Tandem Diabetes Care(TNDM) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This part provides an overview of the company's financial performance and position, including statements and management's discussion Item 1. Financial Statements This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining accounting policies, specific financial items, and significant transactions for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets This section presents the company's financial position at specific dates, detailing assets, liabilities, and equity | Balance Sheet Item (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total Assets | $875,736 | $967,658 | $(91,922) | | Cash and cash equivalents | $64,112 | $69,234 | $(5,122) | | Short-term investments | $251,249 | $369,095 | $(117,846) | | Accounts receivable, net | $128,443 | $114,585 | $13,858 | | Inventories | $142,573 | $149,612 | $(7,039) | | Total Liabilities | $742,453 | $704,560 | $37,893 | | Total Stockholders' Equity | $133,283 | $263,098 | $(129,815) | | Accumulated Deficit | $(1,230,781) | $(1,047,825) | $(182,956) | Condensed Consolidated Statements of Operations and Comprehensive Loss This section details the company's financial performance over specific periods, including sales, gross profit, and net loss | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------- | :------------------------------- | :------------------------------- | :----------- | | Sales | $240,678 | $221,910 | +8.5% | $475,100 | $413,584 | +14.9% | | Gross profit | $125,855 | $112,794 | +11.6% | $244,262 | $207,466 | +17.7% | | Gross margin | 52% | 51% | +1 pp | 51% | 50% | +1 pp | | Operating loss | $(51,810) | $(30,774) | -68.4% | $(172,688) | $(72,452) | -138.4% | | Net loss | $(52,400) | $(30,814) | -70.0% | $(182,956) | $(73,529) | -148.8% | | Net loss per share - basic and diluted | $(0.78) | $(0.47) | -66.0% | $(2.74) | $(1.13) | -142.5% | - Operating expenses for the six months ended June 30, 2025, increased significantly by $137.1 million, primarily due to a $75.2 million charge for acquired in-process R&D and a $20.0 million litigation and settlement expense[167] Condensed Consolidated Statements of Stockholders' Equity This section details changes in stockholders' equity, including contributions, distributions, and net loss | Stockholders' Equity Item (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Balance at December 31 | $263,098 | $313,632 | | Stock-based compensation expense | $51,090 | $46,537 | | Foreign currency translation gains | $5,979 | $(863) | | Net loss | $(182,956) | $(73,529) | | Balance at June 30 | $133,283 | $233,875 | Condensed Consolidated Statements of Cash Flows This section reports cash generated and used across operating, investing, and financing activities | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(27,774) | $(13,271) | | Net cash provided by (used in) investing activities | $67,316 | $(8,596) | | Net cash used in financing activities | $(44,401) | $10,584 | | Net increase (decrease) in cash and cash equivalents | $(5,122) | $(11,171) | | Cash and cash equivalents at end of period | $64,112 | $47,697 | - Investing activities in H1 2025 were primarily driven by $146.4 million from maturities and redemptions of short-term investments, offset by $43.5 million paid for acquired in-process R&D and $26.5 million in purchases of short-term investments[177] - Financing activities in H1 2025 included $40.6 million for principal payments on 2025 Notes and payments for tax withholdings related to stock plans, while H1 2024 included $306.9 million from 2029 Notes issuance, partially offset by 2025 Notes repurchase and capped call payments[178] Notes to Unaudited Condensed Consolidated Financial Statements This section explains accounting policies and specific financial items in the consolidated financial statements 1. Organization and Basis of Presentation This note describes the company's business and the foundational principles for financial statement preparation - Tandem Diabetes Care manufactures and sells advanced automated insulin delivery systems, including t:slim X2 and Tandem Mobi, both featuring Control-IQ+ technology[23][24] - The company's durable insulin pump products generally have an expected lifespan of at least four years, complemented by sales of single-use components like cartridges and infusion sets[24] 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods applied in the preparation of the financial statements - No material changes to accounting policies in H1 2025, except for the addition of derivatives and hedging activities[28] - The company capitalized $13.3 million as an intangible asset for a patent license from Roche, amortizing it over seven years, while expensing the remaining settlement consideration as litigation expense[35] - Revenue from complementary products (data management, software updates) is deferred and recognized over the typical four-year warranty period of insulin pumps[42] - The Tandem Choice program, which allowed eligible t:slim X2 customers to switch to Tandem Mobi, ended on December 31, 2024, with remaining deferrals recognized as revenue at that time[44][45] 3. Short-Term Investments This note provides details on the company's short-term investment portfolio, including types and fair values | Short-Term Investments (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | United States Government-sponsored enterprises | $106,009 | $133,280 | | United States Treasury securities | $72,803 | $103,702 | | Commercial paper | $1,725 | $23,264 | | Corporate debt securities | $70,712 | $105,836 | | Foreign government bonds | — | $3,013 | | Total Estimated Fair Value | $251,249 | $369,095 | - All marketable securities are classified as short-term investments based upon the company's ability and intent to use them to satisfy liquidity requirements[60] 4. Composition of Certain Financial Statement Items This note provides a breakdown of specific balance sheet items, such as accounts receivable and inventories | Item (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Accounts receivable, net | $128,443 | $114,585 | | Inventories | $142,573 | $149,612 | | Allowance for Credit Losses (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Balance at beginning of period | $7,251 | $4,898 | | Provision for expected credit losses | $3,577 | $3,723 | | Write-offs and adjustments, net | $(4,733) | $(3,396) | | Balance at end of period | $6,095 | $5,225 | 5. Fair Value Measurements This note details the fair value hierarchy and measurements for financial assets and liabilities | Fair Value Measurements (in thousands) | June 30, 2025 Total | Level 1 | Level 2 | Level 3 | | :------------------------------------- | :------------------ | :------ | :------ | :------ | | Assets: | | | | | | Cash equivalents | $53,993 | $53,993 | $— | $— | | Available-for-sale securities | $251,249 | $72,803 | $178,446 | $— | | Liabilities: | | | | | | Foreign exchange forward contracts | $612 | $— | $612 | $— | | Fair Value of Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Convertible Senior Notes due 2025 | $— | $39,130 | | Convertible Senior Notes due 2029 | $304,514 | $407,752 | | Total fair value | $304,514 | $446,882 | 6. Leases This note provides information on the company's lease arrangements, including costs and impairment charges - The company recorded a $3.6 million impairment charge in Q1 2025 for the sublease of its Headquarters Lease Phase II, as expected sublease income was less than the right-of-use asset's net book value[75] - An additional $3.1 million impairment charge was recognized in Q1 2025 due to the relocation of development activities from Lausanne, Switzerland, and revised assumptions for the Vista Sorrento lease[76] | Lease Cost (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------ | :------------------------------- | :----------------------------- | | Operating lease cost (excluding sublease income) | $4,304 | $8,523 | | Loss on lease termination and right-of-use asset impairment charges | $— | $6,697 | | Sublease income, gross | $(566) | $(1,132) | | Total lease cost | $3,849 | $14,206 | 7. Debt This note details the company's debt instruments, including convertible senior notes and related transactions - In March 2024, the company issued $316.3 million in 2029 Convertible Senior Notes and used $246.1 million of the proceeds to repurchase 2025 Notes, incurring a $1.3 million loss on extinguishment of debt[79][80] - The 2025 Convertible Senior Notes matured in Q2 2025, and the remaining $40.8 million balance was settled using existing cash balances[87] | Convertible Senior Notes (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | 2025 Notes Principal Amount | $— | $40,760 | | 2029 Notes Principal Amount | $316,250 | $316,250 | | Total debt, net | $309,146 | $348,936 | - The company entered into 2029 Capped Call Transactions at a net cost of $15.8 million, expected to reduce potential dilution upon conversion of the 2029 Notes[91] 8. Stockholders' Equity This note details stockholders' equity components, including shares reserved and stock-based compensation | Shares Reserved for Future Issuance (in thousands) | June 30, 2025 | | :----------------------------------------------- | :------------ | | Conversion of Convertible Senior Notes | 9,335 | | Outstanding warrants | 194 | | Outstanding stock options | 3,054 | | Unvested restricted stock units | 4,351 | | ESPP awards | 2,233 | | Future equity award grants | 328 | | Total | 19,495 | | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------------------- | :------------------------------- | :----------------------------- | | Cost of sales | $1,751 | $3,476 | | Selling, general and administrative | $16,544 | $32,919 | | Research and development | $7,347 | $14,735 | | Total stock-based compensation expense | $25,642 | $51,130 | 9. Derivatives This note describes the company's use of derivative instruments, primarily for hedging foreign currency risk - The company uses foreign currency forward contracts to hedge forecasted international revenue and operating expenses, primarily in Euros, Swiss Francs, and Canadian dollars[100] - As of June 30, 2025, outstanding foreign currency forward contracts had a notional value of $37.7 million and an unrealized loss of $0.6 million for the three and six months ended June 30, 2025[102] 10. Employee Benefits This note outlines the company's employee benefit plans, such as defined contribution plans - The company offers defined contribution plans, including a 401(k) plan for eligible U.S. employees, allowing voluntary contributions and discretionary company matching[103] 11. Income Taxes This note provides details on the company's income tax position, including pre-tax loss and valuation allowances | Income Tax (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------ | :------------------------------- | :----------------------------- | | Pre-tax loss | $(57,722) | $(179,811) | | Income tax benefit (expense) | $(5,322) | $3,145 | - The company maintains a full valuation allowance against its net deferred tax assets, based on the current assessment that future benefits are not more likely than not to be realized before expiration[106] 12. Business Segment and Geographic Information This note presents revenue breakdown by business segment and geographic region - The company operates as a single reportable segment: Insulin Pumps and Supplies, with the CEO evaluating performance based on consolidated financial data[107][108] | Revenue (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :--------------------- | :----------------------------- | :----------------------------- | :----------- | | United States | $320,841 | $286,472 | +12.0% | | Outside the United States | $154,259 | $127,112 | +21.4% | | Total Sales | $475,100 | $413,584 | +14.9% | | Revenue by Product (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Pump | $213,962 | $195,162 | +9.6% | | Supplies and other | $261,138 | $219,414 | +19.0% | | Total Sales | $475,100 | $413,584 | +14.9% | 13. Acquisitions This note details recent acquisition agreements and related accounting treatments - The company revised its AMF Medical acquisition agreement in January 2025, committing to pay CHF 68 million, with CHF 40 million paid upfront and CHF 28 million due in October 2025[116] - The CHF 68 million payment for AMF Medical was recognized as $75.2 million in acquired in-process research and development (IPR&D) expenses for the six months ended June 30, 2025[116][171] 14. Commitments and Contingencies This note outlines significant commitments and potential contingent liabilities, including legal matters - The company resolved all actual or potential patent disputes with Roche through a Settlement, Mutual Release and Cross-License Agreement on May 21, 2025[119] - As of June 30, 2025, the company believes it is not currently a party to any legal proceedings, regulatory matters, or other disputes or claims for which a material loss was considered probable or for which the amount or range of loss was reasonably estimable[120] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting key business strategies, product portfolio developments, market trends, and a detailed comparison of financial performance for the three and six months ended June 30, 2025 and 2024. It also discusses liquidity, capital resources, and critical accounting policies Overview This section summarizes the company's business, products, and strategic initiatives - Tandem Diabetes Care offers t:slim X2 and Tandem Mobi insulin pumps with Control-IQ+ technology, expanding its U.S. addressable market to include type 2 diabetes patients requiring intensive insulin therapy[130][131] - The Tandem Mobi, the world's smallest durable automated insulin delivery (AID) system, received CE Mark approval in May 2025, with commercial release scaled in the U.S. in H1 2024 and international launch activities underway[131] - The company's strategy includes enhancing existing pump platforms, developing the Sigi patch pump, extended wear infusion technology, and advancing algorithms towards fully closed-loop technology[136] - As of December 31, 2024, the company had over 480,000 in-warranty users, with approximately one-third outside the United States, and renewal sales have become a meaningful opportunity and key growth driver[138] Trends and Uncertainties Impacting Financial Results This section discusses market trends, regulatory changes, and economic factors influencing financial performance - Sales of new products are subject to varying international regulatory clearance timelines, and delays or failure to receive approval could impact revenue and results of operations[141] - The company is implementing a multi-channel managed care strategy, serving Tandem Mobi customers through the pharmacy channel since Q1 2025 and preparing to offer t:slim X2 cartridges and infusion sets via pharmacy in Q4 2025[141] - Global economic and market uncertainty, including recessionary concerns, changes in discretionary spending, increased interest rates, and high inflation, have impacted customer purchasing decisions and distributor buying patterns[146] Components of Results of Operations This section explains the primary drivers and components of the company's revenue and expenses - Sales are primarily from insulin pumps and single-use components, with seasonality in the U.S. typically showing lowest sales in Q1 and highest in Q4 due to insurance deductibles[142] - Cost of sales includes raw materials, labor, manufacturing overhead, product training, royalties, freight, warranty reserves, and digital health platform support, with pumps generally having higher gross profit margins than supplies[144] - Litigation and settlement expense in Q2 2025 reflects costs from the cross-license agreement with F. Hoffmann-La Roche AG and its subsidiaries[147] - Acquired in-process research and development (IPR&D) expenses represent costs of external R&D projects acquired outside of business combinations that lack alternative future use, such as the AMF Medical acquisition[149] Results of Operations - Three Months Ended June 30, 2025 and 2024 This section analyzes financial performance for the three-month periods, with year-over-year metric comparisons | Metric (in thousands) | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Total Sales | $240,678 | $221,910 | +8.5% | | United States Sales | $170,209 | $156,711 | +8.6% | | Outside U.S. Sales | $70,469 | $65,199 | +8.1% | | Gross Profit | $125,855 | $112,794 | +11.6% | | Gross Margin | 52% | 51% | +1 pp | | Operating Expenses | $177,665 | $143,568 | +23.7% | | Litigation & Settlement Expense | $19,951 | $— | N/A | | Net Loss | $(52,400) | $(30,814) | -70.0% | - U.S. pump shipments increased to approximately 21,000 in Q2 2025 from 20,000 in Q2 2024, contributing to increased sales[154] - R&D expenses decreased to $48.1 million in Q2 2025 from $49.3 million in Q2 2024, primarily due to lower employee-related expenses as a result of restructuring activities that occurred in Q1 2025[160] Results of Operations - Six Months Ended June 30, 2025 and 2024 This section analyzes financial performance for the six-month periods, with year-over-year metric comparisons | Metric (in thousands) | H1 2025 | H1 2024 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Total Sales | $475,100 | $413,584 | +14.9% | | United States Sales | $320,841 | $286,472 | +12.0% | | Outside U.S. Sales | $154,259 | $127,112 | +21.4% | | Gross Profit | $244,262 | $207,466 | +17.7% | | Gross Margin | 51% | 50% | +1 pp | | Operating Expenses | $416,950 | $279,918 | +49.0% | | Acquired IPR&D Expenses | $75,217 | $— | N/A | | Litigation & Settlement Expense | $19,951 | $— | N/A | | Net Loss | $(182,956) | $(73,529) | -148.8% | - U.S. pump shipments increased to over 38,000 in H1 2025 from nearly 36,000 in H1 2024, while international pump shipments grew to over 20,000 from approximately 19,000[164][165] - SG&A expenses for H1 2025 included one-time charges of $6.7 million for non-recurring facility impairment costs and $2.2 million for restructuring costs[168] Liquidity and Capital Resources This section discusses the company's cash position, funding sources, and ability to meet financial obligations - As of June 30, 2025, the company held $315.4 million in cash, cash equivalents, and short-term investments, which management believes is sufficient to fund ongoing core business activities for at least the next 12 months[174] - Net cash used in operating activities increased to $27.8 million for the six months ended June 30, 2025, compared to $13.3 million for the same period in 2024[176] - Future capital needs are expected to include expenditures related to commercialization efforts, R&D, acquisitions, leasing, and investments for manufacturing and distribution[182] Critical Accounting Policies This section highlights the accounting policies that require significant judgment and estimation - There have been no material changes to the company's critical accounting policies and estimates from the information provided in its Annual Report on Form 10-K for the year ended December 31, 2024[181] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there were no material changes to the company's quantitative and qualitative disclosures about market risk, except for the initiation of foreign currency forward contracts to mitigate exchange rate fluctuations on international revenue and operating expenses - The company entered into foreign currency forward contracts to mitigate the impact of foreign currency exchange rate fluctuations on international revenue and operating expenses[183] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were deemed effective at a reasonable assurance level as of June 30, 2025[185] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[187] PART II. OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, and other required disclosures Item 1. Legal Proceedings This item refers to the "Commitments and Contingencies - Legal and Regulatory Matters" section in Note 14 of the financial statements for details on legal proceedings - Legal proceedings information is detailed in Note 14, "Commitments and Contingencies," of the financial statements[189] Item 1A. Risk Factors An investment in the company's securities involves a high degree of risk, including those related to business and industry, international operations, indebtedness, future financings, macroeconomic conditions, privacy and security, legal and intellectual property, regulatory environment, ESG matters, and other general risks. Several risk factors have been updated or newly introduced since the last Annual Report Risks Related to Our Business and Our Industry This section outlines business and industry risks, including profitability challenges and competitive pressures - The company has an accumulated deficit of $1.2 billion as of June 30, 2025, and cannot assure sustained profitability[202][205] - The business relies heavily on insulin pump sales, which are vulnerable to competition, technological breakthroughs, regulatory actions, and supply chain disruptions[206][208] - Maintaining and growing revenue depends on retaining a high percentage of the customer base, which is challenged by competing products and changes in reimbursement[210][211] - Manufacturing risks, including quality defects, supply chain issues, and inability to scale production, could negatively impact sales and operating margins[240][242] Risks Related to Our International Operations This section details international operation risks, such as regulatory differences and currency fluctuations - International operations, accounting for approximately 28% of 2024 sales, face risks such as local product preferences, differing regulatory requirements, and more restrictive privacy laws like GDPR[254][256] - Foreign currency fluctuations, particularly with the Canadian dollar, Euro, and Swiss franc, could increase operating expenses and reduce revenues, despite hedging efforts[287] Risks Related to Our Indebtedness This section addresses risks from debt obligations, including repayment capacity and potential dilution - The company has incurred significant indebtedness, including $316.3 million in 2029 Convertible Senior Notes, which subjects it to required debt service payments and potential financial flexibility restrictions[259][261] - The company's ability to service the 2029 Notes depends on future business operations and liquidity, and insufficient cash flow could necessitate reducing capital expenditures, selling assets, or seeking additional financing[263] - Conversion of the 2029 Notes, if settled with shares, will dilute existing stockholders' ownership and could negatively impact the common stock's trading price[266] Risks Related to Our Future Financings and Financial Results This section covers future financing risks and the inherent volatility of quarterly operating results - The company may need to raise additional funds through equity or debt offerings, or collaborations, which could lead to stockholder dilution or significant financing costs[273] - Operating results are expected to fluctuate significantly quarter-to-quarter due to factors like new product launches, regulatory clearances, competition, and reimbursement policies[275][277] Risks Related to Macroeconomic Conditions and External Factors This section discusses risks from macroeconomic and external factors, including trade policies and inflation - International trade policies, including tariffs and trade barriers, particularly between the U.S. and China/Mexico, could adversely affect the business by increasing costs and disrupting supply chains[279] - Global economic and political uncertainties, such as recessions, inflation, and military hostilities, could negatively impact consumer demand and affordability of products[284] - The effects of inflation, including higher interest rates, capital costs, and labor/shipping expenses, could negatively impact liquidity, financial condition, and results of operations[288] Risks Related to Privacy and Security This section highlights risks associated with data privacy, cybersecurity threats, and the use of AI technologies - The company processes personal data and is subject to numerous evolving data privacy and security obligations, including U.S. state laws (e.g., CCPA/CPRA) and international regulations (e.g., GDPR)[289][290][293][294] - Cyberattacks, malicious activity, and vulnerabilities in information technology systems, software, and hardware (including third-party components) pose significant risks, potentially leading to security incidents, data breaches, and business disruptions[304][305][308][309] - The use of Artificial Intelligence (AI) technologies by employees and the potential for sensitive information leakage or disclosure through third-party generative AI platforms introduce new compliance costs and risks[297][316] Risks Related to Legal and Intellectual Property This section addresses intellectual property risks, including protection, enforcement, and potential litigation - The company relies on patents, trademarks, and trade secrets, but their protection is uncertain, facing risks of opposition, invalidation, or circumvention by competitors[318] - Patent litigation is common in the medical device industry, and the company may incur substantial costs and divert management attention defending against infringement claims or enforcing its own intellectual property rights[322][323] Risks Related to Our Regulatory Environment This section details risks from medical device regulations, product approvals, and healthcare reforms - The medical device industry is extensively regulated, and failure to comply with requirements for product design, development, testing, manufacturing, and marketing could lead to enforcement actions, fines, and business disruption[329][331] - New products or modifications to existing ones may require new regulatory clearances (e.g., 510(k), PMA, CE Marks), and delays or disagreements with regulatory bodies could halt marketing or necessitate recalls[332][336] - Product recalls or suspensions due to safety issues, defects, or malfunctions could significantly impact the company, diverting resources, harming reputation, and affecting financial results[337][338] - Healthcare reforms (e.g., OBBBA, IRA 2022) and price controls, particularly in the EU, may lead to downward pressure on product prices and reduced reimbursement, adversely affecting revenue and profitability[346][352] Risks Related to Environmental, Social and Governance Matters This section covers risks related to evolving ESG regulations, reporting, and the impacts of climate change - Evolving ESG regulations and stakeholder expectations are increasing general and administrative costs and management time, with challenges in data collection, reporting, and supply chain compliance[355] - Climate change and extreme weather conditions pose potential long-term risks to the business, including disruptions to operations, supply chains, and increased compliance burdens from new regulations[357][358] Other Risks This section includes general risks such as stock price volatility, employee retention, and anti-takeover provisions - The trading price of the common stock is highly volatile, influenced by financial results, product introductions, regulatory actions, and market dynamics, potentially affecting liquidity and capital raising[359][360] - The company's success depends on retaining and motivating senior management and key employees, and competition for talent or labor shortages could adversely affect business expansion and growth[361][362] - Anti-takeover provisions in organizational documents and Delaware law may delay or prevent a change of control, potentially reducing stock price and hindering stockholder actions[363][365] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[377] Item 5. Other Information There is no other information to report under this item - No other information is reported under this item[378] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Amended and Restated Certificate of Incorporation and Bylaws, the Settlement, Mutual Release and Cross-License Agreement with F. Hoffmann-La Roche AG, and certifications from the CEO and CFO - Key exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, the Settlement, Mutual Release and Cross-License Agreement with F. Hoffmann-La Roche AG, and Section 302 and 906 certifications from the CEO and CFO[380]