Palisade Bio Narrows Losses, Secures $138M Equity Infusion

TL;DR

**PALI's massive $138M equity raise post-quarter is a game-changer, temporarily shoring up its precarious cash position despite ongoing losses, but the long-term still hinges on PALI-2108's clinical success.**

AI Summary

PALISADE BIO, INC. (PALI) reported a net loss of $2.868 million for the three months ended September 30, 2025, an improvement from a $3.487 million net loss in the same period of 2024. For the nine months ended September 30, 2025, the net loss was $7.882 million, down from $11.094 million in 2024. Research and development expenses decreased significantly to $1.394 million for the three months ended September 30, 2025, from $2.137 million in 2024, and to $4.019 million for the nine months from $6.979 million in 2024. General and administrative expenses remained relatively stable. The company's cash and cash equivalents declined to $5.227 million as of September 30, 2025, from $9.821 million at December 31, 2024. However, a significant subsequent event on October 2, 2025, saw the company close an equity offering for gross proceeds of $138 million, which management believes alleviates substantial doubt about its ability to continue as a going concern for one year. The company continues to focus on developing PALI-2108 for inflammatory bowel disease and anticipates future net operating losses.

Why It Matters

This filing is critical for investors as it reveals PALI's continued operational losses, but also a substantial $138 million equity raise post-quarter-end, which significantly improves its liquidity and going concern status. This capital infusion provides a lifeline for PALI to advance its lead product candidate, PALI-2108, in a highly competitive biopharmaceutical market focused on autoimmune and inflammatory diseases. For employees, it signals job security and continued R&D efforts. Customers and the broader market could benefit from potential new treatments if PALI-2108 progresses successfully, but the long development timelines and high failure rates in biotech remain a key consideration.

Risk Assessment

Risk Level: medium — Despite the recent $138 million equity offering, PALISADE BIO, INC. still faces significant risks. The company has a limited operating history, has experienced net losses and negative cash flows from operations since inception, and expects to continue incurring net losses in the foreseeable future. Cash and cash equivalents were only $5.227 million as of September 30, 2025, prior to the subsequent financing, indicating a high burn rate.

Analyst Insight

Investors should monitor PALI's cash burn rate closely in future filings, despite the recent capital raise. While the $138 million provides a runway, the company's ability to achieve profitability remains unproven. Consider the long-term clinical trial progress of PALI-2108 and any potential dilution from future capital needs before making investment decisions.

Financial Highlights

debt To Equity

1.17

revenue

$0

operating Margin

N/A

total Assets

$6.973M

total Debt

$3.761M

net Income

-$7.882M

eps

-$1.38

gross Margin

N/A

cash Position

$5.227M

revenue Growth

N/A

Key Numbers

• $7.882M — Net Loss (9 months ended Sep 30, 2025) (Decreased from $11.094M in the prior year period)
• $4.019M — Research and Development Expenses (9 months ended Sep 30, 2025) (Decreased from $6.979M in the prior year period)
• $5.227M — Cash and Cash Equivalents (Sep 30, 2025) (Decreased from $9.821M at Dec 31, 2024)
• $138M — Gross Proceeds from Equity Offering (Closed on October 2, 2025, significantly increasing working capital)
• 149,003,210 — Common Stock Shares Outstanding (As of November 5, 2025)
• $0.38 — Basic and Diluted Net Loss Per Common Share (3 months ended Sep 30, 2025) (Improved from $2.32 in the prior year period)
• 9,119,152 — Common Stock Shares Issued and Outstanding (Sep 30, 2025) (Increased from 2,768,646 at Dec 31, 2024)
• $3,212 — Total Stockholders' Equity (Sep 30, 2025) (Decreased from $7,492 at Dec 31, 2024, prior to the subsequent equity offering)
• $7,703 — Net Cash Used in Operating Activities (9 months ended Sep 30, 2025) (Decreased from $9,812 in the prior year period)
• 1-for-15 — Reverse Stock Split (Effected on April 5, 2024)

Key Players & Entities

• PALISADE BIO, INC. (company) — registrant
• PALI-2108 (product) — lead product candidate for inflammatory bowel disease
• Securities and Exchange Commission (regulator) — filing oversight
• Nasdaq Capital Market (market) — exchange where common stock is registered
• Leading Biosciences, Inc. (company) — wholly owned subsidiary
• Suzhou Neuralstem Biopharmaceutical Co., Ltd. (company) — wholly owned subsidiary
• Board of Directors (person) — authorized future reverse stock split
• One Big Beautiful Bill Act (legislation) — enacted tax legislation
• $138 million (dollar_amount) — gross proceeds from October 2025 equity offering
• $5.227 million (dollar_amount) — cash and cash equivalents as of September 30, 2025

FAQ

Risk Factors

• Going Concern Uncertainty Alleviated by Subsequent Equity Offering [high — financial]: The company reported a net loss of $2.868 million for Q3 2025 and had $5.227 million in cash as of September 30, 2025. This raised concerns about its ability to continue as a going concern. However, a subsequent equity offering on October 2, 2025, raised $138 million in gross proceeds, which management believes substantially alleviates this doubt for at least one year.
• Significant Decline in Cash Reserves Pre-Offering [high — financial]: Cash and cash equivalents decreased from $9.821 million at December 31, 2024, to $5.227 million as of September 30, 2025. This represents a substantial burn rate, underscoring the critical need for the subsequent equity financing.
• Continued Net Operating Losses [medium — financial]: Palisade Bio anticipates future net operating losses as it continues to develop its lead candidate, PALI-2108. The company reported a net loss of $7.882 million for the nine months ended September 30, 2025, indicating ongoing profitability challenges.
• Dependence on PALI-2108 Development [high — operational]: The company's primary focus is the development of PALI-2108 for inflammatory bowel disease. Any setbacks or delays in the development or regulatory approval of this single product candidate pose a significant risk to the company's future.
• Dilution from Equity Offering [medium — financial]: The $138 million equity offering, while alleviating going concern issues, will likely result in significant dilution for existing shareholders. The number of common shares outstanding increased substantially from 2,768,646 at December 31, 2024, to 9,119,152 at September 30, 2025, prior to the large subsequent offering.
• Decreased Research and Development Spending [medium — financial]: R&D expenses decreased significantly to $4.019 million for the nine months ended September 30, 2025, from $6.979 million in the prior year. While this improved short-term losses, it could potentially impact the pace of drug development.

Industry Context

Palisade Bio operates in the biotechnology sector, focusing on the development of novel therapeutics for inflammatory bowel disease (IBD). This is a highly competitive and capital-intensive industry characterized by long development cycles, significant regulatory hurdles, and the need for substantial ongoing investment in research and development. Success is often dependent on the efficacy and safety of a single drug candidate.

Regulatory Implications

As a clinical-stage biotechnology company, Palisade Bio is subject to stringent regulatory oversight from bodies like the FDA. The development and approval process for PALI-2108 will require extensive clinical trials and adherence to Good Manufacturing Practices (GMP). Any delays or failures in the regulatory process could significantly impact the company's prospects.

What Investors Should Do

1. Monitor R&D Pipeline Progress
2. Assess Burn Rate and Future Financing Needs
3. Evaluate Competitive Landscape
4. Analyze Dilution Impact

Key Dates

• 2025-10-02: Closing of Equity Offering — Raised $138 million in gross proceeds, significantly bolstering cash position and alleviating going concern doubts.
• 2025-09-30: End of Third Quarter — Reported $5.227 million in cash and cash equivalents and a net loss of $2.868 million for the quarter.
• 2024-12-31: End of Fiscal Year — Reported $9.821 million in cash and cash equivalents and 2,768,646 common shares outstanding.
• 2024-04-05: Reverse Stock Split — Effected a 1-for-15 reverse stock split, impacting share counts and per-share metrics.

Glossary

Accumulated deficit

The total net losses of a company since its inception, minus any net gains. It represents the cumulative losses that have not been offset by profits. (Indicates the company has historically operated at a loss, with a deficit of $143.826 million as of September 30, 2025.)

Going concern

An accounting assumption that a business will continue to operate for the foreseeable future, typically at least 12 months. If substantial doubt exists, it must be disclosed. (Management believes the recent equity offering alleviates substantial doubt about the company's ability to continue as a going concern for one year.)

Additional paid-in capital

The amount of money a company receives from selling stock above its par or stated value. (Represents a significant portion of the company's equity, totaling $146.945 million as of September 30, 2025, reflecting past equity issuances.)

Weighted average shares outstanding

The average number of a company's outstanding shares over a period, used to calculate earnings per share. It accounts for changes in the number of shares during the period. (Used to calculate basic and diluted net loss per common share, showing a significant increase from 1,500,409 in Q3 2024 to 7,473,898 in Q3 2025.)

Common stock shares issued and outstanding

The total number of common shares that have been issued by the company and are currently held by investors. (Shows a substantial increase from 2,768,646 at December 31, 2024, to 9,119,152 at September 30, 2025, prior to the large subsequent equity offering.)

Year-Over-Year Comparison

Compared to the prior year period, Palisade Bio has significantly reduced its net loss for both the three-month ($2.868M vs $3.487M) and nine-month ($7.882M vs $11.094M) periods ending September 30, 2025. This improvement is largely driven by a substantial decrease in research and development expenses ($4.019M vs $6.979M for nine months). While cash reserves have declined significantly from $9.821M to $5.227M, a subsequent $138 million equity offering has materially altered the financial outlook, mitigating going concern risks that may have been present in the prior period's trend.

Key Financial Figures

• $0.01 — nge on which registered Common Stock, $0.01 par value PALI Nasdaq Capital Marke

Filing Documents

• pali-20250930.htm (10-Q) — 2021KB
• pali-ex10_1.htm (EX-10.1) — 139KB
• pali-ex10_2.htm (EX-10.2) — 121KB
• pali-ex10_4.htm (EX-10.4) — 141KB
• pali-ex10_5.htm (EX-10.5) — 141KB
• pali-ex31_1.htm (EX-31.1) — 18KB
• pali-ex31_2.htm (EX-31.2) — 18KB
• pali-ex32_1.htm (EX-32.1) — 12KB
• 0001193125-25-274262.txt ( ) — 7879KB
• pali-20250930.xsd (EX-101.SCH) — 960KB
• pali-20250930_htm.xml (XML) — 1161KB

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 31 Item 4.

Controls and Procedures

Controls and Procedures 31 PART II - OTHER INFORMATION 33 Item 1.

Legal Proceedings

Legal Proceedings 33 Item 1A.

Risk Factors

Risk Factors 33 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 54 Item 3. Defaults Upon Senior Securities 54 Item 4. Mine Safety Disclosure 54 Item 5. Other Information 54 Item 6. Exhibits 55

SIGNATURES

SIGNATURES 56 i PA RT I FINANCIAL I NFORMATION

UNAUDITED CO NDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. UNAUDITED CO NDENSED CONSOLIDATED FINANCIAL STATEMENTS Palisade Bio, Inc. Condensed Consolidate d Bal ance Sheets (Unaudited) (in thousands, except share and per share amounts) September 30, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 5,227 $ 9,821 Prepaid expenses and other current assets 1,601 673 Total current assets 6,828 10,494 Restricted cash 26 26 Property and equipment, net — 3 Operating lease right-of-use asset — 84 Other noncurrent assets 119 273 Total assets $ 6,973 $ 10,880 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,426 $ 1,105 Accrued liabilities 1,220 1,240 Accrued compensation and benefits 621 722 Current portion of operating lease liability — 90 Insurance financing debt 211 79 Total current liabilities 3,478 3,236 Warrant liability — 2 Other noncurrent liabilities 283 150 Total liabilities 3,761 3,388 Commitments and contingencies (Note 9) Stockholders' equity: Series A Convertible Preferred Stock, $ 0.01 par value, 7,000,000 shares authorized; 200,000 issued and outstanding at September 30, 2025 and December 31, 2024 2 2 Common stock, $ 0.01 par value; 280,000,000 shares authorized; 9,119,152 and 2,768,646 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 91 27 Additional paid-in capital 146,945 143,407 Accumulated deficit ( 143,826 ) ( 135,944 ) Total stockholders' equity 3,212 7,492 Total liabilities and stockholders' equity $ 6,973 $ 10,880 The accompanying notes are an integral part of these condensed consolidated financial statements. Palisade Bio, Inc. Condensed Consolidated Sta tements of Operations (Unaudited) (in thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2025 202

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View this 10-Q filing on SEC EDGAR