ITEM 1A. Risk Factors

The risks described below may not be the only ones relating to our company. Additional risks that we currently believe are immaterial may also impair our

business operations. Our business, financial conditions and future prospects and the trading price of our common stock could be harmed as a result of any of these risks. Investors should also refer to the other information contained or

incorporated by reference in this Annual Report on Form 10-K, including our financial statements and related notes, and our other filings from time to time with the Securities and Exchange Commission or SEC.

Risk Factors Summary

Our business is subject to a number of risks and uncertainties, including those risks discussed at length below. These risks include, among others, the

following principal risk factors that make an investment in our company speculative or risky. You are encouraged to carefully review our full discussion of the material risk factors relevant to an investment in our business, which follows the

brief bulleted list of our principal risk factors set forth below:

Index

Risks Related to Our Business, Financial Position and Capital Requirements

We have a limited operating history and have never generated any product revenue.

We have no products approved for sale. We are a clinical-stage biopharmaceutical company with a limited operating history. Our operations to date have been limited to

organizing our company and developing the Versamune® platform and related immunotherapy product candidates that incorporate the technology of our Versamune® platform. We have not yet successfully completed a large-scale, pivotal clinical trial,

obtained marketing approval, manufactured Versamune® at commercial scale, or conducted sales and marketing activities that will be necessary to successfully commercialize our Versamune® products. Consequently, predictions about our future

success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing immunotherapies.

Index

Our product candidates will require additional clinical development, evaluation of clinical, preclinical and manufacturing activities, marketing approval in multiple

jurisdictions, substantial investment and significant marketing efforts before we generate any revenues from product sales. We are not permitted to market or promote any of our product candidates before we receive marketing approval from the

FDA and comparable foreign regulatory authorities, and we may never receive such marketing approvals.

Our ability to generate revenue and achieve and maintain profitability will depend upon our ability to successfully complete the development of our Versamune® based oncology

products PDS0101, PDS0102, PDS0103, PDS0104 alone or in combination with PDS01ADC and Infectimune® to treat infectious diseases and to obtain the necessary regulatory approvals. We have never generated any product revenue and have no

immunotherapy candidate in late-stage clinical development or approved for commercial sale.

Even if we receive regulatory approval for the sale of the Versamune®, Versamune® in combination with PDS01ADC and Infectimune® Products, we do not know when we will begin

to generate revenue from PDS0101 or other products, if at all. Our ability to generate revenue depends on a number of factors, including our ability to:

● establish sales, marketing, manufacturing and distribution systems;

● attract and retain an experienced management and advisory team;

● maintain, expand and protect our intellectual property portfolio.

Because of the numerous risks and uncertainties associated with immunotherapy development and manufacturing, we are unable to predict the timing or amount of increased

development expenses, or when we will be able to achieve or maintain profitability, if at all. Our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or FDA, or comparable non-U.S.

regulatory authorities, to perform studies or clinical trials in addition to those we currently anticipate. Even if PDS0101 alone or in combination with PDS01ADC is approved for commercial sale, we anticipate incurring significant costs

associated with the commercial launch of and the related commercial-scale manufacturing requirements for PDS0101, PDS01ADC, other Versamune® and Infectimune® products. If we cannot successfully execute on any of the factors listed above, our

business may not succeed, and your investment will be adversely affected.

We have incurred significant losses since our inception and expect to continue to incur significant losses for the foreseeable future and may never

achieve or maintain profitability.

We have never generated any product revenues and expect to continue to incur substantial and increasing losses as we continue to develop Versamune®, Versamune® in combination

with PDS01ADC and Infectimune® based products. None of our products have been approved for marketing in the United States and may never receive such approval. As a result, we are uncertain when or if we will achieve profitability and, if so,

whether we will be able to sustain it. Our ability to generate revenue and achieve profitability is dependent on our ability to complete development, obtain necessary regulatory approvals, and have our products manufactured and successfully

marketed. We cannot assure you that we will be profitable even if we successfully commercialize PDS0101, PDS01ADC or other Versamune® and Infectimune® based products. If we successfully obtain regulatory approval to market PDS0101 alone or in

combination with PDS01ADC, our revenues will be dependent, in part, upon, the size of the markets in the territories for which regulatory approval is received, the number of competitors in such markets for the approved indication, and the price

at which we can offer our products. If the indication approved by regulatory authorities is narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant

revenue from sales of our products, even if approved. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we fail to become and remain profitable the market price of our

common stock and our ability to raise capital and continue operations will be adversely affected.

Index

We expect research and development expenses to increase significantly for Versamune®, Versamune® in combination with PDS01ADC and Infectimune® based products. In addition,

even if we obtain regulatory approval, significant sales and marketing expenses will be required to commercialize our products. As a result, we expect to continue to incur significant and increasing operating losses and negative cash flows for

the foreseeable future. These losses have had and will continue to have an adverse effect on our financial position and working capital. As of December 31, 2023 and 2022, we had an accumulated deficit of $144.5 and $101.6 million, respectively.

We are dependent on the success of our Versamune®, PDS01ADC and Infectimune® products, which are still in clinical development, and if our Versamune®,

PDS01ADC and Infectimune® products do not receive regulatory approval or are not successfully commercialized, our business may be harmed.

PDS0101 and PDS01ADC are in mid clinical development, and as a consequence, it is too early to determine whether our products will ever be approved for commercial sale or

be marketable. We expect that a substantial portion of our efforts and expenditures over the next few years will be devoted to Versamune®, Versamune® in combination with PDS01ADC and Infectimune® based products. Accordingly, our business

currently depends heavily on the successful development, regulatory approval and commercialization of PDS0101 alone or in combination with PDS01ADC. PDS0101 and PDS01ADC may not receive regulatory approval or be successfully commercialized even

if regulatory approval is received. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of PDS0101 and PDS01ADC is and will remain subject to extensive regulation by the FDA and other regulatory

authorities in the United States and other countries that each have differing regulations. We are not permitted to market PDS0101 or PDS01ADC in the United States until it receives approval of a biologics license application, or BLA, from the

FDA, or in any foreign countries until it receives the requisite approval from such countries. To date, we have only completed Phase 2 clinical trials for certain applications of PDS0101. As a result, we have not submitted a BLA to the FDA or

comparable applications to other regulatory authorities and do not expect to be in a position to do so for the foreseeable future. Obtaining approval of a BLA is an extensive, lengthy, expensive and inherently uncertain process, and the FDA may

delay, limit or deny approval of PDS0101 or PDS01ADC for many reasons, including:

● the FDA may not accept data generated at our clinical trial sites;

● the FDA may change its approval policies or adopt new regulations.

Index

We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to complete the development

and commercialization of our Versamune®, PDSO1ADC and Infectimune® based products.

We expect to spend substantial amounts to complete the development of, seek regulatory approvals for and commercialize PDS0101 alone or in combination with PDS01ADC. Even

with our current cash reserves, we will require substantial additional capital to complete the development and potential commercialization of PDS0101 and PDS01ADC and the development of other Versamune® and Infectimune® based products. If we

are unable to raise capital or find appropriate partnering or licensing collaborations or other nondilutive financing, when needed or on acceptable terms, if at all, we could be forced to delay, reduce or eliminate one or more of our

development programs or any future commercialization efforts. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our development efforts.

Our estimate as to what we will be able to accomplish is based on assumptions that may prove to be inaccurate, and we could exhaust our available capital resources sooner

than is currently expected. Because the length of time and activities associated with successful development of PDS0101 and PDS01ADC is highly uncertain, we are unable to estimate the actual funds we will require for development and any

approved marketing and commercialization activities. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

● the effect of competing technological and market developments;

Additional funding may not be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we

may have to significantly delay, scale back or discontinue the development or commercialization of PDS0101 or potentially discontinue operations.

Raising additional funds by issuing securities may cause dilution to existing stockholders and raising funds through lending and licensing arrangements

may restrict our operations or require us to relinquish proprietary rights.

We expect that significant additional capital will be needed in the future to continue our planned operations. Until such time, if ever, as we can generate substantial

product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, strategic alliances and license and development agreements in connection with any collaborations. In February 2020, we completed

an underwritten public offering, in which we sold 10,000,000 shares of common stock at a public offering price of $1.30 per share. The shares sold included 769,230 shares issued upon the exercise by the underwriter of its option to purchase

additional shares at the public offering price. We received gross proceeds of approximately $13 million and net proceeds of approximately $11.9 million after deducting underwriting discounts and commissions. In July 2020, we filed a shelf

registration statement, or the 2020 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights, debt securities and units, which we refer to collectively as the Shelf Securities, up to an

aggregate amount of $100 million. The 2020 Shelf Registration Statement was declared effective on July 31, 2020. The 2020 Registration Statement was terminated upon effectiveness of the 2022 Registration Statement (as discussed below). On

August 13, 2020, we sold 6,900,000 shares of our common stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000 shares issued upon the exercise by the underwriter of its

option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. We received gross proceeds of approximately $19.0 million and net proceeds of approximately $17.1 million, after deducting

underwriting discounts and offering expenses. In June 2021, we completed an underwritten public offering in which we sold 6,088,235 shares of common stock at a public offering price of $8.50 per share pursuant to the 2020 Shelf Registration

Statement, which includes 794,117 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. We received gross proceeds of

approximately $51.7 million and net proceeds of approximately $48.5 million, after deducting underwriting discounts and offering expenses.

Index

In August 2022, we filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of common stock, preferred stock, warrants,

rights, debt securities, and units up to an aggregate amount of $150 million, $50 million of which covers the offer, issuance and sale by the Company of its common stock under the Sales Agreement (as discussed below). The 2022 Shelf

Registration Statement was declared effective on September 2, 2022.

In August 2022, we entered into an At Market Issuance Sales Agreement, or the Sales Agreement, with B. Riley Securities, Inc. and BTIG, LLC, each an Agent and collectively

the Agents, with respect to an at-the-market offering program under which we may 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, or the Placement

Shares, through or to the Agents, as sales agents or principals. Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, the Agents may sell the Placement Shares by any method permitted by law deemed

to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended, including, without limitation, sales made through The Nasdaq Capital Market or on any other existing trading market for our common stock. The

Agents will use commercially reasonable efforts to sell the Placement Shares from time to time, based upon our instructions (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay the

Agents a commission equal to three percent (3%) of the gross sales proceeds of any Placement Shares sold through the Agents under the Sales Agreement, and also has provided the Agents with customary indemnification and contribution rights. We

are not obligated to make any sales of our common stock under the Sales Agreement. The offering of Placement Shares pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all Placement Shares subject to the Sales

Agreement or (ii) termination of the Sales Agreement in accordance with its terms. During the year ended December 31, 2023, we sold 2,642,269 shares of our common stock for a net value of $16.1 million pursuant to the Sales Agreement. For the

year ended December 31, 2022, we sold 1,238,491 shares of our common stock for a net value of $9.9 million pursuant to the Sales Agreement. As of the date of this Annual Report, in the first quarter of 2024 we sold 3,428,681 shares of our

common stock for a net value of $ 19.5 million pursuant to the Sales Agreement.

To the extent that we raise additional capital by issuing equity securities, our existing stockholders’ ownership may experience substantial dilution, and the terms of

these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or

restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends, creating liens, redeeming our stock or making investments.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish

valuable rights to our technologies, future revenue streams, research programs or Versamune® Products or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when

needed, or through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties on acceptable terms, we may be required to delay, limit, reduce or terminate our PDS0101 and PDS01ADC development or

future commercialization efforts or grant rights to develop and market other Versamune® and Infectimune® products that we would otherwise develop and market.

Our operating activities may be restricted as a result of covenants related to the outstanding indebtedness under our venture loan and security

agreement with Horizon and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our business.

In August 2022, we entered into a Venture loan and security agreement, or the Loan and Security Agreement, for separate term

loans of up to an aggregate amount of $35.0 million, with Horizon Technology Finance Corporation, or Horizon, in its capacity as a lender and collateral agent for itself and the other financial institutions that from time to time become

parties to the Loan and Security Agreement, collectively referred to as the Lenders, secured by a security interest in all of our respective rights, title, interests, claims and demands in, to and under all of our respective properties and

other assets, subject to limited exceptions and excluding our intellectual property. The Loan and Security Agreement contains various covenants that limit our ability to engage in specified types of transactions. These covenants include

requirements to maintain minimum cash balances as well as covenants limiting our ability to, among other things, sell, transfer, lease or dispose of certain assets; incur indebtedness; encumber or permit liens on certain assets; make certain

investments; make certain restricted payments, including paying dividends on, or repurchasing or making distributions with respect to, our common stock; and enter into certain transactions with affiliates. Our business may be adversely

affected by these restrictions on our ability to operate our business. A breach of any of the covenants under the Loan and Security Agreement could result in a default. Upon the occurrence of an event of default, the Lenders could elect to

declare all amounts outstanding, if any, to be immediately due and payable. If there are any amounts outstanding that we are unable to repay, the Lenders could proceed against the collateral granted to them to secure such indebtedness.

Index

Our future success depends on our ability to retain executive officers and attract, retain and motivate qualified personnel.

We are highly dependent on our executive officers and the other principal members of the executive and scientific teams, particularly our President and Chief Executive Officer,

Dr. Frank K. Bedu-Addo, our Chief Medical Officer, Dr. Kirk Shepard, our Chief Financial Officer, Mr. Lars Boesgaard and our Chief Scientific Officer, Dr. Gregory L. Conn. The loss of the services of any of our senior executive officers could

impede the achievement of our research, development and commercialization objectives. We do not maintain “key person” insurance for any executive officer or employee.

Recruiting and retaining qualified scientific, clinical, and operational personnel is also critical to our success. We may not be able to attract and retain these personnel

on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research

institutions. Our industry has experienced an increasing rate of turnover of management and scientific personnel in recent years. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in

devising our research and development and commercialization strategy. Our consultants and advisors may be employed by third parties and have commitments under consulting or advisory contracts with other entities that may limit their

availability to advance our strategic objectives. If any of these advisors or consultants can no longer dedicate a sufficient amount of time to us, our business may be harmed.

If we fail to obtain or maintain adequate coverage and reimbursement for PDS0101 or PDS01ADC, our ability to generate revenue could be limited.

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford expensive treatments. Sales of any of

PDS0101 or PDS01ADC that receive marketing approval will depend substantially, both in the United States and internationally, on the extent to which the costs of PDS0101 or PDS01ADC will be paid by health maintenance, managed care, pharmacy

benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only on a

limited basis, we may not be able to successfully commercialize PDS0101 alone or in combination with PDS01ADC. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain adequate

pricing that will allow it to realize a sufficient return on our investment.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the

increasing emphasis on cost-containment initiatives in Europe, Canada and other countries may cause us to price PDS0101 alone or in combination with PDS01ADC on less favorable terms than we currently anticipate. In many countries, particularly

the countries of the European Union, the prices of medical products are subject to varying price control mechanisms as part of national health systems. In these countries, pricing negotiations with governmental authorities can take considerable

time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of PDS0101 or PDS01ADC to other

available therapies. In general, the prices of products under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for products, but monitor and control company profits.

Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for PDS0101 alone or in combination with PDS01ADC. Accordingly, in markets outside the United States, the

reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues and profits.

Moreover, increasing efforts by governmental and third-party payors, in the United States and internationally, to cap or reduce healthcare costs may cause such

organizations to limit both coverage and level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for PDS0101 or PDS01ADC. We expect to experience pricing pressures in connection with

the sale of PDS0101 or PDS01ADC due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly

prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products into the healthcare market.

The Inflation Reduction Act, referred to as the IRA, was recently signed into law by President Biden, which makes significant changes to how drugs are covered and paid for

under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain

drug benefits, and government price-setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028. We have evaluated, and will continue to evaluate, the effect of the IRA on our business. At this time,

we do not expect the IRA to have a material effect on our financial position.

We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and

containing or lowering the cost of healthcare. The ACA and any further changes in the law or regulatory framework that reduce our revenue or increase our costs could also have a material and adverse effect on our business, financial condition

and results of operations.

Index

Even if any of our product candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors and others in the medical

community necessary for commercial success.

If any of our product candidates receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors and others in the medical community. For example,

current cancer treatments like chemotherapy and radiation therapy are well-established in the medical community, and doctors may continue to rely on these treatments. If our product candidates do not achieve an adequate level of acceptance, we

may not generate significant revenues from sales of drugs and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

● the efficacy and safety of the product;

● the potential advantages of the product compared to alternative therapies;

● the prevalence and severity of any side effects;

● the strength of sales, marketing and distribution support;

We will need to expand our organization, and may experience difficulties in managing this growth, which could disrupt operations.

Our future financial performance and our ability to commercialize PDS0101 alone or in combination with PDS01ADC and compete effectively will depend, in part, on our ability

to effectively manage any future growth. As of December 31, 2023, we had 25 employees and 18 consultants. We expect to hire additional employees for our managerial, clinical, scientific and engineering, operational, manufacturing, sales and

marketing teams. We may have operational difficulties in connection with identifying, hiring and integrating new personnel. Future growth would impose significant additional responsibilities on our management, including the need to identify,

recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of our attention away from our day-to-day activities and devote a substantial amount

of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss

of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of PDS0101. If we are unable to

effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, and we may not be able to implement our business strategy.

Many of the other pharmaceutical companies that we compete against for qualified personnel and consultants have greater financial and other resources, different risk profiles

and a longer history in the industry than us. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates and consultants than what it

has to offer. If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can select and develop PDS0101 or PDS01ADC and our business will be limited.

Index

Our employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors may engage

in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse effect on our results of operations.

We are exposed to the risk that our employees and contractors, including principal investigators, consultants, commercial collaborators, service providers and other vendors

may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA and other similar

regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies, manufacturing standards, federal and state healthcare fraud and abuse and health regulatory laws and other

similar foreign fraudulent misconduct laws, or laws that require the true, complete and accurate reporting of financial information or data. Misconduct by these parties may also involve the improper use or misrepresentation of information

obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter third-party misconduct, and the precautions we take to detect and prevent

this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including the imposition of

significant civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, reputational harm, diminished profits and future earnings, and

curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Our business and operations would suffer, and could be negatively affected, in the event of system failures or cyberattacks.

Our computer systems and those of our service providers, including our CROs, are vulnerable to damage from computer viruses, unauthorized access, natural disasters,

terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in our or their operations, it could result in a material disruption of our development programs. For example, the loss of

preclinical or clinical trial data from completed, ongoing or planned trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or

security breach were to result in a loss of or damage to data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of PDS0101 and PDS01ADC could

be delayed.

A cyberattack or similar incident could occur and result in information theft, data corruption, operational disruption, damage to our reputation or financial loss. Our

industry has become increasingly dependent on digital technologies to conduct certain development and financial activities. Our technologies, systems, networks, or other proprietary information, and those of our vendors, suppliers and other

business partners, may become the target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or could otherwise

lead to the disruption of our business operations. Cyberattacks are becoming more sophisticated and certain cyber incidents, such as surveillance, may remain undetected for an extended period and could lead to disruptions in critical systems or

the unauthorized release of confidential or otherwise protected information. These events could lead to financial loss from remedial actions, loss of business, disruption of operations, damage to our reputation or potential liability. Our

systems and insurance coverage for protecting against cybersecurity risks may not be sufficient. Further, as cyberattacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our

protective measures or to investigate and remediate any vulnerability to cyberattacks.

Our failure to comply with international data protection laws and regulations could lead to government enforcement actions and significant penalties

against us, and adversely impact our operating results.

EU member states and other foreign jurisdictions, including Switzerland, have adopted data protection laws and regulations which impose significant compliance obligations.

Moreover, the collection and use of personal health data in the EU, which was formerly governed by the provisions of the EU Data Protection Directive, was replaced with the EU General Data Protection Regulation, or the GDPR, in May 2018. The

GDPR, which is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data,

data breach notification and the use of third-party processors in connection with the processing of personal data. The GDPR also imposes strict rules on the transfer of personal data out of the EU to the U.S., provides an enforcement authority

and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. The GDPR requirements apply not only to third-party

transactions, but also to transfers of information between us and our subsidiary, including employee information. The recent implementation of the GDPR has increased our responsibility and liability in relation to personal data that we process,

including in clinical trials, and we may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase our cost of doing business. In addition, new

regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase our costs of doing business. In this regard, we expect that there will continue to be new proposed laws,

regulations and industry standards relating to privacy and data protection in the United States, the EU and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.

Index

Our failure to comply with state and/or national data protection laws and regulations could lead to government enforcement actions and significant

penalties against us, and adversely impact our operating results.

There are numerous other laws and legislative and regulatory initiatives at the federal and state levels addressing privacy and security concerns, and some state privacy

laws apply more broadly than the Health Insurance Portability and Accountability Act, or HIPAA, and associated regulations. For example, California recently enacted legislation – the California Consumer Privacy Act, or CCPA – which went into

effect January 1, 2020. The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their

information. The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. The CCPA was recently amended by the California Privacy Rights

Act, or CPRA, expanding certain consumer rights such as the right to know. It remains unclear what, if any, additional modifications will be made to these laws by the California legislature or how these laws will be interpreted and enforced.

The potential effects of the CCPA and CPRA and implementing regulations are significant and may cause us to incur substantial costs and expenses to comply.

If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our

financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock. Further, we continue to incur significant increased costs as a result of operating

as a public company, and our management is required to devote substantial time to compliance initiatives.

As a public company, we continue to incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act,

as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on public companies, including requiring establishment and maintenance of effective disclosure controls and internal control over financial reporting

and changes in corporate governance practices. Our management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased our legal and financial compliance costs

and have made some activities more time-consuming and costly.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and

procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. In addition, any testing by us

conducted in connection with Section 404 of the Sarbanes-Oxley Act, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our

financial statements or identify other areas for further attention or improvement. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines

we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begins its Section 404 reviews or becomes aware of either during the conduct of an audit, we could lose investor confidence in

the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the Nasdaq Capital Market, the SEC or other regulatory authorities. Failure to

remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Periodic reporting requirements under the Exchange Act and compliance with the Sarbanes-Oxley Act of 2002, including establishing and maintaining

acceptable internal control over financial reporting, are costly and may increase substantially and, as a smaller reporting company, we may take advantage of reduced reporting requirements which may make our common stock less attractive to

investors.

We are subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our disclosure controls and procedures are

designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time

periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance

that the objectives of the control system are met. Our management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased our legal and financial compliance

costs and will make some activities more time-consuming and costly.

Index

In addition, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In

particular, Section 404 of the Sarbanes-Oxley Act will require us to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public

accounting firm to attest to, the effectiveness of our internal control over financial reporting. We are currently a “smaller reporting company,” but we will cease to be a smaller reporting company if we have a non-affiliate public float in

excess of $250 million and annual revenues in excess of $100 million, or a non-affiliate public float in excess of $700 million, determined on an annual basis. As a smaller reporting company, we could take advantage of certain reduced

governance and disclosure requirements, including not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting. As aresult,

investors and others may be less comfortable with the effectiveness of our internal controls and the risk that materialweaknesses or other deficiencies in internal controls go undetected may increase. In

addition, as a smaller reporting company, we takeadvantage of our ability to provide certain other less comprehensive disclosures in our SEC filings, including, among other things, providing onlytwo years of audited financial statements in annual reports and simplified executive compensation disclosures. Consequently, it may be morechallenging for investors

to analyze our results of operations and financial prospects, as the information we provide to stockholders may bedifferent from what one might receive from other public companies.

We have identified conditions and events that raise substantial doubt regarding our ability to continue as a going concern.

We have incurred net losses and utilized cash in operations since inception. In addition, as of December 31, 2023, we had

approximately $56.6 million in cash and cash equivalents, and during the twelve months ended December 31, 2023, we used $33.6 million of cash in operations and expect to continue to incur significant cash outflows and incur future

additional losses to execute our operating plan. While we intend to finance our cash needs principally through collaborations, strategic alliances, or license agreements with third parties and/or debt or equity financings, there is no

assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. In addition, the Loan and Security

Agreement allows for the lenders to call the outstanding balance of the term loans if the minimum cash balances outlined in the Loan and Security Agreement are not maintained. Due to the uncertainty in securing additional funding,

and the insufficient amount of cash and cash equivalents as of December 31, 2023, we have concluded that substantial doubt exists about our ability to continue as a going concern within one year after the date of the filing of this Annual

Report. If we are unsuccessful in securing sufficient financing, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations.

Our consolidated financial statements included in this Annual Report have been prepared on a going concern basis under which an entity is able to realize its assets and

satisfy its liabilities in the ordinary course of business. The consolidated financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should

we be unable to continue as a going concern within one year after the date that the financial statements are issued.

Our future operations are dependent upon the successful entry into collaborations, strategic alliances, or license agreements with third parties and/or on the

identification and successful completion of equity or debt financing and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that we will be successful in completing these collaborations

or alliances, equity or debt financing or in achieving profitability. As such, there can be no assurance that we will be able to continue as a going concern.

Substantial doubt about our ability to continue as a going concern may materially and adversely affect the price per share of our common stock, and it may be more difficult

for us to obtain financing. If potential collaborators decline to do business with us or potential investors decline to participate in any future financings due to such concerns, our ability to increase our cash position may be limited. The

perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations. If we are unable to continue as a going concern, you could

lose all or part of your investment in our Company.

Index

Risks Related to Clinical Development, Regulatory Approval and Commercialization

Clinical trials are very expensive, time-consuming, difficult to design and implement and involve an uncertain outcome, and if they

fail to demonstrate safety and efficacy to the satisfaction of the FDA, or similar regulatory authorities, we will be unable to commercialize Versamune®, Versamune® in combination with PDS01ADC and Infectimune® based products.

PDS0101 and PDS01ADC are still in clinical development and will require additional clinical testing before we are prepared to submit a BLA for regulatory approval for any

indication or for any other treatment regime. We cannot predict with any certainty if or when we might submit a BLA for regulatory approval for PDS0101, PDS01ADC and other Versamune® based products or whether any such BLAs will be approved by

the FDA. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. For instance, the FDA may not agree with our proposed endpoints for any clinical

trial we propose, which may delay the commencement of our clinical trials. The clinical trial process is also time-consuming. We estimate that the clinical trials we need to conduct to be in a position to submit BLAs for PDS0101 alone or in

combination with PDS01ADC will take several years to complete. We cannot predict the timeline for review of submissions to any regulatory authorities or when any of our product candidates will receive marketing approval, if at all. The timeline

for regulatory approval can be affected by a variety of factors, including, budget and funding levels, agency staffing, and statutory, regulatory and policy changes.

Furthermore, failure can occur at any stage of the trials, and we could encounter problems that cause us to abandon or repeat clinical trials. In later stages of clinical

trials, PDS0101 and PDS01ADC may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials, and the results of current clinical trials of PDS0101 therefore may not be

predictive of the results of our continued or planned Phase 2 and 3 trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety

profiles, notwithstanding promising results in earlier stages of clinical trials.

Moreover, preclinical and clinical data are often susceptible to multiple interpretations and analyses. Many companies that have believed their immunotherapies performed

satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. Success in preclinical testing and early clinical trials does not ensure that later clinical trials, which involve

many more subjects and different indications than we have studied in Phase 2 clinical trials to date, and the results of later clinical trials may not replicate the results of prior clinical trials and preclinical testing. In particular, the

small number of patients in our planned early clinical trials may make the results of these trials less predictive of the outcome of later clinical trials.

Product development costs will also increase if we experience delays in testing or in receiving marketing approvals. We do not know whether any clinical trials will begin

as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize PDS0101 alone or in combination

with PDS01ADC, could allow our competitors to bring products to market before we do, and could impair our ability to successfully commercialize PDS0101 or PDS01ADC, any of which may harm our business and results of operations.

Clinical drug development is a lengthy and expensive process, with an uncertain outcome. If clinical trials of our product candidates fail to demonstrate safety and efficacy

to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs, experience delays in completing, or ultimately be unable to complete, the development of our product candidates or be

unable to obtain marketing approval.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must complete preclinical development and then conduct extensive clinical trials to

demonstrate the safety and efficacy of our product candidates. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at

any stage of testing. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.

Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in

preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their drugs.

Index

We do not know whether ongoing clinical trials will be completed on schedule or at all, or whether future clinical trials will begin on time, need to be redesigned, enroll patients on time or be

completed on schedule, if at all. Clinical trials can be delayed for a variety of reasons, including delays related to:

● obtaining regulatory authorization to commence a trial;

● recruiting suitable patients to participate in a trial;

● addressing any conflicts with new or existing laws or regulations;

● the need to add new clinical trial sites;

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product

candidates, including:

Index

● incur unplanned costs;

● obtain marketing approval in some countries and not in others;

● be subject to additional post-marketing testing requirements; or

● have the drug removed from the market after obtaining marketing approval.

Our drug development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether clinical trials will begin as planned, will need to be restructured

or will be completed on schedule, or at all. Furthermore, we rely on third-party CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and while we have agreements governing their committed activities, we

have limited influence over their actual performance. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring drugs to

market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

Enrollment and retention of subjects in clinical trials is an expensive and time-consuming process and could be made more difficult or

rendered impossible by multiple factors outside our control.

We may encounter delays in enrolling, or be unable to enroll, a sufficient number of participants to complete any of our clinical trials. Once enrolled, we may be unable to

retain a sufficient number of participants to complete any of our trials. Late-stage clinical trials of PDS0101 alone or in combination with PDS01ADC or other agents may require the enrollment and retention of large numbers of subjects. Subject

enrollment and retention in clinical trials depends on many factors, including the size of the subject population, the nature of the trial protocol, the existing body of safety and efficacy data with respect to the study drug, the number and

nature of competing treatments and ongoing clinical trials of competing drugs for the same indication, patients’ and clinicians’ perceived risks and benefits of the product candidate under study the proximity of subjects to clinical sites and

the eligibility criteria for the study.

Furthermore, any negative results we may report in clinical trials of PDS0101 and PDS01ADC may make it difficult or impossible to recruit and retain participants in other

clinical trials of PDS0101. Delays or failures in planned subject enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop PDS0101 and PDS01ADC, or could render

further development impractical. In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will

be limited in our ability to compel their actual performance in compliance with applicable regulations. Enforcement actions brought against these third parties may cause further delays and expenses related to our clinical development programs.

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials

altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, which would cause the value of our company to decline and limit our ability to obtain additional financing.

Index

The successful development of immunotherapies is highly uncertain.

Successful development of immunotherapies is highly uncertain and is dependent on numerous factors, many of which are beyond our control. Immunotherapies that appear

promising in the early phases of development may fail to reach, or be delayed in reaching, the market for several reasons including: preclinical study results that may show the immunotherapy to be less effective than desired (e.g., the study

failed to meet its primary objectives) or to have harmful or problematic side effects; clinical study results that may show the immunotherapy to be less effective than expected (e.g., the study failed to meet its primary endpoint) or to have

unacceptable side effects; failure to receive the necessary regulatory approvals or a delay in receiving such approvals. Among other things, such delays may be caused by slow enrollment in clinical studies, length of time to achieve study

endpoints, delays in receiving the necessary products or supplies for the conduct of clinical or preclinical trials, additional time requirements for data analysis, or Biologics License Application preparation, discussions with the FDA, an FDA

request for additional preclinical or clinical data, FDA delays in inspecting manufacturing establishments, failure to receive FDA approval for manufacturing processes or facilities, or unexpected safety or manufacturing issues; manufacturing

costs, formulation issues, pricing or reimbursement issues, or other factors that make the immunotherapy uneconomical; and the proprietary rights of others and their competing products and technologies that may prevent the immunotherapy from

being commercialized. Success in preclinical and early and interim clinical studies does not ensure that large-scale clinical studies will be successful. Clinical results are frequently susceptible to varying interpretations that may delay,

limit or prevent regulatory approvals. The length of time necessary to complete clinical studies and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly from one immunotherapy to

the next and may be difficult to predict. Even if our product candidates are approved, they may be subject to limitations on the indicated uses and populations for which they may be marketed. They may also be subject to other conditions of

approval, may contain significant safety warnings, including boxed warnings, contraindications, and precautions, may not be approved with label statements necessary or desirable for successful commercialization, or may contain requirements for

costly post-market testing and surveillance, or other requirements, including the submission of a REMS, to monitor the safety or efficacy of the products. If we do not receive FDA approval for, and successfully commercialize our product

candidates, we will not be able to generate revenue from these product candidates in the United States in the foreseeable future, or at all. Any significant delays in obtaining approval for and commercializing our product candidates will have a

material adverse impact on our business and financial condition.

In addition, the success of our products will depend on several factors, including the following:

● timely receipt of marketing approvals for our products;

● the performance of our future collaborators, if any;

● successful launch of commercial sales following any marketing approval;

● a continued acceptable safety profile following any marketing approval;

● our ability to compete with other therapies.

We do not have complete control over many of these factors, including certain aspects of clinical development and the regulatory submission process, potential threats to our intellectual property

rights and the manufacturing, marketing, distribution and sales efforts of any future collaborator. Accordingly, we cannot assure you that we will ever be able to generate revenue through the sale of our product candidates. If we are not

successful in commercializing our products, or are significantly delayed in doing so, our business will be materially harmed.

Index

We may not be able to file INDs or IND amendments to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA may not

permit us to proceed.

We may not be able to file INDs for our future product candidates on the timelines we expect. For example, we may experience manufacturing delays or other delays with IND-enabling studies.

Moreover, we cannot be sure that submission of an IND will result in the FDA allowing further clinical trials to begin, or that, once begun, issues will not arise that lead FDA, IRBs, or other authorities to suspend, terminate, or require changes

to our clinical trials. Additionally, even if such regulatory and other authorities agree with the design and implementation of the clinical trials set forth in an IND, we cannot guarantee that such regulatory authorities will not change their

requirements in the future. These considerations also apply to new clinical trials or changes to existing clinical trials we may submit as amendments to existing INDs or to a new IND. Any failure to file INDs on the timelines we expect or to

obtain regulatory clearance or approvals for our trials may prevent us from completing our clinical trials or commercializing our products on a timely basis, if at all.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete

effectively.

The biotechnology and biopharmaceutical industries are characterized by rapid technological developments and a high degree of competition. As a result, PDS0101, PDS01ADC or

other Versamune® and Infectimune® based products could become obsolete before we recoup any portion of our related research and development and commercialization expenses. Competition in the biopharmaceutical industry is based significantly on

scientific and technological factors. These factors include the availability of patent and other protection for technology and products, the ability to commercialize technological developments and the ability to obtain governmental approval for

testing, manufacturing and marketing. We compete with specialized biopharmaceutical firms in the United States, Europe and elsewhere, as well as a growing number of large pharmaceutical companies that are applying biotechnology to their

operations. Many biopharmaceutical companies have focused their development efforts in the human therapeutics area, including cancer. Many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made

commercial arrangements with other biopharmaceutical companies. These companies, as well as academic institutions and governmental agencies and private research organizations, also compete with us in recruiting and retaining highly qualified

scientific personnel and consultants. Our ability to compete successfully with other companies in the pharmaceutical field will also depend to a considerable degree on the continuing availability of capital to us.

We are aware of certain investigational new drugs under development or approved products by competitors that are used for the prevention, diagnosis, or treatment of certain

diseases we have targeted for drug development. Various companies are developing biopharmaceutical products that have the potential to directly compete with PDS0101 and PDS01ADC even though their approach to may be different. We believe our top

clinical-stage competitors pursuing cancer immunotherapies and/or vaccines for infectious diseases include, but not limited to Merus N.V., F-Star Therapeutics, Johnson & Johnson Innovative Medicine (part of Johnson & Johnson),

Sanofi-Aventis, GlaxoSmithKline plc, Merck and Pfizer, Inovio, Kite Pharma, Hookipa, Moderna, ZIOPHARM Oncology, Heat Biologics, Harpoon Therapeutics, BioNTech, Osivax, Medicago, Vaxart, and Flugen. Many of these companies have substantially

greater financial, marketing, and human resources than we do (including, in some cases, substantially greater experience in clinical testing, manufacturing, and marketing of pharmaceutical products). If one or more of these companies is

successful in developing their technologies, it could materially impact our business. We also experience competition in the development of our immunotherapies from universities and other research institutions and compete with others in

acquiring technology from such universities and institutions.

Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these

industries. Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, drugs that are more effective or less costly than PDS0101, PDS01ADC or our other Versamune® and Infectimune® based products.

We will face competition from other drugs currently approved or that will be approved in the future for the treatment of the other cancers and infectious diseases we are

currently targeting. Therefore, our ability to compete successfully will depend largely on our ability to:

● obtain required regulatory approvals;

Index

The availability of our competitors’ immunotherapies and other treatments could limit the demand, and the price we are able to charge, for PDS0101 alone or in combination

with PDS01ADC. The inability to compete with existing or subsequently introduced immunotherapies and other treatments would have an adverse impact on our business, financial condition and prospects.

Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to license novel compounds that could make PDS0101 and

PDS01ADC less competitive. In addition, any new immunotherapy that competes with an approved treatment must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be

commercially successful. Accordingly, our competitors may succeed in obtaining patent protection, discovering, developing, receiving the FDA’s approval for or commercializing medicines before we do, which would have an adverse impact on our

business and results of operations.

PDS0101 and PDS01ADC may cause adverse effects or have other properties that could delay or prevent its regulatory approval or limit the scope of any

approved label or market acceptance.

Adverse events caused by PDS0101 or PDS01ADC could cause reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt clinical trials and

could result in the denial of regulatory approval. If clinical trials for PDS0101 and PDS01ADC report an unacceptable frequency or severity of adverse events, our ability to obtain regulatory approval for PDS0101 and PDS01ADC may be negatively

impacted.

Furthermore, if PDS0101 alone or in combination with PDS01ADC is approved and then causes serious or unexpected side effects, a number of potentially significant negative

consequences could result, including:

● we could be sued and held liable for injuries sustained by patients;

● we could elect to discontinue the sale of PDS0101 or PDS01ADC;

● our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of PDS0101 and PDS01ADC and could substantially increase the costs of

commercialization.

In addition, if any of our product candidates are associated with adverse events or undesirable side effects or have properties that are unexpected, our trials could be

suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. We, or any future collaborators, may

abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit

perspective. Drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, results of

operations, financial condition and prospects significantly.

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize, or will be

delayed in commercializing, PDS0101 and PDS01ADC, and our ability to generate revenue will be impaired.

PDS0101 and PDS01ADC and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy,

recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries.

Failure to obtain marketing approval for PDS0101 alone or in combination with PDS01ADC will prevent us from commercializing our products. We have not received approval to market PDS0101 or PDS01ADC from regulatory authorities in any

jurisdiction. We have only limited experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on contract research organizations to assist us in this process. Securing regulatory approval

requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the safety and efficacy of PDS0101 and PDS01ADC. Securing

regulatory approval also requires the submission of information about the product manufacturing process, and inspection of manufacturing facilities by, the relevant regulatory authority. PDS0101 and PDS01ADC may not be effective, may be only

moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude it from obtaining marketing approval or prevent or limit commercial use.

Index

The process of obtaining marketing approvals, both in the United States and elsewhere, is expensive, may take many years and can vary substantially based upon a variety of

factors. We cannot assure you that we will ever obtain any marketing approvals in any jurisdiction. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations or

changes in regulatory review for each submitted product application may cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion in the approval process and

may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical or other studies, and clinical trials. In addition, varying interpretations of the data obtained from preclinical

testing and clinical trials could delay, limit or prevent marketing approval of PDS0101 and PDS01ADC. Additionally, any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render

the approved product not commercially viable.

If any of our product candidates receives marketing approval and we, or others, later discover that the drug is less effective than

previously believed or causes undesirable side effects that were not previously identified, our ability, or that of any future collaborators, to market the drug could be compromised.

Clinical trials of our product candidates must be conducted in carefully defined subsets of patients who have agreed to enter into clinical trials. Consequently, it is

possible that our clinical trials, or those of any future collaborator, may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side

effects. If one or more of our product candidates receives marketing approval and we, or others, discover that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified, a number

of potentially significant negative consequences could result, including:

● the drug may become less competitive in the marketplace; and

● our reputation may suffer.

Any of these events could have a material and adverse effect on our operations and business and could adversely impact our stock price.

We rely, and intend to continue to rely, on third parties to conduct our clinical trials and perform some of our research and preclinical studies. If

these third parties do not satisfactorily carry out their contractual duties, fail to comply with applicable regulatory requirements or do not meet expected deadlines, our development programs may be delayed or subject to increased costs or we

may be unable to obtain regulatory approval, each of which may have an adverse effect on our business, financial condition, results of operations and prospects.

There is no guarantee that any such CROs, clinical trial investigators or other third parties on which we rely will devote adequate time and resources to our development

activities or perform as contractually required. If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise perform in a substandard manner, or terminate their

engagements with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated. If our clinical trial site terminates for any reason, we may experience the loss of

follow-up information on subjects enrolled in such clinical trial unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible. In addition, certain of our scientific advisors or

consultants who receive compensation from us are clinical trial investigators for our clinical trial. Although we believe our existing relationships are within the FDA’s guidelines, if these relationships and any related compensation result in

perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and

the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any marketing application we submit by the FDA. Any such delay or rejection could prevent us from commercializing PDS0101, PDS01ADC or

any other product candidates.

Index

Even if we obtain FDA approval in the United States, we may never obtain approval for or commercialize PDS0101 or PDS01ADC in any other jurisdiction,

which would limit our ability to realize each product’s full market potential.

In order to market PDS0101 or PDS01ADC in a particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a country-by-country

basis regarding safety and efficacy. Approval by the FDA in the United States does not ensure approval by regulatory authorities in other countries or jurisdictions.

In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not

guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional testing and validation and additional administrative review periods. Seeking foreign regulatory approval could result in

difficulties and costs for us and require additional preclinical studies or clinical trials that could be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of

PDS0101 or PDS01ADC in those countries. PDS0101 or PDS01ADC is not approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to

comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced.

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more subject data becomes

available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose interim, topline or preliminary data from our sponsored or investigator initiated clinical trials, such as preliminary topline

results which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a full analysis of all data related to the particular trial. We also make

assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. In addition, we may report preliminary analyses of only

certain endpoints rather than all endpoints. As a result, the interim, topline or preliminary results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once

additional data has been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a

result, interim, topline and preliminary data should be viewed with caution until the final data is available. We may also disclose interim data from our clinical trials. Interim data from clinical trials that we may complete are subject to the

risk that one or more of the clinical outcomes may materially change as subject enrollment continues and more subject data becomes available. Adverse differences between interim, topline or preliminary data and final data could significantly

harm our reputation and business prospects. Further, disclosure of interim, topline or preliminary data by us or by our competitors could result in volatility in the price of our common stock.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the

importance of data differently, which could impact the potential of the particular program, the likelihood of marketing approval or commercialization of the particular drug candidate, any approved product, and our company in general. In

addition, the information we choose to publicly disclose regarding a particular study or clinical trial is derived from information that is typically extensive, and you or others may not agree with what we determine is material or otherwise

appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular

program, drug candidate or our business.

If the interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions

reached, our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our drug candidates may be harmed,

which could harm our business, operating results, prospects or financial condition.

The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, interim

results of a clinical trial do not necessarily predict final results, and the results of our clinical trials may not satisfy the requirements of the FDA or comparable foreign regulatory authorities.

We currently have no drugs approved for sale and we cannot guarantee that we will ever have marketable drugs. Clinical failure can occur at any stage of clinical

development. Clinical trials may produce negative or inconclusive results, and we or any future collaborators may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies. We will be required to

demonstrate with substantial evidence through adequate and well-controlled clinical trials that our product candidates are safe and effective for use in treating specific conditions in order to obtain marketing approvals for their commercial

sale. Success in preclinical studies and early-stage clinical trials does not mean that future larger registration clinical trials will be successful because product candidates in later-stage clinical trials may fail to demonstrate safety and

efficacy to the satisfaction of the FDA and non-U.S. regulatory authorities despite having progressed through preclinical studies and early-stage clinical trials. Product candidates that have shown promising results in preclinical studies and

early-stage clinical trials may still suffer significant setbacks in subsequent registration clinical trials. Additionally, the outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later-stage

clinical trials.

Index

In addition, the design of a clinical trial can determine whether its results will support approval of a drug and flaws in the design of a clinical trial may not become

apparent until the clinical trial is well advanced. We have limited experience in designing clinical trials and may be unable to design and conduct a clinical trial to support marketing approval. Further, if our product candidates are found to

be unsafe or lack efficacy, we will not be able to obtain marketing approval for them and our business would be harmed. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have

suffered significant setbacks in advanced clinical trials, even after obtaining promising results in preclinical studies and earlier clinical trials.

In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous

factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. We

do not know whether any clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain marketing approval to market our product candidates.

In addition, in the event that an adverse safety issue, clinical hold, or other adverse finding occurs in one of our clinical trials, that event could adversely affect any

other clinical trials for the same product candidate. An adverse safety issue or other adverse finding in a clinical trial conducted by a third party with a similar mechanism of action could adversely affect clinical trials involving our

product candidates.

Further, our product candidates may not be approved even if they achieve their primary endpoints in clinical trials, including registration trials. The FDA or comparable

foreign regulatory authorities may disagree with our trial design and our interpretation of data from preclinical studies and clinical trials. In addition, any of these regulatory authorities may change requirements for the approval of a

product candidate even after reviewing and providing comments or advice on a protocol for a pivotal clinical trial that has the potential to result in approval by the FDA or comparable foreign regulatory authorities. In addition, any of these

regulatory authorities may also approve a product candidate for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials. In addition, the FDA or other

comparable foreign regulatory authorities may not approve the labeling claims that we believe would be necessary or desirable for the successful commercialization of our product candidates.

Before obtaining marketing approvals for the commercial sale of any product candidate for a target indication, we must demonstrate with substantial evidence gathered in

preclinical studies and adequate and well-controlled clinical trials, and, with respect to approval in the United States, to the satisfaction of the FDA and elsewhere to the satisfaction of other comparable foreign regulatory authorities, that

the product candidate is safe and effective for use for that target indication. There is no assurance that the FDA or other comparable foreign regulatory authorities will consider our future clinical trials to be sufficient to serve as the

basis for approval of one of our product candidates for any indication. The FDA and other comparable foreign regulatory authorities retain broad discretion in evaluating the results of our clinical trials and in determining whether the results

demonstrate that a product candidate is safe and effective. If we are required to conduct more clinical trials of a product candidate than we expect prior to its approval, we will need substantial additional funds and there is no assurance that

the results of any such additional clinical trials will be sufficient for approval.

Our product candidates are in various stages of development and we will not be able to commercialize our product candidates if our

preclinical studies do not produce successful results and/or our clinical trials do not demonstrate the safety and efficacy of our product candidates; early results and early understanding of product candidate potential may not be predictive of

later success.

Our oncology and infectious disease product candidates are susceptible to the risks of failure inherent at any stage of product development, including the

occurrence of unexpected or unacceptable adverse events or the failure to demonstrate efficacy in clinical trials. Clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain.

The results of preclinical studies, preliminary study results, and early clinical trials of our product candidates may not be predictive of the results of

later-stage clinical trials. Our product candidates may not perform as we expect, may ultimately have a different or no impact than expected, may have a different mechanism of action than we initially understand or that we expect in humans, and

may not ultimately prove to be safe and effective.

Preliminary and final results from preclinical studies and early-stage trials, and trials in compounds that we believe are similar to ours, may not be

representative of results that are found in larger, controlled, blinded, and longer-term studies. Product candidates may fail at any stage of preclinical or clinical development. Product candidates may fail to show the desired safety and

efficacy traits even if they have progressed through preclinical studies or initial clinical trials. Preclinical studies and clinical trials may also reveal unfavorable product candidate characteristics, including safety concerns. A number of

companies in the biopharmaceutical industry have suffered significant setbacks in clinical trials, notwithstanding promising results in earlier preclinical studies or clinical trials or promising mechanisms of action. In some instances, there

can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type

of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants. Moreover, should there be an issue with the design of a clinical trial, our results may be impacted.

We may not discover such a flaw until the clinical trial is at an advanced stage.

Index

We may also experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or

commercialize our product candidates. There may be emerging new data or regulatory questions or disagreements regarding interpretations of data and results at any stage. For example, the FDA or comparable foreign regulatory authorities may

disagree with our study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials or find that a product candidate’s benefits do not outweigh its safety risks.

Even if we obtain regulatory approval, we will still face extensive ongoing regulatory requirements, and PDS0101, PDS01ADC and other candidates may face

future development and regulatory difficulties.

Marketing of PDS0101 alone or in combination with PDS01ADC, if approved, along with the manufacturing processes, post- approval clinical data, labeling, packaging,

distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for PDS0101, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and other

regulatory authorities. These requirements include submissions of safety, efficacy and other post-marketing information and reports, establishment of registration and drug listing requirements, continued compliance with current Good

Manufacturing Practice, or cGMP, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and

recordkeeping and current Good Clinical Practice, or cGCP requirements for any clinical trials that we conduct post-approval. Even if marketing approval of PDS0101 or PDS01ADC is granted, the approval may be subject to limitations on the

indicated uses for which PDS0101 may be marketed or to the conditions of approval. If PDS0101 or PDS01ADC receives marketing approval, an accompanying label may limit the approved use of the product(s), which could limit sales.

The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety and/or efficacy of PDS0101 and PDS01ADC.

The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions

on manufacturers’ communications regarding off-label use and if we promote or otherwise market PDS0101 or PDS01ADC for indications other than those for which it is approved, we may be subject to certain enforcement actions. Violations of the

Federal Food, Drug, and Cosmetic Act relating to the promotion of prescription biopharmaceutical products may lead to FDA enforcement actions and investigations alleging violations of federal and state health care fraud and abuse laws, as well

as state consumer protection laws.

In addition, later discovery of previously unknown adverse events or other problems with PDS0101, manufacturers or manufacturing processes, or failure to comply with

regulatory requirements, may yield various results, including:

● restrictions on manufacturing PDS0101 or PDS01ADC;

● restrictions on the labeling or marketing of PDS0101 or PDS01ADC;

● restrictions on distribution or use of PDS0101 or PDS01ADC;

● requirements to conduct post-marketing studies or clinical trials;

● suspension of any of our ongoing clinical trials;

● warning letters;

● withdrawal of PDS0101 or PDS01ADC from the market;

● recalls of PDS0101 or PDS01ADC;

● fines, restitution or disgorgement of profits or revenues;

● suspension or withdrawal of marketing approvals;

● refusal to permit the import or export of PDS0101 or PDS01ADC;

● seizures of PDS0101 or PDS01ADC; or

● injunctions or the imposition of civil or criminal penalties.

Index

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any

failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our product candidates, if approved. If regulatory sanctions are applied or if regulatory

approval is withdrawn, the value of our company and our operating results will be adversely affected.

The regulatory requirements and policies may change, and additional government regulations may be enacted for which we may also be required to comply. We cannot predict the

likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or in other countries. If we or any future collaboration partner are not able to maintain

regulatory compliance, we or such collaboration partner, as applicable, may face government enforcement action and our business will suffer. Moreover, our or our future collaborators’ ability to market any future drugs could be limited, which

could adversely affect our ability to achieve or sustain profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

Even if PDS0101 or PDS01ADC receives licensure, it may fail to achieve market acceptance by physicians, patients, third-party payors or others in the

medical community necessary for commercial success.

If PDS0101 alone or in combination with PDS01ADC receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients,

third-party payors and others in the medical community. If PDS0101 or PDS01ADC does not achieve an adequate level of acceptance, we may not generate significant revenues and become profitable. The degree of market acceptance, if approved for

commercial sale, will depend on a number of factors, including but not limited to:

● the efficacy and potential advantages compared to alternative treatments;

● effectiveness of sales and marketing efforts;

● the cost of treatment in relation to alternative treatments;

● our ability to offer PDS0101 or PDS01ADC for sale at competitive prices;

● the convenience and ease of administration compared to alternative treatments;

● the strength of marketing and distribution support;

● the availability of third-party coverage and adequate reimbursement;

● the prevalence and severity of any side effects; and

Because we expect sales of PDS0101 alone or in combination with PDS01ADC, if approved, to generate substantially all of our revenues for the foreseeable future, the failure

of PDS0101 or PDS01ADC to achieve market acceptance would harm our business and could require us to seek additional financing sooner than we otherwise plan.

Index

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications

that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we are initially developing our product candidates PDS0101, PDS01ADC and the other Versamune and Infectimune based

products. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to

timely capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable

products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements

in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

If we fail to comply with federal and state healthcare regulatory laws, including in our relationships with healthcare providers and customers and

third-party payors, we could face criminal prosecution and sanctions, substantial civil penalties, damages, fines, disgorgement, exclusion from participation in governmental healthcare programs, contractual damages, reputational harm, and the

curtailment of our operations, any of which could harm our business.

PDSB US Equity

PDSB · 10-K · period ended 2023-12-31

ITEM 1A. Risk Factors

PDSB US Equity☆

PDSB · 10-K · period ended 2023-12-31

ITEM 1A. Risk Factors

PDSB US Equity