
PART I. FINANCIAL INFORMATION Item 1. Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, detailing financial position and performance Consolidated Balance Sheets (unaudited) This section details the company's unaudited consolidated balance sheets for June 30, 2025, and December 31, 2024 | ASSETS (in $) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Cash and cash equivalents | 4,474 | 163,476 | | Prepaid expenses | 144,159 | 145,319 | | Assets of disposal group held-for-sale | 83,170,009 | 83,170,009 | | Total Current Assets | 83,318,642 | 83,478,804 | | Restricted cash | 7,005 | 21,516 | | Goodwill | 1,684,182 | 1,684,182 | | Operating lease right-of-use assets | — | 126,753 | | Deposits | 49,122 | 98,251 | | Total Other Assets | 1,740,309 | 1,930,702 | | Total Assets | 85,058,951| 85,409,506 | | LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) (in $) | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------- | :------------ | :---------------- | | Accounts payable | 3,298,447 | 2,959,248 | | Accrued expenses | 415,444 | 252,048 | | Accrued dividend payable | 1,474,009 | 1,310,581 | | Line of credit | 700,000 | — | | Operating lease liabilities - current | 135,609 | 81,510 | | Liabilities held-for-sale | 23,546,478 | 22,941,497 | | Other current liabilities | 105,918 | 1,236 | | Total Current Liabilities | 29,675,905 | 27,546,120 | | Operating lease liabilities – non-current | — | 59,024 | | Total Liabilities | 29,675,905 | 27,605,144 | | Series G preferred stock | 61,681,100 | 61,681,100 | | Common stock | 477 | 475 | | Additional paid-in capital | 198,347,367 | 198,510,795 | | Accumulated deficit | (204,645,898) | (202,388,008) | | Total Stockholders' Equity (Deficit) | (6,298,054) | (3,876,738) | | Total Liabilities, Mezzanine Equity and Stockholders' Equity (Deficit) | 85,058,951| 85,409,506 | Consolidated Statements of Operations (unaudited) This section presents the unaudited consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 | Operating Expenses (in $) | 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 | 10,631 | 219,591 | 26,458 | 675,523 | | General and administrative| 628,233 | 3,206,517 | 1,433,791 | 11,849,633 | | Total operating expenses | 638,864 | 3,426,108 | 1,460,249 | 12,525,156 | | Loss from operations | (638,864) | (3,426,108) | (1,460,249) | (12,525,156) | | Other expenses, net | (36,067) | (4,114) | (162,786) | (4,539) | | Loss from continued operations | (674,931) | (3,430,222) | (1,623,035) | (12,529,695) | | Income tax benefit | — | (4,255,247) | — | 10,604,640 | | Net loss from continued operations | (674,931) | (7,685,469) | (1,623,035) | 1,925,055 | | Loss from discontinued operations net of tax | (323,340) | (1,122,233) | (634,855) | (1,315,041) | | Net loss | (998,271) | (8,807,702) | (2,257,890) | (3,240,096) | | Preferred stock dividends | (82,165) | (38,058) | (163,428) | (104,202) | | Net loss applicable to common shareholders | (1,080,436) | (8,845,760) | (2,421,318) | (3,344,298) | | Weighted average shares outstanding, basic and diluted | 4,765,004 | 2,294,208 | 4,765,004 | 2,028,080 | | Loss per share, basic and diluted | (0.21) | (3.86) | (0.51) | (1.65) | | Loss per share from discontinued operations, basic and diluted | (0.07) | (0.49) | (0.13) | (0.65) | Consolidated Statements of Mezzanine Equity and Changes in Stockholders' Equity (Deficit) (unaudited) This section outlines changes in mezzanine equity and stockholders' equity (deficit) for the periods ended June 30, 2025 and 2024 - The company's total stockholders' equity (deficit) decreased from $(3,876,738) at January 1, 2025, to $(6,298,054) at June 30, 2025, primarily due to a net loss of $(998,270) and deemed dividends of Series B preferred stock of $(163,428)25 - For the six months ended June 30, 2024, the company's total stockholders' equity increased from $3,602,929 to $9,120,595, driven by common stock issuances from offerings ($4,495,526), Series G preferred stock issuance for IMGX acquisition ($57,790,474), and common stock issued for IMGX acquisition ($2,300,500), despite a net loss of $(3,240,096)25 Consolidated Statements of Cash Flows (unaudited) This section presents the unaudited consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 | Cash Flows (in $) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | (873,513) | (7,197,816) | | Net cash provided by investing activities | — | 88,169 | | Net cash provided by financing activities | 700,000 | 4,060,350 | | Net (decrease) in cash, cash equivalents and restricted cash | (173,513) | (3,049,297) | | Cash, cash equivalents and restricted cash, beginning balance | 184,992 | 3,733,292 | | Cash, cash equivalents and restricted cash, ending balance | 11,479 | 683,995 | Note 1 - The Company and Basis of Presentation This note describes the company's business, strategic shifts, and going concern status, including the IMGX acquisition and rescission - Entero Therapeutics, Inc. (formerly First Wave Biopharma, Inc.) focuses on developing non-systemic therapies for gastrointestinal (GI) diseases, with Adrulipase as its primary development program2829 - The company acquired ImmunogenX (IMGX) in March 2024, but subsequently classified IMGX's assets and liabilities as held for sale, representing a strategic shift30 - The company faces substantial doubt about its ability to continue as a going concern due to significant operating losses, negative cash flows, and an accumulated deficit of approximately $204.6 million as of June 30, 2025, necessitating additional capital funding3739 Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements This note details the company's significant accounting policies and recent accounting pronouncements, including R&D costs and lease impairments - The company operates as a single operating segment focused on research and development42 - Research and development costs are expensed as incurred, including compensation, third-party fees for preclinical and clinical activities, drug supply costs, and license fees60 - In March 2025, the company defaulted on its Boca Raton office lease, leading to a full impairment of the related Right-of-Use (ROU) asset of $108,759 and an accrual of $100,902 for outstanding payments and penalties157159 Note 3 – Business Acquisition This note describes the acquisition of ImmunogenX (IMGX) in March 2024, including consideration and purchase price allocation - On March 13, 2024, Entero Therapeutics acquired ImmunogenX, Inc. (IMGX) in a merger, issuing 36,830 shares of Common Stock and 11,777.418 shares of Series G Preferred Stock to IMGX stockholders, and assuming IMGX stock options and warrants808183 - The total consideration for the IMGX acquisition was approximately $60.1 million, with a purchase price allocation that included $63.37 million in intangibles (primarily IPR&D for Latiglutenase and CypCel) and $18.35 million in goodwill8687 - Transaction costs for the IMGX merger amounted to $5,456,038, including approximately $4.0 million in financial advisory fees paid to Tungsten Partners LLC8284 Note 4 – Discontinued Operations and Assets and Liabilities Held for Sale This note details the classification of IMGX assets and liabilities as held for sale and the subsequent rescission agreement - The company initiated a plan to dispose of IMGX assets and liabilities within 12 months of the March 2024 merger, classifying them as held for sale due to a strategic shift90 - A Rescission Agreement was entered into in March 2025 (amended July 2025) with IMGX shareholders to rescind the merger, convey IMGX membership interests back, and cancel related stock and warrants. The company will retain up to $695,000 of IMGX's accounts payable, while IMGX remains responsible for approximately $9.28 million of secured debt91 Loss from Discontinued Operations (in $) | Loss from Discontinued Operations (in $) | 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 expenses | — | 802,470 | — | 923,872 | | General and administrative expenses | — | 70,012 | — | 75,216 | | Total operating expenses | — | 872,482 | — | 999,088 | | Interest expense | (323,340) | (298,480) | (634,855) | (364,682) | | Other (expense) income | — | 48,729 | — | 48,729 | | Loss from discontinued operations | (323,340) | (1,122,233) | (634,855) | (1,315,041) | Assets and Liabilities Held for Sale (in $) | Assets and Liabilities Held for Sale (in $) | June 30, 2025 | | :---------------------------------------- | :------------ | | Assets held for sale: | | | Prepaid expenses and other current assets | 3,131,929 | | Property and equipment, net | 16,180 | | Goodwill and intangible assets | 80,021,900 | | Total assets held for sale | 83,170,009| | Liabilities held for sale: | | | Accounts payable | 141,906 | | Accrued expenses and other current liabilities | 3,128,151 | | Debt | 6,403,737 | | Deferred tax liability | 13,872,684 | | Total liabilities held for sale | 23,546,478| Note 5 - Fair Value Disclosures This note provides fair value disclosures for financial instruments, including money market funds and a note payable Financial Instruments (in $) | Financial Instruments (in $) | Carrying Amount (June 30, 2025) | Fair Value (Level 1) | Fair Value (Level 2) | Fair Value (Level 3) | | :--------------------------- | :------------------------------ | :------------------- | :------------------- | :------------------- | | Money market funds | 18 | 18 | — | — | | Note Payable | 700,000 | — | 700,000 | — | | Financial Instruments (in $) | Carrying Amount (Dec 31, 2024) | Fair Value (Level 1) | Fair Value (Level 2) | Fair Value (Level 3) | | :--------------------------- | :----------------------------- | :------------------- | :------------------- | :------------------- | | Money market funds | 12,723 | 12,723 | — | — | Note 6 – Goodwill This note details the changes in goodwill, including amounts associated with the IMGX acquisition and reclassification Goodwill (in $) | Goodwill (in $) | Amount | | :------------------------------------ | :------- | | Balance on Dec 31, 2024 | 1,684,182| | Balance on March 31, 2025 | 1,684,182| | Goodwill associated with IMGX acquisition | 18,354,326| | Goodwill reclassified as held for sale | (18,354,326)| | Balance on June 30, 2025 (unaudited) | 1,684,182| Note 7 – Intangible Assets and In-Process R&D This note explains the reclassification of all intangible assets and in-process R&D acquired from ImmunogenX as held for sale - As of June 30, 2025, all intangible assets, including patents, trademarks, trade names, and in-process R&D (IPR&D) acquired from ImmunogenX, have been reclassified as held for sale, resulting in a net balance of $098 Note 8 - Accrued Expenses This note provides a breakdown of accrued expenses, including professional and consulting fees, for June 30, 2025, and December 31, 2024 Accrued Expenses (in $) | Accrued Expenses (in $) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Professional fees | 103,530 | 186,173 | | Consulting fees | 129,262 | 65,875 | | Total accrued expenses| 232,792 | 252,048 | Note 9 – Capital Stock This note details the company's capital stock, including common stock, Series G preferred stock, and warrant inducement offers - As of June 30, 2025, the company had 4,765,729 shares of Common Stock issued and outstanding, an increase from 4,754,038 shares at December 31, 2024104 - The company issued 12,373.226 shares of Series G Preferred Stock in connection with the IMGX Merger on March 13, 2024. These shares are convertible into 1,000 shares of Common Stock each upon stockholder approval and are redeemable for cash at the holder's option after six months116117118 - In July 2024, the company completed an inducement offer, generating approximately $1.9 million from the exercise of existing warrants and the issuance of new inducement warrants125 Note 10 – Warrants This note summarizes warrant activity, including outstanding warrants, exercise prices, and remaining terms for the reported periods Warrant Activity | Warrant Activity | Number of Warrants (June 30, 2025) | Weighted Average Exercise Price Per Share (June 30, 2025) | Weighted Average Remaining Term in Years (June 30, 2025) | | :--------------- | :--------------------------------- | :-------------------------------------------------------- | :------------------------------------------------------- | | Outstanding at January 1, 2025 | 4,927,714 | $6.98 | 4.71 | | Expired during the period | (23) | $50,107.83 | — | | Outstanding at June 30, 2025 | 4,927,691 | $6.75 | 4.21 | | Warrant Activity | Number of Warrants (June 30, 2024) | Weighted Average Exercise Price Per Share (June 30, 2024) | Weighted Average Remaining Term in Years (June 30, 2024) | | :--------------- | :--------------------------------- | :-------------------------------------------------------- | :------------------------------------------------------- | | Outstanding at January 1, 2024 | 1,779,780 | $19.29 | 4.99 | | Issued during the period | 1,701,150 | $3.47 | 5.26 | | Assumed from IMGX | 127,680 | $3.48 | 8.72 | | Exercised during the period | (443,525) | — | 4.93 | | Outstanding at June 30, 2024 | 3,165,085 | $12.85 | 5.01 | Note 11 – Equity Incentive Plan This note provides details on the company's equity incentive plan, including outstanding stock options and stock-based compensation expense - As of June 30, 2025, the company had 8,268 stock options outstanding and exercisable, with a weighted average exercise price of $13,041.72 and a remaining contractual life of 6.29 years144 - For the six months ended June 30, 2025, there were no new option grants, and total stock-based compensation expense was $0, a significant decrease from $390,449 in the prior year period144150 Note 12 – Agreements This note discusses significant agreements, including the termination of the license agreement with Sanofi for the Capeserod program - The company terminated its license agreement with Sanofi for the Capeserod program on February 26, 2025, with no payments due to Sanofi upon termination156 Note 13 – Leases This note details the company's lease obligations, including the default on its Boca Raton office lease and related impairment - The company defaulted on its Boca Raton office lease in March 2025, leading to a full impairment of the Right-of-Use (ROU) asset by $108,759 and an accrual of $100,902 for outstanding payments and penalties157159 Note 14 – Debt This note outlines the company's debt, including a new revolving loan agreement and reclassification of IMGX-assumed debt - Effective January 31, 2025, the company entered into a Revolving Loan Agreement for a principal amount of $2.0 million, with an initial disbursement of $700,000 at an 18% annual interest rate161 - Debt assumed from the IMGX acquisition, including a revolving line of credit, promissory notes, and an EIDL loan, has been reclassified to liabilities of disposal group held for sale162163164 Note 15 – Net (Loss) Income per Common Share This note explains the calculation of net loss per common share, including the exclusion of anti-dilutive securities - For the six months ended June 30, 2025, stock options (8,268) and warrants (4,927,691) were excluded from diluted net loss per share calculation as their inclusion would be anti-dilutive167 Potentially Issuable Common Shares | Potentially Issuable Common Shares | June 30, 2025 (unaudited) | June 30, 2024 (unaudited) | | :--------------------------------- | :------------------------ | :------------------------ | | Series G convertible preferred stock | 12,373,226 | 12,373,226 | | Common stock warrants | 4,927,691 | 3,165,085 | | Stock options | 8,268 | 201,077 | | RSUs not yet issued | 1 | 119,539 | | Series B convertible preferred stock | 138 | 135 | | Restricted stock not yet issued | 4 | 4 | | Total shares of common stock issuable | 17,309,328 | 15,859,066 | Note 16 - Employee Benefit Plans This note details changes in employer contributions to the 401(k) plan for the six months ended June 30, 2025 and 2024 - Employer contributions to the 401(k) plan decreased significantly from approximately $30,000 for the six months ended June 30, 2024, to approximately $1,000 for the same period in 2025170 Note 17 - Income Taxes This note discusses the company's effective income tax rate, influenced by valuation allowances and the IMGX Merger - The company's effective income tax rate was approximately 0% for the six months ended June 30, 2025, primarily due to a valuation allowance against deferred tax assets, compared to 160% for the same period in 2024, which was influenced by the IMGX Merger174176 Note 18 - Contingencies This note outlines legal contingencies, including a settled lawsuit against IMGX and a new lawsuit against the company for legal fees - A lawsuit by Mattress Liquidators, Inc. against IMGX for breach of a credit agreement, claiming $7.58 million, was settled in May 2025. The settlement involved Guarantors paying $5.5 million, Immuno LLC paying $62,000 in legal fees, and a new revolving loan for Immuno LLC177178179182183 - Ellenoff Grossman & Schole LLP filed a lawsuit against the company in March 2025, seeking $749,301 for alleged unpaid legal services, with the company currently investigating and planning to defend the action187280 Note 19 - Subsequent Events This note reports subsequent events, including Nasdaq compliance and a securities purchase agreement for approximately $3.0 million - The company regained compliance with Nasdaq Listing Rule 5620(a) by holding its annual meeting on June 30, 2025, but received an extension until October 8, 2025, to comply with the minimum stockholders' equity requirement188189 - On August 9, 2025, the company entered into a Securities Purchase Agreement with institutional investors to issue pre-funded and common warrants for aggregate gross proceeds of approximately $3.0 million190 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial condition, operations, strategic shifts, and liquidity challenges Overview This overview discusses the company's focus on Adrulipase, discontinuation of other programs, IMGX merger rescission, and Nasdaq compliance - The company is focused on developing Adrulipase for exocrine pancreatic insufficiency (EPI) in cystic fibrosis and chronic pancreatitis patients, planning to advance the program in 2025 despite not achieving the primary efficacy endpoint in a Phase 2b study195202 - The company has discontinued its Latiglutenase, Capeserod, and Niclosamide programs, with the Capeserod license agreement with Sanofi terminated in February 2025195199202203 - The merger with ImmunogenX (IMGX) in March 2024 is being rescinded, with a Rescission Agreement signed in March 2025 (amended July 2025) to reverse the transaction and convey IMGX interests back to its former shareholders196197198 - The company received a 180-day extension until September 1, 2025, to regain compliance with Nasdaq's minimum bid price requirement, while compliance with the annual meeting rule was regained on June 30, 2025205209 Liquidity and Capital Resources This section addresses the company's liquidity challenges, going concern doubt, and ongoing efforts to secure additional funding - As of June 30, 2025, the company had cash and cash equivalents of approximately $4,474 and sustained cumulative losses of approximately $2.3 million, raising substantial doubt about its ability to continue as a going concern221222 - The company is dependent on obtaining additional funding through equity and/or debt financings, collaborations, or other arrangements to support its operations and Adrulipase development224 - A Revolving Loan Agreement effective January 31, 2025, provided an initial loan of $700,000 out of a $2.0 million principal amount, bearing 18% annual interest227 Financial Operations Overview This overview discusses the company's lack of revenue, expected future revenue sources, and significant changes in operating expenses and net loss - The company has not generated any revenue to date and expects future revenue primarily from product sales, research funding, development and milestone payments, and royalties232 Operating Expenses (in $) | Operating Expenses (in $) | 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 | 10,631 | 219,591 | 26,458 | 675,523 | | General and administrative| 628,233 | 3,206,517 | 1,433,791 | 11,849,633 | | Total operating expenses | 638,864 | 3,426,108 | 1,460,249 | 12,525,156 | | Other expenses | (36,067) | (4,114) | (162,786) | (4,539) | | Loss from discontinued operations | (323,344) | (1,122,233) | (634,855) | (1,315,041) | | Net income (loss) | (998,271) | (8,807,702) | (2,257,890) | (3,240,096) | - Research and development expenses decreased by approximately $0.2 million (YoY) for the three months ended June 30, 2025, and by approximately $0.7 million (YoY) for the six months ended June 30, 2025, primarily due to a decrease in clinical-related expenses241251 - General and administrative expenses decreased by approximately $2.6 million (80% YoY) for the three months and $10.4 million (88% YoY) for the six months ended June 30, 2025, mainly due to reduced consultant compensation, headcount, public company costs, IMGX merger costs, and legal fees244245255256 Cash Flows for the six months Ended June 30, 2025 and 2024 This section analyzes cash flows from operating and financing activities for the six months ended June 30, 2025 and 2024 - Net cash used in operating activities significantly decreased from approximately $7.2 million in the six months ended June 30, 2024, to approximately $0.9 million in the same period of 2025, primarily due to a lower net loss and changes in working capital261262 - Net cash provided by financing activities decreased from approximately $4.1 million in the six months ended June 30, 2024 (driven by registered direct offerings), to approximately $0.7 million in the same period of 2025 (from a revolver loan draw)265266 Critical Accounting Policies and Estimates This section states that there were no material changes to the company's critical accounting policies and estimates during the reported period - There were no material changes to the company's critical accounting policies and significant judgments and estimates during the three months ended June 30, 2025, as discussed in its Annual Report on Form 10-K/A268 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that quantitative and qualitative disclosures about market risk are not applicable to the company for the reported period - Quantitative and qualitative disclosures about market risk are not applicable269 Item 4. Controls and Procedures The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - The CEO and CFO evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they are effective270 - There were no material changes in internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q271 PART II. OTHER INFORMATION Item 1. Legal Proceedings This section details ongoing legal proceedings, including a settled lawsuit against IMGX and a new lawsuit against the company for legal fees - The lawsuit by Mattress Liquidators, Inc. against IMGX for $7.58 million was settled in May 2025, with the company being released from obligations related to this complaint under the terms of the IMGX Rescission Agreement273275277278 - Ellenoff Grossman & Schole LLP filed a lawsuit against the company in March 2025, seeking $749,301 for alleged unpaid legal services, with the company currently evaluating the claims and negotiating a settlement280 Item 1A. Risk Factors This section refers to the company's Annual Report on Form 10-K/A for risk factors, noting no material changes during the period - There have been no material changes to the risk factors set forth in the company's Annual Report on Form 10-K/A for the year ended December 31, 2024281 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section indicates no unregistered sales of equity securities or use of proceeds occurred during the reported quarter - There were no unregistered sales of equity securities or use of proceeds during the quarter ended June 30, 2025282 Item 3. Defaults Upon Senior Securities This section confirms that there were no defaults upon senior securities during the quarter ended June 30, 2025 - There were no defaults upon senior securities during the quarter ended June 30, 2025283 Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the company for the reported period - Mine safety disclosures are not applicable to the company284 Item 5. Other Information This section reports that no directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during the quarter - None of the company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025285 Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents and certifications - The exhibits include the Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, certifications from the Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents287