Financial Performance - The company reported a net loss of $18.8 million for the nine months ended September 30, 2025, with total operating expenses of $18.7 million and interest expense of $1.1 million[151]. - Net loss for the three months ended September 30, 2025, was $7.8 million, a 39% increase from a net loss of $5.6 million in the same period of 2024[167]. - The company has incurred a net loss of $18.8 million for the nine months ended September 30, 2025, compared to a net loss of $9.4 million for the same period in 2024[190]. - Other income (expense) for the nine months ended September 30, 2025, was an expense of $0.1 million, compared to income of $8.6 million in 2024, reflecting a significant increase in expenses[173]. - Cash used in operating activities was $16.3 million for the nine months ended September 30, 2025, primarily due to operating expenses[192]. - Total operating expenses for the nine months ended September 30, 2025, were $18.7 million, a 4% increase from $18.0 million in 2024[171]. Cash and Funding - As of September 30, 2025, the company had an accumulated deficit of $178.6 million and $14.1 million in cash, cash equivalents, and short-term investments, which are expected to fund operations into the second half of 2026[151]. - The company expects to need substantial additional capital to fund product candidates through regulatory approval and to support ongoing operations[176]. - The company expects to finance future cash requirements through a combination of existing cash, equity offerings, and debt financing[182]. - The company raised gross proceeds of $20.4 million from a private placement transaction in January 2024, with net proceeds of approximately $19.0 million after transaction costs[146]. - An underwritten public offering in November 2024 generated gross proceeds of $10.2 million from the sale of 2,720,000 shares of common stock[147]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $11.5 million, primarily from debt financing[195]. - The company has entered into a Loan Agreement for growth capital loans totaling up to $32.5 million, with the first tranche of $10 million funded on February 28, 2025[150]. - The company has a lease obligation with a monthly rent expense of approximately $10,500, expecting cash requirements of about $32,000 over the next three months[197]. Research and Development - The company has conducted multiple Phase 2 clinical trials for its lead product candidate, Auxora, demonstrating a reduction in organ damage and recovery time in patients[141]. - The company expects to finalize the pivotal trial design for Auxora in acute pancreatitis in the first half of 2026, following positive engagement with the FDA[141]. - The company expects research and development expenses to increase substantially as it continues to invest in clinical trials and regulatory approvals for its product candidates[158]. - Research and development expenses increased by 9% to $3.9 million for the three months ended September 30, 2025, compared to $3.6 million for the same period in 2024[168]. - Research and development expenses for the nine months ended September 30, 2025, were $12.1 million, a 14% increase from $10.6 million in 2024[171]. - The company has paused IND enabling preclinical work on certain compounds to focus resources on clinical programs, pending additional funding[142]. - The company anticipates substantial additional funding will be required to support ongoing clinical trials and commercialization efforts[181]. Going Concern - The company has substantial doubt about its ability to continue as a going concern, as current financial resources may not be sufficient to fund operations into the second half of 2026[176]. - The company has experienced significant operating losses since inception, except for the three-month period ending March 31, 2024[190]. Accounting and Estimates - The company is classified as an emerging growth company and will cease this status on December 31, 2025, allowing it to delay adopting new accounting standards until then[207]. - The company is also a smaller reporting company, with a market value of stock held by non-affiliates less than $700 million and annual revenue below $100 million[208]. - The company has not experienced material differences between accrued costs and actual costs incurred since inception, indicating effective cost estimation practices[202]. - Clinical trial expenses are accrued based on patient enrollment and contracted amounts, with adjustments made for changes in trial protocols[203]. - The fair value of the promissory note is estimated using discounted cash flow analysis, with updates to assumptions potentially impacting results significantly[205]. - Common warrants are valued using the Black-Scholes model, with various scenarios considered that could affect fair value[206]. - The company has not adopted any new accounting pronouncements recently[209]. - The company estimates research and development costs based on the work completed and budget provided, adjusting accrued liabilities as actual costs are known[202]. - The company utilizes estimates for clinical trial costs, which are complicated by the diverse nature of services and lack of timely information[201]. - The company records estimated research and development costs in accrued liabilities and adjusts these as necessary based on actual expenses incurred[202].
Grayscale Investments(GRAY) - 2025 Q3 - Quarterly Report