Windtree Therapeutics(US:WINT)2025-05-15 21:21PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements for Q1 2025 and Q1 2024, along with management's discussion and analysis of financial condition and results of operations Financial Statements This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2025, compared to the same period in 2024, including balance sheets, statements of operations, changes in equity, and cash flows Note 1 – The Company and Description of Business Windtree is a biotechnology company focused on therapies for critical conditions, with a pipeline including istaroxime and a new strategy to acquire revenue-generating FDA-approved products - The company's portfolio includes istaroxime, preclinical SERCA2a activators, rostafuroxin, and a preclinical aPKCi inhibitor for oncology21 - A new corporate strategy was launched in January 2025 to acquire small companies with FDA-approved products to become a revenue-generating entity22 - The lead product, istaroxime, is being evaluated in the SEISMiC C Study for severe cardiogenic shock, with enrollment completion anticipated in Q1 2026, dependent on securing additional funding23 Note 3 – Going Concern and Management's Plans The company has a history of net losses and limited cash, raising substantial doubt about its ability to continue as a going concern, with management planning to secure additional capital - As of March 31, 2025, the company had an accumulated deficit of $850.7 million32 - Cash and cash equivalents of $1.2 million as of March 31, 2025, are only sufficient to fund operations through May 202533 - These conditions raise substantial doubt about the company's ability to continue as a going concern, and management plans to seek additional capital, but there are no committed alternatives3334 Note 13 – Mezzanine Equity and Stockholders' Equity This note details significant and complex equity financing activities, including common stock sales, preferred stock conversions, and warrant exercises, with adjustments to conversion and exercise prices - During Q1 2025, the company sold 0.2 million shares of common stock under its ELOC Purchase Agreement for gross proceeds of $2.0 million122 - In Q1 2025, 8,521 shares of Series C Preferred Stock were converted into 3,045,531 shares of common stock120 - In January 2025, the conversion price of Series C Preferred Stock and the exercise price of July 2024 Warrants were reduced to $8.04 per share9697 Note 15 – Licensing and Research Funding Agreements The company has several key licensing and research agreements, including a new supply agreement with Evofem Biosciences and ongoing agreements with Lee's Pharmaceutical for cardiovascular assets and the KL4 surfactant platform, with potential for significant milestone payments - Entered into a License and Supply Agreement with Evofem Biosciences in March 2025 to act as the supplier for its Phexxi® product outside the U.S136 - An exclusive license agreement with Lee's (HK) for istaroxime, rostafuroxin, and SERCA2a activators in Greater China and other Asian territories could yield up to $3.1 million in upfront/development milestones and $135.25 million in sales milestones161162 - An Amended & Restated License Agreement with Lee's (HK) and Zhaoke grants worldwide commercialization rights (with some exceptions) for the KL4 surfactant platform, with potential for up to $78.9 million in milestone payments156157158 Note 17 – Subsequent Events After the quarter ended, the company engaged in significant financing activities, including a private placement of Series D Preferred Stock and the issuance and retirement of convertible senior secured notes, alongside a potential real estate acquisition - In April and May 2025, the company sold Series D Preferred Stock for aggregate gross proceeds of approximately $2.65 million171172 - Issued $0.3 million in convertible senior secured notes in April 2025, which were fully retired in May 2025 for a payment of $0.3 million181183 - On April 19, 2025, a wholly owned subsidiary, WINT Real Estate, LLC, entered into an assignment agreement to potentially purchase a real property in Houston, Texas for approximately $43.0 million178180 Financial Position (in thousands) | Metric | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,173 | $1,779 | | Total assets | $26,766 | $27,875 | | Total current liabilities | $6,476 | $5,717 | | Total liabilities | $15,438 | $14,698 | | Total stockholders' equity | $10,290 | $9,996 | Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Operating loss | ($4,090) | ($4,405) | | Net (loss) income | ($4,045) | $10,219 | | Net (loss) income per share (Basic and diluted) | ($4.63) | $1,099.37 | Cash Flow Activity (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,407) | ($2,947) | | Net cash provided by financing activities | $1,801 | $1,034 | | Net decrease in cash, cash equivalents, and restricted cash | ($606) | ($1,913) | Management's Discussion and Analysis of Financial Condition and Results of Operations The MD&A details the company's financial performance, business strategy, and liquidity challenges, reiterating the new strategy to acquire revenue-generating assets and providing updates on the clinical pipeline Results of Operations For Q1 2025, the company reported an operating loss of $4.1 million, a slight improvement from the prior year, with a net loss of $4.0 million primarily due to a non-cash gain in Q1 2024 Operating Results (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $2,270 | $2,253 | $17 | | General and administrative | $1,820 | $2,152 | ($332) | | Operating loss | ($4,090) | ($4,405) | $315 | | Net (loss) income | ($4,045) | $10,219 | ($14,264) | - R&D expenses were comparable year-over-year, with costs for the istaroxime cardiogenic shock program (SEISMiC C study) being the primary driver in Q1 2025221224 - The significant difference in net income between Q1 2025 and Q1 2024 is primarily due to a $14.5 million non-cash gain on debt extinguishment recognized in Q1 2024219232 Liquidity and Capital Resources The company's liquidity position is critical, with cash sufficient only through May 2025, raising substantial doubt about its ability to continue as a going concern, necessitating additional capital - The company has cash and cash equivalents of $1.2 million as of March 31, 2025, which is only sufficient to fund operations through May 2025240 - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern and plans to secure additional capital241 Cash Flow Activity (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash used in operating activities | ($2,407) | | Net cash provided by financing activities | $1,801 | | Change in cash and cash equivalents | ($606) | Quantitative and Qualitative Disclosures about Market Risk This section is not applicable to the company for this reporting period - The company has indicated that this item is not applicable259 Controls and Procedures The company's management concluded that its disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report261 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls262 PART II - OTHER INFORMATION This section covers legal proceedings, critical risk factors, unregistered sales of equity securities, other information, and a list of exhibits Legal Proceedings The company reports that it is not aware of any pending legal actions that would have a material adverse effect on its business and operations - The company is not aware of any pending legal actions that would have a material adverse effect on its business264 Risk Factors This section emphasizes the critical risks facing the company, primarily its ability to continue as a going concern due to limited cash, and the potential for delisting from Nasdaq - The company's ability to continue as a going concern is in substantial doubt, with resources sufficient only to fund business beyond May 2025267 - Failure to raise sufficient capital could force the company to limit or cease development activities and operations269 - Despite regaining compliance with Nasdaq's minimum bid price rule in March 2025, the company is under a 'Discretionary Panel Monitor' until March 2026, and there is no assurance it will maintain compliance with all listing requirements271272 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None273 Other Information During the first quarter of 2025, none of the company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025276 Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including amendments to the Certificate of Incorporation, forms of various securities, and CEO/CFO certifications