Matinas BioPharma(MTNB) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS This section presents Matinas BioPharma's unaudited condensed consolidated financial statements and related notes for the reported period Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (in thousands): | Item | March 31, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $6,924 | $7,284 | $(360) | | Total current assets | $7,547 | $8,025 | $(478) | | Total assets | $12,035 | $12,641 | $(606) | | Accounts payable | $282 | $95 | $187 | | Accrued expenses | $1,179 | $1,805 | $(626) | | Total current liabilities | $2,255 | $2,666 | $(411) | | Warrant liability | $1,333 | $— | $1,333 | | Total liabilities | $5,765 | $5,051 | $714 | | Total stockholders' equity | $6,270 | $7,590 | $(1,320) | | Accumulated deficit | $(201,480) | $(199,824) | $(1,656) | Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Research and development | $85 | $3,446 | $(3,361) | | General and administrative | $1,861 | $2,456 | $(595) | | Total costs and expenses | $1,946 | $5,902 | $(3,956) | | Loss from operations | $(1,946) | $(5,902) | $3,956 | | Change in fair value of warrant liability | $294 | $— | $294 | | Net loss | $(1,656) | $(5,824) | $4,168 | | Net loss per share – basic and diluted | $(0.33) | $(1.34) | $1.01 | | Weighted average common shares outstanding | 5,086,985 | 4,347,162 | 739,823 | Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Stockholders' Equity (in thousands): | Item | Balance, December 31, 2024 | Stock-based compensation | Issuance of preferred stock and warrants | Net loss | Balance, March 31, 2025 | | :-------------------------------- | :------------------------- | :----------------------- | :--------------------------------------- | :------- | :---------------------- | | Total Stockholders' Equity | $7,590 | $315 | $21 | $(1,656) | $6,270 | Condensed Consolidated Statements of Cash Flow Condensed Consolidated Statements of Cash Flow (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Net cash used in operating activities | $(2,007) | $(5,769) | $3,762 | | Net cash provided by investing activities | $— | $2,000 | $(2,000) | | Net cash provided by financing activities | $1,647 | $53 | $1,594 | | Net decrease in cash, cash equivalents and restricted cash | $(360) | $(3,716) | $3,356 | | Cash, cash equivalents and restricted cash at end of period | $7,174 | $1,321 | $5,853 | Notes to Unaudited Condensed Consolidated Financial Statements Note 1 – Description of Business - Matinas BioPharma Holdings Inc. is a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using its lipid nanocrystal (LNC) platform delivery technology[21] Note 2 – Liquidity, Plan of Operations and Going Concern - The Company has an accumulated deficit of $201,480 thousand as of March 31, 2025, and reported a net loss of $1,656 thousand for the three months ended March 31, 2025[22] - As of March 31, 2025, cash and cash equivalents were $6,924 thousand, which the Company does not believe is not sufficient to fund planned operations beyond the next twelve months, raising substantial doubt about its ability to continue as a going concern[24] - The Company's ability to continue as a going concern depends on securing partners for MAT2203, controlling operating expenses, future sales of common stock through the At-The-Market Sales Agreement, and securing additional financing. However, the Company is prohibited from issuing common stock or equivalents until November 2025, subject to certain exceptions[25] Note 3 – Summary of Significant Accounting Policies - The condensed consolidated financial statements include the accounts of Holdings and its wholly-owned subsidiaries, BioPharma and Nanotechnologies, prepared in accordance with U.S. GAAP[26] - The Company adopted ASU 2020-06 on January 1, 2025, which simplifies accounting for convertible instruments and contracts in an entity's own equity[28][29] - Warrants are classified as either equity or liability instruments; liability-classified warrants are recorded at fair value upon issuance and revalued at each subsequent balance sheet date, with changes recognized in the condensed consolidated statement of operations[30] Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities Cash, Cash Equivalents and Restricted Cash (in thousands): | Item | March 31, 2025 | December 31, 2024 | March 31, 2024 | December 31, 2023 | | :------------------------------------------------ | :------------- | :---------------- | :------------- | :---------------- | | Cash and cash equivalents | $6,924 | $7,284 | $1,071 | $4,787 | | Restricted cash included in current/non-current assets | $250 | $250 | $250 | $250 | | Cash, cash equivalents and restricted cash in the statement of cash flows | $7,174 | $7,534 | $1,321 | $5,037 | - The Company's investments in marketable debt securities are classified as available-for-sale and carried at fair value. No realized gains or losses were incurred during the three months ended March 31, 2025 and 2024, but an unrealized gain of $87 thousand was recorded in Q1 2024[34] Note 5 – Fair Value Measurements - The Company uses a fair value hierarchy (Level 1, 2, 3) for financial instruments. As of March 31, 2025, a warrant liability of $1,333 thousand was recognized and classified as Level 3, valued using a Monte Carlo simulation model[38][41] Warrant Liability Fair Value Changes (in thousands): | Item | Amount | | :-------------------------------- | :----- | | Balance at January 31, 2025 | $— | | Issuance of Warrants reported at fair value | $1,627 | | Change in fair value | $(294) | | Balance at March 31, 2025 | $1,333 | Key Assumptions for Warrant Valuation (March 31, 2025): | Assumption | Range | | :---------------------- | :------------ | | Expected volatility | 54.0% - 56.0% | | Risk-free interest rate | 3.95% - 4.39% | | Stock price on valuation date | $0.52 - $0.60 | | Exercise price | $0.64 | | Dividend yield | 0.00% | | Expected term | 4.9 - 5.0 years | Note 6 – Leasehold Improvements and Equipment Leasehold Improvements and Equipment, Net (in thousands): | Item | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Equipment | $283 | $283 | | Leasehold improvements | $218 | $218 | | Total | $501 | $501 | | Less: accumulated depreciation and amortization | $51 | $33 | | Leasehold improvements and equipment, net | $450 | $468 | - Depreciation and amortization expense for the three months ended March 31, 2025, was $18 thousand, a decrease from $94 thousand in the same period of 2024[43] Note 7 – Accrued Expenses and Other Liabilities Accrued Expenses (in thousands): | Item | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Severance | $922 | $1,509 | | General and administrative expenses | $257 | $296 | | Total | $1,179 | $1,805 | Note 8 – Leases Operating Lease Information (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Lease expense | $174 | $226 | | Amortization expense on ROU assets | $109 | $145 | Operating Lease Liabilities (in thousands): | Item | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Present value of operating lease liabilities | $2,697 | $2,877 | | Weighted average remaining lease term (years) | 3.1 years | 3.3 years | | Weighted average discount rate | 9.3% | 9.3% | Note 9 – Stockholders' Equity - On August 30, 2024, the Company effected a one-for-fifty (1:50) reverse stock split, reducing authorized common stock from 500,000,000 shares to 250,000,000 shares and outstanding shares from 250,816,164 shares to 5,086,985 shares[51][52] - On February 13, 2025, the Company issued 1,650 shares of Series C Convertible Preferred Stock and warrants to purchase up to 5,631,404 shares of common stock in a private placement, generating gross proceeds of $1.65 million. A second closing on April 8, 2025, generated an additional $1.65 million[56][57] Warrants Outstanding: | Item | Shares | | :------------------------ | :------- | | Outstanding at December 31, 2024 | 666,667 shares | | Issued | 5,631,404 shares | | Outstanding at March 31, 2025 | 6,298,071 shares | - Potentially dilutive securities, including stock options, convertible preferred stock, and warrants, totaling 9,597,262 shares as of March 31, 2025, were excluded from diluted net loss per share calculation as their inclusion would be anti-dilutive[64][65] Note 10 – Stock-based Compensation Stock-based Compensation Expense (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Research and Development | $85 | $415 | | General and Administrative | $230 | $580 | | Total | $315 | $995 | - The Company's Amended and Restated 2013 Equity Compensation Plan expired on May 7, 2024, with no remaining shares available for grant. A new equity compensation plan is pending shareholder approval[66][67] - As of March 31, 2025, total compensation costs related to unvested awards not yet recognized was $1,385 thousand, with a weighted-average recognition period of 1.9 years[67] Note 11 – Subsequent Events - On April 8, 2025, the Company completed the second closing of its private placement, issuing an additional 1,650 shares of Preferred Stock and accompanying Warrants for gross proceeds of $1.65 million, following shareholder approval on April 4, 2025[69] - The shares of Common Stock underlying the Preferred Stock and Warrants were registered on a Form S-3 Registration Statement, filed on April 22, 2025, and declared effective on April 29, 2025[70] Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses financial condition, operational results, liquidity challenges, and strategic efforts for asset monetization Overview - Matinas BioPharma is a clinical-stage biopharmaceutical company focused on its lipid nanocrystal (LNC) platform delivery technology[74] - Key strategies include securing partners to monetize MAT2203, raising non-dilutive capital, conserving cash, and evaluating other strategic options like in-licensing assets or seeking a merger partner[75][76] - The Company incurred net losses of $1,656 thousand and $5,824 thousand for the three months ended March 31, 2025 and 2024, respectively, and expects to incur additional losses, requiring further financing[77] Financial Operations Overview - Research and development expenses are anticipated to be lower in 2025 compared to 2024 until additional funding is secured for the Phase 3 registration trial for MAT2203 and advancement of the LNC platform[78] - General and administrative expenses are expected to decrease slightly in 2025 due to implemented cost-cutting measures[80] - A gain of $294 thousand was recognized for the three months ended March 31, 2025, representing the change in fair value of the warrant liability[82] - Other (expense)/income, net decreased primarily due to recording issuance costs of $148 thousand in connection with the private placement of Series C Preferred Stock and warrants[83] Results of Operations Operating Expenses (in thousands): | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :----------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Research and development | $85 | $3,446 | $(3,361) | | General and administrative | $1,861 | $2,456 | $(595) | | Total Operating Expenses | $1,946 | $5,902 | $(3,956) | - The significant decrease in R&D expenses was primarily due to the pause in the MAT2203 development program and a reduction in headcount costs[91] - The decrease in G&A expenses was mainly attributable to lower stock-based compensation expense and decreased headcount, partially offset by increased legal and consulting fees[92] Liquidity and Capital Resources - Since inception, the Company has raised a total of $154,945 thousand net from sales of its equity securities[93] - As of March 31, 2025, cash and cash equivalents (excluding restricted cash) totaled $6,924 thousand[94] - The 2025 private placement involved two closings (February 13, 2025, and April 8, 2025), each generating gross proceeds of $1.65 million from the issuance of Series C Preferred Stock and accompanying warrants[95][96] - The Company is prohibited from issuing common stock or common stock equivalents until November 2025, subject to certain exceptions, under the terms of the Securities Purchase Agreement[97][105] Cash Flow Summary (in thousands): | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash used in operating activities | $(2,007) | $(5,769) | | Cash provided by investing activities | $— | $2,000 | | Cash provided by financing activities | $1,647 | $53 | | Net decrease in cash and cash equivalents and restricted cash | $(360) | $(3,716) | - The Company does not believe its existing cash and cash equivalents will be not sufficient to fund operating expenses and capital expenditures beyond the next twelve months, indicating substantial doubt about its ability to continue as a going concern[104] Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section states that there are no material quantitative or qualitative disclosures about market risk applicable to the company for the reported period - The Company has no material quantitative or qualitative disclosures about market risk[110] Item 4. CONTROLS AND PROCEDURES Evaluation of disclosure controls and internal control over financial reporting, noting an unaddressed material weakness Evaluation of Disclosure Controls and Procedures - As of March 31, 2025, the Company's disclosure controls and procedures were not effective at the reasonable assurance level due to uncompleted remediation of a deficiency in internal control over financial reporting[111] Management's Report on Internal Control over Financial Reporting - A material weakness was identified as of December 31, 2024, indicating an ineffective internal control environment for processing and reporting non-routine transactions, including indefinite-lived assets impairment assessment[116][117] - This material weakness could result in a material misstatement of the annual or interim consolidated financial statements[118] Remediation Plan - Management has initiated a remediation plan, including engaging additional external accounting resources to assist with the preparation and review of non-routine transactions[119] Changes in Internal Control Over Financial Reporting - Except for changes being implemented to address the identified material weakness, there were no other material changes in internal control over financial reporting during the first quarter of 2025[120] PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS The company reported no legal proceedings for the period - The Company has no legal proceedings[121] Item 1A. RISK FACTORS No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - No material changes from the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[122] Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Private placement in two tranches generated $3.3 million gross proceeds from Preferred Stock and warrants - On February 13, 2025, and April 8, 2025, the Company sold 3,300 shares of Preferred Stock and warrants to purchase up to 11,262,808 shares of Common Stock in two unregistered private placement tranches[123] - The private placement generated aggregate gross proceeds of $3.3 million[123] - The underlying Common Stock was registered on a Form S-3 Registration Statement, filed on April 22, 2025, and declared effective on April 29, 2025[123] Item 3. DEFAULTS UPON SENIOR SECURITIES The company reported no defaults upon senior securities for the period - The Company has no defaults upon senior securities[124] Item 4. MINE SAFETY DISCLOSURES This item is not applicable to the company - Mine safety disclosures are not applicable to the Company[125] Item 5. OTHER INFORMATION During the first quarter of 2025, none of the company's officers or directors adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by officers or directors during the fiscal quarter ended March 31, 2025[126] Item 6. EXHIBITS Index of exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance and agreements - The Exhibit Index includes various corporate documents such as the Certificate of Incorporation, Bylaws, forms of Common Stock Purchase Warrants, Securities Purchase Agreement, and certifications from the CEO and CFO[127][134]