Dogwood Therapeutics, Inc(DWTX) - 2025 Q2 - Quarterly Report

Part I: Financial Information Item 1. Consolidated Financial Statements This section presents Dogwood Therapeutics' unaudited condensed consolidated financial statements for the periods ended June 30, 2025 Condensed Consolidated Balance Sheets Total assets increased to $96.7 million, liabilities decreased to $14.2 million, and stockholders' equity turned positive to $6.9 million as of June 30, 2025 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $96,692,527 | $94,308,246 | | Cash | $13,402,809 | $14,847,949 | | Goodwill | $12,458,383 | $11,812,476 | | Intangible assets | $69,303,582 | $65,710,527 | | Total Liabilities | $14,151,904 | $30,027,223 | | Debt with related party | $0 | $15,381,077 | | Total stockholders' equity (deficit) | $6,878,599 | ($10,124,339) | Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported no revenue, with net loss increasing to $14.7 million for the six months ended June 30, 2025, driven by a $6.1 million debt conversion loss and higher R&D expenses Statement of Operations Highlights (Unaudited, Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $0 | $0 | | Research and development expenses | $5,006,941 | $679,801 | | General and administrative expenses | $3,346,100 | $1,704,124 | | Loss from operations | ($8,353,041) | ($2,383,925) | | Loss on debt conversion with related party | ($6,134,120) | $0 | | Net loss | ($14,732,305) | ($2,341,168) | | Net loss per common share, basic and diluted | ($9.51) | ($2.78) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $8.7 million, while financing activities provided $7.3 million, resulting in a $1.5 million net decrease in cash for the six months ended June 30, 2025 Cash Flow Summary (Unaudited, Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,708,672) | ($1,749,160) | | Net cash provided by financing activities | $7,252,245 | $1,452,397 | | Net decrease in cash | ($1,456,427) | ($296,763) | | Cash, beginning of period | $14,847,949 | $3,316,946 | | Cash, end of period | $13,402,809 | $3,020,183 | - Non-cash financing activities for the six months ended June 30, 2025, included the conversion of $19.5 million in related-party debt and $0.4 million in accrued interest into Series A-1 Non-Voting Convertible Preferred Stock[15] Notes to Condensed Consolidated Financial Statements The notes detail the company's business focus, going concern issues, the Pharmagesic acquisition, debt conversion, and recent equity financing activities - The company is a pre-revenue, development-stage biopharmaceutical firm focused on two main areas: Nav 1.7 modulation for pain (lead candidate Halneuron®) and antiviral therapies for fatigue-related illnesses (IMC-1, IMC-2)[18] - Management has concluded there is substantial doubt about the Company's ability to operate as a going concern within one year, as current cash is insufficient to fund operations beyond the first quarter of 2026. Additional financing is required[23] - On October 7, 2024, the company acquired Pharmagesic (Holdings) Inc. in a business combination, which was accounted for using the acquisition method. This transaction brought in the Halneuron® program[17][58] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operations, and liquidity, highlighting increased expenses from clinical trials and the need for additional financing due to going concern issues Overview The company focuses on developing pain and fatigue medicines, with lead candidate Halneuron® in a Phase 2b trial and antiviral programs seeking partnerships - The lead product candidate, Halneuron®, is in a Phase 2b clinical trial (HALT-CINP-203) for chemotherapy-induced neuropathic pain (CINP)[125] - An interim analysis of the HALT-CINP-203 trial is expected in the fourth quarter of 2025, with top-line data anticipated in the second half of 2026[126] - The antiviral programs for IMC-1 (fibromyalgia) and IMC-2 (Long-COVID) are secondary priorities, and the company is seeking partnerships to advance them[127][130] Results of Operations Operating expenses significantly increased for the six months ended June 30, 2025, driven by a $4.3 million rise in R&D and a $1.6 million increase in G&A expenses Comparison of Operating Expenses (Six Months Ended June 30) | Expense Category | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $5,006,941 | $679,801 | +$4,327,140 | | General and administrative | $3,346,100 | $1,704,124 | +$1,641,976 | | Total operating expenses | $8,353,041 | $2,383,925 | +$5,969,116 | Liquidity and Capital Resources With $13.4 million cash as of June 30, 2025, the company's liquidity is limited to Q1 2026, necessitating additional financing due to going concern issues - The company's cash on hand of approximately $13.4 million as of June 30, 2025, is expected to fund operations only through the first quarter of 2026[138][143] - A registered direct offering in March 2025 raised net proceeds of approximately $4.25 million[141] - Substantial doubt exists regarding the company's ability to continue as a going concern, and it will need to raise additional funds through equity, debt, or partnerships to continue its strategy[143] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Dogwood Therapeutics is not required to provide market risk disclosures - This item is not required for smaller reporting companies[154] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[156] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[157] Part II: Other Information Item 1. Legal Proceedings The company is not currently a party to any material pending or ongoing litigation - The company does not currently have any pending or ongoing material litigation[160] Item 1A. Risk Factors No material changes from previously disclosed risk factors in the 2024 Annual Report on Form 10-K are reported - No material changes from risk factors previously disclosed in the 2024 Annual Report on Form 10-K are reported[161] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None[162] Item 5. Other Information No director or officer adopted or terminated any Rule 10b5-1 trading arrangements during the six months ended June 30, 2025 - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the six months ended June 30, 2025[165] Item 6. Exhibits This section refers to the Exhibit Index, listing all exhibits filed with or incorporated by reference into this Quarterly Report on Form 10-Q