed a second public offering and received $27.7 million of net proceeds from that offering. In March 2025, we closed a third public offering and received $9.6 million of net proceeds from that offering. Due to the funds received through these offerings, and the conversion of preferred stock and convertible notes payable upon the closing of the IPO, we had stockholders’ equity of $18.6 million at September 30, 2025. We expect our cash, cash equivalents, restricted cash and investments, totaling $21.0 million at September 30, 2025, to last into the third quarter of 2026.

 

Recent Developments

 

US-Based Phase 2 Trial in NSCLC

 

In October 2024, we announced that the first patient had been dosed in a Phase 2, open-label, randomized, and controlled clinical trial designed to evaluate the efficacy and safety of intravenously delivered Olvi-Vec oncolytic VACV for patients with recurrent non-small cell lung cancer (“NSCLC”) in the United States. In accordance with our license agreement (as amended, the “Newsoara License”) with our partner in China, Newsoara BioPharma Co. Ltd. (“Newsoara”), Newsoara is generally obligated to fund the Phase 2 NSCLC trial in its entirety in the United States and China (“VIRO-25 Trial”). In November 2023, we agreed with Newsoara that Genelux would directly engage a contract research organization (“CRO”) on mutually agreeable terms to conduct certain startup activities for the VIRO-25 Trial in the U.S. only, with Newsoara reimbursing us for the costs and expenses of such agreed-upon startup activities. Pursuant to a letter of understanding (the “LOU”), in September 2025, we agreed with Newsoara that the CRO would conduct additional study activities beyond startup for the VIRO-25 Trial in the United States and Newsoara would reimburse us for costs and expenses related to such additional activities; however, Newsoara is permitted to defer reimbursement of the foregoing costs and expenses until the earlier of: (i) completion of its next round of financing or (ii) December 31, 2026.

 

Officer Transition

 

On July 7, 2025, the Company announced the appointment of Eric Groen as General Counsel, Corporate Secretary, Chief Compliance Officer and Head of Business Development, effective as of July 1, 2025.

 

Results of Operations

 

Net Sales

 

No revenue was recognized during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, we recognized $0.8 million relating to the Company’s license agreement with Elias Animal Health, LLC.

 

 

Operating Expenses

 

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

 

Research and Development Expenses

 

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts and preclinical and clinical studies under our research programs, which include:

 

	●	employee-related expenses, including salaries, benefits and stock-based compensation expense for our research and development personnel;
	●	costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on our behalf;
	●	costs of manufacturing drug product and drug supply related to our current or future product candidates;

 

	●	costs of conducting preclinical studies and clinical trials of our product candidates;
	●	consulting and professional fees related to research and development activities, including equity-based compensation to non-employees;
	●	costs of maintaining our laboratory, including purchasing laboratory supplies and non-capital equipment used in our preclinical studies;
	●	costs related to compliance with clinical regulatory requirements; and
	●	facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies.

 

Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed. Significant judgment and estimates are made in determining the accrued expense balances at the end of any reporting period.

 

The successful development of our product candidates is highly uncertain. We cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if they are approved. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:

 

	●	the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;
	●	establishing an appropriate safety profile;
	●	successful enrollment in and completion of clinical trials;
	●	whether our product candidates show safety and efficacy in our clinical trials;
	●	receipt of marketing approvals from applicable regulatory authorities;
	●	establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
	●	obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;
	●	commercializing product candidates, if and when approved, whether alone or in collaboration with others;
	●	continued acceptable safety profile of the products following any regulatory approval;

 

A change in the outcome of any of these variables with respect to the development of our current and future product candidates would significantly change the costs and timing associated with the development of those product candidates.

 

 

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase significantly in the foreseeable future as we continue the development of our current and future product candidates, commence additional clinical trials, manufacture greater volume of clinical supply and invest further in our manufacturing facilities. However, we do not believe that it is possible at this time to accurately project expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

 

General and Administrative Expenses

 

General and administrative expenses include salaries and other compensation-related costs, including stock-based compensation, for personnel in executive, finance, business development, operations and administrative roles. Other significant costs include professional service and consulting fees, including legal fees relating to intellectual property and corporate matters, accounting fees, recruiting costs and costs for consultants who we utilize to supplement our personnel, insurance costs, travel costs, facility and office-related costs not included in research and development expenses.

 

We anticipate that our general and administrative expenses will increase in the future as our business expands to support expected growth in research and development activities, including our future clinical programs. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside service providers, among other expenses. We also anticipate increased expenses associated with being a public company, including costs for audit, legal, regulatory and tax-related services related to compliance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and listing standards applicable to companies listed on a national securities exchange, director and officer insurance premiums, and investor relations costs. In addition, if we obtain regulatory approval for any of our product candidates and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

 

Results of Operations

 

Comparison of the Three Months Ended September 30, 2025 and 2024

 

The following table summarizes our results of operations for the following periods indicated (in thousands):

 

		Three Months Ended
		September 30,
		2025				2024				Change
Revenues		$	-			$	-			$	-
Operating expenses:
Research and development			4,741				4,051				690
General and administrative			3,453				2,890				563
Total operating expenses			8,194				6,941				1,253
Loss from operations			(8,194	)			(6, 941)				(1,253	)
Other income:
Interest income			175				222				(47	)
Bond Accretion Income			69				252				(183	)
Total other income			244				474				(230	)
Net loss		$	(7,950	)		$	(6,467	)		$	(1,483	)

 

 

Research and Development (R&D) Expenses

 

R&D expenses are related to our research and development efforts and related candidate costs, which are comprised primarily of costs related to the manufacturing of clinical supplies, efficacy studies and clinical trial expenses. Internal costs primarily relate to development operations at our research facilities in California, including facility costs and laboratory-related expenses.

 

The following table summarizes our research and development expenses for the following periods indicated (in thousands):

 

		Three Months Ended September 30, 2025				Three Months Ended September 30, 2024				Change
Employee compensation and related expenses		$	903			$	901			$	2
Stock compensation, including the cost of stock options and restricted stock grants			986				635				351
Manufacturing and laboratory materials and other expenses			249				90				159
Manufacturing quality services			337				322				15
Clinical and regulatory expenses			1,955				1,656				299
Facility-related expenses, including depreciation			170				323				(153	)
Consulting expenses and contract labor			139				120				19
Other expenses			2				4				(2	)
Total research and development expenses		$	4,741			$	4,051			$	690

 

R&D expenses increased by $0.7 million for the three months ended September 30, 2025, over the same period in 2024. The increase was primarily driven by $0.4 million in stock compensation and $0.3 million in clinical and regulatory expenses relating to increased clinical trial costs associated with our Phase 3 On Prime Registration trial in 2025.

 

General and Administrative Expenses

 

The following table summarizes our general and administrative expenses for the following periods indicated (in thousands):

 

		Three Months Ended September 30, 2025				Three Months Ended September 30, 2024				Change
Employee compensation and related expenses		$	938			$	585			$	353
Stock compensation, including the cost of stock options and restricted stock grants			1,653				1,119				534
Professional services			349				540				(191	)
Facility-related expenses			65				109				(44	)
Insurance expenses			214				260				(46	)
Consulting and contract labor expenses			109				152				(43	)
Other expenses			125				125				-
Total general and administrative expenses		$	3,453			$	2,890			$	563

 

General and administrative expenses increased by $0.6 million for the three months ended September 30, 2025 over the same period in 2024 primarily as a result of an increase of $0.5 million in stock compensation and $0.4 million in salary and benefits partially offset by a decrease of $0.2 million in professional services.

 

 

Other Income

 

Other income was $0.2 million and $0.5 million for the three months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025, other income consisted of interest income of $0.2 million and bond accretion income of $0.07 million from the investment into money market funds, while during the same period in 2024, other income consisted of interest income of $0.2 million and bond accretion income of $0.3 million.

 

Comparison of the Nine Months Ended September 30, 2025 and 2024

 

The following table summarizes our results of operations for the following periods indicated (in thousands):

 

		Nine Months Ended
		September 30,
		2025				2024				Change
Revenues		$	-			$	8			$	(8	)
Operating expenses:
Research and development			14,197				12,478				1,719
General and administrative			9,605				9,478				127
Total operating expenses			23,802				21,956				1,846
Loss from operations			(23,802	)			(21,948	)			(1,854	)
Other income:
Interest income			583				499				84
Bond Accretion Income			321				556				(235	)
Total other income			904				1,055				(151	)
Net loss		$	(22,898	)		$	(20,893	)		$	(2,005	)

 

Research and Development (R&D) Expenses

 

The following table summarizes our research and development expenses for the following periods indicated (in thousands):

 

		Nine Months Ended September 30, 2025				Nine Months Ended September 30, 2024				Change
Employee compensation and related expenses		$	2,767			$	2,715			$	52
Stock compensation, including the cost of stock options and restricted stock grants			2,093				2,311				(218	)
Manufacturing and laboratory materials and other expenses			1,089				447				642
Manufacturing quality services			1,074				1,341				(267	)
Clinical and regulatory expenses			6,299				4,341				1,958
Facility-related expenses, including depreciation			532				1,061				(529	)
Consulting expenses and contract labor			335				229				106
Other expenses			8				33				(25	)
Total research and development expenses		$	14,197			$	12,478			$	1,719

 

R&D expenses increased by $1.7 million for the nine months ended September 30, 2025, over the same period in 2024. The increase was primarily driven by an increase of $2.0 million in clinical trial costs and $0.6 million in manufacturing and laboratory material associated with our Phase 3 On Prime Registration trial in 2025, partially offset by a decrease of $0.5 million in facility expense and $0.3 million in manufacturing quality services.

 

 

General and Administrative Expenses

 

The table below summarizes our general and administrative expenses for the following periods indicated (in thousands):

 

		Nine Months Ended September 30, 2025				Nine Months Ended September 30, 2024				Change
Employee compensation and related expenses		$	2,531			$	1,791			$	740
Stock compensation, including the cost of stock options and restricted stock grants			3,560				3,676				(116	)
Professional services			1,800				1,866				(66	)
Facility-related expenses			248				346				(98	)
Insurance expenses			656				735				(79	)
Consulting and contract labor expenses			301				710				(409	)
Other expenses			509				354				155
Total general and administrative expenses		$	9,605			$	9,478			$	127

 

General and administrative expenses increased by $0.1 million for the nine months ended September 30, 2025 over the same period in 2024 primarily as a result of a $0.7 million increase in employee compensation partially offset by a decrease of $0.4 million in consulting fees and $0.1 million in stock compensation.

 

Other Income

 

Other income was $0.9 million and $1.1 million for the nine months ended September 30, 2025, and 2024, respectively. During the nine months ended September 30, 2025, other income consisted of interest income of $0.6 million and bond accretion income of $0.3 million from the investment into money market funds and investments, while during the same period in 2024, other income consisted of interest income of $0.5 million and bond accretion income of $0.6 million.

 

Liquidity and Capital Resources

 

The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, the Company has experienced recurring losses from operations since inception and incurred a net loss of $22.9 million and used cash in operations of $19.1 million during the nine months ended September 30, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In addition, our independent registered public accounting firm has included an explanatory paragraph in their report with respect to the uncertainty that accompanies our audited financial statements as of and for the year ended December 31, 2024. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its development strategies. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

As of September 30, 2025, we had cash, cash equivalents, restricted cash and investments of $21.0 million. Apart from payment and reimbursement obligations of Newsoara under the Newsoara License, we do not have any committed external source of funds or other support for our developmental efforts. Until we can generate sufficient product revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings and debt financings, which may include ATM Sales, or other capital sources such as milestone payments, royalties or other payments or funding from existing or potential collaborations, strategic alliances, licensing arrangements and other arrangements. Based on our research and development plans, we expect that our existing cash, cash equivalents, restricted cash and investments will fund our planned operations into the third quarter of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. In addition, because the design and outcome of our anticipated and any future clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of Olvi-Vec or any future product candidates. Our existing cash balance may not be sufficient to complete the development of Olvi-Vec or any other product candidate.

 

 

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing, or grant unfavorable terms in future licensing agreements.

 

Cash Flows

 

The following table sets forth the primary sources and uses of cash for each of the periods presented below:

 

		Nine Months Ended September 30,
		2025				2024
		(in thousands)
Cash Flow from:
Operating activities		$	(19,069	)		$	(16,926	)
Investing activities			5,577				(14,805	)
Financing activities			9,619				28,415
Net decrease in cash, cash equivalent and restricted cash		$	(3,873	)		$	(3,316	)

 

During the nine months ended September 30, 2025, cash flow used in operating activities was $19.1 million, which consisted of a net loss of $22.9 million, non-cash expense of stock-related compensation of $3.8 million, partially offset by a decrease in accrued expense of $1.6 million. Cash provided by investing activities amounted to $5.6 million, which was primarily attributable to net maturities of investments of $6.2 million. Cash provided by financing activities of $9.6 million was related to cash received from sale of common stock. See “Stockholders’ Equity” in Note 9 to our unaudited interim condensed financial statements in Part I. Item 1 “Financial Statements” in this Quarterly Report for additional information.

 

During the nine months ended September 30, 2024, cash flow used in operating activities was $16.9 million, which consisted of a net loss of $20.9 million, non-cash expense of stock-related compensation of $4.3 million, partially offset by a decrease in accounts payable and accrued expenses of $1.4 million. Cash used in investing activities amounted to $14.8 million, which was primarily attributable to the net purchase of investments of $14.5 million. Cash provided by financing activities was $28.4 million, which was primarily related to cash received in connection with the closing of a secondary offering from sale of common stock of $27.7 million.

 

Equity Financings

 

Common Stock Issued for Cash Upon Closing of the Company’s Third Public Offering

 

In March 2025, we completed an underwritten offering of 3,000,000 shares of our common stock at an offering price of $3.50 per share. The net proceeds received from the offering were $9.6 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

 

We also agreed to issue the underwriter a warrant to purchase 120,000 shares of our common stock at an exercise price of $4.20 per share and which may be exercised until March 25, 2030, subject to certain terms and conditions.

 

Funding Requirements

 

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue our research and development, initiate and conduct preclinical studies and clinical trials, and seek marketing approval for our current and any of our future product candidates. In addition, if we obtain marketing approval for any of our current or our future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution, which costs we may seek to offset through entry into collaboration agreements with third parties. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

 

 

We believe that our existing cash, cash equivalents, restricted cash and investments will fund our planned operations into the third quarter of 2026. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on a number of factors, including:

 

	●	the costs of conducting preclinical studies and clinical trials;
	●	the costs of manufacturing;
	●	the scope, progress, results and costs of discovery, preclinical development, laboratory testing, and clinical trials for product candidates we may develop, if any;
	●	the costs, timing, and outcome of regulatory review of our product candidates;
	●	our ability to establish and maintain collaborations on favorable terms, if at all;
	●	the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;
	●	the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
	●	the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;
	●	the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;
	●	our headcount growth and associated costs as we expand our business operations and research and development activities;
	●	the costs of operating as a public company; and
	●	the impact of geopolitical and macroeconomic events, including tariffs or other trade measures future bank failures, increased geopolitical tensions between the United States and China, the Russia/Ukraine conflict, conflicts in the Middle East and global pandemics on U.S. and global economic conditions including changes in monetary and fiscal policy, United States political developments and other sources of instability that may affect our ability to access capital on acceptable terms, if at all.

 

We anticipate needing to obtain further funding to achieve our business objectives beyond such date.

 

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through public or private equity offerings and debt financings, which may include ATM Sales, or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our common stockholders’ ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of our common stockholders. Additional debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

 

 

If we raise funds through potential collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

 

Critical Accounting Policies

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheets and the reported amounts of expenses during the reporting periods. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances at the time such estimates are made. Actual results may differ materially from our estimates and judgments under different assumptions or conditions. We periodically review our estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in our financial statements prospectively from the date of the change in estimate.

 

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. Our critical accounting policies are described in Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report. There were no material changes to these accounting policies during the nine months ended September 30, 2025.

 

Recent Accounting Pronouncements

 

For a discussion of our material changes in recent accounting pronouncements, see “Recent Accounting Pronouncements” in Note 2 to our unaudited interim condensed financial statements in Part I. Item 1 “Financial Statements” in this Quarterly Report for additional information.

 

Emerging Growth Company Status

 

As an “emerging growth company,” the Jumpstart Our Business Startups Act of 2012 permits us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

There have been no material changes in the Company’s exposure to market risk from that described in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” of its Annual Report on Form 10-K, as amended, for the year ended December 31, 2024.

 

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2025. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2025.

 

In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II — OTHER INFORMATION 

 

Item 1. Legal Proceedings

 

From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of legal and settlement costs, diversion of management resources and other factors.

 

Item 1A. Risk Factors

 

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2024 (the “Annual Report”), which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report, other than the updates to the risk factors or new risk factors set forth below. New risk factors that were not included in our Annual Report have been marked with an asterisk (*).

 

We have incurred significant losses since our inception and anticipate that we will incur significant and increasing losses for the foreseeable future and we may never achieve or maintain profitability.

 

We are a clinical stage biopharmaceutical company, and our operations to date have been focused substantially on organizing and staffing our company, business planning, raising capital, creating, assessing, and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates, undertaking preclinical studies, commencing clinical trials and manufacturing. Additionally, as an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals, manufacture a commercial-scale product, or conduct sales and marketing activities necessary for successful commercialization. We have never generated any revenue from commercially approved product sales and have incurred significant operating losses. Our net losses were $22.9 million and $20.9 million for the nine months ended September 30, 2025 and the year ended December 31, 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $274.3 million. We expect to continue to incur significant and increasing operating losses for the foreseeable future. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ deficit and working capital.

 

We expect that it will be several years, if ever, before we have a commercialized product. The net losses we incur may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially if, and as, we:

 

	●	advance the Phase 3 registration clinical trial for our lead product candidate, Olvi-Vec, in platinum resistant/refractory ovarian cancer (“PRROC”);
	●	initiate planned and future clinical trials of Olvi-Vec in other cancer indications;
	●	discover and develop new product candidates, and conduct research and development activities, preclinical studies and clinical trials;
	●	manufacture preclinical, clinical and commercial supplies of our product candidates;
	●	broaden and strengthen our internal manufacturing capabilities, including the expansion and upgrade of our in-house manufacturing facility;
	●	seek regulatory approvals for any product candidates that successfully complete clinical trials;
	●	maintain, expand and protect our intellectual property portfolio;
	●	hire additional research and development, clinical, scientific and management personnel;
	●	add operational, financial and management information systems and personnel;
	●	establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval and we commercialize on our own or in collaboration with others; and
	●	incur additional legal, accounting and other expenses operating as a public company.

 

 

To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials, obtaining regulatory approval for product candidates and manufacturing, marketing and selling products for which we may obtain marketing approval and satisfying any post-marketing requirements. We are only in the development stages of most of these activities. We may never succeed in these activities and, even if we do, may never generate revenue that is significant enough to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts or even continue our operations. A decline in the value of our company could also cause stockholders to lose all or part of their investment.

 

We will require substantial additional financing to advance the development of Olvi-Vec and any of our future product candidates, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital could force us to delay, limit, reduce or terminate our product development programs, potential commercialization efforts or other operations.

 

The development of biopharmaceutical product candidates is capital-intensive. Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to continue the preclinical and clinical development of, and seek regulatory approval for, our current and future product candidates. If we are able to gain marketing approval of any product candidate that we develop, including Olvi-Vec, we will require significant additional amounts of cash in order to launch and commercialize such product either alone or in collaboration with others. Because the design and outcome of our ongoing, anticipated and any future clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of any product candidate we develop.

 

Our future capital requirements depend on many factors, including:

 

	●	the scope, progress, results and costs of researching and developing Olvi-Vec and our other product candidates and programs, and of conducting preclinical studies and clinical trials;
	●	the timing of, and the costs involved in, obtaining marketing approvals for Olvi-Vec and future product candidates we develop if clinical trials are successful;
	●	the success of any future collaborations;
	●	the cost of commercialization activities for any approved product, including marketing, sales and distribution costs;
	●	the cost and timing of establishing, equipping, and operating our current and planned manufacturing activities;
	●	the cost of manufacturing Olvi-Vec and future product candidates for clinical trials in preparation for marketing approval and commercialization;
	●	our ability to establish and maintain strategic licensing or other arrangements and the financial terms of such agreements;
	●	the cost, timing and outcome of seeking U.S. Food and Drug Administration (“FDA”) and any other regulatory approvals for any future product candidates;
	●	the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation;
	●	our ability to establish and maintain healthcare coverage and adequate reimbursement for our future products, if any;
	●	the timing, receipt, and amount of sales of, or royalties on, our future products, if any;
	●	the emergence of competing cancer therapies and other adverse market developments;
	●	our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;
	●	the costs associated with being a public company;
	●	our need and ability to retain key management and hire scientific, technical, medical and business personnel;
	●	the costs associated with expanding our facilities or building out our laboratory space; and

 

 

●

the impact of geopolitical and macroeconomic events, including future bank failures, tariffs and other trade measures, increased geopolitical tensions between the United States and China, the Russia/Ukraine conflict, the conflicts in the Middle East and global pandemics on U.S. and global economic conditions including changes in monetary and fiscal policy, U.S. political developments and other sources of instability.

 

Besides the obligations by Newsoara to provide clinical trial funding under the Newsoara License, we do not have any committed external source of funds or other support for our development efforts. Until we can generate sufficient product revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings and debt financings, or other capital sources such as milestone payments, royalties or other payments or funding from existing or potential collaborations, strategic alliances, licensing arrangements and other arrangements. Based on our research and development plans, we expect that our existing cash, cash equivalents, restricted cash and investments will fund our planned operations into the third quarter of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. In addition, because the design and outcome of our anticipated and any future clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of Olvi-Vec or any future product candidates. Our existing cash balance may not be sufficient to complete development of Olvi-Vec or any other product candidate. The failure to receive all or some of the committed proceeds would exhaust our available capital resources sooner than expected and will require us to obtain further funding to achieve our business objectives.

 

Our product candidates are in preclinical and clinical stages of development, are not approved for commercial sale and might never receive regulatory approval or become commercially viable.

 

All of our product candidates are in research, preclinical or clinical development. We have not completed the development of any product candidates, we currently generate no revenue, and we may never be able to develop a marketable product. Enrollment of our Phase 2 clinical trial, an open-label, single-arm study, of our lead product candidate, Olvi-Vec, in patients with PRROC, was completed in September 2019, and we reported multiple data readouts in 2020, 2021, 2022 and 2023 for our Phase 2 PRROC clinical trial. We expect the final readout, reported on May 25, 2023 and published in JAMA Oncology in May 2023, to remain essentially unchanged in the final study report. Our Phase 3 registration trial of Olvi-Vec in PRROC initiated enrollment in the third quarter of 2022. We continue to enroll patients in this Phase 3 trial with topline results anticipated in the second half of 2026.

 

Newsoara is generally obligated under the Newsoara License to fund our ongoing Phase 2, open-label, randomized, and controlled NSCLC clinical trial in its entirety in the United States and China, known as the VIRO-25 Trial. In November 2023, we agreed with Newsoara that we would directly engage a CRO on mutually agreeable terms to conduct certain startup activities for the VIRO-25 Trial in the United States only, with Newsoara reimbursing us for the costs and expenses of such agreed-upon startup activities. In September 2025 and pursuant to the LOU, we agreed with Newsoara that the CRO would conduct study activities beyond startup for the VIRO-25 Trial in the United States and Newsoara would reimburse us for costs and expenses related to such additional activities. Under the agreed upon terms, Newsoara is permitted to defer reimbursement of the foregoing costs and expenses until the earlier of: (i) completion of its next round of financing, or (ii) December 31, 2026. Subject to regulatory authorization in China, the Company expects Newsoara to eventually to add sites in China and for the parties to conduct this study as a multi-regional clinical trial.

 

We and Newsoara co-sponsor a Phase 1/2 clinical trial of Olvi-Vec in patients with recurrent SCLC in China, which Newsoara is conducting, and initiated the Phase 1 portion in the first half of 2023. A readout of interim results in the Phase 1b portion of this trial was disclosed in the first quarter of 2025. We expect to report additional interim results from this trial in the fourth quarter of 2025. Data are supportive of Olvi-Vec being a platinum resensitizing agent beyond ovarian cancer and underscore the current clinical development strategy. In addition to expecting Newsoara to join our ongoing Phase 2 NSCLC trial, as discussed above, we anticipate they will initiate a trial in recurrent ovarian cancer in China.

 

 

Additionally, we have a portfolio of oncolytic VACV constructs that are in early-to-late stages of discovery and preclinical development that may never advance to clinical-stage development or marketing approval. Our ability to generate product revenues, which we do not expect will occur for several years, if ever, will depend on obtaining marketing approvals for, and successfully commercializing our product candidates, either alone or in collaboration with others, and we cannot guarantee that we will ever obtain marketing approval for any of our product candidates. Before obtaining marketing approval for the commercial distribution of our product candidates, we, or a future collaborator, must conduct extensive preclinical studies and clinical trials to demonstrate the safety and efficacy in humans of our product candidates.

 

The success of our current and future product candidates will depend on several factors, including the following:

 

	●	successful completion of preclinical studies and clinical trials;
	●	sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials;
	●	acceptance of investigational new drug (“IND”) applications or IND amendments for our planned clinical trials or future clinical trials;
	●	successful enrollment and completion of clinical trials;
	●	successful data from our clinical trials that support FDA conclusion of an acceptable risk-benefit profile of our product candidates in the intended populations;
	●	receipt of regulatory and marketing approvals from applicable regulatory authorities;
	●	obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates;
	●	obtaining regulatory approval to use our existing or future manufacturing processes for the clinical and commercial manufacture of our product candidates at our existing or future manufacturing facilities or at the facilities of one or more third-party manufacturers with whom we would need to establish supply arrangements;
	●	successfully launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;
	●	acceptance of any products we develop and their benefits and uses, if and when approved, by patients, the medical community and third-party payors;
	●	effectively competing with other therapies;
	●	obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; and
	●	maintaining a continued acceptable safety profile of the products following approval.

 

If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business.

 

 

Results of preclinical studies and early clinical trials may not be predictive of results of future clinical trials.

 

For our lead product candidate, Olvi-Vec, we completed enrollment, and we reported multiple data readouts in 2020, 2021, 2022 and 2023 for our Phase 2 PRROC clinical trial. Our Phase 3 registration trial of Olvi-Vec in PRROC initiated enrollment in the third quarter of 2022. In March 2025, we announced that we had concluded a productive Type D meeting with the FDA for Olvi-Vec in the treatment of PRROC. In response to a question seeking the FDA’s guidance on our expectations regarding a confirmatory trial based on the Phase 3 OnPrime/GOG-3076 registration trial (Phase 3 trial) results, the FDA responded that “As stated previously, an interim analysis of overall survival (“OS”) should be planned at the time of the primary progression-free survival (“PFS”) analysis. If a clinically meaningful PFS advantage is demonstrated in the absence of a decrement in OS, this could potentially support traditional approval.” The FDA further recommended we request a pre-BLA meeting with FDA with topline safety and efficacy data following completion of the trial so that the FDA may discuss next steps. Clinical development is expensive and can take many years to complete and its outcome is inherently uncertain. Olvi-Vec may not perform as we expect in clinical trials, particularly in our open-label, randomized, and controlled Phase 3 registration clinical trial, in which Olvi-Vec may ultimately have a different or no impact on tumors, may have a different mechanism of action than we expect and may not ultimately prove to be safe and effective. The FDA’s analysis and interpretation of the data may also differ from ours.

 

The results of previous clinical trials of Olvi-Vec and results of preclinical studies or early clinical trials of any other product candidate we develop, may not be predictive of the results of subsequent and later-stage clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in registration-stage clinical trials after achieving positive results in earlier development, and we could face similar setbacks. The design of a clinical trial can determine whether its results will support approval of a product and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. We do not have experience in successfully completing a registration-stage clinical trial and may be unable to execute a clinical trial to support marketing approval. In addition, preclinical and clinical data are often susceptible to varying interpretations and analyses. Many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval for the product candidates. Even if we, or future collaborators, believe that the results of clinical trials for our product candidates warrant marketing approval, the FDA or comparable foreign regulatory authorities may disagree and may not grant marketing approval of our product candidates.

 

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols, variations in conducting clinical trials at different sites, changes in medical practice, FDA requirements based on agency guidelines or precedence which may be more strict for a Phase 3 clinical trial, the rate of dropout among clinical trial participants and changes in the manufacturing process. Moreover, should there be an issue with the design of any of our clinical trials, our results may be impacted. We may not discover such a flaw until the clinical trial is at an advanced stage.

 

 

Serious adverse events, undesirable side effects (including emergent drug-drug interactions between Olvi-Vec and any of the other therapeutic agents given to the clinical trial subjects) or other unexpected properties of our current or future product candidates may be identified during development or after approval, which could halt their development or lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to approve our product candidates or, if discovered following marketing approval, revocation of marketing authorizations or limitations on the use of our product candidates thereby limiting the commercial potential of such product candidate.

 

To date, Olvi-Vec is the only product candidate we have tested in humans. The most advanced trial with enrollment completed was our open-label, single-arm Phase 1b/2 clinical trial in PRROC. Enrollment was completed in September 2019, and we reported multiple data readouts in 2020, 2021, 2022 and 2023 for our Phase 2 PRROC clinical trial. We expect the final readout, reported on May 25, 2023 and published in JAMA Oncology in May 2023, to remain essentially unchanged in the final study report. Additionally, we previously conducted five Phase 1 clinical trials and one Expanded Access Program in different indications, using different routes of administration and different dosing regimens. The most common treatment-related toxicities generally observed in our trials from different routes of administration were pyrexia, nausea, vomiting, chills and fatigue with additional common treatment-related toxicities observed in our intraperitoneal administration trials being abdominal pain and abdominal distension. As we continue our development of Olvi-Vec and initiate clinical trials of any future product candidates, serious adverse events, undesirable side effects or unexpected characteristics may emerge or be reported, causing us to abandon these product candidates or limit their development to more narrow uses or subpopulations in which the serious adverse events, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Even if our product candidates initially show promise in early clinical trials, the side effects of therapies are frequently only detectable after the drug is tested in large, Phase 3 clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval. Sometimes, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the product candidate or another factor, especially in oncology subjects who may suffer from other medical conditions and be taking other medications. If serious adverse or unexpected side effects are identified during development and are determined to be attributed to our product candidates, or the result of drug-drug interactions between our product candidate and any of the concomitant therapies given to the trial subjects, we, the FDA or comparable foreign regulatory authorities, or institutional review boards and other reviewing entities, could interrupt, delay, or halt clinical trials and could result in a more restrictive label, a Risk Evaluation and Mitigation Strategy or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authorities may also require, or we may voluntarily develop strategies for managing adverse events during clinical development, which could include restrictions on our enrollment criteria, the use of stopping criteria, adjustments to a study’s design, or the monitoring of safety data by a data monitoring committee, among other strategies. Any requests from the FDA or comparable foreign regulatory authority for additional data or information could also result in substantial delays in the approval of our product candidates.

 

Drug-related side effects could also affect subject recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

 

In addition, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

 

	●	regulatory authorities may withdraw approvals of such product;
	●	regulatory authorities may require additional warnings on the label;
	●	we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;
	●	we may be forced to suspend marketing of that product, or decide to remove the product from the marketplace;
	●	we may be required to change the way the product is administered;
	●	we could be subject to fines, injunctions, or the imposition of criminal or civil penalties;
	●	we could be sued and held liable for harm caused to patients; and
	●	the product may become less competitive, and our reputation may suffer.

 

 

The therapeutic-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, financial condition, results of operations, stock price and prospects.

 

Our current and any future collaborations are not a guarantee of success, and all collaborations are as risky, or more risky, than undertaking the activities ourselves.

 

Our current collaborations with TVAX Biomedical, Inc. and Newsoara, and potential future collaborations we might enter into for Olvi-Vec or our other product candidates, may pose a number of risks, including the following:

 

	●	collaborators may not perform their obligations as expected;
	●	collaborators may not pursue development and commercialization of product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;
	●	collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
	●	collaborators could fail to make timely regulatory submissions for a product candidate;
	●	collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions;
	●	collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
	●	product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;
	●	a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product;
	●	disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive;
	●	collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; and
	●	collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.

 

For example, Newsoara is generally obligated under the Newsoara License to fund a Phase 2, open-label, randomized, and controlled clinical trial designed to evaluate the efficacy and safety of intravenously delivered Olvi-Vec oncolytic VACV for patients with recurrent NSCLC in the United States, which VIRO-25 trial is now ongoing with the first patient dosed in October 2024. Newsoara has also agreed to reimburse us for the costs and expenses of a CRO to conduct activities for the NSCLC trial in the United States, but is permitted to defer such reimbursement payments until the earlier of: (i) completion of its next round of financing, or (ii) December 31, 2026. If Newsoara is unable or unwilling to provide funding and/or reimbursement of costs for the NSCLC trial in a timely manner or at all, we would need to obtain the funding on our own and/or scale back or discontinue these clinical development activities.

 

 

In addition, all of the risks relating to product development, regulatory approval and commercialization described in the Annual Report and in this Quarterly Report also apply to the activities of any of our current or future collaborators.

 

Collaborations with biopharmaceutical companies and other third parties often are terminated or allowed to expire by the other party. Any such termination or expiration could adversely affect us financially and could harm our business reputation.

 

If any collaborations we have entered into or might enter into do not result in the successful development and commercialization of products or if one of our collaborators subsequently terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under such collaboration. If we do not receive the funding we expect under the agreements, our development of our product candidates could be delayed and we may need additional resources to develop our product candidates and our product platform.

 

Additionally, if any collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate development or commercialization of any product candidate licensed to it by us. If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our reputation in the business and financial communities could be adversely affected.

 

We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for any collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.

 

If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms, or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates or bring them to market or continue to develop our product platform and our business may be materially and adversely affected.

 

Disruptions to the operations of the FDA, the SEC, other U.S. governmental agencies or comparable foreign regulatory authorities caused by funding shortages, leadership changes, staffing cuts or other staffing shortages, along with uncertainty regarding the potential for new initiatives, laws, regulations, policies and guidance affecting our product candidates or other aspects of our business, could materially and adversely affect our business.*

 

The ability of the FDA or other comparable foreign regulatory authorities to review and approve new products or take action with respect to other regulatory matters can be affected by a variety of factors, including government budget and funding levels, leadership changes, the ability to hire and retain key personnel and accept payment of user fees, the availability of personnel and other resources, changes in statutes, regulations and policies that affect the FDA’s or comparable foreign regulatory authorities’ ability to perform routine functions, and other business disruptions. Average review times at the FDA and comparable foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

 

Over the last several years, the U.S. government has shut down several times, including most recently on October 1, 2025, and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. In addition, there have recently been terminations of large numbers of federal employees at various federal agencies, including the FDA. Changes and cuts in FDA staffing could result in delays in the FDA’s responsiveness or in its ability to review IND submissions or applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion, or at all. A prolonged government shutdown and/or employee terminations or resignations could significantly impact the ability of the FDA or other federal agencies to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, current and future government shutdowns and/or employee terminations or resignations at the SEC could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

 

 

There is substantial uncertainty as to whether and how the current administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates and any products for which we obtain approval. This uncertainty could present new challenges as we navigate development and approval of our product candidates. Some of these efforts have manifested to date in the form of personnel cuts and measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future. There is uncertainty as to whether we will be materially and negatively impacted by governmental orders, regulations, policies or guidance, or disruptions to the normal operations of government agencies.

 

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.*

 

We operate in a global economy, which includes utilizing third-party suppliers in several countries outside the United States. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The U.S. government has recently announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry. In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures. Further, the Bureau of Industry and Security, U.S. Department of Commerce, has initiated an investigation to determine whether pharmaceutical ingredients, including finished drug product, manufactured outside the United States pose a national security risk and should be subject to additional tariffs. These developments have created a dynamic and unpredictable trade landscape, which may adversely impact our business, results of operations, financial condition and prospects.

 

We rely on specialized laboratory equipment, supplies, and materials, all or part of which we believe may be ultimately sourced from multiple countries outside the United States, to advance our research and development efforts.

 

Current or future tariffs will result in increased research and development expenses, including with respect to increased costs associated with specialized laboratory equipment used in the manufacture of Olvi-Vec. In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain. Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all. In addition, as we advance toward commercialization in the future, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects.

 

The complexity of announced or future tariffs may also increase the risk that we or our suppliers may be subject to civil or criminal enforcement actions in the United States or foreign jurisdictions related to compliance with trade regulations. Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S. entities, which may limit our ability to compete internationally and attract non-U.S. investment, employees, customers and suppliers. Foreign governments may also take other retaliatory actions against U.S. entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks. In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business.

 

 

Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects. While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects. In addition, trade developments have and may continue to heighten the risks related to the other risk factors described in the Annual Report and elsewhere in this Quarterly Report.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

Not applicable.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

Trading Arrangements

 

During the three months ended September 30, 2025, the following officer (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated the contracts, instructions or written plans for the purchase or sale of the Company’s securities as set forth in the table below.

 

 

Item 6. Exhibits

 

Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41599), filed with the SEC on January 30, 2023).
3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41599), filed with the SEC on January 30, 2023).
4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1 (File No. 333-265828), as amended, originally filed with the SEC on August 29, 2022).
4.2		Investors’ Rights Agreement, by and among the Registrant and AbbVie, Inc. and Aladar Szalay, Ph.D., dated January 2010 (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-265828), as amended, originally filed with the SEC on June 24, 2022).
4.3		Form of Umbrella Agreement Regarding Family Investments (incorporated by reference to Exhibit 4.5 to the Registrant’s Registration Statement on Form S-1 (File No. 333-265828), as amended, originally filed with the SEC on June 24, 2022).
4.4		Form of Convertible Note Purchase Agreement under the Umbrella Agreement (incorporated by reference to Exhibit 4.6 to the Registrant’s Registration Statement on Form S-1 (File No. 333-265828), as amended, originally filed with the SEC on June 24, 2022).
4.5		Form of Representative’s Warrant (incorporated by reference to Exhibit 4.7 to the Registrant’s Current Report on Form 8-K (File No. 001-41599), filed with the SEC on January 30, 2023).
4.6		Form of Indenture (incorporated by reference to Exhibit 4.14 to the Registrant’s Registration Statement on Form S-3 (File No. 333-276847), filed with the SEC on February 2, 2024).

 

 

4.7		Form of Common Stock Warrant Agreement and Warrant Certificate (incorporated by reference to Exhibit 4.17 to the Registrant’s Registration Statement on Form S-3 (File No. 333-276847), filed with the SEC on February 2, 2024).
4.8		Form of Preferred Stock Warrant Agreement and Warrant Certificate (incorporated by reference to Exhibit 4.18 to the Registrant’s Registration Statement on Form S-3 (File No. 333-276847), filed with the SEC on February 2, 2024).
4.9		Form of Debt Securities Warrant Agreement and Warrant Certificate (incorporated by reference to Exhibit 4.19 to the Registrant’s Registration Statement on Form S-3 (File No. 333-276847), filed with the SEC on February 2, 2024).
4.10		Form of Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41599), filed with the SEC on May 24, 2024).
10.1		Executive Employment Offer Letter, dated July 1, 2025, by and between the Registrant and Eric Groen.
10.2		Letter of Understanding, dated September 30, 2025, by and between the Registrant and Newsoara Biopharma Co., Ltd.
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the-Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the-Sarbanes-Oxley Act of 2002.
32.1*†		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*	Filed with this Quarterly Report on Form 10-Q.
†	This certification shall not be deemed filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: November 5, 2025

 

GENELUX CORPORATION
By:	/s/ Thomas Zindrick, J.D.
			Thomas Zindrick, J.D.
			President, Chief Executive Officer and Chairman
			(Principal Executive Officer)
By:	/s/ Matthew Pulisic
			Matthew Pulisic
			Chief Financial Officer
			(Principal Financial and Accounting Officer)