Aquestive(US:AQST)2025-08-11 20:11PART I – FINANCIAL INFORMATION This section presents the unaudited financial statements, management's discussion and analysis of financial condition and results of operations, market risk disclosures, and internal controls and procedures Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements, highlighting changes in financial position, operations, and cash flows for the period Condensed Balance Sheets Condensed Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $60,536 | $71,546 | | Total current assets | $81,721 | $88,220 | | Total assets | $93,698 | $101,424 | | Liabilities and Stockholders' Deficit | | | | Total current liabilities | $23,155 | $18,865 | | Total liabilities | $166,288 | $161,580 | | Total stockholders' deficit | $(72,590) | $(60,156) | | Total liabilities and stockholders' deficit | $93,698 | $101,424 | Condensed Statements of Operations and Comprehensive Loss Condensed Statements of Operations (in thousands, except per share data) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Revenues | $10,003 | $20,099 | $18,723 | $32,152 | | Total costs and expenses | $21,371 | $20,044 | $49,456 | $41,054 | | Loss from operations | $(11,368) | $55 | $(30,733) | $(8,902) | | Net loss | $(13,548) | $(2,745) | $(36,478) | $(15,573) | | Loss per share (basic and diluted) | $(0.14) | $(0.03) | $(0.37) | $(0.19) | Condensed Statements of Cash Flows Condensed Statements of Cash Flows (in thousands) | | Six Months Ended June 30, | | :--- | :--- | | | 2025 | 2024 | | Net cash used for operating activities | $(31,314) | $(17,390) | | Net cash used for investing activities | $(242) | $(64) | | Net cash provided by financing activities | $20,546 | $83,452 | | Net (decrease) increase in cash and cash equivalents | $(11,010) | $65,998 | | Cash and cash equivalents at beginning of period | $71,546 | $23,872 | | Cash and cash equivalents at end of period | $60,536 | $89,870 | Notes to Unaudited Condensed Financial Statements - For the six months ended June 30, 2025, the company sold 7,457,627 shares of common stock through its At-The-Market (ATM) facility, generating net proceeds of approximately $21.3 million26 - In June 2024, the company terminated its licensing agreements with Haisco and Mitsubishi Tanabe Pharma America (MTPA), resulting in the one-time recognition of $7.0 million and $3.3 million in deferred revenue, respectively7983 - The company is involved in multiple legal proceedings, including litigation with Neurelis, Inc. regarding Libervant's FDA approval and numerous product liability lawsuits related to Suboxone, for which Indivior has agreed to defend the company153154156 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's financial performance, liquidity, and capital resources, highlighting key operational developments and future outlook Overview - The company is advancing its pipeline, focusing on Anaphylm™ (epinephrine) Sublingual Film for severe allergic reactions and the Adrenaverse™ epinephrine prodrug platform164 - The New Drug Application (NDA) for Anaphylm was accepted by the FDA on June 16, 2025, with a PDUFA target action date of January 31, 2026 The company plans for a product launch in Q1 2026 if approved180 - A U.S. District Court ruling on February 14, 2025, vacated the FDA's approval of Libervant® for patients aged two to five, converting it to a "tentative approval" Consequently, Aquestive has ceased marketing activities for Libervant in the United States182 - The company is pursuing development of AQST-108, a topical gel for alopecia areata, with plans to open an IND in Q4 2025 and initiate a Phase 2a clinical trial in the first half of 2026180 Results of Operations Revenue Comparison (in thousands) | Revenue Category | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Manufacture and supply | $9,583 | $8,123 | 18% | $16,776 | $18,641 | (10%) | | License and royalty | $839 | $11,220 | (93%) | $1,629 | $12,352 | (87%) | | Co-development and research | $378 | $756 | (50%) | $796 | $1,159 | (31%) | | Proprietary product, net | $(797) | $— | N/M | $(478) | $— | N/M | | Total revenues | $10,003 | $20,099 | (50%) | $18,723 | $32,152 | (42%) | - The significant decrease in license and royalty revenue for Q2 and YTD 2025 was primarily due to the one-time recognition of $10.3 million in deferred revenues in Q2 2024 from the termination of agreements with Haisco and MTPA218223 Expense Comparison (in thousands) | Expense Category | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Manufacture and supply | $4,561 | $4,526 | 1% | $8,213 | $8,915 | (8%) | | Research and development | $4,105 | $4,162 | (1%) | $9,466 | $10,094 | (6%) | | Selling, general and administrative | $12,705 | $11,356 | 12% | $31,777 | $22,045 | 44% | - Selling, general and administrative expenses for the six months ended June 30, 2025 increased by 44% ($9.7 million) year-over-year, driven by the Anaphylm PDUFA fee ($4.3M), increased commercial spending ($4.2M), and higher regulatory fees for Libervant (~$1.1M)240 Liquidity and Capital Resources - As of June 30, 2025, the company had $60.5 million in cash and cash equivalents245 - The company believes its existing cash, expense management, and access to equity capital markets (including a $100 million ATM facility with $78 million remaining) provide sufficient liquidity to fund operations for at least the next twelve months245246247 Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used for operating activities | $(31,314) | $(17,390) | | Net cash used for investing activities | $(242) | $(64) | | Net cash provided by financing activities | $20,546 | $83,452 | - Net cash from financing activities decreased significantly in the first six months of 2025 compared to 2024, primarily because the 2024 period included $72.0 million in net proceeds from an underwritten public offering, whereas 2025 financing was mainly from ATM proceeds of $21.2 million256247 Item 3. Quantitative and Qualitative Disclosures about Market Risk The company, as a smaller reporting entity, is exempt from providing quantitative and qualitative disclosures about market risk - The company is a "smaller reporting company" and is therefore exempt from providing quantitative and qualitative disclosures about market risk267 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level269 - No material changes in internal control over financial reporting were identified during the last fiscal quarter270 PART II – OTHER INFORMATION This section provides additional information including legal proceedings, updated risk factors, and disclosures regarding equity sales and other relevant corporate matters Item 1. Legal Proceedings The company refers to Note 20 of the financial statements for detailed information on ongoing legal proceedings - For detailed information on legal proceedings, the report directs readers to Note 20 of the financial statements271 Item 1A. Risk Factors The company identifies risks related to tariffs and trade restrictions that could increase operating costs and negatively impact financial performance - The company faces risks from tariffs and trade restrictions imposed by the U.S. and other countries, which could increase costs for foreign-sourced raw materials and adversely impact operations273275 - The current U.S. administration has expressed intent to impose tariffs on pharmaceutical imports, and the Department of Commerce has initiated an investigation into the national security effects of importing pharmaceuticals, which could lead to new tariffs274 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 - There were no unregistered sales of equity securities or use of proceeds to report for the period276 Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the quarter ended June 30, 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the fiscal quarter ended June 30, 2025279