[Part I – Financial Information](index=3&type=section&id=Part%201%20%E2%80%93%20Financial%20Information) This section presents the unaudited financial information for the company, including detailed financial statements and management's discussion and analysis [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) Unaudited financial statements for Q2 and 6M 2025 show increased assets, net income, and equity, driven by loan growth and net interest income [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) Total assets grew to $1.92 billion by June 30, 2025, fueled by loan and deposit increases, with stockholders' equity also rising Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $72,846 | $55,792 | | Net loans | $1,559,590 | $1,497,167 | | Total Assets | $1,924,369 | $1,853,359 | | **Liabilities & Equity** | | | | Total deposits | $1,593,618 | $1,445,693 | | Federal Home Loan Bank advances | $89,000 | $172,400 | | Total Liabilities | $1,708,317 | $1,642,797 | | Total Stockholders' Equity | $216,052 | $210,562 | [Consolidated Statement of Income](index=5&type=section&id=Consolidated%20Statement%20of%20Income) Net income significantly increased for both Q2 and the first six months of 2025, driven by higher net interest income and a real estate gain Key Income Statement Data (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $17,437 | $15,083 | $33,535 | $30,052 | | Provision for (Recovery of) Credit Losses | ($506) | $87 | ($411) | ($49) | | Noninterest Income | $3,078 | $1,760 | $5,022 | $3,556 | | Noninterest Expense | $13,651 | $11,902 | $25,844 | $23,867 | | **Net Income** | **$6,157** | **$4,164** | **$10,987** | **$8,331** | | **Diluted EPS** | **$0.76** | **$0.52** | **$1.36** | **$1.03** | [Consolidated Statement of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income for Q2 and 6M 2025 was lower than net income due to unrealized losses on available-for-sale securities Comprehensive Income (Loss) Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $6,157 | $4,164 | $10,987 | $8,331 | | Other Comprehensive Loss (net of tax) | ($2,497) | ($1,338) | ($2,864) | ($3,378) | | **Comprehensive Income (Loss)** | **$3,660** | **$2,826** | **$8,123** | **$4,953** | [Consolidated Statement of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased by June 30, 2025, primarily due to net income, despite offsetting dividends and comprehensive losses - For the six months ended June 30, 2025, total stockholders' equity increased by **$5.5 million**, reflecting the balance of net income, dividends, stock grants, and other comprehensive losses[22](index=22&type=chunk) [Consolidated Statement of Cash Flows](index=10&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Cash and cash equivalents increased for the six months ended June 30, 2025, driven by operating and financing activities, offset by investing Summary of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $12,846 | $8,803 | | Net Cash used in Investing Activities | ($56,820) | ($17,942) | | Net Cash from Financing Activities | $61,028 | $561 | | **Net Increase (Decrease) in Cash** | **$17,054** | **($8,578)** | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, loan portfolio growth to $1.58 billion, decreased nonperforming loans, and a settled cyber-attack lawsuit covered by insurance - The total loan portfolio grew to **$1.58 billion** as of June 30, 2025, up from **$1.52 billion** at the end of 2024[66](index=66&type=chunk) - The Allowance for Credit Losses (ACL) on loans decreased slightly to **$22.3 million** at June 30, 2025, from **$22.4 million** at December 31, 2024, driven by portfolio activity, updated assumptions, and the economic outlook[72](index=72&type=chunk) - Nonperforming loans totaled **$25.1 million** as of June 30, 2025, a decrease from **$30.0 million** at December 31, 2024[87](index=87&type=chunk)[146](index=146&type=chunk) - A class action lawsuit related to an April 2023 cyber-attack was settled, with payments issued on May 15, 2025, and losses, including attorney fees and settlement costs, were within the coverage limits of the company's **$3 million** cyber risk insurance policy[103](index=103&type=chunk) [Management's Discussion and Analysis (MD&A)](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong H1 2025 performance to expanded net interest margin, asset growth, improved asset quality, and robust liquidity and capital [Financial Condition](index=45&type=section&id=Financial%20Condition) Total assets grew to $1.92 billion in H1 2025, driven by loan and deposit increases, while FHLB advances decreased and equity rose Loan Portfolio Changes (in thousands) | Loan Category | June 30, 2025 | Dec 31, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Commercial and industrial | $257,519 | $229,034 | $28,485 | 12.44% | | Construction and other | $123,531 | $103,608 | $19,923 | 19.23% | | Home equity lines of credit | $156,297 | $143,379 | $12,918 | 9.01% | | **Total loans** | **$1,581,925** | **$1,519,614** | **$62,311** | **4.10%** | Deposit Portfolio Changes (in thousands) | Deposit Category | June 30, 2025 | Dec 31, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Time Deposits | $334,755 | $247,704 | $87,051 | 35.14% | | Money market | $466,935 | $414,074 | $52,861 | 12.77% | | Interest-bearing demand | $236,239 | $208,291 | $27,948 | 13.42% | | **Total deposits** | **$1,593,618** | **$1,445,693** | **$147,925** | **10.23%** | - The company does not have a concentration in commercial real estate lending as of June 30, 2025, based on regulatory guidance, with commercial real estate loans representing **277.3%** of total risk-based capital, below the **300%** threshold that would trigger heightened scrutiny[135](index=135&type=chunk) [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Net income significantly increased for Q2 and H1 2025, driven by higher net interest income and noninterest income, despite increased noninterest expenses - Net interest margin for the six months ended June 30, 2025, increased by **26 basis points** to **3.79%** compared to the same period in 2024, attributed to higher loan balances and lower costs on borrowings[157](index=157&type=chunk) - Noninterest income for the first six months of 2025 increased by **$1.5 million (41.2%)** year-over-year, primarily due to a **$1.2 million** gain on a real estate exchange and a **$633,000** bank-owned life insurance death benefit[167](index=167&type=chunk) - Noninterest expense for the first six months of 2025 rose by **$2.0 million (8.3%)** year-over-year, mainly due to an **$847,000** increase in salaries and a **$700,000** loss on a property recorded as held for sale[169](index=169&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, with substantial borrowing capacity and all regulatory capital ratios exceeding 'well-capitalized' standards - At June 30, 2025, the company had additional borrowing capacity of **$389.7 million** at the FHLB and **$149.5 million** at the Federal Reserve discount window[185](index=185&type=chunk) Regulatory Capital Ratios (Middlefield Banc Corp.) | Ratio | As of June 30, 2025 | Well-Capitalized Minimum (Bank only) | | :--- | :--- | :--- | | Leverage | 11.03% | 5.00% | | Common Equity Tier 1 | 11.72% | 6.50% | | Tier 1 Risk Based | 12.20% | 8.00% | | Total Risk Based | 13.45% | 10.00% | [Quantitative and Qualitative Disclosures about Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk, with simulations showing limited impact on net interest income from rate changes within tolerance limits Interest Rate Sensitivity Analysis (June 30, 2025) | Change in Rates | % Change in Net Interest Income (NII) | % Change in Economic Value of Equity (EVE) | | :--- | :--- | :--- | | +200bp | (1.80%) | (2.40%) | | -100bp | 0.90% | (0.60%) | [Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective[206](index=206&type=chunk) - No changes occurred in the Company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[208](index=208&type=chunk) [Part II – Other Information](index=63&type=section&id=PART%20II%20%E2%80%93%20Other%20Information) This section provides additional disclosures including legal proceedings, risk factors, share repurchases, and other miscellaneous information [Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) A 2023 cyber-attack lawsuit was settled with costs covered by insurance, and no other legal proceedings are deemed material - A lawsuit related to a 2023 cyber-attack has been settled, and the costs associated with the lawsuit were paid by the insurance company in accordance with the policy[103](index=103&type=chunk)[209](index=209&type=chunk) [Risk Factors](index=63&type=section&id=Item%201a.%20Risk%20Factors) No material updates or changes to the company's risk factors have occurred since the December 31, 2024, Form 10-K report - No material updates or changes in risks faced by the Company have occurred since December 31, 2024[210](index=210&type=chunk) [Share Repurchases](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common shares were repurchased during Q2 2025, with 250,052 shares remaining available under the authorized program - No shares were repurchased during the three months ended June 30, 2025, and the maximum number of shares that may yet be purchased under the program is **250,052**[211](index=211&type=chunk) [Other Disclosures and Exhibits](index=64&type=section&id=Item%203%2C%204%2C%205%20%26%206) The company reported no defaults on senior securities, no new director/officer trading plans, and included a list of exhibits - The company reports no defaults on senior securities and no new Rule 10b5-1 trading plans adopted by directors or officers in the quarter[213](index=213&type=chunk)

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 June 30, 2025 OR 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 number 001-42302 _________________________ (Address of Principal Executive Offices) (Zip Code) (70 ...

[Corporate Information](index=1&type=section&id=Corporate%20Information) This section provides an overview of the company's filing status, voluntary reporting choices, and a cautionary note on forward-looking statements. [Filing Details](index=1&type=section&id=Filing%20Details) Autolus Therapeutics plc filed its Form 10-Q quarterly report for the period ended June 30, 2025, registered in England and Wales, classified as a non-accelerated filer and smaller reporting company, voluntarily filing as a U.S. domestic issuer - The company voluntarily files its Form 10-Q quarterly report as a U.S. domestic issuer, despite being exempt as a "foreign private issuer"[8](index=8&type=chunk)[39](index=39&type=chunk) Company Filing Status | Status | Option | | :--- | :--- | | Large Accelerated Filer | ☐ | | Accelerated Filer | ☐ | | Non-Accelerated Filer | ☒ | | Smaller Reporting Company | ☒ | | Emerging Growth Company | ☐ | - As of August 11, 2025, the company had **266,141,411** ordinary shares issued and outstanding, including shares in the form of ADSs[5](index=5&type=chunk) [Explanatory Note](index=3&type=section&id=Explanatory%20Note) Autolus Therapeutics plc, as a "foreign private issuer," is exempt from filing Form 10-Q under the Exchange Act but has voluntarily chosen to file this report - The company, as a "foreign private issuer," is exempt from filing Form 10-Q but has voluntarily chosen to do so[8](index=8&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This report contains numerous forward-looking statements regarding the company's strategy, future financial condition, operations, R&D costs, management plans, and objectives, cautioning investors about significant risks and uncertainties that could cause actual results to differ materially - Forward-looking statements cover the therapeutic potential of AUCATZYL/obe-cel, market acceptance, regulatory approvals, commercialization, R&D plans, future financing needs, intellectual property protection, and market size and growth potential[16](index=16&type=chunk) - The company cautions investors that forward-looking statements involve known and unknown risks, uncertainties, and assumptions, including macroeconomic events, clinical trial results, regulatory approval timing, market acceptance, financing capabilities, and competition, which could cause actual results to differ materially from expectations[17](index=17&type=chunk) [Part I – Financial Information](index=6&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations. [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20statements) This section presents Autolus Therapeutics plc's unaudited condensed consolidated financial statements for the period ended June 30, 2025, including balance sheets, statements of operations and comprehensive loss, statements of changes in shareholders' equity, statements of cash flows, and detailed notes, offering a comprehensive view of the company's financial position, operating performance, and cash flows [Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202025%20and%20December%2031,%202024%20(Unaudited)) The condensed consolidated balance sheets present the company's financial position, showing changes in assets, liabilities, and equity between June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets Key Data (Thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | **$123,825** | **$227,380** | | Marketable securities | **$330,454** | **$360,643** | | Total current assets | **$574,250** | **$660,929** | | Total assets | **$720,981** | **$782,725** | | **Liabilities:** | | | | Total current liabilities | **$68,151** | **$60,743** | | Total liabilities | **$374,517** | **$355,400** | | **Shareholders' Equity:** | | | | Accumulated deficit | **$(1,217,302)** | **$(1,099,224)** | | Total shareholders' equity | **$346,464** | **$427,325** | - As of June 30, 2025, the company's cash and cash equivalents decreased by approximately **45.5%**, and marketable securities decreased by approximately **8.4%** compared to December 31, 2024[20](index=20&type=chunk) - As of June 30, 2025, the company's total assets decreased by approximately **8%**, total liabilities increased by approximately **5.4%**, and shareholders' equity decreased by approximately **18.9%**[20](index=20&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) The condensed consolidated statements of operations and comprehensive loss detail the company's financial performance, including revenue, expenses, and net loss, for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations and Comprehensive Loss Key Data (Thousands of USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | **$20,923** | **$—** | **$29,905** | **$—** | | License revenue | **$—** | **$—** | **$—** | **$10,091** | | Total net revenue | **$20,923** | **$—** | **$29,905** | **$10,091** | | Cost of sales | **$(24,445)** | **$—** | **$(42,396)** | **$—** | | Research and development expenses, net | **$(27,430)** | **$(36,612)** | **$(54,164)** | **$(67,283)** | | Selling, general and administrative expenses | **$(30,265)** | **$(21,903)** | **$(59,799)** | **$(40,080)** | | Operating loss | **$(61,217)** | **$(58,929)** | **$(126,457)** | **$(97,686)** | | Net loss | **$(47,917)** | **$(58,272)** | **$(118,081)** | **$(110,962)** | | Net loss per share, basic and diluted | **$(0.18)** | **$(0.22)** | **$(0.44)** | **$(0.43)** | - In the second quarter and first half of 2025, the company recognized product net revenue for the first time, totaling **$20.9 million** and **$29.9 million**, respectively, primarily from AUCATZYL sales in the U.S[23](index=23&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - In the first half of 2025, net research and development expenses decreased by **19%** year-over-year, while selling, general and administrative expenses increased by **49%**[23](index=23&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) The condensed consolidated statements of changes in shareholders' equity illustrate the movements in capital stock, additional paid-in capital, accumulated other comprehensive loss, and accumulated deficit for the periods presented Condensed Consolidated Statements of Changes in Shareholders' Equity Key Data (Thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Ordinary shares outstanding | **266,137,837** | **266,121,689** | | Additional paid-in capital | **$1,562,774** | **$1,555,593** | | Accumulated other comprehensive loss | **$862** | **$(29,174)** | | Accumulated deficit | **$(1,217,302)** | **$(1,099,224)** | | Total shareholders' equity | **$346,464** | **$427,325** | - As of June 30, 2025, the company's total shareholders' equity was **$346.5 million**, a decrease from **$427.3 million** as of December 31, 2024, primarily due to an increased accumulated deficit and changes in accumulated other comprehensive loss[26](index=26&type=chunk) - In the first half of 2025, the company increased additional paid-in capital by **$4.305 million** due to share-based compensation expense and recognized **$18.968 million** in other comprehensive income[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) The condensed consolidated statements of cash flows provide an overview of cash generated from or used in operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows Key Data (Thousands of USD) | Cash Flow Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | **$(148,346)** | **$(91,597)** | | Net cash provided by (used in) investing activities | **$36,368** | **$(1,374)** | | Net cash used in (provided by) financing activities | **$(768)** | **$559,362** | | Effect of exchange rate changes | **$9,273** | **$233** | | Net (decrease) increase in cash, cash equivalents, and restricted cash | **$(103,473)** | **$466,624** | | Cash, cash equivalents, and restricted cash at end of period | **$125,332** | **$706,959** | - Net cash used in operating activities significantly increased to **$148.3 million** in the first half of 2025, primarily due to net loss and increases in accounts receivable and inventory[32](index=32&type=chunk)[261](index=261&type=chunk) - Net cash provided by investing activities turned into a **$36.4 million** inflow in the first half of 2025, mainly from maturities and redemptions of marketable securities, offsetting equipment purchases and security acquisitions[32](index=32&type=chunk)[263](index=263&type=chunk) - Net cash used in financing activities was **$0.768 million** in the first half of 2025, compared to a **$559.4 million** inflow in the same period of 2024, primarily due to significant proceeds from the BioNTech agreement and ADS offerings in 2024[32](index=32&type=chunk)[264](index=264&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=13&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide essential disclosures and additional information to the unaudited condensed consolidated interim financial statements, clarifying accounting policies, estimates, and significant events [Note 1. Nature of the Business](index=13&type=section&id=Note%201.%20Nature%20of%20the%20Business) Autolus Therapeutics plc is an early commercial-stage biopharmaceutical company focused on developing next-generation T-cell therapies for cancer and autoimmune diseases, with its lead product AUCATZYL approved in the U.S., UK, and EU, and first commercially sold in the U.S. in January 2025 - The company's core business is developing next-generation programmed T-cell therapies for cancer and autoimmune diseases[36](index=36&type=chunk) - AUCATZYL (obecabtagene autoleucel, obe-cel) received FDA approval on November 8, 2024, for adult relapsed/refractory B-cell precursor acute lymphoblastic leukemia (r/r B-ALL) and was first commercially launched in the U.S. in January 2025[36](index=36&type=chunk) - AUCATZYL received conditional marketing authorization from the UK MHRA in April 2025 and marketing authorization from the European Commission in July 2025[36](index=36&type=chunk) - The company anticipates continued operating losses and significant additional capital requirements to support AUCATZYL commercialization and other product candidate development[38](index=38&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=13&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies followed in preparing the unaudited condensed consolidated interim financial statements, including U.S. GAAP basis, U.S. dollar presentation, emphasis on going concern assumption, use of estimates, product revenue deduction estimation, and the impact of recently issued accounting pronouncements - The company's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) and presented in U.S. dollars[40](index=40&type=chunk) - The company has incurred continuous losses since inception, with an accumulated deficit of **$1.217 billion** as of June 30, 2025, but expects existing cash and marketable securities to fund operations for at least the next 12 months[45](index=45&type=chunk) - Significant uncertainty exists in estimating product revenue net deductions, such as rebates and chargebacks, for which the company uses the expected value method and updates estimates regularly based on actual claims and current information[47](index=47&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - The company adopted ASU 2024-01 and ASU 2024-02 on January 1, 2025, with no material impact on financial statements, and is currently evaluating the impact of ASU 2025-01, ASU 2024-03, and ASU 2023-09[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) [Note 3. Revenue](index=18&type=section&id=Note%203.%20Revenue) This note details the company's product and license revenue recognition. In the first half of 2025, the company recognized its first product net revenue of **$29.9 million**, primarily from AUCATZYL sales in the U.S. License revenue was zero in the first half of 2025, compared to **$10.1 million** in the same period of 2024, mainly from the BioNTech license and option agreement Product Revenue, Net (Thousands of USD) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | United States | **$20,923** | **$—** | **$29,905** | **$—** | | Total | **$20,923** | **$—** | **$29,905** | **$—** | - Following FDA approval of AUCATZYL on November 8, 2024, the company began recognizing product net revenue in the first half of 2025[79](index=79&type=chunk)[80](index=80&type=chunk) License Revenue (Thousands of USD) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Europe | **$—** | **$—** | **$—** | **$10,091** | | Total | **$—** | **$—** | **$—** | **$10,091** | - The **$10.1 million** license revenue recognized in the first half of 2024 was entirely from the BioNTech license and option agreement, with no license revenue in the first half of 2025[86](index=86&type=chunk)[90](index=90&type=chunk) - The company is eligible for up to **$32.0 million** in milestone payments and low single-digit percentage net sales royalties from BioNTech, which were fully constrained and excluded from the transaction price as of June 30, 2025, and 2024[91](index=91&type=chunk) [Note 4. Interest Expense, Net](index=20&type=section&id=Note%204.%20Interest%20Expense,%20Net) This note discloses the composition of the company's interest expense. In the second quarter and first half of 2025, net interest expense was **negative $6.8 million** and **$3.3 million**, respectively, primarily impacted by cumulative catch-up adjustments for liabilities related to future royalties and milestones Interest Expense, Net (Thousands of USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Accretion of interest expense on liabilities related to future royalties and milestones, net | **$10,681** | **$10,169** | **$20,819** | **$18,559** | | Cumulative catch-up adjustment | **$(17,525)** | **$—** | **$(17,525)** | **$10,870** | | Other interest expense | **$15** | **$5** | **$20** | **$14** | | Total interest expense | **$(6,829)** | **$10,174** | **$3,314** | **$29,443** | - Net interest expense was **negative $6.8 million** and **$3.3 million** in the second quarter and first half of 2025, respectively, a significant decrease from the prior year, primarily due to negative cumulative catch-up adjustments for liabilities related to future royalties and milestones[96](index=96&type=chunk) [Note 5. Net Loss Per Share](index=20&type=section&id=Note%205.%20Net%20Loss%20Per%20Share) This note presents the calculation of the company's basic and diluted net loss per share. Due to net losses in all reported periods, potentially dilutive securities, such as unvested restricted stock units, stock options, and warrants, are excluded from diluted net loss per share calculations due to their anti-dilutive effect Net Loss Per Share (Thousands of USD, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | **$(47,917)** | **$(58,272)** | **$(118,081)** | **$(110,962)** | | Weighted-average ordinary shares outstanding, basic and diluted | **266,141,411** | **266,025,783** | **266,134,021** | **255,131,873** | | Net loss per share, basic and diluted | **$(0.18)** | **$(0.22)** | **$(0.44)** | **$(0.43)** | - As the company is in a net loss position, all potentially dilutive securities, including unvested restricted stock units, stock options, and warrants, are excluded from diluted net loss per share calculations due to their anti-dilutive effect[99](index=99&type=chunk)[100](index=100&type=chunk) [Note 6. Fair Value Measurements](index=21&type=section&id=Note%206.%20Fair%20Value%20Measurements) This note describes the company's fair value measurement methods for financial assets, primarily using market participant assumptions and categorized into three levels based on observable and unobservable inputs. As of June 30, 2025, most cash equivalents and marketable debt securities' fair values are determined through active market quotes (Level 1) or observable inputs (Level 2) - The company classifies and measures financial assets using fair value hierarchy (Level 1, Level 2, Level 3) to maximize the use of observable inputs[101](index=101&type=chunk)[102](index=102&type=chunk) Fair Value of Financial Assets as of June 30, 2025 (Thousands of USD) | Asset Class | Total Estimated Fair Value | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | **Cash Equivalents:** | | | | | | Money market funds | **$87,546** | **$87,546** | **$—** | **$—** | | Commercial paper | **$3,966** | **$—** | **$3,966** | **$—** | | UK government securities | **$20,640** | **$—** | **$20,640** | **$—** | | **Marketable Securities:** | | | | | | Commercial paper | **$37,777** | **$—** | **$37,777** | **$—** | | Corporate debt securities | **$123,740** | **$—** | **$123,740** | **$—** | | UK government securities | **$149,501** | **$—** | **$149,501** | **$—** | | U.S. Treasury bills | **$19,436** | **$19,436** | **$—** | **$—** | | **Total** | **$442,606** | **$106,982** | **$335,624** | **$—** | - As of June 30, 2025, the fair value of most of the company's cash equivalents and marketable debt securities is determined using active market quotes (Level 1) or observable inputs (Level 2), with no Level 3 assets[103](index=103&type=chunk) [Note 7. Marketable Securities: Available-For-Sale Debt Securities](index=22&type=section&id=Note%207.%20Marketable%20Securities:%20Available-For-Sale%20Debt%20Securities) This note provides details on the company's available-for-sale debt securities, including their amortized cost, unrealized gains/losses, and fair value. As of June 30, 2025, the company held **$330.0 million** in available-for-sale debt securities, mostly maturing within one year, with 42 securities in an unrealized loss position, though the company does not intend to sell and expects to recover principal and interest Available-For-Sale Debt Securities as of June 30, 2025 (Thousands of USD) | Security Type | Remaining Contractual Maturity | Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial paper | Within 1 year | **$37,782** | **$—** | **$(5)** | **$37,777** | | Corporate debt securities | Within 1 year | **$110,579** | **$14** | **$(50)** | **$110,543** | | UK government securities | Within 1 year | **$149,436** | **$67** | **$(2)** | **$149,501** | | U.S. Treasury bills | Within 1 year | **$14,390** | **$23** | **$—** | **$14,413** | | Corporate debt securities | 1 to 5 years | **$13,196** | **$12** | **$(11)** | **$13,197** | | U.S. Treasury bills | 1 to 5 years | **$5,010** | **$13** | **$—** | **$5,023** | | **Total** | | **$330,393** | **$129** | **$(68)** | **$330,454** | - As of June 30, 2025, the company held 42 available-for-sale debt securities in an unrealized loss position, totaling **$68 thousand** in unrealized losses, but does not intend to sell and expects to recover principal and interest[110](index=110&type=chunk)[112](index=112&type=chunk) [Note 8. Inventories, Net](index=24&type=section&id=Note%208.%20Inventories,%20Net) This note presents the composition and net value of the company's inventories. As of June 30, 2025, net inventories significantly increased to **$23.9 million** from **$4.1 million** on December 31, 2024, primarily due to substantial growth in consumables, raw materials, and work-in-progress. In the first half of 2025, the company recorded a **$3.2 million** inventory reserve Inventories, Net (Thousands of USD) | Inventory Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Consumables | **$7,439** | **$2,026** | | Raw materials | **$8,203** | **$1,956** | | Work-in-progress | **$6,474** | **$16** | | Finished goods | **$1,827** | **$140** | | **Total Inventories, Net** | **$23,943** | **$4,138** | - As of June 30, 2025, net inventories significantly increased to **$23.9 million**, primarily reflecting increased commercial manufacturing for AUCATZYL[114](index=114&type=chunk) - In the first half of 2025, the company recorded a **$3.2 million** inventory reserve, reflecting estimated obsolescence and lower market value[114](index=114&type=chunk) [Note 9. Prepaid Expenses and Other Current Assets](index=24&type=section&id=Note%209.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note presents the composition of the company's prepaid expenses and other current assets. As of June 30, 2025, the total was **$67.9 million**, largely consistent with December 31, 2024, with R&D tax credit receivables remaining the largest component Prepaid Expenses and Other Current Assets (Thousands of USD) | Asset Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | R&D tax credit receivables | **$41,836** | **$38,242** | | Prepaid expenses | **$13,069** | **$15,212** | | VAT receivables | **$5,221** | **$5,996** | | Deferred costs | **$2,860** | **$2,320** | | Accrued interest income | **$1,969** | **$2,566** | | Other tax receivables | **$1,719** | **$—** | | Other receivables | **$665** | **$491** | | Lease and lease deposit receivables | **$538** | **$930** | | Other assets | **$—** | **$1,571** | | **Total Prepaid Expenses and Other Current Assets** | **$67,877** | **$67,328** | - As of June 30, 2025, R&D tax credit receivables totaled **$41.8 million**, representing the largest component of prepaid expenses and other current assets[115](index=115&type=chunk) [Note 10. Property and Equipment, Net](index=25&type=section&id=Note%2010.%20Property%20and%20Equipment,%20Net) This note presents the composition of the company's net property and equipment. As of June 30, 2025, net property and equipment significantly increased to **$66.5 million** from **$49.6 million** on December 31, 2024, primarily due to increased investment in construction in progress Property and Equipment, Net (Thousands of USD) | Asset Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Lab equipment | **$47,012** | **$41,728** | | Office equipment | **$6,908** | **$6,330** | | Furniture and fixtures | **$2,597** | **$2,359** | | Leasehold improvements | **$15,442** | **$14,116** | | Construction in progress | **$36,233** | **$19,638** | | Less: Accumulated depreciation | **$(41,725)** | **$(34,618)** | | **Total Property and Equipment, Net** | **$66,467** | **$49,553** | - As of June 30, 2025, construction in progress significantly increased to **$36.2 million**, serving as the primary driver for the growth in net property and equipment[117](index=117&type=chunk) - Depreciation expense for the first half of 2025 was **$4.1 million**, an increase from **$3.7 million** in the same period of 2024[117](index=117&type=chunk) [Note 11. Intangible Assets, Net](index=25&type=section&id=Note%2011.%20Intangible%20Assets,%20Net) This note presents the composition of the company's net intangible assets. As of June 30, 2025, net intangible assets totaled **$12.9 million**, primarily comprising licensed intellectual property and software licenses. Amortization expense for the first half of 2025 was **$0.6 million**, with an expected annual amortization of **$1.2 million** for the next five years Intangible Assets, Net (Thousands of USD) | Asset Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Licensed intellectual property | **$13,713** | **$12,535** | | Software licenses | **$50** | **$—** | | Less: Accumulated amortization | **$(830)** | **$(162)** | | **Total Intangible Assets, Net** | **$12,933** | **$12,373** | - Amortization expense for the first half of 2025 was **$0.6 million**, with an expected annual amortization of **$1.2 million** for the next five years[118](index=118&type=chunk) [Note 12. Accrued Expenses and Other Liabilities](index=25&type=section&id=Note%2012.%20Accrued%20Expenses%20and%20Other%20Liabilities) This note presents the composition of the company's accrued expenses and other liabilities. As of June 30, 2025, the total was **$51.4 million**, a slight decrease from **$52.3 million** on December 31, 2024, with compensation and benefits and R&D costs remaining the primary components Accrued Expenses and Other Liabilities (Thousands of USD) | Liability Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Compensation and benefits | **$17,792** | **$19,681** | | Research and development costs | **$11,516** | **$13,372** | | Professional services | **$7,017** | **$9,075** | | Manufacturing accruals | **$7,004** | **$6,075** | | VAT accruals | **$4,256** | **$3,594** | | Other liabilities | **$2,148** | **$479** | | Rebates, chargebacks, and returns | **$1,633** | **$—** | | **Total Accrued Expenses and Other Liabilities** | **$51,366** | **$52,276** | - As of June 30, 2025, compensation and benefits and research and development costs remain the primary components of accrued expenses and other liabilities[119](index=119&type=chunk) - A new **$1.6 million** liability for rebates, chargebacks, and returns reflects related deductions following product sales[119](index=119&type=chunk) [Note 13. Shareholders' Equity](index=26&type=section&id=Note%2013.%20Shareholders'%20Equity) This note details the composition and changes in the company's shareholders' equity. As of June 30, 2025, the total number of ordinary shares was **266,137,837**. In February 2024, the company raised approximately **$520 million** in net proceeds through an underwritten offering and a private placement to BioNTech - As of June 30, 2025, the company had **266,137,837** ordinary shares issued and outstanding[20](index=20&type=chunk)[26](index=26&type=chunk) - In February 2024, the company raised **$326.8 million** in net proceeds from an underwritten offering of **58,333,336** ADSs[123](index=123&type=chunk) - In February 2024, the company raised **$193.8 million** in net proceeds from a private placement of **33,333,333** ADSs to BioNTech[124](index=124&type=chunk) [Note 14. Share-Based Compensation](index=26&type=section&id=Note%2014.%20Share-Based%20Compensation) This note discloses detailed information on the company's share-based compensation. In the first half of 2025, total share-based compensation expense was **$7.16 million**, primarily allocated to selling, general and administrative expenses and research and development expenses. As of June 30, 2025, unrecognized stock option compensation expense was **$19.0 million**, expected to be recognized over 3.19 years Share-Based Compensation Expense (Thousands of USD) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | **$1,528** | **$1,048** | **$2,526** | **$1,498** | | Selling, general and administrative expenses | **$2,309** | **$1,887** | **$4,041** | **$3,723** | | Cost of sales | **$468** | **$—** | **$614** | **$—** | | Capitalized to intangible assets, net/property and equipment, net | **$(12)** | **$—** | **$(21)** | **$(2)** | | **Total Share-Based Compensation Expense** | **$4,293** | **$2,935** | **$7,160** | **$5,219** | - Total share-based compensation expense for the first half of 2025 was **$7.16 million**, an increase from **$5.2 million** in the same period of 2024[126](index=126&type=chunk) - As of June 30, 2025, unrecognized stock option compensation expense was **$19.0 million**, expected to be recognized over a weighted-average vesting period of **3.19 years**[130](index=130&type=chunk) [Note 15. Liabilities Related to Future Royalties and Milestones, Net](index=27&type=section&id=Note%2015.%20Liabilities%20Related%20to%20Future%20Royalties%20and%20Milestones,%20Net) This note details the changes and composition of the company's liabilities related to future royalties and milestones. As of June 30, 2025, the total liability was **$251.0 million**, primarily from collaboration agreements with Blackstone and BioNTech. In the first half of 2025, accrued interest expense for this liability was **$20.8 million**, partially offset by a **$17.5 million** cumulative catch-up adjustment Liabilities Related to Future Royalties and Milestones, Net (Thousands of USD) | Metric | Amount | | :--- | :--- | | Balance as of December 31, 2024 | **$248,100** | | Accretion of interest expense | **$20,819** | | Cumulative catch-up adjustment | **$(17,525)** | | Revenue share payments | **$(763)** | | **Balance as of June 30, 2025** | **$250,631** | - As of June 30, 2025, net liabilities related to future royalties and milestones totaled **$251.0 million**, with a current portion of **$6.0 million** and a non-current portion of **$244.6 million**[134](index=134&type=chunk) - In the first half of 2025, accrued interest expense for this liability was **$20.8 million**, with a negative cumulative catch-up adjustment of **$17.5 million**[134](index=134&type=chunk)[135](index=135&type=chunk) - The imputed interest rates for the Blackstone collaboration agreement liability and BioNTech liability are **15.80%** and **28.70%**, respectively[143](index=143&type=chunk) [Note 16. Leases](index=29&type=section&id=Note%2016.%20Leases) This note provides information on the company's operating leases as a lessee. In the first half of 2025, total lease cost was **$5.174 million**. As of June 30, 2025, the weighted-average remaining lease term was **16.1 years**, and the weighted-average discount rate was **8.17%** Lease Costs (Thousands of USD) | Lease Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | **$2,136** | **$2,087** | **$4,308** | **$4,185** | | Variable costs | **$256** | **$484** | **$752** | **$1,028** | | Short-term lease costs | **$99** | **$103** | **$114** | **$204** | | **Total Lease Costs** | **$2,491** | **$2,674** | **$5,174** | **$5,417** | - As of June 30, 2025, the weighted-average remaining lease term for operating leases was **16.1 years**, with a weighted-average discount rate of **8.17%**[148](index=148&type=chunk) Operating Lease Liability Maturities as of June 30, 2025 (Thousands of USD) | Year | Amount | | :--- | :--- | | 2025 | **$1,577** | | 2026 | **$9,763** | | 2027 | **$9,142** | | 2028 | **$8,359** | | 2029 | **$6,285** | | Thereafter | **$84,697** | | **Total Lease Payments** | **$119,823** | | Less: Imputed interest | **$(55,288)** | | **Present Value of Lease Liabilities** | **$64,535** | [Note 17. Commitments and Contingencies](index=30&type=section&id=Note%2017.%20Commitments%20and%20Contingencies) This note discloses the company's licensing agreements, contractual obligations, capital commitments, key supply commitments, and legal proceedings and indemnification agreements. Following EU marketing approval for AUCATZYL in July 2025, the company triggered an **$8.2 million** regulatory milestone payment. As of June 30, 2025, the company had **$13.0 million** in capital expenditure commitments and **$3.5 million** in reagent and consumable purchase commitments - In July 2025, the company received EU marketing approval for AUCATZYL, triggering a regulatory milestone payment of **£6.0 million** (approximately **$8.2 million**) payable under the UCLB license agreement[150](index=150&type=chunk) - As of June 30, 2025, the company had **$13.0 million** in capital expenditure commitments and **$3.5 million** in Miltenyi Biotec GmbH reagent and consumable purchase commitments, expected to occur within one year[155](index=155&type=chunk)[156](index=156&type=chunk) - The company is not currently involved in any material legal proceedings and has not established any contingent reserves for liabilities[159](index=159&type=chunk) - The product option in the BioNTech license and option agreement was not exercised, and therefore no amounts were recognized[157](index=157&type=chunk) [Note 18. Segment Reporting](index=32&type=section&id=Note%2018.%20Segment%20Reporting) This note provides the company's segment reporting information, where its business is managed as a single operating and reportable segment. As of June 30, 2025, most of the company's long-lived assets are located in the UK. This note also provides a summary of revenue and segment loss by geographic region - The company manages its operations and business as a single operating and reportable segment, focusing on the development and commercialization of CAR T-cell therapies[53](index=53&type=chunk) Geographic Distribution of Long-Lived Assets (Thousands of USD) | Region | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | United Kingdom | **$124,493** | **$104,160** | | United States | **$593** | **$891** | | **Total Long-Lived Assets** | **$125,086** | **$105,051** | Summary of Segment Loss (Thousands of USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | **$20,923** | **$—** | **$29,905** | **$—** | | License revenue | **$—** | **$—** | **$—** | **$10,091** | | Cost of sales | **$(24,445)** | **$—** | **$(42,396)** | **$—** | | Research and clinical development | **$(16,069)** | **$(10,854)** | **$(29,120)** | **$(15,971)** | | Operating loss | **$(61,217)** | **$(58,929)** | **$(126,457)** | **$(97,686)** | | Net loss | **$(47,917)** | **$(58,272)** | **$(118,081)** | **$(110,962)** | [Note 19. Related Party Transactions](index=32&type=section&id=Note%2019.%20Related%20Party%20Transactions) This note discloses the company's related party transactions with Blackstone and BioNTech. As of June 30, 2025, the carrying value of the Blackstone collaboration agreement liability was **$212.6 million**, and the BioNTech liability was **$38.0 million** - Blackstone and BioNTech are related parties due to holding over **10%** of the company's voting securities or having the right to nominate directors[167](index=167&type=chunk)[170](index=170&type=chunk) - As of June 30, 2025, the carrying value of the Blackstone collaboration agreement liability was **$212.6 million**, and the BioNTech liability was **$38.0 million**[169](index=169&type=chunk)[171](index=171&type=chunk) - In the first half of 2025, the Blackstone collaboration agreement liability generated **$1.5 million** in cumulative non-cash interest expense and cumulative catch-up adjustments, along with **$0.5 million** in revenue share payments[169](index=169&type=chunk) - In the first half of 2025, the BioNTech liability generated **$1.8 million** in cumulative interest expense and cumulative catch-up adjustments, along with **$0.3 million** in revenue share payments[171](index=171&type=chunk) [Note 20. Subsequent Events](index=33&type=section&id=Note%2020.%20Subsequent%20Events) This note discloses significant events subsequent to the financial statement issuance date of August 12, 2025. In July 2025, the European Commission approved AUCATZYL for marketing, but the company has paused commercialization in Germany and anticipates no EU sales in 2025 and 2026. Additionally, BioNTech's manufacturing and commercial services agreement option expired unexercised in August 2025 - In July 2025, the European Commission approved AUCATZYL for marketing, but the company has paused commercialization in Germany and anticipates no EU sales in 2025 and 2026[173](index=173&type=chunk) - In August 2025, BioNTech's Manufacturing and Commercial Services Agreement (MCSA) option expired unexercised[174](index=174&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's detailed discussion and analysis of the company's financial condition and operating results, covering an overview, recent developments, components of operations, financial performance comparison, liquidity and capital resources, critical accounting policies, and the impact of recent accounting pronouncements. The company recognized product revenue for the first time in the first half of 2025 but still faces ongoing losses and financing needs [Overview](index=34&type=section&id=Overview) This overview summarizes the company's business as an early commercial-stage biopharmaceutical entity, highlighting its accumulated deficit and current financial resources - The company is an early commercial-stage biopharmaceutical company focused on developing next-generation programmed T-cell therapies for cancer and autoimmune diseases[179](index=179&type=chunk) - As of June 30, 2025, the company reported a net loss of **$47.9 million** and an accumulated deficit of **$1.2173 billion**[180](index=180&type=chunk) - As of June 30, 2025, the company held **$123.8 million** in cash and cash equivalents and **$330.5 million** in marketable securities, expected to fund operations for at least the next 12 months[181](index=181&type=chunk) [Recent Developments](index=35&type=section&id=Recent%20Developments) Recent developments include AUCATZYL's commercialization progress in the U.S., regulatory approvals in the UK and EU with market access challenges, and advancements in obe-cel clinical trials for lupus nephritis and multiple sclerosis - AUCATZYL's commercialization in the U.S. is progressing well, with **46** cancer treatment centers fully activated and over **90%** patient coverage as of August 12, 2025[188](index=188&type=chunk) - The UK MHRA has granted conditional marketing authorization for AUCATZYL, but NICE's preliminary recommendation is not to fund it, prompting the company to pursue patient access in the UK[188](index=188&type=chunk) - The European Commission has granted marketing authorization for AUCATZYL, but the company has paused commercialization in Germany and anticipates no EU sales in 2025 and 2026[188](index=188&type=chunk) - Latest long-term data from the FELIX study show a median duration of response of **42.5 months**, **24-month event-free survival of 43%**, and **overall survival of 46%** for r/r B-ALL patients[183](index=183&type=chunk) - Preliminary Phase 1 clinical trial data for obe-cel in lupus nephritis (LN) support progression to a pivotal Phase 2 study, with the first patient dosing planned by the end of 2025[189](index=189&type=chunk) - The company plans to advance obe-cel into clinical development for progressive multiple sclerosis (MS), with the first patient dosing in a Phase 1 clinical trial anticipated by the end of 2025[185](index=185&type=chunk) [Components of Our Results of Operations](index=35&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section details the key components influencing the company's operating results, including product and license revenue recognition, cost of sales, research and development expenses, and selling, general, and administrative expenses [Product Revenue, Net](index=35&type=section&id=Product%20Revenue,%20Net) The company recognizes product revenue under ASC 606 when the product is delivered to and administered by authorized treatment centers, and the customer's right to cancel or return expires. Starting in the second quarter of 2025, CMS policy codes and bills AUCATZYL's therapeutic dose as two separate administrations, with the company recognizing **50%** of revenue after each administration - The company recognizes product revenue upon delivery to and administration by authorized treatment centers, when the customer's right to cancel or return expires[187](index=187&type=chunk) - Starting in the second quarter of 2025, CMS policy codes and bills AUCATZYL's therapeutic dose as two separate administrations, with the company recognizing **50%** of revenue after each administration[190](index=190&type=chunk) - Product revenue, net, is reduced by estimated rebates, chargebacks, patient travel assistance, and patient out-of-pocket assistance[191](index=191&type=chunk) [License Revenue](index=36&type=section&id=License%20Revenue) The company recognizes license revenue under ASC 606, including non-refundable upfront license fees, future commercial license options, milestone payments, and royalties. Revenue recognition depends on the nature of performance obligations in the contract and whether they are satisfied at a point in time or over time - License revenue recognition involves identifying performance obligations, determining their distinctiveness, measuring the transaction price, allocating the transaction price, and recognizing revenue as performance obligations are satisfied[199](index=199&type=chunk) - If an intellectual property license is deemed distinct from other performance obligations, non-refundable upfront fees are recognized as revenue when the license is transferred to the licensee[200](index=200&type=chunk) - Contingent research milestone payments are considered variable consideration and are included in the transaction price only to the extent that a significant reversal of cumulative revenue recognized is not probable[203](index=203&type=chunk)[204](index=204&type=chunk) [Cost of Sales](index=38&type=section&id=Cost%20of%20Sales) Cost of sales includes manufacturing costs, personnel-related expenses, external manufacturing fees, allocated facility costs, depreciation, third-party royalties, and other costs incurred to bring inventory to its saleable location and condition. For newly launched products, cost of sales does not include full manufacturing costs until initial pre-launch raw material inventory is depleted - Cost of sales includes raw materials, personnel-related expenses, external manufacturing fees, facility costs, depreciation, third-party royalties, and inventory-related costs[208](index=208&type=chunk) - Certain manufacturing costs incurred prior to AUCATZYL's approval were expensed as R&D, resulting in lower initial cost of sales and a positive impact on cost of sales as a percentage of net sales[209](index=209&type=chunk) [Research and Development Expenses](index=38&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses include costs related to product candidate development, partially offset by UK R&D tax credits. These expenses cover clinical trials, preclinical studies, manufacturing, personnel-related costs, external professional services, laboratory materials, and licensing fees. The company anticipates a significant increase in R&D expenses in the coming years - Research and development expenses include CRO agreement fees, clinical trial material manufacturing, personnel-related expenses, external professional services, laboratory materials, and licensing fees[215](index=215&type=chunk) - The company anticipates a significant increase in research and development expenses in the coming years to support clinical development and regulatory filings for product candidates[213](index=213&type=chunk) - Successful development and commercialization of R&D activities are highly uncertain, influenced by factors such as clinical trial results, regulatory approvals, manufacturing capabilities, intellectual property protection, and competition[216](index=216&type=chunk)[217](index=217&type=chunk) [U.K. Research and Development Tax Credits](index=39&type=section&id=U.K.%20Research%20and%20Development%20Tax%20Credits) The company benefits from UK government R&D tax incentive schemes, including the Small and Medium-sized Enterprise (SME) scheme and the Research and Development Expenditure Credit (RDEC) scheme. However, effective January 1, 2025, the company will no longer qualify for the SME scheme and will transition to the merged RDEC regime - The company benefits from UK R&D tax credits, including the SME scheme and RDEC scheme, which are recognized as a reduction in research and development expenses[218](index=218&type=chunk)[219](index=219&type=chunk) - The SME scheme allows for cash refunds on trading losses from qualifying R&D activities, with the refund rate reduced to **18.6%** after April 1, 2023, and **27%** for R&D intensive companies[220](index=220&type=chunk) - Effective January 1, 2025, the company will no longer qualify for the SME scheme and will transition to the merged RDEC regime, which can generate up to **16.2%** net cash benefit for loss-making companies[224](index=224&type=chunk)[222](index=222&type=chunk) [Selling, General and Administrative Expenses](index=40&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) Selling, general and administrative expenses primarily include compensation, benefits, and share-based compensation for executive, finance, legal, and other administrative personnel, as well as facility costs, patent application fees, and professional services. The company anticipates continued growth in these expenses with increased headcount and commercial operations preparation - Selling, general and administrative expenses primarily include employee compensation, benefits, share-based compensation, facility costs, patent fees, and professional services[225](index=225&type=chunk) - The company anticipates increased selling, general and administrative expenses in the future due to increased headcount and sales and marketing preparations for AUCATZYL[226](index=226&type=chunk) [Other Income, Net](index=40&type=section&id=Other%20Income,%20Net) Other income, net, primarily comprises sublease income and gains or losses from lease terminations - Other income, net, primarily consists of sublease income and gains or losses from lease terminations[228](index=228&type=chunk) [Foreign Exchange Gains (Losses), Net](index=40&type=section&id=Foreign%20Exchange%20Gains%20(Losses),%20Net) Foreign exchange gains (losses), net, primarily arise from currency translation adjustments on transactions denominated in foreign currencies - Foreign exchange gains (losses), net, primarily result from currency translation adjustments on transactions denominated in foreign currencies[229](index=229&type=chunk) [Interest Income](index=40&type=section&id=Interest%20Income) Interest income primarily relates to interest on cash, cash equivalents, and available-for-sale debt securities, net of amortization or accretion of premiums or discounts on debt security purchases and sales - Interest income primarily derives from investments in cash, cash equivalents, and available-for-sale debt securities[230](index=230&type=chunk) [Interest Expense, Net](index=40&type=section&id=Interest%20Expense,%20Net) Net interest expense primarily includes interest expense from the amortization of liabilities related to future royalties and milestones under collaboration agreements with Blackstone and BioNTech, using the effective interest method. The company quarterly assesses the present value of future payments and adjusts interest expense based on changes in estimates - Net interest expense primarily arises from the amortization of liabilities related to future royalties and milestones under the Blackstone and BioNTech collaboration agreements[231](index=231&type=chunk) - The company quarterly assesses the present value of future payments and makes cumulative catch-up adjustments to interest expense based on changes in estimates[231](index=231&type=chunk) [Income Tax Expenses](index=40&type=section&id=Income%20Tax%20Expenses) The company is subject to corporate income taxes in the UK, U.S., Germany, and Switzerland. Due to the nature of its business, the company has incurred losses since inception. Income tax expense primarily reflects amounts payable or receivable in the UK and U.S - The company is subject to corporate income taxes in the UK, U.S., Germany, and Switzerland, and has incurred losses since its inception[232](index=232&type=chunk) - As of December 31, 2024, the company had **$545.6 million** in cumulative tax loss carryforwards in the UK and has recognized a full valuation allowance against its UK deferred tax assets[233](index=233&type=chunk) - The company may benefit from the UK "patent box" regime, which allows profits generated from patented products or patents to be taxed at an effective rate of **10%**[234](index=234&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the three and six months ended June 30, 2025, and 2024, detailing changes in revenue, expenses, and net loss [Comparison of Three Months Ended June 30, 2025 and 2024](index=41&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) In the second quarter of 2025, the company recognized its first product net revenue of **$20.9 million**, with operating loss slightly increasing to **$61.2 million**. R&D expenses decreased by **25%** due to IT infrastructure and personnel reallocation. Selling, general and administrative expenses grew by **38%** due to increased headcount and commercial operations costs. Net interest expense significantly decreased due to valuation adjustments Comparison of Operating Results for the Three Months Ended June 30, 2025 and 2024 (Thousands of USD) | Metric | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | **$20,923** | **$—** | **$20,923** | **100%** | | Total net revenue | **$20,923** | **$—** | **$20,923** | **100%** | | Cost of sales | **$(24,445)** | **$—** | **$(24,445)** | **100%** | | Research and development expenses, net | **$(27,430)** | **$(36,612)** | **$9,182** | **(25)%** | | Selling, general and administrative expenses | **$(30,265)** | **$(21,903)** | **$(8,362)** | **38%** | | Operating loss | **$(61,217)** | **$(58,929)** | **$(2,288)** | **4%** | | Interest income | **$5,234** | **$9,656** | **$(4,422)** | **(46)%** | | Interest expense, net | **$(6,829)** | **$10,174** | **$17,003** | **(167)%** | | Net loss | **$(47,917)** | **$(58,272)** | **$10,355** | **(18)%** | - Product net revenue for the second quarter of 2025 was **$20.9 million**, compared to zero in the same period of 2024, primarily from AUCATZYL sales in the U.S[236](index=236&type=chunk) - Net research and development expenses decreased by **$9.2 million (25%)**, primarily due to reallocation of IT infrastructure and personnel to commercial manufacturing activities and lower clinical trial costs, partially offset by reduced UK R&D tax credits[239](index=239&type=chunk) - Selling, general and administrative expenses increased by **$8.4 million (38%)**, primarily due to increased headcount, higher IT infrastructure and facility costs, and increased commercialization readiness costs[240](index=240&type=chunk) - Net interest expense decreased by **$17.0 million**, primarily due to negative cumulative catch-up adjustments resulting from changes in valuation assumptions for the Blackstone collaboration agreement and BioNTech license and option agreement[243](index=243&type=chunk) [Comparison of Six Months Ended June 30, 2025 and 2024](index=43&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) In the first half of 2025, total net revenue significantly increased by **196%** to **$29.9 million**, primarily driven by AUCATZYL product sales. Operating loss increased by **29%** to **$126.5 million**. Net R&D expenses decreased by **19%**, while selling, general and administrative expenses grew by **49%**. Net interest expense significantly decreased due to valuation adjustments Comparison of Operating Results for the Six Months Ended June 30, 2025 and 2024 (Thousands of USD) | Metric | 2025 | 2024 | Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | **$29,905** | **$—** | **$29,905** | **100%** | | License revenue | **$—** | **$10,091** | **$(10,091)** | **(100)%** | | Total net revenue | **$29,905** | **$10,091** | **$19,814** | **196%** | | Cost of sales | **$(42,396)** | **$—** | **$(42,396)** | **100%** | | Research and development expenses, net | **$(54,164)** | **$(67,283)** | **$13,119** | **(19)%** | | Selling, general and administrative expenses | **$(59,799)** | **$(40,080)** | **$(19,719)** | **49%** | | Operating loss | **$(126,457)** | **$(97,686)** | **$(28,771)** | **29%** | | Interest income | **$11,371** | **$16,589** | **$(5,218)** | **(31)%** | | Interest expense, net | **$(3,314)** | **$(29,443)** | **$26,129** | **(89)%** | | Net loss | **$(118,081)** | **$(110,962)** | **$(7,119)** | **6%** | - Product net revenue for the first half of 2025 was **$29.9 million**, compared to zero in the same period of 2024, primarily from AUCATZYL sales in the U.S[246](index=246&type=chunk) - Net research and development expenses decreased by **$13.1 million (19%)**, primarily due to reallocation of IT infrastructure and personnel to commercial manufacturing activities, partially offset by reduced UK R&D tax credits and increased clinical trial costs[250](index=250&type=chunk) - Selling, general and administrative expenses increased by **$19.7 million (49%)**, primarily due to increased headcount, higher IT infrastructure and facility costs, and increased commercialization readiness costs[251](index=251&type=chunk) - Net interest expense decreased by **$26.1 million (89%)**, primarily due to cumulative catch-up adjustments resulting from changes in valuation assumptions for the Blackstone collaboration agreement and BioNTech license and option agreement[254](index=254&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$123.8 million** in cash and cash equivalents and **$330.5 million** in marketable securities, expected to fund operations for at least the next 12 months. The company has incurred continuous losses since inception and will require substantial additional capital to support AUCATZYL commercialization and product candidate development - As of June 30, 2025, the company held **$123.8 million** in cash and cash equivalents and **$330.5 million** in marketable securities[259](index=259&type=chunk) - The company expects its existing cash and marketable securities to be sufficient to fund operations for at least the next 12 months[266](index=266&type=chunk) - The company has incurred continuous losses since inception, with an accumulated deficit of **$1.2173 billion** as of June 30, 2025, and will require substantial additional capital in the future[256](index=256&type=chunk)[257](index=257&type=chunk) - Future capital requirements will be influenced by factors such as AUCATZYL commercialization, other product candidate development, regulatory approvals, manufacturing, sales, marketing, distribution costs, and intellectual property maintenance[265](index=265&type=chunk)[269](index=269&type=chunk) - The company plans to raise capital through equity offerings, R&D tax credits, licensing agreements, or strategic collaboration agreements[267](index=267&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=48&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section updates the company's critical accounting policies and significant judgments and estimates, particularly regarding the expected rebate and chargeback percentages for product revenue deductions. Due to AUCATZYL's recent launch and limited actual claims data, the company uses the expected value method for estimation, emphasizing the inherent uncertainty and judgment - The company uses the expected value method to estimate expected rebate and chargeback percentages for product revenue deductions, which considers the probability of rebates or chargebacks applying to sales[272](index=272&type=chunk) - Estimating rebate and chargeback percentages is judgmental due to the time lag between sales and the determination of actual amounts[274](index=274&type=chunk) - As of June 30, 2025, total product revenue deductions for the six months amounted to **$2.1 million**, with **$1.6 million** recorded in accrued expenses and other current liabilities[276](index=276&type=chunk) - A **10%** increase or decrease in the estimated rebate and chargeback percentages payable to government or governmental agencies would result in a **$0.6 million** decrease or increase in product net revenue[277](index=277&type=chunk) [Contractual Obligations](index=48&type=section&id=Contractual%20Obligations) As of June 30, 2025, the company's contractual obligations and commitments have not materially changed from those disclosed in the annual report - As of June 30, 2025, the company's contractual obligations and commitments have not materially changed from those disclosed in the annual report[278](index=278&type=chunk) [Recent Accounting Pronouncements Not Yet Adopted](index=48&type=section&id=Recent%20Accounting%20Pronouncements%20Not%20Yet%20Adopted) This section refers to recently issued accounting pronouncements not yet adopted, whose potential impact on the company's financial condition and operating results is disclosed in Note 2 to the financial statements - Descriptions of recently issued accounting pronouncements not yet adopted are disclosed in Note 2 to the financial statements[279](index=279&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses the company's market risks, primarily interest rate fluctuation risk and foreign currency exchange rate risk. The company manages interest rate risk by investing surplus cash in interest-bearing savings, money market funds, and marketable securities, and minimizes foreign exchange risk by maintaining cash levels in various currencies [Interest Rate Risk](index=49&type=section&id=Interest%20Rate%20Risk) The company's interest rate sensitivity is primarily influenced by changes in U.S. and UK bank rates, affecting its cash, cash equivalents, marketable securities, and certain liabilities - The company's interest rate sensitivity is primarily influenced by changes in U.S. and UK bank rates[281](index=281&type=chunk) - As of June 30, 2025, the company held **$123.8 million** in cash and cash equivalents and **$330.5 million** in marketable securities[281](index=281&type=chunk) - A hypothetical one percentage point sustained change in interest rates over a reporting period would result in a **$1.2 million** increase in interest income for the second quarter and first half of 2025[281](index=281&type=chunk) - The Blackstone collaboration agreement liability has a fixed effective interest rate and is not subject to interest rate fluctuations; the BioNTech liability's effective interest rate may fluctuate due to the discretionary nature of certain contractual payments[282](index=282&type=chunk) [Foreign Currency Exchange Risk](index=49&type=section&id=Foreign%20Currency%20Exchange%20Risk) The company's foreign exchange risk primarily relates to fluctuations in foreign currency-denominated cash, cash equivalents, and liabilities held by its UK operating subsidiary - The company's foreign exchange risk primarily relates to fluctuations in the value of foreign currency-denominated cash, cash equivalents, and liabilities related to future royalties and milestones held by its principal UK operating subsidiary[283](index=283&type=chunk) - As of June 30, 2025, most of the company's cash and cash equivalents were held by its UK subsidiary, with approximately **54%** denominated in GBP and approximately **44%** in USD[284](index=284&type=chunk) - In the second quarter and first half of 2025, the company recorded foreign exchange gains of **$1.5 million** and **$2.7 million**, respectively[285](index=285&type=chunk) - The company currently does not engage in currency hedging activities but may consider using forward foreign exchange contracts and swap agreements to manage risk in the future[287](index=287&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) This section describes the company's evaluation of disclosure controls and procedures and changes in internal control over financial reporting. As of June 30, 2025, the company's management, including the Chief Executive Officer and Chief Financial Officer, assessed and concluded that its disclosure controls and procedures were effective. There were no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=50&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The company maintains disclosure controls and procedures to ensure timely and accurate recording, processing, summarization, and reporting of information required under the Exchange Act - The company maintains disclosure controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is timely recorded, processed, summarized, and reported[288](index=288&type=chunk) - As of June 30, 2025, the company's Chief Executive Officer and Chief Financial Officer assessed and concluded that its disclosure controls and procedures were effective[289](index=289&type=chunk) [Changes in Internal Control over Financial Reporting](index=50&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms that there were no material changes in the company's internal control over financial reporting during the quarter ended June 30, 2025 - There were no material changes in the company's internal control over financial reporting during the quarter ended June 30, 2025[290](index=290&type=chunk) [Part II – Other Information](index=50&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety disclosures, other information, a

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39071 ADC Therapeutics SA (Exact name of registrant as specified in its charter) Switzerland Not Applicable (S ...

[Executive Summary and Corporate Update](index=1&type=section&id=Executive%20Summary%20and%20Corporate%20Update) Theravance Biopharma reported strong Q2 2025 performance, driven by commercial growth, strategic asset monetization, and clinical development progress [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Theravance Biopharma reported strong Q2 2025 performance, fueled by YUPELRI's commercial growth, a China approval milestone, and strategic TRELEGY royalty monetization, with ampreloxetine Phase 3 enrollment progressing - Strong execution across the business, driven by commercial growth, disciplined operations, and continued progress on ampreloxetine[3](index=3&type=chunk) - YUPELRI posted another strong quarter in the U.S., and its recent approval in China triggered a **$7.5 million** milestone payment[3](index=3&type=chunk) - Completion of the strategic monetization of TRELEGY royalty interest brought in **$225 million**, meaningfully strengthening the business[3](index=3&type=chunk) - Enrollment in the pivotal Phase 3 CYPRESS study for ampreloxetine is on track for completion by late summer, with top-line data anticipated approximately six months later[3](index=3&type=chunk) [Second Quarter Operational Highlights](index=1&type=section&id=Second%20Quarter%20Operational%20Highlights) Q2 operational highlights include strong YUPELRI sales, ampreloxetine Phase 3 progress, and the strategic TRELEGY royalty sale [YUPELRI (revefenacin) Performance](index=1&type=section&id=YUPELRI%20%28revefenacin%29%20Performance) YUPELRI achieved **$66.3 million** in U.S. net sales in Q2 2025, a **22%** year-over-year increase, supported by customer demand growth and a **$7.5 million** China approval milestone YUPELRI Performance Metrics | Metric | Q2 2025 Value | Year-over-Year Change | | :-------------------------------- | :------------ | :-------------------- | | YUPELRI U.S. Net Sales (Viatris) | $66.3 million | +22% | | Customer Demand Growth | 4% | | | Hospital Channel Doses Growth | | +31% | | China Approval Milestone Payment | $7.5 million | N/A | - Net sales benefited from continued improvement to net pricing and a one-time favorable adjustment; excluding this, year-over-year net sales growth would have been in the mid-teens[6](index=6&type=chunk) [Ampreloxetine Development Update](index=1&type=section&id=Ampreloxetine%20Development%20Update) The pivotal Phase 3 CYPRESS study for ampreloxetine is on track for enrollment completion by late summer, with pre-launch activities advancing for potential approval - Pivotal Phase 3 CYPRESS study enrollment nearing completion with final patient expected to be enrolled by late summer; top-line data anticipated approximately six months later[9](index=9&type=chunk) - Advancing pre-launch activities across medical affairs and commercial functions in preparation for the potential approval of ampreloxetine[9](index=9&type=chunk) [TRELEGY Royalty Interest Sale](index=1&type=section&id=TRELEGY%20Royalty%20Interest%20Sale) Theravance Biopharma completed the sale of its TRELEGY ELLIPTA royalty interest to GSK for a **$225 million** cash payment, resulting in a **$75.1 million** net gain - Completed sale of TRELEGY ELLIPTA royalty interest to GSK for **$225 million**[5](index=5&type=chunk) - One-time cash payment of **$225 million** received in late Q2 2025[9](index=9&type=chunk) - Net gain on realized contingent milestone and royalty assets was **$75.1 million**, based on sales proceeds of **$225.0 million** less carrying value and transaction costs[11](index=11&type=chunk) - This transaction is the first outcome of the Strategic Review Committee's ongoing efforts to assess strategic alternatives and enhance shareholder value[9](index=9&type=chunk) [Second Quarter Financial Results](index=2&type=section&id=Second%20Quarter%20Financial%20Results) Q2 financial results highlight revenue growth, controlled expenses, a net income turnaround, and a strengthened cash position [Revenue Breakdown](index=2&type=section&id=Revenue%20Breakdown) Total revenue for Q2 2025 surged to **$26.2 million**, an **83.7%** increase year-over-year, driven by Viatris collaboration revenue and a **$7.5 million** licensing payment Revenue by Type | Revenue Type | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change YoY | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | Viatris collaboration agreement | $18,695 | $14,256 | +31% | | Licensing revenue | $7,500 | $0 | N/A | | **Total Revenue** | **$26,195** | **$14,256** | **+83.7%** | - Viatris collaboration revenue represents the Company's **35% share of net sales of YUPELRI**, as well as its proportionate amount of total shared commercial costs[8](index=8&type=chunk) - Theravance Biopharma's implied **35% share of net sales of YUPELRI** for Q2 2025 was **$23.2 million**, a **22% increase** compared to the same period in 2024[8](index=8&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Q2 2025 R&D and SG&A expenses saw slight increases to **$10.5 million** and **$18.4 million** respectively, while share-based compensation decreased to **$4.5 million** Operating Expenses by Type | Expense Type | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change YoY | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | Research and Development | $10,490 | $9,954 | +5.4% | | Selling, General and Administrative | $18,430 | $17,056 | +8.1% | | Share-Based Compensation | $4,543 | $5,376 | -15.4% | [Net Income (Loss) and Non-GAAP Net Loss](index=3&type=section&id=Net%20Income%20%28Loss%29%20and%20Non-GAAP%20Net%20Loss) The company achieved a net income of **$54.8 million** in Q2 2025, a significant turnaround from a prior-year loss, primarily due to a **$75.1 million** gain from the TRELEGY royalty sale Net Income (Loss) and Non-GAAP Net Loss | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | | Net Income (Loss) | $54,835 | $(16,529) | | Non-GAAP Net Loss from Operations | $(4,225) | $(6,250) | - The increase in net income was driven by the **$75.1 million net gain** on contingent milestone and royalty assets arising from the sale of the remaining interest in TRELEGY royalties[11](index=11&type=chunk) - Income tax expense for Q2 2025 was **$18.4 million**, compared to **$1.3 million** in Q2 2024, primarily due to the net gain on royalty assets[11](index=11&type=chunk) [Cash Position](index=3&type=section&id=Cash%20Position) Theravance Biopharma's cash, cash equivalents, and marketable securities significantly increased to **$338.8 million** by June 30, 2025, largely due to the TRELEGY royalty sale proceeds Cash, Cash Equivalents and Marketable Securities | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------- | :-------------------------- | | Cash, cash equivalents and short-term marketable securities | $338,804 | $88,350 | - Strong balance sheet with **$339 million in cash** and no debt[5](index=5&type=chunk) [2025 Financial Guidance](index=4&type=section&id=2025%20Financial%20Guidance) Theravance Biopharma maintains its full-year 2025 expense guidance, with non-GAAP net income and cash burn projected similar to 2024 [Full Year 2025 Outlook](index=4&type=section&id=Full%20Year%202025%20Outlook) The company reaffirms its 2025 guidance for R&D expenses between **$32-38 million** and SG&A between **$50-60 million**, with share-based compensation at **$18-20 million** Full Year 2025 Guidance | Metric | Full Year 2025 Guidance (in millions) | | :------------------------------------------ | :---------------------- | | R&D Expenses (excluding share-based comp.) | $32 to $38 | | SG&A Expenses (excluding share-based comp.) | $50 to $60 | | Share-Based Compensation Expenses | $18 to $20 | - Non-GAAP Net Income (Loss) from Operations and Cash Burn in 2025 are expected to be similar to levels incurred in 2024, excluding one-time, non-recurring revenue and income items[16](index=16&type=chunk) [Product and Clinical Program Details](index=4&type=section&id=Product%20and%20Clinical%20Program%20Details) This section details ampreloxetine as an investigational nOH therapy for MSA, outlining its Phase 3 study and the underlying disease [About Ampreloxetine](index=4&type=section&id=About%20Ampreloxetine) Ampreloxetine is an investigational, once-daily selective norepinephrine reuptake inhibitor for symptomatic nOH in MSA, with Orphan Drug Designation and potential for NDA filing - Ampreloxetine is an investigational, once-daily, selective norepinephrine reuptake inhibitor in development for symptomatic nOH in patients with MSA[15](index=15&type=chunk) - Unique benefits reported include increased norepinephrine levels, favorable blood pressure impact, clinically meaningful and durable symptom improvement, and no signal for worsening of supine hypertension[15](index=15&type=chunk) - Granted **Orphan Drug Designation** in the US for symptomatic nOH in MSA; plans to file an NDA for full approval if Phase 3 CYPRESS study results are supportive[15](index=15&type=chunk) [About CYPRESS (Study 0197), a Phase 3 Study](index=5&type=section&id=About%20CYPRESS%20%28Study%200197%29%2C%20a%20Phase%203%20Study) Study 0197 (CYPRESS) is a registrational Phase 3 randomized withdrawal study evaluating ampreloxetine's efficacy and durability in MSA patients with symptomatic nOH - Study 0197 (CYPRESS) is a registrational Phase 3, multi-center, randomized withdrawal study currently enrolling[17](index=17&type=chunk) - Evaluates the efficacy and durability of ampreloxetine in participants with MSA and symptomatic nOH after **20 weeks of treatment**[17](index=17&type=chunk) - The primary endpoint of the study is change in the Orthostatic Hypotension Symptom Assessment (OHSA) composite score[17](index=17&type=chunk) [About Multiple System Atrophy (MSA) and Symptomatic Neurogenic Orthostatic Hypotension (nOH)](index=5&type=section&id=About%20Multiple%20System%20Atrophy%20%28MSA%29%20and%20Symptomatic%20Neurogenic%20Orthostatic%20Hypotension%20%28nOH%29) MSA is a progressive brain disorder, frequently associated with nOH, a debilitating condition affecting **70-90%** of the approximately **50,000** US MSA patients - MSA is a progressive brain disorder affecting movement, balance, and autonomic nervous system function[18](index=18&type=chunk) - Neurogenic orthostatic hypotension (nOH), a sudden drop in blood pressure upon standing, affects **70-90%** of the approximately **50,000 MSA patients** in the US[18](index=18&type=chunk) - nOH is a debilitating condition resulting in symptoms such as dizziness, lightheadedness, fainting, fatigue, blurry vision, weakness, trouble concentrating, and head and neck pain[19](index=19&type=chunk) [About Theravance Biopharma](index=5&type=section&id=About%20Theravance%20Biopharma) Theravance Biopharma focuses on impactful medicines, leveraging expertise for FDA-approved YUPELRI and advancing ampreloxetine - Theravance Biopharma, Inc.'s focus is to deliver Medicines that Make a Difference in people's lives[20](index=20&type=chunk) - Leverages decades of expertise, leading to the development of FDA-approved **YUPELRI (revefenacin)** for COPD[20](index=20&type=chunk) - Ampreloxetine, its late-stage investigational therapy for symptomatic nOH in MSA, has the potential to be a first-in-class therapy[20](index=20&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP financial measures adjust GAAP net income for non-cash and non-recurring items, offering insights into core operating results and cash - Non-GAAP profit (loss) consists of GAAP net income (loss) before taxes less share-based compensation, non-cash interest expense, non-cash impairment expense, and non-recurring revenue and income items[10](index=10&type=chunk) - Non-GAAP profitability targets and metrics provide meaningful information to assist investors by excluding items not indicative of core operating results and the Company's cash position[26](index=26&type=chunk) - Non-GAAP measures should be considered in addition to, not as a substitute for, or in isolation from, the Company's actual GAAP results[26](index=26&type=chunk) - A reconciliation of non-GAAP net loss to its corresponding GAAP measure is not available on a forward-looking basis without unreasonable effort due to the uncertainty and potential variability of future expenses[27](index=27&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents condensed consolidated balance sheets, statements of operations, and GAAP to non-GAAP net loss reconciliation [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$426.0 million** by June 30, 2025, driven by a significant rise in cash and equivalents, while liabilities and shareholders' equity also grew Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------- | :------------------------------- | | Cash and cash equivalents and short-term marketable securities | $338,804 | $88,350 | | Receivables from milestone and royalty assets | $0 | $50,000 | | Future contingent milestone and royalty assets | $0 | $144,200 | | Total assets | $426,035 | $354,161 | | Total current liabilities | $54,633 | $32,085 | | Shareholders' equity | $224,848 | $175,545 | - The significant increase in cash and total assets is largely due to the **$225 million proceeds** from the TRELEGY royalty sale, which also eliminated the 'Future contingent milestone and royalty assets' line item[30](index=30&type=chunk) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 saw total revenue of **$26.2 million** and a net income of **$54.8 million**, a substantial improvement from Q2 2024's net loss, primarily due to the TRELEGY royalty asset gain Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Total Revenue | $26,195 | $14,256 | | Total Costs and Expenses | $28,920 | $29,961 | | Loss from operations | $(2,725) | $(15,705) | | Net gain on realized contingent milestone and royalty assets | $75,137 | $0 | | Net income (loss) | $54,835 | $(16,529) | | Net income (loss) per share - basic | $1.09 | $(0.34) | | Net income (loss) per share - diluted | $1.08 | $(0.34) | | Non-GAAP net loss | $(4,225) | $(6,250) | - The significant net income in Q2 2025 was primarily driven by the **$75.1 million net gain** from the sale of TRELEGY royalty assets[33](index=33&type=chunk) [Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss](index=11&type=section&id=Reconciliation%20of%20GAAP%20Net%20Income%20%28Loss%29%20to%20Non-GAAP%20Net%20Loss) GAAP net income of **$54.8 million** for Q2 2025 was adjusted to a non-GAAP net loss of **$4.2 million**, primarily by excluding non-recurring revenue and the TRELEGY royalty asset gain Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss | Adjustment Item | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | GAAP net income (loss) | $54,835 | $(16,529) | | Licensing revenue (non-recurring) | $(7,500) | $0 | | Net gain on realized contingent milestone and royalty assets (non-recurring) | $(75,137) | $0 | | Non-cash impairment expense of long-lived assets | $0 | $2,951 | | Share-based compensation expense | $4,543 | $5,376 | | Non-cash interest expense | $663 | $644 | | Income tax expense | $18,371 | $1,308 | | **Non-GAAP net loss** | **$(4,225)** | **$(6,250)** | [Additional Information](index=4&type=section&id=Additional%20Information) This section provides details on the conference call, forward-looking statements, and investor relations contact information [Conference Call and Live Webcast](index=4&type=section&id=Conference%20Call%20and%20Live%20Webcast) Theravance Biopharma held a conference call and webcast on **August 12, 2025**, to discuss Q2 results, with a replay available on the company's website until **September 11, 2025** - Conference call and live webcast held on **August 12, 2025**, at **5:00 pm ET / 2:00 pm PT / 9:00 pm GMT**[13](index=13&type=chunk) - A replay of the webcast will be available on Theravance Biopharma's website for **30 days** through **September 11, 2025**[14](index=14&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections - The press release contains "forward-looking" statements regarding goals, plans, objectives, expectations, and future events, covered by safe harbor provisions[24](index=24&type=chunk) - Statements are subject to risks, uncertainties, changes in circumstances, assumptions, and other factors that may cause actual results to be materially different[24](index=24&type=chunk) - Important factors include risks related to cash requirements, milestone achievement, delays in clinical studies, regulatory decisions, dependence on third parties, and intellectual property protection[24](index=24&type=chunk) [Contact Information](index=7&type=section&id=Contact%20Information) Investor Relations contact details are provided for further inquiries - Investor Relations Contact: **investor.relations@theravance.com**, **650-808-4045**[28](index=28&type=chunk)

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 June 30, 2025 OR 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 number 001-39813 TRISALUS LIFE SCIENCES, INC. (Exact name of registrant as specified in its charter) (State ...

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 June 30, 2025 Commission file number 001-39813 TRISALUS LIFE SCIENCES, INC. (Exact name of registrant as specified in its charter) OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ________________ Kyverna Therapeutics, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 83-1365411 (State or other jurisdic ...

PART I FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The company's financial statements reflect a significant transformation driven by acquisitions, resulting in substantial revenue and asset growth [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet expanded dramatically due to acquisitions, with total assets increasing nearly 5.5-fold, funded by significant debt and equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$858,540** | **$156,554** | **+448.4%** | | Cash and cash equivalents | $10,653 | $5,192 | +105.2% | | Total property and equipment, net | $738,313 | $134,620 | +448.4% | | **Total Liabilities** | **$599,777** | **$103,786** | **+477.9%** | | Credit facility | $387,000 | $28,000 | +1282.1% | | **Mezzanine Equity** | **$164,590** | **$0** | **N/A** | | **Total Stockholders' Equity** | **$94,173** | **$52,768** | **+78.5%** | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company generated significant revenue for the first time, shifting from a net loss to a net income from continuing operations in Q2 2025 Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$68,100** | **$0** | **$80,915** | **$0** | | Income (loss) from operations | $18,936 | $(8,569) | $20,687 | $(16,613) | | Unrealized gain on derivatives | $23,206 | $0 | $23,090 | $0 | | **Net income (loss) from continuing operations** | **$35,683** | **$(8,514)** | **$33,066** | **$(16,506)** | | Net income (loss) attributable to common stockholders | $48,503 | $(8,514) | $(44,971) | $(17,551) | | **Diluted EPS** | **$0.18** | **$(3.49)** | **$(1.27)** | **$(1.60)** | [Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned positive while investing activities were dominated by acquisitions, funded by substantial financing inflows Six Months Ended June 30, Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9,722 | $(8,448) | | Net cash used in investing activities | $(522,289) | $(11,841) | | Net cash provided by financing activities | $518,028 | $9,478 | | **Net increase (decrease) in cash** | **$5,461** | **$(10,811)** | - The primary use of cash in investing activities was **$467.5 million** paid for the Bayswater asset purchase[32](index=32&type=chunk) - Financing activities were driven by **$359.0 million** in borrowings on the Credit Facility, **$148.3 million** from Series F Preferred Stock issuance, and **$43.8 million** from Common Stock issuance[32](index=32&type=chunk) [Note 1 – Organization, Description of Business, and Basis of Presentation](index=15&type=section&id=Note%201%20%E2%80%93%20Organization%2C%20Description%20of%20Business%2C%20and%20Basis%20of%20Presentation) The company is an independent oil and gas producer focused on the DJ Basin, having recently exited the cryptocurrency mining business - The company's strategic focus is on the acquisition and development of crude oil, natural gas, and NGLs in the DJ Basin[35](index=35&type=chunk) - The company exited the cryptocurrency mining business in January 2024; these activities are now classified as discontinued operations[39](index=39&type=chunk) - As of June 30, 2025, the company had a working capital deficit of **$64.2 million** and an accumulated deficit of **$86.7 million**, but management does not believe there is substantial doubt about its ability to continue as a going concern due to available liquidity[43](index=43&type=chunk)[48](index=48&type=chunk) [Note 3 – Acquisitions](index=20&type=section&id=Note%203%20%E2%80%93%20Acquisitions) The company completed two major asset acquisitions, Bayswater and NRO, for a combined consideration of over $545 million Bayswater Acquisition Preliminary Purchase Price Allocation (in thousands) | Component | Amount | | :--- | :--- | | Cash consideration | $466,402 | | Common stock issued to sellers | $16,000 | | Direct transaction costs | $7,094 | | **Total consideration** | **$489,496** | | *Allocation to Oil and natural gas properties* | *$526,163* | - The Bayswater Acquisition closed on March 26, 2025, and was funded with cash on hand, proceeds from stock issuances, and borrowings under the Credit Facility[67](index=67&type=chunk) - The NRO Acquisition closed on October 1, 2024, with a final purchase price of **$55.5 million**[74](index=74&type=chunk) [Note 5 – Derivative Instruments](index=24&type=section&id=Note%205%20%E2%80%93%20Derivative%20Instruments) The company utilizes commodity swap contracts to hedge production, recognizing significant realized and unrealized gains in the first half of 2025 - As of June 30, 2025, the company had outstanding commodity swap contracts for crude oil, natural gas, and NGLs extending through 2028[83](index=83&type=chunk) Gains on Derivatives for Six Months Ended June 30, 2025 (in thousands) | Type | Amount | | :--- | :--- | | Realized gain on derivatives (cash settlements) | $4,162 | | Unrealized gain on derivatives (non-cash) | $23,090 | | **Total gain on derivatives, net** | **$27,252** | [Note 10 – Debt](index=34&type=section&id=Note%2010%20%E2%80%93%20Debt) The company's debt structure was significantly altered, with a new $1.0 billion credit facility and the full conversion of its senior convertible note - The Credit Facility was amended and restated with a maximum commitment of **$1.0 billion** and a borrowing base of **$475.0 million**, maturing in March 2029[118](index=118&type=chunk) - As of June 30, 2025, the company had **$387.0 million** of borrowings outstanding under the Credit Facility, with **$88.0 million** of availability[119](index=119&type=chunk) - The Senior Convertible Note was fully converted into **2.1 million shares** of common stock during the first quarter of 2025[132](index=132&type=chunk) [Note 13 – Mezzanine Equity](index=40&type=section&id=Note%2013%20%E2%80%93%20Mezzanine%20Equity) The company issued $148.3 million of Series F Convertible Preferred Stock, classified as mezzanine equity, to fund the Bayswater Acquisition - Issued 148,250 shares of Series F Preferred Stock for **$148.3 million** in March 2025 to partially fund the Bayswater Acquisition[145](index=145&type=chunk) - The Series F Preferred Stock is classified as mezzanine equity and carries a **12% cumulative dividend**, with the first dividend paid via common stock issuance[146](index=146&type=chunk) [Note 19 – Subsequent Events](index=55&type=section&id=Note%2019%20%E2%80%93%20Subsequent%20Events) Post-quarter, the company continued its acquisition strategy and saw a partial conversion of its Series F Preferred Stock into common stock - On July 2, 2025, the company agreed to acquire assets from Edge Energy II LLC for **$12.5 million**[218](index=218&type=chunk) - On August 8, 2025, the company acquired approximately 5,500 net acres from Exok for **$1.3 million**[219](index=219&type=chunk) - In July 2025, 13,000 shares of Series F Preferred Stock were converted into **4,612,000 shares** of Common Stock[221](index=221&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transformation into a DJ Basin producer, recent developments, and significantly improved operational results [Recent Developments](index=56&type=section&id=Recent%20Developments) The company launched a new well development program, established an ATM offering, and entered into another asset acquisition agreement - Launched an 11-well development program at the Rusch pad in April 2025, with initial production expected in Q3 2025[228](index=228&type=chunk) - Entered into an agreement on July 2, 2025, to acquire assets from Edge Energy for **$12.5 million**[231](index=231&type=chunk) - Established a **$75.0 million** at-the-market (ATM) common stock offering program in June 2025[233](index=233&type=chunk) [Results of Operations](index=59&type=section&id=Results%20of%20Operations) The company's new oil and gas business generated $68.1 million in revenue in Q2 2025 on production of 21,052 Boe/d Production and Revenue Summary | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Total Revenues (in thousands) | $68,100 | $80,915 | | Total Production (MBoe) | 1,916 | 2,211 | | Average Sales Volumes (Boe/d) | 21,052 | 12,213 | | Average Price (per MBoe) | $35.55 | $36.60 | Operating Expenses per Boe | Expense Category | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Lease operating expenses | $5.92 | $6.04 | | Gathering, transportation, and processing | $1.17 | $1.07 | | Ad valorem and production taxes | $3.35 | $3.34 | | Depreciation, depletion, and amortization | $6.37 | $6.48 | | **Total operating expenses per Boe** | **$25.66** | **$27.25** | [Non-GAAP Financial Measures](index=64&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for the first six months of 2025 was $43.0 million, a significant turnaround driven by new oil and gas operations Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net income (loss) from continuing operations | $35,683 | $33,066 | | Adjustments: | | | | Depreciation, depletion, and amortization | $12,199 | $14,315 | | Non-cash stock-based compensation | $2,419 | $3,786 | | Interest expense (income), net | $9,030 | $10,336 | | Non-cash loss on adjustment to fair value | $2,373 | $4,537 | | Unrealized gain on derivatives | $(23,206) | $(23,090) | | **Adjusted EBITDA** | **$38,564** | **$43,021** | [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by its credit facility and access to capital markets, which management deems sufficient for the next year - As of June 30, 2025, the company had a working capital deficit of **$64.2 million** and cash of **$10.7 million**[271](index=271&type=chunk) - Key sources of liquidity include the amended credit facility (with **$88.0 million** available as of June 30, 2025), a new **$75.0 million** ATM offering, and an effective S-3 registration statement[265](index=265&type=chunk)[266](index=266&type=chunk)[278](index=278&type=chunk) - Management expects cash balance, revenues, and available liquidity to be sufficient to meet obligations over the next 12 months[297](index=297&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required as the company is a smaller reporting company - Disclosure is not required[301](index=301&type=chunk) [Item 4. Controls and Procedures](index=72&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[303](index=303&type=chunk) - No changes in internal control over financial reporting occurred during the six months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[306](index=306&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The Company is not involved in any material legal proceedings[307](index=307&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - There have been no material changes in the risk factors from those disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[308](index=308&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company had no unregistered sales of equity securities during the quarter that were not previously reported - There were no unregistered sales of the Company's equity securities during the quarter that were not otherwise disclosed in a Current Report on Form 8–K[309](index=309&type=chunk) [Item 6. Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 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: 001-41276 SKYX PLATFORMS CORP. (Exact name of registrant as specified in its charter) Florida 46-3645414 (State or other jurisdiction of incorp ...