Tevogen Bio(TVGN) - 2025 Q2 - Quarterly Report

Part I - Financial Information Item 1. Financial Statements (Unaudited) The unaudited consolidated financial statements for the six months ended June 30, 2025, report a net loss of $15.9 million, a significant shift from prior year's net income, with a $9.5 million stockholders' deficit and operations sustained by financing Consolidated Financial Statements As of June 30, 2025, the balance sheet shows $4.3 million in assets, $13.8 million in liabilities, and a $9.5 million stockholders' deficit, with a $15.9 million net loss and $6.5 million net cash used in operations for the six months ended June 30, 2025 Consolidated Balance Sheet Summary (Unaudited) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Cash | $685,229 | $1,282,995 | | Total Assets | $4,269,136 | $3,461,675 | | Total Liabilities | $13,753,878 | $10,135,680 | | Total Stockholders' Deficit | $(9,484,742) | $(6,674,005) | Consolidated Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2025 ($) | | :--- | :--- | :--- | | Research and Development | $2,699,991 | $5,895,059 | | General and Administrative | $2,744,545 | $9,905,824 | | Net Loss | $(5,503,979) | $(15,871,040) | | Net Loss Per Share (Basic & Diluted) | $(0.03) | $(0.09) | Consolidated Statement of Cash Flows Summary (Unaudited) | Metric | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,497,766) | $(5,146,335) | | Net cash provided by financing activities | $5,900,000 | $5,229,328 | | Net (decrease) increase in cash | $(597,766) | $82,993 | Notes to the Unaudited Consolidated Financial Statements The notes detail the company's clinical-stage immunotherapy business, liquidity position, significant related-party transactions including a $36 million loan facility, and subsequent events like an at-the-market equity offering - The company is a clinical-stage immunotherapy company using its ExacTcell platform to develop T cell therapies, with its lead product, TVGN 489 for COVID-19, having completed a Phase 1 trial, and is also developing its Tevogen.AI initiative[21][22] - Management believes existing cash, recent financing proceeds, and available credit/grant funding will be sufficient to operate for at least the next 12 months, but the company does not plan to initiate new clinical trials until additional funding is secured[27] - In June 2024, the company entered into a Loan Agreement with The Patel Family, a related party, for a line of credit up to $36 million, of which $4.4 million had been drawn as of June 30, 2025, with $24 million remaining available[59] - Subsequent to the quarter end, the company initiated an "at-the-market" equity offering of up to $50 million, selling approximately 2.3 million shares for net proceeds of $2.53 million between July 3 and August 13, 2025[120][121] - The company has significant related-party transactions, including preferred stock sales, the primary loan agreement, and grants with entities affiliated with The Patel Family[104][105][108] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's pre-revenue status, Q2 2025 operating expense decrease due to lower stock-based compensation, and liquidity, noting sufficient cash for 12 months but additional capital needed for new clinical trials Overview Tevogen is a clinical-stage immunotherapy company developing T cell therapies with its ExacTcell platform, reporting a $5.4 million net loss for Q2 2025 and no revenue - The company's strategy is to develop off-the-shelf CD8+ cytotoxic T lymphocyte (CTL) therapies for infectious diseases, cancers, and other disorders using its ExacTcell technology[128][129] - The first clinical product, TVGN 489, has completed a Phase 1 trial for high-risk COVID-19 patients, showing no dose-limiting toxicities and meeting secondary endpoints[131] - The company is also leveraging its Tevogen.AI initiative to expedite drug development and optimize clinical trials[132] Results of Operations Operating results show Q2 2025 R&D and G&A expenses decreased due to lower stock-based compensation, leading to a $15.9 million net loss for the six-month period compared to a $1.6 million net income in 2024 Comparison of Operating Results (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Research & Development | $2.7M | $4.1M | ($1.4M) | | General & Administrative | $2.7M | $4.5M | ($1.8M) | | Net Loss | ($5.5M) | ($9.7M) | $4.2M | Comparison of Operating Results (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Research & Development | $5.9M | $24.9M | ($19.0M) | | General & Administrative | $9.9M | $13.2M | ($3.3M) | | Net (Loss) Income | ($15.9M) | $1.6M | ($17.5M) | - The primary reason for the decrease in operating expenses in 2025 compared to 2024 was significantly lower non-cash stock-based compensation expense[163][168][169] Liquidity and Capital Resources As of June 30, 2025, the company had $0.7 million in cash, funded by preferred stock sales, a $36 million loan facility, grants, and a subsequent $2.53 million at-the-market offering, sufficient for 12 months of operations but not new clinical trials - The company is financing operations through a combination of preferred stock sales, a loan agreement, grant funding, and an at-the-market equity offering[176][177] - Management has concluded that cash on hand, combined with available loan and grant commitments and proceeds from the Sales Agreement, is sufficient to fund operations for at least the next 12 months[148][190] - The company does not plan to initiate a new clinical trial until additional funding is received[190] Contractual Obligations as of June 30, 2025 | Obligation Type | Total ($) | Less than 1 Year ($) | 1 – 3 Years ($) | More than 3 Years ($) | | :--- | :--- | :--- | :--- | :--- | | Operating lease commitments | $2,512,670 | $327,740 | $983,219 | $1,201,711 | | Notes payable | $1,651,000 | $1,651,000 | - | - | | Loan Agreement repayment | $4,462,614 | $62,614 | - | $4,400,000 | | Total | $8,626,284 | $2,041,354 | $983,219 | $5,601,712 | Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Tevogen is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Tevogen is not required to provide information regarding quantitative and qualitative disclosures about market risk[200] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were not effective as of the end of the period covered by the report[201] - The ineffectiveness is attributed to material weaknesses in the company's internal control over financial reporting[201] Part II - Other Information Item 1. Legal Proceedings The company reports no material legal proceedings are currently pending - As of the filing date, the company is not involved in any material legal proceedings[204] Item 1A. Risk Factors The company's risk factors, detailed in its Annual Report, emphasize the critical need for substantial additional financing, as failure to secure it could jeopardize development and commercialization efforts - The company requires substantial additional financing to pursue its business objectives, and failure to obtain it could force delays or termination of product development[207] - The company's future viability is dependent on its ability to generate cash from operations or raise additional capital[210] - Raising additional capital may not be available on acceptable terms, if at all, and could result in significant dilution to existing stockholders or restrictive covenants[213][215] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - During the second quarter of 2025, no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements[216] Item 6. Exhibits This section provides an index of exhibits filed with the Form 10-Q, including CEO/CFO certifications and the Sales Agreement - The report includes a list of filed exhibits, such as CEO/CFO certifications required by the Sarbanes-Oxley Act and interactive data files (XBRL)[219]