Azitra has $3.75M cash, flags going-concern doubt
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Azitra, Inc. (AZTR) reported a third-quarter net loss of $2,949,779, compared with $2,764,528 a year earlier; its nine-month net loss was $10,224,679, versus $8,721,866. The pre-commercial company had no product revenue; nine-month results included an $802,800 impairment of intangible assets and deferred patent costs.
Cash was $3,750,710 at September 30, 2026, while operations used $8,670,334 during the first nine months. Management said it needs significant additional funding and that these conditions create substantial doubt about continuing as a going concern for twelve months from the date the financial statements were available to be issued. NYSE American confirmed compliance was regained on August 19, 2026, but stockholders’ equity was approximately $4.4 million at September 30, below the $6.0 million standard; Azitra said it remains subject to listing monitoring and cannot assure continued compliance.
Effective October 26, 2026, Azitra decided not to use its ATM program for the foreseeable future after selling 1,000 shares for approximately $126 gross. Approximately $13.8 million remained available under its equity line of credit as of November 12, 2026.
1 point · 0 major2 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointAzitra regained NYSE American listing compliance on August 19, 2026.
Negative
- Major pointManagement cited substantial doubt about continuing as a going concern.
- Major pointNine-month net loss increased to $10,224,679 from $8,721,866.
- Moderate pointEquity was $4.4 million at September 30, 2026, below NYSE American’s $6.0 million threshold.
Filing Explained
The Series A conversion issued 3,671,517 common shares, while 4,850,789 exercisable pre-funded warrants remained potential additional shares.
The unaudited Form 10-Q reports that Azitra’s 10-for-1 reverse split took effect
The Series A preferred stock converted on
Key Figures
Third-quarter net loss attributable to common stockholders: $2,949,779
Nine-month net loss attributable to common stockholders: $10,224,679
Cash and cash equivalents: $3,750,710
+5 more
8 metrics
Third-quarter net loss attributable to common stockholders
$2,949,779
Three months ended September 30, 2026; $2,764,528 in 2025.
Nine-month net loss attributable to common stockholders
$10,224,679
Nine months ended September 30, 2026; $8,721,866 in 2025.
Cash and cash equivalents
$3,750,710
As of September 30, 2026.
Net cash used in operating activities
$8,670,334
Nine months ended September 30, 2026.
Impairment of intangible assets and deferred patent costs
$802,800
Nine months ended September 30, 2026.
Stockholders’ equity
Approximately $4.4 million
As of September 30, 2026; below the stated $6.0 million NYSE American standard.
Minimum stockholders’ equity standard
$6.0 million
NYSE American continued-listing standard described by the company.
ELOC availability
Approximately $13.8 million
Available for future share issuances as of November 12, 2026.
Key Terms
going concern basis, equity line of credit, at the market offering, pre-funded warrants, +2 more
6 terms
going concern basis financial
"prepared on the going concern basis"
An accounting assumption that a company will continue operating for the foreseeable future and will be able to meet its obligations, so assets and liabilities are recorded on that basis rather than at forced-sale or liquidation values. This matters to investors because it affects how items are measured and reported on the financial statements and can influence valuations and risk assessments; if the assumption is doubtful, auditors and companies disclose that uncertainty.
equity line of credit financial
"entered into an Equity Line of Credit"
An equity line of credit is a loan that allows homeowners to borrow money against the value of their property, similar to having a flexible credit card secured by their home. It matters to investors because it provides a way for property owners to access cash for various needs, which can influence real estate markets and overall economic activity. This type of credit offers ongoing borrowing capacity, making it a valuable financial tool for those with significant property equity.
at the market offering financial
"deemed to be an “at the market offering”"
An at-the-market offering is a way a company raises cash by selling newly issued shares directly into the open market at prevailing prices, rather than all at once in a single deal. Think of it like turning a faucet on to drip shares into trading at current prices when needed; it gives the company flexibility to raise funds over time but can dilute existing shareholders and potentially affect the stock price, which investors should monitor.
pre-funded warrants financial
"pre-funded warrants subject to beneficial ownership limitations"
Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.
beneficial ownership limitations financial
"subject to beneficial ownership limitations"
Beneficial ownership limitations are rules or contractual caps that restrict how much of a company’s stock an individual or entity can be treated as owning or controlling for legal, regulatory or corporate-governance purposes. They matter to investors because such limits affect voting power, reporting obligations, takeover risk and the ability to increase a stake — like an elevator weight limit or a lane divider that prevents any one car from taking over the whole road.
live biotherapeutic products medical
"engineered proteins and live biotherapeutic products"
Live biotherapeutic products are medicines made from live microorganisms intended to prevent, treat or cure disease, administered to people under medical oversight. Think of them like highly regulated, medicinal versions of probiotics: they can offer new ways to address illnesses but also bring special risks and costs — strict regulatory approval, complex manufacturing (imagine precision brewing), storage and batch consistency — all of which can significantly affect clinical success and investor returns.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was AZTR’s net loss for the third quarter of 2026?
Azitra reported a net loss attributable to common stockholders of $2,949,779 for the three months ended September 30, 2026, compared with $2,764,528 for the same period in 2025.
How much capacity remained in AZTR’s ATM program?
As of September 30, 2026, up to an additional $3,503,106 of common stock could be sold under the program. After selling 1,000 shares for approximately $126 in gross proceeds between September 28 and October 26, 2026, Azitra decided effective October 26 not to use the program for the foreseeable future.
What are the terms of AZTR’s equity line of credit?
The equity line of credit with Alumni Capital runs through December 31, 2026, or until Alumni Capital purchases shares for an aggregate purchase price of $20 million. Each purchase may be up to $750,000, or up to $4 million with Alumni Capital’s consent; approximately $13.8 million remained available as of November 12, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
For the transition period from ______________ to ______________
Commission File Number 001-41705
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices and zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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. Yes ☒ No ☐
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 (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
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. See the definitions of “large accelerated filer,”
“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of the registrant's common stock outstanding as of November 12, 2026 was 6,060,435 .
Page | ||||||||
PART I - FINANCIAL INFORMATION | F-1 | |||||||
Item 1. | Financial Statements | F-1 | ||||||
Condensed Balance Sheets (Unaudited) | F-1 | |||||||
Condensed Statements of Operations (Unaudited) | F-3 | |||||||
Condensed Statements of Changes in Stockholders' Equity (Unaudited) | F-4 | |||||||
Condensed Statements of Cash Flows (Unaudited) | F-6 | |||||||
Notes to Unaudited Condensed Financial Statements | F-8 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 1 | ||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 14 | ||||||
Item 4. | Controls and Procedures | 14 | ||||||
PART II - OTHER INFORMATION | 14 | |||||||
Item 1. | Legal Proceedings | 14 | ||||||
Item 1A. | Risk Factors | 14 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 16 | ||||||
Item 3. | Defaults Upon Senior Securities | 16 | ||||||
Item 4. | Mine Safety Disclosures | 16 | ||||||
Item 5. | Other Information | 16 | ||||||
Item 6. | Exhibits | 17 | ||||||
Part I FINANCIAL INFORMATION
ITEM 1. Financial Statements.
AZITRA, INC.
CONDENSED BALANCE SHEETS
September 30, 2026 | December 31, 2025 | ||||||||||
ASSETS | (Unaudited) | ||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable | |||||||||||
Tax credits receivable | |||||||||||
Income tax receivable | |||||||||||
Deferred offering costs | |||||||||||
Prepaid expenses | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Financing lease right-of-use asset, net | |||||||||||
Operating lease right-of-use asset, net | |||||||||||
Intangible assets, net | |||||||||||
Deferred patent costs | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | |||||||||||
Income tax payable | |||||||||||
Current financing lease liability | |||||||||||
Current operating lease liability | |||||||||||
Insurance premium financing liability | |||||||||||
Accrued expenses | |||||||||||
Total current liabilities | |||||||||||
Long-term operating lease liability | |||||||||||
Total liabilities | |||||||||||
F-1
The accompanying notes are an integral part of these financial statements.
Part I FINANCIAL INFORMATION
ITEM 1. Financial Statements.
AZITRA, INC.
CONDENSED BALANCE SHEETS
Commitments and contingencies (Note 10) | |||||||||||
Stockholders' equity | |||||||||||
Preferred stock; $ | |||||||||||
Common stock; $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ | |||||||||
F-2
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
General and administrative | $ | $ | $ | $ | ||||||||||||||||||||||
Research and development | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | |||||||||||||||||||||||
Change in fair value of warrants | ||||||||||||||||||||||||||
Other expense | ( | ( | ( | ( | ||||||||||||||||||||||
Total other income (expense) | ( | |||||||||||||||||||||||||
Loss before income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net loss per share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted average common stock outstanding, basic and diluted | ||||||||||||||||||||||||||
F-3
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
Preferred Stock | Common Stock | Additional Paid-in-Capital | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2024 | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
Follow-on public offering, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||
Follow-on public offering, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Draws on equity line of credit, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Draws on equity line of credit, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Offering costs and other miscellaneous adjustments | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance, September 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
F-4
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
Preferred Stock | Common Stock | Additional Paid-in-Capital | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Private Placement, net of issuance costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Draws on equity line of credit, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||
Exercise of Warrants | — | — | ( | — | |||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance - March 31, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Exercise of Warrants | — | — | — | ||||||||||||||||||||||||||||||||||||||
Conversion of Preferred Stock to Common Stock | ( | ( | — | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Offering Costs and Other Miscellaneous Adjustments | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance - June 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Amounts in the Condensed Statements of Changes in Stockholders' Equity may not foot or tie to preceding financial statements due to rounding | |||||||||||||||||||||||||||||||||||||||||
F-5
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended September 30, | |||||||||||
2026 | 2025 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Gain/Loss on lease modification | ( | ||||||||||
Amortization of right-of-use assets | |||||||||||
Stock based compensation | |||||||||||
Change in fair value of warrant liability | ( | ||||||||||
Gain on disposal of property and equipment | |||||||||||
Impairment of intangible assets and deferred patent costs | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Prepaid expenses | ( | ||||||||||
Other assets | ( | ( | |||||||||
Tax credits receivable | |||||||||||
Income tax payable | ( | ( | |||||||||
Accounts payable and accrued expenses | |||||||||||
Operating lease liability | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Proceeds from sale of property and equipment | |||||||||||
Deferred patent costs | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Payment of deferred offering/issuance costs | ( | ||||||||||
Principal payments on finance leases | ( | ( | |||||||||
Proceeds from public offerings, net | |||||||||||
F-6
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Proceeds from exercise of warrants | |||||||||||
Proceeds from private placement, net | |||||||||||
Proceeds from equity line of credit | |||||||||||
Repayment of insurance premium financing liability | ( | ||||||||||
Net cash provided by financing activities | |||||||||||
Net change in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental disclosure of non-cash investing and financing information: | |||||||||||
Financed insurance premium exchanged for prepaid insurance | $ | ||||||||||
Purchases of fixed assets in accounts payable | |||||||||||
F-7
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
1. Organization and Nature of Operations
Azitra, Inc. (the "Company," "Azitra," "We," "us," and "our".) was founded on January 2, 2014. We are a synthetic biology company focused on developing innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products by screening and genetically engineering microbes of the skin. The mission is to discover and develop novel therapeutics to create a new paradigm for treating skin disease. The Company’s discovery platform is screened for naturally occurring bacterial cells with beneficial effects. These microbes are then genomically sequenced and engineered to make cellular therapies, recombinant therapeutic proteins, peptides and small molecules for precision treatment of dermatology diseases. Azitra also leverages these technologies to develop cosmetic ingredients for consumer-oriented products as well as recombinant proteins and peptides for research. On May 17, 2023, the Company changed its name from “Azitra Inc” to “Azitra, Inc.”
In addition to our corporate headquarters located in Branford, Connecticut, the Company maintains a location in Montreal, Canada for certain research activities. The Company also opened a manufacturing and laboratory space in Groton, Connecticut during 2021.
Stock Splits, Change in Par Value, Increase in Shares Authorized, Initial and Follow-on Public Offerings, Equity Line of Credit Issuances, and ATM Program
In June 2023, the Company completed its initial public offering (IPO) in which it issued and sold 751 shares of its common stock at a price to the public of $9,990.00 per share. The shares began trading on the NYSE American on June 16, 2023 under the symbol “AZTR”. The net proceeds received by the Company from the IPO were $6.0 million, after deducting underwriting discounts, commissions and other offering expenses.
Immediately prior to the effectiveness of the Company’s registration statement, the Company effected a 7.1 -for-1 forward stock split (the "Forward Stock Split") of its issued and outstanding shares of common stock. On May 17, 2023, the Company changed the par value of its capital stock from $0.01 to $0.0001 . Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been adjusted retroactively, unless otherwise noted, to reflect the effect of the Forward Stock Split. Refer to Note 6 for additional details relating to the Forward Stock Split.
In February 2024, the Company completed a follow-on public offering (the "February 2024 Offering") in which it issued and sold 8,340 shares of its common stock at a price to the public of $599.40 per share. The net proceeds received by the Company from the follow-on public offering were $4.3 million, after deducting underwriting discounts, commissions and other offering expenses. For further information regarding the February 2024 Offering and related warrant issuance, refer to Notes 6 and 7 respectively.
On July 1, 2024, the Company effected a 30-for-1 reverse stock split of its issued and outstanding shares of common stock (the "2024 Reverse Stock Split") and began trading on a split-adjusted basis the same day. There was no change in par value. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the 2024 Reverse Stock Split. Refer to Note 6 for additional details relating to the Reverse Stock Split.
In July 2024, the Company completed a follow-on public offering (the "July 2024 Offering") in which it issued and sold 100,075 shares of its common stock at a price of $99.90 per share and Class A Warrants exercisable for an aggregate 200,126 shares of common stock. The net proceeds received by the Company from the follow-on public offering were $9.1 million, after deducting placement agent's fees and other offering expenses. For further information regarding the July 2024 Offering and related warrant issuance, refer to Notes 6 and 7 respectively.
In January 2025, the Company completed a follow-on offering (the "January 2025 Offering") in which it issued and sold 72,938 shares of its common stock at a price of $19.98 per share. The net proceeds received by the Company from the January 2025 offering were $1.2 million, after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January 15, 2025. For further information regarding the January 2025 Offering, refer to Notes 6 and 7 respectively.
In February 2025, the Company completed a follow-on offering (the "February 2025 Offering") in which it issued 37,470 shares of its common stock at a public offering price of $18.55 per share and warrants to purchase up to 33,720 shares of common stock at an exercise price of $35.97 . The net proceeds received by the Company from the February 2025 offering were $560,976 after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 6, 2025. For further information regarding the February 2025 Offering and related warrant issuance, refer to Notes 6 and 7, respectively.
F-8
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
On April 24, 2025, the Company entered into an Equity Line of Credit ("ELOC"), as amended, with Alumni Capital LP ("Alumni Capital"), whereby the Company has the right, but not the obligation, to sell to Alumni Capital, and Alumni Capital is obligated to purchase, up to an aggregate of $20 million of shares of the Company's common stock in a series of purchases. Upon each purchase, Alumni Capital will receive warrants to purchase shares of the Company's common stock equal to 10 % of the number of shares purchased in the related purchase.
Under the terms of the ELOC, the Company has issued an aggregate of 925,579 shares of common stock and issued 92,555 warrants. The aggregate gross proceeds received by the Company under the ELOC are $6.2 million. As of November 12, 2026, approximately $13.8 million is available under the ELOC for future share issuances. For further information regarding the ELOC, refer to Notes 6 and 7 respectively.
In July 2025, the Company filed a certificate of amendment to the Second Amended and Restated Certificate of Incorporation increasing the number of authorized shares of common stock from 100,000,000 to 200,000,000 . In June 2026, the Company filed a certificate of amendment to the Second Amended and Restated Certificate of Incorporation increasing the number of authorized shares of common stock from 200,000,000 to 750,000,000 .
On August 21, 2025, the Company effected a 6.66-for-1 reverse stock split of its issued and outstanding shares of common stock (the "2025 Reverse Stock Split") and began trading on a split-adjusted basis the same day. There was no change in par value. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the 2025 Reverse Stock Split. Refer to Note 6 for additional details relating to the 2024 Reverse Stock Split, and the 2025 Reverse Stock Split (together, the "Reverse Stock Splits").
On November 24, 2025, the Company entered into a securities purchase agreement (the “November Purchase Agreement”) with Alumni Capital pursuant to which the Company agreed to issue and sell to Alumni Capital in a private placement offering (the " November PIPE Offering") priced at a premium to market in accordance with NYSE rules an aggregate of 53,576 shares of common stock of the Company, (ii) pre-funded warrants (the “November Pre-Funded Warrants”) to purchase up to an aggregate of 415,174 shares of Common Stock (the “November Pre-Funded Warrants Shares”) at an exercise price of $0.0001 per November Pre-Funded Warrant, and (iii) common stock purchase warrants (the “November Common Warrants” together with the November Pre-Funded Warrants, the “November Warrants”) to purchase up to an aggregate of 468,750 shares of Common Stock (the “November Common Warrant Shares” together with the November Pre-Funded Warrant Shares, the “November Warrant Shares”) at an exercise price of $3.20 per November Common Warrant. The offering price was $3.20 per share of Common Stock or November Pre-Funded Warrant and accompanying November Common Warrant (the “Offering Price”). The November Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The November Common Warrants were exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval. For further information regarding the PIPE Offering, refer to Notes 6 and 7 respectively.
During the nine months ended September 30, 2026, all November Pre-Funded Warrants have been exercised by Alumni Capital.
On March 18, 2026, the Company entered into a securities purchase agreement (the "Series A Purchase Agreement") in which it issued and sold 10,485 shares of its Series A Preferred Stock (the "Series A Offering") at a price of $1,000 per share, which are convertible into 8,522,306 shares of common stock, Series B Warrants exercisable for an aggregate 8,522,306 shares of common stock, and Series C Warrants exercisable for an aggregate 8,522,306 shares of common stock. The net proceeds received by the Company from the Series A Offering were approximately $10.4 million, after deducting offering expenses. For further information related to the Series A Offering and related warrant issuances, refer to Notes 6 and 7 respectively.
On June 16, 2026, pursuant to the terms of the Series A Purchase Agreement, the 10,485 shares of Series A Preferred Stock converted to 3,671,517 shares of common stock and 4,850,789 pre-funded warrants.
On September 28, 2026, the Company entered into a sales agreement (the “September Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”), pursuant to which the Company may issue and sell, from time to time, to or through A.G.P., in the Company’s sole discretion, shares of its common stock, having an aggregate offering price of up to $3,503,232 (the “Placement Shares”) subject to certain conditions, through A.G.P. as sales agent. The issuance and sale, if any, of the Placement Shares by the Company under the Sales Agreement will be made pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-280648) (as amended, the “Registration Statement”), which was filed with the SEC on July 1, 2024, as amended on July 5, 2024 and declared effective on July 8, 2024, the base prospectus contained therein, and a prospectus supplement that was filed with the SEC on September 28, 2026 pursuant to Rule 424(b) under the Securities Act. A.G.P. may sell the Placement Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act, including, without limitation, sales made on or through the NYSE American, on any other existing trading market for the common stock or to or through a market maker. A.G.P. may also sell Placement Shares in negotiated transactions with the Company’s prior written consent. A.G.P. will use
F-9
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NYSE American, to sell the Placement Shares from time to time, up to the amount specified in, and otherwise in accordance with the terms of the applicable placement notice. Effective October 26, 2026, the Company decided not to utilize its at-the-market offering program (the “ATM Program”) under the sales agreement, dated September 28, 2026, between the Company and A.G.P./Alliance Global Partners for the foreseeable future and will not sell shares under the ATM Program. From September 28, 2026 through October 26, 2026, the Company sold an aggregate of 1,000 shares of common stock under the ATM Program for aggregate gross proceeds of approximately $126 . The Company may resume sales under the ATM Program or pursue other financing transactions at any time in its discretion, and makes no assurance as to whether or when it will do so.
On October 26, 2026, the Company effected a 10-for-1 reverse stock split of its issued and outstanding shares of common stock (the "2026 Reverse Stock Split") and began trading on a split-adjusted basis the same day. There was no change in par value. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the 2026 Reverse Stock Split. Refer to Note 6 for additional details relating to the 2024 Reverse Stock Split, the 2025 Reverse Stock Split, and the 2026 Reverse Stock Split (together, the "Reverse Stock Splits").
Other Events
On October 1, 2025, the Company received a deficiency letter (the “Deficiency Letter”) from the NYSE American LLC ("NYSE American") indicating that the Company is not in compliance with the NYSE American continued listing standards set forth in Section 1003(a)(ii) of the NYSE American Company Guide. Section 1003(a)(ii) of the NYSE American Company Guide requires a listed company’s stockholders’ equity be at least $4.0 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Deficiency Letter noted that the Company reported stockholders’ equity of $2.2 million as of June 30, 2025, and losses from continuing operations and/or net losses in three of its four most recent fiscal years ended December 31, 2024.
In order to maintain the Company’s listing on the NYSE American, the NYSE American requested that the Company submit a plan of compliance (the “Plan”) by October 31, 2025 addressing how the Company intends to regain compliance with Section 1003(a)(ii) of the NYSE American Company Guide by April 1, 2027.
The Company’s management submitted the Plan to the NYSE American by the October 31, 2025 deadline and the NYSE American accepted the Plan on December 16, 2025.
On March 13, 2026, the Company received an additional letter (the “March 2026 Letter”) from the NYSE American indicating that the Company was also not in compliance with the continued listing standard set forth in Section 1003(a)(iii) of the NYSE American Company Guide, which requires stockholders’ equity of at least $6.0 million if a listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years. The March 2026 Letter noted that the Company reported stockholders’ equity of $3.8 million as of December 31, 2025 and losses from continuing operations and/or net losses in its five most recent fiscal years ended December 31, 2025. The Company sought to regain compliance with Section 1003(a)(iii), in addition to Section 1003(a)(ii), of the NYSE American Company Guide by the April 1, 2027 plan period deadline pursuant to the Plan. During the plan period, the Company must provide quarterly updates to the NYSE American staff concurrent with its periodic filings, and if the Company does not make progress consistent with the Plan or does not regain compliance by the plan period deadline, the NYSE American may initiate delisting proceedings as set forth in the NYSE American Company Guide.
On August 19, 2026, the Company received a letter from NYSE Regulation confirming that the Company regained compliance with all of the NYSE American continued listing standards set forth in Part 10 of the NYSE American Company Guide, including resolution of the previously identified deficiencies under Sections 1003(a)(ii) and 1003(a)(iii) of the NYSE American Company Guide. As a result, the “below compliance” (“.BC”) indicator was removed from the Company’s trading symbol for its common stock and the Company was removed from the NYSE American’s list of noncompliant issuers on its website.
The Company remains subject to the NYSE American’s continued listing monitoring procedures. In accordance with Section 1009(h) of the NYSE American Company Guide, if the Company is again determined to be below any of the continued listing standards within 12 months of the date of the letter, the NYSE American will examine the relationship between the two incidents of noncompliance and re-evaluate the Company’s method of financial recovery from the first incident, and will then take the appropriate action, which, depending on the circumstances, may include truncating the compliance procedures described in Section 1009 of the NYSE American Company Guide or immediately initiating delisting proceedings. As of September 30, 2026, the Company reported total stockholders’ equity of approximately $4.4 million, which is below the $6.0 million minimum stockholders’ equity requirement of Section 1003(a)(iii) of the NYSE American Company Guide. There can be no assurance that the Company will be able to maintain compliance with the NYSE American’s continued listing standards.
F-10
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Going Concern Matters
The unaudited condensed financial statements have been prepared on the going concern basis, which assumes that the Company will continue in operation for the foreseeable future, and which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, management has identified the following conditions and events that created an uncertainty about the ability of the Company to continue as a going concern. As of and for the nine months ended September 30, 2026, the Company has an accumulated deficit of approximately $78.7 million, a loss from operations of approximately $10.3 million, used approximately $8.7 million to fund operations and had approximately $3.3 million of working capital.
The Company will require a significant amount of additional funds to complete the development of its product and to fund additional losses which the Company expects to incur over the next few years. The Company is still in its pre-commercialization phase and therefore does not yet have product revenue. Management plans to continue to raise funds through equity and/or debt financing to fund operating and working capital needs; however, there can be no assurance that the Company will be successful in securing additional financing, if needed, to meet its operating needs.
These conditions and events create substantial doubt about the ability of the Company to continue as a going concern for twelve months from the date that the financial statements are available to be issued. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Company are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain amounts in the condensed financial statements and associated notes may not add up due to rounding.
Unaudited Interim Financial Information
The unaudited interim financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, within the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the results for the interim periods presented and of the financial condition as of the date of the interim balance sheet. The financial data and the other information disclosed in these notes to the interim financial statements related to the three and nine month periods ended September 30, 2026 are unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2025, and notes thereto that are included in the Company’s Annual Report on Form 10-K as filed with the SEC on February 27, 2026.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. While management believes the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. The most significant estimates in the Company's financial statements relate to accruals for research and development expenses, valuation of warrants and valuation of equity awards, and the recoverability of our deferred patent costs. These estimates and assumptions are based on current facts, historical experience and various other factors 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 and the recording of expenses that are not readily apparent from other sources.
F-11
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Concentration of Credit Risks and other Risks and Uncertainties
Financial instruments, which potentially subject the Company to significant concentrations of risk, consist principally of cash and cash equivalents. The Company’s cash is deposited with a federally insured U.S. financial institution. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.
The Company is dependent on contract research organizations ("CRO") to conduct, and manage our on-going clinical trials, and contract manufacturing organizations (“CMO”) to supply products for research and development of its product candidates, including preclinical and clinical studies, and for commercialization of its product candidates, if approved. The Company’s development programs could be adversely affected by any significant interruption in either the CRO's or the CMO’s operations or by a significant interruption in the supply of active pharmaceutical ingredients and other components.
Products developed by the Company require approval from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s product candidates will receive the necessary approvals. If the Company is denied approvals, approvals are delayed, or the Company is unable to maintain approvals received, such events could have a materially adverse impact on the Company.
The Company’s activities are subject to significant risks and uncertainties including the risk of failure to secure additional funding to properly execute the Company’s business plan. The Company is subject to risks that are common to companies in the pharmaceutical industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements.
Segment Information
Cash and Cash Equivalents
For purposes of the balance sheets and statements of cash flows, the Company considers all cash on hand, demand deposits and all highly liquid investments with original maturities of three months or less to be cash equivalents.
Deferred Offering and Deferred Issuance Costs
The Company capitalizes deferred offering costs, which primarily consists of direct, incremental legal, professional, accounting, and other third-party fees relating to the Company’s public offering initiatives associated with the filing of an S-1 Registration Statement. Once the Company completes the public offering, the Company records these amounts against the gross proceeds of these public offerings within the statements of stockholders’ equity.
In July 2024, the Company also filed a Form S-3 Registration Statement and recorded deferred issuance costs as a long-term asset. In September 2025, the Company wrote off the remaining deferred issuance costs of $35,435 as it was uncertain the Company would be able to issue additional shares against the Form S-3 Registration Statement. The write-off resulted in a reduction to additional paid-in capital. In September 2026, the Company filed a Prospectus Supplement and recorded deferred issuance costs of $31,731 as a long-term asset.
Leases
The Company has 3 operating leases for buildings and recorded an initial ROU assets and lease liabilities totaling $1,418,502 . The basis, terms and conditions of the leases are determined by the individual agreements. The Company’s option to extend certain leases ranges from 36 – 52 months. All options to extend have been included in the calculation of the ROU asset and lease liability. The leases do not contain residual value guarantees, restrictions, or covenants that could incur additional financial obligations to the Company. There are no subleases, sale-leaseback, or related party transactions.
F-12
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
At September 30, 2026, the Company had operating right-of-use assets with a net value of $308,940 and current and long-term operating lease liabilities of $274,197 and $35,962 , respectively.
In 2023, the Company entered into a lease for the use of certain equipment that was classified as a finance lease. The finance lease has a term of 36 months. At September 30, 2026, the Company has fully paid the financing lease.
Deferred Patent Costs
Research and Development
At September 30, 2026 and December 31, 2025, the Company had state tax credit receivables of $100,194 and $103,601 ; respectively, for pending refunds related to the selling of research and development tax credits back to the State of Connecticut. At September 30, 2026 and December 31, 2025, the Company had recorded $0 and $27,269 , respectively, for pending refunds related to Canadian Scientific Research and Experimental Development (SRED) credits. At September 30, 2026 and December 31, 2025, the Company had recorded $24,386 and $9,513 , respectively, related to refunds of Canadian Goods and Services Tax (GST) and Quebec Sales Tax (QST). Receipts of refunds are recorded in research and development on the statements of operations.
Recent and Adopted Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)." Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. We are currently evaluating this ASU to determine its impact on our disclosures.
In July 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which introduces a practical expedient that allows entities to assume that current conditions at the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This eliminates the need to incorporate macroeconomic forecasts for short term receivables. The ASU is effective for fiscal years beginning after December 15, 2025. The Company adopted ASU 2025-05 on January 1, 2026, on a prospective basis, which did not have a significant impact on the financial statements and related disclosures.
F-13
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
3. Property and Equipment
Property and equipment consisted of the following at:
September 30, 2026 | December 31, 2025 | |||||||||||||
Laboratory equipment | $ | $ | ||||||||||||
Computers and office equipment | ||||||||||||||
Furniture and fixtures | ||||||||||||||
Leasehold improvements | ||||||||||||||
Building equipment | ||||||||||||||
Total property and equipment | ||||||||||||||
Less accumulated depreciation & amortization | ( | ( | ||||||||||||
Total property and equipment, net | $ | $ | ||||||||||||
Depreciation expense was $34,513 and $101,662 for the three and nine months ended September 30, 2026, respectively. Depreciation expense was $31,041 and $93,117 for the three and nine months ended September 30, 2025, respectively.
Fixed assets are reviewed for impairment each reporting period. For the three and nine months ended September 30, 2026 there was no 3,244 and $2,069 of gains on disposal of property and equipment recorded, respectively.
4. Intangible Assets
Intangible assets consisted of the following at:
September 30, 2026:
Estimated Useful Life | Gross Amount | Accumulated Amortization | Impairment | Net Amount | |||||||||||||||||||||||||
Trademarks | Indefinite | $ | $ | — | $ | $ | |||||||||||||||||||||||
Patents | |||||||||||||||||||||||||||||
Intangible assets | $ | $ | $ | $ | |||||||||||||||||||||||||
December 31, 2025:
Estimated Useful Life | Gross Amount | Accumulated Amortization | Impairment | Net Amount | |||||||||||||||||||||||||
Trademarks | Indefinite | $ | $ | — | $ | $ | |||||||||||||||||||||||
Patents | |||||||||||||||||||||||||||||
Intangible assets | $ | $ | $ | $ | |||||||||||||||||||||||||
F-14
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
5. Accrued Expenses
Accrued expenses consisted of the following at:
September 30, 2026 | December 31, 2025 | ||||||||||
Employee payroll and bonuses | $ | $ | |||||||||
Vacation | |||||||||||
Research and development projects | |||||||||||
Professional fees | |||||||||||
Other | |||||||||||
Total accrued expenses | $ | $ | |||||||||
6. Stockholders’ Equity
On May 17, 2023, the Company effected a 7.1 -for-1 Forward Stock Split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The par value of the common stock was adjusted as a result of the Forward Stock Split from $0.01 to $0.0001 and the authorized shares were increased to 100,000,000 shares of common stock in connection with the Forward Stock Split. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Forward Stock Split for all periods presented. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities.
On February 16, 2024, the Company completed the February 2024 Offering, consisting of an aggregate of 8,340 shares of its common stock at a public offering price of $599.40 per share. The gross proceeds from the February 2024 Offering, before deducting the placement agent's fees and other offering expenses, were approximately $5 million.
As consideration for ThinkEquity LLC serving as the Placement Agent for the February 2024 Offering (the "February 2024 Placement Agent"), the Company paid the February 2024 Placement Agent a cash fee of 7.5 % of the aggregate gross proceeds of the February 2024 Offering and reimbursed the February 2024 Placement Agent for certain expenses, legal fees for a total of $537,559 , and issued February 2024 Placement Agent Warrants to designees to the February 2024 Placement Agent.
On July 1, 2024, the Company effected a 30-for-1 Reverse Stock Split of its issued and outstanding shares of common stock and began trading on a split-adjusted basis the same day. There was no change to the par value of the common stock. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented unless otherwise noted. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately decreased and the respective per share value and exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.
On July 25, 2024, the Company completed the July 2024 Offering, consisting of an aggregate of 100,075 shares of its common stock and Class A warrants to purchase 200,126 shares of common stock, at a combined public offering price of $99.90 . The Class A warrant had an initial exercise price of $99.90 per share, was exercisable immediately upon issuance, and will expire on the fifth anniversary of the original issuance date. However, if on the date that was 30 calendar days immediately following the date of issuance of the Class A Warrants, or August 24, 2024 (the “Reset Date”), the Reset Price, as defined below, was less than the exercise price at such time, the exercise price would be decreased to the Reset Price. “Reset Price” is defined as 100 % of the trailing five-day VWAP immediately preceding the Reset Date, provided, that in no event would the Reset Price be less than $21.31 (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions), which represented 20 % of the most recent closing price for the Common Stock at the time of execution of the placement agent agreement with respect to the offering. The Reset Price of the Class A Warrants as calculated on the Reset Date was $46.91 . The number of shares of Common Stock issuable upon exercise of the Class A Warrants has not been proportionately adjusted due to the reset of the exercise price.
In consideration for Maxim Group LLC serving as the placement agent of the July 2024 Offering (the “July 2024 Placement Agent”), the Company paid the July 2024 Placement Agent a cash fee equal to 7.0 % of the aggregate gross proceeds of the July 2024 Offering,
F-15
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
reimbursed the July 2024 Placement Agent for certain expenses and legal fees for a total of $809,825 , and issued Placement Agent Warrants.
The gross proceeds from the July 2024 Offering, before deducting the July 2024 Placement Agent’s fees and other offering expenses, were approximately $10.0 million.
On January 14, 2025, the Company completed the January 2025 Offering in which it issued and sold 72,938 shares of its common stock at a price of $19.98 per share. The net proceeds received by the Company from the January 2025 Offering were approximately $1.2 million, after deducting underwriting discounts, commissions and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January 15, 2025.
In consideration for Maxim Group LLC serving as the placement agent of the January 2025 Offering (the "January 2025 Placement Agent"), the Company paid the January 2025 Placement Agent a cash fee equal to 7.0 % of the aggregate gross proceeds raised in the January 2025 Offering and reimbursed the January 2025 Placement Agent for certain expenses and legal fees of $60,000 . The Company also issued warrants to designees of the January 2025 Placement Agent (the "Placement Agent Warrants").
On February 5, 2025, the Company completed the February 2025 Offering in which it issued 37,470 shares of its common stock at a public offering price of $18.55 per share and warrants to purchase up to 33,720 shares of common stock. The net proceeds received by the Company from the February 2025 Offering were $561,000 after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 6, 2025.
In consideration for Maxim Group LLC serving as the placement agent of the February 2025 Offering (the "February 2025 Placement Agent"), the Company paid the February 2025 Placement Agent a cash fee equal to 4.0 % of the aggregate gross proceeds raised in the February 2025 Offering, reimbursed the February 2025 Placement Agent for certain expenses and legal fees of $35,000 , and issued Placement Agent Warrants.
On April 24, 2025, the Company entered into an ELOC, as amended, with Alumni Capital, whereby the Company has the right, but not the obligation, to sell to Alumni Capital, and Alumni Capital is obligated to purchase, up to an aggregate of $20 million of shares of the Company’s common stock in a series of purchases. The term of the ELOC is through December 31, 2026, or the date on which Alumni Capital shall have purchased the shares pursuant to the ELOC for an aggregate purchase price of $20 million. During the term, the Company may at its election cause Alumni Capital to make a series of purchases of shares, each up to $750,000 , or up to $4 million dollars upon consent of Alumni Capital. The closing of each purchase pursuant to the ELOC will be no later than business days after the Company provides a notice to Alumni Capital. The purchase price of the shares that the Company elects to sell to Alumni Capital pursuant to the ELOC will be equal to the lowest daily volume weighted average price of the Common Stock during the period commencing on the date that the Company delivers a notice requiring the purchase of shares by Alumni Capital and ending on the earlier to occur of (i) (5) business days immediately following such date and (ii) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the relevant closing, multiplied by 90 %.
On August 21, 2025, the Company effected a 6.66-for-1 Reverse Stock Split of its issued and outstanding shares of common stock and began trading on a split-adjusted basis the same day. There was no change to the par value of the common stock. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented unless otherwise noted. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately decreased and the respective per share value and exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.
On August 26, 2025, the Company entered into a Modification Agreement (the “Modification Agreement”) with Alumni Capital to amend certain terms of the Purchase Agreement, dated April 24, 2025, between the Company and Alumni Capital (the “Purchase Agreement”). Pursuant to the Modification Agreement, the Company may at its election, cause Alumni Capital to make a series of purchases of ELOC Shares either at (i) the lowest daily volume weighted average price of the Common Stock during the period commencing on the date that the Company delivers written notice (the “Purchase Notice”) and ending on the earlier of (a) (5) business days immediately following the date of a Purchase Notice, and (b) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 90 % (“Purchase Notice Option 1”) or (ii) the lowest traded price of Common Stock during the period commencing on the date the Company delivers a Purchase Notice and ending on the earlier of (x) the same business day a Purchase Notice is delivered, and (y) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 97 % (“Purchase Notice Option 2”). Each Purchase Notice delivered by the Company must specify whether Purchase Notice Option 1 or Purchase Notice Option 2 is selected and the number of
F-16
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
ELOC Shares to be purchased. All other terms and conditions of the Purchase Agreement remain in full force and effect. Refer to Note 7 regarding the terms of the warrants issued in conjunction with the shares.
Through September 30, 2026 the Company has issued an aggregate 925,579 shares of common stock and issued an aggregate 92,555 warrants. During the nine months ended September 30, 2026, the Company issued 130,000 shares of common stock and 13,000 warrants under the ELOC resulting in net proceeds of approximately $215,000 . As of the date of this filing, the aggregate gross proceeds received by the Company under the ELOC were approximately $6.2 million.
On November 24, 2025, the Company completed the November PIPE Offering of 53,576 shares of common stock of the Company, November Pre-Funded Warrants to purchase up to an aggregate of 415,174 shares of common at an exercise price of $0.0001 per November Pre-Funded Warrant, and November Common Warrants to purchase up to an aggregate of 468,750 shares of common stock at an exercise price of $3.20 per November Common Warrant. The offering price was $3.20 per share of common stock or November Pre-Funded Warrant and accompanying November Common Warrant Price. The November Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The November Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval.
For the three and nine months ended September 30, 2026, all November Pre-Funded Warrants have been exercised by Alumni Capital.
In consideration for Maxim Group LLC serving as the placement agent for the November PIPE Offering (the "PIPE Placement Agent"), the Company paid a cash fee equal to 7.0 % of the aggregate gross proceeds raised in the November PIPE Offering, reimbursed the PIPE Placement Agent for certain expenses and legal fees of $50,000 , and issued Placement Agent Warrants.
On March 20, 2026, the Company completed the Series A Offering, for the sale of a unit, each unit consisting of one Series A Preferred Share ("Series A PS"), which is convertible into 812.8 shares of common stock, one Series B Warrant ("B Warrant") exercisable for 812.8 shares of common stock and one Series C Warrant ("C Warrant") exercisable for 812.8 shares of common stock (the "B Warrant and C Warrant" collectively the "Series A Preferred Warrants") and (the "Series A PS, B Warrant and C Warrant", collectively, the "Series A Unit") The Series A Preferred Warrants are exercisable at $1.230 1,000 per Series A Unit and a total of 10,485 Series A Units were sold in the Series A Offering resulting in net proceeds of approximately $10.4 million after deducting offering costs of approximately $101,000 . Purchasers in the Series A Offering included the Company’s Chief Executive Officer, a consultant to the Company and a holder of more than 5% of the Company’s outstanding common stock as of the date of the Series A Purchase Agreement.
On June 16, 2026 the Series A PS converted into 3,671,517 shares of common stock and 4,850,789 pre-funded warrants. The Series B Warrants became exercisable upon the requisite stockholder approval and will terminate 18 months following such approval. The Series C Warrants became exercisable upon the requisite stockholder approval and will terminate 30 calendar days after the date the Company publicly announces data from its cosmetic filaggrin study in humans; provided, however, that if the closing sale price of the common stock is below the exercise price of the Series C Warrants on such termination date, the exercise price will automatically reset to such closing sale price (subject to a floor equal to 50 % of the original exercise price) and the termination date will be extended by an additional 30 calendar days.
In June 2026, the Company filed a certificate of amendment to the Second Amended and Restated Certificate of Incorporation increasing the number of authorized shares of common stock from 200,000,000 to 750,000,000 . There was no change in the common stock par value.
In September 2026, the Company entered into the September Sales Agreement with A.G.P. under which the Company has the ability to issue and sell the Placement Shares, from time to time, through A.G.P., pursuant to the Registration Statement, having an aggregate offering price of up to $3,503,232 through its ATM Program. During the three months ended September 30, 2026, the Company sold 1,000 shares of its common stock under the ATM program for aggregate gross proceeds of approximately $126 . As of September 30, 2026, the Company had remaining capacity to sell up to an additional $3,503,106 of common stock under the ATM program. As previously disclosed, effective October 26, 2026, the Company disclosed it does not intend to utilize the ATM Program for the foreseeable future but may resume sales under the ATM Program or pursue other financing transactions at any time in its discretion, and makes no assurance as to whether or when it will do so.
On October 26, 2026, the Company effected a 10-for-1 Reverse Stock Split of its issued and outstanding shares of common stock and began trading on a split-adjusted basis the same day. There was no change to the par value of the common stock. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented unless otherwise noted. Shares of common stock underlying outstanding stock-based awards and other equity
F-17
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
instruments were proportionately decreased and the respective per share value and exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.
Common Stock
At September 30, 2026 and December 31, 2025, per the Company’s Amended and Restated Certificate of Incorporation, the Company was authorized to issue 750,000,000 and 200,000,000 shares of $0.0001
Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.
Upon receiving stockholder approval of the Certificate of Amendment to the Amended and Restated Certificate of Incorporation, increasing the authorized number of shares of common stock from 200,000,000 to 750,000,000 shares at the 2026 Annual Meeting of Stockholders held on June 15, 2026, the Company reserved 17,771,713 shares of common stock for the potential exercise of stock options and warrants outstanding at September 30, 2026. As previously disclosed, the Company issued 3,671,517 shares of common stock upon the receipt of stockholder approval.
Except as otherwise indicated, all share and share price amounts in this report give effect to a forward stock split effected on May 17, 2023 at a ratio of 7.1 -for-1, the reverse stock split effected on July 1, 2024 at a ratio of 1-for-30, the reverse stock split effected on August 21, 2025 at a ratio of 1-for-6.66 and the reverse stock split effected on October 26, 2026 at a ratio of 1-for-10.
Preferred Stock
At September 30, 2026 and December 31, 2025, per the Company’s Amended and Restated Certificate of Incorporation, the Company has authorized 10,000,000 0.0001
Upon receiving stockholder approval of the Certificate of Amendment to the Amended and Restated Certificate of Incorporation in June 2026, the 10,485 shares of Series A Preferred stock converted to 3,671,517 shares of common stock and 4,850,789 pre-funded warrants. No gain or loss was recorded upon conversion.
Prior to conversion, the Series A Preferred were evaluated pursuant to ASC 480 - Distinguishing Liabilities from Equity and determined to be equity instruments.
7. Warrants
The Company issued warrants to purchase 22 shares of common stock in 2018 in conjunction with convertible debt financing that have a redemption provision providing the holder the right to have the Company redeem all or any portion of the warrant (or shares it has converted into) at a purchase price equal to the fair market value of the shares as determined by the board of directors or an independent appraiser. As a result of this redemption provision, the warrants have been classified as a liability in the financial statements based on ASC 480. These warrants have an exercise price of $959.04 per share and a term of 10 years. The warrants are adjusted to their current fair value each reporting period. The fair value was $—
The Company issued 30 warrants to its underwriters as part of our initial public offering in fiscal 2023. In fiscal 2024, the Company issued an additional 333 warrants in February, and 4,003 warrants in July to its underwriters as part of our February, and July Offerings. The underwriter warrants have a term of 5 years.
In connection with the February 2024 Offering, the Company also issued warrants to designees to the February 2024 Placement Agent exercisable for an aggregate of 333 shares of Common Stock at an exercise price of $749.25 per share (125% of the $599.40 public offering price) and which expire on February 13, 2029. The warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.
The Company issued 200,126 Class A Warrants to investors who participated in the Company's July 2024 Offering. The Class A Warrants had an initial exercise price of $99.90 per share of Common Stock; however, on August 24, 2024 the exercise price was reset to $46.91 . See Note 6. The number of shares of Common Stock issuable upon exercise of the Class A Warrants were not proportionately adjusted in connection with the reset of the exercise price.
The Class A Warrants are exercisable upon issuance and expire five years from the date of issuance. The Class A Warrants contain ownership limitations pursuant to which a holder does not have the right to exercise any portion of their warrants if it would result in the holder (together with its affiliates) beneficially owning more than 4.99 % (or, at the election of the holder, 9.99 %) of the Company’s outstanding Common Stock. The Class A Warrants are issued pursuant to a Warrant Agent Agreement dated July 25, 2024
F-18
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(“Warrant Agent Agreement”) between the Company and VStock Transfer LLC, to which Continental Stock Transfer & Trust Company has succeeded VStock as warrant agent. In August 2024, 15 warrants were exercised for proceeds of $704 .
In connection with the July 2024 Offering, the Company evaluated the Class A Warrants and determined they met the criteria for liability classification as they met the criteria in ASC 815 - Derivatives and Hedging due to the reset provision. The Class A Warrants had an initial fair value of $12.1 million. The gross proceeds of approximately $10.0 million from the July 2024 follow-on public offering was allocated to the Class A Warrants resulting in a loss on issuance of common stock of approximately $2.1 million recorded in Other income (expenses). Upon the reset of the Class A Warrant exercise price, the Class A Warrants no longer met the criteria for liability classification pursuant to ASC 815; at which time the Company recorded a gain in Other income (expenses) - Change in fair value of Class A warrants of $4.0 million, and reclassified $1.9 million to equity representing the difference between the change in the fair value, and the loss upon issuance of our common stock.
The Class A Warrants were valued utilizing a probability weighted scenario method with a Monte Carlo simulation model and Black-Scholes Model. The significant assumptions in the Monte Carlo simulation model include a stay public assumption of 90 %, and a fundamental transaction assumption of 10 %. The significant assumptions utilized in estimating the fair value of the Class A Warrants at issuance include (i) a per share price of common stock range of $1.14 - $1.40 ; (ii) a dividend yield of 0 %; (iii) a risk-free rate range of 4.13 % - 4.14 %; (iv) expected volatility of 119 %; (v) projected stock price and volume weighted average price as of the Reset Date of $1.14 ; (vi) a strike price range of $1.40 - $1.50 ; and (vii) expected term of 4.92 years.
In connection with the July 2024 Offering, the Company also issued warrants to designees of the July 2024 Placement Agent exercisable for an aggregate of 4,003 shares of common stock. The warrants have substantially the same terms as the Class A Warrants, except that the July 2024 Placement Agent warrants have an exercise price equal to $124.88 per share (125% of the $99.90 public offering price), have an initial exercise date of January 23, 2025 and expire on July 23, 2029. The 2024 Placement Agent warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.
In connection with the January 2025 Offering, as consideration for Maxim Group LLC serving as the Placement Agent of the January 2025 Offering, the Company also issued warrants to designees of the Placement Agent exercisable for an aggregate of 2,917 shares of common stock, which represent 4.0 % of the aggregate number of shares of common stock sold in the offering, at an exercise price per share equal to 125 % of the public offering price of $25.31 . The warrants are exercisable six months from the date of issuance and expire five years from the commencement of the sales in this offering. The warrants may be exercisable via cashless exercise in certain circumstances. The warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.
In connection with the February 2025 Offering, the Company issued warrants to purchase up to 33,720 shares of common stock at an exercise price of $35.97 . The warrants are exercisable on the six-month and one day anniversary of their issuance, and their exercise price was calculated as the greater of the (i) book value of the common stock or (ii) market value of the common stock as determined by the NYSE American Rules. The warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.
In connection with shares issued to Alumni Capital under the terms of the ELOC, as amended, Alumni Capital will receive warrants to purchase such number of shares of the Company’s common stock equal to 10 % of the number of shares purchased in the related purchase. The Exercise Price shall equal 130 % of the price per share paid upon closing. The exercise of the warrant will be subject to stockholder approval and expire five years after issuance. The warrants may be exercised via cashless exercise if there is no effective registration statement, or current prospectus available for, the resale of the warrant shares. The Company has issued an aggregate 92,555 warrants as of September 30, 2026.
In connection with the November PIPE Offering, the Company issued November Pre-Funded Warrants to purchase up to 415,174 shares of common stock at an exercise price of $0.0001 , and November Common Warrants to purchase up to an aggregate of 468,750 shares of common stock at an exercise price of $3.20 per November Common Warrant. The November Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The November Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval. For the three and nine months ended September 30, 2026, all November Pre-Funded Warrants have been exercised by Alumni Capital.
In connection with the November PIPE Offering, as consideration for Maxim Group LLC serving as the PIPE Placement Agent, the Company also issued warrants to designees of the PIPE Placement Agent exercisable for an aggregate of 18,750 shares of common stock, which represent 4.0 % of the aggregate number of shares of common stock sold in the offering, at an exercise price per share equal to 125 % of the public offering price of $3.20 . The warrants are exercisable six months from the date of issuance and expire five years from the commencement of the sales in this offering. The warrants may be exercisable via cashless exercise in certain circumstances. The warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.
In connection with the Series A Preferred Offering, the Company issued 4,850,789 pre-funded warrants subject to beneficial ownership limitations and are immediately exercisable until fully exercised, and Series B and Series C Warrants to purchase up to
F-19
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The following table summarizes information about warrants outstanding at September 30, 2026:
Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||||||||||||||||||||||||
Year Granted | Exercise Price | Number of Warrants at 09/30/2026 | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number of Warrants at 09/30/2026 | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||||||||||||||||||||||||||||||||||||
2018 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2023 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2024 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2024 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2024 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
F-20
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2026 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2026 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2026 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2026 | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
2026 | $ | 0 | $ | 0 | $ | |||||||||||||||||||||||||||||||||||||||
2026 | $ | 0 | $ | 0 | $ | |||||||||||||||||||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||||||||||||||||||||
The Series C Warrants will terminate 30 calendar days after the date the Company publicly announces data from its cosmetic filaggrin study in humans (subject to extension as described above), and the pre-funded warrants, which are currently exercisable but subject to the investors' respective beneficial ownership blocker, do not expire until exercised in full; accordingly, the remaining contractual life presented above for such warrants does not reflect a fixed expiration date.
8. Stock Options
In March 2023, the Company’s Board of Directors and stockholders approved the 2023 Stock Incentive Plan (“2023 Plan”). The 2023 Plan allows the Compensation Committee to grant up to 18,184 shares of Common Stock in the form of incentive and non-statutory stock options, restricted stock awards, restricted stock units, and other stock-based awards to employees, directors, and non-employees. On October 3, 2024, the Company’s Board of Directors approved amendments to the 2023 Plan to (i) increase the number of shares of Common Stock that may be issued under the 2023 Plan by 17,183 shares and (ii) adopt an evergreen provision to the 2023 Plan providing for an automatic 5 % annual increase in the shares of Common Stock available for issuance under the 2023 Plan over the next 10 years. Both amendments were approved by the Company’s stockholders at the Company’s annual stockholder meeting held on November 20, 2024. On January 1, 2026, the shares of Common Stock that may be issued under the 2023 Plan increased by 53,703 shares in accordance with the evergreen provision. As of September 30, 2026, options to purchase 65,605 shares of common stock had been granted and were outstanding under the 2023 Plan and 6,283 shares of common stock were available for grant under the 2023 Plan.
During 2016, the Company established the Azitra Inc. 2016 Stock Incentive Plan ("2016 Plan") which provides for the grant up to 746 shares of Common Stock in the form of stock options and restricted shares to the Company’s employees, officers, directors, advisors and consultants. As of September 30, 2026, options to purchase 300 shares of common stock had been granted and 436 shares of common stock were available for grant under the 2016 Plan.
At September 30, 2026, there was $100,613 of unamortized compensation expense that will be amortized over the remaining vesting period. The Company determined the options qualified as plain vanilla under the provisions of SAB 107 and the simplified method was used to estimate the expected option life.
To determine the estimated fair value of the options granted during 2025, the Company used the Black-Scholes option pricing model with the following assumptions: Underlying common stock value of $0.30 ; Expected term of 6.5 to 10 years; Expected Volatility of 86.7 %; to 89.1 % Risk Free Interest Rate of 3.86 % - 4.12 %; and Dividend Yield of 0 %.
To determine the estimated fair value of the options granted during 2026, the Company used the Black-Scholes option pricing model with the following assumptions: Underlying common stock value of $2.10 ; Expected term of 6.5 to 10 years Expected Volatility of 86.7 %; Risk Free Interest Rate of 4.12 %; and Dividend Yield of 0 %.
F-21
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Stock-based compensation expense recognized for options was as follows:
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Research and development | $ | $ | $ | $ | |||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
The following table summarizes information about options outstanding and exercisable at September 30, 2026:
Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||||||||
Exercise Price | Number of Options at September 30, 2026 | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number of Options Exercisable at September 30, 2026 | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | ||||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||||||||
Total stock option activity for the nine months ended September 30, 2026, is summarized as follows:
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||||||||||||
Outstanding at December 31, 2025 | $ | |||||||||||||||||||||||||
Granted | — | |||||||||||||||||||||||||
Exercised | — | — | ||||||||||||||||||||||||
Forfeited | ( | — | — | |||||||||||||||||||||||
Outstanding at September 30, 2026 | $ | |||||||||||||||||||||||||
Vested and Exercisable at September 30, 2026 | ||||||||||||||||||||||||||
9. Net Loss Per Share
The following potential common stock equivalents, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect.
F-22
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, | |||||||||||
2026 | 2025 | ||||||||||
Options to purchase shares of common stock | |||||||||||
Warrants outstanding | |||||||||||
Total | |||||||||||
10. Commitments and Contingencies
Legal
The Company is subject to legal proceedings or claims which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.
License Agreement
Effective January 26, 2022, the Company entered into an Exclusive License Agreement (the License Agreement) with an unrelated third party. Under the License Agreement, the Company is granted an exclusive license for certain patents and a non-exclusive license for certain know-how. The License Agreement continues until the later of the expiration of the last to expire licensed patent or ten years after the first commercial sale of the first licensed therapeutic or non-therapeutic product. The Company may terminate the License Agreement at any time by providing at least 30 days written notice to the third party. The License Agreement is also terminated upon breach of a material obligation under the agreement or bankruptcy. Upon any termination of the License Agreement, neither party is relieved of obligations incurred prior to the termination.
During the periods ended September 30, 2026 and 2025, the Company did not capitalize any payments made under this license.
Operating Leases
The Company leases office and lab space in Branford, CT, Groton, CT, and Montreal, Quebec. The Company’s leases expire at various dates through April 30, 2028. Most leases are for a fixed term and for a fixed amount.
During 2019, the Company entered into a new lease agreement for office and laboratory space in Montreal, Quebec. The Montreal lease required monthly payments of $6,906 , CAD which increases approximately 4 % in each of the following years. The Montreal lease was increased to $8,130 CAD in 2021 upon leasing additional space. The Montreal lease was initially for a one-year term, renewable annually. The Montreal lease also requires the Company to pay additional common area maintenance.
During 2020, the Company entered into a new lease agreement for the Company’s primary office and laboratory space in Branford, CT. The Branford lease requires monthly payments of $13,033 for the first year of the lease, which increases approximately 2 % in each of the following years. The Branford lease also requires the Company to pay a pro-rata share of common area maintenance.
During May 2021, the Company entered into a new lease for office and laboratory space in Groton, CT. The Groton lease required monthly payments of $4,234 , which was increased to $6,824 in September 2021 upon leasing additional space. In August 2024, the Company reassessed its needs and released certain lab space resulting in a decrease to the monthly payment to $5,216 . In April 2026, the Company reassessed its needs and added additional lab space resulting in an increase to the monthly payment to $9,716 . The Groton lease is initially for a one-year term, renewable annually for up to additional years.
F-23
The accompanying notes are an integral part of these unaudited condensed financial statements.
AZITRA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow:
2026 | $ | ||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total future undiscounted lease payments | |||||
Less interest | ( | ||||
Present value of minimum lease payments | $ | ||||
Rent expense for all operating leases was $275,596 and $243,694 for the periods ended September 30, 2026 and 2025, respectively. The weighted average lease term for all operating leases is 0.9 years. The weighted average discount rate for all operating leases is 4.96 %.
Finance Leases
During 2023, the Company entered into an agreement with Hewlett Packard to lease equipment. The lease requires monthly payments of $1,478 , including tax. The lease is for a 3 year term with option of purchase or extension at term end. The remaining lease term is 0.0 years and the discount rate is 0.00 %. The finance lease was repaid in July 2026.
11. Retirement Plan
12. Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist principally of cash.
The cash balance identified in the balance sheet is held in an account with a financial institution and insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At times, cash maintained on deposit may be in excess of FDIC limits.
13. Segment Information
The Company operates and manages its business as a single reportable segment, which is to discover and develop novel therapeutics to create a new paradigm for treating skin diseases and developing cosmetic ingredients for consumer-oriented products. The Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), manages and evaluates the Company's performance on a total Company basis of net loss and assessing how to allocate resources based on the Company cash position as reported in the Company's balance sheet and statement of operations. The Company's significant expenses are consistent with the expense categories presented in the statement of operations.
As of September 30, 2026, all of the Company's fixed assets were maintained in the United States and Canada on an original costs basis of $960,446 and $294,564 , respectively.
F-24
The accompanying notes are an integral part of these unaudited condensed financial statements.
14. Subsequent Events
The Company has evaluated events subsequent to the balance sheet date through November 12, 2026, the date these financial statements are issued. Other than the 2026 Reverse Stock Split as disclosed in Note 1 and elsewhere in these notes to the unaudited condensed financial statements, the Company has not identified any subsequent events requiring recognition or disclosure in these financial statements.
F-25
The accompanying notes are an integral part of these unaudited condensed financial statements.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-looking Statements
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and the related notes thereto contained elsewhere in this report. The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other filings with the Securities and Exchange Commission, or SEC, including our Form 10-K for the year ended December 31, 2025, filed with the SEC on February 27, 2026.
In this report we make statements, and from time to time we otherwise make written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in our documents, reports, filings with the SEC, and news releases, and in written or oral presentations made by officers or other representatives to analysts, stockholders, investors, news organizations and others, and in discussions with management and other of our representatives.
Our future results, including results related to forward-looking statements, involve a number of risks and uncertainties, including those risks included in the “Risk Factors” section in our Form 10-K for the year ended December 31, 2025, filed with the SEC on February 27, 2026. No assurance can be given that the results reflected in any forward-looking statements will be achieved. Any forward-looking statement speaks only as of the date on which such statement is made. Our forward-looking statements are based upon assumptions that are sometimes based upon estimates, data, communications and other information from suppliers, government agencies and other sources that may be subject to revision. Except as required by law, we do not undertake any obligation to update or keep current either (i) any forward-looking statement to reflect events or circumstances arising after the date of such statement or (ii) the important factors that could cause our future results to differ materially from historical results or trends, results anticipated or planned by us, or which are reflected from time to time in any forward-looking statement.
General
We were formed in January 2014 as a biopharmaceutical company focused on developing innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. Azitra also leverages its technologies to develop cosmetic ingredients for consumer-oriented products as well as recombinant proteins and peptides for research. We are an early-stage clinical biopharmaceutical company and have not commenced commercial operations.
To date, we have capitalized our operations primarily through a series of private placements of our convertible preferred stock and convertible promissory notes and our initial public offering, IPO, of common stock which closed on June 21, 2023. In connection with our IPO, we issued 751 shares of our common stock at a public offering price of $9,990 per share. Concurrent with the close of our IPO, all of our outstanding shares of convertible preferred stock and convertible promissory notes converted into a total of 4,480 shares of our common stock. In February 2024, we completed a follow-on public offering in which we issued and sold 8,340 shares of our common stock at a price to the public of $599.40 per share. On July 25, 2024, we completed a follow-on offering of an aggregate of 100,075 shares of our common stock, and Class A warrants to purchase up to 200,126 shares of common stock, at a combined public offering price of $99.90 per share and accompanying warrants. On January 14, 2025, we completed a follow-on offering in which we issued and sold 72,938 shares of our common stock at a price of $19.98 per share. The net proceeds received by us from the follow-on offering were $1.2 million, after deducting placement agent's fees and other offering expenses. The shares were offered by us pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January 15, 2025. On February 5, 2025, we completed a follow-on offering in which we issued 37,470 shares of our common stock at a public offering price of $18.55 per share and warrants to purchase up to 33,720 shares of common stock. The net proceeds received by the Company from the follow-on offering were $561,000 after deducting placement agent's fees and other offering expenses. The shares were offered by us pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 6, 2025. The warrants are exercisable on the six-month and one day anniversary of their issuance, and their exercise price is $35.97.
On April 24, 2025, the Company entered into the ELOC with Alumni Capital LP (the "Purchaser" or "Alumni Capital"), whereby the Company has the right, but not the obligation, to sell to the Purchaser, and the Purchaser is obligated to purchase, up to an aggregate of $20 million (the "Investment Amount") of shares of the Company’s common stock in a series of purchases. The term of
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the Purchase Agreement is through December 31, 2026, or the date on which the Purchaser shall have purchased the shares pursuant to the Purchase Agreement for an aggregate purchase price of the Investment Amount. During the term, the Company may at its election cause the Purchaser to make a series of purchases of shares, each up to $750,000, or up to $4 million dollars upon consent of the Purchaser. The closing of each purchase pursuant to the Purchase Agreement will be no later than five business days after the Company provides notice for the purchase. The purchase price of the shares that the Company elects to sell to the Purchaser pursuant to the Purchase Agreement will be equal to the lowest daily volume weighted average price of the common stock during the period commencing on the date that the Company delivers a notice requiring the purchase of shares by the Purchaser and ending on the earlier to occur of (i) five (5) business days immediately following such date and (ii) the date on which the Purchaser notifies the Company that it is prepared to proceed with the relevant closing, multiplied by 90%. Upon each purchase, the Purchaser will receive warrants to purchase such number of shares of the Company’s common stock equal to 10% of the number of shares purchased in the related purchase (the “Warrants”). The Exercise Price shall equal 130% of the price per share paid upon closing. The exercise of the Warrant will be subject to stockholder approval and expire five years after issuance. The Warrants may be exercised via cashless exercise if there is no effective registration statement, or current prospectus available for, the resale of the Warrant shares. The Company could not issue to the Purchaser under the Purchase Agreement shares in an amount greater than 19.99% of the total number of shares of common stock issued and outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”), unless the Company obtained stockholder approval to issue shares of common stock in excess of the Exchange Cap. On June 23, 2025, at the Company's annual meeting of stockholders, the stockholders approved the sale and issuance of more than 19.99% of our outstanding shares of our common stock, including shares of common stock underlying warrants, pursuant to the Purchase Agreement entered into with the Purchaser.
On August 26, 2025, the Company entered into a Modification Agreement (the “Modification Agreement”) with Alumni Capital to amend certain terms of the ELOC, dated April 24, 2025, between the Company and Alumni Capital (the “Purchase Agreement”). Pursuant to the Modification Agreement, the Company may at its election, cause Alumni Capital to make a series of purchases of ELOC Shares either at (i) the lowest daily volume weighted average price of the Common Stock during the period commencing on the date that the Company delivers written notice (the “Purchase Notice”) and ending on the earlier of (a) five (5) business days immediately following the date of a Purchase Notice, and (b) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 90% (“Purchase Notice Option 1”) or (ii) the lowest traded price of Common Stock during the period commencing on the date the Company delivers a Purchase Notice and ending on the earlier of (x) the same business day a Purchase Notice is delivered, and (y) the date on which Alumni Capital notifies the Company that it is prepared to proceed with the closing of the purchase, multiplied by 97% (“Purchase Notice Option 2”). Each Purchase Notice delivered by the Company must specify whether Purchase Notice Option 1 or Purchase Notice Option 2 is selected and the number of ELOC Shares to be purchased. All other terms and conditions of the Purchase Agreement remain in full force and effect. Refer to Note 7 regarding the terms of the warrants issued in conjunction with the Shares.
On November 24, 2025, the Company entered into a securities purchase agreement (the “November Purchase Agreement”) with Alumni Capital pursuant to which the Company agreed to issue and sell to Alumni Capital in a private placement offering (the "November PIPE Offering") priced at a premium to market in accordance with NYSE rules an aggregate of 53,576 shares of common stock of the Company, (ii) pre-funded warrants (the “November Pre-Funded Warrants”) to purchase up to an aggregate of 415,174 shares of Common Stock (the “November Pre-Funded Warrants Shares”) at an exercise price of $0.0001 per November Pre-Funded Warrant, and (iii) common stock purchase warrants (the “November Common Warrants” together with the November Pre-Funded Warrants, the “November Warrants”) to purchase up to an aggregate of 468,750 shares of Common Stock (the “November Common Warrant Shares” together with the November Pre-Funded Warrant Shares, the “November Warrant Shares”) at an exercise price of $3.20 per November Common Warrant. The offering price was $3.20 per share of Common Stock or November Pre-Funded Warrant and accompanying November Common Warrant (the “November Offering Price”). The November Pre-Funded Warrants are immediately exercisable and do not expire until exercised in full. The November Common Warrants are exercisable upon shareholder approval and will expire on the five-year anniversary of shareholder approval.
On March 18, 2026, the Company entered into a Securities Purchase Agreement (the “March Purchase Agreement”) with the March Purchasers, pursuant to which the Company sold an aggregate of (i) 10,485 shares of its Series A convertible non-redeemable preferred stock, par value $0.0001 per share, (ii) Series B warrants to purchase up to 8,522,306 shares of the Company’s common stock, par value $0.0001 per share (or, in certain circumstances, pre-funded warrants to purchase shares of Common Stock), (iii) Series C warrants to purchase up to 8,522,306 shares of Common Stock (or, in certain circumstances, Pre-Funded Warrants) to the March Purchasers in a private placement (the “March PIPE Financing”). Each share of Series A Preferred Stock is being sold together with a Series B Warrant to purchase 813 shares of Common Stock and a Series C Warrant to purchase 813 shares of Common Stock. The securities were sold at a purchase price of $1,000 per Security to the March Purchasers, which included the Company’s Chief
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Executive Officer, a consultant of the Company, and a holder of more than 5% of the Company’s outstanding Common Stock as of the date of the March Purchase Agreement. The Warrants will each have an exercise price of $1.23 per share.
On June 16, 2026, pursuant to the terms of the Series A Purchase Agreement, the 10,485 shares of Series A Preferred Stock converted to 3,671,517 shares of common stock and 4,850,789 pre-funded warrants.
On September 28, 2026, the Company entered into the September Sales Agreement with A.G.P, pursuant to which the Company may issue and sell, from time to time, to or through A.G.P., in the Company’s sole discretion, the Placement Shares, having an aggregate offering price of up to $3,503,232 subject to certain conditions, through A.G.P. as sales agent. The issuance and sale, if any, of the Placement Shares by the Company under the Sales Agreement will be made pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-280648) (as amended, the “Registration Statement”), which was filed with the SEC on July 1, 2024, as amended on July 5, 2024 and declared effective on July 8, 2024, the base prospectus contained therein, and a prospectus supplement that was filed with the SEC on September 28, 2026 pursuant to Rule 424(b) under the Securities Act. A.G.P. may sell the Placement Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act, including, without limitation, sales made on or through the NYSE American, on any other existing trading market for the common stock or to or through a market maker. A.G.P. may also sell Placement Shares in negotiated transactions with the Company’s prior written consent. A.G.P. will use commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NYSE American, to sell the Placement Shares from time to time, up to the amount specified in, and otherwise in accordance with the terms of the applicable placement notice. Effective October 26, 2026, the Company decided not to utilize its ATM Program under the Sales Agreement for the foreseeable future and will not sell shares under the ATM Program. From September 28, 2026 through October 26, 2026, the Company sold an aggregate of 1,000 shares of common stock under the ATM Program for aggregate gross proceeds of approximately $126. The Company may resume sales under the ATM Program or pursue other financing transactions at any time in its discretion, and makes no assurance as to whether or when it will do so. Between October 26, 2026 and November 12, 2026, the Company has not made any sales or issuances under its ATM Program.
On October 26, 2026, the Company effected a 10-for-1 reverse stock split of its issued and outstanding shares of common stock (the "2026 Reverse Stock Split") and began trading on a split-adjusted basis the same day. There was no change in par value. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the 2026 Reverse Stock Split. Refer to Note 6 for additional details relating to the 2024 Reverse Stock Split, the 2025 Reverse Stock Split, and the 2026 Reverse Stock Split (together, the "Reverse Stock Splits").
As of November 12, 2026, the Company has sold 925,579 shares and issued 92,555 warrants to Alumni Capital LP under the ELOC with an estimated gross proceeds of approximately $6.2 million. During the nine months ended September 30, 2026, the Company issued 130,000 shares of our common stock and 13,000 warrants under the ELOC resulting in net proceeds of approximately $215,000.
As of November 12, 2026, we had 6,060,435 shares of our common stock issued and outstanding. Except as otherwise indicated, all shares and share prices in this report give effect to the reverse stock split effected on July 1, 2024 at a ratio of 30-for-1, the reverse stock split effected on August 21, 2025 at a ratio of 6.66-for-1 and the reverse stock split effected on October 26, 2026 at a ratio of 10-for-1. As of the date of this filing, our Board is still evaluating the need for further reverse splits and, if needed, the exact split ratio based on our financing alternatives and NYSE American compliance considerations.
Overview
We are focused on developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. We have built a proprietary platform that includes a microbial library comprised of approximately 1,500 unique bacterial strains that can be screened for unique therapeutic characteristics. The platform is augmented by an artificial intelligence and machine learning technology, which can enable the transformation of previously genetically intractable strains. Our initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis, or S. epidermidis, which we consider to be an optimal therapeutic candidate species for engineering of dermatologic therapies. The particular species demonstrates a number of well-described properties in the skin. As of the date of this report, we have identified among our microbial library over 60 distinct bacterial species that we believe are capable of being engineered to create living organisms or engineered proteins with significant therapeutic effect. We also leverage our technology to develop cosmetic ingredients for consumer-oriented products as well as recombinant proteins and peptides for research.
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We are a pioneer in genetically engineered bacteria for therapeutic use in dermatology. Our goal is to leverage our platforms and internal microbial library bacterial strains to create new therapeutics that are either engineered living organisms or engineered proteins or peptides to treat skin diseases. Our initial focus is on the development of our current programs, including:
•ATR-COSF, which includes an engineered recombinant human filaggrin protein as a potential ingredient in cosmetic products used to address the appearance of fine lines and wrinkles. Initial testing on explanted cosmetic surgery skin began in Q1 2026. We plan to conduct a cosmetic study to evaluate the effect of the ingredient on human participants in the fourth quarter of 2026.
•ATR-01, which includes a genetically modified strain of S. epidermidis that expresses an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris, a chronic, xerotic (abnormally dry), scaly skin disease with an estimated incidence and prevalence of 1 in 250, which suggests a total patient population of 1.3 million in the United States. We completed lead optimization studies in 2025 and continue to perform IND-enabling studies in 2026.
•ATR-04, which includes a genetically modified strain of S. epidermidis for treating the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor inhibitor, or EGFRi, targeted therapy and other similar targeted therapies. In August 2024, we obtained IND clearance from the FDA to commence a Phase 1/2 clinical trial in certain cancer patients undergoing EGFRi targeted therapy. In September 2024, we obtained Fast Track designation by the FDA in this indication. We dosed the first patient in the Phase 1/2 clinical trial in the third quarter of 2025 and completed enrollment of Cohort 1 in September 2026. In September 2026, the Safety Review Committee recommended proceeding to dose patients in Cohort 2 of the study. Additionally, in October 2026, we received Institutional Review Board (IRB) approval to expand dosing to patients experiencing rash due to mitogen-activated protein kinase kinase (MEK) and Kirsten rat sarcoma virus oncogene homologue (KRAS) inhibitors.
•ATR-12, which includes a genetically modified strain of S. epidermidis for treating the orphan disease, Netherton syndrome, a chronic and sometimes fatal disease of the skin estimated to affect approximately one in every 100,000, but its prevalence may be underestimated due to misdiagnosis caused by similarities to other skin diseases. We received Pediatric Rare Disease Designation for ATR-12 by the United States Food and Drug Administration, or FDA, in 2019. In December 2022, we submitted an investigational new drug application, or IND, for a Phase 1b clinical trial of ATR-12 in Netherton syndrome patients, and on January 27, 2023 we received notification from the FDA that the “study may proceed” with respect to the proposed Phase 1b clinical trial. After submitting post-IND manufacturing reports, we have commenced operating activities for our Phase 1b clinical trial in December 2023, and we dosed our first patient in August 2024. We reported initial clinical safety results in the first half of 2025. In June 2026, following encouraging safety results from the first six enrolled patients, we announced that we paused enrollment of our ongoing Phase 1b clinical trial to conserve capital and redirect funds toward our ATR-COSF program. In the future, we may resume ATR-12 development in Netherton syndrome, as we have already developed improved topical formulations and next-generation live biotherapeutic candidates.
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We also have established partnerships with teams from Carnegie Mellon University and the Fred Hutchinson Cancer Center, or "Fred Hutch", two of the premier academic centers in the United States. Our collaboration with the Carnegie Mellon based team also takes advantage of the power of whole genome sequencing. This partnership is mining our proprietary library of bacterial strains for novel, drug like peptides and proteins. The artificial intelligence/machine learning technology developed by this team predicts the molecules made by microbes from their genetic sequences. The system then compares the predictions to the products actually made through tandem mass spectroscopy and/or nuclear magnetic resonance imaging to refine future predictions. The predictions can be compared to publicly available 2D and 3D protein databases to select drug-like structures.
We hold an exclusive, worldwide license from Fred Hutch regarding the use of its patented SyngenicDNA Minicircle Plasmid, or SyMPL, technologies for all fields of genetic engineering, including to discover, develop and commercialize engineered microbial therapies and microbial-derived peptides and proteins for skin diseases. We are utilizing our licensed patent rights to build plasmids in order to make genetic transformations that have never been previously achieved. To date, our team has successfully engineered our lead therapeutic candidates without the SyMPL technology. However, we believe that SyMPL will open up the ability to make genetic transformations of an expanded universe of microbial species, and we expect that some or all of our future product candidates will incorporate the SyMPL technology.
Azitra is leveraging these technologies to develop next generation tools for improving the efficiency of the production and manufacturing of recombinant proteins, peptides, mRNA and antibodies.
Our Strategy
Beyond our three lead product candidates, our goal is to develop a broad portfolio of product candidates focused on expanding the application of our platforms for precision dermatology and recombinant protein and peptide manufacturing. We believe that we have established a unique position in advancing the development of biologics for precision dermatology and high-value ingredients for the cosmetic industry.
We intend to create a broad portfolio of product candidates for precision dermatology through our development of genetically engineered proteins selected from our proprietary microbial library of approximately 1,500 unique bacterial strains. Additionally, Azitra’s research team is developing the SyMPL technology to improve the production of recombinant proteins, peptides and complex small molecule natural products. Our strategy is as follows:
•Build a sustainable precision dermatology company. Our goal is to build a leading precision dermatology company with a sustainable pipeline of product candidates. To that end, we are focused on rapidly advancing our current pipeline of live
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biotherapeutic candidates while actively developing additional product candidates including recombinant proteins, peptides and natural products. While some products will be focused on prescription drug pathways, others are being developed as biotech tool products or high-value cosmetic ingredients. Each of our current product candidates are proprietary and subject to pending patent applications. We expect that most, if not all, genetically engineered product candidates we develop will be eligible for patent protection.
•Develop our platform's ability to generate commercial stage products. As we have been generating our prescription-oriented programs for dermatological diseases, we have internally performed research to address potential future scale up and manufacturing challenges. These activities have led to projects which have applicability, not just at Azitra, but for broader protein, peptide and natural product synthesis. We plan to investigate the opportunity to further develop and commercialize these biotech tools and ingredients.
•Advance our lead programs, ATR-COSF,ATR-04 and ATR-01, through cosmetic and clinical trials. ATR-COSF is currently in development as a cosmetic ingredient. In August 2024, we received IND clearance from the FDA for a first-in-human Phase 1b/2a clinical trial in patients with EGFRi-associated rash, and in September 2024, the FDA granted Fast Track designation for the ATR-04 program. We commenced a Phase 1b trial for our ATR-04 program in certain cancer patients undergoing EGFRi therapy in the fourth quarter of 2024 and initiated dosing the first patient in the ATR-04 Phase 1/2 clinical trial in the third quarter of 2025. We continue to conduct IND-enabling studies for the development of ATR-01 in 2026.
•Broaden our platform by selectively exploring strategic partnerships that maximize the potential of our precision dermatology programs. We intend to maintain significant rights to all of our core technologies and product candidates. However, we will continue to evaluate partnering opportunities in which a strategic partner could help us to accelerate development of our technologies and product candidates, provide access to synergistic combinations, or provide expertise that could allow us to expand into the treatment of different types of skin diseases and into other markets such as consumer health or biomanufacturing. We may also broaden the reach of our platform by selectively in-licensing technologies or product candidates. In addition, we will consider potentially out-licensing certain of our proprietary technologies for indications and industries that we are not ourselves pursuing. We believe our genetic engineering techniques and technologies have applicability outside of the field of medicine, including cosmetics and in the generation of clean fuels and bioremediation.
•Leverage our academic partnerships. We currently have partnerships with investigators at the Fred Hutchinson Cancer Center, Yale University, Duke University, and Carnegie Mellon University. We expect to leverage these partnerships and potentially expand them or form other academic partnerships to bolster our engineering platforms and expand our research and development pipeline.
•Expand on our other potential product candidates. Beyond our three lead product candidates, our goal is to develop a broad portfolio of product candidates focused on expanding the application of our platforms for precision dermatology. We have a proprietary platform for discovering and developing therapeutic products for precision dermatology. Our platform is built around a microbial library comprised of approximately 1,500 unique bacterial strains to allow screening for unique therapeutic characteristics and utilizes a microbial genetic technology that analyzes, predicts and engineers the proteins, peptides and molecules made by skin microbes. Our ability to genetically engineer intractable microbial species is uniquely leveraged by our exclusive license to the SyMPL technology.
Other Events
On October 1, 2025, the Company received a deficiency letter (the “Deficiency Letter”) from the NYSE American indicating that the Company is not in compliance with the NYSE American continued listing standards set forth in Sections 1003(a)(ii) of the NYSE American Company Guide. Section 1003(a)(ii) of the NYSE American Company Guide requires a listed company’s stockholders’ equity be at least $4.0 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Deficiency Letter noted that the Company reported stockholders’ equity of $2.2 million as of June 30, 2025, and losses from continuing operations and/or net losses in three of its four most recent fiscal years ended December 31, 2024.
In order to maintain the Company’s listing on the NYSE American, the NYSE American requested that the Company submit a plan of compliance (the “Plan”) by October 31, 2025 addressing how the Company intends to regain compliance with Section 1003(a)(ii) of the NYSE American Company Guide by April 1, 2027.
The Company’s management submitted the Plan to the NYSE American by the October 31, 2025 deadline and the NYSE American accepted the Plan on December 16, 2025.
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On March 13, 2026, the Company received an additional letter (the “March 2026 Letter”) from the NYSE American indicating that the Company is also not in compliance with the continued listing standard set forth in Section 1003(a)(iii) of the NYSE American Company Guide, which requires stockholders’ equity of at least $6.0 million if a listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years. The March 2026 Letter noted that the Company reported stockholders’ equity of $3.8 million as of December 31, 2025 and losses from continuing operations and/or net losses in its five most recent fiscal years ended December 31, 2025. The Company sought to regain compliance with Section 1003(a)(iii), in addition to Section 1003(a)(ii), of the NYSE American Company Guide by the April 1, 2027 plan period deadline pursuant to the Plan. During the plan period, the Company must provide quarterly updates to the NYSE American staff concurrent with its periodic filings, and if the Company does not make progress consistent with the Plan or does not regain compliance by the plan period deadline, the NYSE American may initiate delisting proceedings as set forth in the NYSE American Company Guide.
On August 19, 2026, the Company received a letter from NYSE Regulation confirming that the Company has regained compliance with all of the NYSE American continued listing standards set forth in Part 10 of the NYSE American Company Guide, including resolution of the previously identified deficiencies under Sections 1003(a)(ii) and 1003(a)(iii) of the NYSE American Company Guide. As a result, the “below compliance” (“.BC”) indicator was removed from the Company’s trading symbol for its common stock and the Company was removed from the NYSE American’s list of noncompliant issuers on its website.
The Company remains subject to the NYSE American’s continued listing monitoring procedures. In accordance with Section 1009(h) of the NYSE American Company Guide, if the Company is again determined to be below any of the continued listing standards within 12 months of the date of the letter, the NYSE American will examine the relationship between the two incidents of noncompliance and re-evaluate the Company’s method of financial recovery from the first incident, and will then take the appropriate action, which, depending on the circumstances, may include truncating the compliance procedures described in Section 1009 of the NYSE American Company Guide or immediately initiating delisting proceedings. As of September 30, 2026, the Company reported total stockholders’ equity of approximately $4.4 million, which is below the $6.0 million minimum stockholders’ equity requirement of Section 1003(a)(iii) of the NYSE American Company Guide. There can be no assurance that the Company will be able to maintain compliance with the NYSE American’s continued listing standards.
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Results of Operations
We are an early-stage clinical biopharmaceutical company, formed in January 2014, and have limited operating history. We have not commenced revenue-producing operations, and our core focus is on the research and development of innovative therapies for precision dermatology using engineered proteins and live biotherapeutic products. Additionally, Azitra’s research team is developing the SyMPL technology to improve the production of recombinant proteins, peptides and complex small molecule natural products. To date, our operations have consisted of the development of our proprietary microbial library, the identification, characterization and testing of certain bacterial species from our microbial library that we believe are capable of being engineered to provide significant therapeutic effect, the development of our initial product candidates, the commencement of a Phase 1b clinical trial related to our ATR-12 product candidate, for which enrollment was paused in June 2026, and the commencement of a Phase 1/2 clinical trial related to our ATR-04 product candidate.
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
The following table summarizes our results of operations with respect to the items set forth below for the three months ended September 30, 2026 and 2025, together with the percentage change for those items.
Three Months Ended September 30, | ||||||||||||||||||||||||||
2026 | 2025 | $ Change | % Change | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
General and administrative | 1,614,814 | 1,588,406 | 26,408 | 2 | % | |||||||||||||||||||||
Research and development | 1,290,644 | 1,180,078 | 110,566 | 9 | % | |||||||||||||||||||||
Total operating expenses | 2,905,458 | 2,768,484 | 136,974 | 5 | % | |||||||||||||||||||||
Loss from operations | (2,905,458) | (2,768,484) | (136,974) | 5 | % | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest income | 48,531 | 4,823 | 43,708 | 906 | % | |||||||||||||||||||||
Interest expense | — | (372) | 372 | (100) | % | |||||||||||||||||||||
Change in fair value of warrants | — | 133 | (133) | (100) | % | |||||||||||||||||||||
Other (expense) income | (92,852) | (628) | (92,224) | 14685 | % | |||||||||||||||||||||
Total other income (expense) | (44,321) | 3,956 | (48,277) | (1220) | % | |||||||||||||||||||||
Loss before income taxes | (2,949,779) | (2,764,528) | (185,251) | 7 | % | |||||||||||||||||||||
Income tax expense | — | — | — | — | % | |||||||||||||||||||||
Net loss | (2,949,779) | (2,764,528) | (185,251) | 7 | % | |||||||||||||||||||||
Net loss attributable to common stockholders | $ | (2,949,779) | $ | (2,764,528) | $ | (185,251) | 7 | % | ||||||||||||||||||
General and Administrative
General and administrative costs during the third quarter of fiscal 2026 increased by approximately $26,000, or 2%, to $1,614,814 from the comparable prior period. The increase was primarily related to an increase of approximately $90,000 in the use of business consultants which was primarily attributed to increased hours due to incremental public company compliance initiatives and business development efforts, an increase in approximately $44,000 which included a $79,000 write off of deferred patent costs, in legal fees primarily related to patents, an increase of approximately $22,000 in operating lease expense primarily related to the additional space utilized in our Groton location, an increase of approximately $17,000 in software and equipment costs., and an increase in payroll and benefits of approximately $11,000 primarily related to merit increases, offset by a decrease of approximately $114,000 in financing costs primarily attributable to decreased use of investment consultants, a decrease of approximately $28,000 in
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overall insurance costs, a decrease of approximately $11,000 in accounting costs, and a decrease of approximately $5,000 in other overhead expenses
We expect that our general and administrative expenses will incur a modest increase in the future as a result of personnel costs and facility operating costs. We also expect an increase in costs associated with being a public company, including costs related to accounting, audit, legal, consulting fees, regulatory and tax-related services associated with maintaining compliance with applicable NYSE American and SEC requirements, additional director and officer insurance costs, and investor and public relations costs.
Research and Development
Research and development expenses include salaries and benefits of all research personnel, payments to contract research organizations, payments to research consultants, and the purchase of lab supplies.
During the three months ended September 30, 2026 and 2025, our research and development expenses by category were as follows:
Three Months Ended September 30, | ||||||||||||||
Expense Category: | 2026 | 2025 | ||||||||||||
Preclinical and clinical research and development activities | $ | 615,486 | $ | 689,574 | ||||||||||
Chemistry, manufacturing and controls (CMC) | 38,570 | 15,581 | ||||||||||||
Personnel & consultants related expenses | 636,588 | 474,923 | ||||||||||||
Total research and development expenses | $ | 1,290,644 | $ | 1,180,078 | ||||||||||
During the third quarter of fiscal 2026, research and development expenses increased by approximately $111,000, or 9%, to $1,290,644 from the comparable prior period. The increase was primarily related to an increase of approximately $108,000 in lab supplies, an increase of approximately $87,000 in payroll and benefits primarily related to merit increases and a new hire, an increase of approximately $39,000 in our ATR-COSF program as that program prepares to move to clinical trial, an increase of approximately $62,000 in the use of CMC consultants and an increase of $13,000 in the use of clinical consultants offset by a decrease of approximately $127,000 in research and development costs for our ATR-04 program as the program progresses through its clinical trial, a decrease of approximately $80,000 in our ATR-01 program as focus shifts to our ATR-COSF program, and an overall a net increase of approximately $9,000 in other miscellaneous costs.
We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates, the research and development of cosmetic ingredients for our consumer-oriented products, and planned increases in personnel costs due to additional resource hires.
Other Income
Our other income consists of interest income, interest expense, patent impairment expense, state of CT tax expense, loss on disposal of equipment, change in fair value of warrants and loss on foreign currency. During the third quarter of fiscal 2026, other income decreased by approximately $48,000, or 1220%, compared to the comparable period in fiscal 2025. The decrease was primarily related to an increase in interest income of $44,000 offset by an increase of approximately $101,000 in patent impairment expenses and a decrease in miscellaneous costs of approximately $9,000.
We expect our future other income to be consistent with prior periods.
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Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
The following table summarizes our results of operations with respect to the items set forth below for the nine months ended September 30, 2026 and 2025, together with the percentage change for those items.
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2026 | 2025 | $ Change | % Change | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
General and administrative | 6,055,812 | 4,908,057 | 1,147,755 | 23 | % | |||||||||||||||||||||
Research and development | 4,202,738 | 3,832,017 | 370,721 | 10 | % | |||||||||||||||||||||
Total operating expenses | 10,258,550 | 8,740,074 | 1,518,476 | 17 | % | |||||||||||||||||||||
Loss from operations | (10,258,550) | (8,740,074) | (1,518,476) | 17 | % | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest income | 137,911 | 57,448 | 80,463 | 140 | % | |||||||||||||||||||||
Interest expense | (4,776) | (2,133) | (2,643) | 124 | % | |||||||||||||||||||||
Change in fair value of warrants | — | 330 | (330) | (100) | % | |||||||||||||||||||||
Other income (expense) | (99,264) | (37,437) | (61,827) | 165 | % | |||||||||||||||||||||
Total other income (expense) | 33,871 | 18,208 | 15,663 | 86 | % | |||||||||||||||||||||
Loss before Income Taxes | (10,224,679) | (8,721,866) | (1,502,813) | 17 | % | |||||||||||||||||||||
Income Tax Expense | — | — | — | — | % | |||||||||||||||||||||
Net loss | (10,224,679) | (8,721,866) | (1,502,813) | 17 | % | |||||||||||||||||||||
Dividends on preferred stock | — | — | — | — | % | |||||||||||||||||||||
Net loss attributable to common stockholders | $ | (10,224,679) | $ | (8,721,866) | $ | (1,502,813) | 17 | % | ||||||||||||||||||
General and Administrative
General and administrative costs during the first nine months of fiscal 2026 increased by approximately $1,148,000, or 23%, to $6,055,812 from the prior year period. The increase was primarily related to an increase of approximately $881,000 in legal costs which included a $702,000 write off of deferred patent costs, an increase of approximately $215,000 in the use of business consultants which was primarily attributed to increased hours due to incremental public company compliance initiatives and business development efforts, an increase of approximately $198,000 in payroll and benefits costs which included payment of retention bonuses in the second quarter 2026, an increase of approximately $32,000 in operating lease expense primarily related to the additional space utilized in our Groton location, and an increase of approximately $10,000 in software and equipment offset by a decrease of approximately $123,000 in financing costs primarily attributable to decreased use of investment consultants, a decrease of approximately $64,000 in overall insurance expenses, a decrease of approximately $10,000 in accounting expenses and a net increase of $9,000 in other miscellaneous costs.
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Research and Development
Research and development expenses include salaries and benefits of all research personnel, payments to contract research organizations, payments to research consultants, and the purchase of lab supplies. These expenses are offset by development tax credits.
Historically, we have not reported research and development expenses by program or by product candidates due to certain operational and system constraints. During nine months ended September 30, 2026 and September 30, 2025 our research and development expenses by category were as follows:
Nine Months Ended September 30, | ||||||||||||||
Expense Category: | 2026 | 2025 | ||||||||||||
Preclinical and clinical research and development activities | $ | 1,651,127 | $ | 2,238,518 | ||||||||||
Chemistry, manufacturing and controls (CMC) | 711,000 | 66,994 | ||||||||||||
Personnel & consultants related expenses | 1,840,611 | 1,526,505 | ||||||||||||
Total research and development expenses | $ | 4,202,738 | $ | 3,832,017 | ||||||||||
During the first nine months of fiscal 2026, research and development expenses increased by $371,000, or 10%, to $4,202,738 from the comparable prior period. The increase was primarily related to an increase of approximately $523,000 in research and development related costs attributable to our efforts in moving our ATR-01 program forward, an increase of approximately $273,000 in salaries and benefits which includes the payout of retention bonuses in the second quarter of 2026, an increase of approximately $180,000 in lab supplies, an increase of approximately 127,000 attributable to the use of CMC consultants, an increase of $45,000 attributable to moving our ATR-COSF program forward and an overall increase of approximately $15,000 in miscellaneous costs offset by a decrease of approximately $595,000 in our ATR-12 program, a decrease of approximately $111,000 in our ATR-04 program, and a decrease of approximately $86,000 in the use of clinical consultants.
We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates.
Other Income (Expense)
Our other income consists of interest income, interest expense, patent impairment expense, state of CT tax expense, loss on disposal of equipment, change in fair value of warrants and loss on foreign currency. During the first nine months of fiscal 2026, other income increased by $16,000, or 86%, compared to the comparable period in fiscal 2025. The increase was primarily related to an increase of $80,000 in interest income, an increase of approximately $101,000 in patent impairment expense offset by a decrease in the loss on foreign currency of approximately $35,000 and approximately $2,000 of other miscellaneous costs.
Financial Condition
As of September 30, 2026, we had total assets of approximately $6.0 million and working capital of approximately $3.3 million. As of September 30, 2026, our liquidity included approximately $3.8 million of cash and cash equivalents. We believe that our cash on-hand as of the date of this report will not be sufficient to cover our proposed plan of operations over the next twelve months. We intend to seek additional funds through various financing sources, including the sale of our equity and debt securities, federal grants, licensing fees for our technology and joint ventures with industry partners. In addition, we will consider alternatives to our current business plan that may enable us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our common stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing,
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distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
As of the date of this filing, management has determined there is substantial doubt about our ability to continue as a going concern based on our lack of revenue from commercial operations, significant losses, and the need to raise additional capital to support ongoing operations. Our contractual commitments primarily consist of operating and financing leases with contractual undiscounted balances of $317,169, and $—, respectively as of September 30, 2026. Refer to Note 10 for more detailed information regarding our lease commitments. Additionally, as we continue to progress our product candidates through clinical trials, we will continue to incur additional costs related to our CRO's. It is common in our industry for the CRO's to require significant up-front cash payments prior to the beginning of such trial phases, and additional cash payments upon the achievement of certain milestones per the contracts' terms.
Cash Flows
The following table shows a summary of our cash flows for the periods indicated:
Nine Months Ended September 30, | |||||||||||
2026 | 2025 | ||||||||||
Net cash used in operating activities | $ | (8,670,334) | $ | (8,331,514) | |||||||
Net cash used in investing activities | $ | (196,669) | $ | (99,051) | |||||||
Net cash provided by financing activities | $ | 10,549,630 | $ | 5,277,724 | |||||||
Net increase (decrease) in cash | $ | 1,682,627 | $ | (3,152,841) | |||||||
Operating Activities
During the first nine months of fiscal 2026, operating activities used approximately $8.7 million of cash primarily driven by our net loss of approximately $10.2 million offset by approximately $803,000 of impairment expenses related to our patents and approximately $671,000 in accounts payable and accrued expenses. . During the comparable period of fiscal 2025, operating activities used approximately $8.3 million of cash primarily driven by our net loss of approximately $8.7 million.
Investing Activities
During the first nine months of fiscal 2026, investing activities used approximately $197,000 of cash driven by approximately $124,000 in trademark and deferred patent costs and approximately $73,000 for the purchase of equipment. During the comparable period of fiscal 2025, investing activities used approximately $99,000 of cash driven by approximately $87,000 in trademark and deferred patent costs and approximately $15,000 for the purchase of equipment offset by proceeds of approximately $3,000 for the sale of equipment.
Financing Activities
During the first nine months of fiscal 2026, financing activities provided approximately $10.5 million in cash primarily driven by proceeds from our private placement in March, draws on our equity line of credit and exercise of warrants. During the comparable period of fiscal 2025, financing activities provided approximately $5.3 million in cash primarily driven by proceeds from our follow-on offerings in January and February 2025 and draws on our equity line of credit.
Critical Accounting Policies
During the nine months ended September 30, 2026, there were no material changes to our critical accounting policies previously disclosed in our Form 10-K for the year ended December 31, 2025 and filed with the SEC on February 27, 2026.
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Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the condensed financial statements prospectively from the date of change in estimates. There were no material changes to our critical accounting estimates as reported in our Form 10-K for the year ended December 31, 2025 and filed with the SEC on February 27, 2026.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures, pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as of September 30, 2026. In the course of that evaluation, we identified a material weakness as it relates to a lack of adequate segregation of accounting functions that was identified in connection with the audits of our financial statements as of December 31, 2025 and 2024 and for each of the years in the two year period ended December 31, 2025 and 2024. We intend to increase staffing within our accounting infrastructure sufficient to facilitate proper segregation of accounting functions and to enable appropriate review of our internally prepared financial statements. Based upon the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2026.
Inherent Limitations on Effectiveness of Controls
The design of any system of control is based upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated objectives under all future events, no matter how remote, or that the degree of compliance with the policies or procedures may not deteriorate. Because of its inherent limitations, disclosure controls and procedures may not prevent or detect all misstatements. Accordingly, even effective disclosure controls and procedures can provide only reasonable assurance of achieving their 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. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.
Notwithstanding the existence of the material weaknesses discussed above, our management, including our CEO and CFO, has concluded that the financial statements included in this Quarterly Report fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in this Quarterly Report in conformity with U.S. GAAP.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the nine months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. As of the date of this Form 10-Q, we are not a party to any material legal matters or claims. Legal proceedings are inherently uncertain, and the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.
Item 1A. Risk Factors
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This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include our expectations, beliefs, intentions and strategies regarding the future. You should carefully consider the risk factors discussed in the “Risk Factors” section in our Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K") as, in light of those risks, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in our forward-looking statements. Other than as set forth below, there have been no material changes in the risk factors included in our 2025 Form 10-K. The risk factors described in our 2025 Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
Changes in U.S. and international trade policies may adversely impact our business and operating results.
We currently rely on foreign third-party manufacturers and service providers in connection with certain aspects of our clinical operations. The U.S. government and persons involved in the Trump administration have made statements and taken certain actions that have led to, and may continue to lead to, changes to U.S. and international trade policies. In April 2025, the U.S. government commenced collecting a 10% tariff on imports from many countries, with higher levies on goods from larger trading partners. Since that time, the scope, rates and application of announced tariffs have been modified on multiple occasions, and further changes may occur. If maintained, tariffs and the potential escalation of trade disputes with foreign countries could pose a risk to our business and could result in higher operating expenses. The extent and duration of any tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and other countries, the response of such countries, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply of materials we purchase from companies targeted with tariffs. The foreign country hardest hit by the U.S. tariffs to date has been China; however, we do not currently import any goods or services from China. The tariffs have not been applied to the provision of services by foreign service providers as of the date of this filing, however there can be no assurance that the U.S. administration will not attempt to apply tariffs to the provision of overseas services going forward. There can be no assurance that U.S. policies on tariffs and international trade will not increase the cost of manufacturing our product candidates and supporting materials and import or export of raw materials and finished product candidates used in our and our collaborators’ preclinical studies and clinical trials.
Our outstanding warrants and options are exercisable for a number of shares of common stock that substantially exceeds the number of shares of our common stock currently outstanding, and future exercises, sales and other issuances of our common stock could result in substantial dilution to our stockholders and could cause the market price of our common stock to decline.
As of September 30, 2026, we had 6,060,335 shares of common stock outstanding, and there were outstanding warrants to purchase an aggregate of 21,947,000 shares of common stock, including pre-funded warrants to purchase 4,241,182 shares of common stock at an exercise price of $0.0001 per share and Series B Warrants and Series C Warrants to purchase an aggregate of 16,884,612 shares of common stock at an exercise price of $1.23 per share, as well as outstanding options to purchase 65,895 shares of common stock. The exercise of outstanding warrants and options, sales under the ELOC and other issuances of equity or equity-linked securities would dilute, in some cases substantially, the ownership interests of our existing stockholders. In addition, substantially all of the shares of common stock issuable upon exercise of our outstanding warrants have been, or are required to be, registered for resale under the Securities Act, and sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could cause the market price of our common stock to decline and could impair our ability to raise capital through future sales of equity securities. The exercise price of the Series C Warrants is also subject to a downward reset in certain circumstances described in Note 6 to our unaudited condensed financial statements included elsewhere in this report, which could result in issuances of common stock at prices below the current exercise price.
Although we regained compliance with the NYSE American continued listing standards, our stockholders’ equity as of September 30, 2026 was below the minimum required under Section 1003(a)(iii) of the NYSE American Company Guide, and any future noncompliance could result in the delisting of our common stock on an accelerated basis.
On August 19, 2026, we received notice from NYSE American that we had regained compliance with the continued listing standards in Part 10 of the NYSE American Company Guide. That notice followed our earlier deficiencies under Sections 1003(a)(ii) and 1003(a)(iii) of the NYSE American Company Guide relating to minimum stockholders’ equity. However, under Section 1009(h) of the Company Guide, if we are again determined to be below any of the continued listing standards within 12 months of August 19, 2026, NYSE American will examine the relationship between the two incidents of noncompliance and re-evaluate our method of financial recovery from the first incident. NYSE American may then take the action it considers appropriate. Depending on the circumstances, this may include shortening the compliance procedures that would otherwise be available to us, including the opportunity to submit a compliance plan or to have a cure period, or immediately starting delisting proceedings. As of September 30,
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2026, our stockholders’ equity was approximately $4.4 million, which is below the $6.0 million minimum stockholders’ equity requirement of Section 1003(a)(iii) of the NYSE American Company Guide. As a result, NYSE American may determine that we are below the continued listing standards within the 12-month period described above. We therefore cannot assure you that we will continue to meet the continued listing standards. If our common stock were delisted, its liquidity and market price could decline significantly. Delisting could also impact our ability to raise capital, including under the ELOC, the ATM Program and our existing registration statements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities during the quarter ended September 30, 2026, that were not previously reported in a Current Report on Form 8-K.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the quarter ended September 30, 2026, none of the Company’s directors or executive officers adopted terminated
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Item 6. Exhibits
Number | Exhibit Description | Method of Filing | ||||||||||||
3.1 | Second Amended and Restated Certificate of Incorporation of the Registrant | Incorporated herein by reference to the Company’s Current Report on Form 8-K filed on June 21, 2023. | ||||||||||||
3.2 | Second Amended and Restated Bylaws of the Registrant | Incorporated herein by reference to the Company’s Current Report on Form 8-K filed on June 21, 2023. | ||||||||||||
3.3 | Certificate of Amendment dated June 27, 2024 to Amended and Restated Certificate of Incorporation | Incorporated herein by reference to the Company's Form S-3 filed on July 1, 2024. | ||||||||||||
3.4 | Certificate of Amendment filed with the Delaware Secretary of State on July 3, 2025 | Incorporated herein by reference to the Company’s 8-K filed on July 3, 2025. | ||||||||||||
3.5 | Amendment to Second Amended and Restated Bylaws of the Registrant | Incorporated herein by reference to the Company's Quarterly Report on Form 10-Q filed on August 12, 2024. | ||||||||||||
3.6 | Certificate of Amendment filed with the Delaware Secretary of State on August 20, 2025 | Incorporated herein by reference to the Company's 8-K filed on August 20, 2025. | ||||||||||||
3.7 | Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Non-Redeemable Preferred Stock | Incorporated by reference to the Company's 8-K filed on March 23, 2026 | ||||||||||||
3.8 | Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Azitra, Inc., as filed on June 15, 2026 | Incorporated by reference to the Company's 8-K filed on June 16, 2026 | ||||||||||||
3.9 | Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Azitra, Inc. as filed on October 22, 2026 | Incorporated by reference to the Company's 8-K filed on October 22, 2026 | ||||||||||||
10.1 | Sales Agreement dated as of September 28, 2026, by and between Azitra, Inc. and A.G.P./Alliance Global Partners. | Incorporated by reference to the Company's 8-K filed on September 28, 2026 | ||||||||||||
31.1 | Certification under Section 302 of the Sarbanes-Oxley Act of 2002 | Filed electronically herewith. | ||||||||||||
31.2 | Certification under Section 302 of the Sarbanes-Oxley Act of 2002 | Filed electronically herewith. | ||||||||||||
32.1 | Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 | Furnished herewith. | ||||||||||||
101.INS | Inline XBRL Instance Document | Filed electronically herewith. | ||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | Furnished herewith. | ||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed electronically herewith. | ||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Furnished herewith. | ||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Furnished herewith. | ||||||||||||
104.0 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). | Filed electronically herewith. | ||||||||||||
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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.
AZITRA, INC. | ||||||||
Date: November 12, 2026 | By: | /s/ Francisco D. Salva | ||||||
Francisco D. Salva, | ||||||||
President and Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
Date: November 12, 2026 | By: | /s/ Norman Staskey | ||||||
Norman Staskey | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | |||||||||
/s/ Francisco D. Salva | President, Chief Executive Officer and Director | November 12, 2026 | |||||||||
Francisco D. Salva, | (Principal Executive Officer) | ||||||||||
/s/ Norman Staskey | Chief Financial Officer, and Treasurer | November 12, 2026 | |||||||||
Norman Staskey | (Principal Financial and Accounting Officer) | ||||||||||
/s/ Travis Whitfill | Chief Operating Officer, Secretary, and Director | November 12, 2026 | |||||||||
Travis Whitfill | |||||||||||
/s/ Barbara Ryan | Director | November 12, 2026 | |||||||||
Barbara Ryan | |||||||||||
/s/ John Schroer | Director | November 12, 2026 | |||||||||
John Schroer | |||||||||||
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