Financial Performance - Total revenues for Q3 2025 increased by $2.0 million compared to Q3 2024, primarily driven by collaboration and licensing revenue recognition[10] - Total revenues for the three months ended September 30, 2025, were $2.922 million, a significant increase from $953,000 in the same period of 2024, representing a growth of 206%[34] - Collaboration and licensing revenue reached $1.818 million in Q3 2025, compared to $0 in Q3 2024, indicating successful new partnerships[34] - Product revenues increased to $162,000 in Q3 2025 from $66,000 in Q3 2024, reflecting a growth of 145%[34] - Net loss attributable to common shareholders was $325.3 million, or $(1.06) per share, compared to a net loss of $24 million, or $(0.09) per share in Q3 2024[16] - Net loss attributable to common shareholders for Q3 2025 was $325.344 million, compared to $23.978 million in Q3 2024, primarily due to deemed dividends on preferred stock[34] - Operating loss for the nine months ended September 30, 2025, was $88.841 million, an improvement compared to a loss of $106.513 million in the same period of 2024[34] - The company reported a change in fair value of warrant liabilities of $(111.502) million for Q3 2025, which significantly impacted the overall financial results[34] Expenses - Research and development expenses rose by $1.0 million, or 9%, due to increased manufacturing and regulatory filing costs related to PAPZIMEOS[11] - Selling, General and Administrative (SG&A) expenses surged by $14.2 million, or 144%, mainly due to costs associated with PAPZIMEOS commercial readiness[12] - Research and development expenses for the nine months ended September 30, 2025, were $34.343 million, down from $41.312 million in the same period of 2024, indicating a reduction of 17%[34] Assets and Liabilities - Cash, cash equivalents, and investments totaled $123.6 million as of September 30, 2025, expected to fund operations to cash flow break-even[5] - Cash and cash equivalents decreased to $14.322 million as of September 30, 2025, down from $29.517 million at the end of 2024[32] - Total assets increased to $171.264 million as of September 30, 2025, compared to $145.266 million at the end of 2024, showing a growth of 18%[32] - Total current liabilities increased to $32.069 million as of September 30, 2025, compared to $21.518 million at the end of 2024, reflecting a rise of 49%[32] Product Development and Market Presence - Over 100 patients have been registered in the PAPZIMEOS Patient Hub since its launch, with more than 90% of target institutions engaged[5] - PAPZIMEOS received full FDA approval in August 2025, marking it as the first and only treatment for adults with recurrent respiratory papillomatosis (RRP)[6] - The company has achieved private health insurance coverage for over 100 million lives, with PAPZIMEOS now available through Medicare and Medicaid[7] - Long-term follow-up results from the pivotal clinical trial showed 83% of complete responders maintained their response without additional treatment interventions for a median of 36 months[14] - A Marketing Authorization Application for PAPZIMEOS was submitted to the European Medicines Agency in November 2025[7]

Financial Performance - Total revenues for Q3 2025 reached $627,277, a 32.2% increase from $474,522 in Q3 2024[25] - Product revenues increased to $538,381 in Q3 2025, up 32.5% from $406,088 in Q3 2024[25] - The company reported a net comprehensive loss of $5,387,443 for Q3 2025, compared to $6,010,558 in Q3 2024[26] - For the nine months ended September 30, 2025, the net loss was $17,200,488, a decrease of 19.5% compared to the net loss of $21,400,758 for the same period in 2024[32] - The net loss for the three months ended September 30, 2025, was approximately $5.4 million, an 8% improvement from a net loss of $5.9 million in 2024[195] - The net loss for the nine months ended September 30, 2025, was approximately $17.2 million, a 20% improvement from a net loss of $21.4 million in 2024[207] Expenses - Operating loss for Q3 2025 was $5,100,990, a slight improvement from a loss of $5,868,707 in Q3 2024[25] - Research and development expenses decreased to $2,285,907 in Q3 2025, down 34.2% from $3,473,782 in Q3 2024[25] - General and administrative expenses rose by 37% to $2,483,793 for the three months ended September 30, 2025, compared to $1,815,863 in 2024[185] - Research and development expenses decreased by 36% to $7.6 million from $11.8 million in the prior year, primarily due to reduced clinical trial activity[199] - General and administrative expenses increased by 21% to $7.7 million from $6.4 million, driven by higher stock-based compensation and legal fees[202] - Sales and marketing expenses fell by 29% to $2.9 million from $4.1 million, attributed to reduced personnel and marketing costs[204] Cash Flow and Liquidity - Cash and cash equivalents significantly decreased to $199,407 as of September 30, 2025, from $3,264,429 at December 31, 2024[21] - Operating cash used was $14,191,467 for the nine months ended September 30, 2025, compared to $20,461,849 for the same period in 2024, indicating improved cash management[33] - Net cash used in operating activities was $14.2 million for the nine months ended September 30, 2025, a decrease from $20.6 million in the same period of 2024[175] - Net cash provided by financing activities increased to $11.0 million for the nine months ended September 30, 2025, compared to $6.4 million in 2024[177] - The company expressed substantial doubt about its ability to continue as a going concern without obtaining additional financing[208] Financing Activities - The company raised $4,454,633 from the issuance of common stock during the nine months ended September 30, 2025, down from $6,565,422 in the same period of 2024[33] - In March 2025, the company raised $2.3 million from a registered direct offering, selling 2,363,636 shares at $0.55 per share[68] - In August 2025, the company raised $1.21 million from another registered direct offering, selling 1,734,375 shares at $0.64 per share[69] - In September 2025, the company completed a private placement, raising $0.3 million by selling 483,870 shares at $0.62 per share[70][71] - The company raised approximately $880,862 through the sale of 1,386,223 shares under the 2025 ATM Sales Agreement from April 22, 2025, to September 30, 2025[75] - The company amended the 2025 ATM Sales Agreement to increase the maximum aggregate offering price from $7.5 million to $30.0 million[76] Stock and Compensation - The weighted average shares outstanding for Q3 2025 were 108,213,068, an increase from 87,886,012 in Q3 2024[26] - The company reported stock-based compensation of $1,872,586 for the nine months ended September 30, 2025, compared to $942,805 for the same period in 2024, indicating increased compensation expenses[32] - Total stock-based compensation expense related to RSUs for the nine months ended September 30, 2025, was $1,769,014, compared to $937,567 for the same period in 2024[101] - The company has unrecognized compensation expense of $979,980 related to RSUs from grants in 2025, with $224,055 vesting in 2026, $355,907 in 2027, and $400,018 in 2028[147][148] Assets and Liabilities - Total current assets decreased to $1,332,077 as of September 30, 2025, from $4,056,808 at December 31, 2024[21] - Total liabilities increased to $42,398,447 as of September 30, 2025, compared to $35,507,259 at December 31, 2024[23] - The Company's total property and equipment as of September 30, 2025, was $10.5 million, with accumulated depreciation of $6.3 million, resulting in a net value of $4.2 million[51] - The Company's intangible assets, primarily patents, totaled $1.5 million as of September 30, 2025, with accumulated amortization of $1.2 million, leading to a net value of $301,033[53] Strategic Initiatives - The company launched the Nu.Q® Vet Cancer Test in the UK and Ireland in November 2023, and in Japan in July 2024, now available in over twenty countries[170] - The company entered into a master license and product supply agreement with Heska, receiving a $10 million upfront payment and potential additional payments based on milestone achievements[168] - The company aims to partner with established diagnostic companies to market and sell its tests, leveraging their networks and expertise[165] - The company has committed to issuing 2,868,000 RSUs under the 2024 Plan, contingent on achieving various corporate goals[146] Legal and Compliance - The company is not aware of any legal proceedings that would materially affect its financial position[142] - The company adopted ASU 2023-05 on January 1, 2025, which did not have a material impact on its financial statements, indicating proactive compliance with new accounting standards[40] - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2024-03 and ASU 2025-05[42][43]

Drug Development and Research - The company is developing novel therapeutics targeting PTSD, stress-induced anxiety disorders, fibromyalgia, and CNS diseases, with a lead program, SPC-15, focusing on PTSD and anxiety [180]. - SPC-15 is designed as an intranasal drug and is expected to qualify for the FDA's streamlined 505(b)(2) regulatory pathway, with a pre-IND submission planned for 2026 [189][191]. - SP-26, a ketamine-based implant for fibromyalgia, is in preclinical research, with initial animal studies evaluating dosage and time release [193][195]. - The global Alzheimer's therapeutics market is projected to exceed $30.8 billion by 2033, presenting a significant opportunity for SPC-14, which targets cognitive symptoms in Alzheimer's disease [196]. - The company has entered into a license agreement with the University of Maryland for a ketamine polymer implant and a sponsored research agreement with Columbia University for Alzheimer's treatment [185][196]. - SPU-16 targets CNS disorders, with an initial indication for multiple sclerosis, and has been granted an exclusive option for a new commercial license [198][202]. - The company is actively pursuing the acquisition and development of intellectual property to treat rare diseases, expanding its business focus [186]. Financial Performance - Revenues for the three months ended September 30, 2025, and 2024 were both $18,025, while for the nine months, revenues remained at $54,076 for both years [210]. - Cost of revenues for the three months ended September 30, 2025, was $20,687, a significant increase from $1,459 in 2024; for the nine months, it rose to $23,606 from $4,378 [211]. - Total operating expenses for the three months ended September 30, 2025, were $1,148,804, up from $1,026,621 in 2024, and for the nine months, they increased to $3,524,608 from $2,942,040 [212]. - Research and development expenses for the three months ended September 30, 2025, were $543,615, a 5.0% increase from $517,548 in 2024; for the nine months, expenses surged to $1,854,824 from $1,292,437, marking a 43.5% increase [216]. - Loss from operations for the three months ended September 30, 2025, was $1,151,466, compared to $1,010,055 in 2024, reflecting a 14.0% increase; for the nine months, the loss increased to $3,494,138 from $2,892,342, a 20.8% rise [223]. - Net loss for the three months ended September 30, 2025, was $1,110,438, or $0.12 per share, compared to a net loss of $928,814, or $0.22 per share, in 2024, an increase of 19.6%; for the nine months, net loss was $3,346,168, or $0.50 per share, up from $2,662,260, or $0.78 per share, a 25.7% increase [226]. Cash Flow and Investments - As of September 30, 2025, working capital was $5,456,030, with $1,948,579 in short-term investments and $3,917,627 in cash and cash equivalents, compared to $5,455,483 in working capital at the end of 2024 [228]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $3,881,061, an increase of 33.1% from $2,916,482 in 2024 [232]. - Net cash provided by investing activities for the nine months ended September 30, 2025, was $1,164,009, a 15.1% increase from $1,011,436 in 2024 [233]. - On September 29, 2025, the company received net proceeds of $2,146,000 from the October 2025 Offering, which helps mitigate concerns about its ability to continue as a going concern [237]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $3,346,168, reflecting a net loss adjusted for non-cash items and changes in operating assets and liabilities [238]. - Net cash provided by investing activities for the nine months ended September 30, 2025, was $1,164,009, consisting of proceeds from the sale of short-term investments of $1,315,653 [238]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $2,728,880, which included net proceeds from the sale of common stock and pre-funded warrants of $1,593,897 [238]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $2,662,260, adjusted for non-cash items and changes in operating assets and liabilities [238]. - Net cash provided by investing activities for the nine months ended September 30, 2024, was $1,001,436, with proceeds from the sale of short-term investments of $1,149,320 [238]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $3,241,628, including net proceeds from the sale of common stock and pre-funded warrants of $1,673,216 [238]. Accounting and Compliance - Stock-based compensation is recognized based on the grant-date fair value of the award, in accordance with ASC 718 [241]. - Research and development costs are expensed when incurred, with significant estimates related to the percentage of completion of certain projects [242]. - The company does not expect the adoption of new accounting guidance to have a material impact on its consolidated financial statements [243]. - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures [245]. Digital Assets and Treasury Management - The company holds approximately $400,000 in digital assets as part of its cryptocurrency treasury strategy initiated in August 2025 [204]. - The gross proceeds from the October 2025 Offering were $2,500,000, with net proceeds of $2,146,000 after deducting fees and expenses [207]. - The company has engaged Fireblocks for its institutional crypto treasury platform, enhancing its digital asset management capabilities [206].

Financial Performance - Total revenues for Q3 2025 were $4.657 million, a decrease of 43.5% compared to $8.202 million in Q3 2024[15] - Net loss for Q3 2025 was $16.382 million, compared to a net loss of $36.763 million in Q3 2024, representing a 55.5% improvement[15] - Total revenues for the nine months ended September 30, 2025, were $15.9 million, down 27.7% from $22.1 million for the same period in 2024[96] - Loss from operations for the three months ended September 30, 2025, was $(16.9) million, compared to $(32.4) million for the same period in 2024[96] - Loss from operations for the nine months ended September 30, 2025, was $(64.5) million, a decrease from $(68.7) million for the same period in 2024[96] - The company reported a net loss of $55.6 million for the nine months ended September 30, 2025, compared to a net loss of $70.2 million for the same period in 2024[20] - Total comprehensive loss for Q3 2025 was $18.580 million, compared to $34.245 million in Q3 2024, indicating a 45.8% reduction in losses[15] Expenses and Costs - Research and development expenses for the nine months ended September 30, 2025, were $9.907 million, down from $15.338 million in the same period of 2024, a reduction of 35.0%[15] - Operating expenses for Q3 2025 totaled $17.091 million, down from $32.466 million in Q3 2024, a reduction of 47.4%[15] - Research and development expenses for Q3 2025 were $3.328 million, down from $5.127 million in Q3 2024, a decrease of 35.1%[15] - The company incurred a net cash used in operating activities of $23.9 million for the nine months ended September 30, 2025[25] - The company recorded an impairment charge of $16.6 million related to long-lived assets during the nine months ended September 30, 2025[43] Assets and Liabilities - Total assets decreased to $327.345 million as of September 30, 2025, from $378.027 million as of December 31, 2024, a decline of 13.4%[14] - Cash and cash equivalents decreased to $34.061 million as of September 30, 2025, from $56.307 million as of December 31, 2024, a decrease of 39.4%[13] - Total stockholders' equity decreased to $294.987 million as of September 30, 2025, from $338.365 million as of December 31, 2024, a decline of 12.7%[14] - The company had total current liabilities of $13.287 million as of September 30, 2025, compared to $12.549 million as of December 31, 2024, an increase of 5.9%[13] - As of September 30, 2025, accounts receivable net was $15.5 million, down from $19.2 million as of December 31, 2024, reflecting a decrease of approximately 19%[37] - Inventory as of September 30, 2025, totaled $635,000, a decrease of approximately 27% from $866,000 as of December 31, 2024[38] Financing and Funding - The company is evaluating additional strategies to obtain funding for future operations, including equity and debt securities[26] - The company has not yet secured additional financing and there is no assurance it will obtain funding on acceptable terms[26] - The company received zero funding from the Canadian government research and development program during the three months ended September 30, 2025, compared to $8.1 million received in the same period of 2024[76] - The Company executed a Secured Promissory Note for €9.5 million (approximately $11.2 million) to finance equipment purchases, with a 10.56% interest rate and repayment starting in April 2026[106] Market and Customer Concentration - The company's top two customers accounted for approximately 100% of total revenue for the three and nine months ended September 30, 2025, and 100% and 94% for the same periods in 2024, indicating a high concentration of revenue[36] Equity and Stock Options - The weighted-average common shares outstanding for Q3 2025 were 149,340,474, an increase from 143,387,618 in Q3 2024[15] - As of September 30, 2025, the number of shares available for grant under the 2021 Equity Incentive Plan was 5,617,675, with a total of 30,752,349 shares reserved for issuance[88] - The total remaining compensation expense for RSU awards to be recognized under the 2021 Equity Incentive Plan is $8.9 million, expected to be recognized over an estimated weighted average period of 1.2 years[91] - Stock-based compensation expense for the three months ended September 30, 2025, was $1.7 million in general and administrative expenses and $0.5 million in research and development expenses[93] Legal and Regulatory Matters - The company has been involved in legal proceedings related to a putative securities class action and derivative complaints, with settlements entered into in October 2025[108] Other Financial Metrics - The company reported an unrealized gain on marketable securities of $311,000 for Q3 2025, compared to $690,000 in Q3 2024[15] - The company recognized revenue in accordance with ASC 606, with a focus on the transfer of promised goods or services to customers[47] - The Company reported total fair value of financial assets as of September 30, 2025, amounting to $41.22 million, with cash equivalents at $20.94 million and marketable securities at $20.28 million[61]

Revenue Performance - Revenue for the nine months ended September 30, 2025, was $107.4 million, compared to $74.8 million for the same period in 2024, representing a 43.6% increase[155]. - Total revenue for the three months ended September 30, 2025, was $42,850,000, a 57% increase from $27,360,000 in the same period of 2024[187]. - Total revenue for the nine months ended September 30, 2025, reached $107,401 million, a 44% increase from $74,765 million in the same period of 2024[204]. Net Loss - The company reported a net loss of $44.0 million for the nine months ended September 30, 2025, compared to a net loss of $38.3 million for the same period in 2024[155]. - The net loss for the three months ended September 30, 2025, was $1,796,000, a 94% improvement from a net loss of $30,443,000 in the same period of 2024[187]. - For the nine months ended September 30, 2025, the net loss increased to $44.0 million from $38.3 million for the same period in 2024[233]. Revenue Breakdown - Product revenue surged to $9,242,000, up 588% from $1,344,000 year-over-year, with a gross profit margin of 14% compared to a loss margin of 95% in the prior year[189]. - Subscription revenue increased by 27% to $22,685,000 from $17,909,000, with a gross profit margin of 52%, down from 59%[190]. - Service revenue for the three months ended September 30, 2025, was $7,808 million, a 28% increase from $6,085 million in the prior year[192]. - License fee and other revenue increased by 54% to $3,115 million for the three months ended September 30, 2025, compared to $2,022 million in 2024[193]. - Product revenue surged by 194% to $14,092 million for the nine months ended September 30, 2025, compared to $4,789 million in 2024[206]. - Subscription revenue increased to $62,122 million for the nine months ended September 30, 2025, up 30% from $47,783 million in 2024[207]. - Service revenue grew by 26% to $21,224 million for the nine months ended September 30, 2025, compared to $16,903 million in 2024[208]. - License fee and other revenue surged by 88% to $9,963 million for the nine months ended September 30, 2025, from $5,290 million in 2024[209]. Customer Growth - The company added 62 new customers during the three months ended September 30, 2025, contributing to revenue growth[188]. - The company added 179 new customers during the nine months ended September 30, 2025, contributing to increased adoption of its solutions[205]. Expenses and Cost Management - Research and development expenses are expected to decrease for the year ending December 31, 2025, due to cost-cutting measures including a reduction in force[171]. - Sales and marketing expenses are also projected to decline for the year ending December 31, 2025, as a result of similar cost-cutting initiatives[172]. - General and administrative expenses saw a significant increase in 2024 due to legal fees and consulting expenses, but are expected to remain lower in Q4 2025[174]. - Research and development expenses decreased by 16% to $15,207 million for the nine months ended September 30, 2025, down from $18,056 million in 2024[210]. - Sales and marketing expenses fell by 27% to $34,494 million for the nine months ended September 30, 2025, compared to $47,182 million in 2024[211]. - General and administrative expenses increased by 12% to $44,789 million for the nine months ended September 30, 2025, from $39,843 million in 2024[212]. Cash Flow and Liquidity - As of September 30, 2025, the company had $56.2 million in cash and cash equivalents, with outstanding debt of $28.5 million[219]. - The company had cash, cash equivalents, and marketable securities totaling $56.2 million as of September 30, 2025, which is expected to fund operating expenses and capital expenditures for at least twelve months[222][229]. - The company is required to maintain a minimum liquidity of $15.0 million, with actual liquidity reported at $71.1 million as of September 30, 2025[224][228]. - Cash used in investing activities for the nine months ended September 30, 2025, was $43.2 million, primarily for the purchase of property and equipment[236]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $34.7 million, mainly from $30.0 million in proceeds from the Initial Term Loan[238]. Strategic Initiatives - The company entered into a non-exclusive contract manufacturing agreement with Plexus Corp. on November 5, 2025, aimed at enhancing scalability and operational resiliency[148]. - The company is focused on expanding its market presence internationally, with expectations of increased adoption of its products in foreign markets[154]. - The company has discontinued quoting under the Distribution and License Agreement, transitioning to a purchase subscription model for hardware sales[163]. - The company anticipates continued strategic investments to support growth in its emerging technology field[223]. Market Conditions - The company expects to continue experiencing fluctuations in revenue as venues shift towards touchless security screening solutions[151]. - The company anticipates fluctuations in gross margins based on customer demand and strategic management decisions affecting sales and fulfillment models[170]. - The company faces uncertainties related to trade restrictions and tariffs that could adversely affect its financial condition[225].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (State or Other Jurisdiction of Incorporation or Organization) (Mark One) x 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: 001-39417 _____________________ ...

Financial Performance - For the third quarter of 2025, Alumis reported total revenue of $2.1 million, compared to $0 for the same quarter in 2024[13]. - The net loss for Q3 2025 was $110.8 million, compared to a net loss of $93.1 million in Q3 2024[6][13]. - Alumis reported a revenue increase of 15% year-over-year, reaching $250 million in Q3 2023[15]. - The company provided guidance for Q4 2023, expecting revenue between $260 million and $270 million, indicating a potential growth of 4% to 8%[15]. - New product launch scheduled for Q1 2024, anticipated to contribute an additional $30 million in revenue[15]. - The company plans to enter the Asian market by mid-2024, targeting a revenue contribution of $50 million in the first year[15]. Research and Development - Research and development expenses increased to $97.8 million in Q3 2025, up from $87.8 million in Q3 2024, driven by higher clinical trial costs and severance expenses related to the merger with ACELYRIN[6][13]. - A-005, a novel TYK2 inhibitor, is expected to enter a Phase 2 clinical trial in multiple sclerosis in the first half of 2026[7][3]. - The company anticipates topline Phase 3 ONWARD data for envudeucitinib in moderate-to-severe plaque psoriasis to be announced in early Q1 2026[2][3]. - The company expects to establish a once-daily formulation for envudeucitinib in 2025[7][3]. - Investment in R&D increased by 25%, totaling $15 million, to enhance product offerings and technology[15]. Expenses and Costs - General and administrative expenses rose to $19.5 million in Q3 2025, compared to $10.6 million in Q3 2024, primarily due to severance costs and increased personnel-related expenses[6][13]. - Alumis recognized merger-related expenses of $6.3 million for Q3 2025, which included stock-based compensation expenses[8][6]. Market and User Growth - User base expanded to 1.5 million active users, representing a growth of 20% compared to the previous quarter[15]. - Market expansion efforts in Europe resulted in a 10% increase in market share[15]. - Customer retention rate improved to 85%, up from 80% in the previous quarter[15]. Operational Metrics - Operating margin improved to 18%, a 2% increase from the previous year[15]. - Collaboration revenue for Q3 2025 included $2.1 million from a licensing agreement with Kaken Pharmaceutical Co., Ltd.[6][13]. - As of September 30, 2025, Alumis had cash, cash equivalents, and marketable securities totaling $377.7 million, expected to support operations into 2027[9][6]. - Strategic acquisition of a tech startup completed, expected to enhance service capabilities and add $5 million in annual revenue[15].

Revenue Performance - Year-to-date revenue reached $184.8 million, reflecting an 88% increase compared to the previous year[1] - Third quarter revenues totaled $41.9 million, down 40% year-over-year, with procurement revenues at $31.1 million, down 49%[3] - Procurement revenues for the year-to-date were $154.3 million, up 100% from the previous year[3] - Gross profit for the year-to-date was $21.0 million, representing a 39% increase year-over-year[3] Profitability Metrics - Adjusted EBITDA for the year-to-date was $10.7 million, up 59% compared to the same period in 2024[3] - The company reported a net loss of $1.5 million in Q3 2025, compared to a net income of $2.6 million in Q3 2024[3] - The company expects a strong rebound in quarterly EBITDA in Q4 2025, with updated full-year Adjusted EBITDA growth guidance of 50% to 75% compared to 2024[5] Revenue Segmentation - Systems Integration revenues increased by 20% to $9.2 million in Q3 2025, while Facilities Management revenues decreased by 19% to $1.6 million[3] Asset Management - Total current assets increased to $100.3 million as of September 30, 2025, compared to $58.2 million at the end of 2024[13] Operational Improvements - The company has implemented new procedures to increase rack volumes in Q4 2025 after lower-than-expected integration volumes in Q3[2]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 001-40111 __________________________ SABLE OFFSHORE CORP. (Exact name of registrant as specified ...

Business Combination and Financing - The Company completed the Business Combination on February 14, 2024, resulting in the issuance of 44,024,910 shares of Common Stock for gross proceeds of $440.2 million[210]. - The Second PIPE Investment raised approximately $150.0 million by issuing 7,500,000 shares at $20.00 per share on September 26, 2024[211]. - The Company entered into an Underwriting Agreement for the 2025 Offering, raising approximately $282.6 million in net proceeds from the sale of 10,000,000 shares at $29.50 per share[214]. - The company raised $295.0 million in gross proceeds from the sale of 10,000,000 shares of Common Stock in the 2025 Offering[280]. Production and Operations - The Company initiated oil production from six wells on Platform Harmony at SYU on May 15, 2025, with an initial production rate of approximately 6,000 barrels of oil per day[224]. - The Company plans to implement an offshore storage and treating vessel strategy, expecting to begin sales from all SYU platforms in Q4 2026, with anticipated production rates exceeding 50,000 barrels of oil per day[221]. - The Company has focused all operations on recommencing sales of production from the SYU Assets, pending necessary regulatory approvals[263]. - The company plans to recommence oil sales in the fourth quarter of 2026, contingent upon regulatory approvals[280]. Legal and Regulatory Matters - Sable submitted Restart Plans for the Pipelines to OSFM on July 29, 2024, and has conducted successful hydrotests on all segments of Line 324 and Line 325 as of May 27, 2025[226]. - On December 17, 2024, OSFM granted state waivers for enhanced pipeline integrity standards, which were later not objected to by PHMSA[227]. - Sable is facing two lawsuits challenging the issuance of State Waivers, with petitioners seeking to declare the waivers void[228]. - The Coastal Commission imposed an administrative penalty of approximately $18.0 million on Sable related to ongoing development in the Coastal Zone[237]. - Sable filed a complaint against the Coastal Commission on February 18, 2025, challenging the legality of the Notices of Violation and Cease and Desist Order[236]. - The court denied the Coastal Commission's request for a temporary restraining order against Sable on April 17, 2025[238]. - Sable's monetary damages related to the Coastal Commission's actions are quantified in excess of $347 million[240]. - The Center for Biological Diversity and the Wishtoyo Foundation filed complaints against BSEE and BOEM, alleging violations of NEPA and OCSLA related to Sable's operations[241][242]. - The Company is involved in litigation against the County of Santa Barbara regarding the transfer of Final Development Permits, with a hearing set for December 16, 2025[252]. - A putative class action complaint was filed against the Company on July 28, 2025, alleging violations of the Exchange Act and Securities Act[253]. - The Company intends to vigorously defend against claims in the Johnson class action lawsuit, with motions to dismiss due on November 24, 2025[254]. - The California Department of Conservation's CalGEM has asserted that the Company must post a bond of approximately $31.9 million and submit oil spill contingency response plans[257]. Financial Performance - The Company has not generated substantial revenues since the shut-in, with operating expenses being the primary metrics for performance assessment[259]. - Operating and maintenance expenses increased to $79.4 million for the three months ended September 30, 2025, up $53.8 million or 210% from $25.6 million in the same period of 2024[265]. - Depletion, depreciation, amortization, and accretion rose to $3.3 million for the three months ended September 30, 2025, an increase of $0.5 million or 18% compared to $2.8 million for the same period in 2024[266]. - General and administrative expenses were $36.7 million for the three months ended September 30, 2025, reflecting a $10.5 million increase or 40% from $26.2 million in the same period of 2024[267]. - Total other income (expense), net was $15.6 million for the three months ended September 30, 2025, a change of $215.7 million compared to an expense of $200.1 million for the same period in 2024[268]. - Net loss for the three months ended September 30, 2025, was $110.4 million, a decrease of $145.2 million or 57% from a net loss of $255.6 million in the same period of 2024[265]. - Operating and maintenance expenses for the nine months ended September 30, 2025, were $164.2 million, an increase of $97.7 million or 147% compared to $59.2 million for the same period in 2024[272]. - General and administrative expenses decreased to $134.4 million for the nine months ended September 30, 2025, down $77.2 million from $211.6 million for the combined periods in 2024[274]. - Total other expense, net was $14.6 million for the nine months ended September 30, 2025, a decrease of $291.2 million compared to an expense of $305.8 million for the combined periods in 2024[275]. - The net loss for the nine months ended September 30, 2025, was $348.0 million, which includes a non-cash decrease of $40.7 million in fair value of warrants and non-cash stock-based compensation of $30.0 million[289]. - Cash flows used in operating activities for the nine months ended September 30, 2025, amounted to $253.6 million, representing an increase of $105.6 million, or 71%, compared to the previous periods[288]. - Net cash used in investing activities was $323.1 million for the nine months ended September 30, 2025, an increase of $100.4 million, or 45%, compared to the previous periods[290]. - The company has an accumulated deficit of $1.0 billion as of September 30, 2025[284]. Future Expectations and Strategic Plans - The Company expects to opportunistically acquire an existing OS&T vessel in Q1 2026, with delivery anticipated in Q3 2026[221]. - The company expects to incur approximately $450.0 million in remaining start-up expenses to recommence offshore oil sales under the OS&T strategy[281]. - The effective tax rate for the three months ended September 30, 2025, was negative 6.4%, reflecting ongoing assessments of deferred tax assets[269]. - The company expects elevated operating and maintenance expenses to continue for the remainder of 2025 due to restart efforts and increased headcount[265]. - The Senior Secured Term Loan matures on January 9, 2026, but is expected to be extended to March 31, 2027, or 90 days after first sales of hydrocarbons[284]. - The company has curtailed substantially all capital expenditures relating to the Onshore Pipeline and onshore processing facility[278]. - The company has oil inventory storage capacity of 540 MBbls onshore at LFC, with inventory volumes expected to fluctuate over time to maintain optimal operational efficiencies[304]. Accounting and Compliance - The company is classified as an "emerging growth company" and may remain so until the last day of the fiscal year following the fifth anniversary of the IPO, unless certain revenue or market value thresholds are exceeded[312]. - The company is also classified as a "smaller reporting company," allowing it to provide only two years of audited financial statements until specific market value or revenue thresholds are met[313]. - The company will cease to be an emerging growth company or smaller reporting company as of December 31, 2025, after which it will not benefit from reduced reporting requirements[314]. - Management estimates future undiscounted cash flows of affected properties to assess recoverability, based on assumptions consistent with investment evaluation criteria[306]. - Impairment assessments are conducted whenever events indicate that the carrying amounts of assets may not be recoverable, including significant decreases in market prices or adverse changes in usage[307]. - The company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks, and all outstanding warrants are recognized as derivative liabilities[310]. - The company does not anticipate that recently issued accounting standards will have a material effect on its financial statements[315].