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U NITE D STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________________ to ______________
Commission File Number:
GENPREX, INC.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
(I.R.S. Employer |
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incorporation or organization) |
Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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The
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 13, 2025, the registrant had
FORM 10-Q TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
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September 30, |
December 31, |
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2025 |
2024 |
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Assets |
(unaudited) |
(see Note 2) |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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Prepaid expenses and other |
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Total current assets |
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Other non-current assets: |
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Research and development supplies |
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Total other assets |
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Total assets |
$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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Other current liabilities |
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Total current liabilities |
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Non-current liabilities: |
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Derivative liabilities |
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Total liabilities |
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Commitments and contingencies (Note 7) |
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Stockholders’ equity: |
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Preferred stock $ par value: shares authorized; shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively |
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Common stock $ par value: shares authorized; and shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively |
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Additional paid-in capital |
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Accumulated deficit |
(
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(
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
Condensed Consolidated Statements of Operations (unaudited)
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Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
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2025 |
2024 |
2025 |
2024 |
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Operating expenses: |
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Depreciation |
$ |
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$ |
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$ |
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$ |
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Research and development |
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General and administrative |
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Total operating expenses |
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Operating loss |
(
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(
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(
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(
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Other income |
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Other financing costs |
(
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) |
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(
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Realized and unrealized loss |
(
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(
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(
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(
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Net loss |
(
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(
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(
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(
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Deemed dividend related to warrant modification |
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(
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Net loss attributable to common stockholders |
$ |
(
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) | $ |
(
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(
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(
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Net loss per share applicable to common stockholders — basic and diluted |
$ |
(
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) | $ |
(
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) | $ |
(
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) | $ |
(
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Weighted average number of common shares — basic and diluted |
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||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited)
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Common Stock |
Additional |
Accumulated |
Total |
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Three and Nine Months Ended September 30, 2025 |
Shares | Amount | Paid-In Capital | Deficit | Stockholders' Equity | |||||||||||||||
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Balance at December 31, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
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||||||||||
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Issuance of common stock, pre-funded warrants, and warrants for cash, net of issuance costs |
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Issuance of common stock for services |
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RSUs conversion to common stock |
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Share-based compensation |
— |
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Net loss |
— |
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(
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(
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Balance at March 31, 2025 |
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$ |
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$ |
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$ |
(
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Issuance of common stock, pre-funded warrants, and warrants for cash, net of issuance costs |
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Issuance of common stock for services |
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RSUs conversion to common stock |
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Share-based compensation |
— |
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Net loss |
— |
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(
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(
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Balance at June 30, 2025 |
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$ |
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$ |
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$ |
(
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Issuance of common stock, pre-funded warrants, and warrants, net of issuance costs |
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Issuance of common stock for services |
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Share-based compensation |
— |
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Net loss |
— |
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(
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(
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Balance at September 30, 2025 |
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$ |
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$ |
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$ |
(
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||||||||||
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Three and Nine Months Ended September 30, 2024 |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
(
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||||||||||
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Issuance of common stock, pre-funded warrants, and warrants for cash, net of issuance costs |
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Issuance of common stock for services |
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Company issued rounding of street name accounts for reverse stock split |
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(
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RSUs conversion to common stock |
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(
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Share-based compensation |
— |
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Deemed dividend related to warrant modification |
— |
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(
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(
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Warrant modification |
— |
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Net loss |
— |
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(
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(
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Balance at March 31, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
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||||||||||
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Issuance of common stock, pre-funded warrants, and warrants for cash, net of issuance costs |
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|||||||||||||||
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Issuance of common stock for services |
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RSUs conversion to common stock |
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Share-based compensation |
— |
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Net loss |
— |
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(
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(
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Balance at June 30, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
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Issuance of common stock, pre-funded warrants, and warrants for cash, net of issuance costs |
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Issuance of common stock for services |
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Share-based compensation |
— |
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Net loss |
— |
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(
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(
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Balance at September 30, 2024 |
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$ |
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$ |
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$ |
(
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See accompanying notes to the unaudited condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows (unaudited)
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Nine Months Ended September 30, |
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2025 |
2024 |
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Cash flows from operating activities: |
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Net loss |
$ |
(
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(
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
$ |
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Share-based compensation and issuance of stock for services |
$ |
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Non cash financing costs |
$ |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other |
$ |
(
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Research and development supplies |
$ |
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Accounts payable |
$ |
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(
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Other current liabilities |
$ |
(
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) |
(
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Net cash used in operating activities |
(
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(
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Cash flows from investing activities: |
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Disposals of property and equipment |
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Reductions to intellectual property |
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Net cash provided by investing activities |
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Cash flows from financing activities: |
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Net proceeds from issuances of common stock, pre-funded warrants, and warrants |
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Net cash provided by financing activities |
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Net decrease in cash and cash equivalents |
(
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) |
(
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
$ |
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$ |
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Supplemental schedule of non-cash investing and financing activities: |
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Deemed dividend related to warrant modification |
$ |
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$ |
(
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) | |||
See accompanying notes to the unaudited condensed consolidated financial statements.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 1 - Description of Business and Basis of Presentation
Unless the context requires otherwise, references to “Genprex,” or the “Company,” in this Quarterly Report on Form 10 -Q refer to Genprex, Inc. Genprex, incorporated in Delaware in April 2008, is a clinical stage gene therapy company pioneering the development of gene-based therapies for large patient populations with unmet medical needs. The Company’s oncology platform utilizes its systemic, non-viral ONCOPREX® Delivery System which uses lipid-based nanoparticles in a lipoplex form to deliver tumor suppressor gene-expressing plasmids to cancer cells. The product is administered intravenously, where it is taken up by tumor cells that then express tumor suppressor proteins that were deficient in the tumor. The Company’s diabetes technology is designed to work in Type 1 diabetes by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body’s immune system. In Type 2 diabetes, the Company’s technology is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin.
Oncology Platform
Genprex’s lead oncology drug candidate, REQORSA® gene therapy (generic name: quaratusugene ozeplasmid ), previously referred to as GPX- 001, is initially being developed in combination with prominent, approved cancer drugs to treat Non-Small Cell Lung Cancer (“NSCLC”) and Small Cell Lung Cancer (“SCLC”). REQORSA has multimodal effects on cancer cells. It harms the metabolism of cancer cells, which leads to reduced cancer cell growth. It has a mechanism of action whereby it decreases tumor glucose metabolism, interrupts cell signaling pathways that cause replication and proliferation of cancer cells, re-establishes pathways for apoptosis, or programmed cell death, in cancer cells, and increases the immune response against cancer cells. In preclinical studies, REQORSA has been shown to be complementary with targeted drugs and immunotherapies. The Company’s strategy is to develop REQORSA in combination with currently approved therapies and the Company believes REQORSA’s unique attributes position it to provide treatments that improve on these current therapies for patients with NSCLC, SCLC, and possibly other cancers.
The TUSC2 gene, which is the key component of REQORSA and plays a vital role in cancer suppression and normal cell metabolism, is one of a series of genes on the short arm of Chromosome 3 whose therapeutic use is covered by the Company’s exclusive worldwide licenses from The University of Texas MD Anderson Cancer Center (“MD Anderson”). The Company believes that its ONCOPREX Delivery System allows for the delivery of a number of cancer-fighting tumor suppressor genes, alone or in combination with other cancer therapies, to combat multiple types of cancer and the Company is in early stages of discovery programs to identify other cancer candidates. In August 2022, the Company entered into a sponsored research agreement with MD Anderson to support further preclinical studies of TUSC2 and other tumor suppressor genes. Additionally, the Company is collaborating with MD Anderson to discover, develop and utilize biomarkers to select the patient population most likely to respond to REQORSA and enable decisions on progression of its drug candidates to the next phase of development. MD Anderson researchers currently are analyzing biomarkers that may indicate a strong positive or negative response to REQORSA in lung cancer that could be used to enrich the Company’s population of responders in its clinical trials.
Acclaim – 1: The Company currently is enrolling and treating patients in the Phase 2a expansion portion of its Phase 1/2 Acclaim- 1 clinical trial. The Acclaim- 1 trial uses a combination of REQORSA and AstraZeneca’s Tagrisso® ( osimertinib ) in patients with late-stage NSCLC that has activating epidermal growth factor receptor (“EGFR”) mutations and progression on treatment with Tagrisso or Tagrisso-containing regimens. Following the May 2023 completion of the Phase 1 dose escalation portion of the study, the Acclaim- 1 Safety Review Committee (“Acclaim- 1 SRC”) approved advancement from the Phase 1 dose escalation portion to the Phase 2a expansion portion of the study. Based on a review of safety data which showed no dose limiting toxicities (“DLTs”), the Acclaim- 1 SRC determined the recommended Phase 2 dose ( “RP2D” ) of REQORSA to be 0.12 mg/kg. This was the highest dose level delivered in the Phase 1 portion of the study and is twice the highest dose level delivered in the Company’s prior clinical trial combining REQORSA with Tarceva® ( erlotinib ) for the treatment of late-stage lung cancer. There were three patients out of the twelve originally enrolled in the Phase 1 dose escalation portion of the study who had prolonged progression-free survival (“PFS”). One patient attained a partial remission after the second course of REQORSA and Tagrisso and has maintained this response through 56 courses of treatment (approximately 39 months) and continues to receive REQORSA and Tagrisso treatment to date. A second patient had stable disease without disease progression through 32 courses of treatment (approximately 24 months) but then had disease progression and REQORSA treatment was stopped. A third patient had stable disease without disease progression through 14 courses of treatment (approximately 10 months) before disease progression and is no longer receiving treatment. Genprex opened the Phase 2a expansion portion of the study and enrolled and dosed the first patient in January 2024. The initial trial design of the Phase 2a expansion portion of the study included two cohorts with half being patients who received only prior Tagrisso treatment and the other half being patients who received prior Tagrisso treatment and chemotherapy. However, as previously announced in August 2024, based on resource prioritization and to focus on the patients for whom REQORSA is most likely to show a benefit, the Company decided to limit its enrollment efforts moving forward to patients who received only prior Tagrisso treatment and cease enrollment of the second cohort (patients who received prior Tagrisso treatment and chemotherapy). However, noting that two of the patients with prolonged PFS in the Phase 1 portion of the study had previously received both chemotherapy and Tagrisso, in February 2025, the Company amended the protocol to allow entry of patients progressing on Tagrisso or Tagrisso-containing regimens. The Phase 2a expansion portion of the trial is now expected to enroll approximately 33 patients; all of whom have progressed on Tagrisso or Tagrisso-containing regimens. The Phase 2b randomized portion of the study, in which patients progressing on prior Tagrisso treatment will be randomized 1:1 to either REQORSA and Tagrisso combination therapy or to platinum-based chemotherapy, remains unchanged. There will be an interim analysis following the treatment of 19 patients in the Phase 2a portion of the Acclaim- 1 study. The Company expects to complete the enrollment of the first 19 patients for interim analysis in the Phase 2a expansion portion of the study in the first half of 2026 and expects the interim analysis in the second half of 2026.
The Food and Drug Administration (“FDA”) has granted Fast Track Designation for the Acclaim- 1 treatment combination of REQORSA and Tagrisso in NSCLC patients who have progressed on Tagrisso treatment.
The Phase 2a expansion portion of the Acclaim- 1 study provides the Company the advantage of early insight into drug effectiveness in defined and distinct patient populations at the maximum tolerated dose or RP2D in order to better evaluate efficacy and increase the likelihood of a successful randomized Phase 2 trial which will follow the expansion portion of the study.
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Acclaim – 2: The Acclaim- 2 trial involved a combination of REQORSA and Merck & Co.’s Keytruda® ( pembrolizumab ) in patients with late-stage NSCLC whose disease has progressed after treatment with Keytruda. As previously announced in August 2024, based on a number of factors, including enrollment challenges and delays due to competition for investigators and eligible patients with numerous other trials involving the same patient population, the Company decided to cease enrollment of new patients in the Acclaim- 2 trial to prioritize its resources and focus on the other two Acclaim trials in SCLC and NSCLC, respectively. There are no longer any patients receiving study treatment in the Acclaim- 2 trial. Although the Acclaim- 2 study in patients progressing on Keytruda containing regimens has been closed due to, among other factors, slow enrollment, the Company continues to believe that this combination could be beneficial.
Acclaim – 3: The Company is currently enrolling and treating patients in the Phase 2 expansion portion of its Phase 1/2 Acclaim- 3 clinical trial. The Acclaim- 3 clinical trial uses a combination of REQORSA and Genentech, Inc.’s Tecentriq® ( atezolizumab ) as maintenance therapy for patients with extensive stage small cell lung cancer (“ES-SCLC”) who did not develop tumor progression after receiving Tecentriq and chemotherapy as initial standard treatment. Patients are treated with REQORSA and Tecentriq until disease progression or unacceptable toxicity is experienced. On December 16, 2024, the Company announced that it had completed the Phase 1 dose escalation portion of the Acclaim- 3 clinical trial. Based on full safety data, which showed no DLTs, the Acclaim- 3 Safety Review Committee determined that the RP2D of REQORSA will be 0.12 mg/kg, which was the highest dose level delivered in the Phase 1 portion of the trial, and approved the opening of the Phase 2 expansion portion of the trial. The Company anticipates that the Phase 2 expansion portion will enroll approximately 50 patients at approximately 10 to 15 U.S sites. Patients will be treated with REQORSA and Tecentriq until disease progression or unacceptable toxicity is experienced. The primary endpoint of the Phase 2 portion is to determine the 18 -week progression-free survival rate from the time of the start of maintenance therapy with REQORSA and Tecentriq in patients with ES-SCLC. Patients will also be followed for survival. A Phase 2 futility analysis will be performed after the 25th patient enrolled and treated reaches 18 weeks of follow up. The Company expects to complete enrollment of the first 25 patients for interim analysis in the Phase 2 expansion portion of the study in the first half of 2026 and expects the interim analysis in the second half of 2026.
The Acclaim- 3 clinical trial has received FDA Fast Track Designation for this patient population and Acclaim- 3 has also received an FDA Orphan Drug Designation.
Diabetes Gene Therapy
In diabetes, Genprex has exclusively licensed from the University of Pittsburgh of the Commonwealth System of Higher Education (“University of Pittsburgh” or “UP”) multiple technologies relating to the development of a gene therapy product for each of Type 1 and Type 2 diabetes. The same general novel approach is used in each of Type 1 and Type 2 diabetes whereby an adeno-associated virus vector containing the Pdx1 and MafA genes is administered directly into the pancreatic duct. In humans, this can be done with a routine endoscopy procedure. The Company’s diabetes product candidates are currently being evaluated and optimized in preclinical studies at the University of Pittsburgh. GPX- 002 is being developed using the same construct for the treatment of both Type 1 diabetes and Type 2 diabetes. GPX- 002 for Type 1 diabetes is designed to work by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body’s immune system. In a similar approach, GPX- 002 for Type 2 diabetes (formerly known as GPX- 003 ), where autoimmunity is not at play, is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin. The Company finalized the components of the diabetes construct to take forward for nonclinical studies and in December 2023, the Company submitted a request to meet with the FDA to obtain their guidance on the nonclinical studies needed to file an Investigational New Drug (“IND”) application and initiate first -in-human studies. As a result of the FDA’s response, Genprex decided to continue with its planned additional nonclinical studies before requesting regulatory guidance for the IND-enabling studies. The Company is currently working with the University of Pittsburgh on species analyses for the animal models as well as on other regulatory and clinical strategic planning, including the planned initiation of research in Type 2 diabetes animal models, following which the Company plans to submit a request to the FDA to meet regarding IND-enabling studies by the end of 2025. In May 2025, following the recent completion of our August 2022 sponsored research agreement with UP, Genprex entered into a new sponsored research agreement with UP to study Type 1 diabetes and Type 2 diabetes in animal models. The new sponsored research agreement also includes a revised research plan to encompass the Company’s most recent technologies to which Genprex originally acquired exclusive rights from UP in July 2023 as amended and restated in the comprehensive New UP License Agreement in February 2025 ( as defined and described below). These include a MafB promoter to drive expression of the Pdx1 and MafA transcription factors that can potentially be used for both Type 1 and Type 2 diabetes. On February 17, 2025, Genprex and the University of Pittsburgh entered into an amended and restated Exclusive License Agreement (the “New UP License Agreement”), which updated and consolidated into a single agreement the Company’s prior license agreements with UP. Pursuant to the New UP License Agreement, UP granted to Genprex a worldwide, exclusive license for certain patents and related technology, collectively referred to as the “Licensed Technology,” and a worldwide, non-exclusive license to use certain related know-how. The Licensed Technology covered by the New UP License Agreement is based on the same general gene therapy approach as covered under the Company’s prior license agreements with UP (less the previously-licensed macrophage technology), whereby an adeno-associated virus vector containing the Pdx1 and MafA genes is administered directly into the pancreatic duct. More specifically, the Licensed Technology covered by the New UP License Agreement is related to a gene therapy for both Type 1 diabetes and Type 2 diabetes using the genes of the Pdx1 and MafA transcription factors controlled by insulin, glucagon and MafB promoters.
In February 2023, the Company’s research collaborators at UP presented preclinical data in a non-human primate model of Type 1 diabetes highlighting the therapeutic potential of GPX- 002 at the 16th International Conference on Advanced Technologies & Treatments for Diabetes (“ATTD 2023” ) in Berlin, Germany. The statistically significant study results showed the treated animals had decreased insulin requirements, increased c-peptide levels, and improved glucose tolerance compared to baseline. In April 2023, the Company hosted a Key Opinion Leader virtual event entitled “Novel Gene Therapy to Treat Type 1 Diabetes,” which discussed preclinical data reported at ATTD 2023 supporting gene therapy to treat Type 1 diabetes. In June 2025, the Company’s collaboration partners had two presentations at the 2025 American Diabetes Association (“ADA”) 85th Scientific Sessions. Genprex’s research collaborators from UP were invited to give an oral presentation highlighting their work in non-human primate models of Type 1 diabetes. In addition, Genprex’s contract development and manufacturing organization collaborators presented a poster on a non-viral lipid nanoparticle delivery system that would allow a patient to receive multiple treatments.
Formation of Wholly Owned Subsidiary
On February 18, 2025, Genprex announced the formation of a wholly-owned subsidiary, Convergen Biotech, Inc. (“Convergen”). The Company intends to transfer the diabetes program into Convergen in an effort to focus development and commercialization efforts separately from the Company's oncology program.
Capital Requirements, Liquidity and Going Concern Considerations
The Company’s unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has sustained substantial losses from operations since inception and has no current source of revenue. In addition, the Company has used, rather than provided, cash in its operations. Genprex expects to continue to incur significant expenditures to further clinical trials for the commercial development of its patents.
The Company recognizes that it must obtain additional capital resources to successfully commercialize its product candidates. To date, Genprex has received funding in the form of equity and debt, and the Company plans to seek additional funding in the future. However, no assurances can be given that it will be successful in raising additional capital. If the Company is not able to timely and successfully raise additional capital, the timing of its clinical trials, financial condition and results of operations may be materially and adversely affected. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities.
Genprex believes that its current cash and cash equivalents will be sufficient to fund expenditure requirements for its necessary operations and expected clinical trial activities into March 2026. Genprex has based these estimates, however, on assumptions that may prove to be wrong, and could spend available financial resources much faster than it currently expects. The Company will need to raise additional funds to continue funding its development and operations. The Company plans to secure such additional funding and is evaluating various strategies to obtain additional financing, although the Company can give no assurance that its plans or strategies will be effectively implemented in such a way that they will sufficiently alleviate or mitigate the conditions and events noted above.
As a result of its recurring losses from operations and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company’s ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if Genprex is unable to continue as a going concern.
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 2 - Summary of Significant Accounting Policies
Genprex’s unaudited condensed consolidated financial statements have been prepared in accordance with US GAAP and the requirements of the United States Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that is normally required by US GAAP can be condensed or omitted. Accordingly, they do not include all of the information and footnotes normally included in financial statements prepared in conformity with US GAAP. The December 31, 2024 balance sheet was derived from the December 31, 2024 audited financial statements. Genprex’s unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s 2024 Annual Report on Form 10 -K, filed with the SEC on April 1, 2025 ( the “Form 10 -K”).
The accompanying condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of Genprex’s condensed consolidated financial position and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year.
A summary of Genprex’s significant accounting policies consistently applied in the preparation of the accompanying unaudited condensed consolidated financial statements follows.
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly-owned subsidiary, Convergen Biotech, Inc., have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10 -Q and Article 10 of Regulation S- X. All significant intercompany balances and transactions are eliminated in consolidation. As of September 30, 2025 , Convergen Biotech, Inc. has yet to initiate operating activity.
Change in Accounting Principle
During the year ended December 31, 2024 , the Company changed an accounting principle related to accounting treatment of intellectual property expenditures. Previously, the Company capitalized certain intellectual property costs associated with the filing or maintenance of specific patents, including application costs, filing fees, and patent prosecution, in accordance with ASC 350 - 30. The Company voluntarily changed this accounting principle to expense, rather than capitalize, these intellectual property costs on the basis that the new treatment is favorable.
Reverse Stock Split
On
February 2, 2024,
Genprex completed a
1
-for-
On
October 21, 2025,
Genprex completed a
1
-for-
Use of Estimates
The preparation of Genprex’s unaudited condensed consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Genprex considers all highly liquid short-term investments with an initial maturity of
three
months or less to be cash equivalents. Any amounts of cash in financial institutions which exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits expose the Company to cash concentration risk. The Company has cash in a money market account and had $
Net Loss Per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive shares of common stock, which includes common stock equivalents consisting of (i)
Segments
Operating segments are defined as components of an entity for which separate discrete financial information is made available and that is regularly evaluated by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company’s CODM is its Chief Executive Officer and the Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company is focused on pioneering the discovery and development of gene therapies for use in patient populations with unmet medical needs. See “Note 8 – Segment Reporting” for additional disclosures related to segment reporting.
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Fair Value of Financial Instruments
The carrying amounts reported in the condensed consolidated balance sheets for cash, money-market savings account, accounts receivable, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments.
Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, defines fair value, provides a consistent framework for measuring fair value under GAAP and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:
Level 1: Quoted prices for identical instruments in active markets.
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3: Instruments with primarily unobservable value drivers.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from to years. Routine maintenance and repairs are charged to expense as incurred and major renovations or improvements are capitalized.
Research and Development Costs
Research and development expenditures consist of costs incurred to conduct research, develop engineering materials for further study, and develop clinical strategies for current and future programs associated with the Company’s preclinical and Phase 1/2 clinical trials. These expenditures are expensed in the period incurred and include payments to collaborative research partners, manufacturing partners and consultants, and clinical strategy partners, wages and associated employee benefits, facilities, and overhead costs.
Materials acquired to be used in clinical research, that have an alternative future use, are capitalized when the materials are acquired, and included in research and development supplies. These supplies are recognized as expense as they are consumed through use for testing or clinical activities, or have spoiled. The costs of materials that were acquired for a particular research and development activity and have no alternative future use are expensed in the period acquired.
Research and development supplies purchased, valued at cost, and capitalized for future use were $
Intellectual Property
Intellectual property consists of legal and related costs associated with patents, trademarks, and other proprietary technology and rights developed, acquired, or licensed by Genprex. Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These patent-related legal costs are reported as a component of general and administrative expenses.
Accounting for Stock-Based Compensation
Genprex uses the fair value-based method of accounting for stock-based compensation for options granted to employees, independent consultants and contractors. The Company measures options granted at fair value determined as of the grant date and recognizes the expense over the periods in which the options vest or are expected to vest and related services are rendered based on the terms and conditions of the award. Generally, where the award only has a service condition, the requisite service period is the same as the vesting period.
Long-Lived Assets
Genprex reviews long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may
not
be recoverable. In evaluating the fair value and future benefits of its intangible assets, the Company performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the discounted expected future cash flows. During the
nine
months ended
September 30, 2025
, there were
Derivative Liability
The Company evaluates all features contained in financing agreements to determine if there are any embedded derivatives that require separate accounting from the underlying agreement under ASC 815 – Derivatives and Hedging . An embedded derivative that requires separation is accounted for as a separate asset or liability from the host agreement. The derivative asset or liability is accounted for at fair value, with changes in fair value recognized in the condensed consolidated statement of operations within the other financing costs line item. The Company determined that certain features under the Equity Line of Credit (see Note 4 – Equity – Equity Line of Credit) qualified as an embedded derivative. The derivative liability is accounted for separately from the Equity Line of Credit Purchase Agreement and is accounted for at fair value. has been recorded on the accompanying condensed consolidated balance sheet as of September 30, 2025 , related to this derivative liability.
Modification of Equity Classified Warrants
A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant over and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for any incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt financing, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications, the incremental change in fair value is recognized as a deemed dividend. During the nine months ended September 30, 2025 , there were no modifications of equity classified warrants. During the nine months ended September 30, 2024 the Company recognized a modification of an equity classified warrant as a deemed dividend.
Recent Accounting Developments
Accounting pronouncements issued but not effective until after September 30, 2025 , are not expected to have a significant effect on the Company’s financial condition, results of operations, or cash flows.
In December 2023, the FASB issued ASU 2023 - 09, “Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures,” which modifies the rules on income tax disclosures to require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect the amendments in ASU 2023 - 09 will have on its tax disclosures.
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 3 - Intellectual Property
As of
September 30, 2025
, Genprex owned or had exclusive license agreements on
University of Pittsburgh
On February 17, 2025, Genprex and the University of Pittsburgh entered into an amended and restated Exclusive License Agreement (the “New UP License Agreement”) to update and consolidate, into a single agreement, prior license agreements and licensed technologies covered by the prior University of Pittsburgh agreements related to a gene therapy for both Type 1 diabetes and Type 2 diabetes using the genes of the Pdx1 and MafA transcription factors controlled by insulin, glucagon and MafB promoters. As of February 17, 2025, the New UP License Agreement effectuates the termination of, and amends, restates, replaces and supersedes in their entirety, the prior license agreements between Genprex and the University of Pittsburgh which were effective as of February 10, 2020 ( as amended August 17, 2022 and November 3, 2022), December 29, 2022 and July 14, 2023. Genprex also terminated, effective February 17, 2025, a prior agreement with UP related to a license for macrophage technology dated November 22, 2022.
The University of Texas MD Anderson Cancer Center
On May 4, 2020, Genprex entered into an exclusive worldwide license agreement with The Board of Regents of the University of Texas System on behalf of MD Anderson relating to a portfolio of patent applications and related technology for the treatment of cancer using the Company’s lead drug candidate and immunotherapies. See “Note 7 - Commitments and Contingencies - Commitments - MD Anderson Cancer Center” for information on additional agreements involving MD Anderson licensed rights and technologies.
University of Michigan
On November 11, 2024, Genprex and the Regents of the University of Michigan (“UM” or the “University of Michigan”) entered into a Patent License Agreement (“UM License Agreement”), which granted Genprex a worldwide, exclusive license to the University of Michigan’s patent rights in a co-owned patent application relating to the use of REQORSA in combination with ALK-inhibitors for the treatment of ALK- EML4 positive translocated lung cancer.
New York University
On April 25, 2025, the Company and New York University (“NYU”) entered into a License Agreement (the “NYU License Agreement”), which granted Genprex patent exclusivity and commercial rights worldwide relating to Genprex’s lead drug candidate REQORSA for the potential treatment of mesothelioma.
University of Texas Health Sciences Center at Houston
On May 2, 2025, the Company and the Board of Regents of The University of Texas System on behalf of The University of Texas Health Sciences Center at Houston (“UTHealth Houston” or “UTH”) entered into a Patent and Technology License Agreement (the “UTH License Agreement”), which granted Genprex exclusivity and commercial rights worldwide relating to Genprex’s lead drug candidate REQORSA for the potential treatment of glioblastoma.
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 4 - Equity
Reverse Stock Split
On
February 2, 2024,
Genprex completed a
1
-for-
On
October 21, 2025,
Genprex completed a
1
-for-
Registered Direct Offering
On
March 21, 2024,
the Company completed a registered direct offering priced at the market under Nasdaq rules, in which the Company sold to an institutional investor an aggregate of (i)
At-The-Market Offering
On
December 13, 2023,
Genprex entered into an At The Market (“ATM”) Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC, serving as agent (the “Agent”) with respect to an at-the-market offering program (the
“2023
ATM Facility”) under which the Company
may
offer and sell through the Agent, from time to time at its sole discretion, up to such number or dollar amount of shares of its common stock (the “Shares”) as registered on the prospectus supplement covering the
2023
ATM Facility offering, as
may
be amended or supplemented from time to time. Any Shares offered and sold pursuant to the Sales Agreement will be issued pursuant to the Company’s currently effective shelf Registration Statement on Form S-
3
(File
No.
333
-
271386
) filed with the SEC on
April 21, 2023,
which was declared effective on
June 9, 2023.
The Company has agreed to pay the Agent a commission equal to
three
percent (
Equity Line of Credit
On
June 11, 2025,
Genprex entered into an equity line of credit (“ELOC”) purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $
The following table provides the carrying value and fair value of the ELOC derivative liability of the Company measured at fair value on a recurring basis as of September 30, 2025 :
|
Fair Value Measurement at September 30, 2025 |
||||||||||||||||
|
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
|
Liabilities: |
||||||||||||||||
|
Derivative liability |
$ |
|
|
|
$ |
|
||||||||||
|
Totals liabilities measured and recorded at fair value |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
The following table provides quantitative information regarding fair value measurements inputs used with respect to the ELOC derivative liability, as of their respective measurement dates:
|
September 30, 2025 |
||||
|
Closing stock price: |
$ |
|
||
|
Volatility: |
|
% | ||
|
Expected term (in years): |
|
|||
|
Risk-free rate: |
|
% | ||
| % | ||||
The Company expenses the difference between the discounted purchase price of the settled forward and the fair value of the shares on the date of settlement as a non-cash financing cost. During the
three
months ended
September 30, 2025
, the Company sold
See “Note 9 – Subsequent Events – Share Issuances” for a description of the Company’s usage of the 2025 ELOC Facility subsequent to September 30, 2025 .
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Stock Issuances
During the
three
months ended
September 30, 2025
, the Company issued (i)
During the
nine
months ended
September 30, 2025
, the Company issued (i)
During the
three
months ended
September 30, 2024
, the Company issued (i)
During the
nine
months ended
September 30, 2024
, the Company issued (i)
Preferred Stock
Genprex is authorized to issue
Common Stock
Genprex is authorized to issue
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Common Stock Purchase Warrants
Common stock purchase warrant activity for the three and nine months ended September 30, 2025 and 2024 , respectively, is as follows:
|
2025 |
2024 |
|||||||||||||||
| Number of | Weighted Average | Number of | Weighted Average | |||||||||||||
|
Warrants |
Exercise Price |
Warrants |
Exercise Price |
|||||||||||||
|
Outstanding at January 1, |
|
$ |
|
|
$ |
|
||||||||||
|
Warrants issued |
|
|
|
|
||||||||||||
|
Outstanding at March 31, |
|
$ |
|
|
$ |
|
||||||||||
|
Warrants exercised |
|
|
|
|
||||||||||||
|
Outstanding at June 30, |
|
$ |
|
|
$ |
|
||||||||||
|
Warrants exercised |
|
|
|
|
||||||||||||
|
Warrants cancelled or expired |
|
|
|
|
||||||||||||
|
Outstanding at September 30, |
|
$ |
|
|
$ |
|
||||||||||
During the
three
and
nine
months ended
September 30, 2025
the Company (i) did
issue any warrants, and (ii) canceled warrants to purchase up to
During the
three
months ended
September 30, 2024
the Company (i) did
issue any warrants, and (ii) issued
As of
September 30, 2025
, the Company had outstanding warrants to purchase
|
Nine Months Ended September 30, 2024 |
||
|
Expected term (in years): |
|
|
|
Risk-free rate: |
|
|
|
Volatility: |
|
|
|
Dividend yield: |
|
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
2018 Equity Incentive Plan
The Company’s board of directors and stockholders have approved and adopted the Genprex 2018 Equity Incentive Plan ( “2018 Plan”), which became effective on the completion of the Company’s IPO on April 3, 2018. The 2018 Plan provides for the grant of incentive stock options that are intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (“ISOs”), nonstatutory stock options, stock appreciation rights, restricted stock awards, RSU awards, performance-based stock awards and performance-based cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to the Company’s non-employee directors and consultants.
A total
of
On
August 15, 2025
at the
2025
Annual Meeting of Stockholders, the Company’s stockholders approved the Company’s amended and restated
2018
Plan (the
“2018
Amended Plan”). The principal changes to the
2018
Plan implemented by the
2018
Amended Plan include amendments to (i) increase the number of shares of the Company’s common stock authorized for issuance under the
2018
Plan by an additiona
l
On
January 1, 2024
and
2025,
the number of shares of common stock reserved for issuance under the
2018
Plan was increased by an aggregate of
2018 Employee Stock Purchase Plan
The Company’s board of directors and stockholders approved and adopted the Genprex
2018
Employee Stock Purchase Plan (“ESPP”), which became effective on
April 3, 2018.
The ESPP has
not
yet been utilized as a benefit available to the Company’s employees. The ESPP authorizes the issuance of
Stock Options
As of
September 30, 2025
, Genprex had outstanding stock options to purchase
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
The Company did
issue stock options for the
three
or
nine
months ended
September 30, 2025
. During the
nine
months ended
September 30, 2025
, the Company cancelled stock options to purchase
The Company did
issue stock options for the
three
or
nine
months ended
September 30, 2024
. During the
three
months ended
September 30, 2024
, the Company cancelled stock options to purchase
The weighted average remaining contractual term for the outstanding options at
September 30, 2025
and
December 31, 2024
is
Stock option activity for the three and nine months ended September 30, 2025 and 2024, respectively, is as follows:
|
2025 |
2024 |
|||||||||||||||
| Number of | Weighted Average | Number of | Weighted Average | |||||||||||||
|
Options |
Exercise Price |
Options |
Exercise Price |
|||||||||||||
|
Outstanding at January 1, |
|
$ |
|
$ | ||||||||||||
|
Options expired or cancelled |
|
|
|
|
||||||||||||
|
Outstanding at March 31, |
|
$ |
|
$ | ||||||||||||
|
Options expired or cancelled |
|
|
|
|
||||||||||||
|
Outstanding at June 30, |
|
$ |
|
$ | ||||||||||||
|
Options expired or cancelled |
|
|
|
|
||||||||||||
|
Outstanding at September 30, |
|
$ |
|
$ | ||||||||||||
Restricted Stock Units
During the
three
months ended
September 30, 2025
, the Company cancelled
During the
three
months ended
September 30, 2024
, the Company cancelled
A summary of the RSU activity under the 2018 Plan during the three and nine months ended September 30, 2025 and 2024, respectively, is presented below. These amounts include RSUs granted to executives, other employees, and board members.
|
2025 |
2024 |
|||||||||||||||
|
Number of |
Weighted Average |
Number of |
Weighted Average |
|||||||||||||
|
Units |
Grant Date Fair Value |
Units |
Grant Date Fair Value |
|||||||||||||
|
Outstanding at January 1, |
|
$ |
|
|
$ |
|
||||||||||
|
Restricted stock units granted |
|
|
|
|
||||||||||||
|
Restricted stock units vested |
|
|
|
|
||||||||||||
|
Restricted stock units forfeited or cancelled |
|
|
|
|
||||||||||||
|
Outstanding at March 31, |
|
$ |
|
|
$ |
|
||||||||||
|
Restricted stock units vested |
|
|
|
|
||||||||||||
|
Restricted stock units forfeited or cancelled |
|
|
|
|
||||||||||||
|
Outstanding at June 30, |
|
$ |
|
|
$ |
|
||||||||||
|
Restricted stock units forfeited or cancelled |
|
|
|
|
||||||||||||
|
Outstanding at September 30, |
|
$ |
|
|
$ |
|
||||||||||
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Share-Based Compensation
For the
three
and
nine
months ended
September 30, 2025
, the Company’s total share-based compensation was approximately $
For the
three
and
nine
months ended
September 30, 2024
, the Company’s total share-based compensation was approximately $
As of
September 30, 2025
, there are
performance-based stock option awards outstanding and
performance-based warrant outstanding issued to a service provider. The Company’s total compensation cost related to the non-vested performance-based warrant
not
yet recognized was approximately $
Note 5 - 401 (k) Savings Plan
In
2022,
Genprex established a defined contribution savings plan under Section
401
(k) of the Internal Revenue Code (
“401
(k) Plan”) and established an employer matching program for participants in the
401
(k) Plan. The
401
(k) Plan covers all employees who meet defined minimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company incurred $
Note 6 - Related Party Transactions
Introgen Research Institute
Introgen Research Institute (“IRI”) is a Texas-based technology company formed by Rodney Varner, who prior to his passing in May 2024, was the Company’s President, Chief Executive Officer and Chairman of the Board and who was IRI’s sole officer. IRI is owned by trusts of which Mr. Varner's descendants are the sole beneficiaries. In April 2009, prior to Mr. Varner becoming an officer and director of Genprex in August 2012, the Company entered into an Assignment and Collaboration Agreement with IRI, providing Genprex with the exclusive right to commercialize a portfolio of intellectual property. This agreement was amended in 2011 to include additional sublicensing of additional intellectual property made available to IRI from MD Anderson (see Note 7 – Commitments and Contingences – Commitments – MD Anderson Cancer Center). There were no amounts incurred or due under this agreement at September 30, 2025 and December 31, 2024 .
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 7 - Commitments and Contingencies
Commitments
MD Anderson Cancer Center
In
July 2018,
Genprex entered into a
two
-year sponsored research agreement with MD Anderson to sponsor preclinical studies focused on the combination of REQORSA with an immunotherapy with a projected total cost of approximately $
In
2011,
the Company agreed to assume certain contractual and other obligations of IRI in consideration for the sublicense rights, expertise, and assistance associated with certain technologies and intellectual property originally licensed to another party under the
1994
License Agreement with MD Anderson (“Original MD Anderson License Agreement”). These technologies and intellectual property were later sublicensed to IRI (the “IRI Sublicense”). The Company also agreed to pay royalties of
On
March 3, 2021,
the Company entered into an amendment (the “MD License Amendment”) to the Patent and Technology License Agreement dated
May 4, 2020,
with MD Anderson. The MD License Amendment grants Genprex a worldwide, exclusive, sublicensable license to an additional portfolio of
six
patents and
one
patent application and related technology for methods for treating cancer by administration of a
TUSC2
therapy in conjunction with EGFR inhibitors or other anti-cancer therapies in patients predicted to be responsive to
TUSC2
therapy. Pursuant to the MD License Amendment, the Company agreed to (i) pay
annual maintenance fees ranging from the mid
five
figures to the low
six
figures, (ii) total milestone payments of $
National Institutes of Health
Genprex has a royalty obligation to the National Institutes of Health to be paid upon the Company’s receipt of FDA approval using NIH technology. The $
New York University
On
April 25, 2025,
the Company and NYU entered into the NYU License Agreement, which granted Genprex patent exclusivity and commercial rights worldwide relating to Genprex’s lead drug candidate REQORSA for the potential treatment of mesothelioma. Pursuant to the NYU License Agreement, Genprex agreed to pay: (i) an initial license fee of $
University of Michigan
On
November 11, 2024,
the Company and the University of Michigan entered into the UM License Agreement, which granted Genprex a worldwide, exclusive license to the University of Michigan’s patent rights in a co-owned patent application relating to the use of REQORSA in combination with ALK-inhibitors for the treatment of ALK-
EML4
positive translocated lung cancer. Genprex agreed to pay: (i) an initial license issue fee of $
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
University of Pittsburgh
Pursuant to the New UP License Agreement dated
February 17, 2025,
by and between Genprex and the University of Pittsburgh, Genprex agreed to pay (i) an initial licensing fee of $
UTHealth Houston
On
May 2, 2025,
the Company and UTHealth Houston entered into the UTH License Agreement, which granted Genprex exclusivity and commercial rights worldwide relating to Genprex’s lead drug candidate REQORSA for the potential treatment of glioblastoma. Pursuant to the UTH License Agreement, Genprex agreed to pay: (i) an initial license issue fee of $
Contract Development and Manufacturing Organization
Genprex entered into a
three
-year development services agreement in
July 2022,
amended in each of
January 2023
and
March 2023,
with a contract development and manufacturing organization (“CDMO”) to manufacture good manufacturing practices (“GMP”) grade materials for use in the Company’s clinical trials with a projected total cost at inception of approximately $
Contingencies
From time to time, the Company may become subject to threatened and/or asserted claims arising in the ordinary course of its business. Management is not aware of any pending matters, either individually or in the aggregate, that are reasonably likely to have a material impact on the Company’s financial condition, results of operations or liquidity.
GENPREX, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
Note 8 - Segment Reporting
Operating segments are defined as components of an entity for which separate discrete financial information is made available and that is regularly evaluated by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company manages its operations as a single segment (the “Segment”) for the purposes of assessing performance and making operating decisions. The CODM of the Segment is the Company’s Chief Executive Officer. The Segment is focused on pioneering the discovery and development of gene therapies for use in patient populations with unmet medical needs. The accounting policies for the Segment are the same as those described in Note 2, Summary of Significant Accounting Policies. The CODM assesses the performance of the Segment and decides how to allocate resources based on net loss that is reported on the condensed consolidated statements of operations. Further, the following represents information about segment loss and significant segment expenses:
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2024 |
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Revenues |
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Research |
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Other income |
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Plus: |
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Other financing costs |
(
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) |
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(
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) |
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|
Realized and unrealized loss |
(
|
) |
(
|
) |
(
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) |
(
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) | ||||||||
|
Segment and net loss |
$ |
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$ |
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$ |
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$ |
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(
1
) Includes $
Note 9 - Subsequent Events
The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10 -Q and determined that there have been no recognized subsequent events that have occurred that would require adjustments to the Company's disclosures in the condensed consolidated financial statements. The following are nonrecognized subsequent events through the filing of this Quarterly Report on Form 10 -Q.
2025 Reverse Stock Split
On
October 21, 2025,
Genprex completed a
1
-for-
Share Issuances
On
October 1,
2025,
Genprex issued
October 2025 Registered Direct Offerings
On
October 24, 2025,
Genprex completed a registered direct offering priced at-the-market under Nasdaq rules (the
“October 2025
Registered Direct Offering I”), pursuant to which the Company issued an aggregate of
On
October 29, 2025,
Genprex completed a registered direct offering priced at-the-market under Nasdaq rules (the
“October 2025
Registered Direct Offering II”), pursuant to which the Company issued an aggregate of
At-The-Market Offering
On
November 10, 2025,
Genprex filed a prospectus supplement for up to $
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations ( “ MD&A ” ) together with our interim condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “ Risk Factors ” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, in this filing, and in our other SEC filings, as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in United States ( “ U.S. ” ) dollars, unless otherwise noted.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This Quarterly Report contains forward-looking statements that involve substantial risks and uncertainties. Unless the context requires otherwise, references to “Genprex,” the “Company,” “we,” “us” or “our” in this Quarterly Report refer to Genprex, Inc. Any statements in this Quarterly Report about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future management and organizational structure and statements about our current or future product candidates and their development, our beliefs regarding their preclinical or clinical profile or efficacy, and the regulatory approval process and pathway and the timing thereof, are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement.
Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Quarterly Report. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include but are not limited to:
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Market conditions; |
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●
●
●
● |
Our capital position;
Our ability to raise additional future financing and possible lack of financial and other resources, and our ability to continue to support and fund our pre-clinical and clinical development programs and growth of our business;
Our ability to continue as a going concern;
Our ability to regain (as applicable) and maintain compliance with the continued listing requirements of The Nasdaq Capital Market and maintain the listing of our common stock; |
|
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● |
Our ability to compete effectively and with larger and/or better-financed biotechnology and pharmaceutical companies; |
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● |
Our uncertainty of developing marketable products; |
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● |
Our ability to develop and commercialize our products; |
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● |
Our ability to obtain regulatory approvals; |
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● |
Our ability and third-parties’ ability to maintain and protect intellectual property rights; |
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● |
The effects and impacts of public health crises such as epidemics or outbreaks, which could significantly disrupt and have a materially adverse effect upon on our business, our clinical trials and our research programs; as well as on healthcare systems or the global economy as a whole; |
|
|
● |
The success of our clinical trials through all phases of clinical development, including the ability of our third-party suppliers or manufacturers to supply or manufacture our products on a timely, consistent basis in a manner sufficient and appropriate as is commensurate to meet our clinical trial timing, courses of treatment, and other requisite fulfillment considerations necessary to adequately advance our development programs; |
|
|
● |
Our ability to conduct and complete our clinical trials in accordance with projected timelines; |
|
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●
● |
Any delays in regulatory review and approval of our current and future product candidates;
The effects of any strategic research and development prioritization initiatives, and any other strategic alternatives or other efforts that we take or may take in the future that are aimed at optimizing and re-focusing our diabetes, oncology and/or other clinical development programs including prioritization of resources, and the extent to which we are able to implement such efforts and initiatives successfully to achieve the desired and intended results thereof, including successful implementation of the separation of our diabetes clinical development program, including the anticipated benefits of the internal reorganization, the expected timing of the reorganization and/or if it is completed as contemplated or at all; |
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● |
Our dependence on third-party suppliers or manufacturers to supply or manufacture our key ingredients and/or raw materials, products and/or product components and successfully carry out a sustainable, reproducible and scalable manufacturing process in accordance with specifications or applicable regulations; |
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● |
Our ability to control product development costs; |
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● |
Our ability to attract and retain key employees; |
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● |
Our ability to enter into new strategic collaborations, licensing or other arrangements; |
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● |
Changes in government regulation affecting product candidates that could increase our development costs; |
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● |
Our involvement in patent, trademark and other intellectual property litigation that could be expensive and divert management’s attention; |
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The possibility that there may be no market acceptance for our products; and |
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Changes in third-party reimbursement policies which could adversely affect potential future sales of any of our products that are approved for marketing. |
The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking statements, which speak only as of the date of this Quarterly Report or the date of the document incorporated by reference into this Quarterly Report. Except as required by law, we assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements contained in this Quarterly Report. All forward-looking statements are expressly qualified in their entirety by the cautionary statements contained in this section.
Overview
We are a clinical stage gene therapy company pioneering the development of gene-based therapies for large patient populations with unmet medical needs. Our oncology platform utilizes our systemic, non-viral ONCOPREX® Delivery System which uses lipid-based nanoparticles in a lipoplex form to deliver tumor suppressor gene-expressing plasmids to cancer cells. The product is administered intravenously, where it is taken up by tumor cells that then express tumor suppressor proteins that were deficient in the tumor. Our diabetes technology is designed to work in Type 1 diabetes by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body’s immune system. In Type 2 diabetes, our technology is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin.
Oncology Platform
Our lead oncology drug candidate, REQORSA® gene therapy (generic name: quaratusugene ozeplasmid ), previously referred to as GPX-001, is initially being developed in combination with prominent, approved cancer drugs to treat Non-Small Cell Lung Cancer (“NSCLC”) and Small Cell Lung Cancer (“SCLC”). REQORSA has multimodal effects on cancer cells. It harms the metabolism of cancer cells, which leads to reduced cancer cell growth. It has a mechanism of action whereby it decreases tumor glucose metabolism, interrupts cell signaling pathways that cause replication and proliferation of cancer cells, re-establishes pathways for apoptosis, or programmed cell death, in cancer cells, and increases the immune response against cancer cells. In preclinical studies, REQORSA has been shown to be complementary with targeted drugs and immunotherapies. Our strategy is to develop REQORSA in combination with currently approved therapies and we believe REQORSA’s unique attributes position it to provide treatments that improve on these current therapies for patients with NSCLC, SCLC, and possibly other cancers.
The TUSC2 gene, which is the key component of REQORSA and plays a vital role in cancer suppression and normal cell metabolism, is one of a series of genes on the short arm of Chromosome 3 whose therapeutic use is covered by our exclusive worldwide licenses from The University of Texas MD Anderson Cancer Center (“MD Anderson”). We believe that our ONCOPREX Delivery System allows for the delivery of a number of cancer-fighting tumor suppressor genes, alone or in combination with other cancer therapies, to combat multiple types of cancer and we are in early stages of discovery programs to identify other cancer candidates. In August 2022, we entered into a sponsored research agreement with MD Anderson to support further preclinical studies of TUSC2 and other tumor suppressor genes. Additionally, we are collaborating with MD Anderson to discover, develop and utilize biomarkers to select the patient population most likely to respond to REQORSA and enable decisions on progression of our drug candidates to the next phase of development. MD Anderson researchers currently are analyzing biomarkers that may indicate a strong positive or negative response to REQORSA in lung cancer that could be used to enrich our population of responders in our clinical trials.
Acclaim – 1: We currently are enrolling and treating patients in the Phase 2a expansion portion of our Phase 1/2 Acclaim-1 clinical trial. The Acclaim-1 trial uses a combination of REQORSA and AstraZeneca’s Tagrisso® ( osimertinib ) in patients with late-stage NSCLC that has activating epidermal growth factor receptor (“EGFR”) mutations and progression on treatment with Tagrisso or Tagrisso-containing regimens. Following the May 2023 completion of the Phase 1 dose escalation portion of the study, the Acclaim-1 Safety Review Committee (“Acclaim-1 SRC”) approved advancement from the Phase 1 dose escalation portion to the Phase 2a expansion portion of the study. Based on a review of safety data which showed no dose limiting toxicities (“DLTs”), the Acclaim-1 SRC determined the recommended Phase 2 dose (“RP2D”) of REQORSA to be 0.12 mg/kg. This was the highest dose level delivered in the Phase 1 portion of the study and is twice the highest dose level delivered in our prior clinical trial combining REQORSA with Tarceva® ( erlotinib ) for the treatment of late-stage lung cancer. There were three patients out of the twelve originally enrolled in the Phase 1 dose escalation portion of the study who had prolonged progression-free survival (“PFS”). One patient attained a partial remission after the second course of REQORSA and Tagrisso and has maintained this response through 56 courses of treatment (approximately 39 months) and continues to receive REQORSA and Tagrisso treatment to date. A second patient had stable disease without disease progression through 32 courses of treatment (approximately 24 months) but then had disease progression and REQORSA treatment was stopped. A third patient had stable disease without disease progression through 14 courses of treatment (approximately 10 months) before disease progression and is no longer receiving treatment. We opened the Phase 2a expansion portion of the study and enrolled and dosed the first patient in January 2024. The initial trial design of the Phase 2a expansion portion of the study included two cohorts with half being patients who received only prior Tagrisso treatment and the other half being patients who received prior Tagrisso treatment and chemotherapy. However, as previously announced in August 2024, based on resource prioritization and to focus on the patients for whom REQORSA is most likely to show a benefit, we decided to limit our enrollment efforts moving forward to patients who received only prior Tagrisso treatment and cease enrollment of the second cohort (patients who received prior Tagrisso treatment and chemotherapy). However, noting that two of the patients with prolonged PFS in the Phase 1 portion of the study had previously received both chemotherapy and Tagrisso, in February 2025, we amended the protocol to allow entry of patients progressing on Tagrisso or Tagrisso-containing regimens. The Phase 2a expansion portion of the trial is now expected to enroll approximately 33 patients; all of whom have progressed on Tagrisso or Tagrisso-containing regimens. The Phase 2b randomized portion of the study, in which patients progressing on prior Tagrisso treatment will be randomized 1:1 to either REQORSA and Tagrisso combination therapy or to platinum-based chemotherapy, remains unchanged. There will be an interim analysis following the treatment of 19 patients in the Phase 2a portion of the Acclaim-1 study. We expect to complete the enrollment of the first 19 patients for interim analysis in the Phase 2a expansion portion of the study in the first half of 2026 and expect the interim analysis in the second half of 2026.
The Food and Drug Administration (“FDA”) has granted Fast Track Designation for the Acclaim-1 treatment combination of REQORSA and Tagrisso in NSCLC patients who have progressed on Tagrisso treatment.
The Phase 2a expansion portion of the Acclaim-1 study provides us the advantage of early insight into drug effectiveness in defined and distinct patient populations at the maximum tolerated dose or RP2D in order to better evaluate efficacy and increase the likelihood of a successful randomized Phase 2 trial which will follow the expansion portion of the study.
Acclaim – 2: The Acclaim-2 trial involved a combination of REQORSA and Merck & Co.’s Keytruda® ( pembrolizumab ) in patients with late-stage NSCLC whose disease has progressed after treatment with Keytruda. As previously announced in August 2024, based on a number of factors, including enrollment challenges and delays due to competition for investigators and eligible patients with numerous other trials involving the same patient population, we decided to cease enrollment of new patients in the Acclaim-2 trial to prioritize our resources and focus on the other two Acclaim trials in SCLC and NSCLC, respectively. There are no longer any patients receiving study treatment in the Acclaim-2 trial. Although the Acclaim-2 study in patients progressing on Keytruda containing regimens has been closed due to, among other factors, slow enrollment, we continue to believe that this combination could be beneficial.
Acclaim – 3: We are currently enrolling and treating patients in the Phase 2 expansion portion of our Phase 1/2 Acclaim-3 clinical trial. The Acclaim-3 clinical trial uses a combination of REQORSA and Genentech, Inc.’s Tecentriq® ( atezolizumab ) as maintenance therapy for patients with extensive stage small cell lung cancer (“ES-SCLC”) who did not develop tumor progression after receiving Tecentriq and chemotherapy as initial standard treatment. Patients are treated with REQORSA and Tecentriq until disease progression or unacceptable toxicity is experienced. On December 16, 2024, we announced that we had completed the Phase 1 dose escalation portion of the Acclaim-3 clinical trial. Based on full safety data, which showed no DLTs, the Acclaim-3 Safety Review Committee determined that the RP2D of REQORSA will be 0.12 mg/kg, which was the highest dose level delivered in the Phase 1 portion of the trial, and approved the opening of the Phase 2 expansion portion of the trial. We anticipate that the Phase 2 expansion portion will enroll approximately 50 patients at approximately 10 to 15 U.S sites. Patients will be treated with REQORSA and Tecentriq until disease progression or unacceptable toxicity is experienced. The primary endpoint of the Phase 2 portion is to determine the 18-week progression-free survival rate from the time of the start of maintenance therapy with REQORSA and Tecentriq in patients with ES-SCLC. Patients will also be followed for survival. A Phase 2 futility analysis will be performed after the 25th patient enrolled and treated reaches 18 weeks of follow up. We expect to complete enrollment of the first 25 patients for interim analysis in the Phase 2 expansion portion of the study in the first half of 2026 and expect the interim analysis in the second half of 2026.
The Acclaim-3 clinical trial has received FDA Fast Track Designation for this patient population and Acclaim-3 has also received an FDA Orphan Drug Designation.
Diabetes Gene Therapy
In diabetes, we have exclusively licensed from the University of Pittsburgh of the Commonwealth System of Higher Education (“University of Pittsburgh” or “UP”) multiple technologies relating to the development of a gene therapy product for each of Type 1 and Type 2 diabetes. The same general novel approach is used in each of Type 1 and Type 2 diabetes whereby an adeno-associated virus vector containing the Pdx1 and MafA genes is administered directly into the pancreatic duct. In humans, this can be done with a routine endoscopy procedure. Our diabetes product candidates are currently being evaluated and optimized in preclinical studies at the University of Pittsburgh. GPX-002 is being developed using the same construct for the treatment of both Type 1 diabetes and Type 2 diabetes. GPX-002 for Type 1 diabetes is designed to work by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body’s immune system. In a similar approach, GPX-002 for Type 2 diabetes (formerly known as GPX-003), where autoimmunity is not at play, is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin. We finalized the components of the diabetes construct to take forward for nonclinical studies and in December 2023, we submitted a request to meet with the FDA to obtain their guidance on the nonclinical studies needed to file an Investigational New Drug (“IND”) application and initiate first-in-human studies. As a result of the FDA’s response, we decided to continue with our planned additional nonclinical studies before requesting regulatory guidance for the IND-enabling studies. We are currently working with the University of Pittsburgh on species analyses for the animal models as well as on other regulatory and clinical strategic planning, including the planned initiation of research in Type 2 diabetes animal models, following which we plan to submit a request to the FDA to meet regarding IND-enabling studies by the end of 2025. In May 2025, following the recent completion of our August 2022 sponsored research agreement with UP, we entered into a new sponsored research agreement with UP to study Type 1 diabetes and Type 2 diabetes in animal models. The new sponsored research agreement also includes a revised research plan to encompass our most recent technologies to which we originally acquired exclusive rights from UP in July 2023 as amended and restated in the comprehensive New UP License Agreement in February 2025 (as defined and described below). These include a MafB promoter to drive expression of the Pdx1 and MafA transcription factors that can potentially be used for both Type 1 and Type 2 diabetes. On February 17, 2025, we and the University of Pittsburgh entered into an amended and restated Exclusive License Agreement (the “New UP License Agreement”), which updated and consolidated into a single agreement our prior license agreements with UP. Pursuant to the New UP License Agreement, UP granted to us a worldwide, exclusive license for certain patents and related technology, collectively referred to as the “Licensed Technology,” and a worldwide, non-exclusive license to use certain related know-how. The Licensed Technology covered by the New UP License Agreement is based on the same general gene therapy approach as covered under our prior license agreements with UP (less the previously-licensed macrophage technology), whereby an adeno-associated virus vector containing the Pdx1 and MafA genes is administered directly into the pancreatic duct. More specifically, the Licensed Technology covered by the New UP License Agreement is related to a gene therapy for both Type 1 diabetes and Type 2 diabetes using the genes of the Pdx1 and MafA transcription factors controlled by insulin, glucagon and MafB promoters.
In February 2023, the Company’s research collaborators at UP presented preclinical data in a non-human primate model of Type 1 diabetes highlighting the therapeutic potential of GPX-002 at the 16th International Conference on Advanced Technologies & Treatments for Diabetes (“ATTD 2023”) in Berlin, Germany. The statistically significant study results showed the treated animals had decreased insulin requirements, increased c-peptide levels, and improved glucose tolerance compared to baseline. In April 2023, the Company hosted a Key Opinion Leader virtual event entitled “Novel Gene Therapy to Treat Type 1 Diabetes,” which discussed preclinical data reported at ATTD 2023 supporting gene therapy to treat Type 1 diabetes. In June 2025, our collaboration partners had two presentations at the 2025 American Diabetes Association (“ADA”) 85th Scientific Sessions. Our research collaborators from UP were invited to give an oral presentation highlighting their work in non-human primate models of Type 1 diabetes. In addition, our contract development and manufacturing organization collaborators presented a poster on a non-viral lipid nanoparticle delivery system that would allow a patient to receive multiple treatments.
Recent Developments
Equity Line of Credit
On June 11, 2025, we entered into an equity line of credit (“ELOC”) purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $12.5 million in shares of our common stock (subject to certain conditions and limitations contained in the Purchase Agreement) from time to time at our sole discretion over the 24-month term of the Purchase Agreement (the “2025 ELOC Facility”). Sales of shares of common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of the common stock and our determination as to the appropriate sources of funding for our operations. Due to certain pricing and settlement provisions, the Purchase Agreement qualifies as a standby purchase equity agreement and includes an embedded put option and an embedded forward contract. We will account for the Purchase Agreement as a derivative measured at fair value, with changes in fair value recognized in the consolidated statement of operations. The fair value of the ELOC derivative associated with the Purchase Agreement was $243,000 at September 30, 2025. The Company expenses the difference between the discounted purchase price of the settled forward and the fair value of the shares on the date of settlement as a non-cash financing cost. During the three months ended September 30, 2025, we sold 341,224 shares of common stock to Lincoln Park as purchase shares for aggregate net proceeds of $2,943,745 under the 2025 ELOC Facility. During the nine months ended September 30, 2025 , we (i) issued 23,737 shares of common stock to Lincoln Park with a value of $365,550 as commitment shares pursuant to the 2025 ELOC Facility, which was expensed as incurred, and (ii) sold 422,380 shares of common stock to Lincoln Park as purchase shares for aggregate net proceeds of $3,818,631 under the 2025 ELOC Facility.
Reverse Stock Split
At our annual meeting of stockholders held on August 15, 2025, the Company’s stockholders adopted and approved an amendment to our Amended and Restated Certificate of Incorporation to effect a reverse stock split of our issued and outstanding shares of Common Stock, at a specific ratio, ranging from one-for-ten (1:10) to one-for-fifty (1:50), with such ratio to be determined by our Board in its discretion.
On October 16, 2025, we filed the amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of our Common Stock at a ratio of one-for-fifty (1:50) (the “Reverse Stock Split”). The Reverse Stock Split became effective in accordance with the terms of the amendment at 12:01 AM Eastern Time on October 21, 2025. All share and per share amounts in this Quarterly Report on Form 10-Q have been adjusted to reflect the Reverse Stock Split.
October 2025 Registered Direct Offerings
On October 24, 2025, we completed a registered direct offering priced at-the-market under Nasdaq rules (the “October 2025 Registered Direct Offering I”), pursuant to which we issued an aggregate of 243,622 shares of common stock at a purchase price of $11.21 per share. In a concurrent private placement (the “October 2025 Private Placement I”, and together with the October 2025 Registered Direct Offering I, the “October 2025 Financing I”), we issued warrants (the “October 2025 Private Warrants I”) exercisable for up to an aggregate of 487,244 shares of common stock (the “October 2025 Private Warrant Shares I”) at an exercise price of $11.00 per share. The October 2025 Private Warrants I are exercisable immediately upon issuance and will expire 24 months from the effective date of a resale registration statement registering the resale of all of the October 2025 Private Warrant Shares I. Also, we agreed to issue to H.C. Wainwright & Co., LLC (the “Placement Agent”) or its designees warrants to purchase up to an aggregate of 14,617 shares of common stock. The warrants issued to the Placement Agent or its designees have substantially the same terms as the October 2025 Private Warrants I except that the warrants issued to the Placement Agent or its designees have an exercise price of $14.0125 per share and a termination date that will be the earlier of (i) 24 months from the effective date of the resale registration statement covering the resale of the shares of common stock underlying the October 2025 Private Warrant Shares I and (ii) October 23, 2030. The net proceeds of the October 2025 Financing I, after deducting the placement agent’s fees and expenses and other estimated October 2025 Registered Direct Offering I expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the October 2025 Private Warrants I, were approximately $2.5 million. Additionally, if the holders of October 2025 Private Warrants I exercise such warrants in full, we would receive additional gross proceeds of approximately $5.3 million.
On October 29, 2025, we completed a registered direct offering priced at-the-market under Nasdaq rules (the “October 2025 Registered Direct Offering II”), pursuant to which we issued an aggregate of 377,780 shares of common stock at a purchase price of $9.00 per share. In a concurrent private placement (the “October 2025 Private Placement II”, and together with the October 2025 Registered Direct Offering II, the “October 2025 Financing II”), we issued warrants (the “October 2025 Private Warrants II”) exercisable for up to an aggregate of 755,560 shares of common stock (the “October 2025 Private Warrant Shares II”) at an exercise price of $8.75 per share. The October 2025 Private Warrants II are exercisable immediately upon issuance and will expire 24 months from the effective date of a resale registration statement registering the resale of all of the October 2025 Private Warrant Shares II. Also, we agreed to issue to H.C. Wainwright & Co., LLC (the “Placement Agent”) or its designees warrants to purchase up to an aggregate of 22,667 shares of common stock. The warrants issued to the Placement Agent or its designees have substantially the same terms as the October 2025 Private Warrants II except that the warrants issued to the Placement Agent or its designees have an exercise price of $11.25 per share and a termination date that will be the earlier of (i) 24 months from the effective date of the resale registration statement covering the resale of the shares of common stock underlying the October 2025 Private Warrant Shares II and (ii) October 28, 2030. In addition, in connection with any future exercise of the October 2025 Private Warrants II, the Company has agreed to (A) pay the Placement Agent (i) a cash fee equal to 7.0% of the aggregate gross exercise price paid in cash with respect to the exercise of such warrants and (ii) a management fee equal to 1.0% of the aggregate gross exercise price paid in cash with respect to the exercise of such warrants and (B) issue to Placement Agent or its designees additional placement agent warrants to purchase that number of shares equal to 6.0% of the aggregate number of shares of common stock underlying such October 2025 Private Warrants II that have been exercised. The net proceeds of the October 2025 Financing II, after deducting the placement agent’s fees and expenses and other estimated October 2025 Registered Direct Offering II expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the October 2025 Private Warrants II, were approximately $3.1 million. Additionally, if the holders of October 2025 Private Warrants II exercise such warrants in full, we would receive additional net proceeds of approximately $6.1 million.
At-The-Market Offering
On November 10, 2025, we filed a prospectus supplement for up to $11.495 million of common stock with respect to the 2023 ATM Facility (as defined below), which amended the previously filed prospectus supplements to update the aggregate market value of our outstanding common stock held by non-affiliates (“public float”) and indicate that, since our public float is above $75.0 million, we are no longer subject to the sales limitations of General Instruction I.B.6 of Form S-3 with respect to our currently effective shelf Registration Statement on Form S-3 (File No. 333-271386) pursuant to which 2023 ATM Facility sales are effectuated. From October 1, 2025 through the date of filing of this Quarterly Report on Form 10-Q, we sold 242,537 shares of common stock for aggregate net proceeds of $1,006,740 under the 2023 ATM Facility.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed below and in Note 2 to our unaudited condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“US GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We believe that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.
Research and Development Costs
We record accrued expenses for costs invoiced from research and development activities conducted on our behalf by third-party service providers, which include the conduct of preclinical studies and clinical trials and contract research, manufacturing, and testing activities. We record the costs of research and development activities based upon the amount of services provided, and we include these costs in accrued liabilities in the unaudited condensed consolidated balance sheets and within research and development expense in the unaudited condensed consolidated statements of operations. These costs are a significant component of our research and development expenses. Purchased materials to be used in future research are valued at cost and capitalized and included in research and development supplies. The costs of materials that were acquired for a particular research and development activity and have no alternative future use are expensed in the period acquired.
We estimate the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. We make significant judgments and estimates in determining the accrued balance in each reporting period. As actual costs become known, we adjust our accrued estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed, the number of patients enrolled and the rate of patient enrollment in any of our clinical trials may vary from our estimates and could result in our reporting amounts that are too high or too low in any particular period. Our accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from contract research organizations (“CROs”) and other third-party service providers.
Income Taxes
Deferred tax assets or liabilities are recorded for temporary differences between financial statement and tax basis of assets and liabilities, using applicable rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. We have provided a full valuation allowance on our deferred tax assets, which primarily consist of cumulative net operating losses from April 1, 2009 (inception) to September 30, 2025. Due to our history of operating losses since inception and losses expected to be incurred in the foreseeable future, a full valuation allowance was considered necessary.
Impairment of Long-Lived Assets
Management evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be realizable or at a minimum annually during the fourth quarter of the year. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying value to determine if an impairment of such asset is necessary. The effect of any impairment would be to expense the difference between the fair value of such asset and its carrying value based upon discounted cash flows.
Modification of Equity Classified Warrants
A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant over and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for any incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt financing, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications, the incremental change in fair value is recognized as a deemed dividend.
Components of our Results of Operations and Financial Condition
Operating expenses
We classify our operating expenses into three categories: research and development, general and administrative, and depreciation.
Research and development . Research and development expenses consist primarily of:
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costs incurred to conduct research, such as the discovery and development of our current and potential product candidates; |
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costs related to the production and storage of supplies for engineering purposes and storage and usage of clinical supplies, including waste created in the process of producing clinical materials, spoilage, and testing of clinical materials; |
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costs related to the use of contract manufacturers, manufacturing consultants, testing organizations, cold-storage facilities, and logistics service providers; |
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fees paid to clinical consultants, clinical trial sites and vendors, including CROs in conjunction with implementing and monitoring our clinical trials and acquiring and evaluating clinical trial data, including all related fees, such as patient screening fees, laboratory work, and statistical compilation and analysis; |
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costs related to compliance with drug development regulatory requirements; and |
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costs related to staffing and personnel associated with research and development activities, including wages, taxes, benefits, leases, overheads, supplies, and share-based compensation. |
We recognize all research and development costs as they are incurred except those capitalized with alternative further use. Clinical trial costs, contract manufacturing and other development costs incurred by third-parties are expensed as the contracted work is performed.
We expect our research and development expenses to increase in the future as we (i) advance our current and future product candidates into and through clinical trials, (ii) transition some of our manufacturing activities to new vendors for a variety of reasons, such as to incorporate more advanced processes and scale production, including any additional work that has been or may be required to successfully adapt our process to these new processes, (iii) pursue regulatory approval of our current and potential product candidates in the U.S. and Europe, and (iv) expand our research programs to include new therapies and new therapy combinations. The process of conducting the necessary pre-clinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our current and potential product candidates may be affected by a variety of factors including the quality of our current and potential product candidates, early clinical data, investment in our clinical program, competition, manufacturing capability and commercial viability, and limited contracted partners. We may never succeed in achieving regulatory approval for any of our current or future product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if at all. However, we continue to evaluate ways to optimize our clinical and research programs and operational strategies, as part of our ongoing prioritization initiative. Additionally, we are considering various strategic alternatives and opportunities to enhance stockholder value.
General and administrative . General and administrative expense consists of personnel related costs, which include administrative and executive salaries, as well as the costs of professional services, such as accounting and legal, travel, facilities, information technology and other administrative expenses. We expect our general and administrative expense to increase in future periods due to the anticipated growth of our business and related infrastructure as well as accounting, insurance, investor relations, and other costs associated with being a public company.
Depreciation . Depreciation expense consists of depreciation from our fixed assets consisting of our property, equipment, and furniture. We depreciate our assets over their estimated useful life. We estimate furniture and computer and office equipment to have a three to five year life.
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2025 and 2024
The following summarizes our results of operations for the three and nine months ended September 30, 2025 and 2024.
Research and Development Expense
Research and development (“R&D”) expense for the three months ended September 30, 2025 was $ 2,192,881 , compared to $ 2,756,081 for the three months ended September 30, 2024 , a decrease of $ 563,200, or 20%. This decrease was primarily due to (i) differences i n enrollment of the Acclaim-1 and Acclaim-3 clinical trials during each of the periods, and (ii) reduction of R&D overheads and employee associated expenses with a reduction of R&D staff from twelve employees at September 30, 2024 to seven employees at September 30, 2025 .
Research and development expense for the nine months ended September 30, 2025 was $ 7,232,370 , compared to $ 7,696,983 for the nine months ended September 30, 2024 , a decrease of $ 464,613 , o r 6%. This decrease was primarily due to (i) reduction in clinical and manufacturing expenses due to closing of the Acclaim-2 clinical trial, (ii) differences in enrollment of the Acclaim-1 and Acclaim-3 clinical trials during each of the periods, and (iv) reduction of R&D overheads and employee associated expenses with a reduction of R&D staff from twelve employees at September 30, 2024 to seven employees at September 30, 2025 .
General and Administrative Expense
General and administrative (“G&A”) expense for the three months ended September 30, 2025 was $ 1,153,032 , compared to $ 1,566,085 for the three months ended September 30, 2024 , a decrease of $ 413,053 , or 26% . This decrease was primarily due to the implementation of expense reduction strategies by leadership which significantly reduced travel expenses, the number of professional service providers and associated expenses, and reduced headcount and associated overhead of G&A staff from seven employees at September 30, 2024 to six employees at September 30, 2025 .
General and administrative expense for the nine months ended September 30, 2025 was $ 4,764,617 , compared to $ 9,135,225 for the nine months ended September 30, 2024 , a decrease of $ 4,370,608 , or 48% . This decrease was primarily due to the implementation of expense reduction strategies by leadership which significantly reduced travel expenses, the number of professional service providers and associated expenses, and reduced headcount and associated overhead of G&A staff from seven employees at September 30, 2024 to six employees at September 30, 2025 .
Other Income. Other income was $2,405 and $8,080 for the three months ended September 30, 2025 and 2024, respectively, representi ng a decrease of $5,675. The decrease was primarily due to lower cash balances held in interest bearing accounts for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.
Other income was $14,056 and $58,851 for the nine months ended September 30, 2025 and 2024, respectively, representin g a decrease of $44,795. The decrease was primarily due to lower cash balances held in interest bearing accounts for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Depreciation Expense. There was no depreciation expense for the three months ended September 30, 2025, and $1,272 of depreciation expense for the three months ended September 30, 2024, representing a decrease of $1,272. The change in depreciation expense for the three months ended September 30, 2025 was primarily due to the timing of purchases of computer equipment for new employees and changes to accounting policies related to depreciation.
There was no depreciation expense for the nine months ended September 30, 2025, and $6,230 of depreciation expense for the nine months ended September 30, 2024, representing a decrease of $6,230. The change in depreciation expense for the nine months ended September 30, 2025 was primarily due to the timing of purchases of computer equipment for new employees and changes to accounting policies related to depreciation.
Net Loss. We had a net loss of $ 3,799,240 and $ 4,315,987 for the three months ended September 30, 2025 and 2024, respectively, representing a decrease of $ 516,747 , or 12% . The decrease in net loss between these periods was primarily due to (i) the closing of the Acclaim-2 clinical trial and associated reductions in clinical and manufacturing related expenses, and (ii) the implementation of expense reduction strategies by leadership, which reduced travel expenses, the number of professional service providers and associated expenses, and reduced headcount and associated overhead of overall Company staff from nineteen employees at September 30, 2024 to thirteen employees at September 30, 2025 .
We had a net loss of $ 12,438,742 and $ 16,780,702 for the nine months ended September 30, 2025 and 2024, respectively, representing a decrease of $ 4,341,960 , or 26% . The decrease in net loss between these periods was primarily due to (i) the closing of the Acclaim-2 clinical trial and associated reductions in clinical and manufacturing related expenses, and (ii) the implementation of expense reduction strategies by leadership, which reduced travel expenses, the number of professional service providers and associated expenses, and reduced headcount and associated overhead of overall Company staff from nineteen employees at September 30, 2024 to thirteen employees at September 30, 2025 .
Liquidity and Capital Resources
From inception through September 30, 2025, we have never generated revenue from product sales and have incurred net losses in each year. As of September 30, 2025, we had an accumulated deficit of $167,238,185. We have funded our operations primarily through the sale and issuance of capital stock.
For the year ended December 31, 2024, we (i) sold 153,701 shares of common stock for aggregate net proceeds of $6.10 million p ursuant to our 2023 ATM Facility (defined below), and (ii) completed a registered direct offering in which we sold (x) 3,300 shares of our common stock, (y) pre-funded warrants exercisable for up to an aggregate of 27,543 shares of our common stock (“March 2024 Pre-Funded Warrants”), and (z) warrants exercisable for up to an aggregate of 30,843 shares of our common stock (“March 2024 Common Warrants”), for net proceeds of approxi mately $5.8 million. In connection with the March 2024 registered direct offering, we amended certain existing warrants to reduce the exercise price and extend the term thereof. See also “Note 4 - Equity - Registered Direct Offering” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. As of December 31, 2024, all of the 27,543 March 2024 Pre-Funded Warrants had been exercised for shares of common stock.
During the nine months ended September 30, 2025 , we sold (i) 338,811 shares of common stock for aggregate gross proceeds of approximately $7.2 million (resulting in aggregate net proceeds of $6,895,947 after offering expenses), pursuant to our 2023 ATM Facility, and (ii) 446,117 shares of common stock (inclusive of the 23,737 commitment shares issued pursuant to the Purchase Agreement (as defined below)) for aggregate net proceeds of approximately $3,818,631 , pursuant to our 2025 ELOC Facility (as defined below). From October 1, 2025 through the date of filing of this Quarterly Report on Form 10-Q, (i) we sold 242,537 shares of common stock for aggregate net proceeds of approximately $1,006,740 pursuant to our 2023 ATM Facility, and (ii) we sold 326,750 shares of common stock for aggregate net proceeds of approximately $1,434,139, pursuant to our 2025 ELOC Facility.
On June 11, 2025, we entered into an equity line of credit (“ELOC”) purchase agreement, dated June 11, 2025 (the “Purchase Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase from us up to $12.5 million in shares of our common stock (subject to certain conditions and limitations contained in the Purchase Agreement) from time to time at our sole discretion over the 24-month term of the Purchase Agreement (the “2025 ELOC Facility”). Sales of shares of common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of our common stock and our determination as to the appropriate sources of funding for our operations. See also “Note 1 – Description of Business and Basis of Presentation – Capital Requirements, Liquidity and Going Concern Considerations” and “Note 4 - Equity – Equity Line of Credit” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
On December 13, 2023, we entered into an At The Market (“ATM”) Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC, serving as agent (the “Agent”) with respect to an at-the-market offering program (our “2023 ATM Facility”) under which we may offer and sell through the Agent, from time to time at our sole discretion, up to such number or dollar amount of shares of our common stock (the “Shares”) as registered on the prospectus supplement covering the 2023 ATM Facility offering, as may be amended or supplemented from time to time. We have agreed to pay the Agent a commission equal to three percent (3%) of the gross sales proceeds of any Shares sold through the Agent under the Sales Agreement, and also have provided the Agent with customary indemnification and contribution rights. See also “Note 1 - Description of Business and Basis of Presentation - Capital Requirements, Liquidity and Going Concern Considerations” and “Note 4 - Equity - At-The-Market Offering” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
As of September 30, 2025, we had $1,103,315 in cash and cash equivalents.
We do not expect to generate revenue from product sales unless and until we successfully complete development of, obtain regulatory approval for and begin to commercialize one or more of our current or potential product candidates, which we expect will take a number of years and which is subject to significant uncertainty. Accordingly, we anticipate that we will need to raise additional capital to fund our future operations, which include conducting our Acclaim-1 and Acclaim-3 clinical trials (of which both are currently enrolling) and completing preclinical work for potential other oncology candidates and completing preclinical work and conducting clinical trials for our diabetes program. We expect interim enrollment of the Phase 2a expansion portion of the Acclaim-1 trial to be completed in the first half of 2026. We expect interim enrollment in the Phase 2 dose expansion portion of the Acclaim-3 trial to be completed in the first half of 2026. Until such time as we can generate substantial revenue from product sales, if ever, we expect to finance our operating activities through a combination of equity offerings, sales pursuant to our 2025 ELOC Facility, drawdowns on our 2023 ATM Facility pursuant to our Sales Agreement with the Agent, and debt financings and we may seek to raise additional capital through strategic collaborations or transactions. However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our research and development programs or commercialization efforts or grant rights to others to develop or market product candidates that we would otherwise prefer to develop and market ourselves. Failure to receive additional funding could cause us to curtail or cease our operations. Furthermore, even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations. As a result of the Company’s recurring losses from operations and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively over the next 12 months, which raises substantial doubt as to the Company’s ability to continue as a going concern.
Based on our current cash, we estimate that we will be able to fund our expenditure requirements for our current operations and planned clinical trial activities into March 2026. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently plan due to incorrect assumptions or due to a decision to expand our activities beyond those currently planned. We previously have experienced delays in engaging clinical sites as a result of disruptions at these clinical sites caused by the COVID-19 pandemic. We also have experienced delays in clinical trial enrollment as a result of competition for patients and additional time required in connection with transitions to new third party CDMOs and the manufacture of final drug product. Delays in the conduct of our trials could result in utilizing our capital resources sooner without advancing our clinical trials as anticipated.
The following table sets forth the primary sources and uses of cash during the nine months ended September 30, 2025, and 2024:
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Nine Months Ended September 30, |
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2024 |
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Net cash used in operating activities |
$ | (11,212,938 | ) | $ | (14,053,136 | ) | ||
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Net cash provided by investing activities |
— | 774,645 | ||||||
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Net cash provided by financing activities |
10,714,593 | 8,029,143 | ||||||
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Net decrease in cash and cash equivalents |
$ | (498,345 | ) | $ | (5,249,348 | ) | ||
Cash used in operating activities
Net cash used in operating activities was $ 11,212,938 and $ 14,053,136 for the nine months ended September 30, 2025, and 2024 , respectively, a decrease of $ 2,840,198 , or 20% . This decrease was primarily due to (i) the closing of the Acclaim-2 clinical trial and associated reductions in clinical and manufacturing related expenses, and (ii) the implementation of expense reduction strategies by leadership, which reduced travel expenses, the number of professional service providers and associated expenses, and reduced headcount and associated overhead of overall Company staff from nineteen employees at September 30, 2024 to thirteen employees at September 30, 2025 .
Cash provided by investing activities
The Company had no net cash provided by or used in investing activities for the nine months ended September 30, 2025, compared to net cash provided by investing activities of $774,645 for the nine months ended September 30, 2024. This difference in net cash provided by investing activities was primarily due to timing associated with filing and patent prosecution costs of our intellectual property.
Cash provided by financing activities
Net cash provided by financing activities was $10,714,593 and $8,029,143 during the nine months ended September 30, 2025, and 2024, respectively. This increase of $2,685,450 was primarily due to differences in amounts raised by sales of our securities in capital raising activities conducted during the nine months ended September 30, 2025, and 2024, respectively.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is not required to provide the information called for by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer (currently the same person following the passing of Mr. Varner, the Company’s former President, Chief Executive Officer and Chairman of the Board, on May 7, 2024), as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, because of certain material weaknesses in our internal controls over financial reporting, our disclosure controls and procedures were not effective as of September 30, 2025. The material weaknesses relate to a lack of segregation of duties between accounting and other functions and the absence of sufficient depth of in-house accounting personnel with the ability to properly account for complex transactions.
Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions are performed by separate individuals. Our size and nature also do not allow for our accounting staff to have depth of expertise in all areas that might be desirable, such as expertise in accounting for a variety of complex transactions. Management evaluated the impact of our failure to maintain effective segregation of duties and sufficient depth of personnel on our assessment of our internal control over financial reporting and has concluded that these control deficiencies represent material weaknesses.
In response to the material weaknesses described above, during the quarter ended September 30, 2025, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with US GAAP. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.
Remediation Plans
Management is actively engaged in remediation efforts to address the material weaknesses identified in management’s evaluation of internal controls and procedures. The remediation efforts, which have been or are in the process of being implemented, are intended to address the identified material weaknesses, and include:
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new accounting software, processes, and workflows to further segregate duties among limited accounting staff; |
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specific review procedures, including the added involvement of our legal department to review certain accounting transactions following a given period in an effort to enhance accuracy of reporting; |
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specific review procedures, including the added involvement of our manufacturing staff to enhance controls associated with the tracking and reporting of inventory values in our supply chain; |
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a formal Disclosure Committee that has oversight responsibility for the accuracy and timeliness of disclosures made by us through controls and procedures and the monitoring of their integrity and effectiveness; |
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additional hiring of staff and development of accounting processes and policies to further segregate accounting responsibilities and increase the depth of our expertise in accounting for a variety of complex transactions; and |
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| • | additional training, testing, and certification of key accounting, finance, IT, and legal team members. |
During the quarter ended September 30, 2025, we took actions to remediate the material weaknesses relating to our internal controls over financial reporting including: (i) continued evaluation and documentation of policies, processes, and controls, both manual and automated; and (ii) evaluation of and updates to software workflows to further segregate duties, enhance accuracy of vendor billing, and ensure transparency and oversight from vendor or project managers, department leaders, legal team members, and finance team members.
As management continues to evaluate and work to improve its internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of the remediation measures described above. While remediation efforts are active, management requires additional time to demonstrate the operating effectiveness of our remediation efforts. The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Changes in Internal Control over Financial Reporting
Except as described above, there were no changes in our internal control over financial reporting during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations of Disclosure Controls and Internal Control over Financial Reporting
Because of their inherent limitations, our disclosure controls and procedures and our internal control over financial reporting may not prevent material errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to risks, including that the controls may become inadequate because of changes in conditions or that the degree of compliance with our policies or procedures may deteriorate.
From time to time, we may be involved in legal proceedings that arise during the ordinary course of business. Although the results of legal proceedings cannot be predicted with certainty, we do not currently have any pending litigation to which we are a party or to which our property is subject that we believe to be material. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting our overall operations.
Our business is subject to substantial risks and uncertainties. An investment in our common stock involves a high degree of risk. The information presented below updates and supplements the risk factors previously disclosed in “Part I, Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on April 1, 2025. In addition to the other information set forth in this report and in our other SEC filings from time to time, you should carefully consider the risk factors in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 1, 2025, together with the information contained elsewhere in this report, including Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our other SEC filings in evaluating our business. These risks and uncertainties could materially and adversely affect our business, financial condition, operating results, prospects for growth, and the value of an investment in our common stock. Such risks referenced above together with the additional risks set out below are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, operating results, prospects for growth, and the value of an investment in our common stock. If any of the events described in such risks occur, our business, financial condition, results of operations and prospects for growth could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose all or part of your investment. Except as required by the federal securities law, we undertake no obligation to update or revise any risk factor, whether as a result of new information, future events or otherwise.
We are currently listed on The Nasdaq Capital Market. If we fail to regain compliance with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.
Our common stock is currently listed for trading on Nasdaq. On February 7, 2025, we received a notice from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with the requirement under Nasdaq Listing Rule 5550(a)(2) to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq (the “Bid Price Requirement”). We were provided a compliance period of 180 calendar days from the date of the notice, or until August 6, 2025, to regain compliance with the Bid Price Requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A). On August 12, 2025, we received a letter from Nasdaq indicating that, based upon our not having regained compliance with the Bid Price Requirement and our ineligibility for a second 180 calendar day compliance period, the Staff had determined to delist our securities from Nasdaq unless we timely request a hearing before the Nasdaq Hearings Panel (the “Panel”). Additionally, on August 19, 2025, we received a letter from the Nasdaq Staff indicating that we were not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market, under Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”), because our stockholders’ equity of $1,391,195 as reported in our Quarterly Report on Form 10-Q for the period ended June 30, 2025 was below the required minimum of $2.5 million, and because, as of August 19, 2025, we did not meet the alternative compliance standards relating to market value of listed securities or net income from continuing operations. The Staff indicated that this non-compliance with the Minimum Stockholders’ Equity Requirement serves as an additional and separate basis for delisting our securities from Nasdaq. On August 19, 2025, we timely requested a hearing before the Panel which stayed any suspension or delisting action by the Staff. At the Panel hearing, we requested an extension within which to evidence compliance with the Bid Price Requirement and the Minimum Stockholders’ Equity Requirement and the Staff has granted our request for an exception to demonstrate compliance with the Bid Price Requirement and Minimum Stockholders’ Equity Requirement for continued listing through October 31, 2025 (the “Exception”).
We intend to continue to take definitive steps in an effort to evidence compliance with the Bid Price Requirement and the Minimum Stockholders’ Equity Requirement and the other Nasdaq listing requirements, including by the implementation of the one-for-fifty (1:50) reverse stock split, which we implemented effective as of October 21, 2025. To regain compliance with the Bid Price Requirement, the closing bid price of our Common Stock must be at least $1.00 for a minimum of 10 consecutive business days, subject to the Staff’s discretion to extend such 10-day period. The announcement and implementation of the reverse stock split could negatively affect the price of our common stock. We cannot assure you that the prices for shares of the common stock after the reverse stock split will increase proportionately to prices for shares of our common stock immediately before the reverse stock split. Furthermore, even if the market price of our common stock does rise following the reverse stock split, we cannot assure you that the market price of our common stock immediately after the proposed reverse stock split will be maintained for any period of time. There is also the possibility that liquidity may be adversely affected by the reduced number of shares which are now issued and outstanding following implementation of the reverse stock split is effected, particularly if the price per share of our common stock begins a declining trend following implementation of the reverse stock split. Accordingly, our total market capitalization after the reverse stock split may be lower than the market capitalization before the reverse stock split.
We will continue to monitor our stockholders’ equity and may, if appropriate, consider available options, including raising additional capital, to regain compliance with the Minimum Stockholders’ Equity Requirement. If we seek to raise additional capital through the issuance of equity, whether through this offering or other issuances of equity, the issuance may result in dilution, and the announcement or implementation of such fundraising could negatively affect the price of our securities.
Pursuant to the Exception, we are required to, and fully intend to, provide the Panel with prompt notification of any significant events that occur, including any event that may call into question our ability to satisfy the terms of the Exception. If such events do occur, we may request a further extension beyond October 31, 2025 to regain compliance with either or both of the Bid Price Requirement and the Minimum Stockholders’ Equity Requirement. The Panel has reserved the right to reconsider the terms of the Exception based on any event, condition or circumstance that exists or develops that would, in the Panel’s opinion, make continued listing of our securities on Nasdaq inadvisable or unwarranted. There can be no assurance that the Panel would exercise their discretion to grant an extension beyond October 31, 2025 or that we will be able to evidence compliance with the Bid Price Requirement, the Minimum Stockholders’ Equity Requirement and the other Nasdaq listing requirements within any extension period that has been or may be granted by the Panel or that we will be able to maintain compliance.
We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum stockholders’ equity of $2.5 million and a minimum closing bid price of $1.00 per share or risk delisting, which could have a material adverse effect on our business. If our common stock is delisted from Nasdaq, it could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. If our common stock is delisted, it could be more difficult to buy or sell our common stock or to obtain accurate quotations, and the price of our common stock could suffer a material decline. Delisting could also impair our ability to raise capital on acceptable terms, if at all.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended September 30, 2025, we issued and sold the following unregistered securities:
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On July 1, 2025, we issued 100 shares of our common stock to the Chairman of our Scientific Advisory Board in consideration for services during the three months ended September 30, 2025. |
The foregoing issuances of securities were not registered under the Securities Act or the securities laws of any state, and the securities were offered and issued in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2).
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Rule 10b5 - 1 Trading Arrangements and Non-Rule 10b5 - 1 Trading Arrangements
During the fiscal quarter ended September 30, 2025 , of our officers or directors, as those terms are defined in Rule 16a - 1 (f), adopted or terminated a “Rule 10b5 - 1 trading arrangement” or a “non-Rule 10b5 - 1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.
INDEX TO EXHIBITS
* Filed herewith.
** Furnished herewith.
+ Indicates management contract or compensatory plan.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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GENPREX, INC. |
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Date: November 14, 2025 |
By: |
/s/ Ryan M. Confer |
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Ryan M. Confer |
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Chief Executive Officer and Chief Financial Officer |
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(Principal Executive Officer and Principal Financial and Accounting Officer) |
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