Azitra, Inc.
For the period ended Mar 31, 2026. Filed May 13, 2026.
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, 2026 · Filed May 13, 2026
AZTR$0.73+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001701478-25-000050
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001701478-26-000028
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 79 previous paragraphs and 70 current paragraphs.
38 unchanged; 22 reworded; 10 added; 12 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 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 (10)
Current report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
Cautionary Statement Regarding Forward-looking Statements
Current report
On November 24, 2025, the Company entered into a securities purchase agreement (the “Series A Purchase Agreement”) with Alumni Capital pursuant to which the Company agreed to issue and sell to Alumni Capital in a private placement offering (the "November PIPE Offering") priced at a premium to market in accordance with NYSE rules (the “November Offering”) an aggregate of 535,759 shares of common stock of the Company, (ii) pre-funded warrants (the “November Pre-Funded Warrants”) to purchase up to an aggregate of 4,151,741 shares of Common Stock (the “November Pre-Funded Warrants Shares”) at an exercise price of $0.0001 per November Pre-Funded Warrant, and (iii) common stock purchase warrants (the “November Common Warrants” together with the November Pre-Funded Warrants, the “November Warrants”) to purchase up to an aggregate of 4,687,500 shares of Common Stock (the “November Common Warrant Shares” together with the November Pre-Funded Warrant Shares, the “November Warrant Shares”) at an exercise price of $0.32 per November Common Warrant. The offering price was $0.32 per share of Common Stock or November Pre-Funded Warrant and accompanying November Common Warrant (the “November Offering Price”). The November Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The November Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval.
Current report
On March 18, 2026, Azitra, Inc. the Company entered into a Securities Purchase Agreement (the “March Purchase Agreement”) with the March Purchasers, pursuant to which the Company sold an aggregate of (i) 10,485 shares of its Series A convertible non-redeemable preferred stock, par value $0.0001 per share, (ii) Series B warrants to purchase up to 85,233,126 shares of the Company’s common stock, par value $0.0001 per share (or, in certain circumstances, pre-funded warrants to purchase shares of Common Stock), (iii) Series C warrants to purchase up to 85,233,126 shares of Common Stock (or, in certain circumstances, Pre-Funded Warrants) to the Purchasers in a private placement (the “March PIPE Financing”). Each share of Series A Preferred Stock is being sold together with a Series B Warrant to purchase 8,128.1 shares of Common Stock and a Series C Warrant to purchase 8,128.1 shares of Common Stock. The securities were sold at a purchase price of $1,000.00 per Security to the March Purchasers, which included the Company’s
Current report
Chief Executive Officer, a consultant of the Company, and a holder of more than 5% of the Company’s outstanding Common Stock as of the date of the Purchase Agreement. The Warrants will each have an exercise price of $0.123 per share.
Current report
As of May 13, 2026, the Company has sold 9,255,823 shares and issued 925,579 warrants to Alumni Capital LP under the ELOC with an estimated gross proceeds of approximately $6.2 million. During the three months ended March 31, 2026, the Company issued 1,300,000 shares of our common stock and 130,000 warrants under the ELOC resulting in net proceeds of approximately $215,000.
Current report
•ATR-COSF, which includes an engineered recombinant human filaggrin protein as a potential ingredient in cosmetic products used to address the appearance of fine lines and wrinkles. Initial testing on explanted cosmetic surgery skin began in Q1 2026.
Current report
Azitra is leveraging these technologies to develop next generation tools for improving the efficiency of the production and manufacturing of recombinant proteins, peptides, mRNA and antibodies.
Current report
•Develop our platform's ability to generate commercial stage products. As we have been generating our prescription-oriented programs for dermatological diseases, we have internally performed research to address potential future scale up and manufacturing challenges. These activities have led to projects which have applicability, not just at Azitra, but for broader protein, peptide and natural product synthesis. We plan to investigate the opportunity to further develop and commercialize these biotech tools and ingredients.
Current report
Research and Development
Removed paragraphs (12)
Previous report
Cautionary Statement
Previous report
As of November 12, 2025, the Company has sold 7,955,823 shares, and issued 795,579 warrants to Alumni Capital LP under the Purchase Agreement with an estimated gross proceeds of $6.0 million of which $2.4 million was received subsequent to September 30, 2025.
Previous report
Service Revenue - Related Party
Previous report
We did not recognize any revenue during the third quarter of fiscal years 2025 and 2024. We do not expect any further service revenue at this time.
Previous report
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Previous report
Service Revenue - Related Party
Previous report
We generated $— of service revenue under the Bayer JDA during the first nine months of fiscal 2025 compared to service revenue of $7,500 under the JDA for the comparable period in fiscal 2024. The decrease of $7,500 in service revenue is attributable to a decrease in the amount of reimbursable development costs incurred in 2025. We do not expect any further service revenue at this time.
Previous report
General and Administrative
Previous report
General and administrative costs during the first nine months of fiscal 2025 decreased by $43,098, or 1%, to $4,908,057 from the prior year period. The decrease was primarily related to a decrease of $209,000 in legal fees primarily related to the write off of certain patent expenses and public company compliance initiatives, a decrease of $98,000 in salaries and benefits primarily due to a decrease in stock option expense as options vest, a decrease of $123,000 in financing costs primarily attributable to the 2024 payment to the previous investment bank offset by the increase costs associated with the establishment of our equity line of credit, a decrease in hiring costs of $20,000 primarily related to a compensation consultant, a decrease of $23,000 in insurance expense and a net decrease of approximately $26,000 in other overhead expenses offset by an increase of $195,000 in accounting costs primarily related to an increase in fees paid to external auditors and NYSE American, an increase of $134,000 for the use of business consultants which was primarily attributed to increased hours due to incremental public company compliance initiatives and business development efforts, an increase of $94,000 for public relations expenditures which increased due to additional services and an increase in our base rates, an increase of $33,000 for software and equipment.
Previous report
During the first nine months of fiscal 2025, research and development expenses increased by $224,688, or 6%, to $3,832,017 from the prior year period. The increase was primarily related to an net increase of $58,000 in research and development and clinical trial costs related to our ATR-12 program as the program progresses through its clinical trial, an increase of $189,000 in research and development and clinical trial costs in our ATR-04 program as the program progresses through its clinical trial, an increase of $109,000 in research and development costs related to our ATR-01 program as the program continues to progress, an increase in payroll and benefits of $76,000 due merit increases and an additional new hire, and an increase in lab supplies of $43,000 offset by a decrease of $211,000 in consultant expenditures related to our programs prior to entering into their clinical phases, and an overall net decrease of approximately $40,000 in other costs.
Previous report
Other Income
Previous report
Our other income consists of interest income, loss on issuance of stock, loss on foreign currency translation, change in the valuation of warrants carried at fair value, loss on issuance of common stock, gain on disposal of property and equipment, and interest expense. During the first nine months of fiscal 2025, other income decreased by $1,958,417, or 99%, compared to the comparable period in fiscal 2024. The decrease was primarily related to a decrease of $4,000,000 attributable to the change in the valuation of the warrants, a net decrease of $48,000 in other (expense) income, a decrease of $14,000 of interest income, offset by decrease of $2,200,000.
Reworded paragraphs (22)
Previous wording
We were formed in January 2014 as a biopharmaceutical company focused on developing innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. We are an early-stage clinical biopharmaceutical company and have not commenced commercial operations.
Current wording
We were formed in January 2014 as a biopharmaceutical company focused on developing innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. Azitra leverages its technologies to develop cosmetic ingredients for consumer-oriented products. We are an early-stage clinical biopharmaceutical company and have not commenced commercial operations.
Previous wording
During the term, the Company may at its election cause the Purchaser to make a series of purchases of shares, each up to $750,000, or up to $4 million dollars upon consent of the Purchaser. The closing of each purchase pursuant to the Purchase Agreement will be no later than five business days after the Company provides a notice to for the purchase. The purchase price of the shares that the Company elects to sell to the Purchaser pursuant to the Purchase Agreement will be equal to the lowest daily volume weighted average price of the common stock during the period commencing on the date that the Company delivers a notice requiring the purchase of shares by the Purchaser and ending on the earlier to occur of (i) five (5) business days immediately following such date and (ii) the date on which the Purchaser notifies the Company that it is prepared to proceed with the relevant closing, multiplied by 90%. Upon each purchase, the Purchaser will receive warrants to purchase such number of shares of the Company’s common stock equal to 10% of the number of shares purchased in the related purchase (the “Warrants”). The Exercise Price shall equal 130% of the price per share paid upon closing. The exercise of the Warrant will be subject to stockholder approval and expire five years after issuance. The Warrants may be exercised via cashless exercise if there is no effective registration statement, or current prospectus available for, the resale of the Warrant shares. The Company could not issue to the Purchaser under the Purchase Agreement shares in an amount greater than 19.99% of the total number of shares of common stock issued and outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”), unless the Company obtained stockholder approval to issue shares of common stock in excess of the Exchange Cap. On June 23, 2025, at the Company's annual meeting of stockholders, the stockholders approved the sale and issuance of more than 19.99% of our outstanding shares of our common stock, including shares of common stock underlying warrants, pursuant to the Purchase Agreement entered into with the Purchaser.
Current wording
On April 24, 2025, the Company entered into the ELOC with Alumni Capital LP (the "Purchaser" or "Alumni Capital"), whereby the Company has the right, but not the obligation, to sell to the Purchaser, and the Purchaser is obligated to purchase, up to an aggregate of $20 million (the "Investment Amount") of shares of the Company’s common stock in a series of purchases. The term of the Purchase Agreement is through December 31, 2026, or the date on which the Purchaser shall have purchased the shares pursuant to the Purchase Agreement for an aggregate purchase price of the Investment Amount. During the term, the Company may at its election cause the Purchaser to make a series of purchases of shares, each up to $750,000, or up to $4 million dollars upon consent of the Purchaser. The closing of each purchase pursuant to the Purchase Agreement will be no later than five business days after the Company provides notice for the purchase. The purchase price of the shares that the Company elects to sell to the Purchaser pursuant to the Purchase Agreement will be equal to the lowest daily volume weighted average price of the common stock during the period commencing on the date that the Company delivers a notice requiring the purchase of shares by the Purchaser and ending on the earlier to occur of (i) five (5) business days immediately following such date and (ii) the date on which the Purchaser notifies the Company that it is prepared to proceed with the relevant closing, multiplied by 90%. Upon each purchase, the Purchaser will receive warrants to purchase such number of shares of the Company’s common stock equal to 10% of the number of shares purchased in the related purchase (the “Warrants”). The Exercise Price shall equal 130% of the price per share paid upon closing. The exercise of the Warrant will be subject to stockholder approval and expire five years after issuance. The Warrants may be exercised via cashless exercise if there is no effective registration statement, or current prospectus available for, the resale of the Warrant shares. The Company could not issue to the Purchaser under the Purchase Agreement shares in an amount greater than 19.99% of the total number of shares of common stock issued and outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”), unless the Company obtained stockholder approval to issue shares of common stock in excess of the Exchange Cap. On June 23, 2025, at the Company's annual meeting of stockholders, the stockholders approved the sale and issuance of more than 19.99% of our outstanding shares of our common stock, including shares of common stock underlying warrants, pursuant to the Purchase Agreement entered into with the Purchaser.
Previous wording
On August 26, 2025, the Company entered into a Modification Agreement (the “Modification Agreement”) with Alumni Capital to amend certain terms of the Purchase Agreement, dated April 24, 2025, between the Company and Alumni Capital (the “Purchase Agreement”). Pursuant to the Modification Agreement, the Company may at its election, cause Alumni Capital to make a series of purchases of ELOC Shares either at (i) the lowest daily volume weighted average price of the Common Stock during the period commencing on the date that the Company delivers written notice (the “Purchase Notice”) and ending on the earlier of (a) five (5) business days immediately following the date of a Purchase Notice, and (b) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 90% (“Purchase Notice Option 1”) or (ii) the lowest traded price of Common Stock during the period commencing on the date the Company delivers a Purchase Notice and ending on the earlier of (x) the same business day a Purchase Notice is delivered, and (y) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 97% (“Purchase Notice Option 2”). Each Purchase Notice delivered by the Company must specify whether Purchase Notice Option 1 or Purchase Notice Option 2 is selected and the number of ELOC Shares to be purchased. All other terms and conditions of the Purchase Agreement remain in full force and effect. Refer to Note 7 regarding the terms of the warrants issued in conjunction with the Shares.
Current wording
On August 26, 2025, the Company entered into a Modification Agreement (the “Modification Agreement”) with Alumni Capital to amend certain terms of the ELOC, dated April 24, 2025, between the Company and Alumni Capital (the “Purchase Agreement”). Pursuant to the Modification Agreement, the Company may at its election, cause Alumni Capital to make a series of purchases of ELOC Shares either at (i) the lowest daily volume weighted average price of the Common Stock during the period commencing on the date that the Company delivers written notice (the “Purchase Notice”) and ending on the earlier of (a) five (5) business days immediately following the date of a Purchase Notice, and (b) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 90% (“Purchase Notice Option 1”) or (ii) the lowest traded price of Common Stock during the period commencing on the date the Company delivers a Purchase Notice and ending on the earlier of (x) the same business day a Purchase Notice is delivered, and (y) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 97% (“Purchase Notice Option 2”). Each Purchase Notice delivered by the Company must specify whether Purchase Notice Option 1 or Purchase Notice Option 2 is selected and the number of ELOC Shares to be purchased. All other terms and conditions of the Purchase Agreement remain in full force and effect. Refer to Note 7 regarding the terms of the warrants issued in conjunction with the Shares.
Previous wording
As of November 12, 2025, we had 10,204,938 shares of our common stock issued and outstanding. Except as otherwise indicated, all share and share price this report gives effect to a reverse stock split effected on July 1, 2024 at a ratio of 30-for-1. As of the date of this filing, our Board is still evaluating the need for a further reverse split and, if needed, the exact split ratio based on our financing alternatives and NYSE American compliance considerations. Our financial statements will not reflect the further reverse stock split until such time as it occurs.
Current wording
As of May 13, 2026, we had 16,192,438 shares of our common stock issued and outstanding. Except as otherwise indicated, all share and share price this report gives effect to a reverse stock split effected on July 1, 2024 at a ratio of 30-for-1 and August 21, 2025 at a ratio of 6.66-for-1. As of the date of this filing, our Board is still evaluating the need for a further reverse split and, if needed, the exact split ratio based on our financing alternatives and NYSE American compliance considerations.
Previous wording
We are focused on developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. We have built a proprietary platform that includes a microbial library comprised of approximately 1,500 unique bacterial strains that can be screened for unique therapeutic characteristics. The platform is augmented by an artificial intelligence and machine learning technology, which can enable the transformation of previously genetically intractable strains. Our initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis, or S. epidermidis, which we consider to be an optimal therapeutic candidate species for engineering of dermatologic therapies. The particular species demonstrates a number of well-described properties in the skin. As of the date of this report, we have identified among our microbial library over 60 distinct bacterial species that we believe are capable of being engineered to create living organisms or engineered proteins with significant therapeutic effect.
Current wording
We are focused on developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. We have built a proprietary platform that includes a microbial library comprised of approximately 1,500 unique bacterial strains that can be screened for unique therapeutic characteristics. The platform is augmented by an artificial intelligence and machine learning technology, which can enable the transformation of previously genetically intractable strains. Our initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis, or S. epidermidis, which we consider to be an optimal therapeutic candidate species for engineering of dermatologic therapies. The particular species demonstrates a number of well-described properties in the skin. As of the date of this report, we have identified among our microbial library over 60 distinct bacterial species that we believe are capable of being engineered to create living organisms or engineered proteins with significant therapeutic effect. We also leverage our technology to develop cosmetic ingredients for consumer-oriented products.
Previous wording
•ATR-04, which includes a genetically modified strain of S. epidermidisfor treating the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor inhibitor, or EGFRi, targeted therapy. In August 2024, we obtained IND clearance from the FDA to commence a Phase 1/2 clinical trial in certain cancer patients undergoing EGFRi targeted therapy. In September 2024, we obtained Fast Track designation by the FDA in this indication. We dosed the first patient in the Phase 1/2 clinical trial in the third quarter of 2025.
Current wording
•ATR-04, which includes a genetically modified strain of S. epidermidisfor treating the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor inhibitor, or EGFRi, targeted therapy. In August 2024, we obtained IND clearance from the FDA to commence a Phase 1/2 clinical trial in certain cancer patients undergoing EGFRi targeted therapy. In September 2024, we obtained Fast Track designation by the FDA in this indication. We dosed the first patient in the Phase 1/2 clinical trial in the third quarter of 2025 and plan to announce initial data from Cohort 1 of the trail around Q3 2026.
Previous wording
•ATR-01, which includes a genetically modified strain of S. epidermidis that expresses an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris, a chronic, xerotic (abnormally dry), scaly skin disease with an estimated incidence and prevalence of 1 in 250, which suggests a total patient population of 1.3 million in the United States. We are planning to perform lead optimization and IND-enabling studies in 2025 to support an IND filing in 2026.
Current wording
•ATR-01, which includes a genetically modified strain of S. epidermidis that expresses an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris, a chronic, xerotic (abnormally dry), scaly skin disease with an estimated incidence and prevalence of 1 in 250, which suggests a total patient population of 1.3 million in the United States. We completed lead optimization studies in 2025 and continue to perform IND-enabling studies in 2026.
Previous wording
Beyond our three lead product candidates, our goal is to develop a broad portfolio of product candidates focused on expanding the application of our platforms for precision dermatology. We believe that we have established a unique position in advancing the development of biologics for precision dermatology.
Current wording
Beyond our four lead product candidates, our goal is to develop a broad portfolio of product candidates focused on expanding the application of our platforms for precision dermatology. We believe that we have established a unique position in advancing the development of biologics for precision dermatology and high-value ingredients for the cosmetic industry.
Previous wording
We intend to create a broad portfolio of product candidates for precision dermatology through our development of genetically engineered proteins selected from our proprietary microbial library of approximately 1,500 unique bacterial strains. Our strategy is as follows:
Current wording
We intend to create a broad portfolio of product candidates for precision dermatology through our development of genetically engineered proteins selected from our proprietary microbial library of approximately 1,500 unique bacterial strains. Additionally, Azitra’s research team is developing the SyMPL technology to improve the production of recombinant proteins, peptides and complex small molecule natural products. Our strategy is as follows:
Previous wording
•Build a sustainable precision dermatology company. Our goal is to build a leading precision dermatology company with a sustainable pipeline of product candidates. To that end, we are focused on rapidly advancing our current pipeline of live biotherapeutic candidates while actively developing additional product candidates. Each of our current product candidates are proprietary and subject to pending patent applications. We expect that most, if not all, genetically engineered product candidates we develop will be eligible for patent protection.
Current wording
•Build a sustainable precision dermatology company. Our goal is to build a leading precision dermatology company with a sustainable pipeline of product candidates. To that end, we are focused on rapidly advancing our current pipeline of live biotherapeutic candidates while actively developing additional product candidates including recombinant proteins, peptides and natural products. While some products will be focused on prescription drug pathways, others are being developed as biotech tool products or high-value cosmetic ingredients. Each of our current product candidates are proprietary and subject to pending patent applications. We expect that most, if not all, genetically engineered product candidates we develop will be eligible for patent protection.
Previous wording
The Company’s management submitted the Plan to the NYSE American by the October 31, 2025 deadline. If the NYSE American accepts the Company’s Plan, the Company will be able to continue its listing during the Plan period and will be subject to continued periodic review by the NYSE American staff. If the Plan is not accepted, delisting proceedings will commence. If the Plan is accepted but the Company does not make progress consistent with the Plan during the plan period or if the Company is not in compliance with the listing standards by April 1, 2027, then the Company will be subject to delisting procedures as set forth in the NYSE American Company Guide.
Current wording
The Company’s management submitted the Plan to the NYSE American by the October 31, 2025 deadline which was accepted by the NYSE American on December 6, 2025. If the Company does not make progress consistent with the Plan during the plan period or if the Company is not in compliance with the listing standards by April 1, 2027, then the Company will be subject to delisting procedures as set forth in the NYSE American Company Guide.
Previous wording
We are an early-stage clinical biopharmaceutical company, formed in January 2014, and have limited operating history. We have not commenced revenue-producing operations, and our core focus is on the research and development of innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. To date, our operations have consisted of the development of our proprietary microbial library, the identification, characterization and testing of certain bacterial species from our microbial library that we believe are capable of being engineered to provide significant therapeutic effect, the development of our initial product candidates and the commencement of phase 1/2 clinical trials related to our ATR-12, and ATR-04 product candidates.
Current wording
We are an early-stage clinical biopharmaceutical company, formed in January 2014, and have limited operating history. We have not commenced revenue-producing operations, and our core focus is on the research and development of innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. Additionally, Azitra’s research team is developing the SyMPL technology to improve the production of recombinant proteins, peptides and complex small molecule natural products. To date, our operations have consisted of the development of our proprietary microbial library, the identification, characterization and testing of certain bacterial species from our microbial library that we believe are capable of being engineered to provide significant therapeutic effect, the development of our initial product candidates and the commencement of Phase 1/2 clinical trials related to our ATR-12 and ATR-04 product candidates.
Previous wording
General and administrative costs during the third quarter of fiscal 2025 decreased by $324,994, or 17%, to $1,588,406 from the comparable prior period. The decrease was primarily related to a decrease of $328,000 in legal fees primarily related to the write off of certain patent expenses and public company compliance initiatives, a decrease of $119,000 in payroll and benefits primarily related to a decrease in stock option expense as options vest, a decrease of $17,000 in hiring costs primarily related to a compensation consultant, and a net decrease of $20,000 in other overhead expenses offset by an increase of $89,000 in financing costs primarily related to work performed to establish our equity line of credit, an increase of $15,000 in the use of business consultants which was primarily attributed to increased hours due to incremental public company compliance initiatives and business development efforts, an increase of $24,000 in public relations costs related to an increase in our base rate and additional services provided, an increase of $10,000 in accounting and auditing expense, an increase $8,000 in software and equipment, and an increase of $14,000 in insurance costs.
Current wording
General and administrative costs during the first quarter of fiscal 2026 increased by approximately $523,000, or 28%, to $2,373,359 from the comparable prior period. The increase was primarily related to the write-off of approximately $624,000 certain deferred patent costs, an increase in approximately $47,000 in legal fees, an increase of approximately $63,000 in the use of business consultants which was primarily attributed to increased hours due to incremental public company compliance initiatives and business development efforts, and an increase of approximately $4,000 in other overhead expenses, offset by a decrease of approximately $97,000 in payroll and benefits primarily related to bonus accruals; a decrease of approximately $71,000 accounting and auditing costs primarily related to the NYSE annual fee; a decrease of approximately $31,000 in financing costs, and a decrease of approximately $16,000 in overall insurance costs.
Previous wording
During the third quarter of fiscal 2025, research and development expenses increased by $164,271, or 16%, to $1,180,078 from the comparable prior period. The increase was primarily related to a net increase of $239,000 in research and development and clinical trial costs for our ATR-04 program as the program progresses through its clinical trial, an increase of $48,000 in research and development costs for our ATR-01 program, an increase of $29,000 in payroll and benefits due merit increases and an additional new hire, and an increase of $11,000 for lab supplies offset by a net decrease of $104,000 in research and development and clinical trial costs for our ATR-12 program as the program progresses its clinical trial, a decrease of $65,000 in clinical consultant expenditures related to our programs prior to entering into their clinical phases, and a net increase of $6,000 in other miscellaneous costs. There were no government and nonprofit grant revenue received for the periods ended September 30, 2025 and 2024. There were no refundable tax credits for the periods ended September 30, 2025 and 2024.
Current wording
During the first quarter of fiscal 2026, research and development expenses increased by approximately $310,000, or 25%, to $1,560,565 from the comparable prior period. The increase was primarily related to a net increase of approximately $484,000 in research and development and clinical trial costs for our ATR-01 program as the program progresses, an increase of approximately $54,000 in research and development costs for our ATR-04 program as the program progresses through its clinical trial, an increase of approximately $17,000 for lab supplies, and a net increase of approximately $2,000 in other miscellaneous costs offset by a net decrease of approximately $207,000 in research and development and clinical trial costs for our ATR-12 program due to a decrease in the number of patents dosed during the quarter, a decrease of approximately $27,000 in the use of consultants, and a decrease of approximately $13,000 in payroll and benefits.
Previous wording
We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates.
Current wording
We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates, the research and development of cosmetic ingredients for our consumer-oriented products, and planned increases in personnel costs due to additional resource hires.
Previous wording
Our other income consists of interest income, interest expense, loss on issuance of stock, change in the valuation of warrants carried at fair value, and loss on foreign currency. During the third quarter of fiscal 2025, other income decreased by $1,915,760, or 100%, compared to the comparable period in fiscal 2024. The decrease was primarily related to a decrease of $4,000,000 attributable to the change in the valuation of the warrants, a decrease in interest income of $42,000 offset by a decrease of $2,200,000 attributable to the loss on issuance of stock.
Current wording
Our other income consists of interest income, interest expense, change in the valuation of warrants carried at fair value, and loss on foreign currency. During the first quarter of fiscal 2026, other income decreased by approximately $25,000, or 79%, compared to the comparable period in fiscal 2025. The decrease was primarily related to a decrease in interest income of $22,000 and a net decrease of $3,000 in other costs.
Previous wording
As of September 30, 2025, we had total assets of approximately $4.3 million and working capital of approximately $0.4 million. As of September 30, 2025, our liquidity included approximately $1.4 million of cash and cash equivalents. We believe that our cash on-hand as of the date of this report will not be sufficient to cover our proposed plan of operations over the next twelve months. We intend to seek additional funds through various financing sources, including the sale of our equity and debt securities, federal grants, licensing fees for our technology and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.
Current wording
As of March 31, 2026, we had total assets of approximately $12.1 million and working capital of approximately $9.2 million. As of March 31, 2026, our liquidity included approximately $10.1 million of cash and cash equivalents. We believe that our cash on-hand as of the date of this report will not be sufficient to cover our proposed plan of operations over the next twelve months. We intend to seek additional funds through various financing sources, including the sale of our equity and debt securities, federal grants, licensing fees for our technology and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.
Previous wording
As of the date of this filing, management has determined there is substantial doubt about our ability to continue as a going concern based on our lack of revenue from commercial operations, significant losses, and the need to raise additional capital to support ongoing operations. Our contractual commitments primarily consist of operating and financing leases with contractual undiscounted balances of $507,394, and $14,788, respectively as of September 30, 2025. Refer to Footnote 11 for more detailed information regarding our lease commitments. Additionally, as we continue to progress our product candidates through clinical trials, we will continue to incur additional costs related to our CRO's. It is common in our industry for the CRO's to require significant up-front cash payments prior to the beginning of such trial phases, and additional cash payments upon the achievement of certain milestones per the contracts' terms.
Current wording
As of the date of this filing, management has determined there is substantial doubt about our ability to continue as a going concern based on our lack of revenue from commercial operations, significant losses, and the need to raise additional capital to support ongoing operations. Our contractual commitments primarily consist of operating and financing leases with contractual undiscounted balances of $349,795, and $5,920, respectively as of March 31, 2026. Refer to Note 11 for more detailed information regarding our lease commitments. Additionally, as we continue to progress our product candidates through clinical trials, we will continue to incur additional costs related to our CRO's. It is common in our industry for the CRO's to require significant up-front cash payments prior to the beginning of such trial phases, and additional cash payments upon the achievement of certain milestones per the contracts' terms.
Previous wording
During the first nine months of fiscal 2025, operating activities used $8.3 million of cash primarily driven by our net loss of $8.7 million. During the comparable period of fiscal 2024, operating activities used $7.6 million of cash primarily driven by our net loss of $6.6 million and by non-cash items of $1.0 million.
Current wording
During the first three months of fiscal 2026, operating activities used approximately $2.5 million of cash primarily driven by our net loss of approximately $3.9 million offset by approximately $624,000 of impairment expenses related to our patents, approximately $542,000 in accounts payable and accrued expenses and approximately $255,000 in prepaid expenses. During the comparable period of fiscal 2025, operating activities used approximately $3.1 million of cash primarily driven by our net loss of approximately $3.1 million.
Previous wording
During the first nine months of fiscal 2025, investing activities used $99,051 of cash driven by $87,000 in trademark and deferred patent costs and $15,000 for the purchase of equipment offset by $3,000 in proceeds from the sale of property and equipment. During the comparable period of fiscal 2024, investing activities used $263,714 of cash driven by $255,000 in trademark and deferred patent costs and $9,000 for the purchase of equipment.
Current wording
During the first three months of fiscal 2026, investing activities used approximately $37,000 of cash driven by approximately $22,000 in trademark and deferred patent costs and approximately $15,000 for the purchase of equipment. During the comparable period of fiscal 2025, investing activities used approximately $22,000 of cash driven by approximately $25,000 in trademark and deferred patent costs offset by proceeds of approximately $3,000 for the sale of equipment.
Previous wording
During the first nine months of fiscal 2025, financing activities provided $5.3 million in cash primarily driven by proceeds from our January and February 2025 follow-on public offerings and draws on our equity line of credit. During the comparable period of fiscal 2024, financing activities provided $13.3 million in cash primarily driven by proceeds from our February 2024 follow-on offering.
Current wording
During the first three months of fiscal 2026, financing activities provided approximately $10.5 million in cash primarily driven by proceeds from our private placement in March and draws on our equity line of credit. During the comparable period of fiscal 2025, financing activities provided approximately $1.7 million in cash primarily driven by proceeds from our follow-on offerings in January and February 2025.
Previous wording
During the nine months ended September 30, 2025, there were material changes to our critical accounting policies previously disclosed in our Form 10-K dated December 31, 2024 and filed with the SEC on February 24, 2025. We no longer consider our revenue recognition, and estimating the fair value of our common stock critical accounting policies as we currently do not have transactions that produce revenue, and since we are a publicly traded company, we no longer need to estimate the fair value of our common stock as the Company's common stock is traded on the NYSE American.
Current wording
During the three months ended March 31, 2026, there were material changes to our critical accounting policies previously disclosed in our Form 10-K for the year ended December 31, 2025 and filed with the SEC on February 27, 2026.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
On April 24, 2025, the Company entered into a Purchase Agreement (the "Purchase Agreement") with Alumni Capital LP (the "Purchaser" or "Alumni Capital"), whereby the Company has the right, but not the obligation, to sell to the Purchaser, and the Purchaser is obligated to purchase, up to an aggregate of $20 million (the "Investment Amount") of shares of the Company’s common stock in a series of purchases. The term of the Purchase Agreement is through December 31, 2026, or the date on which the Purchaser shall have purchased the shares pursuant to the Purchase Agreement for an aggregate purchase price of the Investment Amount.
Previous report — wording carried elsewhere
The following table summarizes our results of operations with respect to the items set forth below for the for the nine months ended September 30, 2025 and 2024 together with the percentage change for those items.
Previous report — wording carried elsewhere
We expect that our general and administrative expenses will incur a modest increase in the future as a result of personnel costs, and facility operating costs. We also expect an increase in costs associated with being a public company, including costs related to accounting, audit, legal, consulting fees, regulatory and tax-related services associated with maintaining compliance with applicable NYSE American and SEC requirements, additional director and officer insurance costs, and investor and public relations costs.
Previous report — wording carried elsewhere
Research and development expenses include salaries and benefits of all research personnel, payments to contract research organizations, payments to research consultants, and the purchase of lab supplies.
Previous report — wording carried elsewhere
During the nine months ended September 30, 2025 and 2024 our research and development expenses by category were as follows:
Previous report — wording carried elsewhere
We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates.
Previous report — wording carried elsewhere
We expect our future other income (expense) to be consistent with prior periods.