Turnstone Biologics (US:TSBX)2025-05-08 22:16Financial Performance - The company incurred a net loss of $11.8 million for the three months ended March 31, 2025, compared to a net loss of $19.6 million for the same period in 2024, representing a 40% improvement[17]. - Total operating expenses for the first quarter of 2025 were $9.2 million, down 56% from $20.7 million in the first quarter of 2024[17]. - The company reported a net loss of $11.8 million for the three months ended March 31, 2025, compared to a net loss of $19.6 million for the same period in 2024, indicating a 40% improvement in losses year-over-year[34]. - The company recognized a loss on disposal of property and equipment of $2.3 million for the three months ended March 31, 2025[65]. - Other income (expense), net was $(2.6) million in Q1 2025, a decrease of $3.7 million or 336.4% from $1.1 million in Q1 2024, primarily due to reduced interest income and a loss on the sale of laboratory equipment[159]. - Cash used in operating activities for Q1 2025 was $7.1 million, down from $17.5 million in Q1 2024, indicating improved cash flow management[166]. Assets and Cash Position - As of March 31, 2025, the company reported total assets of $27.6 million, a decrease of 31% from $40.1 million as of December 31, 2024[15]. - The company had cash and cash equivalents of $21.8 million as of March 31, 2025, down from $28.9 million at the end of 2024[15]. - The company concluded that its cash and cash equivalents will be sufficient to fund planned expenditures for the next twelve months[33]. - As of March 31, 2025, the company had approximately $0.1 million in restricted cash, which is pledged as collateral for its San Diego facility lease[42]. - Total financial assets decreased from $22.275 million as of December 31, 2024, to $17.988 million as of March 31, 2025[60]. Strategic Alternatives and Workforce - The company is pursuing strategic alternatives, including potential mergers or asset sales, following the discontinuation of all clinical studies for TIDAL-01[27]. - The company reduced its workforce and implemented cost-containment measures, with 8 employees remaining as of March 31, 2025[28]. - A workforce reduction of approximately 60% was announced in October 2024, alongside a strategic prioritization of the pipeline focusing on the Phase 1 program, TIDAL-01[126]. - The company is exploring strategic alternatives, including potential mergers, acquisitions, or asset sales, to enhance stockholder value[123]. - The company expects its strategic review process to extend into, and possibly beyond, the second quarter of 2025[32]. Compliance and Regulatory Issues - The company received a deficiency notice from Nasdaq regarding its stock price, which has been below $1.00 per share for 30 consecutive business days[29]. - The company has been granted an additional 180-day grace period to regain compliance with Nasdaq's minimum bid price requirement[31]. - The company received a deficiency letter from Nasdaq on September 27, 2024, for not maintaining a minimum bid price of $1.00 per share for 30 consecutive business days[127]. - An additional 180-day grace period was granted to regain compliance with the minimum bid price requirement, expiring on September 22, 2025[130]. Research and Development - Research and development expenses increased to $1.219 million as of March 31, 2025, compared to $3.774 million as of December 31, 2024[66]. - The company has not generated any revenue from product sales since its inception and expects to continue incurring significant operating losses for the foreseeable future[34]. - The company anticipates that research and development expenses will continue to significantly decline as a result of the strategic review process[157]. - The company has committed to pay Moffitt a total of at least $17.5 million over five years for research and development services[75]. - The company has discontinued all clinical studies evaluating TIDAL-01 and is exploring strategic alternatives to enhance stockholder value[203]. Liabilities and Financial Obligations - As of March 31, 2025, the Company had an accumulated deficit of $259.4 million, reflecting ongoing financial challenges[34]. - The Company entered into a Loan and Security Agreement with Banc of California for a revolving credit facility of up to $20 million, but failed to meet the covenant requiring at least $40 million in new funding by March 31, 2025[35]. - As of March 31, 2025, no amounts have been drawn from the revolving credit facility due to unmet covenants[90]. - The Company is obligated to pay Moffitt a total of at least $17.5 million over five years for research and development services[141]. Stock and Equity - The Company has 490,000,000 shares of common stock authorized with a par value of $0.001 per share[91]. - Under the 2023 Equity Incentive Plan, an additional 1,156,830 shares were available for future issuance as of January 1, 2025[96]. - The total stock-based compensation expense for the three months ended March 31, 2025, was $325,000, a decrease from $1,046,000 in the same period of 2024[99]. - The company had unrecognized stock-based compensation expense of $1.8 million related to stock options and $0.1 million related to RSUs as of March 31, 2025[101]. Risks and Future Outlook - The Company is subject to risks common to early-stage biotechnology firms, including competition, regulatory compliance, and the need for additional capital[36]. - The company may face challenges in obtaining necessary capital for product development, which could delay or eliminate programs[202]. - Unfavorable global economic conditions could adversely affect the company's business and financial condition, impacting clinical trials and capital raising efforts[212]. - The company must navigate significant risks associated with product development, including regulatory approvals and market acceptance[210].