Carisma Swings to Profit Amid Wind-Down, Nasdaq Delisting

TL;DR

**CARM is a zombie stock, delisted and winding down; any 'profit' is from asset sales, not operations.**

AI Summary

Carisma Therapeutics Inc. (CARM) reported a significant turnaround in the nine months ended September 30, 2025, achieving a net income of $25.677 million, a substantial improvement from a net loss of $42.842 million in the same period of 2024. This was primarily driven by a surge in collaboration revenues to $48.979 million, up from $15.979 million year-over-year. Operating expenses were drastically cut, with research and development plummeting from $44.095 million to $11.777 million, and general and administrative expenses decreasing from $16.208 million to $8.500 million. The company implemented a cash preservation plan in March 2025, reducing its workforce by 84% (37 employees) and ceasing all historical research and development activities. Cash and cash equivalents, however, decreased from $17.909 million at December 31, 2024, to $2.777 million by September 30, 2025. A planned merger with OrthoCellix was terminated on September 16, 2025, due to OrthoCellix's failure to secure a $25.0 million concurrent financing, and CARM is vigorously pursuing a $1.3 million termination fee and expense reimbursement. The company's common stock was delisted from Nasdaq on October 13, 2025, and now trades on the OTCID market.

Why It Matters

This filing signals a critical juncture for Carisma Therapeutics, moving from a clinical-stage biotech to an entity focused on an 'orderly wind down.' For investors, the delisting from Nasdaq to OTCID significantly impacts liquidity and perceived value, making future recovery highly uncertain. Employees have already faced an 84% workforce reduction, indicating a complete shift away from R&D. Customers and the broader market will see the discontinuation of product candidates like CT-0508 and CT-0525, removing potential future therapies from the competitive landscape. The company's ability to collect the $1.3 million termination fee from OrthoCellix will be a key indicator of its financial health during this transition.

Risk Assessment

Risk Level: high — The risk level is high due to the company's explicit plan for an 'orderly wind down' and cessation of all historical research and development activities. The delisting from Nasdaq to the OTCID market on October 13, 2025, further reduces liquidity and investor confidence. Cash and cash equivalents have plummeted from $17.909 million at December 31, 2024, to $2.777 million by September 30, 2025, indicating a rapidly depleting cash runway.

Analyst Insight

Investors should consider this a highly speculative situation with significant downside risk. Given the stated intention to 'wind down its business' and the Nasdaq delisting, existing shareholders should evaluate exiting their positions, as the likelihood of meaningful recovery or future growth is extremely low. New investors should avoid CARM.

Financial Highlights

debt To Equity

N/A

revenue

$48,979,000

operating Margin

58.6%

total Assets

$6,554,000

total Debt

$7,421,000

net Income

$25,677,000

eps

$0.61

gross Margin

N/A

cash Position

$2,777,000

revenue Growth

+207%

Revenue Breakdown

Key Numbers

• $25.677M — Net Income (Nine months ended Sept 30, 2025, a swing from -$42.842M loss in 2024.)
• $48.979M — Collaboration Revenues (Nine months ended Sept 30, 2025, up from $15.979M in 2024.)
• $11.777M — Research and Development Expenses (Nine months ended Sept 30, 2025, down from $44.095M in 2024.)
• $2.777M — Cash and Cash Equivalents (As of Sept 30, 2025, down from $17.909M at Dec 31, 2024.)
• 84% — Workforce Reduction (37 full-time employees terminated as part of the March 2025 cash preservation plan.)
• $1.3M — Termination Fee Receivable (Owed by OrthoCellix for the failed merger, currently unpaid.)
• October 13, 2025 — Nasdaq Delisting Date (Common stock suspended from Nasdaq and moved to OTCID.)
• $4.2M — Workforce Reduction Costs (Incurred during the nine months ended September 30, 2025.)

Key Players & Entities

• Carisma Therapeutics Inc. (company) — registrant of the 10-Q filing
• OrthoCellix, Inc. (company) — target of a terminated merger agreement
• Ocugen, Inc. (company) — partner in the terminated merger and subscription agreement
• Nasdaq Stock Market LLC (regulator) — exchange that delisted CARM's common stock
• OTC Markets Group (company) — operator of the OTCID market where CARM now trades
• $25.677 million (dollar_amount) — net income for the nine months ended September 30, 2025
• $42.842 million (dollar_amount) — net loss for the nine months ended September 30, 2024
• $48.979 million (dollar_amount) — collaboration revenues for the nine months ended September 30, 2025
• $2.777 million (dollar_amount) — cash and cash equivalents as of September 30, 2025
• $1.3 million (dollar_amount) — termination fee and expense reimbursement owed by OrthoCellix

FAQ

Risk Factors

• Dwindling Cash Reserves [high — financial]: Cash and cash equivalents have sharply declined from $17.909 million at December 31, 2024, to $2.777 million by September 30, 2025. This precipitous drop indicates a high burn rate or significant cash outflows, posing a substantial risk to the company's ability to fund ongoing operations or future initiatives without additional capital.
• Termination of Merger and Fee Dispute [medium — operational]: The planned merger with OrthoCellix was terminated on September 16, 2025, due to OrthoCellix's failure to secure financing. Carisma is pursuing a $1.3 million termination fee and expense reimbursement, but this amount is currently unpaid, creating uncertainty and potential legal costs.
• Drastic R&D and Workforce Reduction [high — operational]: The company implemented an 84% workforce reduction (37 employees) and ceased all historical R&D activities as part of a March 2025 cash preservation plan. This strategic shift, while reducing expenses, fundamentally alters the company's operational focus and future growth prospects.
• Nasdaq Delisting [high — market]: Carisma's common stock was delisted from Nasdaq on October 13, 2025, and now trades on the OTCID market. This significantly reduces liquidity, investor visibility, and access to capital markets, potentially impacting stock valuation and future fundraising efforts.
• Significant Operating Expense Reduction [medium — financial]: R&D expenses plummeted from $44.095 million to $11.777 million, and G&A expenses decreased from $16.208 million to $8.500 million for the nine months ended September 30, 2025, compared to the prior year. While this improved profitability, it reflects a radical shift away from prior operational strategies.

Industry Context

The biotechnology sector is characterized by high R&D costs, long development cycles, and significant regulatory hurdles. Companies often rely on strategic partnerships and collaborations for funding and market access. Recent trends show increased consolidation and a focus on pipeline efficiency, with companies shedding non-core assets or pivoting to more promising therapeutic areas.

Regulatory Implications

While not explicitly detailed in this section, the shift in operational focus and potential delisting could impact future regulatory interactions. Companies operating on OTC markets may face different disclosure requirements and investor scrutiny compared to major exchanges like Nasdaq.

What Investors Should Do

1. Monitor cash burn rate closely.
2. Assess the sustainability of collaboration revenues.
3. Evaluate the impact of Nasdaq delisting.
4. Track the outcome of the OrthoCellix termination fee dispute.

Key Dates

• 2025-03-XX: Cash Preservation Plan Implemented — Led to an 84% workforce reduction and cessation of historical R&D, signaling a major strategic pivot.
• 2025-09-16: Merger with OrthoCellix Terminated — Failed due to OrthoCellix's inability to secure financing, resulting in a dispute over a $1.3 million termination fee.
• 2025-10-13: Nasdaq Delisting — Stock moved to the OTCID market, reducing liquidity and investor access.

Glossary

Collaboration Revenues

Revenue generated from agreements with other companies, often involving joint development or licensing of intellectual property. (This is the primary revenue driver for Carisma in the reported period, showing a significant increase.)

Accumulated Deficit

The total cumulative net losses of a company since its inception, minus any cumulative net income. (Carisma still has a substantial accumulated deficit of ($279,902,000) as of September 30, 2025, despite recent profitability.)

Assets Held for Sale

Assets that management has committed to selling and are available for immediate sale in their present condition. (A small amount ($3,000) is listed as held for sale as of September 30, 2025, indicating potential divestitures.)

Right of use assets – operating leases

An asset representing the lessee's right to use an identified asset for a specified period under an operating lease. (These assets and corresponding liabilities have decreased significantly, reflecting lease terminations or expirations as part of the operational restructuring.)

Year-Over-Year Comparison

Compared to the nine months ended September 30, 2024, Carisma Therapeutics Inc. has experienced a dramatic financial turnaround. Revenue surged by over 200% from $15.979 million to $48.979 million, primarily from collaborations. This revenue growth, coupled with a drastic reduction in operating expenses (R&D down from $44.095 million to $11.777 million, G&A down from $16.208 million to $8.500 million), resulted in a swing from a net loss of $42.842 million to a net income of $25.677 million. However, this operational overhaul has led to a severe depletion of cash reserves, down from $17.909 million to $2.777 million, and the company's delisting from Nasdaq.

Key Financial Figures

• $0.001 — ge on which registered Common Stock, $0.001 par value per share CARM The Nasdaq

Filing Documents

• tmb-20250930x10q.htm (10-Q) — 1248KB
• tmb-20250930xex10d5.htm (EX-10.5) — 43KB
• tmb-20250930xex31d1.htm (EX-31.1) — 12KB
• tmb-20250930xex31d2.htm (EX-31.2) — 13KB
• tmb-20250930xex32d1.htm (EX-32.1) — 7KB
• tmb-20250930xex32d2.htm (EX-32.2) — 6KB
• 0001104659-25-110444.txt ( ) — 5808KB
• tmb-20250930.xsd (EX-101.SCH) — 44KB
• tmb-20250930_cal.xml (EX-101.CAL) — 56KB
• tmb-20250930_def.xml (EX-101.DEF) — 92KB
• tmb-20250930_lab.xml (EX-101.LAB) — 411KB
• tmb-20250930_pre.xml (EX-101.PRE) — 268KB
• tmb-20250930x10q_htm.xml (XML) — 951KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management's belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other 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 these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q may include, but are not limited to, statements about: our ability to successfully pursue and consummate additional asset monetization transactions; our ability to preserve our existing cash resources; our ability to successfully execute a planned orderly wind down; our expectations regarding the value or recovery that may be available to our stockholders and other stakeholders as part of a wind down process; our ability to continue as a going concern; the potential benefits and advantages of our platform technology, CT-2401, our pre-clinical stage product candidate targeting liver fibrosis and CT-1119, our product candidate targeting mesothelin-positive solid tumors; our ability to obtain and maintain intellectual property protection for our product candidates; our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents; our estimates regarding the potential market opportunity for our product candidates; the potential impact of public health epidemics or pandemics and of global economic developments on our business, operations, strategy and goals; our estimates regarding expenses, future revenue, capital requirements a

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 16 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 28 Item 4.

Controls and Procedures

Controls and Procedures. 29 PART II. OTHER INFORMATION 30 Item 1. Legal Proceedings. 30 Item 1A. Risk Factors. 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 32 Item 5. Other Information. 32 Item 6. Exhibits. 33

SIGNATURES

SIGNATURES 34 iii Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. CARISMA THERAPEUTICS INC. Unaudited Consolidated Balance Sheets (in thousands, except share and par value) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 2,777 $ 17,909 Prepaid expenses and other assets 3,090 5,916 Assets held for sale 3 — Total current assets 5,870 23,825 Property and equipment, net — 4,385 Right of use assets – operating leases 684 2,040 Deferred financing costs — 208 Total assets $ 6,554 $ 30,458 Liabilities and Stockholders' Deficit Current liabilities: Accounts payable $ 5,571 $ 2,081 Accrued expenses 1,088 7,448 Deferred revenue — 3,729 Operating lease liabilities 153 832 Finance lease liabilities — 905 Other current liabilities — 1,060 Total current liabilities 6,812 16,055 Deferred revenue — 41,250 Operating lease liabilities 609 724 Finance lease liabilities — 20 Other long-term liabilities — 318 Total liabilities 7,421 58,367 Commitments and contingencies (Note 6) Stockholders' deficit: Preferred stock $ 0.001 par value, 5,000,000 shares authorized, none issued or outstanding — — Common stock $ 0.001 par value, 350,000,000 shares authorized, 41,788,096 and 41,750,109 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 41 41 Additional paid-in capital 278,994 277,629 Accumulated deficit ( 279,902 ) ( 305,579 ) Total stockholders' deficit ( 867 ) ( 27,909 ) Total liabilities and stockholders' deficit $ 6,554 $ 30,458 See accompanying notes to unaudited interim consolidated financial statements. 1 Table of Contents CARISMA THERAPEUTICS INC. Unaudited Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Collaboration revenu

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View this 10-Q filing on SEC EDGAR