Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward- looking statements include, but are not limited to, those discussed in “Risk Factors.” We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. All amounts in this report are in United States (“U.S.”) dollars, unless otherwise noted.

Overview

We are a clinical stage gene therapy company pioneering the development of gene-based therapies for large patient populations with unmet medical needs. Our oncology platform utilizes our systemic, non-viral ONCOPREX® Delivery System which uses lipid-based nanoparticles in a lipoplex form to deliver tumor suppressor gene-expressing plasmids to cancer cells. The product is administered intravenously, where it is taken up by tumor cells that then express tumor suppressor proteins that were deficient in the tumor. Our diabetes technology is designed to work in Type 1 diabetes by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body’s immune system. In Type 2 diabetes, our technology is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin.

Oncology Platform

Our lead oncology drug candidate, REQORSA® Immunogene Therapy (generic name: quaratusugene ozeplasmid), previously referred to as GPX-001, is initially being developed in combination with prominent, approved cancer drugs to treat Non-Small Cell Lung Cancer (“NSCLC”) and Small Cell Lung Cancer (“SCLC”). REQORSA has a multimodal mechanism of action whereby it interrupts cell signaling pathways that cause replication and proliferation of cancer cells, re-establishes pathways for apoptosis, or programmed cell death, in cancer cells, and modulates the immune response against cancer cells. In early studies, REQORSA has been shown to be complementary with targeted drugs and immunotherapies. Our strategy is to develop REQORSA in combination with current approved therapies and we believe REQORSA’s unique attributes position it to provide treatments that improve on these current therapies for patients with NSCLC, SCLC, and possibly other cancers.

Acclaim – 1: We currently are enrolling and treating patients in the Phase 2a expansion portion of our Phase 1/2 Acclaim-1 clinical trial. The Acclaim-1 trial uses a combination of REQORSA and AstraZeneca’s Tagrisso® in patients with late-stage NSCLC that has activating epidermal growth factor receptor (“EGFR”) mutations and progression after treatment with Tagrisso. Following the May 2023 completion of the Phase 1 dose escalation portion of the study, the Acclaim-1 Safety Review Committee (“Acclaim-1 SRC”) approved advancement from the Phase 1 dose escalation portion to the Phase 2a expansion portion of the study. Based on a review of safety data which showed no dose limiting toxicities (“DLTs”), the Acclaim-1 SRC determined that the recommended Phase 2 dose (“RP2D”) of REQORSA will be 0.12 mg/kg. This was the highest dose level delivered in the Phase 1 portion of the study and is twice the highest dose level delivered in the Company’s prior clinical trial combining REQORSA with Tarceva® for the treatment of late-stage lung cancer. We opened the Phase 2a expansion portion of the study and enrolled and dosed the first patient in January 2024. The Phase 2a expansion portion of the trial is expected to enroll approximately 66 patients; half will be patients who received only prior Tagrisso treatment and the other half will be patients who received prior Tagrisso treatment and chemotherapy. The aim is to determine toxicity and efficacy profiles of patients with different eligibility criteria. There will be an interim analysis following the treatment of 19 patients in each cohort. We expect to complete the enrollment of 19 patients in each cohort of the Phase 2a expansion portion of the study by the end of 2024, and thus we expect the interim analyses in early 2025. The Food and Drug Administration (“FDA”) has granted Fast Track Designation for the Acclaim-1 treatment combination of REQORSA and Tagrisso in NSCLC patients who have progressed after Tagrisso treatment.

Acclaim – 2: We currently are enrolling and treating patients in the Phase 1 dose escalation portion of our Phase 1/2 Acclaim-2 clinical trial. The Acclaim-2 trial uses a combination of REQORSA and Merck & Co.’s Keytruda® in patients with late-stage NSCLC whose disease has progressed after treatment with Keytruda. Patients are currently being treated at the 0.06 mg/kg dose level in the first cohort of patients and, subject to Acclaim-2 Safety Review Committee (“Acclaim-2 SRC”) approval, will be treated at successive dose levels of 0.09 mg/kg and 0.12 mg/kg. In March 2023, we amended the Acclaim-2 protocol to include additional treatments in the control group with the goal of accelerating enrollment in the study by making the trial more attractive to a wider variety of investigators. We expect enrollment in the dose escalation portion of the study to be completed in the second half of 2024. We will then initiate and evaluate patients in the Phase 2a expansion portion of the study at the maximum tolerated dose (the “MTD”) or RP2D. The FDA has granted Fast Track Designation for the Acclaim-2 treatment combination of REQORSA and Keytruda in NSCLC patients who have progressed after Keytruda treatment.

The expansion portion of both the Acclaim-1 and Acclaim-2 trials are Phase 2 studies. The expansion portion of these studies provides us the advantage of early insight into drug effectiveness in defined and distinct patient populations at the MTD or RP2D in order to better evaluate efficacy and increase the likelihood of a successful randomized Phase 2 trial which will follow the expansion portion of each study.

Acclaim – 3: We currently are enrolling patients in the Phase 1 dose escalation portion of our Phase 1/2 Acclaim-3 clinical trial. The Acclaim-3 clinical trial uses a combination of REQORSA and Genentech, Inc.’s Tecentriq® as maintenance therapy in patients with extensive stage small cell lung cancer (“ES-SCLC”) who did not develop tumor progression after receiving Tecentriq and chemotherapy as initial standard treatment. Patients are treated with REQORSA and Tecentriq until disease progression or unacceptable toxicity is experienced. In January 2024, we opened the Phase 1 portion of the Acclaim-3 study for enrollment. We expect to complete the Phase 1 dose escalation portion of the study during the second half of 2024 and we expect to start the Phase 2 expansion portion of our Acclaim-3 study in the second half of 2024. In June 2023, the FDA granted Fast Track Designation for the Acclaim-3 treatment combination of REQORSA and Tecentriq as maintenance therapy in patients with ES-SCLC who did not develop tumor progression after receiving Tecentriq and chemotherapy as initial standard treatment. In August 2023, the FDA granted Orphan Drug Designation to REQORSA for the treatment of SCLC.

The TUSC2 gene, which is the key component of REQORSA and plays a vital role in cancer suppression and normal cell regulation, is one of a series of genes on the short arm of Chromosome 3 whose therapeutic use is covered by our exclusive worldwide licenses from The University of Texas MD Anderson Cancer Center (“MD Anderson”). We believe that our ONCOPREX Delivery System allows for delivery of a number of cancer-fighting genes, alone or in combination with other cancer therapies, to combat multiple types of cancer and we are in early stages of discovery programs to identify other cancer candidates. In August 2022, we entered into a three-year sponsored research agreement with MD Anderson to support further preclinical studies of TUSC2 and other tumor suppressor genes.

Diabetes Gene Therapy

In diabetes, we have exclusively licensed from the University of Pittsburgh of the Commonwealth System of Higher Education (“University of Pittsburgh”) multiple technologies relating to the development of a gene therapy product for each of Type 1 and Type 2 diabetes. The same general novel approach is used in each of Type 1 and Type 2 diabetes whereby an adeno-associated virus (“AAV”) vector containing the Pdx1 and MafA genes is administered directly into the pancreatic duct. In humans, this can be done with a routine endoscopy procedure. Our diabetes product candidates are currently being evaluated and optimized in preclinical studies at the University of Pittsburgh. GPX-002 is being developed using the same construct for the treatment of both Type 1 diabetes and Type 2 diabetes. GPX-002 for Type 1 diabetes is designed to work by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body’s immune system. In a similar approach, GPX-002 for Type 2 diabetes (formerly known as GPX-003), where autoimmunity is not at play, is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin. We finalized the components of the diabetes construct to take forward for nonclinical studies and in December 2023, we submitted a request to meet with the FDA to obtain their guidance on the nonclinical studies needed to file an Investigational New Drug (“IND”) application and initiate first-in-human studies. As a result of the FDA’s response, the Company will continue with its planned additional nonclinical studies before requesting regulatory guidance in 2024 for the IND-enabling studies. In October 2023, we entered into a one-year extension to our August 2022 sponsored research agreement with the University of Pittsburgh for the use of GPX-002 in a non-human primate (“NHP”) model in Type 2 diabetes. The extension includes a revised research plan to encompass our most recent technologies to which we acquired exclusive rights from the University of Pittsburgh in July 2023. These include a MafB promoter to drive expression of the Pdx1 and MafA transcription factors that can potentially be used for both Type 1 and Type 2 diabetes. See also “Note 7 – Commitments and Contingencies” to our financial statements included in this Annual Report on Form 10-K. In February 2023, the Company’s research collaborators at the University of Pittsburgh presented preclinical data in a NHP model of Type 1 diabetes highlighting the therapeutic potential of GPX-002 at the 16th International Conference on Advanced Technologies & Treatments for Diabetes (ATTD 2023) in Berlin, Germany. The statistically significant study results showed the treated animals had decreased insulin requirements, increased c-peptide levels, and improved glucose tolerance compared to baseline. In April 2023, the Company hosted a Key Opinion Leader virtual event entitled “Novel Gene Therapy to Treat Type 1 Diabetes,” which discussed preclinical data reported at ATTD 2023 supporting gene therapy to treat Type 1 diabetes.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our financial statements appearing in this Annual Report on Form 10-K.

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

Research and Development Costs

We record accrued expenses for costs invoiced from research and development activities conducted on our behalf by third-party service providers, which include the conduct of preclinical studies and clinical trials and contract research, manufacturing, and testing activities. We record the costs of research and development activities based upon the amount of services provided, and we include these costs in accrued liabilities in the condensed balance sheets and within research and development expense in the condensed statements of operations. These costs are a significant component of our research and development expenses. Purchased materials to be used in future research are valued at cost and capitalized and included in research and development supplies.

We estimate the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. We make significant judgments and estimates in determining the accrued balance in each reporting period. As actual costs become known, we adjust our accrued estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed, the number of patients enrolled and the rate of patient enrollment in any of our clinical trials may vary from our estimates and could result in our reporting amounts that are too high or too low in any particular period. Our accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from contract research organizations (“CROs”) and other third-party service providers.

Income Taxes

Deferred tax assets or liabilities are recorded for temporary differences between financial statement and tax basis of assets and liabilities, using applicable rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. We have provided a full valuation allowance on our deferred tax assets, which primarily consist of cumulative net operating losses from April 1, 2009 (inception) to December 31, 2023. Due to our history of operating losses since inception and losses expected to be incurred in the foreseeable future, a full valuation allowance was considered necessary.

Impairment of Long-Lived Assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be realizable or at a minimum annually during the fourth quarter of the year. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying value to determine if an impairment of such asset is necessary. The effect of any impairment would be to expense the difference between the fair value of such asset and its carrying value.

Components of our Results of Operations and Financial Condition

Operating expenses

We classify our operating expenses into three categories: research and development, general and administrative, and depreciation.

Research and development. Research and development expenses consist primarily of:

● costs related to compliance with drug development regulatory requirements; and

We recognize all research and development costs as they are incurred. Clinical trial costs, contract manufacturing and other development costs incurred by third parties are expensed as the contracted work is performed.

We expect our research and development expenses to increase in the future as we (i) continue to advance our current and future product candidates into and through clinical trials, (ii) transition some of our manufacturing activities to new vendors for a variety of reasons, such as to incorporate more advanced processes and scale production, including any additional work that has been or may be required to successfully adapt our process to these new processes, (iii) pursue regulatory approval of our current and potential product candidates in the United States and Europe, and (iv) expand our research programs to include new therapies and new therapy combinations. The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our current and potential product candidates may be affected by a variety of factors including the quality of our current and potential product candidates, early clinical data, investment in our clinical program, competition, manufacturing capability and commercial viability, and limited contracted partners. We may never succeed in achieving regulatory approval for any of our current or future product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if at all.

General and administrative.General and administrative expense consists of personnel related costs, which include salaries, as well as the costs of professional services, such as accounting and legal, travel, facilities, information technology and other administrative expenses. We expect our general and administrative expense to increase in future periods due to the anticipated growth of our business and related infrastructure as well as accounting, insurance, investor relations, legal, information technology, and other costs associated with being a public company.

Depreciation. Depreciation expense consists of depreciation from our fixed assets consisting of our property, equipment, and furniture. We depreciate our assets over their estimated useful life. We estimate furniture and computer and office equipment to have a five-year life.

Results of Operations

Comparison of the Years Ended December 31, 2023 and 2022

The following summarizes our results of operations for the years ended December 31, 2023 and 2022.

Research and Development Expense. Research and development (“R&D”) expense was $17,616,605 for the year ended December 31, 2023 as compared to $11,510,074 for the year ended December 31, 2022. This increase of $6,106,531, or 53%, is primarily due to (i) changes in our manufacturing programs due to our transition to more capable contract development and manufacturing organizations (“CDMOs”), (ii) increased manufacturing and testing of our drug product for our Acclaim-1 and Acclaim-2 clinical trials, and (iii) increase in third-party vendors to support our manufacturing and preclinical and clinical programs.

General and Administrative Expense. General and administrative (“G&A”) expense for the year ended December 31, 2023 was $13,443,961 as compared to $12,295,070 for the year ended December 31, 2022. The increase of $1,148,891, or 9% is primarily due to (i) an increase in professional services and third-party vendors to support corporate programs, and (ii) greater share-based compensation associated with G&A employees and service providers.

Interest Income. Interest income was $215,109 and $90,098 for the years ended December 31, 2023 and 2022, respectively. This increase of $125,011 was primarily due to changes in balances and a significant increase in interest rates of our money market instruments for the year ended December 31, 2023 as compared to the prior year.

Interest Expense. There was no interest expense for the years ended December 31, 2023 and 2022 because we had no debt obligations. As of December 31, 2023, we had no outstanding debt.

Depreciation Expense. Depreciation expense was $15,004 and $25,575 for the years ended December 31, 2023 and 2022, respectively. The decrease of $10,571, or 41%, in depreciation was primarily due to the timing of purchases of computer equipment for new employees.

Net Loss.We had a net loss of $30,860,461, for the fiscal year ended December 31, 2023 compared to a net loss of $23,740,621 for the fiscal year ended December 31, 2022. The increase of $7,119,840, or 30%, in net loss was primarily due to the expansion of our manufacturing to more qualified CDMOs as well as increased manufacturing and testing of our drug product to support our Acclaim-1 and Acclaim-2 clinical trials.

Liquidity and Capital Resources

From inception through December 31, 2023, we have never generated revenue from product sales and have incurred net losses in each year. As of December 31, 2023, we had an accumulated deficit of $133,688,280. We have funded our operations primarily through the sale and issuance of capital stock. For the year ended December 31, 2022, we sold an aggregate of 98 shares of common stock for total net proceeds of $4,532 pursuant to our 2022 ATM facility as governed by the Equity Distribution Agreement (as further described below) and issued 2,925 shares of common stock upon the exercise of options for gross proceeds of $1,755. For the year ended December 31, 2023, we sold an aggregate of 1,342 shares of common stock for total net proceeds of $78,355 pursuant to our 2022 ATM facility as governed by the Equity Distribution Agreement (as further described below).

On November 18, 2022, we entered into an Equity Distribution Agreement with JMP Securities, with respect to an at-the-market offering program (our “2022 ATM Facility”) under which we could offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to $50.0 million. We agreed to pay JMP Securities a commission equal to three percent (3%) of the gross sales proceeds of any shares sold under the Equity Distribution Agreement, and also provided JMP Securities with customary indemnification and contribution rights. For the year ended December 31, 2022, we sold 98 shares of our common stock for net proceeds to us totaling $4,532. For the year ended December 31, 2022, we sold 1,342 shares of our common stock for net proceeds to us totaling $78,355. On December 12, 2023, we provided notice to JMP Securities of our termination of the 2022 ATM Facility. The termination of the Equity Distribution Agreement with JMP Securities was effective as of December 13, 2023.

On March 1, 2023, we completed a registered direct offering in which we sold 95,239 shares of our common stock and warrants to purchase 95,239 shares of our common stock to an accredited healthcare-focused institutional investor for aggregate net proceeds of approximately $3.6 million. On July 21, 2023, we raised approximately $6.7 million in net proceeds in a registered direct offering pursuant to which we sold 185,644 shares of common stock and warrants to purchase up to 185,644 shares of common stock.

On December 13, 2023, we entered into an At The Market (“ATM”) Offering Agreement (the “Agreement”) with H.C. Wainwright & Co., LLC, serving as agent (the “Agent”) with respect to an at-the-market offering program under which we may offer and sell through the Agent, from time to time at our sole discretion, up to such number or dollar amount of shares of our common stock (the “Shares”) as registered on the prospectus supplement covering the ATM offering, as may be amended or supplemented from time to time. We have agreed to pay the Agent a commission equal to three percent (3%) of the gross sales proceeds of any Shares sold through the Agent under the Agreement, and also have provided the Agent with customary indemnification and contribution rights. As of December 31, 2023 we had not sold any Shares through the Agent under the Agreement. From January 1, 2024 through the date of filing of this Annual Report on Form 10-K, subsequent to the December 31, 2023 balance sheet date, we have sold 158,474 Shares for net proceeds to us totaling $881,946 through the Agent under the Agreement.

As of December 31, 2023, we had $6,737,629 in cash. Subsequent to year-end 2023, on March 21, 2024, we raised approximately $5.8 million in net proceeds in a registered direct offering pursuant to which we sold (i) 165,000 shares of our common stock, (ii) pre-funded warrants exercisable for up to an aggregate of 1,377,112 shares of our common stock, and (iii) warrants exercisable for up to an aggregate of 1,542,112 shares of our common stock. In connection with the March 2024 registered direct offering, we amended certain existing warrants to reduce the exercise price and extend the term thereof. See “Note 9 – Subsequent Events – March 2024 Registered Direct Offering” to the Financial Statements included in this Annual Report on Form 10-K. Additionally, as noted above, we received net proceeds totaling $881,946 through the Agent under the ATM Agreement subsequent to year-end 2023.

We do not expect to generate revenue from product sales unless and until we successfully complete development of, obtain regulatory approval for and begin to commercialize one or more of our current or potential product candidates, which we expect will take a number of years and which is subject to significant uncertainty. Accordingly, we anticipate that we will need to raise additional capital to fund our future operations, which include conducting our Acclaim-1, Acclaim-2, and Acclaim-3 clinical trials (of which Acclaim-1, Acclaim-2 and Acclaim-3 are currently enrolling) and completing preclinical work for potential other oncology candidates and completing preclinical work and conducting clinical trials for our diabetes program. We expect enrollment in each of the cohorts of the Phase 2a expansion portion of the Acclaim-1 trial to be completed by the end of 2024. We expect enrollment in the Phase 1 dose escalation portion of the Acclaim-2 trial to be completed by the second half of 2024. Enrollment in the Acclaim-3 clinical trial is expected to be completed during the second half of 2024 after which we expect to commence the Phase 2 portion of the Acclaim-3 trial in the second half of 2024. Until such time as we can generate substantial revenue from product sales, if ever, we expect to finance our operating activities through a combination of equity offerings, drawdowns on our ATM pursuant to our Agreement with the Agent, and debt financings and we may seek to raise additional capital through strategic collaborations or transactions. However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our research and development programs or commercialization efforts or grant rights to others to develop or market product candidates that we would otherwise prefer to develop and market ourselves. Failure to receive additional funding could cause us to curtail or cease our operations. Furthermore, even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations.

Based on our current cash, we estimate that we will be able to fund our expenditure requirements for our current operations and planned clinical trial activities into the third quarter of 2024. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently plan due to incorrect assumptions or due to a decision to expand our activities beyond those currently planned. We previously have experienced delays in engaging clinical sites as a result of disruptions at these clinical sites caused by the COVID-19 pandemic. We also have experienced delays in clinical trial enrollment as a result of competition for patients and additional time required in connection with our transition to the new third party CDMO and the manufacture of final drug product. Delays in the conduct of our trials could result in utilizing our capital resources sooner without advancing our clinical trials as anticipated.

The following table sets forth the primary sources and uses of cash for the years ended December 31, 2023 and 2022:

Years Ended December 31,

Net cash used in investing activities (71,214 ) (59,735 )

Short Term Cash Requirements

We believe that our existing cash is sufficient to fund our expected short-term needs into the third quarter of 2024, but will need additional fundraising activities and cash on hand by such time. We currently have certain fixed cash obligations with respect to development of materials used in our clinical studies and payment obligations associated with our ongoing conduct and monitoring of our Acclaim clinical trials, and we expect that we will have insufficient cash to cover these requirements through fiscal year 2024 without raising additional working capital. The foregoing conditions raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date the financial statements included in this Annual Report are issued. Lack of necessary funds may require us, among other things, to delay, scale back or eliminate some or all of our ongoing and/or planned clinical trials.

Long Term Cash Requirements

We regularly evaluate our business plans and strategy. These evaluations often result in changes to our business plans and strategy, some of which may be material and significantly change our cash requirements. Ongoing business development activity may require us to use some of our liquidity for an acquisition, or additional capital to fund newly acquired operations. If we raise additional funds by issuing equity securities, our existing security holders will likely experience dilution; and the incurring of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict operations.

Our future capital requirements depend on many factors, including, but not limited to:

● the cost of manufacturing our existing and future products;

● the expenses needed to attract and retain skilled personnel;

● the costs associated with being a public company;

Cash used in operating activities

Net cash used in operating activities was $24,738,603 and $17,621,498 for the years ended December 31, 2023 and 2022, respectively. The increase of $7,117,105, or 40%, in net cash used in operating activities in 2023 was primarily due to us advancing our manufacturing programs to support enrollment of patients in our Acclaim-1 and Acclaim-2 clinical trials in the year ended December 31, 2023 compared to December 31, 2022 when our Acclaim-1 and Acclaim-2 clinical trials were initiated but enrolling patients at the slower, safety-oriented, Phase 1 portion per their respective protocols.

Cash used in investing activities

Net cash used in investing activities was $71,214 and $59,735 for the years ended December 31, 2023 and 2022, respectively. The increase in net cash provided by investing activities of $11,479, or 19%, was primarily due to greater use of R&D materials associated with testing and clinical use in our Acclaim clinical trials in the year ended December 31, 2023 compared to the year ended December 31, 2022. Changes in intellectual property and research and development supplies during this period were negligible.

Cash provided by financing activities

Net cash provided by financing activities was $10,593,377 and $6,426 for the years ended December 31, 2023 and 2022, respectively. The increase of $10,586,951, or 100%, in net cash provided by financing activities was primarily due to the registered direct offerings in February 2023 and July 2023 and there were no comparable capital raising activities throughout the year ended December 31, 2022.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information called for by this item.

Item 8. Financial Statements and Supplementary Data.

The financial statements and supplementary data required by this item are included after Part IV of this Annual Report on Form 10-K beginning on page F-1.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company 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 information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting related to a lack of segregation of duties between accounting and other functions and the absence of sufficient depth of in-house accounting personnel with the ability to properly account for complex transactions.

Management’s Report on Internal Control over Financial Reporting

Our principal executive officer and our principal accounting and financial officer are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our management concluded that our internal controls over financial reporting were, and continue to be, ineffective as of December 31, 2023 due to material weaknesses in our internal controls due to the lack of segregation of duties and insufficient depth of in-house accounting personnel.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

In light of the material weakness described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

During the year ended December 31, 2023 and as our operational activities increased, management determined and continues to determine that it does not have sufficient segregation of duties within its accounting functions nor does it have sufficient depth of in-house accounting personnel with the ability to properly account for complex transactions, which are basic internal controls. Due to our size, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Our size and nature also do not allow for our accounting staff to have depth of expertise in all areas that might be desirable, such as expertise in accounting for a variety of complex transactions. Management evaluated the impact of our failure to maintain effective segregation of duties and sufficient depth of personnel on our assessment of our internal control over financial reporting and has concluded that these control deficiencies represent material weaknesses.

Remediation Plans

Management is actively engaged in remediation efforts to address the material weakness identified in the management’s evaluation of internal controls and procedures. The remediation efforts, which have been or are in the process of being implemented, are intended to address the identified material weakness and include:

During the year ended December 31, 2023, we took actions to remediate the material weakness relating to our internal controls over financial reporting including:

As management continues to evaluate and work to improve its internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of the remediation measures described above. While remediation efforts are active, management requires additional time to demonstrate the operating effectiveness of our remediation efforts. The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Internal Control over Financial Reporting

Because of their inherent limitations, our disclosure controls and procedures and our internal control over financial reporting may not prevent material errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to risks, including that the controls may become inadequate because of changes in conditions or that the degree of compliance with our policies or procedures may deteriorate.

Item 9B. Other Information.

Rule 10b5-1 Trading Arrangements and Non-Rule 10b5-1 Trading Arrangements

During the fiscal quarter ended December 31, 2023, none of our officers or directors, as those terms are defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item 10 is incorporated herein by reference to the information that will be contained in our definitive proxy statement (the “Proxy Statement”) for the 2024 annual meeting of stockholders (the “Annual Meeting”), which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2023.

We have adopted a written Code of Business Conduct and Ethics, or Ethics Code, that applies to all of our officers, directors and employees. The Ethics Code is available on our website at www.genprex.com/investors/corporate-governance. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of our Ethics Code that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in paragraph (b) of Item 406 of the SEC’s Regulation S-K, by posting such information on our website, www.genprex.com.

Item 11. Executive Compensation.

The information required by this Item 11 is incorporated herein by reference to the information that will be contained in our Proxy Statement for the Annual Meeting.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 is incorporated herein by reference to the information that will be contained in our Proxy Statement for the Annual Meeting.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 is incorporated herein by reference to the information that will be contained in our Proxy Statement for the Annual Meeting.

Item 14. Principal Accountant Fees and Services.

The information required by this Item 14 is incorporated herein by reference to the information that will be contained in our Proxy Statement for the Annual Meeting.

PART IV

Item 15. Exhibit and Financial Statement Schedules.

(a)(1) Financial statements.

The financial statements and supplementary data required by this item begin on page F-1.

(a)(2) Financial Statement Schedules.

All schedules are omitted because the required information is inapplicable or the information is presented in the financial statements and the related notes.

(a)(3) Exhibits.

EXHIBIT INDEX

Exhibit Number Description of Exhibit

4.20 * Description of Registrant’s Securities.

Exhibit Number Description of Exhibit

10.4 *+ Genprex, Inc. Form of Inducement Grant.

Exhibit Number Description of Exhibit

97.1 *+ Genprex, Inc. Compensation Recovery Policy.

101.INS * Inline XBRL Instance 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 Document.

* Filed herewith.

** Furnished herewith.

+ Indicates management contract or compensatory plan.

Item 16. Form 10–K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

GENPREX, INC.

Date: April 1, 2024 By: /s/ J. Rodney Varner

J. Rodney Varner

Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

J. Rodney Varner (Principal Executive Officer)

/s/ Ryan M. Confer Chief Financial Officer April 1, 2024

Ryan M. Confer (Principal Financial and Accounting Officer)

/s/ Brent Longnecker Member of the Board of Directors April 1, 2024

Brent Longnecker

/s/ Jose Antonio Moreno Toscano Member of the Board of Directors April 1, 2024

Jose Antonio Moreno Toscano

/s/ Will R. Wilson, Jr. Member of the Board of Directors April 1, 2024

Will R. Wilson, Jr.

GENPREX, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (Auditor ID # 100) F-2

Report of Independent Registered Public Accounting Firm (Auditor ID # 0229) F-3

Statements of Operations - December 31, 2023 and 2022 F-6

Statements of Changes in Stockholders’ Equity - December 31, 2023 and 2022 F-7

Statements of Cash Flows - December 31, 2023 and 2022 F-8

Notes to Financial Statements F-9

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Genprex, Inc.:

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Genprex, Inc. (the “Company”) as of December 31, 2023, and the related statements of operations, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the 2023 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit at December 31, 2023 and, since inception, has suffered significant operating losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Revisions to 2022 Financial Statements

The financial statements of the Company as of and for the year ended December 31, 2022, before the effects of the adjustments to retrospectively apply the change in accounting related to the reverse stock split described in Notes 2 and 4 to the financial statements, were audited by other auditors whose report, dated March 31, 2023, expressed an unqualified opinion on those statements. We audited the adjustments to the 2022 financial statements to retrospectively apply the February 2, 2024, reverse stock split, as described in Notes 2 and 4 to the financial statements. In our opinion, such retrospective adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any other procedures to the 2022 financial statements of the Company other than with respect to the retrospective adjustments and procedures related to certain state and federal tax information as described in the following paragraph and, accordingly, we do not express an opinion or any other form of assurance on the 2022 financial statements taken as a whole.

The financial statements of the Company as of and for the year ended December 31, 2022, excluding the tabular federal and state income tax information for the 2022 financial statements disclosed in Note 8, were audited by other auditors whose report, dated March 31, 2023, expressed an unqualified opinion on those statements. We audited the tabular federal and state income tax information for the 2022 financial statements disclosed in Note 8. In our opinion, such information included in the table for 2022 is fairly stated, in all material respects, as of and for the year ended December 31, 2022. However, we were not engaged to audit, review, or apply any other procedures to the 2022 financial statements of the Company other than with respect to the tabular federal and state income tax information for the 2022 financial statements disclosed in Note 8 and procedures related to retroactive adjustments as a result of the reverse stock split as described in the preceding paragraph, and, accordingly, we do not express an opinion or any other form of assurance on the 2022 financial statements taken as a whole.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

F-2

Accounting for Accrued Research and Development Costs

Critical Audit Matter Description

The Company records accrued expenses for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of preclinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided and include the costs incurred but not yet invoiced within other accrued liabilities in the balance sheet and within research and development expense in the statement of operations. These costs can be a significant component of the Company’s research and development expenses.

The Company estimates the amount of work completed through discussions with internal personnel and external service providers as to the progress of the services and the agreed-upon fee to be paid for such services. The Company makes estimates in determining the accrued balance in each reporting period. Clinical trial related contracts vary in duration, and may be for a fixed amount, based on the achievement of certain contingent events or deliverables, a variable amount based on actual costs incurred, capped at a certain limit or contain a combination of these elements. Estimates include costs associated with services provided by contract organizations for preclinical and clinical development, and manufacturing of the Company’s product candidates. In the case of clinical trials, the Company relies on estimates of the progress of the clinical trials and related expenses incurred. As actual costs become known, the Company adjusts its accrued estimates.

We identified accrued research and development costs as a critical audit matter given the estimation involved in accounting for accrued research and development costs, as well as the material weakness identified by the Company in its internal controls over financial reporting. This required extensive audit effort related to the estimation of accrued research and development costs.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to accrued research and development costs included the following, among others: we obtained an understanding and evaluated the design and implementation of controls over the estimation of accrued preclinical studies, clinical trials and manufacturing expenses. We also read a sample of research, collaboration, and manufacturing agreements and contracts, as well as amendments thereto.

We also evaluated publicly available information (such as press releases and investor presentations) and board of directors’ materials regarding the status of preclinical studies, clinical trial and manufacturing activities. For a selection of agreements and contracts, we compared the amount of accrual at the end of the prior period to current year activity and evaluated the accuracy of the Company’s estimation methodology. For the selection of agreements, we obtained a written confirmation of the status of clinical trials and manufacturing from the Company’s third-party service providers. We also made selections of specific amounts recognized as research and development expense as well as those recognized as accrued expenses to evaluate management’s estimate of the vendor’s progress and performed additional procedures.

Accounting for Equity Financing and Warrant Issuances

Critical Audit Matter Description

The Company evaluates its equity issuances to determine if those contracts or embedded components of those contracts qualify as derivative instruments requiring separate recognition in the Company’s financial statements. As described in Note 4, on March 1, 2023, the Company completed a registered direct offering (“RDOs”), in which the Company sold to an accredited healthcare-focused institutional investor an aggregate of 95,239 shares of its common stock and warrants to purchase up to 95,239 shares of its common stock, at a combined offering price of $42.00 per share of common stock and accompanying warrant. On July 21, 2023, the Company completed another registered direct offering priced at the market under Nasdaq rules, in which the Company sold to accredited healthcare-focused institutional investors an aggregate of (i) 185,644 shares of its common stock, and (ii) warrants to purchase up to 185,644 shares of its common stock, at a combined offering price of $40.40 per share of common stock and accompanying warrant. Also, the Company agreed to issue to the Placement Agent warrants to purchase up to an aggregate of 11,140 shares of the Company’s common stock.

We identified the accounting for equity financing and warrant issuances as a critical audit matter because of the complexity in applying the accounting framework, as well as the material weakness identified by the Company in its internal controls over financial reporting. This required extensive audit effort related to application of accounting framework.

How the Critical Audit Matter Was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others, obtaining an understanding of, evaluating the design of the operating effectiveness of controls over management’s process for the accounting treatment, reading the agreements, and evaluating the accounting for the RDO warrant issuance. Testing management’s process included (i) evaluating the internal controls and application of the accounting framework used by management; (ii) testing the mathematical accuracy of management’s calculations; and (iii) testing the completeness and accuracy of the underlying data used. Professionals with specialized skill and knowledge were used to assist in (i) evaluating management’s application of the accounting framework and (ii) testing the mathematical accuracy of management’s calculation and conclusion related to the accounting classification of the 2023 RDO warrant issuances.

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor since 2023.

East Brunswick, New Jersey

April 1, 2024

PCAOB ID Number 100

F-3

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of Genprex, Inc.

Austin, Texas

Opinion on the Financial Statements

We have audited, before (1) the effects of the adjustments to retrospectively apply the effects of the reverse stock split described in Note 2 – Summary of Significant Accounting Policies – Reverse Stock Split and Note 4 – Equity – Reverse Stock Split (Reverse Stock Split) and (2) the inclusion of tabular federal and state income tax information for the 2022 financial statements disclosed in Note 8 – Income Taxes, the accompanying balance sheet of Genprex, Inc. (the “Company”) at December 31, 2022, and the related statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, before (1) the effects of the adjustments to retrospectively apply the reverse stock split described in Note 2 – Summary of Significant Accounting Policies – Reverse Stock Split and Note 4 – Equity – Reverse Stock Split (Reverse Stock Split) and (2) the inclusion of tabular federal and state income tax information for the 2022 financial statements disclosed in Note 8 – Income Taxes, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as whole, and we are not, by communicating the critical matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of equity transactions

As described in the Equity Note to the financial statements, the Company has complex equity transactions including the use of stock options and warrants. The estimates that management used in calculating the price value depend on assumptions specific to the nature of the management service activities with regard to the amount of the price model.

The principal consideration for our determination surrounding equity transactions as a critical audit matter is the significant judgment by management when developing the valuation of options and warrants. This, in turn, led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the price model used to calculate equity transactions.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included evaluating the use of the fair value-based method of accounting for stock-based compensation for options granted to employees, independent consultants and contractors. The Company measures options granted at fair value determined as of the grant date, and recognizes the expense over the periods in which the related services are rendered based on the terms and conditions of the awards. Evaluation of management’s assumptions related to the price model and evaluating whether assumptions used by management were reasonable considering the current and past performance of equity, the consistency, and whether these assumptions were consistent with evidence obtained in other areas of the audit.

/s/ Daszkal Bolton LLP

We served as the Company’s auditor from 2014 through March 2023.

Boca Raton, FL

March 31, 2023

F-4

Genprex, Inc.

Balance Sheets

Year Ended

December 31,

Assets

Current assets:

Accounts receivable — 34,852

Other assets:

Liabilities and Stockholders' Equity

Current liabilities:

Stockholders' equity:

See accompanying notes to the financial statements.

F-5

Genprex, Inc.

Statements of Operations

Year Ended

December 31,

Revenues $ — $ —

Cost and expenses:

Net loss per share — basic and diluted $ (22.56 ) $ (19.80 )

Weighted average number of common shares — basic and diluted 1,367,747 1,198,837

See accompanying notes to the financial statements.

F-6

Genprex, Inc.

Statements of Changes in Stockholders’ Equity

Common Stock

Shares Amount Additional Paid-In Capital Accumulated Deficit Total

See accompanying notes to the financial statements.

F-7

Genprex, Inc.

Statements of Cash Flows

Year Ended

December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Changes in operating assets and liabilities:

Cash flows from investing activities:

Reductions to property and equipment 169 —

Additions to intellectual property (71,383 ) (59,735 )

Net cash used in investing activities (71,214 ) (59,735 )

Cash flows from financing activities:

See accompanying notes to the financial statements.

F-8

Genprex, Inc.

Notes to Financial Statements

Note 1 – Description of Business and Basis of Presentation

Genprex, Inc. (“Genprex” or the “Company”), incorporated in Delaware in

April 2008, is a clinical stage gene therapy company pioneering the development of gene-based therapies for large patient populations with unmet medical needs. The Company’s oncology platform utilizes its systemic, non-viral ONCOPREX® Delivery System which uses lipid-based nanoparticles in a lipoplex form to deliver tumor suppressor gene-expressing plasmids to cancer cells. The product is administered intravenously, where it is taken up by tumor cells that then express tumor suppressor proteins that were deficient in the tumor. The Company’s diabetes technology is designed to work in Type

1 diabetes by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but

may be distinct enough from beta cells to evade the body’s immune system. In Type

2 diabetes, the Company’s technology is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin.

Oncology Platform

Genprex’s lead oncology drug candidate, REQORSA® Immunogene Therapy (generic name: quaratusugene ozeplasmid), previously referred to as GPX-001, is initially being developed in combination with prominent, approved cancer drugs to treat Non-Small Cell Lung Cancer (“NSCLC”) and Small Cell Lung Cancer (“SCLC”). REQORSA has a multimodal mechanism of action whereby it interrupts cell signaling pathways that cause replication and proliferation of cancer cells, re-establishes pathways for apoptosis, or programmed cell death, in cancer cells, and modulates the immune response against cancer cells. In early studies, REQORSA has been shown to be complementary with targeted drugs and immunotherapies. The Company’s strategy is to develop REQORSA in combination with current approved therapies and the Company believes REQORSA’s unique attributes position it to provide treatments that improve on these current therapies for patients with NSCLC, SCLC, and possibly other cancers.

Acclaim – 1: The Company is currently enrolling and treating patients in the Phase 2a expansion portion of its Phase 1/2 Acclaim-1 clinical trial. The Acclaim-1 trial uses a combination of REQORSA and AstraZeneca’s Tagrisso® in patients with late-stage NSCLC that has activating epidermal growth factor receptor (“EGFR”) mutations and progression after treatment with Tagrisso. Following the May 2023 completion of the Phase 1 dose escalation portion of the study, the Acclaim-1 Safety Review Committee (“Acclaim-1 SRC”) approved advancement from the Phase 1 dose escalation portion to the Phase 2a expansion portion of the study. Based on a review of safety data which showed no dose limiting toxicities (“DLTs”), the Acclaim-1 SRC determined that the recommended Phase 2 dose (“RP2D”) of REQORSA will be 0.12 mg/kg. This was the highest dose level delivered in the Phase 1 portion of the study and is twice the highest dose level delivered in the Company’s prior clinical trial combining REQORSA with Tarceva® for the treatment of late-stage lung cancer. Genprex opened the Phase 2a expansion portion of the study and enrolled and dosed the first patient in January 2024. The Phase 2a expansion portion of the trial is expected to enroll approximately 66 patients; half will be patients who received only prior Tagrisso treatment and the other half will be patients who received prior Tagrisso treatment and chemotherapy. The aim is to determine toxicity and efficacy profiles of patients with different eligibility criteria. There will be an interim analysis following the treatment of 19 patients in each cohort. The Company expects to complete the enrollment of 19 patients in each cohort of the Phase 2a expansion portion of the study by the end of 2024, and thus the Company expects the interim analyses in early 2025. The Food and Drug Administration (“FDA”) has granted Fast Track Designation for the Acclaim-1 treatment combination of REQORSA and Tagrisso in NSCLC patients who have progressed after Tagrisso treatment.

Acclaim – 2: The Company is currently enrolling and treating patients in the Phase 1 dose escalation portion of its Phase 1/2 Acclaim-2 clinical trial. The Acclaim-2 trial uses a combination of REQORSA and Merck & Co.’s Keytruda® in patients with late-stage NSCLC whose disease has progressed after treatment with Keytruda. Patients are currently being treated at the 0.06 mg/kg dose level in the first cohort of patients and, subject to Acclaim-2 Safety Review Committee (“Acclaim-2 SRC”) approval, will be treated at successive dose levels of 0.09 mg/kg and 0.12 mg/kg. In March 2023, Genprex amended the Acclaim-2 protocol to include additional treatments in the control group with the goal of accelerating enrollment in the study by making the trial more attractive to a wider variety of investigators. The Company expects enrollment in the dose escalation portion of the study to be completed in the second half of 2024. The Company will then initiate and evaluate patients in the Phase 2a expansion portion of the study at the maximum tolerated dose (the “MTD”) or RP2D. The FDA has granted Fast Track Designation for the Acclaim-2 treatment combination of REQORSA and Keytruda in NSCLC patients who have progressed after Keytruda treatment.

The expansion portion of both the Acclaim-1 and Acclaim-2 trials are Phase 2 studies. The expansion portion of these studies provides the Company with the advantage of early insight into drug effectiveness in defined and distinct patient populations at the MTD or RP2D in order to better evaluate efficacy and increase the likelihood of a successful randomized Phase 2 trial which will follow the expansion portion of each study.

Acclaim –

3: The Company is currently enrolling patients in the Phase

1 dose escalation portion of its Phase

1/2 Acclaim-

3 clinical trial. The Acclaim-

3 clinical trial uses a combination of REQORSA and Genentech, Inc.’s Tecentriq® as maintenance therapy in patients with extensive stage small cell lung cancer (“ES-SCLC”) who did

not develop tumor progression after receiving Tecentriq and chemotherapy as initial standard treatment. Patients are treated with REQORSA and Tecentriq until disease progression or unacceptable toxicity is experienced. In

January 2024, the Company opened the Phase

1 portion of the Acclaim-

3 study for enrollment. The Company expects to complete the Phase

1 dose escalation portion of the study during the

second half of

2024 and the Company expects to start the Phase

2 expansion portion of its Acclaim-

3 study in the

second half of

2024. In

June 2023, the FDA granted Fast Track Designation for the Acclaim-

3 treatment combination of REQORSA and Tecentriq as maintenance therapy in patients with ES-SCLC who did

not develop tumor progression after receiving Tecentriq and chemotherapy as initial standard treatment. In

August 2023, the FDA granted Orphan Drug Designation to REQORSA for the treatment of SCLC.

The

TUSC2 gene, which is the key component of REQORSA and plays a vital role in cancer suppression and normal cell regulation, is

one of a series of genes on the short arm of Chromosome

3 whose therapeutic use is covered by the Company’s exclusive worldwide licenses from The University of Texas MD Anderson Cancer Center (“MD Anderson”). Genprex believes that its ONCOPREX Delivery System allows for delivery of a number of cancer-fighting genes, alone or in combination with other cancer therapies, to combat multiple types of cancer and the Company is in early stages of discovery programs to identify other cancer candidates. In

August 2022, Genprex entered into a

three-year sponsored research agreement with MD Anderson to support further preclinical studies of

TUSC2 and other tumor suppressor genes.

Diabetes Gene Therapy

In diabetes, the Company has exclusively licensed from the University of Pittsburgh of the Commonwealth System of Higher Education (“University of Pittsburgh”) multiple technologies relating to the development of a gene therapy product for each of Type

1 and Type

2 diabetes. The same general novel approach is used in each of Type

1 and Type

2 diabetes whereby an adeno-associated virus (“AAV”) vector containing the

Pdx1 and MafA genes is administered directly into the pancreatic duct. In humans, this can be done with a routine endoscopy procedure. The Company’s diabetes product candidates are currently being evaluated and optimized in preclinical studies at the University of Pittsburgh. GPX-

002 is being developed using the same construct for the treatment of both Type

1 diabetes and Type

2 diabetes. GPX-

002 for Type

1 diabetes is designed to work by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but

may be distinct enough from beta cells to evade the body’s immune system. In a similar approach, GPX-

002 for Type

2 diabetes (formerly known as GPX-

003), where autoimmunity is

not at play, is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin. Genprex finalized the components of the diabetes construct to take forward for nonclinical studies and in

December 2023, the Company submitted a request to meet with the FDA to obtain their guidance on the nonclinical studies needed to file an Investigational New Drug (“IND”) application and initiate

first-in-human studies. As a result of the FDA’s response, the Company will continue with its planned additional nonclinical studies before requesting regulatory guidance in

2024 for the IND-enabling studies. In

October 2023, Genprex entered into a

one-year extension to its

August 2022 sponsored research agreement with the University of Pittsburgh for the use of GPX-

002 in a non-human primate (“NHP”) model in Type

2 diabetes. The extension includes a revised research plan to encompass the Company’s most recent technologies to which it acquired exclusive rights from the University of Pittsburgh in

July 2023. These include a MafB promoter to drive expression of the

Pdx1 and MafA transcription factors that can potentially be used for both Type

1 and Type

2 diabetes. See also “Note

7 – Commitments and Contingencies” to the Company’s financial statements included in this Annual Report on Form

10-K. In

February 2023, the Company’s research collaborators at the University of Pittsburgh presented preclinical data in a NHP model of Type

1 diabetes highlighting the therapeutic potential of GPX-

002 at the

16th International Conference on Advanced Technologies & Treatments for Diabetes (ATTD

2023) in Berlin, Germany. The statistically significant study results showed the treated animals had decreased insulin requirements, increased c-peptide levels, and improved glucose tolerance compared to baseline. In

April 2023, the Company hosted a Key Opinion Leader virtual event entitled “Novel Gene Therapy to Treat Type

1 Diabetes,” which discussed preclinical data reported at ATTD

2023 supporting gene therapy to treat Type

1 diabetes.

F-

Capital Requirements, Liquidity and Going Concern Considerations

The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as shown in the accompanying financial statements, the Company has sustained substantial losses from operations since inception and has no current source of revenue. In addition, the Company has used, rather than provided, cash in its operations. Genprex expects to continue to incur significant expenditures to further clinical trials for the commercial development of its patents.

The Company recognizes that it must obtain additional capital resources to successfully commercialize its product candidates. To date, Genprex has received funding in the form of equity and debt, and the Company plans to seek additional funding in the future. However, no assurances can be given that it will be successful in raising additional capital. If the Company is not able to timely and successfully raise additional capital, the timing of its clinical trials, financial condition and results of operations may be materially and adversely affected. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities.

Genprex believes that its current cash and cash equivalents will be sufficient to fund expenditure requirements for its necessary operations and expected clinical trial activities into the third quarter of 2024. Genprex has based these estimates, however, on assumptions that may prove to be wrong, and could spend available financial resources much faster than it currently expects. The Company will need to raise additional funds to continue funding its development and operations. The Company plans to secure such additional funding, although there are no guarantees or commitments for additional funding.

As a result of its recurring losses from operations and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might be necessary if Genprex is unable to continue as a going concern.

Note 2 – Summary of Significant Accounting Policies

Genprex’s financial statements have been prepared in accordance with US GAAP. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary to make the financial statements not misleading. The results of operations for any interim periods are not necessarily indicative of results to be expected for the full year. A summary of the Company’s significant accounting policies consistently applied in the preparation of the accompanying financial statements follows.

Reverse Stock Split

On February 2, 2024, Genprex completed a 1-for-40 reverse stock split (“Reverse Split”) of its issued and outstanding shares of common stock. The Reverse Split did not change the number of authorized shares of common stock or par value. All references in these financial statements to shares, share prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the Reverse Split (See Note 4 – Equity – Reverse Stock Split).

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. An adjustment has been made to the Statement of Cash Flows for the year ended fiscal year ended December 31, 2022 to reclassify research and development supplies from an investing activity to an operating activity.

Use of Estimates

The preparation of the Company’s financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Genprex considers all highly liquid short-term investments with an initial maturity of three months or less to be cash equivalents. Any amounts of cash in financial institutions which exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits expose the Company to cash concentration risk. Genprex has cash in a money market account and had $6,490,117 and $20,679,538 in excess of FDIC insured limits of $250,000 at December 31, 2023 and 2022, respectively. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

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Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive shares of common stock, which includes common stock equivalents consisting of (i) 632,323 unexercised options granted by the Company’s board of directors and warrants to purchase shares of common stock, and (ii) 51,862 unvested restricted stock units to purchase shares of common stock granted by the Company’s board of directors as of December 31, 2023.

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheet for cash, money-market savings account, accounts receivable, and accounts payables approximate fair value because of the immediate or short-term maturity of these financial instruments.

Property and Equipment

Furniture and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Routine maintenance and repairs are charged to expense as incurred and major renovations or improvements are capitalized.

Research and Development Materials Costs

Research and development expenditures consist of costs incurred to conduct research, develop engineering materials for further study, and develop clinical strategies for current and future programs associated with the Company's preclinical and Phase 1/2 clinical trials. These expenditures are expensed in the period incurred and include payments to collaborative research partners, manufacturing partners and consultants, and clinical strategy partners, wages and associated employee benefits, facilities, and overhead costs.

Materials acquired to be used in clinical research, that have an alternative future use, are capitalized when the materials are acquired, and included in research and development supplies. These supplies are recognized as expense as they are consumed through use for testing or clinical activities, or have spoiled. The costs of materials that were acquired for a particular research and development activity and have no alternative future use are expensed in the period acquired.

Research and development supplies purchased and capitalized for future use were $2,347,488 and $2,864,937 at December 31, 2023 and 2022, respectively.

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Intellectual Property

Intellectual property consists of legal and related costs associated with patents, trademarks, and other proprietary technology and rights developed, acquired, or licensed by Genprex that it believes contribute to a probable economic benefit toward such patents and activities. These costs incurred in connection with obtaining intellectual property protection, such as patent applications and filing fees associated with and patent protection, are capitalized. Intellectual property is stated at cost, to be amortized on a straight-line basis over the estimated useful lives of the assets.

Accounting for Stock-Based Compensation

Genprex uses the fair value-based method of accounting for stock-based compensation for options granted to employees, independent consultants and contractors. The Company measures options granted at fair value determined as of the grant date and recognize the expense over the periods in which the options vest or are expected to vest and related services are rendered based on the terms and conditions of the award. Generally, where the award only has a service condition, the requisite service period is the same as the vesting period.

Long-Lived Assets

Genprex reviews long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, the Company performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the discounted expected future cash flows. During the years ended December 31, 2023 and 2022, there were no deemed impairments of the Company’s long-lived assets.

Recent Accounting Developments

Accounting pronouncements issued but not effective until after December 31, 2023 are not expected to have a significant effect on the Company’s financial condition, results of operations, or cash flows.

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Note 3 – Intellectual Property

As of December 31, 2023, Genprex owned or had exclusive license agreements on 21 granted patents and 23 pending patent applications worldwide for technologies developed in-house or by researchers at the National Cancer Institute, MD Anderson, the University of Texas Southwestern Medical Center, and the University of Pittsburgh. These patents comprise various therapeutic, diagnostic, technical and processing claims. These license rights will be amortized on a straight-line basis over the estimated period of useful lives of the underlying patents or the license agreements.

University of Pittsburgh

On February 11, 2020, Genprex entered into an exclusive license agreement with the University of Pittsburgh for patented gene therapy technologies relating to the potential treatment of Type 1 and Type 2 diabetes. This license was first amended on August 17, 2022, to extend the milestone related to the filing of a new investigational drug (“IND”) application. This license was amended again on November 3, 2022, to include a new licensed glucagon promoter technology related to Type 1 diabetes and set FDA and clinical milestones related to the glucagon technology.

On November 22, 2022, Genprex entered into an exclusive license agreement with the University of Pittsburgh relating to the transformation of macrophages enabling them to reduce autoimmunity activity in Type 1 diabetes.

On December 29, 2022, Genprex entered into an exclusive license agreement with the University of Pittsburgh relating to the use of an insulin promoter in combination with the Company’s existing gene therapy, including the Pdx1 and MafA transcription factors, as a potential treatment for Type 2 diabetes.

On July 14, 2023, Genprex entered into an exclusive license agreement with the University of Pittsburgh related to a gene therapy for both Type 1 and Type 2 diabetes using a MafB promoter to drive expression of the Pdx1 and MafA transcription factors.

The University of Texas MD Anderson Cancer Center

On May 4, 2020, Genprex entered into an exclusive worldwide license agreement with The Board of Regents of the University of Texas System on behalf of MD Anderson relating to a portfolio of patent applications and related technology for the treatment of cancer using the Company’s lead drug candidate and immunotherapies. See “Note 7 - Commitments and Contingencies - Commitments - MD Anderson” for information on additional agreements involving MD Anderson licensed rights and technologies.

Note 4 – Equity

Reverse Stock Split

On February 2, 2024, Genprex completed a 1-for-40 reverse stock split of its issued and outstanding shares of common stock. The Reverse Split did not change the number of authorized shares of common stock or par value. All references in these consolidated financial statements to shares, share prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the split.

Registered Direct Offerings

On March 1, 2023, Genprex completed a registered direct offering, in which the Company sold to an accredited healthcare-focused institutional investor an aggregate of 95,239 shares of its common stock and warrants to purchase up to 95,239 shares of its common stock, at a combined offering price of $42.00 per share of common stock and accompanying warrant. The warrants are exercisable immediately upon issuance, expire 5 years from the date of issuance and have an exercise price of $44.00 per share. The Company received net proceeds of approximately $3.6 million after $400,000 of commissions and expenses, excluding any proceeds that may be received in the future from any exercise of the warrants.

On July 21, 2023, Genprex completed a registered direct offering priced at the market under Nasdaq rules, in which the Company sold to accredited healthcare-focused institutional investors an aggregate of (i) 185,644 shares of its common stock, and (ii) warrants to purchase up to 185,644 shares of its common stock, at a combined offering price of $40.40 per share of common stock and accompanying warrant. The warrants are exercisable immediately upon issuance, expire 5 years from the date of issuance and have an exercise price of $35.40 per share. Also, the Company agreed to issue to H.C. Wainwright & Co., LLC or its designees (the “Placement Agent”) warrants to purchase up to an aggregate of 11,140 shares of the Company’s common stock. The warrants issued to the Placement Agent have substantially the same terms as the warrants issued to the investors except that the Placement Agent warrants have an exercise price of $50.50 per share and expire on July 18, 2028. Genprex received net proceeds of approximately $6.7 million after approximately $800,000 of commissions and expenses, excluding any proceeds that may be received in the future from any exercise of the warrants.

See “Note 9 - Subsequent Events - March 2024 Registered Direct Offering” for a description of the Company's registered direct offering of shares, pre-funded warrants, and warrants in March 2024 resulting in net proceeds of approximately $5.8 million.

At-The Market Offering

On November 18, 2022, Genprex entered into an Equity Distribution Agreement with JMP Securities LLC (“JMP Securities”) pursuant to which the Company may sell from time to time, at its option, shares of its common stock through JMP Securities, as sales agent (the “2022 ATM Facility”), up to an aggregate offering price of $50 million. Sales of the shares were made under the Company’s previously filed Registration Statement on Form S-3 (Reg. No.333-239134), by means of ordinary brokers’ transactions on the NASDAQ Global Market or otherwise. Additionally, under the terms of the Sales Agreement, the shares could be sold at market prices, at negotiated prices or at prices related to the prevailing market price. Genprex agreed to pay JMP Securities a commission of 3.0% of the gross proceeds from the sale of the shares. During the year ended December 31, 2023, the Company sold 1,342 shares of common stock for aggregate net proceeds of $78,355 under the 2022 ATM Facility. On December 12, 2023, the Company provided notice to JMP Securities of its termination of the 2022 ATM Facility. The termination of the Equity Distribution Agreement with JMP Securities was effective as of December 13, 2023.

On December 13, 2023, Genprex entered into an At The Market (“ATM”) Offering Agreement (the “Agreement”) with H.C. Wainwright & Co., LLC, serving as agent (the “Agent”) with respect to an at-the-market offering program (the “2023 ATM Facility”) under which the Company may offer and sell through the Agent, from time to time at its sole discretion, up to such number or dollar amount of shares of its common stock (the “Shares”) as registered on the prospectus supplement covering the ATM offering, as may be amended or supplemented from time to time. Any Shares offered and sold pursuant to this Agreement will be issued pursuant to the Company’s currently effective shelf Registration Statement on Form S-3 (File No.333-271386) filed with the SEC on April 21, 2023, which was declared effective on June 9, 2023. The Company has agreed to pay the Agent a commission equal to three percent (3%) of the gross sales proceeds of any Shares sold through the Agent under the Agreement, and also have provided the Agent with customary indemnification and contribution rights. As of December 31, 2023, the Company had not sold any Shares under the 2023 ATM Facility.

See “Note 9 – Subsequent Events – 2023 ATM Facility” for a description of the Company’s usage of the 2023 ATM Facility after December 31, 2023 resulting in net proceeds of approximately $881,946.

Stock Issuances

During the year ended December 31, 2023, Genprex issued (i) 500 shares of common stock for services provided to the Company valued at $19,200 to the Chairman of its Scientific Advisory Board, and (ii) 500 shares of common stock upon the exercise of options by a former board member of the Company.

During the year ended December 31, 2022, Genprex issued (i) 500 shares of common stock for services provided to the Company valued at $42,400 to the Chairman of its Scientific Advisory Board, (ii) 342 shares of common stock upon the exercise of warrants on a cashless basis, (iii) 2,925 shares of common stock upon the exercise of options by an executive of the Company, and (iv) 1,919 shares of common stock for services provided to the Company, valued at $99,010, to consultants.

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Preferred Stock

Genprex is authorized to issue 10,000,000 shares of preferred stock at a par value of $0.001 per share, none of which are outstanding as of December 31, 2023.

Common Stock

Genprex is authorized to issue 200,000,000 shares of common stock at a par value of $0.001 per share, all of which is voting common stock. There were 1,485,902 shares of common stock outstanding at December 31, 2023.

Common Stock Purchase Warrants

Common stock purchase warrant activity for the years ended December 31, 2023 and 2022 respectively are as follows:

Number of Weighted Average Number of Weighted Average

Warrants Exercise Price Warrants Exercise Price

During the year ended December 31, 2023, Genprex issued (i) warrants to purchase up to an aggregate of 4,250 shares of common stock to service providers at exercise prices ranging from $26.00 to $66.00 per share, the fair market value of a share of common stock on the date of issuance, (ii) warrants to purchase up to 95,239 shares of common stock to accredited healthcare-focused institutional investors in connection with the registered direct offering completed on March 1, 2023, at an exercise price of $44.00 per share, (iii) warrants to purchase up to 185,644 shares of common stock to accredited healthcare-focused institutional investors in connection with the registered direct offering completed on July 21, 2023, at an exercise price of $35.40 per share, and (iv) warrants to purchase up to 11,140 shares of common stock to the Placement Agent in connection with the registered direct offering completed on July 21, 2023, at an exercise price of $50.50 per share. During the year ended December 31, 2023, the Company was deemed to cancel (i) warrants to purchase up to an aggregate of 960 shares of common stock upon termination of warrants previously issued to placement agents associated with the Company’s Initial Public Offering (“IPO”) in March 2018, and (ii) warrants to purchase up to an aggregate of 2,568 shares of common stock upon termination of warrants to a service provider. During the year ended December 31, 2023, the Company recorded share-based compensation of $133,558, respectively, associated with the vesting and issuance of warrants.

During the year ended December 31, 2022, Genprex issued (i) a warrant to purchase up to 1,250 shares of common stock to a service provider at an exercise price of $55.20 per share, the fair market value of a share of common stock on the date of issuance, (ii) a warrant to purchase up to 1,250 shares of common stock to a service provider at an exercise price of $59.60 per share, the fair market value of a share of common stock on the date of issuance, (iii) a warrant, previously accounted as a warrant issuable to a consultant in consideration of services provided at the Company’s IPO, to purchase up to 75 shares of common stock at an exercise price of $200.00 per share, the fair market value of a share of common stock at the Company’s IPO, and (iv) 342 shares of common stock to a placement agent associated with a registered direct offering in November 2019 upon the exercise of warrants on a cashless basis. During the year ended December 31, 2022, the Company was deemed to cancel (i) warrants to purchase up to an aggregate of 257 shares on common stock upon forfeiture of warrant shares associated with a cashless exercise, and (ii) warrants to purchase up to an aggregate of 3,402 shares on common stock upon termination associated with prior service providers.

As of December 31, 2023, Genprex had outstanding warrants to purchase 346,440 shares of common stock at a weighted average exercise price of $57.79 that have been issued to various consultants, investors, and placement agents of the Company. These warrants vest immediately or over periods ranging up to 12 months, are exercisable for a period of up to five years, enable the holders to purchase shares of the Company’s common stock at exercise prices ranging from $26.00 to $288.80 per share and have per-share fair values ranging from $13.85 to $185.00, based on Black-Scholes-Merton pricing models. The following assumptions were used in calculation of fair market value of options via Black-Scholes-Merton pricing models for the year ended December 31, 2023. Assumptions for the year ended December 31, 2022 are similar to those listed for the year ended December 31, 2023.

Twelve Months Ended December 31, 2023

Expected term (in years): 2.5 - 3.0

Dividend yield: 0%

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2018 Equity Incentive Plan

Genprex’s board of directors and stockholders have approved and adopted the Company’s 2018 Equity Incentive Plan (“2018 Plan”), which became effective on the completion of the IPO on April 3, 2018. The 2018 Plan provides for the grant of incentive stock options that are intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (“ISOs”), nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards and performance-based cash awards. ISOs may be granted only to employees of the Company. All other awards may be granted to employees, including officers, and to non-employee directors and consultants of the Company.

The number of shares of common stock reserved for issuance under the 2018 Plan automatically increase on January 1 of each year (the “evergreen provision”), beginning January 1, 2019 by 5% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s board of directors or a committee appointed to administer the 2018 Plan. On January 1, 2023 and 2022, the number of shares of common stock reserved for issuance under the 2018 Plan was increased by an aggregate of 60,132 and 59,843 shares, respectively. As of December 31, 2023, a total of 11,686 shares of common stock remain available for issuance for future awards under the 2018 Plan. Subsequent to the year ended December 31, 2023, an additional 74,294 shares of common stock became available for issuance for future awards under the 2018 Plan pursuant to the evergreen provision thereof.

2018 Employee Stock Purchase Plan

Genprex’s board of directors and stockholders approved and adopted the Company’s 2018 Employee Stock Purchase Plan (“ESPP”), which became effective on April 3, 2018. The ESPP has not yet been utilized as a benefit available to the Company’s employees. The ESPP authorizes the issuance of 5,202 shares of the Company’s common stock pursuant to purchase rights that may be granted to its eligible employees. The number of shares of common stock reserved for issuance under the ESPP is automatically increased on January 1 of each calendar year, beginning on January 1, 2019, by 2% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the administrator of the ESPP. The administrator of the ESPP determined not to increase the number of shares reserved for issuance under the ESPP on January 1, 2023.

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Stock Options

As of December 31, 2023, Genprex had outstanding stock options to purchase 285,883 shares of common stock that have been granted to various executives, employees, directors, and independent contractors of the Company, including outstanding stock options to purchase 25,417 shares of common stock issued as inducement grants, outside of the 2018 Plan, associated with the hiring of new executives in 2021 and 2023. These options vest immediately or over periods ranging from 12 to 48 months, are exercisable for a period of up to ten years, and enable the holders to purchase shares of the Company’s common stock at exercise prices ranging from $18.00 to $140.00 per share. The per-share fair values of these options range from $12.62 to $98.84, based on Black-Scholes-Merton pricing models with the following assumptions:

Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022

Expected term (in years): 6.0 10

Dividend yield: 0% 0%

During the year ended December 31, 2023, Genprex (i) granted stock options to purchase an aggregate of 8,251 shares of the Company’s common stock with exercise prices ranging from $18.00 to $60.40 per share to employees, (ii) cancelled options to purchase 6,245 shares of common stock at an exercise prices ranging from $50.80 to $142.00 per share in connection with the termination of certain employees, and (iii) issued 500 shares of the Company’s common stock upon the exercise of options held by a former board member with an exercise price of $11.92 per share.

During the year ended December 31, 2022, Genprex (i) granted stock options to purchase an aggregate of 74,600 of the Company’s common stock with exercise prices ranging from $50.80 to $140.00 per share to executives and employees, (ii) cancelled options to purchase 1,668 shares of common stock at exercise prices ranging from $80.00 to $146.40 per share in connection with the termination of certain employees, and (iii) issued 2,925 shares of the Company’s common stock upon the exercise of options held by an executive with an exercise price of $0.60 per share.

The weighted average remaining contractual term for the outstanding options at December 31, 2023 and 2022 is 6.13 and 7.08 years, respectively.

Stock option activity for the years ended December 31, 2023 and 2022, respectively, is as follows:

Number of Weighted Average Number of Weighted Average

Options Exercise Price Options Exercise Price

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Restricted Stock Units

A summary of the RSU activity under the 2018 Plan during the year ended December 31, 2023, is presented below. These amounts include RSUs granted to executives, other employees, and board members. There was no RSU activity for the year ended December 31, 2022.

Number of Weighted Average

Units Grant Date Fair Value

Outstanding at January 1, — $ —

Restricted stock units forfeited or cancelled 5,257 66.00

Share-Based Compensation

In the year ended December 31, 2023, Genprex’s total share-based compensation was approximately $5.4 million, consisting of $4.4 million and $1.0 million associated with G&A expense and R&D expense, respectively, which represents the vesting of options and warrants issued to service providers, executives, employees, and board members of the Company. As of December 31, 2023, the Company’s total compensation cost related to non-vested time-based stock option awards, RSUs, and warrants granted to executives, employees, board members, and service providers and not yet recognized was approximately $4.7 million, consisting of $3.8 million and $0.9 million associated with G&A expense and R&D expense, respectively. Genprex expects to record this stock-based compensation expense over the next three years using a graded vesting method. As of December 31, 2023, the weighted average term over which these expenses are expected to be recognized is 1.12 years.

As of December 31, 2023, there are no performance-based stock option awards outstanding and one performance-based warrant outstanding issued to a service provider of the Company. Genprex’s total compensation cost related to the non-vested performance-based warrant not yet recognized was approximately $300,000. The entirety of this warrant may be recognized and recorded upon the achievement of certain milestones.

In the year ended December 31, 2022, the Company’s total share-based compensation was approximately $4.7 million with approximately $4.6 million representing the vesting of options issued to service providers, employees, and board members of the Company.

Note 5 - 401(k) Savings Transactions

In 2022, Genprex established a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code (“401(k) Plan”) and established an employer matching program for participants in the 401(k) Plan. The 401(k) Plan covers all employees who meet defined minimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pre-tax basis. Genprex incurred $141,564 and $74,281 of expense for matching contributions to the 401(k) Plan for the years ended December 31, 2023 and 2022, respectively.

Note 6 - Related Party Transactions

Introgen Research Institute

Introgen Research Institute (“IRI”) is a Texas-based technology company formed by Rodney Varner, Genprex’s President, Chief Executive Officer and Chairman of the Board and IRI’s sole officer. IRI is owned by trusts of which Mr. Varner’s descendants are the sole beneficiaries. In April 2009, prior to Mr. Varner becoming an officer and director of the Company in August 2012, Genprex entered into an Assignment and Collaboration Agreement with IRI, providing the Company with the exclusive right to commercialize a portfolio of intellectual property. This agreement was amended in 2011 to include additional sublicensing of additional intellectual property made available to IRI from MD Anderson (See Note 7 – Commitments and Contingences – Commitments – MD Anderson Cancer Center).

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Note 7 - Commitments and Contingencies

Commitments

MD Anderson

In July 2018, Genprex entered into a two-year sponsored research agreement with MD Anderson to sponsor preclinical studies focused on the combination of REQORSA with an immunotherapy with a projected total cost of approximately $2 million. This agreement was extended beyond the original expiration date. This agreement expired in May 2022. In August 2022, Genprex entered into a three-year sponsored research agreement with MD Anderson to sponsor preclinical studies focused on REQORSA and other potential product candidates in oncology to resensitize NSCLC and SCLC to targeted therapies and immunotherapies with a projected total cost of approximately $2.9 million. As of December 31, 2023, Genprex has paid approximately $1.2 million toward this commitment.

In 2011, Genprex agreed to assume certain contractual and other obligations of IRI in consideration for the sublicense rights, expertise, and assistance associated with certain technologies and intellectual property originally licensed to another party under the 1994 License Agreement with MD Anderson (“Original MD Anderson License Agreement”). These technologies and intellectual property were later sublicensed to IRI (the “IRI Sublicense”). Genprex also agreed to pay royalties of 1% on sales of certain licensed products for a period of 21 years following the termination of the later of the Original MD Anderson License Agreement and the IRI Sublicense. The Company assumed patent prosecution costs and an annual minimum royalty of $20,000 payable to the National Institutes of Health.

On March 3, 2021, Genprex entered into an amendment (the “MD License Amendment”) to the Patent and Technology License Agreement dated May 4, 2020, with MD Anderson. The MD License Amendment grants the Company with a worldwide, exclusive, sublicensable license to an additional portfolio of six patents and one patent application and related technology for methods for treating cancer by administration of a TUSC2 therapy in conjunction with EGFR inhibitors or other anti-cancer therapies in patients predicted to be responsive to TUSC2 therapy. Pursuant to the MD License Amendment, Genprex agreed to (i) pay annual maintenance fees ranging from the mid five figures to the low six figures, (ii) total milestone payments of $6,150,000, (iii) a one-time fee in the mid five figures and (iv) certain patent related expenses. As of December 31, 2023, Genprex has paid approximately $320,000 toward this commitment.

National Institutes of Health

Genprex has a royalty obligation to the National Institutes of Health (“NIH”) to be paid upon the Company’s receipt of FDA approval using NIH technology. The $240,000 contingent obligation which increases annually by $20,000 and is $360,000 and $340,000 for the years ended December 31, 2023 and 2022, respectively, will be recognized when the Company obtains regulatory approval (the event that triggers the payment obligation).

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University of Pittsburgh

Pursuant to an exclusive license agreement dated February 11, 2020 by and between Genprex and the University of Pittsburgh, amended on August 17, 2022, and amended again on November 3, 2022, Genprex agreed to pay (i) an initial licensing fee of $25,000, (ii) annual maintenance fees of $25,000 for the firstthree years and $40,000 for each subsequent year following the first anniversary of the agreement, (iii) royalties ranging from 1.5% to 3% of net sales of licensed technologies, (iv) an annual minimum royalty payment of $250,000 per year beginning in the year of the first commercial sale of licensed technology, (v) a share of non-royalty sublicense income of 20%, and (vi) an aggregate of $3,975,000 in milestone payments related to the usage of a glucagon promoter and gene therapy technologies to potentially treat Type 1 diabetes. Unless earlier terminated pursuant to its terms, the agreement expires upon the later of (i) 20 years after the first commercial sale of the licensed technology thereunder and (ii) expiration of the last valid claim under the patent rights. As of December 31, 2023, Genprex has paid approximately $110,000 toward this commitment.

Pursuant to an exclusive license agreement dated November 22, 2022 by and between Genprex and the University of Pittsburgh, Genprex agreed to pay (i) an initial licensing fee of $25,000, (ii) annual maintenance fees of $25,000 for the firstthree years and $40,000 for each subsequent year following the first anniversary of the agreement, (iii) royalties ranging from 1.5% to 3% of net sales of licensed technologies, (iv) an annual minimum royalty payment of $250,000 per year beginning in the year of the first commercial sale of licensed technology, (v) a share of non-royalty sublicense income of 20%, and (vi) an aggregate of $3,975,000 in milestone payments related to the usage of a macrophage technology and gene therapy technologies to potentially treat Type 1 diabetes. Unless earlier terminated pursuant to its terms, the agreement expires upon the later of (i) 20 years after the first commercial sale of the licensed technology thereunder and (ii) expiration of the last valid claim under the patent rights. As of December 31, 2023, Genprex has paid approximately $50,000 toward this commitment.

Pursuant to an exclusive license agreement dated December 29, 2022 by and between Genprex and the University of Pittsburgh, Genprex agreed to pay (i) an initial licensing fee of $25,000, (ii) annual maintenance fees of $25,000 for the firstthree years and $40,000 for each subsequent year following the first anniversary of the agreement, (iii) royalties ranging from 1.5% to 3% of net sales of licensed technologies, (iv) an annual minimum royalty payment of $250,000 per year beginning in the year of the first commercial sale of licensed technology, (v) a share of non-royalty sublicense income of 20%, and (vi) an aggregate of $3,975,000 in milestone payments related to the usage of an insulin promoter and gene therapy technologies to potentially treat Type 2 diabetes. Unless earlier terminated pursuant to its terms, the agreement expires upon the later of (i) 20 years after the first commercial sale of the licensed technology thereunder and (ii) expiration of the last valid claim under the patent rights. As of December 31, 2023, Genprex has paid approximately $25,000 toward this commitment.

Pursuant to an exclusive license agreement dated July 14, 2023, by and between Genprex and the University of Pittsburgh, Genprex agreed to pay (i) an initial licensing fee of $25,000, (ii) annual maintenance fees of $25,000 for the first year, $50,000 for the second and third years, and $100,000 for the fourth year and each subsequent year following the fourth anniversary of the agreement thereafter until the anniversary prior to the year of the first commercial sale, (iii) royalties ranging from 1.5% to 3% of net sales of licensed technologies, (iv) an annual minimum royalty payment of $250,000 per year beginning in the year of the first commercial sale of licensed technology, (v) a share of non-royalty sublicense income of 20%, and (vi) an aggregate of $4,225,000 in milestone payments related to the usage of an MafB promoter and gene therapy technologies to potentially treat Type 1 and Type 2 diabetes. Unless earlier terminated pursuant to its terms, the agreement expires upon the later of (i) 20 years after the first commercial sale of the licensed technology thereunder and (ii) expiration of the last valid claim under the patent rights. As of December 31, 2023, Genprex has paid approximately $25,000 toward this commitment.

Contract Development and Manufacturing Organization

Genprex entered into a three-year development services agreement in July 2022, amended in each of January 2023 and March 2023, with a contract development and manufacturing organization to manufacture good manufacturing practices (“GMP”) grade materials for use in the Company’s clinical trials with a projected total cost of approximately $4.5 million. As of December 31, 2023, Genprex has paid approximately $2.6 million toward this commitment.

Contingencies

From time to time, the Company may become subject to threatened and/or asserted claims arising in the ordinary course of its business. The Company is not aware of any matters, either individually or in the aggregate, that are reasonably likely to have a material impact on its financial condition, results of operations or liquidity.

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Note 8 – Income Taxes

Components of income tax benefit for the year ended December 31, 2023 and 2022, respectively, are as follows:

Current Tax Expense (Benefit):

Federal — —

State — —

Total — —

Deferred Tax Expense (Benefit):

Federal — —

State — —

Total — —

Total Provision for Income Taxes — —

Temporary differences between financial statement carrying amount and tax basis of assets and liabilities that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2023 and 2022, respectively, are as follows:

Deferred tax assets:

Allowance for Doubtful Accounts — —

Interest Expense — —

Deferred Income Tax Liabilities:

Intangible Assets — —

Lease - Right of Use — —

Unrealized Gain/Loss — —

Net Deferred Income Tax Asset — —

At December 31, 2023 and 2022, the Company had federal net operating losses of $80.5 million and $68.9 million, respectively. Net deferred tax assets are mainly comprised of temporary differences between financial statement carrying amount and tax basis of assets and liabilities.

In assessing the ability to realize the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the period in which these temporary differences become deductible. Management considers the projected future taxable income and prudent and feasible tax planning strategies in making this assessment. As of December 31, 2023 and 2022, valuation allowances of $23.4 million and $17.1 million have been recorded, respectively.

The Company has federal research and development (“R&D”) credit carryforwards of $1.4 million which will begin to expire in 2037.

Effective January 1, 2009 the Company adopted ASC 740-10, the provision formerly FASB Interpretation No.48, Accounting for Uncertainty in Income Taxes, (“FIN48”) and began evaluating tax positions utilizing a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination based on the technical merits of the position. The second step is to measure the benefit to be recorded from tax positions that meet the more-likely-than-not recognition threshold by determining the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement and recognizing that amount in the financial statements.

F-

Note 9 – Subsequent Events

Reserves of 2018 Equity Incentive Plan and 2018 Employee Stock Purchase Plan

On January 1, 2024, the total shares of common stock reserved under the 2018 Plan increased by 74,294 shares. On March 14, 2024, the Company’s board of directors determined that no additional shares would be reserved during the 2024 fiscal year for the ESPP given that no shares have yet been issued under the ESPP.

Share Issuances

On January 2, 2024, Genprex issued 125 shares of common stock to the Chairman of the Company’s Scientific Advisory Board in consideration for services. On January 3, 2024, Genprex issued 6,250 shares of common stock to a service provider of the Company. On March 14, 2024, Genprex issued 30,000 shares of common stock to a service provider of the Company.

2023 ATM Facility

From January 1, 2024 through the date of filing of this Annual Report on Form 10-K, Genprex has sold 158,474 shares of its common stock for aggregate net proceeds to the Company totaling $881,946under the 2023 ATM Facility.

Reverse Stock Split

At Genprex’s special meeting of stockholders held on December 14, 2023, the Company’s stockholders granted the Company’s board of directors the discretion to effect a reverse stock split of the Company’s issued and outstanding common stock through an amendment (the “Certificate of Amendment”) to the Company’s Amended and Restated Certificate of Incorporation, as amended and restated to date, at a ratio of not less than 1-for-10 and not more than 1-for-50, such ratio to be determined by the Company’s board of directors. On January 19, 2024, the Company’s board of directors approved a 1-for-40 reverse stock split and authorized the filing of the Certificate of Amendment for the Reverse Split with the Secretary of State of the State of Delaware. The Reverse Split became effective in accordance with the terms of the Certificate of Amendment on February 2, 2024. The Certificate of Amendment did not change the number of authorized shares of common stock or the par value. All share and per share amounts in this Annual Report on Form 10-K have been adjusted to reflect the Reverse Stock Split.

Departure of a Named Executive Officer

Effective as of February 4, 2024, Catherine Vaczy’s employment with the Company as Senior Vice President, General Counsel, and Chief Strategy Officer was terminated.

March 2024 Registered Direct Offering

On March 21, 2024, the Company completed a registered direct offering, in which the Company sold to an institutional investor an aggregate of (i) 165,000 shares of common stock, (ii) pre-funded warrants (the “March 2024 Pre-Funded Warrants”) exercisable for up to an aggregate of 1,377,112 shares of common stock, and (iii) warrants (the “March 2024 Common Warrants”) exercisable for up to an aggregate of 1,542,112 shares of common stock. The offering price for each share of common stock and accompanying March 2024 Common Warrant was $4.215, and the offering price for each March 2024 Pre-Funded Warrant and accompanying March 2024 Common Warrant was $4.2149. The March 2024 Pre-Funded Warrants are exercisable immediately upon issuance at an exercise price of $0.0001 per share and will expire when exercised in full. The March 2024 Common Warrants are exercisable immediately upon issuance at an exercise price of $4.09 per share and will expire in 5 years from the date of issuance. The Company received net proceeds of approximately $5.8 million after commissions and expenses, excluding any proceeds that may be received in the future from any exercise of the March 2024 Common Warrants. In connection with the offering, the Company also amended certain existing warrants to purchase up to an aggregate of 194,248 shares of common stock that were previously issued to investors in March 2023 and July 2023, with exercise prices of $44.00 and $35.40 per share and expiration dates of March 1, 2028 and July 21, 2028 for $0.125 per amended warrant, such that the amended warrants have a reduced exercise price of $4.09 per share and an expiration date of five years from the closing of this offering.

F-21

GNPX US Equity

GNPX · 10-K · period ended 2023-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibit and Financial Statement Schedules.

Item 16. Form 10–K Summary.

GNPX US Equity☆

GNPX · 10-K · period ended 2023-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibit and Financial Statement Schedules.

Item 16. Form 10–K Summary.

GNPX US Equity