UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices, including zip code)
(
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered |
|---|---|---|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐ Accelerated Filer ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of March 31, 2026, the registrant had
Form type: 10-Q
Period end: 2026-03-31
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Total Revenue | ||
| Total COGS | ||
| Gross Profit | ||
| General and administrative | ||
| Research and development | ||
| Total operating expenses | ||
| Operating income | - | - |
| Other income (expense) | ||
| Other income (expense), net | - | - |
| Net Income | - | |
| Basic earnings per share | - | |
| Diluted earnings per share | - | |
| Weighted average shares outstanding, basic | ||
| Weighted average shares outstanding, diluted | ||
| March 31, 2026 | December 31, 2025 | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | ||
| Prepaid expenses and other current assets | ||
| Total current assets | ||
| Noncurrent assets | ||
| Operating lease right-of-use assets | ||
| Property, plant and equipment | ||
| Property and equipment, gross | ||
| Less: accumulated depreciation and amortization | ||
| Restricted cash, noncurrent | ||
| Other assets (derived) | ||
| Total noncurrent assets | ||
| Total Assets | ||
| Liabilities | ||
| Current liabilities | ||
| Accounts payable | ||
| Accrued liabilities | ||
| Operating lease liabilities, current | ||
| Other current liabilities | ||
| Total current liabilities | ||
| Noncurrent liabilities | ||
| Deferred revenue, noncurrent | ||
| Operating lease liabilities, noncurrent | ||
| Warrant liability | ||
| Other liabilities (derived) | ||
| Total noncurrent liabilities | ||
| Total Liabilities | ||
| Equity | ||
| Preferred stock, par value per share | ||
| Preferred stock, shares authorized | ||
| Preferred stock, shares issued | ||
| Preferred stock, shares outstanding | ||
| Additional paid-in capital | ||
| Common stock | ||
| Common stock, par value per share | ||
| Common stock, shares authorized | ||
| Common stock, shares issued | ||
| Common stock, shares outstanding | ||
| Retained earnings (accumulated deficit) | - | - |
| Treasury stock, at cost | - | - |
| Total Equity | ||
| Total liabilities and equity | ||
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | - | |
| Stock-based compensation | ||
| Change in prepaid expenses and other assets | - | |
| Change in other operating assets | - | |
| Change in accounts payable | ||
| Change in contract liabilities | - | 0 |
| Change in accrued liabilities | - | - |
| Changes in operating assets and liabilities, net | - | - |
| Net cash from operating activities | - | - |
| Investing activities | ||
| Purchases of property and equipment | - | - |
| Net cash from investing activities | - | - |
| Financing activities | ||
| Proceeds from exercise of stock options | ||
| Other financing activities (derived) | - | |
| Net cash from financing activities | - | |
| Net change in cash | - | |
| Cash at beginning of period | 102,920,000 | |
| Cash at end of period | 92,431,000 | |
| Supplemental cash flow information | ||
| Cash paid for interest | ||
| Supplemental disclosure of noncash investing and financing activities | ||
| Capital expenditures incurred but not yet paid | ||
| Common stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Treasury stock, at cost | Total | |
|---|---|---|---|---|---|
| Balance at December 31, 2024 | 469,000 | 258,511,000 | -192,205,000 | -448,000 | 66,327,000 |
| Net income | |||||
| Other equity movements | 24,000 | 945,000 | 0 | 0 | 969,000 |
| Balance at March 31, 2025 | 493,000 | 259,456,000 | -184,826,000 | -448,000 | 74,675,000 |
| Balance at December 31, 2025 | - | - | |||
| Net income | - | - | |||
| Other equity movements | 183,000 | 94,785,000 | 0 | 0 | 94,968,000 |
| Balance at March 31, 2026 | - | - |
Candel Therapeutics, Inc. is a public reporting company classified under Biological Products (No Diagnostic Substances), and its principal products, services, markets, and strategy are described in its prior SEC filings. The Company has initiated a phase 2a, open-label, multi-center study evaluating biomarkers and biodistribution and shedding of aglatimagene plus valacyclovir in men with localized, intermediate-risk prostate cancer who are planning to receive EBRT, with the study aiming to recruit up to 45 patients (30 in the treatment arm and 15 in the control arm treated with EBRT alone), and anticipates that this data will be submitted as part of the BLA filing in the fourth quarter of 2026. The accompanying condensed financial statements as of and for the three months ended March 31, 2026 are unaudited and have been prepared from the connected books, and results are not necessarily indicative of a full year. As of March 31, 2026, the Company held cash and cash equivalents of $194,834,000 compared with $92,165,000 in the prior period, together with restricted cash, noncurrent, of $416,000 compared with $266,000. The Company evaluates the applicability and impact of Accounting Standards Updates issued by the Financial Accounting Standards Board as they are issued, and adopted updates and updates not yet effective are not expected to have a material effect on the financial statements, except as otherwise described in these notes.
The Company recorded revenue of $0 for the three months ended March 31, 2026, and carried deferred revenue, noncurrent, of $67,000 compared with $0 in the prior period. Research and development expense was $9,840,000 compared with $4,016,000 in the prior period, an increase of 145.0%, and general and administrative expense was $6,444,000 compared with $4,114,000, an increase of 56.6%. Other income, net, was $7,423,000 compared with $15,509,000 in the prior period, and included interest expense of $1,564,000. The Company reported a net loss of $8,861,000 for the period. Basic and diluted net loss per share were each $(0.14), based on weighted-average basic shares outstanding of 62,361,897, and 16,505,495 potentially dilutive shares were excluded from the diluted calculation because their effect would have been antidilutive.
Total liabilities were $63,891,000 as of March 31, 2026. Debt, current, was $0 compared with $9,172,000 in the prior period, and other liabilities were $47,475,000 compared with $6,722,000. Scheduled long-term debt maturities are $3,806,000 in year two, $24,175,000 in year three and $22,019,000 in year four. The Company also recorded a warrant liability of $7,955,000 compared with $0 in the prior period. The Company's leases are accounted for as operating leases, with operating lease right-of-use assets of $1,569,000 compared with $468,000 in the prior period and operating lease liabilities of $453,000 current and $1,343,000 noncurrent. Undiscounted lease payments consist of $462,000 for the remainder of the fiscal year, $613,000 within one year, $628,000 in year two and $426,000 in year three, for total undiscounted lease payments of $2,129,000, less imputed interest of $333,000, resulting in a present value of operating lease liabilities of $1,796,000 and a weighted average remaining lease term of 3.4 years. Operating lease cost was $100,000 and variable lease cost was $67,000, for total lease cost of $200,000, and cash paid for amounts included in the measurement of operating lease liabilities was $156,000.
Total stockholders' equity was $138,029,000 as of March 31, 2026. Common stock was $733,000 compared with $493,000 in the prior period, an increase of 48.7%, and additional paid-in capital was $376,992,000 compared with $259,456,000, an increase of 45.3%. The accumulated deficit was $239,248,000 compared with $184,826,000 in the prior period, and treasury stock, at cost, was unchanged at $448,000. Total share-based compensation expense was $1,452,000 compared with $314,000 in the prior period. The components of stockholders' equity and the changes in those components for the periods presented are set forth in the equity note.
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the applicable rules and regulations of the Securities and Exchange Commission. In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented.
The financial statements include the accounts of the Company and its consolidated subsidiaries, if any. All intercompany balances and transactions have been eliminated in consolidation.
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recognized over the estimated useful lives of the related assets, generally on a straight-line basis. Expenditures for maintenance and repairs are expensed as incurred.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. When the carrying amount of an asset or asset group is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds fair value.
The Company determines whether an arrangement is or contains a lease at inception. For leases with terms greater than twelve months, a right-of-use asset and a corresponding lease liability are recognized at the lease commencement date, measured at the present value of the remaining lease payments over the lease term.
Debt is carried at amortized cost. Debt issuance costs and discounts or premiums are presented as an adjustment to the carrying amount of the related debt and amortized to interest expense over the contractual term of the debt.
Share-based compensation is measured at the grant-date fair value of the award and recognized as expense over the requisite service period of the award.
Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock, except when the effect would be antidilutive.
Equity instruments issued by the Company are classified in stockholders' equity based on their terms. The components of stockholders' equity and the changes in those components for the periods presented are set forth in the equity note.
The Company evaluates the applicability and impact of Accounting Standards Updates issued by the Financial Accounting Standards Board as they are issued. Adopted updates and updates not yet effective are not expected to have a material effect on the financial statements, except as otherwise described in these notes.
| Current | Prior | |
|---|---|---|
| Operating lease liabilities, current | ||
| Operating lease liabilities, noncurrent | ||
| Total debt | 1,796,000 | 1,904,000 |
| Amount | |
|---|---|
| Year two | |
| Year three | |
| Year four |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | ||
| Total property and equipment | 2,075,000 | 1,642,000 |
| Current | Prior | |
|---|---|---|
| Additional paid-in capital | ||
| Common stock | ||
| Retained earnings (accumulated deficit) | - | - |
| Treasury stock, at cost | - | - |
| Total stockholders' equity | 138,029,000 | 51,922,000 |
| Current | Prior | |
|---|---|---|
| Weighted average shares outstanding, basic | ||
| Weighted average shares outstanding, diluted | ||
| Basic earnings per share | -0.14 | 0.15 |
| Diluted earnings per share | - | |
| Antidilutive securities excluded from diluted EPS |
| Amount | |
|---|---|
| Remainder of fiscal year | |
| Within one year | |
| Year two | |
| Year three | |
| Total undiscounted lease payments | |
| Less imputed interest | |
| Present value of operating lease liabilities | |
| Weighted average remaining lease term (years) |
| Current | Prior | |
|---|---|---|
| Operating lease cost | ||
| Variable lease cost | ||
| Total lease cost | ||
| Cash paid for amounts included in the measurement of operating lease liabilities |
| Current | Prior | |
|---|---|---|
| Total share-based compensation expense |
| Current | Prior | |
|---|---|---|
| Depreciation | ||
| Interest expense, nonoperating |
| Current | Prior | |
|---|---|---|
| Interest expense |
Candel Therapeutics, Inc. is a public reporting company classified under Biological Products, (No Diagnostic Substances). We have not obtained regulatory approvals for any of our product candidates, and even if our clinical development efforts result in positive data, our product candidates may not receive regulatory approval or be successfully introduced and marketed at prices that would permit us to operate profitably. We have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future. Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. For the period ended March 31, 2026, we did not recognize any revenue, and we reported a net loss of $8,861,000, or $0.14 per basic share, based on 62,361,897 weighted-average basic shares outstanding. Our accumulated deficit was $239,248,000 as of March 31, 2026, compared to $184,826,000 in the prior period.
Research and development expenses were $9,840,000 for the current period, compared to $4,016,000 for the comparable prior-year period, an increase of 145.0%. We expect our research and development expenses to significantly increase in connection with the commencement and continuation of clinical trials of our product candidates. The increase in the current period was primarily attributable to [COMPLETE: specific drivers of research and development expense increase]. General and administrative expenses were $6,444,000 for the current period, compared to $4,114,000 for the comparable prior-year period, an increase of 56.6%. The increase in general and administrative expenses was primarily due to [COMPLETE: specific drivers of general and administrative expense increase]. Other income, net, was $7,423,000 for the current period, compared to $15,509,000 for the comparable prior-year period, a decrease of 52.1%. The change in other income, net, was primarily attributable to [COMPLETE: drivers of change in other income, including any change in the fair value of warrant liability and interest income]. As of March 31, 2026, we recorded a warrant liability of $7,955,000, compared to none in the prior period.
As of March 31, 2026, we had cash and cash equivalents of $194,834,000, compared to $92,165,000 in the prior period, an increase of 111.4%, and restricted cash, noncurrent, of $416,000, compared to $266,000 in the prior period. Additional paid-in capital increased to $376,992,000 from $259,456,000, and common stock increased to $733,000 from $493,000, reflecting [COMPLETE: description of equity financing activity during the period]. We had no current debt outstanding as of March 31, 2026, compared to $9,172,000 in the prior period. Operating lease liabilities consisted of $453,000 classified as current and $1,343,000 classified as noncurrent, compared to $580,000 and $257,000, respectively, in the prior period, and operating lease right-of-use assets increased to $1,569,000 from $468,000. Accounts payable increased to $3,036,000 from $760,000 and accrued liabilities increased to $3,473,000 from $2,720,000, while accrued compensation decreased to zero from $1,019,000. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure.
We expect to continue to incur significant expenses and operating losses over the next several years and for the foreseeable future. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders' equity and working capital. Management believes that our existing cash and cash equivalents [COMPLETE: will or will not be sufficient] to fund our operating expenses and capital expenditure requirements for at least the next twelve months from the date of this filing. Until such time as we can generate significant revenue, if ever, we expect to finance our operations through [COMPLETE: anticipated sources of funding, such as equity offerings, debt financings, or collaborations]. Our future capital requirements will depend on many factors, including the progress, timing, and costs of our clinical development programs, and we may need to raise additional capital sooner than planned.
We are a clinical stage biopharmaceutical company focused on developing off-the-shelf viral immunotherapies that elicit an individualized, systemic anti-tumor immune response to help patients fight cancer. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. As of March 31, 2026, we held cash and cash equivalents of $194,834,000, compared to $92,165,000 at the end of the prior period, together with noncurrent restricted cash of $416,000. Because these funds are held for the purpose of preserving capital and maintaining liquidity to fund our operations, our interest income is sensitive to changes in the general level of interest rates in the United States. Due to the short-term nature of these holdings, we do not believe that an immediate change in market interest rates would have a material effect on the fair market value of our portfolio; however, a decline in interest rates would reduce the interest income we earn on these balances. [COMPLETE: quantified impact on interest income of a hypothetical change in interest rates, if any]
As of March 31, 2026, we had no debt outstanding, compared to $9,172,000 of current debt at the end of the prior period, and accordingly we are not currently exposed to interest rate risk on borrowings. Our balance sheet also reflected a warrant liability of $7,955,000 as of March 31, 2026, which did not exist at the end of the prior period. [COMPLETE: description of fair value remeasurement of the warrant liability and its sensitivity to changes in the price of our common stock and other valuation inputs, if applicable]
We do not have material foreign currency or commodity price exposure. Our operations are conducted primarily in the United States, and we do not currently hedge against foreign currency or commodity price fluctuations. Inflation generally affects us by increasing our cost of labor and clinical trial and research expenses, and we do not believe that inflation has had a material effect on our results of operations during the periods presented. We will continue to monitor our exposure to market risks and may consider hedging or other risk management strategies in the future if our exposure becomes material.
Candel Therapeutics, Inc. maintains disclosure controls and procedures, and management evaluated those controls and procedures as of March 31, 2026, the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including our [COMPLETE: principal executive officer and principal financial officer titles and names], as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, management concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period. [COMPLETE: Management's conclusion language in this paragraph must be reviewed and formally adopted by management before filing.]
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As a biopharmaceutical company with a limited operating history that has not generated any revenue to date from product sales, we continue to assess our control environment as our operations develop.
Management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met, and the design of any control system reflects resource constraints and the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected, and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate.
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any pending legal proceeding that management believes is material to our condensed consolidated financial statements. As a public reporting company operating in the biological products industry, we may be subject to claims and proceedings, including those relating to intellectual property, commercial arrangements, employment matters, and regulatory compliance.
Regardless of the outcome, litigation and other legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Management does not currently believe that any pending matter is material to our financial statements, and we will continue to evaluate legal matters as they arise and disclose any proceedings that become material in future periodic reports.
We have incurred significant losses since inception and expect to continue to incur losses for the foreseeable future. We have no products approved for commercial sale and therefore have never generated any revenue from product sales, and we do not expect to do so in the foreseeable future. For the three months ended March 31, 2026, we recorded no revenue and a net loss of $8,861,000. For the years ended December 31, 2025 and 2024, we reported net losses of $38.2 million and $55.2 million, respectively. Our accumulated deficit was $239,248,000 as of March 31, 2026, compared with an accumulated deficit of $230.4 million as of December 31, 2025. Our research and development expenses increased to $9,840,000 for the period from $4,016,000 in the prior period, and our general and administrative expenses increased to $6,444,000 from $4,114,000. We expect our expenses to remain substantial as we advance our product candidates through clinical development, and our ability to achieve profitability will depend on our success in obtaining regulatory approval for and commercializing our product candidates, which may never occur.
We will require substantial additional capital to fund our operations, and our indebtedness and other obligations may limit our flexibility. As of March 31, 2026, our cash and cash equivalents were $194,834,000, an increase from $119.7 million as of December 31, 2025. On October 14, 2025, we entered into a Loan and Security Agreement, as amended by that certain First Amendment to Loan and Security Agreement dated as of March 10, 2026 (the Trinity LSA), with the lenders party thereto and Trinity Capital Inc. (Trinity), as administrative agent and collateral agent and in October 2025 we borrowed $50.0 million under the Trinity LSA pursuant to the First Tranche at closing. We used a portion of the proceeds from the First Tranche of the Trinity LSA to repay the SVB Loan Agreement in full on October 14, 2025. As of March 31, 2026, our total liabilities were $63,891,000, and we carried a warrant liability of $7,955,000, the fair value of which may fluctuate and affect our reported results of operations. Our additional paid-in capital increased to $376,992,000 from $259,456,000 in the prior period, reflecting equity financings that diluted existing stockholders, and any future equity or debt financing may result in further dilution or restrictive covenants. If we are unable to raise capital when needed or on acceptable terms, we may be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. [COMPLETE: description of the Trinity LSA covenants, remaining tranches, and consequences of default]
We are also exposed to market, legal and operational risks that could adversely affect our business. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. We are involved in legal proceedings arising in the ordinary course of business from time to time, and management does not currently believe any pending matter is material to the financial statements; however, the outcome of litigation is inherently uncertain and an adverse result could harm our business. Management evaluated our disclosure controls and procedures as of the end of the period and concluded they were effective at the reasonable assurance level, and no changes materially affected internal control over financial reporting during the quarter, but any future failure to maintain effective controls could impair our ability to report our results accurately and on a timely basis. [COMPLETE: any additional material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2025]
The following information is provided pursuant to Item 408(a) of Regulation S-K with respect to the adoption or termination of Rule 10b5-1 trading arrangements by directors and officers of Candel Therapeutics, Inc. during the quarter ended March 31, 2026. [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]
[COMPLETE: any information required to be disclosed in a report on Form 8-K during the quarter ended March 31, 2026 that was not so reported, and any material changes to the procedures by which security holders may recommend nominees to the board of directors]