[10-Q] Armata Pharmaceuticals, Inc. Quarterly Earnings Report
Armata Pharmaceuticals, Inc. reported a widening operating and net loss in the first half of 2025 as it advances bacteriophage therapeutics. Total assets were $80.8 million versus $86.4 million at year-end 2024, with cash and cash equivalents of $4.3 million and restricted cash of $5.4 million, for combined cash of $9.7 million. The company recorded a six-month net loss of $22.8 million and used $14.8 million of cash in operating activities during the same period.
The balance sheet shows total liabilities of $150.3 million and a stockholders' deficit of $69.5 million, driven by increased current liabilities including a fair-value accounted Convertible Loan of $33.4 million and current term debt of $78.9 million. Management discloses substantial doubt about going concern, stating current cash is insufficient for the next 12 months. Material subsequent financing includes an August 11, 2025 $15.0 million loan from Innoviva at 14% interest; the company also continues to receive MTEC award funding now totaling $26.2 million (term extended to March 31, 2026) to support AP-SA02 development.
Armata Pharmaceuticals, Inc. ha registrato un aumento delle perdite operative e nette nella prima metà del 2025 mentre avanza nello sviluppo di terapie a base di batteriofagi. Le attività totali ammontavano a $80.8 milioni rispetto a $86.4 milioni alla fine del 2024, con contanti e equivalenti di $4.3 million e contanti vincolati di $5.4 million, per un totale combinato di $9.7 million. La società ha riportato una perdita netta semestrale di $22.8 million e ha utilizzato $14.8 million di cassa nelle attività operative nello stesso periodo.
Lo stato patrimoniale mostra passività totali di $150.3 million e un patrimonio netto negativo (deficit degli azionisti) di $69.5 million, alimentato dall'aumento delle passività correnti, inclusi un prestito convertibile valutato al fair value di $33.4 million e debiti a termine correnti di $78.9 million. La direzione dichiara significativi dubbi sulla continuità aziendale, affermando che la liquidità attuale non è sufficiente per i prossimi 12 mesi. Tra i finanziamenti successivi di rilievo figura un prestito del 11 agosto 2025 da Innoviva di $15.0 million al 14% di interesse; la società continua inoltre a ricevere finanziamenti MTEC, ora per un totale di $26.2 million (termine esteso al 31 marzo 2026) per sostenere lo sviluppo di AP-SA02.
Armata Pharmaceuticals, Inc. informó un aumento de las pérdidas operativas y netas en el primer semestre de 2025 mientras avanza en terapias basadas en bacteriófagos. Los activos totales fueron de $80.8 millones frente a $86.4 millones a finales de 2024, con efectivo y equivalentes de $4.3 million y efectivo restringido de $5.4 million, para un efectivo combinado de $9.7 million. La compañía registró una pérdida neta semestral de $22.8 million y utilizó $14.8 million de efectivo en actividades operativas durante el mismo periodo.
El balance muestra pasivos totales de $150.3 million y un déficit de los accionistas de $69.5 million, impulsado por el aumento de pasivos corrientes, incluidos un préstamo convertible valorado a valor razonable de $33.4 million y deuda a plazo corriente de $78.9 million. La dirección declara dudas sustanciales sobre la continuidad operativa, indicando que la liquidez actual no es suficiente para los próximos 12 meses. Entre los financiamientos posteriores relevantes figura un préstamo del 11 de agosto de 2025 de Innoviva por $15.0 million al 14% de interés; la compañía también sigue recibiendo fondos del MTEC, que ya suman $26.2 million (plazo extendido hasta el 31 de marzo de 2026) para apoyar el desarrollo de AP-SA02.
Armata Pharmaceuticals, Inc.는 박테리오파지 치료제 개발을 진행하는 가운데 2025년 상반기에 영업손실과 순손실이 확대되었다고 보고했습니다. 총자산은 $80.8 million로 2024년말의 $86.4 million에서 감소했으며, 현금 및 현금성자산은 $4.3 million, 제한된 현금은 $5.4 million으로 합산 현금은 $9.7 million입니다. 회사는 6개월 순손실 $22.8 million을 기록했고 같은 기간 영업활동에서 $14.8 million의 현금을 사용했습니다.
대차대조표상 총부채는 $150.3 million이며 주주지분은 $69.5 million의 적자를 나타내고 있는데, 이는 공정가치로 평가된 전환대출금 $33.4 million 및 현재 만기인 기한부 부채 $78.9 million 등 유동부채의 증가에 기인합니다. 경영진은 계속기업 존속에 대한 중대한 의문을 표명하며 현재 현금으로는 향후 12개월을 버티기에는 불충분하다고 밝혔습니다. 이후의 주요 자금조달로는 2025년 8월 11일 Innoviva로부터의 이자율 14% 조건의 $15.0 million 대출이 포함되며, 회사는 AP-SA02 개발을 지원하기 위해 기간이 연장된 MTEC 보조금으로 현재 총 $26.2 million을 계속 수령하고 있습니다 (기간 연장: 2026년 3월 31일).
Armata Pharmaceuticals, Inc. a déclaré une aggravation de ses pertes d'exploitation et nettes au premier semestre 2025 alors qu'elle progresse sur les thérapeutiques à base de bactériophages. L'actif total s'élevait à $80.8 millions contre $86.4 millions à la fin de 2024, avec des liquidités et équivalents de trésorerie de $4.3 million et des liquidités restreintes de $5.4 million, soit un total combiné de $9.7 million. La société a enregistré une perte nette sur six mois de $22.8 million et a utilisé $14.8 million de trésorerie dans ses activités opérationnelles au cours de la même période.
Le bilan fait apparaître des passifs totaux de $150.3 million et un déficit des actionnaires de $69.5 million, provoqué par l'augmentation des passifs courants, y compris un prêt convertible évalué à la juste valeur de $33.4 million et une dette à terme courante de $78.9 million. La direction déclare un doute important sur la continuité d'exploitation, indiquant que la trésorerie actuelle est insuffisante pour les 12 prochains mois. Parmi les financements postérieurs significatifs figure un prêt d'Innoviva daté du 11 août 2025 de $15.0 million au taux de 14 % ; la société continue par ailleurs de recevoir des fonds MTEC, qui s'élèvent désormais à $26.2 million (durée prolongée au 31 mars 2026) pour soutenir le développement de l'AP-SA02.
Armata Pharmaceuticals, Inc. meldete eine ausgeweitete operative und Netto-Verlustsituation im ersten Halbjahr 2025, während das Unternehmen seine Bakteriophagen-Therapeutika vorantreibt. Die Gesamtaktiva beliefen sich auf $80.8 Millionen gegenüber $86.4 Millionen zum Jahresende 2024, mit Zahlungsmitteln und Zahlungsmitteläquivalenten von $4.3 million und gebundenen Zahlungsmitteln von $5.4 million, also kombiniert $9.7 million. Das Unternehmen verzeichnete einen Sechsmonats-Nettoverlust von $22.8 million und verwendete im selben Zeitraum $14.8 million an Zahlungsmitteln für operative Tätigkeiten.
Die Bilanz weist Verbindlichkeiten in Höhe von $150.3 million und ein Eigenkapitaldefizit von $69.5 million aus, bedingt durch gestiegene kurzfristige Verbindlichkeiten, darunter ein zum Fair Value bewertetes wandelbares Darlehen von $33.4 million sowie laufende Terminschulden von $78.9 million. Das Management äußert
- $26.2 million MTEC award increased and extended to March 31, 2026, providing non-dilutive funding for the AP-SA02 clinical program
- Subsequent financing: $15.0 million August 2025 Loan from Innoviva (14.0% interest) and the March 2025 $10.0 million Loan provide additional near-term liquidity
- Completed Phase 2 experience (three Phase 2 trials completed) and prior positive topline results for AP-PA02 noted in the report
- Going concern disclosed: management states existing unrestricted cash of $4.3 million is insufficient to fund operations for the next 12 months, raising substantial doubt about continuing as a going concern
- Stockholders' deficit of $69.5 million and total liabilities of $150.3 million exceed total assets of $80.8 million as of June 30, 2025
- Large short-term obligations: current liabilities increased to $120.1 million driven by current term debt ($78.9M) and fair-value Convertible Loan ($33.4M)
- High financing costs: disclosed loan interest rates at 14.0% and an effective annual rate on the 2023 Loan of 41.64% indicate expensive capital
- Significant net loss and cash burn: six-month net loss of $22.8 million and operating cash used of $14.8 million
Insights
TL;DR: Liquidity is the principal near-term risk; recent loans provide runway but at high cost and stockholders' deficit is large.
The company's condensed statements show constrained liquidity with $4.3M of unrestricted cash and combined cash of $9.7M against $120.1M of current liabilities as of June 30, 2025. Operating cash outflow of $14.8M for six months and a six-month net loss of $22.8M highlight ongoing burn. Subsequent financing of $15M from Innoviva (14% interest) and the March $10M loan materially extend runway but at expensive interest rates; the 2023 loan effective rate was reported at 41.64% as of June 30, 2025, indicating significant financing cost and potential covenant pressure. The fair-value volatility of the Convertible Loan adds earnings volatility. Overall, the filing signals high short-term financing risk despite targeted non-dilutive grant support.
TL;DR: Governance and counterparty concentration with a single principal investor present credit and control considerations.
The company’s primary lender and principal stockholder, Innoviva, is the counterparty for multiple credit facilities including the Convertible Loan, the March 2025 Loan, and the August 2025 Loan disclosed as a subsequent event. This concentration creates related-party risk and potential governance implications if additional financing or restructuring becomes necessary. The balance sheet shows a material stockholders' deficit ($69.5M) and repeated loan amendments extending maturities, which may increase lender influence over strategic options. The MTEC award ($26.2M) provides targeted non-dilutive funding for AP-SA02 but does not eliminate broad liquidity pressures. Impact on minority shareholders could be significant if future financings are on preferential terms to Innoviva.
Armata Pharmaceuticals, Inc. ha registrato un aumento delle perdite operative e nette nella prima metà del 2025 mentre avanza nello sviluppo di terapie a base di batteriofagi. Le attività totali ammontavano a $80.8 milioni rispetto a $86.4 milioni alla fine del 2024, con contanti e equivalenti di $4.3 million e contanti vincolati di $5.4 million, per un totale combinato di $9.7 million. La società ha riportato una perdita netta semestrale di $22.8 million e ha utilizzato $14.8 million di cassa nelle attività operative nello stesso periodo.
Lo stato patrimoniale mostra passività totali di $150.3 million e un patrimonio netto negativo (deficit degli azionisti) di $69.5 million, alimentato dall'aumento delle passività correnti, inclusi un prestito convertibile valutato al fair value di $33.4 million e debiti a termine correnti di $78.9 million. La direzione dichiara significativi dubbi sulla continuità aziendale, affermando che la liquidità attuale non è sufficiente per i prossimi 12 mesi. Tra i finanziamenti successivi di rilievo figura un prestito del 11 agosto 2025 da Innoviva di $15.0 million al 14% di interesse; la società continua inoltre a ricevere finanziamenti MTEC, ora per un totale di $26.2 million (termine esteso al 31 marzo 2026) per sostenere lo sviluppo di AP-SA02.
Armata Pharmaceuticals, Inc. informó un aumento de las pérdidas operativas y netas en el primer semestre de 2025 mientras avanza en terapias basadas en bacteriófagos. Los activos totales fueron de $80.8 millones frente a $86.4 millones a finales de 2024, con efectivo y equivalentes de $4.3 million y efectivo restringido de $5.4 million, para un efectivo combinado de $9.7 million. La compañía registró una pérdida neta semestral de $22.8 million y utilizó $14.8 million de efectivo en actividades operativas durante el mismo periodo.
El balance muestra pasivos totales de $150.3 million y un déficit de los accionistas de $69.5 million, impulsado por el aumento de pasivos corrientes, incluidos un préstamo convertible valorado a valor razonable de $33.4 million y deuda a plazo corriente de $78.9 million. La dirección declara dudas sustanciales sobre la continuidad operativa, indicando que la liquidez actual no es suficiente para los próximos 12 meses. Entre los financiamientos posteriores relevantes figura un préstamo del 11 de agosto de 2025 de Innoviva por $15.0 million al 14% de interés; la compañía también sigue recibiendo fondos del MTEC, que ya suman $26.2 million (plazo extendido hasta el 31 de marzo de 2026) para apoyar el desarrollo de AP-SA02.
Armata Pharmaceuticals, Inc.는 박테리오파지 치료제 개발을 진행하는 가운데 2025년 상반기에 영업손실과 순손실이 확대되었다고 보고했습니다. 총자산은 $80.8 million로 2024년말의 $86.4 million에서 감소했으며, 현금 및 현금성자산은 $4.3 million, 제한된 현금은 $5.4 million으로 합산 현금은 $9.7 million입니다. 회사는 6개월 순손실 $22.8 million을 기록했고 같은 기간 영업활동에서 $14.8 million의 현금을 사용했습니다.
대차대조표상 총부채는 $150.3 million이며 주주지분은 $69.5 million의 적자를 나타내고 있는데, 이는 공정가치로 평가된 전환대출금 $33.4 million 및 현재 만기인 기한부 부채 $78.9 million 등 유동부채의 증가에 기인합니다. 경영진은 계속기업 존속에 대한 중대한 의문을 표명하며 현재 현금으로는 향후 12개월을 버티기에는 불충분하다고 밝혔습니다. 이후의 주요 자금조달로는 2025년 8월 11일 Innoviva로부터의 이자율 14% 조건의 $15.0 million 대출이 포함되며, 회사는 AP-SA02 개발을 지원하기 위해 기간이 연장된 MTEC 보조금으로 현재 총 $26.2 million을 계속 수령하고 있습니다 (기간 연장: 2026년 3월 31일).
Armata Pharmaceuticals, Inc. a déclaré une aggravation de ses pertes d'exploitation et nettes au premier semestre 2025 alors qu'elle progresse sur les thérapeutiques à base de bactériophages. L'actif total s'élevait à $80.8 millions contre $86.4 millions à la fin de 2024, avec des liquidités et équivalents de trésorerie de $4.3 million et des liquidités restreintes de $5.4 million, soit un total combiné de $9.7 million. La société a enregistré une perte nette sur six mois de $22.8 million et a utilisé $14.8 million de trésorerie dans ses activités opérationnelles au cours de la même période.
Le bilan fait apparaître des passifs totaux de $150.3 million et un déficit des actionnaires de $69.5 million, provoqué par l'augmentation des passifs courants, y compris un prêt convertible évalué à la juste valeur de $33.4 million et une dette à terme courante de $78.9 million. La direction déclare un doute important sur la continuité d'exploitation, indiquant que la trésorerie actuelle est insuffisante pour les 12 prochains mois. Parmi les financements postérieurs significatifs figure un prêt d'Innoviva daté du 11 août 2025 de $15.0 million au taux de 14 % ; la société continue par ailleurs de recevoir des fonds MTEC, qui s'élèvent désormais à $26.2 million (durée prolongée au 31 mars 2026) pour soutenir le développement de l'AP-SA02.
Armata Pharmaceuticals, Inc. meldete eine ausgeweitete operative und Netto-Verlustsituation im ersten Halbjahr 2025, während das Unternehmen seine Bakteriophagen-Therapeutika vorantreibt. Die Gesamtaktiva beliefen sich auf $80.8 Millionen gegenüber $86.4 Millionen zum Jahresende 2024, mit Zahlungsmitteln und Zahlungsmitteläquivalenten von $4.3 million und gebundenen Zahlungsmitteln von $5.4 million, also kombiniert $9.7 million. Das Unternehmen verzeichnete einen Sechsmonats-Nettoverlust von $22.8 million und verwendete im selben Zeitraum $14.8 million an Zahlungsmitteln für operative Tätigkeiten.
Die Bilanz weist Verbindlichkeiten in Höhe von $150.3 million und ein Eigenkapitaldefizit von $69.5 million aus, bedingt durch gestiegene kurzfristige Verbindlichkeiten, darunter ein zum Fair Value bewertetes wandelbares Darlehen von $33.4 million sowie laufende Terminschulden von $78.9 million. Das Management äußert
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
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For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
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For the transition period from _________________ to _______________________
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company as defined in Rule 12b-2 of the Exchange Act. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Table of Contents
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION | ||
Item 1. | Financial Statements (unaudited) | 6 |
Condensed Consolidated Balance Sheets | 6 | |
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Condensed Consolidated Statements of Operations | 7 | |
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Condensed Consolidated Statements of Stockholders’ Deficit | 8 | |
Condensed Consolidated Statements of Cash Flows | 10 | |
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Notes to Condensed Consolidated Financial Statements | 11 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 37 |
Item 4. | Controls and Procedures | 37 |
PART II. OTHER INFORMATION | 38 | |
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Item 1. | Legal Proceedings | 38 |
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Item 1A. | Risk Factors | 38 |
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38 |
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Item 3. | Defaults upon Senior Securities | 38 |
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Item 4. | Mine Safety Disclosures | 38 |
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Item 5. | Other Information | 38 |
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Item 6. | Exhibits | 38 |
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SIGNATURES | 41 | |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) and certain information incorporated herein by reference contain forward-looking statements, which are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, results or to our future financial performance and involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or events to be materially different from any future results, performance, or events expressed or implied by the forward-looking statements. Forward-looking statements in this Quarterly Report include, but are not limited to, statements regarding:
● | our estimates regarding anticipated operating losses, capital requirements and needs for additional funds; |
● | our ability to raise additional capital when needed and to continue as a going concern; |
● | our ability to manufacture, or otherwise secure the manufacture of, sufficient amounts of our product candidates for our preclinical studies and clinical trials; |
● | our clinical development plans, including planned clinical trials; |
● | our research and development plans; |
● | our ability to select combinations of phages to formulate our product candidates; |
● | our development of bacteriophage-based therapies; |
● | the potential use of bacteriophages to treat bacterial infections; |
● | the potential future of antibiotic resistance; |
● | the ability for bacteriophage therapies to disrupt and destroy biofilms and restore sensitivity to antibiotics; |
● | the potential for bacteriophage technology being uniquely positioned to address the global threat of antibiotic resistance; |
● | our planned development strategy, presenting data to regulatory agencies and defining planned clinical studies; |
● | the expected timing of additional clinical trials, including Phase 1b/Phase 2 or registrational clinical trials; |
● | our ability to manufacture and secure sufficient quantities of our product candidates for clinical trials; |
● | the drug product candidates to be supplied by us for clinical trials; |
● | the safety and efficacy of our product candidates; |
● | our anticipated regulatory pathways for our product candidates; |
● | the activities to be performed by specific parties in connection with clinical trials; |
● | our ability to successfully complete preclinical and clinical development of, and obtain regulatory approval of our product candidates and commercialize any approved products on our expected timeframes or at all; |
● | our pursuit of additional indications; |
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● | the content and timing of submissions to and decisions made by the U.S. Food and Drug Administration (the “FDA”) and other regulatory agencies; |
● | our ability to leverage the experience of our management team and to attract and retain management and other key personnel; |
● | the capacities and performance of our suppliers, manufacturers, contract research organizations (“CROs”) and other third parties over whom we have limited control; |
● | our ability to staff and maintain our Los Angeles production facility under fully compliant current Good Manufacturing Practices (“cGMP”); |
● | the actions of our competitors and success of competing drugs or other therapies that are or may become available; |
● | our expectations with respect to future growth and investments in our infrastructure, and our ability to effectively manage any such growth; |
● | the size and potential growth of the markets for any of our product candidates, and our ability to capture share in or impact the size of those markets; |
● | the benefits of our product candidates; |
● | the potential market growth and market and industry trends; |
● | maintaining collaborations with third parties including our partnerships with the Cystic Fibrosis Foundation (the “CFF”) and the U.S. Department of Defense (the “DoD”); |
● | potential future collaborations with third parties and the potential markets and market opportunities for product candidates; |
● | our ability to achieve our vision, including improvements through engineering and success of clinical trials; |
● | our ability to meet anticipated milestones in the development and testing of the relevant product; |
● | our ability to be a leader in the development of phage-based therapeutics; |
● | the expected use of proceeds from the $26.2 million DoD award; |
● | the effects of government regulation and regulatory developments, and our ability and the ability of the third parties with whom we engage to comply with applicable regulatory requirements; |
● | the accuracy of our estimates regarding future expenses, revenues, capital requirements and need for additional financing; |
● | our expectations regarding future planned expenditures; |
● | our ability to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act; |
● | our ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection of any of our products and product candidates; |
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● | our ability to protect our intellectual property, including pending and issued patents; |
● | our ability to operate our business without infringing the intellectual property rights of others; |
● | our ability to advance our clinical development programs; |
● | the effects of ongoing conflicts between Ukraine and Russia and in the Middle East, potential future bank failures or other geopolitical events; |
● | the potential economic and regulatory impacts on the biotechnology, pharmaceutical and drug manufacturing industries; |
● | the effects of artificial intelligence on our business and the industry as a whole; and |
● | statements of belief and any statement of assumptions underlying any of the foregoing. |
In some cases, you can identify these statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of those terms, and similar expressions. These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report and are subject to risks and uncertainties. We discuss many of these risks in greater detail in the section hereof entitled “Risk Factors” and in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain. Given these uncertainties, you should not place undue reliance on any of the forward-looking statements included in this Quarterly Report. In addition, this Quarterly Report also contains estimates, projections, and other information concerning our industry, our business, and the markets for our product candidates, as well as data regarding market research, estimates, and forecasts prepared by our management. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.
Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events, or otherwise.
This Quarterly Report includes trademarks and registered trademarks of Armata Pharmaceuticals, Inc. Products or service names of other companies mentioned in this Quarterly Report may be trademarks or registered trademarks of their respective owners.
As used in this Quarterly Report, unless the context requires otherwise, the “Company,” “we,” “us,” and “our” refer to Armata Pharmaceuticals, Inc. and its wholly owned subsidiaries.
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Armata Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share data)
| June 30, 2025 |
| December 31, 2024 | |||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses and other current assets |
| |
| | ||
Other receivables | | | ||||
Total current assets |
| |
| | ||
Restricted cash | | | ||||
Property and equipment, net |
| |
| | ||
Operating lease right-of-use asset |
| |
| | ||
In-process research and development | | | ||||
Goodwill | | | ||||
Other assets |
| |
| | ||
Total assets | $ | | $ | | ||
Liabilities and stockholders’ deficit |
|
|
|
| ||
Current liabilities |
|
|
|
| ||
Accounts payable and accrued liabilities | $ | | $ | | ||
Accrued compensation | | | ||||
Convertible Loan, current | | — | ||||
Term debt, current | | | ||||
Current portion of operating lease liabilities | | | ||||
Other current liabilities | | | ||||
Total current liabilities |
| |
| | ||
Convertible Loan, non-current | — | | ||||
Term debt, non-current | — | | ||||
Operating lease liabilities, net of current portion | | | ||||
Deferred tax liability | | | ||||
Total liabilities |
| |
| | ||
Commitments and contingencies (Note 12) |
|
|
|
| ||
Stockholders’ deficit |
|
|
|
| ||
Common Stock, $ |
| |
| | ||
Additional paid-in capital |
| |
| | ||
Accumulated deficit |
| ( |
| ( | ||
Total stockholders’ deficit |
| ( |
| ( | ||
Total liabilities and stockholders’ deficit | $ | | $ | | ||
See accompanying notes to condensed consolidated financial statements.
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Armata Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Grant and award revenue | $ | | $ | — | $ | | $ | | ||||
Operating expenses | ||||||||||||
Research and development |
| | |
| | | ||||||
General and administrative |
| | |
| | | ||||||
Total operating expenses | | | | | ||||||||
Operating loss |
| ( |
| ( |
| ( |
| ( | ||||
Other income (expense) |
|
|
|
|
|
| ||||||
Interest income |
| | | | | |||||||
Interest expense | ( | ( | ( | ( | ||||||||
Change in fair value of the Convertible Loan | ( | | ( | | ||||||||
Total other income (expense), net |
| ( |
| |
| ( |
| | ||||
Net income (loss) | $ | ( | $ | | $ | ( | $ | ( | ||||
Per share information: | ||||||||||||
Net income (loss) per share, basic | $ | ( | $ | | $ | ( | $ | ( | ||||
Weighted average shares outstanding, basic | | | | | ||||||||
Net loss per share, diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Weighted average shares outstanding, diluted | | | | | ||||||||
See accompanying notes to condensed consolidated financial statements.
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Armata Pharmaceuticals, Inc.
Condensed Consolidated Statements of Stockholders’ Deficit
Three and Six Months Ended June 30, 2025 and 2024
(unaudited)
(in thousands, except share data)
Stockholders’ Deficit | ||||||||||||||
Common Stock | ||||||||||||||
Additional | Total | |||||||||||||
Paid-in | Accumulated | Stockholders’ | ||||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balances, March 31, 2024 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Exercise of stock options | | | | — | | |||||||||
Stock-based compensation expense |
| — | — | | — | | ||||||||
Net income |
| — | — | — | | | ||||||||
Balances, June 30, 2024 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Stockholders’ Deficit | ||||||||||||||
Common Stock | ||||||||||||||
Additional | Total | |||||||||||||
Paid-in | Accumulated | Stockholders’ | ||||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balances, March 31, 2025 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Stock-based compensation expense |
| — | — | | — | | ||||||||
Net loss |
| — | — | — | ( | ( | ||||||||
Balances, June 30, 2025 |
| | $ | | $ | | $ | ( | $ | ( | ||||
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Stockholders’ Deficit | ||||||||||||||
Common Stock | ||||||||||||||
Additional | Total | |||||||||||||
Paid-in | Accumulated | Stockholders’ | ||||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balances, December 31, 2023 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Exercise of stock options | | | | — | | |||||||||
Withholdings for taxes related to net share settlement of equity awards | ( | — | — | — | — | |||||||||
Stock-based compensation expense |
| — | — | | — |
| | |||||||
Net loss |
| — | — | — | ( |
| ( | |||||||
Balances, June 30, 2024 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Stockholders’ Deficit | ||||||||||||||
Common Stock | ||||||||||||||
Additional | Total | |||||||||||||
Paid-in | Accumulated | Stockholders’ | ||||||||||||
Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | ||||||
Balances, December 31, 2024 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Issuance of Common Stock upon release of restricted stock units, net of tax withholdings | | — | ( | ( | ||||||||||
Stock-based compensation expense | — | — | | — | | |||||||||
Net loss |
| — | — | — | ( | ( | ||||||||
Balances, June 30, 2025 |
| | $ | | $ | | $ | ( | $ | ( | ||||
See accompanying notes to condensed consolidated financial statements.
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Armata Pharmaceuticals, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Six Months Ended June 30, | ||||||
| 2025 |
| 2024 | |||
Operating activities: | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization expense |
| |
| | ||
Stock-based compensation expense | | | ||||
Change in fair value of the Convertible Loan | | ( | ||||
Non-cash interest expense | | | ||||
Change in right-of-use asset | | | ||||
Changes in operating assets and liabilities: |
|
| ||||
Prepaid expenses and other assets |
| ( |
| | ||
Accounts payable and accrued liabilities |
| ( |
| ( | ||
Accrued compensation | ( | | ||||
Operating lease liability | ( | ( | ||||
Net cash used in operating activities |
| ( |
| ( | ||
Investing activities: |
|
|
|
| ||
Purchases of property and equipment | ( | ( | ||||
Net cash used in investing activities |
| ( |
| ( | ||
Financing activities: |
|
|
|
| ||
Proceeds from issuance of term debt, net of issuance costs | | | ||||
Payments for taxes related to net share settlement of equity awards | ( | — | ||||
Proceeds from exercise of stock options | — | | ||||
Net cash provided by financing activities |
| |
| | ||
Net (decrease) increase in cash, cash equivalents and restricted cash |
| ( |
| | ||
Cash, cash equivalents and restricted cash, beginning of period |
| |
| | ||
Cash, cash equivalents and restricted cash, end of period | $ | | $ | | ||
Supplemental disclosure of cash flow information: |
|
|
|
| ||
Property and equipment included in accounts payable and accrued liabilities | — | | ||||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Six Months Ended June 30, | ||||||
2025 |
| 2024 | ||||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash | | | ||||
Cash, cash equivalents and restricted cash | $ | | $ | | ||
See accompanying notes to condensed consolidated financial statements.
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Armata Pharmaceuticals, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Organization and Description of the Business
Armata Pharmaceuticals, Inc. (“Armata”) together with its subsidiaries (the “Company”), is a clinical-stage biotechnology company focused on the development of pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using its proprietary bacteriophage-based technology.
Armata’s common stock, par value $
2. Liquidity and Going Concern
The Company has incurred significant operating losses since inception and has primarily relied on equity, debt, grant, and award financing to fund its operations. As of June 30, 2025, the Company had an accumulated deficit of $
The Company has prepared its condensed consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.
Recent Financing:
August 2025 Credit Agreement
As discussed in more detail in Note 15, Subsequent Event, on August 11, 2025, the Company entered into a credit and security (the “August 2025 Credit Agreement”) for a loan in the aggregate amount of $
March 2025 Credit Agreement
On March 12, 2025, the Company entered into a credit and security agreement (the “March 2025 Credit Agreement”) for a loan in an aggregate amount of $
Concurrently with the execution of the March 2025 Credit Agreement, the Company entered into amendments to (i) its existing convertible loan (the “Convertible Loan”) and secured credit and security agreement, dated January 10, 2023, with Innoviva (the “Convertible Credit Agreement”), (ii) its existing secured term loan facility (the “2023 Loan”) and
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credit and security agreement, dated July 10, 2023, with Innoviva (the “2023 Credit Agreement”) and (iii) its existing secured term loan facility (the “2024 Loan”) and credit and security agreement, dated March 4, 2024, with Innoviva (the “2024 Credit Agreement”), which, among other things, extended the maturity date of each loan to March 12, 2026.
2024 Credit Agreement
On March 4, 2024, the Company entered into the 2024 Credit Agreement for the 2024 Loan in an aggregate amount of $
The Company plans to raise additional capital through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses and other similar arrangements. While the Company believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, these plans are not entirely within its control and cannot be assessed as being probable of occurring. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide. The Company may not be able to secure additional financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products on terms that are not favorable to the Company. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve the development and commercialization goals would be adversely affected.
3. Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto as of and for the year ended December 31, 2024 included in the Company’s Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 21, 2025. The information as of December 31, 2024 included in the condensed consolidated balance sheets was derived from the Company’s audited financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the SEC for interim reporting. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments that are of a normal and recurring nature and that are necessary for the fair presentation of the Company’s financial position and the results of its operations and cash flows for the periods presented. Interim results are not necessarily indicative of results for the full year or any future period.
Any reference in the condensed consolidated financial statements to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).
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Significant Accounting Policies
The significant accounting policies used in preparation of the condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024 are consistent with those discussed in Note 3 to the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2024, filed with the SEC on March 21, 2025, except as noted below and within the “Recently Adopted Accounting Pronouncements” section.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. On an ongoing basis, the Company evaluates estimates and assumptions, including but not limited to those related to the fair value of the Convertible Loan, stock-based compensation expense, accruals for research and development costs, the valuation of deferred tax assets, impairment of goodwill and intangible assets and impairment of long-lived assets. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates.
Concentration of Credit Risks and Certain Other Risks
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and restricted cash. As of June 30, 2025, cash equivalents and restricted cash was invested primarily in money market funds and U.S. treasury securities through highly rated financial institutions in accordance with the Company’s investment policy, to a concentration limit per issuer or sector.
Other receivables represent amounts due from the Medical Technology Enterprise Consortium (“MTEC”) (Note 13, “Grants and Awards”).
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued Accounting Standards Update 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on the Company’s consolidated financial statement disclosures.
4. Fair Value Measurements
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering
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market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following three levels:
The financial assets and liabilities measured and recognized at fair value were as follows as of June 30, 2025 and December 31, 2024 (in thousands):
June 30, 2025 | |||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||
Investments in money market fund – financial assets, included in cash and cash equivalents | $ | | $ | | $ | — | $ | — | |||
Convertible Loan– financial liabilities | | — | — | | |||||||
December 31, 2024 | |||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||
Investments in money market fund – financial assets, included in cash and cash equivalents | $ | | $ | | $ | — | $ | — | |||
Convertible Loan– financial liabilities | | — | — | | |||||||
The Company’s Convertible Loan (Note 7) is measured at fair value at inception and remeasured at each measurement period, with changes in fair value recorded as other income (expense) in the condensed consolidated statement of operations. The Company estimates the fair value of its Convertible Loan using a weighted probability model of various debt settlement scenarios during its term discounted to the reporting date. Conversion option scenarios are valued using option pricing models with assumptions and estimates such as volatility, expected term and risk-free interest rates. Level 3 fair value inputs include probability and timing of various settlement scenarios and selection of comparable companies.
The Company estimated the fair value of its Convertible Loan using the following inputs as of June 30, 2025 and December 31, 2024:
June 30, 2025 | December 31, 2024 | ||||
Discount rate | |||||
Probabilities of settlement scenarios | |||||
Volatility | |||||
Expected term (in years) | |||||
Risk-free rate |
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The following table presents a summary of the changes in the fair value of its Convertible Loan for the six months ended June 30, 2025 and 2024 (in thousands):
Six months ended | |||||
June 30, 2025 | June 30, 2024 | ||||
Convertible Loan at the beginning of the period | $ | | $ | | |
Change in fair value | |
| ( | ||
Convertible Loan at the end of the period | $ | | $ | | |
5. Net Loss per Share
The computation of basic EPS is based on the weighted-average number of the Company’s Common Stock outstanding. The computation of diluted EPS is based on the weighted-average number of the Company’s Common Stock outstanding and potential dilutive common stock. Diluted EPS is computed using the treasury stock method, which reflects the potential dilution that would occur if securities or other contracts to issue Common Stock were exercised or converted to the Company’s Common Stock. The Company’s Common Stock options, warrants, and unvested restricted stock units were not included in dilutive EPS for the periods presented as their impact would be antidilutive.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||||
Numerator: |
|
|
|
|
|
|
|
|
| ||||
Net income (loss) attributable to common stockholders, basic | $ | ( | $ | | $ | ( | $ | ( | |||||
Change in fair value of the Convertible Loan | — | ( | — | ( | |||||||||
Net loss attributable to common stockholders, diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Denominator: | |||||||||||||
Weighted average shares outstanding, basic | | | | | |||||||||
Shares issuable upon the conversion of the Convertible Loan | — | | — | | |||||||||
Weighted average common shares outstanding, diluted |
| |
| |
| |
| | |||||
Net income (loss) per share, basic | $ | ( | $ | | $ | ( | $ | ( | |||||
Net loss per share, diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||
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The following outstanding securities as of June 30, 2025 and December 31, 2024 have been excluded from the computation of dilutive weighted-average shares outstanding, as they would have been anti-dilutive:
| June 30, 2025 |
| December 31, 2024 |
| |
Outstanding stock options |
| |
| | |
Unvested restricted stock units | | | |||
Shares issuable upon the conversion of the Convertible Loan (1) | | — | |||
Outstanding warrants | | | |||
Total |
| |
| |
|
(1) The Company determined the number of shares issuable upon the conversion of the Convertible Loan as of June 30, 2025, based on the Convertible Loan principal amount of $
6. Balance Sheet Details
Property and Equipment, net
Property and equipment as of June 30, 2025 and December 31, 2024 consisted of the following (in thousands):
| June 30, 2025 |
| December 31, 2024 | |||
Laboratory equipment | $ | | $ | | ||
Furniture and fixtures | | | ||||
Office and computer equipment |
| |
| | ||
Leasehold improvements |
| |
| | ||
Total | | | ||||
Less: accumulated depreciation |
| ( |
| ( | ||
Property and equipment, net | $ | | $ | | ||
Depreciation and amortization expense totaled $
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities as of June 30, 2025 and December 31, 2024 consisted of the following (in thousands):
June 30, 2025 |
| December 31, 2024 | ||||
Accounts payable | $ | | $ | | ||
Accrued clinical trial expenses | — | | ||||
Other accrued expenses | | | ||||
$ | | $ | | |||
7. Convertible Loan
On January 10, 2023, the Company received the Convertible Loan in the aggregate amount of $
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Agreement maturity date to January 10, 2026. Then, on March 12, 2025, the Company executed a subsequent amendment to the Convertible Credit Agreement which, among other things, extended the Convertible Loan maturity date to March 12, 2026.
The Convertible Loan principal and accrued interest are payable at maturity. Repayment of the Convertible Loan is guaranteed by the Company’s domestic subsidiaries and foreign material subsidiaries, and the Convertible Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors.
The Convertible Credit Agreement provides that if there is a financing from new investors of at least $
The Company evaluated authoritative guidance for accounting for the Convertible Loan and concluded that the Convertible Loan should be accounted for at fair value under ASC 480, Distinguishing Liabilities from Equity, due to the fact that the Convertible Loan will predominately be settled with the Company’s Common Stock. Consequently, the Company recorded the Convertible Loan in its entirety at fair value on its consolidated balance sheet, with changes in fair value recorded as other income (expenses) in the consolidated statements of operations during each reporting period.
On November 12, 2024, the Company amended the terms of the Convertible Credit Agreement and 2023 Credit Agreement, to, among other changes, extend the maturity of both loans to January 10, 2026. The Company concluded that the amendments were a combined transaction and an extinguishment for accounting purposes. The Company estimated fair value of the combined transaction, the 2023 Loan and the Convertible Loan, before and after modification and calculated an extinguishment gain of $
On March 12, 2025, the Company amended the terms of the Convertible Credit Agreement, the 2023 Credit Agreement and the 2024 Credit Agreement, to, among other changes, extend the maturity of the loans to March 12, 2026. The Company concluded that the amendments were a combined transaction and a modification for accounting purposes. After this amendment, the Company continued to account for the Convertible Loan at fair value on its consolidated balance sheet, with changes in fair value recorded as other income (expense) in the consolidated statements of operations during each reporting period.
The Company recognized a loss of $
8. Term Debt
The 2023 Credit Agreement, 2024 Credit Agreement and the March 2025 Credit Agreement each contains customary affirmative and negative covenants and representations and warranties, including financial reporting obligations and certain limitations on indebtedness, liens, investments, distributions (including dividends), collateral,
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investments, mergers or acquisitions and fundamental corporate changes. Each of the 2023 Credit Agreement, the 2024 Credit Agreement and the March 2025 Credit Agreement also includes customary events of default, including payment defaults, breaches of provisions under the loan documents, certain losses or impairment of collateral and related security interests, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth therein, certain bankruptcy or insolvency events, and a material deviation from the Company’s operating budget.
On July 10, 2023, the Company entered into the 2023 Credit Agreement. The 2023 Credit Agreement provides for the 2023 Loan, a secured term loan facility in an aggregate amount of $
On March 4, 2024, the Company entered into the 2024 Credit Agreement for the 2024 Loan in an aggregate amount of $
Repayment of the 2024 Loan is guaranteed by the Company’s domestic subsidiaries, and the 2024 Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors. The 2024 Loan was initially recognized at cash proceeds of $
On November 12, 2024, the Company executed an amendment to the 2023 Credit Agreement, which, among other things, extended the 2023 Loan maturity date to January 10, 2026. On March 12, 2025, the Company executed a subsequent amendment to the 2023 Credit Agreement which, among other things, extended the 2023 Loan maturity date to March 12, 2026. The 2023 Loan was initially recognized at fair value of $
On March 12, 2025, the Company entered into the March 2025 Credit Agreement for the March 2025 Loan in an aggregate amount of $
On March 12, 2025, concurrently with the execution of the March 2025 Credit Agreement, the Company entered into amendments to (i) the Convertible Loan and Convertible Credit Agreement, (ii) the 2023 Loan and 2023 Credit Agreement, and (iii) the 2024 Loan and 2024 Credit Agreement, which, among other things, extended the maturity date of the Convertible Loan, 2023 Loan and 2024 Loan, respectively, to March 12, 2026.
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9. Stockholders’ Deficit
Warrants
As of June 30, 2025, outstanding warrants to purchase shares of the Company’s Common Stock were as follows:
Shares |
| Exercise Price |
| Expiration Date | |
| $ | | |||
| $ | | |||
| $ | | |||
| $ | | |||
| $ | | None | ||
|
|
|
| ||
Shares Reserved for Future Issuance
As of June 30, 2025, the Company had reserved shares of its Common Stock for future issuance as follows:
| June 30, 2025 | |
Stock options outstanding | | |
Unvested restricted stock units | | |
Shares issuable under the Employee Stock Purchase Plan | | |
Shares available for future grants under the 2016 Plan | | |
Shares issuable upon the conversion of the Convertible Loan | | |
Warrants outstanding | | |
Total shares reserved | |
10. Equity Incentive Plans
Stock Award Plans
The Company maintains a 2016 Equity Incentive Plan (the “2016 Plan”), which provides for the issuance of incentive share awards in the form of non-qualified and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance-based stock awards. As of June 30, 2025, there were
Stock option transactions during the six months ended June 30, 2025 are presented below:
Weighted | ||||||||||
Average | ||||||||||
Weighted | Remaining | |||||||||
Average | Contractual | Aggregate | ||||||||
Exercise | Term | Intrinsic | ||||||||
| Shares |
| Price |
| (Years) |
| Value (in thousands) | |||
Outstanding at December 31, 2024 |
| | $ | |
| $ | | |||
Granted |
| | $ | |
|
| $ | — | ||
Exercised | — | $ | — | $ | — | |||||
Forfeited/Cancelled/Expired |
| ( | $ | |
|
| $ | — | ||
Outstanding at June 30, 2025 |
| | $ | |
| $ | | |||
Vested and expected to vest at June 30, 2025 |
| | $ | |
| $ | | |||
Exercisable at June 30, 2025 |
| | $ | |
| $ | | |||
The aggregate intrinsic value of options at June 30, 2025 is based on the Company’s closing stock price on that date of $
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Restricted stock unit awards transactions during the six months ended June 30, 2025 are presented below:
Weighted Avg | |||||
Grant Date | |||||
| Shares |
| Fair Value | ||
Outstanding at December 31, 2024 | | $ | | ||
Granted | — | $ | — | ||
Vested | ( | $ | | ||
Cancelled | — | $ | — | ||
Outstanding at June 30, 2025 | | $ | | ||
Share-based Compensation
The Company estimates the fair value of stock options with performance and service conditions using the Black-Scholes valuation model (“Black-Scholes”). Compensation expense related to stock options granted is measured at the grant date based on the estimated fair value of the award and is recognized on the accelerated attribution method over the requisite service period.
The assumptions used in the Black-Scholes model during the six months ended June 30, 2025 and 2024 are presented below. There were
Six Months Ended June 30, | ||||
| 2025 |
| 2024 | |
Risk-free interest rate | ||||
Expected volatility | ||||
Expected term (in years) | ||||
Expected dividend yield | ||||
The table below summarizes the total share-based compensation expense included in the Company’s condensed consolidated statements of operations for the periods presented (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Research and development | $ | | $ | | $ | | $ | | ||||
General and administrative |
| |
| |
| |
| | ||||
Total stock-based compensation | $ | | $ | | $ | | $ | | ||||
As of June 30, 2025, there was $
11. Income Taxes
The Company did
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is assessing the impact on its consolidated financial statements.
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12. Commitments and Contingencies
Operating Leases
The Company leases office and research and development space under a non-cancelable operating lease in Marina del Rey, California, with the lease term running through December 31, 2031. Annual base rent is from $
On October 28, 2021, the Company entered into a lease for office and research and development space under a non-cancellable lease in Los Angeles, California (the “2021 Lease”). The 2021 Lease payment start date was May 1, 2022 and the total lease term is for
In connection with the execution of the 2021 Lease, the Company delivered an irrevocable standby letter of credit in the amount of $
Future minimum annual lease payments under the Company’s noncancelable operating leases as of June 30, 2025 are as follows (in thousands):
| Operating | ||
Leases | |||
2025 | $ | | |
2026 | | ||
2027 | | ||
2028 | | ||
2029 | | ||
Thereafter | | ||
Total minimum lease payments | | ||
Less: amount representing interest | ( | ||
Present value of operating lease obligations | | ||
Less: current portion | ( | ||
Noncurrent operating lease obligations | $ | | |
Operating lease expenses were $
The following table summarizes supplemental cash flow information related to the Company’s operating leases for the six months ended June 30, 2025 and 2024 (in thousands):
Six Months Ended June 30, | ||||||
2025 |
| 2024 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows from operating leases | $ | | $ | | ||
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The following table summarizes the weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases as of June 30, 2025 and December 31, 2024:
June 30, 2025 | December 31, 2024 | |||||
Weighted-average remaining lease term, years | ||||||
Weighted-average discount rate, % |
Legal Proceedings
From time to time, the Company may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of business. Any of these claims could subject the Company to costly legal expenses and, while management generally believes that there is adequate insurance to cover many different types of liabilities, the Company’s insurance carriers may deny coverage or policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the Company’s consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage the Company’s reputation and business. The Company is currently not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations or financial position.
13. Grants and Awards
MTEC Award
On June 15, 2020, the Company entered into an agreement (the “MTEC Agreement”) with MTEC, pursuant to which the Company received a $
Upon license or commercialization of intellectual property developed with the funding from the MTEC Agreement, additional fees will be due to MTEC. The Company will elect whether to (a) pay a fixed royalty amount, which is subject to a cap based upon total funding received, or (b) pay an additional assessment fee, which would also be subject to a cap based upon a percentage of total funding received.
The MTEC Agreement is effective through March 31, 2026. The MTEC Agreement may be terminated in whole or in part, 30 calendar days following written notice from the Company to MTEC. In addition, MTEC has the right to terminate the MTEC Agreement upon material breach by the Company.
The Company determined that the MTEC Agreement is not in the scope of ASC 808 or ASC 606. Applying ASC 606 by analogy the Company recognizes proceeds received under the MTEC Agreement as grant and award revenue in the statement of operations when related costs are incurred. The Company recognized $
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CFF Therapeutics Development Award
On March 13, 2020, the Company entered into an award agreement (the “Award Agreement”) with the CFF, pursuant to which the Company received a Therapeutics Development Award of up to $
The first payment under the Award Agreement, in the amount of $
If the Company ceases to use commercially reasonable efforts directed to the development of AP-PA02, or any other Product (as defined in the Award Agreement), for a period of
Upon commercialization by the Company of any Product, the Company will owe a fixed royalty amount to CFF, which is to be paid in installments determined, in part, based on commercial sales volumes of the Product. The Company will be obligated to make an additional fixed royalty payment upon achieving specified sales milestones. The Company may also be obligated to make a payment to CFF if the Company transfers, sells or licenses the Product in the CF Field, or if the Company enters into a change of control transaction.
The term of the Award Agreement commenced on March 10, 2020 and expires on the earlier of the date on which the Company has paid CFF all of the fixed royalty payments set forth therein, the effective date of any license granted to CFF following an Interruption, or upon earlier termination of the Award Agreement. Either CFF or the Company may terminate the Award Agreement for cause, which includes the Company’s material failure to achieve certain development milestones. The Company’s payment obligations survive the termination of the Award Agreement.
The Company concluded that the CFF Award is in the scope of ASC 808. Accordingly, as discussed in Note 3, “Significant Accounting Policies” of its 2024 Annual Report, the Company recognizes the award upon achievement of certain milestones as credits to research and development expenses.
14. Segment Reporting
The Company operates and manages its business as
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The following table includes certain segment information for the periods presented (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||
Grant and award revenue | $ | | $ | - | $ | | $ | | ||||
Operating expenses | ||||||||||||
Research and development expenses: | ||||||||||||
AP-PA02: Non-Cystic Fibrosis Bronchiectasis | | | ( | | ||||||||
AP-PA02: Cystic Fibrosis | | | | | ||||||||
AP-SA02: Bacteremia | | | | | ||||||||
AP-SA02: Prosthetic Joint Infection | | | | | ||||||||
Expenses not allocated by projects* | | | | | ||||||||
Total external research and development expenses | | | | | ||||||||
Research and development personnel expenses | | | | | ||||||||
Other research and development expenses | | | | | ||||||||
Total research and development expenses | | | | | ||||||||
General and administrative expenses: | ||||||||||||
General and administrative personnel expenses | | | | | ||||||||
Other general and administrative expenses | | | | | ||||||||
Total general and administrative expenses | | | | | ||||||||
Total operating expenses | | | | | ||||||||
Operating loss | ( | ( | ( | ( | ||||||||
Other income (expense), net | ( | | ( | | ||||||||
Net income (loss) | $ | ( | $ | | $ | ( | $ | ( | ||||
15. Subsequent Events
August 2025 Credit Agreement
On August 11, 2025, the Company entered into a credit and security (the “August 2025 Credit Agreement”) for a loan in the aggregate amount of $
Mango, Inc. Sublease
On July 29, 2025, the Company entered into a sublease with Mango, Inc., doing business as Mango Biosciences as sub-tenant, pursuant to the “2021 Lease” for a portion of a research and development lab and office space. The term of the sublease is
MTEC Agreement Modification
On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026.
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report, and our audited financial statements and notes thereto as of and for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed on March 21, 2025 with the U.S. Securities and Exchange Commission (the “SEC”).
Our common stock, par value $0.01 per share (the “Common Stock”) is traded on the NYSE American exchange under the symbol “ARMP.” We are headquartered in Los Angeles, California, and we have a research and development facility (the “McConnell Facility”) to support advancing phage products from discovery to the clinic. The facility is also equipped with approximately 10,000 square feet of licensed current good manufacturing practice (“cGMP”) drug manufacturing suites enabling the production, testing and release of clinical trial material.
Statements contained in this Quarterly Report that are not statements of historical fact are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements concerning product development plans, commercialization of our products, the expected market opportunity for our products, the use of bacteriophages and synthetic phages to kill bacterial pathogens, having resources sufficient to fund our operations into the first quarter of 2025, future funding sources, general and administrative expenses, clinical trial and other research and development expenses, costs of manufacturing, costs relating to our intellectual property, capital expenditures, the expected benefits of our targeted phage therapies strategy, the potential market for our products, tax credits and carry-forwards, and litigation-related matters. Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “will,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements necessarily contain these identifying words. These statements are subject to risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 21, 2025 with the SEC, and under Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. These forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statements.
Overview
We are a clinical-stage biotechnology company focused on the development of high-purity, pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using our proprietary bacteriophage-based technology. We have completed three Phase 2 clinical trials to date. We see bacteriophages as a potentially safer and effective alternative to antibiotics and an essential response to the growing bacterial resistance to current classes of antibiotics. Bacteriophages or “phages” have a powerful and highly differentiated mechanism of action that enables binding to and killing of specific targeted bacteria while uniquely preserving the normal human microbiome or “healthy bacteria”. This is in direct contrast to traditional broad-spectrum antibiotics which can alter the human microbiome increasing susceptibility to opportunistic pathogens, such as Clostridium difficile. We believe that phages represent a promising means to effectively treat bacterial infections as an alternative to broad-spectrum antibiotics, especially for patients with bacterial infections resistant to current standard of care therapies, including the multidrug-resistant or “superbug” strains of bacteria. We are a leading developer of clinical-stage phage therapeutics of high purity, and believe we are uniquely positioned to address the growing worldwide threat of antibiotic-resistant bacterial infections.
We are combining our proprietary approach and expertise in identifying, characterizing and developing both naturally occurring and engineered (synthetic) bacteriophages with our proprietary phage-specific host-engineered cGMP manufacturing capabilities to advance a target pipeline of high-quality bacteriophage product candidates for late-stage clinical development. Our optimized manufacturing processes significantly increase phage titers and improve production efficiency with the goal of ensuring commercial viability.
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We remain committed to our mission to evaluate phage-based therapeutics in randomized controlled clinical trials that evaluate safety and efficacy required to support potential regulatory approval and commercialization of our phage products as alternatives to traditional antibiotics, providing a potential method of treating patients suffering from drug-resistant and difficult-to-treat bacterial infections. To date, we have completed three critical Phase 2 trials, utilizing two distinct phage cocktails against two different bacterial pathogens with the potential to treat chronic pulmonary disease complicated by bacterial infection, as well as acute systemic bacterial infection. We believe that we are uniquely advancing our two lead candidates, referred to as AP-PA02 and AP-SA02, to address both chronic and acute bacterial infections.
Pseudomonas aeruginosa Phage Product Candidate, AP-PA02
Clinical Development of AP-PA02 in Cystic Fibrosis: Completed Phase 1b/2a Study
Our first phage candidate, inhaled AP-PA02, is focused primarily on the treatment of chronic pulmonary infections due to Pseudomonas aeruginosa (“P. aeruginosa”). On October 14, 2020, we received the approval to proceed from the U.S. Food and Drug Administration (the “FDA”) for our Investigational New Drug (“IND”) application for AP-PA02. In the first quarter of 2023, we announced positive topline results from the completed “SWARM-P.a.” study – a Phase 1b/2a, multicenter, double-blind, randomized, placebo-controlled, single ascending dose and multiple ascending dose clinical trial to evaluate the safety and tolerability of inhaled AP-PA02 in subjects with cystic fibrosis (“CF”) and chronic pulmonary P. aeruginosa infection. Data indicate that AP-PA02 was well-tolerated with a treatment emergent adverse event profile similar to placebo. Pharmacokinetics findings confirm that AP-PA02 can be effectively delivered to the lungs through nebulization with minimal systemic exposure, with single ascending doses and multiple ascending doses resulting in a proportional increase in exposure as measured in induced sputum. AP-PA02 exposures were generally consistent across subjects. Additionally, bacterial levels of P. aeruginosa in the sputum measured at several timepoints suggest improvement in bacterial load reduction for subjects treated with AP-PA02 at the end of treatment as compared to placebo after ten days of dosing. In addition, a correlation was seen between increasing phage dose (higher AP-PA02 exposures) and reduction in the bacterial load, supporting the biologic plausibility of a bacterial specific mechanism of action and creating the opportunity for phage as a therapeutic alternative to inhaled antibiotics. This study was supported by the CFF, which granted us a Therapeutics Development Award of $5.0 million. We received the full award’s amount, including the final payment of $0.3 million, in January 2024. Following the promising Phase 1b/2a results of favorable safety and tolerability profile and plausible mechanism of action, an additional confirmatory Phase 2 trial was initiated in non-cystic fibrosis bronchiectasis (“NCFB”) patients with similar chronic pulmonary disease with infections due to P. aeruginosa.
Clinical Development of AP-PA02 in Non-Cystic Fibrosis Bronchiectasis: Completed Phase 2 Study
On February 22, 2022, Armata announced that it had received from the FDA the approval to proceed for our IND application for AP-PA02, in a second indication, NCFB. On December 19, 2024, Armata announced encouraging results from the completed “Tailwind” study – a Phase 2 multicenter, double-blind, randomized, placebo-controlled study to evaluate the safety, phage kinetics, and efficacy of inhaled AP-PA02 in subjects with NCFB and chronic pulmonary P. aeruginosa infection. Data indicated that inhaled AP-PA02 provides a durable reduction of P. aeruginosa in the lung, with a favorable safety and tolerability profile. The Tailwind study was conducted in two cohorts running in parallel: subjects in one cohort (cohort A) received inhaled AP-PA02 as monotherapy, while subjects in another cohort (cohort B) received inhaled AP-PA02 in combination with inhaled anti-pseudomonal antibiotic treatment. Subjects in both cohorts were dosed at home by nebulization with study drug administered every 12 hours for 10 days and were followed for approximately four weeks after receiving their last dose of study drug. The primary efficacy endpoint was the reduction in P. aeruginosa colony forming units (“CFUs”) in lung sputum at one week following completion of dosing (day 17) compared to baseline. Per the statistical analysis plan, efficacy analysis of each independent cohort showed no significant difference between subjects treated with AP-PA02 and placebo due to small numbers of subjects in each cohort. Notably, a post-hoc intent-to-treat analysis (n=33 active and n=15 placebo; all subjects from both cohorts) demonstrated a statistically significant reduction of P. aeruginosa CFUs in the lung at day 17 (AP-PA02 vs. placebo; P=0.05). The reduction in P. aeruginosa CFUs persisted two weeks following completion of dosing with AP-PA02 when compared with placebo at day 24 (AP-PA02 vs. placebo; P=0.015). Additionally, paired analysis of P. aeruginosa CFU density at baseline compared to day 10 (P=0.03), day 11 (P=0.01), day 17 (P=0.003) and day 24
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(P=0.018) was significant in the AP-PA02-treated cohort. We believe the data suggest that AP-PA02 alone is as effective as the combination therapy of phage and antibiotics in reducing P. aeruginosa CFUs in the lung. Additionally, approximately one-third of subjects treated with phage monotherapy exhibited at least a 2-log CFU reduction in P. aeruginosa compared to no reduction in placebo treated subjects. Safety data indicate that inhaled AP-PA02 was well-tolerated with treatment-emergent adverse events mild and self-limiting. There was one possibly related serious adverse event that was linked to an acute pulmonary event requiring hospitalization that was responsive to antibiotics. We believe the safety and tolerability of AP-PA02 offers a promising profile for treating chronically infected NCFB patients.
Results from the Phase 2 Tailwind study demonstrate the potential of Armata’s high-purity phage cocktail, AP-PA02, as a new monotherapy treatment alternative for chronic pulmonary disease caused by P. aeruginosa infection, including drug-resistant bacteria, and indicate the potential for phage therapy to reduce reliance on chronic antibiotic use. The Phase 2 Tailwind study represents the second successful clinical trial for AP-PA02, Armata’s lead pulmonary candidate, which was first evaluated in people with cystic fibrosis in the Phase 1b/2a SWARM-P.a. trial that completed in 2023. We believe the learnings on dose-schedule regimens gained from the two completed Phase 2 studies position us to define a safe and promising biologic correlation for a Phase 3 definitive trial to evaluate inhaled AP-PA02 as an alternative to antibiotics in chronic pulmonary P. aeruginosa infection.
Contingent upon securing sufficient additional funding, we may at the appropriate time in the future resume clinical development of AP-PA02 for NCFB, which may include the execution of a definitive Phase 3 clinical trial. We are also actively exploring potential strategic partnerships as a means to further advance this important program.
Additional Clinical Indications for AP-PA02
The current Pseudomonas phage cocktail formulated for inhalation (AP-PA02) is prepared with the same high potency and purity of our injectable phage cocktail for S. aureus (AP-SA02). Based on the AP-SA02 clinical findings, we are exploring the potential development of our Pseudomonas phage cocktail for acute ventilator-associated pneumonia and severe infections due to multidrug-resistant P. aeruginosa.
Staphylococcus aureus Phage Product Candidate, AP-SA02
Clinical Development of AP-SA02 in Bacteremia: Completed Phase 1b/2a Study
In parallel to developing novel phage therapeutics that target chronic bacterial infections, we have an acute bacterial infection clinical development plan focused on Staphylococcus aureus (“S. aureus”) bacteremia, a difficult-to-treat and often life-threatening human infection that can result in high morbidity and mortality and for which bacterial resistance to antibiotics is growing.
A key advantage of our phage manufacturing expertise is the purity profiles of our phage products, including AP-SA02, our phage product candidate for S. aureus; this has enabled us to pursue treatment of complicated S. aureus bacteremia, where repetitive intravenous (“IV”) dosing is required. On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we received a $15.0 million award and entered into a multi-year program administered by the U.S Department of Defense through MTEC and managed by the Naval Medical Research Command (“NMRC”) – Naval Advanced Medical Development (“NAMD”) with funding from the Defense Health Agency and Joint Warfighter Medical Research Program. On September 29, 2022, the MTEC Agreement was modified to increase the total award by $1.3 million to $16.3 million and extend the term into the second half of 2024. On July 29, 2024, the MTEC Agreement was modified to increase the total award by $5.3 million to $21.6 million and extend the term into the third quarter of 2025. On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. We are using the award to partially fund a Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled dose escalation study to assess the safety, tolerability and efficacy of our phage-based candidate, AP-SA02, for the treatment of adults with S. aureus (the “diSArm” study) and to support activities required for an end-of-Phase 2 meeting with the FDA.
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On November 17, 2021, we announced that we had received approval from the FDA to proceed with our IND application for AP-SA02.
On May 19, 2025, we announced positive topline data from the Phase 1b/2a diSArm study of intravenously administered AP-SA02 in complicated Staphylococcus aureus bacteremia. The diSArm study (NCT05184764) was a Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled, multiple ascending dose escalation study of the safety, tolerability, and efficacy of intravenous AP-SA02 in addition to best available antibiotic therapy (“BAT”) compared to BAT alone (placebo) for the treatment of adults with complicated SAB. All doses of AP-SA02 were dosed intravenously every six hours for five days. The primary clinical efficacy endpoint for the Phase 2a portion of the diSArm study was clinical outcome (responder rate) in subjects with complicated bacteremia, measured at (i) Test of Cure (“TOC”) for AP-SA02, defined as one week following the end of IV treatment with AP-SA02 (day 12), (ii) TOC for BAT, defined as one week following the end of IV BAT, and (iii) end of study (“EOS”), defined as four weeks following the end of IV BAT. Clinical outcome was evaluated by both the blinded investigators and a blinded Clinical Efficacy Adjudication Committee (the “CEAC”) in the intent-to-treat (“ITT”) population.
Safety and efficacy were assessed in the ITT population, which included all subjects (n=50) who received at least one dose of AP-SA02 or placebo. AP-SA02 was well-tolerated with no serious adverse events related to the study drug. Two subjects had adverse events that were possibly related to the study drug: one with transient liver enzyme elevation and one with hypersensitivity that resolved with discontinuation of vancomycin.
A statistically significant increase in investigator-assessed responder rate was observed at TOC for AP-SA02 (day 12) in AP-SA02 treated subjects (88%) versus placebo (58%) (p = 0.047). At TOC for BAT and at EOS, 100% of the AP-SA02 treated subjects had clinically responded (p = 0.017) versus 25% of placebo subjects considered non-responsive due to either relapse or treatment failure, consistent with the non-responder rate reported in the literature for recent phase 3 trials. Of note, the clinical response with AP-SA02 occurred regardless of whether subjects were infected with methicillin-sensitive S. aureus or methicillin-resistant S. aureus (“MRSA”). All subjects infected with MRSA and treated with AP-SA02 and BAT cleared their infection by TOC for BAT with no evidence of relapse through EOS, as compared to the relapse rate of BAT alone as noted above. Supporting the investigator assessment, clinical outcome was assessed by the CEAC, who agreed that subjects who received placebo had a 22% and 25% non-responder rate at TOC with BAT and at EOS, respectively, while 100% of the subjects who received AP-SA02 clinically responded (p = 0.025: TOC BAT; p = 0.020: EOS).
Additionally, faster time to a negative blood culture and decline of key predictors of mortality and complications in SAB, including interleukin-10 and C-reactive protein, support the improved responder rates in subjects treated with AP-SA02.
We previously demonstrated the persistence of AP-SA02 in the IV space on multiple days one hour post IV push. These trial results support AP-SA02 homing to different sites of infection, presumably penetrating biofilms, and infecting and lysing the target S. aureus bacteria, independent of antibiotic resistance patterns and site of infection.
The results from our Phase 1b/2a diSArm study are an important step forward in our effort to confirm the potent antimicrobial activity of phage therapy and the completion of the study represents a significant milestone in the development of AP-SA02, moving us one step closer to introducing an effective new treatment option to patients suffering from complicated S. aureus bacteremia. This is the first clear evidence in a randomized controlled trial of the efficacy of phage against a serious systemic pathogen that is responsible for significant morbidity and mortality in the United States.
Findings from the Phase 1b/2a study, including the favorable safety and tolerability profile of AP-SA02, inform the design of a larger definitive efficacy study to demonstrate superiority of AP-SA02 in treating complicated S. aureus bacteremia, and form the basis for an end-of-Phase-2 meeting with the FDA which the Company plans to hold in the second half of 2025. We are committed to developing a superiority pivotal trial focused on phage as an alternative to broad-spectrum antibiotics and/or antibiotic sparing to decrease the utilization of broad-spectrum antibiotics and their detrimental impact on the normal human microbiome.
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Additional Clinical Indications for AP-SA02
On August 1, 2022, we announced FDA approval to proceed with our IND application for AP-SA02 in a second indication, prosthetic joint infections (“PJI”) with S. aureus. We had planned to initiate a Phase 1b/2a trial; however, in light of the growing concerns of both PJI and wound infections, we are considering revising the protocol to include both indications. Driven by data from the bacteremia study, and with sufficient funding, we may in the future initiate a Phase 1b/2a trial to assess the safety and tolerability of intravenous and intra-articular AP-SA02 as an adjunct to standard of care antibiotics in adults undergoing treatment of periprosthetic joint infections and/or wound infections caused by S. aureus.
The following chart summarizes the status of our phage product candidate development programs and partners.
We have incurred net losses since our inception and our operations to date have been primarily limited to research and development and raising capital. As of June 30, 2025, we had an accumulated deficit of $350.6 million. We currently expect to use our existing cash and cash equivalents for the focused research and development of our current product candidates and for working capital and other general corporate purposes. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development of and seeking to obtain regulatory approval for our product candidates. We do not expect to generate product revenue unless and until we successfully complete development and obtain marketing approval for at least one of our product candidates. We may also use a portion of our existing cash and cash equivalents for the potential acquisition of, or investment in, product candidates, technologies, formulations or companies that complement our business, although we have no current understandings, commitments or agreements to do so.
Our existing cash and cash equivalents of $4.3 million as of June 30, 2025 will not be sufficient to enable us to complete all necessary development of any potential product candidates and fund our operations for the next twelve months from the date the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, we will be required to obtain further funding through one or more other public or private equity offerings, debt financings, collaboration, strategic financing, grants or government contract awards, licensing arrangements or other sources. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and potential disruptions to, and volatility in, financial markets in the United States and worldwide. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of assets, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.
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Recent Events
August 2025 Credit Agreement
On August 11, 2025, we entered into a credit and security (the “August 2025 Credit Agreement”) for a loan in the aggregate amount of $15.0 million (the “August 2025 Loan”) with Innoviva. The August 2025 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the August 2025 Loan is guaranteed by our domestic subsidiaries, and the loan is secured by substantially all of our assets and the subsidiary guarantors.
Mango, Inc. Sublease
On July 29, 2025, we entered into a sublease with Mango, Inc., doing business as Mango Biosciences as sub-tenant, pursuant to the “2021 Lease” for a portion of a research and development lab and office space. The term of the sublease is 38 months and is anticipated to commence September 1, 2025.
MTEC Agreement Modification
On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. We will continue to recognize additional grant and award revenue until the full amount of the amended award is utilized.
Results of Operations
Comparison of three and six months ended June 30, 2025 and 2024 (in thousands):
Three Months Ended June 30, | Change | |||||||||||
| 2025 |
| 2024 |
| Amount |
| % | |||||
Grant and award revenue | $ | 2,169 | $ | — | $ | 2,169 | * | |||||
Operating expenses | ||||||||||||
Research and development |
| 6,394 | 8,475 |
| (2,081) | (24.6%) | ||||||
General and administrative |
| 2,619 | 3,439 |
| (820) | (23.8%) | ||||||
Total operating expenses | 9,013 | 11,914 | (2,901) | (24.3%) | ||||||||
Loss from operations |
| (6,844) |
| (11,914) |
| 5,070 |
| (42.6%) | ||||
Other income (expense) |
|
|
|
|
|
|
|
| ||||
Interest income | 108 | 221 |
| (113) |
| (51.1%) | ||||||
Interest expense | (3,808) | (2,718) | (1,090) | 40.1% | ||||||||
Change in fair value of the Convertible Loan | (5,751) | 23,397 | (29,148) | (124.6%) | ||||||||
Total other income (expense), net |
| (9,451) |
| 20,900 |
| (30,351) |
| (145.2%) | ||||
Net loss | $ | (16,295) | $ | 8,986 | $ | (25,281) |
| (281.3%) | ||||
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Six Months Ended June 30, | Change | |||||||||||
| 2025 |
| 2024 |
| Amount |
| % | |||||
Grant and award revenue | $ | 2,660 | $ | 966 | $ | 1,694 | 175.4% | |||||
Operating expenses | ||||||||||||
Research and development |
| 11,823 | 16,491 |
| (4,668) | (28.3%) | ||||||
General and administrative |
| 5,872 | 6,617 |
| (745) | (11.3%) | ||||||
Total operating expenses | 17,695 | 23,108 | (5,413) | (23.4%) | ||||||||
Loss from operations |
| (15,035) |
| (22,142) |
| 7,107 |
| (32.1%) | ||||
Other income (expense) |
|
|
|
|
|
|
|
| ||||
Interest income | 167 | 273 |
| (106) |
| (38.8%) | ||||||
Interest expense | (7,410) | (4,538) | (2,872) | 63.3% | ||||||||
Change in fair value of the Convertible Loan | (548) | 10,372 | (10,920) | (105.3%) | ||||||||
Total other income (expense), net |
| (7,791) |
| 6,107 |
| (13,898) |
| (227.6%) | ||||
Net loss | $ | (22,826) | $ | (16,035) | $ | (6,791) |
| 42.4% | ||||
*Not meaningful
Grant and Award Revenue
We recognized $2.2 million and zero of grant and award revenue during the three months ended June 30, 2025 and 2024, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment of SAB.
We recognized $2.7 million and $1.0 million of grant and award revenue during the six months ended June 30, 2025 and 2024, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment of SAB.
Research and Development
The following table summarizes our research and development expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):
Three Months Ended June 30, | Change | |||||||||||
| 2025 |
| 2024 |
| Amount |
| % | |||||
External costs: | ||||||||||||
Clinical trials | $ | 1,146 | $ | 2,667 | $ | (1,521) | (57.0%) | |||||
Other research and development costs, including laboratory materials and supplies | 624 | 835 | (211) | (25.3%) | ||||||||
Total external costs |
| 1,770 | 3,502 |
| (1,732) | (49.5%) | ||||||
Internal costs: |
|
| ||||||||||
Personnel-related costs | 2,293 | 2,810 | (517) | (18.4%) | ||||||||
Facilities and overhead costs |
| 2,331 |
| 2,163 |
| 168 |
| 7.8% | ||||
Total research and development expense: | $ | 6,394 | $ | 8,475 | $ | (2,081) |
| (24.6%) | ||||
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Six Months Ended June 30, | Change | |||||||||||
| 2025 |
| 2024 |
| Amount |
| % | |||||
External costs: | ||||||||||||
Clinical trial expenses | $ | 1,263 | $ | 4,379 | $ | (3,116) | (71.2%) | |||||
Other research and development costs, including consulting, laboratory supplies and other | 1,251 | 1,776 | (525) | (29.6%) | ||||||||
Total external costs |
| 2,514 | 6,155 |
| (3,641) | (59.2%) | ||||||
Internal costs: |
|
| ||||||||||
Personnel-related costs | 4,606 | 5,422 | (816) | (15.0%) | ||||||||
Facilities and overhead costs |
| 4,703 |
| 4,914 |
| (211) |
| (4.3%) | ||||
Total research and development expense: | $ | 11,823 | $ | 16,491 | $ | (4,668) |
| (28.3%) | ||||
Research and development expenses decreased by $2.1 million, from $8.5 million for the three months ended June 30, 2024 to $6.4 million for the three months ended June 30, 2025.
Research and development expenses decreased by $4.7 million, from $16.5 million for the six months ended June 30, 2024 to $11.8 million for the six months ended June 30, 2025.
Clinical trial costs decreased by $1.5 million, from $2.7 million for the three months ended June 30, 2024, to $1.2 million for the three months ended June 30, 2025. The decrease is primarily attributable to a $1.5 million decrease in AP-PA02 NCFB trial costs.
Clinical trial costs decreased by $3.1 million, from $4.4 million for the six months ended June 30, 2024, to $1.3 million for the six months ended June 30, 2025. The decrease is primarily attributable to a $3.6 million decrease in AP-PA02 NCFB trial costs and a $0.2 million decrease in the CF study. The decrease was partially offset by an increase of $0.7 million in AP-SA02 trial costs.
Other external research and development costs decreased by $0.2 million from $0.8 million for the three months ended June 30, 2024 to $0.6 million for the three months ended June 30, 2025. The decrease was primarily due to a decrease of $0.3 million in consulting expenses partially offset by an increase of $0.1 million in outsource service contracts.
Other external research and development costs decreased by $0.5 million from $1.8 million for the six months ended June 30, 2024 to $1.3 million for the six months ended June 30, 2025. The decrease was primarily due to a decrease of $0.5 million in consulting expenses.
Our expenses by product and by project for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):
Three Months Ended June 30, | |||||||
2025 |
| 2024 | |||||
Product | Project name | ||||||
AP-PA02 | Non-Cystic Fibrosis Bronchiectasis | $ | 152 | $ | 1,768 | ||
AP-PA02 | Cystic Fibrosis | 14 | 138 | ||||
AP-SA02 | Bacteremia | 1,011 | 1,051 | ||||
AP-SA02 | Prosthetic Joint Infection | 1 | 1 | ||||
Expenses not allocated by projects* | 592 | 544 | |||||
Total external costs | $ | 1,770 | $ | 3,502 | |||
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Six Months Ended June 30, | |||||||
2025 |
| 2024 | |||||
Product | Project name | ||||||
AP-PA02 | Non-Cystic Fibrosis Bronchiectasis | $ | (288) | $ | 3,602 | ||
AP-PA02 | Cystic Fibrosis | 25 | 235 | ||||
AP-SA02 | Bacteremia | 1,663 | 1,134 | ||||
AP-SA02 | Prosthetic Joint Infection | 2 | 8 | ||||
Expenses not allocated by projects* | 1,112 | 1,176 | |||||
Total external costs | $ | 2,514 | $ | 6,155 | |||
* Expenses not allocated by projects include consultants, laboratory supplies and outsourced services expenses.
Personnel-related costs, including employee payroll and related expenses, decreased by $0.5 million, from $2.8 million for the three months ended June 30, 2024 to $2.3 million for the three months ended June 30, 2025. This decrease was mainly driven by a $0.3 million decrease in incentive compensation, salaries and wages, vacation and insurance due to a reduction in personnel and a decrease of $0.2 million in stock-based compensation expense.
Personnel-related costs, including employee payroll and related expenses, decreased by $0.8 million, from $5.4 million for the six months ended June 30, 2024 to $4.6 million for the six months ended June 30, 2025. This decrease was mainly driven by a $0.9 million decrease in incentive compensation, salaries and wages, vacation and insurance due to a reduction in personnel as we maximize efficiency for product development. This decrease was partially offset by a $0.1 million increase in stock-based compensation expense and employee training expenses.
Facilities and overhead costs increased by $0.2 million, from $2.1 million for the three months ended June 30, 2024 to $2.3 million for the three months ended June, 2025 mainly due to an increase in McConnell Facility costs.
Facilities and overhead costs decreased by $0.2 million, from $4.9 million for the six months ended June 30, 2024 to $4.7 million for the six months ended June, 2025 mainly due to a decrease of $0.3 million in lease expense partially offset by a $0.1 million increase in depreciation and other variable facility costs.
General and Administrative
General and administrative expenses were $2.6 million and $3.4 million for the three months ended June 30, 2025 and 2024, respectively. The decrease of $0.8 million is primarily related to a decrease of $0.6 million in stock-based compensation expense, a decrease of $0.2 million in accounting related fees, and a decrease of $0.2 million in legal fees, partially offset by an increase of $0.2 million in personnel-related costs other than stock-based compensation expense.
General and administrative expenses were $5.9 million and $6.6 million for the six months ended June 30, 2025 and 2024, respectively. The decrease of $0.7 million is primarily related to a decrease of $0.8 million in consulting fees as we continue to streamline and increase in-house expertise, and a decrease of $0.6 million in stock-based compensation expense, partially offset by an increase of $0.7 million in personnel-related costs other than stock-based compensation expense.
Interest Income
Interest income for the three months ended June 30, 2025 and 2024 was $0.1 million and $0.2 million, respectively, and related to interest earned on our money market fund investments.
Interest income for the six months ended June 30, 2025 and 2024 was $0.2 million and $0.3 million, respectively, and related to interest earned on our money market fund investments.
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Interest Expense
We recognized interest expense of $3.8 million and $2.7 million for the three months ended June 30, 2025 and 2024 respectively, related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan and 2024 Loan, as amended in March 2025, and the March 2025 Loan. Stated interest is accrued and is payable at the maturity of the amended 2023 Loan, 2024 Loan, and March 2025 Loan in March 2026.
We recognized interest expense of $7.4 million and $4.5 million for the six months ended June 30, 2025 and 2024 respectively, related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan and 2024 Loan, as amended in March 2025, and the March 2025 Loan. Stated interest is accrued and is payable at the maturity of the amended 2023 Loan, 2024 Loan, and March 2025 Loan in March 2026.
Change in Fair Value of the Convertible Loan
We recognized a loss of $5.8 million and gain of $23.4 million on the change in the fair value of the Convertible Loan for the three months ended June 30, 2025 and 2024, respectively.
We recognized a loss of $0.5 million and a gain of $10.4 million on the change in the fair value of the Convertible Loan for the six months ended June 30, 2025 and 2024, respectively.
The Convertible Loan received from Innoviva in January 2023 and amended in July 2023 and March 2025 is accounted for at fair value using a weighted probability of various settlement scenarios of the Convertible Loan during its term discounted to each reporting date. Conversion option scenarios are valued using an option pricing model with significant assumptions and estimates such as volatility, expected term and risk-free interest rates.
Liquidity, Capital Resources and Financial Condition
We have incurred net losses since our inception and have negative operating cash flows. Our cash and cash equivalents of $4.3 million as of June 30, 2025 will not be sufficient to fund our operations for the next 12 months from the date of issuance of our condensed consolidated financial statements for the six months ended June 30, 2025. We plan to control our expenses and to raise additional capital through a combination of public and private equity, debt financing, strategic alliances, and grant and award arrangements. These circumstances raise substantial doubt about our ability to continue as a going concern. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring. We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.
On March 12, 2025, we entered into the March 2025 Credit Agreement for the March 2025 Loan in an aggregate amount of $10.0 million. The March 2025 Loan bears interest at an annual rate of 14.0% and matures on March 12, 2026. Principal and accrued interest are payable at maturity. Repayment of the March 2025 Loan is guaranteed by our domestic subsidiaries, and the loan is secured by substantially all of our assets and the subsidiary guarantors. Concurrently with the execution of the March 2025 Credit Agreement, we entered into amendments to (i) the Convertible Loan and Convertible Credit Agreement, (ii) the 2023 Loan and 2023 Credit Agreement, and (iii) the 2024 Loan and 2024 Credit Agreement, which, among other things, extended the maturity date of the Convertible Loan, 2023 Loan and 2024 Loan, respectively, to March 12, 2026.
On July 29, 2024, we amended the MTEC Agreement and increased the amount of the award by $5.3 million to a total of $21.6 million. We will recognize grant and award revenue from the third quarter of 2024 until the full amount of the amended award is utilized.
On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. We will continue to recognize additional grant and award revenue until the full amount of the amended award is utilized.
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Future Capital Requirements
We will need to raise additional capital in the future to continue to fund our operations. Our future funding requirements will depend on many factors, including:
| ● | the costs and timing of our research and development activities; |
| ● | the progress and cost of our clinical trials and other research and development activities; |
| ● | manufacturing costs associated with our targeted phage therapies strategy and other research and development activities; |
| ● | the costs and timing of seeking regulatory approvals; |
| ● | the costs of filing, prosecuting and enforcing any patent applications, claims, patents and other intellectual property rights; and |
| ● | the costs of potential lawsuits involving us or our product candidates. |
We may seek to raise capital through a variety of sources, including:
| ● | the public equity market; |
| ● | private equity or debt financings; |
| ● | collaborative arrangements; |
| ● | government grants or awards; or |
| ● | strategic financing. |
Any additional fundraising efforts may divert our management team from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success of our product development activities, including our targeted phage therapies strategy and any clinical trials we initiate, regulatory events, our ability to identify and enter into in-licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control. We cannot be certain that sufficient funds will be available to us when required or on acceptable terms. If we are unable to secure additional funds on a timely basis or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of technology or assets, pursue an acquisition of our company by a third party at a price that may result in a loss on investment for our stockholders, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations, increase the risk of insolvency and loss of investment by our stockholders. To the extent that additional capital is raised through the sale of equity or convertible loan securities, the issuance of such securities could result in dilution to our existing stockholders. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide.
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Cash Flows
The following table summarizes our sources and uses of cash for the periods presented (in thousands):
Six Months Ended June 30, | ||||||
2025 |
| 2024 | ||||
Net cash used in operating activities | $ | (14,791) | $ | (20,761) | ||
Net cash used in investing activities | (248) | (1,616) | ||||
Net cash provided by financing activities | 9,986 | 35,019 | ||||
Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (5,053) | $ | 12,642 | ||
Cash Flows Used in Operating Activities
Net cash used in operating activities was $14.8 million and $20.8 million for the six months ended June 30, 2025 and 2024, respectively.
Cash used in operating activities in the six months ended June 30, 2025 was primarily due to our net loss for the period of $22.8 million, adjusted by non-cash items of $11.2 million and a decrease of $3.2 million in our net operating assets and liabilities. The non-cash items consist of $0.5 million related to a loss from change in fair value of the Convertible Loan, $7.4 million of non-cash interest expense on the 2023 Loan, 2024 Loan and March 2025 Loan, $1.4 million related to stock-based compensation expense, $0.7 million related to depreciation and amortization expense and $1.2 million related to change in right-of-use asset. The decrease in our net operating assets and liabilities was primarily due to a decrease of $0.7 million in accrued compensation, a decrease of $0.8 million in accounts payable and accrued liabilities, a decrease of $0.5 million in the operating lease liability, and an increase of $1.2 million in prepaid expenses and other assets.
Cash used in operating activities in the six months ended June 30, 2024 was primarily due to our net loss for the period of $16.0 million, adjusted by non-cash items of $2.4 million and a decrease of $2.4 million in our net operating assets and liabilities. The non-cash items consist of $10.4 million related to a gain from change in fair value of convertible debt, $4.5 million of non-cash interest expense on the 2023 Loan and the 2024 Loan, $1.9 million related to stock-based compensation expense, $1.0 million related to change in right-of-use asset and $0.6 million related to depreciation and amortization expense. The decrease in our net operating assets and liabilities was primarily due to a decrease of $3.2 million in operating lease liability related to lease payments and payments for the construction of office and laboratory and manufacturing space at our new leased facility in Los Angeles, California, a decrease of $2.1 million in accounts payable and accrued liabilities, an increase of $0.5 million in accrued compensation, and a decrease of $2.6 million in prepaid expenses and other assets.
Cash Flows Used in Investing Activities
Net cash used in investing activities was $0.2 million and $1.6 million for the six months ended June 30, 2025 and 2024, respectively, which is attributable to purchases of laboratory and manufacturing equipment for the new office, laboratory and manufacturing space at our leased facility in Los Angeles, California.
Cash Flows from Financing Activities
Cash provided by financing activities for the six months ended June 30, 2025 was $10.0 million, which consisted primarily of proceeds from issuance of short-term debt.
Cash provided by financing activities for the six months ended June 30, 2024 was $35.0 million, which consisted primarily of proceeds from issuance of long-term debt, net of issuance costs of less than $0.1 million, and proceeds from exercise of stock options of less than $0.1 million.
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Off-Balance Sheet Arrangements
As of June 30, 2025, we did not have off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate estimates and assumptions, including but not limited to those related to convertible debt, stock-based compensation expense, accruals for research and development costs, lease assets and liabilities, the valuation of deferred tax assets, valuation of uncertain income tax positions, impairment of goodwill and intangible assets and impairment of long-lived assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Refer to Note 3 to the consolidated financial statements and critical accounting policies and estimated included in our Form 10-K filed with the SEC on March 21, 2025. There were no material changes to our critical accounting policies from December 31, 2024.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are not required to provide the information required under this item.
Item 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Under the supervision of our Chief Executive Officer (“CEO”) and Senior Vice President, Finance and Principal Financial Officer (“PFO”), we evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act (the “Exchange Act”) as of June 30, 2025. Based on that evaluation, our CEO and PFO have concluded that our disclosure controls and procedures were effective as of June 30, 2025 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and PFO, as appropriate to allow timely discussion regarding required disclosures.
In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined by Rules 13a-15(d) and 15d-15(d) of the Exchange Act) that occurred during the six months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time, we are a party to certain litigation that is either judged to be not material or that arises in the ordinary course of business. We intend to vigorously defend our interests in these matters. We expect that the resolution of these matters will not have a material adverse effect on our business, financial condition or results of operations. However, due to the uncertainties inherent in litigation, no assurance can be given as to the outcome of these proceedings.
Item 1A. RISK FACTORS
Our business is subject to a number of risks, including those identified in Item 1A of Part I of our 2024 Form 10-K. There have been no material changes to the risk factors described in our 2024 Form 10-K.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
Insider Trading Arrangements
During the three months ended June 30, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
Item 6. EXHIBITS
Number |
| Description |
3.1 | Amended and Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 16, 2015). | |
3.2 | Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K (File No. 001-37544), filed with the SEC on April 24, 2017). | |
3.3 | Statement of Correction to Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q, filed on November 8, 2018). | |
3.4 | Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on December 18, 2018). | |
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3.5 | Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on May 10, 2019). | |
3.6 | Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on December 11, 2019). | |
3.7 | Articles of Amendment to Articles of Incorporation of the Company (effective March 26, 2020) (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 30, 2020). | |
3.8 | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2019). | |
3.9 | Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on December 11, 2019). | |
3.10 | Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 26, 2020). | |
4.1 | Reference is made to Exhibits 3.1 through 3.10. | |
10.1 | Credit and Security Agreement, dated March 12, 2025, by and among the Company and Innoviva Strategic Opportunities, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 12, 2025). | |
10.2 | First Amendment to Credit and Security Agreement, dated as of March 12, 2025, by and among the Issuer, Innoviva Strategic Opportunities, LLC and the other parties thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on March 12, 2025). | |
10.3 | Third Amendment to Credit and Security Agreement, dated as of March 12, 2025, by and among the Issuer, Innoviva Strategic Opportunities, LLC and the other parties thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on March 12, 2025). | |
10.4 | Fourth Amendment to Secured Convertible Credit and Security Agreement, dated March 12, 2025, by and among the Company and Innoviva Strategic Opportunities, LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the SEC on March 12, 2025). | |
10.5 | Credit and Security Agreement, dated August 11, 2025 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 12, 2025). | |
31.1 | Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
31.2 |
| Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). |
32.1† |
| Certification of Principal Executive Officer Required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. |
32.2† |
| Certification of Principal Financial Officer Required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. |
101.INS |
| Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document. |
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101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document. |
104 | Cover Page Interactive Data File Cover Page Interactive Data File (embedded within the Inline XBRL document) |
† | The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ARMATA PHARMACEUTICALS, INC. | |||
Date: August 12, 2025 | By | /s/ Deborah L. Birx | |
Name: Deborah L. Birx, M.D. | |||
Title: Chief Executive Officer | |||
(Principal Executive Officer) | |||
By | /s/ David House | ||
Name: David House | |||
Title: Senior Vice President, Finance and Principal Financial Officer | |||
(Principal Financial Officer) | |||
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FAQ
What cash balance did Armata (ARMP) report as of June 30, 2025?
Does the 10-Q state a going concern? What does management say?
How large was Armata's net loss for the six months ended June 30, 2025?
What financing did Armata secure after June 30, 2025?
What grant funding supports Armata's clinical programs?
