Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a looming question regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of a small city, indicating a significant strain on global power grids [2] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI, making it a unique investment opportunity [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend due to tariffs [5][6] - It possesses critical nuclear energy infrastructure assets, making it integral to America's future power strategy [7] - The company is noted for its ability to execute large-scale engineering, procurement, and construction projects across various energy sectors, including oil, gas, and renewables [7] Financial Position - The company is completely debt-free and has a cash reserve that is nearly one-third of its market capitalization, positioning it favorably compared to other energy firms burdened with debt [8] - It also holds a significant equity stake in another AI-related company, providing indirect exposure to multiple growth engines in the AI sector [9][10] Market Sentiment - There is a growing interest from hedge funds in this company, which is considered undervalued and off-the-radar, trading at less than seven times earnings [10][11] - The company is recognized for delivering real cash flows and owning critical infrastructure, making it a compelling investment choice in the context of the AI revolution [11][12] Future Outlook - The article emphasizes the importance of being part of the AI-driven future, with a call to action for investors to seize the opportunity before significant price increases occur [13][15] - The convergence of AI, energy infrastructure, and tariffs is presented as a unique investment landscape that could yield substantial returns in the coming years [14][15]

PART I - FINANCIAL INFORMATION [Item 1. FINANCIAL STATEMENTS](index=4&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents Matinas BioPharma Holdings, Inc.'s unaudited condensed consolidated financial statements for the quarter ended June 30, 2025, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flow, along with detailed notes explaining significant accounting policies, liquidity, fair value measurements, and equity changes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's **total assets** decreased by approximately **9.6%** from December 31, 2024, to June 30, 2025, primarily due to a reduction in current assets, while **total liabilities** also saw a significant decrease, leading to a slight increase in **total stockholders' equity** | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $6,525 | $7,284 | $(759) | -10.4% | | Total current assets | $7,268 | $8,025 | $(757) | -9.4% | | Total non-current assets | $4,156 | $4,616 | $(460) | -10.0% | | Total assets | $11,424 | $12,641 | $(1,217) | -9.6% | | Total current liabilities | $1,784 | $2,666 | $(882) | -33.1% | | Total non-current liabilities | $1,965 | $2,385 | $(420) | -17.6% | | Total liabilities | $3,749 | $5,051 | $(1,302) | -25.8% | | Total stockholders' equity | $7,675 | $7,590 | $85 | 1.1% | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a reduced **net loss** for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by significantly lower **research and development** expenses and a **gain on sale of assets**, despite a **loss** from the change in **fair value** of **warrant liability** | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $0 | $3,371 | $85 | $6,817 | | General and administrative | $1,837 | $2,468 | $3,698 | $4,925 | | Total costs and expenses | $1,837 | $5,839 | $3,783 | $11,742 | | Loss from operations | $(1,837) | $(5,839) | $(3,783) | $(11,742) | | Change in fair value of warrant liability | $(3,455) | $0 | $(3,161) | $0 | | Gain on sale of assets, net | $110 | $0 | $110 | $0 | | Net loss | $(5,245) | $(5,719) | $(6,901) | $(11,543) | | Net loss per share – basic and diluted | $(1.03) | $(1.15) | $(1.36) | $(2.47) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) **Stockholders' equity** increased slightly from December 31, 2024, to June 30, 2025, primarily due to stock-based compensation, issuance of preferred stock and **warrants**, and the reclassification of **warrants** from liability to equity, partially offset by the **net loss** | Metric (in thousands, except shares) | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :---------------- | :------------ | | Common Stock Shares | 5,086,985 | 5,086,985 | | Additional Paid-in Capital | $207,413 | $214,399 | | Accumulated Deficit | $(199,824) | $(206,725) | | Total Stockholders' Equity | $7,590 | $7,675 | **Key Changes (Six Months Ended June 30, 2025):** * **Stock-based compensation:** Increased Additional Paid-in Capital by **$553**. * **Issuance of preferred stock and warrants:** Increased Additional Paid-in Capital by **$330**. * **Reclassification of warrants from liability to equity:** Increased Additional Paid-in Capital by **$6,103**. * **Net loss:** Decreased **Accumulated Deficit** by **$6,901**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flow](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) **Net cash used in operating activities** significantly decreased for the six months ended June 30, 2025, compared to 2024, while **cash provided by financing activities** also decreased. Investing activities used no cash in 2025, leading to a net decrease in **cash, cash equivalents**, and **restricted cash** | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(4,028) | $(8,875) | | Net cash used in investing activities | $0 | $(938) | | Net cash provided by financing activities | $3,269 | $9,242 | | Net decrease in cash, cash equivalents and restricted cash | $(759) | $(571) | | Cash, cash equivalents and restricted cash at end of period | $6,775 | $4,466 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical context to the financial statements, detailing the company's business, significant accounting policies, liquidity challenges including a **going concern** warning, and specific breakdowns of cash, **fair value** measurements, leases, equity changes, and stock-based compensation [Note 1 – Description of Business](index=9&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business) Matinas BioPharma Holdings Inc. is a clinical-stage biopharmaceutical company focused on developing groundbreaking therapies using its proprietary **lipid nanocrystal (LNC) platform delivery technology** - The Company is a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using its **lipid nanocrystal (LNC) platform delivery technology**[22](index=22&type=chunk) [Note 2 – Liquidity, Plan of Operations and Going Concern](index=9&type=section&id=Note%202%20%E2%80%93%20Liquidity%2C%20Plan%20of%20Operations%20and%20Going%20Concern) The company has an **accumulated deficit** of **$206.7 million** as of June 30, 2025, and expects to incur substantial losses. Its current **cash and cash equivalents** are not sufficient to fund operations beyond the next twelve months, raising substantial doubt about its ability to continue as a **going concern**. Future operations depend on securing partners for **MAT2203**, controlling expenses, and obtaining additional financing | Metric | June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------ | :----------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Accumulated deficit | $206,725 | N/A | N/A | | Net loss | N/A | $6,901 | $11,543 | | Cash and cash equivalents | $6,525 | N/A | N/A | | Restricted cash | $250 | N/A | N/A | - Substantial doubt exists about the Company's ability to continue as a **going concern** as **cash and cash equivalents** are not sufficient to fund planned operations beyond the next twelve months[25](index=25&type=chunk) - The Company's ability to continue as a **going concern** is dependent on securing partners for **MAT2203**, controlling operating expenses, future sales of **common stock** through the **At-The-Market Sales Agreement**, and securing additional financing[26](index=26&type=chunk) [Note 3 – Summary of Significant Accounting Policies](index=9&type=section&id=Note%203%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared in accordance with U.S. GAAP and include consolidated accounts of Holdings and its subsidiaries. The company adopted ASU 2020-06 on January 1, 2025, simplifying accounting for convertible instruments and **warrants**. **Warrants** are classified as equity or liability based on specific terms and revalued if liability-classified - The Company adopted ASU **2020-06** on January **1**, **2025**, which simplifies accounting for convertible instruments and removes certain settlement conditions for equity contracts[29](index=29&type=chunk) - **Warrants** are classified as either equity or liability instruments; liability-classified **warrants** are revalued at each balance sheet date with changes recognized in the statement of operations[31](index=31&type=chunk) [Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities](index=10&type=section&id=Note%204%20%E2%80%93%20Cash%2C%20Cash%20Equivalents%2C%20Restricted%20Cash%20and%20Marketable%20Debt%20Securities) **Cash and cash equivalents** decreased from **$7.284 million** at December 31, 2024, to **$6.525 million** at June 30, 2025. **Restricted cash** remained stable at **$250,000**. The company recorded no **unrealized gains on marketable debt securities** for the six months ended June 30, 2025, compared to **$170,000** in the prior year | Metric (in thousands) | June 30, 2025 | December 31, 2024 | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | :------------ | :---------------- | | Cash and cash equivalents | $6,525 | $7,284 | $4,216 | $4,787 | | Restricted cash | $250 | $250 | $250 | $250 | | Total cash, cash equivalents and restricted cash | $6,775 | $7,534 | $4,466 | $5,037 | - **Unrealized gains on marketable debt securities** were **$0** for the six months ended June 30, 2025, a decrease from **$170,000** in the same period of 2024[35](index=35&type=chunk) [Note 5 - Fair Value Measurements](index=11&type=section&id=Note%205%20-%20Fair%20Value%20Measurements) The company uses a **fair value** hierarchy for financial instruments. **Warrants** issued in February 2025 were initially classified as a liability and measured at **fair value** using a Monte Carlo simulation model, resulting in a **$3.161 million** change in **fair value**. On June 26, 2025, the **warrants** were amended to meet equity instrument conditions and reclassified to equity, with no subsequent measurement | Warrant Liability Changes (in thousands) | Amount | | :--------------------------------------- | :----- | | Balance at January 31, 2025 | $0 | | Issuance of warrants reported at fair value | $2,942 | | Change in fair value | $3,161 | | Reclassification to equity | $(6,103) | | Balance at June 30, 2025 | $0 | - **Warrants** were initially classified as a liability and reclassified to equity on June **26**, **2025**, after an amendment removed a provision that did not meet indexation requirements[40](index=40&type=chunk)[41](index=41&type=chunk)[62](index=62&type=chunk) - The **warrant liability** was measured using a Monte Carlo simulation model with assumptions including expected volatility (**54.0%**-**61.0%**), risk-free interest rate (**3.77%**-**4.39%**), and expected term (**4.8**-**5.0** years)[42](index=42&type=chunk)[43](index=43&type=chunk) [Note 6 – Leasehold Improvements and Equipment](index=12&type=section&id=Note%206%20%E2%80%93%20Leasehold%20Improvements%20and%20Equipment) Net leasehold improvements and equipment decreased from **$468,000** at December 31, 2024, to **$158,000** at June 30, 2025, primarily due to the sale of equipment. The company sold **$210,000** of unused laboratory equipment for **$320,000**, realizing a **gain of $110,000**, and has **$70,000** of remaining equipment classified as held for sale | Asset Category (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Equipment | $0 | $283 | | Leasehold improvements | $218 | $218 | | Total | $218 | $501 | | Less: accumulated depreciation and amortization | $60 | $33 | | Leasehold improvements and equipment, net | $158 | $468 | - The Company sold **$210,000** of unused laboratory equipment for **$320,000**, generating a **gain of $110,000**, and has **$70,000** of equipment remaining classified as held for sale[45](index=45&type=chunk) [Note 7 – Accrued Expenses and Other Liabilities](index=13&type=section&id=Note%207%20%E2%80%93%20Accrued%20Expenses%20and%20Other%20Liabilities) Accrued expenses significantly decreased from **$1.805 million** at December 31, 2024, to **$795,000** at June 30, 2025, primarily due to a substantial reduction in severance liabilities | Accrued Expense Category (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Severance | $482 | $1,509 | | General and administrative expenses | $313 | $296 | | Total | $795 | $1,805 | [Note 8 – Leases](index=13&type=section&id=Note%208%20%E2%80%93%20Leases) The company's **operating lease liabilities** decreased from **$2.877 million** at December 31, 2024, to **$2.514 million** at June 30, 2025, with a weighted average remaining lease term of **2.9** years. Operating lease expenses for the six months ended June 30, 2025, were **$345,000**, a decrease from **$452,000** in the prior year | Lease Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Present value of operating lease liabilities | $2,514 | $2,877 | | Present value of finance lease liabilities | $16 | $17 | | Weighted average remaining operating lease term | 2.9 years | 3.3 years | | Weighted average discount rate (operating) | 9.3% | 9.3% | - Operating lease expense for the six months ended June 30, 2025, was **$345,000**, down from **$452,000** in the same period of 2024[49](index=49&type=chunk) [Note 9 – Stockholders' Equity](index=14&type=section&id=Note%209%20%E2%80%93%20Stockholders%27%20Equity) Shareholders approved an increase in authorized **common stock** to **500 million** shares, effective August 6, 2025. The company completed a private placement in February and April 2025, issuing **3,300** shares of **Series C Convertible Preferred Stock** and **warrants** to purchase **11,262,808 common shares**. **Warrants** outstanding increased significantly to **11,929,475** shares by June 30, 2025. Diluted **net loss** per share is the same as basic due to anti-dilutive securities - On August **6**, **2025**, the Company increased its authorized **common stock** from **250,000,000** to **500,000,000** shares[54](index=54&type=chunk)[73](index=73&type=chunk) - In February and April **2025**, the Company completed a private placement, issuing **3,300** shares of **Series C Convertible Preferred Stock** and **warrants** to purchase **11,262,808** shares of **common stock**, generating gross proceeds of **$3.3 million**[58](index=58&type=chunk)[59](index=59&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) | Warrants Outstanding | December 31, 2024 | June 30, 2025 | | :------------------- | :---------------- | :------------ | | Outstanding | 666,667 | 11,929,475 | | Issued | N/A | 11,262,808 | - Potentially dilutive securities, including stock options, convertible preferred stock, and **warrants**, totaling **18,025,176** shares, were excluded from diluted **net loss** per share calculation as they were anti-dilutive[67](index=67&type=chunk) [Note 10 – Stock-based Compensation](index=16&type=section&id=Note%2010%20%E2%80%93%20Stock-based%20Compensation) The **2013** Equity Compensation Plan expired on May **7**, **2024**, with no remaining shares for grant. A new **2025** Equity Incentive Plan was adopted, with **116,500** option grant awards issued and **646,548** available for grant as of June 30, 2025. Total stock-based compensation expense for the six months ended June 30, 2025, was **$553,000**, a decrease from **$1.986 million** in 2024 - The **2013** Plan expired on May **7**, **2024**, and a new **2025** Equity Incentive Plan was adopted, with **646,548** awards available for grant as of June **30**, **2025**[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) | Stock-based Compensation Expense (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :----------------------------- | :----------------------------- | | Research and Development | $85 | $826 | | General and Administrative | $468 | $1,160 | | Total | $553 | $1,986 | | Stock Options Activity | December 31, 2024 | June 30, 2025 | | :--------------------- | :---------------- | :------------ | | Outstanding | 687,356 | 464,297 | | Granted | N/A | 116,500 | | Expired | N/A | (336,458) | [Note 11 – Subsequent Events](index=17&type=section&id=Note%2011%20%E2%80%93%20Subsequent%20Events) Subsequent to the reporting period, on August **6**, **2025**, the company filed a Certificate of Amendment to increase the number of authorized shares of **common stock** from **250,000,000** to **500,000,000**, following shareholder approval on June **23**, **2025** - On August **6**, **2025**, the Company filed a Certificate of Amendment to increase authorized **common stock** from **250,000,000** to **500,000,000** shares, effective upon filing[73](index=73&type=chunk) [Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=18&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and operational results, highlighting a reduced **net loss**, decreased **R&D** and **G&A** expenses, and ongoing liquidity challenges that raise substantial doubt about its ability to continue as a **going concern**. The company's strategy focuses on monetizing **MAT2203** and conserving cash [Overview](index=18&type=section&id=Overview) Matinas BioPharma is a clinical-stage biopharmaceutical company utilizing its **LNC** platform. The company reported a **net loss** of **$6.901 million** for the six months ended June 30, 2025, and expects continued losses. Its strategy involves securing partners for **MAT2203**, conserving cash, and exploring other strategic options, while facing significant **going concern** risks due to insufficient funding - Matinas BioPharma is a clinical-stage biopharmaceutical company focused on its **lipid nanocrystal (LNC) platform delivery technology**[78](index=78&type=chunk) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net loss | $(6,901) | $(11,543) | - Key strategic elements include securing partners to monetize **MAT2203**, raising non-dilutive capital, and conserving cash while evaluating other strategic options like in-licensing assets or seeking a merger partner[81](index=81&type=chunk) - The company expects to incur additional losses for the foreseeable future and faces a **going concern** risk if adequate additional financing is not secured[79](index=79&type=chunk)[82](index=82&type=chunk) [Financial Operations Overview](index=20&type=section&id=Financial%20Operations%20Overview) **Research and development** expenses are expected to be lower in 2025 compared to 2024 due to a pause in the **MAT2203** development program, while **general and administrative** expenses are also projected to decrease due to cost-cutting. The company recognized a **$3.161 million loss** from the change in **fair value** of **warrant liability** and a **$110,000 gain on asset sales** for the six months ended June 30, 2025 - **Research and development** expenses are anticipated to be lower in **2025** compared to **2024** until additional funding is secured for the **MAT2203** Phase **3** trial[83](index=83&type=chunk) | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $1,837 | $2,468 | $3,698 | $4,925 | - A **loss** of **$3.161 million** was recognized for the six months ended June 30, 2025, due to the change in **fair value** of the **warrant liability**[86](index=86&type=chunk) - The company recorded a **gain of $110,000** from the sale of equipment during the six months ended June 30, 2025[87](index=87&type=chunk) [Application of Critical Accounting Policies and Accounting Estimates](index=22&type=section&id=Application%20of%20Critical%20Accounting%20Policies%20and%20Accounting%20Estimates) The company's critical accounting policies include those related to other intangible assets and **warrants**, which require significant management judgment. **Warrants** are classified as equity or liability based on specific terms, with liability-classified **warrants** revalued at each reporting period - Critical accounting policies include other intangible assets and **warrants**, requiring difficult, subjective, and complex judgments[91](index=91&type=chunk) - **Warrants** are classified as equity or liability based on specific terms; liability-classified **warrants** are revalued at **fair value** with changes recognized in the statement of operations[92](index=92&type=chunk) [Recent Accounting Pronouncements](index=22&type=section&id=Recent%20Accounting%20Pronouncements) The company refers to Note **3** of the financial statements for a discussion of recently adopted accounting pronouncements and their expected impact, indicating no material effect on its financial statements - Management believes recent accounting pronouncements will not have a **material effect** on the Company's financial statements[30](index=30&type=chunk)[93](index=93&type=chunk) [Current Operating Trends](index=22&type=section&id=Current%20Operating%20Trends) The company's current **R&D** efforts are focused on advancing **MAT2203** and positioning it for a partnership with a well-funded third party. Significant investment in product development is considered a competitive necessity - Current **R&D** efforts are focused on advancing **MAT2203** and positioning it for a partnership with a well-funded and experienced third-party biotech or pharmaceutical company[94](index=94&type=chunk)[95](index=95&type=chunk) - Significant investment in product development is considered a competitive necessity[94](index=94&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) The company experienced significant decreases in both **Research and Development (R&D)** and **General and Administrative (G&A)** expenses for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to the pause in the **MAT2203** development program, headcount reductions, and lower stock-based compensation [Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024](index=22&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%20to%20the%20three%20months%20ended%20June%2030%2C%202024) For the three months ended June 30, 2025, **R&D** expenses decreased to **$0** from **$3.371 million** in 2024, and **G&A** expenses decreased to **$1.837 million** from **$2.468 million**, driven by reduced clinical trial consulting, headcount, and stock-based compensation | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (in thousands) | % Change | | :------------------------------ | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Research and development | $0 | $3,371 | $(3,371) | -100.0% | | General and administrative | $1,837 | $2,468 | $(631) | -25.6% | - The decrease in **R&D** expenses was primarily due to the pause of the **MAT2203** development program and headcount reductions[96](index=96&type=chunk) - The decrease in **G&A** expenses was mainly attributable to lower stock-based compensation and decreased headcount, partially offset by increased legal and consulting fees[97](index=97&type=chunk) [Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024](index=23&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%20to%20the%20six%20months%20ended%20June%2030%2C%202024) For the six months ended June 30, 2025, **R&D** expenses decreased to **$85,000** from **$6.817 million** in 2024, and **G&A** expenses decreased to **$3.698 million** from **$4.925 million**, reflecting similar factors as the quarterly comparison | Expense Category (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (in thousands) | % Change | | :------------------------------ | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Research and development | $85 | $6,817 | $(6,732) | -98.8% | | General and administrative | $3,698 | $4,925 | $(1,227) | -24.9% | - The decrease in **R&D** expenses was primarily due to the pause of the **MAT2203** development program and headcount reductions[98](index=98&type=chunk) - The decrease in **G&A** expenses was mainly attributable to lower stock-based compensation and decreased headcount, partially offset by increased legal and consulting fees[99](index=99&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company has funded operations primarily through equity sales, raising **$156.465 million** net since inception. As of June 30, 2025, **cash and cash equivalents** totaled **$6.525 million**. Recent financing includes a **$3.3 million** private placement of preferred stock and **warrants** in 2025. The company does not believe existing cash is sufficient for the next twelve months, indicating substantial doubt about its **going concern** ability and a need for significant additional financing [Sources of Liquidity](index=23&type=section&id=Sources%20of%20Liquidity) Since inception, the Company has raised **$156.465 million** net from sales of equity securities. As of June 30, 2025, **cash and cash equivalents** were **$6.525 million**. Recent financing includes a **$3.3 million** gross proceeds private placement of **Series C Preferred Stock** and **warrants** in 2025, and a **$9.125 million** net proceeds registered direct offering in 2024. The **At-The-Market Sales Agreement** has **$44.191 million** available capacity - Since inception, the Company has raised **$156.465 million** net from sales of equity securities[100](index=100&type=chunk) - As of June **30**, **2025**, **cash and cash equivalents** totaled **$6.525 million**[101](index=101&type=chunk) - In **2025**, the Company completed a private placement of **Series C Preferred Stock** and **warrants**, generating gross proceeds of **$3.3 million**[102](index=102&type=chunk)[103](index=103&type=chunk) - In **2024**, a registered direct offering generated net proceeds of approximately **$9.125 million**[105](index=105&type=chunk) - The **At-The-Market Sales Agreement** has an available capacity of **$44.191 million** as of June **30**, **2025**[106](index=106&type=chunk) [Cash Flows](index=24&type=section&id=Cash%20Flows) **Net cash used in operating activities** decreased significantly to **$4.028 million** for the six months ended June 30, 2025, from **$8.875 million** in 2024. Investing activities used **$0** cash in 2025, compared to **$938,000** in 2024. **Net cash provided by financing activities** decreased to **$3.269 million** in 2025 from **$9.242 million** in 2024, primarily due to lower proceeds from equity sales | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash used in operating activities | $(4,028) | $(8,875) | | Cash used in investing activities | $0 | $(938) | | Cash provided by financing activities | $3,269 | $9,242 | - The decrease in **cash provided by financing activities** in **2025** was primarily due to lower net proceeds from the sale of **Series C preferred stock** compared to **common stock** sales in **2024**[110](index=110&type=chunk) [Funding Requirements and Other Liquidity Matters](index=25&type=section&id=Funding%20Requirements%20and%20Other%20Liquidity%20Matters) The Company expects significant expenses and operating losses, with existing **cash and cash equivalents** insufficient to fund operations beyond the next twelve months, raising substantial doubt about its ability to continue as a **going concern**. Future funding will rely on equity offerings, debt, third-party funding, or collaborations, which may lead to dilution or restrictive covenants. The company is prohibited from issuing **common stock** or equivalents until November 2025, subject to exceptions - The Company expects to incur significant expenses and operating losses for the foreseeable future, with existing **cash and cash equivalents** insufficient to fund operations beyond the next twelve months, raising substantial doubt about its ability to continue as a **going concern**[111](index=111&type=chunk) - Future cash needs are expected to be financed through a combination of private and public equity offerings, debt financings, third-party funding, collaborations, and licensing arrangements[112](index=112&type=chunk) - Under terms of a recent financing, the Company is prohibited from issuing **common stock** or **common stock** equivalents until November **2025**, subject to certain exceptions[112](index=112&type=chunk) [Off-Balance Sheet Arrangements](index=26&type=section&id=Off-Balance%20Sheet%20Arrangements) The company did not have any off-balance sheet arrangements during the periods presented and does not currently have any - The Company did not have, and does not currently have, any off-balance sheet arrangements[116](index=116&type=chunk) [Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=26&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the company - This item is not applicable to the Company[117](index=117&type=chunk) [Item 4. CONTROLS AND PROCEDURES](index=26&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) The company's **disclosure controls and procedures** were not effective as of June 30, 2025, due to an un-remediated **material weakness** in **internal control over financial reporting** related to the processing and reporting of non-routine transactions and indefinite-lived asset impairment assessments. Management has initiated a remediation plan involving external accounting resources [Evaluation of Disclosure Controls and Procedures](index=26&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) As of June 30, 2025, the company's **disclosure controls and procedures** were not effective at the reasonable assurance level due to an un-remediated deficiency in **internal control over financial reporting** - **Disclosure controls and procedures** were not effective as of June **30**, **2025**, due to an un-remediated deficiency in **internal control over financial reporting**[118](index=118&type=chunk) [Management's Report on Internal Control over Financial Reporting](index=26&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management determined that the company's **internal control over financial reporting** was not effective as of December 31, 2024, due to a **material weakness**. This **weakness** stems from an ineffective **internal control** environment for processing and reporting non-routine transactions, including indefinite-lived asset impairment assessments, which could lead to material misstatements - Management determined that the Company's **internal control over financial reporting** was not effective as of December **31**, **2024**, due to a **material weakness**[123](index=123&type=chunk) - The **material weakness** identified is an ineffective **internal control** environment for ensuring complete, accurate, and timely processing and reporting of non-routine transactions, including indefinite-lived assets impairment assessment[124](index=124&type=chunk) [Remediation Plan](index=27&type=section&id=Remediation%20Plan) Management has initiated a remediation plan to address the **material weakness**, which includes engaging additional external accounting resources to assist with the preparation and review of non-routine transactions - The remediation plan includes engaging additional external accounting resources to assist with the preparation and review of non-routine transactions[126](index=126&type=chunk) [Changes in Internal Control Over Financial Reporting](index=27&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Except for changes being implemented to address the identified **material weakness**, there were no other material changes in the company's **internal control over financial reporting** during the second quarter of 2025 - No material changes in **internal control over financial reporting** during Q**2** **2025**, except for changes to address the identified **material weakness**[127](index=127&type=chunk) PART II - OTHER INFORMATION [Item 1. LEGAL PROCEEDINGS](index=28&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) The company reported no legal proceedings - There are no legal proceedings[128](index=128&type=chunk) [Item 1A. RISK FACTORS](index=28&type=section&id=Item%201A.%20RISK%20FACTORS) There were no material changes to the risk factors from the Annual Report on Form **10-K** for the fiscal year ended December 31, 2024 - No material changes from the risk factors set forth in the Annual Report on Form **10-K** for the fiscal year ended December **31**, **2024**[129](index=129&type=chunk) [Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=28&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) In February and April 2025, the company sold **3,300** shares of Preferred Stock and **warrants** to purchase **11,262,808** shares of **Common Stock** in an unregistered private placement, generating **$3.3 million** in gross proceeds. The underlying **common stock** was subsequently registered - On February **13**, **2025**, and April **8**, **2025**, the Company sold **3,300** shares of Preferred Stock and **warrants** to purchase **11,262,808** shares of **Common Stock** in an unregistered private placement, generating **$3.3 million** in gross proceeds[130](index=130&type=chunk) - The shares of **Common Stock** underlying the Preferred Stock and **Warrants** were registered on a Form **S-3** Registration Statement, effective April **29**, **2025**[130](index=130&type=chunk) [Item 3. DEFAULTS UPON SENIOR SECURITIES](index=28&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities - There were no defaults upon senior securities[131](index=131&type=chunk) [Item 4. MINE SAFETY DISCLOSURES](index=28&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - This item is not applicable to the Company[132](index=132&type=chunk) [Item 5. OTHER INFORMATION](index=28&type=section&id=Item%205.%20OTHER%20INFORMATION) During the fiscal quarter ended June 30, 2025, none of the company's officers or directors adopted or terminated any Rule **10b5-1** or non-Rule **10b5-1** trading arrangements - None of the Company's officers or directors adopted or terminated a Rule **10b5-1** or non-Rule **10b5-1** trading arrangement during the fiscal quarter ended June **30**, **2025**[133](index=133&type=chunk) [Item 6. EXHIBITS](index=28&type=section&id=Item%206.%20EXHIBITS) This section lists all exhibits filed or furnished with the Quarterly Report on Form **10-Q**, including certificates of incorporation, bylaws, warrant forms, securities purchase agreements, and certifications - The exhibit index includes various corporate documents such as Certificate of Incorporation, Bylaws, forms of **Common Stock** Purchase **Warrants**, Securities Purchase Agreement, and certifications[141](index=141&type=chunk)

PART I - FINANCIAL INFORMATION [Item 1. FINANCIAL STATEMENTS](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents Matinas BioPharma's unaudited condensed consolidated financial statements and related notes for the reported period [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands): | Item | March 31, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $6,924 | $7,284 | $(360) | | Total current assets | $7,547 | $8,025 | $(478) | | Total assets | $12,035 | $12,641 | $(606) | | Accounts payable | $282 | $95 | $187 | | Accrued expenses | $1,179 | $1,805 | $(626) | | Total current liabilities | $2,255 | $2,666 | $(411) | | Warrant liability | $1,333 | $— | $1,333 | | Total liabilities | $5,765 | $5,051 | $714 | | Total stockholders' equity | $6,270 | $7,590 | $(1,320) | | Accumulated deficit | $(201,480) | $(199,824) | $(1,656) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Research and development | $85 | $3,446 | $(3,361) | | General and administrative | $1,861 | $2,456 | $(595) | | Total costs and expenses | $1,946 | $5,902 | $(3,956) | | Loss from operations | $(1,946) | $(5,902) | $3,956 | | Change in fair value of warrant liability | $294 | $— | $294 | | Net loss | $(1,656) | $(5,824) | $4,168 | | Net loss per share – basic and diluted | $(0.33) | $(1.34) | $1.01 | | Weighted average common shares outstanding | 5,086,985 | 4,347,162 | 739,823 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity (in thousands): | Item | Balance, December 31, 2024 | Stock-based compensation | Issuance of preferred stock and warrants | Net loss | Balance, March 31, 2025 | | :-------------------------------- | :------------------------- | :----------------------- | :--------------------------------------- | :------- | :---------------------- | | Total Stockholders' Equity | $7,590 | $315 | $21 | $(1,656) | $6,270 | [Condensed Consolidated Statements of Cash Flow](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Condensed Consolidated Statements of Cash Flow (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Net cash used in operating activities | $(2,007) | $(5,769) | $3,762 | | Net cash provided by investing activities | $— | $2,000 | $(2,000) | | Net cash provided by financing activities | $1,647 | $53 | $1,594 | | Net decrease in cash, cash equivalents and restricted cash | $(360) | $(3,716) | $3,356 | | Cash, cash equivalents and restricted cash at end of period | $7,174 | $1,321 | $5,853 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 – Description of Business](index=8&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business) - Matinas BioPharma Holdings Inc. is a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using its **lipid nanocrystal (LNC) platform delivery technology**[21](index=21&type=chunk) [Note 2 – Liquidity, Plan of Operations and Going Concern](index=8&type=section&id=Note%202%20%E2%80%93%20Liquidity,%20Plan%20of%20Operations%20and%20Going%20Concern) - The Company has an **accumulated deficit** of **$201,480 thousand** as of March 31, 2025, and reported a **net loss** of **$1,656 thousand** for the three months ended March 31, 2025[22](index=22&type=chunk) - As of March 31, 2025, **cash and cash equivalents** were **$6,924 thousand**, which the Company does not believe is **not sufficient to fund planned operations beyond the next twelve months**, raising **substantial doubt about its ability to continue as a going concern**[24](index=24&type=chunk) - The Company's ability to continue as a going concern depends on securing partners for MAT2203, controlling operating expenses, future sales of common stock through the At-The-Market Sales Agreement, and securing additional financing. However, the Company is **prohibited from issuing common stock or equivalents until November 2025**, subject to certain exceptions[25](index=25&type=chunk) [Note 3 – Summary of Significant Accounting Policies](index=8&type=section&id=Note%203%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) - The condensed consolidated financial statements include the accounts of Holdings and its wholly-owned subsidiaries, BioPharma and Nanotechnologies, prepared in accordance with U.S. GAAP[26](index=26&type=chunk) - The Company adopted ASU 2020-06 on January 1, 2025, which simplifies accounting for convertible instruments and contracts in an entity's own equity[28](index=28&type=chunk)[29](index=29&type=chunk) - Warrants are classified as either equity or liability instruments; liability-classified warrants are recorded at fair value upon issuance and revalued at each subsequent balance sheet date, with changes recognized in the condensed consolidated statement of operations[30](index=30&type=chunk) [Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities](index=10&type=section&id=Note%204%20%E2%80%93%20Cash,%20Cash%20Equivalents,%20Restricted%20Cash%20and%20Marketable%20Debt%20Securities) Cash, Cash Equivalents and Restricted Cash (in thousands): | Item | March 31, 2025 | December 31, 2024 | March 31, 2024 | December 31, 2023 | | :------------------------------------------------ | :------------- | :---------------- | :------------- | :---------------- | | Cash and cash equivalents | $6,924 | $7,284 | $1,071 | $4,787 | | Restricted cash included in current/non-current assets | $250 | $250 | $250 | $250 | | Cash, cash equivalents and restricted cash in the statement of cash flows | $7,174 | $7,534 | $1,321 | $5,037 | - The Company's investments in marketable debt securities are classified as available-for-sale and carried at fair value. No realized gains or losses were incurred during the three months ended March 31, 2025 and 2024, but an unrealized gain of **$87 thousand** was recorded in Q1 2024[34](index=34&type=chunk) [Note 5 – Fair Value Measurements](index=10&type=section&id=Note%205%20%E2%80%93%20Fair%20Value%20Measurements) - The Company uses a fair value hierarchy (Level 1, 2, 3) for financial instruments. As of March 31, 2025, a **warrant liability** of **$1,333 thousand** was recognized and classified as Level 3, valued using a Monte Carlo simulation model[38](index=38&type=chunk)[41](index=41&type=chunk) Warrant Liability Fair Value Changes (in thousands): | Item | Amount | | :-------------------------------- | :----- | | Balance at January 31, 2025 | $— | | Issuance of Warrants reported at fair value | $1,627 | | Change in fair value | $(294) | | Balance at March 31, 2025 | $1,333 | Key Assumptions for Warrant Valuation (March 31, 2025): | Assumption | Range | | :---------------------- | :------------ | | Expected volatility | **54.0% - 56.0%** | | Risk-free interest rate | **3.95% - 4.39%** | | Stock price on valuation date | **$0.52 - $0.60** | | Exercise price | **$0.64** | | Dividend yield | **0.00%** | | Expected term | **4.9 - 5.0 years** | [Note 6 – Leasehold Improvements and Equipment](index=11&type=section&id=Note%206%20%E2%80%93%20Leasehold%20Improvements%20and%20Equipment) Leasehold Improvements and Equipment, Net (in thousands): | Item | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Equipment | $283 | $283 | | Leasehold improvements | $218 | $218 | | Total | $501 | $501 | | Less: accumulated depreciation and amortization | $51 | $33 | | Leasehold improvements and equipment, net | $450 | $468 | - Depreciation and amortization expense for the three months ended March 31, 2025, was **$18 thousand**, a decrease from **$94 thousand** in the same period of 2024[43](index=43&type=chunk) [Note 7 – Accrued Expenses and Other Liabilities](index=11&type=section&id=Note%207%20%E2%80%93%20Accrued%20Expenses%20and%20Other%20Liabilities) Accrued Expenses (in thousands): | Item | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Severance | $922 | $1,509 | | General and administrative expenses | $257 | $296 | | Total | $1,179 | $1,805 | [Note 8 – Leases](index=13&type=section&id=Note%208%20%E2%80%93%20Leases) Operating Lease Information (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Lease expense | $174 | $226 | | Amortization expense on ROU assets | $109 | $145 | Operating Lease Liabilities (in thousands): | Item | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Present value of operating lease liabilities | $2,697 | $2,877 | | Weighted average remaining lease term (years) | **3.1 years** | **3.3 years** | | Weighted average discount rate | **9.3%** | **9.3%** | [Note 9 – Stockholders' Equity](index=14&type=section&id=Note%209%20%E2%80%93%20Stockholders'%20Equity) - On August 30, 2024, the Company effected a **one-for-fifty (1:50) reverse stock split**, reducing authorized common stock from **500,000,000 shares** to **250,000,000 shares** and outstanding shares from **250,816,164 shares** to **5,086,985 shares**[51](index=51&type=chunk)[52](index=52&type=chunk) - On February 13, 2025, the Company issued **1,650 shares** of **Series C Convertible Preferred Stock and warrants** to purchase up to **5,631,404 shares** of common stock in a **private placement**, generating **gross proceeds** of **$1.65 million**. A second closing on April 8, 2025, generated an additional **$1.65 million**[56](index=56&type=chunk)[57](index=57&type=chunk) Warrants Outstanding: | Item | Shares | | :------------------------ | :------- | | Outstanding at December 31, 2024 | **666,667 shares** | | Issued | **5,631,404 shares** | | Outstanding at March 31, 2025 | **6,298,071 shares** | - Potentially dilutive securities, including stock options, convertible preferred stock, and **warrants**, totaling **9,597,262 shares** as of March 31, 2025, were excluded from diluted **net loss** per share calculation as their inclusion would be anti-dilutive[64](index=64&type=chunk)[65](index=65&type=chunk) [Note 10 – Stock-based Compensation](index=16&type=section&id=Note%2010%20%E2%80%93%20Stock-based%20Compensation) Stock-based Compensation Expense (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Research and Development | $85 | $415 | | General and Administrative | $230 | $580 | | Total | $315 | $995 | - The Company's **Amended and Restated 2013 Equity Compensation Plan expired** on May 7, 2024, with no remaining shares available for grant. A **new equity compensation plan is pending shareholder approval**[66](index=66&type=chunk)[67](index=67&type=chunk) - As of March 31, 2025, total compensation costs related to **unvested awards not yet recognized** was **$1,385 thousand**, with a weighted-average recognition period of **1.9 years**[67](index=67&type=chunk) [Note 11 – Subsequent Events](index=16&type=section&id=Note%2011%20%E2%80%93%20Subsequent%20Events) - On April 8, 2025, the Company completed the second closing of its **private placement**, issuing an additional **1,650 shares** of Preferred Stock and accompanying **Warrants** for **gross proceeds** of **$1.65 million**, following shareholder approval on April 4, 2025[69](index=69&type=chunk) - The shares of Common Stock underlying the Preferred Stock and **Warrants** were registered on a Form S-3 Registration Statement, filed on April 22, 2025, and declared effective on April 29, 2025[70](index=70&type=chunk) [Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=17&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial condition, operational results, liquidity challenges, and strategic efforts for asset monetization [Overview](index=17&type=section&id=Overview) - Matinas BioPharma is a clinical-stage biopharmaceutical company focused on its **lipid nanocrystal (LNC) platform delivery technology**[74](index=74&type=chunk) - Key strategies include securing partners to monetize MAT2203, raising non-dilutive capital, conserving cash, and evaluating other strategic options like in-licensing assets or seeking a merger partner[75](index=75&type=chunk)[76](index=76&type=chunk) - The Company incurred **net losses** of **$1,656 thousand** and **$5,824 thousand** for the three months ended March 31, 2025 and 2024, respectively, and expects to incur additional losses, requiring further financing[77](index=77&type=chunk) [Financial Operations Overview](index=18&type=section&id=Financial%20Operations%20Overview) - Research and development expenses are anticipated to be lower in 2025 compared to 2024 until additional funding is secured for the Phase 3 registration trial for MAT2203 and advancement of the LNC platform[78](index=78&type=chunk) - General and administrative expenses are expected to decrease slightly in 2025 due to implemented cost-cutting measures[80](index=80&type=chunk) - A gain of **$294 thousand** was recognized for the three months ended March 31, 2025, representing the change in fair value of the **warrant liability**[82](index=82&type=chunk) - Other (expense)/income, **net decreased** primarily due to recording issuance costs of **$148 thousand** in connection with the **private placement** of Series C Preferred Stock and **warrants**[83](index=83&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Operating Expenses (in thousands): | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :----------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Research and development | $85 | $3,446 | $(3,361) | | General and administrative | $1,861 | $2,456 | $(595) | | Total Operating Expenses | $1,946 | $5,902 | $(3,956) | - The significant decrease in R&D expenses was primarily due to the pause in the MAT2203 development program and a reduction in headcount costs[91](index=91&type=chunk) - The decrease in G&A expenses was mainly attributable to lower **stock-based compensation expense** and decreased headcount, partially offset by increased legal and consulting fees[92](index=92&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) - Since inception, the Company has raised a total of **$154,945 thousand** net from sales of its equity securities[93](index=93&type=chunk) - As of March 31, 2025, **cash and cash equivalents** (excluding restricted cash) totaled **$6,924 thousand**[94](index=94&type=chunk) - The 2025 **private placement** involved two closings (February 13, 2025, and April 8, 2025), each generating **gross proceeds** of **$1.65 million** from the issuance of Series C Preferred Stock and accompanying **warrants**[95](index=95&type=chunk)[96](index=96&type=chunk) - The Company is **prohibited from issuing common stock or common stock equivalents until November 2025**, subject to certain exceptions, under the terms of the Securities Purchase Agreement[97](index=97&type=chunk)[105](index=105&type=chunk) Cash Flow Summary (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash used in operating activities | $(2,007) | $(5,769) | | Cash provided by investing activities | $— | $2,000 | | Cash provided by financing activities | $1,647 | $53 | | Net decrease in cash and cash equivalents and restricted cash | $(360) | $(3,716) | - The Company does not believe its existing **cash and cash equivalents** will be **not sufficient to fund operating expenses and capital expenditures beyond the next twelve months**, indicating **substantial doubt about its ability to continue as a going concern**[104](index=104&type=chunk) [Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=25&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that there are no material quantitative or qualitative disclosures about market risk applicable to the company for the reported period - The Company has **no material quantitative or qualitative disclosures about market risk**[110](index=110&type=chunk) [Item 4. CONTROLS AND PROCEDURES](index=25&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) Evaluation of disclosure controls and internal control over financial reporting, noting an unaddressed material weakness [Evaluation of Disclosure Controls and Procedures](index=25&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - As of March 31, 2025, the Company's **disclosure controls and procedures were not effective at the reasonable assurance level** due to uncompleted remediation of a deficiency in internal control over financial reporting[111](index=111&type=chunk) [Management's Report on Internal Control over Financial Reporting](index=26&type=section&id=Management's%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) - A **material weakness was identified** as of December 31, 2024, indicating an **ineffective internal control environment for processing and reporting non-routine transactions**, including indefinite-lived assets impairment assessment[116](index=116&type=chunk)[117](index=117&type=chunk) - This **material weakness** **could result in a material misstatement** of the annual or interim consolidated financial statements[118](index=118&type=chunk) [Remediation Plan](index=26&type=section&id=Remediation%20Plan) - Management has initiated a remediation plan, including engaging **additional external accounting resources** to assist with the preparation and review of non-routine transactions[119](index=119&type=chunk) [Changes in Internal Control Over Financial Reporting](index=26&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - Except for changes being implemented to address the identified **material weakness**, there were no other material changes in internal control over financial reporting during the first quarter of 2025[120](index=120&type=chunk) PART II - OTHER INFORMATION [Item 1. LEGAL PROCEEDINGS](index=27&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) The company reported no legal proceedings for the period - The Company has **no legal proceedings**[121](index=121&type=chunk) [Item 1A. RISK FACTORS](index=27&type=section&id=Item%201A.%20RISK%20FACTORS) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - **No material changes from the risk factors** set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[122](index=122&type=chunk) [Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=27&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Private placement in two tranches generated $3.3 million gross proceeds from Preferred Stock and warrants - On February 13, 2025, and April 8, 2025, the Company sold **3,300 shares** of Preferred Stock and **warrants** to purchase up to **11,262,808 shares** of Common Stock in two unregistered **private placement** tranches[123](index=123&type=chunk) - The **private placement** generated aggregate **gross proceeds** of **$3.3 million**[123](index=123&type=chunk) - The underlying Common Stock was registered on a Form S-3 Registration Statement, filed on April 22, 2025, and declared effective on April 29, 2025[123](index=123&type=chunk) [Item 3. DEFAULTS UPON SENIOR SECURITIES](index=27&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities for the period - The Company has **no defaults upon senior securities**[124](index=124&type=chunk) [Item 4. MINE SAFETY DISCLOSURES](index=27&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Mine safety disclosures are **not applicable to the Company**[125](index=125&type=chunk) [Item 5. OTHER INFORMATION](index=27&type=section&id=Item%205.%20OTHER%20INFORMATION) During the first quarter of 2025, none of the company's officers or directors adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by officers or directors during the fiscal quarter ended March 31, 2025[126](index=126&type=chunk) [Item 6. EXHIBITS](index=27&type=section&id=Item%206.%20EXHIBITS) Index of exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance and agreements - The Exhibit Index includes various corporate documents such as the Certificate of Incorporation, Bylaws, forms of Common Stock Purchase **Warrants**, Securities Purchase Agreement, and certifications from the CEO and CFO[127](index=127&type=chunk)[134](index=134&type=chunk)

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Matinas BioPharma Holdings, Inc. is a clinical-stage biopharmaceutical company focused on its lipid nanocrystal (LNC) platform delivery technology, with MAT2203 as its lead product candidate - Matinas BioPharma is a clinical-stage biopharmaceutical company leveraging its **lipid nanocrystal (LNC) platform delivery technology**[18](index=18&type=chunk) - The lead product candidate, **MAT2203 (oral amphotericin B)**, is a highly potent antifungal drug, now positioned for a single Phase 3 registration trial (ORALTO trial) for invasive aspergillosis[19](index=19&type=chunk) - Following an **80% workforce reduction** in late October 2024, the Company paused further clinical development of MAT2203 to pursue licensing, sale, or other strategic transactions, while maintaining intellectual property and supporting its Expanded/Compassionate Use Access Program[22](index=22&type=chunk) [Background](index=4&type=section&id=Background) The company is a clinical-stage biopharmaceutical firm focused on its LNC platform, with MAT2203 as its primary antifungal drug candidate [Corporate Events](index=5&type=section&id=Corporate%20Events) Recent corporate events include regaining NYSE American compliance, a reverse stock split, FDA agreement on MAT2203's Phase 3 trial, workforce reduction, and a recent $3.3 million financing round - Regained compliance with NYSE American listing standards regarding low share price (March 2024)[24](index=24&type=chunk) - Stockholders approved an authorized share reduction and a **reverse stock split (1:50 ratio)** in November 2023, which became effective on August 30, 2024[24](index=24&type=chunk)[25](index=25&type=chunk) - Announced agreement with the FDA on the design of a single Phase 3 registration trial (ORALTO trial) for MAT2203 in invasive aspergillosis (February 2024)[24](index=24&type=chunk) - Terminated negotiations for global licensing rights to MAT2203, leading to an **80% workforce reduction** and cessation of certain product development activities (October 2024)[25](index=25&type=chunk) - Received a deficiency letter from NYSE American for failing to hold an annual meeting in 2024 (January 2025)[25](index=25&type=chunk) - Entered into a securities purchase agreement in February 2025 to sell Series C Convertible Preferred Stock and warrants for **$3.3 million gross proceeds**, with funds focused on reducing operating expenses and exploring strategic alternatives for MAT2203[25](index=25&type=chunk)[26](index=26&type=chunk) [MAT2203](index=7&type=section&id=MAT2203) MAT2203 is an oral amphotericin B formulation with QIDP, Fast Track, and Orphan Designations, demonstrating efficacy and reduced toxicity in clinical studies - MAT2203 is an oral formulation of amphotericin B, designed to reduce renal toxicity and allow for prolonged, convenient oral administration, potentially increasing efficacy[27](index=27&type=chunk) - MAT2203 has Qualified Infectious Disease Product (QIDP) and Fast Track Status for several indications, and Orphan Designation for cryptococcosis, potentially offering up to **12 years of marketing exclusivity**[28](index=28&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - The EnACT Phase 2 study for cryptococcal meningitis showed MAT2203 exceeded the primary endpoint for Early Fungicidal Activity (EFA) (**0.38 log10 CFU/mL/day** vs. >0.20 threshold) and demonstrated **90% overall survival** at **18 weeks** in Cohort 2, with significantly lower kidney toxicity and anemia compared to IV amphotericin B[30](index=30&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk) - The planned ORALTO Phase 3 trial for invasive aspergillosis will be a randomized, multicenter, open-label study comparing MAT2203 as an oral step-down treatment to standard of care, with all-cause mortality at day 42 as the primary endpoint[34](index=34&type=chunk)[35](index=35&type=chunk) - The MAT2203 Compassionate/Expanded Use Access Program has enrolled **37 patients**, with **15 completing treatment** (median **16 weeks**); **8 had a complete response** and **7 improved** All patients experiencing renal toxicity on AmBisome saw renal function return to baseline after switching to MAT2203[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Strategy](index=10&type=section&id=Strategy) The company's strategy focuses on monetizing MAT2203 through partnerships, conserving cash, and exploring other strategic options, leveraging its QIDP, Fast Track, and Orphan Drug designations - The company's strategy focuses on monetizing MAT2203 through partnerships to advance Phase 3 development and commercialization, while conserving cash and evaluating other strategic options like in-licensing assets or mergers[49](index=49&type=chunk) - MAT2203 has received Qualified Infectious Disease Product (QIDP) and Fast Track designations, along with Orphan Drug Designation for cryptococcosis, potentially granting up to **12 years of marketing exclusivity** in the U.S. upon approval[47](index=47&type=chunk)[48](index=48&type=chunk) [Antifungal Market Opportunity](index=11&type=section&id=Antifungal%20Market%20Opportunity) The global antifungal market is projected to grow, driven by the high incidence and mortality of invasive fungal infections, and the urgent need for new, less toxic treatments due to rising drug resistance **Global Antifungal Market Overview:** | Metric | 2023 Value | 2030 Projected Value | | :----- | :--------- | :------------------- | | Overall Global Antifungal Market | ~$15.8 billion | ~$20.5 billion | | Global Invasive Fungal Infection Market | >$7.2 billion | ~$10.4 billion | **Estimated Annual Incidence in U.S. (Cases):** | Condition | Cases | | :-------- | :---- | | Invasive Candidiasis | ~46,000 | | Invasive Aspergillosis | ~15,000 | | Cryptococcal Meningitis (CM) | ~4,900 | - The market faces challenges including high treatment costs (e.g., aspergillosis-associated hospitalizations cost over **$1.3 billion** in the U.S.), rapid disease progression, high mortality rates (**20%-50%**), and increasing drug resistance to existing antifungal classes, highlighting an urgent need for new, less toxic agents[50](index=50&type=chunk) [Exclusive License Agreement with Rutgers University](index=11&type=section&id=Exclusive%20License%20Agreement%20with%20Rutgers%20University) The company holds an exclusive license from Rutgers University for its LNC Platform, involving tiered royalties, a sales milestone, and an annual license fee - The company holds an exclusive license from Rutgers University for certain patents related to its LNC Platform, acquired through Aquarius Biotechnologies Inc[51](index=51&type=chunk) - The agreement includes tiered royalties (low to mid-single digits) on net sales, a one-time **$100,000 sales milestone**, and an annual license fee of **$50,000** The license term extends until at least **8.5 years** from first commercial sale or patent expiration, whichever is longer[51](index=51&type=chunk)[52](index=52&type=chunk) [Intellectual Property](index=11&type=section&id=Intellectual%20Property) The company protects its product candidates and LNC Platform through a combination of patents, trade secrets, FDA exclusivity, and contractual restrictions - The company protects its product candidates and LNC Platform through patents, trade secrets, know-how, FDA exclusivity, and contractual restrictions[53](index=53&type=chunk) - Exclusively licensed patents from Rutgers cover LNC Platform chemistry and MAT2203, including **1 pending U.S. non-provisional application**, **6 U.S. patents**, and **49 granted foreign patents**, extending protection until at least **2033**[54](index=54&type=chunk) - Matinas-owned patent portfolio includes **5 pending U.S. provisional applications**, **2 pending U.S. non-provisional applications**, **2 pending PCT applications**, **13 pending foreign applications**, and **20 granted foreign patents**, with expirations ranging from **2036 to 2043** for various LNC compositions and methods[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [Competition](index=13&type=section&id=Competition) The biotechnology and pharmaceutical industries are highly competitive, with MAT2203 facing competition from established antifungal classes and other clinical-stage product candidates - The biotechnology and pharmaceutical industries are highly competitive, with many competitors possessing greater resources and more advanced product candidates[64](index=64&type=chunk) - MAT2203, if approved, will compete with established antifungal classes (polyenes, azoles, echinocandins) and branded therapies like Cancidas, Eraxis, Mycamine, Diflucan, Noxafil, Vfend, Sporanox, Cresemba, AmBisome, Abelcet, Rezzayo, Brexafemme, and generic amphotericin B deoxycholate, as well as other product candidates in clinical development[67](index=67&type=chunk) [Manufacturing](index=13&type=section&id=Manufacturing) The company currently leases in-house manufacturing capabilities for clinical supplies but is exploring third-party contract manufacturers for future development and commercialization - The company currently leases in-house manufacturing capabilities for MAT2203 clinical supplies but is exploring third-party contract manufacturers for future development and commercialization[68](index=68&type=chunk) - There are several potential third-party suppliers for amphotericin B, the active pharmaceutical ingredient in MAT2203, and the company believes it can secure sufficient supply[69](index=69&type=chunk) [Sales and Marketing](index=14&type=section&id=Sales%20and%20Marketing) The company currently lacks a sales and marketing infrastructure and plans to rely on partnerships for commercialization -

BEDMINSTER, N.J., March 11, 2025 (GLOBE NEWSWIRE) -- Matinas BioPharma Holdings, Inc. (NYSE American: MTNB) today announced the appointment of biotech industry veterans Keith Murphy and Edward Neugeboren to its Board of Directors as independent members, effective March 11, 2025 (the “Effective Date”). In addition, Matthew Wikler, M.D., and Natasha Giordano stepped down from the Board on the Effective Date. “We are thrilled to announce the addition of Keith and Edward to our Board,” stated Jerome D. Jabbour, ...

Core Viewpoint - Matinas BioPharma Holdings, Inc. has entered into a securities purchase agreement to raise $3.3 million through the sale of Series C Convertible Preferred Stock and warrants to investors, aimed at supporting corporate operations and strategic initiatives, particularly for its antifungal drug candidate MAT2203 [1][4]. Group 1: Securities Purchase Agreement - The agreement involves the sale of 3,300 shares of Series C Convertible Preferred Stock and warrants for a total of $3.3 million, with an initial closing of 1,650 shares generating $1.65 million [1][2]. - The Preferred Stock is convertible into common stock at a price of $0.586, with each share convertible into 1,706 shares of common stock [3]. Group 2: Use of Proceeds - Funds from the securities purchase will be allocated for general corporate purposes, focusing on reducing operating expenses and exploring strategic alternatives for MAT2203, a Phase 3-ready antifungal drug candidate [4]. Group 3: Board Changes - Dr. Robin L. Smith has been appointed to the Board of Directors, bringing extensive experience in the biopharmaceutical industry [5][6]. - Herbert J. Conrad, the founding Chairman, has resigned from the Board, marking a significant leadership transition for the company [9]. Group 4: Product Information - MAT2203 is a potential oral treatment for invasive fungal infections, designed to overcome limitations of existing intravenous treatments, with successful Phase 2 trial results [12].

Core Viewpoint - Matinas BioPharma Holdings, Inc. has appointed Evelyn D'An as an independent director and Chair of the Audit Committee, effective February 5, 2025, enhancing the company's governance and financial oversight capabilities [1][2]. Company Overview - Matinas BioPharma is a biopharmaceutical company focused on delivering innovative therapies through its lipid nanocrystal (LNC) platform delivery technology [3]. Appointment Details - Evelyn D'An brings extensive experience in corporate governance, financial oversight, and accounting, having served as Chair of Audit Committees for various public and private companies [2]. - D'An is a former partner at Ernst & Young, where she spent 18 years working with clients across multiple sectors, including retail and technology [2]. Leadership Commentary - Jerome D. Jabbour, CEO of Matinas, expressed enthusiasm about D'An's appointment, highlighting her strategic expertise and the importance of her role at this critical time for the company [3].

Core Viewpoint - Matinas BioPharma Holdings, Inc. has appointed Evelyn D'An as an independent director and Chair of the Audit Committee, effective February 5, 2025, enhancing the board's expertise in financial oversight and corporate governance [1][2]. Company Overview - Matinas BioPharma is a biopharmaceutical company focused on delivering innovative therapies through its lipid nanocrystal (LNC) platform delivery technology [3]. Appointment Details - Evelyn D'An brings extensive experience in corporate governance, financial oversight, and accounting, having served as Chair of Audit Committees for various public and private companies [2]. - D'An is a former partner at Ernst & Young, where she spent 18 years working with clients across multiple sectors, including retail and technology [2]. Leadership Commentary - Jerome D. Jabbour, CEO of Matinas, expressed enthusiasm about D'An's appointment, highlighting her strategic expertise and the value she adds to the board at a critical time for the company [3].

Core Points - Matinas BioPharma Holdings, Inc. has received a notice from NYSE American indicating it has fallen below certain continued listing standards due to not holding its annual meeting for the fiscal year ending December 31, 2024 [1] - The company plans to hold its annual meeting by December 31, 2025, to regain compliance with NYSE American listing requirements [2] - Matinas BioPharma focuses on delivering innovative therapies through its lipid nanocrystal (LNC) platform delivery technology [3]

Core Insights - Matinas BioPharma has signed a non-binding term sheet granting global rights to develop and commercialize MAT2203, an oral formulation of amphotericin B, for invasive aspergillosis and potentially other invasive fungal infections [1][4][17] - The company is experiencing increased demand for MAT2203, with 31 patients enrolled in the Compassionate/Expanded Use Access Program and 6 additional patients under evaluation [2][5] - Financial results for Q2 2024 show a net loss of $5.7 million, a decrease from $6.1 million in Q2 2023, with total costs and expenses of $5.8 million [11][12] MAT2203 Program Updates - MAT2203 is intended for patients with invasive aspergillosis who have limited or no treatment options, with preparations ongoing for the ORALTO Phase 3 registration trial [4][17] - In the Compassionate/Expanded Use Access Program, 31 patients have been treated, with 7 patients showing positive results for invasive aspergillosis [5][6] - Of the 15 patients who completed treatment, 8 had a complete response and 7 showed improvement, indicating the efficacy of MAT2203 [6] LNC Platform Developments - The LNC platform has shown potential in delivering small oligonucleotides and small molecule oncology drugs, with ongoing evaluations to maximize shareholder returns [3][7] - Recent studies demonstrated tumor growth inhibition in various cancer models using LNC-docetaxel, and further studies are being conducted to improve therapeutic indices [7][8] - An LNC formulation of miriplatin has shown strong cellular uptake and tumor cell-killing capabilities in vitro, with effective tumor size reduction observed in vivo [8] Financial Performance - The company reported no revenue for both Q2 2024 and Q2 2023, with total costs and expenses decreasing from $6.2 million to $5.8 million year-over-year [11][12] - For the first six months of 2024, the net loss was $11.5 million, consistent with the loss of $11.6 million in the same period of 2023 [13][14] - Cash, cash equivalents, and marketable securities as of June 30, 2024, were $14.3 million, an increase from $13.8 million at the end of 2023 [14]