Oragenics(OGEN) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Oragenics, Inc., including the balance sheets, statements of operations, stockholders' deficit, and cash flows, along with their accompanying notes, highlighting an increase in cash, a significant rise in short-term notes payable, and a reduced net loss, influenced by a reverse stock split and recent financing activities Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------ | :------------------ | | Cash and cash equivalents | $1,973,745 | $864,840 | | Total current assets | $2,139,708 | $1,472,510 | | Total assets | $2,139,708 | $1,472,510 | | Accounts payable and accrued expenses | $1,267,423 | $1,355,867 | | Short-term notes payable, net | $3,000,000 | $328,528 | | Total liabilities | $4,267,423 | $1,684,395 | | Accumulated deficit | $(221,275,200) | $(216,786,172) | | Total stockholders' deficit | $(2,127,715) | $(211,885) | - Cash and cash equivalents increased by $1,108,905 from December 31, 2024, to June 30, 2025[10] - Short-term notes payable significantly increased from $328,528 to $3,000,000, contributing to a rise in total liabilities[10] - The accumulated deficit worsened from $(216,786,172) to $(221,275,200), indicating continued operating losses[10] Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $449,679 | $906,779 | $791,221 | $1,570,193 | | General and administrative | $1,264,523 | $1,399,221 | $2,949,208 | $3,195,910 | | Total operating expenses | $1,714,202 | $2,306,000 | $3,740,429 | $4,766,103 | | Loss from operations | $(1,714,202) | $(2,306,000) | $(3,740,429) | $(4,766,103) | | Interest income | $16,793 | $6,405 | $26,996 | $25,640 | | Interest expense | $(572,310) | $(1,803) | $(771,437) | $(8,888) | | Net loss | $(2,272,035) | $(2,305,090) | $(4,489,028) | $(4,755,923) | | Basic and diluted net loss per share | $(3.10) | $(15.27) | $(6.62) | $(35.56) | - Net loss for the three months ended June 30, 2025, slightly decreased to $(2,272,035) from $(2,305,090) in the prior year[13] - Interest expense dramatically increased to $(572,310) for the three months ended June 30, 2025, from $(1,803) in the prior year, primarily due to amortization of debt discount on a new promissory note[13][102] - Basic and diluted net loss per share significantly improved to $(3.10) for the three months ended June 30, 2025, from $(15.27) in the prior year, influenced by the 1-for-30 reverse stock split[13][6] Condensed Consolidated Statements of Stockholders' Deficit | Metric | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------------------- | :------------------ | :--------------- | :-------------- | | Common Stock Shares | 419,003 | 715,843 | 822,927 | | Common Stock Amount | $419 | $716 | $823 | | Additional Paid In Capital | $216,573,868 | $219,140,137 | $219,146,662 | | Accumulated Deficit | $(216,786,172) | $(219,003,165) | $(221,275,200) | | Total Stockholders' Deficit | $(211,885) | $137,688 | $(2,127,715) | - The company's total stockholders' deficit increased from $(211,885) at December 31, 2024, to $(2,127,715) at June 30, 2025, primarily due to net losses[16] - Common stock shares outstanding increased from 419,003 to 822,927 during the six months ended June 30, 2025, reflecting sales of common stock and conversion of prefunded warrants[16] - A 1-for-30 reverse stock split was effected on June 3, 2025, retroactively adjusting all share and per share amounts[6][16] Condensed Consolidated Statements of Cash Flows | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(4,489,028) | $(4,755,923) | | Net cash used in operating activities | $(3,426,460) | $(4,608,778) | | Net cash provided by financing activities | $4,535,365 | $2,473,898 | | Net increase (decrease) in cash and cash equivalents | $1,108,905 | $(2,134,880) | | Cash and cash equivalents at end of period | $1,973,745 | $1,348,621 | - Net cash used in operating activities decreased by $1,182,318 (from $4,608,778 to $3,426,460) for the six months ended June 30, 2025, compared to the prior year, reflecting lower net loss and R&D expenditures[18][109] - Net cash provided by financing activities increased by $2,061,467 (from $2,473,898 to $4,535,365) for the six months ended June 30, 2025, primarily due to new debt financing[18][111] - The company experienced a net increase in cash and cash equivalents of $1,108,905 for the six months ended June 30, 2025, a significant improvement from a net decrease of $2,134,880 in the prior year[18] Notes to Condensed Consolidated Financial Statements Note 1. Basis of Presentation and Nature of Operations - Oragenics, Inc. is a development-stage biopharmaceutical company focused on nasally delivered pharmaceutical therapies for neurological conditions and infectious diseases, with a lead product candidate, ONP-002, for mild traumatic brain injury[26] - The company has incurred recurring losses, an accumulated deficit of $221 million, and negative cash flows, leading to substantial doubt about its ability to continue as a going concern[27][28] - A 1-for-30 reverse stock split was effected on June 3, 2025, with all share and per share amounts retroactively adjusted[24] - Subsequent to quarter-end, a public offering of Series H Preferred Stock and warrants on July 2, 2025, generated approximately $15.2 million in net proceeds, extending the cash runway, but substantial doubt about going concern remains[31][32][33] Note 2. New Accounting Pronouncements - The company plans to adopt ASU 2023-09 (improvements to income tax disclosures) for fiscal years beginning after December 15, 2024, expecting no material effect on financial statements aside from disclosure changes[34] - The company plans to adopt ASU 2024-03 (disaggregation of certain income statement expenses) for fiscal years beginning after December 15, 2026, expecting no material effect on financial statements aside from disclosure changes[35] Note 3. Prepaid Expenses and Other Current Assets - Prepaid expenses and other current assets decreased to $165,963 as of June 30, 2025, from $607,670 as of December 31, 2024, primarily due to amortization of prepaid insurance and timing of R&D vendor milestone payments[36] Note 4. Accounts Payable and Accrued Expenses - Accounts payable and accrued expenses decreased to $1.3 million as of June 30, 2025, from $1.4 million as of December 31, 2024, mainly due to timing of vendor payments and lower accrued external R&D and corporate services[38] Note 5. Short-Term Notes Payable - On March 13, 2025, the company issued a $3.0 million promissory note with a 17% original issue discount, resulting in net proceeds of approximately $2.2 million[39] - The promissory note was non-interest bearing unless an event of default occurred, maturing on July 14, 2025, or upon closing of a subsequent offering[40] - Subsequent to quarter-end, on July 2, 2025, the $3.0 million promissory note was repaid in full using proceeds from the Series H Preferred Stock offering[42] Short-Term Notes Payable | Short-Term Notes Payable | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :------------------ | | Insurance premium financing | $— | $328,528 | | $3.0 million non-interest-bearing promissory note | $3,000,000 | $— | | Total | $3,000,000 | $328,528 | Note 6. Stock-Based Compensation - The 2021 Equity Incentive Plan authorizes grants covering 3,166,667 shares of common stock, with 3,142,655 shares remaining available for awards as of June 30, 2025[43] Stock Option Activity | Stock Option Activity | Number of Shares | Weighted Average Exercise Price per Share | | :-------------------------------- | :--------------- | :-------------------------------------- | | Outstanding at December 31, 2024 | 33,150 | $142.71 | | Cancelled or expired | (9,138) | $105.90 | | Outstanding at June 30, 2025 | 24,012 | $156.72 | | Exercisable at June 30, 2025 | 22,844 | $164.00 | - Unrecognized stock-based compensation expense related to unvested stock options was approximately $6,040 as of June 30, 2025, expected to be recognized over approximately 0.25 years[47] Note 7. Warrants Warrants Outstanding | Warrants Outstanding | Number | Exercise Price | Expiration Date | | :-------------------------------- | :----- | :------------- | :-------------- | | | 1,770 | $1,800 | 7/17/2025 | | | 2,341 | $56.25 | 2/27/2029 | | | 1,834 | $37.50 | 6/29/2029 | | | 13,512 | $20.70 | 9/4/2029 | | Total | 19,457 | | | - All share amounts for warrants have been retroactively adjusted to reflect the 1-for-30 Reverse Stock Split effected on June 3, 2025[48] Note 8. Shareholders' Equity - In February 2025, the company sold 260,000 shares through an At-the-Market Sales Agreement, generating net proceeds of $2.6 million[51] - As of June 30, 2025, 7,488,692 shares of Series F Convertible Preferred Stock remain outstanding, convertible into 249,624 shares of common stock upon certain conditions[52] - Series G Mirroring Preferred Stock, issued in March 2025 in connection with a $3.0 million promissory note, was automatically cancelled on May 2, 2025, following shareholder approval of a reverse stock split proposal[53] Note 9. Net Loss Per Share - Basic and diluted net loss per share are the same for all periods presented as the inclusion of potentially dilutive securities would have been antidilutive[56] - All shares and per share amounts have been retroactively adjusted to reflect the 1-for-30 Reverse Stock Split effective June 3, 2025[57] Potentially Dilutive Securities | Potentially Dilutive Securities | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Stock options | 24,012 | 7,431 | | Warrants | 19,457 | 11,628 | | Total | 43,469 | 19,059 | Note 10. Commitments and Contingencies - The company is involved in an arbitration action with Ladenburg Thalmann regarding a disputed $2.5 million fee related to an asset purchase from Odyssey Health, Inc., with the FINRA action set to be heard from September 29 – October 3, 2025[58] - While the company believes Ladenburg's claims are unlikely to prevail, an unfavorable outcome could materially impact its business and financial position[58] Note 11. Subsequent Events - On May 2, 2025, Janet Huffman was appointed Chief Executive Officer, in addition to her role as Chief Financial Officer[59] - On June 3, 2025, the company effected a 1-for-30 Reverse Stock Split[60] - On July 2, 2025, the company completed a public offering of Series H Convertible Preferred Stock and warrants, generating net proceeds of approximately $15.2 million[61] - The $3.0 million promissory note was repaid in full on or about July 2, 2025, using proceeds from the Series H Preferred Stock and warrants offering[62] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operational results, highlighting its focus on ONP-002, recent funding, and the ongoing need for capital, detailing changes in expenses, interest, and cash flow activities Forward-Looking Statements - The report contains forward-looking statements regarding future performance, business prospects, and product development plans, based on current expectations and estimates[64] - Actual results may differ materially due to various factors, including funding availability, technical risks, and regulatory approvals, as detailed in the 'Risk Factors' section[66] Overview - Oragenics is a development-stage biopharmaceutical company focused on nasal delivery therapies for neurological conditions and infectious diseases[67] - The primary focus is on advancing ONP-002, a neurosteroid for mild traumatic brain injury (mTBI), designed for rapid and direct brain accessibility via intranasal administration[67][68][70] ONP-002 Product Development Timeline | ONP-002 Product Development Timeline | Status | | :-------------------------------- | :------- | | Pre-clinical Animal Studies | Complete | | Phase 1 | Complete | | Phase 2a | Estimated Q3 2025 start | | Phase 2b | Estimated Q4 2026 start | | Phase 3 | Estimated Q4 2027 start | Business Development Strategy - The company expects to seek strategic opportunities through various forms of business development, including alliances, licensing, joint ventures, and M&A, to enhance shareholder value and expand its pipeline[72] Recent Funding - In February 2025, the company sold 260,000 shares via an At-the-Market Sales Agreement, yielding $2.6 million in net proceeds[73] - In March 2025, a $3.0 million promissory note was issued, providing $2.2 million in net proceeds after discounts and expenses[75] - Subsequent to quarter-end, on July 2, 2025, a public offering of Series H Convertible Preferred Stock and warrants generated approximately $15.2 million in net proceeds, which was used to repay the $3.0 million promissory note[74][75] Going Concern - The company refers to Note 1 for a detailed discussion on its going concern status, which indicates substantial doubt due to recurring losses and negative cash flows[76][27] Significant Accounting Policies and Use of Estimates - There were no significant changes to the company's accounting policies and estimates during the three and six months ended June 30, 2025, compared to those disclosed in the 2024 Annual Report on Form 10-K[77] Future Capital Requirements - The company expects substantial expenditures for developing its neurology assets, particularly ONP-002, including costs for research, nonclinical testing, clinical trials, and regulatory submissions[80] - The $15.2 million net proceeds from the July 2025 public offering are expected to fund operations through the first half of 2026, but additional capital will be required to complete planned clinical trials and commercialization efforts[82][83] - Future funding may involve additional equity and debt financings, strategic alliances, or licensing agreements, with potential for significant dilution to existing shareholders[81][84] New Accounting Pronouncements - The company refers to Note 2 for details on new accounting pronouncements, ASU 2023-09 and ASU 2024-03, which are expected to primarily impact disclosures without material financial statement effects[86][34][35] Business Segments - The company operates in a single reportable segment, focusing on the development of ONP-002 for mild traumatic brain injury, consistent with how its Chief Operating Decision Maker reviews financial information[88] - No revenue was generated for the three and six months ended June 30, 2025, and 2024[89][90] Results of Operations Three Months Ended June 30, 2025 vs 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $449,679 | $906,779 | $(457,100) | (50.41)% | | General and administrative | $1,264,523 | $1,399,221 | $(134,698) | (9.63)% | | Total operating expenses | $1,714,202 | $2,306,000 | $(591,798) | (25.66)% | | Loss from operations | $(1,714,202) | $(2,306,000) | $(591,798) | (25.66)% | | Interest income | $16,793 | $6,405 | $10,388 | 162.19% | | Interest expense | $(572,310) | $(1,803) | $(570,507) | 31,642.10% | | Net loss | $(2,272,035) | $(2,305,090) | $33,055 | (1.43)% | Six Months Ended June 30, 2025 vs 2024 | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Research and development | $791,221 | $1,570,193 | $(778,972) | (49.61)% | | General and administrative | $2,949,208 | $3,195,910 | $(246,702) | (7.72)% | | Total operating expenses | $3,740,429 | $4,766,103 | $(1,025,674) | (21.52)% | | Loss from operations | $(3,740,429) | $(4,766,103) | $(1,025,674) | (21.52)% | | Interest income | $26,996 | $25,640 | $1,356 | 5.29% | | Interest expense | $(771,437) | $(8,888) | $(762,549) | 8,579.53% | | Net loss | $(4,489,028) | $(4,755,923) | $266,895 | (5.61)% | Research and Development - R&D expenses decreased by 50.4% to $449,679 for the three months ended June 30, 2025, and by 49.6% to $791,221 for the six months, primarily due to a shift in program focus solely to ONP-002 regulatory submissions and Phase IIa trial initiation, compared to broader vaccine and antibiotic programs in 2024[92][93] - R&D expenses are anticipated to increase in future periods with the initiation of the Phase IIa trial in Australia, IND-enabling work for a Phase IIb trial in the U.S., and manufacturing of ONP-002 clinical trial material[94] General and Administrative - G&A expenses decreased by 9.6% to $1.3 million for the three months ended June 30, 2025, and by 7.7% to $3.0 million for the six months, driven by lower legal and professional fees and reduced headcount[96][97] - Offsetting decreases were higher public company expenses, insurance costs, and a reclassification of patent expense from R&D to G&A starting Q1 2025[97][98] - G&A expenses are expected to increase in future periods to support expanded ONP-002 development, public company compliance, and investor communications[95][99] Other Income (Expense) - Total other expense was $557,833 for the three months ended June 30, 2025, compared to $910 of income in the prior year, primarily due to a $570,507 increase in interest expense[102] - The increase in interest expense is attributed to the amortization of debt discount and financing costs associated with the $3.0 million promissory note issued in March 2025[102] Liquidity and Capital Resources - The company has historically funded operations through equity sales, debt financing, and warrant exercises, and had an accumulated deficit of $221 million as of June 30, 2025[104] Cash Flow Activity | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,426,460) | $(4,608,778) | | Net cash provided by financing activities | $4,535,365 | $2,473,898 | | Net increase (decrease) in cash and cash equivalents | $1,108,905 | $(2,134,880) | Operating Activities - Cash used in operating activities decreased to $3.4 million for the six months ended June 30, 2025, from $4.6 million in the prior year, driven by a lower net loss and reduced R&D expenditures[106][109] - Significant non-cash adjustments included $771,437 for amortization of debt discount and closing costs, and $24,485 for stock-based compensation expense[107] Financing Activities - Net cash provided by financing activities increased to $4.5 million for the six months ended June 30, 2025, from $2.5 million in the prior year[110][111] - This increase was primarily due to $2.6 million in net proceeds from common stock issuance and $2.2 million from short-term notes payable, partially offset by $328,528 in note repayments[110] Short-Term Notes Payable - A $3.0 million promissory note was issued on March 13, 2025, yielding approximately $2.2 million in net proceeds, which was subsequently repaid in full on July 2, 2025, using proceeds from the Series H Preferred Stock offering[113][115] Short-Term Notes Payable | Short-Term Notes Payable | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :------------------ | | Insurance premium financing | $— | $328,528 | | $3.0 million non-interest-bearing promissory note | $3,000,000 | $— | | Total | $3,000,000 | $328,528 | Inflation - Inflation may impact costs of services and supplies, but the company, being in the development stage without significant manufacturing, has not experienced a material inflationary effect on its operating results for the six months ended June 30, 2025 and 2024[117] Off Balance Sheet Arrangements - The company does not have any off-balance sheet arrangements[118] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Oragenics, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide information under this item[119] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, concluding they were effective, while acknowledging inherent limitations in control systems, emphasizing they provide reasonable, not absolute, assurance - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[120] - No material changes in internal control over financial reporting occurred during the period covered by this report[121] - Management acknowledges that control systems provide only reasonable assurance and have inherent limitations, such as potential for errors, circumvention, or management override[122][123] PART II. OTHER INFORMATION Item 1. Legal Proceedings Oragenics, Inc. is engaged in an ongoing arbitration with Ladenburg Thalmann over a disputed $2.5 million fee, with the FINRA action scheduled for September-October 2025, and an unfavorable outcome could materially impact the company - The company is in a legal dispute with Ladenburg Thalmann over a $2.5 million fee related to an asset purchase, with arbitration ongoing at FINRA[124] - Ladenburg's attempt to move the venue to federal court was denied, and the FINRA arbitration is scheduled for September 29 – October 3, 2025[124] - An unfavorable outcome in the litigation could negatively and materially impact the company's business, financial position, and results of operations[124] Item 1A. Risk Factors This section updates the risk factors previously disclosed in the Annual Report on Form 10-K, highlighting new and continuing risks, including anti-dilution provisions of Series H Convertible Preferred Stock, the ongoing need for additional capital, and potential for significant dilution to existing common shareholders from future equity issuances - The Series H Convertible Preferred Stock contains anti-dilution provisions that may reduce its conversion price in future offerings, potentially leading to an indeterminate number of common shares issued upon conversion and greater dilution for existing shareholders[126] - The company will need to raise additional capital to complete product development and commercialization, and its auditor has expressed substantial doubt about its ability to continue as a going concern[127] - Future sales of common stock or other equity securities could result in significant dilution to existing common shareholders and depress the market price of the common stock[130][131] - The exercise price of Series H Warrants is $25 per share, and if the common stock market price remains below the conversion price, warrant holders may not exercise, potentially requiring the company to raise additional capital sooner[129] Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS On March 13, 2025, the company issued a $3.0 million promissory note and Series G Mirroring preferred stock in a private placement, generating approximately $2.25 million in net proceeds, with the Series G Preferred Stock subsequently cancelled in connection with a reverse stock split - On March 13, 2025, the company issued a $3.0 million promissory note to a single investor at a 17% original issue discount, resulting in net proceeds of $2.25 million[132] - In connection with the note, 1,000,000 shares of Series G Mirroring preferred stock were issued and subsequently cancelled due to the reverse stock split[133] - The note and Series G Preferred Stock were issued in a private placement under Section 4(a)(2) of the Securities Act of 1933 and Regulation D[134] Item 5. Other Information During the quarter ended June 30, 2025, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[135] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various articles of incorporation amendments, bylaws, forms of preferred stock warrants, and certifications - The exhibit list includes amendments to the Articles of Incorporation, Bylaws, Form of Series H Preferred Warrant, Warrant Agency Agreement, and certifications from the CEO and CFO[137] Signatures The report is duly signed on behalf of Oragenics, Inc. by Janet Huffman, in her capacity as Chief Financial Officer, Secretary, Treasurer, President, and Chief Executive Officer, as of August 8, 2025 - The report was signed by Janet Huffman, Chief Financial Officer, Secretary, Treasurer, President, and Chief Executive Officer, on August 8, 2025[141]