PALISADE BIO, INC.
For the period ended Sep 30, 2025. Filed Nov 10, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 10, 2025
PALI$1.13-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0000950170-25-106587
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001193125-25-274262
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 87 current paragraphs.
40 unchanged; 29 reworded; 16 added; 11 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
On October 16, 2025, we dosed our first patients in an exploratory Phase 1b cohort in FSCD while we complete longer-term chronic safety and toxicology studies. The exploratory Phase 1b cohort in FSCD will evaluate the safety, tolerability, PK, and PD of once-daily oral dosing of PALI-2108 over a 14-day treatment period as well as evaluate tissue-level pharmacology and molecular responses using paired ileal biopsies and peripheral blood mononuclear cells. Analyses will include single-nucleus and single-cell RNA sequencing to characterize treatment-induced changes in inflammatory and fibrotic signaling. Exploratory endpoints include endoscopic, histologic, and intestinal ultrasound measures to assess structural and inflammatory features of FSCD lesions.
Current report
On October 2, 2025, we closed on an underwritten public offering to issue and sell 197,154,844 shares of common stock and common stock equivalents for gross proceeds, including the full exercise of the underwriter's over-allotment option, of approximately $138.0 million prior to deducting underwriting discounts and commissions and other estimated offering expenses (the "October 2025 Offering"). We intend to use the net proceeds from the offering for working capital and general corporate purposes, including the development of PALI-2108 for the treatment of UC and FSCD.
Current report
July 2025 Warrant Inducement Transaction
Current report
Reverse Stock Split
Current report
On October 17, 2025, our stockholders approved a proposal to amend the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split. The proposal authorizes but does not require our Board of Directors (the “Board”) to effect a reverse stock split of our common stock at a reverse stock split ratio of not less than 1-for-5 and not greater than 1-for-50, with the exact ratio to be set within that range at the discretion of our Board, without further approval or authorization of our stockholders, and to be effected on or before December 31, 2025. Our Board has not yet effected this reverse stock split authorized by our stockholders.
Current report
Pursuant to the Giiant License Agreement, we owe Giiant certain payments upon the achievement of development milestones associated with PALI-2108. Concurrent with the expected dosed our first patients in an exploratory Phase 1b cohort in FSCD, which occurred on October 16, 2025, we recognized an approximate $0.3 million non-cash loss in three months ended September 30, 2025 with the fair value remeasurement of the associated contingent consideration liability. In the three months ended September 30, 2024, we recognized an approximate $0.2 million non-cash gain on the fair value remeasurement of the contingent consideration liability, resulting in a net non-cash loss year-over-year of approximately $0.5 million.
Current report
General and administrative expenses increased by less than $0.1 million, or 5%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily as result of an approximately $0.1 million increase in general and administrative employee-related expenses, and an approximately $0.1 million increase in shareholder services and legal expenses. The increase in shareholder and legal expenses was primarily due to a special shareholder meeting scheduled to occur in the third quarter of 2025 to approve the issuance of common shares underlying the common stock warrants issued in the July 2025 Warrant Inducement, and the timing of the annual shareholder meeting, which occurred in the early fourth quarter of 2025 compared to last year's annual meeting, which occurred in early third quarter of 2024. Partially offsetting these increases was a decrease in consultants and contract labor of approximately $0.1 million in the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Current report
Comparison of the nine months ended September 30, 2025 and 2024
Current report
We recognized an approximate $0.3 million non-cash loss in the nine months ended September 30, 2025 as a result of the fair value remeasurement of the contingent consideration liability under the Giiant License Agreement, and an approximate $0.2 million non-cash gain on the fair value remeasurement of the contingent consideration liability in the nine months ended September 30, 2024, resulting in a net non-cash loss year-over-year of approximately $0.5 million.
Current report
Management believes the October 2025 Offering for gross proceeds of $138 million, as further described below, will provide sufficient capital to fund our operations through major clinical development milestones including a Phase 2 primary efficacy readout of PALI-2108 for UC in the second half of 2027 and a Phase 2 primary efficacy readout of PALI-2108 for FSCD in the first half of 2028.
Current report
Future capital requirements will depend upon many factors, including the timing and extent of spending on research and development and market acceptance of our products, if approved for commercial sale. We will require additional funding to conduct future clinical activities. We may seek additional funding through public and private financings, debt financings, collaboration agreements, strategic alliances and licensing agreements. Although we have been successful in raising capital in the past, there is no assurance of success in obtaining such additional financing on terms acceptable to us, if at all, and there is no assurance that we will be able to enter into collaborations or other arrangements. If we are unable to obtain funding, it could force delays, reduce or eliminate research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect our future business prospects, and the ability to continue operations.
Current report
Pursuant to the October 2025 Offering, we issued and sold (a) 113,240,564 shares of common stock, par value $0.01 per share, at a public offering price of $0.70 per share, and (b) 83,914,280 pre-funded warrants to purchase one share of the Company's common stock, par value $0.01 per share, at a public offering price of $0.6999 per share. Gross proceeds from the offering, including the full exercise of the underwriter's over-allotment option, were approximately $138.0 million, prior to deducting underwriting discounts and commissions and other estimated offering expenses.
Current report
Warrant Inducement Transaction
Current report
Milestone Payment
Current report
Pursuant to the Giiant License Agreement, we owe a development milestone payment of $235,000 to Giiant upon the dosing of the first patient in a Phase 1b clinical trial of PALI-2108. This milestone was achieved with the dosing of patients in our Phase 1b exploratory FSCD cohort, which occurred on October 16, 2025. The Company will settle this milestone payment in cash in the amount of $235,000 within 30 days of the date the milestone was met.
Removed paragraphs (11)
Previous report
Going Concern
Previous report
Our management has evaluated all conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that these financial statements are issued, including: (i) our available cash as of the date of this filing will not be sufficient to fund our anticipated level of operations for the next 12 months; (ii) we will require additional financing prior to or in the first quarter of 2026 to continue at our expected level of operations; and (iii) if we fail to obtain the needed capital, we will be forced to delay, scale back, or eliminate some or all of our development activities, or perhaps cease operations. In the opinion of management, these factors, among others, raise substantial doubt about our ability to continue as a going concern as of the filing date of this Quarterly Report on Form 10-Q and for one year from the issuance of the condensed consolidated financial statements.
Previous report
Comparison of the six months ended June 30, 2025 and 2024
Previous report
Finally, research and development employee-related expenses decreased approximately $0.2 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024 due to a non-cash share-based compensation expense associated with the accelerated vesting of all outstanding employee time-based RSUs recognized in the six months ended June 30, 2024 that did not repeat in the six months ended June 30, 2025 as well as lower salaries and benefits and bonus accrual expense primarily due to lower research and development employee headcount.
Previous report
General and administrative expenses decreased by approximately $0.5 million, or 17%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily as result of (i) non-cash share-based compensation expense of approximately $0.2 million associated with the accelerated vesting of all outstanding employee time-based RSUs recognized in the in the six months ended June 30, 2024 that did not repeat in the six months ended June 30, 2025, (ii) a $0.2 million decrease in consultants and contract labor, and (iii) a $0.1 million decrease shareholder services expense due to a special shareholder meeting held in the first half of 2024, of which there was none in the first half of 2025.
Previous report
Financial Condition
Previous report
Sources of Liquidity
Previous report
We expect to incur substantial operating losses for the foreseeable future. We will need to raise additional capital through a combination of equity offerings, debt financings, exercise of our common stock warrants, collaborations and licensing of our intellectual property, and other similar arrangements. Our ability to raise additional capital may be adversely impacted by: (i) general political or economic conditions, (ii) an economic slowdown or recession, (iii) inflation, (iv) tariffs, sanctions, trade restrictions, or other U.S. and foreign regulatory requirements, (v) rising interest rates, (vi) ongoing supply chain disruptions, (vii) the ongoing global conflicts, including those in the Ukraine and the Middle East, and (viii) limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry. In the event that we are unable to access additional capital, we may need to curtail or greatly reduce our operations, which could have a materially adverse impact on our business, financial condition, and results of operations.
Previous report
Office Lease
Previous report
We are party a to non-cancelable facility operating lease (the "Corporate Office Lease") of office space for our corporate headquarters. The initial contractual term is for 39-months commencing on June 1, 2022 and expiring on August 31, 2025. We have the option to renew the Corporate Office Lease for an additional 36-month period at the prevailing market rent upon completion of the initial lease term. We have determined that we will not exercise this renewal option.
Previous report
Commencing on June 1, 2022, we are subject to contractual monthly lease payments of $10,850, plus certain utilities, for the first 12 months with 3 percent escalations at the first, second and third lease commencement anniversaries. As of June 30, 2025, the total remaining future minimum lease payments associated with the Corporate Office Lease of approximately $24,000, which includes an immaterial amount of imputed interest, will be paid in 2025 over the remaining lease term of approximately 0.2 years.
Reworded paragraphs (29)
Previous wording
We recommend investors read this entire Quarterly Report on Form 10-Q, including the “Risk Factors” section, the condensed consolidated financial statements, and related notes thereto. As used in this Quarterly Report on Form 10-Q, unless the context indicates or otherwise requires, “Palisade,” “Palisade Bio,” the "Company,” “we,” “us,” and “our” or similar designations in this report refer to Palisade Bio, Inc., a Delaware Corporation, and its subsidiaries. Any reference to “common shares” or “common stock,” refers to our $0.01 par value common stock. Any reference to “Series A Preferred Stock” refers to our Series A 4.5% Convertible Preferred Stock. Any reference to “Leading Biosciences, Inc.” or “LBS” refers to our operations prior to the completion of our merger with Seneca Biopharma, Inc. ("Seneca") on April 27, 2021 (the "Merger"). Any technology that we currently own or may acquire the rights to in the future is referred to by us as either a “product candidate” or "product candidates". Additionally, any reference herein that refers to preclinical studies also refers to nonclinical studies.
Current wording
We recommend investors read this entire Quarterly Report on Form 10-Q, including the “Risk Factors” section, the condensed consolidated financial statements, and related notes thereto. As used in this Quarterly Report on Form 10-Q, unless the context indicates or otherwise requires, “Palisade,” “Palisade Bio,” the "Company,” “we,” “us,” and “our” or similar designations in this report refer to Palisade Bio, Inc., a Delaware Corporation, and its subsidiaries. Any reference to “common shares” or “common stock,” refers to our $0.01 par value common stock. Any reference to “Series A Preferred Stock” refers to our Series A 4.5% Convertible Preferred Stock. Any reference herein that refers to preclinical studies also refers to nonclinical studies.
Previous wording
Results of Operations — Analysis of our financial results comparing the three and six months ended June 30, 2025 and 2024.
Current wording
Results of Operations — Analysis of our financial results comparing the three and nine months ended September 30, 2025 and 2024.
Previous wording
We are a clinical-stage biopharmaceutical company focused on developing and advancing novel therapeutics for patients living with autoimmune, inflammatory, and fibrotic diseases. Our lead product candidate, PALI-2108, is being developed as a treatment for patients living with inflammatory bowel disease (“IBD”), including fibrostenotic Crohn’s disease (“FSCD”) and ulcerative colitis (“UC”).
Current wording
We are a clinical-stage biopharmaceutical company focused on developing and advancing novel therapeutics for patients living with autoimmune, inflammatory, and fibrotic diseases. Our lead product candidate, PALI-2108, is being developed as a treatment for patients living with inflammatory bowel disease (“IBD”), including ulcerative colitis (“UC”) and fibrostenotic Crohn’s disease (“FSCD”).
Previous wording
Our lead product candidate, PALI-2108, is a prodrug inhibitor designed to help treat FSCD and UC by targeting the key PDE4 in colon tissues and preventing it from breaking down cyclic Adenosine Monophosphate (“cAMP”) molecules that regulate inflammation in the body. By inhibiting PDE4, intracellular cAMP molecule levels become elevated, which may lead to a reduction of inflammatory molecules and an increase of anti-inflammatory molecules within tissues of the colon. Additionally, we believe that PALI-2108 may help prevent the movement of inflammatory cells from the blood into colon tissues, thereby lowering the activity of certain proteins that contribute to fibrosis (a type of tissue scarring).
Current wording
Our lead product candidate, PALI-2108, is a prodrug inhibitor designed to help treat UC and FSCD by targeting the key PDE4 in colon tissues and preventing it from breaking down cyclic Adenosine Monophosphate (“cAMP”) molecules that regulate inflammation in the body. By inhibiting PDE4, intracellular cAMP molecule levels become elevated, which may lead to a reduction of inflammatory molecules and an increase of anti-inflammatory molecules within tissues of the colon. Additionally, we believe that PALI-2108 may help prevent the movement of inflammatory cells from the blood into colon tissues, thereby lowering the activity of certain proteins that contribute to fibrosis (a type of tissue scarring).
Previous wording
The Phase 1 clinical study of PALI-2108 is a single-center, randomized, double-blinded, placebo-controlled clinical study focused on safety, tolerability, and pharmacokinetics (“PK”) in both healthy volunteers and UC patients. The clinical study includes an open-label UC patient cohort with multiple dosing arms in which we will evaluate the pharmacodynamics ("PD") of PALI-2108 in healthy volunteers.
Current wording
The Phase 1 clinical study of PALI-2108 is a single-center, randomized, double-blinded, placebo-controlled clinical study focused on safety, tolerability, and pharmacokinetics (“PK”) in both healthy volunteers and UC patients. The clinical study included an open-label UC patient cohort with multiple dosing arms in which we will evaluate the pharmacodynamics ("PD") of PALI-2108 in healthy volunteers.
Previous wording
On October 9, 2024, Health Canada issued a No Objection Letter for our Phase 1 human clinical study of PALI-2108 for the treatment of UC. We officially began studying on November 7, 2024. To date, we have completed the dosing of 89 subjects across all planned cohorts of the study. Each of the five Single Ascending Dose (“SAD”) cohorts and the four Multiple Ascending Dose (“MAD”) cohorts consisted of eight subjects, with six subjects receiving the drug and two subjects receiving a placebo. The food effects (“FE”) study included two cohorts each of six subjects, of which one cohort was in a fasted state and the other cohort in a fed state. Finally, we have completed the dosing of all five UC patients in the UC cohort of the study.
Current wording
On October 9, 2024, Health Canada issued a No Objection Letter for our Phase 1 human clinical study of PALI-2108 for the treatment of UC. We officially began studying on November 7, 2024. We have completed the dosing of 89 subjects across all planned cohorts of the study. Each of the five Single Ascending Dose (“SAD”) cohorts and the four Multiple Ascending Dose (“MAD”) cohorts consisted of eight subjects, with six subjects receiving the drug and two subjects receiving a placebo. The food effects (“FE”) study included two cohorts each of six subjects, of which one cohort was in a fasted state and the other cohort in a fed state. Finally, we have completed the dosing of all five UC patients in the UC cohort of the study.
Previous wording
On May 27, 2025, we announced positive results from the SAD, MAD and FE cohorts in healthy volunteers and on August 7, 2025, we announced positive results from the UC cohort portion of the study. The clinical study successfully met its primary endpoints of safety, tolerability, and PK. Based on these results, we plan to initiate an additional safety, tolerability, and PK/PD exploratory Phase 1b cohort in FSCD while we complete longer-term chronic safety and toxicology studies. This will be followed by the initiation of Phase 2 clinical programs to assess PALI-2108’s efficacy, safety, and tolerability in patients with FSCD as well as those with moderate to severe UC. The planned Phase 1b cohort is expected to evaluate multiple dosing strategies to define optimal therapeutic exposure and patient response, and the planned Phase 2 studies are expected to evaluate clinically meaningful endpoints for patients with FSCD and UC.
Current wording
On May 27, 2025, we announced positive results from the SAD, MAD and FE cohorts in healthy volunteers and on August 7, 2025 and September 17, 2025, we announced positive results from the UC cohort portion of the study. The clinical study successfully met its primary endpoints of safety, tolerability, and PK. We also reported that the patients included in the UC cohort demonstrated rapid and consistent clinical activity, with all five of the patients responding to treatment. We also reported that while the study was shorter in duration than standard induction trials and not powered for efficacy, there was promising signals of clinical improvement.
Previous wording
In addition to conducting clinical studies in Canada, we anticipate submitting an Investigational New Drug Application (“IND”) with the United States Food and Drug Administration ("FDA"). If our IND is approved, we anticipate commencing clinical trials of PALI-2108 in the U.S. during the first half of 2026.
Current wording
In addition to conducting clinical studies in Canada, we anticipate data from the exploratory Phase 1b cohort in FSCD together with results from the Phase 1a/1b UC program will support an Investigational New Drug Application (“IND”) submission to the United States Food and Drug Administration ("FDA") in the first half of 2026.
Previous wording
On July 23, 2025, we entered into a warrant inducement agreement to exercise certain of our existing common stock warrants to purchase up to an aggregate of 4,318,905 share of our common stock. The transaction closed on July 25, 2025 for gross cash proceeds of approximately $3.9 million prior to deducting solicitation agent fees and transaction expenses. We intend to use the net proceeds from the warrant inducement transaction for working capital and general corporate purposes, including the development of PALI-2108 for the treatment of FSCD and UC.
Current wording
On July 23, 2025, we entered into a warrant inducement agreement to exercise certain of our existing common stock warrants to purchase an aggregate of 4,318,905 shares of our common stock (the "July 2025 Warrant Inducement"). The transaction closed on July 25, 2025 for gross cash proceeds of approximately $3.9 million prior to deducting solicitation agent fees and transaction expenses. We intend to use the net proceeds from the warrant inducement transaction for working capital and general corporate purposes, including the development of PALI-2108 for the treatment of UC and FSCD.
Previous wording
The approximately $1.0 million, or 36%, decrease in research and development expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 is primarily attributable to an approximately $1.9 million decrease in expenses that were directly related to the preclinical joint development of PALI-2108 and a $0.2 million decrease in employee-related expenses, partially offset by an approximately $1.1 million net increase in clinical trial expenses associated with Phase 1 clinical trial of PALI-2108 and additional chemistry, manufacturing and controls ("CMC") expenses.
Current wording
Our research and development expenses decreased approximately $0.7 million, or 35%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease is primarily attributable to an approximately $1.1 million decrease in expenses that were directly related to the preclinical joint development of PALI-2108 and an approximately $0.5 million decrease in chemistry, manufacturing and controls ("CMC") expenses. These decreases were partially offset by an approximately $0.2 million net increase in clinical trial-related expenses associated with Phase 1 clinical trial of PALI-2108, approximately $0.5 million in non-cash expenses associated with a net increase in the fair value of the contingent consideration liability pursuant to the Giiant License Agreement, and an approximately $0.2 million increase in research and development employee-related expenses.
Previous wording
With the approval to commence the Phase 1 clinical trial of PALI-2108, which we received from Health Canada on October 9, 2024, pursuant to terms of the Giiant License Agreement, we have assumed all development, manufacturing, regulatory and commercialization activities and costs of PALI-2108. Accordingly, preclinical joint development expenses were approximately $1.9 million for the three months ended June 30, 2024 compared to virtually none for the three months ended June 30, 2025.
Current wording
With the approval to commence the Phase 1 clinical trial of PALI-2108, which we received from Health Canada on October 9, 2024, pursuant to terms of the Giiant License Agreement we have assumed all development, manufacturing, regulatory and commercialization activities and costs of PALI-2108. Accordingly, preclinical joint development expenses decreased year-over-year and were approximately $0.9 million for the three months ended September 30, 2024 compared to virtually none for the three months ended September 30, 2025. In addition, in the three months ended September 30, 2025 we recognized a reduction in joint development expenses of $0.2 million that was related to funds received by us from Giiant pursuant to the joint development plan, resulting in a total net decrease in preclinical joint development expenses of approximately $1.1 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Previous wording
We commenced our Phase 1 clinical trial of PALI-2108 in November of 2024 and reported top-line results of the study on May 27, 2025 and August 7, 2025. Accordingly, we recognized clinical trial-related expenses of approximately $0.8 million during the three months ended June 30, 2025, compared to clinical trial-related expenses of approximately $0.1 million during the three months ended June 30, 2024. Additionally, we recognized CMC expenses of approximately $0.4 million during the three months ended June 30, 2025.
Current wording
We commenced our Phase 1 clinical trial of PALI-2108 in November of 2024 and reported top-line results of the study in the second and third quarters of this year. Concurrent with the commencement of the study, we recognized CMC expenses of approximately $0.7 million in the three months ended September 30, 2024 compared to approximately $0.2 million in the three months ended September 30, 2025, a decrease of approximately $0.5 million. We recognized clinical trial-related expenses of approximately $0.5 million in the three months ended September 30, 2025, compared to clinical trial-related expenses of approximately $0.3 million during the three months ended September 30, 2024, an increase of approximately $0.2 million.
Previous wording
The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024 (in thousands):
Current wording
The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands):
Previous wording
The approximately $2.2 million, or 46%, decrease in research and development expenses for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 is primarily attributable to an approximately $4.1 million decrease in expenses that were directly related to the preclinical joint development of PALI-2108 and a $0.2 million decrease in employee-related expenses, partially offset by an approximately $2.2 million net increase in clinical trial expenses associated with Phase 1 clinical trial of PALI-2108 and additional CMC expenses.
Current wording
Our research and development expenses decreased approximately $3.0 million, or 42%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease is primarily attributable to an approximately $5.2 million decrease in expenses that were directly related to the preclinical joint development of PALI-2108, an approximately $0.2 million decrease in CMC expenses, and an approximately $0.1 million decrease in employee-related expenses. The decreases were partially offset by an approximately $2.0 million net increase in clinical trial-related expenses associated with Phase 1 clinical trial of PALI-2108, and an approximately $0.5 million net non-cash loss associated with an increase in the fair value of the contingent consideration liability pursuant to the Giiant License Agreement.
Previous wording
Preclinical joint development expenses were approximately $3.5 million for the six months ended June 30, 2024 compared to less than $0.1 million for the six months ended June 30, 2025. In addition, during the six months ended June 30, 2025 we recognized a reduction in joint development costs of $0.7 million that was related to funds received by us from Giiant pursuant to the joint development plan, resulting in a total net decrease in preclinical joint development expenses of approximately $4.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.
Current wording
Preclinical joint development expenses were approximately $4.3 million for the nine months ended September 30, 2024 compared to less than $0.1 million for the nine months ended September 30, 2025. In addition, during the nine months ended September 30, 2025, we recognized a reduction in joint development costs of $0.9 million that was related to funds received by us from Giiant pursuant to the joint development plan, resulting in a total net decrease in preclinical joint development expenses of approximately $5.2 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. CMC expenses decreased to approximately $0.5 million for the nine months ended September 30, 2025, compared to CMC expenses of approximately $0.7 million for the nine months ended September 30, 2024.
Previous wording
Finally, research and development employee-related expenses decreased approximately $0.2 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 primarily due to a non-cash share-based compensation expense associated with the accelerated vesting of all outstanding employee time-based restricted stock units ("RSUs") recognized in the three months ended June 30, 2024 that did not repeat in the three months ended June 30, 2025 and, to a lesser degree, lower employee headcount.
Current wording
Research and development employee-related expenses decreased approximately $0.1 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 primarily due to a non-cash share-based compensation expense associated with the accelerated vesting of all outstanding employee time-based restricted stock units ("RSUs") recognized in the nine months ended September 30, 2024 that did not repeat in the nine months ended September 30, 2025.
Previous wording
We recognized clinical trial-related expenses of approximately $1.9 million during the six months ended June 30, 2025, compared to clinical trial-related expenses of $0.1 million during the six months ended June 30, 2024. Additionally, we recognized CMC expenses of approximately $0.4 million during the six months ended June 30, 2025.
Current wording
We recognized clinical trial-related expenses of approximately $2.4 million for the nine months ended September 30, 2025, compared to clinical trial-related expenses of $0.4 million for the nine months ended September 30, 2024, an increase of approximately $2.0 million due primarily to the commencement of our Phase 1 clinical trial of PALI-2108 in November of 2024.
Previous wording
General and administrative expenses decreased by approximately $0.4 million, or 26%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily as result of non-cash share-based compensation expense of approximately $0.2 million associated with the accelerated vesting of all outstanding employee time-based RSUs recognized in the three months ended June 30, 2024 that did not repeat in the three months ended June 30, 2025, and a decrease in consultants and contract labor of approximately $0.2 million.
Current wording
General and administrative expenses decreased by approximately $0.4 million, or 10%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily as result of (i) an approximately $0.1 million decrease in general and administrative employee-related expenses due to a non-cash share-based compensation expense of approximately $0.1 million associated with the accelerated vesting of all outstanding employee time-based RSUs recognized in the in the nine months ended September 30, 2024 that did not repeat in the nine months ended September 30, 2025, (ii) an approximately $0.3 million decrease in consultants and contract labor, and (iii) and approximately $0.1 million decrease in insurance expenses due to lower insurance premiums. These decreases were partially offset by an approximately $0.1 million increase in professional fees.
Previous wording
Other income, net, for the six months ended June 30, 2025 and 2024 consists of dividend income from our investments of excess cash in money market funds with maturities of three months or less. The year-over-year decrease is due to a reduction in the cash balance invested during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.
Current wording
Other income, net, for the nine months ended September 30, 2025 and 2024 consists of dividend income from our investments of excess cash in money market funds with maturities of three months or less. The year-over-year decrease is due to a reduction in the cash balance invested during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Previous wording
Since our inception, we have financed our operations through the sales of our securities, issuance of debt, the exercise of common stock warrants, and to a lesser degree, grants and research contracts as well as the licensing of our intellectual property to third parties. Refer to the paragraph under the heading "Going Concern" in the Results of Operations section above for management's assessment of our ability to continue as a going concern.
Current wording
We expect to incur substantial operating losses for the foreseeable future. Since our inception, we have financed our operations through the sales of our securities, issuance of debt, the exercise of common stock warrants, and to a lesser degree, grants and research contracts as well as the licensing of our intellectual property to third parties.
Previous wording
On July 23, 2025, we entered into a warrant inducement agreement (the “July 2025 Warrant Inducement Agreement”) with an accredited and institutional holder (the “July 2025 Warrant Holder”) of certain of the our existing common stock warrants ( the “July 2025 Existing Warrants”) to purchase up to an aggregate of 4,318,905 shares of our common stock. Pursuant to the July 2025 Warrant Inducement Agreement, the exercise price of each July 2025 Existing Warrant exercised was reduced from $1.40 per share to $0.9047 per share. In consideration for the immediate exercise of the July 2025 Existing Warrants, the July 2025 Warrant Holder received new warrants (the “July 2025 Replacement Warrants”) to purchase shares of common stock in a private placement. Pursuant to the July 2025 Warrant Inducement Agreement, the July 2025 Warrant Holder received two July 2025 Replacement Warrants for each July 2025 Existing Warrant exercised. The July 2025 Replacement Warrants will be exercisable, beginning on the effective date of shareholder approval, into an aggregate of up to 8,637,810 shares of our common stock, at an exercise price of $0.9047 per share, and a term of exercise equal to five years from the date of shareholder approval.
Current wording
On July 23, 2025, we entered into a warrant inducement agreement (the “July 2025 Warrant Inducement Agreement”) with an accredited and institutional holder (the “July 2025 Warrant Holder”) of certain of the our existing common stock warrants ( the “July 2025 Existing Warrants”) to exercise the July 2025 Existing Warrants to purchase up to an aggregate of 4,318,905 shares of our common stock. Pursuant to the July 2025 Warrant Inducement Agreement, the exercise price of each July 2025 Existing Warrant exercised was reduced from $1.40 per share to $0.9047 per share. In consideration for the immediate exercise of the July 2025 Existing Warrants, the July 2025 Warrant Holder received new warrants (the “July 2025 Replacement Warrants”) to purchase shares of common stock in a private placement. Pursuant to the July 2025 Warrant Inducement Agreement, the July 2025 Warrant Holder received two July 2025 Replacement Warrants for each July 2025 Existing Warrant exercised. The July 2025 Replacement Warrants will be exercisable, beginning on the effective date of stockholder approval of the issuance of the common stock shares underlying the July 2025 Replacement Warrants ("Warrant Stockholder Approval"), into an aggregate of up to 8,637,810 shares of our common stock, at an exercise price of $0.9047 per share, and a term of exercise equal to five years from the date of Warrant Stockholder Approval. We have not yet received Warrant Stockholder Approval.
Previous wording
The transaction closed on July 25, 2025 with the Company receiving gross cash proceeds from the exercise of the July 2025 Existing Warrants of approximately $3.9 million prior to deducting solicitation agent fees and transaction expenses.
Current wording
The transaction closed on July 25, 2025 with the Company receiving net cash proceeds of approximately $3.4 million, which consisted of gross cash proceeds of $3.9 million from the exercise of the July 2025 Existing Warrants less cash equity issuance costs of approximately $0.5 million.
Previous wording
As of June 30, 2025, we had $5.4 million in cash, cash equivalents and restricted cash. The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024 (in thousands):
Current wording
As of September 30, 2025, we had $5.3 million in cash, cash equivalents and restricted cash. The following table shows a summary of our cash flows for the nine months ended September 30, 2025 and 2024 (in thousands):
Previous wording
Cash used in operating activities was approximately $4.2 million for the six months ended June 30, 2025, which reflects an approximately $5.0 million net loss adjusted for (i) approximately $0.6 million of net cash inflows related to changes in operating assets and liabilities, and (ii) certain non-cash items impacting the net loss, consisting primarily of an approximately $0.1 million non-cash expense recognized for stock-based compensation and related charges, and an approximately $0.1 million non-cash expense related to the write-off of certain deferred equity issuance costs associated with our shelf registration statement that expired in April of 2025. The net cash inflow from operating assets and liabilities was primarily attributable to a net cash inflow of approximately $1.2 million from an increase in accounts payable and accrued liabilities as of June 30, 2025 compared to December 31, 2024, partially offset by net cash outflow of approximately $0.5 million driven by the payment of annual employee cash bonuses in six months ended June 30, 2025 and a $0.1 million cash outflow related to payments of our operating lease. The increase in accounts payable and accrued liabilities was primarily due to higher clinical trial-related expenses as a result of increased clinical trial activity, partially offset by lower accrued joint development expenses associated with the Giiant License Agreement.
Current wording
Cash used in operating activities was approximately $7.7 million for the nine months ended September 30, 2025, which reflects an approximately $7.9 million net loss adjusted for (i) approximately $0.5 million of net cash outflows related to changes in operating assets and liabilities, and (ii) certain non-cash items impacting the net loss, consisting primarily of (ii) an approximately $0.3 million non-cash expense recognized for the fair value remeasurement of liabilities, mainly our contingent consideration liability, (ii) an approximately $0.2 million non-cash expense recognized for stock-based compensation and related charges, (iii) an approximately $0.1 million non-cash operating lease expense, and (iv) an approximately $0.1 million non-cash expense related to the write-off of certain deferred equity issuance costs associated with our shelf registration statement that expired in April of 2025. The net cash outflow from operating assets and liabilities was primarily attributable to (ii) a net cash outflow of approximately $0.5 million from an increase in prepaid and other current assets and other noncurrent assets that was due to the deferral of issuance costs in the amount of approximately $0.6 million associated with the equity offering that closed on October 2, 2025 and a significant prepaid research and development expense of approximately $0.4 million recognized in the period, (ii) a cash outflow of approximately $0.1 million driven by the payment of annual employee cash bonuses in the first quarter of 2025, and (iii) an approximately $0.1 million cash outflow related to payments of our operating lease. These net cash outflows were partially offset by an approximately $0.3 million cash inflow from an increase in accounts payable and accrued liabilities as of September 30, 2025 compared to December 31, 2024, primarily due to higher clinical trial-related expenses as a result of increased clinical trial activity, partially offset by lower accrued joint development expenses associated with the Giiant License Agreement.
Previous wording
Cash used in operating activities was approximately $6.7 million for the six months ended June 30, 2024, which reflects an approximately $7.6 million net loss adjusted for (i) approximately $0.3 million of net cash inflows related to changes in operating assets and liabilities, and (ii) certain non-cash items impacting the net loss, consisting primarily of an approximately $0.5 million non-cash expense recognized for stock-based compensation and related charges, and an approximately $0.1 million non-cash expense associated with the issuance of our common stock as payment for vendor services provided. The net cash inflow from operating assets and liabilities was primarily attributable to a net cash outflow of approximately $0.5 million driven by the payment of annual employee cash bonuses in the first quarter of 2024 and a $0.1 million cash outflow related to payments of the our operating lease that was more than offset by a cash inflow of approximately $0.9 million from: (i) a decrease in prepaids and other current assets and other noncurrent assets, which was primarily attributable to the amortization of the current and non-current portions of our prepaid insurance policies, and (ii) an increase in accounts payable and accrued liabilities, which was primarily due to an increase in accrued joint development expenses associated with the Giiant License Agreement that were partially offset by a decrease in accrued severance payments, lower accrued Board of Director ("Board") and Board committee fees, and lower accounts payable due to the timing of payments.
Current wording
Cash used in operating activities was approximately $9.8 million for the nine months ended September 30, 2024, which reflects an approximately $11.1 million net loss adjusted for (i) approximately $0.7 million of net cash inflows related to changes in operating assets and liabilities, and (ii) certain non-cash items impacting the net loss, consisting primarily of an approximately $0.6 million non-cash expense recognized for stock-based compensation and related charges, an approximately $0.1 million non-cash expense associated with the issuance of our common stock as payment for vendor services provided, and a $0.2 million non-cash gain recognized for the remeasurement of our contingent consideration liability. The net cash inflow from operating assets and liabilities was primarily attributable to a net cash outflow of approximately $0.3 million driven by the payment of annual employee cash bonuses in the first quarter of 2024, and an approximately $0.1 million cash outflow related to payments of the our operating lease that was more than offset by approximately $1.1 million from (i) a decrease in prepaids and other current assets and other noncurrent assets, which was primarily attributable to the amortization of the current and non-current portions of the our prepaid insurance policies, and (ii) an increase in accounts payable and accrued liabilities, which was primarily due to an increase in accrued joint development expenses associated with the Giiant License Agreement, and additional drug manufacturing accruals associated with our ramp up for the clinical trials of PALI-2108 for UC. These increases in accounts payable and accrued liabilities were partially offset by a decrease in accrued severance payments, lower accrued Board of Director ("Board") and Board committee fees, and a decrease in the current portion of our contingent consideration liability, which was zero as of September 30, 2024.
Previous wording
For the six months ended June 30, 2025, cash used in financing activities of approximately $0.3 million was attributable to the payment of equity issuance costs of approximately $0.2 million, primarily related to our underwritten equity offering completed in December of 2024, and payments made on our insurance financing arrangement of approximately $0.1 million.
Current wording
For the nine months ended September 30, 2025, cash provided by financing activities of approximately $3.1 million was primarily attributable to net cash proceeds of approximately $3.5 million from the exercise of common stock warrants in conjunction with the July 2025 Warrant Inducement, partially offset by the payment of equity issuance costs of approximately $0.2 million in the period, primarily related to our underwritten equity offering completed in December of 2024, and payments made on our insurance financing arrangement of approximately $0.2 million.
Previous wording
For the six months ended June 30, 2024, cash provided by financing activities of approximately $5.6 million was attributable to net cash proceeds of approximately $2.2 million from the exercise of common stock warrants in conjunction with warrant inducement agreements entered into between us and certain investors in February of 2024 and net cash proceeds of approximately $3.6 million from our equity financing completed in May of 2024, partially offset by payments made on the our insurance financing arrangement of approximately $0.2 million.
Current wording
For the nine months ended September 30, 2024, cash provided by financing activities of approximately $5.4 million was attributable to net cash proceeds of approximately $2.2 million from the exercise of common stock warrants in conjunction with our warrant inducement transaction in February 2024 and net cash proceeds of approximately $3.5 million from our private placement financing completed in May of 2024, partially offset by payments made on our insurance financing arrangement of approximately $0.3 million.
Previous wording
In June of 2025, we entered into an agreement to finance insurance policies that renewed in May of 2025. The insurance financing arrangement is secured by the associated insurance policy. As of June 30, 2025, the aggregate remaining balance under the insurance financing arrangement of approximately $0.3 million is payable over a 9-month period with the first payment payable on June 30, 2025.
Current wording
In June of 2025, we entered into an agreement to finance insurance policies that renewed in May of 2025. The insurance financing arrangement is secured by the associated insurance policy. As of September 30, 2025, the aggregate remaining balance under the insurance financing arrangement of approximately $0.2 million is payable over a 9-month period commencing with the first payment that was payable on June 30, 2025.
Previous wording
We have incurred significant operating losses and negative cash flows from operations since our inception. To date, we have not been able to generate significant revenues nor achieve operating profitability. Based upon our cash and cash equivalents balance of $5.4 million as of June 30, 2025 and the gross cash proceeds of $3.9 million received from the July 2025 Warrant Inducement Transaction, we believe we have sufficient cash to fund our currently planned operations into the first quarter of 2026 and beyond that we will need to raise additional capital to continue at our expected level of operations. Notwithstanding, should our anticipated level of operations significantly change, we may require additional financing sooner than anticipated. If we fail to obtain the capital needed, we will be forced to delay, scale back, or eliminate some or all of our development activities, or potentially cease our operations.
Current wording
We have incurred significant operating losses and negative cash flows from operations since our inception. To date, we have not been able to generate significant revenues nor achieve operating profitability. Based upon our cash and cash equivalents balance including the gross cash proceeds of $138 million from our underwritten public offering that closed on October 2, 2025, we believe we have sufficient capital to fund our operations through major clinical development milestones including a Phase 2 primary efficacy readout of PALI-2108 for UC in the second half of 2027 and a Phase 2 primary efficacy readout of PALI-2108 for FSCD in the first half of 2028.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The exploratory Phase 1b cohort in FSCD is expected to be followed by the initiation of Phase 2 clinical programs to assess PALI-2108’s efficacy, safety, and tolerability in patients with FSCD, as well as those with moderate to severe UC.
Current report — wording carried from elsewhere
We intend to use the net proceeds from the warrant inducement transaction for working capital and general corporate purposes, including the development of PALI-2108 for the treatment of UC and FSCD.