Hepion Pharmaceuticals(US:HEPA)2026-03-12 01:43Financial Performance - The company has an accumulated deficit of $246.1 million as of December 31, 2025, with no revenue generated from operations since inception [266]. - The company reported a net loss of $8.3 million for the year ended December 31, 2025, compared to a net loss of $13.2 million in 2024, reflecting a decrease of $4.9 million [268]. - The company expects to continue incurring significant losses for the foreseeable future and requires additional financing to sustain operations [276]. Expenses - Research and development expenses decreased from $11.8 million in 2024 to $0.4 million in 2025, a reduction of $11.4 million primarily due to decreased clinical trial costs [269]. - General and administrative expenses also decreased from $7.5 million in 2024 to $3.3 million in 2025, a reduction of $4.2 million attributed to various cost-saving measures [270]. Cash Flow and Working Capital - As of December 31, 2025, the company had a working capital of $2.8 million, an increase of $4.3 million from a working capital deficit of $1.5 million in 2024 [282]. - As of December 31, 2025, the company had $1.8 million in cash, with net cash used in operating activities amounting to $3.3 million, primarily due to a net loss of $8.3 million [283]. - For the year ended December 31, 2024, net cash used in operating activities was $18.3 million, driven by a net loss of $13.2 million and an increase in non-cash charges of $5.3 million [284]. - Net cash used in investing activities was $0.1 million for the year ended December 31, 2025, related to the acquisition of licenses from New Day Diagnostics [285]. - Net cash provided by financing activities was $4.8 million for the year ended December 31, 2025, primarily due to $8.3 million in proceeds from common stock and warrants [286]. Licensing and Agreements - The company entered into a license agreement with New Day Diagnostics LLC, paying $525,000 in cash and $200,000 in common stock, with potential milestone payments of up to $17.15 million [265]. Clinical Trials - The company has initiated wind-down activities for its ASCEND-NASH clinical trial due to insufficient funding [259]. - The company has no products approved for commercial sale in the United States but has three products with CE marks eligible for sale in the EU [274]. Financial Instruments and Valuation - The assumptions and estimates related to the fair value of derivative financial instruments, particularly warrants, have the greatest potential impact on the company's consolidated financial statements [288]. - The Black-Scholes model is used to calculate the fair value of warrants, incorporating significant assumptions such as risk-free interest rate and volatility [289]. - The company reported a change in fair value of derivative warrants amounting to $4.1 million in 2025 and $7.6 million in 2024 [283][284]. - The company’s financial statements are prepared in accordance with GAAP, requiring estimates and assumptions that may differ from actual results under different conditions [287]. Off-Balance Sheet Arrangements - The company had no off-balance sheet arrangements as of December 31, 2025 [290]. Working Capital Changes - Changes in working capital accounts negatively impacted cash by $0.4 million in 2025 and $2.7 million in 2024, primarily due to increases in accounts payable and accrued expenses [283][284].