PCSA US Equity☆

Item 1A. Risk Factors 29

Item 1B. Unresolved Staff Comments 52

Item 1C. Cybersecurity 52

Item 2. Properties. 53

Item 3. Legal Proceedings. 53

Item 4. Mine Safety Disclosures. 53

Part II

Item 6. [Reserved] 55

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 62

Item 8. Financial Statements and Supplementary Data 62

Item 9A. Controls and Procedures 63

Item 9B. Other Information 64

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 64

Part III

Item 10. Directors, Executive Officers and Corporate Governance 65

Item 11. Executive Compensation 70

Item 14. Principal Accounting Fees and Services 78

Part IV

Item 15. Exhibits, Financial Statement Schedules 79

Signatures 81

GLOSSARY

OF CERTAIN SCIENTIFIC TERMS

The

medical and scientific terms used in this Annual Report on Form 10-K have the following meanings:

“Active

Metabolite” means a drug that is processed by the body into an altered form which effects the body.

“Agonist”

means a chemical/drug that binds to a receptor in the body and activates that receptor to produce a biological response.

“Analog”

means a compound having a structure similar to that of an approved drug but differing from it with respect to a certain component of

the molecule which may cause it to have similar or different effects on the body.

“cGCP”

means current Good Clinical Practices. The FDA and other regulatory agencies promulgate regulations and standards, commonly referred

to as current Good Clinical Practices, for designing, conducting, monitoring, auditing and reporting the results of clinical trials to

ensure that the data and results are accurate and that the rights and welfare of trial participants are adequately protected.

“cGMP”

means current Good Manufacturing Practices. The FDA and other regulatory agencies promulgate regulations and standards, commonly referred

to as current Good Manufacturing Practices, which include requirements relating to quality control and quality assurance, as well as

the corresponding maintenance of records and documentation.

“CMO”

means Contract Manufacturing Organization.

“CRO”

means Contract Research Organization.

“Deuterated

analog” means a small molecule in which one or more of the hydrogen atoms are replaced by deuterium.

“EMA”

means the European Medicines Agency.

“FDA”

means the Food and Drug Administration.

“IND”

means an Investigational New Drug Application. Before testing a new drug on human subjects, the company must file an IND with the FDA.

Information must be produced on the absorption, distribution, metabolism, and excretion properties of the drug and detailed protocols

for testing on human subjects must be submitted.

“Indication”

means a condition which makes a particular treatment or procedure advisable.

“Moiety”

means an active or functional part of a molecule.

“NDA”

means a New Drug Application submitted to the FDA. Under the Food, Drug, and Cosmetic Act of 1938, an NDA is submitted to the FDA enumerating

the uses of the drug and providing evidence of its safety.

“NGC” means Next Generation Cancer therapy, referring to the

drugs in our pipeline that change the metabolism or distribution of existing cancer drugs to increase potency and reduce toxicity.

“NL”

means Necrobiosis Lipoidica, a rare chronic and granulomatous disorder.

SPECIAL

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This

Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. All statements other than statements

of historical facts contained in this Form 10-K are forward-looking statements. In some cases, you can identify forward-looking statements

by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,”

“estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,”

“project,” “seek,” “should,” “target,” “will,” “would,” or the

negative of these words or other comparable terminology. We have based these forward-looking statements on our current expectations and

projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-

and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks,

uncertainties and assumptions, including those described in “Risk Factors” and elsewhere in this Form 10-K. Moreover, we

operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management

to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of

factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of

these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10-K may not occur, and

actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these

uncertainties, you should not place undue reliance on these forward-looking statements. These risks are discussed more fully in the “Risk

Factors” section of this Annual Report on Form 10-K and are summarized below under the “Summary Risk Factors” section.

These risks include, but are not limited to, the following:

● our ability to meet obligations under our license agreements;

● our ability to obtain and maintain regulatory approval of our product;

● our ability to recruit and enroll suitable patients in our clinical trials;

● the pricing and reimbursement of our product candidates, if approved;

● developments relating to our competitors and our industry;

● our financial performance; and

You

should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected

in the forward-looking statements are reasonable as of the date of this Form 10-K, we cannot guarantee that the future results, levels

of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake

no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-K to conform these statements

to new information, actual results or to changes in our expectations, except as required by law.

You

should read this Form 10-K and the documents that we reference in this Form 10-K and have filed with the SEC as exhibits with the understanding

that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we

expect.

In

this Form 10-K, “we,” “us”, “our”, “Processa” and “the Company” refer to

Processa Pharmaceuticals, Inc. and its subsidiary.

Part

I

Item

1. Business

Corporate

Information

We

were incorporated under the laws of the State of Delaware on March 29, 2011. Our principal executive office is located at 7380 Coca Cola

Drive, Suite 106, Hanover, MD 21076. Our telephone number is (443) 776-3133.

We

make available free of charge on or through our Internet website (http://www.processapharmaceuticals.com) our Annual Report on

Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished

pursuant to Section 13(a) or 15(d) of the Exchange Act, as well as our Code of Ethics and Code of Conduct, as soon as reasonably practicable

after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC). The SEC also maintains

a website which provides online access to reports and other information regarding registrants that file electronically with the SEC at:

www.sec.gov.

The

information contained on our website and social media channels is not included as a part of, or incorporated by reference into, this

report.

Overview

We

are a clinical-stage biopharmaceutical company developing a pipeline of Next Generation Cancer therapy (“NGC”) small molecules,

two of which are in, or have completed, Phase 2 trials, and one is in pre-clinical development.

We

believe our strategy reduces clinical risk, regulatory risk and commercial risk. Our risk-mitigated strategy is to identify existing

cancer therapies where the mechanism of action is well understood and that are cornerstones of current treatment regimens, but are highly

toxic, with side effects that are often treatment limiting (see Our Strategy below). We devise technologies to change the way the body

metabolizes them, or the way they are distributed within the body, to improve the therapeutic effect and reduce toxicity. We then efficiently

develop our pipeline of Next Generation Cancer therapies utilizing our proprietary Regulatory Science Approach (see Regulatory Science

Approach below), which we believe will further increase the likelihood of regulatory approval. Since the underlying drugs are already

commonly used in cancer therapy, we believe, that if our clinical trials are successful, and are showing better efficacy and tolerability

than the currently used drugs, the commercial adoption for our NGC therapies will be rapid and broad.

The NGC treatments in our pipeline are as follows (see Our Drug Pipeline below for a more detailed discussion of each):

We are currently evaluating options

to monetize two non-oncology drug assets, which may include out-licensing or partnering these assets with one or more third parties.

Our

Strategy

We

believe our strategy reduces clinical risk, regulatory risk and commercial risk, while addressing a critical need in fighting cancer.

Historically,

cancer therapies targeted rapidly dividing cells because cancer cells tend to divide and grow more quickly than normal cells.

Unfortunately, most of these drugs do not distinguish between cancer cells and normal cells that also divide rapidly, such as those

in the bone marrow, digestive tract, and hair follicles. Prior to FDA’s Project Optimus Initiative, oncology drug developers

would begin human clinical trials with dose-escalating studies meant to identify a Maximum Tolerated Dose (“MTD”), which

they hoped would be high enough to impact the cancer. If approved by the FDA, the recommended dose would be at or near the MTD,

resulting in many patients suffering from severe side effects from treatment. Developers were defining the “optimal”

treatment dose by the highest dose that may potentially be tolerated and then assumed that the highest dose would also provide the

greatest efficacy, which may not have been correct.

Our

risk-mitigated strategy is to identify existing effective cancer therapies where the active cancer-killing ingredients are well understood

and that are foundations of current treatment regimens, but are highly toxic, with side effects that are often treatment limiting. We

then devise technologies to change the way the body metabolizes the drugs, or the way they are distributed within the body, to increase

potency and reduce toxicity. By modifying the drugs in this manner, we believe our treatments will provide improved safety and efficacy

profiles when compared to their currently marketed counterparts. We believe our approach will extend survival and improve quality of

life for many patients fighting cancer. We also believe that we can develop these drug candidates at a lower cost with a higher success

rate than is common in the industry. We call our drug candidates Next Generation Cancer (NGC) therapies.

Clinical

Risk

We

already know these drugs work. They have been used in cancer treatment for decades, and there are hundreds, if not thousands, of

scientific publications looking at all aspects of the drugs. In many ways, these drugs are better understood now than when they were

first approved. This improved knowledge, added to the data from prior human clinical trials, leads us to believe clinical risk is

significantly reduced when compared to a potential drug that is focusing on a new mechanism of action or new target. By modifying

how an existing anti-cancer drug is metabolized or distributed within the body, thereby making the existing drug less toxic and more

effective, we do not rely on finding an MTD that exceeds what is safe for many patients. Instead, we seek to merely increase the

amount of the proven anti-cancer ingredients in the cancer cells, while reducing those ingredients in healthy cells, often with a

lower dose of the approved drug, which we believe results in less clinical risk.

Regulatory

Risk

Our

strategy is to efficiently develop our pipeline of Next Generation Cancer therapies utilizing our proprietary Regulatory Science Approach

(described more fully in “Regulatory Science Approach” below), including the principles associated with FDA’s Project

Optimus oncology initiative and the related FDA draft guidance (Optimus, 2025). Part of the development includes determining the optimal

dosage regimen, rather than an MTD, based on the dose-response relationship. By changing either the metabolism, distribution, and/or

elimination of already FDA-approved cancer drugs (e.g., capecitabine, gemcitabine, and irinotecan) or their Active Metabolites, we believe

that our oncology drugs represent the next generation of cancer therapy with an improved safety and efficacy

profile, thereby potentially benefiting more patients while maintaining the mechanism of how the drug kills cancer cells. By combining

these modified, approved cancer treatments with our Regulatory Science Approach and our experience using the principles of FDA’s

Project Optimus initiative, we anticipate that we will be able to increase the probability of FDA approval, improve the safety-efficacy

profile over the existing counterparts of our NGC drugs, and more efficiently develop each drug.

Commercial

Risk

Since

the underlying drugs are already heavily used in cancer therapy, we believe that, if our clinical trials are successful in demonstrating

greater efficacy with better tolerability, our NGC therapies will be rapidly and broadly adopted. Why would an oncologist use the older,

more toxic drug?

Summary

To

date, we have data that we believe suggests our NGC treatments are likely to have a better safety-efficacy profile than the current widely

used marketed counterpart drugs, not only potentially making the development and approval process more efficient, but also differentiating

our NGC treatments from the existing treatment in the market.

Regulatory

Science Approach

Our

Regulatory Science Approach was conceived in the early 1990s when the founders of Processa and other faculty at the University of Maryland

worked with the FDA to develop multiple FDA Guidances. Regulatory science is the science of developing new tools, standards, and approaches

to assess the safety, efficacy, quality, and performance of all FDA-regulated products. Two of our founders, Dr. David Young and Dr.

Sian Bigora, developed trade secrets and know-how developed from the regulatory science research initially developed in collaboration

with FDA and later refined by Drs. Young and Bigora over the last 30+ years. They also expanded the original regulatory science concept

by including it in pre-clinical and clinical studies to justify the benefit-risk assessment required for FDA approval when designing

the development programs of new drug products. Our regulatory science approach defines the scientific information that the FDA requires

to determine if the benefit outweighs the risk of a drug in a specific population of patients and at a specific dosage regimen for a

specific drug product. The studies are designed to obtain the necessary scientific information to support the regulatory decision.

Recently,

the FDA took steps to define some of the regulatory science required for the FDA approval of oncology products. Historically, most cancer drugs were dosed at the MTD, which lead to many patients experiencing significant side

effects and lower quality of life. What was ignored was that a lower dose may result in the same efficacy as a higher dose while providing fewer side

effects and/or less severe side effects. Through the FDA’s

Project Optimus Oncology Initiative (Optimus, 2025) and the related Draft Guidance on determining the “optimal” dosage regimen

for an oncology drug, the FDA chose to make the development of oncology drugs more science-based than in the past. Since the principles

of the FDA’s Project Optimus and the related Draft Guidance have been used by our regulatory science approach in a number of non-oncology

drugs, our experience with the principles of Project Optimus differentiates us from other biotechnology companies by focusing us, not

only on the clinical science, but also on the equally important regulatory process. We believe utilizing our Regulatory Science Approach

provides us with three distinct advantages:

● Greater efficiencies (e.g., the right trial design and trial readouts);

Our

Drug Pipeline

Our

oncology pipeline currently consists of NGC-Cap, NGC-Gem and NGC-Iri (also identified as PCS6422, PCS3117, and PCS11T, respectively) and

two non-oncology drugs (PCS12852 and PCS499). We are exploring options for our non-oncology drugs, which may include out-licensing or

partnership opportunities. A summary of each drug is provided below.

NGC-Cap

Capecitabine

(NCI, 2025), as presently prescribed and FDA-approved, is an oral prodrug of the cancer drug 5-fluorouracil (“5-FU”) (Casale

J, 2024), which is itself widely used as an intravenous anticancer agent in many types of cancer. Capecitabine is metabolized into

5-FU where it is then further metabolized to anabolites (which kill both cancer cells and normal duplicating cells) and catabolites (have

no cancer killing properties and may cause side effects) (Yen-Revollo, 2008). In 2021, Medicare Part B alone reports over 9.2 million dosing units of capecitabine used.

Dihydropyrimidine

dehydrogenase (“DPD”) is an enzyme that helps the body break down thymine and uracil, and inactivates 80–90% 5-FU (Yen-Revollo,

2008). This means the dose of capecitabine must be high enough to account for the DPD effect. However, DPD enzyme activity has been shown

to vary among individuals in a Gaussian pattern (i.e. normal distribution or bell-shaped curve), with as much as a sixfold variation

from the lowest to the highest values. This wide variation in DPD activity is likely responsible for the wide variation in the half-life

observed in patients in population studies (Diasio, 1998). This may suggest a source of the high incidence of moderate to severe side

effects experienced by people taking capecitabine.

Adverse

side effects occur in up to 70% of patients treated with capecitabine (Yen-Revollo, 2008) (Xeloda Package Insert, 2015), including myelosuppression,

cardiac toxicity, mucositis, diarrhea, and hand-foot syndrome (“HFS”). These side effects frequently result in decreased

doses, interrupted doses, or discontinuation of treatment with capecitabine, which limits its effectiveness to the patient. Approximately

30% of patients will experience toxicities above grade 3, and approximately 10% to 20% will require hospitalization to treat these toxicities

(Meulendijks D, 2016).

HFS

occurs in 15.5% to 68.3% (median, 53.5%) of patients treated with capecitabine (Yen-Revollo, 2008). The molecular pathophysiology of

5-FU-induced HFS remains unclear, but since combination therapy of 5-FU with a DPD inhibitor significantly reduces the occurrence of

HFS, it suggests that the toxicity may be due to a byproduct of DPD catabolism of the drug (Yen-Revollo, 2008).

PCS6422

is an orally administered irreversible inhibitor of the enzyme DPD. When capecitabine is given in combination with PCS6422 (“NGC-Cap”),

PCS6422 significantly changes the metabolism of 5-FU, which results in a change in the distribution of 5-FU within the body. Due to this

change in metabolism, and the overall metabolite profile of anabolites and catabolites, the side effect and efficacy profile of NGC-Cap

has been found to be different from capecitabine given without PCS6422. Since the potency of NGC-Cap is greater than FDA-approved capecitabine,

the amount of capecitabine anabolites formed from 1mg of capecitabine administered in NGC-Cap will, therefore, be much greater than would

be formed from the administration of 1mg of existing capecitabine. Therefore, a lower dose of capecitabine would be expected to accomplish

the same, or greater, cancer-killing activity. Importantly, chemically inhibiting DPD activity also reduces interpatient and intrapatient

variability, raises plasma levels of bioavailable 5-FU, and lengthens the time of pharmacologic exposure to the drug (Yen-Revollo, 2008),

meaning that there should be less variability in response and side effects.

On

August 2, 2021, we enrolled the first patient in our Phase 1B trial in patients with advanced refractory gastrointestinal (GI) tract

tumors. Our interim analysis of Cohorts 1 and 2A found no dose-limiting toxicities (DLTs), no drug-related adverse events greater than

Grade 1, and no adverse events associated with the catabolites of 5-FU such as HFS. In this Phase 1B trial, it was demonstrated that

the irreversible inhibition of DPD by PCS6422 could alter the metabolism, distribution and elimination of 5-FU, making NGC-Cap significantly

(up to 50 times) more potent than capecitabine alone and potentially leading to higher levels of anabolites which can kill replicating

cancer and normal cells. By administering NGC-Cap to cancer patients, the balance between anabolites and catabolites changes depending

on the dosage regimens of PCS6422 and capecitabine used, making the efficacy-safety profile of NGC-Cap different than that of FDA-approved

capecitabine and requiring further evaluation of the PCS6422 and capecitabine regimens to determine the optimal NGC-Cap regimens for

patients.

In

an effort to better estimate the timeline of DPD inhibition and formation of new DPD, we modified the protocol for the Phase 1B trial

and began enrolling patients in the amended Phase 1B trial in April 2022. On November 1, 2022, we announced that data from the Phase

1B trial identified multiple dosage regimens with potentially better safety and efficacy profiles than currently existing capecitabine

regimens. Since 5-FU exposure is dependent on both the PCS6422 regimen and the capecitabine regimen, safe regimens were identified as

well as regimens that cause DLTs. One of the regimens in the Phase 1B trial did cause DLTs in two patients,

one of whom died from complications of his condition in conjunction with the treatment. The Phase

1B trial completed enrollment in early 2024 and the last subject completed the study in July 2024. Data from the Phase 1B showed, that

although 5-FU exposure at therapeutic doses was 5 to 10 fold greater than for monotherapy, adverse events from 5-FU catabolites were

minimal while anabolite associated adverse events for the highest dose cohorts were similar to those reported for monotherapy. In these

evaluable subjects with refractory or intolerant cancer, the combination of PCS6422 and capecitabine showed an efficacy with a partial

response rate of 11%, stable disease rate of 44%, and a median progression free survival of 93 days. This safety and efficacy data supports

the inclusion of the 2 dosage regimens of PCS6422 in combination with capecitabine (from Cohort 3 [75 mg BID] and Cohort 4 [225 mg BID])

in the Phase 2 study. The safety review committee determined the MTD and RP2D as (capecitabine 450 mg/day; 225 mg BID), the Cohort 4

dosing regimen.

In

parallel with the Phase 1B trial, we had discussions with the FDA which clarified that the major goal for the next Phase 2 trial would

be to evaluate and understand the dose- and exposure-response relationship for anti-tumor activity and safety. The specific dosage regimens

for the trial were defined following the determination of the MTD from Phase 1B trial. Following the FDA meeting on December 11, 2023,

we determined the next NGC-Cap trial would be a Phase 2 trial in breast cancer. This decision was supported through discussions with

the FDA, where we agreed with the FDA that the development of NGC-Cap in breast cancer would be a more efficient development program

than metastatic colorectal cancer and improve the likelihood of FDA approval. The FDA agreed that the data generated from past and existing

studies could be used to directly support the Phase 2 trial in breast cancer. Capecitabine is already approved as both monotherapy and

combination therapy in breast cancer, which contributes to the logic and efficiency of our current direction. In addition, the FDA’s

agreement that our present data would support a Phase 2 trial in breast cancer makes the expansion seamless. The objective for the Phase

2 trial is to provide safety-efficacy data to preliminarily demonstrate the benefit of NGC-Cap over monotherapy capecitabine. Based on

this expansion to breast cancer, we expanded our Oncology Advisory Board to include key breast cancer oncologists.

The

IND for the evaluation of NGC-Cap for the treatment of breast cancer was cleared by the FDA on July 24, 2024, and allowed for the Phase

2 trial to be initiated. The Phase 2 study (NCT06568692) is a global multicenter, open-label, adaptive designed safety-efficacy trial

comparing two different doses of NGC-Cap to FDA-approved monotherapy capecitabine in approximately 60 to 90 patients with advanced or

metastatic breast cancer. The trial is designed to evaluate the safety-efficacy profile of NGC-Cap versus monotherapy capecitabine, to

determine the potential optimal dosage regimens of NGC-Cap as required by the FDA Project Optimus Initiative and to evaluate the possibility

of personalizing NGC-Cap therapy. The first patient in the trial was dosed on October 2, 2024, and the trial is currently enrolling additional

patients. After 20 patients have been treated, an interim analysis will be conducted.

Breast

cancer is the most diagnosed cancer, representing approximately 15% of all new cancer patients in 2023. It has a prevalence of more than

3.8 million patients, with nearly 300,000 new diagnoses last year. Over 150,000 women are currently living with advanced or metastatic

breast cancer. The NGC-Cap annual newly diagnosed incidence rate for breast, colorectal and other cancers is greater than 250,000 patients

per year.

NGC-Gem

Gemcitabine

is widely used in pancreatic, gall bladder, lung, and other solid tumor cancers. Approximately 20%-40% of patients respond to gemcitabine

across solid tumor cancers. Resistance to gemcitabine is a key problem with 55%-85% of patients are inherently resistant or acquire resistance

(Gemzar PI, 2019). In 2021, Medicare Part B alone reports over 840,000 dosing units used.

PCS3117

has completed a Phase 2A trial in patients with progressive metastatic pancreatic cancer after previous chemotherapy treatments, including

93% refractory to gemcitabine, with the following results:

● 31% (14 patients) had progression-free survival for 8 weeks or more

● 12% (5 patients) had stable disease for more than 4 months

● One patient had a tumor reduction of 40% after 28 days of treatment

Like

gemcitabine, NGC-Gem could be used to treat patients with various cancers such as pancreatic, biliary tract, lung, ovarian, and breast.

We estimate more than 275,000 patients in the United States were newly diagnosed in 2022 with pancreatic, biliary tract, lung, ovarian,

and breast cancer.

NGC-Iri

The muscle-to-plasma ratio was less than 0.10 for

NGC-Iri and greater than 0.4 for irinotecan and Onivyde®

We are defining the potential paths to approval, which

include defining the targeted patient population and the type of cancer. In 2025, subject to available funding, we plan to expand the

preclinical analysis, including additional preclinical efficacy and toxicity studies; evaluate manufacturing options for NGC-Iri; and

conduct chemistry, manufacturing and control (CMC) activities and pre-IND enabling studies.

Like irinotecan, NGC-Iri could be used to treat patients

with various cancers such as lung, colorectal, gastrointestinal, and pancreatic cancer. We estimate at least 200,000 patients in the United

States were newly diagnosed in 2022 with lung, colorectal, gastrointestinal, and pancreatic cancer.

Non-Oncology

Pipeline for Out-licensing or Partnership

Market

Overview

Capecitabine

Market

Drivers:

Market

Size and Growth:

Gemcitabine

Market

Size and Growth:

Market

Drivers:

Market

Segmentation:

Irinotecan

/ SN-38

Market

Size and Growth:

Market

Segmentation:

Key

Market Drivers:

References

Camptosar PI. (1996). Camptosar Package Insert. Retrieved from https://www.accessdata.fda.gov/drugsatfda_docs/label/2014/020571s048lbl.pdf

Casale

J, P. P. (2024, 2 16). StatPearls. Retrieved from https://www.ncbi.nlm.nih.gov/books/NBK549808/

Consegic.

(2025, Jan). Capecitabine Market - Size, Industry Share, Growth Trends and Forecasts (2025-2032). Retrieved from https://www.consegicbusinessintelligence.com/capecitabine-market

Dataintelo.

(2024). Irinotecan Market Outlook 2032. Retrieved from https://dataintelo.com/report/global-irinotecan-market

Delveinsight. (2019, Oct). Gastroparesis: Market

Insights, Epidemiology, and Market Forecast-2028. Delveinsight

Diasio,

R. B. (1998). The Role of Dihydropyrimidine Dehydrogenase (DPD) Modulation in 5-FU Pharmacology. Oncology, Vol 12; Issue 10.

Fact.MR.

(2023, April). Gemcitabine HCL Market. Retrieved from https://www.factmr.com/report/4646/gemcitabine-hcl-market

Gemzar PI. (2019, May). Gemzar Package Insert. Retrieved from https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/020509s082lbl.pdf

GMI

Insights. (2023, October). Capecitabine Market Size - By Indication (Breast, Colorectal, Gastric, Pancreatic), By Synthesis Type (Chemical

Based API, Biological API, Highly Potent API, Mode, Global Forecast 2023- 2032. Retrieved from https://www.gminsights.com/industry-analysis/capecitabine-market

Market

Data Forecast. (2024, June). North America Capecitabine Market Research Report - Segmented By Application, Drug Formulation &

Country (U.S, Canada & Rest of North America) - Industry Analysis, Size, Share, Growth, Trends, & Forecasts (2024 to 2032).

Retrieved from https://www.marketdataforecast.com/market-reports/na-capecitabine-market

Meulendijks

D, C. A. (2016). Improving safety of fluoropyrimidine chemotherapy by individualizing treatment based on dihydropyrimidine dehydrogenase

activity – Ready for clinical practice? . Cancer Treat Rev. , 50:23-34.

NCI.

(2025, 1 2). National Cancer Institute - Capecitabine. Retrieved from https://www.cancer.gov/about-cancer/treatment/drugs/capecitabine

Onivyde PI. (1996). Onivyde Package Insert. Retrieved

from https://www.accessdata.fda.gov/drugsatfda_docs/label/2024/207793s016lbl.pdf

Optimus,

F. (2025). FDA Project Optimus. Retrieved from https://www.fda.gov/about-fda/oncology-center-excellence/project-optimus

Yen-Revollo,

J. L., & Goldberg, R. a. (2008). Can Inhibiting Dihydropyrimidine Dehydrogenase Limit Hand-Foot Syndrome Caused by Fluoropyrimidines?

Clinical Cancer Research, 14:8-13.

Our Team

Our

drug development efforts are guided by our knowledge and experience in applying our regulatory science approach to decrease manageable

risks, costs, and time toward achieving marketing authorization from regulatory authorities including the FDA. We have assembled a seasoned

management team and development team with extensive experience in developing therapies, including advancing product candidates from preclinical

research through clinical development and ultimately regulatory approval and commercialization. Our team is led by our President of Research

and Development and Founder David Young, Pharm.D., Ph.D. who has extensive experience in research, regulatory approval and business development

and who served at Questcor Pharmaceuticals for eight years, initially as an independent director on its Board of Directors and, subsequently,

as its Chief Scientific Officer.

To

execute our strategy, we assembled an experienced and development team with a successful track record of drug approvals and successful

exits. Our team is experienced in developing drug products through all principal regulatory tiers from IND-enabling studies to New Drug

Application (NDA) submission. Throughout their careers, the combined scientific, development and regulatory experiences of our team members

have resulted in more than 30 drug approvals in indications reviewed by almost every division of the FDA including the oncology divisions,

over 100 meetings with the FDA and involvement with more than 50 drug development programs, including drug products targeted to patients

who have an unmet medical need and cancer patients. In addition, the FDA Project Optimus Oncology initiative and recent FDA Oncology

Guidance applies our regulatory science approach and principles used and refined by our Founders over the last 30 years.

Intellectual

Property

Our

success will depend in large part on our ability and that of our licensors to:

● prosecute and defend our existing and future patents, once obtained;

Although

we rely extensively on licensing patents from third parties, we intend to seek appropriate patent protection for product candidates in

our research and development programs, where applicable, and their uses by filing patent applications in the United States and other

selected countries. We intend for these patent applications to cover, where possible, claims for compositions of matter, medical uses,

processes for preparation and formulations.

Our

current patent portfolio consists of the number of patents related to our drug candidates licensed from each third-party licensor. In

addition to the international patents and/or international and U.S. patent applications licensed from our third-party licensors, we have

licensed at least the following number of U.S. patents:

CoNCERT Yuhan Aposense Elion Ocuphire Total

A

provisional patent for NGC-Cap has been filed.

Besides

relying on patents, we may also rely on trade secrets, proprietary know-how and continuing innovation to develop and maintain our competitive

position, especially when we do not believe that patent protection is appropriate or can be obtained. In addition, we continuously evaluate

opportunities to obtain exclusivity through our regulatory filings with the FDA. We seek protection of these trade secrets, proprietary

know-how and any continuing innovation, in part, through confidentiality and proprietary information agreements. However, these agreements

may not provide meaningful protection for, or adequate remedies to protect, our technology in the event of unauthorized use or disclosure

of information. Furthermore, our trade secrets may otherwise become known to, or be independently developed by, our competitors.

License

Agreements

The

following descriptions of our license agreements are only summaries. You should also refer to the copies of such agreements which have

been filed as exhibits to this Annual Report.

License

Agreement with Elion Oncology, Inc.

On

August 23, 2020, we entered into a condition precedent License Agreement with Elion Oncology (“Elion License Agreement”),

pursuant to which we acquired an exclusive license to develop, manufacture and commercialize PCS6422 globally. The license grant was

conditioned on the following being satisfied by October 30, 2020: (i) our closing on an equity financing of at least $15 million in gross

proceeds and (ii) successful up-listing to Nasdaq.

On

October 6, 2020, all conditions were satisfied, resulting in the addition of PCS6422 to our portfolio, and we paid $100,000 cash and

issued 41,250 shares of our common stock to Elion. As part of the Elion License Agreement, we agreed to issue to Elion 5,000 shares of

our common stock on each of the first and second anniversary dates of the Elion License Agreement.

As

additional consideration, we will pay Elion development and regulatory milestone payments (a portion of which are payable in shares of

our common stock and a portion of which are payable in cash) upon the achievement of certain milestones, which include FDA or other regulatory

approval and dosing a patient. In addition, we must pay Elion one-time sales milestone payments based on the achievement during a calendar

year of one or more thresholds for annual sales for products made and pay royalties based on annual licensing sales. We are also required

to split any milestone payments received with Elion based on any sub-license agreement we may enter.

On

May 17, 2022, we amended the third Milestone Event of Section 6.4 of our License Agreement with Elion Oncology, Inc. changing the third

Milestone Event from “1st Patient in Dose Confirmation Study” to (a) determination of the maximum tolerated dose

(MTD) or (b) determination of the recommended Phase 2 Dose. Prior to this amendment, the third milestone was not considered probable

since it was unknown when, or if a dose confirmation study was going to be conducted. As a result of the modification, we consider it

probable that the recommended Phase 2 dosage regimen could be determined in connection with our current Phase 1B trial for NGC-Cap. We

recorded an expense and related liability of $189,000 representing the value of the shares we anticipate issuing to Elion at the fair

value on the date of modification. No other terms or conditions of the License Agreement were modified. We determined the dosage for

our Phase 2 study on January 25, 2024 and issued 5,000 shares of common stock to Elion for meeting this milestone.

We

are required to use commercially reasonable efforts, at our sole cost and expense to research, develop and commercialize products in

one or more countries, including dosing a first patient with a product in a Phase 2 or 3 clinical trial by October 6, 2024. We dosed

our first patient in a Phase 2 clinical trial on October 2, 2024. Either party may terminate the agreement in the event of a material

breach of the agreement that has not been cured following written notice and a 90-day opportunity to cure such breach (which is shortened

to 15 days for a payment breach). See Item 3 – Legal Proceedings herein for additional information regarding the status of the

Elion License Agreement.

License Agreement with Ocuphire Pharma, Inc.

On June 16, 2021, we executed

a License Agreement with Ocuphire Pharma, Inc. (“Ocuphire Agreement”) under which we received a license to research, develop

and commercialize PCS3117 globally, excluding the Republic of Singapore, China, Hong Kong, Macau and Taiwan.

As consideration for the Ocuphire

Agreement, we issued 2,235 shares of our common stock to Ocuphire, a cash payment of $200,000 and assumed $66,583 in certain liabilities.

Additional consideration includes future development and regulatory milestones payments to Ocuphire upon our achievement of certain defined

clinical milestones, such as dosing a patient in pivotal trials and receiving marketing authorization by a regulatory authority in the

United States or another country. In addition, we are required to pay Ocuphire one-time sales milestone payments based on the achievement

during a calendar year of the highest annual Net Sales for products made and pay royalties based on annual Net Sales, as defined in the

Ocuphire Agreement.

We are required to use commercially

reasonable efforts, at our sole cost and expense to oversee such commercialization efforts, to research, develop and commercialize products

in one or more countries, including meeting specific diligence milestones that consist of: (i) first patient administered drug in a Clinical

Trial of a Product prior to June 16, 2024 and (ii) first patient administered drug in a Pivotal Clinical Trial of a Product or first patient

administered drug in a Clinical Trial for a Second Indication of a Product prior to June 16, 2026. We are currently in discussions with

Ocuphire to extend these deadlines. Either party may terminate the agreement in the event of a material breach of the agreement that has

not been cured following written notice and a 120-day opportunity to cure such breach.

License

Agreement with Aposense, Ltd.

On

May 24, 2020, we entered into a condition precedent License Agreement with Aposense, Ltd. (“Aposense License Agreement”),

pursuant to which we were granted Aposense’s patent rights and Know-How to develop and commercialize their next generation irinotecan

cancer drug, PCS11T. The Aposense License Agreement provides us with an exclusive worldwide license (excluding China), to research, develop

and commercialize products comprising or containing PCS11T. The license grant was conditioned on the following being satisfied within

nine months of May 24, 2020 (or the Aposense License Agreement shall terminate): (i) our closing of an equity financing and successful

up-listing to Nasdaq and (ii) Aposense obtaining the approval of the Israel Innovation Authority for the consummation of the transactions

contemplated by the Aposense License Agreement.

On

October 6, 2020, all conditions were satisfied, resulting in the addition of PCS11T to our portfolio, and we issued 31,250 shares of

our common stock to Aposense. As additional consideration, we will pay Aposense development and regulatory milestone payments (up to

$3.0 million per milestone) upon the achievement of certain milestones, which primarily consist of having a drug indication approved

by a regulatory authority in the United States or another country. In addition, we will pay Aposense one-time sales milestone payments

based on the achievement during a calendar year of one or more thresholds for annual sales for products made and pay royalties based

on annual licensing sales. We are also required to split any sales milestone payments or royalties we receive with Aposense based on

any sub-license agreement we may enter.

License

Agreement with Yuhan Corporation

On

August 19, 2020, we entered into a License Agreement with Yuhan Corporation (“Yuhan License Agreement”), pursuant to which

we acquired an exclusive license to develop, manufacture and commercialize PCS12852 globally, excluding South Korea.

As

consideration for the Yuhan License Agreement and related Share Issuance Agreement, we issued to Yuhan 25,000 shares of common stock.

As additional consideration, we will pay Yuhan development and regulatory milestone payments (a portion of which are payable in shares

of our common stock based on the volume weighted average trading price during the period prior to such achievement and a portion of which

are payable in cash) upon the achievement of certain milestones, based on a Yuhan affiliate purchasing 37,500 shares of common stock

for $3,000,000 in our October 2020 underwritten public offering. The milestones primarily consist of dosing a patient in pivotal trials

or having a drug indication approved by a regulatory authority in the United States or another country. In addition, we must pay Yuhan

one-time sales milestone payments based on the achievement during a calendar year of one or more thresholds for annual sales for products

made and pay royalties based on annual licensing sales. We are also required to split any milestone payments received with Yuhan based

on any sub-license agreement we may enter.

We

are required to use commercially reasonable efforts, at our sole cost and expense, in conjunction with a joint Processa-Yuhan Board to

oversee such commercialization efforts, to research, develop and commercialize products in one or more countries, including meeting specific

diligence milestones that consist of: (i) preparing a first draft of the product development plan within 90 days; (ii) requesting an

FDA pre-IND meeting for a product within 6 months; (iii) dosing a first patient in a Phase 2A clinical trial with a product within 24

months; and (iv) dosing a first patient with a product in a Phase 2B clinical trial, Phase 3 clinical trial or other pivotal clinical

trial with a product by August 19, 2024. Either party may terminate the agreement in the event of a material breach of the agreement

that has not been cured following written notice and a 60-day opportunity to cure such breach (which is shortened to 15 days for a payment

breach).

License

Agreement with CoNCERT Pharmaceuticals, Inc.

On

October 4, 2017, Promet entered into a License Agreement with CoNCERT (“CoNCERT License Agreement”). On March 19, 2018, we,

Promet, and CoNCERT entered into an Amended Option Licensing Agreement (“March Amendment”) that, among other things, assigned

the CoNCERT Agreement from Promet to us and we exercised the exclusive commercial license option for the PCS499 compound from CoNCERT.

The

CoNCERT License Agreement provides us with an exclusive (including as to CoNCERT) royalty-bearing license to CoNCERT’s patent rights

and Know-How to develop, manufacture, use, sub-license and commercialize compounds (PCS499 and each metabolite thereof) and pharmaceutical

products with such compounds worldwide. We are required to pay CoNCERT royalties, on a product–by-product basis, on future worldwide

net sales, or pay a percentage of any sublicense revenue.

We

will incur royalty obligations to CoNCERT on a country-by-country and product-by-product basis that expire on a country-by-country and

product-by-product basis on the later of (i) expiration or invalidation of the last patent rights covering such product in such country

or (ii) the tenth anniversary of the date of the first commercial sale to a non-sublicensee third party of such product in such country.

We

are required to use commercially reasonable efforts, at our sole cost and expense, to develop and obtain regulatory approval for one

product in the U.S. and at least one other major market and, subject to obtaining regulatory approval in the applicable major market,

commercialize one product in the U.S. and at least one other major market. CoNCERT may terminate the agreement if, following written

notice and a 60-day opportunity to demonstrate a plan to cure, it believes that we are not using commercially reasonable efforts to develop

and obtain regulatory approval for one product in the U.S. and in at least one other major market for any consecutive nine-month period.

The

term of the CoNCERT License Agreement continues in full force and effect until the expiration of the last royalty term. On a country-by-country

and product-by-product basis, upon the expiration of the royalty term in such country with respect to such product, we shall have a fully

paid-up, perpetual, irrevocable license to such intellectual property with respect to such product in such country. In the event of a

material breach of the CoNCERT Agreement, either party may terminate the agreement provided such breach is not cured in the 90 days following

written notice of the breach (which is shortened to 15 days for a payment breach). In addition, either party may terminate the agreement

upon an assignment for the benefit of creditors or the filing of an insolvency proceeding by or against the other party that is not dismissed

within 90 days of such filing.

Manufacturing

and Clinical Supplies

We

do not own or operate, and currently have no plans to establish, any manufacturing facilities. We currently rely, and expect to continue

to rely, on multiple third-party contract manufacturing organizations (CMOs) for the supply of current Good Manufacturing Practices (cGMP)-grade

clinical trial materials and commercial quantities of our product candidates and products, if approved. We require all our CMOs to conduct

manufacturing activities in compliance with cGMP. We have assembled a team of experienced employees and consultants to provide the necessary

technical, quality and regulatory oversight of our CMOs.

We

anticipate that these CMOs will have the capacity to support both clinical supply and commercial-scale production, but we do not have

any formal agreements at this time with any of these CMOs to cover commercial production. We also may elect to pursue additional CMOs

for manufacturing supplies of drug substance and finished drug product in the future. We believe that our standardized manufacturing

process can be transferred to a number of other CMOs for the production of clinical and commercial supplies of our product candidates

in the ordinary course of business.

Competition

Many

of our potential competitors may have significantly greater financial resources, a more established presence in the market, and more

expertise in research and development, manufacturing, pre-clinical and clinical testing, obtaining regulatory approvals and reimbursement,

and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may

result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also

prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These potential

competitors may also compete with us in recruiting and retaining top qualified scientific, sales, marketing and management personnel

and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary

to, or necessary for, our programs.

The

key competitive factors affecting each of our products, if approved, are likely to include the efficacy, safety, convenience and price

of the products relative to other approved products used on- or off-label for each unmet medical need condition. Although preliminary

clinical data exists to support the possibility of improved efficacy and safety profiles for our drugs, more in-depth randomized, controlled

studies are required for our products to determine if our preliminary findings will support the approval in the designated unmet medical

need indication.

For

NGC-Cap, the competitive factors will be related to the efficacy and safety of the product when compared to capecitabine. The market

penetration will depend on how much improvement will occur in the efficacy and/or safety profiles when administered in combination with

PCS6422. Currently, there are no other reversible or irreversible enzyme inhibitor products approved in the US and no irreversible enzyme

inhibitors approved ex-US, which may make PCS6422 the first DPD irreversible inhibitor available.

For NGC-Gem, the competitive

factors will include establishing market penetration against other cytidine analogues, such as gemcitabine, which is currently used as

first or second line chemotherapy either alone or in combination with other chemotherapy agents. The market penetration will depend on

the potential for an improved efficacy profile in patients who have developed tolerance to other agents.

For

NGC-Iri, the competitive factors will include establishing marketing penetration against the existing irinotecan product (Camptosar®)

and the newer liposomal irinotecan product (Onivyde®). The establishment of that market will be based upon improved efficacy and/or

safety of NGC-Iri.