Soligenix(SNGX) - 2025 Q1 - Quarterly Report

Part I Part I - Financial Information This section presents the company's unaudited financial statements, management's discussion and analysis, and disclosures on market risks and internal controls Item 1. Condensed Consolidated Financial Statements (unaudited) The unaudited condensed consolidated financial statements for Q1 2025 report an increased net loss and reduced cash, prompting a 'going concern' warning despite convertible debt repayment Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows decreased total assets and liabilities, primarily due to reduced cash and convertible debt repayment Condensed Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $7,297,171 | $7,819,514 | | Total current assets | $7,640,742 | $8,828,630 | | Total assets | $7,746,120 | $8,966,483 | | Total liabilities | $4,133,682 | $4,848,412 | | Total shareholders' equity | $3,612,438 | $4,118,071 | Condensed Consolidated Statements of Operations The statement of operations for Q1 2025 reports zero revenue and an increased net loss, primarily driven by higher research and development expenses Statement of Operations Summary (unaudited) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total revenues | $0 | $117,029 | | Research and development | $2,227,175 | $1,095,040 | | General and administrative | $1,084,828 | $1,022,051 | | Loss from operations | $(3,312,003) | $(2,117,091) | | Net loss | $(3,236,763) | $(1,915,327) | | Basic and diluted net loss per share | $(1.06) | $(2.91) | Condensed Consolidated Statements of Cash Flows Cash flow for Q1 2025 shows net cash used in operations, partially offset by financing activities, resulting in a net decrease in cash Cash Flow Summary (unaudited) | Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,847,012) | $(1,342,482) | | Net cash from financing activities | $1,324,669 | $(8,992) | | Net decrease in cash and cash equivalents | $(522,343) | $(1,354,610) | | Cash and cash equivalents at end of period | $7,297,171 | $7,091,548 | Notes to Condensed Consolidated Financial Statements Notes to the financial statements disclose a going concern warning due to recurring losses and limited cash, alongside details on segment operations and convertible debt repayment - The company's financial statements have been prepared on a going concern basis, but management has identified conditions that raise substantial doubt about its ability to continue as a going concern, lacking sufficient cash to fund operations for at least 12 months from the filing date[24][27] - Management's plans to alleviate going concern issues include raising additional capital through equity offerings (including an existing At-the-Market agreement), securing government grants, and pursuing strategic partnerships or M&A[28][30] - In February 2025, the company fully repaid all outstanding obligations under its convertible debt agreement with Pontifax and terminated the agreement, releasing all related liens[57] - The company has a contingent milestone payment of $5 million payable to Hy Biopharma if and when HyBryte™ receives FDA approval[66] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion covers increased Q1 2025 net loss due to higher R&D, reiterates going concern risk, and outlines strategies for clinical trials and funding Business Overview and Strategy Soligenix, a biopharmaceutical company, focuses on advancing rare disease and public health programs, including the HyBryte™ FLASH2 trial and seeking strategic partnerships - The company's primary focus is on developing and commercializing products for rare diseases with unmet medical needs through its Specialized BioTherapeutics and Public Health Solutions segments[81] - Key strategic priorities include executing the FLASH2 trial for HyBryte™, expanding development of synthetic hypericin into psoriasis, and identifying a partner to continue the SGX942 oral mucositis program[88] Product Candidates in Development The development pipeline features HyBryte™ in a confirmatory Phase 3 trial for CTCL, alongside other candidates and public health programs like RiVax® with PRV potential - HyBryte™ (CTCL): Following an FDA Refusal to File letter, a second confirmatory Phase 3 trial (FLASH2) began enrollment in December 2024, with top-line results expected in the second half of 2026[82][112][115] - SGX942 (Oral Mucositis): After a Phase 3 trial did not meet its primary endpoint, the company is designing a second study and seeking a partner to continue development[88][143] - Public Health Solutions programs, including RiVax® (ricin vaccine) and filovirus vaccines, are developed with the ThermoVax® heat stabilization technology and are contingent on government or non-governmental funding[84][92][93] - The RiVax® vaccine program, if approved, has the potential to qualify for a biodefense Priority Review Voucher (PRV), which is transferable and has been sold for approximately $100 million in recent years[182] Material Changes in Results of Operations Q1 2025 saw a $1.3 million increase in net loss, driven by higher R&D expenses and a lack of revenue compared to the prior year Key Expense Changes (Q1 2025 vs Q1 2024) | Expense/Income Item | Change (Increase/Decrease) | Reason | | :--- | :--- | :--- | | Revenue | -$117,029 | No government subaward revenue in Q1 2025 | | R&D Expenses | +$1,132,135 | Increased costs for Phase 2 BD and Phase 3 CTCL trials | | G&A Expenses | +$62,777 | Increases in professional fees and taxes | | Other Income | -$126,324 | Primarily due to a $165,382 gain on fair value of debt in 2024 with no corresponding gain in 2025 | Financial Condition and Liquidity The company's cash decreased to $7.3 million, raising going concern doubts, with plans to secure funding through equity sales, grants, and partnerships - The company does not have sufficient cash to fund operations for at least 12 months, raising substantial doubt about its ability to continue as a going concern[195] - As of May 2, 2025, approximately $1.8 million remained available for sale under the AGP At Market Issuance Sales Agreement[199] - Management's plans to manage liquidity include selling stock via the AGP ATM, securing additional government grants, pursuing partnerships, and potentially other equity/debt financings[198][199][200] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's market risks primarily involve interest rate sensitivity and foreign exchange fluctuations, which are deemed immaterial - The company's main market risks are interest rate changes affecting income from short-term investments and foreign exchange fluctuations, which are not considered material[217] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[219] - There were no changes in internal controls over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[220] Part II Part II - Other Information This section provides information on legal proceedings, risk factors, equity sales, and other corporate disclosures Item 1. Legal Proceedings The company is subject to ordinary course legal proceedings, for which it accrues potential losses when probable and estimable - The company is subject to ordinary course legal proceedings and claims, for which it provisions if a loss is probable and estimable[222] Item 1A. Risk Factors This section outlines significant risks including shareholder dilution, the uncertain drug approval process, regulatory compliance, and potential impacts from healthcare reform Risks Related to Our Securities Shareholders face significant potential dilution from outstanding warrants, options, and future equity issuances under the incentive plan Potential Dilutive Securities as of May 2, 2025 | Security Type | Number of Underlying Shares | | :--- | :--- | | Common stock warrants | 1,467,581 | | Stock options | 92,691 | | Available under 2015 Equity Plan | 5,770,122 | Risks Related to Marketing Approval and Other Legal Compliance Matters Extensive regulatory risks include uncertain marketing approval processes, foreign jurisdiction challenges, post-approval compliance, and potential impacts from healthcare pricing reforms - The drug approval process is lengthy and uncertain, and regulatory authorities like the FDA may require additional clinical trials, as seen with the request for a second Phase 3 study for HyBryte™[228][233] - Obtaining marketing approval in foreign jurisdictions is a separate process with unique risks, including Brexit-related changes for the UK market and potential pricing controls in the EU[240][242] - The company is subject to numerous healthcare laws, including the Anti-Kickback Statute and False Claims Act, and data privacy laws like HIPAA, with non-compliance leading to severe penalties[298][299][300][301] - Future revenue is at risk from legislative and regulatory actions aimed at controlling pharmaceutical prices and reimbursement, which could limit profitability even if products are approved[283][285][289] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds On March 14, 2025, the company issued 12,346 common shares to a vendor, exempt from registration under Section 4(a)(2) - On March 14, 2025, the company issued 12,346 shares of common stock to a vendor at a fair value of $2.43 per share, exempt from registration[326] Item 5. Other Information On May 5, 2025, the company amended its CEO's employment agreement, significantly increasing shares issuable upon a change of control - The company amended its CEO's employment agreement to increase the number of shares he would receive upon a change of control transaction from 2,084 to 200,000[327] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including the CEO's employment agreement amendment and officer certifications - Exhibits filed with the report include the CEO's employment agreement amendment and required officer certifications[330]