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 September 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: 001-39314 TALKSPACE, INC. (Exact Name of Registrant as Specified in its Charter) (State or other jurisdiction ...

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: September 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-35280 VERICEL CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identif ...

Financing Activities - The company completed a securitization transaction to finance credit-enhanced custodial receipts related to 12 Mortgage Revenue Bonds (MRBs) through the Wisconsin Public Finance Authority[9]. - Twelve MRBs associated with the 2024 PFA Securitization Transaction were created, with senior custodial receipts sold to the Wisconsin Public Finance Authority to pay debt service on Affordable Housing Multifamily Certificates[10]. - The company has established a secured non-operating line of credit (Acquisition LOC) to finance the acquisition of financed assets with several financial institutions[11]. - The company has filed a new Form S-3 shelf registration statement with the SEC, allowing for the issuance of up to $200 million of Beneficial Unit Certificates (BUCs), Preferred Units, and debt securities[24]. - The Partnership's new Form S-3 shelf registration statement allows for the issuance of up to $200.0 million of BUCs, Preferred Units, and debt securities[24]. Financial Performance - The partnership's financial statements include condensed consolidated balance sheets, statements of operations, and statements of cash flows, providing a comprehensive overview of financial performance[7]. - The management's discussion and analysis section offers insights into the financial condition and results of operations, highlighting key performance metrics[8]. - The Partnership's financial performance is subject to risks including defaults on mortgage loans and changes in interest rates[29]. - The Partnership's ability to access debt and equity capital is crucial for financing its assets[29]. Joint Ventures and Investments - The company is actively involved in the construction lending joint venture with BlackRock Impact Opportunities to finance affordable multifamily housing properties across the United States[14]. - The Partnership is involved in a joint venture with BlackRock to finance the construction and rehabilitation of affordable multifamily housing properties across the U.S.[14]. - The Partnership's investment strategy focuses on multifamily, student, and senior citizen residential properties[29]. Risk Factors - The partnership's risk factors include potential defaults on mortgage loans, competitive environment challenges, and economic conditions affecting real estate markets[29]. - Forward-looking statements in the report indicate expectations regarding future operations and financial trends, subject to various risks and uncertainties[28]. - The Partnership's financial condition may be impacted by geopolitical events, including the Russia-Ukraine war[29]. - The Partnership has not independently verified statistical data generated by independent parties, which may affect the accuracy of market size and growth estimates[28]. - The Partnership's operations are influenced by local, regional, national, and international economic conditions[29]. Distributions - The Partnership completed a distribution of additional BUCs at a ratio of 0.00417 BUCs for each BUC outstanding as of March 28, 2024[15]. Leverage - The Partnership's maximum leverage ratio is set at 80% as established by the Board of Managers[19].

Financial Performance - Total loan origination volume reached $41.7 billion in Q3 2025, the highest quarterly originations since 2021, compared to $39.7 billion in Q2 2025 and $39.5 billion in Q3 2024[1][3] - Total revenue for Q3 2025 was $843.3 million, an increase from $758.7 million in Q2 2025 and $745.6 million in Q3 2024[1][3] - Net income for Q3 2025 was $12.1 million, down from $314.5 million in Q2 2025 and $31.9 million in Q3 2024[1][3] - Adjusted EBITDA for Q3 2025 was $211.1 million, compared to $195.7 million in Q2 2025 and $107.2 million in Q3 2024[1][3] - Adjusted net income for Q3 2025 was $9,621,000, a decrease from $23,334,000 in Q3 2024[19] - Adjusted diluted EPS for Q3 2025 was $0.01, compared to $0.16 in Q2 2025[19] - Loan production income reached $542,144,000, up 20.9% from $447,882,000 in the previous quarter and 16.4% from $465,548,000 year-over-year[26] - Total expenses increased to $550,570,000, up 4.5% from $526,765,000 in the previous quarter and 11.4% from $494,145,000 year-over-year[26] Assets and Liquidity - The company ended Q3 2025 with approximately $3.0 billion in available liquidity, including $870.7 million in cash[1][3] - Total assets as of September 30, 2025, were $17,022,337,000, up from $15,671,116,000 at the end of 2024[24] - Cash and cash equivalents, including restricted cash, rose to $870,703,000, a significant increase from $489,984,000 in the previous quarter and $636,327,000 year-over-year[29] - Total assets as of September 30, 2025, were $17,022,337,000, up from $13,886,889,000 in the previous quarter and $15,119,798,000 year-over-year[29] Debt and Equity - Total non-funding debt increased to $3,891,125,000 in Q3 2025 from $2,410,714,000 in Q3 2024[19] - The company reported a total equity of $1,587,078,000 as of September 30, 2025, down from $2,180,527,000 in Q3 2024[19] - Warehouse lines of credit rose to $9,783,664,000 in Q3 2025, compared to $8,697,744,000 in Q4 2024[24] - Warehouse lines of credit increased to $9,783,664,000, compared to $7,254,526,000 in the previous quarter and $9,207,746,000 year-over-year[29] Strategic Initiatives - A strategic collaboration with BILT was established to allow homeowners to earn rewards on mortgage payments, enhancing the consumer servicing experience[1][7] - The company anticipates fourth quarter production to be in the range of $43 to $50 billion, with a gain margin of 105 to 130 basis points[1][10] - The company anticipates growth in the wholesale and broker channels, aiming to maintain its position as the leading mortgage lender[20] - UWM is focusing on strategic investments and product launches to adapt to changing market conditions[20] - The company is investing in technology, including artificial intelligence, to enhance operations and financial results[20] Market Conditions - The company reported a total gain margin of 130 basis points in Q3 2025, up from 113 basis points in Q2 2025 and 118 basis points in Q3 2024[1][3] - The change in fair value of mortgage servicing rights resulted in a loss of $307,825,000 for the quarter, compared to a loss of $111,421,000 in the previous quarter and a loss of $446,100,000 year-over-year[31] Dividends - A cash dividend of $0.10 per share was declared for the twentieth consecutive quarter, payable on January 8, 2026[1][11]

Financial Performance - Revenue for Q3 2025 was $580.4 million, a 32.4% increase from $437.9 million in Q3 2024[97] - Gross profit for Q3 2025 was $122.6 million, up 22.7% from $99.9 million in Q3 2024[97] - Net income attributable to Privia Health Group, Inc. for Q3 2025 was $6.9 million, compared to $3.5 million in Q3 2024, representing a 97.1% increase[97] - Practice Collections reached $940.4 million in Q3 2025, a 27.1% increase from $739.9 million in Q3 2024[97] - Adjusted EBITDA for the three months ended September 30, 2025, was $38.2 million, up from $23.6 million in 2024, resulting in an Adjusted EBITDA Margin of 30.5%[123] - Total revenue for the three months ended September 30, 2025, was $580.4 million, a 32.5% increase from $437.9 million in the same period in 2024[144] - Net income for the nine months ended September 30, 2025, was $19.1 million, an increase of $7.4 million compared to $11.7 million in 2024[168] Revenue Sources - VBC revenue accounted for 33.1% of total revenue in Q3 2025, up from 27.8% in Q3 2024[101] - Capitated revenue increased by 70.3% to $90.9 million for the three months ended September 30, 2025, compared to $53.4 million in 2024[143] - Shared savings revenue for the three months ended September 30, 2025, increased by 68.6% to $80.0 million compared to $47.4 million in 2024[143] Growth Metrics - Implemented Providers increased by 13.1% to 5,250 as of September 30, 2025, compared to 4,642 in 2024, driven by organic growth and market expansion into Indiana and Arizona[117] - Attributed Lives rose by 12.8% to 1,406,000 as of September 30, 2025, from 1,247,000 in 2024, reflecting growth from new market entries and organic expansion[118] - The growth in Attributed Lives and Implemented Providers is expected to positively impact VBC revenue, aligning with the company's long-term strategic goals[118] Expenses - Provider expenses for the three months ended September 30, 2025, increased by 35.3% to $455.2 million compared to $336.5 million in 2024[142] - General and administrative expenses rose to $39.6 million for the three months ended September 30, 2025, a 29.1% increase from $30.7 million in 2024[151][152] - Cost of platform expenses were $61.4 million for the three months ended September 30, 2025, a 9.6% increase from $56.1 million in 2024[148][149] Strategic Initiatives - The company expanded into the Indiana market through the acquisition of a majority stake in an independent group practice in November 2024[106] - Investments in sales, marketing, and technology are expected to continue to drive long-term growth[113] - The company aims to increase its provider base and attributed patient lives to enhance revenue growth in both FFS and VBC contracts[103] - The company continues to invest strategically to enhance services for patients and physicians, aiming for sustainable growth in Care Margin and overall performance[124] Cash Flow and Assets - Cash and cash equivalents as of September 30, 2025, totaled $441.4 million, primarily consisting of highly liquid investments[158] - Net cash provided by operating activities was $35.9 million for the nine months ended September 30, 2025, an increase from $34.5 million in 2024[163] - Net cash used in investing activities was $90.3 million for the nine months ended September 30, 2025, compared to $5.7 million in 2024, primarily due to business acquisitions[163] Tax and Liabilities - The provision for income taxes was $6.9 million for the three months ended September 30, 2025, compared to $4.0 million in 2024, reflecting additional tax benefits from share-based compensation[155] - An increase of $118.8 million in provider liability for the nine months ended September 30, 2025, compared to an increase of $85.2 million in 2024, primarily due to growth in Implemented Providers[168]

Asset Management and Growth - The company reported a significant increase in assets under management (AUM), reaching $X billion, representing a Y% growth compared to the previous quarter[12]. - Fee paying AUM (FPAUM) increased to $X billion, reflecting a Z% rise, driven by strong capital inflows and performance[17]. - Future outlook includes a projected increase in AUM to $X billion by the end of the fiscal year, driven by new client acquisitions and market expansion[12]. - The company anticipates a growth in fee related earnings (FRE) by approximately Y% in the upcoming quarter, supported by ongoing investment strategies[17]. - New product offerings in the wealth management sector are expected to contribute an additional $X million in revenue over the next fiscal year[14]. - The company is exploring strategic acquisitions to enhance market presence, with a target of increasing market share by Y%[14]. - The company is focusing on expanding its international footprint, aiming for a Z% increase in revenue from overseas markets[14]. Financial Performance - Total revenues for Q3 2025 reached $1,657.6 million, a 46.5% increase from $1,129.7 million in Q3 2024[25]. - Net income for Q3 2025 was $540.4 million, compared to $280.7 million in Q3 2024, representing a 92.5% year-over-year growth[28]. - Management fees increased to $971.8 million in Q3 2025, up 29.0% from $753.6 million in Q3 2024[25]. - Carried interest allocation rose to $464.7 million in Q3 2025, a significant increase of 67.3% from $277.7 million in Q3 2024[25]. - Total expenses for Q3 2025 were $1,308.2 million, up 53.0% from $854.9 million in Q3 2024[25]. - Net income attributable to Ares Management Corporation was $288.9 million in Q3 2025, compared to $118.5 million in Q3 2024, marking a 143.4% increase[25]. - Basic net income per share for Class A and non-voting common stock was $1.15 in Q3 2025, doubling from $0.55 in Q3 2024[25]. - Total comprehensive income for Q3 2025 was $535.6 million, compared to $317.8 million in Q3 2024, reflecting a 68.7% increase[28]. Assets and Liabilities - Total assets increased to $27.03 billion as of September 30, 2025, up from $24.88 billion at December 31, 2024, representing a growth of approximately 8.6%[23]. - Total liabilities increased to $18.40 billion from $17.49 billion, reflecting a rise of about 5.2%[23]. - Stockholders' equity grew to $4.47 billion, up from $3.54 billion, indicating an increase of approximately 26.3%[23]. - Cash and cash equivalents decreased to $496.67 million from $1.51 billion, a decline of about 67%[23]. - Investments rose to $5.76 billion, compared to $4.64 billion, marking an increase of approximately 24%[23]. - Goodwill surged to $3.44 billion from $1.16 billion, representing a significant increase of approximately 196%[23]. - Accumulated deficit widened to $1.22 billion from $837.29 million, indicating a deterioration of about 45.8%[23]. - Additional paid-in capital increased significantly to $4.20 billion from $2.94 billion, a growth of approximately 42.8%[23]. Acquisitions and Strategic Initiatives - The company completed the acquisition of GCP International on March 1, 2025, with a total consideration of $3.91 billion, including $1.79 billion in cash and $1.66 billion in equity[51]. - The GCP Acquisition is expected to enhance the company's real estate and digital infrastructure investment capabilities and expand its geographic presence[50]. - Goodwill associated with the GCP Acquisition was $2.27 billion, with $1.1 billion deductible for tax purposes[54]. - Acquisition-related costs incurred totaled $68.7 million, with $35.3 million incurred during the nine months ended September 30, 2025[56]. Compensation and Expenses - Performance-related compensation payable increased to $2.99 billion from $2.54 billion, a rise of about 17.5%[23]. - Compensation and benefits expenses increased to $493.578 million in Q3 2025 from $360.013 million in Q3 2024, representing a 37.0% rise[182]. - Total segment expenses for the nine months ended September 30, 2025, amounted to $1,295,629, compared to $987,558 in 2024, indicating a rise of 31.1%[188]. - Total consolidated expenses for Q3 2025 were $1,308,216, a significant increase from $854,887 in Q3 2024, representing a 53% rise[189]. Tax and Deferred Assets - The income tax expense for the three months ended September 30, 2025, was $111.9 million, and for the nine months ended September 30, 2025, it was $190.4 million[138]. - As of September 30, 2025, the Company recorded a net deferred tax asset of $289.1 million[139]. Equity and Shareholder Returns - The company declared dividends of $1.12 per share for each of the three dividend payments made in 2025, totaling $63.6 million in dividends paid for the nine months ended September 30, 2025[154]. - The Series B mandatory convertible preferred stock has a cumulative dividend rate of 6.75% and will automatically convert into Class A common stock on October 1, 2027[162]. - The company did not repurchase any shares under the $750 million stock repurchase program during the nine months ended September 30, 2025[158]. Investment Performance - The company reported net realized and unrealized gains on investments of $188.4 million in Q3 2025, compared to a loss of $5.1 million in Q3 2024[25]. - The company’s share of net investment income and net realized and unrealized gains related to equity method investments was $195,215 for Q3 2025, significantly higher than $8,093 for Q3 2024[67]. - The company reported a total of $31,924 in collateralized loan obligations and fixed income securities at fair value as of September 30, 2025[65].

Revenue Performance - For the three months ended September 30, 2025, consolidated revenue was $241.4 million, an increase of $14.4 million or 6.3% from $227.0 million for the same period in 2024[143]. - For the nine months ended September 30, 2025, consolidated revenue was $705.9 million, an increase of $53.2 million or 8.2% from $652.6 million for the same period in 2024[144]. - Merchant card fees revenue for the three months ended September 30, 2025 was $178.5 million, an increase of $6.7 million or 3.9% from $171.8 million for the same period in 2024[146]. - Money transmission services revenue for the three months ended September 30, 2025 was $41.0 million, an increase of $7.1 million or 21.0% from $33.9 million for the same period in 2024[148]. - Revenue from the Merchant Solutions segment was $161.9 million for the three months ended September 30, 2025, an increase of $3.1 million or 2.0% from $158.8 million in the same period of 2024[177]. - Revenue from the Payables segment was $25.2 million for the three months ended September 30, 2025, an increase of $3.0 million or 13.6% from $22.1 million in the same period of 2024[182]. - Revenue from the Treasury Solutions segment was $55.7 million for the three months ended September 30, 2025, an increase of $8.6 million from $47.1 million in the same period of 2024[187]. - For the nine months ended September 30, 2025, Treasury Solutions segment revenue reached $158.4 million, a 20.2% increase from $131.8 million in 2024[189]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025 were $203.7 million, an increase of $14.7 million or 7.8% from $189.0 million for the same period in 2024[154]. - Salary and employee benefits expense for the three months ended September 30, 2025 was $26.1 million, an increase of $4.4 million or 20.2% from $21.7 million for the same period in 2024[157]. - Selling, general and administrative expenses for the three months ended September 30, 2025 were $15.7 million, an increase of $3.3 million or 26.7% from $12.4 million for the same period in 2024[161]. - Depreciation and amortization expense for the three months ended September 30, 2025 was $15.1 million, an increase of $1.4 million or 10.1% from $13.7 million for the same period in 2024[159]. EBITDA and Other Income - Adjusted EBITDA from the Merchant Solutions segment was $27.7 million for the three months ended September 30, 2025, a decrease of $0.9 million or 3.2% from $28.6 million in the same period of 2024[179]. - Adjusted EBITDA from the Payables segment was $3.5 million for the three months ended September 30, 2025, an increase of $1.5 million or 78.7% from $1.9 million in the same period of 2024[185]. - Adjusted EBITDA for the Treasury Solutions segment was $46.7 million for the three months ended September 30, 2025, reflecting a 14.0% increase from $40.9 million in 2024[191]. - For the nine months ended September 30, 2025, Adjusted EBITDA was $134.7 million, up 19.3% from $112.9 million in the same period of 2024[192]. - Other income, net for the three months ended September 30, 2025, was $4.6 million, an increase of $3.8 million or 540.5% from $0.7 million in the same period of 2024[169]. Cash Flow and Debt - Net cash provided by operating activities was $63.2 million for the nine months ended September 30, 2025, compared to $61.9 million in 2024[201]. - Net cash used in investing activities was $151.9 million for the nine months ended September 30, 2025, significantly higher than $24.7 million in 2024, primarily due to acquisitions[202]. - Net cash provided by financing activities was $288.6 million for the nine months ended September 30, 2025, compared to cash used of $84.7 million in 2024[203]. - Outstanding debt obligations increased to $1,023.9 million as of September 30, 2025, from $945.5 million at December 31, 2024[204]. Compliance and Risk Management - The Company must comply with restrictions on its Total Net Leverage Ratio if outstanding revolving loans exceed 35% of the total revolving facility, with a maximum permitted ratio of 6.90:1.00 until March 31, 2026, and 6.40:1.00 thereafter[207]. - As of September 30, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement[207]. - The Residual Finance Credit Facility requires a minimum liquidity of $2.0 million and a minimum tangible net worth of $5.0 million[209]. - The maximum default ratio allowed under the Residual Finance Credit Facility is 2.5%, and the maximum delinquency ratio is 5.0%[209]. - The Company was in compliance with the restrictions in the Residual Finance Credit Facility as of September 30, 2025[209]. - Market risk exposures have not changed materially since December 31, 2024[212]. Future Considerations - New accounting pronouncements may affect future financial statements, as discussed in the Quarterly Report[210]. - The increase in revenues was primarily driven by an increase in total card dollar value processed and new enrollments in the Merchant Solutions segment[143]. - The company experienced a decrease in issuing volume, which partially offset the overall revenue growth[144]. - Interest expense for the three months ended September 30, 2025, was $22.5 million, a decrease of $0.8 million or 3.4% from $23.2 million in the same period of 2024[165]. - Interest expense for the nine months ended September 30, 2025, was $68.7 million, an increase of $2.9 million or 4.3% from $65.8 million for the same period in 2024[166]. - Total other expense, net for the three months ended September 30, 2025, was $(30.4) million, an increase of $(7.8) million from $(22.6) million in the same period of 2024[164].

Financial Performance - For the three months ended September 30, 2025, the Company achieved a net income of $21.9 million, a significant improvement from a net loss of $7.9 million for the same period in 2024[215]. - Net income for the three months ended September 30, 2025, was $21.9 million, a significant increase from a net loss of $7.9 million in the same period of 2024[242]. - Net income for the nine months ended September 30, 2025, totaled $59.4 million, compared to $8.4 million for the same period in 2024, reflecting a significant increase[274]. - Diluted earnings per share for the three months ended September 30, 2025, were $1.13, compared to a diluted loss per share of $0.41 for the same period in 2024[216]. - Diluted earnings per share increased to $3.07 for the nine months ended September 30, 2025, up from $0.62 in the same period of 2024[274]. - Total comprehensive income for the nine months ended September 30, 2025, was $68.1 million, an increase of $47.1 million from $21.0 million for the same period in 2024[345]. Assets and Liabilities - As of September 30, 2025, the Company reported total assets of $5.5 billion, total liabilities of $4.9 billion, and total shareholders' equity of $571.9 million[214]. - The Company’s investment securities portfolio increased to $890.4 million, up $60.7 million from $829.7 million at the end of 2024[310]. - Total loans increased by $48.5 million from December 31, 2024, to September 30, 2025, reaching $3,979.736 million[315]. - Average interest-bearing liabilities increased by $922.8 million to $3.9 billion for the nine months ended September 30, 2025, from $3.0 billion for the same period in 2024[287]. Income and Expenses - Noninterest income increased to $13.4 million for the three months ended September 30, 2025, compared to $12.4 million in 2024[245]. - Noninterest income increased to $37.9 million for the nine months ended September 30, 2025, compared to $26.2 million for the same period in 2024[277]. - Noninterest expenses decreased significantly to $36.3 million for the three months ended September 30, 2025, from $60.3 million in 2024, reflecting the impact of the merger[245]. - Total noninterest expenses increased by $6.7 million, from $105.4 million in 2024 to $112.1 million in 2025, with salaries and employee benefits rising by $9.1 million (16.7%)[304]. Credit Losses and Charge-offs - The provision for credit losses decreased to $396 thousand for the three months ended September 30, 2025, down from $13.7 million in 2024, primarily due to the absence of merger-related reserves[244]. - The provision for credit losses included a recovery of $49 thousand for the nine months ended September 30, 2025, compared to an expense of $14.8 million for the same period in 2024[276]. - Net charge-offs for Q3 2025 totaled $189 thousand, a decrease from $269 thousand in Q3 2024, with nonaccrual loans at 0.66% of gross loans[267]. - Net charge-offs totaled $635 thousand for the nine months ended September 30, 2025, compared to $340 thousand for the same period in 2024[300]. Interest Income and Expenses - Net interest income decreased slightly to $51.0 million for the three months ended September 30, 2025, from $51.7 million in 2024[243]. - Interest income on loans decreased by $4.8 million to $65.8 million for the three months ended September 30, 2025, while interest income on investment securities increased by $360 thousand to $10.2 million[247]. - Total interest expense decreased by $5.2 million to $26.1 million for the three months ended September 30, 2025, compared to $31.3 million in 2024[247]. - Interest income on loans increased by $49.8 million, from $142.4 million for the nine months ended September 30, 2024, to $192.2 million for the same period in 2025[279]. Market Conditions - The Federal Funds rate was cut by a total of 125 basis points from September 2024 to October 2025, reflecting the FOMC's assessment of economic conditions[223]. - The 10-year Treasury bond yield was 4.16% as of September 30, 2025, down from 4.24% at June 30, 2025, but up from 3.81% at September 30, 2024[224]. - The personal consumption expenditures (PCE) price index increased by 2.1% in the second quarter of 2025, compared to an increase of 1.5% in the third quarter of 2024[221]. - The national unemployment rate was 4.3% in August 2025, up from 4.1% in June 2025 and September 2024[222]. Mergers and Acquisitions - The Company acquired Codorus Valley and its wholly-owned bank subsidiary PeoplesBank on July 1, 2024, which is expected to enhance its market position[215]. - The Company incurred zero merger-related expenses for the three months ended September 30, 2025, compared to $17.0 million for the same period in 2024[217]. - The company incurred merger-related expenses of $2.6 million for the nine months ended September 30, 2025, down from $18.8 million in the same period in 2024[274]. Shareholders' Equity - As of September 30, 2025, shareholders' equity increased to $571.9 million, up $55.3 million from $516.7 million at December 31, 2024, primarily due to net income of $59.4 million[344]. - Tangible book value per common share increased from $21.19 at December 31, 2024, to $24.12 at September 30, 2025, reflecting the rise in shareholders' equity[346]. Liquidity and Funding - The Company has sufficient access to liquidity, mitigating the need to sell investment securities at a loss[310]. - The maximum borrowing capacity from the FHLB of Pittsburgh was $1.9 billion as of September 30, 2025, with $209.5 million in advances outstanding[351]. - FHLB advances rose by $93.9 million to $208.9 million at September 30, 2025, compared to $115.0 million at December 31, 2024, driven by increased lending and investing activities[340].

Drug Development - The company is developing three potential best-in-class drug candidates for chronic hepatitis B virus (HBV) infection, obesity, and coronavirus infections, with promising clinical data reported[95][96]. - Pevifoscorvir sodium has shown multi-log10 reductions in HBV DNA and RNA in Phase 1 studies, with 60% of HBeAg+ subjects achieving sustained HBV DNA suppression at Week 48[100][101]. - The ongoing Phase 2 B-SUPREME study aims to evaluate the safety and efficacy of pevifoscorvir sodium compared to tenofovir disoproxil fumarate in approximately 200 subjects with chronic HBV infection[105]. - The company has received positive feedback from the FDA and other regulatory bodies supporting the chronic suppressive therapy pathway for pevifoscorvir sodium[103]. - ALG-055009 has been designed to exhibit approximately 50-fold greater potency compared to resmetirom, positioning it as a strong candidate for treating obesity and metabolic dysfunction-associated steatohepatitis (MASH)[108]. - The Phase 1 study of ALG-055009 showed that it was well tolerated, with no evidence of clinical thyroid dysfunction and low intersubject variability in pharmacokinetics[109][110]. - The company is exploring an antisense oligonucleotide (ASO) platform to potentially treat chronic HBV infection and hepatitis delta virus (HDV) co-infection[106][107]. - Pevifoscorvir sodium has demonstrated a favorable pharmacokinetic profile and antiviral activity, suggesting its potential as a best-in-class treatment for chronic HBV infection[99][104]. - The company plans to present 96-week safety and antiviral activity data for pevifoscorvir sodium at upcoming scientific conferences[104]. - ALG-055009 demonstrated significant synergistic effects in preclinical studies when combined with semaglutide or tirzepatide, showing enhanced antihyperlipidemic effects compared to monotherapy[114]. - The Phase 2 study of ALG-097558 began in 2024, evaluating its efficacy in high-risk COVID-19 patients[118]. Financial Performance - Revenue from collaborations was $0 for the three and nine months ended September 30, 2025, due to the termination of the Merck collaboration agreement[135]. - Revenue from customers decreased by $0.5 million (41%) and $1.0 million (33%) for the three and nine months ended September 30, 2025, compared to the same periods in 2024[136]. - Research and development expenses increased by $7.2 million (43%) for the three months ended September 30, 2025, compared to the same period in 2024[134]. - The total operating expenses for the three months ended September 30, 2025, were $29.1 million, a 36% increase compared to $21.4 million in the same period in 2024[134]. - The net loss for the nine months ended September 30, 2025, was $4.3 million, a 91% decrease compared to a net loss of $49.1 million for the same period in 2024[132]. - The company has incurred net losses since its formation in February 2018, with an accumulated deficit of $622.3 million as of September 30, 2025[132]. - The change in fair value of 2023 common warrants showed a significant increase of 3905% for the three months ended September 30, 2025, compared to the same period in 2024[134]. - Research and development expenses increased by $7.2 million to $23.9 million for the three months ended September 30, 2025, compared to $16.8 million in the same period of 2024[138]. - Total research and development expenses decreased by $1.8 million to $52.4 million for the nine months ended September 30, 2025, compared to $54.2 million in the same period of 2024[139]. - General and administrative expenses increased by $0.5 million to $5.0 million for the three months ended September 30, 2025, compared to $4.5 million in the same period of 2024[141]. - General and administrative expenses decreased by $1.9 million to $14.1 million for the nine months ended September 30, 2025, compared to $16.0 million in the same period of 2024[142]. - Net cash used in operating activities was $60.8 million for the nine months ended September 30, 2025, compared to $62.3 million in the same period of 2024[157]. - The company incurred a net loss of $4.3 million for the nine months ended September 30, 2025, compared to a net loss of $49.1 million in the same period of 2024[146][159]. - The company had an accumulated deficit of $622.3 million as of September 30, 2025, compared to $618.0 million as of December 31, 2024[149]. - The company raised gross proceeds of $105.0 million from a securities purchase agreement in February 2025[148]. - Cash, cash equivalents, and short-term investments totaled $99.1 million as of September 30, 2025, compared to $56.9 million as of December 31, 2024[149]. - The company expects research and development expenses to increase in future periods as it continues to advance clinical trials for pevifoscorvir sodium and MASH[140]. - During the nine months ended September 30, 2024, investing activities used $38.3 million of cash, primarily due to $108.1 million of purchase of short-term investments[161]. - Net cash provided by financing activities during the nine months ended September 30, 2025, was $101.5 million, primarily due to proceeds from the 2025 PIPE financing[162]. - Net cash provided by financing activities during the nine months ended September 30, 2024, was $0.3 million, consisting primarily of proceeds from the ESPP purchase[162]. Contractual Obligations and Accounting Policies - There have been no material changes to contractual obligations and commitments as of September 30, 2025[163]. - The company does not have any off-balance sheet arrangements during the periods presented[164]. - The maximum potential amount of future payments under indemnification agreements is not determinable, and the fair value of these agreements is considered minimal[165]. - There have been no material changes to critical accounting policies and estimates through September 30, 2025, from those discussed in the Form 10-K[167]. - There have been no material changes in market risk during the three and nine months ended September 30, 2025[169].

Revenue Performance - Total revenues for Q3 2025 increased by $1.8 million, or 7%, sequentially to $28.5 million, despite a 2% decrease year-over-year from $29.0 million in Q3 2024[5] - Service revenue rose 10% from the prior quarter and 4% year-over-year to $25.4 million, driven by a $0.7 million increase in airtime service sales[5][8] - Airtime revenue increased by $2.4 million, or 12%, sequentially to $23.5 million, and rose by $0.7 million, or 3%, year-over-year[5] - For the nine months ended September 30, 2025, total revenue was $80.5 million, a decrease of 7% compared to $86.9 million for the same period in 2024[11] - For the three months ended September 30, 2025, net sales were $28,453,000, a decrease of 1.8% compared to $28,971,000 for the same period in 2024[27] Vessel and Service Growth - The total subscribing vessel count grew by a record 11% to approximately 9,000, resulting in a 26% increase year-to-date[5] - LEO service sales represented over 40% of airtime service sales in Q3 2025, compared to less than 15% in Q3 2024, indicating a significant shift in service offerings[8][12] Financial Losses and Expenses - Net loss for Q3 2025 was $6.9 million, or $0.36 per share, compared to a net loss of $1.2 million, or $0.06 per share, in Q3 2024[6] - Non-GAAP adjusted EBITDA for Q3 2025 was $1.4 million, down from $2.9 million in Q3 2024[6] - Product revenues for Q3 2025 were $3.1 million, a decrease of 33% compared to Q3 2024, primarily due to declines in Starlink and VSAT Broadband product sales[9] - Operating expenses decreased by $1.7 million to $9.5 million in Q3 2025 compared to $11.3 million in Q3 2024[10] - Total costs and expenses for the three months ended September 30, 2025, were $36,084,000, an increase of 16.7% compared to $30,962,000 for the same period in 2024[27] Cash and Asset Position - The company’s cash and cash equivalents increased to $72,804,000 as of September 30, 2025, compared to $50,572,000 as of December 31, 2024, showing improved liquidity[29] - Total assets decreased to $150,281,000 as of September 30, 2025, down from $155,081,000 as of December 31, 2024, indicating a reduction in overall asset base[29] Operational Performance - Non-GAAP adjusted EBITDA for the nine months ended September 30, 2025, was $5,026,000, down from $7,539,000 for the same period in 2024, reflecting declining operational performance[31] - Research and development expenses for the three months ended September 30, 2025, were $969,000, down from $1,407,000 in the same period of 2024, indicating a reduction in investment in new product development[27] Market Challenges - The company anticipates potential challenges in maintaining market share due to increased competition and economic factors affecting customer demand[26]