Entero Therapeutics, Inc.(ENTO) - 2024 Q3 - Quarterly Report

Financial Position - Entero Therapeutics reported stockholders' equity of $881,960 as of June 30, 2023, which was below the$2.5 million minimum requirement for Nasdaq listing compliance [176]. - Nasdaq provided Entero a compliance period until March 5, 2025, to regain compliance with the minimum bid price requirement of $1.00 per share [179]. - The company had cash and cash equivalents of approximately$0.4 million as of September 30, 2024, and cumulative losses attributable to common stockholders of approximately $190.1 million [196]. - The company is subject to a Notice of Default and Acceleration regarding its Credit Agreement, with a 30-day Cure Period to address the Events of Default [186]. Mergers and Acquisitions - The company completed a merger with ImmunogenX, Inc. in March 2024, focusing on the biologic Latiglutenase for celiac disease treatment [169]. - Entero initiated a plan to dispose of certain assets and liabilities of ImmunogenX, including Latiglutenase and CypCel, within 12 months of the merger [170]. - A binding term sheet was entered into with Journey Therapeutics, Inc. for the acquisition of 100$1.1 million from the sale of 275,000 shares of Common Stock at $2.95 per share [173]. - The company received gross proceeds of approximately$4.0 million from a March 2024 Offering, which included 173,100 shares of Common Stock priced at $7.61 each [172]. - The company anticipates needing to raise substantial additional capital in the near term to fund continuing operations and satisfy existing obligations [196]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was approximately$5.61 million, primarily from registered direct offerings [223]. Operational Performance - Research and development expenses for Q3 2024 totaled approximately $0.2 million, a decrease of approximately$0.8 million, or 80%, compared to $1.0 million in Q3 2023 [204]. - General and administrative expenses for Q3 2024 totaled approximately$1.7 million, a decrease of approximately $0.7 million, or 30$2.4 million in Q3 2023 [207]. - Total operating expenses for the three months ended September 30, 2024, decreased to $1.89 million, down 45$3.43 million for the same period in 2023 [208]. - Net loss for the three months ended September 30, 2024, was approximately $2.58 million, a decrease of$0.85 million or 25% compared to a net loss of approximately $3.43 million for the same period in 2023 [210]. - Research and development expenses for the nine months ended September 30, 2024, totaled approximately$0.88 million, a decrease of $2.84 million or 76$3.73 million for the same period in 2023 [212]. - General and administrative expenses for the nine months ended September 30, 2024, increased to approximately $13.54 million, an increase of$5.58 million or 70% compared to $7.95 million for the same period in 2023 [215]. - The increase in general and administrative expenses was primarily due to$4.0 million in non-cash financial advisor fees related to the IMGX acquisition [216]. - Net cash used in operating activities for the nine months ended September 30, 2024, was approximately $9.05 million, compared to$8.94 million for the same period in 2023 [221]. - Loss from discontinued operations for the nine months ended September 30, 2024, was $2.0 million, representing expenses related to a disposal group classified as held for sale [218]. - Income tax benefit of approximately$10.6 million was recorded in the nine months ended September 30, 2024, due to the release of a portion of the valuation allowance in connection with the IMGX Merger [217]. - Total cash decrease for the nine months ended September 30, 2024, was approximately $3.34 million, compared to an increase of$1.93 million for the same period in 2023 [221]. Strategic Initiatives - Entero is exploring strategic alternatives for its Niclosamide program, which is currently under a non-binding term sheet for potential sale [171]. - The company has paused development of non-essential research and development activities and is exploring strategic alternatives, including a potential sale or merger [183]. - The company is exploring various potential strategies, including raising capital and restructuring indebtedness, but there is no assurance these efforts will be successful [196]. Employment and Consulting - As of December 31, 2023, Entero had 9 employees, which increased to 15 after the merger, but was later reduced to 11 employees in July 2024 [180]. - The company entered into a consulting agreement with former CEO James Sapirstein, paying $400 per hour for services rendered [181].