Bio-Path(BPTH) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of Bio-Path Holdings, Inc's financial condition and results of operations Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and shareholders' equity, along with detailed notes explaining accounting policies, financial positions, and significant events for Bio-Path Holdings, Inc. for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets (Unaudited and not reviewed) The balance sheets show a significant decrease in total assets and a shift to a shareholders' deficit by June 30, 2025, primarily due to a reduction in cash and an increase in current liabilities compared to December 31, 2024 Condensed Consolidated Balance Sheets (Unaudited) | Metric | As of June 30, 2025 (Unaudited) | As of December 31, 2024 | | :----------------------------- | :------------------------------ | :---------------------- | | Cash | $0 | $1,173 | | Total Assets | $746 | $3,883 | | Total Current Liabilities | $7,864 | $3,295 | | Total Shareholders' (Deficit) Equity | $(7,158) | $154 | Condensed Consolidated Statements of Operations (Unaudited and not reviewed) The company reported increased net operating losses and net losses for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to higher research and development expenses and a reduced gain from warrant liability fair value changes Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Research and development | $4,048 | $1,873 | | General and administrative | $514 | $1,165 | | Net operating loss | $(4,562) | $(3,038) | | Net loss | $(4,597) | $(1,869) | | Net loss per share, basic and diluted | $(0.55) | $(1.16) | Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Research and development | $6,025 | $4,161 | | General and administrative | $1,778 | $2,572 | | Net operating loss | $(7,803) | $(6,733) | | Net loss | $(7,449) | $(5,026) | | Net loss per share, basic and diluted | $(0.97) | $(4.45) | Condensed Consolidated Statements of Cash Flows (Unaudited and not reviewed) Cash used in operating activities decreased for the six months ended June 30, 2025, compared to 2024, while cash provided by financing activities significantly declined, leading to a net decrease in cash to zero by June 30, 2025 Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(1,596) | $(4,266) | | Net cash provided by financing activities | $423 | $7,220 | | Net increase (decrease) in cash | $(1,173) | $2,954 | | Cash, end of period | $0 | $4,006 | Condensed Consolidated Statements of Shareholders' (Deficit) Equity (Unaudited and not reviewed) The company's shareholders' equity shifted from a positive balance to a significant deficit by June 30, 2025, primarily due to accumulated net losses, despite some capital increases from warrant exercises and stock-based compensation Condensed Consolidated Statements of Shareholders' (Deficit) Equity (in thousands) | Metric (in thousands) | As of June 30, 2025 | As of June 30, 2024 | | :-------------------------------- | :------------------ | :------------------ | | Common Stock (Shares) | 8,308 | 2,283 | | Common Stock (Amount) | $8 | $2 | | Additional Paid in Capital | $117,784 | $113,922 | | Accumulated Deficit | $(124,950) | $(112,633) | | Total Shareholders' (Deficit) Equity | $(7,158) | $1,291 | Notes to the Unaudited and not Reviewed Condensed Consolidated Financial Statements These notes provide essential context and detail for the condensed consolidated financial statements, covering the company's business, significant accounting policies, specific balance sheet and income statement items, equity changes, and subsequent events Explanatory Note The Quarterly Report on Form 10-Q for the period ended June 30, 2025, has not been reviewed by an independent registered public accounting firm and is considered deficient - The Quarterly Report on Form 10-Q for the period ended June 30, 2025, has not been reviewed by an independent registered public accounting firm and is considered deficient[19] - The Company plans to actively work with an independent registered public accounting firm to remedy the deficiency and will file an amendment to this Form 10-Q once the review is completed[20] 1. Organization and Business Bio-Path Holdings, Inc. is a clinical and preclinical stage oncology and obesity-focused RNAi nanoparticle drug development company, utilizing its proprietary DNAbilize® technology - The Company is a clinical and preclinical stage oncology and obesity-focused RNAi nanoparticle drug development company utilizing a novel technology called DNAbilize®[21] - The DNAbilize® platform allows for systemic delivery of antisense drug substances to reduce or eliminate target proteins in blood diseases and solid tumors, demonstrating an excellent safety profile in animal studies and clinical trials[21] - The Company currently has four antisense drug candidates in development to treat at least five different cancer disease indications and one indication in obesity[21] - Operations are subject to significant risks and uncertainties, including the potential requirement to secure additional funding, the outcome of clinical trials, and competition[23][24] 2. Significant Accounting Policies Key accounting policies include basic net loss per share calculation, going concern uncertainty due to insufficient cash, single operating segment reporting, and warrant liability classification at fair value - Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding; diluted net loss per share equals basic due to antidilutive warrants and stock options[25] - Substantial doubt exists about the Company's ability to continue as a going concern due to $0.0 million cash at June 30, 2025, which is insufficient to fund liquidity and capital expenditure requirements for the next 12 months[26] - The Company views its operations as a single operating segment, a research and development drug development company[27] - Warrants are classified as a liability and recorded at fair value using Level 3 inputs, with changes in fair value recognized in the Condensed Consolidated Statement of Operations[28] 3. Prepaid Drug Product Prepaid drug product expenses decreased from $1.1 million at December 31, 2024, to $0.5 million at June 30, 2025, reflecting the recognition of these advance payments as expenses for clinical development activities Prepaid Drug Product | Metric | As of June 30, 2025 | As of December 31, 2024 | | :------------------ | :------------------ | :---------------------- | | Prepaid drug product | $474k | $1,074k | - Advance payments for contract drug manufacturing and raw material suppliers for prexigebersen for a Phase 2 clinical trial totaled $1.1 million as of December 31, 2024[30] - Advanced payments remaining to be expensed totaled $0.5 million as of June 30, 2025[31] 4. Other Current Assets Other current assets significantly decreased from $1.5 million at December 31, 2024, to $0.2 million at June 30, 2025, primarily due to the expensing of prepayments for clinical trials for BP1001-A and BP1002 Other Current Assets | Metric | As of June 30, 2025 | As of December 31, 2024 | | :---------------- | :------------------ | :---------------------- | | Other current assets | $206k | $1,529k | - As of December 31, 2024, other current assets included $1.2 million in prepayments for clinical trials for BP1001-A and BP1002, and $0.3 million for prepaid insurance[32] 5. Accounts Payable Accounts payable increased substantially from $1.3 million at December 31, 2024, to $3.5 million at June 30, 2025, mainly driven by higher clinical trial expenses, legal and patent fees, and drug manufacturing development costs Accounts Payable | Metric | As of June 30, 2025 | As of December 31, 2024 | | :--------------- | :------------------ | :---------------------- | | Accounts payable | $3,479k | $1,274k | - As of June 30, 2025, accounts payable primarily included $2.0 million for clinical trial expenses, $0.6 million for legal and patent fees, and $0.4 million for drug manufacturing development and testing services[33] 6. Notes Payable The company incurred $0.4 million in notes payable by June 30, 2025, from March and April 2025 promissory notes, which include a 12% one-time interest charge and default provisions allowing for 150% repayment and conversion into common stock at a discounted price Notes Payable | Metric | As of June 30, 2025 | As of December 31, 2024 | | :----------- | :------------------ | :---------------------- | | Notes payable | $422k | $0 | - Current liabilities included $0.4 million in notes payable as of June 30, 2025, related to the March 2025 Promissory Notes and the April 2025 Promissory Note[34] - The promissory notes bear a one-time interest charge of twelve percent and include default provisions for immediate repayment at 150% of outstanding principal plus interest, 22% default interest, and a conversion right into common stock at 65% of the lowest closing bid price[35][36][37][38][40] 7. Accrued Expense Accrued expenses significantly increased from $1.9 million at December 31, 2024, to $3.9 million at June 30, 2025, primarily due to higher accrued clinical trial expenses Accrued Expenses | Metric | As of June 30, 2025 | As of December 31, 2024 | | :------------- | :------------------ | :---------------------- | | Accrued expenses | $3,906k | $1,938k | - As of June 30, 2025, accrued expenses primarily included $3.5 million for clinical trial expenses[41] 8. Warrant Liability The fair value of warrant liability decreased from $0.4 million at December 31, 2024, to $40,000 at June 30, 2025, resulting in a non-cash income of $0.4 million, due to the revaluation of warrants classified as liabilities Warrant Liability | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------- | :------------------ | :---------------------- | | Warrant liability | $40k | $434k | - The net change in fair value of warrant liability resulted in $0.4 million of other income on the Condensed Consolidated Statements of Operations[43] - Warrants are classified as a liability and recorded at fair value using the Black-Scholes valuation model due to a fundamental transaction provision[42][43] 9. Fair Value Measurements The company measures warrant liabilities at fair value using Level 3 unobservable inputs, with the fair value decreasing from $434,000 at December 31, 2024, to $40,000 at June 30, 2025, based on the Black-Scholes valuation model Warrant Liability (in thousands) | Metric (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :-------------------- | :------------------ | :---------------------- | | Warrant liability (Level 3) | $40 | $434 | - The fair value of warrants is estimated using the Black-Scholes valuation model with assumptions including a risk-free interest rate of 3.92%, expected volatility of 129%, and an expected term of 3.9 years as of June 30, 2025[45] 10. Stockholders' Equity Stockholders' equity decreased to a deficit of $(7.2) million by June 30, 2025, from $0.2 million at December 31, 2024, despite some capital increases from pre-funded warrant exercises Stockholders' (Deficit) Equity | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Stockholders' (Deficit) Equity | $(7.2) million | $0.2 million | | Common Stock Issued and Outstanding | 8,307,892 shares | 5,768,000 shares | - During the six months ended June 30, 2025, the Company issued 2.54 million shares of common stock from the exercise of pre-funded warrants at a weighted average exercise price of approximately $0.001 per share[55] 11. Stock-Based Compensation Plan Stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to 2024, with no options granted in either period and $0.1 million unamortized expense remaining Stock-Based Compensation Expense (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Stock-based compensation expense | $28 | $100 | | G&A portion | $15 | $101 | | R&D portion | $13 | $40 | Stock-Based Compensation Expense (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | | Stock-based compensation expense | $100 | $300 | | G&A portion | $100 | $200 | | R&D portion | $45 | $100 | - No stock options were granted in the six months ended June 30, 2025, or 2024[61] - As of June 30, 2025, unamortized stock-based compensation expense for all outstanding options was $0.1 million, expected to be recognized over a weighted average vesting period of 1.7 years[62] 12. Commitments and Contingencies Total commitments for the company's drug supplier project plan were $0.1 million as of June 30, 2025, primarily for testing services, with the full amount expected to be incurred within the next 12 months - Total commitments for the drug supplier project plan were $0.1 million as of June 30, 2025, primarily for testing services[63] - The Company expects to incur $0.1 million of these commitments over the next 12 months[63] 13. Subsequent Events On August 13, 2025, the Board of Directors approved the dismissal of Ernst & Young LLP as the company's independent registered public accounting firm, and the company is actively seeking a new firm - On August 13, 2025, the Board of Directors approved the dismissal of Ernst & Young LLP (EY) as the Company's independent registered public accounting firm[64] - EY's reports for 2023 and 2024 included an explanatory paragraph regarding the Company's ability to continue as a going concern[65] - The Company is actively seeking a new independent registered public accounting firm[66] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses Bio-Path Holdings, Inc.'s business, drug development programs, financial performance, and liquidity, emphasizing its oncology and obesity drug candidates, clinical trial updates, and financial challenges Overview Bio-Path is a clinical and preclinical stage oncology and obesity-focused RNAi nanoparticle drug development company using its DNAbilize® technology, with four drug candidates and recent operational pause to conserve capital - Bio-Path Holdings, Inc. is a clinical and preclinical stage oncology and obesity-focused RNAi nanoparticle drug development company utilizing its DNAbilize® technology[69] - The company has four drug candidates (BP1001/prexigebersen, BP1002, BP1003, BP1001-A) in development for at least five different cancer indications and one obesity indication[70] - The Phase 2 clinical trial for prexigebersen in AML was amended to include a triple combination therapy with decitabine and venetoclax, showing promising interim data with 75% CR/CRh/CRi in newly diagnosed patients and 55% in relapsed/refractory patients[70][71][72][76] - The Phase 1 clinical trial for BP1002 in refractory/relapsed lymphoma and CLL was discontinued due to enrollment challenges, with increased focus on the obesity development program[77] - Preclinical studies for BP1001-A demonstrated its potential as a treatment for obesity by attenuating fatty acid-induced insulin resistance and restoring insulin sensitivity[83][84] - On June 24, 2025, the Company instituted a company-wide operational pause and furloughed most employees to conserve capital while seeking financing[88] Company History and Available Information Bio-Path Holdings, Inc. was incorporated in 2000, underwent a reverse merger in 2008, changed its state of incorporation to Delaware in 2014, and was delisted from Nasdaq in February 2025 - The Company was incorporated in May 2000 as a Utah corporation, completed a reverse merger in February 2008, and changed its state of incorporation to Delaware effective December 31, 2014[91] - On February 19, 2025, trading of the Company's common stock was suspended on The Nasdaq Capital Market and commenced on the OTCQB Venture Market under the ticker symbol 'BPTH'[93] - A 1-for-20 reverse stock split of outstanding common stock was effected on February 22, 2024[92] Recent Accounting Pronouncements There are no recent accounting pronouncements that have a material impact on the company's condensed consolidated financial statements - There are no recent accounting pronouncements that have a material impact on the condensed consolidated financial statements[93] Financial Operations Overview This section outlines the company's revenue strategy, which currently lacks significant revenue and relies on future drug commercialization, and details the nature of research and development and general and administrative expenses Revenue The company has not generated significant revenues to date and does not expect to for many years, if ever, as revenue generation is heavily dependent on successful drug development and commercialization - The Company has not generated significant revenues to date and does not expect to for many years, if ever[94] - Future revenue generation will depend heavily on the successful development and eventual commercialization of drug candidates, or from grants, service agreements, strategic alliances, and licensing arrangements[94][95] Research and development expenses R&D expenses are charged as incurred, with advance payments capitalized, and are expected to be substantial and increase, with significant uncertainty regarding the timing and costs of drug candidate development - Research and development expenses are charged to expense as incurred, with advance payments for future activities deferred and capitalized[96] - R&D expenses are expected to be substantial and increase over time, with the successful development of drug candidates being highly uncertain[97] - Uncertainties include the rate of progress, results, and costs of clinical trials, regulatory approvals, competing developments, and performance of third-party manufacturers[97][98][100] General and administrative expenses G&A expenses primarily cover management and administrative personnel salaries and benefits, professional fees (legal, accounting), travel, and facility costs - General and administrative expenses primarily consist of salaries and benefits for management and administrative personnel, professional fees (legal, accounting), travel costs, and facility-related costs[101] Results of Operations This section details the financial performance for the three and six months ended June 30, 2025, compared to the same periods in 2024, highlighting changes in operating expenses, net operating loss, and net loss per share Comparisons of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024 For Q2 2025, the company reported no revenue, a significant increase in R&D expenses due to clinical trial pauses, a decrease in G&A expenses, and a higher net loss compared to Q2 2024 - No revenue was generated for the three months ended June 30, 2025 and 2024[102] Financial Performance (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | | Research and Development | $4,048 | $1,873 | +$2,175 | | General and Administrative | $514 | $1,165 | -$651 | | Net Operating Loss | $(4,562) | $(3,038) | -$(1,524) | | Net Loss | $(4,597) | $(1,869) | -$(2,728) | | Net Loss per Share | $(0.55) | $(1.16) | +$0.61 | - The increase in R&D expense was primarily due to expenses related to pausing clinical trials for BP1001 and BP1001-A, partially offset by decreased manufacturing expenses[103] - The decrease in G&A expense was primarily due to decreased salaries and benefits expense, as well as decreased professional and consulting fees[103] Comparisons of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024 For H1 2025, the company reported no revenue, increased R&D expenses due to clinical trial pauses and manufacturing, decreased G&A expenses, and a higher net loss compared to H1 2024 - No revenue was generated for the six months ended June 30, 2025 and 2024[106] Financial Performance (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | | Research and Development | $6,025 | $4,161 | +$1,864 | | General and Administrative | $1,778 | $2,572 | -$794 | | Net Operating Loss | $(7,803) | $(6,733) | -$(1,070) | | Net Loss | $(7,449) | $(5,026) | -$(2,423) | | Net Loss per Share | $(0.97) | $(4.45) | +$3.48 | - The increase in R&D expense was primarily due to expenses related to pausing clinical trials for BP1001 and BP1001-A, as well as increased manufacturing expenses related to drug product releases in 2025[107] - The decrease in G&A expense was primarily due to decreased salaries and benefits expense, professional and consulting fees, and shareholder meeting expenses related to a special shareholder meeting in Q1 2024[107] Liquidity and Capital Resources This section discusses the company's financial position, highlighting its reliance on external financing due to a lack of significant revenue and the ongoing need for substantial additional capital, which raises substantial doubt about its ability to continue as a going concern Overview The company has not generated significant revenue and relies on equity/debt financings, with $0 cash at June 30, 2025, raising substantial doubt about its ability to continue as a going concern - The Company has not generated significant revenues and funds operations primarily through public and private offerings of capital stock and other securities[110] - As of June 30, 2025, the Company had a cash balance of $0.0 million, a decrease of $1.2 million compared to December 31, 2024[111] - Substantial doubt exists about the Company's ability to continue as a going concern for the next 12 months due to insufficient cash to meet obligations and fund capital expenditure requirements[111][112] - The Company will continue to require substantial additional capital and may seek collaborations and license arrangements for drug candidates[110] Cash Flows Net cash used in operating activities decreased in H1 2025 compared to H1 2024, while net cash provided by financing activities significantly declined, leading to a net decrease in cash to zero Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(1,596) | $(4,266) | | Net cash provided by financing activities | $423 | $7,220 | - Net cash used in operating activities for H1 2025 primarily consisted of a net loss of $7.4 million, offset by an increase in accounts payable and accrued expenses of $4.1 million, and decreases in other current assets and prepaid drug product[113] - Net cash provided by financing activities for H1 2025 was $0.4 million from warrant exercises and promissory notes, a significant decrease from $7.2 million in H1 2024 from various equity offerings[114] 2022 Shelf Registration Statement The company's 2022 Shelf Registration Statement, effective June 2022, allowed for the offering of up to $110.0 million in securities, but the company is no longer eligible to utilize this statement - The 2022 Shelf Registration Statement, effective June 14, 2022, registered the offering, issuance, and sale of up to $110.0 million of common stock, preferred stock, warrants, or combinations thereof[115] - As of the date of this report, the Company is not eligible to utilize the 2022 Shelf Registration Statement[115] March 2024 Registered Direct Offering and March 2024 Private Placement In March 2024, the company raised approximately $0.2 million net proceeds from a registered direct offering of common stock and a concurrent private placement of warrants - In March 2024, the Company sold 75,000 shares of common stock in a registered direct offering and issued warrants to purchase up to 75,000 shares in a concurrent private placement[116] - Net proceeds from these offerings were approximately $0.2 million[116] At the Market Offering In April 2024, the company sold 436,511 shares for $2.0 million gross proceeds under an ATM agreement, then increased the offering by $1.1 million, selling 334,929 shares for $1.1 million gross proceeds by June 30, 2025 - In April 2024, the Company sold 436,511 shares of common stock for gross proceeds of approximately $2.0 million under an At The Market Offering Agreement, with net proceeds of approximately $1.8 million[117] - Subsequently, the Company increased the ATM offering by $1.1 million, selling 334,929 shares for gross proceeds of approximately $1.1 million and net proceeds of approximately $1.0 million by June 30, 2025[118] April 2024 Registered Direct Offering and April 2024 Private Placement In April 2024, the company raised approximately $0.9 million net proceeds from a registered direct offering of common stock and a concurrent private placement of warrants - In April 2024, the Company sold 375,000 shares of common stock in a registered direct offering and issued warrants to purchase up to 375,000 shares in a concurrent private placement[119] - Net proceeds from these offerings were approximately $0.9 million[119] June 2024 PIPE In June 2024, the company completed a private placement (PIPE) raising approximately $3.3 million net proceeds by selling common stock, pre-funded warrants, and Series A and B warrants - In June 2024, the Company completed a private placement (PIPE) for gross proceeds of approximately $4.0 million[120] - The PIPE involved the sale of common stock, pre-funded warrants, and Series A and B warrants[120] - Net proceeds from the June 2024 PIPE were approximately $3.3 million[120] October 2024 Private Placement In October 2024, the company raised approximately $3.5 million net proceeds from a private placement of pre-funded warrants and Series A and B warrants, which also involved the cancellation of previously issued warrants - In October 2024, the Company completed a private placement for gross proceeds of approximately $4.0 million[123] - The offering included pre-funded warrants, Series A warrants, and Series B warrants[121][123] - Net proceeds from the October 2024 Private Placement were approximately $3.5 million[123] Pre-Funded Warrant Exercises In February 2025, investors exercised remaining pre-funded warrants, resulting in the issuance of 2.54 million common shares at a weighted average exercise price of approximately $0.001 per share - In February 2025, investors exercised remaining outstanding pre-funded warrants to purchase 2.54 million shares of common stock[124] - The weighted average exercise price for these warrants was approximately $0.001 per share[124] March 2025 Promissory Notes In March 2025, the company entered into two promissory notes totaling $261,050 in principal, with a 12% one-time interest charge and default terms including a 150% repayment penalty and conversion rights - On March 6, 2025, the Company entered into a promissory note for $161,000 principal amount, and on March 28, 2025, another for $100,050 principal amount[125][126] - Both March 2025 Promissory Notes bear a one-time interest charge of twelve percent[125][126] - Upon an Event of Default, the notes become immediately due and payable at 150% of the outstanding principal plus accrued interest, with a 22% default interest rate, and include a conversion right into common stock at 65% of the lowest closing bid price[127] April 2025 Promissory Note In April 2025, the company entered into a promissory note for $161,000 principal, with a 12% one-time interest charge and default terms mirroring the March 2025 notes, including a 150% repayment penalty and conversion rights - On April 28, 2025, the Company entered into a promissory note for $161,000 principal amount[128] - The April 2025 Promissory Note bears a one-time interest charge of twelve percent[128] - Upon an Event of Default, the note becomes immediately due and payable at 150% of the outstanding principal plus accrued interest, with a 22% default interest rate, and includes a conversion right into common stock at 65% of the lowest closing bid price[129] Future Capital Requirements The company expects to continue incurring significant operating expenses for drug development and will require substantial additional capital, which may not be available on favorable terms or at all - The Company expects to continue incurring significant operating expenses for drug development, including clinical trials, manufacturing, and regulatory approval[130] - Substantial additional capital will be required to fund projected operating requirements, and there is no assurance that such capital will be available when needed or on favorable terms[130] Off-Balance Sheet Arrangements As of June 30, 2025, the company did not have any material off-balance sheet arrangements - As of June 30, 2025, the Company did not have any material off-balance sheet arrangements[131] Critical Accounting Policies There have been no significant changes to the company's critical accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no significant changes to the Company's critical accounting policies from those disclosed in its Annual Report on Form 10-K as of the year ended December 31, 2024[132] 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 - This item is not applicable[133] Item 4. Controls and Procedures This section details the management's evaluation of the company's disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, and reporting no material changes in internal control over financial reporting during the period Evaluation of Disclosure Controls and Procedures Management, including the Interim CEO/CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and determined them to be effective - Management, including the Interim Chief Executive Officer (who is also the Interim Chief Financial Officer), reviewed and evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025[135] - It was determined that as of June 30, 2025, the disclosure controls and procedures were effective[135] Changes in Internal Control over Financial Reporting There were no changes in internal control over financial reporting during the period that materially affected or are reasonably likely to materially affect these controls - There were no changes in internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[136] PART II - OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings The company reported no legal proceedings during the period - The Company reported no legal proceedings[139] Item 1A. Risk Factors The company highlights that its operational pause and employee furloughs, implemented to conserve capital, may not achieve intended outcomes and could lead to negative consequences - The operational pause and furlough of most employees, implemented on June 24, 2025, to conserve capital, may not achieve intended outcomes[140] - Potential negative consequences include loss of institutional knowledge and expertise, attrition beyond intended numbers, decreased morale, and difficulty pursuing new opportunities or initiatives[140] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - The Company reported no unregistered sales of equity securities and use of proceeds[141] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - The Company reported no defaults upon senior securities[142] Item 4. Mine Safety Disclosures The company reported no mine safety disclosures during the period - The Company reported no mine safety disclosures[143] Item 5. Other Information This section covers insider trading arrangements and the recent appointment of an Interim Chief Executive Officer and Interim Chief Financial Officer Insider Adoption or Termination of Trading Arrangements No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter - None of the Company's directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter[144] Appointment of Interim Chief Executive Officer and Interim Chief Financial Officer On August 14, 2025, Douglas P. Morris was appointed Interim CEO and Interim CFO, a co-founder and director, and is currently the only officer of the company - On August 14, 2025, Douglas P. Morris was appointed as interim Chief Executive Officer and interim Chief Financial Officer[145] - Mr. Morris is a co-founder of Bio-Path, has served as a director since 2007, and previously served as an officer from 2007 to June 2014[145] - At this time, Mr. Morris is the only officer of the Company[145] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including various agreements, certificates, and certifications - The section lists various agreements, certificates, and certifications filed as exhibits to the Form 10-Q[147]