VISK 10-K & 10-Q changes, risk factors and insider trading
Viskase Holdings, Inc. · OTC · Biological Products, (No Diagnostic Substances) · CIK 727510 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “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 the pre-closing stockholders (other than Carl Icahn, IEH and their respective affiliates) have on the management of the post-merger combined company (the “Combined Company”) following the Merger.”
New heading “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.”
New heading “Following completion of the Merger, as a result of Viskase’s operations, we may not realize the anticipated benefits of the Merger.”
New heading “We may not be able to utilize our net operating loss carryforwards (“NOLs”), certain credits and other tax attributes following the completion of the Merger.”
New heading “The Merger is subject to a number of closing conditions and, if these conditions are not satisfied, the Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed. In addition, the parties have the right to terminate the Merger Agreement under other specified circumstances, in which case the Merger would not be completed.”
New heading “The Merger Agreement limits Enzon’s ability to pursue alternatives to the Merger.”
New heading “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.”
New heading “If the Merger is not completed, the business, financial results and stock prices of Enzon could be adversely affected.”
New heading “Our sources of revenue are limited and we expect only limited revenue and profitability for the foreseeable future if the Merger is not completed.”
New heading “Except for those holders of Series C Preferred Stock that elect to participate in the Series C Exchange Offer, the Series C Preferred Stock is not convertible into shares of Common Stock.”
Removed heading “Our search for a business, company or assets to acquire or in which to invest may be unsuccessful, or it could result in a change of control, and we may fail to utilize the proceeds of our Rights Offering and/or realize the value of our NOLs.”
Removed heading “Our sources of revenue are limited and, as a result of our cash reserves, we expect only limited revenue and profitability for the foreseeable future; while we increased our cash reserve by completing the Rights Offering and generate revenue from such cash reserve, unanticipated liabilities and expenses could adversely affect our ability to engage in a public company acquisition or investment, as currently intended, or to continue operations.”
Removed heading “We have outsourced all corporate functions, which makes us more dependent on third parties to perform these corporate functions.”
Removed heading “While we may, potentially, acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our NOLs, we may be unable to do so and, accordingly, we may be unable to realize our deferred income tax assets.”
Removed heading “Our common stock ranks junior to our Series C Preferred Stock.”
Removed heading “The declaration of common stock dividends is within the discretion of our Board, 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, declining royalty revenues, our ability to acquire other revenue sources and our ability to manage expenses, including costs relating to our ongoing operations.”
Removed heading “We have adopted a Section 382 rights plan, which may discourage a corporate takeover.”
Removed heading “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.”
Removed heading “In the event of any dissolution, liquidation, or winding up of our Company, we may not be able to make distributions or payments in full to all the holders of the Series C Preferred Stock or, if required, we may not be able to redeem such shares.”
Removed heading “The dividends on our Series C Preferred Stock can be paid either in cash or be paid in kind by increasing the liquidation value of the shares of Series C Preferred Stock.”
Removed heading “The Series C Preferred Stock is equity and is subordinate to our existing and future indebtedness and other liabilities, and your interests may be diluted in the event we issue additional shares of preferred stock.”
Removed heading “The Series C Preferred Stock is not convertible into common stock.”
Largest changes
“The declaration of common stock dividends is within the discretion of our Board, 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, declining royalty revenues, our ability to acquire other revenue sources and our ability to manage expenses, including costs relating to our ongoing operations.”see in full comparison
“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 the pre-closing stockholders (other than Carl Icahn, IEH and their respective affiliates) have on the management of the post-merger combined company (the “Combined Company”) following the Merger.”see in full comparison
“Our sources of revenue are limited and, as a result of our cash reserves, we expect only limited revenue and profitability for the foreseeable future; while we increased our cash reserve by completing the Rights Offering and generate revenue from such cash reserve, unanticipated liabilities and expenses could adversely affect our ability to engage in a public company acquisition or investment, as currently intended, or to continue operations.”see in full comparison
“The Merger is subject to a number of closing conditions and, if these conditions are not satisfied, the Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed. In addition, the parties have the right to terminate the Merger Agreement under other specified circumstances, in which case the Merger would not be completed.”see in full comparison
“While we may, potentially, acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our NOLs, we may be unable to do so and, accordingly, we may be unable to realize our deferred income tax assets.”see in full comparison
“In the event of any dissolution, liquidation, or winding up of our Company, we may not be able to make distributions or payments in full to all the holders of the Series C Preferred Stock or, if required, we may not be able to redeem such shares.”see in full comparison
Full comparison: every changed paragraph (68)
You should carefully consider the following risk factors, as well as other information in this Annual Report, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as our other public filings. Our business, financial condition and results of operations may be impacted by one or more of the following factors, any of which could cause actual results to vary materially from historical and current results or anticipated future results. As noted above, we have entered into the Merger Agreement with Viskase and our stockholders have approved the Reverse Stock Split Proposal and the Merger Proposal. Subject to the remaining conditions to closing being satisfied or waived, we expect to consummate the Merger with Viskase. For more information relating to Viskase’s business, financial condition and results of operations, including the related risks thereto, please see the Prospectus/Consent Solicitation/Offer to Exchange, which was filed by Enzon with the SEC on January 30, 2026, and previously mailed to Enzon’s stockholders.
Risks RelatingRelated to the CompanyMerger and itsMerger OperationsAgreement
Mr. Carl C. Icahn, directly and indirectly, beneficially owns approximately 48.6% of the outstanding shares of our Common Stock, as well as approximately 98.2% of the outstanding Series C Preferred Stock. Mr. Icahn may have interests that are different from, in addition to or not always consistent with our interests or with the interests of our other common or preferred stockholders. To the extent that conflicts of interest may arise between us and Mr. Icahn and his affiliates, those conflicts may be resolved in a manner adverse to us or our other stockholders. In addition, Mr. Icahn and his affiliates will continue to hold a significant portion of Enzon’s Common Stock following the consummation of the Merger. Accordingly, the interests of these significant stockholders may not always coincide with our interests or the interests of other stockholders, or otherwise be in the best interests of us or all stockholders.
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 the pre-closing stockholders (other than Carl Icahn, IEH and their respective affiliates) have on the management of the post-merger combined company (the “Combined Company”) following the Merger.
It is anticipated that, upon completion of the Merger and assuming that the Enzon Series C Preferred Stock is exchanged for Enzon’s Common Stock in full, (i) the holders of Enzon’s Common Stock immediately prior to the Closing are expected to own approximately 5% of the Enzon’s Common Stock, (ii) the holders of the Series C Preferred Stock are expected to own approximately 40% of the Enzon’s Common Stock and (iii) Viskase stockholders are expected to own 55% of the Enzon’s Common Stock, subject to certain adjustments based upon the number of shares of Series C Preferred Stock exchanged for Enzon’s Common Stock by non-affiliates of the IEH Parties. If the actual facts differ from any of the foregoing assumptions (which they may), the percentage ownership retained by pre-closing Enzon stockholders in the Combined Company will differ.
Upon completion of the Merger, the issuance of Enzon’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 pre-closing Enzon stockholders, as described above. As a result, pre-closing Enzon stockholders (other than the IEH Parties) will experience a significant reduction in their relative influence over Enzon following the Merger, which, following the Merger, will encompass the combined businesses of Enzon and Viskase.
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 the date of this filing, 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) 93.97% of the issued and outstanding shares of Viskase’s common stock. Following the Merger, it is expected that Mr. Icahn and his related entities will beneficially own approximately 93.32% of the outstanding shares of the Combined Company, assuming all of the Series C Preferred Stock is exchanged for Enzon’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, including, but not limited to, (i) the declaration of any future dividends, (ii) the ability to control the election, removal or replacement of any one or more members of the board of directors of the Combined Company, (iii) the voting on decisions related to fundamental corporate actions, consolidations or sales of all or substantially all of the Combined Company’s assets and (iv) the ability to control the approval of various transactions. 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.
Following completion of the Merger, as a result of Viskase’s operations, we may not realize the anticipated benefits of the Merger.
Until the completion of the Merger, Enzon and Viskase will continue to operate as separate companies. The success of the Merger will depend on the success of Viskase’s operations and performance following the completion of the Merger.
Viskase’s operating performance and financial condition has recently deteriorated as a result of, among other things, underperformance of the Viskase business in the second half of 2025, personnel changes and Viskase pausing capital investment into one of its product lines. There can be no assurance that Viskase’s business will not further decline before or after completion of the Merger. We cannot assure you that the anticipated benefits of the Merger will be achieved.
We may not be able to utilize our net operating loss carryforwards (“NOLs”), certain credits and other tax attributes following the completion of the Merger.
Enzon’s accountants have performed an analysis under Section 382 of the Internal Revenue Code (“the Code”), the results of which conclude, based on certain assumptions, that utilization of Enzon’s NOLs and certain other credit carryforwards should not be subject to an annual limitation under Section 382 of the Code (“Section 382”). 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 Enzon’s NOL carryforwards and other tax attributes under Section 382. However, Section 382 rules and the application of such rules to the Merger are complex and there is no assurance that the Internal Revenue Service will not reach a different conclusion under Section 382. If such a conclusion is made and an ownership change is found to have occurred, the amount of the Combined Company’s taxable income that could be offset by Enzon’s pre-ownership change NOL carryforwards and other tax attributes would be severely limited. However, notwithstanding the foregoing, due to the existence of a valuation allowance for substantially all of the deferred tax assets for both Enzon and Viskase, the effect of having an ownership change under Section 382 of the Code may not be significant.
In addition, following the Merger, 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 payment of taxes would be limited if the Combined Company experiences an “ownership change” within the meaning of Section 382 of the Code. An ownership change under Section 382 would establish an annual limitation to the amount of Enzon’s NOL carryforwards, certain credits, and other tax attributes that the Combined Company could utilize in any single year. Assuming the Combined Company has taxable income, it would potentially have higher cash tax obligations than if it were able to utilize Enzon’s NOLs, which could adversely affect the Combined Company’s financial condition, results of operations and cash flows, if that occurred.
Enzon had previously adopted a Section 382 Rights Agreement, dated as of August 14, 2020, by and between Enzon and Continental Stock Transfer & Trust Company, as rights agent (as amended, the “Rights Agreement”), which is specifically designed to reduce the risk of an ownership change that would limit Enzon’s ability to use its NOL carryforwards. The Merger Agreement, however, requires that the Rights Agreement be terminated prior to the Merger becoming effective. Enzon plans to further amend the final expiration date under the Rights Agreement so that the Rights Agreement remains in effect until immediately prior to the closing of the Merger. Following the completion of the Merger, the Rights Agreement will have been terminated, and Enzon will have no similar protections in place. Although the Combined Company is expected to adopt a similar Section 382 Rights Agreement, there can be no assurances that it will do so.
The Merger is subject to a number of closing conditions and, if these conditions are not satisfied, the Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed. In addition, the parties have the right to terminate the Merger Agreement under other specified circumstances, in which case the Merger would not be completed.
The Merger is subject to a number of closing conditions and, if these conditions are not satisfied or waived (to the extent permitted by law), the Merger will not be completed. The closing of the Merger is subject to the satisfaction or waiver of certain conditions. The following conditions have not yet been satisfied: (i) the completion of the exchange offer of the Series C Preferred Stock, (ii) the accuracy of the parties’ representations and warranties, subject to certain “materiality” and “material adverse effect” qualifications; (iii) compliance by the parties in all material respects with their respective covenants; (iv) no law or order making the Merger illegal or otherwise prohibiting consummation of the Merger; (v) the shares of Combined Company Common Stock to be issued in the Merger having been approved for listing (subject to official notice of issuance) on the OTC Markets; (vi) the consummation of the Reverse Stock Split, which has been approved by Enzon’s stockholders; (vii) dissenters’ rights not having been exercised by Viskase stockholders representing more than three percent (3%) of the outstanding shares of Viskase’s common stock; and (viii) Enzon having at least $40 million in cash at closing. In addition, either Enzon or Viskase may terminate the Merger Agreement if the Merger is not consummated prior to 11:59 p.m., eastern time, on March 31, 2026.
The Merger Agreement limits Enzon’s ability to pursue alternatives to the Merger.
The Merger Agreement contains provisions that make it more difficult for Enzon to enter into alternative transactions. The Merger Agreement contains certain provisions that restrict Enzon’s 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.
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 we expect to incur additional costs following the completion of the Merger in order to integrate 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. If we terminate the Merger Agreement or the Merger is not completed by the outside date provided in the Merger Agreement, we will have incurred substantial costs from the Merger that we will not be able to recover. We anticipate that we will incur further costs before the Merger is consummated and that we will continue to incur costs to combine operations following the completion of the Merger, 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 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 may be subject to litigation related to any failure to complete the Merger or any failure to fulfill the parties’ respective obligations under the Merger Agreement and there is no guarantee that the market price of our Common Stock will not decline if the Merger is not completed. 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.
Our sources of revenue are limited and we expect only limited revenue and profitability for the foreseeable future if the Merger is not completed.
On June 23, 2025, we entered into the Merger Agreement. If the Merger is consummated, our operations post-Closing will be comprised primarily of the operations of Viskase. However, if the Merger is not consummated, we currently have limited sources of revenue. Prior to 2024, we incurred losses and, in 2025 and 2024, our primary source of income was from interest income. Other than interest income, we do not anticipate generating any additional cash or revenues. As interest rates may fluctuate in the future, there can be no assurance that we will continue to receive interest income at our existing levels, or at levels that allow us to achieve a profit. We do not expect to receive any additional royalty revenues and even if we do receive any additional royalties, we do not expect that such amounts will be material. We currently do not intend to acquire new sources of royalty revenues. If we do not consummate the Merger, we will have only limited revenue relating to the interest income on our existing cash.
Our search for a business, company or assets to acquire or in which to invest may be unsuccessful, or it could result in a change of control, and we may fail to utilize the proceeds of our Rights Offering and/or realize the value of our NOLs.
We are positioned as a public company acquisition vehicle, where we can become an acquisition platform and potentially utilize our NOLs and enhance stockholder value. Although we may acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our approximately $101.4 million in federal NOLs, there can be no assurance we will be able to do so. In addition, we do not have any current plans, arrangements or understandings with respect to any acquisitions or investments, and we may pursue acquisitions that could result in a change of control of us. Although we have had significant discretion in the use of the net proceeds of our Rights Offering, it is possible that we may not utilize such proceeds and if a transaction is pursued that results in a change of control, as defined in the Certificate of Designation of the Series C Non-Convertible Preferred Stock, holders of the Series C Non-Convertible Redeemable Preferred Stock will be entitled to redemption rights, and if exercised would require the Company to redeem such preferred stock. Further, if such change of control occurs, it would likely substantially limit the utilization of our NOLs. We cannot assure you that we will be able to realize the value of all or any of our NOLs.
For example, as discussed in Note 15 to the Condensed Consolidated Financial Statements, we have been contacted with respect to exploring a potential business combination transaction with an affiliate of our significant stockholder, Carl C. Icahn. The Company, through a special committee of the Board, is currently in discussions regarding such a transaction. There can be no assurances that any agreement will be reached or that a transaction will be consummated, or that if such a transaction is consummated, it won’t result in a change of control, or that we will be able to realize the value of all or any of our NOLs.
Our sources of revenue are limited and, as a result of our cash reserves, we expect only limited revenue and profitability for the foreseeable future; while we increased our cash reserve by completing the Rights Offering and generate revenue from such cash reserve, unanticipated liabilities and expenses could adversely affect our ability to engage in a public company acquisition or investment, as currently intended, or to continue operations.
Prior to 2023, we incurred losses and, in 2023 and 2024, our primary source of revenue was from interest income. We received approximately $43.1 million of net proceeds in the fourth quarter of 2020 from the Rights Offering, which we are using to position us as a public company acquisition vehicle, unless and until we can consummate an acquisition or investment that generates income, and other than interest income, we do not anticipate generating any additional cash or revenues. As interest rates may fluctuate in the future, there can be no assurance that we will continue to receive interest income at our existing levels, or at levels that allow us to achieve a profit. Accordingly, there can be no assurance that we will continue to generate a profit based on our interest income. In addition, because the patents have expired in all jurisdictions, we will receive no further royalties on sales of PegIntron, although there may be a potential liability to Merck for product returns and rebates. Based on current estimates, we do not expect any future liability for those returns and rebates to be material. Moreover, our right to receive royalty revenues from other products is limited and we currently do not intend to acquire new sources of royalty revenues. For those remaining existing or potential sources of royalty revenue, our licensees may be unable to maintain regulatory approvals for currently licensed products or obtain regulatory approvals for new products. Safety issues could also result in the failure to maintain regulatory approvals or decrease revenues.
While we have substantially reduced our operating expenses, including ceasing our research and development activities, eliminating our workforce in favor of independent contractors and consultants, and discontinuing our significant lease commitments, we may incur unanticipated liabilities or expenses, including expenses to defend unasserted product liability claims or greater than expected liabilities for PegIntron and expenses incurred in our search for a target business to acquire or in which to invest. Any such expenses or liabilities could impact the availability of assets that we expect to use to fund future operations or adversely affect our ability to pay dividends or make distributions to shareholders upon a liquidation of the Company.
We have outsourced all corporate functions, which makes us more dependent on third parties to perform these corporate functions.
We have outsourced all corporate functions, which makes us more dependent on third parties for the performance of these functions. To the extent that we are unable to effectively reallocate employee responsibilities, retain key officers as consultants, maintain effective internal control over financial reporting and effective disclosure controls and procedures, establish and maintain agreements with competent third-party contractors on terms that are acceptable to us, or effectively manage the work performed by any retained third-party contractors, our ability to manage the operations effectively could be compromised.
While we may, potentially, acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our NOLs, we may be unable to do so and, accordingly, we may be unable to realize our deferred income tax assets.
The ultimate realization of our deferred income tax assets is dependent upon generating future taxable income, executing tax planning strategies, and reversals of existing taxable temporary differences. We have recorded a partial valuation allowance against our deferred income tax assets, which may fluctuate as conditions change. While we are positioned as a public company acquisition vehicle and may acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our NOLs, we cannot provide any assurance that we will be able to do so. If we fail to do so, approximately 97% of our current federal NOLs will expire by 2036 and more than 90% of our current federal NOLs will expire by the end of 2031. As a result of the expiration dates of our NOLs and our efforts to date to identify acquisition candidates, we may consider transactions that could result in a change of control of us in an effort to enhance stockholder value.
Our ability to utilize our NOLs to offset our future taxable income and/or to recover previously paid taxes would be limited or could be non-existent if we were to undergo an “ownership change” within the meaning of Section 382 of the Internal Revenue Code. In general, an “ownership change” occurs whenever the percentage of the stock of a corporation owned by “5-percent shareholders” (within the meaning of Section 382 of the Internal Revenue Code) increases by more than 50 percentage points over the lowest percentage of the stock of such corporation owned by such “5-percent shareholders” at any time over the testing period.
An ownership change under Section 382 of the Internal Revenue Code would establish an annual limitation to the amount of NOLs we could utilize to offset our taxable income in any single year. The application of these limitations might prevent full utilization of the deferred tax assets attributable to our NOLs. Although we have adopted a Section 382 rights plan in an effort to protect stockholder value by attempting to protect against a possible limitation on our ability to use our NOLs, we cannot assure you that we will not undergo an ownership change within the meaning of Section 382. (See Notes 9 and 11 to the Consolidated Financial Statements.)
Our common stock ranks junior to our Series C Preferred Stock.
With respect to the payment of cash dividends and amount payable in the event our liquidation, dissolution or winding up, our common stock will rank junior to our Series C Non-Convertible Redeemable Preferred Stock (“Series C Preferred Stock”). This means that, unless full dividends have been (i) paid, (ii) redeemed in an amount in excess of the initial liquidation value of $1,000 per share of Series C Preferred Stock or (iii) set aside for payment on all outstanding Series C Preferred Stock for all dividends or increases in the liquidation value in excess of the initial liquidation amount of $1,000 of such Series C Preferred Stock, no cash dividends may be declared or paid on our common stock. Likewise, in the event of our voluntary or involuntary liquidation, dissolution or winding up, no distribution of our assets may be made to holders of our common stock until we have paid to the holders of our Series C Preferred Stock the liquidation preference related to such Series C Preferred Stock, plus in each case any accrued and unpaid dividends.
In addition, the holders of Series C Preferred Stock have the right to demand that we redeem their shares in the event that we undergo a change of control. Accordingly, if such demands were made, there could be limited or no cash available to declare or make any dividends to holders of our common stock.
Mr. Carl C. Icahn, directly and indirectly, beneficially owns approximately 49% of the outstanding shares of our common stock, as well as approximately 98% of the outstanding Series C Preferred Stock. Mr. Icahn may have interests that are different from, in addition to or not always consistent with our interests or with the interests of our other common or preferred stockholders. To the extent that conflicts of interest may arise between us and Mr. Icahn and his affiliates, those conflicts may be resolved in a manner adverse to us or our other stockholders. In addition, the existence of significant stockholders may have the effect of making it difficult for, or may discourage or delay, a third party from seeking to acquire a majority of our outstanding common stock, which may adversely affect the market price of our common stock. In addition, such stockholders may exert significant influence over our operations. Accordingly, the interests of these significant stockholders may not always coincide with our interests or the interests of other stockholders, or otherwise be in the best interests of us or all stockholders.
The price of our commonCommon stockStock has historically been volatile and may decline significantly if we are unable to consummate a business acquisition or investment.significantly.
Historically, the market price of our commonCommon stockStock has fluctuated over a wide range for a variety of reasons, including Company-specific factors and global and industry-wide conditions and events such as the COVID-19 pandemic and resulting recession, as well as the fact that only a few stockholders, in the aggregate, hold more than a majority of our commonCommon stock,Stock, and, therefore, there is a small public float with limited trading activity in our commonCommon stock.Stock. InFor example, in the future, if we are unable to consummate the Merger, the value of our commonCommon stockStock may be impacted by our lack of royalty revenues, our ability to monetize our remaining assets, including our NOLs, and any unexpected liabilities or expenses that impact our continued operations, our ability to pay dividends or make distributions to our stockholders and the success of any future activities which we undertake, including our ability to consummate a business acquisition or investment.undertake.
In addition, financings that may be available to us under current market conditions frequently involve sales at prices below the prices at which our common stock currently trades on the OTCQX, as well as the issuance of warrants or convertible equity that require exercise or conversion prices that are calculated in the future at a discount to the then market price of our common stock.
Our commonCommon stockStock is quoted on the OTCQXOTCQB market of the OTC Markets Group, Inc., which has a very limited trading market and, therefore, market liquidity for our commonCommon stockStock is low and our stockholders’ ability to sell their shares of our commonCommon stockStock may be limited.
Our commonCommon stockStock is quoted on the OTCQXOTCQB market of the OTC Markets Group, Inc. and the quotation of our commonCommon stockStock on the OTCQXOTCQB market does not assure that a liquid trading market exists or will develop. Stocks traded on the OTCQXOTCQB market generally have very limited trading volume and exhibit a wider spread between the bid/ask quotations than stocks traded on national exchanges. Moreover, a significant number of institutional investors have investment policies that prohibit them from trading in stocks on the OTCQXOTCQB marketplace. As a result, investors may find it difficult to dispose of, or to obtain accurate quotations of the price of, our commonCommon stock.Stock. This significantly limits the liquidity of our commonCommon stockStock and may adversely affect the market price of our commonCommon stock.Stock. In addition, although the Common Stock will continue to trade on the OTCQB market immediately following the Merger, there is no guarantee that it will continue to do so as a result of the re-application process that the Company is required to undertake following the Merger.
We do not currently, and are not expected in the future to, meet the listing standards of any national exchange. On June 10, 2024, we were notified by the OTCQX Markets Group that we had regained compliance with the OTCQX’s standards for continued qualification as a result of our stock price trading at, or in excess of, $0.10 for the period of time that was required to regain compliance. We presently anticipate that our common stock will continue to be quoted on the OTCQX market. As a result of not expecting to meet the listing standards of any national exchange, investors must bear the economic risk of holding their shares of our common stock for an indefinite period of time. In the future, our common stock could become subject to “penny stock” rules which impose additional disclosure requirements on broker-dealers and could further negatively impact market liquidity for our common stock and our stockholders’ ability to sell their shares of our common stock.
The declaration of common stock dividends is within the discretion of our Board, 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, declining royalty revenues, our ability to acquire other revenue sources and our ability to manage expenses, including costs relating to our ongoing operations.
The declaration of dividends is within the discretion of our Board, subject to any applicable limitations under Delaware corporate law, and, therefore, our Board could decide in the future not to declare dividends. In addition, as described elsewhere, our common stock ranks junior to the Series C Preferred Stock, and we cannot declare or pay cash dividends on our common stock unless we satisfy the dividend requirements of such Series C Preferred Stock. Also, our ability to pay dividends in the future depends on, among other things, interest rates, our future revenues, including any revenues from existing and any future royalties and/or milestone payments, our ability to acquire other revenue sources and our ability to manage expenses, including costs relating to our ongoing operations. We expect little or no future royalties from existing products for which we have the right to receive royalties. In addition, while we may acquire or invest in businesses, entities or revenue streams and we may be entitled to a share of milestone and royalty payments from the approval and sale of Vicineum, we cannot assure you that we will be able to do so or that we will have sufficient royalty or milestone revenues to be able to pay dividends in the future.
We have adopted a Section 382 rights plan, which may discourage a corporate takeover.
On August 14, 2020, our Board of Directors adopted the Section 382 rights plan and declared a dividend distribution of one right for each outstanding share of our common stock to stockholders of record at the close of business on August 24, 2020. Each share of our common stock issued thereafter will also include one right. Each right entitles its holder, under certain circumstances, to purchase from us one one-thousandth of a share of our Series A-1 Junior Participating Preferred Stock at an exercise price of $1.20 per right, subject to adjustment.
The Board adopted the Section 382 rights plan in an effort to protect stockholder value by attempting to protect against a possible limitation on our ability to use our NOLs. We may utilize these NOLs in certain circumstances to offset future United States taxable income and reduce our United States federal income tax liability. Because the Section 382 rights plan could make it more expensive for a person to acquire a controlling interest in us, it could have the effect of delaying or preventing a change in control even if a change in control was in our stockholders’ interest.
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.
In addition to our Section 382 rights plan, provisions of our certificate of incorporation and bylaws, as well as provisions of Delaware corporate law, could make it more difficult for a third party to acquire us, even though such acquisitions may be beneficial to our stockholders. These anti-takeover provisions include:
The provisions described above, our Section 382 rights plan and provisions of Delaware corporate law relating to business combinations with interested stockholders, along with the significant amount of common stock beneficially owned by Mr. Icahn, may discourage, delay or prevent a third party from acquiring us. These provisions may also discourage, delay or prevent a third party from acquiring a large portion of our securities, or initiating a tender offer, even if our stockholders might receive a premium for their shares in the acquisition over the then current market price.
Risks RelatedRelating to the Series C Preferred Stock
In the event of any dissolution, liquidation, or winding up of our Company, we may not be able to make distributions or payments in full to all the holders of the Series C Preferred Stock or, if required, we may not be able to redeem such shares.
The Series C Preferred Stock ranks senior to our common stock, but we may in the future issue one or more series of preferred stock that ranks senior to, junior to or pari passu with our Series C Preferred Stock. In the event of any dissolution, liquidation, winding up or change of control of our Company, we may not be able to make distributions or payments in full to all the holders of the Series C Preferred Stock or, if requested by such holders upon a change of control, to redeem the Series C Preferred Stock, in which case holders of the Series C Preferred Stock could lose some or all of the entire value of their investment.
The dividends on our Series C Preferred Stock can be paid either in cash or be paid in kind by increasing the liquidation value of the shares of Series C Preferred Stock.
The terms of the Series C Preferred Stock allow dividends on the shares of Series C Preferred Stock to be paid either in cash or be paid in kind by increasing the liquidation value of the shares of Series C Preferred Stock and, therefore, allow the repayment of the principal and accrued dividends on the Series C Preferred Stock to be deferred until the earliest of the redemption of the Series C Preferred Stock or upon our dissolution, liquidation or winding up. We may not have enough capital to repay the full amount of the principal and accrued dividends when the payment of principal and accrued dividends on the Series C Preferred Stock becomes due.
Management's Discussion & Analysis (MD&A)
New heading “Merger Agreement”
New heading “Series C Exchange Offer”
New heading “Operating Expenses”
New heading “Transaction Expenses:”
Largest changes
“As a result of our income, primarily from interest, exceeding our expenses for the year ended December 31, 2024, we realized approximately $1,125,000 in pre-tax book income before utilization of NOLs. We utilized approximately $1.1 million of our NOLs. We are projecting 2025 pre-tax book income due to interest rates on our short-term cash investments and the absence of any acquisitions at this time. …”see in full comparison
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 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 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.see in full comparisonAsAccordingly, the Company is projecting pre-tax book loss through the expected closing date ofDecemberthe31,pending2024,Mergerwewithbelieve,Viskase.basedUpononreviewourofprojections,positivethatand negative evidence in determining a partial reversal of the valuation allowance, the Company has concluded that a full valuation allowance is necessary.Interest rates may fluctuate throughout 2025, however, they are not expected to return to low rates of the past creating a projected taxable income position. Therefore, the Company will partially reverse the valuation allowances. We are positioned as a public company acquisition vehicle, where we can become an acquisition platform and potentially utilize our NOLs. We may acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our approximately $101.4 million of federal NOLs. At this time, however, we cannot assure you that we will be successful in doing so.Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when 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 theRights OfferingMerger (See Note 13 to the Consolidated Financial Statements).
Full comparison: every changed paragraph (43)
The percentage changes throughout the following discussion are based on amounts stated in thousands of dollars.
Enzon Pharmaceuticals, Inc. (together with its subsidiaries, the “Company,” “Enzon,” “we” or “us”) is positioned as a public company acquisition vehicle.
Historically, we 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. We previously were a party to a marketing agreement relating to the drug Vicineum, which, if approved, could have potentially generated milestone and royalty payments to us in the future. However, our licensee for this drug was canceled by the counterparty to the marketing agreement and our patent for Vicineum has since expired. Accordingly, we do not believe any future revenue will be earned from this product or that if any such revenue is earned it will be material.
Merger Agreement
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, which was amended on October 24, 2025 (as amended, the “Merger Agreement”). 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”). Following consummation of the Merger, it is anticipated that Enzon’s pre-closing stockholders, including holders of Enzon’s Series C Preferred Stock who exchange such stock for shares of Enzon’s Common Stock pursuant to the Series C Exchange Offer (see below), will hold 45% of the outstanding shares of Enzon’s Common Stock, and Viskase’s pre-closing stockholders will hold 55% of the outstanding shares of Enzon’s Common Stock. If the Merger is completed, Enzon Pharmaceuticals, Inc. will change its name to “Viskase Holdings, Inc.” and its common stock will be quoted on the OTCQB tier of the OTC Markets Group, Inc., although pursuant to the rules of the OTCQB, Enzon is required to re-apply to the OTCQB following such change of control transaction The Merger Agreement and the transactions contemplated thereby, including the anticipated amendment to the Company’s Amended and Restated Certificate of Incorporation to effect the consolidation of the issued and outstanding shares of the Enzon’s Common Stock at a ratio of 1-for-100 (which we refer to as the “Reverse Stock Split”), were approved by the requisite holders of Enzon’s Common Stock. The closing of the transactions contemplated by the Merger Agreement is subject to satisfaction or waiver of the remaining conditions to closing as set forth in the Merger Agreement. The conditions to the closing of the transactions subject to the Merger Agreement are described in more detail in the Prospectus/Consent Solicitation/Offer to Exchange filed by Enzon with the SEC on January 30, 2026.
Series C Exchange Offer
As required by the Merger Agreement, on January 30, 2026, Enzon commenced an exchange offer pursuant to which Enzon offered each holder of the its Series C Preferred Stock to exchange each share of Enzon’s Series C Preferred Stock held by such stockholder for a number of shares of Enzon’s Common Stock equal to (i) the aggregate liquidation preference of each share of Enzon’s Series C Preferred Stock, divided by (ii) $7.83 after giving effect to the Reverse Stock Split (referred to as the “Series C Exchange Offer”). The Series C Exchange Offer will expire one minute after 11:59 p.m., Eastern Time, on March 9, 2026, unless extended or terminated in Enzon’s sole discretion or in accordance with applicable law.
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.
During 2020, the Company adopted a Section 382 rights plan and completed a Rights Offering, each as further described below. As a result of the successful completion of the Rights Offering, we are positioned as a public company acquisition vehicle, where we can become an acquisition platform and potentially utilize our NOLs and enhance stockholder value. We may acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our approximately $101.4 million of federal NOLs. To date, we have not identified any actionable acquisition candidates and, while we expect that, ultimately, we will be successful in realizing the value of our NOLs, we cannot assure you that we will be able to do so.
Prior to 2017, the primary source of our royalty revenues was derived from sales of PegIntron, which is marketed by Merck. We currently have no clinical operations and limited corporate operations. We have no intention of resuming any clinical development activities. We had no revenues from sales of PegIntron for the years ended December 31, 2024 and 2023. We have a marketing agreement with Micromet AG, now part of Amgen, Inc. (the “Micromet Agreement”), pursuant to which we may be entitled to certain milestone and royalty payments if Vicineum, a drug that was being developed by Sesen, Inc., (“Sesen”) is approved for the treatment of non-muscle invasive bladder cancer. Sesen announced that it had completed a merger with Carisma Therapeutics Inc. (“Carisma”) and that the combined company will focus on the advancement of Carisma’s proprietary cell therapy for the treatment of cancer and other disorders and that that it intends to seek a partner for the further development of Vicineum.
Due to the challenges associated with developing and obtaining approval for drug products, and the lack of our involvement in the development and approval process, there is substantial uncertainty as to whether we will receive any milestone or royalty payments under the Micromet Agreement. We will not recognize revenue until all revenue recognition requirements are met.
We may be entitled to certain potential future milestone payments contingent upon the achievement of certain regulatory approval-related milestones by third-party licensees. We cannot assure you that we will receive any milestone payments resulting from our agreements with any of our third-party licensees or that any sales of related products will be made. We will not recognize revenue from any of our third-party licensees until all revenue recognition requirements are met.
Royalties and Milestones Revenues (in thousands of dollars):
The revenues in 20242025 and 20232024 were approximately $26,000$0 and $0,$26,000, respectively, from license fees from Amgen, Inc. (“Amgen”) in payment offor a worldwide, royalty-free non-exclusive right to license Vicineum. Our right to receive royalties on U.S. and European sales of PegIntron have expired in all jurisdictions as of December 31, 2024.2024 and our agreement with Amgen in connection with Vicineum was canceled by Amgen.
Interest and Dividend Income (in thousands of dollars):
Interest and dividend income is attributable to the interest and dividends received on the invested cash and cash equivalents we received from the $46.9$43.6 million of proceeds from our rights offering (See Note 1311 to the Condensed Consolidated Financial Statements). Interest and dividend income increaseddecreased by approximately $191,000,$531,000, or 8%,22%, to $1,921,000 for 2025 from $2,452,000 for 2024 from $2,261,000 for 2023.2024. The increasedecrease in interest and dividends income is primarily attributable to the higherlower rates of interest and smaller balances in 20242025 as compared with 2023.2024.
Operating Expenses
General and Administrative Expenses (in thousands of dollars):
For the year ended December 31, 2024,2025, general and administrative expenses were approximately $1,353,000,$1,356,000, an increase of approximately $309,000,$3,000, 30%,substantially unchanged from $1,044,000$1,353,000 in the prior year, primarily attributable to an increase in professional fees.year.
Transaction Expenses:
Transaction expenses incurred in connection with the Merger were approximately $3,955,000 for the year ended December 31, 2025. These expenses were, primarily, for legal, consulting and professional fees. There were no comparable amounts during the corresponding period in 2024. (See Note 13 to our Consolidated Financial Statements).
For the year ended December 31, 2025, we incurred approximately $3,390,000 in pre-tax book loss primarily due to increased expenses related to the pending Merger with Viskase. We are projecting 2026 pre-tax book loss through the expected closing date of the pending Merger with Viskase. Upon review of positive and negative evidence, the Company has concluded that a full valuation allowance is necessary as of December 31, 2025. A deferred tax expense of $17,000 was recorded during the year ended December 31, 2025.
As a result of our income, primarily from interest, exceeding our expenses for the year ended December 31, 2024, we realized approximately $1,125,000 in pre-tax book income before utilization of NOLs. We utilized approximately $1.1 million of our NOLs. We are projecting 2025 pre-tax book income due to interest rates on our short-term cash investments and the absence of any acquisitions at this time. 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. Interest rates may fluctuate throughout 2025, however, they are not expected in the near term to return to the low rates of the past creating a projected taxable income position. Therefore, the Company will partially reverse the valuation allowances as of December 31, 2024. A deferred tax expense of $342,000 was recorded during the year ended December 31, 2024. We may acquire businesses, entities or revenue streams that will generate sufficient income so that we can utilize our approximately $101.4 million NOLs. While we anticipate that, ultimately, we could be successful in realizing the value of our NOLs, we cannot assure you that we will be able to do so.
Our management will continue to assess the need for this valuation allowance and will make adjustments when appropriate. Additionally, our management believes that our NOLs will not be limited by any changes in the Company’s ownership as a result of the successful completion of the Rights Offering. (See Note 13 to the Consolidated Financial Statements.)
These projections and beliefs are based upon a variety of estimates and numerous assumptions made by our management with respect to, among other things, interest rates, forecasted sales of the drug products for which we have the right to receive royalties, our ability to acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our NOLsexpenses and othertransaction matters, many of which are difficult to predict, are subject to significant uncertainties and are beyond our control.costs. As a result, we cannot assure you that the estimates and assumptions upon which these projections and beliefs are based will prove accurate, that the projected results will be realized or that the actual results will not be substantially higher or lower than projected.
On August 14, 2020, we entered into the Section 382 Rights Agreement with Continental Stock Transfer & Trust Company, as rights agent (as amended, the “Rights Agreement”), in order to protect our net operating loss carryforwards (“NOLs”), certain credits and other tax attributes. The Merger Agreement requires that we terminate the Rights Plan prior to the consummation of the Merger. On February 27, 2026, the Company entered into an amendment to the Rights Agreement to extend the final expiration date of the Rights Agreement to noon, New York City time, on March 11, 2026. We may further extend the term of the Rights Agreement to the extent necessary to provide that the Rights Agreement will terminate immediately prior to the date on which the Merger is consummated.
On August 14, 2020, in an effort to protect stockholder value by attempting to protect against a possible limitation on our ability to use our NOLs, our Board of Directors adopted a Section 382 rights plan and declared a dividend distribution of one right for each outstanding share of the Company’s common stock to stockholders of record at the close of business on August 24, 2020. Accordingly, holders of the Company’s common stock own one preferred stock purchase right for each share of common stock owned by such holder. The rights are not immediately exercisable and will become exercisable only upon the occurrence of certain events as set forth in the Section 382 rights plan. If the rights become exercisable, each right would initially represent the right to purchase from us one one-thousandth of a share of our Series A-1 Junior Participating Preferred Stock, par value $0.01 per share, for a purchase price of $1.20 per right. If issued, each fractional share of Series A-1 Junior Participating Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of the Company’s common stock. However, prior to exercise, a right does not give its holder any rights as a stockholder of the Company, including any dividend, voting or liquidation rights. The rights will expire on the earliest of (i) the close of business on June 2, 2024 (unless that date is advanced or extended by the Board of Directors), (ii) the time at which the rights are redeemed or exchanged under the Section 382 rights plan, (iii) the close of business on the day of repeal of Section 382 of the Internal Revenue Code or any successor statute and (iv) the close of business on the first day of a taxable year of the Company to which our Board of Directors determines that no NOLs may be carried forward. On May 16, 2024, the Company entered into the Second Amendment to the Section 382 Rights Agreement, which extends the expiration date of the Section 382 rights plan to the close of business on March 31, 2025.
On SeptemberOctober 1,9, 2020, we completed a rights offering (the “Rights Offering”) pursuant to which we offered our Boardexisting of Directors approvedstockholders the Rightsability Offeringto purchase rights consisting of shares of our Series C Preferred Stock and shares of theour Company’sCommon commonStock. stock.In Onconnection October 9, 2020,with the Rights Offering was completed and, as a result,Offering, we realized gross proceeds of approximately $43.6 million,million and issued 40,000 shares of Series C Preferred Stock and 30,000,000 shares of commonCommon stockStock. such that there isWe currently have an aggregate of 40,000 shares of Series C Preferred Stock and 74,214,603 shares of commonCommon stockStock outstanding. (See Note 1211 to the Consolidated Financial Statements.)
WithThe regardterms toof the Series C Preferred Stock,Stock provide, on an annual basis, that the Company’s Board of Directors 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 3% of the liquidation preference as in effect at such time (initially $1,000 per share). If the dividend is not so paid in cash, the liquidation preference is adjusted and increased annually by an amount equal to 5% of the liquidation preference per share as in effect at such time, that is not paid in cash to the holders on such date. HoldersPursuant of Series C Preferred Stock do not have any voting rights andto the Series C Preferred Stock is not convertible into shares of our common stock. The initial liquidation valueterms of the SeriesMerger CAgreement, Preferredwe Stockare wasnot $1,000permitted perto share.pay Onany December 20, 2024, our Board declared a cash dividend of 3% of the liquidation preference ($42,483,286) of the Series C Preferred Stock, aggregating approximately $1,275,000 ($31.86 per share). Such dividend was paid on January 9, 2025dividends to the holders of recordour Common Stock and we are not permitted to pay any cash dividends to the holders of our Series C Preferred Stock aswhile ofthe Januarytransactions 2,contemplated 2025.by the Merger Agreement are pending.
The initial liquidation value of the Series C Preferred Stock was $1,000 per share. On December 20, 2024, our Board declared a cash dividend of 3% of the liquidation preference ($42,483,286) of the Series C Preferred Stock, aggregating approximately $1,275,000 ($31.86 per share). Such dividend was paid on January 9, 2025 to the holders of record of our Series C Preferred Stock as of January 2, 2025.
Due to the restrictions in the Merger Agreement, we are not permitted to pay a cash dividend on its Series C Preferred Stock for 2025. However, pursuant to the terms of the Series C Preferred Stock, if a cash dividend is not paid, we must accrete an increase in liquidation preference equal to 5% of the liquidation preference as in effect at such time. Accordingly, the Series C Preferred Stock was adjusted and increased by an amount equal to 5% of the liquidation preference per share ($42,483,400) as in effect at such time which aggregated approximately $2,124,000 ($53.10 per share) at December 31, 2025. Following such adjustment the liquidation preference of the Series C Preferred Stock at December 31, 2025 was approximately $44,607,400.
As described above, we have commenced the Series C Exchange Offer which allows holders of our Series C Preferred Stock to elect to exchange their shares of Series C Preferred Stock for shares of our Common Stock. Holders of Series C Preferred Stock that do not participate in the Series C Exchange Offer will not have the right to exchange their shares of Series C Preferred Stock into shares of Enzon’s Common Stock following the expiration of the Series C Exchange Offer. The Series C Exchange Offer is open to holders of Enzon’s Series C Preferred Stock that are held by holders other than Icahn Enterprises Holdings L.P., a Delaware limited partnership (“IEH”), and certain of its affiliates (collectively with IEH, the “IEH Parties”). Any shares of Enzon’s Series C Preferred Stock held by holders other than the IEH Parties that are not exchanged for shares of Enzon’s Common Stock in the Series C Exchange Offer will remain outstanding pursuant to their current terms. Pursuant to the terms of the Merger Agreement, the IEH Parties are required to exchange the shares of the Company’s Series C Preferred Stock into shares of the Company’s Common Stock prior to the completion of the Merger in a private exchange offer.
Since November 1, 2022, we have 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 wethe Company redeem their shares of Series C Preferred Stock in the event that wethe undergoCompany experiences a change of control.control, such as the Merger. Under the terms of Enzon’s Series C Preferred Stock, we may redeem any outstanding shares of our Series C Preferred Stock for a cash amount equal to the aggregate liquidation preference of such shares at any time.
We believe that the completion of the Rights Offering will not limit the use of our NOLs due to any Section 382 limitations.
As the Company’s Board declared dividends on the Series C Preferred Stock as of December 31, 2024 and 2023, the liquidation value at both December 31, 2024 and 2023 was $1,062 per share. (See Note 13 to the Consolidated Financial Statements.)
Our current source of liquidity is our existing cash on hand, which includes the approximately $43.6 million of gross proceeds from our Rights Offering and the interest earned on that amount.amount less certain operating expenses. (See Note 1311 to the 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 theour approvalfew andremaining salelicensed ofpatents, Vicineum.but we do not expect any such amounts to be material. We believe that our existing cash and cash equivalents on hand will be sufficient to fund our operations, at least, through March 2026.2027, 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. We anticipate that we will continue to incur transaction costs in connection with the Merger. If the Merger is not completed, we will continue to be positioned as a public company acquisition vehicle.
While we are positioned as a public company acquisition vehicle, where we can become an acquisition platform to potentially utilize our NOLs in an effort to enhance stockholder value, we cannot assure you that we will succeed in making acquisitions that are profitable or that we will be able to utilize any or all of our NOLs.
Net cashCash used in operating activities represents income,activities, as adjusted for certain non-cash items including the effect of changes in operating assets and liabilities. Net cash from operating activitiesliabilities, during 2024the year ended December 31, 2025 was $1,122,000,approximately $3,010,000, as compared to net cash from operating activities during the year ended December 31, 2024 of $1,305,000 in 2023.$1,122,000. The decrease in net cash provided of approximately $183,000$4,132,000 was primarily attributable to operatingthe losstransaction costs of approximately $1,327,000$3,955,000 in 2024,the resulting2025 period related to the Merger for which there was no corresponding amount in netthe year ended December 31, 2024 and the decrease in interest and dividend income of approximately $778,000$531,000, decreasing to approximately $1,921,000 during thatthe year ended December 31, 2025, from approximately $2,452,000 during the comparable period comparedin to net income of approximately $1,373,000 during 2023.2024.
Cash used in financing activities represents cash dividends of approximately $1,275,000 paid to holders of the Company’s Series C Preferred Stock duringin 2025 relating to the 2024 and 2023. No cash was provided by investing activities in 2024 or 2023.period.
The net effect of the foregoing was a virtuallydecrease unchangedof cash positionand cash equivalents of approximately $46.9$4,285,000 andfrom $47.0approximately million$46,859,000 atfor the year ended December 31, 2024 andto 2023,approximately respectively.$42,574,000 for the year ended December 31, 2025.
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 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 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. AsAccordingly, the Company is projecting pre-tax book loss through the expected closing date of Decemberthe 31,pending 2024,Merger wewith believe,Viskase. basedUpon onreview ourof projections,positive thatand negative evidence in determining a partial reversal of the valuation allowance, the Company has concluded that a full valuation allowance is necessary. Interest rates may fluctuate throughout 2025, however, they are not expected to return to low rates of the past creating a projected taxable income position. Therefore, the Company will partially reverse the valuation allowances. We are positioned as a public company acquisition vehicle, where we can become an acquisition platform and potentially utilize our NOLs. We may acquire businesses, entities or revenue streams that could generate sufficient income so that we can utilize our approximately $101.4 million of federal NOLs. At this time, however, we cannot assure you that we will be successful in doing so. Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when 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 OfferingMerger (See Note 13 to the 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.
What changed in the latest 10-Q
Risk Factors
As a smaller reporting company, we are not required to provide information required by this item.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Results of Operations – Comparison of Six Months Ended June 30, 2026 and 2025”
New heading “Operating Expenses”
New heading “Selling, General and Administrative”
New heading “Amortization of Intangibles”
New heading “Restructuring and Related Expenses”
New heading “Income from Operations”
New heading “Other Income (Expense):”
New heading “Interest Expense, Net”
New heading “Other (Expense) Income, Net”
New heading “Income Tax Provision”
Removed heading “Critical Accounting Estimates”
Largest changes
“North America operating income has improved $11.8 million due to lower asset impairment and restructuring expense of $16.4 million offset by a decrease in gross profit due to lower sales volume. EMEA operating income is lower by $1.6 million compared to March 31, 2025 due to lower gross profit on sales mix and inflation on costs.”see in full comparison
“North America operating income has improved $10.6 million due to lower asset impairment and restructuring expense of $4.8 million offset by a decrease in gross profit due to lower sales volume. EMEA operating income is higher by $1.5 million compared to June 30, 2025 due to higher gross profit on sales mix and inflation on costs.”see in full comparison
“Results of Operations – Comparison of Six Months Ended June 30, 2026 and 2025”see in full comparison
“The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate refinancing of its Senior Credit Facility before its maturity in August 2027.”see in full comparison
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate refinancing of its Senior Credit Facility before its maturity in August 2027.see in full comparison
Full comparison: every changed paragraph (71)
On June 20, 2025, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) that was amended on October 23, 2025, by and between Enzon Pharmaceuticals, Inc. (which is now known as Viskase Holdings, Inc.), Viskase Companies, Inc. (which was converted into a limited liability company following the Merger and is now known as Viskase Companies, LLC (“Viskase Companies”), and EPSC Acquisition Corp. (“EPSC”). Pursuant to the terms of the Merger Agreement, EPSC was merged with and into Viskase Companies, with Viskase Companies surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Immediately following the Merger, Viskase Companies converted into a limited liability company under Delaware law, and the Company changed its name from “Enzon Pharmaceuticals, Inc.” to “Viskase Holdings, Inc.” References herein to the Company refer to Viskase Holdings, Inc., which operates it business through its subsidiaries, including Viskase Companies.
Immediately following the Merger, Viskase Companies converted into a limited liability company under Delaware law, and the Company changed its name from “Enzon Pharmaceuticals, Inc.” to “Viskase Holdings, Inc.” References herein to the Company refer to Viskase Holdings, Inc., which operates it business through its subsidiaries, including Viskase Companies.
Viskase is subject to continuing risks and uncertainties in connection with, and as a result of, the current geopolitical and economic uncertainty, including increases in inflation, risk of economic slowdown, fluctuating interest rates, new or increased tariffs and other barriers to trade, supply chain disruptions, changes to fiscal and monetary policy or government budget dynamics (particularly in the product segment of the food industry), volatility in financial markets, elevated energy and commodity prices, potential government shut downs, and war, military conflicts and/or hostilities, including the ongoing conflicts between Russia and Ukraine and regional hostilities in the Middle East and the responses thereto. While we are closely monitoring the impact of the current macroeconomic and geopolitical conditions on all aspects of our business, the ultimate extent of the impact on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of our control and could exist for an extended period of time, and could have material adverse effects on our business, results of operations, financial condition, and liquidity, including through increased input costs, disrupted supply chains, reduced consumer demand, tighter financial conditions, and impaired access to capital markets. We will continue to evaluate the nature and extent of the potential impacts to itsour business, results of operations, liquidity and capital resources. For additional information, see the section titled “Risk Factors — Risk Factors Relating to Viskase’s Business” in the prospectus/consent solicitation statement/offer to exchange filed by the Company with the SEC on January 30, 2026.
Net Sales
Results of Operations – Comparison of Three Months Ended MarchJune 31,30, 2026 and 2025
Net Sales
Net sales decreased by approximately $7.7$7.2 million, or (8.17.3)%, to $86.5$90.1 million for the three months ended MarchJune 31,30, 2026, compared to $94.2$97.3 million for the three months ended MarchJune 31,30, 2025. The decrease in net sales was primarily driven by volume-related decreases of approximately $13.0$10.9 million, partially offset by price and product mix-related increases of approximately $1.0$2.6 million and a favorable foreign currency impact of $4.3$1.1 million.
The decrease in North America nets sales of $16.8$5.6 million is mainly due to reduced sales volume resulting from a temporary production capacity issue related to the 2025 restructuring plan, offset by an increase in selling price. EMEA nets sales has increased $10.6$5.4 million due to $6$5.3 million of intercompany sales volume and $4 million of increased customer sales mainly driven by foreign currency translation.volume. Asia net sales decreased $1.5$3.4 million due to sales volume.
Cost of sales decreased by approximately $2.2$6.6 million or (2.87.7)% to $77.5$79.0 million for the three months ended MarchJune 31,30, 2026, compared to $79.8$85.6 million for the three months ended MarchJune 31,30, 2025. The decrease in cost of sales was primarily driven by lower volumes of product sold due to temporary capacity constraints.
Gross margin decreased by approximately $5.4$0.5 million, or (37.54.6)%, to $9.0$11.1 million for the three months ended MarchJune 31,30, 2026, compared to $14.4$11.6 million for the three months ended MarchJune 31,30, 2025. The decrease in gross margin was primarily driven by lower volumes of product sold due to temporary capacity constraints.
Selling, general and administrative expenses increaseddecreased by approximately $0.7$0.8 million, or 6.3 %,6.0%, to $12.4$12.1 million for the three months ended MarchJune 31,30, 2026, compared to $11.7$12.9 million for the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily driven by higherlower year over year professional fees and payroll expenses.
Amortization of intangible assets totaled approximately $0.5 million for the three months ended MarchJune 31,30, 2026 andcompared to $0.4 million for the three months ended June 30, 2025 on the amortization of intangible assets recognized with acquisitions.
Restructuring and related expense totaled approximately $0.4$0.2 million for the three months ended MarchJune 31,30, 2026, compared to an expense of $4.7$0.9 million for the three months ended MarchJune 31,30, 2025. See the discussion in the Restructuring Plan section above for additional details.
Loss from operations totaled approximately $4.3$2.0 million for the three months ended MarchJune 31,30, 2026, compared to $14.4$2.6 million for the three months ended MarchJune 31,30, 2025. The decrease in operating loss of $10.1$0.6 million or (69.923.4)% was primarily driven by assetthe impairment expense of $12.1 million recordeddecrease in duringselling, thegeneral sameand periodadministrative in prior year, partially offset by lower year over year gross margin during the three months ended March 31, 2026.expenses.
North America operating income has improved $0.6 million due to selling, general and administrative.
North America operating income has improved $11.8 million due to lower asset impairment and restructuring expense of $16.4 million offset by a decrease in gross profit due to lower sales volume. EMEA operating income is lower by $1.6 million compared to March 31, 2025 due to lower gross profit on sales mix and inflation on costs.
Interest expense, net of interest income totaled approximately $2.7 million for the three months ended June 30, 2026 compared to $2.8 million for the three months ended MarchJune 31, 2026 and30, 2025.
Other (Expense) Income,Expense, Net
Other income,expense, net totaled approximately $1.2$0.1 million for the three months ended MarchJune 31,30, 2026, compared to approximately $2.2$0.4 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by foreign currency gains or losses recognized during the period.
During the three months ended MarchJune 31,30, 2026, an income tax provision of approximately $0.7$0.3 million was recognized on the loss before income taxes of $6.0$4.8 million compared to an income tax benefitexpense of approximately $1.4$14.4 million for the three months ended MarchJune 31,30, 2025 on loss before income taxes of $15.0$5.9 million. Our effective income tax rate was (12.56)% and 9.4 (243.6)% for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
For the three months ended MarchJune 31,30, 2026 the effective tax rate was lower than the statutory federal rate of 21%, for corporations, primarily due to a valuation allowance against US deferred tax assets and the jurisdictional mix of earnings and operating losses expected for the year.
For the three months ended MarchJune 31,30, 2025 the effective tax rate was lowerhigher than the statutory federal rate of 21%, for corporations, primarily due to the recognition of a valuation allowance against the deferred tax assets in the U.S. and the jurisdictional mix of earnings and operating losses expected for the year.
Results of Operations – Comparison of Six Months Ended June 30, 2026 and 2025
The following table summarizes Viskase’s annual condensed consolidated statement of operations for the periods presented (in thousands):
Net sales decreased by approximately $14.8 million, or (7.7)%, to $176.7 million for the six months ended June 30, 2026, compared to $191.5 million for the six months ended June 30, 2025. The decrease in net sales was primarily driven by volume-related decreases of approximately $23.7 million, partially offset by price and product mix-related increases of approximately $3.9 million and a favorable foreign currency impact of $5.0 million.
The following table summarizes our segment revenues for the periods presented (in thousands):
The decrease in North America nets sales of $22.4 million is mainly due to reduced sales volume resulting from a temporary production capacity issue related to the 2025 restructuring plan, offset by an increase in selling price. EMEA nets sales has increased $16.0 million due to $12 million of intercompany sales volume and $4 million of increased customer sales mainly driven by foreign currency translation. Asia net sales decreased $4.9 million due to sales volume.
Cost of Sales
Cost of sales decreased by approximately $8.9 million or (5.4)% to $156.6 million for the six months ended June 30, 2026, compared to $165.4 million for the six months ended June 30, 2025. The decrease in cost of sales was primarily driven by lower volumes of product sold due to temporary capacity constraints.
Gross Margin
Gross margin decreased by approximately $5.9 million, or (22.8)%, to $20.1 million for the six months ended June 30, 2026, compared to $26.0 million for the six months ended June 30, 2025. The decrease in gross margin was primarily driven by lower volumes of product sold due to temporary capacity constraints.
Operating Expenses
Selling, General and Administrative
Selling, general and administrative expenses remained the same at $24.6 million for the six months ended June 30, 2026 and 2025.
Amortization of Intangibles
Amortization of intangible assets totaled approximately $1.1 million for the six months ended June 30, 2026 and $0.8 million for the six months ended June 30, 2025 on the amortization of intangible assets recognized with acquisitions.
Restructuring and Related Expenses
Restructuring and related expense totaled approximately $0.6 million for the six months ended June 30, 2026, compared to an expense of $5.6 million for the six months ended June 30, 2025. See the discussion in the Restructuring Plan section above for additional details.
Income from Operations
Loss from operations totaled approximately $6.3 million for the six months ended June 30, 2026, compared to $17.0 million for the six months ended June 30, 2025. The decrease in operating loss of $10.7 million or (62.7)% was primarily driven by asset impairment expense of $12.1 million recorded in during the same period in prior year, partially offset by lower year over year gross margin during the six months ended June 30, 2026.
The following table summarizes our segment operating income for the periods presented (in thousands):
North America operating income has improved $10.6 million due to lower asset impairment and restructuring expense of $4.8 million offset by a decrease in gross profit due to lower sales volume. EMEA operating income is higher by $1.5 million compared to June 30, 2025 due to higher gross profit on sales mix and inflation on costs.
Other Income (Expense):
Interest Expense, Net
Interest expense, net of interest income totaled approximately $5.5 million for the six months ended June 30, 2026 and $5.6 million for the six months ended June 30, 2025.
Other (Expense) Income, Net
Other income, net totaled approximately $1.1 million for the six months ended June 30, 2026, compared to approximately $1.7 million for the six months ended June 30, 2025. The decrease was primarily driven by foreign currency gains or losses recognized during the period.
Income Taxes:
Income Tax Provision
During the six months ended June 30, 2026, an income tax provision of approximately $1.1 million was recognized on the loss before income taxes of $10.8 million compared to an income tax expense of approximately $12.9 million for the six months ended June 30, 2025 on loss before income taxes of $20.9 million. Our effective income tax rate was (9.7)% and (61.9)% for the six months ended June 30, 2026 and 2025, respectively.
For the six months ended June 30, 2026 the effective tax rate was lower than the statutory federal rate of 21%, for corporations, primarily due to the jurisdictional mix of earnings and operating losses expected for the year.
For the six months ended June 30, 2025 the effective tax rate was higher than the statutory federal rate of 21%, for corporations, primarily due to a valuation allowance against US deferred tax assets and the jurisdictional mix of earnings and operating losses expected for the year.
Viskase’s primary sources of liquidity are net cash provided by operating activities and available borrowing capacity under its Amended Senior Credit Facility and Foreign Lines of Credit (as further discussed and defined below). As of MarchJune 31,30, 2026, Viskase had approximately $28.6$7.9 million of cash and cash equivalents and approximately $5.8 million of unused borrowing capacity under the Amended Senior Credit Facility, net of letters of credit.
On April 16, 2026, we finalized the Seventh Amendment to our Credit Agreement, which extendsextended the Maturity Date from August 13, 2026 until August 13, 2027, amendsamended the definition of Applicable Rate to increase the interest rate, amendsamended the definition of Consolidated EBITDA to address the treatment of certain restructuring and transaction related costs and expenses, amendsamended the definition of Permitted Transfers to allow the disposition of the equipment, real property and improvements of the Osceola Facility and the real property and improvements of the Chicago Property, and amendsamended certain thresholds for obligations under the Existing Credit Agreement.
The assessment of liquidity and going concern requires us to make judgments about its ability to meet its obligations as they fall due for at least one year after the date that its condensed consolidated financial statements for the threesix months ended MarchJune 31,30, 2026 are issued.
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate refinancing of its Senior Credit Facility before its maturity in August 2027.
The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate refinancing of its Senior Credit Facility before its maturity in August 2027.
Cash Flows – Comparison of ThreeSix Months Ended MarchJune 31,30, 2026 and 2025
For the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was approximately $16.3$(27.5) million, compared to net cash provided by operating activities of approximately $0.1$2.4 million for the threesix months ended MarchJune 31,30, 2025. The decrease was primarily attributable to increases in receivables, inventories, and other current assets, as well as a decrease in accounts payable during the threesix months ended MarchJune 31,30, 2026.
For the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities was approximately $8.9$16.7 million, compared to $7.4$(16.3) million for the threesix months ended MarchJune 31,30, 2025, representing an increase of $1.5 million.2025. The increase was primarily attributable to higher capital expenditures related to manufacturing facilities and production equipment.
VISK insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding VISK (13F)
None of the 59 investors we track reported a position in their latest 13F.