Traws Pharma, Inc.(TRAW) - 2025 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION Financial Statements (Unaudited) This section presents unaudited Q1 2025 financial statements, reporting a $21.5 million net income, $19.1 million in assets, and $15.9 million cash, while noting going concern doubts and a $2.7 million revenue recognition in April 2025 Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $19.1 million, liabilities significantly reduced to $13.1 million, and stockholders' equity improved to a positive $6.0 million Condensed Consolidated Balance Sheet Highlights (unaudited) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $15,937,000 | $21,338,000 | | Total assets | $19,063,000 | $24,962,000 | | Warrant liabilities | $154,000 | $42,494,000 | | Total liabilities | $13,063,000 | $56,592,000 | | Total stockholders' equity (deficit) | $6,000,000 | $(31,630,000) | Condensed Consolidated Statements of Operations For Q1 2025, the company reported a net income of $21.5 million (vs. $5.0 million loss in Q1 2024), primarily due to a $26.5 million gain from warrant liability fair value changes Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share data) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $57 | $56 | | Research and development | $2,506 | $1,912 | | General and administrative | $2,754 | $3,356 | | Loss from operations | $(5,203) | $(5,212) | | Change in fair value of warrant liability | $26,513 | $— | | Net income (loss) | $21,490 | $(4,983) | | Net income (loss) per share, basic | $2.17 | $(5.92) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $5.4 million in Q1 2025, resulting in a $5.4 million decrease in cash and equivalents, ending the period at $15.9 million Condensed Consolidated Statements of Cash Flows Highlights (unaudited, in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,437) | $(4,424) | | Net cash provided by financing activities | $13 | $— | | Net decrease in cash and cash equivalents | $(5,401) | $(4,431) | | Cash and cash equivalents at end of period | $15,937 | $16,390 | - The company's primary focus is on developing tivoxavir marboxil for bird flu and ratutrelvir for COVID-19, with oncology programs narazaciclib and rigosertib targeted for partnerships[23] - As of March 31, 2025, the company held $15.9 million in cash and equivalents with an accumulated deficit of $627.7 million, leading management to conclude substantial doubt about its ability to continue as a going concern[25] - Effective April 17, 2025, the Symbio license agreement was terminated, resulting in the recognition of $2.7 million in deferred revenue in April 2025[99] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial performance, liquidity, and strategic focus, highlighting $15.9 million cash, going concern doubts, increased R&D for virology programs, and an ATM offering agreement - The company's portfolio includes four clinical programs, with primary focus on the two antiviral programs, tivoxavir marboxil and ratutrelvir, acquired in the Merger[110] Comparison of Operating Expenses (Q1 2025 vs Q1 2024) | Expense Category | Q1 2025 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2.5M | $1.9M | +$0.6M | +31% | | General and administrative | $2.8M | $3.4M | -$0.6M | -18% | - The increase in R&D expenses was primarily driven by a $1.7 million increase in spending on virology programs, reflecting the strategic shift post-Trawsfynydd merger[135] - The company entered an ATM Offering Agreement in March 2025 to sell up to $50 million in common stock, raising $0.1 million in net proceeds during Q1 2025[118][138] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Traws Pharma is not required to provide quantitative and qualitative disclosures about market risk[151] Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to un-remediated material weaknesses from an insufficient post-merger risk assessment and inadequate segregation of duties - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[152] - The ineffectiveness stems from material weaknesses identified in the 2024 Annual Report, specifically an insufficient post-Merger risk assessment process and inadequate segregation of duties[155] - A remediation plan is underway, aiming to resolve the material weaknesses before December 31, 2025[157] PART II — OTHER INFORMATION Legal Proceedings The company is in arbitration over a severance claim from its former President, Dr. Steven M. Fruchtman, with a potential loss estimated between zero and $1.5 million - The company is in a legal dispute with former President Dr. Steven M. Fruchtman over severance claims following his resignation[68][158] - The company estimates a potential loss from this claim between zero and $1.5 million, with the matter currently in arbitration[68] Risk Factors No material changes have been made to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes have been made to the risk factors disclosed in the Annual Report[160] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2025, the company had no unregistered sales of securities not previously reported and did not repurchase any outstanding equity securities - There were no unregistered sales of securities during the three months ended March 31, 2025, that were not already reported[161] - The Company did not repurchase any of its equity securities during the quarter[162] Other Information For Q1 2025, no directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter[165] Exhibits This section provides an index of all exhibits filed with the Form 10-Q, including warrant amendments, separation agreements, and the ATM Offering Agreement - The report includes several key exhibits, such as amendments to Series A and Pre-Funded Warrants, separation agreements, an employment agreement, and the ATM Offering Agreement[167]