Aptose Biosciences(US:APTO)2025-05-08 11:30PART I—FINANCIAL INFORMATION Financial Statements This section presents unaudited condensed consolidated interim financial statements, highlighting a 'going concern' warning due to cash projected to fund operations only through May 2025 - The company's ability to continue as a going concern is in substantial doubt, as its cash and cash equivalents as of March 31, 2025, are projected to support operations only through May 2025242630 Condensed Consolidated Statements of Financial Position (Unaudited) | (In thousands of US dollars) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $4,743 | $6,152 | | Total current assets | $6,969 | $9,530 | | Total assets | $7,467 | $10,127 | | Liabilities and Shareholders' Deficit | | | | Total current liabilities | $6,318 | $4,477 | | Total liabilities | $14,860 | $14,670 | | Total shareholders' deficit | $(7,393) | $(4,543) | Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) | (In thousands of US dollars, except per share data) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $— | $— | | Research and development | $2,364 | $6,445 | | General and administrative | $3,097 | $3,315 | | Net loss | $(5,543) | $(9,640) | | Basic and diluted loss per common share | $(2.61) | $(22.02) | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands of US dollars) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $(2,795) | $(11,763) | | Cash used in investing activities | $— | $(1,991) | | Cash provided by financing activities | $829 | $11,847 | | Decrease in cash, cash equivalents and restricted cash | $(1,964) | $(1,906) | - On February 26, 2025, the company executed a 1-for-30 reverse stock split of its Common Shares. All share and per-share amounts have been retroactively adjusted24 - On March 18, 2025, the company entered into a Debt Conversion Agreement with Hanmi Pharmaceutical, converting $1.5 million of debt into 409,063 Common Shares at $3.70 per share50 Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes the company's financial condition and operational results, focusing on clinical programs, liquidity, and capital resources, amidst significant 'going concern' risk Overview and Program Updates Aptose, a clinical-stage biotech, focuses on hematology with its lead program, tuspetinib, showing promising early data in AML, while luxeptinib development is paused - The lead program, tuspetinib, is being developed as a frontline triplet combination therapy (TUS+VEN+HMA) for newly diagnosed AML patients, aiming to establish a new standard of care939495 - The TUSCANY Phase 1/2 trial of the TUS+VEN+AZA triplet has shown early positive results, achieving complete remissions in difficult-to-treat AML patients at the initial 40 mg dose of tuspetinib, leading to dose escalation to 80 mg95107108 - Development of the luxeptinib program has been paused to conserve funds and prioritize the advancement of tuspetinib100132 - Aptose entered into a Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute (NCI) to collaborate on the clinical development of tuspetinib in NCI-sponsored myeloMATCH trials104 Results of Operations The company reported a net loss of $5,543 thousand for Q1 2025, a significant decrease from Q1 2024, primarily due to reduced Research and Development expenses Comparison of Operating Results (Q1 2025 vs Q1 2024) | (In thousands of US dollars) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $5,543 | $9,640 | $(4,097) | | Research & Development Expenses | $2,364 | $6,445 | $(4,081) | | General & Administrative Expenses | $3,097 | $3,315 | $(218) | - R&D expenses decreased by $4,081 thousand year-over-year, mainly due to reduced activity in the tuspetinib APTIVATE clinical trial, lower manufacturing costs, and a reduction in R&D personnel headcount179183 - G&A expenses decreased by $218 thousand, primarily due to a $300 thousand reduction in stock-based compensation expense, partially offset by a $100 thousand increase in legal and consulting fees182184 Liquidity and Capital Resources The company's financial position is precarious, with cash reserves projected to last only through May 2025, raising substantial doubt about its ability to continue as a going concern - The company has sufficient liquidity to support operations only through May 2025, which raises substantial doubt about its ability to continue as a going concern142148150 Key Liquidity Metrics | (In thousands of US dollars) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,743 | $6,152 | | Working capital | $651 | $5,053 | | Stockholders' deficit | $(7,393) | $(4,543) | - The company was delisted from the Nasdaq Stock Market effective April 2, 2025, for failing to regain compliance with the minimum stockholders' equity requirement. Its shares continue to trade on the TSX and OTC markets88141 - In Q1 2025, the company raised net proceeds of $829 thousand through its 2025 At-The-Market (ATM) facility by issuing 137,000 common shares152174 Qualitative and Quantitative Disclosures about Market Risk As a 'smaller reporting company' under SEC rules, the company is not required to provide disclosures about market risk - Aptose Biosciences is not required to provide information on market risk because it qualifies as a 'smaller reporting company' under SEC regulations191 Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to a material weakness in internal control over financial reporting, with a remediation plan underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025192 - The ineffectiveness is due to a material weakness in internal control over financial reporting related to the accounting for complex financial instruments, specifically warrants192 - A remediation plan is underway to address the material weakness, involving engaging specialists for technical accounting analysis and providing additional training to employees195 PART II—OTHER INFORMATION Legal Proceedings The company is not currently involved in any material active legal proceedings, though it may be subject to ordinary course legal actions - As of the filing date, the company is not involved in any material active legal actions198 Risk Factors This section supplements annual 10-K risk factors, emphasizing the immediate 'Going Concern Risk' due to limited cash runway, imminent bankruptcy risk, and urgent funding needs - The company's financial statements have been prepared on a going concern basis, but its ability to continue is in substantial doubt as current cash is only projected to support operations through May 2025199 - As of the filing date, the company's cash-on-hand was approximately $2.2 million, and it had a working capital deficiency201 - Newly highlighted risks include the risk of imminent bankruptcy, the need to obtain substantial funding immediately, and potential work stoppages or contract changes from key suppliers200 - A single contract research organization represented 43% of the company's accounts payable as of March 31, 2025200 Exhibits This section lists exhibits filed with the Form 10-Q, including certifications of Principal Executive and Financial Officers and Inline XBRL financial statements List of Filed Exhibits | Exhibit Number | Description | | :--- | :--- | | 31.1 | Certification of Principal Executive Officer (Section 302) | | 31.2 | Certification of Principal Financial Officer (Section 302) | | 32.1 | Certification of Principal Executive Officer (Section 906) | | 32.2 | Certification of Principal Financial Officer (Section 906) | | 101 | Inline XBRL Financial Statements | Signatures The quarterly report was officially signed by William G. Rice, Ph.D., President and CEO of Aptose Biosciences Inc., on May 8, 2025 - The report was duly signed by William G. Rice, Ph.D., President and Chief Executive Officer, on May 8, 2025205206