Virios Therapeutics(VIRI) - 2024 Q3 - Quarterly Report

Company Overview - The company is a pre-revenue, development-stage biopharmaceutical firm focused on developing new medicines for pain and fatigue-related disorders, with a pipeline centered on NaV 1.7 modulation and combination antiviral therapies [88]. Product Development - The lead development candidate, Halneuron®, has shown statistically significant pain reduction in a Phase 2 study for cancer-related pain, with an interim efficacy readout expected in the second half of 2025 [90]. - The antiviral program includes IMC-1 and IMC-2, with top-line data from an ongoing IMC-2 Phase 2 study for Long-COVID expected in November 2024 [88]. - Halneuron® has received fast track status from the FDA for the treatment of chemotherapy-induced neuropathic pain (CINP) [92]. - IMC-1 is ready for Phase 3 development for fibromyalgia, with agreed-upon program requirements from the FDA [94]. Corporate Actions - The company completed a Combination with Pharmagesic on October 7, 2024, acquiring 100% of its common shares, which is expected to enhance its asset pipeline [97]. - Under the terms of the Combination, the company issued 211,383 shares of common stock and 2,108.3854 shares of Series A Non-Voting Convertible Preferred Stock to Sealbond, representing 19.99% of the outstanding shares [98]. - The Company changed its name from "Virios Therapeutics, Inc." to "Dogwood Therapeutics, Inc." effective October 9, 2024, and began trading under the ticker symbol "DWTX" on Nasdaq [119]. - A reverse stock split was executed, converting every 25 shares of Common Stock into one share, resulting in 1,110,317 outstanding shares prior to the Exchange Agreement [121]. Financial Performance - The Company incurred net losses of $2,280,684 and$4,621,852 for the three and nine months ended September 30, 2024, respectively, compared to $1,235,074 and$4,192,842 for the same periods in 2023 [132]. - As of September 30, 2024, the company had an accumulated deficit of $66,091,074 and cash of$2,039,819 [132]. - Net cash used in operations for the nine months ended September 30, 2024, was $2,659,297, compared to$3,401,318 for the same period in 2023, indicating a 21.7% improvement [143]. - Net cash provided by financing activities during the nine months ended September 30, 2024, was $1,382,170, compared to$1,156,443 in the same period of 2023 [145]. - The company raised gross proceeds of $1.7 million from a public offering on May 22, 2024, with net proceeds of approximately$1.4 million after expenses [135]. Expenses and Funding - Research and development expenses increased by $0.2 million for the three months ended September 30, 2024, primarily due to a$0.3 million increase associated with a grant to BHC for a proof-of-concept study [129]. - General and administrative expenses increased by $0.9 million (70.8$535,162, up from $374,200 in the same period of 2023, representing a 43.0$3,000,000 in loan proceeds in February 2025 to fund operations through the end of 2025 [140]. Debt and Financing - The Company entered into a Loan Agreement for a total principal amount of $19,500,000, with$16,500,000 disbursed on October 7, 2024, and $3,000,000 to be disbursed on February 18, 2025 [106]. - There were no debt financings during the nine months ended September 30, 2024, and no debt outstanding as of September 30, 2024 [138]. - A contingent value rights agreement was established, allowing holders to receive 87.75$7,500,000 if requested by holders of at least 30% of Registrable Securities [108]. Operational Status - The company has experienced negative cash flows from operations since inception and will require additional financing to fund ongoing clinical trials and operations beyond 2025 [133]. - The company is not currently involved in any material pending or ongoing litigation that could impact operations [155]. - No changes in internal control over financial reporting were identified during the quarter that materially affected the company's internal controls [153].