Pulmatrix(PULM) - 2025 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Unaudited Q1 2025 financial statements report a $1.8 million net loss from zero revenue, with a pending merger critical for future operations Consolidated Balance Sheets Total assets decreased to $8.1 million from $9.9 million by Q1 2025, primarily due to reduced cash, impacting stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $7,708 | $9,521 | | Total current assets | $8,041 | $9,920 | | Total assets | $8,051 | $9,943 | | Total current liabilities | $903 | $929 | | Total liabilities | $904 | $996 | | Total stockholders' equity | $7,147 | $8,947 | Consolidated Statements of Operations Q1 2025 reported zero revenue and a $1.8 million net loss, a stark contrast to Q1 2024's $5.9 million revenue and $0.8 million net income Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $0 | $5,885 | | Research and development | $19 | $3,512 | | General and administrative | $1,828 | $1,626 | | Total operating expenses | $1,847 | $5,138 | | (Loss) income from operations | ($1,847) | $747 | | Net (loss) income | ($1,808) | $825 | | Net (loss) income per share | ($0.50) | $0.23 | Consolidated Statements of Stockholders' Equity Stockholders' equity decreased from $8.9 million to $7.1 million in Q1 2025, primarily due to the $1.8 million net loss - Stockholders' equity decreased by $1.8 million in Q1 2025, from $8,947 thousand to $7,147 thousand, almost entirely due to the net loss of $1,808 thousand[17] Consolidated Statements of Cash Flows Net cash used in operating activities was $1.8 million in Q1 2025, an improvement from Q1 2024, with total cash ending at $7.7 million Cash Flow Summary (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,813) | ($2,719) | | Net cash used in investing activities | $0 | ($154) | | Net decrease in cash, cash equivalents and restricted cash | ($1,813) | ($2,873) | | Cash, cash equivalents and restricted cash — end of period | $7,718 | $17,772 | Notes to Condensed Consolidated Financial Statements Notes detail the critical pending merger with Cullgen Inc., whose failure could lead to dissolution, and current cash sufficiency is contingent on the merger's outcome - Pulmatrix entered a Merger Agreement with Cullgen Inc. on November 13, 2024, with pre-merger Cullgen stockholders owning approximately 96.4% and Pulmatrix stockholders 3.6% of the combined company post-merger[24][28] - The company's future operations are highly dependent on the successful consummation of the merger; failure could lead to board-initiated dissolution and liquidation[33][36] - The fair value of the warrant liability was remeasured at $1 thousand as of March 31, 2025, resulting in a gain of $66 thousand for the quarter[52] - On April 7, 2025, the Merger Agreement was amended to revise the transaction structure from a two-step merger to a one-step merger[66] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the strategic shift post-Cullgen merger agreement, pausing clinical asset development for monetization, with Q1 2025 showing a net loss and liquidity contingent on merger success Overview Pulmatrix entered a merger agreement with Cullgen Inc., pausing product development to monetize assets, with its future highly dependent on the merger's success - The company entered into a Merger Agreement with Cullgen Inc. on November 13, 2024, which was unanimously approved by the board[75] - In connection with the merger, the company is exploring opportunities to monetize its clinical assets (PUR3100, PUR1800, PUR1900) and has paused their development[81] - The company's future operations are highly dependent on the success of the Merger; if not consummated, the board may pursue dissolution and liquidation[78] Therapeutic Candidates Details therapeutic candidates PUR3100, PUR1800, and PUR1900, all being explored for monetization, with PUR1900 having a 2% royalty agreement with Cipla - PUR3100 (inhaled DHE for migraine) is Phase 2-ready, with its IND application accepted by the FDA in September 2023, and the company is seeking financing or partnership for Phase 2[87][94] - PUR1800 (for AECOPD) completed a Phase 1b study with positive safety and tolerability, supporting continued development, and the company is exploring monetization opportunities for this asset[98][99][101] - For PUR1900, partner Cipla holds exclusive development and commercialization rights outside the U.S., paying Pulmatrix a 2% royalty on future net sales, while Pulmatrix seeks to monetize the asset within the United States[103][105][108] Results of Operations Q1 2025 revenues fell by $5.9 million to zero, R&D expenses decreased by $3.5 million, and G&A expenses increased by $0.2 million due to merger costs Comparison of Results of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $0 | $5,885 | ($5,885) | | Research and development | $19 | $3,512 | ($3,493) | | General and administrative | $1,828 | $1,626 | $202 | | Net (loss) income | ($1,808) | $825 | ($2,633) | - The $5.9 million decrease in revenue is primarily related to the completion of the wind-down of the PUR1900 Phase 2b clinical trial during 2024[117] - The $3.5 million decrease in R&D expenses was mainly due to $2.2 million less in employment/operating costs after the MannKind Transaction and $1.2 million less in costs for the PUR1900 program[118] - The $0.2 million increase in G&A expenses was primarily due to $0.7 million of costs related to the Merger, partially offset by decreased employment and other operating costs[119] Liquidity and Capital Resources As of March 31, 2025, Pulmatrix had $7.7 million in cash, with an accumulated deficit of $299.0 million, and management believes current cash is sufficient for 12 months - The company had a cash and cash equivalents balance of $7.7 million as of March 31, 2025[120] - Management expects existing cash and cash equivalents will be sufficient to fund corporate operating expenses for at least the next 12 months[122] Cash Flow Summary (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,813) | ($2,719) | | Net cash used in investing activities | $0 | ($154) | Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is marked as 'Not applicable,' indicating no material exposure to market risks requiring quantitative and qualitative disclosure - The company states this item is not applicable[132] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[133] - There were no material changes in internal control over financial reporting during Q1 2025[135] PART II—OTHER INFORMATION Item 1. Legal Proceedings The company is not aware of any material legal proceedings against it, its subsidiaries, or its property - As of the filing date, the company is not aware of any material legal proceedings to which it is a party[137] Item 1A. Risk Factors Investors are directed to the Annual Report on Form 10-K for December 31, 2024, for a comprehensive understanding of the company's risk factors - Investors are advised to consider the risks and uncertainties described in the company's Annual Report on Form 10-K for the year ended December 31, 2024[139] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or issuer purchases of its equity securities during the reporting period - The company reports no unregistered sales of equity securities or issuer purchases of its equity securities for the period[140][141] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities during the period - None reported[143] Item 4. Mine Safety Disclosures This section is marked as 'Not applicable' - Not applicable[145] Item 5. Other Information The company reports no other information for disclosure in this item - None reported[146] Item 6. Exhibits This section provides a list of exhibits filed or furnished with this Quarterly Report on Form 10-Q - Refers to the 'Index to Exhibits' for a list of exhibits filed or furnished with the report[147]