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Tevogen Bio Holdings Inc. (LGST)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 was Tevogen’s first quarter as a public company, with net income of $11.26M driven by a non-cash $48.47M gain from the change in fair value of convertible promissory notes and offset by $29.52M of operating expenses, including $26.33M of stock-based compensation recognized upon closing the SPAC merger .
  • The company eliminated $94.9M of balance sheet liabilities by converting promissory notes into common stock, materially improving the pro forma capital structure (removal: $80.7M current, $14.2M long-term) .
  • Liquidity remains tight (cash $1.32M; net cash used in operations $(2.16)M), and management disclosed substantial doubt about going concern absent additional financing; a binding term sheet for an unsecured line of credit up to $36.0M and an optional PIPE was executed on May 10, 2024 .
  • No revenue was reported; there was no earnings call transcript available. Near-term catalysts include closing the LOC/PIPE and advancing TVGN 489 to a pivotal trial in immunocompromised COVID-19 patients .

What Went Well and What Went Wrong

What Went Well

  • Eliminated $94.9M in liabilities via conversion of promissory notes into common stock, reducing both current ($80.7M) and long-term ($14.2M) liabilities on a pro forma basis .
  • Non-cash gain of $48.47M from the change in fair value of convertible promissory notes drove positive net income for Q1 2024 despite zero revenue .
  • Secured a binding term sheet for up to $36.0M unsecured line of credit and an optional PIPE to strengthen liquidity and fund baseline operating expenses over 36 months .
    • “Tevogen’s first quarterly financial report since its public listing underscores the strength of our innovative business philosophy,” CEO Ryan Saadi .

What Went Wrong

  • No product revenue; management explicitly does not expect revenue until TVGN 489 or other candidates obtain marketing approval and are commercialized .
  • Heavy non-cash stock-based compensation ($26.33M total; $19.74M R&D and $6.60M G&A) inflated operating expenses and masked underlying cash burn dynamics .
  • Merger-related costs ($7.50M) and default status on assumed Polar notes payable ($1.651M, no interest but in default) highlight near-term cash constraints and execution risk around transaction close-outs .

Financial Results

MetricQ1 2023Q1 2024
Revenue ($USD Millions)$0.00 $0.00
Operating Expenses ($USD Millions)$2.32 $29.52
Loss from Operations ($USD Millions)$(2.32) $(29.52)
Net Income (Loss) ($USD Millions)$(30.76) $11.26
Basic EPS ($USD)$(0.26) $0.08
Diluted EPS ($USD)$(0.26) $(0.26)
Net Cash Used in Operating Activities ($USD Millions)$(2.18) $(2.16)
Stock-Based Compensation ($USD Millions)$0.00 $26.33

Notes:

  • Margins (gross, EBITDA, net) are not meaningful due to $0 revenue in both periods .
  • The positive net income in Q1 2024 reflects non-cash items (fair value changes, SBC) rather than operating profitability .

Segment breakdown (company reports one segment):

MetricQ1 2023Q1 2024
Operating Segments (count)1 1

Key KPIs and capital structure:

KPIQ1 2023Q1 2024
R&D Expenses ($USD Millions)$1.35 $20.81
G&A Expenses ($USD Millions)$0.98 $8.71
Cash And Equivalents at Period End ($USD Millions)$5.67 $1.32
Convertible Promissory Notes (Fair Value, $USD Millions)$70.23 $0.00
Shares Legally Outstanding (period end)119,999,989 164,614,418
Liability Elimination via Conversion ($USD Millions)N/A$94.90 (80.7 current; 14.2 long-term)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Unsecured Line of CreditMulti-year facility (up to 36 months)NoneBinding term sheet for up to $36.0M LOC; interest in shares; 48-month maturities per draw New
Optional PIPETriggered by stock price conditionNoneOption to purchase at least $14.0M of common stock; pricing at 30% discount to 10-day VWAP upon ≥$10 threshold; expandable to undrawn LOC capacity New
Revenue/Margins/OpEx GuidanceFY/QuarterNoneNone provided; company does not expect product revenue until approvals Maintained (no formal guidance)

Earnings Call Themes & Trends

(No earnings call transcript found; themes derived from Q1 filings and press releases.)

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2024)Trend
AI/technology initiativesCEO highlighted launch of Tevogen.ai and leadership appointments (Apr 26 press) Continued emphasis on AI-linked IP (2 patents related to AI) and tech leadership for discovery and operations Expanding AI agenda
Manufacturing strategyPlan to acquire cell therapy manufacturing facility with clinical/commercial capabilities (May 1 press) Building manufacturing infrastructure; expects increased commercialization expenses in future Scaling capabilities
Funding/liquidityOngoing capital raising; Series A/Series A-1 preferred planned Binding LOC up to $36.0M; optional PIPE; going concern disclosure due to low cash Near-term funding path identified
Product performance (TVGN 489)Phase 1 proof-of-concept completed; positive safety and virologic signals Planning pivotal trial in B-cell malignancy COVID-19; exploring Long COVID applications Advancing toward pivotal
Regulatory/legalNo material proceedings reported No material changes; regulatory pathway discussions ongoing in MD&A Stable
R&D executionPreclinical/clinical focus; modest spend historically Large non-cash SBC recognized; R&D scaling plans described Scaling R&D post-SPAC

Management Commentary

  • “Tevogen’s first quarterly financial report since its public listing underscores the strength of our innovative business philosophy.” — CEO Ryan Saadi .
  • “The Tevogen.ai initiative aims to harness the immense potential of AI to enhance drug discovery, development, manufacturing, distribution, and patient access.” — CEO letter (Apr 26) .
  • Management reiterated confidence in ExacTcell and wholly owned IP (3 granted patents; 12 pending, 2 AI-related) .

Q&A Highlights

  • No Q1 2024 earnings call transcript was available; investor communications consisted of the 10-Q, an Item 2.02 8-K press release (Apr 26), and the Q1 financial results press release (May 29) .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable for LGST this quarter. As a result, no “vs. estimates” comparisons are included.
  • Where relevant, comparisons focus on year-over-year and qualitative drivers from filings and press releases .

Key Takeaways for Investors

  • Positive net income was entirely driven by non-cash items (fair value gain on notes and SBC) amid zero revenue; underlying operating loss and cash outflows persisted, implying no change in cash-generation status .
  • The $94.9M liability elimination significantly de-risked the balance sheet versus year-end, but cash remained just $1.32M at quarter-end, underscoring urgency to close the LOC/PIPE financing .
  • Near-term execution focus: finalize $36.0M LOC and optional PIPE, cure/resolve legacy notes payable default mechanics, and maintain capital discipline while scaling R&D/manufacturing .
  • Clinical catalyst path: initiate pivotal TVGN 489 trial in immunocompromised COVID-19 population; communicates potential Long COVID applications, which could be meaningful for medium-term value if approvals and reimbursement dynamics are favorable .
  • AI initiative and IP portfolio may support platform differentiation and potential efficiencies; watch for concrete AI-enabled development milestones and manufacturing outcomes .
  • No formal guidance; given going concern language, trading setup is highly sensitive to financing milestones, trial starts, and any manufacturing acquisition updates. Positioning should reflect binary financing and clinical execution risks .

Source Documents Read

  • 8-K Item 2.02 press release (Apr 26, 2024) — CEO highlights liability elimination, AI initiative, leadership appointments .
  • 10-Q for Q1 2024 (filed May 28, 2024) — full financials, MD&A, liquidity and going concern disclosure through .
  • Q1 2024 financial results press release (May 29, 2024) — net income, net cash used in operations, and financing updates .
  • FY 2023 financial results and operational objectives press release (May 1, 2024) — manufacturing strategy and near-term operational objectives .