10-Q: Azitra Faces Delisting, Reports Widening Losses

Sentiment:

Quarterly Report 12 November 2025 5:00 PM

Azitra, Inc. reported a significant increase in net loss and received a NYSE American delisting notice, raising substantial doubt about its ability to continue as a going concern.

Capital raiseThe company has an Equity Line of Credit (ELOC) with Alumni Capital LP for up to an aggregate of $20 million.As of November 12, 2025, approximately $14.0 million is available under the ELOC for future share issuances.The company issued 7,955,823 shares of common stock and 795,579 warrants under the ELOC, with gross proceeds of $6.0 million, of which $2.4 million was received subsequent to September 30, 2025.Management plans to continue to raise funds through equity and/or debt financing to fund operating and working capital needs.

Worse than expectedNet loss increased by 33% for the nine months ended September 30, 2025, compared to the prior year.Cash and cash equivalents significantly decreased, indicating a high burn rate.Stockholders' equity fell below the NYSE American's minimum requirement, leading to a delisting notice.The company explicitly stated "substantial doubt" about its ability to continue as a going concern.Revenue was zero, indicating no progress towards commercialization.

Summary

Net loss increased by 33% to $8.7 million for the nine months ended September 30, 2025, compared to $6.6 million in the prior year.
Received a deficiency letter from NYSE American on October 1, 2025, for non-compliance with listing standards, specifically stockholders' equity below $4.0 million.
Management submitted a plan to NYSE American by October 31, 2025, to regain compliance by April 1, 2027.
Substantial doubt exists about the company's ability to continue as a going concern due to an accumulated deficit of $66.3 million, operating losses, and low working capital of $0.4 million.
Cash and cash equivalents decreased to $1.4 million as of September 30, 2025, from $4.6 million at December 31, 2024.
The company continues to advance its clinical programs, with ATR-12 reporting initial safety results in H1 2025 and ATR-04 dosing its first patient in Q3 2025.
Secured an Equity Line of Credit (ELOC) with Alumni Capital LP for up to $20 million, with $14.0 million remaining available as of November 12, 2025.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, including a 'going concern' warning and a NYSE American delisting notice. While clinical programs are advancing, the financial instability overshadows operational progress, indicating a very high-risk investment.

Positives

ATR-12 (Netherton syndrome) reported initial clinical safety results in the first half of 2025.
ATR-04 (EGFRi rash) received IND clearance in August 2024 and Fast Track designation in September 2024, with the first patient dosed in Q3 2025.
ATR-01 (Ichthyosis vulgaris) is planning lead optimization and IND-enabling studies in 2025 to support an IND filing in 2026.
Secured an Equity Line of Credit (ELOC) for up to $20 million, with $14.0 million still available as of November 12, 2025, providing a potential source of future funding.
General and administrative costs decreased by 1% for the nine months ended September 30, 2025, compared to the prior year.

Negatives

Net loss increased by 33% to $8.7 million for the nine months ended September 30, 2025, compared to $6.6 million in the prior year.
Total revenue was $0 for the nine months ended September 30, 2025, a 100% decrease from $7,500 in the prior year.
Cash and cash equivalents significantly decreased to $1.4 million as of September 30, 2025, from $4.6 million at December 31, 2024.
Stockholders' equity decreased to $2.2 million as of September 30, 2025, from $5.7 million at December 31, 2024.
Net cash used in operating activities increased to $8.3 million for the nine months ended September 30, 2025, from $7.6 million in the prior year.
Net cash provided by financing activities significantly decreased to $5.3 million for the nine months ended September 30, 2025, from $13.3 million in the prior year.
The company has an accumulated deficit of $66.3 million as of September 30, 2025.
Identified a material weakness in internal controls related to a lack of adequate segregation of accounting functions.

Risks

Substantial doubt about the company's ability to continue as a going concern for the foreseeable future.
Risk of delisting from the NYSE American due to non-compliance with continued listing standards (stockholders' equity below $4.0 million).
Requires a significant amount of additional funds to complete product development and fund future losses.
No assurance that additional financing will be available on commercially reasonable terms, if at all.
Dependence on contract research organizations (CROs) and contract manufacturing organizations (CMOs) for clinical trials and product supply.
Product candidates require approval from the U.S. Food and Drug Administration (FDA) or other international regulatory agencies, with no assurance of receiving necessary approvals.
Risks common to the pharmaceutical industry, including new technological innovations by competitors, dependence on key personnel, reliance on third-party manufacturers, protection of proprietary technology, and compliance with regulatory requirements.
Potential adverse impact from changes in U.S. and international trade policies, such as tariffs, which could increase operating expenses.
Dilution of common stockholders' ownership interests if additional capital is raised through equity or convertible debt securities.
Debt or preferred equity financing may involve covenants restricting business actions.
Relinquishing valuable rights to technologies or product candidates if funds are raised through collaborations or licensing arrangements.

Future Outlook

The company expects research and development expenses to significantly increase due to planned clinical trial activity and continued product candidate development. General and administrative expenses are also expected to modestly increase due to personnel, facility operating costs, and public company compliance. Management intends to continue raising funds through equity and/or debt financing to support operations, acknowledging substantial doubt about its ability to continue as a going concern without additional funding. The company is committed to undertaking transactions to achieve compliance with NYSE American listing standards by April 1, 2027.

Management Comments

Management has identified conditions and events that created an uncertainty about the ability of the Company to continue as a going concern.
The Company will require a significant amount of additional funds to complete the development of its product and to fund additional losses which the Company expects to incur over the next few years.
Management plans to continue to raise funds through equity and/or debt financing to fund operating and working capital needs, however, there can be no assurance that the Company will be successful in securing additional financing, if needed, to meet its operating needs.
The Company is committed to undertaking a transaction or transactions in the future to achieve compliance with the NYSE Americans requirements.
There can be no assurance that the Company will be able to achieve compliance with the NYSE Americans continued listing standards within the required time frame.
Our Board is still evaluating the need for a further reverse split and, if needed, the exact split ratio based on our financing alternatives and NYSE American compliance considerations.
We expect that our general and administrative expenses will incur a modest increase in the future as a result of personnel costs, and facility operating costs. We also expect an increase in costs associated with being a public company...
We expect our research and development expenses to significantly increase in the future due primarily to our planned clinical trial activity and continued development of product candidates.

Industry Context

Azitra operates in the highly competitive and capital-intensive biopharmaceutical industry, specifically focusing on precision dermatology using engineered proteins and live biotherapeutic products. Its strategy to leverage a proprietary microbial library and AI/machine learning for genetically engineered therapies positions it within an innovative, but high-risk, segment of biotech. The company's early-stage clinical programs (Phase 1b/2a) are typical for a development-stage biotech, but the significant cash burn and 'going concern' warning highlight the inherent financial challenges faced by companies in this sector prior to commercialization and revenue generation. The Fast Track designation for ATR-04 indicates regulatory recognition of unmet medical need, which is a positive, but overall financial health remains a major concern compared to more established industry players.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Authorized Shares Increase	Amended and restated Certificate of Incorporation in July 2025, increasing the number of authorized shares of common stock from 100,000,000 to 200,000,000.	July 2025	Increases flexibility for future equity financing but also potential for significant dilution.
Reverse Stock Split	Effected a 6.66-for-1 reverse stock split of its issued and outstanding shares of common stock.	August 21, 2025	Aimed at increasing share price to meet listing requirements, but often signals underlying financial distress and can be followed by further dilution.
NYSE American Listing Compliance	Received a deficiency letter from NYSE American for non-compliance with stockholders' equity requirements. Submitted a plan to regain compliance.	October 1, 2025	Critical for maintaining public listing; failure could lead to delisting and reduced liquidity/investor confidence.
Internal Control Material Weakness	Identified a material weakness related to a lack of adequate segregation of accounting functions.	September 30, 2025	Indicates a risk to financial reporting reliability; management plans to increase staffing to address this.

Related Party Transactions

No related party revenue for the three and nine months ended September 30, 2025.
Total related party revenue was $7,500 for the nine months ended September 30, 2024, from Bayer.
Bayer was no longer considered a related party as of July 2024.

Stakeholder Impact

Shareholders: Significant risk of dilution from ongoing equity raises (ELOC, future offerings). Risk of delisting from NYSE American could severely impact liquidity and share value. "Going concern" warning indicates high risk of investment loss.
Employees: Continued operations are uncertain, potentially impacting job security and stock-based compensation value.
Creditors: "Going concern" warning increases credit risk.
Customers (future): Delays or termination of product development due to lack of funding would impact potential future patients.
Suppliers/CROs/CMOs: Dependence on third parties means their operations could be impacted by the company's financial instability, and vice-versa.

Next Steps

Regain compliance with NYSE American listing standards by April 1, 2027, by executing a transaction or transactions.
Continue to raise funds through equity and/or debt financing to fund operating and working capital needs.
Complete lead optimization and IND-enabling studies for ATR-01 in 2025 to support an IND filing in 2026.
Increase staffing within the accounting infrastructure to address the material weakness in internal controls.
Board to evaluate the need for a further reverse stock split.

Key Dates

Date	Description
January 2, 2014	Company founded.
January 1, 2019	Company sponsors a 401(k) plan.
January 1, 2020	401(k) plan transitioned to a safe harbor plan.
January 26, 2022	Entered into an Exclusive License Agreement with an unrelated third party.
December 2022	Submitted an IND application for a Phase 1b clinical trial of ATR-12.
January 27, 2023	Received FDA notification that ATR-12 Phase 1b clinical trial may proceed.
March 2023	Board of Directors and stockholders approved the 2023 Stock Incentive Plan.
May 17, 2023	Company changed its name to Azitra, Inc. and effected a 7.1-for-1 forward stock split.
June 2023	Completed initial public offering (IPO), issuing 7,508 shares at $999.00 per share.
June 16, 2023	Shares began trading on NYSE American under symbol AZTR.
June 21, 2023	Close of IPO, all outstanding preferred stock and convertible promissory notes converted to common stock.
December 2023	Commenced operating activities for ATR-12 Phase 1b clinical trial.
February 2024	Completed a follow-on public offering (February 2024 Offering), issuing 83,404 shares at $59.94 per share.
July 1, 2024	Effected a 30-for-1 reverse stock split and filed a Form S-3 Registration Statement.
July 25, 2024	Completed a follow-on public offering (July 2024 Offering), issuing 1,000,750 shares and Class A Warrants.
August 2024	Dosed first patient in ATR-12 Phase 1b clinical trial.
August 2024	Obtained IND clearance from FDA for ATR-04 Phase 1/2 clinical trial.
August 24, 2024	Reset Date for Class A Warrants exercise price to $4.69.
September 2024	Obtained Fast Track designation by FDA for ATR-04.
October 3, 2024	Board of Directors approved amendments to the 2023 Plan (stock increase and evergreen provision).
November 20, 2024	Stockholders approved amendments to the 2023 Plan.
January 14, 2025	Completed a follow-on offering (January 2025 Offering), issuing 729,381 shares at $2.00 per share.
February 5, 2025	Completed a follow-on offering (February 2025 Offering), issuing 374,696 shares and warrants.
First half of 2025	Reported initial clinical safety results for ATR-12.
April 24, 2025	Entered into an Equity Line of Credit (ELOC) with Alumni Capital LP for up to $20 million.
June 23, 2025	Stockholders approved the sale and issuance of more than 19.99% of outstanding common stock under the ELOC.
July 2025	Amended and restated Certificate of Incorporation, increasing authorized common stock to 200,000,000 shares.
August 21, 2025	Effected a 6.66-for-1 reverse stock split.
August 26, 2025	Entered into a Modification Agreement with Alumni Capital to amend ELOC terms.
September 30, 2025	End of the quarterly reporting period.
Third quarter of 2025	Dosed the first patient in the ATR-04 Phase 1/2 clinical trial.
October 1, 2025	Received a deficiency letter from NYSE American regarding non-compliance with listing standards.
October 31, 2025	Submitted a plan of compliance to NYSE American.
November 11, 2025	Number of shares of common stock outstanding was 10,204,938.
November 12, 2025	Date of filing and evaluation of subsequent events.
December 31, 2026	Term end for the Equity Line of Credit with Alumni Capital LP.
April 1, 2027	Deadline to regain compliance with NYSE American listing standards.

Recommendation

strong sell

The company faces severe financial challenges, including a 'going concern' warning and a NYSE American delisting notice due to insufficient stockholders' equity and persistent losses. Cash reserves are critically low, and while an Equity Line of Credit provides some potential funding, it comes with significant dilution risk. The widening net loss and lack of revenue indicate a challenging path to profitability. Despite some clinical progress, the fundamental financial instability and high risk of delisting make this a highly speculative and precarious investment, warranting a strong sell recommendation for any existing holdings and avoidance for new investments.

Keywords

Azitra, AZTR, Biopharmaceutical, Dermatology, Netherton syndrome, EGFRi rash, Ichthyosis vulgaris, Clinical trials, SEC filing, 10-Q, Going concern, NYSE American, Delisting risk, Equity Line of Credit, Synthetic biology, Microbial therapeutics, S. epidermidis, FDA Fast Track, Financial results

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