Imunon Inc

Results of Operations

Comparison of Fiscal Year Ended December 31, 2024 and Fiscal Year Ended December 31, 2023.

For the year ended December 31, 2024, our net loss was $18.6 million compared to a net loss of $19.5 million for the year ended December 31, 2023. The Company recognized $1.3 million in tax benefits from the sale of its New Jersey NOLs under the NOL Program in the fourth quarter of 2023. As of December 31, 2024, the Company had $5.9 million in cash and cash equivalents to fund its operations. The Company’s primary sources of cash have been proceeds from the issuance and sale of its common stock, including via its ATM program and other funding transactions. There can be no assurance that the Company will be able to do so in the future on a timely basis on terms acceptable to the Company, or at all. The Company has not yet commercialized any of its product candidates. Even if the Company commercializes one or more of its product candidates, it may not become profitable in the near term or at all. The Company’s ability to achieve profitability depends on several factors, including its ability to obtain regulatory approval for its product candidates, successfully complete any post-approval regulatory obligations and successfully commercialize its product candidates alone or in partnership.

Such conditions raise substantial doubt about the Company’s ability to continue as a going concern. Based on the above, management has determined there is substantial doubt regarding our ability to continue as a going concern. The report of our independent registered public accounting firm for the year ended December 31, 2024 includes an explanatory paragraph which expresses substantial doubt about our ability to continue as a going concern.

Management’s plan includes raising funds from the issuance and sale of its common stock, including via its ATM program and other funding transactions. However, as mentioned above, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives. The Company’s financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.

The Company operates in one segment for the research and development of our product candidates. The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company based on consolidated financial information. Consequently, we view the entire organization as one reportable segment and the strategic purpose of all operating activities (including general & administrative expenses) is to support that one segment. As a pre-revenue research and development company, the CODM evaluates company-wide performance and allocates resources based on non-financial research and development milestones achieved, and to a lesser extent, financial measures of performance such as clinical development (research and development expenses) and general and administrative expenses incurred. Our CODM does not generally evaluate our performance using asset or historical cash flow information.

The table below provides a summary of the significant expense categories and consolidated net loss details provided to the CODM (in thousands):

Research and Development Expenses

Research and development (“R&D”) expenses decreased $0.3 million to $11.6 million in 2024 from $11.3 million in 2023. Costs associated with the OVATION 2 Study were $1.4 and $1.2 million in 2024 and 2023, respectively. Costs associated with the PlaCCine Vaccine Study were $1.4 million in 2024. Other clinical and regulatory costs were $2.4 million in 2024 compared to $1.8 million in 2023. R&D costs associated with the development of IMNN-001 to support the OVATION 2 Study were $1.8 million in 2024, an increase from $0.3 million in same period of 2023. The development of the PLACCINE DNA vaccine technology platform decreased to $2.6 million in 2024 compared to $4.5 million in 2023. CMC costs decreased to $2.0 million in 2024 compared to $2.3 million in 2023.

General and Administrative Expenses

General and administrative expenses decreased to $7.5 million in 2024 compared to $9.7 million in 2023. This decrease is primarily attributable to the decrease in legal expenses of $1.4 million, employee related costs of $0.4 million, non-cash stock compensation expenses of $0.3 million, insurance costs of $0.1 million, and franchise tax of $0.2 million offset by higher consulting fees of $0.2 million.

Investment income and interest expense

The Company recognized interest expense of $0.2 million in 2023. As more fully discussed in Note 7 to our financial statements included in this Annual Report, in June 2021, the Company entered into a $10 million loan facility with Silicon Valley Bank. The Company immediately used $6 million from this facility to retire all outstanding indebtedness with Horizon Technology Finance Corporation. In connection with the SVB Loan Facility, the Company incurred $0.2 million in interest expense in 2023. In connection with the termination of the SVB Loan Facility in the second quarter of 2023, the Company paid early termination and end-of-term charges to SVB and recognized $0.3 million as a loss on debt extinguishment.

Investment income from the Company’s short-term investments was $0.5 million in 2024 compared to $1.2 million in 2023.

Income Tax Benefit

Annually, the State of New Jersey enables approved technology and biotechnology businesses with New Jersey NOLs the opportunity to sell these losses through the NOL Program, thereby providing cash to companies to help fund their research and development and business operations. During 2021, the New Jersey State Legislature increased the maximum lifetime benefit per company from $15 million to $20 million, which will allow the Company to participate in this innovative funding program in future years. After the cumulative NOL sales through 2023, the Company has approximately $0.4 million remaining under the NOL Program.

The Company entered into an agreement to sell the approved portion of the New Jersey NOLs applied for in 2023 for $1.3 million. At December 31, 2023, the Company evaluated the valuation reserve for its NOLs associated with its New Jersey NOLs and reduced the valuation reserve and recognized $1.3 million as a deferred tax asset and an income tax benefit. The Company completed the sale of these NOLs in March of 2024.