Lixte Biotechnology(US:LIXT)2025-05-12 12:30PART I - FINANCIAL INFORMATION Condensed Consolidated Financial Statements Unaudited condensed financial statements show a Q1 2025 net loss of $709,555, an improvement, with cash of $1,384,697 after a $914,228 February offering Condensed Consolidated Balance Sheet Data (Unaudited) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $1,384,697 | $1,038,952 | | Total Assets | $1,514,228 | $1,145,503 | | Liabilities & Equity | | | | Total Current Liabilities | $355,098 | $318,284 | | Total Stockholders' Equity | $1,159,130 | $827,219 | | Total Liabilities & Stockholders' Equity | $1,514,228 | $1,145,503 | Condensed Consolidated Statement of Operations (Unaudited) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | Research and development costs | $91,457 | $119,064 | | General and administrative costs | $615,483 | $847,815 | | Loss from operations | $(706,940) | $(966,879) | | Net loss | $(709,555) | $(971,322) | | Net loss per common share | $(0.29) | $(0.43) | Condensed Consolidated Statement of Cash Flows (Unaudited) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(568,483) | $(789,225) | | Net cash provided by financing activities | $914,228 | $0 | | Net increase (decrease) in cash | $345,745 | $(789,225) | | Cash at end of period | $1,384,697 | $3,414,263 | Note 1: Organization and Basis of Presentation Lixte, a clinical-stage biopharmaceutical company, faces going concern doubt with cash only until September 30, 2025, and must meet Nasdaq's $2.5 million equity requirement by July 3, 2025 - The company's primary focus is the clinical development of a protein phosphatase inhibitor, LB-100, for cancer therapy29 - Management has substantial doubt about the company's ability to continue as a going concern, with cash resources at March 31, 2025, estimated to fund operations only through September 30, 20254345 - The company received an extension from Nasdaq until July 3, 2025, to regain compliance with the minimum stockholders' equity requirement of $2,500,000 to maintain its listing3739 Note 2: Summary of Significant Accounting Policies Key accounting policies include expensing patent costs, recognizing R&D over contract life, valuing stock-based compensation, and classifying all warrants as equity, operating as a single PP2A inhibitor development segment - All patent and licensing legal and filing fees are charged to operations as incurred. These costs were $56,084 for the three months ended March 31, 202557 - The company operates in a single reportable segment, which is the development of Protein Phosphatase 2A inhibitors48 - At March 31, 2025, all outstanding warrants were classified as equity, and there were no liability-classified warrants70 - Potentially dilutive securities, including preferred stock, warrants, and options totaling 2,010,753 potential shares, were excluded from the EPS calculation as their effect would have been anti-dilutive7374 Note 4: Stockholders' Equity The company's equity structure includes a February 2025 offering of 434,784 shares and equal warrants, raising $914,228 net proceeds, with 2,684,074 common shares and 1,275,758 warrants outstanding - In February 2025, the company sold 434,784 shares of common stock at $2.415 per share and issued warrants for an equal number of shares in a registered direct offering and concurrent private placement104 - The February 2025 offering generated gross proceeds of $1,050,003 and net proceeds of $914,228 after deducting placement agent fees and other costs106 Common Stock Warrant Activity | | Number of Shares | Weighted Average Exercise Price | | :--- | :--- | :--- | | Warrants outstanding at Dec 31, 2024 | 808,365 | $16.407 | | Issued | 467,393 | $2.341 | | Warrants outstanding at Mar 31, 2025 | 1,275,758 | $11.254 | Note 5: Related Party Transactions Related party costs decreased to $208,469 in Q1 2025 from $317,662 in Q1 2024 due to lower cash compensation, as the Board approved paying director fees in stock options to preserve cash - To preserve cash, the Board of Directors approved amendments to receive stock options in lieu of cash compensation for services from Q2 2024 through Q4 2025126 Related Party Costs | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Cash-based | $108,731 | $214,735 | | Stock-based | $99,738 | $102,927 | | Total | $208,469 | $317,662 | Note 6: Stock-Based Compensation Stock-based compensation costs were $99,738 for Q1 2025, nearly flat year-over-year, with $303,000 of unrecognized expense for unvested options to be recognized over approximately 17 months as of March 31, 2025 - Total stock-based compensation costs were $99,738 for Q1 2025, compared to $102,927 for Q1 2024148 - As of March 31, 2025, total deferred compensation expense for unvested stock options was approximately $303,000, to be recognized over a weighted-average period of 17 months148 - On March 31, 2025, non-officer directors were granted 32,181 stock options in lieu of cash compensation for the quarter, with a grant date fair value of $27,500146 Note 8: Commitments and Contingencies Financial commitments total $514,000 for clinical trials through 2027, with a colorectal cancer trial paused due to Serious Adverse Events (SAEs), and long-term commitments exist under an NIH license agreement - As of March 31, 2025, remaining financial contractual commitments for clinical trial agreements and monitoring totaled approximately $514,000, scheduled to be incurred through 2027155 - A Phase 1b clinical trial of LB-100 combined with atezolizumab for colorectal cancer, conducted with the Netherlands Cancer Institute, has been paused for enrollment by the Institutional Review Board (IRB) due to two Serious Adverse Events (SAEs)160212 - The company was relieved of the financial obligation to support the randomized Phase 2 portion of its clinical trial with GEIS for advanced soft tissue sarcoma, making the continuation of that phase uncertain172 - The company has a patent license agreement with the NIH that includes future benchmark payments totaling $1,225,000 and royalty obligations190194 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, highlighting going concern uncertainty, Nasdaq compliance, and clinical trial risks, with net loss decreasing to $709,555 due to reduced expenses, though cash only funds operations through Q3 2025 Overview and Recent Developments The company focuses on its lead PP2A inhibitor, LB-100, for cancer therapy, with recent preclinical data on its active form and a new study initiated to test its ability to eliminate pre-malignant cells - The company's product pipeline is primarily focused on inhibitors of protein phosphatase 2A (PP2A), with its lead compound being LB-100225 - New preclinical data was published demonstrating the enzymatic conversion of LB-100 into its active metabolite, endothall, which may serve as a biomarker to identify responsive patients227228 - A new preclinical study with the Netherlands Cancer Institute will investigate whether LB-100 can eliminate 'initiated' cells with cancer-related mutations, potentially reducing cancer risk230232 Going Concern and Nasdaq Compliance Substantial doubt exists about the company's going concern, with $1.38 million cash funding operations only through September 30, 2025, and a need to meet Nasdaq's $2.5 million equity requirement by July 3, 2025 - Existing cash resources of $1.38M are estimated to be sufficient to fund operations only through September 30, 2025, raising substantial doubt about the company's ability to continue as a going concern234239 - The company has until July 3, 2025, to demonstrate compliance with Nasdaq's $2.5 million minimum stockholders' equity requirement to maintain its listing247249 Results of Operations This section analyzes Q1 2025 financial performance, showing a 26.9% decrease in net loss to $709,555 from $971,322 in Q1 2024, driven by reduced R&D and G&A expenses Comparison of Operating Results (Three Months Ended March 31) | | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Research and development costs | $91,457 | $119,064 | (23.2%) | | General and administrative costs | $615,483 | $847,815 | (27.4%) | | Net Loss | $(709,555) | $(971,322) | (26.9%) | - The decrease in R&D costs was mainly due to a $61,710 reduction in preclinical research focused on developing new anti-cancer compounds294 - The decrease in G&A costs was primarily due to lower officer compensation, insurance expense, patent costs, and director fees298 Liquidity and Capital Resources Liquidity depends on equity sales, with working capital increasing to $1.16 million due to a $914,228 February 2025 offering, cash used in operations at $568,483, and $514,000 in clinical trial commitments, with cash only lasting through Q3 2025 - Working capital increased by $331,911 during the quarter to $1,159,130, mainly due to a registered direct offering302 - Net cash provided by financing activities was $914,228 for the quarter from the sale of securities in February 2025310 - Net cash used in operating activities decreased to $568,483 in Q1 2025 from $789,225 in Q1 2024302309 - Remaining financial contractual commitments for clinical trials and monitoring totaled $514,000 as of March 31, 2025308311 Quantitative and Qualitative Disclosures About Market Risk The company states this section is not applicable, indicating no significant exposure to market risks requiring quantitative and qualitative disclosure - Not applicable368 Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting identified during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025370 - No change in the company's internal control over financial reporting occurred during the quarter that has materially affected, or is reasonably likely to materially affect, internal controls372 PART II - OTHER INFORMATION Legal Proceedings The company reports it is not currently a party to any pending or threatened legal actions or claims - The Company is not currently subject to any pending or threatened legal actions or claims374 Risk Factors This section highlights risks including potential Nasdaq delisting for failing to meet the $2.5 million equity requirement by July 3, 2025, and the pause of a colorectal cancer study due to Serious Adverse Events (SAEs), which could delay drug development - The company faces a significant risk of being delisted from the Nasdaq Capital Market if it cannot regain compliance with the $2.5 million minimum stockholders' equity requirement by the extended deadline of July 3, 2025380384386 - The company's clinical trial for colorectal cancer, testing LB-100 with atezolizumab, is on hold due to two Serious Adverse Events (SAEs). This poses a material risk that could delay or halt the drug's development, increase costs, and negatively impact regulatory approval and future financing387390 Unregistered Sales of Equity Securities and Use of Proceeds In February 2025, the company conducted a private placement of unregistered warrants to purchase 434,784 common shares for investors and 32,609 for the placement agent, relying on Section 4(a)(2) of the Securities Act exemption - In a private placement concurrent with a registered offering in February 2025, the company issued unregistered warrants to purchase an aggregate of 434,784 shares of common stock393 - The placement agent for the offering also received unregistered warrants to purchase 32,609 shares of common stock395 - These unregistered sales were conducted in reliance on the exemption from registration requirements afforded by Section 4(a)(2) of the Securities Act394 Defaults Upon Senior Securities The company states this section is not applicable - Not applicable397 Mine Safety Disclosures The company states this section is not applicable - Not applicable398 Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended March 31, 2025 - During the quarter, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement399 Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications under Sarbanes-Oxley and Inline XBRL data files - The report includes required exhibits such as officer certifications under Sarbanes-Oxley and Inline XBRL documents400