Canton Strategic Holdings, Inc 10-Q for FY2025 Q2
Canton Strategic Holdings, Inc. (CNTN)
About this 10-Q
Canton Strategic Holdings, Inc filed this 10-Q on August 14, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $1.86M
- compared with a net loss of $2.33M a year earlier
- Diluted EPS
- -$0.64
- compared with -$2.42 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
For the transition period from ________ to _________
Commission
file number
(Exact name of registrant as specified in charter)
(State or jurisdiction of Incorporation or organization) |
I.R.S. Employer Identification No. |
| (Address of principal executive offices) | (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(s) | Name of each exchange on which registered | ||
| The
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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.
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).
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 definition 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 | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No
Number of common shares outstanding as of August 11, 2025 was .
TABLE OF CONTENTS
| 2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:
| ● | our projected financial position and estimated cash burn rate; | |
| ● | our estimates regarding expenses, future revenues and capital requirements; | |
| ● | our ability to continue as a going concern; | |
| ● | our need to raise substantial additional capital to fund our operation; | |
| ● | the success, cost and timing of our clinical trials; | |
| ● | our dependence on third parties in the conduct of our clinical trials; | |
| ● | our ability to obtain the necessary regulatory approvals to market and commercialize our product candidates; | |
| ● | the impact of a health epidemic on our business, our clinical trials, our research programs, healthcare systems, or the global economy as a whole; | |
| ● | the potential that results of pre-clinical and clinical trials indicate our current product candidates or any future product candidates we may seek to develop are unsafe or ineffective; | |
| ● | the results of market research conducted by us or others; | |
| ● | our ability to obtain and maintain intellectual property protection for our current and future product candidates; | |
| ● | our ability to protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our intellectual property rights; | |
| ● | the possibility that a third party may claim we or our third-party licensors have infringed, misappropriated or otherwise violated their intellectual property rights and that we may incur substantial costs and be required to devote substantial time defending against claims against us; | |
| ● | our reliance on third-party suppliers and manufacturers; | |
| ● | the success of competing therapies and products that are or become available; | |
| ● | our ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel; | |
| ● | the potential for us to incur substantial costs resulting from product liability lawsuits against us and the potential for these product liability lawsuits to cause us to limit our commercialization of our product candidates; | |
| ● | market acceptance of our product candidates, the size and growth of the potential markets for our current product candidates and any future product candidates we may seek to develop, and our ability to serve those markets; | |
| ● | the successful development of our commercialization capabilities, including sales and marketing capabilities; and | |
| ● | general business and economic conditions, such as inflationary pressures, geopolitical conditions and other trade barriers. |
All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.
This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.
| 3 |
THARIMMUNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Deferred offering costs | ||||||||
| Total current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Insurance premium financing liability | ||||||||
| Note payable | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (see Note 5) | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $ par value, shares authorized, shares issued and outstanding as of June 30, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value, shares authorized, shares and shares issued and shares and shares outstanding as of June 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock, at cost, shares held in treasury as of June 30, 2025 and December 31, 2024 | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-1 |
THARIMMUNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income | ||||||||||||||||
| Total other income (expense), net | ( | ) | ||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding*: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
| * |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-2 |
THARIMMUNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)
| Shares | Amount | Capital | Deficit | Shares | Amount | Total | ||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Treasury Stock | |||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Shares | Amount | Total | ||||||||||||||||||||||
| For the three months ended June 30, 2024: | ||||||||||||||||||||||||||||
| Balance, March 31, 2024* | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Private investment in public equity offering, net of issuance costs of $ | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| For the six months ended June 30, 2024: | ||||||||||||||||||||||||||||
| Balance, December 31, 2023* | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Stock issuance pursuant to services agreement | - | |||||||||||||||||||||||||||
| Private investment in public equity offering, net of issuance costs of $ | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| For the three months ended June 30, 2025: | ||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Private investment in public equity offering, net of issuance costs of $ | - | |||||||||||||||||||||||||||
| At-the-market offerings, net of issuance costs | - | |||||||||||||||||||||||||||
| Cashless exercise of pre-funded warrants | ( | ) | - | |||||||||||||||||||||||||
| Issuance costs related to Form S-8 Options Registration Statement | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock issuance pursuant to termination agreement | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| For the six months ended June 30, 2025: | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Private investment in public equity offering, net of issuance costs of $ | - | |||||||||||||||||||||||||||
| Private investment in public equity offering, net of issuance costs | - | |||||||||||||||||||||||||||
| At-the-market offerings, net of issuance costs | - | |||||||||||||||||||||||||||
| Cashless exercise of pre-funded warrants | ( | ) | - | |||||||||||||||||||||||||
| Stock issuance pursuant to bonus liability | - | - | ||||||||||||||||||||||||||
| Restricted stock unit issuance pursuant to service agreement | ( | ) | - | |||||||||||||||||||||||||
| Issuance costs related to Form S-8 Options Registration Statement | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock issuance pursuant to termination agreement | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| * |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-3 |
THARIMMUNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| 2025 | 2024 | |||||||
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Stock issuance pursuant to termination agreement | ||||||||
| Stock issuance pursuant to services agreement | ||||||||
| Increase in operating assets: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Increase (decrease) in operating liabilities: | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Net cash provided by (used in) investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock upon private investment in public equity offering | ||||||||
| Proceeds from issuance of common stock upon at-the-market offerings | ||||||||
| Payment of deferred offering costs | ( | ) | ( | ) | ||||
| Proceeds from insurance premium financing liability | ||||||||
| Repayment of insurance premium financing liability | ( | ) | ( | ) | ||||
| Repayment of note payable | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash financing activities: | ||||||||
| Unpaid deferred financing costs | $ | $ | ||||||
| Amortization of deferred offering costs from ATM offering | $ | $ | ||||||
| Reduction of premium related to insurance premium financing | $ | $ | ||||||
| Issuance of note payable for settlement of previously incurred professional fees | $ | $ | ||||||
| Issuance of options to settle liability | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-4 |
THARIMMUNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 – Description of Business and Liquidity
Nature of Operations
Tharimmune, Inc. (formerly, Hillstream BioPharma, Inc.) (“Tharimmune” or the “Company”) was incorporated on March 28, 2017, as a Delaware C-corporation. At June 30, 2025, Tharimmune had one wholly-owned subsidiary: Hillstream Oncology, Inc. (“Hillstream Oncology”), formerly, HB Pharma Corp.
Tharimmune is a clinical-stage biotechnology company developing therapeutic candidates in immunology and inflammation conditions with high unmet need. On November 3, 2023, the Company entered into a patent license agreement (the “Avior License Agreement”) with Avior Inc. d/b/a Avior Bio, LLC (“Avior”) pursuant to which it received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103) and to practice the Licensed Technology in connection with the foregoing, throughout the world (each as defined in the Avior License Agreement). In February 2023, the U.S. Food and Drug Administration (“FDA”) approved an investigational new drug (“IND”) application for TH104. TH104 has a dual mechanism of action by affecting multiple receptors, known to suppress chronic, debilitating pruritus or “uncontrollable itching.” With respect to TH104, the Company originally intended to first seek approval for the treatment of moderate to severe chronic pruritus in patients with primary biliary cholangitis (“PBC”), an orphan rare form of liver disease with no known cure in which more than 70% of patients suffer from debilitating chronic pruritic. The Company engaged and received positive feedback in March 2025 from the FDA regarding the additional proposed indication of temporary prophylaxis of respiratory and/or nervous system depression in military personnel and chemical incident responders entering an area contaminated with high-potency opioids (“PrHPO”), for which it submitted a Pre-Investigational New Drug Application (“PIND”). With respect to the PIND for this additional proposed indication for TH104, the Company received positive feedback from the FDA regarding a regulatory pathway that will allow it to submit a 505(b)(2) New Drug Application (“NDA”) for TH104. The FDA advised that the Company will need to perform additional nonclinical studies (i.e., in vitro toxicology studies), but the FDA confirmed that it does not believe any additional clinical trials will be required to define the prophylactic dosing window prior to IND or NDA submission for this indication, which the Company expects will be the lead program. The Company intends to pursue the pruritus in PBC indication subsequent to the nearer term opportunity of filing an NDA for PrHPO. the Company intends to conduct a capital efficient strategy to file an NDA for PrHPO, which involves actively progressing its Chemistry, Manufacturing, and Controls (“CMC”) plan to meet the stringent requirements for filing an NDA with the FDA. This comprehensive plan encompasses all aspects of the manufacturing process, quality control measures, and product stability to ensure the consistent production of a high-quality buccal film formulation known as TH104.
On September 11, 2024, Tharimmune entered into a Patent License Agreement (the “Intract Agreement”) with Intract Pharma Limited (“Intract”), pursuant to which, the Company exclusively licensed INT-023/TH023, an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody infliximab. Infliximab is a purified, recombinant DNA-derived chimeric IgG monoclonal antibody protein that contains both murine and human components that inhibit tumor TNF-α. Under the terms of the Intract Agreement, the Company licensed global development and commercialization rights (outside of South Korea) to Intract’s Soteria® and Phloral® delivery platform along with an existing supply agreement for infliximab to be used in the oral product development program.
The Company has developed an early-stage pipeline of novel therapeutic candidates targeting validated high value immuno-oncology (“IO”) targets including human epidermal growth factor (“EGF”) receptor 2 (“HER2”), human EGF receptor 3 (“HER3”) and programmed cell death protein 1 (“PD-1”). The Company is developing antibodies including bispecific antibodies and small molecular weight bovine-derived “knob” domains which have the potential to target and bind more tightly to “undruggable” epitopes differently than full sized antibodies. The Company is advancing HS1940, a bispecific biologic against both PD-1 and vascular endothelial growth receptor (“VEGF”) antibody which targets both receptors. We have also developed HS3215, a bispecific antibody against both HER2 and HER3 which targets a novel “bridging epitope” encompassing multiple domains of the HER2 extracellular domain (“ECD”) as well as ligand-dependent and independent blocking of the ECD of HER3.
In addition, on May 23, 2024, HB Pharma Corp. filed a Certificate of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware pursuant to which it changed its name to Hillstream Oncology, Inc. effective as of May 23, 2024.
| F-5 |
Liquidity and Going Concern
The
accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern,
which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. During
the six months ended June 30, 2025, the Company incurred operating losses in the amount of approximately $
Based on the Company’s limited operating history, recurring negative cash flows from operations, current plans and available resources, the Company will need substantial additional funding to support future operating activities. The Company has concluded that the prevailing conditions and ongoing liquidity risks faced raise substantial doubt about the Company’s ability to continue as a going concern for at least one year following the date these condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
The Company may seek to raise additional funding through the sale of additional equity or debt securities, enter into strategic partnerships, grants, or other arrangements or a combination of the foregoing to support its future operations; however, there can be no assurance that the Company will be able to obtain additional capital on terms acceptable to the Company, on a timely basis or at all. The failure to obtain sufficient additional funding could adversely affect the Company’s ability to achieve its business objectives and product development timelines and may result in the Company delaying or terminating clinical trial activities which could have a material adverse effect on the Company’s results of operations.
Other Risks and Uncertainties
There can be no assurance that the Company’s products, if approved, will be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed, if at all. The Company is subject to risks common to biopharmaceutical and biotechnology companies including, but not limited to, the development of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, uncertainty of market acceptance of products and the need to obtain additional financing. The Company is dependent on third party suppliers. The Company’s products require approval or clearance from the FDA prior to commencing commercial sales in the United States. Approvals or clearances are also required in foreign jurisdictions in which the Company may license or sell its products. There can be no assurance that the Company’s products will receive all of the required approvals or clearances.
| F-6 |
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
These accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary for a fair statement of the balance sheet, operating results, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Operating results for the six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025 or any other future period. Certain information and footnote disclosure normally included in the annual financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. The Company’s financial position, results of operations, and cash flows are presented in U.S. Dollars. These condensed consolidated financial statements and related notes should be read in conjunction with the audited financial statements and related notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2025.
The Company operates in one segment and the Company’s Chief Executive Officer serves as the chief operating decision maker (“CODM”). The CODM uses net loss, as reported in the condensed consolidated financial statements, to monitor budget versus actual results and allocate resources. The CODM is regularly provided with financial information, including expenses, in a format consistent with the condensed consolidated statements of operations. The CODM does not review assets at a different level than those disclosed in the consolidated balance sheet.
Reverse Stock Splits
On
May 24, 2024, the Company effectuated a reverse split of shares of its common stock at a ratio of
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Tharimmune and its wholly-owned subsidiary, Hillstream Oncology. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Areas of the condensed consolidated financial statements where estimates may have the most significant effect include research and development expense recognition, valuation of common shares and share-based compensation, allowances of deferred tax assets, valuation of debt related instruments, and cash flow assumptions regarding going concern considerations. Although management believes the estimates that have been used are reasonable, actual results could vary from the estimates that were used.
Concentration of Credit Risk
The
Company maintains cash balances with various financial institutions. Account balances at these institutions are insured by the Federal
Deposit Insurance Corporation (“FDIC”) up to $
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents, if any, are stated at cost and consist primarily of money market accounts.
| F-7 |
Research and Development
Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials, and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials, administrative costs incurred by third parties, and other indicators of the services completed.
The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees, and directors as an expense in the condensed consolidated statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of common stock issued pursuant to termination agreements as well as restricted stock or restricted stock units is generally measured as the grant-date price of the Company’s common stock. The fair value of each option grant to employees, non-employees, and directors is estimated as of the date of grant using the Black-Scholes option-pricing model, net of actual forfeitures. The fair value is amortized as compensation cost on the straight-line basis over the requisite service period of the awards, which is generally the vesting period.
Prior to January 12, 2022, the Company was a private company and the Company’s common stock has only been publicly traded since that date. As a result, the Company has limited company-specific historical and implied volatility information. Therefore, it has estimated its expected stock volatility based on the historical data of a publicly traded set of peer companies. The expected term of stock options granted was between five and seven years. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant for time periods approximately equal to the expected term of the award.
Fair Value Measurements
The Company applies Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
The carrying value of the Company’s cash, prepaid expenses, accounts payable, and accrued expenses approximate fair value because of the short-term maturity of these financial instruments.
The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:
| Level 1 Inputs: Observable inputs such as quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |
| Level 2 Inputs: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for assets or liabilities recently traded in active markets, with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals, as well as quoted prices for identical or similar assets or liabilities in markets that are not active. |
| Level 3 Inputs: Unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities, that reflect the reporting entity’s own assumptions. |
| F-8 |
Deferred Offering Costs
Deferred
offering costs consists primarily of legal, accounting, underwriters’ fees, printing, and filing fees that are incurred prior to
an offering of the Company’s common stock and are initially capitalized and then subsequently reclassified to additional paid-in
capital upon completion of the offering. If an offering is not completed, any associated offering costs will be expensed immediately
upon termination of the offering. At June 30, 2025 and December 31, 2024, there were $
Insurance Premium Financing Liability
In
January 2024, the Company entered into an insurance premium financing agreement for $
In
January 2025, the Company entered into an insurance premium financing agreement for $
Retirement Plan
The
Company has a 401(k) defined contribution plan which covers all employees that meet the plan’s eligibility requirements. Eligible
employees may contribute a percentage of their salary subject to certain limitations. The Company makes a discretionary match which is
currently equal to 3% of employee contributions. Total company contributions to the plan were $
Income Taxes
The Company accounts for income taxes using the asset-and-liability method in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
Deferred income taxes are recognized for the tax effect of temporary differences between the financial statement carrying amount of assets and liabilities and the amounts used for income tax purposes and for certain changes in valuation allowances. Valuation allowances are recorded to reduce certain deferred tax assets when, in management’s estimation, it is more-likely-than-not that a tax benefit will not be realized. A full valuation allowance has been recognized for all periods since it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized in future periods.
The Company follows the guidance in FASB ASC Subtopic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely-than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority. The Company recognizes the impact of an uncertain income tax position in the financial statements if it believes that the position is more-likely-than-not to be sustained by the relevant taxing authority. The Company will recognize interest and penalties related to tax positions in income tax expense. At June 30, 2025 and December 31, 2024, the Company had no unrecognized uncertain income tax positions, and therefore no amounts have been recognized in the condensed consolidated financial statements.
| F-9 |
The Company reports loss per share in accordance with FASB ASC Subtopic 260-10, Earnings Per Share, which provides for calculation of basic and diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation of diluted net earnings (loss) per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.
Potentially
dilutive securities not included in the computation of loss per share for the six months ended June 30, 2025 and 2024 included options
to purchase and shares of common stock, respectively, and and restricted stock units subject to vesting, respectively.
Other potentially dilutive securities not included in the computation of loss per share for the six months ended June 30, 2025 and 2024
included warrants to purchase shares of the Company’s common stock related to the Company’s initial public offering (the
“IPO”); warrants to purchase and shares of the Company’s common stock issued in the Company’s May
2023 and November 2023 offerings, respectively; pre-funded warrants to purchase shares of the Company’s common stock issued
in the June 2024 PIPE Offering; warrants to purchase and shares of the Company’s common stock issued in the December
2024 PIPE Offering and June 2024 PIPE Offering, respectively; warrants to purchase shares of the Company’s common stock
issued to the placement agents in the June 2024 PIPE Offering; and warrants to purchase shares of the Company’s common
stock issued in the June 2025 PIPE Offering. All common share amounts as of June 30, 2025 and December 31, 2024 and per share amounts
for the six months ended June 30, 2025 and 2024 have been retroactively adjusted to reflect a
Recently Adopted Accounting Pronouncements
The Company has evaluated all recent accounting pronouncements that were required to be adopted or are required to be adopted in the near future and believes that none of them will have a material effect on the Company’s financial position, results of operations, or cash flows.
Note 3 – Note Payable
The
Company issued a promissory note in the amount of $
As
the promissory note does not have an interest component, imputed interest at
Note 4 – Common Stock
Pursuant
to the Company’s Certificate of Incorporation, the Company has shares of common stock authorized for issuance. On May
24, 2024, the Company effectuated a reverse split of shares of its common stock at a ratio of
| F-10 |
On
January 24, 2024, pursuant to a corporate advisory consulting agreement, the Company issued shares of its common stock with a per
share value of $, representing total compensation expense of $
On
June 7, 2024, the Company entered into the ATM Agreement with Rodman & Renshaw LLC (the “ATM Sales Manager”) under which
the Company may sell, from time to time through the ATM Sales Manager, shares of common stock in one or more offerings up to a total
dollar amount of $
On
June 21, 2024, the Company closed a private placement offering with certain accredited investors of $
On
December 9, 2024, the Company closed an additional private placement offering with certain accredited investors of $
On
December 20, 2024, the Company sold shares of its common stock pursuant to the ATM Agreement at an offering price of $ per
share. Net proceeds from the offering were approximately $
During
the six months ended June 30, 2025, the Company sold shares of its common stock pursuant to the ATM Agreement at an average offering
price of $ per share. Net proceeds from the offering were approximately $
| F-11 |
On
June 13, 2025, the Company closed an additional private placement offering with certain accredited investors of $
Incentive Plans and Options
Under the Company’s 2017 Stock Incentive Plan (the “2017 Plan”), the Company could grant incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees, directors, and consultants of the Company and its affiliates. Up to shares of the Company’s common stock may be issued pursuant to the 2017 Plan.
The Company granted options to acquire shares of common stock at $ per share under the 2017 Plan. At both June 30, 2025 and December 31, 2024, there were options outstanding to acquire shares of common stock. As of June 30, 2025 and December 31, 2024, all such options were fully vested, and had a weighted average remaining contractual life of approximately and years, respectively.
In July 2019, the Company authorized an additional plan, the 2019 Stock Incentive Plan (the “2019 Plan”). Under the 2019 Plan, the Company could grant incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees, directors, and consultants of the Company and its affiliates. At both June 30, 2025 and December 31, 2024, a total of shares were authorized for issuance under the 2019 Plan.
As of both June 30, 2025 and December 31, 2024, the Company has granted options to acquire shares of common stock under the 2019 Plan and shares of common stock remain available for issuance under the 2019 Plan. There are stock options outstanding to acquire shares of common stock with a weighted-average exercise price of $ at both June 30, 2025 and December 31, 2024 and weighted average contractual terms of years and years at June 30, 2025 and December 31, 2024, respectively.
On August 17, 2023, the Company authorized the Tharimmune, Inc. 2023 Omnibus Incentive Plan (as amended, the “2023 Plan”). Under the 2023 Plan, the Company may grant incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees, directors, and consultants of the Company and its affiliates. Initially, there were shares of the Company’s common stock available to be issued pursuant to the 2023 Plan. Under an amendment and restatement to the 2023 Plan approved by the Company’s stockholders on May 14, 2024, a total of up to shares of the Company’s common stock may be issued pursuant to the 2023 Plan. In addition, under the amendment, an “evergreen” provision was added to automatically increase the number of shares available under the 2023 Plan on January 1 annually, beginning January 1, 2025 and ending January 1, 2033, equal to the lesser of five percent of the shares of common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year or such lesser number of shares of the Company’s common stock as determined by the Board of Directors. Effective January 1, 2025, an additional shares of the Company’s common stock were added to the 2023 Plan. Further, effective June 10, 2025, the shareholders approved an amendment to the 2023 Plan, increasing the 2023 Plan by 520,314 shares.
| F-12 |
During the three and six months ended June 30, 2025, the Company granted options to acquire shares of common stock under the 2023 Plan. At June 30, 2025 shares of common stock remain available for issuance under the 2023 Plan. As of June 30, 2025 and December 31, 2024, there are stock options outstanding to acquire and shares of common stock with a weighted-average exercise price of $ and $, respectively, and weighted-average contractual terms of years and years, respectively.
Schedule of Stock Option Activity
| Weighted | Weighted | |||||||||||
| Shares | Average | Average | ||||||||||
| Underlying | Exercise | Contractual | ||||||||||
| Options | Price | Terms | ||||||||||
| Outstanding at December 31, 2024 | $ | years | ||||||||||
| Granted | $ | years | ||||||||||
| Forfeited | ( | ) | $ | years | ||||||||
| Outstanding at June 30, 2025 | $ | years | ||||||||||
| Exercisable options at June 30, 2025 | $ | years | ||||||||||
| Vested and expected to vest at June 30, 2025 | $ | years | ||||||||||
The fair value of stock option awards is estimated at the date of grant using the Black-Scholes option-pricing model. The estimated fair value of each stock option is then expensed over the requisite service period, which is generally the vesting period (ranging between immediate vesting and four years). The determination of fair value using the Black-Scholes model is affected by the Company’s share price as well as assumptions regarding a number of complex and subjective variables, including expected price volatility, expected life, risk-free interest rate, and forfeitures. Forfeitures are accounted for as they occur.
Schedule of Options Weighted Average Assumptions
| For the six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Expected volatility | % | N/A | ||||||
| Risk-free interest rate | % | N/A | ||||||
| Expected dividend yield | % | N/A | ||||||
| Expected life of options in years | N/A | |||||||
| Estimated fair value of options granted | $ | N/A | ||||||
stock options were granted during the six months ended June 30, 2024.
| F-13 |
The weighted-average grant date fair value of stock options granted during six months ended June 30, 2025 was approximately $. The weighted-average fair value of stock options vested during the three and six months ended June 30, 2025 was approximately $ and $, respectively, and during each of the three and six months ended June 30, 2024 was approximately $.
Schedule of Stock-Based Compensation Expense
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | ||||||||||||
As of June 30, 2025, the total unrecognized compensation expense related to non-vested options was approximately $ and is expected to be recognized over the remaining weighted-average service period of approximately years.
Warrants
In
connection with the IPO, the Company issued warrants to purchase such number of shares of the Company’s common stock equal to 5%
of the total shares of common stock issued in the IPO, or
In
May 2023, the Company issued warrants to designees of the underwriter (the “Representative’s Warrants”) to purchase
In
November 2023, the Company issued the underwriters from a private placement offering warrants to purchase
| F-14 |
In
connection with the June 2024 PIPE Offering as described in Note 4 to the condensed consolidated financial statements, the Company issued
the June 2024 Pre-Funded Warrants to purchase
In
connection with the December 2024 PIPE Offering as described in Note 4 to the condensed consolidated financial statements, the Company
issued the December 2024 Pre-Funded Warrants to purchase
In
connection with the June 2025 PIPE Offering as described in Note 4 to the condensed consolidated financial statements, the Company issued
the June 2025 Pre-Funded Warrants to purchase
Terms of the warrants outstanding at June 30, 2025 are as follows:
Schedule of Warrants
| Initial | Expiration | Exercise | Warrants | Warrants | Warrants | |||||||||||||||
| Issuance Date | Exercise Date | Date | Price | Issued | Exercised | Outstanding | ||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| N/A | $ | |||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| N/A | $ | |||||||||||||||||||
| N/A | $ | |||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
Restricted Stock Units
During the six months ended June 30, 2025, as stock-based consideration for consulting services, the Company granted restricted stock units (“RSUs”) under the 2023 Plan to an individual representing the right to receive one share of the Company’s common stock.
The grant date fair value of an RSU represents the closing price of the Company’s common stock on the date of grant. The estimated fair value of each RSU is then expensed over the requisite service period, which is generally the vesting period (approximately a year and a half).
The total stock compensation expense related to RSUs for the three and six months ended June 30, 2025 was $ and $, respectively. The total estimated fair value of RSUs at June 30, 2025 was $, of which $ remains to be vested quarterly through June 30, 2026.
Termination Agreement
In
connection with the resignation of a board member, effective June 23, 2025, shares of the Company’s common stock were issued
as stock-based compensation at an estimated fair value of $
Note 6 – Commitments and Contingencies
Research Collaboration and Product License Agreement with Minotaur Therapeutics, Inc. (“Minotaur”) and Commercial License Agreement with Taurus Biosciences, LLC (“Taurus”)
The Company has entered into a research collaboration and product license agreement with Minotaur (as amended, the “Minotaur Agreement”) and a commercial license agreement with Taurus (the “Taurus Agreement”) for use of certain technology, including OmniAb antibodies, to advance Picobodies against novel, unreachable, and undruggable epitopes in high-value validated targets starting with PD-1. The Minotaur Agreement and Taurus Agreement are for the development of proprietary targeted biologics, including TH 1940, against PD-1. It is anticipated that the Company will collaborate with Minotaur under the license from Taurus to discover, develop, and advance biotherapeutics against high-value validated IO targets starting with PD-1.
| F-15 |
The
Minotaur Agreement included an up-front payment of $
Research and Development Collaboration and License Agreement with Applied Biomedical Science Institute
On July 5, 2023 (the “ABSI Effective Date”), the Company entered into a Research and Development Collaboration and License Agreement (the “ABSI Agreement”) with ABSI pursuant to which ABSI granted the Company an exclusive royalty-bearing, sublicensable license to the ABSI Patents (as defined in the ABSI Agreement) and a non-exclusive, royalty-bearing, sublicensable license to the ABSI Know-How (as defined in the ABSI Agreement) to Exploit (as defined in the ABSI Agreement) the ABSI Products (as defined in the ABSI Agreement) for the treatment, diagnosis, prediction, detection or prevention of disease in humans and animals worldwide (the “Territory”).
Pursuant to the ABSI Agreement, the parties shall form a committee to manage the preclinical, investigational new drug enabling studies and such other activities as shall lead to the initiation of a Phase 1 clinical trial of the ABSI Product. The parties will collaborate on a Target-by-Target basis to identify and evaluate ABSI Products directed against such Target (as defined below) with a view to identifying or generating suitable Products (as defined in the ABSI Agreement) for the Company to Exploit. “Target” means ErB2 (Her2) and ErbB3. Upon completion of the Discovery Timeline (as defined in the ABSI Agreement) for a Target, subject to the terms and conditions of ABSI Agreement, the Company shall exclusively own any ABSI Products against such Target. In the event the committee determines that the discovery activities are unsuccessful with respect to a Target, the Company may propose an additional target, which, upon approval by ABSI, shall replace a failed Target.
Pursuant
to the ABSI Agreement: (i) the Company issued ABSI shares of its common stock which is equal to $
On a Product-by-Product basis, upon the expiration of the last Royalty Term of such Product in the Territory, licenses granted to the Company with respect to such Product shall be deemed non-exclusive, fully paid, royalty-free, perpetual and irrevocable. The ABSI Agreement shall expire upon the expiration of the last Royalty Term of the last Product, unless such agreement is terminated earlier pursuant to its terms. The ABSI Agreement may also be terminated (i) by either the Company or ABSI for (A) a material breach of the ABSI Agreement or (B) bankruptcy, (ii) ABSI may terminate the ABSI Agreement upon the commencement of a Challenge Proceeding (as defined in the ABSI Agreement) or (iii) the Company may terminate the ABSI Agreement at any time upon 90 days prior written notice to ABSI. Upon termination or expiration of the ABSI Agreement other than as a result of a bankruptcy or Challenge Proceeding, all licenses granted to the Company pursuant to such agreement will terminate and all rights under such licenses shall revert to ABSI.
| F-16 |
On
March 11, 2024, the Company entered into an addendum to the ABSI Agreement to fund research services with quarterly payments of $
Avior Patent License Agreement
On
November 3, 2023 (the “Avior Effective Date”), the Company entered into the Avior Patent License Agreement with Avior pursuant
to which the Company received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among
other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the
Licensed Technology in connection with the foregoing, throughout the world. Pursuant to the Avior Patent License Agreement, the Company
paid Avior an up front license fee of $
During
the three and six months ended June 30, 2025, the Company paid
| F-17 |
Enkefalos License Agreement
On
June 17, 2024 (the “Enkefalos Effective Date”), the Company signed a letter of intent to enter into the Enkefalos License
Agreement with Enkefalos Biosciences Inc. (“Enkefalos”) pursuant to which the Company is licensing the global rights in all
fields of use for the products related to the compounds knows as cyclotides to deliver HER2 antibodies across the blood-brain barrier
and all associated know-how, technology, intellectual property and related information and constructs, and any associated authorized
generic rights and all related assets (collectively, the “Products” referred to in this letter as ENBI-01) from Enkefalos.
This agreement was terminated during the six months ended June 30, 2025. Pursuant to the Enkefalos License Agreement, the Company paid
Enkefalos an up-front license fee of $
Intract Patent License Agreement
On
September 11, 2024, the Company entered into the Intract Agreement pursuant to which the Company exclusively licensed INT-023/TH023,
an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody infliximab. Under the terms of the Intract Agreement, the
Company licensed global development and commercialization rights (outside of South Korea) to Intract’s Soteria® and Phloral®
delivery platform along with an existing supply agreement for infliximab to be used in the oral product development program. Pursuant
to the Intract Agreement, the Company paid Intract an up-front license fee of $
During
the three and six months ended June 30, 2025, the Company incurred fees of $
Employment Agreements
On
July 6, 2023, the Company entered into an amended and restated employment agreement (the “Former CEO Employment Agreement”)
with the now former CEO. The Former CEO Employment Agreement had the same terms as the COO Employment Agreement (as defined below) except,
the CEO (i) would receive a base salary of $
| F-18 |
In
connection with the appointment of the Company’s Chief Operating Officer on July 11, 2023, the Company entered into an employment
agreement (the “COO Employment Agreement”) with the COO. The COO Employment Agreement shall continue for a period of five
years and, thereafter, shall automatically renew for successive one-year terms unless either party provides the other party with written
notice of non-renewal at least 60 days prior to the last day of the then-current term. Pursuant to the COO Employment Agreement, the
COO would: (i) receive a base salary of $
In accordance with the Former CEO Employment Agreement and COO Employment Agreement, the compensation committee approved a bonus of 50% in equity compensation and 50% in cash compensation on January 13, 2025, based on corporate performance objectives earned during the year ended December 31, 2024. The former CEO’s equity bonus for the year ended December 31, 2024 was made up of options to purchase up to shares of the Company’s common stock, which had a grant date fair value of $. The COO’s equity bonus for the year ended December 31, 2024 was made up of options to purchase up to shares of the Company’s common stock, which had a grant date fair value of $.
In
connection with the appointment of the Company’s Executive Chairman of the Board (the “Chairman”), on June 11, 2025,
the Company entered into an employment agreement with the Chairman (the “Chairman Employment Agreement”). The Chairman Employment
Agreement shall continue for a period of five years and, thereafter, shall automatically renew for successive one year terms unless either
party provides the other party with written notice of non-renewal at least 60 days prior to the last day of the then current term. Pursuant
to the Chairman Employment Agreement, the Chairman shall: (i) receive a base salary of $
In the event that the Chairman’s employment is terminated by the Company other than as a result of his death or disability and other than for cause, or if the Chairman terminates his employment for Good Reason (as defined in the Chairman Employment Agreement), then, in addition to accrued compensation, the Company shall (i) continue to pay his base salary and provide health benefits for a period of 12 months following the termination date or, in the case of benefits, such time as he receives equivalent coverage and benefits under plans and programs of a subsequent employer; and (ii) provide such other or additional benefits, if any, as may be provided under applicable employee benefit plans, programs and/or arrangements of the Company (other than any severance plans or programs). In addition, all unvested time-based equity awards (including restricted shares and stock options) shall be immediately and fully accelerate and become vested. Moreover, stock options that have vested as of the termination date shall remain exercisable until the earlier of (i) 60 months following such termination and (ii) the expiration date of the stock option. As noted, the terms of the COO Employment Agreement were amended to mirror the terms of the Chairman Employment Agreement.
As
of June 30, 2025, there was accrued bonus of less than $
Note 7 – Related Party Transactions
Related Party Ownership
The
Company’s Chairman is a partner and licensed broker at President Street Global, a consultant for the Company. His combined ownership,
both individually and through President Street Global, is approximately
The
CEO, individually as well as through companies he serves as managing member and managing partner, collectively owns
Note 8 – Subsequent Events
Except as noted below, there were no material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements.
On
July 23, 2025, the Company entered into a securities purchase agreement in relation to a registered direct public offering with certain
purchasers, under a Shelf Registration Statement, of $
On July 25, 2025, the Company entered into a securities purchase agreement with certain accredited individual and
institutional investors for the issuance and sale in a private placement of (i) shares of the Company’s common stock, par
value $, (ii) pre-funded warrants to purchase up to
On August 4, 2025, the Company’s board of directors appointed Nancy Davis as a member of the Board effective as of August 4, 2025. Ms. Davis will serve for a term expiring at the 2026 annual meeting of stockholders.
| F-19 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as may be amended, supplemented, or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted.
Throughout this Quarterly Report on Form 10-Q, references to “we,” “our,” “us,” the “Company,” or “Tharimmune,” refer to Tharimmune, Inc., individually, or as the context requires, collectively with its subsidiary.
Overview
Tharimmune is a clinical-stage biotechnology company developing therapeutic candidates in immunology and inflammation conditions with high unmet need. On November 3, 2023, we entered into a patent license agreement (the “Avior License Agreement”) with Avior Inc. d/b/a Avior Bio, LLC (“Avior”) pursuant to which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the Licensed Technology in connection with the foregoing, throughout the world (each as defined in the Avior License Agreement). In February 2023, the U.S. Food and Drug Administration (“FDA”) approved an investigational new drug (“IND”) application for TH104. TH104 has a dual mechanism of action by affecting multiple receptors, known to suppress chronic, debilitating pruritus or “uncontrollable itching.” With respect to TH104, we originally intended to first seek approval for the treatment of moderate-to-severe chronic pruritus in patients with primary biliary cholangitis (“PBC”), an orphan rare form of liver disease with no known cure in which more than 70% of patients suffer from debilitating chronic pruritic. In March 2025, we engaged and received positive feedback from the FDA regarding the additional proposed indication of temporary prophylaxis of respiratory and/or nervous system depression in military personnel and chemical incident responders entering an area contaminated with high-potency opioids (“PrHPO”), for which we submitted a Pre-Investigational New Drug Application (“PIND”). With respect to our PIND for this additional proposed indication for TH104, the Company received positive feedback from the FDA regarding a regulatory pathway that will allow the Company to submit a 505(b)(2) New Drug Application (“NDA”) for TH104. The FDA advised that we will need to perform additional nonclinical studies (i.e., in vitro toxicology studies), but the FDA confirmed that it does not believe any additional clinical trials will be required to define the prophylactic dosing window prior to IND or NDA submission for this indication, which we expect will be the lead program for the Company. The Company intends to pursue the pruritus in PBC indication subsequent to the nearer term opportunity of filing an NDA for PrHPO. The Company intends to conduct a capital efficient strategy to file an NDA for PrHPO, which involves actively progressing its Chemistry, Manufacturing, and Controls (“CMC”) plan to meet the stringent requirements for filing an NDA with the FDA. This comprehensive plan encompasses all aspects of the manufacturing process, quality control measures, and product stability to ensure the consistent production of a high-quality buccal film formulation known as TH104.
On September 11, 2024, we entered into a Patent License Agreement (the “Intract Agreement”) with Intract Pharma Limited (“Intract”), pursuant to which, we exclusively licensed INT-023/TH023, an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody infliximab. Infliximab is a purified, recombinant DNA-derived chimeric IgG monoclonal antibody protein that contains both murine and human components that inhibit tumor TNF-α. Under the terms of the Intract Agreement, we licensed global development and commercialization rights (outside of South Korea) to Intract’s Soteria® and Phloral® delivery platform along with an existing supply agreement for infliximab to be used in the oral product development program.
We are also developing an early-stage pipeline of novel therapeutic candidates targeting validated high value immuno-oncology (“IO”) targets including human epidermal growth factor (“EGF”) receptor 2 (“HER2”), human EGF receptor 3 (“HER3”) and programmed cell death protein 1 (“PD-1”). We are developing antibodies including bispecific antibodies, antibody drug conjugates (“ADCs”) and small molecular weight bovine-derived “knob” domains which have the potential to target and bind more tightly to “undruggable” epitopes better than full sized antibodies. We are advancing HS1940, a bispecific biologic against both PD-1 and vascular endothelial growth receptor (“VEGF”) antibody which targets both receptors. In addition, we have completed initial pre-clinical in-vitro testing for HS3215, a HER2/HER3 bispecific antibody.
The critical components of our business strategy to achieve our goals include:
| ● | Develop TH104 as a transmucosal buccal film product for temporary prophylaxis of respiratory and/or nervous system depression in military personnel and chemical incident responders entering and area contaminated with high-potency opioids; | |
| ● | Develop TH104 as a transmucosal buccal film product for the treatment of moderate-to-severe chronic pruritus in PBC and other inflammatory diseases either through strategic partnership or on our own; | |
| ● | Develop TH023 by obtaining regulatory authorization to initiate a first-in-human bioavailability clinical trial and pursue an IND through the FDA post optimizing its CMC program; |
| 4 |
| ● | Create a preclinical and clinical path forward for, HS1940, with a unique PD-1 knob-domain antibody fragment as a bispecific biologic against PD-1 and VEGF with unique binding differentiation for IO vulnerable tumors; | |
| ● | Continue to advance pre-clinical candidate selection activities against HER2/HER3 receptors with various antibody formats, including HS3215 designed for multiple solid tumor types; | |
| ● | Hasten the discovery of next generation multi-specific (bi- and tri) antibodies with binding capabilities to novel epitopes of combinations of HER2 and HER3 with and without toxin delivery capacity to multiple high unmet need rare cancers and other validated immunology and metabolic targets; and | |
| ● | Pursue strategic collaboration opportunities including partnering and potential merger and acquisition transactions to maximize the value of our pipeline to bring novel therapies to patients suffering from high unmet need conditions. |
License Agreements
Applied Biomedical Research Institute Research and Development Collaboration and License Agreement
On July 5, 2023, we entered into the ABSI Agreement with ABSI pursuant to which ABSI granted us an exclusive royalty-bearing, sublicensable license to the ABSI Patents and a non-exclusive, royalty-bearing, sublicensable license to the ABSI Know-How to Exploit the ABSI Products for the treatment, diagnosis, prediction, detection or prevention of disease in humans and animals worldwide. Pursuant to the ABSI Agreement, the parties shall form a committee to manage the preclinical, IND-enabling studies and such other activities as shall lead to the initiation of a Phase 1 clinical trial of the ABSI Product. The parties will collaborate on a Target-by-Target basis to identify and evaluate ABSI Products directed against such Target with a view to identifying or generating suitable Products for our Company to Exploit. “Target” means ErB2 (Her2) and ErbB3. Upon completion of the Discovery Timeline for a Target, subject to the terms and conditions of ABSI Agreement, we shall exclusively own any ABSI Products against such Target. In the event the committee determines that the discovery activities are unsuccessful with respect to a Target, we may propose an additional target, which, upon approval by ABSI, shall replace a failed Target, each capitalized term as defined in the ABSI Agreement.
On March 11, 2024, we entered into an addendum to the ABSI Agreement to fund research services with quarterly payments of $50,000 beginning March 18, 2024 with subsequent payments due on the 18th of each calendar quarter. This addendum was terminated on July 17, 2025 and no further payments are due under the addendum for research services.
Avior Patent License Agreement
On November 3, 2023, we entered into the Avior Patent License Agreement with Avior pursuant to which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other things, develop, have developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the Licensed Technology in connection with the foregoing, throughout the world. Pursuant to the Avior Patent License Agreement, we paid Avior an up front license fee of $0.4 million and a quarterly license fee of $0.15 million each quarter in 2024. In addition, we shall pay Avior a high single digit percentage of any upfront payments received by us as a result of the grant of any sublicenses with respect to TH104. We shall also pay Avior milestone payments in the aggregate amount of $24.25 million upon the occurrence of various development milestones (the “Development Milestone Payments”). Furthermore, we shall pay Avior certain fees based upon sales milestones. The payments for such sales milestones range from the low seven digits to the low eight digits with higher sales being subject to higher fees. Finally, we shall pay Avior royalties based on net sales. Such royalties range from low single digit percentages to mid-single digit percentages with higher sales being subject to lower percentages. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Avior Patent License Agreement.
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Intract Patent License Agreement
On September 11, 2024, we entered into the Intract Agreement with Intract, pursuant to which the Company exclusively licensed INT-023/TH023, an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody infliximab. Under the terms of the Intract Agreement, we licensed global development and commercialization rights (outside of South Korea) to Intract’s Soteria® and Phloral® delivery platform along with an existing supply agreement for infliximab to be used in the oral product development program. Pursuant to the Intract Agreement, we paid an upfront license fee of $0.4 million and are required to make additional payments upon an equity financing of the Company. Intract is eligible to receive future development, regulatory and commercial milestones, as well as mid-single digit royalties based on net product sales. Under the terms of the Intract Agreement, we retain a right of first refusal to continue development and commercialization after a Phase 2 clinical trial and have the option to exercise the license to Intract’s platform for up to four additional targets. The term of the Intract Agreement expires upon the final payment obligation of the Company under the Intract Agreement. In addition, the Intract Agreement may be terminated by us at any time upon 90 days written notice to Intract. Either party may terminate the Intract Agreement if the other party materially breaches any provision of the Intract Agreement and fails to cure such breach within 30 days after the breaching party receives written notice thereof. In addition, either party may terminate the Intract Agreement on written notice in the event that either party declare: (a) becomes insolvent or admits inability to pay its debts generally as they become due; (b) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully dismissed or vacated within 60 days; (c) is dissolved or liquidated or takes any corporate action for such purpose; (d) makes a general assignment for the benefit of creditors; or (e) has a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business. On March 14, 2025 we amended the Intract Agreement to pay the milestone due upon closing of our December 2024 PIPE Offering in equal installments over the next 12 months, with the first payment beginning in the second quarter of 2025.
Recent Developments
On June 7, 2024, we entered into an at-the-market offering agreement (the “ATM Agreement”) with Rodman & Renshaw LLC (the “ATM Sales Manager”) under which we may sell, from time to time through the ATM Sales Manager, shares of common stock in one or more offerings up to a total dollar amount of $1.65 million.
To date, we have sold 203,359 shares pursuant the ATM Agreement for net proceeds of approximately $0.3 million, after deducting commissions of $15,505 and other offering expenses of $33,600. See Note 4 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
In addition, on July 23, 2025, we entered into a securities purchase agreement in relation to a registered direct public offering with certain purchasers, under a Shelf Registration Statement, of $1.74 million of our securities, consisting of (i) 414,331 shares of Common Stock, par value $0.0001 per share and 559,910 pre-funded warrants to acquire shares of Common Stock; and (ii) in a concurrent private placement, 974,241 warrants to acquire shares of Common Stock at the exercise price of $1.66 per share, at the price of $1.786 for each one share of Common Stock or Pre-Funded Warrant, and Common Warrant. The offering closed on July 25, 2025.
Components of Results of Operations
Revenue
We did not recognize revenues for the three and six months ended June 30, 2025 and 2024.
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Research and Development Expenses
Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials, and manufacture drug supplies and materials as well as stock-based compensation for our research and development personnel. Research and development expenses are charged to operations as incurred.
We accrue costs incurred by external service providers, including contract research organizations and clinical investigators, based on estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials, administrative costs incurred by third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered.
We have incurred research and development expenses related to the development of HSB-1216, which has been deprioritized. We expect that our research and development expenses will increase as we plan for and commence our clinical trials of HS1940 and HS3215.
We cannot determine with certainty the duration and costs of future clinical trials of our product candidates, HS1940 and HS3215, or any other product candidates we may develop or if, when or to what extent we will generate revenue from the commercialization and sale of any of our product candidates for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any of our product candidates. The duration, costs and timing of clinical trials and development of our current and future product candidates will depend on a variety of factors, including:
| ● | the scope, rate of progress, expense and results of clinical trials of our current product candidates, as well as of any future clinical trials of our future product candidates and other research and development activities that we may conduct; |
| ● | uncertainties in clinical trial design and patient enrollment rates; |
| ● | the actual probability of success for our product candidates, including their safety and efficacy, early clinical data, competition, manufacturing capability and commercial viability; |
| ● | significant and changing government regulations and regulatory guidance; and |
| ● | the timing and receipt of any marketing approvals. |
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to slower than expected patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.
General and Administrative Expenses
General and administrative expenses consist primarily of compensation and consulting related expenses, including stock-based compensation for our general and administrative personnel. General and administrative expenses also include professional fees and other corporate expenses, including legal fees relating to corporate matters; professional fees for accounting, auditing, tax, and consulting services; insurance costs; travel expenses and other operating costs that are not specifically attributable to research activities.
We expect that our general and administrative expenses will increase in the future as we increase our personnel headcount to support our continued research activities and development of our product candidates. We also incur expenses associated with being a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, directors and officers insurance expenses, corporate governance expenses, investor relations activities and other administrative and professional services.
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Interest Income
Interest income consists of interest income from funds held in our cash accounts.
Deferred Offering Costs
Deferred offering costs consisted of legal, accounting, printing, and filing fees that were capitalized and offset against the proceeds from our securities offerings. At June 30, 2025, deferred offering costs of approximately $92,000 represent professional services incurred related to the At the Market Offering Agreement (the “ATM Agreement”), through which the Company may sell, from time to time through the applicable sales manager, shares of common stock in one or more offerings up to a total dollar amount of $1.65 million. See Notes 2 and 4 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Results of Operations
Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024
Three Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Condensed Consolidated Statements of Operations Data: | ||||||||||||
| Operating expenses: | ||||||||||||
| Research and development | $ | 546,204 | $ | 999,553 | $ | (453,349 | ) | |||||
| General and administrative | 1,304,956 | 1,373,901 | (68,945 | ) | ||||||||
| Total operating expenses | 1,851,160 | 2,373,454 | (522,294 | ) | ||||||||
| Other expense: | ||||||||||||
| Interest expense | (6,161 | ) | (5,217 | ) | (944 | ) | ||||||
| Interest income | 2,168 | 53,614 | (51,446 | ) | ||||||||
| Total other income (expense), net | (3,993 | ) | 48,397 | (52,390 | ) | |||||||
| Net loss | $ | (1,855,153 | ) | $ | (2,325,057 | ) | $ | 469,904 | ||||
Research and Development Expenses
The table below summarizes by program our research and development expenses for the periods presented:
Three Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| HS1940 | $ | 69,197 | $ | 122,500 | $ | (53,303 | ) | |||||
| HS3215 | 43,341 | 281,219 | (237,878 | ) | ||||||||
| TH023 | 62,500 | - | 62,500 | |||||||||
| TH104 | 274,783 | 355,603 | (80,820 | ) | ||||||||
| Other research and development | 96,383 | 240,231 | (143,848 | ) | ||||||||
| Total research and development expenses | $ | 546,204 | $ | 999,553 | $ | (453,349 | ) | |||||
Research and development expenses decreased by approximately $0.5 million, or 45%, to approximately $0.5 million for the three months ended June 30, 2025 from approximately $1.0 million for three months ended June 30, 2024. The decrease was primarily the result of a decrease in pre-clinical vendor expenses of approximately $0.3 million and license fees of approximately $0.4 million. These decreases were offset by increases in stock-based compensation of approximately $0.2 million.
General and Administrative Expenses
General and administrative expenses decreased by approximately $0.1 million, or 5%, to $1.3 million for the three months ended June 30, 2025 from $1.4 million for the three months ended June 30, 2024. The change in general and administrative expenses was primarily due to a decrease in personnel expenses of approximately $0.3 million, offset by an increase in investor relations fees of $0.2 million.
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Interest Expense
Interest expense increased by approximately $1,000, or 18%, to $6,161 for the three months ended June 30, 2025 from $5,217 for the three months ended June 30, 2024. The increase in interest expense was primarily related to the director and officer insurance premium financing liability as well as the note payable related to the legal fees settlement.
Interest Income
Interest income decreased by approximately $51,000, or 96%, to $2,168 for the three months ended June 30, 2025 from $53,614 for the three months ended June 30, 2024. The decrease in interest income was primarily due to the decrease in cash from June 2024 to June 2025.
Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
Six Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Condensed Consolidated Statements of Operations Data: | ||||||||||||
| Operating expenses: | ||||||||||||
| Research and development | $ | 1,140,274 | $ | 2,024,811 | $ | (884,537 | ) | |||||
| General and administrative | 3,257,555 | 2,695,946 | 561,609 | |||||||||
| Total operating expenses | 4,397,829 | 4,720,757 | (322,928 | ) | ||||||||
| Other expense: | ||||||||||||
| Interest expense | (14,632 | ) | (9,917 | ) | (4,715 | ) | ||||||
| Interest income | 15,604 | 149,508 | (133,904 | ) | ||||||||
| Total other income (expense), net | 972 | 139,591 | (138,619 | ) | ||||||||
| Net loss | $ | (4,396,857 | ) | $ | (4,581,166 | ) | $ | 184,309 | ||||
Research and Development Expenses
The table below summarizes by program our research and development expenses for the periods presented:
Six Months Ended June 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| HS1940 | $ | 140,034 | $ | 264,147 | $ | (124,113 | ) | |||||
| HS3215 | 120,953 | 281,219 | (160,266 | ) | ||||||||
| TH023 | 132,557 | - | 132,557 | |||||||||
| TH104 | 579,268 | 614,332 | (35,064 | ) | ||||||||
| Other research and development | 167,462 | 865,113 | (697,651 | ) | ||||||||
| Total research and development expenses | $ | 1,140,274 | $ | 2,024,811 | $ | (884,537 | ) | |||||
Research and development expenses decreased by $0.9 million, or 44%, to $1.1 million for the six months ended June 30, 2025 from $2.0 million for six months ended June 30, 2024. The decrease was primarily the result of a decrease in pre-clinical vendor expenses of approximately $0.5 million, license fees of approximately $0.4 million, and clinical trials of approximately $0.2 million. These decreases were offset by increases in stock-based compensation of approximately $0.2 million and other small increases.
General and Administrative Expenses
General and administrative expenses increased by $0.6 million, or 21%, to $3.3 million for the six months ended June 30, 2025 from $2.7 million for the six months ended June 30, 2024. The change in general and administrative expenses was primarily due to increases of approximately $0.3 million in stock compensation expense, approximately $0.5 million in investor relations, and approximately $0.2 million in director remuneration. The increases were offset by approximately $0.4 million in decreases in personnel expense.
Interest Expense
Interest expense increased by approximately $5,000, or 48%, to $14,632 for the six months ended June 30, 2025 from $9,917 for the six months ended June 30, 2024. The increase in interest expense was primarily related to the director and officer insurance premium financing liability as well as the note payable related to the legal fees settlement.
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Interest Income
Interest income decreased by approximately $0.1 million, or 90%, to $15,604 for the six months ended June 30, 2025 from $149,508 for the six months ended June 30, 2024. The decrease in interest income was primarily due to the decrease in cash from June 2024 to June 2025.
Liquidity and Capital Resources
The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. During the six months ended June 30, 2025, we incurred operating losses in the amount of approximately $4.4 million, expended approximately $3.8 million of net cash in operating activities, and had an accumulated deficit of approximately $41.3 million as of June 30, 2025. Through June 30, 2025, we have primarily financed our operations through public and private offerings of our equity securities.
In April and May 2025, we raised net proceeds of $0.2 million pursuant to the ATM Agreement from the sale of 163,359 shares of our common stock at an average price of $1.63 per share, after deducting sales agent commissions and other offering fees.
Further, on June 17, 2024, December 9, 2024, and June 13, 2025, we closed private placement offerings (the “June 2024 PIPE Offering,” “December 2024 PIPE Offering”, and “June 2025 PIPE Offering,” respectively) with certain accredited investors, consisting of offerings of shares of our common stock and/or pre-funded warrants to acquire shares of our common stock and warrants to acquire shares of our common stock, with combined net proceeds of approximately $5.9 million.
Based on our limited operating history, recurring negative cash flows from operations, current plans and available resources, we will need substantial additional funding to support future operating activities. We have concluded that the prevailing conditions and ongoing liquidity risks faced by us raise substantial doubt about our ability to continue as a going concern for at least one year following the date the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.
We may seek to raise additional funding through the sale of additional equity or debt securities, enter into strategic partnerships, grants or other arrangements or a combination of the foregoing to support our future operations; however, there can be no assurance that we will be able to obtain additional capital on terms acceptable to us, on a timely basis, or at all. The failure to obtain sufficient additional funding could adversely affect our ability to achieve our business objectives and product development timelines and may result in us delaying or terminating clinical trial activities which could have a material adverse effect on our results of operations.
Cash Flow Activities for the Six Months Ended June 30, 2025 and 2024
The following table sets forth a summary of our cash flows for the periods presented.
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (3,831,531 | ) | $ | (5,004,484 | ) | ||
| Net cash provided by financing activities | 2,514,150 | 1,964,959 | ||||||
| Net decrease in cash | $ | (1,317,381 | ) | $ | (3,039,525 | ) | ||
Cash Flows from Operating Activities
Cash used in operating activities for the six months ended June 30, 2025 was $3.8 million, which consisted of net loss of $4.4 million and net changes in operating assets and liabilities of approximately $0.2 million, partially offset by non-cash stock-based compensation of approximately $0.8 million.
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Cash used in operating activities for the six months ended June 30, 2024 was $5.1 million, which consisted of net loss of $4.6 million, increase in prepaid and other current assets of $0.3 million and decrease in operating liabilities of $0.5 million, partially offset by non-cash stock-based compensation and stock issuance of $0.3 million.
Cash Flows from Financing Activities
Cash provided by financing activities for the six months ended June 30, 2025 was $2.5 million. The net increase in financing activities was due to gross proceeds from the June 2025 PIPE Offering of $2.5 million, ATM offerings of $0.3 million, and insurance premium financing liability of $0.3 million, offset by payments of deferred offering costs of $0.3 million, repayments of insurance premium financing liability of $0.2 million, and repayments of the note payable of $0.1 million.
Cash provided by financing activities for the six months ended June 30, 2024 was $2.0 million. The net increase in financing activities was due to proceeds from the insurance premium financing liability of $0.3 million, offset by repayments of insurance premium financing liability of $0.1 million.
Reverse Stock Split
On May 24, 2024, the Company effectuated an additional reverse split of shares of its common stock at a ratio of 1-for-15 pursuant to an amendment to the Company’s Certificate of Incorporation, as amended, filed with the Delaware Secretary of State and approved by the Company’s board of directors and stockholders. The par value of the Company’s common stock was not adjusted as a result of this or any prior reverse split. All issued and outstanding common stock share and per share amounts contained in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect this and any prior reverse split for all periods presented.
Critical Accounting Policies and Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: research and development expense recognition, stock-based compensation, allowances of deferred tax assets, and cash flow assumptions regarding going concern considerations. Although management believes the estimates that have been used are reasonable, actual results could vary from the estimates that were used.
Critical Accounting Policies
Research and development
Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. We accrue for costs incurred by external service providers, including contract research organizations and clinical investigators, based on our estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials, administrative costs incurred by third parties, and other indicators of the services completed.
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Stock-based compensation
Stock-based compensation represents the cost related to stock-based awards granted to our employees, directors, consultants, and affiliates. We measure stock-based compensation costs at the grant date, based on the estimated fair value of the award and recognize the cost over the requisite service period.
We recognize compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the condensed consolidated statements of operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each option grant to employees, non-employees and directors is estimated as of the date of grant using the Black-Scholes option-pricing model, net of actual forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Prior to January 12, 2022, we were a private company and our common stock has only been publicly traded since that date. As a result, we lack company-specific historical and implied volatility information. Therefore, we have estimated our expected stock price volatility based on the historical volatility of a publicly traded set of peer companies. The expected term of stock options granted was between five and seven years. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
Recently Issued and Adopted Accounting Standards
See Note 2 to our condensed consolidated financial statements included elsewhere in this quarterly Report on Form 10-Q.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.
Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and (ii) complying with the requirement adopted by the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on financial statements. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.
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ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our principal executive officer and principal financial officer evaluated the effectiveness of our “disclosure controls and procedures” as of June 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Chief Executive Officer and our Interim Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
Except as set forth above, there were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedure, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedure relative to their costs.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS.
Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 26, 2025 (“Annual Report”). There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
During
the fiscal quarter ended June 30, 2025, none of the Company’s directors or executive officer
ITEM 6. EXHIBITS.
| * | Filed herewith. |
| ** | Furnished herewith. |
| + | Indicates a management contract or any compensatory plan, contract or arrangement. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| THARIMMUNE, INC. | ||
| Date: August 14, 2025 | By: | /s/ Sireesh Appajosyula |
| Sireesh Appajosyula | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 14, 2025 | By: | /s/ Sireesh Appajosyula |
| Sireesh Appajosyula | ||
| Interim Chief Financial Officer | ||
| (Interim Principal Financial and Accounting Officer) | ||
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Exhibit 10.1
CONFIDENTIAL
CONFIDENTIAL
SETTLEMENT AGREEMENT AND
COMPLETE RELEASE OF ALL CLAIMS
This CONFIDENTIAL SETTLEMENT AND GENERAL RELEASE AGREEMENT (the “Agreement”) is entered into by and between Randy Milby (“Executive”) and Tharimmune, Inc. (the “Company”) and collectively, the “Parties.”
RECITALS
| A. | Executive and the Company entered into an Amended and Restated Milby Employment Agreement dated as of July 6, 2023 by and between Tharimmune, Inc. (formerly Hillstream BioPharma Inc.) (the “Employment Agreement”); |
| B. | Executive owns vested and unvested stock options, as set forth in Exhibit A to this Agreement. |
| C. | Executive’s employment with the Company and position as a director terminated on June 11, 2025 (the “Termination Date”); |
| D. | The Parties now desire to memorialize their agreement to resolve all and any disputes between them arising out of or in connection with Executive’s employment with, and separation of employment from, the Company, and any and all other matters; and |
| E. | The Parties are willingly and voluntarily entering into this Agreement and Executive has reviewed and understands the terms of this Agreement. |
AGREEMENT
IN CONSIDERATION of the promises and mutual covenants contained in this Agreement, the Parties agree as follows:
1. Effective Date.
This Agreement shall be effective immediately upon Executive’s execution of this Agreement (the “Effective Date”).
2. Payments.
2.1 In consideration of the promises made by Executive in this Agreement, including in particular the release which forms a material part of this Agreement, the Company agrees that within twenty one (21) days after the Effective Date and delivery of the signed Agreement to the Company, the Company shall pay to Executive the gross amount of One Hundred Thirty Three Thousand Five Hundred Dollars and no Cents ($133,500), less all applicable withholdings and deductions, including any garnishments or other legally required deductions to be paid upon closing of the Company raising at least $3,000,000 of financing in debt, equity, or some combination thereof (the “Payment”). This amount is equivalent to three (3) months of compensation at Executive’s regular rate of pay. In addition, Company shall reimburse Executive for any unpaid business expenses as prescribed by applicable Company policy and as evidenced by written documentation.
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2.2 The Executive’s unvested stock options shall immediately vest as of the Effective Date. Notwithstanding language to the contrary in prior agreements between the parties, Executive’s stock options shall be exercisable for the respective terms set forth in the option agreements.
2.3 Executive acknowledges and agrees that the Company has not made any representations or warranties regarding the tax consequences of any amounts paid pursuant to this Agreement. Executive is solely responsible for all tax reporting obligations and agrees to pay all local, state and federal income taxes, penalties, interest, fines or other assessment incurred or owed by Executive, if any, in connection with the Payment or this Agreement. Executive agrees to indemnify and hold harmless the Company against any liabilities, assessment of taxes, penalties, interests, fines, costs and expenses, including attorneys’ fees, arising out of the Payment or this Agreement.
3. No Admission.
It is understood and agreed that this Agreement shall not be construed as an admission by either party of any liability or the violation of any law, statute, ordinance, contract, regulation or legal or moral duty whatsoever. The Company specifically disclaims any liability to Executive for any violation of any law, statute, ordinance, contract or duty. Executive specifically disclaims any liability to the Company for any violation of any law, statute, ordinance, contract or duty.
4. General Release.
4.1 In consideration for the Payment, Executive knowingly and voluntarily releases and forever discharges the Company and/or its parent, subsidiary, affiliated, predecessor, or successor companies, its/their past or present owners, stockholders, directors, officers, employees, contractors, agents, attorneys, insurers, assigns, and representatives (the “Released Parties”) from all actions, suits, claims, demands, damages, monies, injunctive relief, attorney’s fees, liabilities, debts, grievances, arbitrations, charges, interest, expenses and costs, contracts, equity, stock (including “phantom stock”), stock options, ownership interest, profit share, management fees, promises, judgments, awards, orders, executions or demands of any nature whatsoever, and/or causes of action of whatever kind or character whether known or unknown, suspected or unsuspected, which Executive ever had, now has, or which Executive’s heirs, assigns, executors or administrators hereafter can, shall or may have, arising out of or relating in any way to any acts, circumstances, facts, transactions, omissions, or other subject matters, based on facts occurring prior to the time Executive executes this Agreement.
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4.2 Executive’s release of the Company and the Released Parties includes, but is not limited to: (i) any claims, actions, suits or charges arising out of Executive’s employment with the Company and/or the termination of Executive’s employment with the Company, including, but not limited to, any salary, wages, bonuses, equity, stock (including “phantom stock”), stock options, ownership interest, profit share, management fees, holiday pay, vacation, employee benefits, defamation, libel, personal injury, any other compensatory damage; (ii) any claim that the Company or any of the Released Parties discriminated, harassed or retaliated against Executive on the basis of race, color, gender, sex, sexual orientation, religion, national origin, disability, medical condition, ancestry, veteran status, marital status, age, and/or any other protected category; (iii) that the Company or any of the Released Parties violated any promise or agreement either express or implied with Executive; (iv) any and all claims arising under Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act; the Age Discrimination in Employment Act (ADEA); the Executive Retirement Income Security Act (excluding vested benefits); the National Labor Relations Act; the New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the New Jersey Conscientious Executive Protection Act, the New Jersey Wage and Hour laws, the New Jersey Worker’s Compensation Act, the New Jersey Civil Rights Act, the New Jersey Sales Representatives Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, The Executive Polygraph Protection Act, the Americans with Disabilities Act, the Rehabilitation Act, the Executive Retirement Income Security Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Sarbanes-Oxley Act of 2002, and the Family and Medical Leave Act, and any and all other applicable federal, state, county or local statutes, ordinances, Executive Order or regulations;; and all other federal, state or local labor or employment/human rights laws; and any other federal, state or local statute, rule, regulation or ordinance or the common law which might arise out of Executive’s association with, employment with, and/or termination from employment with the Company; (v) claims for wrongful termination in violation of public policy, any and all other common law claims and/or causes of action of whatever kind or character, in tort or contract, statutory or otherwise, for legal or equitable relief. All such claims, liabilities or causes of action (including, without limitation, claims for related attorneys’ fees and costs) are forever barred by this Agreement regardless of the forum in which they may be brought. The Parties intend for this release to be as broad as possible. Notwithstanding the foregoing, Executive does not waive or release any claim which cannot be waived or released by private agreement. Specifically, nothing in this Agreement shall prevent Executive from filing a charge or complaint with, or from participating in, an investigation or proceeding conducted by the SEC, OSHA, EEOC, the NJ Department of Labor, or any other federal, state or local agency charged with the enforcement of any employment laws. Executive, however, understands that by signing this Agreement, Executive waives the right to recover any damages or to receive other relief in any claim or suit brought by or through the EEOC or any other state or local deferral agency on Executive’s behalf to the fullest extent permitted by law, but expressly excluding any monetary award or other relief available from the SEC/OSHA, including an SEC/OSHA whistleblower award, or other awards or relief that may not lawfully be waived.
4.3 Executive’s release excludes (i) any claim for indemnification to which Executive may be entitled pursuant to the terms of the Company’s organizational documents or the Employment Agreement, and (ii) any claims for which insurance is available to Executive under any insurance policy, including any Director & Officer’s Policy, maintained by the Company.
4.4 Executive warrants and agrees that Executive shall not and has not filed any claims, causes of action or complaints against the Company or any of the Released Parties that relate to any actions or conduct occurring prior to the execution of this Agreement, except for any such claims that cannot be waived in a private agreement. Executive agrees that if (s)he does file such court action the Company shall be entitled to cease any further payments and that the payments already made under this Agreement, if any, shall constitute full and complete consideration for Executive’s release of claims.
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4.5 In consideration of this Agreement and the undertakings provided for herein, including but not limited to Executive’s general release of claims, the sufficiency of which is hereby acknowledged, the Company and its parent, subsidiary, affiliated, predecessor, or successor companies, its/their past or present owners, stockholders, directors, officers, employees, contractors, agents, attorneys, insurers, assigns, and representatives (the “Company Releasors”) knowingly and voluntarily release and forever discharge the Executive and his agents, heirs, representatives, attorneys, successors, and assigns (“Executive Releasees”) from all actions, suits, claims, demands, damages, monies, injunctive relief, attorney’s fees, liabilities, debts, grievances, arbitrations, charges, interest, expenses and costs, contracts, equity, stock (including “phantom stock”), stock options, ownership interest, profit share, management fees, promises, judgments, awards, orders, executions or demands of any nature whatsoever, and/or causes of action of whatever kind or character whether known or unknown, suspected or unsuspected, which the Company Releasors ever had, now has, or which their heirs, assigns, executors or administrators hereafter can, shall or may have, arising out of or relating in any way to any acts, circumstances, facts, transactions, omissions, or other subject matters, based on facts occurring prior to the time Company executes this Agreement.
4.6 To the extent the releases set forth in this Agreement expressly extends to persons or entities that are not signatories to this Agreement, it is expressly declared to be for their benefit and use.
5. No Other Consideration.
Executive represents and acknowledges that the consideration contained in this Agreement shall constitute the entire consideration provided to Executive and Executive will not seek any further compensation for any claim, damage, cost, or attorney’s fees in connection with the matters encompassed in this Agreement. Executive represents and acknowledges that the consideration contained in this Agreement constitutes a full satisfaction and accord of any claims Executive has or may have against the Company or any of the Released Parties. Executive acknowledges the Payment constitutes ample consideration, the sufficiency of which is hereby acknowledged, for Executive’s promises in this Agreement.
6. Covenant Not To Sue.
This Agreement is expressly conditioned upon Executive’s covenant not to file any claim against the Company or its owners, officers, directors, employees, or any of the Released Parties. Executive agrees not to sue any of the Released Parties or become a party to a lawsuit, whether in an individual or representative capacity, on the basis of any claims of any type that arise out of any aspect of Executive’s employment or termination of employment with the Company or any other matter up through the date Executive executes this Agreement. Executive understands that this is an affirmative promise by Executive not to sue any of the Released Parties, which is in addition to Executive’s general release of claims. If Executive (whether individually or jointly) breaches this Agreement by suing any of the Released Parties in violation of this Covenant Not to Sue, Executive understands that (i) the Released Parties will be entitled to apply for and receive an injunction to restrain any violation of this Agreement; (ii) Executive will be required to pay the Released Parties’ legal costs and expenses, including reasonable attorney fees, associated with defending against any such lawsuit and enforcing the terms of this Agreement; and (iii) the Company shall be entitled to cease any further payments to Executive in which event Executive agrees that the payments already made under this Agreement, if any, shall constitute full and complete consideration for Executive’s release of claims; provided, however, that this section will not apply to any lawsuit necessary to enforce the terms of this Agreement.
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7. Executive Representations.
Executive warrants, represents and acknowledges that the Company is paying the Payment in reliance upon the following: a) Executive has returned all Company property to the Company, including all confidential information, files, data, employee information, PII, business plans, marketing information, emails, company social media posts and accounts, computer hardware or software, printer, copier, files, papers, memoranda, correspondence, customer, vendor, supplier lists, financial data, credit cards, keys, recordings, pictures, passwords and security access cards, and any other items of any nature which were or are the property of the Company (which expressly includes all documents and correspondence created or received by Executive as part of Executive’s employment with the Company); b) Executive will not retain any copies (whether in electronic or hard copy form) of any such property in Executive’s possession or under Executive’s control; c) Executive has no reason to believe that Executive has suffered any injuries or illnesses on the job which have not been reported in writing to the Company; d) Executive acknowledges that Executive has been properly provided any leave of absence because of Executive’s or Executive’s family member’s health condition; and e) Executive agrees that the Company do not possess any property belonging to Executive.
8. Transition and Cooperation.
Upon reasonable notice, Executive agrees to reasonably cooperate with the Company and/or any of the Released Parties and its or their legal counsel in providing information in connection with any current or future investigation or litigation relating to any matter with which Executive was involved or of which Executive has knowledge.
9. Liens and Encumbrances.
Executive represents and warrants that the there are no liens or encumbrances on the Payment. Executive also represents and warrants that Executive has not assigned or transferred or purported to assign or transfer to any person, firm or corporation any claim, demand, right, damage, liability, debt, account, action, cause of action, or any other matter herein released. Executive agrees to indemnify and hold the Company and Released Parties harmless against any claim, demand, right, damage, liability, debt, account, action, cause of action, cost or expense, including attorneys’ fees, arising out of or in any way connected with any liens, encumbrances, transfer or assignment, or any such purported claimed lien, encumbrance, transfer or assignment.
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10. Arbitration.
The Parties acknowledge that as part of this Agreement and in exchange for valid consideration described above, they have mutually agreed to submit to arbitration any future disputes between them and/or between Executive and any of the Released Parties, whether or not arising out of this Agreement and/or Executive’s employment with the Company and/or its termination. Thus, all future disputes, controversies or differences which may arise between the Parties (including between Executive and the Released Parties), whether arising in contract, statute, tort, fraud, misrepresentation, discrimination, common law or any other legal theory, including, but not limited to disputes relating to claims for wrongful termination; personal, physical or emotional injury; defamation; wages or other compensation due; equity, options, stock or any ownership interest; penalties; benefits; reimbursement of expenses; discrimination or harassment, including but not limited to discrimination or harassment based on race, color, sex, gender, pregnancy, religion, national origin, ancestry, age, marital status, physical disability, mental disability, medical condition, sexual orientation, or any other characteristic protected by law; retaliation; violation of any federal, state or other governmental constitution, statute, ordinance or regulation (as originally enacted and as amended); disputes relating to the making, performance or interpretation of this Agreement, or the relationship of the parties, including the type of relationship; and claims or other disputes arising under but not limited to Title VII of the Civil Rights Act of 1964 (“Title VII”), Age Discrimination in Employment Act of 1967 (“ADEA”), Americans with Disabilities Act (“ADA”), Fair Labor Standards Act (“FLSA”), Executive Retirement Income Security Act (“ERISA”), Consolidated Omnibus Budget Reconciliation Act (“COBRA”), Family and Medical Leave Act (“FMLA”), New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the New Jersey Conscientious Executive Protection Act, the New Jersey Wage and Hour laws, the New Jersey Worker’s Compensation Act, the New Jersey Civil Rights Act, the New Jersey Sales Representatives Act, or any other similar federal, state or local law or regulation, whenever brought, which cannot be settled by the Parties themselves, shall be settled finally and bindingly by arbitration, to be held in Newark, New Jersey, in accordance with the Federal Arbitration Act and with the Employment Arbitration and Mediation Rules then in effect of the American Arbitration Association (“AAA”) available at www.adr.org, provided that the Company shall be responsible for all fees and costs unique to the arbitration process (recognizing that each side bears its own deposition, witness, expert and attorneys’ fees and other expenses to the same extent as if the matter were being heard in court). In any arbitration proceeding conducted pursuant to this paragraph, the Parties shall have the right to discovery, to call witnesses, and to cross-examine the other party’s witnesses. The arbitrator shall render a final decision in writing, setting forth the reasons for the arbitration award. Both Parties are bound by this agreement to arbitrate, but it does not include disputes, controversies or differences which may not by law be arbitrated. THE PARTIES WAIVE THEIR RIGHT TO HAVE ANY SUCH DISPUTE, CLAIM OR CONTROVERSY DECIDED BY A JUDGE OR JURY IN A COURT. THE PARTIES ALSO AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN THEIR INDIVIDUAL CAPACITIES, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS, REPRESENTATIVE OR COLLECTIVE PROCEEDING.
11. Confidentiality of Agreement.
Executive agrees not to disclose the terms of this Agreement, or the fact of its existence or execution, to anyone other than Executive’s immediate family members, attorneys or accountants (provided that Executive obtains such person’s written agreement not to disclose the fact or terms of this Agreement and that a breach by such person shall be considered a breach by Executive), governmental taxing authorities, or pursuant to a subpoena or order of a court of competent jurisdiction or to the SEC, OSHA, EEOC, NLRB, NYS Division of Human Rights, or NYC Commission on Human Rights to the extent required by law. The Company agrees not to disclose the terms of this Agreement, or the fact of its existence or execution, to anyone other than the Company’s officers, directors, attorneys or accountants (provided the Company obtains such person’s written agreement not to disclose the fact or terms of this Agreement and that a breach by such person shall be considered a breach by the Company), governmental taxing authorities, or pursuant to a subpoena or order of a court of competent jurisdiction or to the SEC, OSHA, EEOC, NLRB, NYS Division of Human Rights, or NYC Commission on Human Rights to the extent required by law, except that the Agreement is required to be filed with the SEC on a Form 8-K or Form 10-Q. This Confidentiality provision is a material term of this agreement.
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12. Non-Disparagement.
Neither Company nor Executive shall make or publish or instigate the making or publication of any statement (in verbal, written or electronic or other form) disparaging of the other, their respective products, services, affairs, or operations or their past or present directors, officers, employees, shareholders, owners or agents whether or not such disparagement constitutes libel or slander. The Parties’ non-disparagement obligations are an essential term of this Agreement, the damages for which, if any, will be determined by a court of competent jurisdiction in the event of a proven breach. Executive agrees that he shall not disparage, criticize, condemn or impugn the reputation or character of Company or any of the Releasees. Company agrees to instruct the directors and officers of the Company in writing that they shall not disparage, criticize, condemn or impugn the reputation or character of Executive and shall take reasonable steps to enforce such instructions. Company agrees that, if contacted by any of Executive’s potential future employers regarding Executive’s employment at Company, then Company shall only provide such potential future employers with Executive’s dates of employment and last position held at the Company.
13. Severability.
Should any clause or provision of this Agreement be declared illegal or unenforceable, it shall be modified as minimally necessary to be enforceable. If the provision cannot be modified to be enforceable, such provision shall be deemed null and void, leaving the remainder of this Agreement in full force and effect, provided, however, that if the deletion of such provision materially affects the operation of the release by Executive of all claims against the Company and/or the Released Parties, there shall be no obligation for the Company to make any payment to Executive under this Agreement except for 10% of the Payment, and any payment already made by the Company to Executive in accordance with this Agreement shall be fully recoverable by the Company as applicable from Executive, except for 10% of the Payment, which shall be sufficient consideration for any and all of Executive’s promises in this Agreement.
14. No Reliance.
The Parties represent and acknowledge that in executing this Agreement, they do not rely and have not relied upon any representation or statement made by the other party or the other party’s agents, attorneys, employees, officers, directors, or representatives with regard to the subject matter, basis or effect of this Agreement or otherwise, other than those specifically stated in this Agreement.
15. Continuing Obligations.
15.1 Executive agrees and acknowledges that Executive shall continue to be bound by Sections 6 and 7 of the Employment Agreement, except that Executive shall not be bound by Section 7(a) , (b), or (c). Company agrees and acknowledges that it shall continue to be bound by Section 12 of the Employment Agreement. Company also agrees that Executive shall be considered a past officer and director under the Company’s Directors and Officers insurance policy that is in place at the time that a claim is made.
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15.2 Executive agrees and acknowledges that during Executive’s employment, Executive obtained certain confidential business information of the Company and its clients. Executive agrees to hold in strictest confidence, and not to use (except for the benefit of the Company as applicable) or disclose to any person, firm, or corporation without written authorization of an officer of the Company, any confidential or proprietary information.
15.3 Executive understands that this confidential or proprietary information is or may be in the nature of a trade secret, and is the exclusive property of the Company. Executive will not retain any copies of any such confidential or proprietary information in Executive’s possession or under Executive’s control and will return all such confidential and proprietary information to the Company. Executive covenants that Executive will not, directly or indirectly, use for Executive’s own benefit, use to the detriment of the Company, or divulge to persons other than authorized representatives of the Company, any confidential or proprietary information.
16. Miscellaneous.
16.1 Counterparts and Signatures: This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same written instrument. An electronic signature (i.e., an electronic sound, symbol, or process attached or associated with a contract or record and executed or adopted by a person with the intent to sign a record) will be treated as a handwritten signature under federal and state law. Delivery of this Agreement via electronic or facsimile transmission shall be deemed equivalent to physical delivery of the Agreement.
16.2 Successors in Interest: This Agreement shall be binding upon the Parties and upon their heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of the Parties and each of them and to their heirs, administrators, representatives, executors, successors, and assigns. Executive expressly warrants that Executive has not transferred to any person or entity any rights, causes of action, or claims released in this Agreement, and that Executive is fully empowered to enter into this Agreement.
16.3 Governing Law and Interpretation: This Agreement shall be governed by, interpreted under and enforced under the laws of New Jersey and venue shall be deemed to be in Newark, New Jersey. The Agreement shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against any of the Parties hereto.
16.4 Amendment: This Agreement may not be modified, altered or changed, except upon express written consent of the Parties.
16.5 Entire Agreement: This Agreement, together with any exhibits and other documents expressly referenced in this Agreement, sets forth the entire agreement between the Parties and supersedes any prior agreements, contracts or understandings between the Parties.
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17. Knowing and Voluntary Agreement.
Executive warrants that he is fully competent to enter into this Agreement and acknowledges that he has been afforded the opportunity to review this Agreement with an attorney for at least twenty-one (21) calendar days, that he has been advised to consult with an attorney prior to executing this Agreement, that he has read and understands this Agreement, and that he has signed this Agreement freely and voluntarily. If Executive executed this Agreement prior to the end of such twenty-one (21) day period, such early execution was a knowing and voluntary waiver by Executive of his right to consider this Agreement for twenty-one (21) days, and was due to Executive’s belief that Executive had ample time in which to consider and understand this Agreement and review it with an attorney. Further, Executive acknowledges that he has the opportunity to revoke this Agreement within seven (7) calendar days of signing it in accordance with the Age Discrimination in Employment Act and that he must notify Company in writing within seven (7) days of signing this Agreement if he wishes to revoke it. If Executive timely revokes his execution of this Agreement, then Executive acknowledges that this Agreement shall be of no force or effect and Executive must return any amounts received hereunder.
Having read the foregoing, having fully understood and agreed to the terms and provisions of this Agreement and intending to be bound hereby, the Parties voluntarily and of their own free will execute this Agreement as follows:
PLEASE READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
| AGREED AND UNDERSTOOD: | ||
Dated: June 11, 2025 |
By: | /s/ Randy Milby |
| RANDY MILBY |
| THARIMMUNE, INC. | ||
| Dated: June 11, 2025 | By: | /s/ Sireesh Appajosyula |
| Sireesh Appajosyula | ||
| Chief Operating Officer |
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Exhibit 10.2
AMENDED AND RESTATED APPAJOSYULA EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of June 11, 2025 (the “Effective Date”) by and between Tharimmune Inc., a Delaware corporation with principal executive offices at 1200 Route 22 EastBridgewayer, New Jersey 08807 (“Company”), and Sireesh Appajosyula, residing at 2 Linden Court, Holmdel, NJ 07733 (“Executive”). Each of Company and Executive is referred to herein as a “Party” and together they are referred to as the “Parties.”
Whereas, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, in each case effective as of the date of an initial public offering of the Company (the “Effective Date”);
Whereas, in connection with the foregoing, Executive shall be required to perform Executive’s duties and obligations hereunder on behalf of the Company, as appropriate, and such duties and obligations shall be enforceable by the Company;
Whereas, this Agreement supersedes any and all prior employment agreements by and between Executive and the Company;
TERMS
Now therefore, in consideration of such employment and mutual covenants and promises herein contained, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree that the above recitals are hereby incorporated by reference into this Agreement and are binding upon the parties hereto and agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Executive, and Executive hereby agrees to be employed with the Company, upon the terms and conditions contained in this Agreement. Unless earlier terminated by either party in accordance with Section 5, Executive’s employment with the Company shall continue for an initial term commencing on the Effective Date and continuing until the fifth (5th) anniversary of the Effective Date (the “Initial Term”) and thereafter shall automatically renew for successive one year terms (each a “Renewal Term”) unless either party provides written notice of non-renewal to the other party at least sixty (60) days prior to the last day of the then-current term (such Initial Term and subsequent Renewal Term(s) or portions thereof occurring prior to termination, collectively the “Employment Period”).
2. DUTIES.
(a) During the Employment Period, Executive shall serve the Company on a full-time basis and perform services in a capacity and in a manner consistent with Executive’s position for the Company. Executive shall have the title of Chief Executive Officer of the Company and shall have such duties, authorities and responsibilities as are consistent with such position, as the the Board of Directors of the Company (the “Company Board”) may designate from time to time. Executive will report directly to the Company Board. Notwithstanding the foregoing, Executive may (i) serve as a director officer and/or advisor of one (1) for-profit company without the prior approval of the Company Board; (ii) perform and participate in charitable, civic, educational, professional, community and industry affairs and other related activities; and (iii) manage Executive’s personal investments, provided, however, that such activities do not materially interfere, individually or in the aggregate with the performance of Executive’s duties hereunder or conflict or compete with the interests of the Company.
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3. LOCATION OF EMPLOYMENT.
(a) Place of Performance. The duties to be performed by Executive hereunder shall (subject to reasonable travel requirements on behalf of Company) be performed remotely or at the executive offices of the Company in Bridgewater, New Jersey, or wherever the principal executive offices of the Company shall hereafter be located, or such other place as the Board may reasonably designate.
4. COMPENSATION.
As full compensation for the performance by Executive of the Services, Company shall pay Executive as follows:
(a) Base Salary. In consideration of all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary (the “Base Salary”) at an annual rate of $285,000 (as it may be increased from time to time, the “Base Salary”) during the Employment Period. The Base Salary shall be paid in such installments and such times as the Company pays its regularly salaried employees, but no less than once per month, less applicable withholding and deductions. The Board shall annually review the Base Salary to determine whether an increase in the amount thereof is warranted.
(b) Annual Discretionary Bonus. During each fiscal year of the Executive’s employment with the Company (commencing with the 2023 fiscal year), Executive will be eligible to receive an annual discretionary bonus (“Cash Bonus”). Executive’s target Cash Bonus shall be equal to 60% of Base Salary (the “Target Bonus”). The Cash Bonus amount will be based upon achievement of Company and individual performance targets established by the Company Board, in its sole and absolute discretion, for the fiscal year to which the bonus relates. The payment of any Cash Bonus described herein will be made at the same time annual bonuses are generally paid to other senior executives of the Company (generally the first regular payroll date following the Company Board’s certification of achievement of applicable performance targets). If Executive is eligible to receive a Cash Bonus, such bonus will not be deemed to be fully “earned” unless Executive is (i) employed by the Company and in good standing on the date the Cash Bonus is paid, and (ii) has not given notice of Executive’s intention to resign Executive’s employment as of, or prior to, the date the Company pays the applicable Cash Bonus. The Cash Bonus shall be paid to Executive no later than March 15th of the year following the year for which the bonus is payable.
(c) Equity. Equity Award. Executive will be granted an equity-based compensation award (“Award”) in such amounts and subject to such terms and conditions that are consistent with the terms and conditions outlined on Exhibit A attached hereto. Upon termination of Executive’s employment, the treatment of any portion of outstanding Award shall be determined in accordance with the terms of any agreements (and/or Company incentive plan) governing such Awards (“Award Agreement”). Executive shall remain eligible to receive additional equity-based compensation awards as the Company may grant from time to time.
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(d) Withholding. Company shall withhold all applicable federal, state, local taxes and social security and such other amounts as may be required by law, including withholding and/or deductions properly elected by Executive, from all amounts payable to Executive under this Section 5.
(e) Expenses. Company shall reimburse Executive for all reasonable business expenses incurred by Executive in furtherance of the business and affairs of Company, including without limitation reasonable travel, lodging, meals, and entertainment, in each case, upon timely receipt by Company of appropriate vouchers or other proof of Executive’s expenditures and otherwise in accordance with any expense reimbursement policy as may from time to time be adopted by Company. In any case, any claim by Executive for reimbursement of expenses for a calendar year must be submitted by the Executive by March 15th of the following year, and payment of the reimbursement shall be made by the Company within ninety (90) days after Executive’s submission of request for reimbursement.
(f) Other Benefits. Executive shall be entitled to benefits for which he shall be eligible under any benefit or other plans of the Company (including, without limitation, dental, vision, medical, medical reimbursement and hospital plans, pension plans, employee stock purchase plans, profit sharing plans, bonus plans, prescription drug reimbursement plans, short and long term disability plans, life insurance and other so-call “fringe” benefits) as Company shall make available to its senior executives from time to time. Executive shall be designated as a named insured on directors’ and officers’ liability insurance for Company.
5. VACATION. During the Employment Period, Executive shall be entitled to vacation benefits consistent with Company policy, as may be in effect from time to time, except to the extent such policy is inconsistent with this Agreement.
6. CONFIDENTIAL INFORMATION AND INVENTIONS.
(a) Confidential Information; Non-Use. Executive recognizes and acknowledges that in the course of his duties he is likely to receive confidential or proprietary information of Company, its affiliates or third parties with whom Company or any such affiliates has an obligation of confidentiality. Accordingly, during and after the Term, Executive agrees to keep confidential and not disclose or make accessible to any other person or use for any other purpose other than in connection with the fulfillment of his duties under this Agreement, any “Confidential and Proprietary Information” (defined below) owned by or received by or on behalf of Company or any of its affiliates. The term “Confidential and Proprietary Information” shall include, but shall not be limited to, confidential or proprietary scientific or technical information, data, formulas and related concepts, business plans (both current and under development), client lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, investments, sales activities, promotions, credit and financial data, manufacturing processes, financing methods, plans or the business and affairs of Company or of any affiliate or client of Company. Executive expressly acknowledges that the Confidential and Proprietary Information constitutes a protectable business interest of Company. Executive agrees: (i) not to use any such Confidential and Proprietary Information for himself or others; and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from Company’s offices at any time during his employment by Company, except as required in the execution of Executive’s duties to Company, unless and until such Confidential and Proprietary Information has become public knowledge without fault by Executive. Executive agrees to return immediately all Company material and reproductions (including but not limited, to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof in his possession to Company upon request and in any event immediately upon termination of employment.
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Notwithstanding any other provisions of this Agreement, Executive may be entitled to immunity and protection from retaliation under the Defend Trade Secrets Act of 2016 for disclosing a trade secret under certain limited circumstances. Specifically, pursuant to 18 U.S.C. 1833(b), Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, Executive who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the Executive and use the trade secret information in the court proceeding, if Executive (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.
(b) Non-Disclosure. Except with prior written authorization by Company, Executive agrees that during the Term and thereafter, he will not disclose or publish: (i) any of the Confidential and Proprietary Information; or (ii) any confidential, scientific, technical, or business information of any party to whom the Executive knows, or should reasonably know, that Company or any of its affiliates owes an obligation of confidence.
(c) Inventions. Executive agrees that all inventions, discoveries, improvements and patentable or copyrightable works (“Inventions”) initiated, conceived or made by him within the scope of the Company’s business (during the Term) or using Company’s resources, either alone or in conjunction with others shall be the sole property of Company to the maximum extent permitted by applicable law and, to the extent permitted by law, shall be “works made for hire” as that term is defined in the United States Copyright Act (17 U.S.C.A., Section 101). Company shall be the sole owner of all patents, copyrights, trade secret rights, and other intellectual property or other rights in connection therewith; provided, however that this Section 6(c) shall not apply to Inventions which are not related to the business of Company and which are made and conceived by Executive not during normal working hours, not on Company’s premises and not using Company’s tools, devices, equipment or Confidential and Proprietary Information. Subject to the foregoing, Executive hereby assigns to Company all right, title and interest he may have or acquire in all Inventions; provided, however, that the Board may in its sole discretion agree to waive Company’s rights pursuant to this Section 6(c).
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(d) Further Actions and Assistance. Executive agrees to cooperate reasonably with Company and at Company’s expense, both during and after his employment with Company, with respect to the procurement, maintenance and enforcement of copyrights, patents, trademarks, and other intellectual property rights (both in the United States and foreign countries) relating to such Inventions. Executive shall sign all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights and powers of attorney, that Company reasonably may deem necessary or desirable in order to protect its rights and interests in any Inventions. Executive further agrees that if Company is unable, after reasonable effort, to secure Executive’s signature on any such papers, any officer of Company shall be entitled to execute such papers as his agent and attorney-in-fact and Executive hereby irrevocably designates and appoints each officer of Company as his agent and attorney-in-fact to execute any such papers on his behalf and to take any and all actions as Company reasonably may deem necessary or desirable in order to protect its rights and interests in any Inventions, under the conditions described in this paragraph.
(e) Prior Inventions. Executive will not assert any rights to any invention, discovery, idea, or improvement relating to the business of the Company or his duties hereunder as having been made or acquired by Executive prior to his work for Company, except for the matters, if any, described in Appendix A to this agreement.
(f) Disclosure. Executive agrees that he will promptly disclose to Company all Inventions initiated, made, or conceived or reduced to practice by him, either alone or jointly with other, during the Term.
(g) Survival. The provisions of this Section 6 shall survive any termination of this Agreement.
(h) Return of Company Property. Within ten (10) days following the date of any termination of Executive’s employment, Executive or Executive’s personal representative shall return all property of the Company and its Affiliates in Executive’s possession, including but not limited to all Company Group-owned computer equipment (hardware and software), smart phones, facsimile machines, tablet computers and other communication devices, credit cards, office keys, security access cards, badges, identification cards and all copies (including drafts) of any documentation or information (however stored) relating to the business of the Company and its Affiliates, its customers and clients or its prospective customers and clients.
(i) Cooperation. During the Employment Period and for six years thereafter, Executive shall give Executive’s assistance and cooperation, upon reasonable advance notice, in any matter relating to Executive’s position with the Company and its Affiliates, or Executive’s knowledge as a result thereof as the Company may reasonably request, including Executive’s attendance and truthful testimony where deemed appropriate by the Company, with respect any investigation or the Company’s (or an Affiliate’s) defense or prosecution of any existing or future claims or litigations or other proceeding relating to matters in which Executive was involved or had knowledge by virtue of Executive’s employment with the Company Group, in all cases on schedules that are reasonably consistent with Executive’s other permitted activities and commitments. The Company agrees to reimburse Executive for any costs Executive incurs in connection with complying with this Section, including Executive’s reasonable attorney’s fees.
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7. NON-COMPETITION, NON-SOLICITATION AND NON-DISPARAGEMENT.
(a) Restrictive Covenant. Executive understands and recognizes that his services to Company are special and unique and that in the course of performing such services Executive will have access to and knowledge of Confidential and Proprietary Information and Executive agrees that, during the Term and twelve month period immediately following Executive’s separation from employment (the “Termination Restriction Period”), whether such separation is voluntary or involuntary, he shall not in any manner, directly or indirectly, on behalf of himself or any other person, firm, partnership, joint venture, corporation or other business entity (“Person”), enter into or engage in any business involving the development or commercialization of competing products developed or commercialized by the Company at the time of Executive’s separation or at any time during Executive’s employment with the Company (the “Business of the Company”) within the geographic area in which Company does business, which is deemed by the Parties hereto to be the United States and the European Union. Executive acknowledges that, due to the unique nature of Company’s business, Company has a strong legitimate business interest in protecting the continuity of its business interests and its Confidential and Proprietary Information and the restriction herein agreed to by Executive narrowly and fairly serves such an important and critical business interest of Company. Notwithstanding the foregoing, nothing contained in this Section 7(a) shall be deemed to prohibit Executive from acquiring or passively holding, solely for investment, publicly traded securities of any corporation, some or all of the activities of which are engaged in the Business of Company so long as such securities do not, in the aggregate, constitute more than four percent (4%) of any class or series of outstanding securities of such corporation; and further notwithstanding the foregoing, nothing contained in this Section 7(a) shall preclude Executive from performing the functions of chief executive or other senior executive, per se, provided such functions do not involve the development of a product within the Business of the Company, as defined herein, or the use of the Confidential and Proprietary Information; becoming an employee of, or from otherwise providing services to, a separate division or operating unit of a multi-divisional business or enterprise (a “Division”) if: (i)) the Division by which Executive is employed, or to which Executive provides services, is not engaged in the Business of Company, (ii) Executive does not provide services, directly or indirectly, to any other division or operating unit of such multi-divisional business or enterprise engaged in or proposing to engage in the Business of Company (individually, a “Competitive Division” and collectively, the “Competitive Divisions”) and (iii) the Competitive Divisions, in the aggregate, accounted for less than 10% of the multi-divisional business or enterprise’s consolidated revenues for the fiscal year, and each subsequent quarterly period, prior to Executive’s commencement of employment with or provision of services to the Division.
(b) Reasonableness of Restriction. Executive hereby acknowledges and agrees that the covenant against competition provided for pursuant to Section 7 (a) is reasonable with respect to its duration, geographic area and scope. If, at the time of enforcement of this Section 7, a court holds that the restrictions stated herein are unreasonable under the circumstances then existing, the Parties hereto agree that the maximum duration, scope or geographic area legally permissible under such circumstances will be substituted for the duration, scope or area stated herein.
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(c) Non-Solicitation. During the Term and the applicable Termination Restriction Period (as defined hereinafter), Executive shall not, directly or indirectly, without written consent of Company: (i) solicit or induce any employee or independent contractor of Company or any of its affiliates to leave the employ of Company or any affiliate; or hire for any purpose any employee or independent contractor of Company; or hire any former employee or independent contractor who has left the employment of Company or any affiliate of Company within twelve (12) months of the termination of such employee’s employment with Company or any such affiliate for any purpose; or hire any former employee or independent contractor of Company in knowing violation of such employee’s non-competition agreement with Company or any such affiliate; or (ii) solicit, divert or take away, or attempt to divert or take away, the business or patronage of any agent, client or customer (or any potential agent, client or customer) of Company which was served by Company (or which the Company solicited for service) during the twelve-month period prior to the termination of Executive’s employment with Company; or (iii) without the consent of the Board solicit or accept employment or be retained by any person, who at any time during the twelve month period prior to the termination of Executive’s employment with Company, was an agent, client or customer of Company or any of its subsidiaries where his position will be related to the Business of Company.
(d) Non-Disparagement. Executive agrees that he shall not directly or indirectly disparage, whether or not truthfully, the name or reputation of Company or any of its affiliates, including but not limited to, any officer, director, employee or shareholder of Company or any of its affiliates provided that, nothing in this Section shall be construed to interfere with Executive’s right to engage in protected concerted activity under the National Labor Relations Act. Notwithstanding this Section 7(d), nothing contained herein shall apply to statements made by Executive (x) in the course of his responsibility to evaluate the performance and/or participate in any investigation of the conduct or behavior of officers, employees and/or others or (y) as part of any judicial, administrative or other legal action or proceeding, and nothing shall be construed to limit or impair the ability of Executive to provide truthful testimony in response to any validly issued subpoena or to file pleadings or respond to inquiries or legal proceedings by any government agency to the extent required by applicable law. In addition, Executive agrees not to, without Company’s prior written consent, communicate, directly or indirectly, with the press or other media, concerning the past or present employees or businesses of the Company Group.
(e) Enforcement. In the event that Executive breaches or threatens to breach any provisions of Section 6 or this Section 7, then, in addition to any other rights Company may have, Company shall be entitled to seek injunctive relief to enforce such provisions. Company and Executive agree that any such action for injunctive or equitable relief shall be heard in a state or federal court situated in Morris County in the State of New Jersey and each of the Parties hereto agrees to accept service of process by registered or certified mail and to otherwise consent to the jurisdiction of such courts.
(f) Remedies Cumulative; Judicial Modification. (i) Each of the rights and remedies enumerated in Section 7(e) shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to Company at law or in equity. If any of the covenants contained in this Section 7, or any part of any of them, is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants or rights or remedies, which shall be given full effect without regard to the invalid portions. If any of the covenants contained in this Section 7 is held to be invalid or unenforceable because of the duration of such provision or the area covered thereby, the Parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision and in its reduced form such provision shall then be enforceable. (ii) In the event that an actual proceeding is brought in equity to enforce the provisions of Section 6 or this Section 7, Executive shall not urge as a defense that there is an adequate remedy at law, nor shall Company be prevented from seeking any other remedies that may be available.
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(g) Survival. The provisions of this Section 7 shall survive any termination of this Agreement.
8. REPRESENTATIONS AND WARRANTIES.
(a) By Executive. Executive hereby represents and warrants to Company as follows:
(i) Neither the execution nor delivery of this Agreement nor the performance by Executive of his duties and other obligations hereunder conflict with or constitute a default or breach of any covenant or obligation under (whether immediately, upon the giving of notice or lapse of time or both) any prior employment agreement, contract, or other instrument to which Executive is a party or by which he is bound.
(ii) Executive has the full right, power and legal capacity to enter and deliver this Agreement and to perform his duties and other obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of Executive enforceable against him in accordance with its terms. No approvals or consents of any persons or entities are required for Executive to execute and deliver this Agreement or perform his duties and other obligations hereunder.
(iii) Executive will not use any confidential information or trade secrets of any third Party in his employment by Company in violation of the terms of the agreements under which he had access to or knowledge of such confidential information or trade secrets.
(b) By Company. Company hereby represents and warrants to Executive as follows:
(i) Neither the execution nor delivery of this Agreement nor the performance by Company of its obligations hereunder conflict with or constitute a default or breach of any covenant or obligation under (whether immediately, upon the giving of notice or lapse of time or both) any prior agreement, contract, or other instrument to which Company is a party or by which it is bound.
(ii) Company has the full right and power to enter and deliver this Agreement and to preform obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of Company enforceable against it in accordance with its terms. All approvals or consents required for Company to validly execute and deliver this Agreement and perform its obligations hereunder, including, without limitation, approval of the Board, have been obtained.
9. TERMINATION.
(a) Cause. Executive’s employment hereunder may be terminated by the Board immediately for “Cause” (defined below). Any of the following actions by Executive shall constitute “Cause”:
(i) The willful failure, disregard or refusal by Executive to perform his material duties or obligations under this Agreement;
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(ii) Any willful, intentional or grossly negligent act by Executive having the effect of materially injuring (whether financial or otherwise and as determined reasonably and in good faith by a majority of the members of the Board) the business or reputation of Company or any of its affiliates;
(iii) Executive’s indictment for or being charged with any felony or a crime involving serious moral turpitude (including entry of a guilty or nolo contendere plea);
(iv) A good faith determination by the Board and/or any government representative or agency that the Executive is a “bad actor” as defined by 17 CFR 230.506(a);
(v) The good faith determination by the Board, after a reasonable and good-faith investigation by the Company following any allegation by another employee of Company, that Executive engaged in some form of harassment prohibited by law (including, without limitation, harassment on the basis of age, sex or race) unless Executive’s actions were specifically directed by the Board;
(vi) Any willful misconduct by the Executive or misappropriation, theft or embezzlement by Executive of the property of Company or its affiliates (whether or not a misdemeanor or felony);
(vii) Breach by Executive of any material provision of this Agreement or any other agreement between Executive and the Company or of any policy of the Company that is not cured by Executive to the reasonable satisfaction of Company’s Board within thirty (30) days after written notice thereof is given to Executive by Company.
For purposes of Section 9 (a), no act or omission by Executive shall be considered willful if reasonably and in good faith believed by Executive to be in, or not contrary to, the best interests of Company.
(b) Death. Executive’s employment hereunder shall be terminated upon Executive’s death.
(c) Disability. The Board may terminate Executive’s employment hereunder due to Executive’s “Disability” (defined below). For purposes of this Agreement, a termination due to Executive’s “Disability” shall be deemed to have occurred:
(i) when the Board has provided a written termination notice to Executive supported by a written statement from a “Reputable Independent Physician” (defined below), whose determination as to disability shall be binding on all Parties, to the effect that Executive shall have become so physically or mentally incapacitated by reason of physical or mental illness or injury as to be unable to resume (with or without reasonable accommodation as that term is defined under applicable law) within the ensuing three (3) months his employment under this Agreement; or
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(ii) upon rendering of a written termination notice by the Board after Executive has been unable to substantially perform his duties hereunder by reason of any physical or mental illness or injury (with or without reasonable accommodation as that term is defined under applicable law) for ninety (90) or more consecutive days or more than one hundred twenty (120) days in any consecutive twelve-month period.
The term “Reputable Independent Physician” means a physician satisfactory to both Executive and Company, provided that if Executive and Company do not agree on a physician, then a third physician selected by the physicians selected by Executive and Company. Executive agrees to make himself available and to cooperate in a reasonable examination by the Reputable Independent Physician.
(d) Good Reason. Executive may terminate his employment hereunder for “Good Reason” (defined below). The term “Good Reason” shall mean the occurrence any of the following events (provided, Executive has provided Company with written notice of the occurrence of such events within ninety (90) days of the occurrence of such events and Company has not cured such breach within thirty (30) days from such notice and Executive terminates employment within 30 days of the expiration of such cure period):
(i) any material breach of this Agreement by Company if Executive has provided Company with written notice of the breach within ninety (90) days of the breach and Company has not cured such breach within thirty (30) days from such notice;
(ii) without Executive’s express written consent, any material reduction by Company of Executive’s duties, responsibilities, or authority, including, without limitation, a change in the line of reporting between him and the Board;
(iii) a relocation of Company’s principal place of business outside of the New York metropolitan area or to a location more than 50 miles from the immediately preceding location without Executive’s written consent; or
(iv) material reduction in Executive’s annual base salary unless all officers and/or members of the Company’s executive management team experience an equal or greater percentage reduction in annual base salary and/or total compensation.
(e) Convenience. Company and Executive each may terminate Executive’s employment hereunder for any reason or no reason at any time by written notice of termination to the other Party, which notice shall specify the termination date, or by providing a Notice of Nonrenewal to the other Party.
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10. COMPENSATION UPON TERMINATION.
In the event Executive’s employment is terminated, Company shall pay to Executive the Base Salary and benefits otherwise payable to him under Section 5 through the last day of his actual employment by Company, any reimbursable business expenses, and any earned but unpaid bonuses (together, the “Accrued Compensation”). In addition to the Accrued Compensation:
(a) Death or Disability. If Executive’s employment is terminated as a result of his death or Disability, Company shall pay to Executive or to Executive’s estate, as applicable, (i) his Base Salary through the date which is ninety (90) days after his death or Disability and (ii) such other or additional benefits, if any, as may be provided under applicable employee benefit plans, programs and/or arrangements of Company. All shares of capital stock of Company held by Executive that are subject to vesting (“Restricted Shares”) and all options to purchase shares of capital stock of Company (“Stock Options”) that are scheduled to vest on or before the next succeeding anniversary of the Effective Date shall be accelerated and deemed to have vested as of the termination date. All Restricted Shares and Stock Options that have not vested (or been deemed pursuant to the immediately preceding sentence to have vested) as of the date of termination shall be forfeited to Company as of such date. Stock Options that have vested as of Executive’s termination shall remain exercisable until the earlier to occur of (i) the expiry of sixty (60) months following such termination and (ii) the last expiration/termination date applicable under the grant under which such Stock Options were granted. For Disability, all payments, benefits and/or grants under this Section 10(a) shall be subject to Executive’s execution and delivery within 21 days of separation from service of a general release of Company, its parents, subsidiaries, and affiliates and each of its officers, directors, employees, agents, successors and assigns in a form that is acceptable to Company, with such payments, benefits and or grants commencing thirty (30) days after Executives separation from service.
(b) Cause. If Executive’s employment is terminated by the Board for Cause, then Company shall provide such other or additional benefits, if any, as may be required under applicable employee benefit plans, programs and or arrangements of Company. Executive shall have no further entitlement hereunder to any other compensation or benefits from Company except to extent otherwise provided by law. All Restricted Shares that have not vested as of the date of termination shall be forfeited to Company as of such date. All unexercised Stock Options vested as of Executive’s termination shall remain exercisable for ninety (90) days following such termination.
(c) Other than for Cause, Death, or Disability. . If Company terminates Executive’s employment other than as a result of Executive’s death or Disability and other than for Cause or if Executive terminates Executive’s employment for Good Reason, then Company shall (i) continue to pay the Executive his Base Salary for a period of twelve (12) months and provide health benefits for a period of twelve (12) months following the effective date of the Executive’s separation from service (such period of payment referred to herein as the “Section 10(c) Termination Benefits Period” or, in the case of benefits, such time as Executive receives equivalent coverage and benefits under plans and programs of a subsequent employer; and (ii) provide such other or additional benefits, if any, as may be provided under applicable employee benefit plans, programs and/or arrangements of the Company (other than any severance plans or programs). Furthermore, upon such termination, all outstanding unvested time-based equity awards (including Restricted Shares and Stock Options) held by the Executive as of the date of Executive’s Separation from Service shall immediately and fully accelerate and become 100% vested. Stock Options that have vested as of Executive’s termination shall remain exercisable until the earlier to occur of (i) the expiry of sixty (60) months following such termination and (ii) the last expiration/termination date applicable under the grant under which such Stock Options were granted. All payments, benefits and/or grants under this Section 10(c) shall be subject to Executive’s execution and delivery within sixty (60) days of separation from service of a separation agreement with Company, including without limitation non-disparagement and confidentially provisions, an agreement to cooperate past-separation of employment and a general release of the Company, its parents, subsidiaries and affiliates and each of its officers, directors, employees, agents, successors and assign in a form acceptable to the Company, with such payments, benefits, and or grants commencing sixty (60) days from Executive’s separation from service, except that any such payments, benefits, and/or grants that would otherwise be payable during the sixty (60) day period shall be paid on the first payroll date following the expiration of such 60-day period.
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(d) By Executive for Convenience. If Executive terminates Executive’s employment pursuant to Section 9(e), Executive shall not be entitled to receive any payments or benefits other than the Accrued Compensation.
(e) This Section 10 sets forth the only obligations of Company with respect to the termination of Executive’s employment with Company, and Executive acknowledges that, upon the termination of his employment, he shall not be entitled to any payments or benefits which are not explicitly provided in this Section 10, except as required by law or the terms of another employee plan, program or arrangement covering him. Executive acknowledges and agrees that upon the termination of his employment with the Company, regardless of the reason or grounds therefore, he shall resign from his position on the Board and from any other board, organization or foundation wherein Executive sits or belongs as a representative of the Company.
(f) The obligations of Company that arise under this Section 10 shall survive the expiration or earlier termination of this Agreement.
11. CHANGE OF CONTROL.
(a) Change of Control Defined. The term “Change of Control” means, after the Effective Date:
(i) the acquisition by an individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of beneficial ownership of any capital stock of Company, if, after such acquisition, such individual, entity or group beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) fifty percent (50%) or more of the combined voting power of the then-outstanding securities of Company entitled to vote generally in the election of directors (“Outstanding Company Voting Securities”); or
(ii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving Company or a sale or other disposition of all or substantially all of the assets of Company (“Business Combination”), unless, immediately following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Company or substantially all of Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership of the Outstanding Company Voting Securities immediately prior to such Business Combination.
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(b) Consequence. In the event of Executive’s termination of employment with the Company either (i) by the Company without Cause at any time within twelve (12) months prior to the consummation of a Change of Control if, prior to, or as of such termination, a Change of Control transaction was Pending (as defined herein) at any time during such twelve (12)-month period, (ii) by Executive for Good Reason at any time within twelve (12) months after the consummation of a Change of Control, or (iii) by the Company without Cause at any time upon or within twelve (12) months after the consummation of a Change of Control, then, Executive shall be entitled to receive the following:(i) the acceleration and vesting in full of any then outstanding and unvested portion of any time- vesting equity award with, options continuing to be exercisability for sixty (60) months following termination (or, if earlier, their expiration date); (ii) the benefits described in Section 4 (a), (b) and (c), provided, however, that the Severance Amount shall equal two (2) times the sum of Base Salary and Target Bonus and the Severance Period shall be twenty-four (24) months. A Change of Control transaction shall be deemed to be “Pending” each time any of the following circumstances exist: (A) the Company and a third party have entered into a confidentiality agreement that has been signed by a duly-authorized officer of the Company and that is related to a potential Change of Control transaction; (B) the Company has received a written expression of interest from a third party, including a binding or nonbinding term sheet or letter of intent, related to a potential Change of Control transaction; or (C) a third party has publicly announced, through a filing with the Securities and Exchange Commission, its intent to commence a tender offer or similar transaction to acquire 50% or more of the outstanding voting interests of the Company.
(c) Potential Adjustments due to Tax Implications. Notwithstanding anything in this Agreement or any other agreement between Executive and Company to the contrary, but subject to this Section 11(c), Company will make the payments and other acceleration of benefits under this Agreement or any other agreement or plan between the Company and Executive and other compensatory arrangements without regard to whether Section 280G of the Internal Revenue Code of 1986 (the “Code”) would limit or preclude the deductibility of such payments or benefits. However, if reducing or eliminating any such payment and/or other benefit would increase the “Total After-Tax Payments” (defined below), then the amounts payable to Executive will be reduced or eliminated as follows (or in such other manner as Company may specify at the applicable time) to the extent necessary to maximize such Total After-Tax Payments:
(i) first, by reducing or eliminating any cash payments or other benefits (other than the vesting of any options or stock) and
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(ii) second, by reducing or eliminating the vesting of options and stock that occurs as a result of a Change of Control or other event covered by Section 280G of the Code.
Company’s independent, certified public accounting firm will determine whether and to what extent payments or vesting are required to be reduced or eliminated in accordance with the foregoing. If there is ultimately determined to be an underpayment of or overpayment to Executive under this provision, the amount of such underpayment or overpayment will be immediately paid to Executive or refunded by him, as the case may be with interest at the applicable federal rate under the Code. The term “Total After-Tax Payments” means the total value of all “parachute payments” (as that term is defined in Section 280G(b)(2) of the Code) made to Executive or for his benefit (whether made under the Agreement or otherwise), after reduction for all applicable federal taxes (including, without limitation, the tax described in Section 4999 of the Code).
12. INDEMNIFICATION. Company shall defend and indemnify Executive in his capacity as Chief Operating Officer of Company to the fullest extent permitted under to the Delaware General Corporate Law (the “DGCL”). Executive’s rights to, and Company’s obligation to provide, indemnification shall survive termination of this Agreement.
13. COMPLIANCE WITH CODE SECTION 409A.
(a) The intent of the Parties to the Agreement is that the payments, compensation, and benefits under this Agreement will be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, in this connection, the Agreement shall be interpreted to be exempt or in compliance with Section 409A.
(b) Potential Delay of Payment(s) and Adjustments. Notwithstanding any other provisions of the Agreement, if any payment, compensation or other benefit provided to Executive in connection with his separation from service is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Executive is a “specified employee” within the meaning of Section 409A, no part of such payments shall be paid before the day that is six (6) months plus one (1) day after the termination date (the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to Executive during the period between the termination date and the New Payment Date shall be paid to Executive in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement.
(c) Separation from Service. For purposes of this Agreement, the terms “termination of employment” or “separation from service” will be determined consistent with the rules relating to “separation from service” under Section 409A.
(d) Installments. If any payment, compensation, or other benefit required by the Agreement is to be paid in a series of installment payments, each individual payment in the series shall be considered a separate payment for purposes of Section 409A.
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14. MISCELLANEOUS.
(a) Governing Law. Subject to the next sentence, this Agreement and all questions relating to its validity, interpretation, performance, remediation, and enforcement (including, without limitation, provisions concerning limitations of actions) shall be governed by and construed in accordance with the substantive laws of the State of New Jersey, notwithstanding any choice-of-law doctrines of that jurisdiction or any other jurisdiction that ordinarily would or might cause the substantive law of another jurisdiction to apply.
Notwithstanding the foregoing, all questions relating to the validity, interpretation, performance, remediation, and enforcement of Company’s obligations, and Executive’s rights, under Section 12 shall be governed by and construed in accordance with the substantive laws of the State of Delaware.
(b) Personal Jurisdiction. To the fullest extent permitted by applicable law, any action or proceeding relating in any way to this Agreement may only be brought and enforced in the State New Jersey, to the extent subject matter jurisdiction exists therefore. The Parties irrevocably submit to the jurisdiction of such courts in respect of any such action or proceeding. The parties irrevocable waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to the laying of venue of any such action or proceeding in such courts, as well as any claim that any such action or proceeding brought in any such court has been brought in any inconvenient forum.
(c) Service of Process. The Parties further irrevocably consent to the service of Process out of any of the aforementioned courts in the manner and to the address specified in Section 14(h) of this Agreement.
(d) Waiver of Jury Trail. Each of the parties hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based in contract, tort, or otherwise) arising out of or relating to this Agreement or the actions of any party in the negotiation, administration, performance, and enforcement thereof. Each of the parties hereto further warrants and represents that it has reviewed this waiver with its legal counsel, and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing, and this waiver shall apply to any subsequent amendments, renewals, supplements, or modifications to this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial by court.
(e) Assignment. This Agreement, and Executive’s rights and obligations hereunder, may not be assigned by Executive. Company may assign its rights, together with its obligations, hereunder in connection with any sale, transfer or other disposition of all or substantially all of its business or assets. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties hereto, and their respective heirs, legal representatives, successors and assigns.
(f) Amendment. This Agreement cannot be amended orally, or by any course of conduct or dealing, but only by a written agreement duly executed by the Parties.
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(g) Waiver. The failure of either Party to insist upon the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment of future compliance therewith, and such terms, conditions and provisions shall remain in full force and effect. No waiver of any term or condition of this Agreement on the part of either Party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such Party. Unless the written waiver instrument expressly provides otherwise, no waiver by a Party of any right or remedy or breach by the other Party in any particular instance shall be construed to apply to any right, remedy or breach arising out of or related to a subsequent instance.
(h) Notices. All notices, demands or other communications desired or required to be given by a Party to the other Party shall be in writing and shall be deemed effectively given upon (i) personal delivery to the Party to be notified, (ii) upon confirmation of receipt of fax or other electronic transmission, (iii) one business day after deposit with a reputable overnight courier, prepaid for priority overnight delivery, or (iv) five days after deposit with the United States Post Office, postage prepaid, certified mail, return receipt requested, in each case to the Party to be notified at its/his address set forth at the top of this Agreement; or to such other addresses and to the attention of such other individuals as either Party shall have designated to the other by notice given in the foregoing manner.
(i) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the Parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements, and understandings, written or oral between the Parties, relating to the subject matter hereof. No representation, promise or inducement has been made by either Party that is not embodied in this Agreement, and neither Party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.
(j) Affiliate and Control Defined. As used in this Agreement, the term “affiliate” of a specified Person shall mean and include any Person controlling, controlled by or under common control with the specified Person. A Person shall be deemed to “control” another Person if such first Person possesses directly or indirectly the power to direct, or cause the direction of, the management and policies of the second Person, whether through the ownership of voting securities, by contract or otherwise.
(k) Captions, Headings and Cross-References. The section headings contained herein are for reference purposes and convenience only and shall not in any way affect the meaning or interpretation of this Agreement. Except as expressly set forth otherwise, all cross-references to sections refer to sections of this Agreement.
(l) Severability. In addition to, and not in conflict with, the provisions of Section 7(b) and 7(f), the Parties agree that each and every provision of this Agreement shall be deemed valid, legal and enforceable in all jurisdictions to the fullest extent possible. Any provision of this Agreement that is determined to be invalid, illegal or unenforceable in any jurisdiction or country in the Territory shall, as to that jurisdiction or country, be adjusted and reformed rather than voided, if possible, in order to achieve the intent of the Parties. Any provision of this Agreement that is determined to be invalid, illegal or unenforceable in any jurisdiction or country which cannot be adjusted and reformed shall for the purposes of that jurisdiction or country, be voided. Any adjustment, reformation or voidance of any provisions of this Agreement shall only be effective in the jurisdiction or country requiring such adjustment or voidance, without affecting in any way the remaining provisions of this Agreement in such jurisdiction or country or adjusting, reforming, voiding or rendering that provision or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction or country.
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(m) Counterpart Execution. This Agreement may be executed in one or more counterparts each of which shall be an original document and all of which together shall constitute one and the same instrument. The Parties acknowledge that this Agreement may be executed and delivered by means of electronic signatures and that use and acceptance of electronic signatures to bind the Parties represents the voluntary agreement and intention of the Parties to conduct this transaction by electronic means. The Parties agree that execution and delivery by electronic means will have the same legal effect as if signatures had been manually written on this Agreement. This Agreement will be deemed lawfully executed by the Parties by such action for purposes of any statute or rule of law that requires this Agreement to be executed by the Parties to make the mutual promises, agreements and obligations of the Parties set forth herein legally enforceable. Facsimile and .pdf exchanges of signatures will have the same legal force and effect as the exchange of original signatures. The parties hereby waive any right to raise any defense or waiver based upon the execution of this Agreement by means of electronic signatures in any proceeding arising under or relating to this Agreement. The Parties agree that the legal effect, validity and enforceability of this Agreement will not be impaired solely because of its execution in electronic form or that an electronic record was used in its formation. The Parties acknowledge that they are capable of retaining electronic records of this transaction.
IN WITNESS WHEREOF, the Parties hereto have executed this Employment Agreement as of the date forth above.
| THARIMMUNE, INC. | EXECUTIVE: | |
| /s/ Vincent LoPriore | /s/ Sireesh Appajosyula | |
| Name: Vincent LoPriore | Sireesh Appajosyula | |
| Title: Executive Chairman of Board | Chief Executive Officer | |
| Date: June 11, 2025 | Date: June 11, 2025 |
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EXHIBIT
A
Equity Terms
| Type of Award (“Award”) | ● An award of stock options under the Company’s 2023 Stock Option plan
● Executive’s Award to equal _________ shares at the initial public offering price of the common stock
● Award is evidenced by agreement executed by Executive and the Company |
| Vesting of Award | ● Vesting shall be monthly over a 48 month period with a 12 month cliff. |
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Exhibit 10.4
LOPRIORE (V) EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of June 11, 2025 (the “Effective Date”) by and between Tharimmune Inc., a Delaware corporation with principal executive offices at 1200 Route 22 EastBridgewayer, New Jersey 08807 (“Company”), and Vincent Lopriore, residing at 21 Bruce Road Red Bank,NJ 07701 (“Executive”). Each of Company and Executive is referred to herein as a “Party” and together they are referred to as the “Parties.”
Whereas, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, in each case effective as of the date of an initial public offering of the Company (the “Effective Date”);
Whereas, in connection with the foregoing, Executive shall be required to perform Executive’s duties and obligations hereunder on behalf of the Company, as appropriate, and such duties and obligations shall be enforceable by the Company;
Whereas, this Agreement supersedes any and all prior employment agreements by and between Executive and the Company;
TERMS
Now therefore, in consideration of such employment and mutual covenants and promises herein contained, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree that the above recitals are hereby incorporated by reference into this Agreement and are binding upon the parties hereto and agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Executive, and Executive hereby agrees to be employed with the Company, upon the terms and conditions contained in this Agreement. Unless earlier terminated by either party in accordance with Section 5, Executive’s employment with the Company shall continue for an initial term commencing on the Effective Date and continuing until the fifth (5th) anniversary of the Effective Date (the “Initial Term”) and thereafter shall automatically renew for successive one year terms (each a “Renewal Term”) unless either party provides written notice of non-renewal to the other party at least sixty (60) days prior to the last day of the then-current term (such Initial Term and subsequent Renewal Term(s) or portions thereof occurring prior to termination, collectively the “Employment Period”).
2. DUTIES.
(a) During the Employment Period, Executive shall serve the Company on a full-time basis and perform services in a capacity and in a manner consistent with Executive’s position for the Company. Executive shall have the title of Executive Chairman of the Board of the Company and shall have such duties, authorities and responsibilities as are consistent with such position, as the Board of Directors of the Company (the “Company Board”) may designate from time to time. Executive will report directly to the Company Board. Notwithstanding the foregoing, Executive may (i) serve as a director officer and/or advisor of one (1) for-profit company without the prior approval of the Company Board; (ii) perform and participate in charitable, civic, educational, professional, community and industry affairs and other related activities; and (iii) manage Executive’s personal investments, provided, however, that such activities do not materially interfere, individually or in the aggregate with the performance of Executive’s duties hereunder or conflict or compete with the interests of the Company.
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3. LOCATION OF EMPLOYMENT.
(a) Place of Performance. The duties to be performed by Executive hereunder shall (subject to reasonable travel requirements on behalf of Company) be performed remotely or at the executive offices of the Company in Bridgewater, New Jersey, or wherever the principal executive offices of the Company shall hereafter be located, or such other place as the Board may reasonably designate.
4. COMPENSATION.
As full compensation for the performance by Executive of the Services, Company shall pay Executive as follows:
(a) Base Salary. In consideration of all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary (the “Base Salary”) at an annual rate of $285,000 (as it may be increased from time to time, the “Base Salary”) during the Employment Period. The Base Salary shall be paid in such installments and such times as the Company pays its regularly salaried employees, but no less than once per month, less applicable withholding and deductions. The Board shall annually review the Base Salary to determine whether an increase in the amount thereof is warranted.
(b) Annual Discretionary Bonus. During each fiscal year of the Executive’s employment with the Company (commencing with the 2023 fiscal year), Executive will be eligible to receive an annual discretionary bonus (“Cash Bonus”). Executive’s target Cash Bonus shall be equal to 60% of Base Salary (the “Target Bonus”). The Cash Bonus amount will be based upon achievement of Company and individual performance targets established by the Company Board, in its sole and absolute discretion, for the fiscal year to which the bonus relates. The payment of any Cash Bonus described herein will be made at the same time annual bonuses are generally paid to other senior executives of the Company (generally the first regular payroll date following the Company Board’s certification of achievement of applicable performance targets). If Executive is eligible to receive a Cash Bonus, such bonus will not be deemed to be fully “earned” unless Executive is (i) employed by the Company and in good standing on the date the Cash Bonus is paid, and (ii) has not given notice of Executive’s intention to resign Executive’s employment as of, or prior to, the date the Company pays the applicable Cash Bonus. The Cash Bonus shall be paid to Executive no later than March 15th of the year following the year for which the bonus is payable.
(c) Equity. Equity Award. Executive will be granted an equity-based compensation award (“Award”) in such amounts and subject to such terms and conditions that are consistent with the terms and conditions outlined on Exhibit A attached hereto. Upon termination of Executive’s employment, the treatment of any portion of outstanding Award shall be determined in accordance with the terms of any agreements (and/or Company incentive plan) governing such Awards (“Award Agreement”). Executive shall remain eligible to receive additional equity-based compensation awards as the Company may grant from time to time.
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(d) Withholding. Company shall withhold all applicable federal, state, local taxes and social security and such other amounts as may be required by law, including withholding and/or deductions properly elected by Executive, from all amounts payable to Executive under this Section 5.
(e) Expenses. Company shall reimburse Executive for all reasonable business expenses incurred by Executive in furtherance of the business and affairs of Company, including without limitation reasonable travel, lodging, meals, and entertainment, in each case, upon timely receipt by Company of appropriate vouchers or other proof of Executive’s expenditures and otherwise in accordance with any expense reimbursement policy as may from time to time be adopted by Company. In any case, any claim by Executive for reimbursement of expenses for a calendar year must be submitted by the Executive by March 15th of the following year, and payment of the reimbursement shall be made by the Company within ninety (90) days after Executive’s submission of request for reimbursement.
(f) Other Benefits. Executive shall be entitled to benefits for which he shall be eligible under any benefit or other plans of the Company (including, without limitation, dental, vision, medical, medical reimbursement and hospital plans, pension plans, employee stock purchase plans, profit sharing plans, bonus plans, prescription drug reimbursement plans, short and long term disability plans, life insurance and other so-call “fringe” benefits) as Company shall make available to its senior executives from time to time. Executive shall be designated as a named insured on directors’ and officers’ liability insurance for Company.
5. VACATION. During the Employment Period, Executive shall be entitled to vacation benefits consistent with Company policy, as may be in effect from time to time, except to the extent such policy is inconsistent with this Agreement.
6. CONFIDENTIAL INFORMATION AND INVENTIONS.
(a) Confidential Information; Non-Use. Executive recognizes and acknowledges that in the course of his duties he is likely to receive confidential or proprietary information of Company, its affiliates or third parties with whom Company or any such affiliates has an obligation of confidentiality. Accordingly, during and after the Term, Executive agrees to keep confidential and not disclose or make accessible to any other person or use for any other purpose other than in connection with the fulfillment of his duties under this Agreement, any “Confidential and Proprietary Information” (defined below) owned by or received by or on behalf of Company or any of its affiliates. The term “Confidential and Proprietary Information” shall include, but shall not be limited to, confidential or proprietary scientific or technical information, data, formulas and related concepts, business plans (both current and under development), client lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, investments, sales activities, promotions, credit and financial data, manufacturing processes, financing methods, plans or the business and affairs of Company or of any affiliate or client of Company. Executive expressly acknowledges that the Confidential and Proprietary Information constitutes a protectable business interest of Company. Executive agrees: (i) not to use any such Confidential and Proprietary Information for himself or others; and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from Company’s offices at any time during his employment by Company, except as required in the execution of Executive’s duties to Company, unless and until such Confidential and Proprietary Information has become public knowledge without fault by Executive. Executive agrees to return immediately all Company material and reproductions (including but not limited, to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof in his possession to Company upon request and in any event immediately upon termination of employment.
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Notwithstanding any other provisions of this Agreement, Executive may be entitled to immunity and protection from retaliation under the Defend Trade Secrets Act of 2016 for disclosing a trade secret under certain limited circumstances. Specifically, pursuant to 18 U.S.C. 1833(b), Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, Executive who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the Executive and use the trade secret information in the court proceeding, if Executive (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.
(b) Non-Disclosure. Except with prior written authorization by Company, Executive agrees that during the Term and thereafter, he will not disclose or publish: (i) any of the Confidential and Proprietary Information; or (ii) any confidential, scientific, technical, or business information of any party to whom the Executive knows, or should reasonably know, that Company or any of its affiliates owes an obligation of confidence.
(c) Inventions. Executive agrees that all inventions, discoveries, improvements and patentable or copyrightable works (“Inventions”) initiated, conceived or made by him within the scope of the Company’s business (during the Term) or using Company’s resources, either alone or in conjunction with others shall be the sole property of Company to the maximum extent permitted by applicable law and, to the extent permitted by law, shall be “works made for hire” as that term is defined in the United States Copyright Act (17 U.S.C.A., Section 101). Company shall be the sole owner of all patents, copyrights, trade secret rights, and other intellectual property or other rights in connection therewith; provided, however that this Section 6(c) shall not apply to Inventions which are not related to the business of Company and which are made and conceived by Executive not during normal working hours, not on Company’s premises and not using Company’s tools, devices, equipment or Confidential and Proprietary Information. Subject to the foregoing, Executive hereby assigns to Company all right, title and interest he may have or acquire in all Inventions; provided, however, that the Board may in its sole discretion agree to waive Company’s rights pursuant to this Section 6(c).
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(d) Further Actions and Assistance. Executive agrees to cooperate reasonably with Company and at Company’s expense, both during and after his employment with Company, with respect to the procurement, maintenance and enforcement of copyrights, patents, trademarks, and other intellectual property rights (both in the United States and foreign countries) relating to such Inventions. Executive shall sign all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights and powers of attorney, that Company reasonably may deem necessary or desirable in order to protect its rights and interests in any Inventions. Executive further agrees that if Company is unable, after reasonable effort, to secure Executive’s signature on any such papers, any officer of Company shall be entitled to execute such papers as his agent and attorney-in-fact and Executive hereby irrevocably designates and appoints each officer of Company as his agent and attorney-in-fact to execute any such papers on his behalf and to take any and all actions as Company reasonably may deem necessary or desirable in order to protect its rights and interests in any Inventions, under the conditions described in this paragraph.
(e) Prior Inventions. Executive will not assert any rights to any invention, discovery, idea, or improvement relating to the business of the Company or his duties hereunder as having been made or acquired by Executive prior to his work for Company, except for the matters, if any, described in Appendix A to this agreement.
(f) Disclosure. Executive agrees that he will promptly disclose to Company all Inventions initiated, made, or conceived or reduced to practice by him, either alone or jointly with other, during the Term.
(g) Survival. The provisions of this Section 6 shall survive any termination of this Agreement.
(h) Return of Company Property. Within ten (10) days following the date of any termination of Executive’s employment, Executive or Executive’s personal representative shall return all property of the Company and its Affiliates in Executive’s possession, including but not limited to all Company Group-owned computer equipment (hardware and software), smart phones, facsimile machines, tablet computers and other communication devices, credit cards, office keys, security access cards, badges, identification cards and all copies (including drafts) of any documentation or information (however stored) relating to the business of the Company and its Affiliates, its customers and clients or its prospective customers and clients.
(i) Cooperation. During the Employment Period and for six years thereafter, Executive shall give Executive’s assistance and cooperation, upon reasonable advance notice, in any matter relating to Executive’s position with the Company and its Affiliates, or Executive’s knowledge as a result thereof as the Company may reasonably request, including Executive’s attendance and truthful testimony where deemed appropriate by the Company, with respect any investigation or the Company’s (or an Affiliate’s) defense or prosecution of any existing or future claims or litigations or other proceeding relating to matters in which Executive was involved or had knowledge by virtue of Executive’s employment with the Company Group, in all cases on schedules that are reasonably consistent with Executive’s other permitted activities and commitments. The Company agrees to reimburse Executive for any costs Executive incurs in connection with complying with this Section, including Executive’s reasonable attorney’s fees.
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7. NON-COMPETITION, NON-SOLICITATION AND NON-DISPARAGEMENT.
(a) Restrictive Covenant. Executive understands and recognizes that his services to Company are special and unique and that in the course of performing such services Executive will have access to and knowledge of Confidential and Proprietary Information and Executive agrees that, during the Term and twelve month period immediately following Executive’s separation from employment (the “Termination Restriction Period”), whether such separation is voluntary or involuntary, he shall not in any manner, directly or indirectly, on behalf of himself or any other person, firm, partnership, joint venture, corporation or other business entity (“Person”), enter into or engage in any business involving the development or commercialization of competing products developed or commercialized by the Company at the time of Executive’s separation or at any time during Executive’s employment with the Company (the “Business of the Company”) within the geographic area in which Company does business, which is deemed by the Parties hereto to be the United States and the European Union. Executive acknowledges that, due to the unique nature of Company’s business, Company has a strong legitimate business interest in protecting the continuity of its business interests and its Confidential and Proprietary Information and the restriction herein agreed to by Executive narrowly and fairly serves such an important and critical business interest of Company. Notwithstanding the foregoing, nothing contained in this Section 7(a) shall be deemed to prohibit Executive from acquiring or passively holding, solely for investment, publicly traded securities of any corporation, some or all of the activities of which are engaged in the Business of Company so long as such securities do not, in the aggregate, constitute more than four percent (4%) of any class or series of outstanding securities of such corporation; and further notwithstanding the foregoing, nothing contained in this Section 7(a) shall preclude Executive from performing the functions of chief executive or other senior executive, per se, provided such functions do not involve the development of a product within the Business of the Company, as defined herein, or the use of the Confidential and Proprietary Information; becoming an employee of, or from otherwise providing services to, a separate division or operating unit of a multi-divisional business or enterprise (a “Division”) if: (i)) the Division by which Executive is employed, or to which Executive provides services, is not engaged in the Business of Company, (ii) Executive does not provide services, directly or indirectly, to any other division or operating unit of such multi-divisional business or enterprise engaged in or proposing to engage in the Business of Company (individually, a “Competitive Division” and collectively, the “Competitive Divisions”) and (iii) the Competitive Divisions, in the aggregate, accounted for less than 10% of the multi-divisional business or enterprise’s consolidated revenues for the fiscal year, and each subsequent quarterly period, prior to Executive’s commencement of employment with or provision of services to the Division.
(b) Reasonableness of Restriction. Executive hereby acknowledges and agrees that the covenant against competition provided for pursuant to Section 7 (a) is reasonable with respect to its duration, geographic area and scope. If, at the time of enforcement of this Section 7, a court holds that the restrictions stated herein are unreasonable under the circumstances then existing, the Parties hereto agree that the maximum duration, scope or geographic area legally permissible under such circumstances will be substituted for the duration, scope or area stated herein.
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(c) Non-Solicitation. During the Term and the applicable Termination Restriction Period (as defined hereinafter), Executive shall not, directly or indirectly, without written consent of Company: (i) solicit or induce any employee or independent contractor of Company or any of its affiliates to leave the employ of Company or any affiliate; or hire for any purpose any employee or independent contractor of Company; or hire any former employee or independent contractor who has left the employment of Company or any affiliate of Company within twelve (12) months of the termination of such employee’s employment with Company or any such affiliate for any purpose; or hire any former employee or independent contractor of Company in knowing violation of such employee’s non-competition agreement with Company or any such affiliate; or (ii) solicit, divert or take away, or attempt to divert or take away, the business or patronage of any agent, client or customer (or any potential agent, client or customer) of Company which was served by Company (or which the Company solicited for service) during the twelve-month period prior to the termination of Executive’s employment with Company; or (iii) without the consent of the Board solicit or accept employment or be retained by any person, who at any time during the twelve month period prior to the termination of Executive’s employment with Company, was an agent, client or customer of Company or any of its subsidiaries where his position will be related to the Business of Company.
(d) Non-Disparagement. Executive agrees that he shall not directly or indirectly disparage, whether or not truthfully, the name or reputation of Company or any of its affiliates, including but not limited to, any officer, director, employee or shareholder of Company or any of its affiliates provided that, nothing in this Section shall be construed to interfere with Executive’s right to engage in protected concerted activity under the National Labor Relations Act. Notwithstanding this Section 7(d), nothing contained herein shall apply to statements made by Executive (x) in the course of his responsibility to evaluate the performance and/or participate in any investigation of the conduct or behavior of officers, employees and/or others or (y) as part of any judicial, administrative or other legal action or proceeding, and nothing shall be construed to limit or impair the ability of Executive to provide truthful testimony in response to any validly issued subpoena or to file pleadings or respond to inquiries or legal proceedings by any government agency to the extent required by applicable law. In addition, Executive agrees not to, without Company’s prior written consent, communicate, directly or indirectly, with the press or other media, concerning the past or present employees or businesses of the Company Group.
(e) Enforcement. In the event that Executive breaches or threatens to breach any provisions of Section 6 or this Section 7, then, in addition to any other rights Company may have, Company shall be entitled to seek injunctive relief to enforce such provisions. Company and Executive agree that any such action for injunctive or equitable relief shall be heard in a state or federal court situated in Morris County in the State of New Jersey and each of the Parties hereto agrees to accept service of process by registered or certified mail and to otherwise consent to the jurisdiction of such courts.
(f) Remedies Cumulative; Judicial Modification. (i) Each of the rights and remedies enumerated in Section 7(e) shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to Company at law or in equity. If any of the covenants contained in this Section 7, or any part of any of them, is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants or rights or remedies, which shall be given full effect without regard to the invalid portions. If any of the covenants contained in this Section 7 is held to be invalid or unenforceable because of the duration of such provision or the area covered thereby, the Parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision and in its reduced form such provision shall then be enforceable. (ii) In the event that an actual proceeding is brought in equity to enforce the provisions of Section 6 or this Section 7, Executive shall not urge as a defense that there is an adequate remedy at law, nor shall Company be prevented from seeking any other remedies that may be available.
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(g) Survival. The provisions of this Section 7 shall survive any termination of this Agreement.
8. REPRESENTATIONS AND WARRANTIES.
(a) By Executive. Executive hereby represents and warrants to Company as follows:
(i) Neither the execution nor delivery of this Agreement nor the performance by Executive of his duties and other obligations hereunder conflict with or constitute a default or breach of any covenant or obligation under (whether immediately, upon the giving of notice or lapse of time or both) any prior employment agreement, contract, or other instrument to which Executive is a party or by which he is bound.
(ii) Executive has the full right, power and legal capacity to enter and deliver this Agreement and to perform his duties and other obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of Executive enforceable against him in accordance with its terms. No approvals or consents of any persons or entities are required for Executive to execute and deliver this Agreement or perform his duties and other obligations hereunder.
(iii) Executive will not use any confidential information or trade secrets of any third Party in his employment by Company in violation of the terms of the agreements under which he had access to or knowledge of such confidential information or trade secrets.
(b) By Company. Company hereby represents and warrants to Executive as follows:
(i) Neither the execution nor delivery of this Agreement nor the performance by Company of its obligations hereunder conflict with or constitute a default or breach of any covenant or obligation under (whether immediately, upon the giving of notice or lapse of time or both) any prior agreement, contract, or other instrument to which Company is a party or by which it is bound.
(ii) Company has the full right and power to enter and deliver this Agreement and to preform obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of Company enforceable against it in accordance with its terms. All approvals or consents required for Company to validly execute and deliver this Agreement and perform its obligations hereunder, including, without limitation, approval of the Board, have been obtained.
9. TERMINATION.
(a) Cause. Executive’s employment hereunder may be terminated by the Board immediately for “Cause” (defined below). Any of the following actions by Executive shall constitute “Cause”:
(i) The willful failure, disregard or refusal by Executive to perform his material duties or obligations under this Agreement;
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(ii) Any willful, intentional or grossly negligent act by Executive having the effect of materially injuring (whether financial or otherwise and as determined reasonably and in good faith by a majority of the members of the Board) the business or reputation of Company or any of its affiliates;
(iii) Executive’s indictment for or being charged with any felony or a crime involving serious moral turpitude (including entry of a guilty or nolo contendere plea);
(iv) A good faith determination by the Board and/or any government representative or agency that the Executive is a “bad actor” as defined by 17 CFR 230.506(a);
(v) The good faith determination by the Board, after a reasonable and good-faith investigation by the Company following any allegation by another employee of Company, that Executive engaged in some form of harassment prohibited by law (including, without limitation, harassment on the basis of age, sex or race) unless Executive’s actions were specifically directed by the Board;
(vi) Any willful misconduct by the Executive or misappropriation, theft or embezzlement by Executive of the property of Company or its affiliates (whether or not a misdemeanor or felony);
(vii) Breach by Executive of any material provision of this Agreement or any other agreement between Executive and the Company or of any policy of the Company that is not cured by Executive to the reasonable satisfaction of Company’s Board within thirty (30) days after written notice thereof is given to Executive by Company.
For purposes of Section 9 (a), no act or omission by Executive shall be considered willful if reasonably and in good faith believed by Executive to be in, or not contrary to, the best interests of Company.
(b) Death. Executive’s employment hereunder shall be terminated upon Executive’s death.
(c) Disability. The Board may terminate Executive’s employment hereunder due to Executive’s “Disability” (defined below). For purposes of this Agreement, a termination due to Executive’s “Disability” shall be deemed to have occurred:
(i) when the Board has provided a written termination notice to Executive supported by a written statement from a “Reputable Independent Physician” (defined below), whose determination as to disability shall be binding on all Parties, to the effect that Executive shall have become so physically or mentally incapacitated by reason of physical or mental illness or injury as to be unable to resume (with or without reasonable accommodation as that term is defined under applicable law) within the ensuing three (3) months his employment under this Agreement; or
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(ii) upon rendering of a written termination notice by the Board after Executive has been unable to substantially perform his duties hereunder by reason of any physical or mental illness or injury (with or without reasonable accommodation as that term is defined under applicable law) for ninety (90) or more consecutive days or more than one hundred twenty (120) days in any consecutive twelve-month period.
The term “Reputable Independent Physician” means a physician satisfactory to both Executive and Company, provided that if Executive and Company do not agree on a physician, then a third physician selected by the physicians selected by Executive and Company. Executive agrees to make himself available and to cooperate in a reasonable examination by the Reputable Independent Physician.
(d) Good Reason. Executive may terminate his employment hereunder for “Good Reason” (defined below). The term “Good Reason” shall mean the occurrence any of the following events (provided, Executive has provided Company with written notice of the occurrence of such events within ninety (90) days of the occurrence of such events and Company has not cured such breach within thirty (30) days from such notice and Executive terminates employment within 30 days of the expiration of such cure period):
(i) any material breach of this Agreement by Company if Executive has provided Company with written notice of the breach within ninety (90) days of the breach and Company has not cured such breach within thirty (30) days from such notice;
(ii) without Executive’s express written consent, any material reduction by Company of Executive’s duties, responsibilities, or authority, including, without limitation, a change in the line of reporting between him and the Board;
(iii) a relocation of Company’s principal place of business outside of the New York metropolitan area or to a location more than 50 miles from the immediately preceding location without Executive’s written consent; or
(iv) material reduction in Executive’s annual base salary unless all officers and/or members of the Company’s executive management team experience an equal or greater percentage reduction in annual base salary and/or total compensation.
(e) Convenience. Company and Executive each may terminate Executive’s employment hereunder for any reason or no reason at any time by written notice of termination to the other Party, which notice shall specify the termination date, or by providing a Notice of Nonrenewal to the other Party.
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10. COMPENSATION UPON TERMINATION.
In the event Executive’s employment is terminated, Company shall pay to Executive the Base Salary and benefits otherwise payable to him under Section 5 through the last day of his actual employment by Company, any reimbursable business expenses, and any earned but unpaid bonuses (together, the “Accrued Compensation”). In addition to the Accrued Compensation:
(a) Death or Disability. If Executive’s employment is terminated as a result of his death or Disability, Company shall pay to Executive or to Executive’s estate, as applicable, (i) his Base Salary through the date which is ninety (90) days after his death or Disability and (ii) such other or additional benefits, if any, as may be provided under applicable employee benefit plans, programs and/or arrangements of Company. All shares of capital stock of Company held by Executive that are subject to vesting (“Restricted Shares”) and all options to purchase shares of capital stock of Company (“Stock Options”) that are scheduled to vest on or before the next succeeding anniversary of the Effective Date shall be accelerated and deemed to have vested as of the termination date. All Restricted Shares and Stock Options that have not vested (or been deemed pursuant to the immediately preceding sentence to have vested) as of the date of termination shall be forfeited to Company as of such date. Stock Options that have vested as of Executive’s termination shall remain exercisable until the earlier to occur of (i) the expiry of sixty (60) months following such termination and (ii) the last expiration/termination date applicable under the grant under which such Stock Options were granted. For Disability, all payments, benefits and/or grants under this Section 10(a) shall be subject to Executive’s execution and delivery within 21 days of separation from service of a general release of Company, its parents, subsidiaries, and affiliates and each of its officers, directors, employees, agents, successors and assigns in a form that is acceptable to Company, with such payments, benefits and or grants commencing thirty (30) days after Executives separation from service.
(b) Cause. If Executive’s employment is terminated by the Board for Cause, then Company shall provide such other or additional benefits, if any, as may be required under applicable employee benefit plans, programs and or arrangements of Company. Executive shall have no further entitlement hereunder to any other compensation or benefits from Company except to extent otherwise provided by law. All Restricted Shares that have not vested as of the date of termination shall be forfeited to Company as of such date. All unexercised Stock Options vested as of Executive’s termination shall remain exercisable for ninety (90) days following such termination.
(c) Other than for Cause, Death, or Disability. . If Company terminates Executive’s employment other than as a result of Executive’s death or Disability and other than for Cause or if Executive terminates Executive’s employment for Good Reason, then Company shall (i) continue to pay the Executive his Base Salary for a period of twelve (12) months and provide health benefits for a period of twelve (12) months following the effective date of the Executive’s separation from service (such period of payment referred to herein as the “Section 10(c) Termination Benefits Period” or, in the case of benefits, such time as Executive receives equivalent coverage and benefits under plans and programs of a subsequent employer; and (ii) provide such other or additional benefits, if any, as may be provided under applicable employee benefit plans, programs and/or arrangements of the Company (other than any severance plans or programs). Furthermore, upon such termination, all outstanding unvested time-based equity awards (including Restricted Shares and Stock Options) held by the Executive as of the date of Executive’s Separation from Service shall immediately and fully accelerate and become 100% vested. Stock Options that have vested as of Executive’s termination shall remain exercisable until the earlier to occur of (i) the expiry of sixty (60) months following such termination and (ii) the last expiration/termination date applicable under the grant under which such Stock Options were granted. All payments, benefits and/or grants under this Section 10(c) shall be subject to Executive’s execution and delivery within sixty (60) days of separation from service of a separation agreement with Company, including without limitation non-disparagement and confidentially provisions, an agreement to cooperate past-separation of employment and a general release of the Company, its parents, subsidiaries and affiliates and each of its officers, directors, employees, agents, successors and assign in a form acceptable to the Company, with such payments, benefits, and or grants commencing sixty (60) days from Executive’s separation from service, except that any such payments, benefits, and/or grants that would otherwise be payable during the sixty (60) day period shall be paid on the first payroll date following the expiration of such 60-day period.
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(d) By Executive for Convenience. If Executive terminates Executive’s employment pursuant to Section 9(e), Executive shall not be entitled to receive any payments or benefits other than the Accrued Compensation.
(e) This Section 10 sets forth the only obligations of Company with respect to the termination of Executive’s employment with Company, and Executive acknowledges that, upon the termination of his employment, he shall not be entitled to any payments or benefits which are not explicitly provided in this Section 10, except as required by law or the terms of another employee plan, program or arrangement covering him. Executive acknowledges and agrees that upon the termination of his employment with the Company, regardless of the reason or grounds therefore, he shall resign from his position on the Board and from any other board, organization or foundation wherein Executive sits or belongs as a representative of the Company.
(f) The obligations of Company that arise under this Section 10 shall survive the expiration or earlier termination of this Agreement.
11. CHANGE OF CONTROL.
(a) Change of Control Defined. The term “Change of Control” means, after the Effective Date:
(i) the acquisition by an individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of beneficial ownership of any capital stock of Company, if, after such acquisition, such individual, entity or group beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) fifty percent (50%) or more of the combined voting power of the then-outstanding securities of Company entitled to vote generally in the election of directors (“Outstanding Company Voting Securities”); or
(ii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving Company or a sale or other disposition of all or substantially all of the assets of Company (“Business Combination”), unless, immediately following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Company or substantially all of Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership of the Outstanding Company Voting Securities immediately prior to such Business Combination.
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(b) Consequence. In the event of Executive’s termination of employment with the Company either (i) by the Company without Cause at any time within twelve (12) months prior to the consummation of a Change of Control if, prior to, or as of such termination, a Change of Control transaction was Pending (as defined herein) at any time during such twelve (12)-month period, (ii) by Executive for Good Reason at any time within twelve (12) months after the consummation of a Change of Control, or (iii) by the Company without Cause at any time upon or within twelve (12) months after the consummation of a Change of Control, then, Executive shall be entitled to receive the following:(i) the acceleration and vesting in full of any then outstanding and unvested portion of any time- vesting equity award with, options continuing to be exercisability for sixty (60) months following termination (or, if earlier, their expiration date); (ii) the benefits described in Section 4 (a), (b) and (c), provided, however, that the Severance Amount shall equal two (2) times the sum of Base Salary and Target Bonus and the Severance Period shall be twenty-four (24) months. A Change of Control transaction shall be deemed to be “Pending” each time any of the following circumstances exist: (A) the Company and a third party have entered into a confidentiality agreement that has been signed by a duly-authorized officer of the Company and that is related to a potential Change of Control transaction; (B) the Company has received a written expression of interest from a third party, including a binding or nonbinding term sheet or letter of intent, related to a potential Change of Control transaction; or (C) a third party has publicly announced, through a filing with the Securities and Exchange Commission, its intent to commence a tender offer or similar transaction to acquire 50% or more of the outstanding voting interests of the Company.
(c) Potential Adjustments due to Tax Implications. Notwithstanding anything in this Agreement or any other agreement between Executive and Company to the contrary, but subject to this Section 11(c), Company will make the payments and other acceleration of benefits under this Agreement or any other agreement or plan between the Company and Executive and other compensatory arrangements without regard to whether Section 280G of the Internal Revenue Code of 1986 (the “Code”) would limit or preclude the deductibility of such payments or benefits. However, if reducing or eliminating any such payment and/or other benefit would increase the “Total After-Tax Payments” (defined below), then the amounts payable to Executive will be reduced or eliminated as follows (or in such other manner as Company may specify at the applicable time) to the extent necessary to maximize such Total After-Tax Payments:
(i) first, by reducing or eliminating any cash payments or other benefits (other than the vesting of any options or stock) and
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(ii) second, by reducing or eliminating the vesting of options and stock that occurs as a result of a Change of Control or other event covered by Section 280G of the Code.
Company’s independent, certified public accounting firm will determine whether and to what extent payments or vesting are required to be reduced or eliminated in accordance with the foregoing. If there is ultimately determined to be an underpayment of or overpayment to Executive under this provision, the amount of such underpayment or overpayment will be immediately paid to Executive or refunded by him, as the case may be with interest at the applicable federal rate under the Code. The term “Total After-Tax Payments” means the total value of all “parachute payments” (as that term is defined in Section 280G(b)(2) of the Code) made to Executive or for his benefit (whether made under the Agreement or otherwise), after reduction for all applicable federal taxes (including, without limitation, the tax described in Section 4999 of the Code).
12. INDEMNIFICATION. Company shall defend and indemnify Executive in his capacity as Chief Operating Officer of Company to the fullest extent permitted under to the Delaware General Corporate Law (the “DGCL”). Executive’s rights to, and Company’s obligation to provide, indemnification shall survive termination of this Agreement.
13. COMPLIANCE WITH CODE SECTION 409A.
(a) The intent of the Parties to the Agreement is that the payments, compensation, and benefits under this Agreement will be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, in this connection, the Agreement shall be interpreted to be exempt or in compliance with Section 409A.
(b) Potential Delay of Payment(s) and Adjustments. Notwithstanding any other provisions of the Agreement, if any payment, compensation or other benefit provided to Executive in connection with his separation from service is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Executive is a “specified employee” within the meaning of Section 409A, no part of such payments shall be paid before the day that is six (6) months plus one (1) day after the termination date (the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to Executive during the period between the termination date and the New Payment Date shall be paid to Executive in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement.
(c) Separation from Service. For purposes of this Agreement, the terms “termination of employment” or “separation from service” will be determined consistent with the rules relating to “separation from service” under Section 409A.
(d) Installments. If any payment, compensation, or other benefit required by the Agreement is to be paid in a series of installment payments, each individual payment in the series shall be considered a separate payment for purposes of Section 409A.
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14. MISCELLANEOUS.
(a) Governing Law. Subject to the next sentence, this Agreement and all questions relating to its validity, interpretation, performance, remediation, and enforcement (including, without limitation, provisions concerning limitations of actions) shall be governed by and construed in accordance with the substantive laws of the State of New Jersey, notwithstanding any choice-of-law doctrines of that jurisdiction or any other jurisdiction that ordinarily would or might cause the substantive law of another jurisdiction to apply.
Notwithstanding the foregoing, all questions relating to the validity, interpretation, performance, remediation, and enforcement of Company’s obligations, and Executive’s rights, under Section 12 shall be governed by and construed in accordance with the substantive laws of the State of Delaware.
(b) Personal Jurisdiction. To the fullest extent permitted by applicable law, any action or proceeding relating in any way to this Agreement may only be brought and enforced in the State New Jersey, to the extent subject matter jurisdiction exists therefore. The Parties irrevocably submit to the jurisdiction of such courts in respect of any such action or proceeding. The parties irrevocable waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to the laying of venue of any such action or proceeding in such courts, as well as any claim that any such action or proceeding brought in any such court has been brought in any inconvenient forum.
(c) Service of Process. The Parties further irrevocably consent to the service of Process out of any of the aforementioned courts in the manner and to the address specified in Section 14(h) of this Agreement.
(d) Waiver of Jury Trail. Each of the parties hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based in contract, tort, or otherwise) arising out of or relating to this Agreement or the actions of any party in the negotiation, administration, performance, and enforcement thereof. Each of the parties hereto further warrants and represents that it has reviewed this waiver with its legal counsel, and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing, and this waiver shall apply to any subsequent amendments, renewals, supplements, or modifications to this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial by court.
(e) Assignment. This Agreement, and Executive’s rights and obligations hereunder, may not be assigned by Executive. Company may assign its rights, together with its obligations, hereunder in connection with any sale, transfer or other disposition of all or substantially all of its business or assets. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties hereto, and their respective heirs, legal representatives, successors and assigns.
(f) Amendment. This Agreement cannot be amended orally, or by any course of conduct or dealing, but only by a written agreement duly executed by the Parties.
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(g) Waiver. The failure of either Party to insist upon the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment of future compliance therewith, and such terms, conditions and provisions shall remain in full force and effect. No waiver of any term or condition of this Agreement on the part of either Party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such Party. Unless the written waiver instrument expressly provides otherwise, no waiver by a Party of any right or remedy or breach by the other Party in any particular instance shall be construed to apply to any right, remedy or breach arising out of or related to a subsequent instance.
(h) Notices. All notices, demands or other communications desired or required to be given by a Party to the other Party shall be in writing and shall be deemed effectively given upon (i) personal delivery to the Party to be notified, (ii) upon confirmation of receipt of fax or other electronic transmission, (iii) one business day after deposit with a reputable overnight courier, prepaid for priority overnight delivery, or (iv) five days after deposit with the United States Post Office, postage prepaid, certified mail, return receipt requested, in each case to the Party to be notified at its/his address set forth at the top of this Agreement; or to such other addresses and to the attention of such other individuals as either Party shall have designated to the other by notice given in the foregoing manner.
(i) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the Parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements, and understandings, written or oral between the Parties, relating to the subject matter hereof. No representation, promise or inducement has been made by either Party that is not embodied in this Agreement, and neither Party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.
(j) Affiliate and Control Defined. As used in this Agreement, the term “affiliate” of a specified Person shall mean and include any Person controlling, controlled by or under common control with the specified Person. A Person shall be deemed to “control” another Person if such first Person possesses directly or indirectly the power to direct, or cause the direction of, the management and policies of the second Person, whether through the ownership of voting securities, by contract or otherwise.
(k) Captions, Headings and Cross-References. The section headings contained herein are for reference purposes and convenience only and shall not in any way affect the meaning or interpretation of this Agreement. Except as expressly set forth otherwise, all cross-references to sections refer to sections of this Agreement.
(l) Severability. In addition to, and not in conflict with, the provisions of Section 7(b) and 7(f), the Parties agree that each and every provision of this Agreement shall be deemed valid, legal and enforceable in all jurisdictions to the fullest extent possible. Any provision of this Agreement that is determined to be invalid, illegal or unenforceable in any jurisdiction or country in the Territory shall, as to that jurisdiction or country, be adjusted and reformed rather than voided, if possible, in order to achieve the intent of the Parties. Any provision of this Agreement that is determined to be invalid, illegal or unenforceable in any jurisdiction or country which cannot be adjusted and reformed shall for the purposes of that jurisdiction or country, be voided. Any adjustment, reformation or voidance of any provisions of this Agreement shall only be effective in the jurisdiction or country requiring such adjustment or voidance, without affecting in any way the remaining provisions of this Agreement in such jurisdiction or country or adjusting, reforming, voiding or rendering that provision or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction or country.
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(m) Counterpart Execution. This Agreement may be executed in one or more counterparts each of which shall be an original document and all of which together shall constitute one and the same instrument. The Parties acknowledge that this Agreement may be executed and delivered by means of electronic signatures and that use and acceptance of electronic signatures to bind the Parties represents the voluntary agreement and intention of the Parties to conduct this transaction by electronic means. The Parties agree that execution and delivery by electronic means will have the same legal effect as if signatures had been manually written on this Agreement. This Agreement will be deemed lawfully executed by the Parties by such action for purposes of any statute or rule of law that requires this Agreement to be executed by the Parties to make the mutual promises, agreements and obligations of the Parties set forth herein legally enforceable. Facsimile and .pdf exchanges of signatures will have the same legal force and effect as the exchange of original signatures. The parties hereby waive any right to raise any defense or waiver based upon the execution of this Agreement by means of electronic signatures in any proceeding arising under or relating to this Agreement. The Parties agree that the legal effect, validity and enforceability of this Agreement will not be impaired solely because of its execution in electronic form or that an electronic record was used in its formation. The Parties acknowledge that they are capable of retaining electronic records of this transaction.
IN WITNESS WHEREOF, the Parties hereto have executed this Employment Agreement as of the date forth above.
| THARIMMUNE, INC. | EXECUTIVE: | |
| /s/ Sireesh Appajosyula | /s/ Vincent Lopriore | |
| Name: Sireesh Appajosyula | Vincent Lopriore | |
| Title: Chief Executive Officer | Executive Chairman of Board | |
| Date: June 11, 2025 | Date: June 11, 2025 |
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EXHIBIT
A
Equity Terms
| Type of Award (“Award”) | ● An award of stock options under the Company’s 2023 Stock Option plan
● Executive’s Award to equal _________ shares at the initial public offering price of the common stock
● Award is evidenced by agreement executed by Executive and the Company |
| Vesting of Award | ● Vesting shall be monthly over a 48 month period with a 12 month cliff. |
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Exhibit 31.1
Certification of Chief Executive Officer of Tharimmune, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Sireesh Appajosyula, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Tharimmune, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2025 | /s/ Sireesh Appajosyula |
| Sireesh Appajosyula | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
Certification of Chief Financial Officer of Tharimmune, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Sireesh Appajosyula, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Tharimmune, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2025 | /s/ Sireesh Appajosyula |
| Sireesh Appajosyula | |
| Interim Chief Financial Officer | |
| (Interim Principal Financial and Accounting Officer) |
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Sireesh Appajosyula, Chief Executive Officer of Tharimmune, Inc. (the “Company”), hereby certifies that based on the undersigned’s knowledge:
| 1. | The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 14, 2025 | /s/ Sireesh Appajosyula |
| Sireesh Appajosyula | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 32.2
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Sireesh Appajosyula, Interim Chief Financial Officer of Tharimmune, Inc. (the “Company”), hereby certifies that based on the undersigned’s knowledge:
| 1. | The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 14, 2025 | /s/ Sireesh Appajosyula |
| Sireesh Appajosyula | |
| Interim Chief Financial Officer | |
| (Interim Principal Financial and Accounting Officer) |