Klotho Neurosciences, Inc.(KLTO) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's analysis, market risk disclosures, and controls and procedures ITEM 1. Financial Statements The financial statements show a significant increase in cash and assets due to financing, a higher net loss, and a going concern uncertainty Condensed Consolidated Balance Sheets Total assets increased to $10.8 million from $2.5 million, driven by a substantial rise in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $8,430,946 | $63,741 | | Total current assets | $8,546,332 | $157,811 | | Total assets | $10,845,886 | $2,457,365 | | Liabilities & Equity | | | | Total current liabilities | $62,962 | $1,247,534 | | Total liabilities | $195,409 | $1,272,020 | | Total stockholders' equity | $10,650,477 | $1,185,345 | Unaudited Condensed Consolidated Statements of Operations The company reported a significantly widened net loss of $6.3 million for the six months ended June 30, 2025, due to increased operating and interest expenses Comparison of Operations (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating expenses | $1,892,852 | $395,607 | $3,479,820 | $817,652 | | Net operating loss | $(1,892,852) | $(395,607) | $(3,479,820) | $(817,652) | | Net loss | $(4,093,231) | $(451,639) | $(6,327,213) | $(1,123,683) | | Net loss per share | $(0.12) | $(0.03) | $(0.21) | $(0.07) | Unaudited Condensed Consolidated Statements of Cash Flows Cash and cash equivalents increased by $8.37 million for the six months ended June 30, 2025, primarily from $11.89 million in financing activities Cash Flow Summary for the Six Months Ended June 30 | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,522,178) | $(929,399) | | Net cash used in investing activities | $0 | $(123,497) | | Net cash provided by financing activities | $11,889,383 | $1,895,424 | | Net Change in Cash | $8,367,205 | $842,528 | | Cash - End of period | $8,430,946 | $845,336 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the company's business, reverse merger, accounting policies, going concern doubt, equity transactions, and FDA Orphan Drug Designation - The company develops medicines for chronic diseases, including cancer and neurodegenerative disorders, and recently changed its name from ANEW Medical, Inc. to Klotho Neurosciences, Inc. to reflect its strategic focus[19][21] - Management has substantial doubt about the Company's ability to continue as a going concern for the next twelve months due to significant operating losses, negative cash flows, and the need to raise additional capital[30] - During Q2 2025, holders of common stock warrants exercised 11.0 million warrants for gross proceeds of $11.4 million after the company initiated an inducement program, reducing the exercise price from $3.49 to $1.35[89] - Subsequent to the quarter end, on July 3, 2025, the FDA granted Orphan Drug Designation to the company's gene therapy candidate KLTO-202 for the treatment of ALS[105] - The company regained compliance with Nasdaq listing requirements on July 14, 2025, after receiving deficiency notices in 2024 regarding minimum market value and bid price[97][100][109] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses increased operating expenses and net loss, improved liquidity from financing, and ongoing going concern doubt Results of Operations The company reported no revenue and a net loss of $6.3 million for the first half of 2025, significantly higher than the prior year Comparison of Operating Results | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $0 | $0 | $0 | | Operating Expenses | $1,892,852 | $395,607 | $3,479,820 | $817,652 | | Net Loss | $4,093,231 | $451,639 | $6,327,213 | $1,123,683 | Liquidity and Capital Resources Cash increased to $8.4 million due to $11.9 million from financing activities, but substantial doubt about going concern remains without further funding - Cash position increased to $8.4 million as of June 30, 2025, primarily due to $11.9 million raised from financing activities in the first six months of the year[128][130] - The company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to continue operations, and without it, there is substantial doubt about its ability to continue as a going concern[131] ITEM 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Klotho Neurosciences is exempt from providing market risk disclosures - As a smaller reporting company, Klotho Neurosciences is not required to make disclosures under this item[135] ITEM 4. Controls and Procedures Management concluded that disclosure controls were ineffective due to material weaknesses in accounting resources and segregation of duties - Management concluded that disclosure controls and procedures were ineffective as of the end of the reporting period[136] - The ineffectiveness is due to material weaknesses related to inadequate accounting resources and a lack of segregation of duties, stemming from the company's small size[137] - There were no changes in internal controls during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[143] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, other information, and a list of exhibits filed with the report ITEM 1. Legal Proceedings The company reported no legal proceedings during the period - None[146] ITEM 1A. Risk Factors As a smaller reporting company, the company is not required to provide disclosures under this item - As a smaller reporting company, disclosures under this item are not required[147] ITEM 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[151] ITEM 6. Exhibits This section lists the various exhibits filed as part of the Quarterly Report, including officer certifications and XBRL data - The report includes various exhibits, such as officer certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files (101 series)[153]