ORAGENICS INC

Notes to Consolidated Financial Statements

Note 1. Basis of Presentation and Nature of Operations

Basis of Presentation

The accompanying condensed consolidated financial information of Oragenics, Inc. and its wholly-owned subsidiary Noachis Terra Inc. are unaudited and has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial reporting. All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation of the Companby’s consolidated financial position, results of operations, and cash flows for the interim period presented have been included. The condensed consolidated balance sheet as of December 31, 2024, has been derived from the audited financial statements included in the Company’s annual report on the Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025.

These interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on the Form 10-K for the year ended December 31, 2024. The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2025.

On June 3, 2025, the Company effected a 1-for-30 reverse stock split of its outstanding common stock. All share and per share amounts in these consolidated financial statements and related footnotes have been retroactively adjusted to reflect the reverse stock split for all periods presented, unless otherwise indicated.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the six-month ended June 30, 2025, as compared to those disclosed in the consolidated financial statements included in the Company’s Annual Report on the Form 10-K for the year ended December 31, 2024.

Nature of Operations

Organics, Inc. (the “Company”) is development-stage biopharmaceutical company dedicated to the research and development of nasally delivered pharmaceutical therapies targeting neurological conditions and infectious diseases. The Company is currently focused on advancing the development and commercialization of its lead product candidate, ONP-002, novel formulation intended for the treatment of mild traumatic brain injury (“mTBI” or “concussion”). ONP-002 is being developed as a potential first-in-class therapeutic targeting the unmet medical need for effective concussion treatment.

Going Concern

Considering our recurring losses, accumulated deficit, and negative cash flows, the report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2024, included an explanatory paragraph raising substantial doubt about our ability to continue as a going concern.

We have incurred operating losses and negative cash flow from operations since inception. To date, we have not generated significant revenues from our operations. We incurred a net loss of $4.5 million and used $3.4 million cash resources in operating activities during the six months ending June 30, 2025. As of June 30, 2025, we had an accumulated deficit of $221 million and cash and cash equivalents of $2 million.

Historically, our primary sources of liquidity have included proceeds from public and private offerings of our common and preferred stock, warrant exercises, debt financings, grant income, and interest income. During the six months ending June 30, 2025, we raised approximately $2.6 million in net proceeds from private placements and sales of our common stock and received approximately $2.2 million in net proceeds from the issuance of debt.

We expect to continue to incur substantial expenses as we advance the development of ONP-002, our lead product candidate for the treatment of mild traumatic brain injury. Based on our available cash of June 30, 2025, we previously concluded that our working capital would only be sufficient to fund operations through the third quarter of 2025.

Subsequent to quarter-end, on July 2, 2025, we completed a public offering of Series H Preferred Stock and warrants to purchase additional shares of Series H Preferred Stock, resulting in net proceeds of approximately $15.2 million. We believe that this financing meaningfully extends our cash runway and extends our ability to execute on our near-term operating objectives.

While this subsequent financing mitigates some of the liquidity risk, substantial doubt about our ability to continue as a going concern continues to exist unless and until we obtain additional capital to fund operations beyond the current planning horizon. There can be no assurance that we will be able to obtain such financing on acceptable terms, or at all. If we are unable to raise sufficient capital in the future, we may be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts, which would adversely affect our business prospects and ability to continue as a going concern.

Note 2. New Accounting Pronouncements

ASU 2023-09

In December 2023, the FASB issued ASU 2023-09 related to improvements to income tax disclosures. The amendments in this update require enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. We plan to adopt this pronouncement and make the necessary updates to our disclosures for the year ending December 31, 2025, and, aside from these disclosure changes, we do not expect the amendments to have a material effect on our financial statements.

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03 related to the disaggregation of certain income statement expenses. The amendments in this update require public entities to disclose incremental information related to purchases of inventory, team member compensation and depreciation, which will provide investors the ability to better understand entity expenses and make their own judgements about entity performance. The amendments in this update are effective for fiscal years beginning after December 15, 2026. We plan to adopt this pronouncement and make the necessary updates to our disclosures for the year ending December 31, 2027, and, aside from these disclosure changes, we do not expect the amendments to have a material effect on our financial statements.

Note 3. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets were $165,963 as of June 30, 2025, compared to $607,670 as of December 31, 2024. The decrease was primarily due to amortization of prepaid insurance and timing of vendor milestone payments related to research and development services.

The Company’s prepaid balances typically consist of insurance premiums, research and development service agreements, and other vendor advances aligned with ongoing clinical and regulatory activities.

Note 4. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses totaled $1.3 million as of June 30, 2025, compared to $1.4 million as of December 31, 2024. The decrease was primarily attributable to the timing of vendor payments and lower accrued external R&D and corporate services as of the period end.

These liabilities consist primarily of account payables to research and development partners, payroll and benefits accruals, and other general corporate obligations.

Note 5. Short-Term Notes Payable

On March 13, 2025, we issued a $3.0 million promissory note (the “Note”) to a single investor at an original issue discount of 17%. Net proceeds to us were approximately $2.2 million after placement agent fees of $175,000 and legal expenses of $98,437.

No interest accrues on the Note unless an event of default occurs, at which time interest will accrue at a rate of 20% per annum. The Note matures upon the earlier of July 14, 2025, or the closing of any subsequent offering by us with net proceeds equal to or in excess of all amounts due under the Note.

In connection with the issuance of the Note, we designated and issued 1,000,000 shares of our authorized but unissued Series G Mirroring Preferred Stock. For a description of the Series G terms, see Note 8. We used the net proceeds for working capital and general corporate purposes. Subsequently, in connection with the Reverse Stock Split the shares of Series G Preferred Stock were cancelled. See Note 8.

Short-term notes payable consisted of the following:

Subsequent to quarter end, on July 2, 2025, the Company repaid in full the $3.0 million promissory note issued on March 13, 2025. The repayment was made using a portion of the net proceeds from the Company’s July 2, 2025, public offering of Series H Preferred Stock and warrants to purchase additional shares of Series H Preferred Stock.

Note 6. Stock-Based Compensation

2021 Equity Incentive Plan

Our 2021 Equity Incentive Plan (the “2021 Plan”) authorizes the grant of stock options (incentive and non-statutory), stock appreciation rights and restricted stock covering a total of 3,166,667 shares of our common stock. Options are granted at the fair value of our common stock on the date of grant and generally vest either immediately or over a period of up tothree years from the date of grant and expire 10 years from the date of grant. As of June 30, 2025,24,012 shares were reserved for issuance related to the 2021 Plan and 3,142,655 shares of our common stock remain available for awards.

On June 3, 2025, the Company effected a 1-for-30 Reverse Stock Split of its outstanding common shares. However, as approved by shareholders at the Company’s 2025 Annual meeting, the total number of authorized shares of common stock for the 2021 Equity Incentive Plan remains unchanged at 3,166,667.

Stock Option Activity

The following table summarizes stock option activity for the six-months ended June 30, 2025. All share amounts have been retroactively adjusted to reflect the Company’s 1-for-30 Reverse Stock Split effected on June 3, 2025.

The cancelled or expired options of 9,138 relate to the forfeiture of stock options.

Unrecognized Stock-Based Compensation Costs

As of June 30, 2025, unrecognized stock-based compensation expense related to unvested stock options was approximately $6,040, which is expected to be recognized over a weighted average period of approximately 0.25 years.

Note 7. Warrants

Outstanding and exercisable warrants as of June 30,2025, are summarized below. All share amounts have been retroactively adjusted to reflect the 1-for-30 Reverse Stock Split effected on June 3, 2025:

Note 8. Shareholders’ Equity

At-The-Market Sales Agreement with Dawson James

On October 11, 2024, we entered into an At-the-Market Sales Agreement (the “ATM Agreement”) with Dawson James Securities Inc. (“Dawson James”) pursuant to which are allowed to issue and sell, from time to time, shares of our common stock (the “Shares”). Dawson James uses its commercially reasonable efforts to sell the shares requested by us to be sold, consistent with their normal trading and sales practices. We may instruct Dawson James not to sell the shares if the sales cannot be effected at or above the price designated by us and we may suspend sales pursuant to the ATM Agreement at any time. We pay Dawson James a commission of up to 3.0% of the gross proceeds from the sale of Shares under the ATM.

In February 2025, we sold 260,000 shares pursuant to the ATM Agreement for net proceeds of $2.6 million after commissions and legal expenses totaling $0.11 million.

Series F Convertible Preferred Stock

In December 2023, we issued 8,000,000 shares of our Series F Convertible Preferred Stock in connection with our purchase of assets from Odyssey Health, Inc. (“Odyssey”). The Series F Convertible Preferred Stock is convertible shares of our common stock in accordance with the Certificate of Designation for the Series F Convertible Preferred Stock. Upon issuance,511,308 shares of Series F Convertible Preferred Stock were converted to 17,044 shares of our common stock. As of June 30, 2025,7,488,692 shares of Series F Convertible Preferred Stock remain outstanding. Currently, such 7,488,692 shares of Series F preferred stock are convertible into 249,624 shares of our common stock, subject to the provisions and limitations contained in the Certificate of Designation for the Series F Convertible Preferred Stock, which provide that the following Subsequent Conversion Conditions must occur before such shares can be converted: (i) the Company must have applied for and been approved for initial listing on the NYSE American or another national exchange or shall have been delisted from the NYSE American, and (ii) if required by the rules of the NYSE American, the Corporation’s shareholder shall have approved any change of control that could be deemed to occur upon the conversion of the Series F Convertible Preferred Stock into Common Stock, based on the facts and circumstances existing at such time.

Series G Mirroring Preferred Stock

In March 2025, in connection with our issuance of a $3.0 million promissory note (see Note 5), we designated and issued 1,000,000 shares of our authorized but unissued shares of preferred stock as Series G Mirroring preferred stock, no par value and a stated value of $0.10 per share. On May 2, 2025, upon our shareholders’ approval, at our annual shareholders meeting, of a proposal authorizing the Company’s Board of Directors, in its discretion at any time within one year after shareholder approval is obtained, to effect a Reverse Stock Split of then-outstanding shares of the Company’s common stock, at a ratio of not less than one-for-five (1:5) and not greater than one-for-sixty (1:60), with the exact ratio to be determined by the Company’s Board and included in a public announcement (the “Reverse Split Proposal”), in accordance with the Certificate of Designation creating the Series G Mirroring Preferred Stock, all of the shares of Series G Mirroring Preferred Stock were automatically transferred to the Company and cancelled and such shares have resumed the status of authorized but unissued shares of preferred stock and are no longer designated as Series G Preferred Stock.

We evaluated the transaction and determined that it should be accounted for as an asset purchase. Furthermore, it was determined that the assets acquired were in-process research and development and, accordingly, the entire purchase price was recorded as a component of Research and development expense in the fourth quarter of 2023.

Note 9. Net Loss Per Share

Basic and diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Basic and diluted net loss per share are the same for all periods presented, as the inclusion of potentially dilutive securities would have been antidilutive.

All shares and per share amounts have been retroactively adjusted to reflect the Company’s 1-for-30 Reverse Stock Split, which became effective on June 3, 2025.

The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive:

Note 10. Commitments and Contingencies

On December 7, 2022, we entered into an investment banking engagement letter with Ladenburg Thalmann, (“Ladenburg”). The engagement letter was subsequently amended at various times (together with amendments to the “Engagement Letter”). We terminated the Engagement Letter as of August 15, 2023. Ladenburg sent us an invoice in the amount of $2,500,000, and a demand letter from Ladenburg’s general counsel demanding payment thereof followed shortly thereafter. Ladenburg is of the view that a fee is owed based on our purchase of assets from Odyssey Health, Inc. We strongly disagree that any such fee is due to Ladenburg and initiated a confidential action for arbitration against Ladenburg with the Financial Industry Regulatory Authority (“FINRA”) on March 12, 2024, seeking, among other things, a declaratory judgment that no such fee is owed. On April 17, 2024, Ladenburg filed a Complaint in federal court in the Southern District of Florida and also filed motion for a temporary restraining order (“TRO”) and preliminary injunction seeking to move the venue from FINRA to the federal court in Miami-Dade County. On May 3, 2024, the Magistrate Judge assigned to the case issued a Report and Recommendation denying the motion; although Ladenburg objected to the Report and Recommendation, the District Court Judge adopted the Report and Recommendation, finalizing the Court’s denial of the requested injunctive relief. On May 9, 2024, we filed a motion to dismiss, which is still pending. Meanwhile, the FINRA action continues and is set to be heard in from September 29 – October 3, 2025. While we believe Ladenburg’s claims are unlikely to prevail and intend to defend vigorously against such claims. It is possible, however, that there could be an unfavorable outcome or resolution of the claims asserted, which could negatively and materially impact our business, consolidated financial position and results of operations. Litigation is inherently uncertain and there can be no assurance that we will prevail. We do not include an estimate of legal fees and other related defense costs in our estimate of loss contingencies.

Note 11. Subsequent Events

Series H Preferred Stock and Warrants

On May 2, 2025, the Board of Directors of the Company appointed Janet Huffman, the Company’s Chief Financial Officer and Interim Chief Executive Officer, to serve as the Company’s Chief Executive Officer, in addition to continuing to serve as its Chief Financial Officer, and, in connection therewith, effective May 2, 2025, the Company entered into an Executive Employment Agreement with Ms. Huffman (the “Employment Agreement”).

On June 3, 2025, the Company effected a 1-for-30 Reverse Stock Split of its outstanding common stock.

On July 2, 2025, the Company completed a public offering of Series H Convertible Preferred Stock and warrants to purchase additional shares of Series H Convertible Preferred Stock, resulting in gross proceeds of approximately $16.5 million and net proceeds of approximately $15.2 million, after deducting placement agent fees and offering expenses. In connection with the offering, the Company issued 660,000 shares of Series H Preferred Stock, each with a stated value of $25.00, and 660,000 warrants to purchase an equal number of Series H Preferred Shares at an exercise price of $25.00 per warrant. Each share of Series H Preferred Stock is convertible into Common Stock at an initial conversion price of $2.50 per share. The warrants are exercisable immediately and expire on July 2, 2030.

On or about July 2, 2025, the Company repaid in full the $3.0 million promissory note. The repayment was made using a portion of the net proceeds from the Company’s July 2, 2025, public offering of Series H Preferred Shares and warrants.