Viskase Holdings, Inc 10-Q for FY2025 Q3
Viskase Holdings, Inc. (VISK)
About this 10-Q
Viskase Holdings, Inc filed this 10-Q on November 12, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $824K
- compared with net income of $254K a year earlier
- Diluted EPS
- -$0.02
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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
(Exact name of registrant as specified in its charter)
(State of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
| N/A | | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| |
Large accelerated filer ☐ | 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
Shares of Common Stock outstanding as of November 4, 2025:
ENZON PHARMACEUTICALS, INC.
Table of Contents
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 | |
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2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
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| September 30, |
| December 31, | ||
| | 2025 | | 2024 | ||
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| (Unaudited) |
| | | |
ASSETS |
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Current assets: |
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Cash and cash equivalents | | $ | | | $ | |
Other current assets | |
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Total current assets | | | | | | |
Deferred tax asset | | | | | | |
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Total assets | | $ | | | $ | |
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LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY | |
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Current liabilities: | |
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Accounts payable | | $ | | | $ | |
Accrued expenses and other current liabilities | |
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Dividends payable on Series C preferred stock | | | — | | | |
Total current liabilities | | | | | | |
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Commitments and contingencies | |
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Mezzanine equity: | | | | | | |
Series C preferred stock - $ | | | | | | |
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Stockholders’ (deficit) equity: | |
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Preferred stock - $ | |
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Common stock - $ | |
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Additional paid-in capital | |
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Accumulated deficit | |
| ( | | | ( |
Total stockholders’ (deficit) equity | |
| ( | | | |
Total liabilities, mezzanine equity and stockholders’ (deficit) equity | | $ | | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | Three months ended | | Nine months ended | ||||||||
| | September 30, | | September 30, | ||||||||
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| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Revenues: | | | | | | | | | | | | |
Royalties and milestones, net | | $ | — | | $ | — | | $ | — | | $ | |
Total revenues | |
| — | | | — | | | — | | | |
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Operating expenses: | |
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General and administrative | |
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Transaction expenses | | | | | | — | | | | | | — |
Total operating expenses | |
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Operating loss | |
| ( | | | ( | | | ( | | | ( |
Interest and dividend income | | | | | | | | | | | | |
| | | | | | | | | | | | |
(Loss) income before income (expense) benefit | | | ( | | | | | | ( | | | |
| | | | | | | | | | | | |
Income tax (expense) benefit | |
| ( | | | ( | | | | | | ( |
| | | | | | | | | | | | |
Net (loss) income | | | ( | | | | | | ( | | | |
Accretion of dividend on Series C preferred stock | | | ( | | | ( | | | ( | | | ( |
Net loss available to common shareholders | | $ | ( | | $ | ( | | $ | ( | | $ | ( |
| | | | | | | | | | | | |
Loss per common share | | | | | | | | | | | | |
Basic and diluted | | $ | ( | | $ | ( | | $ | ( | | $ | ( |
| | | | | | | | | | | | |
Weighted-average number of shares – basic | | | | | | | | | | | | |
Weighted-average number of shares – diluted | |
| | | | | | | | | | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY
(In thousands)
(Unaudited)
| | Mezzanine Equity – Series C | | | | | | | | | | | | | | | | |||
| | Preferred Stock | | | Common Stock | | Additional | | | | | Total | ||||||||
| | Number of | | Par | | | Number of | | Par | | Paid-in | | Accumulated | | Stockholders’ | |||||
|
| Shares |
| Value |
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| Shares |
| Value |
| Capital |
| Deficit |
| Equity | |||||
Balance, December 31, 2023 | | | | $ | | | | | | $ | | | $ | | | $ | ( | | $ | |
Net income | | — | | | — | | | — | | | — | | | — | | | | | | |
Preferred stock dividend accretion |
| — | | | | | | — | | | — | | | ( | | | — | | | ( |
Balance, March 31, 2024 | | | | | | | | | | | | | | | | | ( | | | |
Net income | | — | | | — | | | — | | | — | | | — | | | | | | |
Preferred stock dividend accretion | | — | | | | | | — | | | — | | | ( | | | — | | | ( |
Balance, June 30, 2024 | | | | | | | | | | | | | | | | | ( | | | |
Net income | | — | | | — | | | — | | | — | | | — | | | | | | |
Preferred stock dividend accretion | | — | | | | | | — | | | — | | | ( | | | — | | | ( |
Balance, September 30, 2024 |
| | | $ | | | | | | $ | | | $ | | | $ | ( | | $ | |
| | Mezzanine Equity – Series C | | | | | | | | | | | | | | | ||||
| | Preferred Stock | | | Common Stock | | Additional | | | | | Total | ||||||||
| | Number of | | Par | | | Number of | | Par | | Paid-in | | Accumulated | | Stockholders’ | |||||
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| Shares |
| Value |
|
| Shares |
| Value |
| Capital |
| Deficit |
| Equity (Deficit) | |||||
Balance, December 31, 2024 | | | | $ | | | | | | $ | | | $ | | | $ | ( | | $ | |
Net loss |
| — | |
| — | | | — | | | — | |
| — | |
| ( | |
| ( |
Preferred stock dividend accretion |
| — | | | | | | — | | | — | | | ( | | | — | | | ( |
Balance, March 31, 2025 | | | | | | | | | | | | | | | | | ( | | | |
Net loss | | — | | | — | | | — | | | — | | | — | | | ( | | | ( |
Preferred stock dividend accretion |
| — | | | | | | — | | | — | | | ( | | | — | | | ( |
Balance, June 30, 2025 | | | | | | | | | | | | | | | | | ( | | | |
Net loss | | — | | | — | | | — | | | — | | | — | | | ( | | | ( |
Preferred stock dividend accretion | | — | | | | | | — | | | — | | | ( | | | — | | | ( |
Balance, September 30, 2025 |
| | | $ | | | | | | $ | | | $ | | | $ | ( | | $ | ( |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | Nine months ended | ||||
| | September 30, | ||||
|
| 2025 |
| 2024 | ||
Cash flows from operating activities: | | | | | | |
Net (loss) income | | $ | ( | | $ | |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |
| | | | |
Deferred income taxes | |
| ( | | | |
Changes in operating assets and liabilities | | | | | | ( |
Net cash (used in) provided by operating activities | |
| ( | | | |
| | | | | | |
Cash flows from financing activities: | |
| | | | |
Preferred stock dividend payments | | | ( | | | ( |
Net cash used in financing activities | |
| ( | | | ( |
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Net decrease in cash and cash equivalents | |
| ( | | | ( |
| | | | | | |
Cash and cash equivalents, beginning of period | |
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Cash and cash equivalents, end of period | | $ | | | $ | |
| | | | | | |
Non-cash financing activities: | | | | | | |
Accretion of dividend for Series C Preferred Stock | | $ | | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1)Description of Business
Enzon Pharmaceuticals, Inc. (together with its subsidiaries, the “Company,” “Enzon,” “we” or “us”) is positioned as a public company acquisition vehicle, where it can become an acquisition platform.
Historically, the Company had received royalty revenues from licensing arrangements with other companies primarily related to sales of certain drug products that utilized Enzon’s proprietary technology. For more than
Previously, over the last few years, the Board of Directors of the Company (the “Board”) and the Company’s management have been actively involved in pursuing, sourcing, reviewing and evaluating various potential acquisition transactions consistent with its strategy. Over that time period, the Company’s management and members of the Board have engaged in numerous discussions with principals of individual companies and financial advisors on behalf of various individual companies relating to potential transactions with such parties, and have regularly evaluated the Company’s strategic alternatives.
On June 20, 2025, the Board entered into an Agreement and Plan of Merger, which was amended on October 24, 2025 (as amended, the “Merger Agreement”), pursuant to which Enzon plans to merge its wholly owned subsidiary, EPSC Acquisition Corp. (“EPSC”), with and into Viskase Companies, Inc. (“Viskase”), with Viskase continuing as the surviving entity following the merger (the “Merger”) (See Note 14). Enzon intends to file a registration statement on Form S-4 with the Securities and Exchange Commission (“SEC”) that will contain a consent solicitation statement and prospectus relating to the transactions contemplated by the Merger Agreement, including the Merger. Such registration statement will include financial information regarding proposed transaction and the combined company and stockholders of Enzon are encouraged to review such information once filed.
The Company maintains its principal executive offices at 20 Commerce Drive, Suite 135, Cranford, New Jersey 07016 through a service agreement with Regus Management Group, LLC.
(2)Summary of Significant Accounting Policies
Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared from the books and records of the Company in accordance with United States accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X promulgated by the SEC. Accordingly, these financial statements do not include all of the information and footnotes required for complete annual financial statements. Interim results are not necessarily indicative of the results that may be expected for the full year. Interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, SCA Ventures, Inc. and EPSC. All intercompany balances and transactions have been eliminated as part of the consolidation.
7
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(2)Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include legal and contractual contingencies and income taxes. Although management bases its estimates on historical experience, relevant current information and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ from these estimates.
Revenue Recognition
Royalty revenues from the Company’s agreements with third parties and pursuant to the sale of the Company’s former specialty pharmaceutical business are recognized when the Company can reasonably determine the amounts earned. In most cases, this will be upon notification from the third-party licensee, which is typically during the quarter following the quarter in which the sales occurred. The Company does not participate in the selling or marketing of products for which it receives royalties. Because the Company records revenue only when collection is assured,
Contingent payments with third parties and pursuant to the sale of the Company’s former specialty pharmaceutical business are recognized as income when the milestone has been achieved and collection is assured, such payments are non-refundable and no further effort is required on the part of the Company or the other party to complete the earning process.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized. The effect of a change in tax rates or laws on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date of the rate change. A valuation allowance is established to reduce the deferred tax assets to the amounts that are more likely than not to be realized from operations.
Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has
Reclassifications
General and administrative expenses have been reclassified from the prior quarter ended March 31, 2025 to conform to the current period’s presentation for the nine months ended September 30, 2025. Such reclassifications had no effect on the Company’s prior quarter results of operations or financial position.
8
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(3)Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact the adoption of this standard on its financial statements but does not expect it to be material.
In November 2024, the FASB issued ASU 2024-03, Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses which requires disaggregated disclosure of income statement expenses for public entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for the Company in its annual reporting on January 1, 2027. The Company does not plan to adopt this standard early. The Company is currently evaluating the effect that the adoption of ASU 2024-03 will have on the Company’s disclosures.
Other recent Accounting Standards Updates issued by the FASB and guidance issued by the SEC did not, or are not believed by management to, have a material effect on the Company’s present or future condensed consolidated financial statements.
(4)Financial Instruments and Fair Value
The carrying values of cash and cash equivalents, other current assets, accounts payable, accrued expenses and other current liabilities in the Company’s consolidated balance sheets approximated their fair values at September 30, 2025 and December 31, 2024 due to their short-term nature. As of each of September 30, 2025 and December 31, 2024, the Company held cash equivalents aggregating approximately $
(5)Supplemental Cash Flow Information
The Company made
(6)Accounts Payable and Accrued Expenses
Prior to 2017, the Company’s primary source of royalty revenues was derived from sales of PegIntron, which is marketed by Merck & Co., Inc. (“Merck”). At December 31, 2022, we recorded a to Merck of approximately $
Accrued expenses and other current liabilities consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):
|
| September 30, |
| December 31, | ||
|
| 2025 |
| 2024 | ||
Professional and consulting fees | | $ | | | $ | |
Accrued transaction costs | | | | | | — |
Other | | | | | | |
| | $ | | | $ | |
9
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(7)Loss Per Common Share
Basic and diluted earnings (loss) per common share (EPS) is calculated by dividing net (loss) income, less any dividends, accretion or reduction or redemption on the Company’s Series C Preferred Stock, by the weighted average number of common shares outstanding during the reported period. There are
| | Three months ended | | Nine months ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
(Loss) Income Per Common Share - Basic and Diluted: | | | | | | | | | | | | |
Net (loss) income | | $ | ( | | $ | | | $ | ( | | $ | |
Accretion of dividend on Series C preferred stock | | | ( | | | ( | | | ( | | | ( |
Net loss available to common shareholders | | $ | ( | | $ | ( | | | ( | | $ | ( |
| | | | | | | | | | | | |
Weighted-average number of common shares outstanding | |
| | | | | | | | | | |
| | | | | | | | | | | | |
Basic and diluted loss per common share | | $ | ( | | $ | ( | | $ | ( | | $ | ( |
(8)Income Taxes
Income Taxes
During the nine-month period ended September 30, 2025 the Company recorded approximately $
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Because of the inherent uncertainties, including future interest rates and other factors, including, but not limited to, if the Merger will close, projecting long-term future performance of the Company is problematic. Accordingly, the Company is only projecting pre-tax book income through the expected closing date of the pending transaction with Viskase. Upon review of positive and negative evidence in determining a partial reversal of the valuation allowance, the Company has concluded that a partial reversal of the valuation allowance is necessary. Accordingly, deferred tax expense of $
Management of the Company will continue to assess the need for this valuation allowance and will make adjustments when or if appropriate.
At September 30, 2025, the Company had federal net operating loss carryforwards (“NOLs”) of approximately $
10
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(8)Income Taxes (continued)
At September 30, 2025,
The Company’s ability to use the NOLs and R&D tax credit carryforwards may be limited, as they are subject to certain limitations due to ownership changes as defined by rules pursuant to Section 382 of the Internal Revenue Code of 1986 (“IRC”), as amended (“Section 382”), or may otherwise expire before the Company has the opportunity to use them. In an effort to protect stockholder value by attempting to protect against a possible limitation on the Company’s ability to use its NOLs, the Board adopted a Section 382 rights plan. (See Note 10 to the Condensed Consolidated Financial Statements.)
The Company has not recorded a liability for unrecognized income tax benefits.
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act, which includes several changes to U.S. federal income tax law, including the temporary and permanent extension, of expiring provisions of the Tax Cuts and Jobs Act of 2017. The Company accounted for the tax effects of the legislation, including NOLs and tax credits, in the period of enactment, which is the third quarter of 2025, and concluded that the impact was not material.
(9)Commitments and Contingent Liabilities
The Company may be involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material effect on the Company’s consolidated financial position, results of operations, or liquidity.
(10)Section 382 Rights Plan
In 2020, in an effort to protect against certain acquisitions of the Company’s common stock (including unapproved third party initiated transactions), which could possibly limit the Company’s ability to utilize its NOLs if the overall transaction was not beneficial to shareholders, the Board adopted a Section 382 rights plan (referred to as the Rights Agreement). As noted above, the Company entered into the Merger Agreement, which requires that the Rights Agreement be terminated prior to the effective time of the Merger. On August 13, 2025, Enzon entered into an amendment to the Rights Agreement to provide that the Final Expiration Date (as defined in the Rights Agreement) of the rights issued thereunder would be the close of business on September 30, 2025. On September 30, 2025, Enzon entered into an amendment to the Rights Agreement to provide that the Final Expiration Date (as defined in the Rights Agreement) of the rights issued thereunder would be the close of business on December 31, 2025. If the Merger has not closed by December 31, 2025, Enzon may seek to further extend the Final Expiration Date under the Rights Agreement. Once the Rights Agreement terminates, the protections afforded by the Rights Agreement will no longer be in effect. Details of that plan are disclosed in summary in the Company’s Form 10-K for December 31, 2024, as amended, and in detail in Exhibits 4.2, 4.3, 4.4 and 4.5 thereto, and in Exhibit 4.1 and 4.2 hereto.
11
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(11)Series C Preferred Stock and Rights Offering
On September 1, 2020, the Board approved a Rights Offering. As a result of the sale of all
On an annual basis, the Board may, at its sole discretion, cause a dividend with respect to the Series C Preferred Stock to be paid in cash to the holders in an amount equal to
Since November 1, 2022, the Company has been able to redeem the Series C Preferred Stock at any time, in whole or in part, for an amount based on the liquidation preference per share as in effect at such time. Holders of Series C Preferred Stock have the right to demand that the Company redeem their shares in the event that the Company undergoes a change of control as defined in the Certificate of Designation of the Series C Preferred Stock.
On December 20, 2024, the Board declared a cash dividend of
As of September 30, 2025, the Board had not yet determined whether to declare a cash dividend at the end of 2025. Under the terms of the Merger Agreement, the Board cannot declare a cash dividend on the Series C Preferred Stock without the consent of Viskase. Accordingly, the Company accrued an accretion at
The Series C Preferred Stock is currently redeemable solely at the option of the Company. Accordingly, the Series C Preferred Stock has been classified in mezzanine equity on the Condensed Consolidated Balance Sheets. If a change of control occurs, which would occur if the Merger is consummated, the Series C Preferred Stock would also become redeemable at the option of the holder. See Note 14 for the treatment of, and actions expected to be taken with respect to, the Series C Preferred Stock in connection with the Merger.
Since the redemption of the Series C Preferred Stock is contingently or optionally redeemable, unless and until the Company undertakes a change of control, the Series C Preferred Stock has been classified in mezzanine equity on the Company’s Condensed Consolidated Balance Sheets.
(12)Cash and Cash Equivalents
The Company defines cash equivalents as highly liquid, short-term investments with original maturities of three months or less. These financial instruments potentially subject the Company to concentrations of credit risk. The Company maintains deposit accounts with several financial institutions. These balances are partially insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor, per FDIC-insured bank, per ownership category. Such deposits may exceed FDIC insurance limits. Although the Company currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the nine-month periods ended September 30, 2025 and 2024 and for the year ended December 31, 2024.
12
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(13)Segment Reporting
Accounting Standards Codification (“ASC”) 280, Segment Reporting, establishes standards for reporting operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements.
The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who is also its chief financial officer. As the Company is a public company acquisition vehicle, where it can become an acquisition platform, has no operating activities and derives the majority of its income from interest, the Company’s CODM evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. As such, the Company operates as
(14)Merger Agreement
On June 20, 2025, the Company, EPSC Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Viskase entered into the Merger Agreement, which was amended on October 24, 2025 by the First Amendment to the Merger Agreement (the “Merger Agreement Amendment”). Upon the terms and subject to the satisfaction or waiver of the conditions described in the Merger Agreement, at the effective time of the Merger, Merger Sub will be merged with and into Viskase, with Viskase continuing as the surviving entity following the Merger as a wholly owned subsidiary of Enzon (the “Merger”). Following the Merger, Viskase will be converted into a limited liability company and will operate under the name “Viskase Companies, LLC.” The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. Following the consummation of the Merger, it is anticipated that Enzon Pharmaceuticals, Inc. will change its name to “Viskase Holdings, Inc.,” which will be the parent of Viskase Companies, LLC. Following consummation of the Merger, it is anticipated that Enzon’s current stockholders, including holders of Enzon’s Series C Preferred Stock, will hold approximately
On October 24, 2025, the Company and Viskase announced that they entered into the Merger Agreement Amendment, which was entered into to reflect recent developments in the operations of Viskase during the past several months and its expected operations in the near term.
Pursuant to the terms of the Merger Agreement Amendment, the parties agreed, among other things, to:
| ● | adjust the exchange ratio as calculated under the Merger Agreement for the exchange of each share of common stock, par value $ |
| ● | adjust the exchange ratio for the exchange of each share of Enzon’s Series C Preferred Stock, for shares of Enzon’s common stock to be based upon the Volume Weighted Average Closing Price of the Company’s common stock for the twenty trading days prior to execution of the Merger Agreement Amendment (the “20-Day VWAP”); |
| ● | reduce the minimum amount of cash that Enzon is required to have at the closing of the Merger; |
| ● | determine that Enzon would effect a -for-100 reverse stock split with respect to all shares of Enzon’s common stock prior to the effective time of the Merger; and |
| ● | extend the date on which either party may terminate the Merger Agreement if the Merger has not yet occurred from 11:59 p.m., Eastern Time, on December 31, 2025, to 11:59 p.m., Eastern Time, on March 31, 2026. |
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ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(14)Merger Agreement (continued)
In connection with the execution and delivery of the Merger Agreement Amendment, Icahn Enterprises Holdings L.P., a Delaware limited partnership (“IEH”) and certain of its affiliates entered into an amendment to the Support Agreement (the “Support Agreement Amendment”) that was previously entered into between the Company, IEH and Viskase in connection with the execution of the Merger Agreement (the “Support Agreement”). Pursuant to the terms of the Support Agreement (as amended by the Support Agreement Amendment), IEH agreed to, among other things, (i) deliver or cause the delivery of written consents with respect to all of the issued and outstanding shares of Enzon’s common stock held by IEH and its affiliates approving the Merger and the amendment to Enzon’s certificate of incorporation, and (ii) exchange all of the shares of Series C Preferred Stock held by IEH and its affiliates for the Company’s common stock prior to the consummation of the Merger, based on the full liquidation preference of such shares of Series C Preferred Stock and the
The Company believes that the Merger pursuant to the terms of the Merger Agreement, as amended by the Merger Agreement Amendment, should not limit its NOL carryforwards and other tax attributes under Section 382 of the IRC. However, the Section 382 rules are complex and there is no assurance that the Company’s view is correct. If such an ownership change is found to have occurred, the amount of the combined company’s taxable income that could be offset by the Company’s pre-ownership change NOL carryforwards and other tax attributes would be severely limited.
The Merger must be approved by Enzon stockholders and is subject to receipt of required regulatory approvals and satisfaction or waiver of other certain closing conditions.
On June 27, 2025, Enzon and Viskase filed their respective Notification and Report Forms pursuant to the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”). On July 15, 2025, the Federal Trade Commission advised the Company that the Company’s request for early termination of the waiting period under HSR was granted effective July 15, 2025.
Each of the Merger Agreement and the Merger Agreement Amendment was unanimously recommended by the Company’s Special Committee and, acting upon such recommendations, was unanimously approved by the Board.
The foregoing summary is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 20, 2025, and the Merger Agreement Amendment, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 24, 2025, each of which is incorporated herein by reference.
In connection with the Merger, Enzon intends to file a registration statement on Form S-4 with the SEC that will contain a consent solicitation statement and prospectus. Such registration statement will include financial information regarding the proposed transaction and the combined company and stockholders of Enzon are encouraged to review such information once filed.
(15)Common Stock and Trading Market
On August 11, 2025, the Company was notified by the OTCQX Markets Group (the “OTCQX”), the marketplace for the over-the-counter trading of its stock, that it no longer met the standards for continued qualification for the OTCQX, in that its stock bid price had fallen below $
(16)Subsequent Events
On October 24, 2025, the Company and Viskase entered into the Merger Agreement Amendment as more fully discussed above in Note 14.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “Enzon,” the “Company,” “we,” “us,” or “our” and similar terms mean Enzon Pharmaceuticals, Inc. and its subsidiaries. The discussion below may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements as a result of many factors, including but not limited to those under the heading “Forward-Looking Information and Factors that May Affect Future Results.” The following discussion of our financial condition and results of operations should be read together with our consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q and our 2024 Annual Report on Form 10-K, as amended.
Overview
Enzon (together with its subsidiaries, the “Company,” “Enzon,” “we” or “us”) is positioned as a public company acquisition vehicle, where it can become an acquisition platform.
Historically, Enzon had received royalty revenues from licensing arrangements with other companies primarily related to sales of certain drug products that utilized Enzon’s proprietary technology. For more than ten years, we have had no clinical operations and limited corporate operations. In the last two years the Company has received only minimal payments on our licenses. We had a marketing agreement with Micromet AG, now part of Amgen, Inc., pursuant to which we may have been entitled to certain milestone and royalty payments if Vicineum, a drug that was being developed by Sesen, Inc. (subsequently acquired by Carisma Therapeutics, Inc.), was approved for the treatment of non-muscle invasive bladder cancer. That agreement has been canceled. Enzon cannot assure you that it will receive any future royalties or milestones.
Throughout this Management’s Discussion and Analysis, the primary focus is on our results of operations, cash flows and financial condition. The percentage changes throughout the following discussion are based on amounts stated in thousands of dollars and not the rounded millions of dollars reflected in this section.
Acquisition Activities
On June 20, 2025, the Company, EPSC Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of ours (“Merger Sub”), and Viskase Companies, Inc. (“Viskase”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), which was amended on October 24, 2025 (the “Merger Agreement Amendment”). Upon the terms and subject to the satisfaction or waiver of the conditions described in the Merger Agreement, at the effective time of the merger, Merger Sub will be merged with and into Viskase, with Viskase as the surviving entity following the merger as a wholly owned subsidiary of Enzon (the “Merger”) The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. Following the consummation of the Merger, it is anticipated that Enzon Pharmaceuticals, Inc. will change its name to “Viskase Holdings, Inc.” Following consummation of the Merger, it is anticipated that Enzon’s current stockholders, including holders of Enzon’s Series C Preferred Stock, will hold approximately 45% of the outstanding shares of Enzon’s common stock following the Merger, and Viskase’s current stockholders will hold approximately 55% of the outstanding shares of Enzon’s common stock following the Merger.
On October 24, 2025, the Company and Viskase announced that they entered into the Merger Agreement Amendment, which was entered into to reflect recent developments in the operations of Viskase during the past several months and its expected operations in the near term.
Pursuant to the terms of the Merger Agreement Amendment, the parties agreed, among other things, to:
| ● | adjust the exchange ratio as calculated under the Merger Agreement for the exchange of each share of common stock, par value $0.01 per share, of Viskase, issued and outstanding immediately prior to the Merger into shares of the common stock of Enzon, such that current Viskase stockholders will own 55% of the combined company following the Merger; |
| ● | adjust the exchange ratio for the exchange of each share of Enzon’s Series C Preferred Stock, for shares of Enzon’s common stock to be based upon the Volume Weighted Average Closing Price of the Company’s common stock for the twenty trading days prior to execution of the Merger Agreement Amendment (the “20-Day VWAP”); |
| ● | reduce the minimum amount of cash that Enzon is required to have at the closing of the Merger; |
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| ● | determine that Enzon would effect a 1-for-100 reverse stock split with respect to all shares of Enzon’s common stock prior to the effective time of the Merger; and |
| ● | extend the date on which either party may terminate the Merger Agreement if the Merger has not yet occurred from 11:59 p.m., Eastern Time, on December 31, 2025, to 11:59 p.m., Eastern Time, on March 31, 2026. |
In connection with the execution and delivery of the Merger Agreement Amendment, Icahn Enterprises Holdings L.P., a Delaware limited partnership (“IEH”), and certain of its affiliates entered into an amendment to the Support Agreement (the “Support Agreement Amendment”) that was previously entered into between the Company, IEH and Viskase in connection with the execution of the Merger Agreement (the “Support Agreement”). Pursuant to the terms of the Support Agreement (as amended by the Support Agreement Amendment), IEH agreed to, among other things, (i) deliver or cause the delivery of written consents with respect to all of the issued and outstanding shares of Enzon’s common stock held by IEH and its affiliates approving the Merger and the amendment to Enzon’s certificate of incorporation, and (ii) exchange all of the shares of Series C Preferred Stock held by IEH and its affiliates for the Company’s common stock prior to the consummation of the Merger, based on the full liquidation preference of such shares of Series C Preferred Stock and the 20-Day VWAP.
Enzon believes that the Merger pursuant to the terms of the Merger Agreement, as amended by the Merger Agreement Amendment, should not limit its net operating loss (“NOL”) carryforwards and other tax attributes under Section 382 of the Internal Revenue Code of 1986, as amended (“IRC”). However, the Section 382 rules are complex and there is no assurance that the Company’s view is correct. If such an ownership change is found to have occurred, the amount of the combined company’s taxable income that could be offset by our pre-ownership change NOL carryforwards and other tax attributes would be severely limited.
The Merger must be approved by Enzon stockholders and is subject to receipt of required regulatory approvals and satisfaction or waiver of other certain closing conditions.
Each of the Merger Agreement and the Merger Agreement Amendment was unanimously recommended by the Company’s Special Committee and, acting upon such recommendations, was unanimously approved by the Board of Directors of the Company.
In connection with the Merger, Enzon intends to file a registration statement on Form S-4 with the Securities and Exchange Commission (“SEC”) that will contain a consent solicitation statement and prospectus. Such registration statement will include financial information regarding the proposed transaction and the combined company and stockholders of Enzon are encouraged to review such information once filed.
Results of Operations
Revenues:
Royalties and Milestone Revenues
In the three and nine-month periods ended September 30, 2025, we had no revenue from royalties and milestones. In both the three and nine-months periods ended September 30, 2024, we earned approximately $26,000 in royalties and milestones.
Interest and Dividend Income (in thousands of dollars):
| | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||||||||
| | | | | % | | | | | | | | % | | | |
|
| 2025 |
| Change |
| 2024 |
| 2025 |
| Change |
| 2024 | ||||
Interest and dividend income | | $ | 496 | | (24) | % | $ | 654 | | $ | 1,494 | | (22) | % | $ | 1,906 |
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Interest and dividend income is attributable to the interest and dividends received on the invested cash and cash equivalents we received primarily from the $43.6 million of proceeds from our rights offering (See Note 11 to our Condensed Consolidated Financial Statements) as well as other cash and cash equivalents. Interest and dividend income decreased by approximately $158,000, or 24%, to $496,000 for the three months ended September 30, 2025 from $654,000 for the comparable period in 2024. The decrease in interest and dividend income is attributable to the reduced cash and cash equivalent balances and lower rates of interest in the 2025 period compared to the same period in 2024.
Interest and dividend income decreased by approximately $412,000, or 22%, to $1,494,000 for the nine months ended September 30, 2025 from $1,906,000 for the nine months ended September 30, 2024. The decrease in interest and dividend income is primarily attributable to the reduced cash and cash equivalent balances and lower interest rates in 2025 period compared to the same period in 2024.
Operating Expenses:
General and Administrative (in thousands of dollars):
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
|
| | |
| % |
| | |
| | |
| % |
| | |
| | 2025 | | Change | | 2024 | | 2025 | | Change | | 2024 | ||||
General and administrative | | $ | 229 | | (35) | % | $ | 351 | | $ | 1,038 | | (1) | % | $ | 1,028 |
General and administrative expenses, decreased by approximately $122,000, or 35%, to approximately $229,000 for the three months ended September 30, 2025 from $351,000 for the three months ended September 30, 2024. The decrease in general and administrative expense is substantially attributable to a decrease in professional and consulting fees not associated with the Merger.
General and administrative expenses were comparable for the nine-month periods ended September 30, 2025 and 2024.
Transaction expenses:
Transaction expenses incurred in connection with the Merger were approximately $1,075,000 and $2,801,000, respectively, for the three and nine-month periods ended September 30, 2025. These expenses were, primarily, for legal, consulting and professional fees. There were no comparable amounts during the corresponding periods in 2024. (See Note 14 to our Condensed Consolidated Financial Statements).
Tax Expense:
Assuming no acquisition is completed or material changes in results through September 2025, the Company has partially reversed the valuation allowances as of September 30, 2025. A deferred tax benefit of $9,000 and deferred tax expense of $53,000, respectively, were recorded during the nine-month periods ended September 30, 2025 and 2024. In the three-month periods ended September 30, 2025 and 2024, deferred tax expense of $16,000 and deferred tax expense of $50,000, respectively, were recorded. (See Note 8 to the Condensed Consolidated Financial Statements.)
Liquidity and Capital Resources
Our current source of liquidity is our existing cash on hand, which included the gross proceeds from our Rights Offering and the interest earned on that amount less certain operating expenses. (See Note 11 to the Condensed Consolidated Financial Statements.) While we no longer have any research and development activities, we continue to retain rights to receive fees, royalties and milestone payments from existing licensing arrangements with other companies and, accordingly, we may be entitled to a share of milestone and royalty payments from our few remaining licensed patents. We believe that our existing cash and cash equivalents on hand will be sufficient to fund our operations, at least, through November 2026, if the Merger is not consummated. Our future royalty revenues are expected to be de minimis over the foreseeable future and we cannot assure you that we will receive any royalty, milestone or other revenues.
We have entered into the Merger Agreement with Viskase for an all-stock transaction. Should the Merger not successfully close, we will continue to be positioned as a public company acquisition vehicle.
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Cash used in operating activities, as adjusted for certain non-cash items including the effect of changes in operating assets and liabilities, during the nine months ended September 30, 2025 was approximately $2,328,000, as compared to cash provided by operating activities of approximately $896,000 during the comparable period in 2024. The decrease of approximately $3,324,000 was primarily attributable to the transaction costs of approximately $2,801,000 in the 2025 period related to the Merger for which there was no corresponding amount in 2024 and the decrease in interest and dividend income of approximately $412,000, decreasing to approximately $1,494,000 during the nine months ended September 30, 2025, from approximately $1,906,000 during the comparable period in 2024.
Cash used in financing activities represents cash dividends of approximately $1,275,000 paid to holders of the Company’s Series C Preferred Stock in each of the periods.
The net effect of the foregoing was a decrease of cash and cash equivalents of approximately $3,603,000 from approximately $46,859,000 at December 31, 2024 to approximately $43,256,000 at September 30, 2025.
Off-Balance Sheet Arrangements
As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (SPEs), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually limited purposes. As of September 30, 2025, we were not involved in any SPE transactions.
Critical Accounting Policies and Estimates
A critical accounting policy is one that is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Our consolidated financial statements are presented in accordance with accounting principles that are generally accepted in the U.S. (“U.S. GAAP”). All applicable U.S. GAAP accounting standards effective as of September 30, 2025 have been taken into consideration in preparing the consolidated financial statements. The preparation of the consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Some of those estimates are subjective and complex, and, consequently, actual results could differ from those estimates. The following accounting policies and estimates have been highlighted as significant because changes to certain judgments and assumptions inherent in these policies could affect our consolidated financial statements.
We base our estimates, to the extent possible, on historical experience. Historical information is modified as appropriate based on current business factors and various assumptions that we believe are necessary to form a basis for making judgments about the carrying value of assets and liabilities. We evaluate our estimates on an ongoing basis and make changes when necessary. Actual results could differ from our estimates.
Income Taxes
Under the asset and liability method of accounting for income taxes, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and NOL and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance on net deferred tax assets is provided for when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of September 30, 2025, we believe, based on our projections, without taking into consideration the Merger, that a partial reversal of the valuation allowance is necessary. Therefore, the Company will partially reverse the valuation allowances. Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when or if appropriate. Additionally, our management believes that our NOLs will not be limited by any changes in our ownership as a result of the successful completion of the Rights Offering (See Note 11 to the Condensed Consolidated Financial Statements).
We recognize the benefit of an uncertain tax position that we have taken or expect to take on the income tax returns we file if it is more likely than not that we will be able to sustain our position.
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Forward-Looking Information and Factors That May Affect Future Results
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the Merger involving Enzon and Viskase, the ability to consummate the Merger, and the ability to quote the common stock of the combined company on the “OTCQB” tier of the OTC market of the OTC Markets Group, Inc. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend,” and other similar expressions, among others. Statements that are not historical are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and that are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation:
| ● | the risk that the conditions to the closing of the Merger are not satisfied, including the failure to obtain the necessary approvals for the proposed transaction; |
| ● | uncertainties as to the timing of the consummation of the Merger, including timing for satisfaction of the closing conditions, and the ability of each of Enzon and Viskase to consummate the proposed transaction; |
| ● | the ability of Viskase to timely deliver the financial statements required by the Merger Agreement, as amended; |
| ● | the possibility that other anticipated benefits of the proposed transaction will not be realized, including without limitation, anticipated revenues, expenses, earnings and other financial results, and growth and expansion of the combined company’s operations, and the anticipated tax treatment of the combination; |
| ● | potential litigation relating to the proposed Merger that could be instituted against Enzon, Viskase, or their respective officers or directors; |
| ● | we may experience possible disruptions from the Merger that could harm Enzon or Viskase’s respective businesses; |
| ● | potential adverse reactions or changes to relationships with customers, suppliers, employees or other parties resulting from the uncertainty, including changes to existing business relationships, during the pendency of the Merger that could affect Enzon’s financial performance; |
| ● | estimates regarding future revenue, expenses, and capital requirements following the closing of the transactions contemplated by the Merger Agreement; |
| ● | legislative, regulatory and economic developments, |
| ● | certain restrictions during the pendency of the Merger may impact our ability to pursue certain business opportunities or strategic transactions; |
| ● | we may be unsuccessful in our strategy to fully utilize our NOLs and other tax assets and enhance stockholder value as a public company acquisition vehicle; |
| ● | our sources of revenue are limited and, as a result of the interest on our cash reserves, we expect only limited revenue and profitability for the foreseeable future prior to the Merger; |
| ● | our rights to receive royalties on sales of PegIntron and sales of other drug products have expired. We currently do not anticipate any royalties from other sources; |
| ● | natural disasters, pandemics, like COVID-19, or other major public health crises may materially and adversely affect our future right to receive licensing fees, milestone payments and royalties on product candidates that are being developed by third parties, if any; |
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| ● | we have reallocated all employment responsibilities and outsourced all corporate functions, which makes us more dependent on third parties to perform these corporate functions; |
| ● | we may be subject to a variety of types of product liability or other claims based on allegations that the use of our product candidates by participants in our previously conducted clinical trials has resulted in adverse effects, and our insurance may not cover all product liability or other claims; |
| ● | we largely depend on proprietary rights, which may offer only limited protection against the development of competing products; |
| ● | we are party to license agreements whereby we may receive royalties and or milestone payments from products subject to regulatory approval; |
| ● | the price of our common stock has been, and may continue to be, volatile, including after the consummation of the Merger; |
| ● | our common stock is quoted on the OTCQB market of the OTC Markets Group, Inc., which has a very limited trading market and, therefore, market liquidity for our common stock is low and our stockholders’ ability to sell their shares of our common stock may be limited, including after consummation of the Merger; |
| ● | the declaration of dividends is within the discretion of our Board of Directors, subject to any applicable limitations under Delaware corporate law, as well as the requirements of the Series C Preferred Stock. Our ability to pay dividends in the future depends on, among other things, our fulfillment of the conditions of the Series C Preferred Stock, fluctuating royalty revenues, our ability to acquire other revenue sources and our ability to manage expenses, including costs relating to our ongoing operations, including the Merger; |
| ● | while we have adopted a Section 382 rights plan, which may discourage a corporate takeover, the Merger Agreement requires that we terminate the Section 382 rights plan before consummating the Merger; |
| ● | anti-takeover provisions in our charter documents and under Delaware corporate law may make it more difficult to acquire us, even though such acquisitions may be beneficial to our stockholders; |
| ● | the terms of our outstanding Series C Preferred Stock and the issuance of additional series of preferred stock may adversely affect rights of our common stockholders; |
| ● | the interests of our significant stockholders may conflict with the interests of other stockholders; |
| ● | if we experience an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended, our ability to fully utilize our NOLs on an annual basis will be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, which could therefore significantly impair the value of those benefits; |
| ● | if the Merger is consummated or we otherwise experience a “Change of Control,” as defined in Certificate of Designation of the Series C Preferred Stock, the holders of the Series C Preferred Stock (other than IEH and its affiliates) shall have the right, at such holder’s option, to require the Company to redeem at the Liquidation Preference then in effect all or a portion of such holder’s shares of Series C Preferred Stock, which would negatively impact our available cash; |
| ● | if we terminate the Merger Agreement or the termination date passes and the Merger has not been effected, we will have incurred substantial costs from the Merger that we will not be able to recover, and we may incur further costs before the Merger is consummated, and such expenses could adversely affect our business, financial results and operations; |
| ● | the Merger Agreement we entered into with Viskase is subject to numerous closing conditions and the Merger may not close as currently structured in the Merger Agreement, or at all; and |
| ● | unpredictability and severity of effects from geopolitical events or matters, including, but not limited to, hostilities, armed conflicts and/or war, acts of terrorism, economic conditions, inflationary pressures, trade wars (including impacts |
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| associated with quotas, duties, tariffs, taxes or other similar restrictions on the import or export of materials), and/or global logistics and supply chain issues could adversely affect our business, financial results and operations. |
A more detailed discussion of these risks and uncertainties and other factors that could affect results is contained in our filings with the SEC, including in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, as amended, in the registration statement on Form S-4 that will be filed in connection with the Merger, and in Item 1A “Risk Factors” below. These risks and uncertainties and other factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. As such, no assurance can be given that the conditions to the Merger will be satisfied or that the future results covered by the forward-looking statements will be achieved. All information in this Quarterly Report on Form 10-Q is as of the date of this report, unless otherwise indicated, and, except as required by applicable law, we undertake no duty to review or update this information or to make any other forward looking-statements, whether as a result of new information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to provide information required by this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, consisting of Richard L. Feinstein who serves as our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of September 30, 2025. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, the Company’s disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
Part II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business.
Item 1A. Risk Factors.
This report and other documents we file with the SEC contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs, and our management’s assumptions. These statements are not guarantees of future performance, and they involve certain risks, uncertainties and assumptions that are difficult to predict. You should carefully consider the risks and uncertainties facing our business.
Other than as set forth below, there have been no material changes to our risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K, as amended, for the year ended December 31, 2024.
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Risks Related to the Merger and the Merger Agreement
We may not be able to realize our deferred income tax assets.
The combined company’s ability to utilize NOLs, certain credits, and other tax attributes to offset the combined company’s future taxable income and/or to recover previously paid taxes would be limited if the combined company experiences an “ownership change” within the meaning of Section 382 of the IRC. An ownership change under Section 382 of the IRC would establish an annual limitation to the amount of our NOL carryforwards, certain credits, and other tax attributes that the combined company could utilize to offset its taxable income in any single year, thereby resulting in potentially higher cash tax obligations for the combined company than if it were able to utilize our NOLs, which could adversely affect the combined company’s financial condition, results of operations, and cash flows if that occurred.
Historically, we have not been able to utilize much of our NOLs because we have had minimal or no taxable income. If the Merger results in future taxable profits, the ability of the combined company to use our unexpired NOL carryforwards annually to offset future taxable income would result in a deferred tax asset. However, the restrictions imposed by Section 382 of the IRC, if applicable, could materially reduce or eliminate the future benefit of these NOL carryforwards even if the combined company becomes profitable after the Merger. The loss of these tax benefits could be significant, and there can be no assurance that subsequent ownership changes—whether through additional equity issuances, strategic transactions, or other events—would not impose additional limitations on the combined company’s ability to use our NOLs and other tax attributes. In addition, similar rules under state and foreign tax laws could further limit utilization of our NOLs and other tax attributes.
The Company’s accountants have performed an analysis under Section 382 of the IRC through the date of this filing, the results of which conclude that utilization of the Company’s NOLs and certain other credit carryforwards should not be subject to an annual limitation under Section 382 of the IRC. It is therefore intended that the Merger, pursuant to the terms of the Merger Agreement, as amended by the Merger Agreement Amendment, should not limit our NOL carryforwards and other tax attributes under Section 382 of the IRC. However, the Section 382 of the IRC rules and the application of such rules to the Merger are complex and there is no assurance that our view is correct. If such an ownership change is found to have occurred, the amount of the combined company’s taxable income that could be offset by our pre-ownership change NOL carryforwards and other tax attributes would be severely limited.
We had previously adopted a Rights Agreement specifically designed to reduce the risk of an ownership change that would limit our ability to use our NOLs carryforwards. The Merger Agreement, however, requires that the Rights Agreement be terminated prior to the Merger becoming effective. Accordingly, on August 13, 2025, we amended the Rights Agreement to set the Final Expiration Date as the close of business on September 30, 2025, and, again, amended the Rights Agreement on September 30,2025 to set the Final Expiration Date as the close of business on December 31, 2025. Once the Rights Agreement terminates, we will have no similar protections in place.
Our stockholders (other than Carl Icahn, IEH and their respective affiliates) will experience immediate dilution as a consequence of the issuance of shares of our common stock in connection with the Merger. Having a minority share position will reduce the influence that our current stockholders (other than Carl Icahn, IEH and their respective affiliates) have on the management of the combined company following the Merger.
It is anticipated that, upon completion of the Merger our current stockholders, including holders of shares of our Series C Preferred Stock, will own approximately 45% of our common stock following the Merger, and the current Viskase stockholders will own approximately 55% of our common stock following the Merger.
Upon completion of the Merger, the issuance of the Company’s common stock in connection with the Merger and the other transactions contemplated by the Merger Agreement will result in significant dilution of the ownership and voting interests of the Company’s current stockholders (other than Carl Icahn, IEH and their respective affiliates), as described above. As a result, the Company’s current stockholders (other than Carl Icahn, IEH and their respective affiliates) will experience a significant reduction in their relative influence over the Company following the Merger, which, following the Merger, will encompass the combined businesses of Enzon and Viskase.
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Carl C. Icahn, IEH and their respective affiliates will exert significant influence on the Company after the Merger and non-IEH stockholders will have limited governance rights.
Upon completion of the Merger, the Company expects that IEH and its affiliates will hold a substantial majority of the voting power of the combined company. As of October 24, 2025, the Company believes that IEH, through its control of its affiliates, beneficially owned approximately (i) 48.6% of the issued and outstanding shares of the Company’s common stock, (ii) 98.2% of the issued and outstanding shares of the Company’s Series C Preferred Stock and (iii) in excess of 90% of the issued and outstanding shares of Viskase’s common stock. Mr. Icahn is the controlling stockholder and chairman of the board of the general partner of IEH. Because of their substantial ownership and voting power, Mr. Icahn, IEH and their respective affiliates may exert significant influence over the management and strategic direction of the combined company following the Merger. This concentration of ownership may also discourage or prevent a third party from seeking to acquire control of the combined company, even if such a transaction might be beneficial to other stockholders. As a result, the interests of Mr. Icahn, IEH and their respective affiliates may not always align with the interests of Enzon or its other stockholders.
The Merger Agreement limits our ability to pursue alternatives to the Merger.
The Merger Agreement contains provisions that make it more difficult for us to enter into alternative transactions. As is typical for transactions like the Merger, the Merger Agreement contains certain provisions that restrict our ability to, among other things, solicit, initiate or knowingly facilitate or encourage (including by way of furnishing non-public information) the submission of inquiries regarding, or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, an offer regarding a potential alternative transaction to the Merger from a third party. The Merger Agreement also provides that our Board of Directors and the Special Committee of our Board of Directors may only change their recommendation that the Enzon stockholders approve the Merger in certain limited circumstances. In the event that a third party makes a superior offer to the transaction with Viskase, the Board of Directors and the Special Committee of our Board of Directors may change their recommendation, and the Company may be required to pay Viskase a termination fee of $1,000,000, under certain circumstances, in connection with such change of recommendation and termination of the Merger Agreement. In addition, the significant ownership by Mr. Icahn, IEH and their respective affiliates of our common stock and our Series C Preferred Stock may hinder a third party from making a proposal or offer for the Company.
We have incurred direct and indirect costs as a result of the Merger and we may incur additional direct and indirect costs whether or not the Merger is consummated.
We have incurred significant non-recurring costs in connection with the Merger and the integration of our business with Viskase’s business. These costs include legal, financial advisory, accounting, consulting and other professional fees, as well as regulatory filing fees and other transaction-related expenses. We have incurred these costs and expect that we will continue to incur additional costs whether or not the Merger is consummated. In addition, if we terminate the Merger Agreement or the termination date passes and the Merger has not been effected, we will have incurred substantial costs from the Merger that we will not be able to recover, and we may incur further costs before the Merger is consummated, and such expenses could have an adverse impact on our business, financial results and operations.
If the Merger is not completed, the business, financial results and stock prices of Enzon and Viskase could be adversely affected.
The Merger is subject to a number of conditions, and there can be no assurance that it will be completed. If the Merger is not consummated for any reason, our ongoing business may be adversely affected. In addition, we will be subject to a number of risks, including, among others:
| ● | the obligation to pay a termination fee to the other party under certain circumstances, as provided in the Merger Agreement; |
| ● | if we terminate the Merger Agreement or the termination date passes and the Merger has not been effected, we will have incurred substantial costs from the Merger that we will not be able to recover, and we may incur further costs before the Merger is consummated, and such expenses could have an adverse impact on our business, financial results and operations; |
| ● | potential declines in the market prices of the Company’s common stock to the extent that such prices reflect a market assumption that the Merger will be completed; |
23
| ● | negative reactions from the financial markets; and |
| ● | potential litigation related to the Merger (whether or not the Merger is completed) or to any failure to complete the Merger or to enforcement proceedings to perform the parties’ respective obligations under the Merger Agreement. |
If the Merger is not completed, we cannot assure our stockholders that these risks will not materialize or will not materially adversely affect their businesses, financial results or stock prices.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
In connection with the transactions contemplated by the Merger Agreement, on September 30, 2025, Enzon entered into the Fifth Amendment to the Section 382 Rights Agreement (the “Fifth Amendment”), which amends the Section 382 Rights Agreement, dated as of August 14, 2020 (the “Rights Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, as rights agent, to provide that the Final Expiration Date (as defined in the Rights Agreement) would be changed to the close of business on December 31, 2025. Effective June 2, 2021, the Company entered into the First Amendment to the Rights Agreement (the “First Amendment”) to extend the Final Expiration Date (as defined in the Rights Agreement) of the rights issued pursuant to the Rights Agreement from the close of business on August 13, 2021 to the close of business on June 2, 2024. Effective May 16, 2024, the Company entered into the Second Amendment to the Rights Agreement (the “Second Amendment”) to extend the Final Expiration Date of the rights issued pursuant to the Rights Agreement from the close of business on June 2, 2024 to the close of business on March 31, 2025. On March 31, 2025, the Company entered into the Third Amendment to the Rights Agreement (the “Third Amendment”), which extended the Final Expiration Date of the rights issued pursuant to the Rights Agreement from the close of business on March 31, 2025 to the close of business on June 30, 2026. As noted above, on August 13, 2025, Enzon entered into an amendment to the Section 382 Rights Agreement to provide that the Final Expiration Date of the rights issued thereunder would be changed to the close of business on September 30, 2025, as the Merger Agreement requires that Enzon terminate the Rights Agreement prior to the closing of the Merger. On August 13, 2025, Enzon entered into the Fourth Amendment to the Section 382 Rights Agreement (the “Fourth Amendment”). As noted above, on September 30, 2025, Enzon entered into Fifth Amendment to the Section 382 Rights Agreement to provide that the Final Expiration Date thereunder would be changed to the close of business on December 31, 2025, as the Merger Agreement requires that Enzon terminate the Rights Agreement prior to the closing of the Merger. If the Merger has not closed by December 31, 2025, Enzon may seek to further extend the Final Expiration Date under the Rights Agreement.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the complete text of the Rights Agreement, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) as Exhibit 4.1 to the Current Report on Form 8-K filed on August 14, 2020, the First Amendment, which was filed with the SEC as Exhibit 4.1 to the Current Report on Form 8-K filed on June 8, 2021, the Second Amendment, which was filed with the SEC as Exhibit 4.1 to the Current Report on Form 8-K filed on May 22, 2024, the Third Amendment, a copy of which is attached as Exhibit 4.1 to the Current Report on Form 8-K filed on April 1, 2025, the Fourth Amendment, a copy of which is attached hereto as Exhibit 4.1, and the Fifth Amendment a copy of which is attached as Exhibit 4.2, hereto, each of which is incorporated herein by reference.
During the three-month period ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company
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Item 6. Exhibits
(a) Exhibits required by Item 601 of Regulation S-K.
Exhibit |
| Description |
| Reference |
2.1** | | | 1 | |
3.1 | | | 2 | |
3.2 | | | 3 | |
3.3 | | | 4 | |
3.4 | | | 5 | |
3.5 | | First Amendment to the Second Amended and Restated By-Laws, effective February 24, 2022. | | 5 |
4.1 |
| 6 | ||
4.2 | | | 7 | |
10.1 |
| 1 | ||
10.2 | | | 8 | |
31.1 | | | + | |
32.1 | | | + | |
101.INS | | Inline XBRL Instance Document | | + |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document | | + |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | + |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | + |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document | | + |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | + |
104 | | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). | | + |
+ Filed herewith.
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* This certification is not deemed filed by the Commission and is not to be incorporated by reference in any filing the Company makes under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings.
** Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
Referenced exhibit was previously filed with the SEC as an exhibit to the Company’s filing indicated below and is incorporated herein by reference to that filing:
| * | (1) | Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, filed on August 9, 2010. |
| | | |
| * | (2) | Annual Report on Form 10-K for the year ended December 31, 2012, filed on March 18, 2013. |
| | | |
| * | (3) | Current Report on Form 8-K filed on August 14, 2020. |
| | | |
| * | (4) | Current Report on Form 8-K filed on September 23, 2020. |
| | | |
| * | (5) | Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed on February 25, 2022. |
| | | |
| * | (6) | Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, filed on August 14, 2025. |
| | | |
| * | (7) | Current Report on Form 8-K filed on September 30, 2025. |
| | | |
| * | (8) | Current Report on Form 8-K filed on October 24, 2025. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ENZON PHARMACEUTICALS, INC. |
| (Registrant) |
|
|
|
|
Dated: November 12, 2025 | /s/ Richard L. Feinstein |
| Richard L. Feinstein |
| Chief Executive Officer, Chief Financial Officer and Secretary |
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
27
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Richard L. Feinstein, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 of Enzon Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | As the registrant’s sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
November 12, 2025 |
| /s/ Richard L. Feinstein |
| | Richard L. Feinstein |
| | Chief Executive Officer, Chief Financial Officer and Secretary |
| | (Principal Executive Officer and Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Enzon Pharmaceuticals, Inc. (the Company) on Form 10-Q for the quarterly period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Richard L. Feinstein, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 12, 2025 |
| /s/ Richard L. Feinstein |
| | Richard L. Feinstein |
| | Chief Executive Officer, Chief Financial Officer and Secretary |
| | (Principal Executive Officer and Principal Financial Officer) |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Enzon Pharmaceuticals, Inc. and will be furnished to the Securities Exchange Commission or its staff upon request.