Processa Pharmaceuticals, Inc. Issues Amendment No. 1 to 2025 Annual Report

Key Highlights and Potential Share Price Sensitivities

• Amendment Filing: Processa Pharmaceuticals, Inc. has filed Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. This amendment is crucial as it includes information required by Items 10-14 of Part III of Form 10-K, notably details about directors, executive officers, compensation, security ownership, related transactions, and principal accounting fees. The amendment also updates certifications required under Section 302 of the Sarbanes-Oxley Act of 2002.
• Corporate Structure and Stock Information:
  • Business Address: 601 21st Street, Suite 300, Vero Beach, FL 32960
  • Trading Symbol: PCSA
  • Exchange: Nasdaq Stock Market LLC
  • Outstanding Shares as of April 29, 2026: 2,738,998
  • Aggregate market value of voting and non-voting common equity held by non-affiliates as of June 30, 2025: Not specified, but calculation can be inferred from outstanding shares and market price.
• Corporate Governance:
  • The company is a non-accelerated filer and a smaller reporting company.
  • Not an emerging growth company, nor a shell company.
  • All reports required under Sections 13 and 15(d) of the Securities Exchange Act of 1934 have been timely filed.
  • Interactive Data Files and internal controls attestation: All requirements met except for auditor attestation under Section 404(b) of Sarbanes-Oxley Act, which was not required.
• Board and Management:
  • Executive Officers include: Chief Financial Officer, President of Research and Development, and others.
  • Dr. David Young (President, R&D) and other named executive officers are listed, with detailed compensation and equity awards disclosed.
  • Compensation Committee hired an independent consultant in 2025 for executive pay review.
• Executive Compensation:
  • Philosophy: Designed to reward achievement of individual and corporate objectives, align management and shareholder interests, and incentivize performance through stock options and RSUs.
  • Omnibus Plan allows for issuance of up to 432,000 shares to eligible participants, supporting retention and performance incentives.
  • Summary Compensation Table and Outstanding Equity Awards Table: Details on salary, bonus, stock awards, and options for named executive officers, including vesting schedules and market values.
  • Market value for RSUs based on \$2.88/share closing price on December 31, 2025.
• Beneficial Ownership:
  • Detailed tables of shares beneficially owned by directors, officers, and shareholders with more than 5% ownership.
  • SEC rules applied for calculation, including options and RSUs exercisable or distributable within 60 days of April 29, 2026.
  • Largest individual holdings are disclosed, with Richland Fund, LLC and Justin Yorke among top beneficial owners.
• Equity Compensation Plan Information:
  • Plans approved by security holders: 193,013 securities to be issued upon exercise of options, warrants, and rights.
  • Plans not approved by security holders: 97 securities, with 9,940 remaining available for issuance.
  • Weighted average exercise price and plan specifics detailed in tables.
• Related Party Transactions:
  • Audit committee has written policies for review and approval of related party transactions.
  • No material related party transactions exceeding \$120,000 or 1% of average assets for last two fiscal years, except for transactions disclosed.
  • Policies ensure independence and fair terms for all transactions.
• Accounting Fees:
  • Audit Fees: \$213,968 for 2025; \$171,211 for 2024, paid to Cherry Bekaert, LLP and BD & Company, Inc. for annual audit and regulatory filings.
  • Other Fees: Services related to registration statements and comfort letters.
• Internal Controls and Compliance:
  • All Section 16(a) filings were timely except for late Form 4 submissions for certain officers/directors regarding distribution of vested RSUs (potential governance issue but not material).
  • Code of business conduct and ethics applies to all employees, officers, and directors; amendments and waivers will be disclosed on the company website.

Potential Price-Sensitive Information and Shareholder Considerations

• Amendment Filing: The filing of Amendment No. 1 is a significant event, as it addresses previously omitted information regarding governance, compensation, and related party transactions. Such amendments can influence investor confidence and affect share price if material changes or corrections are made.
• Executive Compensation and Equity Plans: Changes or clarifications in compensation structures or equity plans may impact dilution, future earnings, and management incentives, which are relevant for valuation and investor analysis.
• Beneficial Ownership Changes: Significant movements in share ownership by key officers or large shareholders, including the vesting and distribution of RSUs, can signal changes in company control or management confidence.
• Audit Fees and Internal Controls: No auditor attestation under Section 404(b) may be seen as a risk factor, especially for institutional investors, but the company asserts compliance in all other respects.
• Related Party Transactions: Absence of material related party transactions reinforces governance standards; however, any future disclosure in this area could be price-sensitive.
• Equity Compensation Plan Availability: The number of shares authorized and available under equity compensation plans can affect dilution and future share supply.

Conclusion

The Amendment No. 1 to Processa Pharmaceuticals, Inc.’s 2025 Annual Report provides comprehensive updates on governance, executive compensation, beneficial ownership, equity plans, and accounting fees. Investors should monitor any further amendments, executive share transactions, and changes in compensation or equity plans as these could materially impact share value. The company’s compliance with key regulatory filings and absence of material related party transactions supports its governance profile. However, late Form 4 filings and lack of auditor attestation under Sarbanes-Oxley remain points for investor scrutiny.