Indaptus Therapeutics, Inc. Annual Report - A Pivotal Transformation and New Direction

Indaptus Therapeutics, Inc. experienced a year of profound change. The fiscal year ending December 31, 2025, marked not a period of traditional business operations, but a dramatic shift that set the company on an entirely new course.

Business Overview Indaptus Therapeutics, Inc., along with its subsidiaries Intec Pharma Ltd. and Decoy Biosystems, Inc., has undergone a fundamental transformation. The company, once focused on developing novel anti-cancer immunotherapies, has effectively become a "shell company." This means it currently has no significant operations but exists primarily to facilitate a merger or acquisition. Its new mission: identify and acquire an operating business. This strategic pivot means the company is winding down or pausing its past therapeutic development activities as it seeks a new identity.

Financial Performance (Fiscal Year Ended December 31, 2025)

• Revenue: Indaptus reported negligible revenue of approximately $0.2 million, reflecting a significant reduction in its previous business activities.
• Net Loss: Indaptus recorded a substantial net loss of $15.5 million for the year, primarily from ongoing operational costs and expenses tied to its strategic shift.
• Cash Position: Before a critical new investment, the company held approximately $1.2 million in cash. A subsequent $6.0 million investment significantly bolstered its liquidity, raising the cash balance to roughly $7.2 million.
• Market Value: As of June 30, 2025, common stock held by non-affiliates (public shareholders) had a market value of approximately $5.78 million. This figure offers a snapshot of the company's size before the full impact of recent changes.

Risk Factors Given the dramatic changes, several key risks stand out:

• Extreme Shareholder Dilution and Control: The new preferred stock issued to Mr. Lazar can convert into common stock. If this occurs, existing public shareholders will own a significantly smaller percentage of the company. More importantly, Mr. Lazar's near-complete control (96.4%) severely limits other shareholders' influence over company decisions.
• Uncertainty of the New Strategy: Indaptus's success now hinges entirely on finding and acquiring a suitable "Target Company." There are no guarantees this will happen, or that the acquired business will succeed. If the acquisition fails, the company's future becomes highly uncertain.
• Impact of the Reverse Stock Split: While intended to boost share price, reverse stock splits do not always lead to sustained value increases. They can sometimes signal underlying issues, reduce stock liquidity, and make it harder for small investors to trade "odd lots" (share quantities less than 100).
• Management and Board Instability: The investment has already led to significant changes in the Board and management team. Further changes are likely if an acquisition occurs, potentially creating ongoing uncertainty in leadership and direction.
• No Current Operating Business: As a shell company, Indaptus currently generates minimal revenue and conducts no active core business operations. Its value is speculative, tied entirely to a future acquisition.

Management Discussion and Analysis (MD&A) Highlights This fiscal year marked a profound strategic pivot. The company's financial results—negligible revenue and a substantial net loss of $15.5 million—directly reflect the winding down of its former therapeutic development activities and its transition to a shell company structure. Ongoing operational expenses during this transitional period primarily drove these losses.

A critical $6.0 million investment from David E. Lazar in December 2025 recapitalized the company, significantly improving its cash position and liquidity from $1.2 million to approximately $7.2 million. This capital infusion supports the company's new singular focus: identifying and acquiring an operating business.

The 1-for-28 reverse stock split, executed in June 2025, primarily aimed to increase the per-share stock price, potentially to meet listing requirements. It formed part of the broader restructuring efforts preceding the new strategic direction. Management now primarily focuses on allocating capital towards the planned acquisition to transform the company into an active operating entity.

Financial Health David E. Lazar's $6.0 million investment primarily drives the company's current financial health, significantly improving its cash position and liquidity. This capital supports the search for and potential acquisition of a new operating business. The company currently holds no significant long-term debt. Its current liquidity appears sufficient to fund operations and the search for an acquisition target in the near term.

Future Outlook Indaptus Therapeutics, Inc.'s future entirely hinges on executing its planned acquisition. The company actively evaluates options to acquire or invest in an operating business, aiming to create new growth opportunities and establish a new core identity. This strategy's success will dictate the company's long-term viability and potential for shareholder value. Broader economic conditions and the competitive M&A landscape could also influence its ability to find and close a suitable deal. David E. Lazar's investment fundamentally reset the leadership and strategic direction, giving him overwhelming control and leading to a new Board and management structure dedicated to this acquisition-focused strategy.

Competitive Position As a shell company focused on acquiring an operating business, Indaptus currently holds no active competitive position. Its future competitive landscape will entirely depend on the industry and market of the company it eventually acquires. Until the company completes such an acquisition, it will not engage in any competitive operational activities.