Overview

Enzon is positioned as a public company acquisition vehicle, where it can become an acquisition platform and potentially utilize its net operating loss carryforwards (“NOLs”) in an effort to enhance stockholder value. The company has not had any clinical operations or significant corporate operations for more than ten years, and in the last two years, it has received only minimal payments on its licenses. Enzon cannot assure that it will receive any future royalties or milestones.

Results of Operations

Revenues: Enzon earned no milestone or royalty revenues in the three months ended March 31, 2025 and 2024. However, the company did have interest and dividend income, which decreased by 23% from $647,000 in the first quarter of 2024 to $497,000 in the first quarter of 2025. This decrease is attributable to lower interest rates on smaller cash balances.

Operating Expenses: General and administrative expenses increased by 207% from $326,000 in the first quarter of 2024 to $1,002,000 in the first quarter of 2025. This increase is primarily due to an increase in professional fees.

Tax Expense: The company has recorded a full valuation allowance as of March 31, 2025, assuming no acquisition is completed or material changes in results through March 2026. Deferred tax expense of $17,000 was recorded in the first quarter of 2025, compared to a deferred tax benefit of $1,000 in the first quarter of 2024.

Liquidity and Capital Resources Enzon’s current source of liquidity is its existing cash on hand, which includes the $43.6 million of gross proceeds from its Rights Offering. The company believes its existing cash on hand will be sufficient to fund its operations through May 2026. However, the company cannot assure that it will succeed in making acquisitions that are profitable and enable it to utilize its NOLs.

Cash used in operating activities was $618,000 in the first quarter of 2025, compared to cash provided by operating activities of $251,000 in the first quarter of 2024. This decrease was primarily due to the increase in general and administrative expenses, particularly professional fees.

Cash used in financing activities represents $1,275,000 in cash dividends paid to holders of the company’s Series C Preferred Stock.

The net effect was a decrease in cash and cash equivalents of $1.9 million, from $46.9 million at December 31, 2024 to $45.0 million at March 31, 2025.

Forward-Looking Information and Factors That May Affect Future Results Enzon faces several risks and uncertainties that could materially and adversely affect its future results, including:

• Unsuccessful strategy to fully utilize NOLs and enhance stockholder value as a public company acquisition vehicle
• Limited revenue and profitability due to limited sources of revenue
• Expiration of rights to receive royalties on certain drug products
• Potential impact of natural disasters, pandemics, or other public health crises on licensing fees, milestone payments, and royalties
• Dependence on third parties to perform corporate functions
• Potential product liability or other claims related to clinical trials
• Limited protection of proprietary rights
• Volatility in the price of its common stock
• Low trading volume and market liquidity for its common stock
• Uncertainty around the declaration of dividends
• Anti-takeover provisions that may discourage acquisitions
• Potential conflicts of interest with significant stockholders
• Limitations on the use of NOLs due to ownership changes
• Potential redemption of Series C Preferred Stock upon a “Change of Control”