Azora Therapeutics, Inc. (DE)
For the period ended Mar 31, 2025. Filed May 14, 2025.
View on SEC.govAbout this filing
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.
Mar 31, 2025 · Filed May 14, 2025
ADIL$5.05+36.1%Stored close · as of Oct 28, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001213900-24-097519
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001213900-25-043281
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 69 previous paragraphs and 49 current paragraphs.
24 unchanged; 14 reworded; 11 added; 24 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (11)
Current report
On Feb 4, 2025, we received a positive response from the U.S. Food and Drug Administration (“FDA”) on it’s proposed in-vitro bridging strategy for AD04. At the April 2023 Type C meeting with the FDA, they reaffirmed the acceptance of the heavy-drinking-day based endpoints as a basis for approval for the treatment of Alcohol Use Disorder rather than the previously required abstinence-based endpoints. As a result, we are preparing for the next FDA interaction to confirm the Phase 3 clinical plan in the United States. In January of 2025, the FDA also released a Qualification Statement accepting another surrogate endpoint for Alcohol Use Disorder (AUD). The newly released Qualification Statement by Center for Drug Evaluation and Research (CDER), states the acceptance of the 2-level reduction of the World Health Organization (WHO) risk drinking levels of alcohol consumption as an efficacy endpoint in pivotal clinical trials with adults diagnosed with (AUD). We have also been issued key patents in the United States, the European Union, and other jurisdictions for which we have exclusive license rights. The active ingredient in AD04 is ondansetron, a serotonin-3 antagonist. Due to its mechanism of action, AD04 has the potential to be used for the treatment of other addictive disorders, such as Opioid Use Disorder, obesity, smoking, and other drug addictions.
Current report
On May 1, 2025, we announced patent number 12,274,692 was issued on April 15, 2025 by the United States Patent and Trademark Office covering the administration of AD04, our investigational drug, as a precision medicine approach for patients with specific genetic markers. The patent claims a method of treating addiction by administering a therapeutically effective amount of AD04 to patients with serotonin-related gene variations, including specific genotypes of HTR3A, HTR3B, and SLC6A4, such as the LL genotype of 5-HTTLPR in combination with variations in rs1150226, rs17614942, and rs1176713.
Current report
On May 2, 2025, we entered into a warrant inducement agreement (the “Inducement Agreement”) with an existing healthcare-focused institutional investor of ours for the immediate exercise of existing Series B Warrants to purchase 1,418,440 shares of our common stock and Series C Warrants, and together with the Series B Warrants (the "Existing Warrants") to purchase 2,300,000 shares of our common stock at a reduced exercise price of $0.74 for net proceeds of approximately $2.35 million, before deducting legal fees and other transaction expenses. In consideration for the immediate exercise in full of the Existing Warrants, the investor received, in a private placement, new unregistered (i) Series B-1 warrants to purchase up to 2,482,270 shares of common stock(the "Series B-1 Warrants"), and (ii) Series C-1 Warrants to purchase up to 4,025,000 shares of common stock (the "Series C-1 Warrants"), and together with the Series B-1 Warrants the "New Warrants"). The New Warrants have an exercise price of $0.74 and will be exercisable upon stockholder approval. The Series B-1 Warrants expire five years from the date of such approval and the Series C-1 Warrants will expire eighteen months from the date of such approval. The warrant inducement transaction closed on May 5, 2025. We expect to use the net proceeds from these transactions for working capital and other general corporate purposes.
Current report
The exercise price and the number of shares of common stock issuable upon exercise of each New Warrant are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. In addition, in certain circumstances, upon a fundamental transaction (as defined in the New Warrants), a holder of New Warrants will be entitled to receive, upon exercise of the New Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the New Warrants immediately prior to the fundamental transaction.
Current report
We may not effect the exercise of certain New Warrants, and the applicable holder will not be entitled to exercise any portion of any such New Warrant, which, upon giving effect to such exercise, would cause the aggregate number of shares of common stock beneficially owned by the holder of such New Warrant (together with its affiliates) to exceed 4.99% (or, at the election of the holder, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such New Warrants.
Current report
Research and development expenses increased by approximately $293,000 (65%) during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The key drivers of the increase were increased chemistry, manufacturing, and controls (CMC) expenses to develop clinical supplies for the upcoming program and consulting expenses as we continue to progress and advance AD04 to a Phase 3 trial.
Current report
General and administrative expenses increased by approximately $129,000 (9%) during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This modest increase was mainly due to higher compensation and consulting.
Current report
Change in Value of Equity Method Investment
Current report
On May 2, 2025, we entered into the Inducement Agreement with an existing healthcare-focused institutional investor of ours for the immediate exercise of existing the Series B Warrants to purchase 1,418,440 shares of our common stock and the Series C Warrants, and together with the Series B Warrants to purchase 2,300,000 shares of our common stock at a reduced exercise price of $0.74 for net proceeds of approximately $2.35 million, before deducting legal fees and other transaction expenses.
Current report
Net cash used in operating activities decreased by approximately $41,000 in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The primary drivers of the decrease were higher accounts payable and accrued expenses as compared to the prior period.
Current report
Net cash provided by investing activities increased by approximately $150,000 in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was due to the recognition of a milestone payment received from Adovate of $150,000.
Removed paragraphs (24)
Previous report
In January 2021, we expanded our portfolio in the field of addiction with the acquisition of Purnovate, LLC via a merger into our wholly owned subsidiary, Purnovate, Inc. (“Purnovate”) and in January 2023, we entered into an option agreement with Adovate LLC (“Adovate”), pursuant to which we granted to Adovate an exclusive option for Adovate or its designated affiliate to acquire all of the assets of Purnovate and to assume related liabilities and expenses. (Our then-CEO was a significant equity holder in Purnovate, LLC, so this was considered a related party transaction.) On May 8, 2023, Adovate sent a letter exercising its option effective May 16, 2023 and made payment of the $450,000 in fees due on exercise. Effective June 30, 2023, Adovate issued to us the equity stake in Adovate due on exercise of the option agreement. On August 17, 2023, a Bill of Sale, Assignment and Assumption Agreement (“Bill of Sale”) was executed between Purnovate and Adovate, transferring the Purnovate assets to Adovate, effective as of June 30, 2023. On August 17, 2023, Purnovate and Adovate also entered into a letter agreement acknowledging that Adovate acquired the assets of Purnovate effective as of June 30, 2023, pursuant to the Bill of Sale.
Previous report
Financial Developments
Previous report
In consideration of the Holder’s immediate exercise of the Existing Warrants and the payment of $0.125 per New Warrant (as such term is defined below) in accordance with the Inducement Agreement, we issued unregistered Series C Warrants (the “New Warrants”) to purchase 2,300,000 shares of common stock (200% of the number of shares of common stock issued upon exercise of the Existing Warrants) (the “New Warrant Shares”) to the Holder of Existing Warrants.
Previous report
On April 18, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Sales Agent” or “Wainwright”) providing for sale of our shares of common stock, from time to time, through the Sales Agent, with certain limitations on the number of shares of common stock that may be offered and sold by us as set forth in the ATM Agreement. The aggregate market value of the shares of Common Stock eligible for sale under the ATM prospectus supplement filed in connection with the ATM Agreement was $4,283,650 which is based on the limitations of such offerings under SEC regulations. The ATM Agreement provides that we will pay the Sales Agent commissions for its services in acting as agent in the sale of shares of common stock pursuant to the ATM Agreement. The Sales Agent will be entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of shares of common stock pursuant to the ATM Agreement. The offering of shares of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all shares of common stock subject to the ATM Agreement; or (ii) termination of the ATM Agreement by us as permitted therein. During the nine months ended September 30, 2024, we used this ATM Agreement to sell 2,348,520 shares of common stock for net proceeds of approximately $4 million, after fees and expenses. During the three months ended September 30, 2024, we sold 2,109,700 shares of common stock under the ATM Agreement for net proceeds of approximately $3.8 million.
Previous report
Research and development expenses increased by approximately $825,000 (399%) during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The key drivers of the increase were direct clinical trial expenses associated with the Phase 1b trial, which increased by approximately $771,000, the bulk of trial activities taking place in the third quarter of 2024, and chemistry, manufacturing, and controls (CMC) expenses which increased by approximately $204,000, as stability testing took place to support the Phase 1b trial in 2024. These increases were partially offset by modest decreases in license royalty expense of $60,000, and decreases of approximately $52,000 in the salaries of R&D personnel and of approximately $12,000 in equity-based compensation of R&D personnel.
Previous report
General and administrative expenses increased by approximately $29,000 (3%) during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This modest increase was the sum of many small changes, the larger of which were increased direct patent expenses of approximately $45,000, increased investor and public relations expenses of approximately $42,000. These increases were somewhat offset by decreased compensation of G&A directed employees of approximately $45,000, along with a number of smaller decreased expense categories.
Previous report
Losses from Equity Method Investment
Previous report
Gain from discontinued operations, net of tax
Previous report
The loss from discontinued operations, net of tax, decreased by approximately $37,000 (100%) in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This decrease is wholly due to the fact that the business of Purnovate, Inc., the activities of which are now classified as discontinued, was sold in June of 2023 and all activity ceased, with the last, residual expenses associated with the business being recognized in September of 2023.
Previous report
Research and development expenses increased by approximately $1,495,000 (149%) during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The key drivers of this increase were direct clinical trial expenses associated with the Phase 1b trial initiated in 2024, which increased by approximately $1,273,000, the conduct of was initiated and took place in 2024, and chemistry, manufacturing, and controls (CMC) expenses which increased by approximately $291,000, as stability testing took place to support the Phase 1b trial in 2024. These increases were amplified by added use of regulatory and product development strategic consultants for increased expense of approximately $29,000 and increases of approximately $24,000 in the salaries of R&D personnel, partially offset by an approximately $137,000 reduction in equity-based compensation of R&D personnel, which in 2023 included both options expense and bonuses paid in the form of stock.
Previous report
General and administrative expenses decreased by approximately $256,000 (6%) during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease was the result of lower corporate legal expense of approximately $100,000, lower insurance premiums of approximately $45,000, and a decrease in compensation of G&A directed employees of approximately $140000. These decreases were partially offset by an increase in investor and public relations expenses of approximately $35,000.
Previous report
Losses from Equity Method Investment
Previous report
Inducement Expense
Previous report
The inducement expense of approximately $4,464,000 which was a one time, noncash expense associated with the issuance of new warrants to induce the exercise of outstanding warrants which occurred in the nine months ended September 30, 2024.
Previous report
Total Other income (expenses)
Previous report
Total other income, excluding losses from the equity method investment and inducement expense, increased by $117,000 (1671%) in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This increase was due to two factors: the increase of approximately $66,000 in interest income that resulted from a higher cash balance held in the period, and a one time expense in the prior year period of approximately $52,000 related to issuing commitment shares on establishment of our standby equity purchase agreement.
Previous report
Income from discontinued operations, net of tax
Previous report
The gain from discontinued operations, net of tax, decreased by approximately $1,894,000 (100%) in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease is wholly due to the fact that the business of Purnovate, Inc., the activities of which are now classified as discontinued, was sold in June of 2023 and all activity ceased.
Previous report
We have been using and will continue to use the additional $7.8 million in funding received from warrant exercises and sales of our common stock pursuant to the ATM Agreement to accelerate the development of AD04.
Previous report
If we are successful in raising sufficient additional funds, under our accelerated development plans, we expect to use between approximately $13 million and $16 million in cash during the twelve months ended September 30, 2025 for both AD04 development costs and general corporate expenses, of which between approximately $9 million and $12.0 million are contingent on our implementation of our accelerated development plans. Since implementation of our accelerated development plans would require the expenditure of our current cash on hand by in the second quarter of 2025, we will not be able to fully implement our accelerated development plans without additional financing. We do not have any fixed commitments of financing and there can be no assurance that we will be able secure financing on acceptable terms, if at all. In addition, there is no assurance that funds could be raised on acceptable terms to continue our operations and AD04 development projects before we have expended our current cash on hand, even if we delay our accelerated development plans.
Previous report
Net cash used in operating activities increased by approximately $870,000 in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The primary drivers of the increase were higher operating expenses of $1,240,000 and a decrease in equity compensation of $849,000, partially offset by the favorable increase of $1,150,000 in the net change in operating assets and liabilities when comparing the same two periods.
Previous report
Net cash used in discontinued operations
Previous report
Net cash used in discontinued operations decreased by approximately $986,000 in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This was entirely due to the completion of the sale of the discontinued operations in June of 2023, after which these operations ceased requiring the use of cash.
Previous report
Net cash provided by investing activities decreased by approximately $1,150,000 in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was driven by payments received in the prior year period related to the sale of Purnovate.
Reworded paragraphs (14)
Previous wording
Our current cash and cash equivalents are not expected to be sufficient to fund operations for the twelve months from the date of filing this Quarterly Report on Form 10-Q, based on our current commitments and development plans.
Current wording
Our current cash and cash equivalents, including the cash received from the warrant inducement that closed on May 5, 2025, are not expected to be sufficient to fund operations for the twelve months from the date of filing this Quarterly Report on Form 10-Q, based on our current commitments and development plans. We have incurred recurring losses and need to raise additional funds to sustain our operations. These factors raise substantial doubt about our ability to continue as a going concern.
Previous wording
We have incurred net losses in each year since our inception, including net losses of approximately $11.1 million and $5.1 million for the nine months ended September 30, 2024 and year ended December 31, 2023, respectively. We had accumulated deficits of approximately $79.9 million and $68.8 million as of September 30, 2024 and December 31, 2023, respectively. All of our operating losses in the nine months ended September 30, 2024 resulted from costs incurred in continuing operations, including costs in connection with our continuing research and development programs and from general and administrative costs associated with our operations. Our net loss for the nine months ended September 30, 2024 also includes uncapitalized financing costs, such as the cost of issuing new warrants to induce a holder to exercise existing warrants.
Current wording
We have incurred net losses in each year since our inception, including net losses of approximately $2.2 million and $13.2 million for the three months ended March 31, 2025 and year ended December 31, 2024, respectively. We had accumulated deficits of approximately $84.2 million and $82 million as of March 31, 2025 and December 31, 2024, respectively. All of our operating losses in the three months ended March 31, 2025 resulted from costs incurred in continuing operations, including costs in connection with our continuing research and development programs and from general and administrative costs associated with our operations.
Previous wording
We will not generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for AD04, which we expect will take a number of years and is subject to significant uncertainty. We do not believe our current cash and equivalents will be sufficient to fund our operations for the next twelve months from the filing of these financial statements.
Current wording
We will not generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for AD04, which we expect will take a number of years and is subject to significant uncertainty.
Previous wording
The expense recognized to the change in the value of our equity method investment in Adovate, LLC increased by approximately $31,000 in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase is entirely due to the fact that this investment was only acquired on June 30 of 2023, with changes to the value of our Adovate equity recognized on a three month lag.
Current wording
The expense recognized to the change in the value of our equity method investment in Adovate, LLC decreased by approximately $27,000 in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This slight decrease is due to variations in the loss recognized related to our equity investment, with changes to the value of our Adovate equity recognized on a three month lag.
Previous wording
Total other income, excluding losses from the equity method investment, increased by approximately $41,000 (410%) in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase was entirely due to the increase in interest income that came from a substantial higher working cash balance held in the period.
Current wording
Total other income, excluding losses from the equity method investment and inducement expense from the March 2024 warrant inducement transaction, increased by approximately $179,000 in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was mainly due to the recognition of a milestone payment received from Adovate of $150,000 along with an increase in interest income that resulted from a higher cash balance held in the period.
Previous wording
Our principal liquidity needs have historically been working capital, R&D costs including clinical trials, patent costs and personnel costs. We expect these needs to continue to increase in the near term as we engage in clinical trials and develop and eventually commercialize our compound, if approved by regulatory authorities. Over the next several years, we expect to increase our R&D expenses as we undergo clinical trials to demonstrate the safety and efficacy of our lead product candidate. To date, we have funded our operations primarily with the proceeds from our initial and secondary public offerings, sales pursuant to out ATM Agreement and, to a lesser extent, private placements and our equity line, as well as other equity financings, warrant exercises, and the issuance of debt securities prior to that.
Current wording
Our principal liquidity needs have historically been working capital, R&D costs including clinical trials, patent costs and personnel costs. We expect these needs to continue to increase in the near term as we engage in clinical trials and develop and eventually commercialize our compound, if approved by regulatory authorities. Over the next several years, we expect to increase our R&D expenses as we undergo clinical trials to demonstrate the safety and efficacy of our lead product candidate. To date, we have funded our operations primarily with the proceeds from our initial and secondary public offerings, sales pursuant to the At the Market Offering Agreement, dated April 18, 2024, that we entered into with H.C. Wainwright & Co., LLC (the “ ATM Agreement”), private placements, use of our equity line, as well as other equity financings, warrant exercises, and the issuance of debt securities.
Previous wording
During the nine months ended September 30, 2024, our primary sources of funding was the exercise of previously issued warrants and the use of our ATM Agreement.
Current wording
During the year ended December 31, 2024, our primary sources of funding were the exercise of previously issued warrants and the use of our ATM Agreement and the March 2024 warrant inducement described below.
Previous wording
In the nine months ended September 30, 2024, we sold 2,348,520 shares of common stock through our ATM agreement, for net proceeds of approximately $4 million after placement fees and expenses.
Current wording
In the year ended December 31, 2024, we sold 2,348,520 shares of common stock through our ATM Agreement, for net proceeds of approximately $4 million after placement fees and expenses.
Previous wording
We have initiated and nearly completed Phase 1 pharmacokinetic study of AD04 with an estimated total cost of approximately $1.4 million, of which approximately $1.2 million has been paid, with the remaining $200 thousand expected to be paid by the end of 2024. In addition, we plan to begin a Phase III study of AD04 in the second half of 2025, to complete production of sufficient drug product to carry out the study, and to begin the process of revalidation for our companion diagnostic to be included in our Phase III study. Were we to proceed with all these additional accelerated development plans without raising any additional funds, we would potentially expend our cash on hand by during the second quarter of 2025. However, management retains the ability to delay implementation of these plans and will not proceed without having first secured sufficient funding either through a financing or a partnership agreement. If these additional accelerated development plans are not implemented, our cash on hand would be sufficient to fund our operations and meet our existing commitments into the second half of 2025.
Current wording
At March 31, 2025, we had cash and cash equivalents of $2.4 million. As of May 12, 2025, we had cash and cash equivalents of approximately $3.9 million. We have completed a Phase 1 pharmacokinetic study of AD04 with a total cost of approximately $1.4 million, which has been fully paid. In addition, we plan to begin a Phase III study of AD04 in the second half of 2025, to complete production of sufficient drug product to carry out the study, and to begin the process of revalidation for our companion diagnostic to be included in our Phase III study. We have signed a contract with a vendor for approximately $2.3 million, which is cancellable by either party, to produce sufficient drug product to carry out the study, validate the manufacturing process, and manufacture registration batches for commercial usage. Our cash on hand and cash equivalents, including the cash proceeds of the warrant inducement that closed on May 5, 2025 is sufficient to fund our operations and meet our existing commitments into the fourth quarter of 2025, based on our current commitments. We have incurred recurring losses and need to raise additional funds to sustain our operations. These factors raise substantial doubt about our ability to continue as a going concern.
Previous wording
We will require additional financing as we continue to execute our overall business strategy, including two additional Phase 3 trials for AD04 that are currently expected to require an average of $8-12 million each in direct expenses, and up to $5 million in additional other development expenses. These estimates may change based on upcoming discussions with regulatory authorities and final trial designs. Our liquidity may be negatively impacted as a result of research and development cost increases in addition to general economic and industry factors. Our continued operations will depend on our ability to raise additional capital through various potential sources, such as equity and/or debt financings, grant funding, strategic relationships, or out-licensing in order to complete its subsequent clinical trial requirements for AD04. Management is actively pursuing financing and other strategic plans but can provide no assurances that such financing or other strategic plans will be available on acceptable terms, or at all. Without additional funding, we will be required to delay, scale back or eliminate some or all of our research and development programs, which would likely have a material adverse effect on us and our financial statements.
Current wording
We will require additional financing as we continue to execute our overall business strategy, including two additional Phase 3 trials for AD04 that are currently expected to require $8-12 million each in direct expenses, and up to $5 million in additional other development expenses. These estimates may change based on upcoming discussions with regulatory authorities and final trial designs. Our liquidity may be negatively impacted as a result of research and development cost increases in addition to general economic and industry factors. Our continued operations will depend on our ability to raise additional capital through various potential sources, such as equity and/or debt financings, grant funding, strategic relationships, or out-licensing in order to complete its subsequent clinical trial requirements for AD04. At this time, we have no committed sources of funding and our ability to use our ATM Agreement is restricted by certain SEC rules and our ability to use our equity line is restricted by certain Nasdaq rules. Management is actively pursuing financing and other strategic plans but can provide no assurances that such financing or other strategic plans will be available on acceptable terms, or at all. Without additional funding, we will be required to delay, scale back or eliminate some or all of our research and development programs, which would likely have a material adverse effect on us and our financial statements.
Previous wording
If we raise additional funds by issuing equity securities or convertible debt, our shareholders will experience dilution. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to our products, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. We cannot be certain that additional funding will be available on acceptable terms, or at all. Any failure to raise capital in the future could have a negative impact on our financial condition and our ability to pursue our business strategies.
Current wording
If we raise additional funds by issuing equity securities or convertible debt, our stockholders will experience dilution. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to our products, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. We cannot be certain that additional funding will be available on acceptable terms, or at all. Any failure to raise capital in the future could have a negative impact on our financial condition and our ability to pursue our business strategies. These factors raise substantial doubt about our ability to continue as a going concern.
Previous wording
Net cash provided by financing activities increased by approximately $7,846,000 in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. In the nine months ended September 30, 2023, we engaged in a single limited sale of common stock to a single individual investor, whereas in the nine months ended September 30, 2024, we sold 2,348,520 shares of common stock through our ATM agreement for net proceeds of approximately $4,021,000 and realized additional funds from the induced and uninduced exercise of additional warrants for net proceeds of approximately $3,824,000.
Current wording
Net cash provided by financing activities decreased by approximately $3,774,000 in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. In the three months ended March 31, 2024, we realized additional funds from the induced and uninduced exercise of warrants for net proceeds of approximately $3,824,000, whereas in the three months ended March 31, 2025, we sold 75,000 shares of common stock through our purchase agreement with Alumni Capital for net proceeds of approximately $51,000.
Previous wording
See Note 3 to the unaudited condensed consolidated financial statements for a discussion of recent accounting pronouncements, if any.
Current wording
See Note 3 to the unaudited condensed consolidated financial statements for a discussion of recent accounting pronouncements.
Previous wording
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results and experiences may differ materially from these estimates. We did not identify any critical accounting estimates. Our significant accounting policies are more fully described in Note 3 to our financial statements included with this report.
Current wording
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results and experiences may differ materially from these estimates. We did not identify any critical accounting estimates. Our significant accounting policies are more fully described in Note 3 to our unaudited condensed consolidated financial statements included with this report.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
On March 1, 2024, we entered into a warrant inducement agreement (the “Inducement Agreement”) with a certain holder (the “Holder”) of our warrants (the “Existing Warrants”) to purchase shares of our common stock, par value $0.001 per share (the “common stock”), issued in a private placement offering that closed on October 24, 2023. Pursuant to the Inducement Agreement, the Holder of the Existing Warrants agreed to exercise for cash the Existing Warrants to purchase up to approximately 1,150,000 shares of common stock, at an exercise price of $2.82 per share. The transactions contemplated by the Inducement Agreement closed on March 6, 2024. We received aggregate gross proceeds of approximately $3.5 million, before deducting placement agent fees and other expenses payable by us. Net proceeds of this transaction were approximately $3.1 million.
Previous report — wording carried elsewhere
On March 1, 2024, warrants to purchase 268,440 warrants to purchase shares of our common stock at an exercise price of $2.82 per share were exercised for gross proceeds of approximately $757 thousand.
Previous report — wording carried elsewhere
Results of operations for the nine months ended September 30, 2024 and 2023(rounded to nearest thousand)
Previous report — wording carried elsewhere
The following table sets forth the components of our statements of operations in dollars for the periods presented:
Previous report — wording carried elsewhere
Research and development (“R&D”) expenses
Previous report — wording carried elsewhere
General and administrative expenses (“G&A”) expenses
Previous report — wording carried elsewhere
The expense recognized to the change in the value of our equity method investment in Adovate, LLC increased by approximately $443,000 in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This increase is entirely due to the fact that this investment was only acquired on June 30 of 2023, with changes to the value of our Adovate equity recognized on a three month lag.