Clearside Biomedical(CLSD) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section details the unaudited financial statements, management's analysis of financial condition, and related disclosures Item 1. Financial Statements (unaudited) This section presents the unaudited consolidated financial statements and detailed notes on the company's financial position and performance Consolidated Balance Sheets Total assets and cash significantly decreased, while liabilities and accumulated deficit increased, reflecting a challenging financial position Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :---------------------- | :--------------------------- | :------------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $9,376 | $20,020 | $(10,644) | -53.17% | | Total current assets | $11,785 | $21,274 | $(9,489) | -44.60% | | Total assets | $15,332 | $25,126 | $(9,794) | -39.00% | | Total current liabilities | $3,047 | $4,794 | $(1,747) | -36.44% | | Total liabilities | $64,066 | $63,981 | $85 | 0.13% | | Accumulated deficit | $(367,993) | $(355,275) | $(12,718) | 3.58% | | Total stockholders' deficit | $(48,734) | $(38,855) | $(9,879) | 25.43% | Consolidated Statements of Operations Net loss decreased for both three and six months ended June 30, 2025, due to increased license revenue and reduced research and development expenses Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | % Change (3M) | | :-------------------- | :------------------------------- | :------------------------------- | :---------- | :------------ | | License and other revenue | $492 | $90 | $402 | 446.67% | | Research and development | $1,584 | $4,603 | $(3,019) | -65.58% | | General and administrative | $2,476 | $3,077 | $(601) | -19.53% | | Total operating expenses | $4,060 | $7,680 | $(3,620) | -47.14% | | Net loss | $(4,495) | $(7,594) | $3,099 | -40.81% | | Net loss per share (basic and diluted) | $(0.06) | $(0.10) | $0.04 | -40.00% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | % Change (6M) | | :-------------------- | :----------------------------- | :----------------------------- | :---------- | :------------ | | License and other revenue | $2,822 | $320 | $2,502 | 781.88% | | Cost of goods sold | $248 | $0 | $248 | N/A | | Research and development | $6,047 | $10,218 | $(4,171) | -40.82% | | General and administrative | $5,300 | $5,901 | $(601) | -10.18% | | Total operating expenses | $11,595 | $16,119 | $(4,524) | -28.07% | | Net loss | $(12,718) | $(19,357) | $6,639 | -34.30% | | Net loss per share (basic and diluted) | $(0.16) | $(0.27) | $0.11 | -40.74% | Consolidated Statements of Stockholders' Deficit Accumulated deficit and total stockholders' deficit increased due to net losses, partially offset by common stock issuances Consolidated Statements of Stockholders' Deficit (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Common Stock (Shares) | 78,495,760 | 76,578,383 | 1,917,377 | | Common Stock (Amount) | $78 | $77 | $1 | | Additional Paid-In Capital | $319,181 | $316,343 | $2,838 | | Accumulated Deficit | $(367,993) | $(355,275) | $(12,718) | | Total Stockholders' Deficit | $(48,734) | $(38,855) | $(9,879) | Consolidated Statements of Cash Flows Net cash decreased due to operating activities and a shift to net cash outflow from financing activities, contrasting with the prior year's inflow Consolidated Statements of Cash Flows (in thousands) | Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :---------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash used in operating activities | $(10,559) | $(13,531) | $2,972 | | Net cash used in investing activities | $(9) | $(11,494) | $11,485 | | Net cash (used in) provided by financing activities | $(76) | $14,343 | $(14,419) | | Net decrease in cash and cash equivalents | $(10,644) | $(10,682) | $38 | | Cash and cash equivalents, end of period | $9,376 | $18,238 | $(8,862) | Notes to the Consolidated Financial Statements These notes detail the company's operations, accounting policies, financial instruments, and recent events, including a going concern warning and strategic review 1. The Company Clearside Biomedical, a biopharmaceutical company, faces significant liquidity challenges, initiated a strategic review, and implemented a reduction in force, raising substantial doubt about its going concern - Clearside Biomedical, Inc. is a biopharmaceutical company specializing in therapies delivered to the back of the eye via the suprachoroidal space (SCS®)[20][105] - As of June 30, 2025, the Company had cash and cash equivalents of $9.4 million[22][159] - In July 2025, the Company announced plans to explore a full range of strategic alternatives to maximize stockholder value, including potential sale, license, or merger of assets[22][100][121] - A 'Reduction in Force' was implemented in July 2025, terminating all employees and transitioning them to consulting roles, with estimated severance costs of $2.6 million in Q3 2025[22][101][102] - The Company has suffered recurring losses and negative cash flows since inception, and its current cash and cash equivalents are not expected to fund operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern[28][30][123] 2. Significant Accounting Policies This section outlines the company's accounting principles, including revenue recognition, R&D expensing, share-based compensation, and accounting for royalty and warrant liabilities - Revenue from license agreements, including upfront payments, milestone payments, and royalties, is recognized under ASC 606 as performance obligations are satisfied[37] - Research and development costs are expensed as incurred, including employee-related expenses, CRO/CMO costs, clinical trial activities, and regulatory application costs[39][44] - Warrant liabilities are measured at fair value using a simulation model, with changes recognized in other income (expense) in the consolidated statements of operations[49] - The Company adopted ASU 2023-09 (Income Taxes) on January 1, 2025, which did not have a material impact, and is evaluating ASU 2024-03 (Expense Disaggregation) for future impact[50][52] 3. Property and Equipment, Net Net property and equipment decreased from $3.2 million to $3.1 million, primarily due to accumulated depreciation Property and Equipment, Net (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :--------------------------- | :------------------------------- | | Furniture and fixtures | $249 | $249 | | Machinery and equipment | $1,759 | $1,756 | | Computer equipment | $20 | $20 | | Leasehold improvements | $476 | $476 | | Work in process | $1,876 | $1,870 | | Total property and equipment | $4,380 | $4,371 | | Less: Accumulated depreciation | $(1,315) | $(1,146) | | Property and equipment, net | $3,065 | $3,225 | 4. Accrued Liabilities Accrued liabilities significantly decreased from $3.0 million to $1.5 million, mainly due to a reduction in accrued employee costs Accrued Liabilities (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------ | :--------------------------- | :------------------------------- | | Accrued research and development | $451 | $545 | | Accrued income taxes | $692 | $0 | | Accrued employee costs | $194 | $2,159 | | Accrued professional fees | $116 | $37 | | Accrued expense | $84 | $226 | | Total Accrued Liabilities | $1,537 | $2,967 | 5. Royalty Purchase and Sale Agreement The company sold future royalty and milestone rights to HCR for up to $65 million, with the related liability increasing to $55.7 million at a 21.8% effective interest rate - The Company sold rights to future royalty and milestone payments from license agreements (Arctic Vision, Bausch, Aura, REGENXBIO, BioCryst) to HealthCare Royalty Management, LLC (HCR) for up to $65 million[55] - The Purchase and Sale Agreement expires when HCR receives payments equal to 3.4 times the aggregate amount of payments made under the agreement (Cap Amount)[58] Royalty Purchase and Sale Agreement (in thousands) | Metric (in thousands) | Amount | | :-------------------- | :----- | | Balance at December 31, 2023 | $41,988 | | Non-cash interest expense (2024) | $9,779 | | Balance at December 31, 2024 | $51,767 | | Payments (2025) | $(1,500) | | Non-cash interest expense (2025) | $5,435 | | Balance at June 30, 2025 | $55,702 | | Effective interest rate | 21.8% | 6. Common Stock Authorized common stock increased from 200 million to 400 million shares, and outstanding common stock rose to 78.5 million shares by June 30, 2025 - The Company's authorized common stock increased from 200,000,000 to 400,000,000 shares as of June 30, 2025, following stockholder approval on May 30, 2025[62] Common Stock | Metric | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Shares issued and outstanding | 78,495,760 | 76,578,383 | 7. Common Stock Warrants Warrant liabilities decreased from $6.7 million to $4.8 million, driven by a decline in stock price and increased uncertainty from the strategic alternatives announcement - In February 2024, the Company issued warrants to purchase 11,111,111 shares of common stock at an exercise price of $1.62 per share, expiring August 9, 2029[64][65] Common Stock Warrants (in thousands) | Metric (in thousands) | Amount | | :-------------------- | :----- | | Fair value of warrants at issuance (Feb 9, 2024) | $10,327 | | Change in fair value during the period (2024) | $(3,635) | | Fair value of warrants at December 31, 2024 | $6,692 | | Change in fair value during the period (2025) | $(1,927) | | Fair value of warrants at June 30, 2025 | $4,765 | - The fair value of warrant liabilities declined significantly after June 30, 2025, due to a drop in the traded stock price and increased uncertainty following the July 2025 strategic alternatives announcement[67] 8. Share-Based Compensation Share-based compensation expense decreased for both three and six months ended June 30, 2025, with $4.0 million unrecognized for stock options and $0.2 million for RSUs Share-Based Compensation Expense (in thousands) | Share-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock Options | $621 | $864 | $1,236 | $1,666 | | Restricted Stock Units (RSUs) | $69 | $253 | $174 | $510 | | Employee Stock Purchase Plan (ESPP) | $4 | $3 | $5 | $6 | | Total | $694 | $1,120 | $1,415 | $2,182 | - As of June 30, 2025, the Company had $4.0 million of unrecognized compensation expense for unvested stock options, expected to be recognized over 2.6 years[71] - As of June 30, 2025, the Company had $0.2 million of unrecognized compensation expense for RSUs, expected to be recognized over 0.6 years[73] 9. Commitments and Contingencies The company has office lease commitments and ongoing annual maintenance fees under the Georgia Tech License Agreement, totaling $1.5 million through 2028 - The Company leases approximately 14,000 square feet of office space in Alpharetta, Georgia, with monthly rental payments of $30,747, increasing 3% annually, under a four-year term with a renewal option[76] Georgia Tech License Agreement Maintenance Fee (in thousands) | Year Ending December 31, | Georgia Tech License Agreement Maintenance Fee (in thousands) | | :----------------------- | :---------------------------------------------------------- | | 2025 | $250 | | 2026 | $350 | | 2027 | $400 | | 2028 | $500 | | Total | $1,500 | 10. License and Other Agreements The company holds exclusive license agreements for XIPERE with Bausch + Lomb and Arctic Vision, and for its SCS Microinjector with BioCryst, with associated royalties and milestones largely sold to HCR - Bausch + Lomb holds an exclusive license for XIPERE in the United States and Canada, with potential milestone payments up to $55.0 million and tiered royalties from high-teens to twenty percent[82][84] - Arctic Vision has an exclusive license for XIPERE in the Arctic Territory (China, Hong Kong, Macau, Taiwan, South Korea, India, ASEAN, Australia, New Zealand), with potential development and sales milestones up to $22.0 million and tiered royalties of ten to twelve percent[86][87][88] - BioCryst Pharmaceuticals holds an exclusive, worldwide license for the SCS Microinjector with avoralstat, with potential clinical and regulatory milestones up to $30.0 million, sales-based milestones up to $47.5 million, and tiered mid-single digit royalties[89][90] - The Company's rights to royalties and milestone payments from these agreements have been sold pursuant to the Purchase and Sale Agreement described in Note 5[84][87][90] 11. Fair Value Measurements Financial instruments like cash are Level 1 in the fair value hierarchy, while warrant liabilities are Level 3 due to significant unobservable inputs - Cash and cash equivalents, other current assets, and accounts payable are classified as Level 1 in the fair value hierarchy[93] - Warrant liabilities are classified as Level 3 in the fair value hierarchy due to significant unobservable inputs in their valuation[93] 12. Related Party Transactions The company engaged in transactions with related parties, including a vendor, BioCryst Pharmaceuticals, and Aura Biosciences, resulting in recorded payables, expenses, and license revenue - The Company had $0.5 million in accounts payable and $0.3 million in accrued expense with a vendor whose CEO was a board member until January 2025[95] - License and other revenue from BioCryst License Agreement, where BioCryst's board chair also serves on the Company's board, was $0.3 million for the three months ended June 30, 2025 (vs. $81,000 in 2024) and $0.3 million for the six months ended June 30, 2025 (vs. $0.2 million in 2024)[96] - License and other revenue from Aura License Agreement, where Aura's CFO is a board member, was $0.1 million for both the three and six months ended June 30, 2025[97] 13. Net Loss Per Share Basic and diluted net loss per share are identical as all potential common stock equivalents were antidilutive and excluded from diluted EPS calculation - Basic and diluted net loss per share are the same for all periods because all potential common stock equivalents were antidilutive[98] Antidilutive Securities | Antidilutive Securities | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | | Outstanding stock options | 14,330,189 | 12,767,330 | | Non-vested restricted stock units | 126,508 | 437,305 | | Common stock warrants | 11,140,907 | 11,140,907 | | Total | 25,597,604 | 24,345,542 | 14. Subsequent Event In July 2025, the company announced a strategic review and implemented a reduction in force, transitioning employees to consulting roles, with estimated severance costs of $2.6 million - On July 17, 2025, the Company announced plans to explore a full range of strategic alternatives to maximize stockholder value for its SCS platform and drug development pipeline[100] - A 'Reduction in Force' was implemented in July 2025, terminating all employees and transitioning them into consulting roles to extend company resources[100][101] - The Company estimates approximately $2.6 million in charges for severance and other employee termination-related costs in the third quarter of 2025[102] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial performance, liquidity, and outlook, highlighting the strategic review, pipeline, and significant financial challenges Overview Clearside Biomedical is a biopharmaceutical company focused on SCS® injection platform for eye therapies, with XIPERE® as its first approved product for macular edema associated with uveitis - Clearside Biomedical is a biopharmaceutical company focused on delivering therapies to the back of the eye through its proprietary suprachoroidal space (SCS®) injection platform[105] - XIPERE® (triamcinolone acetonide injectable suspension) was approved by the U.S. FDA in October 2021 as the first therapeutic delivered into the SCS and the first therapy for macular edema associated with uveitis[106] Clinical Development Pipeline All internal R&D programs are paused due to the strategic review, while CLS-AX for wet AMD achieved positive Phase 2b results and has FDA alignment for Phase 3, alongside preclinical candidates and external collaborations - All internal research and development programs have been paused during the strategic review process to extend resources[108] - CLS-AX (axitinib injectable suspension) for wet AMD, the most advanced product candidate, achieved positive topline results in the ODYSSEY Phase 2b clinical trial, demonstrating stable vision and retinal thickness, and reduced injection frequency by 84%[109][111][112][114] - The Company gained FDA alignment on essential components for a potential Phase 3 program for CLS-AX, which would include two pivotal, non-inferiority trials with aflibercept 2 mg as a comparator[116] - The preclinical pipeline includes small molecules for geographic atrophy (GA) and CLS-AX combinations for diabetic retinopathy and diabetic macular edema[117] - The Company maintains external collaborations with Bausch + Lomb, Arctic Vision, REGENXBIO, Inc., Aura Biosciences, and BioCryst Pharmaceuticals to expand the reach of its suprachoroidal injection platform[118] Operating Outlook and Strategic Review The company has recurring net losses and an accumulated deficit of $368.0 million, with a strategic review underway as current cash is insufficient for the next 12 months, raising substantial doubt about its going concern - The Company has incurred net losses since inception, with an accumulated deficit of $368.0 million as of June 30, 2025[120] - Net losses were $4.5 million and $12.7 million for the three and six months ended June 30, 2025, respectively, a reduction from $7.6 million and $19.4 million in the prior year periods[120] - A strategic review is being conducted to explore alternatives to maximize stockholder value, including asset sales, licenses, mergers, or other transactions[121] - Based on current plans, the Company does not believe its cash and cash equivalents will fund operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern[123] Macroeconomic Conditions Unfavorable macroeconomic conditions, including inflation, interest rate hikes, and global conflicts, could negatively impact the company's business and financial results - Unfavorable macroeconomic conditions, including rising inflation, increased interest rates, and global conflicts, may negatively affect the Company's business and financial results[124] Recent Developments Recent developments include the strategic review, a reduction in force with $2.6 million in severance costs, and Nasdaq delisting risk due to minimum bid price non-compliance, which the company plans to appeal - The Company implemented a reduction in force in July 2025, terminating all employees and transitioning them to consulting roles, with estimated severance costs of $2.6 million in Q3 2025[125] - The Company received a Nasdaq delisting notification for failing to meet the $1.00 minimum bid price requirement by August 6, 2025, and intends to appeal the determination[126] - A reverse stock split proposal (1-for-5 to 1-for-15) will be put to stockholders to raise the per share trading price and maintain Nasdaq listing[126] Components of Operating Results This section details operating results components, including license revenue, cost of goods sold, R&D and G&A expenses, interest income, other income, non-cash interest expense, and income tax expense - Revenue is primarily generated from license agreements, including technology access, upfront payments, regulatory/commercial milestones, and royalties, with some payments recorded as non-cash revenue until obligations under the Purchase and Sale Agreement are fulfilled[127][128] - Research and development expenses are expensed as incurred and include employee costs, CRO/CMO fees, preclinical/clinical activities, regulatory applications, physician training, intellectual property licenses, facility costs, and depreciation[130][134] - Other income, net, primarily reflects expenses allocated to warrants and changes in their fair value[137] - Non-cash interest expense on liability related to future royalties consists of imputed interest and amortization of issuance costs[138] Critical Accounting Policies and Significant Judgments and Estimates Financial statements rely on significant estimates for royalty financing, warrant liabilities, and R&D expenses, with no material changes to critical accounting policies during the period - Significant estimates and judgments are required for royalty financing obligations, warrant liabilities valuation, and research and development expenses[140] - No significant changes to critical accounting policies were made during the six months ended June 30, 2025[141] Results of Operations for the Three Months Ended June 30, 2025 and 2024 Net loss significantly decreased to $4.5 million from $7.6 million for the three months ended June 30, 2025, due to increased license revenue and reduced R&D and G&A expenses Results of Operations for the Three Months Ended June 30, 2025 and 2024 (in thousands) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change | % Change | | :-------------------- | :------------ | :------------ | :----- | :------- | | License and other revenue | $492 | $90 | $402 | 446.7% | | Research and development | $1,584 | $4,603 | $(3,019) | -65.6% | | General and administrative | $2,476 | $3,077 | $(601) | -19.5% | | Total operating expenses | $4,060 | $7,680 | $(3,620) | -47.1% | | Loss from operations | $(3,568) | $(7,590) | $4,022 | -53.0% | | Interest income | $115 | $419 | $(304) | -72.6% | | Other income, net | $1,720 | $1,917 | $(197) | -10.3% | | Non-cash interest expense on liability related to the sales of future royalties | $(2,762) | $(2,340) | $(422) | 18.0% | | Net loss | $(4,495) | $(7,594) | $3,099 | -40.8% | - The $3.0 million decrease in R&D expenses was primarily due to the completion of the CLS-AX Phase 2b clinical trial ($1.6 million decrease), reduced employee costs ($0.8 million decrease), and a research and development tax credit ($0.4 million decrease)[144] - The $0.6 million decrease in G&A expenses was mainly due to lower employee-related costs[145] Results of Operations for the Six Months Ended June 30, 2025 and 2024 Net loss decreased to $12.7 million from $19.4 million for the six months ended June 30, 2025, driven by increased license revenue, including Arctic Vision milestones, and reduced R&D expenses Results of Operations for the Six Months Ended June 30, 2025 and 2024 (in thousands) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change | % Change | | :-------------------- | :------------ | :------------ | :----- | :------- | | License and other revenue | $2,822 | $320 | $2,502 | 781.9% | | Cost of goods sold | $248 | $0 | $248 | N/A | | Research and development | $6,047 | $10,218 | $(4,171) | -40.8% | | General and administrative | $5,300 | $5,901 | $(601) | -10.2% | | Total operating expenses | $11,595 | $16,119 | $(4,524) | -28.1% | | Loss from operations | $(8,773) | $(15,799) | $7,026 | -44.5% | | Interest income | $278 | $767 | $(489) | -63.8% | | Other income, net | $1,927 | $418 | $1,509 | 360.0% | | Non-cash interest expense on liability related to the sales of future royalties | $(5,435) | $(4,743) | $(692) | 14.6% | | Loss before income taxes | $(12,003) | $(19,357) | $7,354 | -38.0% | | Income tax expense | $715 | $0 | $715 | N/A | | Net loss | $(12,718) | $(19,357) | $6,639 | -34.3% | - License and other revenue for the six months ended June 30, 2025, included $1.5 million in milestones from Arctic Vision and $1.3 million from other training, services, and SCS Microinjector kit sales[151] - The $4.2 million decrease in R&D expenses was primarily due to a $3.4 million decrease in CLS-AX program costs (completion of ODYSSEY trial), $0.5 million in reduced employee costs, and a $0.4 million R&D tax credit, partially offset by a $0.4 million increase in GA program costs[153] Liquidity and Capital Resources Liquidity is severely constrained with $9.4 million in cash, requiring additional financing as current resources are insufficient for the next 12 months, raising substantial doubt about its going concern - As of June 30, 2025, the Company had cash and cash equivalents of $9.4 million[159] - In February 2024, the Company raised $13.9 million net proceeds from a registered direct offering of common stock and warrants[161] - During the six months ended June 30, 2025, the Company sold 1,649,796 shares of common stock for net proceeds of $1.4 million under an at-the-market (ATM) sales agreement[163] - The Company's primary uses of capital are compensation, R&D costs, legal/regulatory expenses, and general overhead, and it will require additional financing to fund future operations[164][166] - The successful development of product candidates is highly uncertain, and the Company cannot reasonably estimate the nature, timing, and costs of future development efforts[165] Outlook The company anticipates continued losses and requires additional financing, with current cash insufficient for the next 12 months, leading to paused R&D and substantial doubt about its going concern - The Company expects to incur additional losses and will need further financing to fund operations, potentially through equity/debt offerings, royalty monetization, or strategic arrangements[171] - Current cash and cash equivalents are not expected to fund operations for the next 12 months, leading to a pause in all internal R&D programs to conserve cash[172] - These factors raise substantial doubt about the Company's ability to continue as a going concern[173] Cash Flows Net cash used in operating activities decreased, investing activities significantly decreased, and financing shifted from inflow to outflow, resulting in a $10.6 million net decrease in cash Cash Flows (in thousands) | Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :---------------------- | :----------------------------- | :----------------------------- | :----- | | Operating activities | $(10,559) | $(13,531) | $2,972 | | Investing activities | $(9) | $(11,494) | $11,485 | | Financing activities | $(76) | $14,343 | $(14,419) | | Net change in cash and cash equivalents | $(10,644) | $(10,682) | $38 | - Net cash used in operating activities decreased by $3.0 million, primarily due to reduced R&D and G&A expenses[174] - Net cash used in investing activities decreased significantly by $11.5 million, mainly due to no purchases of short-term investments in 2025 compared to $11.0 million in 2024[175] - Financing activities shifted from providing $14.3 million in 2024 (registered direct offering) to using $76,000 in 2025 (royalty purchase payments partially offset by ATM sales)[176][177] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Clearside Biomedical is not required to provide detailed quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[178] Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The Company's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2025[181] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[182] PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, other information, and exhibits related to the company's operations Item 1. Legal Proceedings The company is not a party to any material legal proceedings and is unaware of any pending actions that could significantly impact its business or financial condition - The Company is not currently a party to any material legal proceedings[184] Item 1A. Risk Factors This section highlights critical risks, including insufficient working capital, going concern doubts, uncertainty of strategic alternatives, and Nasdaq delisting risk Risks Related to Our Financial Position and Capital Needs Insufficient working capital raises substantial doubt about the company's going concern ability, and the strategic review may not yield a favorable transaction, potentially leading to bankruptcy - The Company does not have sufficient working capital to fund planned operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern[186][188] - The strategic alternatives exploration may not result in any transaction or enhance stockholder value, and failure could lead to bankruptcy or winding down operations[187][189][190] - The reduction in force implemented in July 2025 is expected to incur approximately $2.6 million in severance costs[186] Risks Related to Ownership of Our Common Stock The company faces Nasdaq delisting risk due to its common stock trading below the $1.00 minimum bid price, with no assurance that an appeal or reverse stock split will regain compliance - The Company received a Nasdaq notification for non-compliance with the $1.00 minimum bid price requirement and expects delisting notice, which it intends to appeal[193] - A reverse stock split (1-for-5 to 1-for-15) is proposed to raise the per share trading price and maintain Nasdaq listing[193] - Failure to regain Nasdaq compliance could reduce liquidity, decrease market price, deter investors, and negatively impact the company's ability to raise equity financing[194] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales or issuer purchases of equity securities during the period - No unregistered sales of equity securities occurred[195] - No issuer purchases of equity securities occurred[195] Item 5. Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[196] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, officer agreements, and Sarbanes-Oxley Act certifications - Exhibits include amendments to the Certificate of Incorporation and Bylaws, separation and consulting agreements for George Lasezkay, Charles Deignan, and Victor Chong, and certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[197][198] Signatures The report was officially signed on August 8, 2025, by Charles A. Deignan, Chief Financial Officer, for Clearside Biomedical, Inc - The report was signed by Charles A. Deignan, Chief Financial Officer, on August 8, 2025[202]