[10-Q] Evoke Pharma Inc Quarterly Earnings Report
Evoke Pharma reported Q3 2025 results with net product sales of
Stockholders’ equity was
Subsequent events: the company entered a Merger Agreement with QOL Medical, featuring a cash tender offer of
- Definitive Merger Agreement: Cash tender offer of
$11.00 per share with expected Q4 2025 closing, subject to conditions.
- Going concern uncertainty disclosed due to ongoing losses and potential Eversana termination rights that could accelerate
$5.0M principal plus accrued interest. - Additional cash outflows tied to change of control/expiration of Eversana agreement, including
$1.0M deferred costs.
Insights
Signed cash tender offer at
Evoke Pharma agreed to be acquired via a tender offer at
The agreement outlines treatment of options and warrants, including cash payments where the exercise price is below the offer price. A termination fee of
Completion depends on sufficient tendered shares and other conditions. Any change in recommendation or superior proposal provisions could affect outcomes. Monitor the tender completion milestone and subsequent merger steps.
Going concern raised; Eversana obligations may accelerate.
The company reported a going concern uncertainty, driven by continuing losses and conditions under the Eversana agreement. As of September 30, current liabilities included a
An October 29 letter with Eversana adds that, upon change of control or expiration, outstanding principal and interest become due and
The balance sheet shows cash of
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) |
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(IRS Employer Identification No.) |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading symbol |
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Name of each exchange on which registered |
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. 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 |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
As of November 6, 2025, the registrant had
Evoke pharma, inc.
Form 10-Q
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
1 |
Item 1. Financial Statements |
1 |
Condensed Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 |
1 |
Condensed Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (Unaudited) |
2 |
Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024 (Unaudited) |
3 |
Condensed Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (Unaudited) |
5 |
Notes to Condensed Financial Statements (Unaudited) |
6 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. Quantitative and Qualitative Disclosures about Market Risk |
26 |
Item 4. Controls and Procedures |
26 |
PART II. OTHER INFORMATION |
27 |
Item 1. Legal Proceedings |
27 |
Item 1A. Risk Factors |
27 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
28 |
Item 3. Defaults Upon Senior Securities |
28 |
Item 4. Mine Safety Disclosures |
29 |
Item 5. Other Information |
29 |
Item 6. Exhibits |
30 |
SIGNATURES |
32 |
i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Evoke Pharma, Inc.
Condensed Balance Sheets
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September 30, |
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December 31, |
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2025 |
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2024 |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of allowance for credit losses of $ |
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Prepaid expenses |
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Inventories |
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Other current assets |
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Total current assets |
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Operating lease right-of-use asset |
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Deferred offering costs |
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— |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholdersʼ equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Accrued compensation |
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Operating lease liability |
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Note payable |
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Accrued interest payable |
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Total current liabilities |
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Operating lease liability, net of current portion |
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Total liabilities |
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Commitments and contingencies |
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Stockholdersʼ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholdersʼ equity |
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Total liabilities and stockholdersʼ equity |
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$ |
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$ |
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See accompanying notes to these unaudited condensed financial statements.
1
Evoke Pharma, Inc.
Condensed Statements of Operations
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Net product sales |
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$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Cost of goods sold |
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Research and development |
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Selling, general and administrative |
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Total operating expenses |
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Loss from operations |
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Other income (expense): |
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Interest income |
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Interest expense |
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( |
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Total other expense |
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Net loss |
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$ |
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$ |
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$ |
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$ |
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Net loss per share of common stock, basic and diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted-average shares used to compute basic and diluted |
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See accompanying notes to these unaudited condensed financial statements.
2
Evoke Pharma, Inc.
Condensed Statements of Stockholders’ Equity (Deficit)
(Unaudited)
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Accumulated |
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Stockholdersʼ |
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Shares |
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Amount |
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Capital |
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Deficit |
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Equity |
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Balance as of January 1, 2025 |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation expense |
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— |
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— |
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— |
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Issuance of common stock pursuant to the ESPP |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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Balance as of March 31, 2025 |
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Stock-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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Balance as of June 30, 2025 |
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Stock-based compensation expense |
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— |
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— |
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— |
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Issuance of common stock pursuant to the ESPP |
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— |
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Issuance of common stock upon cashless exercise of |
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— |
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Issuance of common stock upon cashless exercise of |
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— |
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Net loss |
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— |
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— |
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— |
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Balance as of September 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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3
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Accumulated |
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Stockholdersʼ |
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Shares |
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Amount |
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Capital |
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Deficit |
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(Deficit) Equity |
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Balance as of January 1, 2024 |
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$ |
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$ |
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$ |
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Stock-based compensation expense |
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— |
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— |
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— |
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Issuance of common stock, Pre-Funded Warrants, Series |
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— |
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Amendment and issuance of common stock and Pre-Funded Warrants from the March 2024 Amendment of Series B Warrants and Series C Warrants, net of issuance costs |
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— |
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Net loss |
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— |
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— |
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— |
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Balance as of March 31, 2024 |
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Stock-based compensation expense |
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— |
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— |
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— |
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Issuance of common stock from cashless exercise of |
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( |
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— |
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— |
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Amendment and issuance of Pre-Funded Warrants from |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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Balance as of June 30, 2024 |
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( |
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Stock-based compensation expense |
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— |
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— |
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— |
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Amendment and issuance of common stock from the |
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— |
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Amendment and issuance of common stock from the |
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— |
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Issuance of common stock from the exercise of Pre-Funded |
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— |
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Redemption of fractional shares due to reverse stock split |
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— |
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— |
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( |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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Balance as of September 30, 2024 |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to these unaudited condensed financial statements.
4
Evoke Pharma, Inc.
Condensed Statements of Cash Flows
(Unaudited)
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Nine Months Ended September 30, |
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2025 |
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2024 |
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Operating activities |
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Net loss |
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$ |
( |
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$ |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation expense |
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Non-cash interest expense |
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Non-cash operating lease expense |
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— |
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Change in operating assets and liabilities: |
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Accounts receivable |
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Prepaid expenses and other assets |
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Inventories |
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Accounts payable and accrued expenses |
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Accrued compensation |
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( |
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Operating lease liabilities |
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Net cash used in operating activities |
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Financing activities |
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Proceeds from February 2024 Offering |
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— |
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Payment of February 2024 Offering costs |
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— |
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Proceeds from March 2024 Warrant Amendment, net of issuance costs |
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— |
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Proceeds from June 2024 Warrant Amendment, net of issuance costs |
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— |
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Payment of August 2024 Shelf Registration Statement offering costs |
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— |
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( |
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Proceeds from September 2024 Exercise Price Amendment, net of issuance costs |
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— |
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Proceeds from September 2024 Warrant Amendment, net of issuance costs |
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— |
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Proceeds from exercise of Pre-Funded Warrants |
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— |
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Redemption of fractional shares due to reverse stock split |
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— |
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Proceeds from the issuance of common stock pursuant to the ESPP |
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— |
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Net cash provided by financing activities |
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Net (decrease) increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental disclosure of non-cash investing and financing activities |
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Cashless exercise of Series A Warrants and Pre-Funded Warrants |
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$ |
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$ |
— |
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August 2024 Shelf Registration Statement costs included in accounts payable |
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$ |
— |
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$ |
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September 2024 Exercise Price Warrant Amendment costs included in accounts |
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$ |
— |
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$ |
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September 2024 Warrant Amendment costs included in accounts payable |
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$ |
— |
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$ |
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See accompanying notes to these unaudited condensed financial statements.
5
Evoke Pharma, Inc.
Notes to Condensed Financial Statements
(Unaudited)
1. Organization and Basis of Presentation
Evoke Pharma, Inc. (the “Company”) was incorporated under the laws of the state of Delaware in
Since its inception, the Company has devoted its efforts to developing its sole product, Gimoti® (metoclopramide) nasal spray, the first and only nasally-administered product indicated for the relief of symptoms in adults with acute and recurrent diabetic gastroparesis. The Company launched U.S. commercial sales of Gimoti in October 2020 through its commercial partner Eversana Life Science Services, LLC (“Eversana”).
The Company’s activities are subject to the significant risks and uncertainties associated with any specialty pharmaceutical company that has launched its first commercial product, including market acceptance of the product and the potential need to obtain additional funding for its operations.
Going Concern
The financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses and negative cash flows from operations since inception and expects to continue to incur net losses for the foreseeable future until such time, if ever, that it can generate significant revenues from the sale of Gimoti. As of September 30, 2025 the Company had approximately $
The Company’s net losses may fluctuate significantly from quarter to quarter and year to year. The Company anticipates that it will be required to raise additional funds through debt, equity or other forms of financing, such as potential collaboration arrangements, to fund future operations and continue as a going concern.
There can be no assurance that additional financing will be available when needed or on acceptable terms. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, and/or suspend or curtail commercialization activities. Any of these actions could materially harm the Company’s business, results of operations, financial condition and future prospects. Because the Company’s business is entirely dependent on the success of Gimoti, if the Company is unable to secure additional financing, successfully commercialize Gimoti or identify and execute on strategic alternatives for Gimoti or the Company, the Company will be required to curtail all of its activities and may be required to liquidate, dissolve or otherwise wind down its operations.
2. Summary of Significant Accounting Policies
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions of the Securities and Exchange Commission (“SEC”) on Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the condensed financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair statement of the
6
Company’s financial position and of the results of operations and cash flows for the periods presented. These financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2025. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2024, has been derived from the audited financial statements at that date.
Risks and Uncertainties
Use of Estimates
Cash and Cash Equivalents
The Company deposits its cash with reputable financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). This cash is held in checking, cash sweep, and money market accounts. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company maintains an insured cash sweep account in which cash from its main operating checking account is invested overnight in highly liquid, short-term investments. The Company considers all highly liquid investments with a maturity date of 90 days or less at the date of purchase to be cash equivalents. The Company has not experienced any losses in its cash and cash equivalents and management believes the Company is not exposed to significant credit risk with respect to such accounts. The Company's cash and cash equivalents are classified as Level 1 inputs within the fair value hierarchy.
Fair Value of Financial Instruments
The carrying amounts of all financial instruments, including accounts receivable and accounts payable and accrued expenses, are considered to be representative of their respective fair values because of the short-term nature of those instruments. The carrying value of the note payable approximates fair value since the debt is due on demand as of September 30, 2025 and the carrying value is the settlement value, which is a Level 2 input within the fair value hierarchy.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded net of allowance for credit losses, if any. The Company evaluates its estimate of expected credit losses based on a combination of factors, including historical experience, assessment of specific customer-related risks, review of outstanding invoices, forecasts about the future, and various other assumptions and estimates. The allowance for credit losses was
Inventories
The Company's inventories consisted of the following as of September 30, 2025 and December 31, 2024:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
Inventories are stated at the lower of cost (first-in first-out basis) or net realizable value. The Company’s raw materials inventories are held at its third-party suppliers and its finished goods inventories are held on consignment by Eversana and distributing pharmacies.
7
Deferred Offering Costs
Deferred offering costs represent legal, accounting, and other direct costs related to future equity financings and are recognized as a non-current asset on the condensed balance sheets. After consummation of the equity financing, the offering costs are recognized as a reduction of proceeds and reclassified to additional paid-in capital on the condensed balance sheet. Should a planned equity financing be abandoned, terminated, or significantly delayed, the deferred offering costs are immediately written off as an administrative expense. As of December 31, 2024, the Company had deferred offering costs of $
Warrants
The Company accounts for warrants as equity-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For warrants that meet all criteria for equity classification, the warrants are required to be recorded as additional paid-in capital in the condensed balance sheets at the time of issuance. Equity-classified warrants are measured at their estimated fair value on the issuance date using either the Black-Scholes option pricing model or a Monte-Carlo simulation model based on the applicable assumptions, which include the exercise price of the warrants, the Company's stock price and volatility, the expected warrant term, the risk-free interest rate, the expected dividends, and if applicable, the vesting behavior.
Revenue Recognition
At the inception of a collaboration arrangement, the Company first assesses whether the contractual arrangement is within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether the arrangement involves a joint operating activity and involves two (or more) parties that are both active participants in the activity and exposed to significant risks and rewards dependent on the commercial success of such activity. Then the Company determines whether the collaboration arrangement in its entirety represents a contract with a customer as defined by ASC 606, Revenue from Contracts with Customers (“ASC 606”). If only a portion of the collaboration arrangement is potentially with a customer, the Company applies the distinct good or service unit-of-account guidance in ASC 606 to determine whether there is a unit of account that should be accounted for under ASC 606.
The Company has entered into a collaborative arrangement with Eversana for the commercialization and distribution of Gimoti in the United States. Under this arrangement, Eversana is responsible for market access, marketing, distribution, and patient support services, while the Company retains ownership of Gimoti and all legal, regulatory, and manufacturing responsibilities. The Company records sales for Gimoti. The Company reimburses Eversana for its commercialization costs pursuant to an agreed upon budget and a percentage of product profits, if any, which are recorded within selling, general and administrative expenses in the statement of operations. The Company has determined that the underlying patient is the customer and the Company is the principal in its relationship with Eversana based on the indicators of control occurring prior to product transfer to the customer, including risks related to inventory and responsibility for product fulfillment. Payment terms are net 30 from invoice date.
In accordance with ASC 606, the Company recognizes revenue when a customer obtains control of promised goods in an amount that reflects the consideration the Company expects to receive in exchange for the goods provided. Customer control is determined upon the customer’s physical receipt of the product. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: identify the contracts with the customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) it satisfies a performance obligation. At contract inception, the Company assesses the goods promised within each contract and determines those that are performance obligations and assesses whether each promised good is distinct. The Company then recognizes as revenue the amount of the transaction price allocated to the respective performance obligation when the customer obtains control of the product.
Product revenues are recognized net of any applicable variable consideration. The Company uses judgment to estimate variable consideration including (i) Medicaid and Medicare program rebates, (ii) sales related adjustments, wherever applicable, including patient support programs, rebates, and other sales related discounts and (iii) co-pay assistance. The Medicaid and Medicare program rebates are determined based on statutory provisions and are estimated based on the expected number of
8
claims and related cost associated with the customer transaction. Medicaid and Medicare rebates of $
Co-pay assistance is recorded as an offset to gross revenue at the time revenue from the product sale is recognized based on expected and actual program participation. Co-pay assistance liabilities are estimated using prescribing data available from customers. The Company's analysis also contemplates application of the constraint in accordance with the guidance, under which it determines a significant reversal of revenue would not occur in a future period. If actual results in the future vary from estimates, the Company will adjust these estimates, which could affect net product revenue and earnings in the period such variances become known. Liabilities for co-pay assistance of approximately $
The Company does not allow product returns. The Company may replace damaged product upon shipment, but such amounts have been immaterial. Cash receipts from sales come directly from the Company’s commercial partner, Eversana, and are typically received in 30 to 60 days after month-end.
Net Loss Per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common stock outstanding for the period, without consideration for common stock equivalents. Warrants to purchase shares of the Company’s common stock are included in the calculation of basic net loss per common share if the exercise price of the warrants represents de minimis consideration and is non-substantive in relation to the price paid for the warrant, and if the warrants are immediately exercisable with no further vesting conditions or contingencies associated with them. The
The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:
|
|
Three and Nine Months Ended September 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Warrants to purchase common stock |
|
|
|
|
|
|
||
Common stock options |
|
|
|
|
|
|
||
Total excluded securities |
|
|
|
|
|
|
||
Recent Accounting Pronouncements – Not Yet Adopted
From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted as of the specified effective date. The Company believes the impact of recently issued standards, other than those noted below, and any issued but not yet effective standards will not have a material impact on our financial statements upon adoption.
In December 2023, the FASB issued ASU No. 2023-09 ("ASU 2023-09"), “Improvements to Income Tax Disclosures.” ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statement disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update require disclosure, in the notes to the financial statements, of specific expense categories present within expense captions presented on the face of the income statement within continuing operations of public business entities. The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or
9
retrospectively to any and all prior periods presented in the financial statements. The impact of adoption this ASU on the Company’s disclosures is currently being evaluated.
In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The amendment in this update clarifies the effective date of ASU 2024-03, which is that public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The impact of adoption of this ASU on the Company’s disclosures is currently being evaluated.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides all entities, including public business entities, with a practical expedient, which allows the entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when developing reasonable and supportable forecasts as part of estimating expected credit losses. The amendments in this ASU should be applied prospectively and are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements.
3. Commitments and Contingencies
Leases
In December 2016, the Company entered into an operating lease for office space in Solana Beach, California (the “Initial Lease”). The Initial Lease commenced on
Upon expiration of the Initial Lease, the Company entered into an operating lease for a new office space in Solana Beach, California commencing on
Upon expiration of the Short-Term Lease, the Company entered into an amendment for the same office space in Solana Beach commencing on
The following table summarizes supplemental lease information:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Lease costs(1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cash paid for leases(1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
10
Future lease payments as of September 30, 2025 were as follows:
Years Ending December 31, |
|
|
|
|
2025 (Remainder) |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
Total future lease payments |
|
|
|
|
Less: imputed interest |
|
|
( |
) |
Total lease liability |
|
$ |
|
|
4. Stockholders’ Equity
Equity Transactions
February 2024 Offering
In February 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC and Laidlaw & Company (UK) Ltd. (collectively, the “Underwriters”), relating to the issuance and sale of
Net cash proceeds from the February 2024 Offering was $
August 2024 Shelf Registration Statement
On August 29, 2024, the Company filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), covering the offering of up to $
As of September 30, 2025, there have been
At The Market Equity Offering
The Company had previously entered into a Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to approximately $
11
The Company did
Warrant Amendments
In each of March, June and September 2024, the Company entered into substantially similar amendments with certain holders of its Series B Warrants and Series C Warrants (individually, the “March 2024 Warrant Amendment,” “June 2024 Warrant Amendment,” and the “September 2024 Warrant Amendment,” respectively and collectively, the “Warrant Amendments”). Pursuant to the Warrant Amendments, to the extent a holder exercised its Series B Warrants prior to the exercise deadlines set forth in the respective Warrant Amendment (the “Amendment Exercise Deadline”), the holder’s corresponding Series C Warrants vested and became exercisable for the lesser of (i) three times the number of Series B Warrants exercised by the Holder and (ii) the total number of Series C Warrants outstanding to the holder. Following each Amendment Exercise Deadline, if the holder exercised any remaining Series B Warrants, the remaining Series C Warrants, if any, vested and became exercisable on a one-for-one basis as to the same number of Series B Warrants exercised.
The Warrant Amendments allowed a holder to elect to receive Pre-Funded Warrants upon exercise of Series B Warrants and Series C Warrants in lieu of shares of the Company’s common stock, at a purchase price of $
Net cash proceeds from the March Warrant Amendment, the June Warrant Amendment, and the September 2024 Warrant Amendment were $
September 2024 Exercise Price Warrant Amendment
In September 2024, the Company also entered into an amendment with certain holders of its Series A Warrants, Series B Warrants and Series C Warrants (the “September 2024 Exercise Price Warrant Amendment”). Pursuant to the September 2024 Exercise Price Warrant Amendment, such holders who agreed to pay a non-refundable up-front payment of $
Net cash proceeds from the September 2024 Exercise Price Warrant Amendment were $
In connection with the September 2024 Exercise Price Warrant Amendment, the Company entered into a letter agreement, dated September 27, 2024 (the “Letter Agreement”), with certain affiliates of Nantahala Capital Management, LLC (collectively, “Nantahala”), pursuant to which, subject to certain limitations, the Company provided Nantahala the right to appoint (or cause to be nominated) (i) one member of the Company’s board of directors (the “Board”) and one member of each Board committee so long as Nantahala, together with its affiliates, beneficially owns at least
12
Warrants
Each of the outstanding warrants is convertible on a one-for-one basis into the Company’s common stock and are fully exercisable as of September 30, 2025.
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Number of |
|
|
|
|
|
|
|
|
|
||
|
|
Warrants Outstanding |
|
|
Exercise Price |
|
|
Initial Exercise Date |
|
Expiration Date |
|
||
Pre-Funded Warrants |
|
|
|
|
$ |
|
|
|
Until Exercised in Full |
|
|||
Series A Warrants |
|
|
|
|
$ |
|
|
|
|
||||
Modified Series A Warrants(1) |
|
|
|
|
$ |
|
|
|
|
||||
Series C Warrants |
|
|
|
|
$ |
|
|
|
|
||||
Modified Series C Warrants(1) |
|
|
|
|
$ |
|
|
|
|
||||
Representativesʼ Warrants |
|
|
|
|
$ |
|
|
|
|
||||
Total warrants |
|
|
|
|
|
|
|
|
|
|
|
||
__________________
Stock-Based Compensation
Stock Options
In January 2025, the number of shares of common stock available for issuance under the 2013 Equity Incentive Award Plan (the “2013 Plan”) was increased by
During the nine months ended September 30, 2025 and 2024, the Company granted stock options to purchase
The following assumptions were used in estimating the grant date fair value of options issued during the three and nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
Risk free interest rate |
|
|
|
|
||||
Expected option term (in years) |
|
— |
|
|
|
|||
Volatility of common stock |
|
|
|
|
||||
Expected dividend yield |
|
|
|
|
||||
Employee Stock Purchase Plan
Stock-based compensation expense also includes charges related to common stock issued under the Amended and Restated 2013 Employee Stock Purchase Plan (the “ESPP”). The Company allows eligible employees to purchase shares of the Company’s common stock through payroll deductions at a price equal to
13
The estimated fair value of each ESPP award granted was determined on the date of purchase using the Black-Scholes option-pricing valuation model with the following assumptions for the periods presented:
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
Risk free interest rate |
|
|
|
|
||||
Expected option term (in years) |
|
|
|
|
||||
Volatility of common stock |
|
|
|
|
||||
Expected dividend yield |
|
|
|
|
||||
The Company recognized stock-based compensation expense as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Stock options |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
ESPP |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of September 30, 2025, there was approximately $
As of September 30, 2025, there was approximately $
5. Commercial Services and Loan Agreements with Eversana
On January 21, 2020, the Company entered into a commercial services agreement (as amended, the “Eversana Agreement”) with Eversana for the commercialization of Gimoti. Pursuant to the Eversana Agreement, Eversana commercializes and distributes Gimoti in the United States. Eversana also manages the marketing of Gimoti to targeted health care providers, as well as the sales and distribution of Gimoti in the United States.
Under the terms of the Eversana Agreement, the Company maintains ownership of the Gimoti NDA, as well as legal, regulatory, and manufacturing responsibilities for Gimoti. Eversana utilizes its internal sales organization, along with other commercial functions, for market access, marketing, distribution and other related patient support services. The Company records sales for Gimoti and retain more than
Upon expiration or termination of the agreement, the Company will retain all profits from product sales and assume all corresponding commercialization responsibilities. Either party may terminate the agreement: for the material breach of the other
14
party, subject to a 60-day cure period; in the event an insolvency, petition of the other party is pending for more than 60 days; upon 30 days written notice to the other party if Gimoti is subject to a safety recall; the other party is in breach of certain regulatory compliance representations under the Eversana Agreement; if the Company discontinues the development or production of Gimoti; if the net profit is negative for any two consecutive calendar quarters (the “Net Profit Quarterly Termination Right”) beginning with the measurement date of June 30, 2023; or if there is a change in applicable laws that makes operation of the services as contemplated under the agreement illegal or commercially impractical. Either party may also terminate the Eversana Agreement upon a change of control of the Company’s ownership.
The Company's net profits were negative for the two preceding calendar quarters as of September 30, 2025, and therefore, Eversana or the Company could have exercised the Net Profit Quarterly Termination Right (“NPQTR”) during the 60-day period after quarter-end. Since the note payable and accrued interest payable could be accelerated by Eversana by terminating the Eversana Agreement as of September 30, 2025, those payments were recorded as current liabilities as of September 30, 2025. Each party continues to have the option to exercise the NPQTR for the 60-day period following the end of future quarters so long as the net profit under the Eversana Agreement remains negative for consecutive quarters. In the event the Company initiates such termination, the Company shall pay to Eversana a one-time payment equal to all of Eversana’s unreimbursed costs plus a portion of Eversana’s commercialization costs incurred in the 12 months prior to termination. Such payment amount would be reduced by the amount of previously reimbursed commercialization costs and profit split paid for the related prior twelve-month period and any revenue which occurred prior to the termination yet to be collected. If Eversana terminates the agreement due to an uncured material breach by the Company, or if the Company terminates the Eversana Agreement in certain circumstances, including pursuant to the NPQTR, the Company has agreed to reimburse Eversana for its unreimbursed commercialization costs for the prior twelve-month period and certain other costs. In addition, Eversana may terminate the Eversana Agreement if the Company withdraws Gimoti from the market for more than 90 days. If Eversana terminates the Eversana Agreement for convenience, the Company is under no obligation to reimburse Eversana for unreimbursed commercialization costs.
In connection with the Eversana Agreement, the Company and Eversana have entered into the Eversana Credit Facility, pursuant to which Eversana has agreed to provide a revolving Credit Facility of up to $
The Company may prepay any amounts borrowed under the Eversana Credit Facility at any time without penalty or premium. The maturity date of all amounts, including interest, borrowed under the Eversana Credit Facility will be 90 days after the expiration or earlier termination of the Eversana Agreement. The Eversana Credit Facility also includes events of default, the occurrence and continuation of which provide Eversana with the right to exercise remedies against the Company and the collateral securing the loans under the Eversana Credit Facility, including the Company’s cash. These events of default include, among other things, the Company’s failure to pay any amounts due under the Eversana Credit Facility, an uncured material breach of the representations, warranties and other obligations under the Eversana Credit Facility, the occurrence of insolvency events and the occurrence of a change in control.
As more fully described in Note 7. Subsequent Events, the Company and Eversana entered into the Eversana Letter Agreement (as defined below), whereby in the case of a Change of Control (as defined therein), or expiration of the Eversana Agreement, the Eversana Credit Facility and accrued interest payable will become due. In addition, the Company will be required to pay Eversana $
6. Segment Information
Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance.
15
The accounting policies of the development and commercialization of pharmaceutical products segment are the same as those described in Note 2. Summary of Significant Accounting Policies. All Company assets are in the United States. The measure of segment assets is reported on the balance sheets as total assets. The Company does not have intra-entity sales or transfers.
The Company has no transactions denominated in foreign currencies nor any tangible or intangible property for which it recognizes depreciation or amortization and depreciating assets are not part of the CODMs evaluation or decision-making process.
The following table summarizes the Company’s financial data for its development and commercialization of pharmaceutical products segment:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
||||
Net product sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Eversana profit sharing |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Employee expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Professional fees |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Stock-based compensation |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Sales and marketing expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Other operating expenses(1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense (non-cash) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Total segment costs loss and net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
________________
(1) Includes ongoing product development costs, occupancy costs (including rent and utilities), administrative costs, travel and business taxes.
16
7. Subsequent Events
Merger Agreement with QOL Medical
On
If Shares representing more than
At the effective time of the Merger (the “Effective Time”), each Share that is issued and outstanding immediately prior to the Effective Time (other than Shares (i) owned by Parent, Merger Sub, the Company or any direct or indirect wholly owned subsidiary of Parent or Merger Sub, in each case, immediately prior to the Effective Time, (ii) irrevocably accepted for purchase pursuant to the Offer, or (iii) held by any stockholder who is entitled to demand and has properly and validly demanded their statutory right of appraisal of such Shares in compliance in all respects with Section 262 of the DGCL) will be cancelled and extinguished and automatically converted into the right to receive the Offer Price, without interest thereon and subject to any applicable withholding taxes pursuant to the Merger Agreement. As a result of the Merger, the Company will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent.
Each Company option that is outstanding as of immediately prior to the effective time of the Merger (“Effective Time”) will accelerate and become fully vested effective immediately prior to, and contingent upon the occurrence of, the Effective Time. Effective as of immediately prior to the Effective Time, each Company option that is outstanding and unexercised immediately prior thereto will automatically be canceled and terminated and converted into the right to receive from the Surviving Corporation an amount in cash (without interest), if any, equal to the product obtained by multiplying (i) the aggregate number of Shares underlying such Company option immediately prior to the Effective Time, by (ii) an amount equal to the Offer Price less the per share exercise price of such Company option, except that if the Offer Price is less than the per share exercise price of such Company option, such Company option will be canceled and terminated without any consideration payable therefor.
At the Effective Time, each Company warrant that is outstanding and unexercised as of immediately prior to the Effective Time (excluding any Company warrant to the extent the holder thereof has elected a cashless exercise of such Company warrant) will cease to represent a right to acquire Shares. At or following the Effective Time, each holder of a Company warrant that has an exercise price less than the Offer Price will be entitled to receive cash in respect of each Share for which such Company warrant is exercisable immediately prior to the Effective Time in an amount equal to the product obtained by multiplying (i) the aggregate number of Shares underlying such Company warrant immediately prior to the Effective Time, by (ii) an amount equal to the Offer Price less the exercise price payable per Share under such Company warrant. Each holder of a Company warrant that has an exercise price equal to or greater than the Offer Price will not receive any consideration with respect to such Company warrant. Notwithstanding anything to the contrary set forth in the Merger Agreement, the foregoing will not apply to any holders of Company warrants who elect to receive the Black Scholes Value (as defined in the applicable Company warrants) in accordance with their Company warrants. Holders of Company warrants may exercise their right to receive such Black Scholes Value at any time concurrently or within 30 days following the closing of the Merger.
The Merger Agreement also contains certain customary termination rights in favor of each of the Company and Parent, including the Company’s right, subject to certain limitations, to terminate the Merger Agreement in certain circumstances to accept a Superior Proposal and Parent’s right, subject to certain limitations, to terminate the Merger Agreement if the Board changes its recommendation that stockholders of the Company tender their Shares in the Offer (as further described in the Merger Agreement). In addition, either the Company or Parent may terminate the Merger Agreement if the Offer has not been consummated by May 3, 2026. Upon termination of the Merger Agreement under other specified circumstances, the Company will be required to pay Parent a termination fee of $
The transaction is expected to close in the fourth quarter of 2025, subject to the terms of the Merger Agreement.
Eversana Letter Agreement
On October 29, 2025, the Company entered into a letter agreement with Eversana (the “Eversana Letter Agreement”), which was made in reference to the Eversana Agreement. The Eversana Letter Agreement provides, amongst other things, for payment to Eversana of
17
$
Amended and Restated Employment Agreements
On November 3, 2025, concurrently with the signing of the Merger Agreement, each of Matthew J. D’Onofrio, Mark Kowieski, CPA, and Marilyn R. Carlson (each, an “Executive”) entered into an amended and restated employment agreement with the Company (the “A&R Employment Agreements”). The A&R Employment Agreements include implementation of the following changes: (i) provide that each Executive will receive his or her target annual bonus for 2025 if the Executive is terminated prior to the Company’s payment of such 2025 annual bonuses, (ii) add a provision addressing the treatment of parachute payments arising under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, and (3) update the form of release of claims attached to the A&R Employment Agreements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and the financial statements and accompanying notes thereto for the fiscal year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 13, 2025. Past operating results are not necessarily indicative of results that may occur in future periods.
Forward-Looking Statements
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, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, the Merger and other transactions contemplated by the Merger Agreement (each term as defined in Note 7. Subsequent Events to our condensed financial statements of this quarterly report), including our expectations regarding our ability to complete the transaction within the timeframe we anticipate or at all, and the potential effects of the proposed transactions pursuant to the Merger Agreement and related agreements on us and our stockholders, our business strategy, commercial activities to be conducted by Eversana Life Science Services, LLC, or Eversana, the pricing and reimbursement for Gimoti®™ (metoclopramide) nasal spray, future prescribing trends for Gimoti, future regulatory developments, research and development costs, the timing and likelihood of commercial success, the potential to develop future product candidates, plans and objectives of management for future operations, continued compliance with Nasdaq listing requirements and future results of current and anticipated products, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statement. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. You should read this Quarterly Report on Form 10-Q completely. As a result of many factors, including without limitation those set forth under “Risk Factors” under Item 1A of Part II below, and elsewhere in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements. Except as required by applicable law, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
We use our registered trademark, EVOKE PHARMA, and other trademarks, including GIMOTI, in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this Quarterly Report on Form 10-Q appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trademarks and tradenames.
Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “Evoke,” “the Company,”“we,” “us” and “our” refer to Evoke Pharma, Inc.
Overview
We are a specialty pharmaceutical company focused primarily on the development and commercialization of drugs to treat gastrointestinal, or GI, disorders and diseases. Since our inception, we have devoted our efforts to developing our sole product, Gimoti (metoclopramide) nasal spray, the first and only nasally-administered product indicated for the relief of symptoms in adults with acute and recurrent diabetic gastroparesis. In June 2020, we received approval from the U.S. Food and Drug Administration, or FDA, for our 505(b)(2) New Drug Application, or NDA, for Gimoti. We launched commercial sales of Gimoti in the United States in October 2020 through our commercial partner Eversana.
Diabetic gastroparesis is a GI disorder affecting millions of patients worldwide, in which food in an individual’s stomach takes too long to empty resulting in a variety of serious GI symptoms and systemic metabolic complications. The gastric delay caused by gastroparesis can compromise absorption of orally administered medications. In May 2023, we reported results from a study conducted by Eversana which showed diabetic gastroparesis patients taking Gimoti had significantly fewer physician office visits, emergency department visits, and inpatient hospitalizations compared to patients taking oral metoclopramide. This overall lower health resource utilization reduced patient and payor costs by approximately $15,000 during a six-month time period for patients taking Gimoti compared to patients taking oral metoclopramide.
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In January 2020, we entered into a commercial services agreement with Eversana, or the Eversana Agreement, for the commercialization of Gimoti. Pursuant to the Eversana Agreement, Eversana commercializes and distributes Gimoti in the United States. Eversana also manages the marketing of Gimoti to targeted health care providers, as well as the sales and distribution of Gimoti in the United States. Eversana also provided a $5.0 million revolving credit facility, or the Eversana Credit Facility, that became available upon FDA approval of the Gimoti NDA. In 2020, we borrowed $5.0 million under the Eversana Credit Facility, which expires on December 31, 2026, unless terminated earlier pursuant to its terms.
We have primarily funded our operations through the sale of our convertible preferred stock prior to our initial public offering in September 2013, borrowings from loans, and the sale of shares of our common stock, warrants, and pre-funded warrants in public offerings. We launched commercial sales of Gimoti in late October 2020 with Eversana and, to date, have generated modest sales.
We have incurred losses in each year since our inception. These operating losses resulted from expenses incurred in connection with advancing Gimoti through development activities, pre-commercial and commercialization activities, and other general and administrative costs associated with our operations. We expect to continue to incur operating losses until revenues from sales of Gimoti exceed our expenses, if ever. We may never become profitable, or if we do, we may not be able to sustain profitability on a recurring basis.
As of September 30, 2025, we had cash and cash equivalents of approximately $11.6 million. Current cash on hand is intended to fund commercialization activities for Gimoti, including manufacturing Gimoti, conducting the post-marketing commitment single-dose pharmacokinetics, or PK, clinical trial of Gimoti to characterize dose proportionality of a lower dose strength of Gimoti and any additional development activities should we seek additional indications, protecting our intellectual property portfolio and for other general and administrative costs to support our operations. We believe, based on our current operating plan, excluding any potential early repayment of the Eversana Credit Facility, that our existing cash and cash equivalents as of September 30, 2025, as well as cash flows from future net sales of Gimoti, will be sufficient to fund our operations into the fourth quarter of 2026. However, should Eversana terminate the Eversana Agreement under the NPQTR (as defined in Note 1. Organization and Basis of Presentation to our financial statements), repayment of the Eversana Credit Facility, in addition to our other ongoing obligations, would raise substantial doubt about our ability to continue as a going concern. As such, we have concluded there is substantial doubt about our ability to continue as a going concern as our existing cash on hand as of September 30, 2025, is not sufficient to fund our operations 12 months from the issuance of this Quarterly Report on Form 10-Q. This period could be further shortened if future net sales of Gimoti are less than expected or if there are any significant increases in planned spending on commercialization activities, including for marketing and manufacturing of Gimoti, and our selling, general and administrative costs to support operations, including as a result of any termination of the Eversana Agreement. If the Merger is not completed, we anticipate that we will be required to raise additional funds in order to continue as a going concern. Because our business is entirely dependent on the success of Gimoti, if we are unable to secure additional financing or identify and execute on other development or strategic alternatives for Gimoti or our company, we will be required to curtail all of our activities and may be required to liquidate, dissolve or otherwise wind down our operations. Any of these events could result in a complete loss of your investment in our securities.
Merger Agreement with QOL Medical
On November 3, 2025, we entered into the Merger Agreement with QOL Medical, LLC, a Delaware limited liability company, or QOL Medical, and QOL-EOS Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of QOL Medical, or Merger Sub, pursuant to which Merger Sub will commence a tender offer, or the Offer, to acquire all of our outstanding shares of our common stock, or the Shares, for $11.00 in cash per Share, subject to any applicable withholding taxes and without interest thereon, or the Offer Price. If the Merger Agreement is terminated by us under specified circumstances, we will be required to pay QOL Medical a termination fee of $1.5 million. The transaction is expected to close in the fourth quarter of 2025, subject to the terms of the Merger Agreement. Please refer to Note 7, "Subsequent Events" to our condensed financial statements included elsewhere in this quarterly report on Form 10-Q for further details.
Nasdaq Listing
On May 24, 2023, we received a written notice from Nasdaq indicating that, based on our stockholders’ equity of $2.1 million as of March 31, 2023, as reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, we were not in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1) (“Minimum Stockholders’ Equity Requirement”). As required by Nasdaq, we submitted our plan to regain compliance with the Minimum Stockholders’ Equity Requirement and, following a hearing before the Nasdaq Hearings Panel (the “Panel”), and several quarters in which we demonstrated continued compliance with the Minimum Stockholders’ Equity Requirements, we were notified on June 4, 2024, that the Panel determined that we had regained compliance with the Minimum Stockholders’ Equity Requirement. Pursuant to Nasdaq Listing Rule 5815(d)(4)(A), we were subject to a discretionary panel monitor through June 4, 2025. On June 20, 2025, we received a letter from Nasdaq indicating that we had regained compliance with the Minimum Stockholder’s Equity Requirements and were no longer under a panel monitor.
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Recent Developments
One Big Beautiful Bill Act
On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements and will recognize the income tax effects in the consolidated financial statements beginning in the period in which the OBBBA was signed into law.
Financial Operations Overview
Revenue Recognition
Our ability to generate revenue and become profitable depends on our ability to successfully commercialize Gimoti, which we launched in the United States through prescription in October 2020 through our commercial partner Eversana. If we or Eversana fail to successfully grow sales of Gimoti, we may never generate significant revenues and our results of operations and financial position will be adversely affected.
In accordance with Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers, we recognize revenue when a customer obtains control of promised goods in an amount that reflects the consideration we expect to receive in exchange for the goods provided. Customer control is determined upon the customer’s physical receipt of the product. To determine revenue recognition for arrangements within the scope of ASC 606, we perform the following five steps: identify the contracts with the customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) it satisfies a performance obligation. At contract inception, we assess the goods promised within each contract and determine those that are performance obligations and assess whether each promised good is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when the customer obtains control of the product.
Product revenues are recorded net of sales-related adjustments, wherever applicable, including patient support programs, rebates, and other sales related discounts. We use judgment to estimate variable consideration. We are subject to rebates under Medicaid and Medicare programs. The rebates for these programs are determined based on statutory provisions. We estimate Medicaid and Medicare rebates based on the expected number of claims and related cost associated with the customer transaction.
We also make estimates about co-payment assistance to commercially insured patients meeting certain eligibility requirements, as well as to uninsured patients. Co-payment assistance is recorded as an offset to gross revenue at the time revenue from the product sale is recognized based on expected and actual program participation. Co-pay liabilities are estimated using prescribing data available from customers. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Liabilities for Medicare and Medicaid rebates, as well as co-pay assistance, are classified as accounts payable and accrued expenses in the balance sheets.
Sales of Gimoti Metrics
Gimoti prescriptions, prescribers, and other revenue metrics continue to increase. Net product sales during the quarter ended September 30, 2025 were approximately $4.3 million which is a $0.5 million increase compared to net product sales for the quarter ended June 30, 2025. ASPN Pharmacy, or ASPN, serves as the non-dispensing pharmacy hub for Gimoti. ASPN offers a seamless path for processing and filling prescriptions, helps patients understand coverage and identify available savings opportunities, and facilitates communications between providers and payors. ASPN improves the proportion of prescriptions covered by insurance payors through increased patient communication and electronic automation of processes and speed of communication. We continue to add new dispensing pharmacies to the ASPN platform, which has allowed for better insurance coverages by mitigating geographic and pharmacy benefit manager restrictions to filling prescriptions. Adding dispensing pharmacies has also added redundancy and capacity to fill prescriptions and reduced reliance on any one of our dispensing pharmacy partners. ASPN continues to process inbound prescriptions at a pace that is showing improved patient capture and conversion to reimbursed fills by insurers, and reduced reliance on savings programs.
There were approximately 2,226 new inbound prescriptions into the ASPN reimbursement center during the quarter ended September 30, 2025, which is a 13.6% increase compared to the quarter ended June 30, 2025. Patients who have an opportunity to refill the product (that is, patients who have completed their first fill and have additional refills on their prescription) received a refill approximately 70% of the time. We believe some patients choose not to refill their prescriptions due to remission of symptoms. Cumulatively, new prescribers increased 8.1% during the quarter ended September 30, 2025 as compared to the quarter ended June 30, 2025.
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The ASPN team conducts benefit verification and facilitates the prior authorization process across all payer types for patients prescribed Gimoti. For the nine months ended September 30, 2025, these government programs made up approximately 30% of the filled prescriptions for Gimoti. From the commercial launch of Gimoti through September 30, 2025, the majority of patients have been between the ages of 31 and 65 years old. The vast majority of patients are female and were being treated by a gastroenterologist or a nurse practitioner or physician assistant on their staff.
Key Opinion Leaders, or KOLs, have presented data regarding the safety profile for Gimoti and we expect KOLs will present additional data in the future. Data presented at the May 2024 Digestive Disease Week indicated a far lower incidence of tardive dyskinesia, or TD, than previously published. This retrospective data was generated from a U.S. based database covering over 270 million patient lives. The outcome showed a 0.12% incidence of TD for gastroparesis patients taking any form of metoclopramide for any diagnosis.
At the May 2023 Digestive Disease Week conference, a head-to-head (oral v. nasal metoclopramide), real world evidence data in 514 patients was presented. Compared to patients in the oral metoclopramide cohort, patients taking Gimoti experienced fewer visits to a physician’s office and emergency room (60% reduction), and had fewer inpatient admissions (68% reduction) compared to oral metoclopramide. To our knowledge, this study is the first such head-to-head data ever to be presented regarding the product and a clear support for improved outcomes for patients using Gimoti. This data was further validated in October 2023 at the American College of Gastroenterology conference, when the related cost data was presented at a plenary session showing a $15,000 savings for those patients taking Gimoti compared to oral metoclopramide over the six-month period following initiation of therapy. In October 2024 during the American College of Gastroenterology meeting, additional data related to the comparative study between Gimoti and oral metoclopramide showed a similar benefit for persons also taking GLP-1 treatments. This continues to be an area of interest for gastroenterologists who are more frequently seeing patients with delayed gastric emptying accompanying GLP-1 following initiation of therapy. These data have recently been provided to our commercialization field force to inform physicians and payers of the potential benefits seen in these real-world trials.
Research and Development Expenses
We expense all research and development expenses as they are incurred. Research and development expenses primarily include:
All of our research and development expenses to date have been incurred in connection with the development of Gimoti. Since FDA approval of Gimoti in June 2020, research and development costs have decreased and shifted to commercialization and selling costs. We are waiting for feedback from the FDA related to the design of an FDA post-marketing commitment single-dose PK clinical trial of Gimoti to characterize dose proportionality of a lower dose strength of Gimoti to accommodate patients that may require further dosage adjustments. We are unable to estimate with any certainty the costs we will incur related to this trial, or the regulatory review of such lower dosage of Gimoti, though such costs may be significant and will substantially increase research and development expenses once this trial is initiated. We may also incur additional costs to the extent we pursue additional clinical trials to expand the indication of Gimoti. Clinical development timelines, the probability of success and development costs can differ materially from expectations.
The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following:
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Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation. Other selling, general and administrative expenses include professional fees for accounting, tax, patent costs, legal services, insurance, facility costs and costs associated with being a publicly-traded company, including fees associated with investor relations and directors’ and officers’ liability insurance premiums. We expect that selling, general and administrative expenses will increase in the future as we continue to progress with the commercialization of Gimoti and we reimburse Eversana from the net profits attained from the sales of Gimoti.
Other Developments
The United States has enacted, and continues to consider, a range of trade-related measures, including tariffs, export controls, and other policies. These actions, as well as retaliatory tariffs imposed by other countries on U.S. exports, have led to significant volatility and uncertainty in global markets. Although we are actively monitoring the tariff developments and analyzing the potential impacts, we currently do not expect them to have a material impact on our business or results of operations.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which we have prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed financial statements, as well as the reported expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates under different assumptions or conditions.
There have been no new or significant changes to our critical accounting policies and estimates discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 13, 2025.
Results of Operations
Comparison of Three Months Ended September 30, 2025 and 2024
The following table summarizes the results of our operations:
|
|
Three Months Ended September 30, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||
Net product sales |
|
$ |
4,283,979 |
|
|
$ |
2,654,186 |
|
|
$ |
1,629,793 |
|
|
|
61 |
% |
Cost of goods sold |
|
$ |
101,977 |
|
|
$ |
104,024 |
|
|
$ |
(2,047 |
) |
|
|
-2 |
% |
Research and development expenses |
|
$ |
5,320 |
|
|
$ |
11,677 |
|
|
$ |
(6,357 |
) |
|
|
100 |
% |
Selling, general and administrative expenses |
|
$ |
5,314,370 |
|
|
$ |
3,824,142 |
|
|
$ |
1,490,228 |
|
|
|
39 |
% |
Net Product Sales. Net product sales for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 increased by approximately $1.6 million. The increase in product sales during 2025 is due to the increased conversion rate due to the expanded pharmacy network, a greater number of physicians within larger gastroenterology teams prescribing Gimoti after first-physician adoption and patients re-filling prescriptions at a higher rate.
Cost of Goods Sold. Cost of goods sold for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 decreased by approximately $2,000. The decrease in costs of goods sold during 2025 is primarily due to timing of stability testing on commercial product batches.
Research and Development Expenses. Research and development expenses for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 decreased by approximately $6,000 due employee-related expenses.
Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 increased by approximately $1.5 million primarily due to an increase of $1.3 million in marketing and Eversana profit sharing amounts as a direct result of an increase in net product sales, an increase of $0.1
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million in professional fees and a $0.1 million increase in product liability insurance and other costs associated with being a public company.
Comparison of Nine Months Ended September 30, 2025 and 2024
The following table summarizes the results of our operations:
|
|
Nine Months Ended September 30, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||
Net product sales |
|
$ |
11,116,279 |
|
|
$ |
6,941,042 |
|
|
$ |
4,175,237 |
|
|
|
60 |
% |
Cost of goods sold |
|
$ |
311,269 |
|
|
$ |
238,031 |
|
|
$ |
73,238 |
|
|
|
31 |
% |
Research and development expenses |
|
$ |
56,516 |
|
|
$ |
16,322 |
|
|
$ |
40,194 |
|
|
|
246 |
% |
Selling, general and administrative expenses |
|
$ |
14,746,777 |
|
|
$ |
10,697,128 |
|
|
$ |
4,049,649 |
|
|
|
38 |
% |
Net Product Sales. Net product sales for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 increased by approximately $4.2 million. The increase in product sales during 2025 is due to the increased conversion rate due to the expanded pharmacy network, a greater number of physicians within larger gastroenterology teams prescribing Gimoti after first-physician adoption and patients re-filling prescriptions at a higher rate.
Cost of Goods Sold. Cost of goods sold for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 increased by approximately $0.1 million. The increase in costs of goods sold during 2025 is primarily due to timing of stability testing on commercial product batches.
Research and Development Expenses. Research and development expenses for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 increased by approximately $40,000 due to miscellaneous product development costs and employee-related expenses.
Selling, General and Administrative Expenses. Selling, general and administrative expenses for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 increased by approximately $4.0 million primarily due to an increase of $3.5 million in marketing and Eversana profit sharing amounts as a direct result of an increase in net product sales, an increase of $0.6 million in professional fees and a $0.1 million increase in product liability insurance and other costs associated with being a public company. These increases were partially offset by a $0.2 million decrease in stock-based compensation expense.
Liquidity and Capital Resources
Since our inception in 2007, we have funded our operations primarily from the sale of equity securities and borrowings under loan and security agreements.
In connection with the Eversana Agreement, we entered into the Eversana Credit Facility, pursuant to which Eversana agreed to provide a revolving credit facility of up to $5.0 million to us upon FDA approval of the Gimoti NDA, as well as certain other customary conditions. The Eversana Credit Facility terminates on December 31, 2026, unless terminated earlier pursuant to its terms. The Eversana Credit Facility is secured by all of our personal property other than our intellectual property. Under the terms of the Eversana Credit Facility, we cannot grant an interest in our intellectual property to any other person. Each loan under the Eversana Credit Facility will bear interest at an annual rate equal to 10.0%, with such interest due at the end of the loan term. In 2020, we borrowed $5.0 million from the Eversana Credit Facility.
As of September 30, 2025, we had approximately $11.6 million in cash and cash equivalents. We anticipate that we will continue to incur losses from operations due to commercialization activities, including manufacturing Gimoti, conducting the post-marketing commitment single-dose PK clinical trial of Gimoti to characterize dose proportionality of a lower dose strength of Gimoti, and for other general and administrative costs to support our operations. Both we and Eversana may terminate the commercial services agreement (as described in Note 5. Commercial Services and Loan Agreements with Eversana), pursuant to the NPQTR (as defined in Note 5); however, we have no intent to terminate the Eversana Agreement. There can be no assurance that Eversana will not exercise its right pursuant to the NPQTR. Should Eversana exercise its right under the NPQTR, the Loan Agreement (as described in Note 5) would also be terminated and we would be responsible for repaying the principal and accrued interest on the loan, which was $7.5 million as of September 30, 2025, within 90 days of the effective date of the termination. In addition, we would need to establish a commercial infrastructure in order to continue distributing Gimoti. The timing and costs associated with this are not clear, but we believe they would be substantial. Additionally, as more fully discussed in Note 7. Subsequent Events, if the Merger is completed or the Eversana Agreement is terminated, the Company will owe Eversana an additional $1.0 million. As a result, management believes that there is substantial doubt about its ability to continue as a going concern for one year after the date these financial statements are issued. This would materially and adversely affect our near-term liquidity needs and cash runway. If the Merger is not completed, we anticipate we will be required to raise additional funds in order to continue as a going concern. Because our business is entirely dependent on the success of Gimoti, if we are unable to secure additional financing or identify and execute on other development or
24
strategic alternatives for Gimoti or our company, we will be required to curtail all of our activities and may be required to liquidate, dissolve or otherwise wind down our operations. Any of these events could result in a complete loss of your investment in our securities.
There is no assurance that other financing will be available when needed to allow us to continue as a going concern. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.
Sources and Uses of Our Cash
The following table summarizes our cash flows:
|
|
Nine Months Ended September 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|||
Net cash used in operating activities |
|
$ |
(2,084,485 |
) |
|
$ |
(4,218,700 |
) |
|
$ |
2,134,215 |
|
Net cash provided by financing activities |
|
$ |
63,895 |
|
|
$ |
10,818,306 |
|
|
$ |
(10,754,411 |
) |
Net (decrease) increase in cash and cash equivalents |
|
$ |
(2,020,590 |
) |
|
$ |
6,599,606 |
|
|
$ |
(8,620,196 |
) |
Operating Activities. The primary use of our cash has been to fund our clinical research, prepare our NDA, manufacture Gimoti, commercial sales of Gimoti, and other general operations. The cash used in operating activities during the nine months ended September 30, 2025 and 2024 was primarily related to commercialization activities for Gimoti and other general operational activities. We expect that cash used in operating activities during the remainder of 2025 will be in-line with cash used during similar periods in 2024 because growing sales are expected to offset commercialization activities, including manufacturing Gimoti.
Financing Activities. During the nine months ended September 30, 2025, cash provided by financing activities was $63,895 due to the issuance of 19,437 shares of common stock pursuant to our employee stock purchase plan. No shares were issued from our employee stock purchase plan during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, cash provided by financing activities was $10.8 million primarily due to the sale of 513,424 shares of common stock at $8.16 per share, 683,475 Pre-Funded Warrants at $8.1588 per share and 373,176 Modified Series A Warrants and 250,627 Modified Series C Warrants at $3.99 per share in connection with the September 2024 Exercise Price Warrant Amendment.
Capital Resource Requirements
On October 16, 2024, we entered into the Seventh Amendment to our existing office lease agreement. The Seventh Amendment extends the term of the lease from October 31, 2024 to March 31, 2027. The Seventh Amendment provides for an initial monthly base rent of approximately $6,500, with stated escalation clauses each November first through the lease term. We are also responsible for common area maintenance costs associated with the leased space.
The amount and timing of our future funding requirements will depend on many factors, including but not limited to:
We expect to continue to incur expenses as we:
25
Item 3. Quantitative and Qualitative Disclosure about Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
As required by SEC Rule 13a-15(b), as of September 30, 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2025.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) of the Exchange Act during the quarter ended September 30, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
There have been no material changes to the risk factors included in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 13, 2025 and in “Part II, Item 1A. Risk Factors” in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025 filed with the SEC on May 13, 2025 and August 14, 2025, respectively, other than the following:
Risks Related to the Pending Transaction with QOL Medical
We may not complete the pending transaction with QOL Medical within the timeframe we anticipate, or at all, which could have an adverse effect on our business, financial results and/or operations.
On November 3, 2025, we entered into the Merger Agreement with QOL Medical and Merger Sub, pursuant to which Merger Sub will commence the Offer to acquire all of the Shares for the Offer Price. Upon the terms and subject to the conditions set forth in the Merger Agreement, as soon as practicable following the consummation of the Offer, QOL Medical will effect the Merger of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly owned indirect subsidiary of QOL Medical.
Merger Sub’s obligation to purchase the Shares validly tendered and not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver of customary conditions, including, among others, (i) there being validly tendered and not validly withdrawn immediately prior to the Expiration Time (as defined in the Merger Agreement) a number of Shares that, together with any Shares held by QOL Medical, Merger Sub or any of their direct or indirect wholly owned subsidiaries, represents at least one more Share than 50% of the total number of outstanding Shares, plus the aggregate number of Shares issuable to holders of Company options or warrants for which the Company has received valid notices of exercise and for which payment of any applicable exercise price has been made in accordance with the terms of such Company options or warrants prior to the expiration of the Offer (and in respect of which Shares have not yet been issued to the exercising holder), as of immediately prior to the Expiration Time, (ii) the absence of any law or order that prohibits consummation of the Offer or the Merger or that has the effect of making the Offer or Merger illegal, (iii) the accuracy of the representations and warranties of the Company contained in the Merger Agreement, subject to certain materiality standards, (iv) the Company’s compliance and performance in all material respects with its covenants and agreements contained in the Merger Agreement and (v) the absence of any change, occurrence, effect, event, circumstance or development that has occurred since the date of the Merger Agreement that has had, or would reasonably be expected to have, a material adverse effect on the Company and is continuing, as well as other customary conditions set forth in Annex A to the Merger Agreement. The Merger Agreement also contains certain customary termination rights in favor of each of the Company and QOL Medical, including the Company’s right, subject to certain limitations, to terminate the Merger Agreement in certain circumstances to accept a Superior Proposal (as defined in the Merger Agreement) and QOL Medical’s right, subject to certain limitations, to terminate the Merger Agreement if the Company’s board of directors changes its recommendation that stockholders of the Company tender their Shares in the Offer (as further described in the Merger Agreement). As a result, we cannot assure you that the transaction with QOL Medical will be completed, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement as of its date or within the expected timeframe.
If the Merger is not completed within the expected timeframe or at all, we may be subject to a number of material risks. The price of our common stock may decline to the extent that current market price reflects a market assumption that the Merger will be completed. We could be required to pay QOL Medical a termination fee of $1.5 million if the Merger Agreement is terminated under specific circumstances described in the Merger Agreement. The failure to complete the Merger also may result in negative publicity and negatively affect our relationship with our stockholders, employees, vendors, suppliers, customers. regulators and other business partners. We may also be required to devote significant time and resources to litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement.
The pendency of the Merger could adversely affect our business, financial results and/or operations.
Our efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our results of operation and our business. Uncertainty as to whether the Merger will be completed may affect our ability to retain and motivate existing employees. A substantial amount of our management’s and employees’ attention is being directed toward the Offer and completion of the Merger and thus is being diverted from our day-to-day operations. Uncertainty as to our future could adversely affect our business and our relationship with collaborators, vendors, customers, regulators, and other business partners. For example, vendors, collaborators, and other counterparties may defer decisions concerning working with us, or seek to change existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our results of operations and financial condition, as well as the market price of our common stock. The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.
27
While the Merger Agreement is in effect, we are subject to restrictions on our business activities.
While the Merger Agreement is in effect, we are subject to restrictions on our business activities, generally requiring us to conduct our business in the ordinary course and consistent with past practice in all material respects, and subjecting us to a variety of specified restrictions absent QOL Medical’s prior consent. These limitations include, among other things, restrictions on our ability to acquire other businesses and assets, dispose of our assets, make investments, enter into certain contracts, repurchase or issue securities, pay dividends, make capital expenditures, take certain actions relating to intellectual property, amend our organizational documents, and incur indebtedness. These restrictions could prevent us from pursuing strategic business opportunities, taking actions with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and may, as a result, materially and adversely affect our business, results of operations and financial condition.
The Merger Agreement contains provisions that could discourage a potential competing acquirer of our company or could result in any competing proposal being at a lower price than it might otherwise be, and in certain instances requires us to pay a termination fee.
We are subject to certain restrictions on our ability to solicit alternative acquisition proposals from third parties, to provide information to third parties and to enter into or continue discussions or negotiations with third parties regarding alternative acquisition proposals, subject to customary exceptions. In addition, we may be required to pay QOL Medical a termination fee of $1.5 million under specific circumstances described in the Merger Agreement, including, but not limited to, in the event we accept and enter into an agreement for the consummation of a transaction which our board of directors determines is a Superior Proposal (as defined in the Merger Agreement). These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of our company from considering or proposing such an acquisition, including, if the Merger Agreement is terminated prior to the consummation of the Merger, after such termination of the Merger Agreement, even if it were prepared to pay a purchase price per share higher than the purchase price per share proposed to be paid in the Merger, or might result in a potential competing acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in specified circumstances under the Merger Agreement, including, in certain circumstances, after a valid termination of the Merger Agreement in accordance with the terms thereof. If the Merger Agreement is terminated under the foregoing circumstances, the termination fee we would be required to pay under the Merger Agreement may require us to use available cash that would have otherwise been available for general corporate purposes and other uses.
We have incurred, and will continue to incur, direct and indirect costs as a result of the pending transaction with QOL Medical.
We have incurred, and will continue to incur, significant costs and expenses, including fees for professional services and other transaction costs, in connection with the pending transaction. We must pay substantially all of these costs and expenses whether or not the transaction is completed. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses.
Litigation may arise in connection with the Offer or the Merger, which could be costly and divert management’s attention and otherwise materially harm our business.
Lawsuits may be filed challenging the disclosures contained in the Offer and/or challenging other aspects of the proposed Merger. Regardless of the outcome of any future litigation related to the proposed Offer or Merger, such litigation may be time-consuming and expensive and may distract our management from running the day-to-day operations of our business. The litigation costs and diversion of management’s attention and resources to address the claims and counterclaims in any litigation related to the proposed Offer and Merger may materially adversely affect our business, financial condition and operating results. The outcome of any lawsuit filed or that may be filed challenging the Offer or the Merger is uncertain. If any lawsuit is successful in obtaining an order enjoining the Offer or the Merger, then the transaction may not be consummated within the expected timeframe, or at all, and could result in substantial costs, including but not limited to, costs associated with the indemnification of our directors and officers. If the Merger is not consummated for any reason, litigation could be filed in connection with the failure to consummate the Merger. Any litigation related to the proposed Offer or Merger may result in negative publicity or an unfavorable impression of us, which could adversely affect the price of our common stock, impair our ability to retain employees, damage our relationships with our partners, or otherwise materially harm our operations and financial performance.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
28
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended September 30, 2025, none of our officers or directors adopted modified terminated
29
Item 6. Exhibits
Index to Exhibits
Exhibit Number |
|
Description of Exhibit |
|
Form |
|
File Number |
|
Date of Filing |
|
Exhibit Number |
|
Filed Herewith |
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1+ |
|
Agreement and Plan of Merger, dated November 3, 2025, by and among the Company, QOL Medical, LLC and QOL -EOS Merger Sub, Inc. |
|
8-K |
|
001-36075 |
|
11/4/2025 |
|
2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
Amended and Restated Certificate of Incorporation of the Company |
|
8-K |
|
001-36075 |
|
9/30/2013 |
|
3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company |
|
8-K |
|
001-36075 |
|
5/20/2022 |
|
3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.3 |
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company |
|
10-Q |
|
001-36075 |
|
8/13/2024 |
|
3.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.4 |
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company |
|
8-K |
|
001-36075 |
|
8/1/2024 |
|
3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.5 |
|
Amended and Restated Bylaws of the Company |
|
8-K |
|
001-36075 |
|
9/30/2013 |
|
3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1 |
|
Form of Pre-Funded Warrant |
|
S-1/A |
|
333-275443 |
|
12/15/2023 |
|
4.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2 |
|
Form of Series A Warrant |
|
S-1/A |
|
333-275443 |
|
1/11/2024 |
|
4.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3 |
|
Form of Series B Warrant |
|
S-1/A |
|
333-275443 |
|
1/11/2024 |
|
4.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.4 |
|
Form of Series C Warrant |
|
S-1/A |
|
333-275443 |
|
1/11/2024 |
|
4.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.5 |
|
Form of Representative Warrant |
|
S-1/A |
|
333-275443 |
|
2/14/2024 |
|
4.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.6 |
|
Form of Warrant Amendment |
|
8-K |
|
001-36075 |
|
3/25/2024 |
|
4.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.7 |
|
Form of Warrant Amendment |
|
8-K |
|
001-36075 |
|
6/20/2024 |
|
4.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.8 |
|
Form of Exercise Price Warrant Amendment |
|
8-K |
|
001-36075 |
|
9/27/2024 |
|
4.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.9 |
|
Form of Series C Vesting Warrant Amendment |
|
8-K |
|
001-36075 |
|
9/27/2024 |
|
4.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1 |
|
Form of Insider Support Agreement |
|
8-K |
|
001-36075 |
|
11/4/2025 |
|
10.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2 |
|
Form of Key Company Stockholder Support Agreement |
|
8-K |
|
001-36075
|
|
11/4/2025 |
|
10.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3 |
|
Letter Agreement, dated October 29, 2025, by and between the Company and Eversana Life Sciences Services, LLC |
|
8-K |
|
001-36075 |
|
11/4/2025
|
|
10.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4# |
|
Third Amended and Restated Employment Agreement, effective as of November 1, 2025, by and between the Company and Matthew D’Onofrio |
|
8-K |
|
001-36075 |
|
11/4/2025
|
|
10.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5# |
|
Second Amended and Restated Employment Agreement, effective as of November 1, 2025, by and between the Company and Mark Kowieski |
|
8-K |
|
001-36075 |
|
11/4/2025
|
|
10.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6# |
|
Second Amended and Restated Employment Agreement, effective as of November 1, 2025, by and between the Company and Marilyn Carlson, M.D. |
|
8-K |
|
001-36075 |
|
11/4/2025
|
|
10.6 |
|
|
30
Exhibit Number |
|
Description of Exhibit |
|
Form |
|
File Number |
|
Date of Filing |
|
Exhibit Number |
|
Filed Herewith |
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7# |
|
Transition Services Agreement, dated as of November 3, 2025, by and among the Company, and Matthew D’Onofrio and QOL Medical, LLC |
|
8-K |
|
001-36075 |
|
11/4/2025
|
|
10.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8# |
|
Transition Services Agreement, dated as of November 3, 2025, by and among the Company, and Mark Kowieski and QOL Medical, LLC |
|
8-K |
|
001-36075 |
|
11/4/2025
|
|
10.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9#
|
|
Transition Services Agreement, dated as of November 3, 2025, by and among the Company, and Marilyn Carlson, M.D. and QOL Medical LLC |
|
8-K |
|
001-36075 |
|
11/4/2025
|
|
10.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1 |
|
Certification of Principal Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934 |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
Certification of Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934 |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1* |
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2* |
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
+ |
Certain annexes and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted annexes and schedules upon request by the SEC; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any annexes or schedules so furnished. |
# Management contract or compensatory plan or arrangement.
* This certification is being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
31
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.
|
|
Evoke Pharma, Inc. |
||
|
|
|
|
|
Date: November 13, 2025 |
|
By: |
|
/s/ Matthew J. D'Onofrio |
|
|
|
|
Matthew J. D’Onofrio Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
|
|
|
Evoke Pharma, Inc. |
||
|
|
|
|
|
Date: November 13, 2025 |
|
By: |
|
/s/ Mark Kowieski |
|
|
|
|
Mark Kowieski Chief Financial Officer (Principal Financial and Accounting Officer) |
|
|
|
|
|
32
FAQ
What were Evoke Pharma (EVOK) Q3 2025 net product sales?
What was EVOK’s Q3 2025 net loss and cash position?
Did Evoke Pharma raise a going concern issue?
What are the key terms of the QOL Medical merger for EVOK shareholders?
How many EVOK shares were outstanding?
What obligations are tied to the Eversana agreement upon change of control?
What were EVOK’s stockholders’ equity and key liabilities?
