Exhibit 99.1 Lifeward Ltd. Reports Second Quarter 2025 Financial Results Achieves record number of ReWalk systems placed for Medicare beneficiaries since fee schedule established Third consecutive quarter of U.S. ReWalk pipeline growth with over 130 qualified leads in process Operating loss in the second quarter of 2025 was $6.6 million, compared to $4.4 million in the second quarter of 2024. On a non- GAAP basis, which excludes the items in the attached non-GAAP reconciliation table, adjusted operating los ...

Exhibit 99.1 Unicycive Therapeutics Announces Second Quarter 2025 Financial Results and Provides Business Update LOS ALTOS, California, August 14, 2025 -- Unicycive Therapeutics, Inc. ("Unicycive" or the "Company") (Nasdaq: UNCY), a clinical-stage biotechnology company developing therapies for patients with kidney disease, today announced its financial results for the three months ended June 30, 2025, and provided a business update. "Our team has made great progress in the second quarter and we have request ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___________ to ___________ Commission File Number: 001-41905 Cassava Sciences, Inc. (Exact name of registrant as specified in its charter) De ...

[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents Candel Therapeutics' unaudited financial statements and management's analysis for the periods ended June 30, 2025 [Item 1. Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Candel Therapeutics' unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with notes for periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Candel Therapeutics' balance sheet shows a slight decrease in total assets, a significant decrease in total liabilities due to warrant liability, and an increase in stockholders' equity | Metric (in thousands) | June 30, 2025 (Unaudited) | Dec 31, 2024 | Change (in thousands) | | :-------------------- | :------------------------ | :----------- | :-------------------- | | Total Assets | $105,968 | $106,866 | $(898) | | Total Liabilities | $15,758 | $40,539 | $(24,781) | | Total Stockholders' Equity | $90,210 | $66,327 | $23,883 | | Cash and Cash Equivalents | $100,687 | $102,654 | $(1,967) | | Warrant Liability | $1,146 | $21,718 | $(20,572) | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)%20(Unaudited)) For the six months ended June 30, 2025, the company reported a net income of $2.58 million, a significant improvement from a net loss, primarily driven by warrant liability fair value changes | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $6,991 | $4,979 | $11,007 | $9,081 | | General and administrative | $4,186 | $3,592 | $8,300 | $7,392 | | Total operating expenses | $11,177 | $8,571 | $19,307 | $16,473 | | Loss from operations | $(11,177) | $(8,571) | $(19,307) | $(16,473) | | Interest income | $926 | $240 | $1,860 | $560 | | Interest expense | $(236) | $(567) | $(542) | $(1,213) | | Change in fair value of warrant liability | $5,691 | $(13,339) | $20,572 | $(13,332) | | Net income (loss) | $(4,796) | $(22,237) | $2,583 | $(30,458) | | Net income (loss) per share, basic | $(0.09) | $(0.74) | $0.05 | $(1.03) | [Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20(Unaudited)) Stockholders' equity increased from $66.33 million to $90.21 million, primarily driven by registered direct and at-the-market offerings, and net income | Metric (in thousands) | Dec 31, 2024 | June 30, 2025 | | :-------------------- | :----------- | :------------ | | Common Stock | $469 | $549 | | Treasury Stock | $(448) | $(448) | | Additional Paid-in Capital | $258,511 | $279,731 | | Accumulated Deficit | $(192,205) | $(189,622) | | Total Stockholders' Equity | $66,327 | $90,210 | - Key drivers for the increase in stockholders' equity include **$14.33 million** from a registered direct offering, **$5.04 million** from at-the-market offerings, and **$2.58 million** in net income for the six months ended June 30, 2025[29](index=29&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash used in operating activities increased to $17.51 million, while net cash provided by financing activities significantly increased due to stock offerings, resulting in a slight overall cash decrease | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(17,507) | $(14,636) | | Net cash used in investing activities | $(34) | $(13) | | Net cash provided by financing activities | $15,574 | $690 | | Net decrease in cash, cash equivalents and restricted cash | $(1,967) | $(13,959) | | Cash, cash equivalents and restricted cash at end of period | $100,953 | $21,720 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations of Candel Therapeutics' financial statements, including accounting policies, fair value measurements, and updates on capital raises and warrant liability - Candel Therapeutics is a clinical-stage biopharmaceutical company focused on developing off-the-shelf viral immunotherapies for cancer, with product candidates CAN-2409 and CAN-3110 in clinical trials[33](index=33&type=chunk) - The company reported a net income of **$2.6 million** for the six months ended June 30, 2025, a significant improvement from a **$30.5 million** net loss in the prior year, but still has an accumulated deficit of **$189.6 million**[35](index=35&type=chunk) - The company believes existing resources will fund planned operations for at least 12 months from the issuance date of these financial statements, indicating a going concern basis[39](index=39&type=chunk) - The company completed a registered direct offering on June 25, 2025, issuing **3,221,395 shares** of common stock for approximately **$15.0 million** in gross proceeds[38](index=38&type=chunk) - The warrant liability decreased significantly from **$21.7 million** at December 31, 2024, to **$1.1 million** at June 30, 2025, primarily due to changes in fair value[52](index=52&type=chunk)[73](index=73&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | R&D | $424 | $1,269 | $298 | $1,822 | | G&A | $626 | $572 | $1,066 | $1,062 | | Total | $1,050 | $1,841 | $1,364 | $2,884 | - The company operates in a single business segment focused on viral immunotherapies for cancer, with disaggregated R&D and G&A expenses provided[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides an overview of Candel Therapeutics' business, clinical development, financial condition, and results of operations, highlighting its focus on viral immunotherapies and liquidity [Overview](index=24&type=section&id=Overview) Candel Therapeutics is a clinical-stage biopharmaceutical company developing viral immunotherapies (CAN-2409, CAN-3110) for cancer, with recent positive clinical trial data and capital raises - Candel Therapeutics is a clinical-stage biopharmaceutical company focused on developing off-the-shelf viral immunotherapies (CAN-2409 and CAN-3110) to elicit systemic anti-tumor immune responses for cancer treatment[103](index=103&type=chunk)[105](index=105&type=chunk) - CAN-2409 received Regenerative Medicine Advanced Therapy (RMAT) designation for newly diagnosed localized prostate cancer in intermediate-to-high-risk patients in May 2025[106](index=106&type=chunk) - The pivotal Phase 3 clinical trial for CAN-2409 in prostate cancer met its primary endpoint, demonstrating a statistically significant improvement in disease-free survival (DFS) (**p=0.0155; HR 0.70**) and an increase in pathological complete response (**80.4% vs. 63.6% in control; p=0.0015**)[107](index=107&type=chunk) - Final survival data from the Phase 2a clinical trial of CAN-2409 in NSCLC showed a median overall survival (mOS) of **24.5 months** in patients with inadequate response to ICI treatment, significantly longer than historical controls (**9.8–11.8 months**)[110](index=110&type=chunk) - Final analysis of the Phase 2a clinical trial of CAN-2409 in borderline resectable PDAC showed an estimated mOS of **31.4 months** in the CAN-2409 group versus **12.5 months** in the control group[110](index=110&type=chunk) - CAN-3110 received Fast Track and Orphan Drug Designations for recurrent high-grade glioma (HGG), with initial clinical activity data from repeat dosing showing improved survival compared to historical controls[109](index=109&type=chunk)[112](index=112&type=chunk) - The company's enLIGHTEN™ Discovery Platform is generating new viral immunotherapy candidates, with preclinical data supporting multimodal therapeutics for solid tumors[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - The company's cash and cash equivalents were **$100.7 million** as of June 30, 2025, expected to fund operations into Q1 2027[123](index=123&type=chunk) [Collaborations](index=28&type=section&id=Collaborations) Details Candel Therapeutics' license and collaboration agreements, including those with Periphagen, Mass General Brigham for CAN-3110, and Ventagen for specific territories - Amended exclusive license agreement with Periphagen in June 2023, reverting rights to NT-3 and Gene Transfer Neuro-Assets, while retaining exclusive rights for oncologic diseases[126](index=126&type=chunk) - Entered into an exclusive worldwide patent license agreement with MGB for CAN-3110, involving an initial fee, patent cost reimbursements, annual license fees, and potential milestone payments up to **$39.0 million** plus increasing royalties on net sales[130](index=130&type=chunk) - Maintains an exclusive license agreement with Ventagen, a related party (**49.5%** owned by company stockholders), for technology utilizing herpes-derived TK protein in specific Latin American territories[131](index=131&type=chunk) [Components of Our Results of Operations](index=29&type=section&id=Components%20of%20Our%20Results%20of%20Operations) Outlines Candel Therapeutics' financial results components, primarily operating expenses, interest income/expense, and warrant liability changes, with no product sales revenue yet - The company has not generated any revenue from product sales to date and does not expect to in the foreseeable future[132](index=132&type=chunk) - Research and development expenses are expected to increase substantially due to ongoing clinical trials, new product candidate discovery, and scaling manufacturing capabilities[135](index=135&type=chunk) - General and administrative expenses are projected to increase due to higher personnel headcount, public company compliance costs (accounting, legal, regulatory), and commercial readiness[140](index=140&type=chunk) - Changes in the fair value of warrant liability, driven by remaining contractual term, volatility, and stock price changes, significantly impact other income (expense)[143](index=143&type=chunk) - The company has significant federal and state net operating loss (NOL) carryforwards (**$111.6 million** federal, **$101.9 million** state as of Dec 31, 2024) and research and development tax credits, but a full valuation allowance has been established due to uncertainty of realization[145](index=145&type=chunk)[146](index=146&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Candel Therapeutics reported a net income of $2.58 million for the six months ended June 30, 2025, a substantial improvement from a net loss, primarily driven by warrant liability fair value changes Net Loss Comparison (in thousands) | Period | Net Loss (2025) | Net Loss (2024) | Change (in thousands) | | :----- | :-------------- | :-------------- | :-------------------- | | 3 Months | $(4,796) | $(22,237) | $17,441 | | 6 Months | $2,583 | $(30,458) | $33,041 | Operating Expenses (in thousands) | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | R&D | $6,991 | $4,979 | $11,007 | $9,081 | | G&A | $4,186 | $3,592 | $8,300 | $7,392 | | Total Operating Expenses | $11,177 | $8,571 | $19,307 | $16,473 | - The **$33.90 million** positive change in fair value of warrant liability for the six months ended June 30, 2025, was the primary driver for the shift to net income[159](index=159&type=chunk) - Clinical development costs increased by **$2.5 million** for the six months ended June 30, 2025, primarily due to increased manufacturing costs for CAN-2409 programs[155](index=155&type=chunk) - General and administrative expenses increased by **$0.9 million** for the six months ended June 30, 2025, mainly due to a **$0.5 million** increase in commercial readiness costs and a **$0.4 million** increase in professional and consulting fees[156](index=156&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Candel Therapeutics had $100.7 million in cash and cash equivalents as of June 30, 2025, expected to fund operations into Q1 2027, relying on equity and debt financings - Cash and cash equivalents totaled **$100.7 million** as of June 30, 2025, projected to fund operations into the first quarter of 2027[160](index=160&type=chunk) - The company has raised approximately **$291.6 million** in gross proceeds since inception, primarily from government grants, convertible preferred stock, common stock sales, and debt borrowings[161](index=161&type=chunk) - As of June 30, 2025, **$6.7 million** of indebtedness was outstanding under the Loan Agreement with SVB, which matures on January 1, 2026[164](index=164&type=chunk) - Recent capital raises include **$85.9 million** net proceeds from the 2024 Follow-On Offering and **$14.3 million** net proceeds from the June 2025 Registered Direct Offering[166](index=166&type=chunk)[167](index=167&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) Net cash used in operating activities increased to $17.5 million, while net cash provided by financing activities significantly increased from stock offerings, with minimal investing activities Cash Flow Summary (in thousands) | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | | Operating | $(17,507) | $(14,636) | | Investing | $(34) | $(13) | | Financing | $15,574 | $690 | - Net cash used in operating activities increased to **$17.5 million** for the six months ended June 30, 2025, primarily due to net income of **$2.6 million** offset by non-cash charges of **$18.3 million** (mainly warrant liability fair value change)[171](index=171&type=chunk) - Net cash provided by financing activities was **$15.6 million**, driven by **$15.0 million** from a registered direct offering and **$5.0 million** from ATM offerings, partially offset by **$5.0 million** in term loan principal payments[174](index=174&type=chunk) [Funding Requirements](index=36&type=section&id=Funding%20Requirements) Anticipates substantial increases in operating expenses for R&D and commercialization, requiring significant additional financing beyond current cash to achieve long-term objectives - Operating expenses are expected to increase substantially due to advancing CAN-2409 and CAN-3110 through clinical trials, developing manufacturing capabilities, and preparing for potential commercialization[176](index=176&type=chunk)[178](index=178&type=chunk) - Future funding requirements are highly dependent on the progress and costs of clinical development, regulatory approvals, commercialization activities, and intellectual property protection[178](index=178&type=chunk)[181](index=181&type=chunk) - The company plans to finance future cash needs through public/private equity or debt financings, and collaborations, acknowledging potential dilution or restrictive covenants[179](index=179&type=chunk) [Contractual Obligations and Commitments](index=37&type=section&id=Contractual%20Obligations%20and%20Commitments) As of June 30, 2025, primary contractual obligations total $9.01 million, including operating lease payments, the SVB Loan Agreement, and the Periphagen Note Contractual Obligations (in thousands) as of June 30, 2025 | Obligation | Total (in thousands) | Less Than 1 Year (in thousands) | 1 to 3 Years (in thousands) | | :--------- | :------------------- | :------------------------------ | :-------------------------- | | Operating lease obligation | $724 | $620 | $104 | | Loan Agreement with SVB | $6,931 | $6,931 | $0 | | Periphagen Note | $1,352 | $0 | $1,352 | | Total | $9,007 | $7,551 | $1,456 | [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) No material changes to critical accounting estimates were reported for the three and six months ended June 30, 2025 - No material changes to critical accounting estimates were reported for the three and six months ended June 30, 2025[185](index=185&type=chunk) [Recent Accounting Pronouncements](index=38&type=section&id=Recent%20Accounting%20Pronouncements) The company is evaluating the impact of recent accounting pronouncements, including ASUs 2023-06, 2023-09, and 2024-03, on its financial statements - The company adopted ASU 2023-07 (Segment Reporting) on an interim basis starting January 1, 2025[48](index=48&type=chunk) - The company is evaluating the potential impact of ASU 2023-06 (Disclosure Improvements), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-03 (Expense Disaggregation Disclosures)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [Emerging Growth Company Status](index=38&type=section&id=Emerging%20Growth%20Company%20Status) Candel Therapeutics' "emerging growth company" and "smaller reporting company" status allows reduced disclosure, potentially impacting investor perception and stock price - Candel Therapeutics qualifies as an "emerging growth company" and "smaller reporting company," enabling it to use reduced disclosure requirements and an extended transition period for new accounting standards[187](index=187&type=chunk)[192](index=192&type=chunk) - The company will remain an EGC until the earliest of exceeding **$1.235 billion** in annual revenue, qualifying as a large accelerated filer, issuing over **$1 billion** in non-convertible debt, or December 31, 2026[188](index=188&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Candel Therapeutics is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Candel Therapeutics is exempt from providing quantitative and qualitative disclosures about market risk[189](index=189&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of Candel Therapeutics' disclosure controls and procedures as of June 30, 2025, concluding they were effective - Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[192](index=192&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by this Form 10-Q[193](index=193&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides additional information beyond financial statements, covering legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in material legal proceedings, but litigation, regardless of outcome, could negatively impact its business - The company is not currently involved in any litigation or legal proceedings deemed to have a material adverse effect on its business[195](index=195&type=chunk) - Litigation, even if successfully defended, can adversely impact business due to defense and settlement costs and diversion of management resources[195](index=195&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) Details numerous risks, including limited operating history, funding needs, product candidate dependence, clinical trial challenges, competition, and legal/IP risks [Risks Related to Our Business, Financial Position and Capital Requirements](index=40&type=section&id=Risks%20Related%20to%20Our%20Business,%20Financial%20Position%20and%20Capital%20Requirements) Highlights risks from limited operating history, no product revenue, significant accumulated deficit, need for substantial additional funding, and potential impacts from financial services industry developments - The company has a limited operating history, no product sales revenue, and an accumulated deficit of **$189.6 million** as of June 30, 2025, expecting continued significant operating losses[198](index=198&type=chunk)[200](index=200&type=chunk) - Substantial additional funding is required, and inability to raise capital could force delays, reductions, or elimination of product development programs or commercialization efforts[207](index=207&type=chunk) - Indebtedness, including a **$20.0 million** term loan with SVB (with **$6.7 million** outstanding as of June 30, 2025), could adversely affect financial condition and limit flexibility[214](index=214&type=chunk)[164](index=164&type=chunk) - Adverse developments in the financial services industry, such as bank failures (e.g., SVB), could impair access to funding, increase borrowing costs, and negatively impact business operations and financial condition[219](index=219&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) [Risks Related to Product Development](index=45&type=section&id=Risks%20Related%20to%20Product%20Development) Success depends on CAN-2409 and CAN-3110, facing risks in clinical trials, regulatory approval, potential side effects, patient enrollment, and competition due to novel immunotherapy development - Business success is dependent on CAN-2409 and CAN-3110, which require additional development, regulatory approval, and market acceptance; failure would significantly harm the company[225](index=225&type=chunk)[227](index=227&type=chunk) - Preclinical studies and clinical trials may fail to adequately demonstrate safety and efficacy, leading to delays or prevention of regulatory approval and commercialization[229](index=229&type=chunk) - Product candidates have caused side effects (e.g., flu-like symptoms, injection site reactions, blood abnormalities), which could delay or prevent approval or limit commercialization[232](index=232&type=chunk) - Interim, topline, and preliminary clinical data are subject to change and regulatory verification, and may not be predictive of final results, potentially harming business prospects[233](index=233&type=chunk)[235](index=235&type=chunk) - The novel approach of viral immunotherapies makes development time and cost difficult to predict, and regulatory approval processes may be lengthy and complex due to limited precedents[242](index=242&type=chunk)[244](index=244&type=chunk) - Difficulty in identifying and enrolling sufficient eligible patients, especially for rare cancers like brain cancer, could delay or prevent clinical trials and regulatory approval[254](index=254&type=chunk)[255](index=255&type=chunk) - Substantial competition from major pharmaceutical and biotechnology companies, including those developing similar or different immuno-oncology therapies, poses a risk to market share and profitability[261](index=261&type=chunk)[262](index=262&type=chunk)[264](index=264&type=chunk) [Risks Related to Government Regulation and Commercialization of Our Product Candidates](index=51&type=section&id=Risks%20Related%20to%20Government%20Regulation%20and%20Commercialization%20of%20Our%20Product%20Candidates) Regulatory approval is lengthy and uncertain, with post-approval scrutiny, healthcare reform impacts, commercialization challenges, and compliance risks from fraud/abuse and data privacy laws - Regulatory approval processes are lengthy, unpredictable, and may be delayed or denied, materially impairing the ability to generate revenue[266](index=266&type=chunk)[267](index=267&type=chunk) - FDA's Special Protocol Assessment (SPA) for CAN-2409 in prostate cancer does not guarantee approval and can be revoked or altered[272](index=272&type=chunk)[273](index=273&type=chunk) - Fast Track and Regenerative Medicine Advanced Therapy (RMAT) Designations do not guarantee faster development, review, or approval, nor do they increase the likelihood of marketing approval[276](index=276&type=chunk)[281](index=281&type=chunk) - Orphan Drug Designation for CAN-2409 (pancreatic cancer) and CAN-3110 (recurrent HGG) may not provide market exclusivity if approval is broader or if certain conditions are not met[280](index=280&type=chunk) - Post-approval, products are subject to extensive ongoing regulatory requirements (cGMP, labeling, reporting), and non-compliance or new safety information could lead to restrictions, withdrawal of approval, or significant penalties[291](index=291&type=chunk)[294](index=294&type=chunk) - Promoting products for unapproved ("off-label") uses or in a manner inconsistent with approved labeling could result in substantial fines, criminal penalties, and reputational harm[297](index=297&type=chunk)[301](index=301&type=chunk) - Healthcare reform measures, including the Inflation Reduction Act and executive orders on drug pricing, could lead to downward pressure on prices, reduced reimbursement, and adverse effects on profitability[309](index=309&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) - Failure to establish effective sales, marketing, and patient support capabilities, or to secure favorable third-party agreements, could limit commercialization success and revenue generation[316](index=316&type=chunk)[318](index=318&type=chunk) - Compliance with complex and evolving healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Acts) and data privacy laws (HIPAA, GDPR, CCPA) is critical, with potential for significant penalties and reputational damage for non-compliance[325](index=325&type=chunk)[326](index=326&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk)[335](index=335&type=chunk)[337](index=337&type=chunk) [Risks Related to Employee Matters, Managing Growth and General Business Operations](index=65&type=section&id=Risks%20Related%20to%20Employee%20Matters,%20Managing%20Growth%20and%20General%20Business%20Operations) Success depends on retaining key personnel and managing growth, while facing risks from social media, AI, cybersecurity, natural disasters, and geopolitical conflicts - Future success is highly dependent on retaining key executives and attracting/motivating qualified scientific, clinical, manufacturing, and management personnel[350](index=350&type=chunk)[351](index=351&type=chunk) - Expansion of development, manufacturing, and regulatory capabilities, along with potential sales/marketing, may lead to difficulties in managing growth, diverting resources and disrupting operations[353](index=353&type=chunk) - Increasing use of social media and evolving AI technologies introduce risks such as reputational damage, data security breaches, and compliance challenges with new regulations (e.g., EU AI Act)[354](index=354&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk) - Internal computer systems and those of third-party contractors are vulnerable to cybersecurity incidents and data breaches, which could disrupt development programs, lead to data loss, and incur significant costs and liabilities[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk)[359](index=359&type=chunk) - Operations are susceptible to disruptions from natural disasters, pandemics, wars (e.g., Russia-Ukraine, Israel-Hamas conflicts), or other catastrophic events, potentially impacting research, clinical trials, and supply chains[360](index=360&type=chunk) - Disclosure controls and procedures, while designed for reasonable assurance, may not prevent or detect all errors or fraud, and future material weaknesses in internal control over financial reporting could adversely affect financial reporting and stock price[362](index=362&type=chunk)[363](index=363&type=chunk)[365](index=365&type=chunk) [Risks Related to Legal and Compliance Matters](index=68&type=section&id=Risks%20Related%20to%20Legal%20and%20Compliance%20Matters) Faces product liability exposure, anti-corruption, trade control, healthcare fraud, and environmental law compliance risks, with potential for significant penalties and reputational damage - Product liability exposure from clinical trials and future commercial sales poses a risk of substantial liability, potential limits on commercialization, and reputational damage, with insurance coverage potentially inadequate[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk) - Non-compliance with anti-corruption laws (e.g., FCPA) and trade control laws could lead to civil/criminal penalties, sanctions, and adverse impacts on business and reputation[370](index=370&type=chunk)[372](index=372&type=chunk) - Failure to comply with federal and state healthcare laws (e.g., Anti-Kickback Statute, False Claims Acts) could result in substantial penalties, exclusion from government programs, and harm to business and financial condition[375](index=375&type=chunk)[376](index=376&type=chunk)[378](index=378&type=chunk) - Changes in tax laws (e.g., Section 174 of the Code, OBBBA) or their interpretation may adversely affect business and financial condition, including limitations on net operating loss (NOL) carryforwards[379](index=379&type=chunk)[381](index=381&type=chunk) - Violations of environmental, health, and safety laws and regulations could subject the company to fines, penalties, or significant cleanup costs, potentially exceeding resources[390](index=390&type=chunk)[391](index=391&type=chunk) [Risks Related to Our Reliance on Third Parties](index=73&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Heavy reliance on third-party collaborators, clinical investigators, and CDMOs for development and manufacturing poses risks of delays, non-compliance, and intellectual property issues - Dependence on development and commercialization collaborators (e.g., MGB, Periphagen) means their failure to perform or fulfill responsibilities could significantly reduce future revenue and harm the business[393](index=393&type=chunk)[394](index=394&type=chunk) - Reliance on independent clinical investigators and CROs to conduct trials means their non-compliance with GCPs or failure to meet deadlines could delay or impair regulatory approval[398](index=398&type=chunk)[402](index=402&type=chunk)[403](index=403&type=chunk) - Reliance on third-party manufacturers (CDMOs) for product candidates carries risks of production delays, quality control issues, non-compliance with cGMP, and supply interruptions, which could delay development and commercialization[405](index=405&type=chunk)[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk) - Geopolitical tensions with China and potential sanctions (e.g., BIOSECURE Act) could impact current partners like WuXi and affect contractual relationships[412](index=412&type=chunk) - Sharing trade secrets with third parties increases the risk of discovery by competitors, misappropriation, or unauthorized disclosure, harming the company's competitive position[420](index=420&type=chunk)[421](index=421&type=chunk)[422](index=422&type=chunk) [Risks Related to Intellectual Property](index=78&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Success depends on protecting IP through patents, trademarks, and trade secrets, facing risks from third-party licenses, patent challenges, infringement claims, and limited foreign rights - Reliance on third-party licenses (e.g., MGB, Periphagen) for key patent rights means non-compliance with obligations could lead to termination of licenses and loss of development/commercialization rights[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk) - Disputes over license agreement interpretations or intellectual property ownership could narrow rights or increase obligations, adversely affecting business[426](index=426&type=chunk)[427](index=427&type=chunk) - Protecting intellectual property through patents, trademarks, and trade secrets is difficult and costly, with risks of patent applications failing to issue, being challenged, or competitors designing around claims[432](index=432&type=chunk)[435](index=435&type=chunk)[438](index=438&type=chunk) - Changes in patent laws (e.g., America Invents Act, IRA) or their interpretation, including the establishment of the Unified Patent Court (UPC) in Europe, could diminish patent value and increase prosecution/enforcement costs[440](index=440&type=chunk)[442](index=442&type=chunk) - Third-party claims of intellectual property infringement could lead to expensive litigation, injunctions, substantial damages, and diversion of management attention[455](index=455&type=chunk)[456](index=456&type=chunk)[460](index=460&type=chunk) - Inability to protect trade secrets, either through misappropriation or independent development by competitors, would harm the company's competitive position[452](index=452&type=chunk) - Limited foreign intellectual property rights mean the company may not be able to prevent third parties from practicing inventions or selling competing products in all countries[478](index=478&type=chunk) - Patent terms may be inadequate to protect competitive position, as patents could expire before or shortly after product commercialization, leading to competition from generic products[480](index=480&type=chunk) [Risks Related to Our Common Stock](index=88&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Common stock price is volatile, influenced by clinical results, competition, and regulatory factors, with dilution risks from future equity sales and significant insider influence - The price of common stock is volatile and influenced by factors such as clinical trial results, competition, regulatory developments, and general market conditions, potentially leading to substantial losses for stockholders[484](index=484&type=chunk) - Raising additional capital through equity sales (e.g., ATM Program, future offerings) will dilute existing stockholders and could cause the stock price to decline[485](index=485&type=chunk) - As an "emerging growth company" and "smaller reporting company," the company utilizes reduced disclosure requirements, which may make its common stock less attractive to some investors and increase stock price volatility[488](index=488&type=chunk)[493](index=493&type=chunk) - Executive officers, directors, and principal stockholders (e.g., PBM Capital Group, LLC) collectively hold significant influence (approx. **25.5%** of outstanding common stock), limiting other stockholders' ability to influence corporate matters[501](index=501&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could delay or prevent a change of control, potentially limiting the market price of common stock[502](index=502&type=chunk)[504](index=504&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future, making capital appreciation the sole source of gain for stockholders[500](index=500&type=chunk) - The potential exercise of outstanding warrants (e.g., Series B and Conditional Series B Warrants for **7,344,968 shares**) could result in substantial dilution to stockholders[511](index=511&type=chunk)[512](index=512&type=chunk)[514](index=514&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or issuer purchases were reported, and the use of proceeds section is not applicable - No unregistered sales of equity securities or issuer purchases of equity securities were reported[516](index=516&type=chunk)[518](index=518&type=chunk) - The section on "Use of Proceeds" is not applicable for this reporting period[517](index=517&type=chunk) [Item 3. Defaults Upon Senior Securities](index=95&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[519](index=519&type=chunk) [Item 4. Mine Safety Disclosures](index=95&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to Candel Therapeutics' business operations - Mine safety disclosures are not applicable to the company's operations[520](index=520&type=chunk) [Item 5. Other Information](index=95&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading agreements during the three months ended June 30, 2025[521](index=521&type=chunk) [Item 6. Exhibits](index=96&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including corporate documents, agreements, and certifications from executive officers - Key exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, Specimen Common Stock Certificate, Securities Purchase Agreement, and certifications from the Principal Executive Officer and Principal Financial Officer[523](index=523&type=chunk) [Signatures](index=97&type=section&id=Signatures) The report was duly signed by Candel Therapeutics' President and CEO, and Chief Financial Officer on August 14, 2025 - The report was signed by Paul Peter Tak (President and CEO) and Charles Schoch (CFO) on August 14, 2025[528](index=528&type=chunk)

Part I Financial Information [Financial Statements](index=9&type=section&id=Item%201.%20Financial%20Statements) Xilio's June 30, 2025, financials show increased cash and liabilities, a $29.1 million net loss, and significant going concern doubts [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $121,551 | $55,291 | | Total current assets | $123,716 | $60,234 | | Total assets | $133,813 | $71,075 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $53,260 | $27,261 | | Common stock warrant liabilities | $38,550 | $0 | | Total liabilities | $126,744 | $53,477 | | Accumulated deficit | $(412,862) | $(383,753) | | Total stockholders' equity | $7,069 | $17,598 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statement of Operations Summary (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Collaboration and license revenue | $8,084 | $2,357 | $11,014 | $2,357 | | Research and development | $15,330 | $11,216 | $23,596 | $21,616 | | General and administrative | $7,120 | $5,815 | $15,635 | $11,954 | | Total operating expenses | $22,450 | $17,061 | $39,231 | $34,548 | | Loss from operations | $(14,366) | $(14,704) | $(28,217) | $(32,191) | | Net loss | $(15,844) | $(13,925) | $(29,109) | $(31,128) | | Net loss per share, basic and diluted | $(0.16) | $(0.24) | $(0.34) | $(0.73) | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,501 | $9,451 | | Net cash used in investing activities | $(423) | $(21) | | Net cash provided by financing activities | $52,194 | $20,997 | | **Increase in cash, cash equivalents and restricted cash** | **$66,272** | **$30,427** | [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company has incurred significant operating losses, with a **net loss of $29.1 million** for the six months ended June 30, 2025, and an **accumulated deficit of $412.9 million**, raising substantial doubt about its ability to continue as a going concern[33](index=33&type=chunk) - To fund operations, the company will need to raise additional capital through warrant exercises, milestone payments from Gilead and AbbVie, equity/debt financings, or other collaborations, with potential cost reduction strategies if capital is not secured[34](index=34&type=chunk) - In February 2025, the company entered a collaboration with AbbVie for up to four programs, receiving an initial **$52.0 million** ($42.0 million upfront cash and $10.0 million from a private placement) and is eligible for up to approximately **$2.1 billion** in additional contingent payments[55](index=55&type=chunk)[61](index=61&type=chunk) - In March 2024, the company entered a license agreement with Gilead for its XTX301 (IL-12) program, receiving **$55.0 million** ($30.0 million upfront cash and $25.0 million from private placements) and is eligible for up to **$592.5 million** in additional contingent payments, including a **$75.0 million** transition fee[72](index=72&type=chunk)[74](index=74&type=chunk) - In June 2025, the company closed a follow-on public offering of prefunded warrants and accompanying common stock warrants, receiving initial gross proceeds of **$50.0 million**, with potential for an additional **$100.0 million** if certain warrants are exercised for cash by the second half of 2026[32](index=32&type=chunk)[89](index=89&type=chunk)[96](index=96&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports Xilio, a clinical-stage biotech, has $121.6 million cash, funding through Q3 2026, but faces going concern doubts and needs more capital [Overview](index=43&type=section&id=Overview) - Xilio is a clinical-stage biotechnology company developing tumor-activated immuno-oncology (I-O) therapies to improve outcomes for cancer patients while minimizing systemic side effects[123](index=123&type=chunk) - The company's most advanced product candidates are vilastobart (anti-CTLA-4 mAb) and XTX301 (engineered IL-12), with vilastobart in a Phase 2 trial and XTX301 in a Phase 1 trial under a license agreement with Gilead[123](index=123&type=chunk) - The company is also advancing preclinical programs, including XTX501 (masked PD-1/IL-2 bispecific) and masked T cell engagers, partly in collaboration with AbbVie[123](index=123&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Comparison of Results for the Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Collaboration and license revenue | $8,084 | $2,357 | $5,727 | | Research and development | $15,330 | $11,216 | $4,114 | | General and administrative | $7,120 | $5,815 | $1,305 | | **Net loss** | **$(15,844)** | **$(13,925)** | **$(1,919)** | Comparison of Results for the Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Collaboration and license revenue | $11,014 | $2,357 | $8,657 | | Research and development | $23,596 | $21,616 | $1,980 | | General and administrative | $15,635 | $11,954 | $3,681 | | **Net loss** | **$(29,109)** | **$(31,128)** | **$2,019** | - The increase in collaboration revenue for both the three and six-month periods in 2025 was primarily due to revenue recognized under the new agreement with AbbVie and increased revenue from the Gilead agreement[147](index=147&type=chunk)[155](index=155&type=chunk) - R&D expenses increased in Q2 2025 due to higher clinical development costs for vilastobart and manufacturing activities for XTX501, partially offset by the discontinuation of the XTX202 program[148](index=148&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **cash and cash equivalents of $121.6 million**[165](index=165&type=chunk)[178](index=178&type=chunk) - Management anticipates that existing cash will be sufficient to fund operating expenses and capital expenditure requirements through the end of the **third quarter of 2026**[178](index=178&type=chunk) - The company's recurring operating losses and negative cash flows raise substantial doubt about its ability to continue as a going concern, with future operations dependent on raising additional capital through warrant exercises, milestone payments, or other financing activities[178](index=178&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,501 | $9,451 | | Net cash used in investing activities | $(423) | $(21) | | Net cash provided by financing activities | $52,194 | $20,997 | [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is not required to provide this information - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, Xilio Therapeutics is not required to provide the information under this item[191](index=191&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control - The company's principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective at a reasonable assurance level[193](index=193&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[194](index=194&type=chunk) Part II Other Information [Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) Xilio faces substantial risks including going concern doubts, potential delisting, unproven early-stage products, clinical/manufacturing challenges, third-party reliance, and IP/regulatory hurdles [Risks Related to Financial Position and Capital Requirements](index=71&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History,%20Financial%20Position%20and%20Capital%20Requirements) - Recurring losses from operations raise substantial doubt about the company's ability to continue as a going concern, potentially requiring cost reduction strategies like delaying or reducing R&D programs without additional capital[198](index=198&type=chunk)[199](index=199&type=chunk) - The company's common stock may be delisted from Nasdaq for failing to meet the minimum bid price requirement of **$1.00 per share**, which could negatively impact its ability to access capital markets[206](index=206&type=chunk) - The company has a history of significant operating losses, with an **accumulated deficit of $412.9 million** as of June 30, 2025, and expects these losses to continue for the foreseeable future[212](index=212&type=chunk) [Risks Related to Product Discovery and Development](index=81&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20Our%20Product%20Candidates) - The company's business is highly dependent on the success of its current product candidates (vilastobart and XTX301), which are in early stages of development and require significant additional clinical work[224](index=224&type=chunk) - The company's technological approach to discovering and developing tumor-activated product candidates is unproven, with no guarantee it will lead to commercially valuable products[265](index=265&type=chunk) - Clinical trials may be substantially delayed, suspended, or terminated due to numerous unforeseen events, including regulatory hurdles, patient enrollment difficulties, and unfavorable results[239](index=239&type=chunk) - Interim and preliminary data from clinical trials may change as more patient data becomes available, and final data could be materially different[253](index=253&type=chunk) [Risks Related to Manufacturing and Supply](index=100&type=section&id=Risks%20Relating%20to%20Manufacturing%20and%20Supply) - Manufacturing biologics is complex and subject to problems like contamination or lot failures, which could delay development and commercialization programs[273](index=273&type=chunk)[276](index=276&type=chunk) - The company relies on a single CDMO, WuXi Biologics, based in China, exposing it to risks related to supply interruptions, regulatory compliance, and geopolitical tensions, including potential U.S. trade restrictions or sanctions[280](index=280&type=chunk)[285](index=285&type=chunk)[516](index=516&type=chunk) [Risks Related to Dependence on Third Parties](index=108&type=section&id=Risks%20Related%20to%20our%20Dependence%20on%20Third%20Parties) - The company relies on third-party CROs to conduct clinical trials, and their unsatisfactory performance could harm the business and delay programs[291](index=291&type=chunk)[292](index=292&type=chunk) - Success is dependent on collaborations with Gilead and AbbVie, where partners have significant discretion over development and commercialization, with no guarantee of success or future payments[295](index=295&type=chunk)[297](index=297&type=chunk) [Risks Related to Intellectual Property](index=124&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - The company's success depends on its ability to obtain and maintain patent protection, as insufficient scope could allow competitors to develop similar products, adversely affecting commercialization[338](index=338&type=chunk)[339](index=339&type=chunk) - The company relies on in-licensed patent rights for its product candidates (e.g., from City of Hope and WuXi Biologics) and faces risks of losing these rights if it fails to comply with license obligations[359](index=359&type=chunk)[360](index=360&type=chunk) - The company may face third-party claims of intellectual property infringement, which could be expensive, time-consuming, and prevent or delay development efforts[384](index=384&type=chunk) [Risks Related to Regulatory Approval and Legal Compliance](index=152&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) - The regulatory approval process for biologics is expensive, lengthy, and uncertain, and the company, lacking experience in filing for marketing approval, may be unable to obtain it for its product candidates[411](index=411&type=chunk)[412](index=412&type=chunk) - Disruptions at the FDA and other government agencies due to funding cuts, shutdowns, or other events could hinder their ability to provide guidance and review submissions in a timely manner[423](index=423&type=chunk) - Current and future healthcare legislation, such as the Inflation Reduction Act (IRA), may increase the difficulty and cost of obtaining reimbursement and limit the prices for the company's products if approved[464](index=464&type=chunk)[476](index=476&type=chunk) - The company is subject to stringent and evolving data privacy laws (e.g., GDPR, CCPA), and failure to comply could result in significant fines and penalties[492](index=492&type=chunk)[498](index=498&type=chunk) [Other Information](index=211&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[582](index=582&type=chunk) [Exhibits](index=212&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including corporate documents and officer certifications - The Exhibit Index lists key corporate and financial documents filed with the report, such as the Restated Certificate of Incorporation, Warrant Agreements, and Officer Certifications pursuant to the Sarbanes-Oxley Act[585](index=585&type=chunk)

[Executive Summary & Corporate Update](index=1&type=section&id=Executive%20Summary%20%26%20Corporate%20Update) MeiraGTx achieved significant regulatory milestones in Q2 2025, including FDA alignment for AQUAx2, RMAT for AAV-GAD, and planned MAA/BLA filings for LCA4, while the CEO highlighted productive regulatory interactions and advancements in late-stage programs [Q2 2025 Highlights](index=1&type=section&id=Q2%202025%20Highlights) MeiraGTx reported significant regulatory and operational progress in Q2 2025, including FDA alignment for the pivotal Phase 2 AQUAx2 study for radiation-induced xerostomia (RIX), RMAT designation for AAV-GAD in Parkinson's disease, and plans to file for Marketing Authorization Approval for LCA4 in the UK and US - Gained alignment with U.S. Food and Drug Administration (FDA) on the ongoing Phase 2 AQUAx2 randomized double-blind, placebo-controlled pivotal study in Grade 2/3 radiation-induced xerostomia (RIX) to support a potential Biologics License Application (BLA) filing; on track for potential data readout late 2026[1](index=1&type=chunk) - FDA Granted Regenerative Medicine Advanced Therapy (RMAT) designation for AAV-GAD for the treatment of Parkinson's disease[1](index=1&type=chunk) - On track to file for Marketing Authorization Approval (MAA) under exceptional circumstances with the U.K. Medicines and Healthcare products Regulatory Agency (MHRA) for the treatment of LCA4, and BLA in the US with the FDA via a similar pathway to approval in the fourth quarter of 2025[1](index=1&type=chunk) [CEO Statement](index=1&type=section&id=CEO%20Statement) Dr. Alexandria Forbes highlighted productive regulatory interactions, successful FDA audit for AAV-GAD, and the advancement of late-stage clinical programs as planned - CEO emphasized productive regulatory interactions with MHRA and FDA around multiple later stage clinical programs as well as manufacturing[2](index=2&type=chunk) - Expressed excitement about the potential of AAV-GAD to show disease modifying changes to pathological circuitry and the substantia nigra, and the opportunity to discuss the use of AI analysis of imaging data to support labeling claims for the proposed Phase 3 study in Parkinson's disease[2](index=2&type=chunk)[3](index=3&type=chunk) - Engaged with regulators to be in a position to initiate first-in-human studies using the transformative riboswitch platform by the end of 2025[3](index=3&type=chunk) [Pipeline & Clinical Development Updates](index=2&type=section&id=Pipeline%20%26%20Clinical%20Development%20Updates) MeiraGTx advanced multiple late-stage clinical programs, including AAV2-hAQP1 for RIX, AAV-GAD for Parkinson's, AAV-AIPL1 for LCA4, and bota-vec for XLRP, achieving key regulatory designations and publishing compelling data [AAV2-hAQP1 for Radiation-Induced Xerostomia (RIX)](index=2&type=section&id=AAV2-hAQP1%20for%20Radiation-Induced%20Xerostomia%20(RIX)) The AAV2-hAQP1 program for RIX received RMAT designation and achieved FDA alignment on clinical and CMC requirements for its pivotal Phase 2 AQUAx2 study, on track for data readout in late 2026 - Granted RMAT designation by the FDA for AAV2-hAQP1 for the treatment of Grade 2/3 RIX in December 2024[5](index=5&type=chunk) - Aligned with the FDA on both the CMC and clinical requirements for the ongoing Phase 2 AQUAx2 study, including the use of a single Patient Reported Outcome (PRO) as primary endpoint and statistical analyses[5](index=5&type=chunk) - The Phase 2 AQUAx2 study is currently enrolling the final high dose cohorts, targeting completion of enrollment in the fourth quarter of 2025, with potential for pivotal data readout late 2026[5](index=5&type=chunk) [AAV-GAD for Parkinson's Disease](index=2&type=section&id=AAV-GAD%20for%20Parkinson's%20Disease) AAV-GAD received RMAT designation for Parkinson's disease, with a joint venture formed with Hologen AI to use AI-driven imaging analysis for a proposed Phase 3 study aiming for a disease modification claim - FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to AAV-GAD for the treatment of Parkinson's disease on May 8th, 2025, following positive data from 3 clinical studies[5](index=5&type=chunk)[6](index=6&type=chunk) - MeiraGTx and partner Hologen are currently in discussion with the FDA around use of AI driven analysis of imaging data from the proposed double-blind, sham-surgery controlled Phase 3 study with the potential to support a disease modification claim on the label for AAV-GAD[8](index=8&type=chunk) - MeiraGTx and Hologen are forming a joint venture, Hologen Neuro AI Ltd, with additional committed funding from Hologen of up to **$230 million** to finance the development of the AAV-GAD program to commercialization. MeiraGTx will hold a **30% ownership** and lead clinical development and manufacturing[8](index=8&type=chunk) [AAV-AIPL1 for LCA4](index=4&type=section&id=AAV-AIPL1%20for%20LCA4) Published data for AAV-AIPL1 for LCA4 showed meaningful responses in all treated children, leading to preparations for MAA and BLA submissions supported by Orphan Drug and Rare Pediatric Disease Designations - Data demonstrating the efficacy of rAAV8.hRKp.AIPL1 for the treatment of LCA4 were published in The Lancet in February 2025, showing meaningful responses in **11 out of 11 treated children**, with all children blind at birth now able to see[13](index=13&type=chunk) - Preparing the submission of an MAA in the UK and a BLA in the US for AAV-AIPL1, a treatment for LCA4, based on clinical data and feedback from MHRA and FDA on a potentially expedited CMC PPQ package[13](index=13&type=chunk) - AAV-AIPL1 for the treatment of LCA4 has orphan drug designation in the US and EU, and Rare Pediatric Disease Designation (RPDD) from the FDA[13](index=13&type=chunk) [Botaretigene Sparoparvovec (bota-vec) for X-linked Retinitis Pigmentosa (XLRP)](index=4&type=section&id=Botaretigene%20Sparoparvovec%20(bota-vec)%20for%20X-linked%20Retinitis%20Pigmentosa%20(XLRP)) Compelling Phase 3 data for bota-vec for XLRP received strong support, with the program holding Fast Track and orphan drug designations and MeiraGTx eligible for significant milestone payments - Compelling Phase 3 data for botaretigene sparoparvovec (bota-vec) for the treatment of X-linked retinitis pigmentosa was presented, leading to strong public support for its filing and ultimate approval from the Foundation Fighting Blindness[13](index=13&type=chunk) - The FDA has granted Fast Track and orphan drug designations to bota-vec, and EU regulatory authorities have granted Priority Medicines (PRIME), advanced therapy medicinal product (ATMP), and orphan drug designations[13](index=13&type=chunk) - MeiraGTx is eligible to receive up to **$285 million** upon the first commercial sales of bota-vec in the US and EU and manufacturing tech transfer, and anticipates additional revenue from a commercial supply agreement with Johnson & Johnson Innovative Medicine[13](index=13&type=chunk)[14](index=14&type=chunk) [Technology Platforms](index=5&type=section&id=Technology%20Platforms) MeiraGTx is advancing its riboswitch gene regulation technology for in vivo delivery, focusing on metabolic diseases and CAR-T, and acquired ProTcell technology to enhance allogeneic RiboCAR-T therapies [Riboswitch Gene Regulation Technology](index=5&type=section&id=Riboswitch%20Gene%20Regulation%20Technology) The riboswitch platform is progressing for in vivo delivery, initially focusing on obesity, metabolic disease, neuropathic pain, and CAR-T, with first-in-human studies anticipated in 2025 - MeiraGTx continues to progress its riboswitch technology platform in multiple potential indications, with an initial focus on obesity and metabolic disease, neuropathic pain and CAR-T[18](index=18&type=chunk) - Generated compelling preclinical data with metabolic peptides and hormones, including incretins, myokines and leptin, indicating greater efficacy on weight loss and positive impact on fat to muscle ratio and post prandial glucose control[18](index=18&type=chunk) - Pre-clinical data from Riboswitch delivered leptin is particularly compelling and likely to be the first IND using the Company's riboswitch small molecule platform, with first-in-human studies intended to initiate in 2025[18](index=18&type=chunk) [ProTcell Technology & RiboCAR-T](index=5&type=section&id=ProTcell%20Technology%20%26%20RiboCAR-T) MeiraGTx acquired ProTcell technology to complement its RiboCAR platform, enabling the generation of T-cell progenitors outside the body for allogeneic high-performance RiboCAR-T therapies - Acquired ProTcell technology via the acquisition of certain assets and operations of Smart Immune, which allows T-cell progenitors to be generated outside the body, complementing the Company's RiboCAR platform[18](index=18&type=chunk) - This technology provides a unique potential for allogeneic high performance RiboCAR-T, with ProTcell technology having shown proof of concept in **20 patients** treated in **3 clinical studies**[18](index=18&type=chunk) [Manufacturing Capabilities](index=5&type=section&id=Manufacturing%20Capabilities) MeiraGTx maintains robust manufacturing capabilities with two licensed facilities in the UK and Ireland, ensuring GMP compliance and readiness for commercial production of gene therapies [United Kingdom Facility](index=5&type=section&id=United%20Kingdom%20Facility) MeiraGTx's UK manufacturing facility holds two MHRA authorizations and successfully renewed its licenses following a May 2024 inspection, confirming GMP compliance for IMPs and readiness for a commercial MIA license application - MeiraGTx's UK manufacturing facility holds two authorizations issued by the MHRA[16](index=16&type=chunk) - The UK facility was inspected in May 2024, and the licences were successfully renewed, confirming GMP compliance for Investigational Medicinal Products (IMPs) and readiness to support an application for a commercial MIA licence[16](index=16&type=chunk) [Ireland Facility](index=5&type=section&id=Ireland%20Facility) MeiraGTx's Shannon facility holds two HPRA authorizations, including an MIA Licence for QC testing and an MIA(IMP) Licence for manufacturing, with a recent inspection adding viral vector manufacturing capability - MeiraGTx's Shannon facility holds two authorizations issued by Ireland's Health Products Regulatory Authority (HPRA): MIA Licence (M1316) for QC testing of commercial products and MIA(IMP) Licence (MIA(IMP) 45522) for manufacturing, fill-finish, and QC testing of Investigational Medicinal Products (IMPs)[17](index=17&type=chunk)[18](index=18&type=chunk) - The latest HPRA inspection in February 2025 was highly successful, renewing both QC licenses and adding viral vector manufacturing to the MIA(IMP) license, a first-of-its-kind license for a gene therapy facility in Ireland[20](index=20&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) MeiraGTx reported $32.2 million in cash as of Q2 2025, with a positive financial outlook into 2027 supported by the Hologen collaboration and potential bota-vec milestones, while Q2 2025 saw increased service revenue and an improved net loss [Financial Outlook & Liquidity](index=6&type=section&id=Financial%20Outlook%20%26%20Liquidity) As of June 30, 2025, MeiraGTx had $32.2 million in cash and cash equivalents, expecting to fund operations into 2027 and repay its $75.0 million debt with anticipated proceeds from the Hologen collaboration and bota-vec milestones Cash and Receivables (as of June 30, 2025) | Item | Amount (Millions) | | :-------------------------- | :---------------- | | Cash and cash equivalents | $32.2 | | Receivables (Johnson & Johnson) | $2.3 | | Tax incentive receivables | $4.5 | - The Company believes that with current funds, **$17.0 million** received in Q3 2025, and remaining proceeds from the Hologen collaboration, it will have sufficient capital to fund operating expenses and capital expenditure requirements into **2027** and to repay its debt obligation of **$75.0 million** (due August 2026)[21](index=21&type=chunk) - This estimate does not include the **$285.0 million** in milestones the Company is eligible to receive under the asset purchase agreement upon first commercial sale of bota-vec in the US and EU, manufacturing tech transfer, and regulatory approval of J&J's manufacturing facility[21](index=21&type=chunk) [Q2 2025 Financial Results](index=6&type=section&id=Q2%202025%20Financial%20Results) For Q2 2025, MeiraGTx reported a significant increase in service revenue to $3.7 million, with a net loss attributable to ordinary shareholders improving to $38.8 million, resulting in a lower basic and diluted net loss per share of $0.48 Q2 2025 vs Q2 2024 Key Financials (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Service revenue | $3,691 | $282 | +$3,409 | | Cost of service revenue | $2,676 | $0 | +$2,676 | | General and administrative expenses | $12,313 | $11,257 | +$1,056 | | Research and development expenses | $33,495 | $34,934 | -$1,439 | | Foreign currency gain (loss) | $8,624 | $(284) | +$8,908 | | Interest income | $408 | $827 | -$419 | | Interest expense | $3,034 | $3,254 | -$220 | | Net loss | $(38,795) | $(48,620) | +$9,825 | | Basic and diluted net loss per share | $(0.48) | $(0.76) | +$0.28 | - Service revenue increased by **$3.4 million** for the three months ended June 30, 2025, compared to the prior year, due to increased progress of PPQ services under the asset purchase agreement with Johnson & Johnson Innovative Medicine[22](index=22&type=chunk) - Research and development expenses decreased by **$1.4 million**, primarily due to reclassification of batch costs and cost of service revenue, and reduced expenses for certain programs, partially offset by increased clinical trial expenses for the AAV-GAD program[25](index=25&type=chunk) - Foreign currency gain was **$8.6 million** for Q2 2025, a significant change from a **$0.3 million** loss in Q2 2024, primarily due to the weakening of the U.S. dollar against the pound sterling and euro[26](index=26&type=chunk) [Company Overview](index=7&type=section&id=About%20MeiraGTx) MeiraGTx is a vertically integrated, clinical-stage genetic medicines company with a broad pipeline of four late-stage clinical programs, leveraging innovative technology for capsid, promoter, and translational control optimization, supported by extensive in-house manufacturing capabilities and a transformative riboswitch gene regulation technology - MeiraGTx is a vertically integrated, clinical-stage genetic medicines company with a broad pipeline of four late-stage clinical programs, using local delivery of small doses for disease modifying effects in inherited and common diseases[30](index=30&type=chunk) - Utilizes innovative technology in optimization of capsids, promoters and novel translational control elements to develop best in class, potent, safe viral vectors[30](index=30&type=chunk) - Possesses comprehensive end-to-end in-house manufacturing capabilities with **5 facilities globally**, including two licensed for GMP viral vector production and a GMP QC facility with clinical and commercial licensure[30](index=30&type=chunk) - Developed a novel riboswitch gene regulation technology for in vivo delivery of any biologic therapeutic using oral small molecules, focusing on regulated in vivo delivery of metabolic peptides (e.g., GLP-1, Leptin) and cell therapy (CAR-T)[31](index=31&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward%20Looking%20Statement) This section contains forward-looking statements regarding product development, clinical trial milestones, regulatory matters, potential milestone payments, and the Hologen collaboration, which are subject to risks and uncertainties - This press release contains forward-looking statements regarding product candidate development, anticipated milestones, clinical data, regulatory matters, potential milestone payments, and the collaboration with Hologen[32](index=32&type=chunk) - These statements are based on management's current expectations and involve known and unknown risks, uncertainties, and other important factors that may cause actual results, performance or achievements to be materially different[32](index=32&type=chunk) - The company disclaims any obligation to update such forward-looking statements at some point in the future, unless required by law[33](index=33&type=chunk) [Contacts](index=9&type=section&id=Contacts) This section provides contact information for investor relations and media inquiries [Financial Statements](index=10&type=section&id=Financial%20Statements) The financial statements present the unaudited condensed consolidated statements of operations and balance sheets, detailing the company's financial performance and position for Q2 2025 and year-to-date [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The unaudited condensed consolidated statements of operations show a net loss of $38.8 million for Q2 2025, an improvement from $48.6 million in Q2 2024, driven by increased service revenue and slightly decreased R&D expenses Condensed Consolidated Statements of Operations and Comprehensive Loss (Q2 2025 vs Q2 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Service revenue | $3,691 | $282 | $5,617 | $979 | | Cost of service revenue | $2,676 | — | $4,054 | — | | General and administrative | $12,313 | $11,257 | $21,677 | $24,404 | | Research and development | $33,495 | $34,934 | $66,275 | $69,256 | | Loss from operations | $(44,793) | $(45,909) | $(86,389) | $(92,681) | | Foreign currency gain (loss) | $8,624 | $(284) | $12,311 | $(819) | | Interest income | $408 | $827 | $1,379 | $1,924 | | Interest expense | $(3,034) | $(3,254) | $(6,077) | $(6,504) | | Net loss | $(38,795) | $(48,620) | $(78,776) | $(69,062) | | Basic and diluted net loss per share | $(0.48) | $(0.76) | $(0.99) | $(1.08) | | Weighted-average shares outstanding | 80,585,625 | 64,376,396 | 79,813,273 | 64,221,145 | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The unaudited condensed consolidated balance sheets show total assets decreased to $198.7 million as of June 30, 2025, from $269.8 million at December 31, 2024, with a significant decrease in cash and cash equivalents Condensed Consolidated Balance Sheets (as of June 30, 2025 vs Dec 31, 2024, in thousands) | Asset/Liability/Equity | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **ASSETS:** | | | | Cash and cash equivalents | $32,166 | $103,659 | | Total Current Assets | $47,084 | $123,518 | | Property, plant and equipment, net | $110,816 | $102,878 | | TOTAL ASSETS | $198,716 | $269,751 | | **LIABILITIES:** | | | | Total Current Liabilities | $53,436 | $60,783 | | Deferred revenue - related party | $63,044 | $57,576 | | Note payable, net | $73,773 | $73,221 | | TOTAL LIABILITIES | $195,756 | $201,924 | | **SHAREHOLDERS' EQUITY:** | | | | Total Shareholders' Equity | $2,960 | $67,827 |

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for Q2 2025 reflect a significant performance downturn, resulting in a net loss, reduced cash, and substantial doubt about the company's ability to continue as a going concern [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$49.99 million** from **$54.70 million**, primarily due to a significant drop in cash, while stockholders' equity also declined Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $959 | $3,723 | | Total current assets | $22,800 | $25,076 | | Total assets | $49,985 | $54,696 | | Total current liabilities | $5,384 | $7,365 | | Total liabilities | $21,415 | $22,708 | | Total stockholders' equity | $28,571 | $31,988 | [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) For Q2 and H1 2025, revenues plummeted, leading to significant net losses of **$4.19 million** and **$6.76 million** respectively, a sharp reversal from prior year's net income Three Months Ended June 30, Performance Comparison (in millions, except EPS) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $1.86 | $15.65 | -88.1% | | Gross Profit (Loss) | ($0.13) | $9.01 | -101.4% | | Net Income (Loss) | ($4.19) | $3.34 | -225.5% | | Diluted EPS | ($0.36) | $0.29 | -224.1% | Six Months Ended June 30, Performance Comparison (in millions, except EPS) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $4.33 | $27.05 | -84.0% | | Gross Profit | $0.97 | $13.64 | -92.9% | | Net Income (Loss) | ($6.76) | $3.85 | -275.7% | | Diluted EPS | ($0.59) | $0.41 | -243.9% | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For H1 2025, net cash decreased by **$2.76 million** due to significant cash usage in operations and investing, a stark reversal from the **$11.96 million** increase in H1 2024 driven by financing Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,515) | $(940) | | Net cash used in investing activities | $(249) | $(2,228) | | Net cash provided by financing activities | $0 | $15,131 | | **Net Change in Cash** | **$(2,764)** | **$11,963** | [Notes to the Condensed Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) Key notes reveal substantial doubt about going concern due to net losses and low cash, highlight high customer concentration, significant related-party debt restructuring, and a complete pivot to freeze-dried candy products - The company has raised substantial doubt about its ability to continue as a going concern, citing an accumulated deficit of **$69.2 million**, a net loss of **$6.8 million** for the six-month period, and a cash balance of only **$959,416** as of June 30, 2025[66](index=66&type=chunk) - Management's plans to address the going concern issue include debt restructuring (completed in Q2 2025), cost-cutting, entering new overseas markets, and exploring potential partnerships, asset sales, or capital raises[67](index=67&type=chunk)[69](index=69&type=chunk) - The company has significant customer concentration risk, with its top three customers accounting for **48%**, **17%**, and **9%** of revenues for the six months ended June 30, 2025[48](index=48&type=chunk) - In April 2025, the company restructured **$2.5 million** in outstanding promissory notes held by related parties into new senior convertible notes maturing April 30, 2030, reclassifying the debt from current to long-term liabilities[71](index=71&type=chunk)[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the severe H1 2025 revenue decline and gross profit collapse to intense competitive pressure and customer loss, leading to deteriorated liquidity and reinforcing substantial doubt about the company's going concern ability [Overview and Key Factors](index=26&type=section&id=Overview%20and%20Key%20Factors) Sow Good, a freeze-dried candy manufacturer, faces significant competitive challenges from larger players impacting customer retention, market access, and revenue, alongside supply chain risks - The company operates in a highly competitive industry and has lost significant customers due to competitors using their market status and marketing spend to limit Sow Good's access to shelf space[159](index=159&type=chunk) - As of June 30, 2025, the company's products are sold in approximately **5,000** retail outlets in the U.S. and it has expanded distribution to the Middle East[151](index=151&type=chunk)[155](index=155&type=chunk) - Operational challenges, such as extreme summer heat in 2024, have previously disrupted transportation, increased inventory levels, and negatively impacted revenue and market reputation[163](index=163&type=chunk)[164](index=164&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Operations analysis reveals a dramatic downturn for Q2 and H1 2025, with revenues plummeting by **88%** and **84%** respectively, leading to significant gross losses primarily due to reduced demand and competitive pressure Comparison of Three Months Ended June 30 | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $1.86M | $15.65M | -88% | | Gross Profit (Loss) | ($0.13M) | $9.01M | -101% | | Net Operating (Loss) Income | ($4.07M) | $4.89M | -183% | Comparison of Six Months Ended June 30 | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $4.33M | $27.05M | -84% | | Gross Profit | $0.97M | $13.64M | -93% | | Net Operating (Loss) Income | ($6.49M) | $5.81M | -212% | [Liquidity, Going Concern and Capital Resources](index=32&type=section&id=Liquidity,%20Going%20Concern%20and%20Capital%20Resources) The company's liquidity is precarious with cash at **$959.4 thousand**, insufficient for the next twelve months, reinforcing substantial doubt about its going concern ability and necessitating additional financing - As of June 30, 2025, the company had only **$959.4 thousand** in cash and cash equivalents, a decrease of **$2.8 million** since December 31, 2024[199](index=199&type=chunk) - Management explicitly states that the company may not have sufficient funds to sustain operations for the next twelve months, which raises substantial doubt about its ability to continue as a going concern[199](index=199&type=chunk) - In April 2025, the company restructured **$2.7 million** of outstanding current debt into long-term convertible notes maturing in 2030, improving its short-term liquidity profile on paper[200](index=200&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports minimal commodity price and interest rate risks but anticipates increasing foreign currency risk with expanding international operations in Mexico, Colombia, and China - The company does not expect significant effects from commodity price risk or interest rate risk[213](index=213&type=chunk)[214](index=214&type=chunk) - Foreign currency risk is expected to increase as the company's foreign operations in markets like Mexico, Colombia, and China grow[215](index=215&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, management concluded that disclosure controls and procedures are effective, with no material changes to internal control over financial reporting during the period - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[216](index=216&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the six months ended June 30, 2025[217](index=217&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any legal proceedings expected to have a material adverse effect on its financial condition or operations - The company is not currently involved in any material legal proceedings[220](index=220&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section highlights critical risks including substantial doubt about going concern, potential Nasdaq delisting due to minimum bid price non-compliance, and adverse impacts from significant tariffs - There is substantial doubt about the company's ability to continue as a going concern, as its cash of **$959.4 thousand** is not sufficient to fund operations for the next twelve months[222](index=222&type=chunk) - On May 14, 2025, the company received a non-compliance notice from Nasdaq for its stock's closing bid price being below **$1.00** for 30 consecutive trading days, with a compliance deadline of November 10, 2025[223](index=223&type=chunk) - The company faces risks from potential significant tariffs, which could materially increase costs, reduce margins, and disrupt the sourcing of raw materials[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[229](index=229&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the period - No directors or officers adopted or terminated any Rule 10b5-1 trading plans[232](index=232&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and incorporated by reference documents

Exhibit 99.1 Research and Development Expenses: Research and development expenses were $7.0 million for the second quarter of 2025 compared to $5.0 million for the second quarter of 2024. The increase was primarily due to an increase in manufacturing costs in support of the Company's CAN- 2409 programs, partially offset by a decrease in employee-related expenses, which was driven primarily from a reduction in stock-based compensation expense. Research and development expenses included a non-cash stock compe ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2025. ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Commission file number: 001-35376 OBLONG, INC. (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Id ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Synergy CHC Corp.'s unaudited condensed interim financial statements for Q2 2025 and 2024, prepared under US GAAP [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change (vs. Dec 31, 2024) ($) | | :-------------------------------- | :-------------- | :---------------- | :-------------------------- | | Cash and cash equivalents | $1,458,561 | $687,920 | +$770,641 | | Accounts receivable, net | $7,069,889 | $5,321,037 | +$1,748,852 | | Inventory, net | $2,364,158 | $1,716,552 | +$647,606 | | Total Current Assets | $19,509,679 | $16,059,768 | +$3,449,911 | | Total Assets | $19,726,346 | $16,343,101 | +$3,383,245 | | Short term loans payable, net | $1,894,857 | $7,725,272 | -$5,830,415 | | Total Current Liabilities | $7,126,547 | $17,184,369 | -$10,057,822 | | Notes payable, long-term | $24,978,999 | $7,457,022 | +$17,521,977 | | Total Liabilities | $32,105,546 | $32,974,444 | -$868,898 | | Total Stockholders' Deficit | $(12,379,200) | $(16,631,343) | +$4,252,143 | [Unaudited Condensed Consolidated Statements of Income and Comprehensive Income](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Income Statement Highlights (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :----------------- | :------------ | :------------ | :----------- | | Product Sales | $6,734,996 | $8,024,840 | -16.08 | | License Revenue | $1,400,000 | - | N/A | | Total Revenue | $8,134,996 | $8,024,840 | +1.37 | | Gross profit | $6,238,605 | $5,575,950 | +11.89 | | Operating expenses | $4,614,870 | $3,992,358 | +15.59 | | Net income after tax | $1,473,237 | $655,186 | +124.86 | | Net income per share – basic | $0.17 | $0.09 | +88.89 | Income Statement Highlights (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :----------------- | :------------- | :------------- | :----------- | | Product Sales | $13,405,530 | $17,436,703 | -23.12 | | License Revenue | $2,900,000 | - | N/A | | Total Revenue | $16,305,530 | $17,436,703 | -6.59 | | Gross profit | $12,402,626 | $12,350,674 | +0.42 | | Operating expenses | $8,831,188 | $8,958,753 | -1.42 | | Net income after tax | $2,349,501 | $1,235,716 | +90.14 | | Net income per share – basic | $0.27 | $0.17 | +58.82 | [Unaudited Condensed Consolidated Statement of Stockholders' Deficit](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Stockholders%27%20Deficit) Stockholders' Deficit Changes (Six Months Ended June 30, 2025) | Item | Amount ($) | | :---------------------------------------------------------------- | :----------- | | Balance as of December 31, 2024 | $(16,631,343) | | Foreign currency translation loss | $(1,935) | | Issuance of common stock for loan financing | $117,648 | | Net income (March 31, 2025) | $876,264 | | Foreign currency transaction gain | $39,874 | | Issuance of pre-funded warrants for settlement of shareholder notes payable | $899,993 | | Issuance of common stock for modification of notes payable | $847,062 | | Net income (June 30, 2025) | $1,473,237 | | Balance as of June 30, 2025 | $(12,379,200) | - The total stockholders' deficit improved from **$(16,631,343)** at December 31, 2024, to **$(12,379,200)** at June 30, 2025, primarily due to net income and equity issuances for debt settlement and financing[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 ($) | 2024 ($) | Change (YoY) ($) | | :----------------------------- | :------------ | :------------ | :----------- | | Net cash used in operating activities | $(899,731) | $(1,140,005) | +$240,274 | | Net cash from investing activities | $0 | $0 | $0 | | Net cash provided by financing activities | $1,632,433 | $407,391 | +$1,225,042 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $770,641 | $(545,241) | +$1,315,882 | | Cash and restricted cash, end of period | $1,558,561 | $187,293 | +$1,371,268 | - The Company saw a **significant increase** in net cash provided by financing activities in 2025, primarily from new loans, leading to a **positive net increase** in cash, cash equivalents, and restricted cash, compared to a decrease in the prior year[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=NOTES%20TO%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Note 1 – Nature of the Business](index=11&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20the%20Business) - Synergy CHC Corp. is a consumer health care company focused on building a portfolio of best-in-class consumer product brands through organic growth and acquisitions[17](index=17&type=chunk) - The Company incorporated Synergy CHC Mexico in May 2025 to expand into the Mexican market[18](index=18&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=11&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in conformity with US GAAP, with all adjustments considered necessary for fair presentation included[19](index=19&type=chunk) - A 1-for-11.9 reverse stock split was effected on September 11, 2024, with all per-share information retroactively adjusted[21](index=21&type=chunk) - Management concluded that factors such as net income, working capital surplus, debt refinancing, and options for capital raises alleviate substantial doubt about the Company's ability to continue as a going concern for the next twelve months[69](index=69&type=chunk)[70](index=70&type=chunk) - An immaterial error related to Treasury Shares was corrected, resulting in a reclassification of **$127,500** and a revision of earnings per share for prior periods[71](index=71&type=chunk)[74](index=74&type=chunk) [Note 3 – Income Taxes](index=22&type=section&id=Note%203%20%E2%80%93%20Income%20Taxes) Income Tax Expense | Period | 2025 ($) | 2024 ($) | | :---------------------- | :----------- | :----------- | | Three months ended June 30 | $(190,107) | $(179,382) | | Six months ended June 30 | $(178,647) | $(306,571) | - The Company has net operating loss carryforwards of approximately **$48.7 million** (June 30, 2025) and **$50.8 million** (December 31, 2024), but a **100% valuation allowance** has been established due to uncertainty of realization[83](index=83&type=chunk) [Note 4 – Accounts Receivable](index=22&type=section&id=Note%204%20%E2%80%93%20Accounts%20Receivable) Accounts Receivable, Net | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :------------ | :---------------- | | Trade accounts receivable | $7,069,889 | $5,321,037 | | Other receivables | $2,025,094 | $1,999,637 | | Total accounts receivable, net | $9,094,983 | $7,320,674 | - The allowance for doubtful accounts was **$0** for both periods[84](index=84&type=chunk) [Note 5 – Prepaid Expenses](index=23&type=section&id=Note%205%20%E2%80%93%20Prepaid%20Expenses) Prepaid Expenses Breakdown | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------------------- | :------------ | :---------------- | | Advances for inventory | $260,572 | $605,913 | | Prepaid consulting fees, related party | $695,587 | $296,981 | | Advertising and promotions | $859,920 | $869,920 | | Total | $2,064,094 | $1,859,563 | [Note 6 – Concentration of Credit Risk](index=23&type=section&id=Note%206%20%E2%80%93%20Concentration%20of%20Credit%20Risk) - Two customers accounted for **84%** of trade accounts receivable at June 30, 2025, and three customers accounted for approximately **80%** of net revenue for the six months ended June 30, 2025[87](index=87&type=chunk)[88](index=88&type=chunk) - Two vendors accounted for **58%** of accounts payable at June 30, 2025, and three suppliers accounted for approximately **47%** of purchases for the six months ended June 30, 2025[89](index=89&type=chunk)[90](index=90&type=chunk) [Note 7 – Inventory](index=24&type=section&id=Note%207%20%E2%80%93%20Inventory) Inventory Breakdown | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :------------- | :------------ | :---------------- | | Finished goods | $2,213,770 | $1,578,561 | | Components | $105,388 | $92,991 | | Raw materials | $45,000 | $45,000 | | Total inventory | $2,364,158 | $1,716,552 | - No inventory write-offs occurred during the six months ended June 30, 2025 and 2024[92](index=92&type=chunk) [Note 8 – Intangible Assets](index=24&type=section&id=Note%208%20%E2%80%93%20Intangible%20Assets) Intangible Assets, Net | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------ | :------------ | :---------------- | | License Fee | $450,000 | $450,000 | | Less accumulated amortization | $(233,333) | $(166,667) | | Intangible assets, net | $216,667 | $283,333 | - Amortization expense for the six months ended June 30, 2025, was **$66,666**[93](index=93&type=chunk) [Note 9 – Related Party Transactions](index=24&type=section&id=Note%209%20%E2%80%93%20Related%20Party%20Transactions) Related Party Balances | Item | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------------------------- | :------------ | :---------------- | | Loan receivable (related party) | $4,427,883 | $4,375,059 | | Prepaid consulting fees, related party | $695,587 | $296,981 | | Royalties, shareholder | $92,955 | $88,644 | - The Company repaid a **$135,000** advance from a related party during the six months ended June 30, 2025[95](index=95&type=chunk) - Loans with Knight Therapeutics Inc., a shareholder, were modified and subsequently repaid in May and June 2025[100](index=100&type=chunk)[106](index=106&type=chunk) [Note 10 – Accounts Payable and Accrued Liabilities](index=26&type=section&id=Note%2010%20%E2%80%93%20Accounts%20Payable%20and%20Accrued%20Liabilities) Accounts Payable and Accrued Liabilities | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------- | :------------ | :---------------- | | Accrued payroll | $195,889 | $76,399 | | Legal fees | $214,829 | $13,722 | | Commissions | - | $450,208 | | Manufacturers | $1,635,113 | $409,744 | | Promotions | $823,174 | $2,570,126 | | Total | $4,960,331 | $5,191,868 | [Note 11 – Notes Payable](index=27&type=section&id=Note%2011%20%E2%80%93%20Notes%20Payable) Notes Payable Summary | Loan Type | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------------------- | :------------ | :---------------- | | $10,000,000 August 9, 2017 Loan (Knight) | $0 | $12,333,052 | | $2,000,000 and $6,000,000 Notes | $9,794,165 | $9,794,165 | | $5,450,000 December 28, 2023 Loan | $0 | $2,802,445 | | $3,020,824 March 27, 2024 Loan | $1,400,000 | $2,302,824 | | $17,500,000 May 2025 Loan | $17,500,000 | - | | Total (net of discount) | $26,873,856 | $27,515,346 | - The **$10 million** loan from Knight Therapeutics Inc. was satisfied in May 2025 through a **$10 million** cash repayment, a **$1.2 million** early payment discount, and a **$1.5 million** equity conversion, resulting in a gain of **$1,813,865**[106](index=106&type=chunk)[107](index=107&type=chunk) - The **$2 million** and **$6 million** loans became subordinated debt with no maturity date, subject to specific interest and principal payment conditions[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - A new **$17.5 million** term loan credit agreement was entered into with ACP Agency, LLC in May 2025, secured by company assets, with proceeds used to repay existing debt and for working capital[130](index=130&type=chunk)[134](index=134&type=chunk) [Note 12 – Stockholders' Deficit](index=32&type=section&id=Note%2012%20%E2%80%93%20Stockholders%27%20Deficit) - The Company issued **30,360 shares** for loan financing, **428,570 pre-funded warrants** (fully exercised) for partial debt settlement, and **441,178 shares** for modification of notes payable during 2025[138](index=138&type=chunk)[139](index=139&type=chunk) Common Stock Issued and Outstanding | Metric | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Shares issued | 9,621,926 | 8,721,818 | | Shares outstanding | 9,441,853 | 8,541,745 | [Note 13 – Commitments and Contingencies](index=33&type=section&id=Note%2013%20%E2%80%93%20Commitments%20and%20Contingencies) - Management believes there are no current legal matters that would have a material effect on the Company's financial position or results of operations[141](index=141&type=chunk) [Note 14 – Stock Options and Warrants](index=33&type=section&id=Note%2014%20%E2%80%93%20Stock%20Options%20and%20Warrants) Stock Options and Warrants Outstanding (June 30, 2025) | Instrument | Number Outstanding | Weighted Average Exercise Price ($) | | :--------- | :----------------- | :---------------------------------- | | Options | 252,102 | $6.15 | | Warrants | 103,500 | $11.70 | - The Company issued **428,570 pre-funded warrants** valued at **$899,993** in June 2025 to settle a loan payable to a shareholder, which were fully exercised during the period[144](index=144&type=chunk)[145](index=145&type=chunk) [Note 15 – Segments](index=34&type=section&id=Note%2015%20%E2%80%93%20Segments) - The Company operates as one operating segment, deriving revenue from the sale of nutraceuticals[146](index=146&type=chunk) Net Sales by Geography (Three Months Ended June 30) | Geography | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :-------------- | :------------ | :------------ | :----------- | | United States | $7,954,326 | $6,705,486 | +18.62 | | Foreign countries | $180,670 | $1,319,354 | -86.31 | Net Sales by Product Group (Six Months Ended June 30) | Product Group | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :-------------- | :------------- | :------------- | :----------- | | Nutraceuticals | $13,405,530 | $17,436,703 | -23.12 | | License Revenue | $2,900,000 | - | N/A | Net Sales by Major Sales Channel (Six Months Ended June 30) | Sales Channel | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :------------ | :------------- | :------------- | :----------- | | Online | $4,836,284 | $2,150,177 | +124.92 | | Retail | $11,469,246 | $15,286,526 | -25.09 | [Note 16 – Subsequent Events](index=36&type=section&id=Note%2016%20%E2%80%93%20Subsequent%20Events) - Subsequent to June 30, 2025, the Company repaid **$1,400,000** of principal on the March 27, 2024 loan, **$416,614** of principal and **$69,386** of interest on the February 2025 loan, **$92,942** of interest on the March 8, 2022 loan, and **$379,371** of interest on the May 2025 loan[153](index=153&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Synergy CHC Corp.'s financial performance and condition for Q2 2025 and 2024 [Special Note Regarding Forward-Looking Statements](index=37&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) - This report includes forward-looking statements that involve risks and uncertainties, and actual results may differ materially from expectations[155](index=155&type=chunk) [Overview](index=37&type=section&id=Overview) - Synergy CHC Corp. is a provider of consumer health care, beauty, and lifestyle products, with core brands FOCUSfactor (brain health supplement) and Flat Tummy (weight management products)[157](index=157&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) - The Company uses **EBITDA** (earnings before interest, taxes, depreciation, and amortization) as a non-GAAP financial measure to evaluate business relationships and operating performance[159](index=159&type=chunk) EBITDA Reconciliation | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | | :------------------------------- | :------------------------------- | :------------------------------- | | Net income | $1,473,237 | $655,186 | | Interest expense | $2,107,714 | $745,528 | | Income tax expense | $190,107 | $179,382 | | Depreciation and amortization | $33,334 | $33,334 | | **EBITDA** | **$3,804,013** | **$1,613,056** | | Metric | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------- | :------------------------------- | :------------------------------- | | Net income | $2,349,501 | $1,235,716 | | Interest expense | $3,203,083 | $1,855,508 | | Income tax expense | $178,647 | $306,571 | | Depreciation and amortization | $66,667 | $66,667 | | **EBITDA** | **$5,783,637** | **$3,463,701** | [Results of Operations for the Three Months Ended June 30, 2025 and June 30, 2024](index=38&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section analyzes Synergy CHC Corp.'s financial performance for the three months ended June 30, 2025 and 2024 [Revenue](index=38&type=section&id=Revenue%20(Three%20Months)) Revenue (Three Months Ended June 30) | Category | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :-------------- | :------------ | :------------ | :----------- | | Product Sales | $6,734,996 | $8,024,840 | -16.08 | | License Revenue | $1,400,000 | - | N/A | | Total Revenue | $8,134,996 | $8,024,840 | +1.37 | - Nutraceuticals revenue decreased due to a new product sell-in in 2024 that did not repeat in 2025, offset by new license revenue for foreign expansion[163](index=163&type=chunk) [Cost of Revenue](index=39&type=section&id=Cost%20of%20Revenue%20(Three%20Months)) Cost of Revenue (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :------------- | :------------ | :------------ | :----------- | | Cost of revenue | $1,896,391 | $2,448,890 | -22.60 | - The decrease in cost of sales was primarily due to the decrease in revenue[164](index=164&type=chunk) [Gross Profit](index=39&type=section&id=Gross%20Profit%20(Three%20Months)) Gross Profit (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :---------- | :------------ | :------------ | :----------- | | Gross profit | $6,238,605 | $5,575,950 | +11.89 | | Gross margin (%) | 77 | 69 | +8 pp | - The increase in gross profit and margin is directly related to the new license revenue[165](index=165&type=chunk) [Operating Expenses](index=39&type=section&id=Operating%20Expenses%20(Three%20Months)) [Selling and Marketing Expenses](index=39&type=section&id=Selling%20and%20Marketing%20Expenses%20(Three%20Months)) Selling and Marketing Expenses (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :---------------------- | :------------ | :------------ | :----------- | | Selling and marketing expenses | $3,062,211 | $3,055,186 | +0.23 | [General and Administrative Expenses](index=39&type=section&id=General%20and%20Administrative%20Expenses%20(Three%20Months)) General and Administrative Expenses (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :----------------------------- | :------------ | :------------ | :----------- | | General and administrative expenses | $1,519,325 | $903,838 | +68.10 | - The increase in general and administrative expenses is primarily due to public market expenses[167](index=167&type=chunk) [Depreciation and Amortization Expenses](index=39&type=section&id=Depreciation%20and%20Amortization%20Expenses%20(Three%20Months)) Depreciation and Amortization Expenses (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :--------------------------- | :---------- | :---------- | :----------- | | Depreciation and amortization | $33,334 | $33,334 | 0.00 | [Other Income and Expenses](index=39&type=section&id=Other%20Income%20and%20Expenses%20(Three%20Months)) Other Income and Expenses (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :---------------------------------------- | :------------ | :------------ | :----------- | | Interest expense | $2,107,714 | $745,528 | +182.72 | | Gain on settlement of loans | $(2,154,522) | - | N/A | | Total other (income) expense | $(39,609) | $749,024 | -105.29 | - The increase in interest expense is primarily due to an advance, shares issued related to the modification of notes payable, and a new May 2025 loan[169](index=169&type=chunk) [Net Income](index=40&type=section&id=Net%20Income%20(Three%20Months)) Net Income (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :-------- | :------------ | :------------ | :----------- | | Net income | $1,473,237 | $655,186 | +124.86 | - Net income significantly increased due to a gain on settlement of loans[170](index=170&type=chunk) [Results of Operations for the Six Months Ended June 30, 2025 and June 30, 2024](index=40&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section analyzes Synergy CHC Corp.'s financial performance for the six months ended June 30, 2025 and 2024 [Revenue](index=40&type=section&id=Revenue%20(Six%20Months)) Revenue (Six Months Ended June 30) | Category | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :-------------- | :------------- | :------------- | :----------- | | Product Sales | $13,405,530 | $17,436,703 | -23.12 | | License Revenue | $2,900,000 | - | N/A | | Total Revenue | $16,305,530 | $17,436,703 | -6.59 | - Nutraceuticals revenue decreased due to a non-recurring new product sell-in in 2024, partially offset by new license revenue[172](index=172&type=chunk) [Cost of Revenue](index=40&type=section&id=Cost%20of%20Revenue%20(Six%20Months)) Cost of Revenue (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :------------- | :------------ | :------------ | :----------- | | Cost of revenue | $3,902,904 | $5,086,029 | -23.26 | - The decrease in cost of revenue was primarily due to the overall decrease in revenue[173](index=173&type=chunk) [Gross Profit](index=40&type=section&id=Gross%20Profit%20(Six%20Months)) Gross Profit (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :---------- | :------------- | :------------- | :----------- | | Gross profit | $12,402,626 | $12,350,674 | +0.42 | | Gross margin (%) | 76 | 71 | +5 pp | - The slight increase in gross profit and improved gross margin are related to the new license revenue[174](index=174&type=chunk) [Operating Expenses](index=40&type=section&id=Operating%20Expenses%20(Six%20Months)) [Selling and Marketing Expenses](index=40&type=section&id=Selling%20and%20Marketing%20Expenses%20(Six%20Months)) Selling and Marketing Expenses (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :---------------------- | :------------ | :------------ | :----------- | | Selling and marketing expenses | $5,938,482 | $6,639,863 | -10.57 | - The decrease in selling and marketing expenses is primarily due to lower revenue and improved management of promotions[175](index=175&type=chunk) [General and Administrative Expenses](index=40&type=section&id=General%20and%20Administrative%20Expenses%20(Six%20Months)) General and Administrative Expenses (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :----------------------------- | :------------ | :------------ | :----------- | | General and administrative expenses | $2,826,039 | $2,252,223 | +25.48 | - The increase in general and administrative expenses is primarily due to public market expenses[176](index=176&type=chunk) [Depreciation and Amortization Expenses](index=41&type=section&id=Depreciation%20and%20Amortization%20Expenses%20(Six%20Months)) Depreciation and Amortization Expenses (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :--------------------------- | :---------- | :---------- | :----------- | | Depreciation and amortization | $66,667 | $66,667 | 0.00 | [Other Income and Expenses](index=41&type=section&id=Other%20Income%20and%20Expenses%20(Six%20Months)) Other Income and Expenses (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :---------------------------------------- | :------------ | :------------ | :----------- | | Interest expense | $3,203,083 | $1,855,508 | +72.63 | | Gain on settlement of loans | $(2,154,522) | - | N/A | | Total other expense | $1,043,290 | $1,849,634 | -43.60 | - The increase in interest expense is primarily due to an advance taken in 2025, shares issued related to the modification of notes payable, and a new May 2025 loan[178](index=178&type=chunk) [Net Income](index=41&type=section&id=Net%20Income%20(Six%20Months)) Net Income (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) (%) | | :-------- | :------------ | :------------ | :----------- | | Net income | $2,349,501 | $1,235,716 | +90.14 | - Net income significantly increased due to lower operating expenses and a gain on loan settlements[179](index=179&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Synergy CHC Corp.'s cash position, cash flows, and overall capital management [Overview](index=41&type=section&id=Overview%20(Liquidity)) - As of June 30, 2025, the Company had **$1,458,561** in cash on hand and **$100,000** in restricted cash for credit card collateral[180](index=180&type=chunk) [Cash Flows from Operating Activities](index=41&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Net Cash Used in Operating Activities (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) ($) | | :----------------------------------- | :------------ | :------------ | :----------- | | Net cash used in operating activities | $(899,731) | $(1,140,005) | +$240,274 | - The decrease in net cash used in operating activities was influenced by adjustments including amortization of debt discount, stock issued for notes payable modification, and a gain on debt settlement[182](index=182&type=chunk) [Cash Flows from Investing Activities](index=43&type=section&id=Cash%20Flows%20from%20Investing%20Activities) - The Company used **$0** in net cash for investing activities for both the six months ended June 30, 2025 and 2024[184](index=184&type=chunk) [Cash Flows from Financing Activities](index=43&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Net Cash Provided by Financing Activities (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (YoY) ($) | | :----------------------------------- | :------------ | :------------ | :----------- | | Net cash provided by financing activities | $1,632,433 | $407,391 | +$1,225,042 | - The increase in net cash provided by financing activities was primarily attributable to proceeds from new notes payable, partially offset by repayments of notes payable[185](index=185&type=chunk)[186](index=186&type=chunk) [Key Near-Term Initiatives](index=43&type=section&id=Key%20Near-Term%20Initiatives) - The Company plans to organically grow existing product lines, develop and launch new products, expand into new markets, and pursue additional strategic acquisitions[187](index=187&type=chunk) [Off-Balance Sheet Arrangements](index=43&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company had no off-balance sheet arrangements during the six months ended June 30, 2025, or the year ended December 31, 2024[188](index=188&type=chunk) [Inflation](index=43&type=section&id=Inflation) - The effect of inflation on the Company's operating results was not significant in the six months ended June 30, 2025 or 2024[189](index=189&type=chunk) [Critical Accounting Estimates](index=43&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include those related to revenue recognition and accounts receivable allowances[190](index=190&type=chunk) [Recent Accounting Pronouncements](index=43&type=section&id=Recent%20Accounting%20Pronouncements) - Information on recent accounting pronouncements is detailed in Note 2 to the unaudited condensed consolidated financial statements[191](index=191&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Synergy CHC Corp. has elected not to provide market risk disclosures - As a smaller reporting company, Synergy CHC Corp. has elected not to provide quantitative and qualitative disclosures about market risk[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded Synergy CHC Corp.'s disclosure controls were not effective as of June 30, 2025 [Evaluation of Disclosure Controls and Procedures](index=44&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, to ensure material information is recorded, processed, summarized, and reported timely[193](index=193&type=chunk) [Changes in Internal Control Over Financial Reporting](index=44&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There have been no material changes in internal control over financial reporting during the quarter ended June 30, 2025[194](index=194&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Synergy CHC Corp. is not a party to any material legal proceedings - The Company is not a party to any material legal proceedings, but may be involved in routine litigation[197](index=197&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Synergy CHC Corp. is not required to include risk factors - As a smaller reporting company, the Company is not required to include risk factors in this report, and no material changes to previously disclosed risk factors have occurred[198](index=198&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities or use of proceeds were reported for the period[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Synergy CHC Corp. reported no defaults upon senior securities - No defaults upon senior securities were reported[202](index=202&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Synergy CHC Corp - This item is not applicable to the Company[203](index=203&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No other material information was reported, and no Rule 10b5-1 trading arrangements were adopted - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the quarter ended June 30, 2025[205](index=205&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report - The report includes various exhibits such as merger agreements, asset purchase agreements, articles of incorporation, credit agreements, and certifications[206](index=206&type=chunk)[207](index=207&type=chunk) SIGNATURES [Signature Block](index=47&type=section&id=Signature%20Block) The Quarterly Report was signed by Jack Ross, CEO and Chairman, on August 14, 2025 - The report was signed by Jack Ross, Chief Executive Officer and Chairman, on August 14, 2025[212](index=212&type=chunk)