Titan Pharmaceuticals(US:TTNP)2025-05-14 20:05Part I. Financial Information Financial Statements This section presents unaudited condensed financial statements for Q1 2025, showing a reduced net loss of $0.56 million and decreased total assets Note 1: Organization and Summary of Significant Accounting Policies This note details the company's strategic shift, including a pending reverse merger, asset sale, leadership changes, and Nasdaq compliance issues - The company is in the process of a reverse merger with TalenTec Sdn Bhd Upon completion, existing TalenTec and Titan security holders are expected to own approximately 79.89% and 20.11% of the combined company, respectively The merger is subject to stockholder approval and other conditions282989 - On March 26, 2025, Titan received a notice from Nasdaq for failing to meet the minimum stockholders' equity requirement of $2.5 million, as its equity was $2.44 million at the end of 20243594120 - The company has undergone significant leadership changes, including the resignation of CEO David Lazar in April 2024, the appointment and subsequent resignation of CEO Seow Gim Shen, and the appointment of Chay Weei Jye as CEO in December 2024252734 - In September 2023, the company sold its ProNeura assets to Fedson, Inc for $2.0 million plus potential future milestone payments up to $50 million and royalties2685104 - Management concluded that as of March 31, 2025, the company's cash of approximately $1.9 million is sufficient to fund planned operations through the first quarter of 20264144 Note 9: Subsequent Events This note details a post-period private placement of $1.0 million in April 2025, expected to resolve Nasdaq equity deficiency - On March 29, 2025, the company entered into a Securities Purchase Agreement with Blue Harbour Asset Management for a private placement of $1.0 million The transaction closed on April 11, 202570107128 - The private placement involved the issuance of 100,000 shares of Series B Convertible Preferred Stock at $10.00 per share Each share is convertible into common stock at an initial conversion price of $3.007071 - As a result of the private placement, the company believes it has regained compliance with the Nasdaq minimum stockholders' equity requirement of $2.5 million and is awaiting formal confirmation from Nasdaq7496121 Condensed Balance Sheets (in thousands) | | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $1,945 | $2,831 | | Total current assets | $2,156 | $2,923 | | Total assets | $2,156 | $2,923 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $279 | $483 | | Total liabilities | $279 | $483 | | Total stockholders' equity | $1,877 | $2,440 | | Total liabilities and stockholders' equity | $2,156 | $2,923 | Condensed Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | General and administrative expenses | $534 | $1,063 | | Loss from operations | $(534) | $(1,063) | | Net loss | $(563) | $(1,060) | | Basic and diluted net loss per common share | $(0.62) | $(1.24) | Condensed Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(867) | $(613) | | Net cash used in financing activity | $(19) | - | | Net decrease in cash | $(886) | $(613) | | Cash at beginning of period | $2,831 | $6,772 | | Cash at end of period | $1,945 | $6,159 | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q1 2025 financial performance, noting reduced net loss, lower expenses, and sufficient liquidity, alongside strategic updates Operating Expenses Comparison (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | General and administrative | $534 | $1,063 | $(529) | - Net loss for Q1 2025 was approximately $0.6 million ($0.62 per share), compared to a net loss of approximately $1.0 million ($1.24 per share) for the same period in 2024101 - As of March 31, 2025, the company had cash of approximately $1.9 million, which management believes is sufficient to fund planned operations through the second quarter of 2025106 Sources and Uses of Cash (in thousands) | | Three months Ended March 31, 2025 | Three months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(867) | $(613) | | Net cash used in financing activities | $(19) | - | | Net decrease in cash | $(886) | $(613) | Quantitative and Qualitative Disclosures About Market Risk This section confirms no material changes to the company's market risk disclosures since its 2024 Form 10-K filing - The company's market risk disclosures have not materially changed from those set forth in its 2024 10-K109 Controls and Procedures Management concluded disclosure controls were ineffective due to a material weakness, yet financial statements are fairly presented, and internal controls were effective - The principal executive and financial officers concluded that disclosure controls and procedures were not effective as of the end of the period covered by the report110 - Despite the ineffective disclosure controls, management believes the financial statements included in the report fairly present the company's financial condition in all material respects111 - Based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of March 31, 2025114 Part II. Other Information Legal Proceedings This section details that Fedson, Inc assumed liabilities for a pending employment claim as part of a September 2023 asset sale - A pending employment claim alleging wrongful termination and other charges was assumed by Fedson, Inc in September 2023 as part of an asset sale agreement60117 Risk Factors This section highlights the significant risk of Nasdaq delisting due to non-compliance with minimum stockholders' equity requirements - The company faces the risk of its common stock being delisted from Nasdaq for failing to meet continued listing standards, specifically the minimum stockholders' equity requirement119 - On March 26, 2025, Titan received a notice from Nasdaq for not satisfying the $2.5 million stockholders' equity rule, as its reported equity was $2.44 million120 - The company believes the April 2025 private placement resolved the equity deficiency and has submitted a compliance plan, but there is no assurance of success and it remains subject to Nasdaq monitoring121 Unregistered Sales of Equity Securities and Use of Proceeds This section discloses two unregistered equity transactions: a March 2024 common stock issuance and an April 2025 preferred stock private placement - In March 2024, 54,132 shares of common stock were issued upon the conversion of a $500,000 convertible promissory note and accrued interest held by Choong Choon Hau125126 - In April 2025, the company completed a private placement of 100,000 shares of Series B Convertible Preferred Stock for $1.0 million, which was not registered under the Securities Act128 Other Information This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by officers or directors - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter ended March 31, 2024129 Exhibits This section lists all exhibits filed with the Form 10-Q, including preferred stock documents and officer certifications - The report includes exhibits related to the March 2025 private placement, such as the Certificate of Designations for Series B Preferred Stock and the Securities Purchase Agreement130 - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002 are included as exhibits130 Signature Signature The quarterly report was signed and authorized by CEO Chay Weei Jye on May 14, 2025 - The report was signed on May 14, 2025, by Chay Weei Jye, Chief Executive Officer133