UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-33672 PALISADE BIO, INC. (Exact name of registrant as specified in its charter) | | Trading | | | --- | --- | --- | | Title of e ...

PALI-2108 demonstrated to be safe and well tolerated with no serious adverse events (SAEs) Extended half-life and local bioactivation support convenient once-daily dosing in ulcerative colitis (UC) and fibrostenotic Crohn’s disease (FSCD) Colon tissue drug levels exceeded target thresholds 36 hours post-dose in completed Phase 1a MAD cohort Company advancing toward IND submission for Phase 2 study in H1 2026 Carlsbad, CA, Aug. 07, 2025 (GLOBE NEWSWIRE) -- Palisade Bio, Inc. (Nasdaq: PALI) (“Palisade”, “Pali ...

Core Insights - PALI-2108 is the first and only PDE4 inhibitor specifically designed to target the terminal ileum and colon for treating fibrostenotic Crohn's disease (FSCD) and ulcerative colitis (UC), addressing significant unmet medical needs in these conditions [1] - The inflammatory bowel disease market in China is projected to approach $1 billion in total revenues by 2030, indicating a large and growing market opportunity [1] Company Developments - The China National Intellectual Property Administration has issued a Notice of Allowance for a patent covering PALI-2108, with a base patent term extending into 2045, subject to regulatory approval extensions [2] - The CEO of Palisade Bio emphasized the importance of strengthening the global intellectual property portfolio for PALI-2108, which supports the company's clinical and strategic objectives in one of the fastest-growing pharmaceutical markets [3] - Palisade Bio is currently conducting a Phase 1b/2a clinical trial for PALI-2108 aimed at treating FSCD and UC, with multiple near-term clinical milestones expected in the next 12-18 months [3] Company Overview - Palisade Bio is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for patients with autoimmune, inflammatory, and fibrotic diseases, aiming to transform the treatment landscape through targeted approaches [4]

Core Viewpoint - Palisade Bio, Inc. has entered into an agreement with accredited investors to exercise existing warrants for the purchase of up to 4,318,905 shares of common stock at a reduced exercise price, generating approximately $3.9 million in gross proceeds for the company [1][2]. Group 1: Existing Warrants and Financial Details - The existing warrants were issued at adjusted exercise prices of $1.40 and will be exercised at a reduced price of $0.9047 per share [1]. - The gross proceeds from the exercise of the existing warrants are expected to be approximately $3.9 million before deducting fees and expenses [2]. - The company intends to use the net proceeds from the offering for working capital and general corporate purposes [4]. Group 2: Replacement Warrants - In exchange for the immediate exercise of existing warrants, holders will receive new unregistered replacement warrants to purchase up to 8,637,810 shares of common stock at an exercise price of $0.9047 per share, with a term of five years from shareholder approval [3]. - The replacement warrants are offered in a private placement and have not been registered under the Securities Act [5]. Group 3: Company Overview - Palisade Bio is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for patients with autoimmune, inflammatory, and fibrotic diseases [7].

– Video webcast now available on-demand Carlsbad, CA, July 22, 2025 (GLOBE NEWSWIRE) -- Palisade Bio, Inc. (Nasdaq: PALI) (“Palisade”, “Palisade Bio”, or the “Company”), a clinical-stage biopharmaceutical company focused on developing and advancing novel therapeutics for patients living with autoimmune, inflammatory, and fibrotic diseases, today announced JD Finley Chief Executive Officer of Palisade Bio, participated in the Virtual Investor “What’s Your Story” Summer Spotlight On-Demand Conference. As part ...

Core Insights - Palisade Bio, Inc. has appointed Emil Chuang, MB BS FRACP to its Board of Directors, enhancing its clinical strategy in treating Fibrostenotic Crohn's Disease and Ulcerative Colitis [1][9] Company Overview - Palisade Bio is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for patients with autoimmune, inflammatory, and fibrotic diseases [10] Leadership Experience - Dr. Chuang brings nearly 25 years of pharmaceutical and clinical experience, including contributions to drug development programs that led to two successful regulatory approvals: infliximab for pediatric Crohn's disease and lorcaserin for morbid obesity [3][4] - His previous roles include Chief Medical Officer at Intrinsic Medicine and leadership positions at Nestlé Health Science, Takeda, and Progenity, with over 80 peer-reviewed publications to his name [6][7] Strategic Importance - The addition of Dr. Chuang is expected to provide valuable insights into the company's clinical programs, particularly in inflammatory bowel diseases [5][6] - The company aims to leverage Dr. Chuang's expertise to advance its pipeline and address unmet medical needs in the therapeutic landscape [6]

Core Insights - Palisade Bio announced positive topline results from Phase 1 studies of PALI-2108, a PDE4 B/D inhibitor for fibrostenotic Crohn's disease and ulcerative colitis [1][2] - The study met primary endpoints of safety, tolerability, and pharmacokinetics, supporting progression to Phase 2 development [2][3] Safety & Tolerability - No serious adverse events (SAEs) or treatment-emergent adverse events (TEAEs) related to laboratory values or EKGs were observed across SAD, MAD, and food effect cohorts [7] - In the SAD study (15–450 mg), only mild and reversible TEAEs occurred, limited to the highest dose [7] - The MAD cohorts showed mostly minor TEAEs, with the 15 mg BID dose free of any TEAEs [7] Pharmacokinetics - PALI-2108 achieved therapeutically relevant concentrations in colon tissue up to 24 hours post-dose, confirming its targeted profile [7] - Plasma-to-tissue ratios indicated localized drug activation in the distal gut with low systemic exposure [7] - Population PK modeling supports a therapeutic window aligned with observed safety and tolerability [7] Future Development Plans - Based on the results, Palisade Bio plans to initiate a Phase 1b cohort to further explore safety, tolerability, and pharmacokinetics while completing chronic safety studies [8] - Phase 2 clinical programs will assess PALI-2108's efficacy, safety, and tolerability in patients with fibrostenotic Crohn's disease and moderate to severe ulcerative colitis [8]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q1 2025 show decreased assets and a reduced net loss, with notes highlighting going concern uncertainty [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $8.19 million by March 31, 2025, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $7,230 | $9,821 | | Total current assets | $7,887 | $10,494 | | Total assets | $8,190 | $10,880 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $2,777 | $3,236 | | Total liabilities | $2,859 | $3,388 | | Total stockholders' equity | $5,331 | $7,492 | | Total liabilities and stockholders' equity | $8,190 | $10,880 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss for Q1 2025 decreased to $2.23 million, driven by a significant reduction in operating expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $950 | $2,214 | | General and administrative | $1,360 | $1,459 | | Total operating expenses | $2,310 | $3,673 | | Loss from operations | $(2,310) | $(3,673) | | Net loss | $(2,230) | $(3,527) | | Basic and diluted net loss per common share | $(0.47) | $(4.59) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity declined to $5.33 million due to net loss, while common shares increased from warrant exercises - Total stockholders' equity decreased by **$2.16 million** during the first quarter of 2025, primarily driven by a net loss of **$2.23 million**[15](index=15&type=chunk) - The company issued **1,628,000 shares** of common stock in connection with the exercise of warrants during the three months ended March 31, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $2.33 million, resulting in a $2.59 million net decrease in cash Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,333) | $(3,180) | | Net cash (used in) provided by financing activities | $(258) | $2,024 | | Net decrease in cash, cash equivalents and restricted cash | $(2,591) | $(1,156) | | Cash, cash equivalents and restricted cash, end of period | $7,256 | $11,302 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's going concern uncertainty, reverse stock split, collaborations, and financial instrument fair values - The company is a clinical-stage biopharmaceutical company focused on developing PALI-2108 for inflammatory bowel disease (IBD), including Crohn's disease and ulcerative colitis[21](index=21&type=chunk) - There is substantial doubt about the Company's ability to continue as a going concern for one year, given its history of net losses, negative cash flows, and an accumulated deficit of **$138.2 million** as of March 31, 2025[22](index=22&type=chunk)[23](index=23&type=chunk) - On April 5, 2024, the company effected a **1-for-15 reverse stock split** of its common stock, with all share and per-share data retrospectively adjusted[28](index=28&type=chunk) - In February 2024, a warrant inducement transaction generated net proceeds of approximately **$2.2 million** from the exercise of **228,162 existing warrants**[51](index=51&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses PALI-2108 development, Q1 2025 financial results, and ongoing liquidity challenges with going concern warning [Executive Overview](index=24&type=section&id=Executive%20Overview) The company is advancing PALI-2108 for IBD, with Phase 1 data expected in Q2 2025 and planned U.S. trials in 2026 - The lead product candidate, PALI-2108, is a prodrug inhibitor of phosphodiesterase-4 (PDE4) being developed to treat ulcerative colitis (UC) and fibrostenotic Crohn's disease (FSCD)[110](index=110&type=chunk)[113](index=113&type=chunk) - A Phase 1 clinical study of PALI-2108 is ongoing in Canada, with all Single Ascending Dose (SAD) and Multiple Ascending Dose (MAD) cohorts completed, and topline data anticipated in the second quarter of 2025[115](index=115&type=chunk)[116](index=116&type=chunk) - The company plans to submit an Investigational New Drug Application (IND) to the FDA during 2025 and, if approved, commence U.S. clinical trials in the first quarter of 2026[117](index=117&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Total operating expenses decreased by 37% in Q1 2025 due to lower R&D costs for PALI-2108 Comparison of Results of Operations (in thousands) | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $950 | $2,214 | $(1,264) | (57)% | | General and administrative | $1,360 | $1,459 | $(99) | (7)% | | **Total operating expenses** | **$2,310** | **$3,673** | **$(1,363)** | **(37)%** | | **Net loss** | **$(2,230)** | **$(3,527)** | **$1,297** | **(37)%** | - The **$1.3 million** decrease in R&D expenses was primarily due to a **$2.2 million** reduction in preclinical joint development costs with Giiant, partially offset by a **$1.1 million** increase in costs for the Phase 1 clinical trial of PALI-2108, which commenced in November 2024[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - General and administrative expenses decreased by **$0.1 million** due to lower costs for shareholder services (no special meeting in Q1 2025), employee bonuses, and insurance[130](index=130&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company's $7.3 million cash balance is sufficient only through Q4 2025, necessitating additional financing - Management has concluded there is substantial doubt about the company's ability to continue as a going concern, as available cash is insufficient to fund operations for the next 12 months[123](index=123&type=chunk)[133](index=133&type=chunk) - The company believes its cash balance of **$7.2 million** as of March 31, 2025, is sufficient to fund planned operations through the fourth quarter of 2025, after which it will require additional financing[144](index=144&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,333) | $(3,180) | | Net cash (used in) provided by financing activities | $(258) | $2,024 | [Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Palisade Bio is exempt from providing market risk disclosures - As a smaller reporting company, Palisade Bio is not required to provide quantitative and qualitative disclosures about market risk[148](index=148&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a persistent material weakness in financial reporting - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were not effective at a reasonable assurance level[150](index=150&type=chunk) - A material weakness in internal control over financial reporting persists, stemming from a lack of controls in the financial closing and reporting process, including insufficient segregation of duties and formalized procedures[153](index=153&type=chunk) - Remediation efforts are underway, including hiring additional finance staff, implementing new accounting software, and updating formal policies, but are not yet complete[155](index=155&type=chunk)[159](index=159&type=chunk) [PART II - OTHER INFORMATION](index=32&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, and other required disclosures [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings for the current period - The company reported no legal proceedings[161](index=161&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks including development, financial, operational, intellectual property, and securities-related challenges [Risks Related to Development, Commercialization, and Regulatory Approval](index=32&type=section&id=Risks%20Related%20to%20Our%20Development,%20Commercialization%20and%20Regulatory%20Approval%20of%20Our%20Product%20Candidates) Success hinges on PALI-2108's development, regulatory approval, and commercialization, facing clinical trial and third-party reliance risks - The company's business depends entirely on the successful clinical development, regulatory approval, and commercialization of its lead asset, PALI-2108[163](index=163&type=chunk)[169](index=169&type=chunk) - The company depends on its license agreement with Giiant Pharma Inc. for the rights to PALI-2108; termination of this agreement would materially harm the business[172](index=172&type=chunk) - There is a risk that the FDA or other foreign regulators may not accept data from the Phase 1 clinical trial being conducted in Canada, which could require additional, costly trials[174](index=174&type=chunk) [Risks Related to Our Business](index=40&type=section&id=Risks%20Related%20to%20Our%20Business) The company faces risks from limited operating history, unproven business model, and dependence on key personnel - The company has a limited operating history, has never generated revenue from product sales, and adopted a new business plan in September 2023, making it difficult to evaluate its future viability[200](index=200&type=chunk) - Future growth may depend on the ability to in-license or acquire additional product candidates, a process that is lengthy, complex, and competitive[206](index=206&type=chunk) [Risks Related to Dependence on Third Parties](index=42&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Heavy reliance on CROs and third-party manufacturers for PALI-2108 creates significant operational and supply chain risks - The company relies on third-party CROs to conduct clinical trials; if these CROs fail to meet regulatory requirements (like GCP), the clinical data may be deemed unreliable[211](index=211&type=chunk) - The company depends on two qualified suppliers for the API used in PALI-2108 and does not have internal manufacturing capabilities, creating risks related to supply shortages, quality control, and cost[212](index=212&type=chunk) - Reliance on foreign third parties in China and other countries for API supply creates risks related to potential U.S. legislation, tariffs, sanctions, or other trade restrictions[221](index=221&type=chunk)[222](index=222&type=chunk) [Risks Related to Financial Operations](index=44&type=section&id=Risks%20Related%20to%20Our%20Financial%20Operations) Significant financial risks include going concern doubt, history of losses, and an un-remediated material weakness in internal controls - Management has expressed substantial doubt about the company's ability to continue as a going concern for the next year, as available cash is not sufficient to fund operations for that period[223](index=223&type=chunk) - The company has a history of net losses and expects them to continue, with no guarantee of ever achieving profitability[225](index=225&type=chunk) - A material weakness in internal control over financial reporting, related to the financial closing process and segregation of duties, has not been fully remediated[226](index=226&type=chunk) [Risks Related to Intellectual Property](index=44&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success depends on securing and enforcing patent protection for product candidates and complying with license agreements - The company's success depends on its ability to obtain and maintain patent protection for its product candidates, which is an uncertain, expensive, and time-consuming process[228](index=228&type=chunk)[229](index=229&type=chunk) - Failure to comply with obligations under the Giiant License Agreement could lead to termination of the license, which would materially harm the business as it covers the lead product candidate, PALI-2108[238](index=238&type=chunk) [Risks Related to Our Securities](index=47&type=section&id=Other%20Risks%20Related%20to%20Our%20Securities) Risks include stock price volatility, potential Nasdaq delisting, future dilution from financing, and no anticipated dividends - The company's common stock is at risk of being delisted from the Nasdaq Stock Market for failing to maintain the minimum **$1.00** bid price requirement, having received a non-compliance notice on April 30, 2025[247](index=247&type=chunk) - The company will require substantial additional capital, and future equity offerings will likely cause significant dilution to existing stockholders[242](index=242&type=chunk) - The company does not anticipate paying any dividends in the foreseeable future, so capital appreciation is the likely sole source of gain for stockholders[249](index=249&type=chunk) [General Risk Factors](index=50&type=section&id=General%20Risk%20Factors) General risks include health pandemics, adverse global economic conditions, and cybersecurity threats impacting operations - Health pandemics could disrupt business operations, delay research and development programs, and negatively impact the supply chain and clinical trial execution[258](index=258&type=chunk) - Global economic conditions, including inflation, tariffs, and rising interest rates, could increase operating costs and make it more difficult to obtain necessary financing[259](index=259&type=chunk) - The company is vulnerable to cyber-attacks, which could compromise sensitive data (including patient data), disrupt clinical trials, and lead to regulatory actions, litigation, and reputational harm[263](index=263&type=chunk)[272](index=272&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None reported[274](index=274&type=chunk) [Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None reported[275](index=275&type=chunk) [Mine Safety Disclosure](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This disclosure item is not applicable to the company's operations - Not Applicable[276](index=276&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) The company reported no other information requiring disclosure for the period - None reported[277](index=277&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including corporate and contractual documents - Lists all exhibits filed with the report, including certificates of designation, warrants, license agreements, and officer certifications[278](index=278&type=chunk)[279](index=279&type=chunk)[281](index=281&type=chunk)

Core Insights - Palisade Bio, Inc. has been selected to present at the 3rd Annual Precision Medicine in Inflammatory Bowel Disease Summit, highlighting its focus on innovative therapeutics for autoimmune and inflammatory diseases [1][2] - The presentation will discuss the use of AI-driven insights to improve patient subtyping and treatment personalization in inflammatory bowel disease (IBD) [2] Company Overview - Palisade Bio is a clinical-stage biopharmaceutical company dedicated to developing novel therapeutics for patients with autoimmune, inflammatory, and fibrotic diseases [3] - The company aims to transform the treatment landscape through a targeted approach with its therapeutics [3]

Core Insights - Palisade Bio, Inc. has completed enrollment and dosing in all Phase 1a single ascending dose (SAD) and multiple ascending dose (MAD) cohorts for PALI-2108, aimed at treating Ulcerative Colitis (UC) [1][2][3] - Preliminary data indicates no serious adverse events (SAEs) or treatment-emergent adverse events (TEAEs) related to laboratory values or EKGs, demonstrating the drug's safety and tolerability [1][2][3] - The company is on track to report topline data from the Phase 1a portion of the study by the end of May 2025, with ongoing screening for the Phase 1b UC cohort [1][2][3] Study Details - The Phase 1a/b study aims to evaluate the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of PALI-2108 in healthy volunteers and UC patients [4] - Biomarkers such as serum high sensitivity C-reactive protein (hsCRP) and fecal calprotectin (CalPro) will be used to assess the drug's effects [4] - PALI-2108 is a new chemical entity that has not been previously administered to humans, differentiating it from other PDE4 inhibitors [4] Company Overview - Palisade Bio is focused on developing novel therapeutics for autoimmune, inflammatory, and fibrotic diseases, aiming to transform the treatment landscape with targeted approaches [6]