Overview

Indaptus Therapeutics, Inc. is a clinical biotechnology company developing a novel and patented systemically-administered anti-cancer and anti-viral immunotherapy. The company’s approach is based on the hypothesis that efficient activation of both innate and adaptive immune cells and associated anti-tumor and anti-viral immune responses will require a multi-targeted package of immune system activating signals that can be administered safely intravenously.

In 2023, Indaptus initiated a Phase 1 clinical trial with its lead clinical candidate, Decoy20, in patients with advanced solid tumors where currently approved therapies have failed. The company’s patented technology is composed of single strains of attenuated and killed, non-pathogenic, Gram-negative bacteria, designed to have reduced i.v. toxicity, but largely uncompromised ability to prime or activate many of the cellular components of innate and adaptive immunity.

Impact of Macroeconomic Conditions on Operations

Economic developments such as inflation and interest rates have negatively affected the global financial markets and may reduce Indaptus’ ability to access capital, which could negatively impact its short-term and long-term liquidity. The ultimate impact of current economic conditions is highly uncertain and subject to change. The company’s business operations also expose it to risks associated with public health crises and epidemics/pandemics.

Components of Operating Results

Research and Development Expenses

Research and development expenses account for a significant portion of Indaptus’ operating expenses. These expenses consist primarily of fees paid to contract research organizations (CROs) and contract manufacturing organizations (CMOs), as well as compensation expenses for certain employees involved in the planning, managing, and analyzing the work of the CROs and CMOs and materials used for research and development activities. Indaptus expects its research and development expenses to increase substantially as it continues to ramp up its clinical development activities.

General and Administrative Expenses

General and administrative expenses include compensation, employee benefits, and stock-based compensation, finance administration and human resources, facility costs, professional service fees, and other general overhead costs to support Indaptus’ operations. The company expects its general and administrative expenses to increase as it continues to increase its headcount to support its research and development activities and operations, and as a result of operating as a public company.

Other Income, Net

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.

Results of Operations

Year Ended December 31, 2024 compared to Year Ended December 31, 2023

The following table summarizes Indaptus’ results of operations for the years ended December 31, 2024 and 2023:

Research and Development Expenses

Indaptus’ research and development expenses decreased by $0.4 million, or 4.9%, in 2024 compared to 2023. This was primarily due to a decrease in costs for the development of the company’s manufacturing processes for Decoy20, which were mainly conducted in 2023, offset by an increase in costs associated with the Phase 1 clinical trial.

General and Administrative Expenses

Indaptus’ general and administrative expenses decreased by $0.7 million, or 7.3%, in 2024 compared to 2023. This was primarily due to a decrease in legal fees, recruitment costs, payroll and related expenses, franchise tax, and directors’ and officers’ insurance expenses, offset by an increase in investor relations and business development expenses.

Other Income

Indaptus’ other income, net decreased by $0.6 million, or 64.0%, in 2024 compared to 2023. This was primarily due to lower income earned on the company’s cash and cash equivalent accounts, as the balances were lower in 2024 compared to 2023.

Liquidity and Resources

Indaptus has funded its operations primarily through public and private offerings of its equity securities. In 2024 and early 2025, the company completed several financing transactions, including registered direct offerings, a private placement, and entering into a Standby Equity Purchase Agreement, raising a total of approximately $6.3 million in net proceeds.

As of December 31, 2024, Indaptus had approximately $5.8 million in cash and cash equivalents, which, together with the $2.0 million in net proceeds from the January 2025 financing, the company believes will enable it to fund its operating expenses and capital expenditure requirements into the second quarter of 2025. However, the company will need to increase its capital resources through equity or debt financings, or other transactions, in order to continue its operations and development activities.

Cash Flows

Indaptus used $12.3 million in cash for operating activities in 2024, compared to $13.4 million in 2023. This decrease was primarily attributable to changes in operating assets and liabilities. There was no net cash provided by or used in investing activities in 2024, compared to $17.1 million in net cash provided by investing activities in 2023, which was related to the maturity of marketable securities. Net cash provided by financing activities in 2024 was $4.8 million, primarily from the issuance and sale of common stock and warrants.

Funding Requirements

Indaptus expects its operating expenses to continue to increase in the future as it ramps up its clinical development activities and incurs expenses associated with hiring additional personnel to support its research and development efforts. The company’s future capital requirements will depend on many factors, including the scope, progress, and costs of its preclinical studies and clinical trials, the number of its clinical trials and research and development programs, the amount of revenue it receives from future licensing, collaboration, and commercialization arrangements, and the costs of filing, prosecuting, and defending its intellectual property.

Indaptus believes its existing cash and cash equivalents will enable it to fund its operations into the second quarter of 2025, but it will need to secure additional financing through equity or debt offerings, or other transactions, in order to continue its operations and development activities beyond that point.

Critical Accounting Policies

Indaptus’ critical accounting policies include accounting for research and development costs and stock-based compensation. The company accrues expenses for manufacturing, preclinical studies and clinical trial activities performed by third parties based on estimates of services received and efforts expended. Stock-based compensation expense is measured at the grant date based on the fair value of the award, which is determined using the Black-Scholes valuation model.