UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
☐ TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number: 001-40877
CERO THERAPEUTICS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
South San Francisco, CA 94080
(Address of principal executive offices) (Zip Code)
(650)407-2376
(Registrant’s telephone
number, including area code)
N/A
(Former name, former address and former fiscal
year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.0001 per share CERO None
Warrants to purchase one share of Common Stock CEROW None
Securities registered pursuant to Section 12(g)
of the Act: None
Indicate by check mark if the Registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate by check mark if the Registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
Indicate by check mark whether the registrant
(1) has 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 every Interactive Data File required to be submitted 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 such files). Yes
☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-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
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2025, the last business day of
the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s voting securities
held by non-affiliates was approximately $11,236,525 based on the number of shares held by non-affiliates and the last reported sales
price of the registrant’s common stock as of that date.
As of April 14, 2026, the registrant had 36,786,686
shares of common stock, par value $0.0001 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Definitive
Proxy Statement relating to the 2026 Annual Meeting of Stockholders, which the Registrant intends to file with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days after the end of the Registrant’s fiscal year ended December 31, 2025, are
incorporated by reference into Part III of this Annual Report on Form 10-K.
Table of Contents
Page
PART I
ITEM 1. Business 1
ITEM 1A. Risk Factors 32
ITEM 1B. Unresolved Staff Comments 77
ITEM 1C. Cybersecurity 77
ITEM 2. Properties 78
ITEM 3. Legal Proceedings 78
ITEM 4. Mine Safety Disclosures 78
PART II
ITEM 6. [Reserved] 79
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 88
ITEM 8. Financial Statements and Supplementary Data 88
ITEM 9A. Controls and Procedures 88
ITEM 9B. Other Information 89
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 89
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance 90
ITEM 11. Executive Compensation 90
ITEM 14. Principal Accountant Fees and Services 90
PART IV
ITEM 15. Exhibits and Financial Statement Schedules 91
Signatures 96
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form
10-K (this “Annual Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). All statements other than statements of historical facts contained in this Annual Report, including statements regarding
our future results of operations and financial position, business strategy, drug candidates, planned preclinical studies and clinical
trials, results of preclinical studies, clinical trials, research and development (“R&D”) costs, regulatory approvals,
timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements.
These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control
and 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.
In some cases, you can identify
forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,”
“plan,” “anticipate,” “could,” “intend,” “target,” “project,”
“believe,” “estimate,” “predict,” “potential,” or “continue” or the negative
of these terms or other similar expressions. Forward-looking statements contained in this Annual Report include, but are not limited to,
statements about:
● our financial performance;
ii
● our ability to realize the anticipated benefits of any strategic transactions;
● our ability to maintain proper and effective internal controls;
● our anticipated use of our existing cash and cash equivalents.
We have based these forward-looking
statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends
that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements
are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Annual Report
and are subject to a number of risks, uncertainties and assumptions described in “Risk Factors” and elsewhere in this
Annual Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted
or quantified, 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. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements
contained herein until after we distribute this Annual Report, whether as a result of any new information, future events or otherwise.
In addition, statements that
“we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon
information available to us as of the date of this Annual Report, and while we believe such information forms a reasonable basis for such
statements, such information may be limited or incomplete, and 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 upon these statements.
This Annual Report includes
trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames
referred to in this Annual Report appear without the ® and TM symbols, but those references are not intended to indicate, in
any way, that we will not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert
its rights, to these trademarks and tradenames.
Unless the context otherwise
requires, all references herein to “we,” “us,” “our” or “the Company” refer to the business
and operations of CERo Therapeutics Holdings, Inc. (“CERo”) and its subsidiaries.
iii
SELECTED DEFINITIONS
As used in this Annual Report, unless
otherwise noted or the context otherwise requires, references to the following capitalized terms have the meanings set forth below:
“2016 Plan”
refers to the CERo Therapeutics, Inc. 2016 Equity Incentive Plan, as amended from time to time.
“2024 ESPP”
refers to the CERo Therapeutics Holdings, Inc. 2024 Employee Stock Purchase Plan, as amended from time to time.
“2024 Plan”
refers to the CERo Therapeutics Holdings, Inc. 2024 Equity Incentive Plan, as amended from time to time.
“Arena”
refers to Arena Business Solutions Global SPC II, Ltd. on behalf of and for the account of Segregated Portfolio #13 - SPC #13.
“Arena Commitment
Shares” refer to up to 500 shares of Common Stock issued to Arena as consideration for executing and delivering the Arena Purchase
Agreement.
“Arena Purchase
Agreement” refers to the Purchase Agreement, dated as of February 23, 2024, by and between CERo and Arena.
“Board of directors”
refers to the board of directors of CERo.
“Business Combination”
or “Merger” refers to the transactions contemplated by the Business Combination Agreement, including the merger between
Merger Sub and Legacy CERo.
“Business Combination
Agreement” refers to the Business Combination Agreement, dated as of June 4, 2023, as amended by Amendment No. 1, dated February
5, 2024 and Amendment No. 2, dated February 13, 2024, by and between PBAX, Merger Sub and Legacy CERo.
“Bylaws”
refers to the Second Amended and Restated Bylaws of CERo.
“CERo”
refers to CERo Therapeutics Holdings, Inc.
“Charter”
refers to CERo’s Second Amended and Restated Certificate of Incorporation, as filed with the Secretary of the State of Delaware
February 14, 2024, as amended from time to time.
“Closing”
refers to the closing of the Business Combination.
“Commitment Shares”
refers to the Arena Commitment Shares and the Keystone Commitment Shares.
“Common Stock”
refers to the common stock, par value $0.0001 per share, of CERo.
“Common Warrants”
refers to the Public Warrants, Private Placement Warrants, the Conversion Warrants, the Series A Warrants, the Series C Warrants, the
December 2024 Common Warrants, the January 2025 Common Warrants, the February 2025 Common Warrants and the February 2025 Pre-Funded Warrants.
“Conversion Warrants”
refer to the warrants initially issued by CERo Therapeutics, Inc. and converted into warrants to purchase Common Stock in connection with
the Business Combination.
“Convertible Notes”
refer to the convertible promissory note issued to Keystone on February 9, 2026 and March 6, 2026.
“December 2024 Common
Warrants” refer to the warrants to purchase shares of Common Stock, at a current exercise price of $112.20 per share, issued
by the Company in a private placement on December 23, 2024.
“DGCL”
refers to the Delaware General Corporation Law, as may be amended from time to time.
“Earnout Shares”
refer to the Primary Earnout Shares, the Secondary Earnout Shares and the Tertiary Earnout Shares, collectively.
“Exchange Act”
refers to the Securities Exchange Act of 1934, as amended.
“FDA”
refers to the U.S. Food and Drug Administration, or any successor agency thereto.
“February 2024 Keystone
Purchase Agreement” refers to the Common Stock Purchase Agreement, dated as of February 14, 2024, by and between CERo and Keystone.
iv
“February 2024 Keystone
Registration Rights Agreement” refers to the Registration Rights Agreement, dated as of February 14, 2024, by and between CERo
and Keystone.
“February 2025 Common
Warrants” refer to the warrants to purchase shares of Common Stock, at a current exercise price of $39.20 per share, issued
by the Company in a public offering on February 7, 2025.
“February 2025 Pre-Funded
Warrants” refer to the warrants to purchase shares of Common Stock, at an exercise price of $0.002 per Share, issued in a public
offering on February 7, 2025.
“Fee Modification
Agreements” refers to the fee modification agreements between CERo and certain third-party vendors and service providers, pursuant
to which such vendors received shares of Common Stock in lieu of certain payments due to such vendors prior to Closing.
“Fifth PIPE Financing”
refers to the private placement pursuant to which we issued and sold, and the PIPE Investors purchased, shares of Series E Preferred Stock,
on the terms and conditions set forth in the Fifth Securities Purchase Agreement.
“Fifth PIPE Registration
Rights Agreement” refers to the Registration Rights Agreement, dated as of October 14, 2025, by and between CERo and certain
PIPE Investors.
“Fifth Securities
Purchase Agreement” refers to the Securities Purchase Agreement, dated as of October 14, 2025, by and among CERo and certain
PIPE Investors, pursuant to which CERo agreed to issue and sell up to 9,750 shares of Series E Preferred Stock.
“First PIPE Financing”
refers to the private placement pursuant to which we issued and sold, and the PIPE Investors purchased, shares of Series A Preferred Stock,
the Series A Warrants and Preferred Warrants, on the terms and conditions set forth in the First Securities Purchase Agreement.
“First PIPE Registration
Rights Agreement” refers to the Registration Rights Agreement, dated as of February 14, 2024, by and between CERo and certain
PIPE Investors.
“First Securities
Purchase Agreement” refers to the Amended and Restated Securities Purchase Agreement, dated as of February 14, 2024, by and
among PBAX, Legacy CERo and certain PIPE Investors, pursuant to which CERo agreed to issue and sell 10,089 shares of Series A Preferred
Stock, 306 Series A Warrants and 2,500 Preferred Warrants.
“Fourth PIPE Financing”
refers to the private placement pursuant to which we issued and sold, and the PIPE Investors purchased, shares of Series D Preferred Stock,
on the terms and conditions set forth in the Fourth Securities Purchase Agreement.
“Fourth PIPE Registration
Rights Agreement” refers to the Registration Rights Agreement, dated as of April 22, 2025, by and between CERo and certain PIPE
Investors.
“Fourth Securities
Purchase Agreement” refers to the Securities Purchase Agreement, dated as of April 21, 2025, as amended as of June 25, 2025,
by and among CERo and certain PIPE Investors, pursuant to which CERo agreed to issue and sell up to 10,000 shares of Series D Preferred
Stock.
“Initial Public
Offering” refers to the initial public offering of PBAX, which closed on October 8, 2021.
“Investor Rights
Agreement” refers to the Investor Rights and Lock-up Agreement, dated February 14, 2024, by and among CERo, the Sponsor, certain
Legacy CERo Stockholders and certain other parties.
“January 2025 Common
Warrants” refer to the warrants to purchase shares of Common Stock, at a current exercise price of $116.40 per share, issued
by the Company in a private placement on January 6, 2025.
“July 2025 Keystone
Purchase Agreement” refers to the Common Stock Purchase Agreement, dated as of July 11, 2025, by and between CERo and Keystone.
“July 2025 Keystone
Registration Rights Agreement” refers to the Registration Rights Agreement, dated as of July 11, 2025, by and between CERo and
Keystone.
“Keystone”
refers to Keystone Capital Partners, LLC.
“Keystone Commencement
Date” refers to the time when all of the conditions to our right to commence sales of Common Stock to Keystone set forth in
the respective Keystone Purchase Agreements have been satisfied.
v
“Keystone Commitment
Amount” refers to the $25,000,000 of shares of Common Stock that Keystone has committed to purchase pursuant to the Keystone
Purchase Agreements.
“Keystone Commitment
Shares” refers to the 992 shares of Common Stock that have been issued to Keystone as consideration for Keystone entering into
the Keystone Purchase Agreements.
“Keystone Equity
Financing” refers to the equity line of credit established by the Keystone Purchase Agreements.
“Keystone Purchase
Agreements” refers to the February 2024 Keystone Purchase Agreement, November 2024 Keystone Purchase Agreement, July 2025 Keystone
Purchase Agreement and the November 2025 Keystone Purchase Agreement.
“Keystone Purchase
Shares” refers to the shares of Common Stock that CERo may elect to issue and sell to Keystone after the Keystone Commencement
Date.
“Keystone Registration
Rights Agreements” refers to the February 2024 Registration Rights Agreement, November 2024 Registration Rights Agreement, July
2025 Keystone Registration Rights Agreement and the November 2025 Keystone Registration Rights Agreement.
“Legacy CERo”
refers to CERo Therapeutics, Inc.
“Legacy CERo common
stock” refers to the common stock, par value $0.0001 per share, of Legacy CERo.
“Legacy CERo preferred
stock” refers to the preferred stock, par value $0.0001 per share, of Legacy CERo.
“Legacy CERo Stockholders”
refers to the holders of Legacy CERo common stock and/or Legacy CERo preferred stock prior to the Business Combination.
“Legacy CERo warrants”
refers to the warrants to purchase shares of Legacy CERo preferred stock.
“Liquidated Damages
Modification Agreement” refers to the Liquidated Damages Modification Agreement, dated as of February 23, 2024, by and between
us and Danforth Advisors, LLC.
“Merger Sub”
refers to PBCE Merger Sub, Inc., a Delaware corporation.
“Nasdaq”
refers to the Nasdaq Stock Market LLC.
“November 2025 Keystone
Purchase Agreement” refers to the Common Stock Purchase Agreement, dated as of November 26, 2025, by and between CERo and Keystone.
“November 2025 Keystone
Registration Rights Agreement” refers to the Registration Rights Agreement, dated as of November 26, 2025, by and between CERo
and Keystone.
“November 2024 Keystone
Purchase Agreement” refers to the Common Stock Purchase Agreement, dated as of November 8, 2024, by and between CERo and Keystone.
“November 2024 Keystone
Registration Rights Agreement” refers to the Registration Rights Agreement, dated as of November 8, 2024, by and between CERo
and Keystone.
“PBAX”
refers to Phoenix Biotech Acquisition Corp., a Delaware corporation.
“PIPE Financings”
refers to the First PIPE Financing, the Second PIPE Financing, the Third PIPE Financing, the Fourth PIPE Financing and the Fifth PIPE
Financing.
vi
“PIPE Investors”
refer to the investors in the PIPE Financings.
“PIPE Registration
Rights Agreement” refers to the First PIPE Registration Rights Agreement, the Second PIPE Registration Rights Agreement, the
Third PIPE Registration Rights Agreement, the Fourth PIPE Registration Rights Agreement and the Fifth PIPE Registration Rights Agreement.
“PIPE Warrants”
refer to the Series A Warrants, the Series C Warrants and the Preferred Warrants issued in the PIPE Financings.
“Preferred Stock”
refers to the shares of preferred stock, par value $0.0001 per share, of CERo.
“Preferred Shares”
refer to the shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series
E Preferred Stock issued in the PIPE Financings, including the Warrant Preferred Shares.
“Preferred Warrants”
refer to warrants to purchase shares of Series A Preferred Stock.
“Primary Earnout
Shares” refer to the 600 shares of Common Stock issued to the holders of Legacy CERo common stock and Legacy CERo preferred
stock in connection with the Business Combination, 500 of which are subject to vesting upon the achievement of certain stock price-based
earnout targets and 100 of which are subject to vesting upon a change of control, respectively.
“Private Placement
Warrants” refer to private placement warrants to purchase shares of Common Stock, at an exercise price of $23,000.00 per share,
that were originally sold in a private placement concurrently with the Initial Public Offering.
“Public Warrants”
refer to the warrants to purchase shares of Common Stock, at an exercise price of $23,000.00 per share, that were originally issued in
the Initial Public Offering.
“Reverse Stock Splits”
refers to the Company’s reverse stock split that became effective at 12:01 a.m. Eastern time on January 8, 2025, pursuant to which
each 100 shares of Common Stock outstanding immediately prior thereto was converted into 1 share of Common Stock outstanding immediately
thereafter, and to the Company’s reverse stock split that became effective at 12:01 a.m. Eastern time on June 13, 2025, pursuant
to which each 20 shares of Common Stock outstanding immediately prior thereto was converted into 1 share of Common Stock outstanding immediately
thereafter.
“SEC”
refers to the U.S. Securities and Exchange Commission.
“Secondary Earnout
Shares” refer to the 438 shares of Common Stock issued to the holders of Legacy CERo common stock and Legacy CERo preferred
stock in connection with the Business Combination, which became fully vested at Closing.
“Second PIPE Financing”
refers to the private placement pursuant to which we issued and sold, and the PIPE Investors purchased, shares of Series B Preferred Stock,
on the terms and conditions set forth in the Second Securities Purchase Agreement.
“Second PIPE Registration
Rights Agreement” refers to the Registration Rights Agreement, dated as of March 29, 2024, by and between CERo and certain PIPE
Investors.
“Second Securities
Purchase Agreement” refers to the Securities Purchase Agreement, dated as of March 29, 2024, by and among CERo and certain PIPE
Investors, pursuant to which CERo agreed to issue and sell 626 shares of Series B Preferred Stock.
“Securities Act”
refers to the Securities Act of 1933, as amended.
“Securities Purchase
Agreements” refers to the First Securities Purchase Agreement, the Second Securities Purchase Agreement, the Third Securities
Purchase Agreement, the Fourth Securities Purchase Agreement and the Fifth Securities Purchase Agreement.
“Selling Securityholder”
refers to Keystone.
“Series A Certificate
of Designations” refers to the Certificate of Designations of Rights and Preferences of the Series A Preferred Stock, as amended
from time to time.
“Series A Preferred
Stock” refers to the Series A convertible preferred stock, $0.0001 par value per share, of CERo.
vii
“Series A Warrants”
refers to warrants to purchase Common Stock, at a current exercise price of $2,780.00 per share, sold to certain PIPE Investors pursuant
to the First Securities Purchase Agreement.
“Series B Certificate
of Designations” refers to the Certificate of Designations of Rights and Preferences of the Series B Preferred Stock, as amended
from time to time.
“Series B Preferred
Stock” refers to the Series B convertible preferred stock, $0.0001 par value per share, of CERo.
“Series C Certificate
of Designations” refers to the Certificate of Designations of Rights and Preferences of the Series C Preferred Stock, as amended
from time to time.
“Series C Preferred
Stock” refers to the Series C convertible preferred stock, $0.0001 par value per share, of CERo.
“Series C Warrants”
refers to warrants to purchase shares of Common Stock, at a current exercise price of $0.80 per share, sold to certain PIPE Investors
pursuant to the Third Securities Purchase Agreement.
“Series D Certificate
of Designations” refers to the Certificate of Designations of Rights and Preferences of the Series D Preferred Stock, as amended
from time to time.
“Series D Preferred
Stock” refers to the Series D convertible preferred stock, $0.0001 par value per share, of CERo.
“Series E Certificate
of Designations” refers to the Certificate of Designations of Rights and Preferences of the Series E Preferred Stock, as amended
from time to time.
“Series E Preferred
Stock” refers to the Series E convertible preferred stock, $0.0001 par value per share, of CERo.
“Sponsor”
refers to Phoenix Biotech Sponsor, LLC, a Delaware limited liability company.
“Tertiary Earnout
Shares” refer to the 500 shares of Common Stock issued to the holders of Legacy CERo common stock and Legacy CERo preferred
stock in connection with the Business Combination, which became fully vested upon the achievement of certain regulatory milestone-based
earnout targets.
“Third PIPE Financing”
refers to the private placement pursuant to which we issued and sold, and the PIPE Investors purchased, shares of Series C Preferred Stock,
on the terms and conditions set forth in the Third Securities Purchase Agreement.
“Third PIPE Registration
Rights Agreement” refers to the Registration Rights Agreement, dated as of September 26, 2024, by and between CERo and certain
PIPE Investors.
“Third Securities
Purchase Agreement” refers to the Securities Purchase Agreement, dated as of September 25, 2024, by and among CERo and certain
PIPE Investors, pursuant to which CERo agreed to issue and sell 2,853 shares of Series C Preferred Stock and Series C Warrants to purchase
4,088 shares of Common Stock.
“Warrant Common
Shares” refer to the shares of Common Stock underlying the Common Warrants.
“Warrant Preferred
Shares” refer to the shares of Preferred Stock underlying the Preferred Warrants
“Warrants”
refer to the Rollover Warrants, the Private Placement Warrants, the Series A Warrants, the Series C Warrants, the December 2024 Common
Warrants, the January 2025 Common Warrants, the Public Warrants, the February 2025 Common Warrants and the February 2025 Pre-Funded Warrants.
viii
RISK FACTORS SUMMARY
Our business is subject to
numerous risks and uncertainties that you should consider before investing in our securities. Some of the principal risk factors are summarized
below:
● There is substantial doubt as to our ability to continue as a going concern.
ix
x
PART I
Item 1. Business.
Overview
We are an innovative
immunotherapy company advancing the development of next-generation engineered T cell therapeutics for the treatment of cancer. Our proprietary
approach to T cell engineering, which enables us to integrate certain desirable characteristics of both innate and adaptive immunity into
a single therapeutic construct, is designed to engage the body’s full immune repertoire to achieve optimized cancer therapy. Our
novel cellular immunotherapy platform is designed to redirect patient-derived T cells to eliminate tumors by building in pathways that
employ both cytotoxic and phagocytic mechanisms to destroy cancer cells, creating what we refer to as Chimeric Engulfment Receptor T (“CER-T”)
cells. Our lead molecule is CER-1236, an autologous T-cell product that targets a novel tumor antigen, TIM-4 ligand. Unlike currently
approved chimeric antigen receptor (“CAR-T”) therapies which have largely been active in hematological B cell malignancies,
we believe CER-1236 will be active in both hematological malignancies and solid tumors.
On November 14, 2024, we
received notice from the FDA that the Investigational New Drug Application (“IND”) was cleared after being put on a brief
clinical hold due to insufficient nonclinical data to adequately judge off target toxicity. The clinical hold was lifted after additional
in vitro experiments were performed. We submitted a second IND application for the investigation of CER-T cell therapy in non-small cell
lung cancer (“NSCLC”) and ovarian cancer, which was accepted by the FDA on March 27, 2025. We anticipate initiation of a Phase
1 study in NSCLC and ovarian cancer in the first quarter of 2026. In May 2025, we initiated our Phase 1 clinical trial, designed to evaluate
the safety, potential therapeutic utility and applicable dose of CER-1236 in patients with acute myeloid leukemia (“AML”).
The first-in-human, multi-center, open label, Phase 1/1b study is designed to evaluate the safety and preliminary efficacy of CER-1236
in patients with acute myeloid leukemia that is either relapsed/refractory, or in remission with measurable residual disease, or newly
diagnosed patients with TP53 mutated MDS/AML or AML. The two-part study has begun with dose escalation to determine highest tolerated
dose and recommended dose for Phase 2, followed by an expansion phase to evaluate safety and efficacy. Primary outcome measures include
incidence of adverse events and serious adverse events, incidence of dose limited toxicities and estimation of overall response rate,
complete response, composite complete response, and measurable residual disease. Secondary outcome measures include pharmacokinetics.
To date we have successfully manufactured and administered cell products for four patients. After dosing and completion of a 28-day dose-limiting
toxicity monitoring period, the dose escalation committee determined that there were no safety concerns and we could advance to the next
dose for the fourth patient. The fourth patient received an initial dose of CER-1236 at twice the initial dose of the patients in the
first cohort, with a follow-on second identical dose 48 hours later. The fifth patient was dosed in March 2026.
The ability to enhance the
activity of T cells against human cancers through genetic engineering has been among the most significant advances in cancer therapy in
the last decade. One of the more promising therapeutic uses of T cells to emerge has been CAR-T cell technology. However promising CAR-T
cell therapy has been, its use has been largely limited to the treatment of certain hematological cancers due to lack of specific tumor-associated
antigens and CAR-T cells’ limited ability to proliferate, traffic, and circulate in solid tumors. Curative CAR-T cell therapies
for solid tumors currently do not exist, and the significance of this limitation is underscored by the prevalence of solid tumor malignancies.
The American Cancer Society estimates that solid tumor cancers accounted for more than 1.7 million of the 1.9 million people newly diagnosed
with cancer in 2022. Even in hematological malignancies with approved CAR-T cell therapies, cure rates do not exceed 60%. Nevertheless,
despite such limitations, sales of CAR-T cell therapies are anticipated to grow rapidly over the next several years and are expected to
exceed $10 billion globally by 2030.
We believe that the preferential
attributes engineered into our CER-T cell therapy enable us to overcome many of the limitations which hinder the wider application of
CAR-T technology. Our CER-T cells employ a novel targeting mechanism that targets a ligand broadly expressed on tumor cells but not healthy
cells. Specifically, CER-1236 targets the TIM-4 Ligand (“TIM-4-L”), otherwise known as phosphatidylserine (“PS”),
a critical component of the cell’s plasma membrane that has a key role in cell removal. Exposure of TIM-4-L on the outer surface
of the plasma membrane acts as an “eat-me” signal and marks abnormal, stressed and dying or dead cells for phagocytosis. The
pro-phagocytic activities of CER-T cells are designed to integrate innate immune effector functions into cytotoxic killer T cells, creating
within a single T cell the ability to directly mediate cytotoxic effects and indirectly prime other immune cells. Moreover, in preclinical
studies, we have observed that CER-1236 cells exhibit superior cross-presentation abilities compared to conventional T cells, potentially
triggering a broad complement of immune effector cells against tumors. Since externally oriented TIM-4-L is broadly expressed by numerous
cancer cell types but has very limited exposure on normal healthy cells, we envision CER-1236 as having differentiated therapeutic utility
with application across a wide array of cancer types.
We have patterned the design
of our CER-T constructs based upon many of the components found in existing conventional CAR-T cell therapies, which we believe could
shorten development timelines and enhance commercial application. The processes and protocols used to genetically modify a patient’s
T cells to produce CAR-T cells are already well recognized, as is the use of lentivirus in the manufacture of these therapies. Accordingly,
we have developed CER-T cell manufacturing processes that closely resemble those used to produce existing engineered CAR-T cells. We also
expect to benefit from the well-defined and recognized regulatory guidelines established by both U.S. and European regulatory authorities
related to CAR-T therapies and their use. In contrast to these attributes, we believe that other emerging CAR-based drug candidates which
involve immune effector cells other than T cells, such as CAR-NK and CAR-M therapies, are unlikely to enjoy similar benefits.
1
In preclinical studies, we have observed CER-1236
to display attractive functional attributes, among which are:
● phagocytosis of tumor cells;
● enhanced antigen acquisition, processing and presentation;
● no evidence of T cell exhaustion despite repeated challenges;
● no observed off-target or off-tumor toxicities;
● well defined and scalable manufacturing protocols.
Based on the preclinical data regarding the use of CER-1236 T cells
to combat hematologic malignancies, we began our Phase 1 clinical trial in May 2025. Our initial targets are relapsed or refractory AML
patients as well as AML patients with measurable residual disease (“MRD”) and patients with mutations in TP53, a gene mutation
associated with aggressive AML. AML is a heterogenous and aggressive hematopoietic malignancy characterized by the rapid buildup of immature
myeloid cells in the bone marrow and blood. This process results in the inhibition of normal hematopoiesis, manifesting as neutropenia,
anemia, thrombocytopenia, and the clinical features of bone marrow failure. According to the American Cancer Society, AML accounts for
90% of all acute leukemias in adults, with an estimated 22,010 new cases and 11,090 estimated deaths in the United States in 2025. The
current treatment has remained largely unchanged over several decades with combination chemotherapy with cytarabine for 7 days and an
anthracycline for 3 days (“7+3”). Newer, targeted approaches that include multi-kinase domain inhibitors and antibody-drug
conjugates are now available during induction chemotherapy for certain patients. For patients that are sufficiently healthy and at unfavorable
risk, allogeneic Hematopoietic Stem Cell Transplants (“HSCTs”) are commonly performed. Despite these interventions, there
is significant unmet medical need for novel therapies, including cell therapeutic approaches. In July 2025, CER-1236 received an FDA Orphan
Drug Designation for the treatment of acute myeloid leukemia. In September 2025, CER-1236 received FDA Fast Track Designation.
Our Phase 1 AML clinical
trial is intended to evaluate the safety, potential therapeutic utility and applicable dose of CER-1236. The approved starting dose for
the clinical trial is sufficiently high that we expect to begin to see clinical activity by the second dose level cohort. Based on favorable
interim safety results and effects in one patient, the trial was expanded to include patients with Myelodysplastic Syndrome (“MDS”)
and Myelofibrosis (“MF”). Concurrent with a trial in these hematological malignancies, we intend to expand the clinical development
of CER-1236 with an additional IND submission, which has been approved, to investigate solid tumors such as NSCLC and ovarian cancer.
We believe that CER-1236 has the potential to address unmet medical needs in the targeted indications, and be differentiated from currently
available therapeutics by its safety, tolerability and efficacy. We dosed the first three patients in dose 1 of our Phase 1 AML clinical
trial in May 2025, July 2025 and September 2025. The first patient of the second dose cohort was dosed in October 2025. The four patients
completed their DLT periods without any treatment-related toxicities, and the cell therapy was observed to expand during treatment of
all four patients, with a peak of expansion between 10 to 14 days post infusion. None of the abovementioned statements regarding any of
our products in development are intended to be a prediction or conclusion of efficacy.
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Our Strategy
Our intent is to become a
leading biopharmaceutical company focused on the capital-efficient advancement of innovative anti-cancer product candidates targeting
the unmet medical need associated with aggressive and difficult-to-treat hematological malignancies and solid tumors. To accomplish this
objective, the key elements of our strategy include:
The Immune System and its Function
The immune system is a host
defense system comprising multiple structures and processes within an organism that protects against disease. As with other mammalian
species, the human immune system is segregated into two separate yet interconnected components, the innate immune system and the adaptive
immune system. The innate immune system is responsible for an immediate, non-specific response to infected or diseased cells. Triggering
its activation are pathogen-associated and damage-associated molecular patterns recognized by preconfigured pattern recognition receptors
which reside on the surface of various types of leukocytes, or white blood cells, that make up the innate immune system, including macrophages,
dendritic cells, eosinophils and natural killer (“NK”) cells. In addition to its direct participation in eliminating damaged
or diseased cells, certain components of the innate immune system function significantly as antigen-presenting cells (“APCs”)
promoting the activity of the adaptive immune system.
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The adaptive immune system
is composed of special types of leukocytes known as T and B lymphocytes, also known as T and B cells, respectively. T cells participate
primarily in the cell-mediated immune response while B cells are involved in the humoral immune response. T cells are an essential component
of the adaptive immune system, targeting specific antigens and either destroying targeted cells directly or participating in their destruction
by activating other immune cells. T cells use T cell specific receptors to recognize antigens presented via major histocompatibility complex
(“MHC”) molecules on APCs. Through this mechanism, T cells have the ability to target tumor-transformed or virus infected
cells, as well as help coordinate the activity of other immune cells.
T cells are differentiated
by the expression of protein markers on their surface. The two most prominent types of T cells are those that express CD8 molecules and
are known as CD8 T cells, and those that express CD4 molecules and are known as CD4 T cells. CD8 T cells, also referred to as cytotoxic
lymphocytes (“CTLs”), eliminate cells which they encounter that are recognized as being infected with viruses or other pathogens
or are otherwise damaged or dysfunctional through a process referred to as cell lysis, which involves the release by these killer T cells
of perforins and granzymes to compromise the integrity of the target cell’s membrane. Endogenous pathogens are broken down by mechanisms
present in virtually all cells into smaller fragments and presented to CD8 T cells in combination with an MHC Class I molecule. CD4 T
cells, also referred to as T helper cells, have limited cytotoxic activity and typically do not kill infected or dysfunctional cells or
eliminate pathogens directly. Instead, they participate in the immune response by providing signals which activate and orchestrate other
types of immune cells to perform these tasks. Professional APCs, such as dendritic cells and macrophages, process exogenous pathogens
and then present small fragments of the degraded pathogen to CD4 T cells in combination with an MHC Class II molecule, through a phenomenon
known as cross-presentation, while antigens of exogenous origin are coupled with an MHC Class I molecule to amplify CD8 T cell activity.
Antigen cross presentation is of particular importance in the immune system’s response to cancer.
Genetically Engineered T Cells
The ability to enhance the
activity of T cells against human cancers through genetic engineering has been among the most significant advances in cancer therapy in
the last decade. Advances in understanding T cells and their role in immunology, and an appreciation of their potential use to treat cancer,
has increased interest in the clinical application of T cells in recent years, with the field of adoptive immunotherapy attaining increased
prominence as a means of enhancing immune control over tumors. Modern molecular biological techniques allow scientists to introduce genes
into human T cells that enhance T cell activity, expand their numbers and infuse them back into the patient from whom they were originally
collected. We have developed a novel approach to T cell engineering which has enabled us to integrate certain desirable characteristics
of both the innate immune system and the adaptive immune system into a single therapeutic construct intended to optimize cancer therapy.
This novel cellular immunotherapy platform is designed to redirect T cells to eliminate tumors by building in engulfment pathways that
employ phagocytic programs, creating our CER-T cell therapy.
Phagocytosis is a vital cellular
process by which a phagocytic cell engulfs and internalizes a target for elimination and is a major mechanism for the removal of pathogens
and unwanted cells to maintain tissue homeostasis. The human body removes billions of cells daily through phagocytic processes. Phagocytic
removal employs specific cell clearance programs and machinery to eliminate target cells. The process is a crucial part of the innate
immune system and is distinct from the adaptive immune response which involves the generation of cytotoxic T cells to elicit antigen-specific,
cytolytic target elimination. Compared to traditional CAR-T cell approaches, which largely target the adaptive immune system, we developed
CER-T cell therapy to collaboratively mediate both cytotoxic and phagocytic mechanisms to optimize anti-tumor function. By leveraging
both immune responses, we believe CER-T cell therapy has the potential to eliminate cancer cells more effectively and with fewer side
effects than traditional CAR-T cell therapies.
The recognition of phagocytosis
as a therapeutic modality to directly clear cancer cells and initiate anti-tumor T cell immune responses has fueled interest in effectively
engaging phagocytes for use in cancer therapy. Macrophage cell engineering and macrophage-targeting approaches that enhance cytotoxic,
phagocytic and cytokine-mediated anti-tumor function are in development. Early clinical trial data from therapeutic candidates targeting
myeloid inhibitor function has demonstrated the potential to elicit clinical responses. However, the diverse pro-tumor functions of myelo-monocytic
cells may offset these efforts by supporting cancer cell survival, proliferation and the release of factors that may impede anti-tumor
immune responses. Limited in vivo proliferation and manufacturing challenges have also been hurdles in the development of macrophage-based
cellular therapy.
Experimental evidence demonstrates
the ability of CER-T cells to engulf targeted cells, employ cytolytic and non-cytolytic killing mechanisms, and exhibit pro-inflammatory
and antigen processing capabilities that augment the current capabilities of T cell immunotherapy. To that end, we believe CER-1236 cell
therapy, if approved, may become a component of standard of care treatment regimens, used as a monotherapy or in combination with both
small molecule therapeutics and biologics to direct robust tumor elimination.
The Increasing Prominence of CAR-T Technology
Immunotherapy is a treatment
that harnesses the components and mechanics of the immune system to address diseases and disorders. Cellular immunotherapy is a form of
immunotherapy that focuses on modulating or enhancing the activity of different immune cells. One of the more prominent and promising
therapeutic uses of T-cells to emerge has been CAR-T cell technology.
CAR-T therapy recognizes
specific antigens that are present on the surface of tumor cells and destroys them. The concept of CAR-T builds upon the normal biology
of CTLs, whereby naturally occurring receptors serve to activate these cells when a foreign pathogen or cancerous cell is detected. Conventional