aztr-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 001-41705

Azitra, Inc.

(Exact name of registrant as specified in its charter)


Delaware						46-4478536
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

21 Business Park Drive

Branford, CT 06405

(Address of principal executive offices and zip code)

(203)-646-6446

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock: Par value $0.0001

AZTR

NYSE American, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding as of May 13, 2025 was 16,476,354.


		Page

	PART I - FINANCIAL INFORMATION	F-1

Item 1.	Financial Statements	F-1

	Condensed Balance Sheets	F-1

	Condensed Statements of Operations	F-3

	Condensed Statements of Preferred Stock and Stockholders' Equity	F-4

	Condensed Statements of Cash Flows	F-5

	Notes to Unaudited Condensed Financial Statements	F-6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	8

Item 4.	Controls and Procedures	9

	PART II - OTHER INFORMATION	9

Item 1A.	Risk Factors	9

Item 6.	Exhibits	10

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements.

AZITRA, INC.

CONDENSED BALANCE SHEETS




	March 31, 2025		December 31, 2024
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	3,206,710	$	4,554,719
Accounts receivable	—		233

Tax credits receivable	103,046		101,663

Deferred offering costs	—		4,106
Prepaid expenses	561,798		567,569
Total current assets	3,871,554		5,228,290

Property and equipment, net	621,012		653,957
Financing lease right-of-use asset	20,652		24,522
Operating lease right-of-use asset	447,903		527,393
Intangible assets, net	244,140		246,420
Deferred patent costs	620,253		593,802
Deferred issuance costs	35,435		37,477
Other assets	46,942		46,941
Total assets	$	5,907,891	$	7,358,802

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	558,924		490,255
Income tax payable	—		11,572
Current financing lease liability	16,456		16,066
Current operating lease liability	237,647		255,177
Accrued expenses	467,394		602,787

Total current liabilities	1,280,421		1,375,857

Long-term financing lease liability	5,843		10,105
Long-term operating lease liability	213,765		274,161
Warrant liability	238		381

Total liabilities	1,500,267		1,660,504

Commitments and contingencies (Note 11)

The accompanying notes are an integral part of these unaudited condensed financial statements.

F-1

AZITRA, INC.

CONDENSED BALANCE SHEETS


Stockholders' equity
Preferred stock; $0.0001 par value; 10,000,000 shares authorized at March 31, 2025 and December 31, 2024; 0 shares issued at March 31, 2025 and December 31, 2024	—		—
Common stock; $0.0001 par value, 100,000,000 shares authorized at March 31, 2025 and December 31, 2024, 14,979,354 and 7,626,056 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively	1,498		763
Additional paid-in capital	65,040,296		63,263,360
Accumulated deficit	(60,634,170)		(57,565,825)
Total stockholders' equity	4,407,624		5,698,298
Total liabilities and stockholders' equity	$	5,907,891	$	7,358,802

F-2

The accompanying notes are an integral part of these unaudited condensed financial statements.

AZITRA, INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


	For the Three Months Ended March 31,
	2025		2024



Operating expenses:
General and administrative	$	1,850,138	$	1,488,527
Research and development	1,250,100		1,472,970
Total operating expenses	3,100,238		2,961,497

Loss from operations	(3,100,238)		(2,961,497)

Other income (expense):
Interest income	37,164		7,609
Interest expense	(1,293)		(915)



Change in fair value of warrants	143		28,255

Other expense	(4,121)		(6,327)
Total other income	31,893		28,622

Loss before income taxes	(3,068,345)		(2,932,875)

Income tax expense	—		—



Net loss attributable to common shareholders	$	(3,068,345)	$	(2,932,875)

Net loss per share, basic and diluted	$	(0.23)	$	(4.32)

Weighted average common stock outstanding, basic and diluted	13,171,516		678,885

F-3

The accompanying notes are an integral part of these unaudited condensed financial statements.

AZITRA, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)



	Preferred Stock	Common Stock			Additional Paid-in-Capital		Accumulated Deficit		Total Stockholders' Equity
		Shares	Amount			Shares					Amount
Balance - December 31, 2023		—	$	—	403,246		$	40	$	51,511,439		$	(48,598,333)	$	2,913,146

Exercise of stock options		—	—		1,333		—		19,100			—		19,100
Follow-on public offering, net of issuance costs of $709,426		—	—		555,567		56		4,290,618			—		4,290,674
Stock-based compensation		—	—		—		—		34,171			—		34,171
Net loss		—	—		—		—		—			(2,932,875)		(2,932,875)
Balance, March 31, 2024		—	$	—	960,146		$	96	$	55,855,328		$	(51,531,208)	$	4,324,216
















	Preferred Stock	Common Stock			Additional Paid-in-Capital		Accumulated Deficit		Total Stockholders' Equity
		Shares	Amount			Shares					Amount
Balance - December 31, 2024		—	$	—	7,626,056		$	763	$63,263,360			$	(57,565,825)	$	5,698,298
Exercise of stock options		—	—		—		—		—			—		—
Follow-on public offering, net of issuance costs of $269,948		—	—		4,857,780		486		1,185,807			—		1,186,293
Follow-on public offering, net of issuance costs of $133,076					2,495,518		249		560,727			—		560,976
Stock-based compensation		—	—		—		—		30,402			—		30,402
Net loss		—	—		—		—		—			(3,068,345)		(3,068,345)
Balance, March 31, 2025		—	$	—	14,979,354		$	1,498	$	65,040,296		$	(60,634,170)	$	4,407,624

F-4

The accompanying notes are an integral part of these unaudited condensed financial statements.

AZITRA, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)


	For the Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net loss	$	(3,068,345)	$	(2,932,875)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	34,055		32,446

Amortization of right-of-use assets	83,360		82,467
Change in foreign currency rates on remeasurement of Canadian fixed assets	—		3,757

Stock based compensation	30,402		34,171
Change in fair value of warrant liability	(143)		(28,155)



Gain/Loss on disposal of property and equipment	(1,175)		—


Changes in operating assets and liabilities:
Accounts receivable	233		96,398
Prepaid expenses	5,771		65,126
Other assets	—		219
Tax credits receivable	(1,383)		(7,133)
Income tax payable/receivable	(11,572)		(7,399)
Accounts payable and accrued expenses	(65,039)		(281,096)

Operating lease liability	(77,926)		(77,934)

Net cash used in operating activities	(3,071,762)		(3,020,008)

Cash flows from investing activities:

Proceeds from sale of property and equipment	3,153		—
Deferred patent costs	(24,839)		(81,078)


Net cash used in investing activities	(21,686)		(81,078)

Cash flows from financing activities


Principal payments on finance leases	(3,872)		(3,519)
Proceeds from public offerings, net	1,749,311		4,290,674
Proceeds from exercise of stock options	—		19,100
Net cash provided by financing activities	1,745,439		4,306,255

Net change in cash and cash equivalents	(1,348,009)		1,205,169

Cash and cash equivalents at beginning of period	4,554,719		1,795,989
Cash and cash equivalents at end of period	$	3,206,710	$	3,001,158

F-5

The accompanying notes are an integral part of these unaudited condensed financial statements.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1. Organization and Nature of Operations

Azitra, Inc. (the "Company") was founded on January 2, 2014. It is a synthetic biology company focused on screening and genetically engineering microbes of the skin. The mission is to discover and develop novel therapeutics to create a new paradigm for treating skin disease. The Company’s discovery platform is screened for naturally occurring bacterial cells with beneficial effects. These microbes are then genomically sequenced and engineered to make cellular therapies, recombinant therapeutic proteins, peptides and small molecules for precision treatment of dermatology diseases. On May 17, 2023, the Company changed its name to from “Azitra Inc” to “Azitra, Inc.”

In addition to our corporate headquarters located in Branford, Connecticut, the Company maintains a location in Montreal, Canada for certain research activities. The Company also opened a manufacturing and laboratory space in Groton, Connecticut during 2021.

Stock Splits, Change in Par Value, and Initial and Follow-on Public Offerings

In June 2023, the Company completed its initial public offering (IPO) in which it issued and sold 50,000 shares of its common stock at a price to the public of $150.00 per share. The shares began trading on the NYSE American on June 16, 2023 under the symbol “AZTR”. The net proceeds received by the Company from the offering were $6.0 million, after deducting underwriting discounts, commissions and other offering expenses.

Immediately prior to the effectiveness of the Company’s registration statement, the Company effected a 7.1-for-1 forward stock split (the "Forward Stock Split") of its issued and outstanding shares of common stock (the Forward Stock Split). On May 17, 2023, the Company changed the par value of its capital stock from $0.01 to $0.0001. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been adjusted retroactively, unless otherwise noted, to reflect the effect of the Forward Stock Split. Refer to Note 6 for additional details relating to the Forward Stock Split.

At a special meeting of stockholders on February 20, 2025, our stockholders approved a further reverse split of our common stock at a specific ratio, ranging from one-for-two (1:2) to one-for-seven (1:7), with the exact ratio within such range and the timing of any such reverse split to be determined by our Board.

As of the date of this filing, 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. Our financial statements will not reflect the further reverse stock split until such time as it occurs.

In February 2024, the Company completed a follow-on public offering in which it issued and sold 555,567 shares of its common stock at a price to the public of $9.00 per share. The net proceeds received by the Company from the follow-on public offering were $4.3 million, after deducting underwriting discounts, commissions and other offering expenses. For further information regarding the February follow-on offering and related warrant issuance, refer to Notes 6 and 7, respectively.

On July 1, 2024, the Company effected a 30-for-1 reverse stock split of its issued and outstanding shares of common stock (the "Reverse Stock Split") and began trading on a split-adjusted basis the same day. There was no change in par value. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the Reverse Stock Split. Refer to Note 6 for additional details relating to the Reverse Stock Split.

In July 2024, the Company completed a follow-on public offering in which it issued and sold 6,665,000 shares of its common stock at a price of $1.50 per share and Class A Warrants exercisable for an aggregate 13,330,000 shares of common stock. The net proceeds received by the Company from the follow-on public offering were $9.1 million, after deducting placement agent's fees and other offering expenses. For further information regarding the July follow-on offering and related warrant issuance, refer to Notes 6 and 7, respectively.

On January 14, 2025, the Company completed a follow-on offering in which it issued and sold 4,857,780 shares of its common stock at a price of $0.30 per share. The net proceeds received by the Company from the follow-on offering were $1.2 million, after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January15, 2025. For further information regarding the January follow-on offering, refer to Notes 6 and 7 respectively.

On February 5, 2025, the Company completed a follow-on offering in which it issued 2,495,518 shares of its common stock at a public offering price of $0.28 per share and warrants to purchase up to 2,245,968 shares of common stock at an exercise price of

F-6

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

$0.54. The net proceeds received by the Company from the follow-on offering were $560,976 after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 6, 2025. For further information regarding the February follow-on offering and related warrant issuance, refer to Notes 6 and 7, respectively.

Going Concern Matters

The financial statements have been prepared on the going concern basis, which assumes that the Company will continue in operation for the foreseeable future, and which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, management has identified the following conditions and events that created an uncertainty about the ability of the Company to continue as a going concern. As of and for the for the period ended March 31, 2025, the Company has an accumulated deficit of $60.6 million, a loss from operations of $3.1 million, used $3.1 million to fund operations and had $2.6 million of working capital. These factors among others raise substantial doubt about the Company’s ability 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. The Company is still in its pre-commercialization phase and therefore does not yet have product revenue. Management plans to continue to raise funds through equity and/or debt financing to fund operating and working capital needs, however, there can be no assurance that the Company will be successful in securing additional financing, if needed, to meet its operating needs.

These conditions and events create substantial doubt about the ability of the Company to continue as a going concern for twelve months from the date that the financial statements are available to be issued. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

2. Summary of Significant Accounting Policies

Basis of Accounting

The financial statements of the Company are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Unaudited Interim Financial Information

The unaudited interim financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, within the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the results for the interim periods presented and of the financial condition as of the date of the interim balance sheet. The financial data and the other information disclosed in these notes to the interim financial statements related to the three months are unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2024, and notes thereto that are included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 24, 2025.

Use of Estimates

The preparation of the financial statement in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. While management believes the estimates and assumptions used in the preparation of the financial statement are appropriate, actual results could differ from those estimates. The most significant estimates in the Company's condensed financial statements relate to accruals for research and development expenses, valuation of warrants and valuation of equity awards. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

F-7

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Concentration of Credit Risks and other Risks and Uncertainties

Financial instruments, which potentially subject the Company to significant concentrations of risk, consist principally of cash and cash equivalents. The Company’s cash is deposited with a federally insured U.S. financial institution. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

The Company is dependent on contract research organizations ("CRO") to conduct, and manage our on-going clinical trials, and contract manufacturing organizations (“CMO”) to supply products for research and development of its product candidates, including preclinical and clinical studies, and for commercialization of its product candidates, if approved. The Company’s development programs could be adversely affected by any significant interruption in either the CRO's or the CMO’s operations or by a significant interruption in the supply of active pharmaceutical ingredients and other components.

Products developed by the Company require approval from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s product candidates will receive the necessary approvals. If the Company is denied approvals, approvals are delayed, or the Company is unable to maintain approvals received, such events could have a materially adverse impact on the Company.

The Company’s activities are subject to significant risks and uncertainties including the risk of failure to secure additional funding to properly execute the Company’s business plan. The Company is subject to risks that are common to companies in the pharmaceutical industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements.

Segment Information

The Company operates and manages its business as one operating segment, which is to discover and develop novel therapeutics to create a new paradigm for treating skin diseases. The Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), reviews financial information on a aggregate basis, along with cash balances for purposes of allocating resources and evaluating performance. For additional segment disclosures, see Note 15.

Deferred Offering and Deferred Issuance Costs

The Company capitalizes deferred offering costs, which primarily consisted of direct, incremental legal, professional, accounting, and other third-party fees relating to the Company’s public offering initiatives associated with the filing of an S-1 Registration Statement. Once the Company completes the public offering, the Company records these amounts against the gross proceeds of these public offerings within the statements of stockholders’ equity.

In July 2024, the Company also filed a Form S-3 Registration Statement and recorded deferred issuance costs as a long-term asset. As shares are issued against the Form S-3 Registration Statement, the Company will record these amounts on a pro-rata basis against the gross proceeds within the statements of stockholders' equity. Additional issuance costs associated with the shares will also be recorded against the gross proceeds within the statements of stockholders' equity.

Leases

The Company elected to account for non-lease components as part of the lease component to which they relate. Lease accounting involves significant judgments, including making estimates related to the lease term, lease payments, and discount rate. In accordance with the guidance, the Company recognized ROU assets and lease liabilities for all leases with a term greater than 12 months. Leases are classified as either operating or financing leases based on the economic substance of the agreement.

The Company has 3 operating leases for buildings with a ROU asset and lease liability totaling $1,418,502. The basis, terms and conditions of the leases are determined by the individual agreements. The Company’s option to extend certain leases ranges from 36 – 52 months. All options to extend have been included in the calculation of the ROU asset and lease liability. The leases do not contain residual value guarantees, restrictions, or covenants that could incur additional financial obligations to the Company. There are no subleases, sale-leaseback, or related party transactions.

At March 31, 2025, the Company had operating right-of-use assets with a net value of $447,903 and current and long-term operating lease liabilities of $237,647 and $213,765, respectively.

F-8

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

In 2023, the Company entered into a lease for the use of certain equipment that is classified as a finance lease. The finance lease has a term of 36 months. At March 31, 2025, the Company had financing right-of-use assets with a net value of $20,652 and current and long-term operating lease liabilities of $16,456 and $5,843, respectively.

Deferred Patent Costs

Deferred patent costs represent legal and filing expenses incurred related to the submission of patent applications for patents pending approval. These deferred costs will be reclassed to intangible assets and begin to be amortized over their estimated useful lives upon the formal approval of the patent. If the patent is not issued, the costs associated with the patent will be expensed in the year the patent was rejected. Deferred patent costs are reviewed for impairment at each reporting period. The costs associated with any impairment are expensed in the period the deferred patent costs are determined to be impaired.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification (ASC) subtopic 730-10, Research and Development. Accordingly, research and development costs are expensed as incurred. Research and development costs consist of costs related to labor, materials and supplies, as well as fees paid to consultants, external research fees. Research and development costs incurred were $1,250,100 and $1,472,970 during the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025 and December 31, 2024, the Company had state tax credit receivables of $65,676 for pending refunds related to the selling of research and development tax credits back to the State of Connecticut. At March 31, 2025 and December 31, 2024, the Company had $27,666 for pending refunds related to Canadian Scientific Research and Experimental Development (SRED) credits. At March 31, 2025 and December 31, 2024, the Company had recorded $9,704 and $8,321, respectively, related to refunds of Canadian Goods and Services Tax (GST) and Quebec Sales Tax (QST). Receipts of refunds are recorded in research and development on the statements of operations.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement: Reporting Comprehensive Income— Expense Disaggregation Disclosures, which requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement, as well as disclosures about selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

F-9

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

3. Property and Equipment

Property and equipment consisted of the following at:


	March 31, 2025		December 31, 2024
Laboratory equipment	$	1,070,032	$	1,070,032
Computers and office equipment	30,825		30,825
Furniture and fixtures	20,164		24,316
Leasehold improvements	28,855		28,855
Building equipment	14,932		14,932
Total property and equipment	1,164,808		1,168,960
Less accumulated depreciation & amortization	(543,796)		(515,003)
Total property and equipment, net	$	621,012	$	653,957

Depreciation and amortization expense was $30,967 and $29,935 for the three months ended March 31, 2025 and 2024, respectively. Fixed assets are reviewed for impairment each reporting period. The Company recorded gains on disposal of assets of $1,175 and $0 for the three months ended March 31, 2025 and 2024, respectively.

4. Intangible Assets

Intangible assets consisted of the following at:

March 31, 2025:


	Estimated Useful Life	Gross Amount		Accumulated Amortization		Impairment		Net Amount
Trademarks	Indefinite	$	60,244	$	—	$	—	$	60,244
Patents	17 years	213,931		30,035		—		183,896

Intangible assets		$	274,175	$	30,035	$	—	$	244,140

December 31, 2024:


	Estimated Useful Life	Gross Amount		Accumulated Amortization		Impairment		Net Amount
Trademarks	Indefinite	$	60,244	$	—	$	—	$	60,244
Patents	17 years	213,122		26,946		—		186,176

Intangible assets		$	273,366	$	26,946	$	—	$	246,420

During the three months ended March 31, 2025 and 2024, amortization expense related to intangible assets was $3,088 and $2,511, respectively.

F-10

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

5. Accrued Expenses

Accrued expenses consisted of the following at:


	March 31, 2025		December 31, 2024
Employee payroll and bonuses	$	149,991	$	410,781
Vacation	64,633		32,969
Research and development projects	73,810		75,047

Professional fees	171,418		82,762
Other	7,542		1,228
Total accrued expenses	$	467,394	$	602,787

6. Stockholders’ Equity

On May 17, 2023, the Company effected a 7.1-for-1 Forward Stock Split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The par value of the common stock was adjusted as a result of the Forward Stock Split from $0.01 to $0.0001 and the authorized shares were increased to 100,000,000 shares of common stock in connection with the Forward Stock Split. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Forward Stock Split for all periods presented. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities.

On February 16, 2024, the Company completed a follow-on offering of an aggregate of 555,567 shares of its common stock at a public offering price of $9.00 per share. The gross proceeds from the offering, before deducting the placement agent's fees and other offering expenses, were approximately $5.0 million.

As consideration for ThinkEquity LLC serving as the placement agent for the offering (the "Placement Agent"), the Company paid the Placement Agent a cash fee of 7.5% of the aggregate gross proceeds of the Offering and reimbursed the Placement Agent for certain expenses, legal fees for a total of $537,559, and issued Placement Agent Warrants to designees to the Placement Agent.

On July 1, 2024, the Company effected a 30-for-1 Reverse Stock Split of its issued and outstanding shares of common stock and began trading on a split-adjusted basis the same day. There was no change to the par value of the common stock. In lieu of any fractional shares issued as a result of the split the Company paid a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented unless otherwise noted. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately decreased and the respective per share value and exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.

On July 25, 2024, the Company completed a follow-on offering of an aggregate of 6,665,000 shares of its common stock and Class A warrants to purchase 13,330,000 shares of common stock, at a combined public offering price of $1.50. The Class A warrant had an initial exercise price of $1.50 per share, are exercisable immediately upon issuance, and will expire on the fifth anniversary of the original issuance date. However, if on the date that was 30 calendar days immediately following the date of issuance of the Class A Warrants, or August 24, 2024 (the “Reset Date”), the Reset Price, as defined below, was less than the exercise price at such time, the exercise price would be decreased to the Reset Price. “Reset Price” is defined as 100% of the trailing five-day VWAP immediately preceding the Reset Date, provided, that in no event would the Reset Price be less than $0.32 (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions), which represented 20% of the most recent closing price for the Common Stock at the time of execution of the placement agent agreement with respect to the offering. The Reset Price of the Class A

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NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Warrants as calculated on the Reset Date was $0.7043. The number of shares of Common Stock issuable upon exercise of the Class A Warrants has not been proportionately adjusted due to the reset of the exercise price.

In consideration for Maxim Group LLC serving as the placement agent of the offering (the “Placement Agent”), the Company paid the Placement Agent a cash fee equal to 7% of the aggregate gross proceeds of the Offering, reimbursed the Placement Agent for certain expenses and legal fees for a total of $809,825, and issued Placement Agent Warrants.

The gross proceeds from the offering, before deducting the placement agent’s fees and other offering expenses, were approximately $10.0 million.

On January 14, 2025, the Company completed a follow-on offering in which it issued and sold 4,857,780 shares of its common stock at a price of $0.30 per share. The net proceeds received by the Company from the follow-on offering were $1.2 million, after deducting underwriting discounts, commissions and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated January15, 2025.

In consideration for Maxim Group LLC serving as the placement of the Offering (the "Placement Agent"), the Company paid the Placement Agent a cash fee equal to 7.0% of the aggregate gross proceeds raised in the Offering and the reimbursed the Placement Agent for certain expenses and legal fees of $60,000. The Company also issued warrants to designees of the Placement Agent (the "Placement Agent Warrants").

On February 5, 2025, the Company completed a follow-on offering in which it issued 2,495,518 shares of its common stock at a public offering price of $0.2785 per share and warrants to purchase up to 2,245,968 shares of common stock. The net proceeds received by the Company from the follow-on offering were $561 thousand after deducting placement agent's fees and other offering expenses. The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 filed with the SEC on July 1, 2024, and a final prospectus supplement dated February 6, 2025.

In consideration for Maxim Group LLC serving as the placement of the Offering (the "Placement Agent"), the Company paid the Placement Agent a cash fee equal to 4.0% of the aggregate gross proceeds raised in the Offering, reimbursed the Placement Agent for certain expenses and legal fees of $35,000, and issued Placement Agent Warrants.

Common Stock

At March 31, 2025 and December 31, 2024, per the Company’s amended and restated Certificate of Incorporation, the Company was authorized to issue 100,000,000 shares of $0.0001 par value common stock.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

The Company currently has 16,110,501 shares of common stock reserved for future issuance for the potential exercise of stock options and warrants outstanding at March 31, 2025.

Except as otherwise indicated, all share and share price amounts in this report gives effect to a forward stock split effected on May 17, 2023 at a ratio of 7.1-for-1, and the reverse stock split effected on July 1, 2024 at a ratio of 1-for-30. At a special meeting of stockholders on February 20, 2025, our stockholders approved a further reverse split of our common stock at a specific ratio, ranging from one-for-two (1:2) to one-for-seven (1:7), with the exact ratio within such range and the timing of any such reverse split to be determined by our Board.

Preferred Stock

At March 31, 2025 and December 31, 2024, per the Company’s amended and restated Certificate of Incorporation, the Company has authorized 10,000,000 shares of $0.0001 par value preferred stock.

Upon the close of the Company’s IPO in June 2023, all of the then outstanding preferred stock converted to common stock, resulting in the issuance of shares of common stock in exchange for outstanding Series A (48,608 shares), Series A-1 (98,828 shares), and Series B Preferred Stock (109,485 shares), respectively. There was no gain or loss upon conversion.

7. Warrants

The Company issued warrants to purchase 1,596 shares of common stock in 2018 in conjunction with convertible debt financing that have a redemption provision providing the holder the right to have the Company redeem all or any portion of the warrant (or shares it

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NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

has converted into) at a purchase price equal to the fair market value of the shares as determined by the board of directors or an independent appraiser. As a result of this redemption provision, the warrants have been classified as a liability in the financial statements based on ASC 480. These warrants have an exercise price of $14.40 per share and a term of 10 years. The warrants are marked to market each reporting period. The fair value was $238 and $381 at March 31, 2025 and December 31, 2024, respectively.

The Company issued 2,000 warrants to its underwriters as part of our initial public offering in fiscal 2023. In fiscal 2024, the Company issued an additional 22,223 warrants in February, and 266,600 warrants in July to its underwriters as part of our follow-on offerings in fiscal 2024. The underwriter warrants have a term of 5 years.

In connection with the February 2024 follow-on offering, the Company also issued warrants to designees to the placement agent exercisable for an aggregate of 22,223 shares of Common Stock at an exercise price of $11.40 per share (125% of the $9.00 public offering price) and which expire on February 16, 2029. The warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.

The Company issued 13,330,000 Class A Warrants to investors who participated in the Company's July 2024 follow-on public offering. The Class A Warrants had an initial exercise price of $1.50 per share of Common Stock, however on August 24, 2024 the exercise price was reset to $0.7043. See Note 6. The number of shares of Common Stock issuable upon exercise of the Class A Warrants were not proportionately adjusted in connection with the reset of the exercise price.

The Class A Warrants are exercisable upon issuance and expire five years from the date of issuance. The Class A Warrants contain ownership limitations pursuant to which a holder does not have the right to exercise any portion of their warrants if it would result in the holder (together with its affiliates) beneficially owning more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding Common Stock. The Class A Warrants are issued pursuant to a Warrant Agent Agreement dated July 25, 2024 (“Warrant Agent Agreement”) between the Company and VStock Transfer LLC, as warrant agent.

In connection with the July 2024 follow-on public offering, the Company evaluated the Class A Warrants and determined they met the criteria for liability classification as they met the criteria in ASC 815 - Derivatives and Hedging due to the reset provision. The Class A Warrants had an initial fair value of $12.1 million. The gross proceeds of $10.0 million from the July 2024 follow-on public offering was allocated to the Class A Warrants resulting in a loss on issuance of common stock of approximately $2.1 million recorded in Other income (expenses). Upon the reset of the Class A Warrant exercise price, the Class A Warrants no longer met the criteria for liability classification pursuant to ASC 815; at which time the Company recorded a gain in Other income (expenses) - Change in fair value of Class A warrants of $4.0 million, and reclassified $1.9 million to equity representing the difference between the change in the fair value, and the loss upon issuance of our common stock.

The Class A Warrants were valued utilizing a probability weighted scenario method with a Monte Carlo simulation model and Black-Scholes Model. The significant assumptions in the Monte Carlo simulation model include a stay public assumption of 90%, and a fundamental transaction assumption of 10%. The significant assumptions utilized in estimating the fair value of the Class A Warrants at issuance include (i) a per share price of common stock range of $1.14 - $1.40; (ii) a dividend yield of 0%; (iii) a risk-free rate range of 4.13% - 4.14%; (iv) expected volatility of 119%; (v) projected stock price and volume weighted average price as of the Reset Date of $1.14; (vi) a strike price range of $1.40 - $1.50; and (vii) expected term of 4.92.

In connection with the July 2024 follow-on offering, the Company also issued warrants to designees of the placement agent exercisable for an aggregate of 266,600 shares of Common Stock. The warrants have substantially the same terms as the Class A Warrants, except that the placement agent warrants have an exercise price equal to $1.875 per share (125% of the $1.50 public offering price), have an initial exercise date of January 23, 2025 and expire on July 23, 2029. The placement agent warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.

In connection with the January 2025 follow-on offering, as consideration for Maxim Group LLC serving as the placement agent of the Offering, the Company also issued warrants to designees of the placement agent exercisable for an aggregate of 194,311 shares of Common Stock, which represent 4.0% of the aggregate number of shares of common stock sold in the offering, at an exercise price per share equal to 125% of the public offering price of $0.375. The warrants are exercisable six months from the date of issuance and expire five years from the commencement of the sales in this offering. The warrants may be exercisable via cashless exercise in certain circumstances. The warrants were evaluated in accordance with ASC 718 and recorded within stockholders' equity.

In connection with the February 5, 2025 follow-on offering, the Company issued warrants to purchase up to 2,245,968 shares of common stock at an exercise price of $0.54. The warrants are exercisable on the six-month and one day anniversary of their issuance,

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NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

and their exercise price was calculated as the greater of the (1) book value of the common stock or (ii) market value of the common stock as determined by the NYSE American Rules.

The following table summarizes information about warrants outstanding at March 31, 2025:


			Warrants Outstanding				Warrant Exercisable
Year Granted	Exercise Price		Number of Warrants at 03/31/2025	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Warrants at 03/31/2025	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price

2018	$	14.40	1,596	3.0 years	$	14.40	1,596	3.0 years	$	14.40
2019	$	158.40	7,195	0.9 years	$	158.40	7,195	0.9 years	$	158.40
2023	$	187.50	2,000	3.2 years	$	187.50	2,000	3.2 years	$	187.50
2024	$	11.40	22,223	3.9 years	$	11.40	22,223	3.9 years	$	11.40
2024	$	0.70	13,329,000	4.3 years	$	0.70	13,329,000	4.3 years	$	0.70
2024	$	1.88	266,600	4.3 years	$	1.88	266,600	4.3 years	$	1.88
2025	$	0.38	194,311	4.8 years	$	0.38	—	0.0 years	$	—
2025	$	0.54	2,245,968	4.9 years	$	0.54	—	0.0 years	$	—
			16,068,893		$	0.80	13,628,614		$	0.85

8. Stock Options

In March 2023, the Company’s Board of Directors and stockholders approved the 2023 Stock Incentive Plan (“2023 Plan”). The 2023 Plan allows the Compensation Committee to grant up to 1,211,068 shares of Common Stock in the form of incentive and non-statutory stock options, restricted stock awards, restricted stock units, and other stock-based awards to employees, directors, and non-employees. As of March 31, 2025, options to purchase 1,333 shares of common stock had been granted and were outstanding under the 2023 Plan and 1,209,734 shares of common stock were available for grant under the plan. On October 3, 2024, the Company’s Board of Directors approved amendments to the 2023 Plan that, subject to stockholder approval, would (i) increase the number of shares of Common Stock that may be issued under the 2023 Plan by 1,144,401 shares and (ii) adopt an evergreen provision to the 2023 Plan providing for an automatic 5% annual increase in the shares of Common Stock available for issuance under the 2023 Plan over the next 10 years. Both amendments were approved by the Company’s stockholders at the Company’s annual stockholder meeting held on November 20, 2024.

During 2016, the Company established the Azitra Inc. 2016 Stock Incentive Plan ("2016 Plan") which provides for the grant up to

SEC Form 10-Q filed by Azitra Inc