Financial Performance - The company reported a net loss of $110.8 million for the three months ended September 30, 2025, compared to a net loss of $93.1 million for the same period in 2024, reflecting an increase in operating expenses[253]. - As of September 30, 2025, the company had an accumulated deficit of $808.9 million, primarily due to research and development costs[253]. - For the three months ended September 30, 2025, total revenue was $2.1 million, with collaboration revenue of $2.1 million and license revenue of $17.4 million for the nine months ended September 30, 2025[285]. - The net loss for the three months ended September 30, 2025, was $110.8 million, a 19% increase from a net loss of $93.1 million in the same period in 2024[284]. - The company has not generated any revenue from product sales since inception and does not expect to do so until regulatory approvals are obtained[255]. - The company does not expect to generate revenue from product sales until successful development and regulatory approval of its product candidates[316]. Expenses and Costs - Research and development expenses increased by 11% to $97.8 million for the three months ended September 30, 2025, compared to $87.8 million for the same period in 2024[286]. - General and administrative expenses rose by 85% to $19.5 million for the three months ended September 30, 2025, compared to $10.6 million for the same period in 2024[284]. - Total operating expenses for the three months ended September 30, 2025, were $117.4 million, an increase of 19% from $98.4 million in the same period in 2024[284]. - Research and development expenses for the nine months ended September 30, 2025, totaled $303.2 million, a 70% increase from $178.4 million in the same period in 2024[286]. - The company anticipates significant increases in expenses as it progresses multiple clinical trials and integrates the ACELYRIN business[254]. - The increase in research and development expenses is attributed to higher costs associated with clinical trials and professional consulting services, particularly for the envu program[288][289]. - Personnel-related costs rose by $36.6 million to $69.3 million for the nine months ended September 30, 2025, primarily due to severance costs related to the ACELYRIN Merger[296]. - CRO, CMO, and clinical trials expenses increased by $97.0 million to $187.6 million for the nine months ended September 30, 2025, driven by clinical trial progression and related expenses[294]. - General and administrative expenses surged by $52.5 million to $76.3 million for the nine months ended September 30, 2025, compared to $23.8 million for the same period in 2024[302]. Mergers and Collaborations - The company completed the ACELYRIN Merger on May 21, 2025, in a transaction valued at approximately $238.1 million, acquiring net assets with a fair value of $426.0 million[261]. - The company entered into a Collaboration Agreement with Kaken on March 25, 2025, granting Kaken exclusive rights to develop and commercialize envu in Japan, with an upfront payment of $20.0 million received[264][266]. - The company recognized a gain on bargain purchase of $187.9 million related to the ACELYRIN Merger[281]. - The company recognized a gain on bargain purchase of $187.9 million at the Closing Date of the ACELYRIN Merger[306]. Cash Flow and Funding - Cash, cash equivalents, and marketable securities totaled $377.7 million as of September 30, 2025, sufficient to meet operating and capital requirements for at least 12 months[312]. - Net cash used in operating activities was $297.6 million for the nine months ended September 30, 2025, compared to $180.3 million for the same period in 2024[318]. - Future funding requirements will depend on various factors, including clinical trial outcomes and regulatory approval processes[317]. - Net cash used in operating activities for the nine months ended September 30, 2025 was $297.6 million, compared to $180.3 million for the same period in 2024, primarily due to a net loss of $150.4 million[319]. - Net cash provided by investing activities for the nine months ended September 30, 2025 was $192.9 million, driven by proceeds from maturities of marketable securities totaling $305.4 million[324]. - Net cash provided by financing activities for the nine months ended September 30, 2025 was $0.7 million, mainly from the issuance of common stock under the 2024 Employee Stock Purchase Plan (ESPP)[326]. Obligations and Agreements - The company is obligated to pay contingent consideration of up to $120.0 million related to the acquisition of FronThera, with $23.0 million paid for a milestone achieved in August 2024[329]. - The Pierre Fabre Agreement includes potential milestone payments of up to $490.5 million and tiered royalties on worldwide net sales[333]. - As of September 30, 2025, total undiscounted lease payment obligations under non-cancelable leases were $54.9 million[336]. - Total value of non-cancellable obligations under contracts as of September 30, 2025 was $3.8 million, an increase from zero as of December 31, 2024[328]. Accounting and Financial Reporting - The company recognizes revenue based on the transaction price, which may include fixed and variable considerations such as non-refundable upfront payments and milestone payments[353]. - Revenue is allocated to distinct performance obligations based on relative standalone selling prices, considering factors like forecasted revenues and probabilities of success[354]. - Stock-based compensation expense is measured using the Black-Scholes model and is recognized on a straight-line basis over the requisite service period[356]. - The company is classified as an "emerging growth company," allowing it to delay the adoption of certain accounting standards until they apply to private companies[361]. - As of June 30, 2024, the company qualifies as a "smaller reporting company" with a market value of common stock below $700 million and annual revenue under $100 million[363]. Market and Economic Conditions - The company does not believe that a hypothetical 10% change in interest rates would materially affect its financial statements[364]. - Foreign currency transaction gains and losses have not been material, and the company does not have a formal hedging program for foreign currency[365]. - Inflation has not had a material effect on the company's business or financial condition[366].

Revenue Performance - Net revenue decreased by $7.2 million, or 27.5%, to $19.0 million for the three months ended September 30, 2025, compared to $26.2 million for the same period in 2024[143]. - Net revenue decreased by $20.6 million or 27.7% to $53.8 million for the nine months ended September 30, 2025, compared to $74.4 million for the same period in 2024[155]. - Direct net revenue fell by $7.3 million, or 28.4%, primarily due to increased costs from newly implemented tariffs, leading to higher retail prices and reduced consumer demand[143]. - Direct net revenue decreased by $22.4 million or 30.4% due to newly implemented tariffs and a reduction in consumer demand[155]. Cost and Expenses - Cost of goods sold decreased by $2.1 million, or 19.8%, to $8.3 million for the three months ended September 30, 2025, compared to $10.4 million for the same period in 2024[145]. - Cost of goods sold decreased by $5.4 million or 18.8% to $23.2 million for the nine months ended September 30, 2025, compared to $28.6 million for the same period in 2024[157]. - Sales and distribution expenses decreased by $4.1 million, or 29.3%, to $9.8 million for the three months ended September 30, 2025, compared to $13.9 million in 2024[141]. - Sales and distribution expenses for the nine months ended September 30, 2025, were $31.9 million, down from $42.3 million in the prior year, a decrease of $10.4 million or 24.7%[159]. - General and administrative expenses decreased by $767,000, or 21.0%, to $2.9 million for the three months ended September 30, 2025, compared to $3.6 million in 2024[141]. - General and administrative expenses decreased by $4.76 million, or 34.5%, to $9.05 million for the nine months ended September 30, 2025, primarily due to a reduction in stock-compensation and headcount expenses[162]. Profitability - Gross profit margin declined to 56.1% for the three months ended September 30, 2025, down from 60.3% in the same period of 2024, primarily due to product mix and higher costs from tariffs[146]. - Gross profit margin decreased to 56.9% for the nine months ended September 30, 2025, down from 61.6% for the same period in 2024[158]. - The Company reported a gross profit of $10.7 million for the three months ended September 30, 2025, compared to $15.8 million for the same period in 2024, representing a decrease of 32.8%[200]. - Contribution margin for the three months ended September 30, 2025, was $2.96 million, which is 15.5% of net revenue, down from 17.0% in the same period of 2024[200]. - Adjusted EBITDA for the three months ended September 30, 2025, was $(0.43) million, compared to $0.49 million for the same period in 2024, indicating a decline in operational performance[201]. Losses - The company experienced an operating loss of $2.0 million for the three months ended September 30, 2025, compared to an operating loss of $1.7 million in the same period of 2024[141]. - Net loss increased by $508,000, or 28.7%, to $2.3 million for the three months ended September 30, 2025, compared to a net loss of $1.8 million in 2024[141]. - The net loss for the three months ended September 30, 2025, was $(2.28) million, compared to $(1.77) million for the same period in 2024[201]. - The company incurred a net loss of $11.0 million and used net cash flows from operations of $9.9 million during the nine months ended September 30, 2025[174]. Cash Flow and Liquidity - Net cash used in operating activities was $9.9 million for the nine months ended September 30, 2025, driven by net cash losses from operations of $7.9 million and a $2.0 million outflow from changes in working capital[166]. - As of September 30, 2025, the company had unrestricted cash of $7.6 million and an accumulated deficit of $722.7 million[174]. - The Minimum Credit Party Liquidity covenant was reduced to $5.0 million, contingent upon the delivery of a Liquidity Certificate evidencing liquidity of at least $6.8 million[186]. - The company is required to remain in compliance with financial covenants under the MidCap Credit Facility and was in compliance as of September 30, 2025[175]. - As of September 30, 2025, the outstanding balance on the MidCap credit facility was $6.2 million, down from $6.9 million as of December 31, 2024[187]. Strategic Initiatives - The company is exploring alternative sourcing outside of China to mitigate the impact of tariffs on its supply chain and margins[136]. - The company announced a fixed cost reduction plan on May 14, 2025, which included a workforce reduction affecting approximately 20 employees, expected to generate annualized savings of approximately $5 to $6 million[177][178]. - The company plans to continue exploring additional sources of outside capital to fund its operations and growth strategy, particularly for potential M&A opportunities[173]. - The Company has temporarily suspended its share repurchase program, which was authorized to acquire up to $3.0 million of common stock[188]. Market Conditions - The new U.S. tariff policies could materially increase import costs, potentially leading to higher prices and reduced consumer demand[189]. - The change in fair market value of warrant liabilities was a loss of $0.161 million for the three months ended September 30, 2025, compared to a gain of $0.143 million in the prior year, reflecting an 88.8% change[152]. - The change in fair market value of warrant liabilities increased by $0.622 million, or 85.2%, for the nine months ended September 30, 2025, primarily due to a reduced share price[164]. Estimates and Judgments - Estimates of recoverability of asset groupings are subject to uncertainty, including judgments on market growth rates and future sales price increases[207]. - Key factors influencing estimates include fluctuations in exchange rates, raw material prices, discount rates, and operating efficiencies[207]. - The company will closely monitor actual results versus expectations and any significant changes in current events that may affect future estimated cash flows[206].

Financial Performance - Consolidated revenues for the three months ended September 30, 2025, totaled $9,646,392, an increase of $8,353,945 or 646% compared to the same period in 2024[124] - Gross profit for the 2025 period was $637,502, a significant increase of $1,029,465 from a gross loss of $391,963 in the 2024 period, resulting in a gross profit margin of 7%[125] - The company reported a gross profit of $162,146 for the nine months ended September 30, 2025, a decrease of $834,899 or 84% compared to the same period in 2024[132] - Other income for the 2025 period totaled $2,209,203, a significant improvement compared to other expense of $3,991,934 in the 2024 period[129] Expenses - Research and development expenses rose to $5,968,131 in the 2025 period, an increase of $4,088,645 or 218% compared to the 2024 period[126] - General and administrative expenses increased to $9,215,783 during the 2025 period, up by $5,106,939 or 124% from the previous year[128] - Sales and marketing costs increased to $9,487,010 during the 2025 period, representing a rise of $3,904,541 or 70% compared to the previous year[134] Net Loss and Cash Flow - Net loss from continuing operations for the nine months ended September 30, 2025, was $52,418,759, an increase of $26,417,399 or 102% compared to the same period in 2024[138] - Net cash used in operating activities was $52,656,680 during the nine months ended September 30, 2025, an increase of $37,963,914 or 258% from the prior year[139] Assets - Current assets as of September 30, 2025, totaled $248,802,498, with cash amounting to $206,425,996[142] Fair Value and Risk Disclosures - The fair value of the issued warrants is estimated using a Monte Carlo simulation model, with significant unobservable inputs including stock price, exercise price, risk-free rate of return, time to expiration, and volatility[155] - Changes in unobservable inputs could lead to a material increase or decrease in the estimated fair value of the warrants[155] - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures[156]

Financial Performance - Net income from continuing operations for Q3 2025 was $5.9 million, compared to a net loss of $3.9 million in Q3 2024[7] - Revenue for Q3 2025 reached $11.3 million, a 21.5% increase from $9.3 million in Q3 2024[7] - Gross margin improved to 49.4%, up from 45.3% year-over-year[7] - Revenue for the three months ended September 30, 2025, was $11,315,003, representing a 21.5% increase from $9,306,777 in the same period of 2024[18] - Gross profit for the nine months ended September 30, 2025, was $11,042,151, up from $7,490,880 in 2024, indicating a 47.5% increase[18] - The net loss for the three months ended September 30, 2025, was $808,443, a significant improvement from a net loss of $7,464,415 in the same period of 2024[18] - Adjusted EBITDA for the three months ended September 30, 2025, was $(604,377), compared to $(887,774) in 2024, showing a reduction in losses[22] - The comprehensive loss for the three months ended September 30, 2025, was $(738,372), compared to $(7,104,411) in 2024, indicating a substantial decrease in losses[18] Balance Sheet and Assets - The balance sheet as of September 30, 2025, showed $81.5 million in DAT assets and cash, with no debt and shareholders' equity of $78.7 million[1] - GameSquare held 15,618 ETH valued at $64.5 million, with an unrealized gain of $9.3 million in Q3 2025[3] Operational Efficiency - GameSquare's adjusted EBITDA loss narrowed to $0.6 million, representing 5.3% of revenue, compared to a loss of $0.9 million or 9.5% of revenue in Q3 2024[7] - Total operating expenses for the three months ended September 30, 2025, were $7,985,890, compared to $7,359,256 in 2024, reflecting an increase of 8.5%[18] - Research and development expenses for the three months ended September 30, 2025, were $519,275, up from $450,637 in 2024, indicating a 15.2% increase[18] Shareholder Actions - GameSquare repurchased 833,124 shares for $599,148, averaging approximately $0.72 per share under a $5 million authorization[3] - The weighted average common shares outstanding for the three months ended September 30, 2025, were 87,949,202, significantly higher than 31,270,253 in 2024[18] Strategic Initiatives - The acquisition of Click Management is expected to enhance profitability and expand operational capabilities[2] - GameSquare's digital asset treasury strategy generated a yield of $0.6 million since its inception on August 1, 2025[3] Restructuring and Charges - The company incurred restructuring charges of $(1,535,097) for the three months ended September 30, 2025, compared to $330,167 in 2024[18] - The company reported a loss from continuing operations before income taxes of $5,946,781 for the three months ended September 30, 2025, compared to a loss of $3,935,539 in 2024[18]

Financial Performance - As of September 30, 2025, Senti Bio held cash and cash equivalents of approximately $12.2 million, a decrease from $48.3 million as of December 31, 2024[9]. - Research and development expenses for Q3 2025 were $10.5 million, up from $8.7 million in Q3 2024, reflecting a 20.7% increase primarily due to higher external services and personnel-related costs[9]. - General and administrative expenses decreased slightly to $6.4 million in Q3 2025 from $6.6 million in Q3 2024, a reduction of 3%[9]. - The net loss for Q3 2025 was $18.1 million, or $0.69 per share, compared to a net loss of $28.9 million, or $6.31 per share, in Q3 2024[9][16]. - Total operating expenses for the nine months ended September 30, 2025, were $50.1 million, compared to $44.9 million for the same period in 2024, indicating an increase of 11.5%[16]. - Senti Bio's accumulated deficit as of September 30, 2025, was approximately $344.1 million, up from $297.1 million at the end of 2024[14]. - The total assets of Senti Bio as of September 30, 2025, were $52.7 million, a decrease from $97.8 million as of December 31, 2024[14]. Clinical Development - Senti Bio plans to present updated clinical data for the SENTI-202 study at the American Society of Hematology Annual Meeting in December 2025, highlighting the efficacy and safety of its Logic Gate technology[5][2]. - The company is focused on expanding its clinical development for SENTI-202, particularly in enrolling additional patients with relapsed/refractory acute myeloid leukemia (AML)[2]. Investor Relations - Senti Bio's participation in various investor conferences aims to increase market awareness and visibility among the investor and scientific communities[4].

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: 333-288102 HOYNE BANCORP, INC. (Exact name of registrant as specified in its charter) Delaware 39-2556785 (St ...

Financial Performance - Non-GAAP loss from operations for Q3 2025 was $24.7 million, compared to $16.5 million in Q3 2024, reflecting a 50% increase [252]. - Revenues for Q3 2025 increased by $0.4 million, or 93%, to $0.8 million, primarily due to the commencement of DaaS revenue in December 2024 [266]. - Total operating expenses for Q3 2025 rose by $12.1 million, or 65%, to $30.7 million, driven by increases in research and development, general and administrative, and truck and freight operations expenses [265]. - Research and development expenses for Q3 2025 increased by $3.0 million, or 29%, to $13.5 million, mainly due to higher headcount-related expenses and third-party software license costs [267]. - General and administrative expenses for Q3 2025 rose by $4.0 million, or 78%, to $9.2 million, primarily due to increased headcount-related expenses and professional service costs related to going public [268]. - Truck and freight operations expenses for Q3 2025 increased by $4.5 million, or 216%, to $6.6 million, attributed to higher headcount-related expenses and operational infrastructure costs [269]. - Free cash flow for Q3 2025 was $(40.0) million, compared to $(15.7) million in Q3 2024, indicating a significant increase in cash used [254]. - Revenues for the nine months ended September 30, 2025, increased by $1.5 million, or 124%, to $2.7 million, driven by a $1.0 million increase in DaaS revenue and a $0.5 million increase from U.S. Army contracts [274]. - Total other expenses for Q3 2025 increased by $239.0 million to $240.0 million, primarily due to losses on the issuance of preferred stock and common stock [271]. - Net loss before income taxes for Q3 2025 was $(269.9) million, compared to $(19.1) million in Q3 2024, reflecting a significant increase in losses [265]. - General and administrative expenses increased by $5.8 million, or 37%, to $21.5 million for the nine months ended September 30, 2025, from $15.7 million for the same period in 2024 [276]. - Truck and freight operations expenses rose by $10.1 million, or 169%, to $16.1 million for the nine months ended September 30, 2025, compared to $6.0 million for the same period in 2024 [277]. - Sales and marketing expenses increased by $0.8 million, or 31%, to $3.3 million for the nine months ended September 30, 2025, from $2.5 million for the same period in 2024 [278]. - Other expenses, net increased by $435.1 million to $437.9 million for the nine months ended September 30, 2025, from $2.8 million for the same period in 2024 [279]. - The company incurred a net loss of $511.8 million for the nine months ended September 30, 2025, and expects additional losses and increased expenses in future periods [281]. - As of September 30, 2025, the company had cash and cash equivalents of $146.2 million and current debt of $22.1 million, which is insufficient to meet capital requirements for at least one year [282]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $70.2 million, compared to $36.2 million for the same period in 2024 [284]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $211.6 million, compared to $42.4 million for the same period in 2024 [289]. - The company expects to seek additional funding through debt or equity offerings, which may result in substantial dilution or restrictive covenants [282]. Business Model and Operations - Kodiak AI, Inc. received $171.2 million in cash proceeds from the reverse recapitalization and private investment, net of transaction costs [225]. - As of September 30, 2025, Kodiak Driver-powered vehicles have logged over 5,200 cumulative hours of paid driverless operations and delivered over 10,000 loads across 3,000,000 autonomous miles driven [222]. - The company operates under a Driver-as-a-Service (DaaS) model, generating revenue through per-vehicle or per-mile license fees, aiming for predictable recurring revenue [223]. - As of September 30, 2025, customers had 10 customer-owned driverless vehicles licensed for the Kodiak Driver, indicating early adoption of the DaaS model [246]. - The company has established a freight network spanning nearly 23,000 miles across the southern United States, enhancing operational viability [227]. - Kodiak anticipates a shift to an asset-light business model as customer-owned vehicles represent a larger share of the deployed fleet over time [229]. - The company generates revenue through licensing the Kodiak Driver, freight delivery via Kodiak Driver-powered trucks, and services to the U.S. Army, recognizing revenue when control is transferred to customers [307]. - The company employs a five-step revenue recognition model, requiring significant judgment in estimating revenue and identifying performance obligations [309]. Market and Regulatory Environment - The U.S. Department of War is increasingly prioritizing the adaptation of commercial AI technologies for defense purposes, creating opportunities for Kodiak in the defense market [232]. - Kodiak is proactively engaging with policymakers to ensure regulatory frameworks support safe and scalable driverless deployment [239]. - Kodiak's future performance will depend on scaling deployments and achieving technical and commercial milestones, with potential risks from delays impacting revenue and profitability [233]. Financial Reporting and Valuation - Stock-based compensation is estimated using the Black-Scholes option pricing model, with fair value recognized on a straight-line basis over the requisite service period [310]. - The valuation of financial instruments involves significant judgment and is based on expected volatility, expected term, and discount rates, which could lead to materially different valuations if actual results differ from estimates [313]. - The One Big Beautiful Bill Act signed in July 2025 did not materially impact the company's financial statements due to its taxable loss position and valuation allowance on deferred tax assets [315]. - The company is exposed to market risks, including interest rate fluctuations and inflation, but does not believe a hypothetical 100-basis-point change in interest rates would materially impact its operations [318]. - Inflation has not had a material impact on the company's financial condition, although rising operating costs could adversely affect its business if not offset by price adjustments [319].

Financial Performance - Revenue for Q3 2025 was $3.5 million, a 19% increase from $2.966 million in Q3 2024, with U.S. growth at 25% and international growth at 3%[218]. - Revenue for the first nine months of 2025 was $9.636 million, up 16% from $8.304 million in the same period of 2024, with U.S. growth at 18% and international growth at 10%[219]. - Gross profit for Q3 2025 increased to $1.914 million, a 16% rise from $1.657 million in Q3 2024, while gross margin decreased from 56% to 54%[222]. - Net loss for Q3 2025 was approximately $7.921 million, a 37% increase from $5.794 million in Q3 2024[230]. - Total operating expenses for Q3 2025 were $9.933 million, a 33% increase from $7.460 million in Q3 2024[215]. - Costs of revenue for Q3 2025 increased by $0.315 million, or 24%, to $1.624 million compared to Q3 2024[221]. - As of September 30, 2025, the company had an accumulated deficit of $148.3 million, primarily funded through proceeds from convertible preferred stock sales, IPO proceeds, and revenue from CapsoCam capsules and related services[189]. - The company reported an accumulated deficit of $148.3 million as of September 30, 2025[231]. Research and Development - Research and development expenses rose to $6.090 million in Q3 2025, a 35% increase from $4.522 million in Q3 2024, driven by ongoing clinical trials and new product development[227]. - Research and development expenses include costs related to clinical trials and are subject to significant estimation uncertainty[250][251]. - The company is investing in AI to improve pathology detection accuracy and streamline diagnostic processes, leveraging a unique dataset from its CapsoCloud platform[195]. - The company is developing a capsule delivery device and a patency capsule, with FDA submissions planned for Q1 2026, to enhance its product offerings[192]. Regulatory and Product Development - The company filed a 510(k) submission to the FDA for the CapsoCam Colon capsule endoscopy solution in Q2 2025, with plans for a second-generation product submission in Q2 2026, aiming for FDA clearance by Q4 2026[183]. - The company plans to submit a 510(k) application for AI enhancements to CapsoCam Plus by the end of 2025, with commercialization expected shortly after FDA review[184]. - The company entered a development agreement with Canon Inc. for high-resolution CMOS image sensors to enhance future capsule endoscopies[186]. - The company is focused on expanding its small bowel capsule endoscopy market while preparing for the commercialization of the CapsoCam Colon capsule by the end of 2026[191]. Cash Flow and Financing - Net cash used in operating activities for Q3 2025 was $5.7 million, down from $7.1 million in Q3 2024[231]. - For the nine months ended September 30, 2025, net cash used in operating activities totaled $15.2 million, primarily driven by a net loss of $17.9 million[242]. - The company expects that its existing cash balances will not be sufficient to fund operations for at least the next 12 months, indicating a need for additional capital[236][237]. - Net cash provided by financing activities for the nine months ended September 30, 2025 was $23.6 million, compared to $10.1 million for the same period in 2024[241][246]. - The company may need to engage in equity or debt financings to secure additional funds, which could lead to significant dilution for existing stockholders[237][239]. - The company currently does not have any commitments to obtain additional funds and is evaluating different strategies for future funding[240]. Expenses and Cost Management - General and administrative expenses for Q3 2025 were $2.070 million, a 74% increase from $1.193 million in Q3 2024, primarily due to higher payroll and stock-based compensation[228]. - The company expects selling and marketing expenses to increase as it expands its sales organization and market penetration, but to decrease as a percentage of revenue as overall revenue grows[206]. - The company anticipates that gross profit and gross margin will be affected by various factors, including product costs and customer mix, particularly with the introduction of higher-priced CapsoCam Colon capsules[203]. - The company is addressing potential risks from U.S. trade policy changes, including increased tariffs, which could impact revenue and gross profit margins[202].

Financial Performance - Total revenues for the three months ended September 30, 2025, reached $4,938,503, a significant increase from $739,157 in the same period of 2024, representing a growth of 570%[16] - The company reported a net income of $65,588,809 for the three months ended September 30, 2025, compared to a net loss of $9,039,787 in the same period of 2024, marking a turnaround of $74,628,596[16] - The net income for the nine months ended September 30, 2025, was $52,201,644, compared to a net loss of $3,511,070 for the same period in 2024[28] - The company reported a gross profit of $1,087,953 for the three months ended September 30, 2025, compared to $195,849 in 2024, indicating an increase of 454%[16] Revenue Breakdown - Blockchain infrastructure revenues amounted to $4,215,224 for the three months ended September 30, 2025, compared to $739,157 in 2024, indicating a growth of 470%[16] - Blockchain infrastructure revenues for the nine months ended September 30, 2025, reached $8,676,357, compared to $1,751,735 in 2024, indicating a year-over-year increase of about 394%[100] - DeFi revenues from the Imperium business line for the three months ended September 30, 2025, were $723,279, while no revenues were recorded in the same period of 2024[103] - The Company earned $3,356,357 from block building through Builder+ for the three months ended September 30, 2025, compared to $404,503 in 2024, marking an increase of approximately 730%[102] Expenses and Liabilities - The company incurred total operating expenses of $7,079,833 for the three months ended September 30, 2025, compared to $1,920,693 in the same period of 2024, representing an increase of 269%[16] - The total liabilities increased to $73,450,855 as of September 30, 2025, compared to $4,245,435 as of December 31, 2024, reflecting a growth of 1,730%[14] - The total cost of blockchain infrastructure revenues for the three months ended September 30, 2025, was $3,843,634, compared to $543,308 for the same period in 2024, representing a significant increase[112] Assets and Equity - Total current assets increased to $298,344,324 as of September 30, 2025, up from $38,137,940 as of December 31, 2024, reflecting a growth of 682%[14] - The total stockholders' equity rose to $225,404,497 as of September 30, 2025, compared to $33,999,954 as of December 31, 2024, an increase of 563%[14] - As of September 30, 2025, the company's total crypto assets amounted to $293,180,682, a significant increase from $36,056,683 as of December 31, 2024, representing a growth of approximately 715%[161][174] Cash and Financing Activities - The company’s cash and cash equivalents increased to $4,486,051 as of September 30, 2025, compared to $1,977,778 as of December 31, 2024, a growth of 127%[14] - The net cash provided by financing activities for the nine months ended September 30, 2025, was $205,373,353, significantly higher than $653,340 in 2024[28] - The company issued 26,394,414 shares of common stock during the nine months ended September 30, 2025, raising $135,160,842 net of offering costs[18] Stock and Compensation - Stock-based compensation for the nine months ended September 30, 2025, was $3,850,662, compared to $1,887,800 in 2024[28] - The Company issued 329,110 shares of Common Stock to officers and employees as part of accrued bonus compensation, with a total fair value of approximately $813,000[196] - The Company issued 49,812 shares of Common Stock to independent directors, with a total grant date fair value of approximately $113,000 for the nine months ended September 30, 2025[195] Crypto Assets and Valuation - The fair value of crypto assets is primarily determined based on pricing data from Kraken, the Company's principal market[48] - The Company measures its crypto assets at fair value using the last closing price of the day in the UTC time zone at each reporting period end[51] - The fair market value of Ethereum (ETH) held by the company is $291,581,923, with a cost basis of $213,513,938, indicating a realized gain of approximately 36.5%[159] Strategic Operations - The company completed a strategic wind-down of its validator node operations on multiple platforms to focus on Ethereum[34] - The Company expanded its blockchain infrastructure operations to include DeFi activities under the Imperium business line starting in 2025, participating directly in DeFi ecosystems[96] - The Company recognizes revenue from blockchain operations under ASC 606, with three primary sources: staking rewards, transaction fees, and protocol-driven rewards[79]

Product Development - The company is developing a new class of intranasal product candidates called pherines, with five clinical-stage candidates currently in its neuroscience pipeline[82]. - Fasedienol, the lead product candidate, is in the U.S. registration-directed PALISADE Program for the acute treatment of social anxiety disorder (SAD), with positive topline results reported from the PALISADE-2 Phase 3 trial[83]. - The ongoing PALISADE Program includes PALISADE-3 and PALISADE-4 Phase 3 trials, with topline data for PALISADE-3 expected in Q4 2025 and for PALISADE-4 in the first half of 2026[83]. - The PALISADE-2 study, which enrolled 141 patients, successfully met its primary efficacy endpoint after early termination, leading to the initiation of further trials[90]. - Fasedienol's mechanism of action is fundamentally differentiated from FDA-approved anti-anxiety medications, aiming for rapid-onset effects without systemic absorption[87]. - SAD affects over 30 million adults in the U.S., with a mean duration of about 20 years, highlighting a significant unmet medical need[86]. - The company plans to generate evidence to support the clinical meaningfulness of fasedienol's effects for a potential NDA submission to the U.S. FDA[91]. - Fasedienol has received fast track designation and aims to become the first FDA-approved acute treatment for SAD[89]. - The company is focused on developing transformative treatment options to meet growing unmet needs in mental health[85]. - The PALISADE Program is designed to evaluate the efficacy, safety, and tolerability of fasedienol during anxiety-provoking situations, using the Subjective Units of Distress Scale as the primary endpoint[90]. - Itruvone has received FDA fast track designation for the treatment of Major Depressive Disorder (MDD) and demonstrated a reduction in depressive symptoms within one week in a Phase 2A clinical trial[96][97]. - PH80 is under development as a non-hormonal treatment for vasomotor symptoms (hot flashes) due to menopause, affecting 60% - 80% of menopausal women in the U.S.[98][99]. - In a Phase 2A clinical study, PH80 significantly reduced the daily number of hot flashes compared to placebo by the end of the first week, with improvements maintained through four weeks[100][101]. - PH284 is being evaluated for cancer cachexia, which affects up to 80% of people with advanced cancer and is thought to cause up to 30% of cancer deaths[108][109]. - In a Phase 2A study, PH284 showed a cumulative effect on mean Subjective Feeling of Hunger scores compared to placebo, with no serious adverse events reported[111]. - AV-101 has received Fast Track designation for the treatment of neuropathic pain and as an adjunctive treatment for MDD, targeting the NMDAR[115][113]. - The company launched the PALISADE-3 Phase 3 clinical trial for fasedienol in the treatment of social anxiety disorder (SAD) and initiated the PALISADE-4 trial in September 2024[117]. - The company is focusing on creating, protecting, and patenting intellectual property related to its neuroscience product candidates and nasal spray delivery technologies[117]. Financial Performance - As of September 30, 2025, the company had an accumulated deficit of approximately $442.1 million and a net loss of approximately $51.4 million for the fiscal year 2025[118]. - For the three months ended September 30, 2025, total revenues were $258,000, compared to $183,000 for the same period in 2024, reflecting an increase in sublicense and other revenue[129]. - Research and development expenses for the three months ended September 30, 2025, were $15.9 million, up from $10.2 million in the same period in 2024, primarily due to increased costs associated with the PALISADE Program for fasedienol[132]. - The company incurred a net loss of $19.4 million for the three months ended September 30, 2025, compared to a net loss of $12.9 million for the same period in 2024[129]. - General and administrative expenses were $4.4 million for the three months ended September 30, 2025, compared to $4.2 million for the same period in 2024[136]. - The company expects research and development expenses to increase over the next fiscal year as it advances its product candidates and expands operations[135]. - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities of approximately $77.2 million, raising concerns about its ability to continue as a going concern[142]. - The company has financed operations through the issuance of equity securities, raising approximately $370.2 million to date[139]. - The company anticipates that sublicense and other revenue will remain consistent in future periods unless milestones under existing agreements are achieved[131]. - The company sold an aggregate of 9,608,772 shares under its Sales Agreement during the three months ended September 30, 2025, generating net proceeds of $27.9 million[141]. - For the six months ended September 30, 2025, net cash used in operating activities was $32.6 million, compared to $21.8 million for the same period in 2024, reflecting an increase of approximately 49%[146][147][148]. - Net cash used in investing activities decreased significantly to $0.9 million for the six months ended September 30, 2025, from $13.3 million in 2024, indicating a reduction of about 93%[149]. - Net cash provided by financing activities increased to $29.1 million for the six months ended September 30, 2025, primarily from the sale of common stock, compared to immaterial amounts in 2024[150][151]. - The company's cash and cash equivalents at the end of the period were $62.8 million as of September 30, 2025, down from $84.2 million at the end of the same period in 2024, representing a decrease of approximately 25%[146]. - The net loss for the six months ended September 30, 2025, was $34.5 million, compared to a net loss of $23.7 million for the same period in 2024, reflecting an increase in losses of about 45%[147][148]. - The company plans to seek additional financing to support clinical development and operating activities, indicating a focus on growth despite current cash flow challenges[144]. - There have been no material changes in contractual obligations and commitments during the three and six months ended September 30, 2025[152]. - No material changes were reported in critical accounting estimates during the three and six months ended September 30, 2025[153]. - Future financing availability remains uncertain, with no assurance of sufficient amounts or acceptable terms[145]. - The company continues to manage operating costs carefully, including clinical and pre-commercialization programs[144].