Group 1: Company Performance - Aspire Biopharma Holdings, Inc. saw a stock price increase of 91.71%, reaching a high of $0.43, attributed to advancements in its drug pipeline and plans for a new drug application by 2025 [2][6] - Hepion Pharmaceuticals, Inc. experienced a 73.91% rise in stock price to $0.09, likely due to the completion of its application to the OTCQB market and developments in diagnostic tests for various conditions [3][6] - Mountain Lake Acquisition Corp. had a significant stock price increase of 284.42%, possibly due to anticipation of a major announcement regarding business combination plans [4][6] - RF Acquisition Corp II Right saw a 157.5% rise, driven by optimism surrounding potential mergers or acquisitions in high-growth sectors like artificial intelligence and biotechnology [4][6] Group 2: Market Dynamics - The market is currently dynamic, with notable interest in companies involved in mergers, acquisitions, and advancements in drug therapies and diagnostics [5][6] - Investors are closely monitoring these companies for insights into their operational success and market potential [5]

```markdown [PART I—FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and related disclosures [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows, along with their accompanying notes, for the periods ended June 30, 2025 and December 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position at specific dates, detailing assets, liabilities, and equity Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 ($ in millions) | December 31, 2024 ($ in millions) | | :-------------------------- | :-------------- | :---------------- | | Cash | $2,924,395 | $406,408 | | Total current assets | $4,505,469 | $1,613,737 | | Total assets | $4,505,469 | $1,613,737 | | Notes payable, current | $371,661 | $2,900,000 | | Total current liabilities | $592,854 | $3,143,886 | | Total liabilities | $708,531 | $3,477,075 | | Total stockholders' equity | $3,796,938 | $(1,863,338) | | Accumulated deficit | $(244,968,265) | $(237,819,806) | - Total assets increased significantly from **$1.61 million** at December 31, 2024, to **$4.51 million** at June 30, 2025, primarily driven by an **increase in cash**[12](index=12&type=chunk) - Total liabilities decreased from **$3.48 million** to **$0.71 million**, mainly due to the **repayment of notes payable**[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific periods Net Loss (Three Months Ended June 30) | Year | Net Loss ($ in millions) | | :--- | :--------- | | 2025 | $(1,042,572) | | 2024 | $(3,925,212) | Net Loss (Six Months Ended June 30) | Year | Net Loss ($ in millions) | | :--- | :--------- | | 2025 | $(7,148,459) | | 2024 | $(6,779,018) | Research and Development Expenses (Three Months Ended June 30) | Year | Amount ($ in millions) | | :--- | :------- | | 2025 | $423,277 | | 2024 | $7,136,679 | General and Administrative Expenses (Three Months Ended June 30) | Year | Amount ($ in millions) | | :--- | :------- | | 2025 | $919,488 | | 2024 | $1,367,169 | Asset Impairment Loss (Three Months Ended June 30) | Year | Amount ($ in thousands) | | :--- | :------- | | 2025 | $402,746 | | 2024 | $0 | Change in fair value of contingent consideration and derivative financial instruments (Six Months Ended June 30) | Year | Amount ($ in millions) | | :--- | :----------- | | 2025 | $(4,102,408) | | 2024 | $6,459,752 | Basic and Diluted Net Loss per Common Share | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | $(0.09) | $(34.00) | | Six Months Ended June 30 | $(1.00) | $(62.50) | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the company's comprehensive loss, including net loss and other comprehensive income/loss items Comprehensive Loss (Three Months Ended June 30) | Year | Comprehensive Loss ($ in millions) | | :--- | :------------------- | | 2025 | $(1,042,572) | | 2024 | $(3,988,234) | Comprehensive Loss (Six Months Ended June 30) | Year | Comprehensive Loss ($ in millions) | | :--- | :------------------- | | 2025 | $(7,148,459) | | 2024 | $(6,754,061) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit Total Stockholders' Equity | Date | Amount ($ in millions) | | :---------------- | :----------- | | December 31, 2024 | $(1,863,338) | | June 30, 2025 | $3,796,938 | - Total stockholders' equity significantly increased from a deficit of **$(1.86) million** at December 31, 2024, to a positive **$3.80 million** at June 30, 2025[22](index=22&type=chunk) - This improvement was primarily driven by the conversion of 2025 Series B warrants into common stock, generating **$9.76 million** and **$0.67 million** in additional paid-in capital during the first and second quarters of 2025, respectively, and the issuance of common stock and pre-funded warrants, net, contributing **$2.09 million**[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities Net Cash Used in Operating Activities (Six Months Ended June 30) | Activity | 2025 ($ in millions) | 2024 ($ in millions) | | :-------------------- | :-------------- | :--------------- | | Operating activities | $(2,492,782) | $(14,545,497) | | Investing activities | $(132,117) | $0 | | Financing activities | $5,142,886 | $1,849,707 | Cash at End of Period | Date | Amount ($ in millions) | | :----------- | :----------- | | June 30, 2025 | $2,924,395 | | June 30, 2024 | $2,115,047 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the unaudited condensed consolidated financial statements, covering business operations, accounting policies, equity transactions, debt, fair value measurements, share-based payments, loss per share, and commitments and contingencies. It highlights the company's shift from drug development to medical diagnostics and its ongoing need for additional capital [1. Business Overview](index=11&type=section&id=1.%20Business%20Overview) This section provides an overview of the company's business, strategic shifts, and key developments - **Hepion Pharmaceuticals, Inc. transitioned from developing drug therapy for chronic liver diseases (rencofilstat) to focusing on medical diagnostics**[28](index=28&type=chunk)[139](index=139&type=chunk) - The **ASCEND-NASH clinical trial for rencofilstat was wound down and closed in August 2024 due to insufficient funding**[30](index=30&type=chunk)[141](index=141&type=chunk) - A **proposed merger with Pharma Two B Ltd. was terminated in December 2024 due to Nasdaq's burn rate calculation**[33](index=33&type=chunk)[144](index=144&type=chunk) - In May 2025, the **company in-licensed diagnostic tests for celiac disease, respiratory multiplex, H. pylori, and HCC from New Day Diagnostics LLC**. These tests have CE marks for sale in the EU and other eligible markets, but not currently the US[34](index=34&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) - An **impairment loss of $0.40 million was recorded for these licensed assets due to delayed market timing and insufficient projected cash flow to recover costs within the initial two-year license term**[36](index=36&type=chunk)[156](index=156&type=chunk)[160](index=160&type=chunk) - The **company sold all Rencofilstat-related patent assets and data for a nominal amount in May 2025, retaining contingent value rights for stockholders upon future milestones**[37](index=37&type=chunk)[39](index=39&type=chunk) [2. Basis of Presentation](index=12&type=section&id=2.%20Basis%20of%20Presentation) This section outlines the basis for preparing the financial statements, including accounting standards and significant events - The **unaudited condensed consolidated financial statements are prepared in accordance with SEC requirements and U.S. GAAP for interim reporting**[38](index=38&type=chunk) - A **one-for-fifty reverse stock split was effected on March 17, 2025, proportionally adjusting common stock, options, and warrants**[42](index=42&type=chunk)[101](index=101&type=chunk) - As of June 30, 2025, the **company had $2.9 million in cash, an accumulated deficit of $245.0 million, and a net loss of $7.1 million for the six months ended June 30, 2025**. Management concluded there is **substantial doubt about the company's ability to continue as a going concern without additional capital**[43](index=43&type=chunk)[44](index=44&type=chunk)[169](index=169&type=chunk) - A "**best efforts**" **public offering on January 23, 2025, generated approximately $9.0 million gross proceeds, used to repay indebtedness and for general corporate purposes**[46](index=46&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk)[145](index=145&type=chunk)[162](index=162&type=chunk) [3. Summary of Significant Accounting Policies](index=13&type=section&id=3.%20Summary%20of%20Significant%20Accounting%20Policies) This section details the company's significant accounting policies and estimates - **No material changes to significant accounting policies since the December 31, 2024, Form 10-K**[48](index=48&type=chunk)[151](index=151&type=chunk) Cash Balances | Date | Amount ($ in millions) | | :---------------- | :----------- | | June 30, 2025 | $2.9 million | | December 31, 2024 | $0.4 million | - **Derivative financial instruments (warrants) are measured at fair value, primarily classified as Level 2 within the fair value hierarchy**[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[57](index=57&type=chunk) - The **company maintains a full valuation allowance for net deferred tax assets, and NOL and tax credit carryforwards are subject to Section 382 limitations**[55](index=55&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) - **Research and development costs, including purchased in-process R&D from the New Day licensing agreement, are expensed as incurred**[62](index=62&type=chunk)[64](index=64&type=chunk) [4. Stockholders' Equity](index=18&type=section&id=4.%20Stockholders'%20Equity) This section provides details on changes in stockholders' equity, including capital transactions and derivative liabilities - The **Merger Agreement with Pharma Two B Ltd. was terminated on December 11, 2024, due to Nasdaq's burn rate calculation**[78](index=78&type=chunk) - A **public offering on January 23, 2025, generated approximately $9.0 million gross proceeds, involving common stock, pre-funded warrants, and Series A and B warrants**[91](index=91&type=chunk)[94](index=94&type=chunk) - By April 4, 2025, all 2025 Series B warrants (10,173,402 shares) were exercised on a **cashless basis** at a weighted average reset price of **$3.27**, generating no proceeds[96](index=96&type=chunk) - The **company underwent a one-for-fifty reverse stock split in March 2025 and was subsequently delisted from Nasdaq, transitioning to the OTCQB Venture Market in June 2025**[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) Derivative Financial Instruments Liability | Date | Amount ($ in thousands) | | :---------------- | :------- | | December 31, 2024 | $333,189 | | June 30, 2025 | $115,677 | [5. Notes Payable](index=23&type=section&id=5.%20Notes%20Payable) This section describes the company's outstanding debt obligations and related transactions - **Original Issue Discount Senior Unsecured Nonconvertible Notes of $2.9 million, issued in July 2024, became due in December 2024 upon merger termination and were paid off on January 23, 2025**[108](index=108&type=chunk)[109](index=109&type=chunk) - A **new one-year Directors and Officers Liability Insurance agreement was entered into on March 15, 2025, for $0.66 million, with an outstanding balance of $0.37 million at June 30, 2025, financed over ten months at 7.30% APR**[110](index=110&type=chunk) [6. Fair Value Measurements](index=23&type=section&id=6.%20Fair%20Value%20Measurements) This section explains the valuation methodologies and fair value hierarchy for financial instruments Fair Value of Derivative Liabilities Related to Warrants | Date | Amount (Level 2) ($ in thousands) | | :---------------- | :--------------- | | June 30, 2025 | $115,677 | | December 31, 2024 | $333,189 | - The fair value of derivative liabilities related to warrants **decreased from $0.33 million at December 31, 2024, to $0.12 million at June 30, 2025**[112](index=112&type=chunk) - **Valuation is estimated using the Black-Scholes option pricing model, considering inputs such as stock price, expected warrant term, risk-free interest rates, expected volatility, and dividend yields**[90](index=90&type=chunk)[99](index=99&type=chunk) [7. Accrued Liabilities](index=24&type=section&id=7.%20Accrued%20Liabilities) This section details the company's accrued expenses and other short-term liabilities - **Accrued expenses at June 30, 2025, and December 31, 2024, primarily consisted of accrued interest on the note payable from the July 2024 Securities Purchase Agreement**[115](index=115&type=chunk) [8. Accounting for Share-Based Payments](index=24&type=section&id=8.%20Accounting%20for%20Share-Based%20Payments) This section outlines the accounting treatment for share-based compensation plans and related expenses Stock-Based Compensation Expense (Six Months Ended June 30) | Year | Amount ($ in thousands) | | :--- | :------- | | 2025 | $20,783 | | 2024 | $734,395 | - **No new stock option grants were made during the three and six months ended June 30, 2025**[118](index=118&type=chunk) - As of June 30, 2025, 7,813 **stock options were outstanding, all vested and exercisable, with a weighted average exercise price of $373.11 and an average remaining contractual term of 8.25 years**[121](index=121&type=chunk) - **Unrecognized compensation cost related to non-vested stock options was $0.0 million as of June 30, 2025**[122](index=122&type=chunk) [9. Loss per Share](index=25&type=section&id=9.%20Loss%20per%20Share) This section presents the calculation of basic and diluted net loss per common share Net Loss per Common Share (Basic and Diluted) | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | $(0.09) | $(34.00) | | Six Months Ended June 30 | $(1.00) | $(62.50) | Weighted Average Common Shares Outstanding | Period | 2025 | 2024 | | :-------------------------- | :---------- | :------- | | Three Months Ended June 30 | 11,328,122 | 115,983 | | Six Months Ended June 30 | 7,137,017 | 108,728 | - **Certain outstanding securities, totaling 3,502,108 for the six months ended June 30, 2025, were excluded from the computation of basic and diluted weighted shares outstanding as they would have been anti-dilutive due to net loss**[127](index=127&type=chunk) [10. Commitments and Contingencies](index=26&type=section&id=10.%20Commitments%20and%20Contingencies) This section discloses the company's legal proceedings, lease commitments, and other contingent liabilities - The **company is involved in various legal proceedings but does not anticipate a material adverse effect on its financial condition or results of operations**[128](index=128&type=chunk) - The **corporate office lease in Edison, New Jersey, was terminated, and the office vacated by December 2024, resulting in no ROU assets or lease liabilities as of June 30, 2025**[129](index=129&type=chunk)[134](index=134&type=chunk) Rent Expense (Three Months Ended June 30) | Year | Amount ($ in thousands) | | :--- | :------- | | 2025 | $0 | | 2024 | $38,995 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting the strategic shift from drug development to medical diagnostics. It discusses the discontinuation of the rencofilstat program, the termination of a merger agreement, and the recent in-licensing of diagnostic tests. The discussion also covers critical accounting estimates, recent accounting pronouncements, detailed comparisons of operating results for the three and six months ended June 30, 2025 and 2024, and an analysis of liquidity and capital resources, emphasizing the ongoing need for additional funding [Overview](index=28&type=section&id=Overview) This section provides a high-level summary of the company's strategic direction and recent operational changes - **Hepion Pharmaceuticals, Inc. has transitioned from a chronic liver disease drug developer (rencofilstat) to a medical diagnostic company**[139](index=139&type=chunk) - The **rencofilstat clinical trial (ASCEND-NASH) was halted and closed in August 2024 due to funding issues**[141](index=141&type=chunk) - A **planned merger with Pharma Two B Ltd. was terminated in December 2024**[144](index=144&type=chunk) - In May 2025, the **company in-licensed diagnostic tests for celiac disease, respiratory multiplex, H. pylori, and HCC, which are approved for sale in the EU and other markets (excluding the US)**[146](index=146&type=chunk)[147](index=147&type=chunk) - A **public offering in January 2025 raised $9.0 million, used partly to repay debt**[145](index=145&type=chunk) [FINANCIAL OPERATIONS OVERVIEW](index=29&type=section&id=FINANCIAL%20OPERATIONS%20OVERVIEW) This section summarizes the company's financial performance and accumulated deficit since inception - As of June 30, 2025, the **company has an accumulated deficit of $245.0 million and has not generated any revenue from operations since its inception**[149](index=149&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=30&type=section&id=CRITICALACCOUNTING%20ESTIMATES) This section discusses the key accounting estimates that require significant management judgment - There were **no significant changes to the company's critical accounting estimates during the six months ended June 30, 2025, from those previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024**[151](index=151&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=30&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section addresses the impact of recently issued accounting standards on the financial statements - There are **no recent accounting pronouncements that will have a material effect on the condensed consolidated financial statements for the three months ended June 30, 2025**[152](index=152&type=chunk)[75](index=75&type=chunk) [RESULTS OF OPERATIONS](index=30&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance by comparing operating results across periods - The **company reported no revenues for both the three and six months ended June 30, 2025, or 2024**[153](index=153&type=chunk)[157](index=157&type=chunk) [Comparison of the three months ended June 30, 2025 and 2024](index=30&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030,%202025%20and%202024) This section compares the company's operating results for the specified three-month period Net Loss (Three Months Ended June 30) | Year | Net Loss ($ in millions) | | :--- | :--------- | | 2025 | $(1,042,572) | | 2024 | $(3,925,212) | - **Research and development expenses decreased by $6.7 million, primarily due to a $3.8 million decrease in clinical trial costs and a $3.1 million decrease in Chemistry, Manufacturing and Controls costs, partially offset by $0.4 million for purchased in-process R&D from the New Day acquisition**[154](index=154&type=chunk) - **General and administrative expenses decreased by $0.4 million, mainly due to reduced employee salaries, insurance, and professional fees**[155](index=155&type=chunk) - An **asset impairment loss of $0.4 million was recognized in 2025, related to the newly licensed diagnostic assets due to delayed market timing**[156](index=156&type=chunk) [Comparison of the six months ended June 30, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030,%202025%20and%202024) This section compares the company's operating results for the specified six-month period Net Loss (Six Months Ended June 30) | Year | Net Loss ($ in millions) | | :--- | :--------- | | 2025 | $(7,148,459) | | 2024 | $(6,779,018) | - **Research and development expenses decreased by $9.3 million, primarily due to a $5.9 million decrease in clinical trial costs, a $3.2 million decrease in Chemistry, Manufacturing and Controls costs, and a $0.6 million decrease in employee compensation costs**[158](index=158&type=chunk) - **General and administrative expenses decreased by $1.8 million, mainly due to a $0.9 million reduction in employee salaries and a $0.7 million reduction in employee stock compensation**[159](index=159&type=chunk) - A **significant negative change in the fair value of contingent consideration and derivative financial instruments (a $10.56 million swing) and the absence of a $2.97 million income tax benefit from the prior year contributed to the increased net loss**[157](index=157&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section evaluates the company's ability to meet its short-term and long-term financial obligations and funding needs - The **company has historically funded operations through the issuance of convertible preferred stock, warrants, and common stock**[161](index=161&type=chunk) - A **public offering on January 23, 2025, generated $9.0 million in gross proceeds**[162](index=162&type=chunk) Financial Position (June 30, 2025) | Metric | Amount ($ in millions) | | :---------------- | :----------- | | Cash | $2.9 million | | Accumulated Deficit | $245.0 million | | Working Capital | $3.9 million | - **Significant additional financing will be required to fund future operations, including the development of acquired assets**[165](index=165&type=chunk)[166](index=166&type=chunk)[170](index=170&type=chunk) - There is **substantial doubt about the company's ability to continue as a going concern without additional capital**[169](index=169&type=chunk) [Sources of Liquidity](index=31&type=section&id=Sources%20of%20Liquidity) This section identifies the primary sources of capital the company has utilized to fund its operations - The **company's liquidity has primarily come from issuing convertible preferred stock, warrants, and common stock**[161](index=161&type=chunk) - A "**best efforts**" **public offering on January 23, 2025, raised $9.0 million in gross proceeds, which were used to repay certain indebtedness and for general corporate purposes**[162](index=162&type=chunk) [Future Funding Requirements](index=32&type=section&id=Future%20Funding%20Requirements) This section discusses the company's anticipated capital needs and the challenges in securing additional financing - The **company has no commercial products approved in the US and has incurred substantial losses since inception, with an accumulated deficit of $245.0 million as of June 30, 2025**[163](index=163&type=chunk) - It **expects to continue incurring significant losses and will require substantial additional financing to fund operations, including the development of newly acquired diagnostic assets**[163](index=163&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - The **ability to continue as a going concern is dependent on securing this additional capital, which may lead to significant stockholder dilution or restrictive debt covenants**[169](index=169&type=chunk)[170](index=170&type=chunk) [Cash Flows](index=33&type=section&id=Cash%20Flows) This section provides a detailed analysis of cash generated and used in operating, investing, and financing activities Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 ($ in millions) | 2024 ($ in millions) | | :-------------------- | :-------------- | :--------------- | | Operating activities | $(2,492,782) | $(14,545,497) | | Investing activities | $(132,117) | $0 | | Financing activities | $5,142,886 | $1,849,707 | - For the six months ended June 30, 2025, **net cash used in operating activities significantly decreased to $(2.49) million from $(14.55) million in the prior year**[172](index=172&type=chunk) - **Investing activities used $(0.13) million for license acquisition, and financing activities provided $5.14 million, mainly from equity issuances offset by debt repayment**[174](index=174&type=chunk)[176](index=176&type=chunk) - This resulted in a **net increase in cash of $2.52 million, bringing the cash balance to $2.92 million at period-end**[25](index=25&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is marked as "Not applicable," indicating that the company does not have material market risks requiring quantitative and qualitative disclosures - **Not applicable**[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting. These weaknesses include an ineffective control environment lacking sufficient personnel and proper segregation of duties, and inadequate design and implementation of controls over complex accounting transactions and income tax provision. The company is committed to remediation, planning to add personnel, utilize external consultants for technical issues, expand review processes for complex transactions, and enhance income tax provision procedures, contingent on raising additional capital - The **company's disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting**[178](index=178&type=chunk) - **Material weaknesses identified include an ineffective control environment (insufficient personnel, lack of segregation of duties), and inadequate design and implementation of controls over complex accounting transactions and income tax provision**[182](index=182&type=chunk) - **Remediation plans, contingent on raising additional capital, include increasing personnel, utilizing external consultants for technical accounting issues, expanding review processes for complex transactions, and enhancing income tax provision procedures**[179](index=179&type=chunk)[182](index=182&type=chunk) [PART II—OTHER INFORMATION](index=35&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section covers other essential information, including risk factors, other disclosures, and exhibits [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Form 10-K for the year ended December 31, 2024 - **No material changes from the risk factors disclosed in the Form 10-K for the year ended December 31, 2024**[184](index=184&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement - **No director or officer adopted or terminated any Rule 10b5-1 trading arrangement, and/or any non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025**[185](index=185&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications required under the Exchange Act and Sarbanes-Oxley Act, as well as XBRL interactive data files - Includes **certifications of Interim Chief Executive Officer and Principal Financial and Accounting Officer required under Rule 13a-14(a)/15d-14(a) and 18 U.S.C Section 1350**[188](index=188&type=chunk) - Includes **XBRL Instance Document and Taxonomy Extension files**[188](index=188&type=chunk) [SIGNATURES](index=36&type=section&id=SIGNATURES) The report is duly signed on behalf of Hepion Pharmaceuticals, Inc. by Kaouthar Lbiati, Interim Chief Executive Officer, and Jonathan Kwofie, Corporate Financial Controller, on August 14, 2025 - The **report was signed by Kaouthar Lbiati, Interim Chief Executive Officer, and Jonathan Kwofie, Corporate Financial Controller, on August 14, 2025**[192](index=192&type=chunk) ```

Core Viewpoint - Hepion Pharmaceuticals has successfully transitioned to the OTCQB Venture Market, with its common stock trading under the symbol HEPA starting June 25, 2025 [1]. Company Overview - Hepion Pharmaceuticals is a clinical stage biopharmaceutical company focused on developing and commercializing diagnostic tests for various conditions, including celiac disease, respiratory multiplex (Covid/Influenza A/B and RSV), helicobacter pylori (H. pylori), and hepatocellular carcinoma (HCC) [2].

Core Insights - Hepion Pharmaceuticals has appointed Dr. Kaouthar Lbiati as interim CEO, effective June 16, 2025, replacing John Brancaccio who is retiring for personal reasons [1][2] - Dr. Lbiati's leadership is expected to focus on strategic renewal and innovation in diagnostics for unmet clinical needs, including celiac disease, respiratory multiplex testing, H. pylori, and HCC [2][4] - Dr. Lbiati has over 15 years of experience in biotech and pharmaceuticals, having held significant roles in advancing therapies from preclinical development to commercialization [3] Company Strategy - The company aims to reposition itself as a leader in precision diagnostics, targeting underdiagnosed conditions and leveraging scalable technologies [4] - Hepion plans to prioritize immediate revenue generation and long-term innovation, focusing on clinical utility for patients at risk of liver cancer and their caregivers [4] Recent Developments - In April 2024, Hepion announced the winding down of its ASCEND-NASH clinical trial, which had a target enrollment of 336 subjects but was paused with 151 subjects randomized [6] - On May 26, 2025, Hepion entered into an agreement to sell all patent assets and related data for Rencofilstat for a nominal amount, along with a contingent value right for stockholders [7]

Financial Performance - The company reported no revenues for the three months ended March 31, 2025, and 2024, maintaining an accumulated deficit of $243.4 million[147][156]. - The net loss for the three months ended March 31, 2025, was $6.1 million, compared to a net loss of $2.9 million in the same period of 2024, representing an increase in loss of approximately 115%[151]. - The company anticipates continuing to incur significant losses for the foreseeable future, with substantial doubt about its ability to continue as a going concern without additional capital[162][163]. Expenses - Research and development expenses decreased to $22,235 in Q1 2025 from $2.5 million in Q1 2024, a reduction of approximately 99% due to decreased clinical trial costs and reduced headcount[152]. - General and administrative expenses fell to $1.3 million in Q1 2025 from $2.6 million in Q1 2024, a decrease of approximately 50% attributed to lower employee compensation expenses[153]. - Adjusted non-cash charges for Q1 2025 were $4.8 million, including $20,783 for stock-based compensation, while in Q1 2024, non-cash charges increased by $1.4 million[165][166]. Cash Flow and Working Capital - The company experienced a cash outflow from operating activities of $1.1 million in Q1 2025, compared to an outflow of $3.6 million in Q1 2024, indicating improved cash management[164]. - As of March 31, 2025, the company had working capital of $5.4 million, an increase of $3.9 million from a working capital deficit of $1.5 million as of December 31, 2024[164]. - Net cash used in operating activities for Q1 2025 was $1.1 million, compared to $3.6 million in Q1 2024, reflecting a net loss of $6.1 million in 2025 versus $2.9 million in 2024[165][166]. - Changes in working capital had a positive impact of $0.2 million on cash in Q1 2025, while in Q1 2024, it had a negative impact of $2.1 million[165][166]. - Net cash provided by financing activities was $5.3 million in Q1 2025, primarily from warrant exercises and equity issuance, compared to $1.8 million in Q1 2024[168]. Financing Activities - The company raised gross proceeds of $9 million from a registered offering on January 23, 2025, which was partially used to repay existing notes[143][155]. - The company made a $2.9 million payment on notes payable during Q1 2025[168]. Licensing and Product Development - The company entered into a License Agreement with New Day Diagnostics LLC, involving an upfront payment of $525,000 and potential milestone payments of up to $17.15 million[144][145]. - The company has no products approved for commercial sale in the U.S., but three diagnostic tests related to the New Day licensing agreement have CE marks and are eligible for sale in Europe[156]. Cash Position - As of March 31, 2025, the company had $4.6 million in cash, down from $13.1 million as of March 31, 2024[165][166]. - There were no cash flows from investing activities in both Q1 2025 and Q1 2024[167].

Core Viewpoint - Hepion Pharmaceuticals has transitioned from developing treatments for chronic liver diseases to focusing on diagnostic tests, while facing delisting from Nasdaq due to non-compliance with listing standards [1][2]. Company Overview - Hepion Pharmaceuticals, Inc. is a clinical stage biopharmaceutical company that was previously developing treatments for non-alcoholic steatohepatitis (NASH) and hepatocellular carcinoma (HCC) [1]. - The company's primary asset, Rencofilstat, is a potent inhibitor of cyclophilins, which has shown efficacy in reducing liver fibrosis and HCC tumor burden in experimental models [3]. Recent Developments - On May 9, 2025, the company received a notice from Nasdaq indicating that its shares would be delisted due to failure to maintain a minimum bid price of $1.00 per share and being classified as a public shell [1]. - Following the suspension of trading on Nasdaq, the company's shares are expected to be quoted on the OTC Markets Group under the existing symbol "HEPA" [2]. - Hepion announced a license agreement with New Day Diagnostics LLC on May 9, 2025, to in-license diagnostic tests for celiac disease, respiratory multiplex (Covid/Influenza A/B and RSV), H. pylori, and HCC, with some tests already having CE marks for sale in Europe [5]. Clinical Trials - In April 2024, Hepion decided to wind down its ASCEND-NASH clinical trial, which was a Phase 2b study aimed at evaluating the safety and efficacy of Rencofilstat over 12 months, with a target enrollment of 336 subjects [4]. - Enrollment in the trial was paused in April 2023 after 151 subjects were randomized, and approximately 80 subjects have completed their Day 365 visits [4].

Core Insights - Hepion Pharmaceuticals has entered into a binding letter of intent with New Day Diagnostics to in-license diagnostic tests for various diseases, including celiac disease and hepatocellular carcinoma [1][2][3] - The combined addressable market for these diagnostic tests exceeds $15 billion, with significant growth projections across multiple segments [2] Company Developments - The diagnostic tests include CE-marked products that are eligible for sale in Europe, allowing Hepion to generate near-term revenues through existing distributor networks [3] - Hepion's primary asset, Rencofilstat, is a potent inhibitor of cyclophilins, which has shown efficacy in reducing liver fibrosis and tumor burden in experimental models [4] - The company previously announced the winding down of its ASCEND-NASH clinical trial, which was paused in April 2023 after randomizing 151 subjects [5][6] Market Opportunities - The Respiratory Panel RT-PCR Multiplex CE-IVD targets a $5.6 billion market, growing at 6.6% annually through 2029, while the H. pylori test addresses a $700 million market with a 6.0% growth rate projected through 2032 [2] - The celiac disease screening test operates in a $457 million market, expected to grow at 10.4% annually through 2034, and the mSEPT9 assay for HCC detection serves an $8.7 billion market with a 6.7% growth rate projected through 2030 [2]

Core Insights - Hepion Pharmaceuticals has entered into a binding letter of intent with New Day Diagnostics to in-license diagnostic tests for various diseases, including celiac disease and hepatocellular carcinoma [1][2][3] - The combined addressable market for these diagnostic tests exceeds $15 billion, with significant growth projections across multiple segments [2] Company Developments - The diagnostic tests include CE-marked products that are eligible for sale in Europe, allowing Hepion to generate near-term revenues through existing distributor networks [3] - Hepion's primary asset, Rencofilstat, is a potent inhibitor of cyclophilins, which has shown promise in reducing liver fibrosis and tumor burden in experimental models [4] - The company previously announced the winding down of its ASCEND-NASH clinical trial, which was paused in April 2023 after randomizing 151 subjects [5] Market Opportunities - The Respiratory Panel RT-PCR Multiplex CE-IVD targets a $5.6 billion market, growing at 6.6% annually through 2029 [2] - The H. pylori CE-IVD addresses a $700 million market with a projected growth rate of 6.0% through 2032 [2] - The CeliaCare CE-IVD supports a $457 million market growing at 10.4% annually through 2034 [2] - The mSEPT9 assay for early detection of hepatocellular carcinoma serves an $8.7 billion market projected to grow at 6.7% annually through 2030 [2] Strategic Partnerships - The partnership with New Day Diagnostics is viewed as a strategic step to enhance the accessibility of high-impact diagnostics globally [3][6] - The collaboration aims to expand the reach of CE-marked tests into the United States, unlocking new opportunities for early detection and improved patient outcomes [3]

Financial Performance - The company reported no revenues for the years ended December 31, 2024 and 2023, as it does not have any commercial biopharmaceutical products[292]. - The net loss for the year ended December 31, 2024 was $13.2 million, compared to a net loss of $48.9 million in 2023, reflecting a decrease of $21.3 million[292]. - As of December 31, 2024, the company had an accumulated deficit of $237.8 million and a working capital deficit of $1.5 million[289][307]. - As of December 31, 2023, the company had $14.8 million in cash, with net cash used in operating activities amounting to $40.9 million, primarily due to a net loss of $48.9 million[309]. Research and Development - Research and development expenses decreased from $35.6 million in 2023 to $11.8 million in 2024, a reduction of $23.8 million primarily due to decreased clinical trial costs[293]. - The company recorded a full impairment of its in-process research and development (IPR&D) asset valued at $3.2 million as of December 31, 2023, due to delays in clinical trials[325]. - The company does not expect to have any commercial biopharmaceutical products for several years, if at all, and expenses all research and development costs as incurred[321]. - Prepaid research and development costs decreased from $2.5 million in 2023 to $0 million in 2024[322]. Administrative Expenses - General and administrative expenses also decreased from $9.6 million in 2023 to $7.5 million in 2024, a reduction of $2.1 million[294]. Financing Activities - The company raised gross proceeds of $9 million from a registered offering on January 23, 2025, which was partially used to repay outstanding notes[288][297]. - Net cash provided by financing activities was $4.4 million for the year ended December 31, 2024, compared to $4.5 million in 2023, mainly from the exercise of warrants and equity issuance[311]. Clinical Trials - The company initiated wind-down activities for its ASCEND-NASH clinical trial due to insufficient funding, with the trial closing in August 2024[284]. - The Data and Safety Monitoring Board approved the continuation of the ASCEND-NASH Phase 2b study in June 2023, indicating no safety concerns[282]. Strategic Planning - The company plans to explore strategic and financing alternatives to maximize stockholder value amid ongoing financial challenges[283]. - The company incurred a one-time restructuring charge of approximately $0.7 million in Q4 2023 as part of a strategic restructuring plan[283]. Accounting and Tax - The company maintains a full valuation allowance for its U.S. and foreign net deferred tax assets, with income tax expense for 2024 and 2023 related to foreign operations[318]. - The company continues to evaluate significant accounting estimates that could materially impact its financial statements, particularly in areas such as fair value of financial instruments and research and development[313]. Other Financial Information - The fair value of contingent consideration related to the acquisition of Ciclofilin is zero for the year ended December 31, 2024, as management concluded that the milestones will not be achieved[315]. - The company had no off-balance sheet arrangements as of December 31, 2024[328].

Core Viewpoint - Hepion Pharmaceuticals is implementing a 1-for-50 reverse stock split to increase its common stock bid price and regain compliance with Nasdaq's minimum bid price requirement of $1.00 for continued listing [2][10]. Group 1: Reverse Stock Split Details - The reverse stock split will take effect at 4:01 p.m. Eastern Time on March 17, 2025, with trading on a split-adjusted basis starting on March 18, 2025 [1][2]. - The number of issued and outstanding shares will decrease from approximately 54.25 million to about 1.08 million [4]. - No fractional shares will be issued; fractional interests will be rounded up to the next whole share [3][6]. Group 2: Impact on Stockholders - The reverse stock split will not change stockholders' percentage ownership or voting power, except for minor changes due to fractional shares [3]. - Proportionate adjustments will be made to the exercise prices and number of shares underlying outstanding stock options and warrants [5]. Group 3: Company Background - Hepion Pharmaceuticals is focused on developing treatments for chronic liver diseases, including non-alcoholic steatohepatitis (NASH) and hepatocellular carcinoma (HCC) [1][8]. - The company's primary asset, Rencofilstat, has received Fast Track and Orphan Drug designations from the FDA for treating NASH and HCC, respectively [8].