Aldeyra Therapeutics(ALDX) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents Aldeyra Therapeutics, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2025, and December 31, 2024 ITEM 1. Condensed Consolidated Financial Statements This section presents Aldeyra Therapeutics, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes for the periods ended June 30, 2025, and December 31, 2024 Consolidated Balance Sheets The consolidated balance sheets provide a snapshot of the company's financial position, showing a decrease in total assets and stockholders' equity at June 30, 2025 | Metric | June 30, 2025 (Unaudited, USD) | December 31, 2024 (USD) | | :-------------------------------- | :-------------------------- | :------------------ | | Cash and cash equivalents | $41,241,269 | $54,527,092 | | Marketable securities | $40,678,370 | $46,624,180 | | Total current assets | $84,558,228 | $104,072,478 | | Total assets | $84,962,888 | $104,606,694 | | Total current liabilities | $29,531,299 | $18,601,823 | | Total liabilities | $29,674,746 | $33,601,823 | | Total stockholders' equity | $55,288,142 | $71,004,871 | - Total assets decreased from $104.6 million at December 31, 2024, to $84.96 million at June 30, 2025[8] - Total stockholders' equity decreased from $71.0 million at December 31, 2024, to $55.3 million at June 30, 2025[8] Consolidated Statements of Operations The consolidated statements of operations show a reduced net loss for the three and six months ended June 30, 2025, due to decreased operating expenses | Metric | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $8,505,229 | $14,969,743 | $15,928,552 | $21,153,251 | | General and administrative | $1,663,503 | $3,038,064 | $4,667,639 | $6,248,420 | | Loss from operations | $(10,168,732) | $(18,007,807) | $(20,596,191) | $(27,401,671) | | Total other income, net | $401,420 | $1,160,235 | $899,378 | $2,471,977 | | Net loss | $(9,767,312) | $(16,847,572) | $(19,696,813) | $(24,929,694) | | Net loss per share (basic & diluted) | $(0.16) | $(0.28) | $(0.33) | $(0.42) | - Net loss decreased by 42.0% for the three months ended June 30, 2025, compared to the same period in 2024[11] - Net loss decreased by 21.0% for the six months ended June 30, 2025, compared to the same period in 2024[11] Consolidated Statements of Comprehensive Loss The consolidated statements of comprehensive loss detail total comprehensive loss, including net loss and unrealized loss on marketable securities | Metric | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(9,767,312) | $(16,847,572) | $(19,696,813) | $(24,929,694) | | Net unrealized loss on marketable securities | $(12,593) | $(6,629) | $(48,437) | $(9,658) | | Total other comprehensive loss | $(12,593) | $(6,629) | $(48,437) | $(9,658) | | Comprehensive loss | $(9,779,905) | $(16,854,201) | $(19,745,250) | $(24,939,352) | Consolidated Statements of Stockholders' Equity The consolidated statements of stockholders' equity detail changes in equity components, reflecting net losses and stock-based compensation | Metric (Six Months Ended June 30, 2025) | Shares | Common Stock Amount (USD) | Additional Paid-in Capital (USD) | Accumulated Other Comprehensive Income/(Loss) (USD) | Accumulated Deficit (USD) | Total Stockholders' Equity (USD) | | :-------------------------------------- | :----------- | :------------------ | :------------------------- | :-------------------------------------------- | :------------------ | :------------------------- | | Balance, December 31, 2024 | 59,648,278 | $59,648 | $521,018,373 | $37,442 | $(450,110,592) | $71,004,871 | | Stock-based compensation | — | — | $3,025,711 | — | — | $3,025,711 | | Issuance of common stock, exercise of stock options | 240,209 | $241 | $982,953 | — | — | $983,194 | | Issuance of common stock, employee stock purchase plan | 7,101 | $7 | $19,609 | — | — | $19,616 | | Issuance of common stock, vested restricted stock units | 149,942 | $150 | $(150) | — | — | — | | Other comprehensive loss | — | — | — | $(48,437) | — | $(48,437) | | Net loss | — | — | — | — | $(19,696,813) | $(19,696,813) | | Balance, June 30, 2025 | 60,045,530 | $60,046 | $525,046,496 | $(10,995) | $(469,807,405) | $55,288,142 | - Total stockholders' equity decreased from $71.0 million at December 31, 2024, to $55.3 million at June 30, 2025, primarily due to the net loss[16] - Stock-based compensation contributed $3.0 million to additional paid-in capital for the six months ended June 30, 2025[16] Consolidated Statements of Cash Flows The consolidated statements of cash flows show a net decrease in cash, driven by reduced operating cash use and positive investing activities | Cash Flow Activity | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(21,024,921) | $(23,196,985) | | Net cash provided by (used in) investing activities | $6,736,288 | $(48,614,499) | | Net cash provided by financing activities | $1,002,810 | $18,191 | | NET DECREASE IN CASH AND CASH EQUIVALENTS | $(13,285,823) | $(71,793,293) | | CASH AND CASH EQUIVALENTS, END OF PERIOD | $41,241,269 | $71,029,723 | - Net cash used in operating activities decreased by $2.17 million (9.3%) for the six months ended June 30, 2025, compared to the same period in 2024[19][140] - Investing activities shifted from using $48.6 million in cash in 2024 to providing $6.7 million in 2025, primarily due to maturities of marketable securities[19][141] Notes to Condensed Consolidated Financial Statements These notes provide essential context for the financial statements, covering business, accounting policies, and significant agreements 1. NATURE OF BUSINESS Aldeyra Therapeutics, Inc. is a clinical-stage biotechnology company focused on developing therapies for immune-mediated and metabolic diseases - Aldeyra Therapeutics, Inc. is a clinical-stage biotechnology company[22] - The company focuses on discovering and developing therapies for immune-mediated and metabolic diseases[22] - Principal activities include research and development and related business planning[22] 2. BASIS OF PRESENTATION Interim financial statements are unaudited, prepared under U.S. GAAP, and management expects sufficient funding for the next 12 months - Interim financial statements are unaudited and prepared under U.S. GAAP for interim reporting, not full annual disclosures[23] - Management believes current cash, cash equivalents, and marketable securities are sufficient to fund projected operating expenses and debt obligations for at least the next 12 months[25] - Additional funding will be needed for future research, development, regulatory activities, and potential commercialization efforts[25] 3. HELIO VISION ACQUISITION Aldeyra acquired Helio Vision for ADX-2191 rights, but ceased development, potentially reverting intellectual property rights - Aldeyra acquired Helio Vision, Inc. in January 2019, obtaining rights to develop ADX-2191[31] - Contingent payments included up to $12.5 million in common stock upon FDA approvals for specific indications[31] - The company ceased development of ADX-2191 for proliferative vitreoretinopathy in 2024, which may result in intellectual property rights reverting to former Helio stockholders[31] 4. NET LOSS PER SHARE Diluted weighted average common shares equal basic shares due to the company's net loss position, rendering dilutive securities antidilutive - Diluted weighted average common shares outstanding equal basic weighted average common shares due to net loss[33] Potentially Dilutive Securities | Potentially Dilutive Securities | For the Three and Six Months Ended June 30, 2025 (Shares) | For the Three and Six Months Ended June 30, 2024 (Shares) | | :------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Options to purchase common stock | 8,605,370 | 8,033,741 | | Nonvested restricted stock units | 364,567 | 732,056 | | Total of common stock equivalents | 8,969,937 | 8,765,797 | 5. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES Cash, cash equivalents, and marketable securities decreased to $81.9 million at June 30, 2025, with all maturities less than one year Asset Category Fair Value | Asset Category | June 30, 2025 (Fair Value, USD) | December 31, 2024 (Fair Value, USD) | | :--------------- | :------------------------- | :----------------------------- | | Cash | $17,502,858 | $23,734,013 | | Money market funds | $23,738,411 | $30,793,079 | | U.S. government agency securities | $40,678,370 | $46,624,180 | | Total | $81,919,639 | $101,151,272 | - Total cash, cash equivalents, and marketable securities decreased by approximately $19.2 million from December 31, 2024, to June 30, 2025[34][36] - All contractual maturities of cash equivalents and available-for-sale securities were less than one year at June 30, 2025[35] 6. FAIR VALUE MEASUREMENTS Assets are measured at fair value using a three-level hierarchy, with money market funds and U.S. government agency securities classified as Level 1 and Level 2 - Fair value measurements are categorized into Level 1 (quoted prices in active markets) and Level 2 (observable inputs other than Level 1)[38][39] Assets at Fair Value | Asset Category | June 30, 2025 (Total Fair Value, USD) | December 31, 2024 (Total Fair Value, USD) | | :--------------- | :------------------------------- | :----------------------------------- | | Money market funds | $23,738,411 | $30,793,079 | | U.S. government agency securities | $40,678,370 | $46,624,180 | | Total assets at fair value | $64,416,781 | $77,417,259 | - Money market funds are valued at Level 1, and U.S. government agency securities are valued at Level 2[40][41] 7. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets decreased due to reduced deferred research and development expenses Prepaid Expenses and Other Current Assets | Category | June 30, 2025 (USD) | December 31, 2024 (USD) | | :---------------------------------------- | :------------ | :---------------- | | Deferred research and development expenses and deposits | $1,417,021 | $2,211,963 | | Prepaid insurance expenses | $1,028,081 | $408,091 | | Miscellaneous prepaid expenses and other current assets | $193,487 | $301,152 | | Total prepaid expenses and other current assets | $2,638,589 | $2,921,206 | - Deferred research and development expenses decreased by approximately $0.8 million[45] - Prepaid insurance expenses increased by approximately $0.62 million[45] 8. ACCRUED EXPENSES Accrued expenses significantly decreased due to reductions in accrued compensation and research and development expenses Accrued Expenses | Category | June 30, 2025 (USD) | December 31, 2024 (USD) | | :-------------------------------- | :------------ | :---------------- | | Accrued compensation | $3,160,622 | $4,333,216 | | Accrued research and development expenses | $2,976,949 | $7,228,922 | | Accrued other expenses | $526,009 | $556,229 | | Total accrued expenses | $6,663,580 | $12,118,367 | - Accrued research and development expenses decreased by approximately $4.25 million[46] - Accrued compensation decreased by approximately $1.17 million[46] 9. CREDIT FACILITY The company has a $60.0 million Hercules Credit Facility, with $15.0 million funded, and was in compliance with all covenants - The Hercules Credit Facility provides for a term loan of up to $60.0 million, with $15.0 million funded as of June 30, 2025[47][53] - Amendments extended interest-only payments to April 1, 2026, and the Maturity Date to April 1, 2026[50] - The term loan interest rate is the greater of Prime Rate plus 3.10% or 11.10%, with an effective interest rate of 12.4% at June 30, 2025[50][52] Debt Components | Debt Component | June 30, 2025 (USD) | December 31, 2024 (USD) | | :------------------------------ | :------------ | :---------------- | | Term loan payable | $15,000,000 | $15,000,000 | | Second supplemental end of term charge | $150,000 | $33,333 | | Unamortized debt issuance costs | $(1,103) | $(1,961) | | Less: current portion | $(15,148,897) | $(31,372) | | Total long-term debt | $0 | $15,000,000 | 10. STOCKHOLDERS' EQUITY As of June 30, 2025, the company had an Open Market Sales Agreement for up to $75.0 million in common stock, with no shares sold - The company has an Open Market Sales Agreement with Jefferies for up to $75.0 million in common stock sales[55] - No shares of common stock were sold under the 2024 Jefferies Sales Agreement as of June 30, 2025[55] 11. INCOME TAXES No current or deferred tax provision expenses were recorded due to accumulated losses, with a 100% valuation allowance against deferred tax assets - No current or deferred tax provision expenses have been recorded due to accumulated losses since inception[56] - A 100% valuation allowance is applied against net deferred tax assets, as realization is not considered probable[57] - The company is assessing the implications of the 'One Big Beautiful Bill Act' enacted July 4, 2025, particularly regarding the restoration of immediate expensing for qualified R&D[59] 12. STOCK-BASED COMPENSATION Stock-based compensation expense decreased for the six months ended June 30, 2025, with shares available under the 2023 Equity Incentive Plan Stock-Based Compensation Expense | Expense Category | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expenses | $177,819 | $1,034,174 | $1,498,906 | $1,898,358 | | General and administrative expenses | $18,745 | $901,355 | $921,672 | $1,586,008 | | Total stock-based compensation expense | $196,564 | $1,935,529 | $2,420,578 | $3,484,366 | - Total stock-based compensation expense decreased by approximately $1.06 million (30.5%) for the six months ended June 30, 2025, compared to the same period in 2024[66] - As of June 30, 2025, there were 2,721,787 shares available for grant under the 2023 Equity Plan[63] 13. LEASES The company leases office space, with the lease term extended through December 2026, and an unamortized Right-Of-Use asset of approximately $0.4 million - The company's office lease was extended through December 2026 by exercising extension options[72] - As of June 30, 2025, the unamortized Right-Of-Use asset and operating lease liability were approximately $0.4 million[73] Lease Liability Components | Lease Liability Component | Amount (USD) | | :------------------------ | :----- | | 2025 remaining total lease payments | $437,159 | | Less: effect of discounting | $(30,161) | | Present value of lease liabilities | $406,998 | | Current operating lease liabilities | $263,551 | | Non-current operating lease liabilities | $143,447 | | Total | $406,998 | 14. COMMITMENTS AND CONTINGENCIES The company indemnifies officers and directors and holds an exclusive license for ADX-2191, with no material legal proceedings expected - The company indemnifies officers and directors, with no material claims or losses as of June 30, 2025[74] - An exclusive worldwide license for ADX-2191 from MEEI involves annual license maintenance fees, future sales-dependent milestone payments (up to low seven figures), and low single-digit royalties on net sales[75][77] - The company is not currently a party to any material legal proceedings expected to have a material adverse effect on its business[80] 15. SIGNIFICANT AGREEMENTS Aldeyra has an exclusive option agreement with AbbVie for reproxalap, including a $6.0 million deferred collaboration revenue - Aldeyra granted AbbVie an exclusive option for reproxalap, including co-exclusive U.S. and exclusive ex-U.S. licenses[81] - AbbVie paid a non-refundable $1.0 million option payment and a $5.0 million option extension fee, which would be credited against a $100.0 million upfront payment if the option is exercised[81][82][84] - As of August 7, 2025, AbbVie has not exercised the option, and Aldeyra has recorded $6.0 million of deferred collaboration revenue[84][85] 16. SEGMENT REPORTING Aldeyra operates as a single operating segment, focusing on discovering and developing therapies for immune-mediated and metabolic diseases - The company operates through a single operating and reportable segment[86] - The focus is on discovering and developing therapies for immune-mediated and metabolic diseases, modulating protein systems[86] - The Chief Executive Officer is the Chief Operating Decision Maker (CODM), evaluating performance and allocating resources based on net income (loss)[87][88] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, results of operations, liquidity, and capital resources, highlighting reduced net loss and product development Cautionary Note Regarding Forward-Looking Statements This section warns that the report contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially - The report contains forward-looking statements subject to substantial risks and uncertainties[90] - Actual results could differ materially from projections due to factors like regulatory approval delays, commercialization challenges, and financing availability[90] - Investors are cautioned not to place undue reliance on forward-looking statements, and the company undertakes no obligation to update them[90][91] Overview Aldeyra is a clinical-stage biotechnology company developing RASP modulators like reproxalap and ADX-2191, with an unexercised AbbVie option - Aldeyra is a biotechnology company focused on immune-mediated and metabolic diseases, developing RASP modulators[93] - Late-stage product candidates include reproxalap for dry eye disease and allergic conjunctivitis, and ADX-2191 for retinitis pigmentosa[93] - The company has an exclusive option agreement with AbbVie for reproxalap, which includes potential upfront and milestone payments, but AbbVie has not exercised the option as of August 7, 2025[96][99] Research and development expenses Research and development expenses decreased for both three and six months ended June 30, 2025, primarily due to lower external clinical development and manufacturing costs Research and Development Expenses | Period | 2025 (USD) | 2024 (USD) | Change (USD) | Change (%) | | :-------------------------- | :----------- | :----------- | :----------- | :--------- | | Three months ended June 30 | $8,505,229 | $14,969,743 | $(6,464,514) | (43.2%) | | Six months ended June 30 | $15,928,552 | $21,153,251 | $(5,224,699) | (24.7%) | - The decrease in R&D expenses for the three months was primarily due to reductions in external clinical development ($3.3 million), drug product manufacturing ($1.9 million), personnel ($0.9 million), and preclinical costs ($0.4 million)[118] - Approximately 40% of total R&D expenses for both periods were related to late-stage product candidates, primarily reproxalap[119][123] General and administrative expenses General and administrative expenses decreased for both three and six months ended June 30, 2025, mainly due to lower personnel and legal costs General and Administrative Expenses | Period | 2025 (USD) | 2024 (USD) | Change (USD) | Change (%) | | :-------------------------- | :----------- | :----------- | :----------- | :--------- | | Three months ended June 30 | $1,663,503 | $3,038,064 | $(1,374,561) | (45.2%) | | Six months ended June 30 | $4,667,639 | $6,248,420 | $(1,580,781) | (25.3%) | - The decrease in G&A expenses for the three months was primarily due to lower personnel costs ($1.0 million) and legal costs ($0.3 million)[120] - G&A expenses are expected to increase in the future due to expanded operating activities and costs associated with being a publicly traded company[110] Other income (expense) Total other income, net, decreased for both three and six months ended June 30, 2025, due to lower investment balances and interest rates Other Income (Expense) | Period | 2025 (USD) | 2024 (USD) | Change (USD) | Change (%) | | :-------------------------- | :--------- | :--------- | :----------- | :--------- | | Three months ended June 30 | $401,420 | $1,160,235 | $(758,815) | (65.4%) | | Six months ended June 30 | $899,378 | $2,471,977 | $(1,572,599) | (63.6%) | - The decrease in net other income was principally due to lower investment balances and decreased interest rates[121][125] Comprehensive loss Comprehensive loss for the six months ended June 30, 2025, was $19.7 million, including net loss and unrealized loss on marketable securities - Comprehensive loss for the six months ended June 30, 2025, was $19.7 million[112] - This includes a net loss of $19.7 million and a net unrealized loss on marketable securities of $48.4 thousand[112] - For the six months ended June 30, 2024, comprehensive loss was $24.9 million, including a net unrealized loss of $9.7 thousand[112] Critical Accounting Estimates Management's financial statements rely on estimates for R&D costs, stock-based compensation, and income taxes, with no material changes reported - Financial statements require management estimates and assumptions for assets, liabilities, and expenses[113] - Significant estimates include deferred and accrued R&D costs, stock-based compensation, and income taxes[27] - No material changes to critical accounting estimates occurred during the six months ended June 30, 2025[114] Results of Operations Operating results are expected to fluctuate, with net loss decreasing by 42.0% and 21.0% for the three and six months ended June 30, 2025, respectively - Operating results are expected to fluctuate due to R&D efforts, clinical trials, regulatory submissions, and the AbbVie option[117] Net Loss - Three Months Ended June 30 | Metric | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | Change Amount (USD) | Change Percent | | :----- | :------------------------------- | :------------------------------- | :------------ | :------------- | | Net loss | $(9,767,312) | $(16,847,572) | $7,080,260 | (42.0%) | Net Loss - Six Months Ended June 30 | Metric | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | Change Amount (USD) | Change Percent | | :----- | :----------------------------- | :----------------------------- | :------------ | :------------- | | Net loss | $(19,696,813) | $(24,929,694) | $5,232,881 | (21.0%) | Liquidity and Capital Resources The company has $81.9 million in cash and marketable securities, expected to fund operations into 2027, but requires substantial additional financing - Operations are funded primarily by equity sales and debt, with significant accumulated operating losses[126] - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $81.9 million, projected to fund operations into 2027[126][136] - Substantial additional funding is required for planned R&D, regulatory activities, and commercialization, with no guarantee of availability on acceptable terms[136][137] Cash Flows Net cash used in operating activities decreased, while investing activities shifted to providing cash, and financing activities provided $1.0 million Cash Flow Activities | Cash Flow Activity | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(21,024,921) | $(23,196,985) | | Net cash provided by (used in) investing activities | $6,736,288 | $(48,614,499) | | Net cash provided by financing activities | $1,002,810 | $18,191 | | Net decrease in cash and cash equivalents | $(13,285,823) | $(71,793,293) | - The decrease in cash used in operating activities was primarily due to a decrease in net loss[140] - Net cash provided by investing activities in 2025 was mainly from maturities of marketable securities, contrasting with net cash used in 2024 for purchases[141] ITEM 3. Quantitative and Qualitative Disclosures about Market Risk As a 'smaller reporting company,' Aldeyra Therapeutics, Inc. is not required to provide market risk disclosures in this Quarterly Report - The company is a 'smaller reporting company' and is exempt from providing quantitative and qualitative disclosures about market risk[143] ITEM 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[144] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[145] PART II – OTHER INFORMATION This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits ITEM 1. Legal Proceedings Aldeyra Therapeutics, Inc. is not currently a party to any material legal proceedings expected to adversely affect its business - The company is not currently involved in any material legal proceedings expected to adversely affect its business[147] ITEM 1A. Risk Factors This section outlines numerous risks that could materially affect Aldeyra's business, financial condition, and future results, including product development, financial position, and intellectual property Summary of Risks Related to our Business Investment in Aldeyra's common stock is speculative due to dependence on reproxalap, need for capital, and a history of significant operating losses - Business success is largely dependent on the successful commercialization and FDA approval of reproxalap[150] - The company requires substantial additional financing and may face delays or termination of development if capital is not obtained[150] - Significant operating losses have been incurred since inception, with expectations of continued losses[150] Risks Related to the Potential Development and Commercialization of Reproxalap and our Product Candidates The company faces significant risks in developing and commercializing product candidates, including regulatory approval failures, clinical trial delays, and intense competition - Success is highly dependent on regulatory approval and commercialization of reproxalap, which is uncertain[152][153] - The FDA has issued Complete Response Letters for reproxalap, requiring additional studies to demonstrate efficacy in treating dry eye symptoms, leading to delays[156] - Clinical trials may be delayed or unsuccessful due to various factors, including patient enrollment, safety concerns, manufacturing issues, and regulatory changes[164][166] Risks Related to our Financial Position and Capital Requirements Aldeyra has a history of operating losses, requires substantial additional financing, and faces uncertainties regarding market acceptance and reimbursement - The company has incurred significant operating losses since inception and expects to continue doing so, with an accumulated deficit of $469.8 million as of June 30, 2025[238] - Substantial additional financing is required for ongoing operations and commercialization efforts; failure to obtain it could force delays or termination of product development[245][246] - Market acceptance and sales of product candidates depend on adequate insurance coverage and reimbursement, which are uncertain and subject to government and third-party payor policies, including potential price controls and healthcare reform[200][201][263] Risks Related to our Reliance on Third Parties Aldeyra heavily relies on third parties for clinical development, manufacturing, and commercial readiness, with limited control over their performance - The company relies extensively on outsourcing for clinical development, manufacturing, and commercial readiness, with only 8 full-time employees as of June 30, 2025[271] - Dependence on third-party CROs and investigators means the timing and success of clinical trials are largely outside the company's direct control[274] - Reliance on third-party suppliers for drug substance and product manufacturing poses risks of supply interruptions, quality issues, and regulatory non-compliance, which could delay development and commercialization[277][279] Risks Relating to Our Intellectual Property Aldeyra's success depends on protecting intellectual property, which is subject to risks like patent challenges, infringement claims, and changes in patent law - Commercial success depends on obtaining and maintaining patent and trade secret protection for product candidates and technologies[288] - Patent applications may not result in issued patents, and issued patents may be challenged, invalidated, or circumvented[290] - Claims by third parties of patent infringement could lead to costly litigation, development delays, or the need for unfavorable licensing agreements[291] Risks Related to Employee Matters and Managing Growth The company is highly dependent on senior management and key consultants, and future growth requires significant organizational expansion - The company is highly dependent on its senior management team and key consultants; their loss could delay or prevent product development[310] - As of June 30, 2025, the company had only 8 full-time employees, necessitating substantial growth for future commercialization and public company functions[314] - Failure to attract, retain, and integrate qualified personnel could impede business strategy and growth[311][314] Risks Related to Other Legal or Regulatory Matters Aldeyra faces political, economic, legal, and social risks, including evolving data privacy laws, anti-corruption regulations, and potential product liability lawsuits - The company is exposed to political, economic, legal, and social risks, including global conflicts, trade policies, and compliance with diverse national and local laws[315] - Stringent and evolving data privacy laws (e.g., EU GDPR, UK GDPR, CPRA) pose risks of regulatory investigations, litigation, significant fines, and business disruptions if not complied with[322][323][324] - Operations are subject to anti-corruption, fraud and abuse, and other healthcare laws, which could lead to civil/criminal penalties, exclusion from government programs, and reputational harm if violated[336][338][342] Risks Related to Our Common Stock The trading price of common stock is highly volatile, and investors' returns depend solely on stock price appreciation, with no dividends intended - The trading price of common stock is highly volatile, influenced by regulatory developments, clinical trial results, and market conditions[363][365] - Failure to meet Nasdaq listing requirements could result in delisting, negatively affecting stock price and liquidity[368] - The company does not intend to pay dividends, meaning investor returns depend solely on stock price appreciation[371] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[387] ITEM 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[388] ITEM 4. Mine Safety Disclosures Mine safety disclosures are not applicable to Aldeyra Therapeutics, Inc.'s operations - Mine safety disclosures are not applicable[389] ITEM 5. Other Information There is no other information to report for the period - No other information was reported[390] ITEM 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate documents and Sarbanes-Oxley Act certifications - Key exhibits include the Restated Certificate of Incorporation, Amended and Restated Bylaws, and a Sixth Amendment to Lease[392] - Certifications from the Principal Executive Officer and Principal Financial and Accounting Officer, as required by the Sarbanes-Oxley Act, are also filed[392] Signatures The report is signed on behalf of Aldeyra Therapeutics, Inc. by its Chief Executive Officer and Head of Finance on August 7, 2025 - The report was signed by Todd C. Brady, M.D., Ph.D., Chief Executive Officer[397] - The report was also signed by Michael Alfieri, Head of Finance (Principal Financial and Principal Accounting Officer)[398] - The signing date was August 7, 2025[397][398]