Portage Biotech (US:PRTG)2025-07-25 20:20Part I Item 3. Key Information The company presents key financial data showing recent net losses and details significant risks including funding, clinical development, and Nasdaq compliance Selected Financial Data (U.S. Dollars in thousands, except per share amounts) | Indicator | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net loss attributable to owners | $(6,767) | $(75,339) | $(104,611) | $(16,870) | $(15,833) | | Working capital | $1,125 | $4,816 | $11,811 | $24,049 | $1,738 | | Total assets | $2,225 | $7,779 | $99,129 | $194,662 | $174,860 | | Equity attributable to owners | $(123) | $4,022 | $76,045 | $121,205 | $101,449 | | Net loss per share - Basic & Diluted | $(5.72) | $(77.83) | $(129.79) | $(25.83) | $(26.97) | - The company has limited funding and is exploring strategic alternatives, which may include partnerships, a sale of the company, a merger, restructuring, or a wind-down; current cash is insufficient for the next twelve months of operations4142 - The company faces risks related to its need for additional capital, a history of operating losses, and uncertainties inherent in pharmaceutical research and development, including expensive and uncertain clinical trials465157 - On December 10, 2024, the company received a notice of non-compliance from Nasdaq regarding the minimum shareholders' equity requirement; the company regained compliance as of June 24, 202599 - The company believes it was a Passive Foreign Investment Company (PFIC) for the fiscal year ended March 31, 2025, which could have adverse U.S. federal income tax consequences for U.S. shareholders106107 Item 4. Information on the Company The immuno-oncology company details strategic changes to its clinical pipeline, driven by capital constraints, focusing on its adenosine antagonist platform - Due to capital constraints, the company discontinued the iOx Therapeutics IMPORT-201 (PORT-2) trial in January 2024 and paused the Tarus Therapeutics ADPORT-601 (PORT-6 and PORT-7) trial in April 2024139 - In December 2024, Portage entered into a Letter of Intent (LOI) with Immunova, LLC for the potential acquisition of its wholly-owned subsidiary, iOx Therapeutics, which is developing iNKT agonists like PORT-2140 - In March 2025, patient enrollment resumed in the final cohort of the PORT-6 Phase 1a clinical trial, following a temporary pause, based on favorable safety and preliminary activity signals142 Adenosine Antagonist Platform Pipeline | ASSET | TECHNOLOGY | INDICATION | STAGE | | :--- | :--- | :--- | :--- | | PORT-6 | A2AR Antagonist | SOLID TUMORS | Phase 1a | | PORT-7 | A2BR Antagonist | SOLID TUMORS | Phase 1a* | | PORT-6 + PORT-7 | A2AR + A2BR Antagonist | SOLID TUMORS | Phase 1a* | | PORT-8 | Fixed A2AR/A2BR Antagonist | SOLID TUMORS | Preclinical | | PORT-9 | Gut-Restricted A2BR Antagonist | COLORECTAL GI TUMORS | Preclinical | *Patient dosing has not yet commenced. Item 5. Operating and Financial Review and Prospects The company's net loss narrowed significantly in Fiscal 2025 due to the absence of prior-year impairment charges and reduced R&D spending Comparison of Operating Results (in thousands of U.S. Dollars) | Line Item | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Operating expenses | $(7,383) | $(18,199) | $(16,575) | | Impairment losses (IPR&D, Goodwill, etc.) | $0 | $(82,685) | $(108,585) | | Net loss | $(6,778) | $(75,382) | $(104,666) | | Total comprehensive loss | $(6,778) | $(75,420) | $(109,949) | - The decrease in net loss from $75.4 million in FY2024 to $6.8 million in FY2025 was mainly driven by the absence of $82.5 million in non-cash impairment charges recorded in FY2024206208 - Research and Development (R&D) expenses decreased by 75% to $3.1 million in FY2025 from $12.5 million in FY2024, primarily due to pausing enrollment in sponsored clinical trials to preserve cash211212 - Management has concluded that the company's cash of $0.6 million as of July 21, 2025, is not sufficient to fund operations for the next twelve months, raising significant doubt about its ability to continue as a going concern231585 Item 6. Directors, Senior Management and Employees The company details its board and executive team composition, recent leadership changes, compensation policies, and significant insider share ownership - Key leadership changes include Alexander Pickett appointed as CEO on December 15, 2024, and Andrea E. Park appointed as CFO on September 30, 2024265273275 - A new Director Compensation Policy was adopted on March 7, 2025, providing an annual cash fee of $30,000, payable when the company has sufficient working capital280281 Share Ownership as of July 21, 2025 | Holder Group | Beneficially Owned Shares | Percentage | | :--- | :--- | :--- | | All directors and executive officers (8 individuals) | 837,682 | 35.91% | | Compedica Holdings, Ltd | 625,000 | 27.43% | | Gregory Bailey | 508,780 | 22.28% | | James Mellon | 276,624 | 12.13% | Item 7. Major Shareholders and Related Party Transactions The company outlines significant related party transactions, including a private placement with directors and a stock exchange making Compedica a major shareholder - On January 29, 2025, the company sold 524,390 ordinary shares to two directors, Gregory Bailey and James Mellon, for aggregate proceeds of $2.15 million in a private placement359711 - On June 5, 2025, the company issued 625,000 ordinary shares to Compedica Holdings Limited in exchange for its shares, resulting in Compedica owning 27.4% of Portage360754 Item 8. Financial Information The company states its dividend policy is to retain all earnings to finance business growth, with no cash dividends paid or planned - The company has not declared or paid any cash dividends and has no present intention to do so in the foreseeable future; earnings are to be retained for business growth and development365 Item 9. The Offer and Listing The company's shares trade on Nasdaq under "PRTG", and this section provides historical stock price data adjusted for a recent reverse stock split Annual High and Low Market Prices (Nasdaq, US$) | Year ended March 31, | High | Low | | :--- | :--- | :--- | | 2025 | $11.06 | $2.15 | | 2024 | $77.40 | $8.13 | | 2023 | $239.00 | $52.00 | | 2022 | $856.20 | $131.40 | | 2021 | $790.00 | $177.50 | Item 10. Additional Information This section details the company's BVI corporate structure, shareholder rights, and the material U.S. tax risk of its PFIC classification - The company is incorporated under the laws of the British Virgin Islands (BVI) and is authorized to issue an unlimited number of no-par value ordinary shares376377 - Under BVI law and the company's articles, there are no statutory pre-emption rights for the issuance of new shares390 - The company is likely classified as a Passive Foreign Investment Company (PFIC), which can result in adverse U.S. federal income tax consequences for U.S. Holders441443 Item 11. Quantitative and Qualitative Disclosures about Market Risk The company's primary financial exposure is liquidity risk due to its early stage of development, while credit and foreign currency risks are minimal - The company's primary financial risk is liquidity risk, stemming from its early-stage development, lack of internal cash flow, and uncertainty in capital markets472474 - Credit risk is considered minimal as cash and cash equivalents are held with major international financial institutions469470 - Foreign currency risk is limited because substantially all transactions are denominated in the U.S. Dollar475 Part II Item 15. Controls and Procedures Management concluded that disclosure controls were not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025480 - The ineffectiveness was attributed to material weaknesses in internal control over financial reporting, including the inability to perform effective risk assessment and a lack of sufficient skilled personnel483486 - Specific weaknesses include a lack of staff to properly segregate duties, establish fair value estimates, and apply complex accounting principles, as well as insufficient written policies for IFRS and SEC requirements486487 Item 16. Corporate Governance and Other Matters This section covers governance topics including a recent change in auditors, reliance on home country practices, and cybersecurity risk oversight - On May 29, 2025, Marcum LLP resigned as the company's auditor and was replaced by CBIZ CPAs P.C., with the approval of the Audit Committee493 - As a foreign private issuer, the company follows its home country (BVI) governance practices, exempting it from certain Nasdaq listing rules510511512 - The company maintains a cybersecurity program, the Audit Committee oversees risk, and no material cybersecurity incidents have been experienced in the last two years519525526 Part III Item 18. Financial Statements The audited financial statements include an auditor's report expressing significant doubt about the company's ability to continue as a going concern - The independent auditor's report on the FY 2025 financial statements includes an explanatory paragraph highlighting significant doubt about the company's ability to continue as a going concern539 Consolidated Statement of Financial Position (U.S. Dollars in thousands) | | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total current assets | $2,225 | $7,695 | | Total assets | $2,225 | $7,779 | | Total current liabilities | $1,100 | $2,879 | | Total liabilities | $3,052 | $4,450 | | Total equity (deficit) | $(827) | $3,329 | - A 1-for-20 reverse share split was effected on August 15, 2024; all share and per-share data in the financial statements have been retroactively adjusted575578 - The company has a commitment for its ADPORT-601 clinical trial with Fortrea Inc., with budgeted costs of approximately $6.9 million704