Indaptus Therapeutics, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations along with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on March 13, 2025 (the “2024 Annual Report on Form 10-K”). The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions. Please also see the “Cautionary Note Regarding Forward-Looking Statements” section in the forepart of this Quarterly Report.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations along with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on March 13, 2025 (the “2024 Annual Report on Form 10-K”). The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions. You should review the sections titled “Summary Risk Factors” and Part II. Item 1A. Risk Factors in this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described below. Please also see the “Cautionary Note Regarding Forward-Looking Statements” section in the forepart of this Quarterly Report.

Previous wording

In August 2023, we evaluated the first four participants who received a single dose of 7 x 10^7 Decoy20 in Part 1 of the Phase 1 clinical trial. All four participants who enrolled were evaluable in the first cohort. These participants experienced generally anticipated transient adverse events including hemodynamic changes such as changes in pulse or blood pressure that resolved within 30 minutes and laboratory abnormalities such as grade 1-3 elevations in transaminases (liver function tests) and grade 4 reductions in lymphocytes that generally resolved within three days. One patient had a dose-limiting toxicity of grade 3 bradycardia (slow heart rate) and grade 2 hypotension (low blood pressure) which resolved within approximately 90 minutes with i.v. fluids. Participants also experienced transient induction of over 50 different biomarkers associated with innate and adaptive anti-tumor immune responses. After the end of infusion, Decoy20 was cleared from the blood within 30 to 120 minutes. Peak cytokine and chemokine induction occurred within ~4 to 24 hours and most cytokine/chemokines returned to the patient’s respective baseline by 24-72 hours. This rapid clearance and associated transient cytokine/chemokine induction are desired to avoid prolonged toxicity, often associated with longer term cytokine exposure.

Current wording

In August 2023, we evaluated the first four participants who received a single dose of 7 x 10^7 Decoy20 in Part 1 of the Phase 1 clinical trial. All four participants who enrolled were evaluable in the first cohort. These participants experienced generally anticipated transient adverse events including hemodynamic changes such as changes in pulse or blood pressure that resolved within 30 minutes and laboratory abnormalities such as grade 1-3 elevations in transaminases (liver function tests) and grade 4 reductions in lymphocytes that generally resolved within three days. One participant had a dose-limiting toxicity of grade 3 bradycardia (slow heart rate) and grade 2 hypotension (low blood pressure) which resolved within approximately 90 minutes with i.v. fluids. Participants also experienced transient induction of over 50 different biomarkers associated with innate and adaptive anti-tumor immune responses. After the end of infusion, Decoy20 was cleared from the blood within 30 to 120 minutes. Peak cytokine and chemokine induction occurred within ~4 to 24 hours and most cytokine/chemokines returned to the participant’s respective baseline by 24-72 hours. This rapid clearance and associated transient cytokine/chemokine induction are desired to avoid prolonged toxicity, often associated with longer term cytokine exposure.

Previous wording

As of October 2024, we completed one month of the weekly dosing part in the first six participants at the 3 x 10^7 Decoy20 dose and following the review of the safety data by the Safety Review Committee we received the authorization to initiate unrestricted enrollment of participants at the 3 x 10^7 Decoy20 dose. As of May 13, 2025, we have enrolled 13 participants on Decoy20 as a single dose and 32 participants in the weekly dosing among the two Decoy20 dose levels and decided to conclude enrollment in the weekly dosing and focus on the combination study of Decoy20 with Tislelizumab, as further described below. We have observed early signs of potential benefits emerging with some participants with stable disease. As expected with the mechanism of action of Decoy20, we have seen adverse events of cytokine release syndrome (CRS) in 4 participants that have resolved within 24 hours.

Current wording

As of October 2024, we completed one month of the weekly dosing part in the first six participants at the 3 x 10^7 Decoy20 dose and following the review of the safety data by the Safety Review Committee we received the authorization to initiate unrestricted enrollment of participants at the 3 x 10^7 Decoy20 dose. By May 2025, we had enrolled 13 participants on Decoy20 as a single dose and 32 participants in the weekly dosing among the two Decoy20 dose levels. In May 2025, we decided to conclude enrollment in the weekly dosing and focus on the combination study of Decoy20 with Tislelizumab, as further described below. We have observed early signs of potential benefits emerging with some participants with stable disease. As expected with the mechanism of action of Decoy20, we have seen adverse events of cytokine release syndrome (CRS) in 6 participants that have resolved within 24-72 hours.

Previous wording

In October 2024, we entered into a clinical supply agreement, or the Supply Agreement, with BeOne Medicines (formerly known as BeiGene Switzerland GmbH), to advance clinical evaluation of Decoy20 in combination with BeOne’s anti-PD-1 antibody, Tislelizumab, or the BeOne Product, for the treatment of participants with advanced solid tumors, or the Combination Study. This Combination Study builds on preclinical results where Decoy20, combined with a PD-1 inhibitor, demonstrated tumor eradication. In March 2025, we announced the initiation of the Phase 1 Combination Study of Decoy20 with Tislelizumab.

Current wording

In October 2024, we entered into a clinical supply agreement, or the Supply Agreement, with BeOne Medicines (formerly known as BeiGene Switzerland GmbH), to advance clinical evaluation of Decoy20 in combination with BeOne’s anti-PD-1 antibody, Tislelizumab, or the BeOne Product, for the treatment of participants with advanced solid tumors, or the Combination Study. This Combination Study builds on preclinical results where Decoy20, combined with a PD-1 inhibitor, demonstrated tumor eradication. In June 2025 we announced the dosing of the first participant in the Combination Study and by August 2025 we had enrolled 6 participants, and we have seen one related serious adverse event of CRS in 1 participant that has resolved within 72 hours. The Combination Study will assess safety, dose optimization, and early signs of anti-tumor activity in participants with advanced solid tumors, previously treated with a checkpoint inhibitor or with tumors typically unresponsive to checkpoint inhibitors.

Previous wording

The process of conducting the necessary clinical research to obtain FDA and other regulatory approval is costly and time consuming and the successful development of product candidates is highly uncertain. As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects, or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates.

Current wording

The process of conducting the necessary clinical research to obtain FDA and other regulatory approval is costly and time consuming and the successful development of product candidates is highly uncertain. These risks and uncertainties associated with our research and development projects are discussed more fully in Part II. Item 1A. “Risk Factors -We expect to continue to incur significant research and development expenses and other operating expenses, which may make it difficult for us to attain profitability.” As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects, or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates.

Previous wording

Other income, net, includes interest earned on deposits and investments and other items of income, expense, gain and loss that are incidental to the core operations of the Company.

Current wording

Other income, net includes interest earned on deposits and investments and other items of income and gain and loss that are incidental to the core operations of the Company.

Previous wording

The following table sets forth our results of operations for the three months ended March 31, 2025 and 2024 and the relative dollar change between the two periods.

Current wording

The following tables set forth our results of operations for the three months ended June 30, 2025 and 2024 and the relative dollar change between the two periods.

Previous wording

Our research and development expenses for the three months ended March 31, 2025 amounted to approximately $2.8 million, an increase of approximately $1.2 million, or approximately 76.7%, compared to approximately $1.6 million for the three months ended March 31, 2024. This increase was attributable primarily to an increase of approximately $1.5 million in costs associated with our Phase 1 clinical trial and was offset by a decrease of approximately $0.3 million in payroll and related expenses.

Current wording

Research and development expenses were approximately $2.2 million for the three months ended June 30, 2025, compared to approximately $1.7 million for the three months ended June 30, 2024, representing an increase of approximately $0.5 million, or 26.4%. The increase was primarily driven by higher clinical trial costs of approximately $0.8 million related to our ongoing Phase 1 study. This increase was partially offset by a decrease of approximately $0.3 million in payroll and related expenses.

Previous wording

During the three months ended March 31, 2025, our other income, net was approximately $0.04 million, which represented a decrease of approximately $0.1 million, or approximately 70.6%, compared to approximately $0.14 million for the three months ended March 31, 2024. The other income generated in the period consists primarily of income earned on our cash and cash equivalent accounts, the balances of which were lower during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

During the three months ended June 30, 2025, our other income, net was approximately $0.015 million, which represented a decrease of approximately $0.078 million, or approximately 83.4%, compared to approximately $0.093 million for the three months ended June 30, 2024. The other income generated in the period consists primarily of income earned on our cash and cash equivalent accounts, the balances of which were lower during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

In February 2025, we entered into a SEPA with Yorkville pursuant to which we have the right, but not the obligation, to sell up to $20.0 million of our common stock during a 36-month period, subject to the restrictions and satisfaction of the conditions in the SEPA. Upon execution of the SEPA, we issued to Yorkville 305,960 commitment shares. During March 2025, we sold 1,605,200 shares of our common stock under the SEPA for aggregate SEPA for aggregate net proceeds of approximately $1.15 million, after deducting offering expenses in the amount of approximately $0.1 million.

Current wording

In February 2025, we entered into a SEPA with Yorkville, pursuant to which we have the right, but not the obligation, to sell up to $20.0 million of our common stock during a 36 months period, subject to the restrictions and satisfaction of the conditions in the SEPA. Upon execution of the SEPA, we issued to Yorkville 10,927 commitment shares. During the first six months of 2025, we sold 89,902 shares of common stock under the SEPA for aggregate net proceeds of approximately $1.75 million, after deducting offering expenses in the amount of approximately $0.1 million.

Previous wording

In January 2025, we completed a private placement for the sale and issuance by us of an aggregate of: (i) 2,109,383 shares of our common stock and (ii) warrants to purchase 2,109,383 shares of common stock. The shares and warrants were sold on a combined basis for consideration of $1.065 for one share and a warrant for aggregate gross proceeds of approximately $2.25 million.

Current wording

In January 2025, we completed a private placement (the “January 2025 Financing”) for the sale and issuance by us of an aggregate of: (i) 75,335 shares of our common stock and (ii) warrants to purchase 75,335 shares of common stock. The shares and warrants were sold on a combined basis for consideration of $29.82 for one share and one warrant for aggregate gross proceeds of approximately $2.25 million.

Previous wording

In June 2022, we entered into an At The Market Offering Agreement (the “ATM Agreement”) which was amended on September 1, 2022 with H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to which we may offer and sell, from time to time through Wainwright, shares of our common stock, par value $0.01 per share, for aggregate gross proceeds of up to $3.7 million. The issuance and sale of common stock by us under the ATM Agreement is being made pursuant to our effective “shelf” registration statement on Form S-3 filed with the SEC on September 1, 2022 and declared effective on September 9, 2022. In 2024, we sold 152,000 shares of our common stock for aggregate gross proceeds of approximately $0.4 million. On August 6, 2024, we filed a prospectus supplement to reduce the amount of shares registered under the prospectus for the ATM to $0.00 and to suspend the ATM program, but the ATM Agreement remains in full force and effect.

Current wording

In June 2022, we entered into an At The Market Offering Agreement (the “ATM Agreement”) which was amended on September 1, 2022 with H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to which we may offer and sell, from time to time through Wainwright, shares of our common stock, par value $0.01 per share, for aggregate gross proceeds of up to $3.7 million. The issuance and sale of common stock by us under the ATM Agreement is being made pursuant to our effective “shelf” registration statement on Form S-3 filed with the SEC on September 1, 2022 and declared effective on September 9, 2022. In 2024, we sold 5,428 shares of our common stock for aggregate gross proceeds of approximately $0.4 million. On August 6, 2024, we filed a prospectus supplement to reduce the amount of shares registered under the prospectus for the ATM to $0.00 and to suspend the ATM program, but the ATM Agreement remains in full force and effect.

Previous wording

As of the date of the issuance of this Quarterly Report and based on our current operating plan, we will need to obtain additional capital to fund our ongoing activities beyond the second quarter of 2025. We will need to increase our capital resources through equity or debt financings, and we may need to do so sooner than we expect. We may also seek to finance our cash needs through collaborations, strategic alliances, or license agreements with third parties. If sources of financing are available, they may result in substantial dilution to our stockholders. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. If we are unable to consummate a financing or other transaction, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations. These conditions raise substantial doubt regarding our ability to continue as a going concern within one year after the date of the filing of this Quarterly Report. For additional information, see Note 1 to our unaudited condensed financial statements included elsewhere in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Current wording

We believe that our cash and cash equivalents of approximately $6.2 million that we had as of June 30, 2025 will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025 based on our current operating plan. We will need to increase our capital resources through equity or debt financings, and we may need to do so sooner than we expect. We may also seek to finance our cash needs through collaborations, strategic alliances, or license agreements with third parties. If sources of financing are available, they may result in substantial dilution to our stockholders. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. If we are unable to consummate a financing or other transaction, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations. These conditions raise substantial doubt regarding our ability to continue as a going concern within one year after the date of the filing of this Quarterly Report. For additional information, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Previous wording

Net cash used in operating activities was approximately $5.0 million for the three months ended March 31, 2025, compared with net cash used in operating activities of approximately $3.9 million for the three months ended March 31, 2024. The increase in net cash used was primarily attributable to an increase in our research and development activities which were mostly related to our Phase 1 clinical trial.

Current wording

Net cash used in operating activities was approximately $9.1 million for the six months ended June 30, 2025, compared with net cash used in operating activities of approximately $6.4 million for the six months ended June 30, 2024. The increase in net cash used was primarily attributable to an increase in our research and development activities which were mostly related to our Phase 1 clinical trial and an increase in transaction-related expenses associated with the private placement of convertible notes and warrants completed in June 2025.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was approximately $3.2 million, which was provided by the issuance and sale of our common stock and warrants in the January 2025 offering and by the issuance and sale of our common stock under the SEPA. Net cash provided by financing activities for the three months ended March 31, 2024 was approximately $0.3 million, which was provided by theissuance and sale of our common stock under the ATM Agreement.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 was approximately $9.4 million, which was provided by the issuance and sale of our common stock and warrants in the January 2025 Financing, the issuance and sale of our common stock under the SEPA and the issuance of convertible notes and warrants in the June 2025 Financing. Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $0.4 million, which was provided by issuance and sale of our common stock under the ATM Agreement.

Previous wording

As of the date of the issuance of this Quarterly Report and based on our current operating plan, we will need to obtain additional capital to fund our ongoing activities beyond the second quarter of 2025. In May 2025, we began implementing a cost-reduction plan that includes a focus on the Combination Study, the elimination of non-essential expenses and accepted a voluntary temporary reduction of the base salaries of certain officers and temporary elimination of board fees.

Current wording

We believe that our existing cash and cash equivalents as of June 30, 2025 are adequate to fund our ongoing activities into the fourth quarter of 2025 based on our current operating plan. In addition, in May 2025, we began implementing a cost-reduction plan that included a focus on the Combination Study, the elimination of non-essential expenses, and accepted a voluntary temporary reduction of the base salaries of certain officers and temporary elimination of board fees.

Previous wording

Operating lease liabilities represent our commitment for future rent made under a non-cancelable lease for our offices in San Diego, CA. The total future payments for our operating lease obligation on March 31, 2025 were approximately $0.06 million and are due in the next twelve months. For additional details regarding our lease, see Note 7 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

Current wording

Operating lease liabilities represent our commitment for future rent made under a non-cancelable lease for our offices in San Diego, CA. The total future payments for our operating lease obligation on June 30, 2025 was approximately $0.03 million and are due in the next twelve months. For additional details regarding our lease, see Note 8 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

Previous wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our 2024 Annual Report on Form 10-K. During the three months ended March 31, 2025, there were no material changes to our critical accounting policies from those discussed in our 2024 Annual Report on Form 10-K.

Current wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our 2024 Annual Report on Form 10-K. During the six months ended June 30, 2025, there were no material changes to our critical accounting policies from those discussed in our 2024 Annual Report on Form 10-K.