Phio Pharmaceuticals Corp.

Other than set forth below, there have been no material changes in our risk factors set forth in “Risk Factors in Part I, “Item 1A”. in our 2025 Form 10-K. The risk factor described therein and set forth below could materially adversely affect our business, financial condition, or results of operations. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including these risks. Additional risks not currently known or currently material to us may also harm our business.

Future financing may be obtained through, and future development efforts may be paid for by, the issuance of debt or equity, which may have an adverse effect on our stockholders or may otherwise adversely affect our business.

If we raise funds through the issuance of debt or equity, any debt securities or preferred stock issued will have rights, preferences and privileges senior to those of holders of Common Stock in the event of a liquidation. In such event, there is a possibility that once all senior claims are settled, there may be no assets remaining to pay out to the holders of Common Stock. The terms of debt securities may also impose restrictions on our operations, which may include limiting our ability to incur additional indebtedness, to pay dividends on or repurchase our capital stock, or to make certain acquisitions or investments. In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios, and our ability to satisfy such covenants may be affected by events outside of our control. For example, in April 2026, we established an At the Market Agreement (the "Sales Agreement") with H.C. Wainwright & Co., LLC ("HCW”) pursuant to which we may offer and sell shares of Common Stock having an aggregate offering price of up to $6,360,000 from time to time through HCW, acting as sales agent, at prevailing market prices pursuant to one or more “at the market” offerings. As of the date of this filing, we have $6,360,000 million of Common Stock remaining available for sale under the Sales Agreement. If we raise funds through the issuance of additional equity, whether through private placements or public offerings, which we have done in the past, including through one or more “at the market” offerings under the Sales Agreement, such issuances would dilute current stockholders’ ownership in us, perhaps substantially. The issuance of a significant amount of shares of Common Stock could cause the market price of Common Stock to decline or become highly volatile.

We may not be able to maintain compliance with the continued listing requirements of The Nasdaq Capital Market.

To maintain continued listing on The Nasdaq Capital Market, we must satisfy minimum financial and other requirements. For example, Nasdaq Listing Rule 5550(b)(1) requires companies listed on The Nasdaq Capital Market to maintain stockholders’ equity of at least $2.5 million for continued listing. As of September 30, 2026, our stockholders’ equity was $8.6 million and there can be no assurance that we will be able to maintain or increase our stockholders’ equity in the future. If our stockholders’ equity falls below $2.5 million, as a result of operating losses or for other reasons, or if we are unable to demonstrate to Nasdaq’s satisfaction that we subsequently regained compliance with this requirement, Nasdaq will notify us of such non-compliance. If we receive such notice from Nasdaq, in accordance with the Nasdaq Listing Rules, we will have 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b)(1). If our compliance plan is accepted, we may be granted up to 180 calendar days from the date of the initial notification to evidence compliance. If our compliance plan is not accepted or we are otherwise unable to evidence compliance within Nasdaq’s allotted timeframe, Nasdaq may take steps to delist our Common Stock.

In addition, Nasdaq Listing Rule 5550(a)(2) requires a minimum bid price of at least $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. As of September 30, 2026, we were in compliance with this requirement. However, as of the date of the filing of this report, we have closed below the minimum bid price per share for 21 consecutive business days. We have in the past effected reverse stock splits of our Common Stock in order to regain or maintain compliance with this requirement (most recently on July 5, 2024).

Such a delisting would have an adverse effect on the market liquidity of our securities, decrease the market price of our securities, result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities, and adversely affect our ability to obtain financing for the continuation of our operations. We actively monitor our stockholders’ equity and minimum bid price and will consider any and all options available to us to maintain compliance with Nasdaq Listing Rules 5550(b)(1) and (a)(2).