PART I – FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Anavex Life Sciences Corp.'s unaudited condensed consolidated interim financial statements for the period ended June 30, 2025, including balance sheets, statements of operations and comprehensive loss, cash flows, and changes in stockholders' equity, along with detailed notes explaining business operations, accounting policies, accrued liabilities, other income, equity offerings, commitments, contingencies, and subsequent events [Condensed Consolidated Interim Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Balance%20Sheets) **Condensed Consolidated Interim Balance Sheet Highlights (in thousands):** | Metric | June 30, 2025 | September 30, 2024 | | :-------------------------------- | :------------ | :----------------- | | Cash and cash equivalents | $101,164 | $132,187 | | Total Assets | $102,432 | $135,567 | | Total Liabilities | $11,474 | $15,304 | | Total Stockholders' Equity | $90,958 | $120,263 | [Condensed Consolidated Interim Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) **Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (in thousands, except per share amounts):** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total operating expenses | $14,459 | $14,603 | $40,564 | $38,606 | | Operating loss | $(14,459) | $(14,603) | $(40,564) | $(38,606) | | Total other income, net | $1,216 | $2,389 | $4,014 | $7,224 | | Net loss and comprehensive loss | $(13,243) | $(12,214) | $(36,550) | $(31,382) | | Net Loss per share (Basic and diluted) | $(0.16) | $(0.14) | $(0.43) | $(0.38) | | Weighted average shares outstanding | 85,380,587 | 84,535,328 | 85,085,795 | 83,022,330 | [Condensed Consolidated Interim Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Interim Statements of Cash Flows (in thousands):** | Metric | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(30,440) | $(24,154) | | Net cash (used in) provided by financing activities | $(583) | $11,886 | | Decrease in cash and cash equivalents | $(31,023) | $(12,268) | | Cash and cash equivalents, end of period | $101,164 | $138,756 | [Condensed Consolidated Interim Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) **Changes in Stockholders' Equity (in thousands, except share amounts):** | Metric | June 30, 2025 | October 1, 2024 | | :------------------------------------ | :------------ | :-------------- | | Common Stock Shares | 85,411,692 | 84,795,517 | | Additional Paid-in Capital | $463,494 | $456,249 | | Accumulated Deficit | $(372,621) | $(336,071) | | Total Stockholders' Equity | $90,958 | $120,263 | - During the nine months ended June 30, 2025, the company issued **360,021 shares** from stock option exercises and **550,000 shares** from cashless exercises, while withholding **293,846 shares** for taxes and cashless exercises. Share-based compensation recognized was **$7,828 thousand**[20](index=20&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 1 Business Description](index=10&type=section&id=Note%201%20Business%20Description) - Anavex Life Sciences Corp. is a clinical-stage biopharmaceutical company focused on developing precision medicine therapeutics for central nervous system (CNS) diseases with high unmet needs, including Alzheimer's, Parkinson's, schizophrenia, neurodevelopmental, neurodegenerative, and rare diseases like Rett syndrome[21](index=21&type=chunk)[22](index=22&type=chunk) [Note 2 Basis of Presentation](index=10&type=section&id=Note%202%20Basis%20of%20Presentation) - The unaudited condensed consolidated interim financial statements are prepared in accordance with SEC rules and U.S. GAAP for interim reporting, with certain disclosures condensed or omitted. Management believes current working capital is sufficient for over 12 months, but future financing may be needed for costly drug development[23](index=23&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The Company has not generated any revenue from operations to date and expects negative cash flows for the foreseeable future[27](index=27&type=chunk) - As of June 30, 2025, **15,463,566** potentially dilutive common shares related to outstanding options and warrants were excluded from diluted loss per share calculation due to their anti-dilutive effect[35](index=35&type=chunk) [Note 3 Accrued Liabilities](index=12&type=section&id=Note%203%20Accrued%20Liabilities) **Principal Components of Accrued Liabilities (in thousands):** | Component | June 30, 2025 | September 30, 2024 | | :----------------------------- | :------------ | :----------------- | | Accrued investigator payments | $149 | $860 | | Accrued compensation and benefits | $1,188 | $1,527 | | Milestone-based contract accruals | $547 | $557 | | All other accrued liabilities | $2,045 | $1,891 | | **Total accrued liabilities** | **$3,929** | **$4,835** | [Note 4 Other Income](index=12&type=section&id=Note%204%20Other%20Income) - The Company recognized **$25 thousand** and **$37 thousand** in grant income for the three and nine months ended June 30, 2025, respectively, from a **$1.0 million** Michael J. Fox Foundation research grant for ANAVEX2-73 in Parkinson's disease. **$0.8 million** remains as deferred grant income[39](index=39&type=chunk)[40](index=40&type=chunk) **Research and Development Incentive Income (in millions):** | Period | 2025 (USD) | 2025 (AUD) | 2024 (USD) | 2024 (AUD) | | :----------------------------- | :--------- | :--------- | :--------- | :--------- | | Three months ended June 30, | $0.1 | $0.2 | $0.5 | $0.8 | | Nine months ended June 30, | $0.6 | $1.0 | $1.6 | $2.4 | - Research and development incentive income, primarily from the Australia R&D credit, decreased for both the three and nine months ended June 30, 2025, compared to 2024. The Company's tax incentive claims from 2020 to 2024 are open to potential review by the ATO[42](index=42&type=chunk)[46](index=46&type=chunk) [Note 5 Equity Offerings](index=13&type=section&id=Note%205%20Equity%20Offerings) - The Company has a **$150.0 million** purchase agreement with Lincoln Park Capital Fund, LLC (2023 Purchase Agreement) valid until February 3, 2026. As of June 30, 2025, **$110.8 million** remains unused, and a prospectus supplement is required to access these funds[49](index=49&type=chunk)[51](index=51&type=chunk) - No shares were issued under the 2023 Purchase Agreement during the nine months ended June 30, 2025, compared to **2,455,646 shares** for **$11.3 million** in the comparable 2024 period[51](index=51&type=chunk) - The 2020 Sales Agreement with Cantor Fitzgerald & Co. and SVB Leerink LLC was terminated on July 24, 2024, with no shares sold during the nine months ended June 30, 2024[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - During the nine months ended June 30, 2025, the Company issued **217,503 common shares** to its CEO and **38,651 shares** to a director upon net exercise of stock options, involving withholding shares for exercise price and tax obligations[55](index=55&type=chunk)[56](index=56&type=chunk) [Note 6 Commitments and Contingencies](index=15&type=section&id=Note%206%20Commitments%20and%20Contingencies) **Operating Lease Costs (in thousands):** | Period | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Operating lease costs | $33 | $31 | $99 | $92 | **401(k) Plan Contributions (in thousands):** | Period | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Contributions to 401(k) plan | $56 | $98 | $213 | $223 | - A shareholder class action lawsuit filed on March 13, 2024, alleging violations related to ANAVEX2-73 Rett syndrome clinical trials, was dismissed on June 18, 2025, but the plaintiff filed an appeal. Two similar derivative lawsuits have been stayed pending the outcome of the class action[61](index=61&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) **Stock Option Activity (Nine months ended June 30, 2025):** | Metric | Number of Options | Weighted Average Exercise Price ($) | Weighted Average Grant Date Fair Value ($) | | :-------------------------- | :---------------- | :-------------------------------- | :--------------------------------------- | | Outstanding, Sept 30, 2024 | 15,037,754 | 6.80 | 5.12 | | Granted | 1,488,500 | 8.58 | 6.22 | | Expired | (100,000) | 16.24 | — | | Exercised | (910,021) | 2.45 | 1.40 | | Forfeited | (62,667) | 4.79 | 3.59 | | Outstanding, June 30, 2025 | 15,453,566 | 7.17 | 5.41 | | Exercisable, June 30, 2025 | 10,541,530 | 6.07 | 4.73 | **Share-based Compensation Expense (in thousands):** | Expense Category | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | General and administrative | $1,717 | $997 | $3,124 | $2,901 | | Research and development | $2,607 | $1,491 | $4,704 | $4,524 | | **Total share-based compensation** | **$4,324** | **$2,488** | **$7,828** | **$7,425** | [Note 7 Subsequent Events](index=19&type=section&id=Note%207%20Subsequent%20Events) - On July 25, 2025, the Company entered into a Sales Agreement with TD Securities (USA) LLC to offer and sell up to **$150 million** in common stock through an 'at the market offering' or negotiated transactions, with commissions up to **3.0%** of gross proceeds[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - On July 4, 2025, the 'One Big Beautiful Bill Act' was signed into law, which is expected to allow for more taxpayer-favorable treatment of R&D expenditures for US income tax purposes, and the Company is evaluating its financial impact[83](index=83&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.](index=20&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) This section provides management's perspective on the Company's financial condition and operational results, highlighting its clinical-stage biopharmaceutical focus, pipeline development, and financial performance. It details R&D efforts, clinical trial progress for key drug candidates (ANAVEX2-73, ANAVEX3-71), intellectual property, and financial results including operating expenses, net loss, and liquidity, along with forward-looking statements and risk factors [Forward-Looking Statements](index=20&type=section&id=Forward-Looking%20Statements) - The report contains forward-looking statements regarding future clinical and regulatory milestones, financial position, business strategy, and operations, identified by words like 'believe,' 'may,' 'expect,' and 'will.'[84](index=84&type=chunk) - These statements are based on current expectations and projections but are subject to risks and uncertainties, including stock price volatility, ability to conduct trials, raise capital, generate revenue, and obtain regulatory approvals[85](index=85&type=chunk)[86](index=86&type=chunk) [Overview and Strategy](index=21&type=section&id=Overview%20and%20Strategy) - Anavex Life Sciences Corp. is a clinical-stage biopharmaceutical company developing differentiated therapeutics for CNS diseases using precision medicine and genomic data to identify biomarkers[89](index=89&type=chunk) - The Company focuses on innovative treatments for Alzheimer's, Parkinson's, schizophrenia, neurodevelopmental, neurodegenerative, and rare diseases like Rett syndrome, with a pipeline including ANAVEX2-73 and ANAVEX3-71[90](index=90&type=chunk) - Anavex's compounds target sigma-1 receptor (SIGMAR1), an intracellular chaperone protein crucial for cellular communication and restoring homeostasis, which is believed to be involved in the pathogenesis of many neurodegenerative and neurodevelopmental diseases[91](index=91&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) [Clinical Program Overview](index=23&type=section&id=Clinical%20Program%20Overview) - ANAVEX2-73 (blarcamesine) is being developed as a disease-modifying approach for neurodegenerative and neurodevelopmental diseases through SIGMAR1 activation, available in oral capsule and liquid formulations[96](index=96&type=chunk) [ANAVEX®2-73 (blarcamesine)](index=23&type=section&id=ANAVEX%C2%AE2-73%20(blarcamesine)) [Alzheimer's Disease](index=23&type=section&id=Alzheimer's%20Disease) - ANAVEX2-73's Phase 2b/3 trial in early Alzheimer's disease met co-primary endpoints, showing significant improvements in ADAS-Cog13 (P < **0.025**) and CDR-SB (P < **0.025**) at **48 weeks**, slowing clinical progression by **36.3%** overall[101](index=101&type=chunk)[102](index=102&type=chunk) - The drug also significantly slowed brain atrophy in key regions (whole brain by **37.6%**, total grey matter by **63.5%**, lateral ventricles by **25.1%**) and showed a good safety profile, with dizziness as a common, transient adverse event[102](index=102&type=chunk)[103](index=103&type=chunk) - A Marketing Authorisation Application (MAA) for ANAVEX2-73 for Alzheimer's disease was submitted to and accepted by the European Medicines Agency (EMA) in November/December 2024 for scientific review[104](index=104&type=chunk) [Parkinson's Disease](index=24&type=section&id=Parkinson's%20Disease) - ANAVEX2-73 demonstrated clinically meaningful, dose-dependent, and statistically significant improvements in cognitive (CDR computerized assessment) and motor impairment (MDS-UPDRS total score) in a Phase 2 trial for Parkinson's disease dementia[108](index=108&type=chunk) - Preliminary data from the **48-week** Open Label Extension (OLE) trial showed longitudinal beneficial effects on primary and secondary objectives, with consistent improvement in MDS-UPDRS Part II + III and CGI-I after resuming treatment[110](index=110&type=chunk) - The Company plans further clinical trials for ANAVEX2-73 in Parkinson's disease dementia and received a **$1.0 million** research grant from The Michael J. Fox Foundation to explore PET imaging biomarkers[111](index=111&type=chunk)[112](index=112&type=chunk) [Rett Syndrome](index=25&type=section&id=Rett%20Syndrome) - ANAVEX2-73 has received Orphan Drug, Rare Pediatric Disease, and Fast Track designations from the FDA for Rett syndrome treatment[114](index=114&type=chunk) - The AVATAR Phase 3 trial met all primary and secondary efficacy and safety endpoints, showing statistically significant improvements in RSBQ (p = **0.037**), ADAMS (p = **0.010**), and CGI-I (p = **0.037**) responses[117](index=117&type=chunk) - The EXCELLENCE Phase 2/3 trial in pediatric patients showed improvement on the RSBQ co-primary endpoint, with a statistically significant rapid onset of action at **4 weeks** (p=**0.041**), and no new safety signals[120](index=120&type=chunk)[121](index=121&type=chunk)[123](index=123&type=chunk) [Other indications](index=27&type=section&id=Other%20indications) - Preclinical data supports ANAVEX2-73's potential as a platform drug for other neurodegenerative diseases, including epilepsy, infantile spasms, Fragile X syndrome, Angelman syndrome, multiple sclerosis, and tuberous sclerosis complex (TSC)[125](index=125&type=chunk) - ANAVEX2-73 significantly reduced audiogenic-induced seizures in Angelman syndrome mouse models and restored hippocampal brain-derived neurotrophic factor (BDNF) expression in Fragile X syndrome models[126](index=126&type=chunk) - Preclinical data also suggests ANAVEX2-73 may promote remyelination in multiple sclerosis and provide protection for oligodendrocytes, OPCs, and CNS neurons[128](index=128&type=chunk) [ANAVEX2-73 (blarcamesine)-specific Biomarkers](index=28&type=section&id=ANAVEX2-73%20(blarcamesine)-specific%20Biomarkers) - Genomic analysis of Alzheimer's patients treated with ANAVEX2-73 identified actionable genetic variants, including SIGMAR1 and COMT, which significantly impact drug response[130](index=130&type=chunk) - Excluding patients with the identified SIGMAR1 biomarker variant (**10%-20%** of the population) in prospective studies could lead to **80%-90%** of patients showing clinically significant improved functional and cognitive scores[130](index=130&type=chunk) [ANAVEX3-71](index=28&type=section&id=ANAVEX3-71) - ANAVEX3-71 is an orally available clinical drug candidate with a novel mechanism of action via SIGMAR1 activation and M1 muscarinic allosteric modulation, showing neuroprotection and cognition enhancement in Alzheimer's models[131](index=131&type=chunk) - The Phase 1 clinical trial met primary and secondary endpoints for safety, tolerability, and PK, with no serious adverse events or dose-limiting toxicities, and demonstrated linear, dose-proportional, and time-invariant pharmacokinetics[135](index=135&type=chunk)[137](index=137&type=chunk) - Based on preclinical and Phase 1 results, the Company plans to advance ANAVEX3-71 into a biomarker-driven clinical development program for schizophrenia, Frontotemporal Dementia (FTD), and Alzheimer's disease[138](index=138&type=chunk) [Schizophrenia](index=29&type=section&id=Schizophrenia) - The U.S. FDA-cleared ANAVEX3-71-SZ-001 Phase 2 trial in schizophrenia commenced in March 2024, exploring multiple ascending doses and a **28-day** treatment period, utilizing standard clinical outcome measures and novel fluid/electrophysiological biomarkers[139](index=139&type=chunk) - Preliminary results from Part A showed a dose-dependent effect of ANAVEX3-71 on two key EEG biomarkers, reversing known abnormalities associated with schizophrenia and correlating with positive, negative, and cognitive symptoms[140](index=140&type=chunk) - Enrollment for Part B of the Phase 2 study was completed in May 2025, with top-line data expected in the second half of 2025[141](index=141&type=chunk) [ANAVEX1-41](index=30&type=section&id=ANAVEX1-41) - ANAVEX1-41 is a sigma-1 agonist that demonstrated significant neuroprotective benefits in preclinical tests by modulating endoplasmic reticulum, mitochondrial, and oxidative stress, and preventing caspase-3 expression[142](index=142&type=chunk)[143](index=143&type=chunk) [ANAVEX1066](index=30&type=section&id=ANAVEX1066) - ANAVEX1066, a mixed sigma-1/sigma-2 ligand, is designed for neuropathic and visceral pain treatment, showing rapid, dose-dependent efficacy in preclinical models without affecting normal gastrointestinal transit[144](index=144&type=chunk) [ANAVEX1037](index=30&type=section&id=ANAVEX1037) - ANAVEX1037 is a synthetic compound with high affinity for sigma-1 receptors, designed for prostate and pancreatic cancer treatment, demonstrating antitumor potential by selectively killing cancer cells and suppressing tumor growth in preclinical studies[145](index=145&type=chunk)[146](index=146&type=chunk) [Our Target Indications](index=30&type=section&id=Our%20Target%20Indications) - The Company is developing compounds for Central Nervous System Diseases, including Alzheimer's disease (**7.2 million** Americans aged 65+ in 2025), Parkinson's disease (**10+ million** worldwide), Rett syndrome (**1 in 10,000-15,000 females**), Schizophrenia (**24 million** worldwide), Fragile X (**1.4 million** worldwide), and Depression[148](index=148&type=chunk)[149](index=149&type=chunk) - Target indications also include Epilepsy (**3.4 million** Americans in 2015), Neuropathic Pain, and Cancer, specifically Malignant Melanoma (market expected to reach **$7.5 billion** by 2029), Prostate Cancer (market expected to reach **$10.1 billion** by 2030), and Pancreatic Cancer (market expected to reach **$3.7 billion** by 2027)[150](index=150&type=chunk)[155](index=155&type=chunk) [Patents, Trademarks and Intellectual Property](index=32&type=section&id=Patents,%20Trademarks%20and%20Intellectual%20Property) - Anavex holds ownership or exclusive rights to **30 issued U.S. patents** and **20 pending U.S. patent applications**, along with numerous PCT and ex-U.S. applications, related to its drug candidates and research programs[151](index=151&type=chunk) - Key patents include those for ANAVEX2-73 (composition of matter, crystalline polymorphs, seizure treatment, neurodevelopmental disorders, cardiac dysfunction, insomnia/anxiety/agitation, systolic hypertension), ANAVEX19-144, ANAVEX1-41, ANAVEX1066, and ANAVEX3-71[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[165](index=165&type=chunk) - Most of these patents are expected to expire between **2030** and **2039**, absent any patent term extensions for regulatory delays[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Financial Overview](index=34&type=section&id=Financial%20Overview) - The Company is in the development stage and has not earned any revenue since its inception in 2004, anticipating revenue only upon establishing alliances for product development, licensing, or marketing[170](index=170&type=chunk) [Operating Expenses](index=34&type=section&id=Operating%20Expenses) **Operating Expenses (in thousands):** | Expense Category | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total operating expenses | $14,459 | $14,603 | $40,564 | $38,606 | | Research and development | $9,959 | $11,811 | $30,298 | $30,224 | | General and administrative | $4,500 | $2,792 | $10,266 | $8,382 | - The decrease in R&D expenses for the three-month period was primarily due to a **$1.9 million** decrease in manufacturing for ANAVEX2-73 and a **$1.0 million** decrease in the Alzheimer's program, partially offset by a **$1.1 million** increase in stock-based compensation[175](index=175&type=chunk)[178](index=178&type=chunk) - G&A expenses increased for both periods, mainly due to higher corporate and intellectual property legal fees, and an increase in non-cash stock-based compensation from new milestone-based options[177](index=177&type=chunk) [Other income (net)](index=36&type=section&id=Other%20income%20(net)) **Net Other Income (in thousands):** | Period | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net other income | $1,216 | $2,389 | $4,014 | $7,224 | - The decrease in net other income for both periods was primarily due to a reduction in research and development incentive income (following the completion of Australian clinical trials) and lower interest income (due to reduced cash balances and market interest rates)[179](index=179&type=chunk) [Net loss](index=36&type=section&id=Net%20loss) **Net Loss and EPS:** | Period | Net Loss (in millions) | EPS | | :------------------------------- | :--------------------- | :---- | | Three months ended June 30, 2025 | $(13.2) | $(0.16) | | Three months ended June 30, 2024 | $(12.2) | $(0.14) | | Nine months ended June 30, 2025 | $(36.6) | $(0.43) | | Nine months ended June 30, 2024 | $(31.4) | $(0.38) | - The increase in net loss for both periods is primarily attributed to the net increases in operating expenses and net decreases in other income[181](index=181&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) [Working Capital](index=36&type=section&id=Working%20Capital) **Working Capital (in thousands):** | Metric | June 30, 2025 | September 30, 2024 | | :---------------- | :------------ | :----------------- | | Current Assets | $102,432 | $135,567 | | Current Liabilities | $11,474 | $15,304 | | **Working Capital** | **$90,958** | **$120,263** | - Net current assets decreased by approximately **$29.3 million** from September 30, 2024, to June 30, 2025, primarily due to cash utilized in operations[182](index=182&type=chunk) [Cash Flows](index=36&type=section&id=Cash%20Flows) **Summary of Cash Flows (in thousands):** | Activity | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(30,440) | $(24,154) | | Net cash (used in) provided by financing activities | $(583) | $11,886 | | Decrease in cash and cash equivalents | $(31,023) | $(12,268) | - Net cash used in operating activities increased by **$6.3 million**, from **$24.2 million** in 2024 to **$30.4 million** in 2025, primarily due to an increased net loss and decreased working capital balances[185](index=185&type=chunk) - Cash flows from financing activities shifted from a **$11.9 million** inflow in 2024 (primarily from common share issuance under the 2023 Purchase Agreement) to a **$0.6 million** outflow in 2025 (due to tax withholding for stock option exercises)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) [Other Financings](index=37&type=section&id=Other%20Financings) - On July 25, 2025, the Company entered into a Sales Agreement with TD Securities (USA) LLC to sell up to **$150 million** in common stock through an 'at the market offering' or negotiated transactions, with commissions up to **3.0%**[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - The 2023 Purchase Agreement with Lincoln Park Capital Fund, LLC allows the Company to sell up to **$150.0 million** in common stock until February 3, 2026. As of June 30, 2025, **$110.8 million** remains unused, and no shares were issued under this agreement during the nine months ended June 30, 2025[192](index=192&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company has no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on its financial condition, revenues, expenses, results of operations, liquidity, or capital resources[199](index=199&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=38&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) - There have been no significant changes to the Company's critical accounting policies and estimates since its Annual Report on Form 10-K for the year ended September 30, 2024[201](index=201&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=38&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - The Company refers to Note 2, 'Recent Accounting Pronouncements,' in its Condensed Consolidated Interim Financial Statements for details on new FASB ASUs, including ASU No. 2023-07 (Segment Reporting) and ASU No. 2023-09 (Income Taxes), and is currently assessing their impact[36](index=36&type=chunk)[37](index=37&type=chunk)[202](index=202&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISKS.) As a smaller reporting company, Anavex Life Sciences Corp. is not required to provide quantitative and qualitative disclosures about market risks in this quarterly report - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risks[203](index=203&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=38&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of Anavex Life Sciences Corp.'s disclosure controls and procedures as of June 30, 2025, based on management's evaluation, and states that no material changes to internal control over financial reporting occurred during the quarter [Disclosure Controls and Procedures](index=38&type=section&id=Disclosure%20Controls%20and%20Procedures) - As of June 30, 2025, the Company's disclosure controls and procedures were evaluated by management, including the principal executive and financial officers, and concluded to be effective[204](index=204&type=chunk)[205](index=205&type=chunk) [Changes in Internal Control over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No changes to the Company's internal control over financial reporting were identified during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[206](index=206&type=chunk) PART II – OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=39&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Anavex Life Sciences Corp. is involved in several legal proceedings, including a shareholder class action lawsuit related to ANAVEX2-73 Rett syndrome clinical trials, which was dismissed but is under appeal. Two similar derivative lawsuits have been stayed pending the outcome of the class action. The Company believes no loss is probable and has not recorded any contingencies - A shareholder class action complaint filed on March 13, 2024, alleging violations related to ANAVEX2-73 Rett syndrome clinical trials, was dismissed on June 18, 2025, but the plaintiff filed a notice of appeal on July 17, 2025[208](index=208&type=chunk) - Two derivative lawsuits with similar allegations have been filed against the Company and its officers/directors, both of which have been stayed pending the resolution of the initial class action lawsuit[210](index=210&type=chunk)[211](index=211&type=chunk) - The Company believes it is not probable that any loss will occur from these lawsuits and has not recorded any loss contingencies in the financial statements[208](index=208&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) [ITEM 1A. RISK FACTORS](index=40&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates the risk factors, emphasizing the lengthy, complex, and unpredictable nature of pharmaceutical marketing approval processes, particularly with the EMA and FDA. It highlights that approval in one jurisdiction does not guarantee approval in others and that the Company's business could be adversely affected by litigation, government investigations, and changes in U.S. and international trade policies - There have been no material changes to the risk factors discussed in the Annual Report on Form 10-K, except for specific risks related to the marketing approval process and business operations[213](index=213&type=chunk) - The marketing approval process for pharmaceutical products by the EMA, FDA, and other authorities is lengthy, complex, and unpredictable, with no guarantee of approval, and a failure or delay in one jurisdiction can negatively impact others[213](index=213&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - The Company's business is subject to risks from litigation, government investigations, and enforcement actions, which can be expensive and time-consuming, potentially resulting in fines, penalties, and reputational damage[217](index=217&type=chunk)[218](index=218&type=chunk) - Changes in U.S. and international trade policies, such as tariffs, could adversely impact the Company's business, affecting import/export costs, product demand, and commercial activities[219](index=219&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=41&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Anavex Life Sciences Corp. did not report any unregistered sales of equity securities during the period covered by this Quarterly Report on Form 10-Q that were not previously disclosed - The Company has not sold any equity securities that were not registered under the Securities Act of 1933 and not previously reported in a Current Report on Form 8-K during the period[220](index=220&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=41&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) Anavex Life Sciences Corp. reported no defaults upon senior securities during the period - There were no defaults upon senior securities during the reporting period[221](index=221&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to Anavex Life Sciences Corp - This item is not applicable to the Company[222](index=222&type=chunk) [ITEM 5. OTHER INFORMATION](index=41&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Anavex Life Sciences Corp. reported no adoption, modification, or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by its directors or Section 16 officers during the three-month period ended June 30, 2025 - None of the Company's directors or Section 16 officers adopted, modified, or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three-month period ended June 30, 2025[223](index=223&type=chunk) [ITEM 6. EXHIBITS](index=42&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including articles of incorporation, bylaws, an amendment to the 2022 Omnibus Incentive Plan, Rule 13a-14(a)/15(d)-14(a) certifications, Section 1350 certifications, and XBRL instance documents - The exhibits include Articles of Incorporation, Amended and Restated Bylaws, Amendment No. 1 to the 2022 Omnibus Incentive Plan, Rule 13a-14(a)/15(d)-14(a) Certifications, Section 1350 Certifications, and XBRL documents[224](index=224&type=chunk) SIGNATURES - The report was duly signed on August 12, 2025, by Christopher Missling, PhD, Chief Executive Officer (Principal Executive Officer), and Sandra Boenisch, CPA, CGA, Principal Financial Officer (Principal Financial and Accounting Officer)[227](index=227&type=chunk)[228](index=228&type=chunk)

News Release For Immediate Release: August 12, 2025 H&R Block Reports Fiscal 2025 Results and Provides Fiscal 2026 Outlook - Delivered Revenue Growth of 4% and Earnings per Share Growth of 7% - - Returned $600 Million to Shareholders via Dividends and Share Repurchases - Exhibit 99.1 - Increases Quarterly Dividend by 12% - KANSAS CITY, Mo., August 12, 2025 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) (the "Company") today released financial results for its fiscal 2025 year ended June 30, 2025. 1 "Fiscal ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) INOVIO announced Q2 2025 results, with the CEO confirming the INO-3107 BLA submission is on track for 2H25, targeting mid-2026 FDA approval [Introduction and CEO Statement](index=1&type=section&id=Introduction%20and%20CEO%20Statement) INOVIO announced its second quarter 2025 financial results and provided business updates, with the CEO highlighting that the Biologics License Application (BLA) for INO-3107 is on track for submission in the second half of 2025, aiming for FDA acceptance by year-end and potential approval by mid-2026 - INO-3107 BLA submission remains on track for **2H25**, with the goal of FDA acceptance by year-end[3](index=3&type=chunk) - Potential INO-3107 approval date is anticipated in **mid-2026**[3](index=3&type=chunk) [Operational Highlights](index=1&type=section&id=Operational%20Highlights) INOVIO advanced INO-3107 with BLA progress and strong clinical data, while also presenting next-gen DNA medicine data and strengthening its financial position [INO-3107 (Recurrent Respiratory Papillomatosis - RRP)](index=1&type=section&id=INO-3107%20(Recurrent%20Respiratory%20Papillomatosis%20-%20RRP)) INOVIO made significant progress with INO-3107, completing device verification testing and initiating a rolling BLA submission, with long-term clinical data demonstrating sustained efficacy and safety, showing a substantial reduction in surgeries for RRP patients [Regulatory and Commercial Progress](index=1&type=section&id=Regulatory%20and%20Commercial%20Progress) INOVIO completed device verification for CELLECTRA® 5PSP, requested a rolling BLA submission for INO-3107, and advanced commercial preparations - Completed design verification (DV) testing for the CELLECTRA® 5PSP device, a requirement for BLA submission[4](index=4&type=chunk)[5](index=5&type=chunk) - Requested rolling submission from the US FDA for INO-3107 in **July 2025**, leveraging its Breakthrough Therapy designation[4](index=4&type=chunk)[5](index=5&type=chunk) - Continuing to advance commercial preparations for the potential launch of INO-3107 in **2026**, if approved by the FDA[5](index=5&type=chunk) [Clinical Data and Efficacy](index=2&type=section&id=Clinical%20Data%20and%20Efficacy) Long-term clinical data for INO-3107, published in The Laryngoscope, demonstrated sustained efficacy with significant reductions in RRP surgeries and a favorable safety profile - Data from a retrospective study (RRP-002) investigating the long-term clinical efficacy of INO-3107 were published in The Laryngoscope[5](index=5&type=chunk)[6](index=6&type=chunk) - Patients experiencing a **50-100% reduction in surgeries** (Overall Response Rate) increased from **72% at Year 1 to 86% at Year 2**[9](index=9&type=chunk) - Patients achieving a Complete Response (**0 surgeries per year**) increased from **28% for Year 1 to 50% for Year 2**[9](index=9&type=chunk) - Mean number of surgeries reduced from **4.1 (pre-treatment) to 1.7 (Year 1) and further to 0.9 (Year 2)**[9](index=9&type=chunk) - INO-3107 was well tolerated, with no serious adverse events or long-term safety concerns identified[9](index=9&type=chunk) [Next Generation DNA Medicine Candidates](index=2&type=section&id=Next%20Generation%20DNA%20Medicine%20Candidates) INOVIO presented data on its next-generation DNA medicine technology, including DNA-encoded monoclonal antibodies (DMAbs) for COVID-19 and DNA-encoded protein technology (DPROT) for long-term protein expression, at the Orphan Drug Summit - Presented data on next-generation DNA medicine technology at the Orphan Drug Summit in **July**[6](index=6&type=chunk) - Data included key insights from an ongoing Phase 1 proof-of-concept trial evaluating DNA-encoded monoclonal antibodies (DMAbs) for COVID-19[6](index=6&type=chunk) - Provided an overview of DNA-encoded protein technology (DPROT) that targets long-term protein expression[6](index=6&type=chunk) [General Corporate Developments](index=2&type=section&id=General%20Corporate%20Developments) INOVIO maintained its focus on financial discipline, directing resources towards the INO-3107 program, and strengthened its balance sheet through a public offering in July 2025, which generated approximately $22.5 million in net proceeds - Remains focused on financial discipline and directing resources to support the INO-3107 program[7](index=7&type=chunk) - Strengthened its balance sheet with an underwritten public offering of common stock and warrants in **July 2025**[7](index=7&type=chunk) - Net proceeds from the July 2025 offering were approximately **$22.5 million**[7](index=7&type=chunk) [Upcoming Presentations](index=2&type=section&id=Upcoming%20Presentations) INOVIO is scheduled to present data on INO-3107 and other promising DNA medicine candidates at several key industry conferences throughout October 2025 - INOVIO will present data on INO-3107 and other DNA medicine candidates at multiple upcoming events in **October 2025**, including the American Academy of Otolaryngology and World Vaccine Congress Europe[7](index=7&type=chunk)[10](index=10&type=chunk) [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) INOVIO reported significantly reduced operating expenses and net loss for Q2 2025, with cash and investments supporting operations into Q2 2026 [Summary of Financial Results](index=2&type=section&id=Summary%20of%20Financial%20Results) For the second quarter of 2025, INOVIO reported a significant decrease in total operating expenses and a reduced net loss compared to the same period in 2024, driven by lower R&D and G&A expenditures Total Operating Expenses (Three Months Ended June 30) | Year | Amount (USD) | | :--- | :--- | | 2025 | $23.1 million | | 2024 | $33.3 million | | **Change (YoY)** | **↓ 30.6%** | Net Loss (Three Months Ended June 30) | Year | Amount (USD) | | :--- | :--- | | 2025 | $(23.5) million | | 2024 | $(32.2) million | | **Change (YoY)** | **↓ 27.0%** | Net Loss Per Share (Basic and Diluted, Three Months Ended June 30) | Year | Amount (USD) | | :--- | :--- | | 2025 | $(0.61) | | 2024 | $(1.19) | | **Change (YoY)** | **↓ 48.7%** | [Research and Development (R&D) Expenses](index=2&type=section&id=Research%20and%20Development%20(R%26D)%20Expenses) R&D expenses for Q2 2025 decreased substantially compared to Q2 2024, primarily due to reduced costs associated with drug manufacturing, clinical studies for INO-3107, and lower contract labor R&D Expenses (Three Months Ended June 30) | Year | Amount (USD) | | :--- | :--- | | 2025 | $14.5 million | | 2024 | $23.1 million | | **Change (YoY)** | **↓ 37.2%** | - The decrease was primarily a result of lower drug manufacturing, clinical study, and other expenses related to INO-3107, and lower contract labor[11](index=11&type=chunk) [General and Administrative (G&A) Expenses](index=2&type=section&id=General%20and%20Administrative%20(G%26A)%20Expenses) G&A expenses for Q2 2025 also saw a decrease year-over-year, mainly attributed to lower employee and consultant stock-based compensation, reduced outside services, and decreased contract labor G&A Expenses (Three Months Ended June 30) | Year | Amount (USD) | | :--- | :--- | | 2025 | $8.6 million | | 2024 | $10.2 million | | **Change (YoY)** | **↓ 15.7%** | - The decrease was primarily related to a decrease in employee and consultant stock-based compensation, lower outside services, and lower contract labor[11](index=11&type=chunk) [Cash, Cash Equivalents and Investments](index=3&type=section&id=Cash%2C%20Cash%20Equivalents%20and%20Investments) As of June 30, 2025, INOVIO's cash, cash equivalents, and short-term investments totaled $47.5 million, a decrease from $94.1 million at the end of 2024, excluding the net proceeds from the July 2025 public offering Cash, Cash Equivalents and Short-term Investments | Date | Amount (USD) | | :--- | :--- | | June 30, 2025 | $47.5 million | | December 31, 2024 | $94.1 million | | **Change** | **↓ 49.5%** | - This balance excludes net proceeds of approximately **$22.5 million** from the July 2025 public offering[7](index=7&type=chunk)[17](index=17&type=chunk) [Cash Guidance and Runway](index=3&type=section&id=Cash%20Guidance%20and%20Runway) INOVIO estimates that its current cash, cash equivalents, and short-term investments, including the July 2025 offering proceeds, will support operations into the second quarter of 2026, with an anticipated operational net cash burn of approximately $22 million for Q3 2025 - Current cash, cash equivalents, and short-term investments (including July 2025 offering proceeds) are estimated to support operations into the **second quarter of 2026**[13](index=13&type=chunk) - Operational net cash burn estimate for the third quarter of 2025 is approximately **$22 million**[13](index=13&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present INOVIO's balance sheet and statements of operations, detailing assets, liabilities, equity, and financial performance for Q2 2025 and year-to-date [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets provide a detailed snapshot of INOVIO's financial position, showing total assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024, reflecting a decrease in total assets and liabilities over the period Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (USD) | December 31, 2024 (USD) | Change | | :--- | :--- | :--- | :--- | | Total current assets | $52,697,149 | $97,830,050 | ↓ 46.2% | | Total assets | $68,240,504 | $113,197,206 | ↓ 39.7% | | Total current liabilities | $31,707,610 | $35,325,584 | ↓ 10.2% | | Total liabilities | $39,709,599 | $44,693,411 | ↓ 11.1% | | Total Stockholders' Equity | $28,530,905 | $68,503,795 | ↓ 58.4% | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations detail INOVIO's financial performance for the three and six months ended June 30, 2025, and 2024, illustrating reduced operating expenses and a lower net loss across both periods compared to the prior year Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 (USD) | 2024 (USD) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue from collaborative arrangement | $— | $100,762 | ↓ 100% | | Research and development | $14,521,407 | $23,090,989 | ↓ 37.1% | | General and administrative | $8,563,112 | $10,206,686 | ↓ 16.1% | | Total operating expenses | $23,084,519 | $33,297,675 | ↓ 30.6% | | Loss from operations | $(23,084,519) | $(33,196,913) | ↓ 30.5% | | Net loss | $(23,519,412) | $(32,237,098) | ↓ 27.0% | | Net loss per share (Basic and diluted) | $(0.61) | $(1.19) | ↓ 48.7% | Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2025 (USD) | 2024 (USD) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue from collaborative arrangement | $65,343 | $100,762 | ↓ 35.2% | | Research and development | $30,612,309 | $44,001,307 | ↓ 30.4% | | General and administrative | $17,588,082 | $20,781,337 | ↓ 15.4% | | Total operating expenses | $48,200,391 | $64,782,644 | ↓ 25.6% | | Loss from operations | $(48,135,048) | $(64,681,882) | ↓ 25.6% | | Net loss | $(43,214,109) | $(62,706,969) | ↓ 31.1% | | Net loss per share (Basic and diluted) | $(1.12) | $(2.48) | ↓ 54.9% | [Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of INOVIO's proprietary DNA medicines platform and its mission to develop treatments for HPV-related diseases, cancer, and infectious diseases [About INOVIO's DNA Medicines Platform](index=3&type=section&id=About%20INOVIO%27s%20DNA%20Medicines%20Platform) INOVIO's DNA medicines platform utilizes precisely designed DNA plasmids, delivered by its proprietary CELLECTRA investigational medical device, to enable the body's cells to produce specific disease-fighting proteins without the need for chemical adjuvants or viral vectors - INOVIO's DNA medicines platform comprises precisely designed DNA plasmids and its proprietary investigational medical device, CELLECTRA[15](index=15&type=chunk) - DNA plasmids function like software, allowing the body's cells to produce specific proteins to target and fight disease[15](index=15&type=chunk) - CELLECTRA delivery devices are designed to optimally deliver DNA medicines without chemical adjuvants, lipid nanoparticles, or the risk of anti-vector response[15](index=15&type=chunk) [About INOVIO](index=3&type=section&id=About%20INOVIO) INOVIO is a biotechnology company dedicated to developing and commercializing DNA medicines for HPV-related diseases, cancer, and infectious diseases, by leveraging technology that empowers the body to generate its own disease-fighting mechanisms - INOVIO is a biotechnology company focused on developing and commercializing DNA medicines[16](index=16&type=chunk) - Its DNA medicines aim to treat and protect people from HPV-related diseases, cancer, and infectious diseases[16](index=16&type=chunk) - The technology optimizes the design and delivery of DNA medicines to teach the body to manufacture its own disease-fighting tools[16](index=16&type=chunk) [Important Disclosures](index=4&type=section&id=Important%20Disclosures) This section includes important forward-looking statements regarding INOVIO's business and provides contact information for media and investor inquiries [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding INOVIO's business, including clinical trials, regulatory submissions, commercialization, and financial projections, which are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations - The press release contains forward-looking statements related to business plans, clinical trials, BLA submission, commercial launch, and cash resource sufficiency[18](index=18&type=chunk) - Actual events or results may differ from expectations due to uncertainties inherent in preclinical studies, clinical trials, product development, funding availability, and regulatory approvals[18](index=18&type=chunk) [Contacts](index=4&type=section&id=Contacts) Contact information is provided for media and investor relations inquiries - Media Contact: Jennie Willson, (267) 429-8567, communications@inovio.com[19](index=19&type=chunk) - Investors Contact: Peter Vozzo - ICR Healthcare, (443) 213-0505, investor.relations@inovio.com[19](index=19&type=chunk)

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) NeuroPace reported **record quarterly revenue** of **$23.5 million** in Q2 2025, a **22%** year-over-year increase, and subsequently raised its **full-year 2025 revenue guidance** to between **$94 million** and **$98 million**, while also increasing its **gross margin guidance** and confirming CMS maintains current MS-DRG assignment for RNS System procedures, ensuring **reimbursement stability**, with NAUTILUS data on track for FDA submission for IGE indication expansion - Reported **record quarterly revenue** of **$23.5 million** in Q2 2025[1](index=1&type=chunk) - Increased **full-year 2025 revenue guidance** to between **$94 million** and **$98 million**[2](index=2&type=chunk) - Increased **gross margin guidance** to between **75%** and **76%**[2](index=2&type=chunk) - CMS maintains current MS-DRG assignment for RNS System® procedures, preserving **reimbursement stability**[2](index=2&type=chunk)[5](index=5&type=chunk) - Remain on track to submit NAUTILUS data to FDA for potential IGE indication expansion in the second half of 2025[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) NeuroPace's Q2 2025 revenue grew **22%** year-over-year to **$23.5 million**, with RNS System revenue increasing **16%** in Q2 and **21%** in the first half of 2025, achieving a strong gross margin of **77.1%** due to manufacturing efficiencies and a positive product mix, and successfully refinanced its existing debt into a new **$75 million** credit facility Q2 2025 Revenue and Gross Margin Highlights | Metric | Q2 2025 | YoY Growth | | :------------------- | :-------- | :--------- | | Revenue | $23.5 million | 22% | | RNS System Revenue (Q2) | N/A | 16% | | RNS System Revenue (H1) | N/A | 21% | | Gross Margin | 77.1% | N/A | - Refinanced existing debt into a new **$75 million** credit facility with MidCap Financial at **favorable terms**[5](index=5&type=chunk) [Operational & Strategic Highlights](index=1&type=section&id=Operational%20%26%20Strategic%20Highlights) The NAUTILUS study for RNS therapy in IGE demonstrated a **statistically significant safety profile** and **clinically meaningful improvement** in secondary effectiveness endpoints, including a **79%** median GTC seizure reduction at 12 months, while NeuroPace also saw **increased momentum** from Project CARE, achieved **record highs** in active accounts and prescribers, and secured a favorable CMS outcome for RNS procedures - Announced compelling one-year preliminary data from the NAUTILUS study evaluating RNS therapy in IGE, demonstrating a **statistically significant safety profile** and **clinically meaningful improvement** across multiple prespecified secondary effectiveness endpoints, including **79%** median GTC seizure reduction at 12 months[5](index=5&type=chunk) - Built on Project CARE **momentum** with an increasing contribution in the second quarter compared with the first quarter of 2025[5](index=5&type=chunk) - Achieved **record highs** in number of both active accounts and prescribers[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Joel Becker highlighted the company's continued momentum in Q2 2025, emphasizing significant progress in key initiatives for sustained long-term growth, including advancing RNS therapy access and adoption, supporting operating leverage, and making important clinical, regulatory, and R&D advancements, such as the NAUTILUS and pediatric PMA supplement programs, and AI software development - Advancing strategy to drive increased access to and adoption of RNS therapy and supporting operating leverage as the company scales[4](index=4&type=chunk) - Made important clinical and regulatory and research and development progress, including advancing NAUTILUS and pediatric PMA supplement programs[4](index=4&type=chunk) - Advancing AI software development programs, reflecting **leadership in the field** and commitment to addressing **unmet patient needs**[6](index=6&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) NeuroPace reported Q2 2025 total revenue of **$23.5 million**, a **22%** increase year-over-year, **primarily driven by** RNS System sales, with gross margin improving to **77.1%**, total operating expenses rising to **$25.0 million** largely due to **one-time personnel costs**, resulting in a net loss of **$8.7 million**, and the company ending the quarter with **$62.1 million** in cash, cash equivalents, and short-term investments, and improved free cash flow to (**$2.3 million**) Q2 2025 Key Financial Metrics | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :------------------------- | :--------------------- | :--------------------- | :--------- | | Total Revenue | $23,520 | $19,256 | +22.1% | | Gross Margin | 77.1% | 73.4% | +3.7 ppts | | Total Operating Expenses | $24,956 | $20,364 | +22.5% | | Loss from Operations | $(6,824) | $(6,230) | +9.5% | | Net Loss | $(8,651) | $(7,514) | +15.1% | | Net Loss Per Share (basic & diluted) | $(0.26) | $(0.26) | 0% | - Revenue growth **primarily driven by** increased sales of the RNS System and meaningful revenue from SEEG products[6](index=6&type=chunk) - Total operating expenses increase largely driven by **one-time personnel expenses** totaling **$1.9 million**, including severance and recruiting, and **$1.6 million** in personnel-related expenses for an executive transition[7](index=7&type=chunk)[8](index=8&type=chunk) Cash and Debt Position (as of June 30, 2025) | Metric | Amount (in millions) | | :-------------------------------------- | :------------------- | | Cash, cash equivalents and short-term investments | $62.1 | | Long-term borrowings | $58.6 | | Free cash flow (Q2 2025) | ($2.3) | | Free cash flow (Q2 2024) | ($4.0) | [Updated Full Year 2025 Financial Guidance](index=2&type=section&id=Updated%20Full%20Year%202025%20Financial%20Guidance) NeuroPace has increased its **full-year 2025 total revenue guidance** to between **$94 million** and **$98 million**, representing **18%-23%** growth over 2024, and raised its **gross margin guidance** to **75%-76%**, while maintaining its total operating expenses guidance range of **$92 million** to **$95 million** Updated Full Year 2025 Financial Guidance | Metric | Previous Guidance | Updated Guidance | YoY Growth (vs. $79.9M in 2024) | | :----------------------- | :---------------- | :--------------- | :------------------------------ | | Total Revenue | $93M - $97M | $94M - $98M | 18% - 23% | | Gross Margin | 73% - 75% | 75% - 76% | N/A | | Total Operating Expenses | $92M - $95M | $92M - $95M | N/A | - Total operating expenses guidance includes approximately **$11 million** in stock-based compensation, a **non-cash expense**[12](index=12&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) [Webcast and Conference Call Information](index=2&type=section&id=Webcast%20and%20Conference%20Call%20Information) NeuroPace hosted a conference call on August 12, 2025, to discuss its second quarter 2025 financial results, with details for accessing the live and archived webcast, as well as participating via telephone, provided - Conference call held on Tuesday, August 12, 2025, at **4:30 P.M. Eastern Time**[11](index=11&type=chunk) - Live and archived webcast available at https://viavid.webcasts.com/starthere.jsp?ei=1724652&tp_key=858d589533[11](index=11&type=chunk) - Webcast will be archived on the Company's investor relations website for at least **90 days**[11](index=11&type=chunk) [About NeuroPace, Inc.](index=3&type=section&id=About%20NeuroPace%2C%20Inc.) NeuroPace, Inc. is a medical device company based in Mountain View, Calif., dedicated to improving the lives of individuals with epilepsy by reducing or eliminating debilitating seizures, with its RNS System being the first and only commercially available, brain-responsive platform that delivers personalized, real-time treatment at the seizure source, aiming to establish a new standard of care for drug-resistant epilepsy and potentially other brain disorders - NeuroPace is a medical device company focused on transforming the lives of people living with epilepsy[13](index=13&type=chunk) - Its RNS System is the first and only commercially available, brain-responsive platform that delivers personalized, real-time treatment at the seizure source[13](index=13&type=chunk) - The platform aims to drive a better standard of care for patients with drug-resistant epilepsy and has potential for other brain disorders[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding NeuroPace's future plans, including **potential indication expansion** for its RNS System, **increased adoption** of RNS therapy, and anticipated financial performance for 2025, cautioning investors that actual results may **materially differ** from these statements due to various risks, such as market acceptance, regulatory compliance, and product development challenges, as detailed in the company's SEC filings - Statements include expectations regarding **potential indication expansion** for the RNS System and software/product development efforts[14](index=14&type=chunk) - Includes expectations for increasing access to and adoption of RNS therapy, and the ability to maintain or increase gross margin[14](index=14&type=chunk) - Anticipated revenue, gross margin, and operating expenses for the year ending 2025 are forward-looking[14](index=14&type=chunk) - Actual results or events could **materially differ** due to various factors, including market acceptance, regulatory risks, and operating expenses, as described in SEC filings[14](index=14&type=chunk) [Investor Contact](index=3&type=section&id=Investor%20Contact) This section provides contact information for NeuroPace's investor relations, including the Head of Investor Relations, Scott Schaper, and general investor email addresses - Investor Contact: Scott Schaper, Head of Investor Relations[15](index=15&type=chunk) - Email contacts: sschaper@neuropace.com and investors@neuropace.com[15](index=15&type=chunk) [Condensed Financial Statements](index=4&type=section&id=Condensed%20Financial%20Statements) [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) The unaudited condensed statements of operations detail NeuroPace's financial performance for the three and six months ended June 30, 2025, and 2024, presenting key figures such as revenue, cost of goods sold, gross profit, operating expenses, loss from operations, and net loss Condensed Statements of Operations (Unaudited) | (in thousands, except share and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $23,520 | $19,256 | $46,044 | $37,380 | | Cost of goods sold | $5,388 | $5,122 | $10,570 | $9,903 | | Gross profit | $18,132 | $14,134 | $35,474 | $27,477 | | Sales and marketing | $12,043 | $9,756 | $23,046 | $19,789 | | Research and development | $6,845 | $6,065 | $14,285 | $11,849 | | General and administrative | $6,068 | $4,543 | $10,114 | $9,614 | | Total operating expenses | $24,956 | $20,364 | $47,445 | $41,252 | | Loss from operations | $(6,824) | $(6,230) | $(11,971) | $(13,775) | | Net loss and comprehensive loss | $(8,651) | $(7,514) | $(15,240) | $(16,439) | | Net loss per share attributable to common stockholders, basic and diluted | $(0.26) | $(0.26) | $(0.47) | $(0.58) | [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) The unaudited condensed balance sheets provide a snapshot of NeuroPace's financial position as of June 30, 2025, and December 31, 2024, detailing current and total assets, current and long-term liabilities, and stockholders' equity Condensed Balance Sheets (Unaudited) | (in thousands, except share and per share amounts) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $22,857 | $13,430 | | Short-term investments | $39,284 | $39,325 | | Total current assets | $93,742 | $81,339 | | Total assets | $106,114 | $94,647 | | **Liabilities and Stockholders' Equity** | | | | Accounts payable | $4,721 | $2,954 | | Total current liabilities | $17,143 | $15,156 | | Long-term debt | $58,616 | $59,525 | | Total liabilities | $86,676 | $86,634 | | Total stockholders' equity | $19,438 | $8,013 |

[Nkarta Q2 2025 Earnings Release Overview](index=1&type=section&id=Nkarta%20Reports%20Second%20Quarter%202025%20Financial%20Results%20and%20Corporate%20Highlights) [Executive Summary](index=1&type=section&id=Executive%20Summary) Nkarta reported Q2 2025 results, highlighting **$334.0 million** cash, NKX019 clinical progress, and a new CMO appointment - The company is focused on executing clinical trials for NK cell therapy to treat autoimmune diseases[3](index=3&type=chunk) - Dr. Shawn Rose, an experienced rheumatologist and immunologist, was appointed Chief Medical Officer and Head of R&D in **June 2025**[4](index=4&type=chunk) - Initial data updates for the NKX019 program in multiple autoimmune indications are expected in the **second half of 2025**[6](index=6&type=chunk) - The company's cash balance of **$334.0 million** as of June 30, 2025, is projected to fund operations **into 2029**[6](index=6&type=chunk) [NKX019 Clinical Program](index=1&type=section&id=NKX019%20Clinical%20Program%20Progress%20and%20Upcoming%20Milestones) [Program Progress and Milestones](index=1&type=section&id=Program%20Progress%20and%20Milestones) NKX019 autoimmune clinical programs are enrolling, with Ntrust-1 and Ntrust-2 preliminary data expected in H2 2025 - Patient enrollment is ongoing for the Ntrust-1, Ntrust-2, and two investigator-sponsored clinical trials for NKX019 in autoimmune diseases[7](index=7&type=chunk) - Preliminary data from the Ntrust-1 and Ntrust-2 clinical trials are planned for release in the **second half of 2025**[7](index=7&type=chunk) [Ntrust℠ Clinical Trials (Ntrust-1 & Ntrust-2)](index=2&type=section&id=About%20the%20Ntrust%E2%84%A0%20Clinical%20Trials%20in%20Autoimmune%20Disease) Ntrust-1 and Ntrust-2 trials evaluate NKX019 safety and efficacy in autoimmune diseases like lupus nephritis and systemic sclerosis - Ntrust-1 (NCT06557265) is enrolling **up to 24 patients** with lupus nephritis or primary membranous nephropathy[9](index=9&type=chunk)[10](index=10&type=chunk) - Ntrust-2 (NCT06733935) is enrolling **up to 36 patients** with systemic sclerosis, idiopathic inflammatory myopathy, or ANCA-associated vasculitis[9](index=9&type=chunk)[10](index=10&type=chunk) - The trial protocol includes a **three-dose cycle** of NKX019 following lymphodepletion, with no supplemental cytokines, to evaluate the single-agent activity of the therapy[11](index=11&type=chunk) [Investigator-Sponsored Clinical Trials](index=2&type=section&id=About%20the%20Investigator-Sponsored%20Clinical%20Trials) Nkarta supports two **Phase 1** investigator-sponsored trials for NKX019 in myasthenia gravis and systemic lupus erythematosus - A **Phase 1** investigator-sponsored trial is enrolling patients with generalized myasthenia gravis to evaluate the safety and clinical outcomes of NKX019[12](index=12&type=chunk) - A separate **Phase 1** investigator-sponsored trial (NCT06518668) is enrolling **up to 6 patients** with systemic lupus erythematosus to evaluate NKX019[14](index=14&type=chunk) [Financial Performance and Position](index=1&type=section&id=Second%20Quarter%202025%20and%20Recent%20Financial%20Highlights) [Financial Highlights and Guidance](index=1&type=section&id=Financial%20Highlights%20and%20Guidance) Nkarta held **$334.0 million** cash as of June 30, 2025, expected to fund operations into 2029, with a Q2 2025 net loss of **$23.0 million** Q2 2025 Financial Summary | Metric | Amount (in millions) | | :--- | :--- | | Cash, Cash Equivalents, and Investments | $334.0 | | Research & Development (R&D) Expenses | $20.8 | | General & Administrative (G&A) Expenses | $6.4 | | Net Loss | $23.0 | | Net Loss per Share | $0.31 | - The company's current cash and cash equivalents are expected to be sufficient to fund its operating plan **into 2029**[8](index=8&type=chunk) [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Nkarta's Q2 2025 total operating expenses decreased to **$27.2 million**, resulting in a net loss of **$23.0 million** Condensed Statements of Operations (in thousands) | Line Item | 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 | $20,778 | $23,130 | $44,950 | $48,367 | | General and administrative | $6,408 | $7,585 | $18,800 | $15,110 | | **Total operating expenses** | **$27,186** | **$30,715** | **$63,750** | **$63,477** | | Loss from operations | ($27,186) | ($30,715) | ($63,750) | ($63,477) | | Interest income | $3,970 | $5,724 | $8,346 | $8,970 | | **Net loss** | **($22,977)** | **($24,993)** | **($54,960)** | **($54,511)** | | Net loss per share, basic and diluted | ($0.31) | ($0.34) | ($0.74) | ($0.88) | [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, Nkarta's total assets were **$448.3 million**, with **$334.0 million** in cash and investments Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, restricted cash and investments | $334,041 | $380,489 | | Total assets | $448,312 | $501,203 | | Total liabilities | $90,644 | $93,227 | | Total stockholders' equity | $357,668 | $407,976 | [Company and Product Information](index=3&type=section&id=About%20Nkarta) [About NKX019](index=3&type=section&id=About%20NKX019) NKX019 is an **allogeneic, off-the-shelf** immunotherapy using engineered NK cells with a **CD19-directed CAR** and **membrane-bound IL-15** - NKX019 is an **allogeneic**, cryopreserved, **off-the-shelf** immunotherapy candidate using NK cells from healthy donors[15](index=15&type=chunk) - It is engineered with a humanized **CD19-directed CAR** and a **membrane-bound form of IL-15** to improve persistence and activity without exogenous cytokine support[15](index=15&type=chunk) [About Nkarta](index=3&type=section&id=About%20Nkarta%20Company) Nkarta is a **clinical-stage** biotechnology company developing **allogeneic, off-the-shelf** NK cell therapies for autoimmune diseases - Nkarta is a **clinical-stage** biotechnology company developing **allogeneic, off-the-shelf** NK cell therapies for autoimmune diseases[16](index=16&type=chunk) - The company's goal is to build a pipeline of cell therapies for broad access in an **outpatient treatment setting**[16](index=16&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Cautionary%20Note%20on%20Forward-Looking%20Statements) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding Nkarta's clinical development timelines, data, regulatory pathways, and cash runway - Forward-looking statements include expectations for clinical development timelines, availability of clinical data, regulatory pathways for NKX019, and the company's cash runway[17](index=17&type=chunk) [Risk Factors](index=4&type=section&id=Risk%20Factors) Key risks include limited operating history, lack of approved products, clinical trial unpredictability, funding needs, and NKX019 dependence - Identified risks include limited operating history, lack of approved products, potential for clinical trial failures, need for additional funding, and competition[18](index=18&type=chunk) - The company is dependent on the clinical success of its lead candidate, NKX019, and faces risks related to manufacturing complexity and third-party reliance[18](index=18&type=chunk) - More detailed risk factors are described in Nkarta's SEC filings, including its Quarterly Report on **Form 10-Q**[19](index=19&type=chunk)

[Corporate Highlights & Pipeline Update](index=1&type=section&id=Corporate%20Highlights%20%26%20Pipeline%20Update) SELLAS advanced its AML pipeline with positive SLS009 Phase 2 results and a positive IDMC recommendation for REGAL [Phase 3 REGAL Trial of GPS](index=1&type=section&id=Phase%203%20REGAL%20Trial%20of%20GPS) The IDMC recommended continuing the Phase 3 REGAL trial for GPS in AML, with final data expected by year-end 2025 - The IDMC issued a positive recommendation to continue the Phase 3 REGAL trial of GPS in AML without modification, identifying no safety concerns[5](index=5&type=chunk) - The final analysis of the REGAL trial is expected by year-end 2025, contingent on reaching 80 patient deaths[5](index=5&type=chunk) [Phase 2 Trial of SLS009 in r/r AML](index=1&type=section&id=Phase%202%20Trial%20of%20SLS009%20in%20r%2Fr%20AML) The Phase 2 SLS009 trial in r/r AML met all primary endpoints, showing a **44% response rate** and **8.9-month mOS** in AML-MRC patients - The trial met all primary endpoints, with a **44% response rate** in patients with Acute Myeloid Leukemia-Myelodysplasia-Related Changes (AML-MRC), exceeding the 20% target[7](index=7&type=chunk) - Median overall survival (mOS) was **8.9 months** in AML-MRC patients and **8.8 months** in patients refractory to venetoclax-based regimens, far exceeding the historical benchmark of **2.4 months**[7](index=7&type=chunk) [SLS009 Future Development](index=2&type=section&id=SLS009%20Future%20Development) The FDA recommended advancing SLS009 into a first-line AML trial, with an **80-patient study** planned for Q1 2026 enrollment - The FDA recommended advancing SLS009 into a trial for newly diagnosed, first-line AML patients eligible for venetoclax/azacitidine therapy[8](index=8&type=chunk) - An **80-patient randomized trial** is being prepared, with enrollment expected to start by **Q1 2026**, potentially supporting an NDA and accelerated approval[8](index=8&type=chunk) [Other Corporate Developments](index=2&type=section&id=Other%20Corporate%20Developments) SELLAS presented positive preclinical data for SLS009, expanded its Scientific Advisory Board, and was included in Russell Indexes - Presented preclinical data at ASCO 2025 showing SLS009's efficacy in ASXL1 mutated colorectal cancer[9](index=9&type=chunk) - Expanded the Scientific Advisory Board with three new members: Philip C. Amrein, MD, Alex Kentsis, MD, PhD, and Linghua Wang, MD, PhD[10](index=10&type=chunk) - Announced inclusion in the Russell 3000® and Russell 2000® Indexes[11](index=11&type=chunk) - A poster on the preclinical efficacy of SLS009 in T-Cell Prolymphocytic Leukemia (T-PLL) will be presented at ESMO 2025[12](index=12&type=chunk) [Financial Results for the Second Quarter 2025](index=3&type=section&id=Financial%20Results%20for%20the%20Second%20Quarter%202025) SELLAS reported a reduced net loss of **$6.6 million** in Q2 2025, driven by lower R&D expenses, ending with **$25.3 million** in cash [R&D Expenses](index=3&type=section&id=R%26D%20Expenses) Research and development expenses decreased to **$3.9 million** in Q2 2025, primarily due to reduced clinical trial costs R&D Expenses Comparison (in millions) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Q2** | $3.9 | $5.2 | | **H1** | $7.1 | $10.3 | [G&A Expenses](index=3&type=section&id=G%26A%20Expenses) General and administrative expenses increased to **$3.0 million** in Q2 2025, driven by higher professional fees and personnel costs G&A Expenses Comparison (in millions) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Q2** | $3.0 | $2.4 | | **H1** | $5.9 | $7.0 | [Net Loss](index=3&type=section&id=Net%20Loss) Net loss decreased to **$6.6 million** (or **$0.07 per share**) in Q2 2025, an improvement from **$7.5 million** in Q2 2024 Net Loss and Loss Per Share Comparison | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Loss (in millions)** | $6.6 | $7.5 | $12.4 | $17.0 | | **Loss Per Share** | $0.07 | $0.13 | $0.13 | $0.33 | [Cash Position](index=3&type=section&id=Cash%20Position) Cash and cash equivalents totaled **$25.3 million** as of June 30, 2025, with an additional **$4.0 million** from warrant exercises - Cash and cash equivalents totaled **$25.3 million** as of June 30, 2025[16](index=16&type=chunk) - The company received an additional **$4.0 million** in proceeds from warrant exercises in July 2025[16](index=16&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents SELLAS Life Sciences' unaudited consolidated Statements of Operations and Balance Sheets for Q2 2025 [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Total operating expenses were **$6.9 million** and net loss was **$6.6 million** for Q2 2025, an improvement from Q2 2024 Consolidated Statements of Operations (Unaudited, in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Research and development (in thousands)** | $3,871 | $5,186 | $7,076 | $10,297 | | **General and administrative (in thousands)** | $3,002 | $2,435 | $5,860 | $6,969 | | **Total operating expenses (in thousands)** | $6,873 | $7,621 | $12,936 | $17,266 | | **Loss from operations (in thousands)** | $(6,873) | $(7,621) | $(12,936) | $(17,266) | | **Interest income (in thousands)** | $272 | $151 | $522 | $230 | | **Net loss (in thousands)** | **$(6,601)** | **$(7,470)** | **$(12,414)** | **$(17,036)** | | **Net loss per share, basic and diluted (in dollars)** | $(0.07) | $(0.13) | $(0.13) | $(0.33) | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets were **$32.3 million** and total stockholders' equity was **$26.1 million** as of June 30, 2025, a significant increase Consolidated Balance Sheet Highlights (Unaudited, in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents (in thousands)** | $25,297 | $13,886 | | **Total current assets (in thousands)** | $29,447 | $16,327 | | **Total assets (in thousands)** | **$32,305** | **$19,432** | | **Total current liabilities (in thousands)** | $5,999 | $9,510 | | **Total liabilities (in thousands)** | $6,156 | $9,967 | | **Total stockholders' equity (in thousands)** | **$26,149** | **$9,465** | | **Total liabilities and stockholders' equity (in thousands)** | **$32,305** | **$19,432** | [About SELLAS and Forward-Looking Statements](index=4&type=section&id=About%20SELLAS%20and%20Forward-Looking%20Statements) SELLAS is a late-stage biopharmaceutical company developing cancer therapies, with forward-looking statements subject to risks - SELLAS is a late-stage biopharmaceutical company developing cancer therapies, with lead candidates GPS (targeting WT1 protein) and SLS009 (a CDK9 inhibitor)[17](index=17&type=chunk) - The report includes forward-looking statements concerning clinical development, timing of milestones, and potential regulatory approvals, which are subject to inherent risks and uncertainties[18](index=18&type=chunk)

[Executive Summary & Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Outlook) Rekor Systems reduced operating expenses by 17% and narrowed Adjusted EBITDA loss in Q2 2025, focusing on disciplined execution, AI data fusion, and a new General Manager structure - Management's focus for the second half of 2025 is on disciplined execution, expanding margins, and positioning the company for sustained long-term growth[2](index=2&type=chunk) - The company is building a connected intelligence infrastructure for modern transportation, with growing trust from agencies like TxDOT and CTRMA reflecting a broader industry shift toward AI-powered data fusion[6](index=6&type=chunk) - A new General Manager structure has been implemented, giving each business unit full P&L responsibility to drive innovation and scale operations more effectively[6](index=6&type=chunk) Q2 2025 Financial Highlights Summary | Metric | Value/Change | | :--- | :--- | | Quarterly Gross Revenue | $12.4 million (nearly flat YoY) | | Operating Expense Reduction | 17% (QoQ and YoY) | | Adjusted EBITDA Loss | Narrowed by $2 million for the six-month period | | ATM Offering | Terminated | [Operational & Strategic Highlights](index=1&type=section&id=Operational%20%26%20Strategic%20Highlights) Rekor secured a statewide blanket purchase order from TxDOT, a $1.4 million contract extension with CTRMA, and a new $1.2 million DaaS agreement, expanding its RoadView platform to smaller municipalities - Received a statewide blanket purchase order for Rekor Command® from the Texas Department of Transportation (TxDOT), with initial operations in Austin showing substantial benefits[2](index=2&type=chunk) - CTRMA extended its use of Rekor Command® with a **$1.4 million**, five-year contract, citing a **324% increase in incident detection** and an **11-minute reduction in average response time** from previous deployments[2](index=2&type=chunk) - Began a **$1.2 million** Data-as-a-Service (DaaS) deployment of 150 Rekor Discover® systems in a major Sun Belt state, expanding its recurring revenue model[3](index=3&type=chunk) - Expanded its RoadView situational awareness platform to municipalities and counties lacking 24/7 traffic operations centers, providing real-time visibility without significant infrastructure investment[5](index=5&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) This section analyzes Rekor's Q2 2025 financial results, highlighting a nearly flat year-over-year revenue but significant reductions in operating loss and improved Adjusted EBITDA through cost containment [Revenue and Gross Profit](index=2&type=section&id=Revenue%20and%20Gross%20Profit) Q2 2025 revenue was $12.4 million, a 1% decrease year-over-year, with Adjusted Gross Margin falling to 49.5% due to a less favorable software and hardware revenue mix Revenue and Adjusted Gross Profit (in thousands) | Period | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Three Months** | Revenue | $12,359 | $12,427 | -1% | | | Adjusted Gross Profit | $6,114 | $6,651 | -8% | | | Adjusted Gross Margin | 49.5% | 53.5% | -7% | | **Six Months** | Revenue | $21,557 | $22,205 | -3% | | | Adjusted Gross Profit | $10,551 | $11,144 | -5% | | | Adjusted Gross Margin | 48.9% | 50.2% | -3% | - The decrease in revenue for the six-month period was primarily attributed to adverse weather conditions and a slowdown in project activity within the government sector[8](index=8&type=chunk) - The increase in cost of revenue and subsequent decrease in Adjusted Gross Margin was due to the mix of software and hardware revenue, as software sales typically carry a higher margin[9](index=9&type=chunk)[10](index=10&type=chunk) [Loss from Operations](index=3&type=section&id=Loss%20from%20Operations) Rekor significantly improved operational profitability in Q2 2025, reducing its loss from operations by 23% year-over-year to $(7.7) million, driven by successful cost containment efforts Loss from Operations (in thousands) | Period | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Three Months** | $(7,735) | $(10,075) | $2,340 | -23% | | **Six Months** | $(17,874) | $(22,991) | $5,117 | -22% | - The reduction in operating loss was primarily due to lower payroll and related costs resulting from cost containment efforts[11](index=11&type=chunk) - The loss from operations improved by **$2.4 million**, or **24%**, in Q2 2025 compared to Q1 2025[12](index=12&type=chunk) [EBITDA and Adjusted EBITDA](index=3&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $(5.8) million, nearly flat year-over-year, but the six-month Adjusted EBITDA loss improved by $2.0 million to $(13.1) million due to better cost management EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Period | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | | Net Loss | $(8,658) | $(9,795) | $(19,532) | $(28,409) | | | EBITDA | $(6,511) | $(6,907) | $(15,239) | $(22,135) | | | **Adjusted EBITDA** | **$(5,788)** | **$(5,792)** | **$(13,146)** | **$(15,160)** | - The company defines Adjusted EBITDA as net loss adjusted for interest, taxes, depreciation, amortization, stock-based compensation, and other non-recurring items[13](index=13&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents Rekor Systems' unaudited condensed consolidated financial statements, including Balance Sheets and Statements of Operations, for periods ending June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Rekor's total assets were $80.1 million, total liabilities decreased to $44.7 million, and total stockholders' equity increased to $35.4 million Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,830 | $5,013 | | Total current assets | $21,380 | $19,930 | | **Total assets** | **$80,072** | **$82,475** | | Total current liabilities | $15,221 | $18,223 | | **Total liabilities** | **$44,673** | **$48,334** | | **Total stockholders' equity** | **$35,399** | **$34,141** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Rekor reported a Q2 2025 net loss of $(8.7) million, or $(0.07) per share, an improvement from Q2 2024, with the six-month net loss also narrowing significantly to $(19.5) million Key Statement of Operations Items (in thousands, except per share data) | Period | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | | Revenue | $12,359 | $12,427 | $21,557 | $22,205 | | | Loss from operations | $(7,735) | $(10,075) | $(17,874) | $(22,991) | | | **Net loss** | **$(8,658)** | **$(9,795)** | **$(19,532)** | **$(28,409)** | | | **Loss per common share** | **$(0.07)** | **$(0.12)** | **$(0.17)** | **$(0.35)** | [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) Rekor Systems will host a conference call on August 12, 2025, at 4:30 P.M. ET, to discuss Q2 2025 financial results, with replay and webcast options available - A conference call to discuss Q2 2025 results is scheduled for Tuesday, August 12, 2025, at 4:30 P.M. (Eastern)[15](index=15&type=chunk) - A replay of the call will be available for two weeks via dial-in, and an archived webcast will be available on the company's investor relations website[16](index=16&type=chunk) [About Rekor Systems, Inc.](index=4&type=section&id=About%20Rekor%20Systems%2C%20Inc.) Rekor Systems, Inc. (NASDAQ: REKR) specializes in AI-enabled roadway intelligence systems, utilizing its Rekor One® platform to aggregate mobility data for actionable insights to improve road safety and efficiency - Rekor develops and implements roadway intelligence systems using AI, computer vision, and machine learning[17](index=17&type=chunk) - The company's core Rekor One® platform collects and organizes mobility data to create a digitally-enabled operating system for roadways[17](index=17&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains a standard safe harbor statement, cautioning that the press release includes forward-looking statements subject to substantial risks and uncertainties, advising readers to refer to SEC filings - The press release contains forward-looking statements regarding future results, business strategy, and objectives, which are subject to significant risks and uncertainties[18](index=18&type=chunk) - Readers are cautioned not to place undue reliance on these statements and are directed to the 'Risk Factors' section of the company's SEC filings for more information[18](index=18&type=chunk)

Exhibit 99.1 Caribou Biosciences Reports Second Quarter 2025 Financial Results and Provides Business Update -- Two robust clinical datasets from CB-010 and CB-011 expected to be disclosed in H2 2025 -- -- $184 million in cash, cash equivalents, and marketable securities expected to fund the Company's current operating plan into H2 2027 -- BERKELEY, Calif., August 12, 2025 (GLOBE NEWSWIRE) -- Caribou Biosciences, Inc. (Nasdaq: CRBU), a leading clinical-stage CRISPR genome-editing biopharmaceutical company, t ...

[Business Updates](index=1&type=section&id=Business%20Updates) Metagenomi advanced its MGX-001 Hemophilia A program, showcased platform technology, and strengthened its board and R&D committee [MGX-001 Hemophilia A Program](index=1&type=section&id=MGX-001%20Hemophilia%20A%20Program) MGX-001 demonstrated durable FVIII activity in NHP studies, with IND/CTA submissions planned for 2026, and alternative constructs under evaluation - The company plans to submit an **Investigational New Drug (IND)** and **Clinical Trial Application (CTA)** for its Hemophilia A program in 2026[3](index=3&type=chunk) Long-Term NHP Study FVIII Activity Levels (Months 12-19) | Animal ID | Mean FVIII Activity | | :--- | :--- | | 1001 | 75% | | 1002 | 8% | | 1003 | 29% | - Emerging data from a bioengineered FVIII construct showed **higher than expected activity**, prompting additional studies and consideration of alternatives[3](index=3&type=chunk) [Platform Technology Updates](index=2&type=section&id=Platform%20Technology%20Updates) Metagenomi presented early proof-of-concept data for compact nucleases and novel CAST systems at ASGCT and TIDES conferences - Presented three abstracts at the **ASGCT 28th Annual Meeting in May 2025**, highlighting early proof-of-concept data for compact nucleases and novel CAST systems for large genomic integrations[8](index=8&type=chunk) - Delivered an oral presentation at **TIDES 2025** on the use of AI to systematically identify and optimize efficient compact gene editing systems[8](index=8&type=chunk) [Corporate Updates](index=2&type=section&id=Corporate%20Updates) The company appointed Dr. Laurence Reid to its Board of Directors and established a new R&D Committee for strategic insights - In August 2025, **Laurence Reid, Ph.D.**, was appointed to the Board of Directors[8](index=8&type=chunk) - A new **Research and Development (R&D) Committee** was established within the Board of Directors to provide scientific and clinical strategy insights[8](index=8&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Metagenomi reported a **$205.0 million** cash position, reduced R&D and G&A expenses, and a **$19.9 million** net loss for Q2 2025 [Financial Performance Summary](index=2&type=section&id=Financial%20Performance%20Summary) The company maintained a **$205.0 million** cash position as of June 30, 2025, with reduced R&D and G&A expenses year-over-year - Cash, cash equivalents, and available-for-sale marketable securities totaled **$205.0 million** as of June 30, 2025, anticipated to support operations into 2027[1](index=1&type=chunk)[6](index=6&type=chunk) Quarterly Operating Expenses (YoY Comparison) | Expense Category | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | R&D Expenses | $22.5M | $28.3M | ($5.8M) | | G&A Expenses | $7.0M | $8.6M | ($1.6M) | [Condensed Financial Statements](index=5&type=section&id=Condensed%20Financial%20Statements) The condensed balance sheet shows total assets of **$272.3 million** and total stockholders' equity of **$195.8 million** as of June 30, 2025, both decreasing from year-end 2024; Q2 2025 operations reported **$8.5 million** in collaboration revenue and a **$19.9 million** net loss Condensed Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $204,993 | $248,307 | | Total assets | $272,284 | $324,599 | | Total liabilities | $76,453 | $89,742 | | Total stockholders' equity | $195,831 | $234,857 | Condensed Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Collaboration revenue | $8,513 | $20,008 | | Total operating expenses | $29,500 | $36,871 | | Loss from operations | $(20,987) | $(16,863) | | Net loss | $(19,908) | $(10,739) | | Net loss per share | $(0.54) | $(0.29) | [Company Overview](index=3&type=section&id=Company%20Overview) Metagenomi is a precision gene editing company leveraging an AI-driven platform to develop genome editing therapeutics, with a lead program targeting Hemophilia A - Metagenomi is a precision gene editing company utilizing **AI and machine learning** to develop next-generation genome editing therapeutics[10](index=10&type=chunk) - The company's platform encompasses a full spectrum of gene editing technologies, including **ultra-small nucleases, base editors, and CRISPR-associated transposase (CAST) systems**[10](index=10&type=chunk) - The lead development program targets **Hemophilia A**, an X-linked inherited bleeding disorder affecting over **500,000 patients globally**[9](index=9&type=chunk)[10](index=10&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding product development, regulatory filings, and financial runway, subject to various risks and uncertainties - The press release contains forward-looking statements regarding product development programs, timing of regulatory filings, potential therapies, and the company's anticipated cash runway[11](index=11&type=chunk) - Actual results may differ materially due to risks and uncertainties, including those related to **R&D activities, clinical testing, third-party supplier dependence, competition, and macroeconomic factors**[11](index=11&type=chunk)[12](index=12&type=chunk)

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201%20Financial%20Statements%20%28Unaudited%29) The unaudited condensed consolidated financial statements for ALX Oncology Holdings Inc. as of June 30, 2025, show a decrease in total assets to $95.3 million from $147.8 million at year-end 2024, primarily due to a reduction in cash and investments [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company had total assets of $95.3 million, a decrease from $147.8 million at December 31, 2024, driven by a reduction in cash, cash equivalents, and short-term investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $19,302 | $17,567 | | Short-term investments | $60,012 | $110,190 | | Total current assets | $85,257 | $134,352 | | **Total assets** | **$95,320** | **$147,775** | | **Liabilities & Equity** | | | | Total current liabilities | $18,848 | $18,500 | | **Total liabilities** | **$30,905** | **$34,157** | | **Total stockholders' equity** | **$64,415** | **$113,618** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported a net loss of $25.9 million, an improvement from the $39.4 million loss in the same period of 2024, primarily due to lower research and development expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $18,022 | $34,653 | $41,910 | $66,370 | | General and administrative | $5,451 | $6,872 | $13,383 | $12,917 | | Impairment charge | $3,175 | $— | $3,175 | $— | | Total operating expenses | $26,648 | $41,525 | $58,468 | $79,287 | | Loss from operations | $(26,648) | $(41,525) | $(58,468) | $(79,287) | | **Net loss** | **$(25,949)** | **$(39,399)** | **$(56,703)** | **$(74,980)** | | Net loss per share | $(0.49) | $(0.76) | $(1.05) | $(1.47) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was $48.1 million, offset by $50.0 million provided by investing activities, resulting in a net increase in cash of $1.7 million Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(48,069) | $(64,490) | | Net cash provided by investing activities | $49,961 | $27,380 | | Net cash (used in) provided by financing activities | $(157) | $30,238 | | **Net increase (decrease) in cash** | **$1,735** | **$(6,872)** | | Cash at end of period | $19,368 | $15,600 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, financial instruments, and operational structure, including its clinical-stage status, reliance on future financing, and an impairment charge related to a leased property - The company is a clinical-stage biotechnology firm with no product revenues and expects to incur additional losses, though management believes existing capital is sufficient to fund operations for at least the next twelve months[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - In May 2025, the company decided to sublease its Palo Alto property, resulting in a pre-tax long-lived asset impairment charge of **$3.2 million** on the right-of-use asset and leasehold improvements[55](index=55&type=chunk)[140](index=140&type=chunk) - The company has a term loan agreement for up to **$100.0 million**, with **$10.0 million** drawn, and a **$25.0 million** tranche remained available at the lenders' sole discretion as of June 30, 2025, after the company opted not to draw down other available tranches[63](index=63&type=chunk)[156](index=156&type=chunk) - As of June 30, 2025, the company had non-cancellable commitments of approximately **$1.5 million** for manufacturing and services, primarily with KBI Biopharma and three other contract manufacturers[89](index=89&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's clinical-stage pipeline, led by evorpacept and ALX2004, highlighting recent clinical trial results, strategic shifts to preserve capital, and financial performance showing a reduced net loss for Q2 2025 [Overview](index=21&type=section&id=Overview) ALX Oncology is a clinical-stage biotechnology company focused on cancer therapies, with lead product evorpacept showing promising results in gastric cancer but not qualifying for accelerated FDA approval, leading to a strategic focus on the ASPEN-Breast trial - Lead product evorpacept is a next-generation CD47 blocker designed to avoid hematologic toxicities of other CD47 approaches[94](index=94&type=chunk)[95](index=95&type=chunk) - In the ASPEN-06 trial for gastric cancer, evorpacept plus TRP showed a **65% ORR** in CD47-high patients, compared to **26%** with TRP alone, with full data to be presented in Q4 2025[103](index=103&type=chunk)[105](index=105&type=chunk) - The FDA advised that ASPEN-06 data is not eligible for accelerated approval, leading the company to not pursue a Phase 3 trial in gastric cancer and instead focus resources on the ASPEN-Breast trial[105](index=105&type=chunk) - The company's second candidate, ALX2004, an EGFR-targeted ADC, received IND clearance from the FDA in April 2025[115](index=115&type=chunk) - The company received a Nasdaq minimum bid price non-compliance notice on April 23, 2025, and has until October 20, 2025, to regain compliance[114](index=114&type=chunk)[117](index=117&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) The company's net loss decreased to $25.9 million in Q2 2025 from $39.4 million in Q2 2024, primarily driven by a 48% decrease in R&D expenses and a 21% decrease in G&A expenses Comparison of Results of Operations (in thousands) | Item | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $18,022 | $34,653 | $(16,631) | -48% | | General and administrative | $5,451 | $6,872 | $(1,421) | -21% | | Impairment charge | $3,175 | $— | $3,175 | 100% | | **Loss from operations** | **$(26,648)** | **$(41,525)** | **$14,877** | **-36%** | | **Net loss** | **$(25,949)** | **$(39,399)** | **$13,450** | **-34%** | - R&D expenses for Q2 2025 decreased by **$16.6 million** year-over-year, mainly due to a decrease of **$8.5 million** in clinical and development costs (less manufacturing of clinical trial materials) and a **$4.1 million** decrease in stock-based compensation[135](index=135&type=chunk) - G&A expenses for Q2 2025 decreased by **$1.4 million** year-over-year, primarily due to a **$1.0 million** decrease in stock-based compensation and lower legal consulting costs[138](index=138&type=chunk) - A **$3.2 million** impairment charge was recorded in Q2 2025 after the company decided to sublease its Palo Alto property[140](index=140&type=chunk) [Liquidity and Capital Resources; Plan of Operations](index=29&type=section&id=Liquidity%20and%20Capital%20Resources%3B%20Plan%20of%20Operations) As of June 30, 2025, the company had $83.5 million in cash, cash equivalents, and investments, which management believes is sufficient to fund operations into the first quarter of 2027 - The company had cash, cash equivalents, and investments of **$83.5 million** as of June 30, 2025[144](index=144&type=chunk)[189](index=189&type=chunk) - Management estimates that existing cash will fund operating expenses and capital requirements into the **first quarter of 2027**[157](index=157&type=chunk)[189](index=189&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(48,069) | $(64,490) | | Net cash provided by investing activities | $49,961 | $27,380 | | Net cash (used in) provided by financing activities | $(157) | $30,238 | - The company decided not to draw down on a **$40.0 million** tranche of its loan agreement by the June 30, 2024 deadline, resulting in only a **$25.0 million** tranche remaining available at the lenders' sole discretion as of June 30, 2025[156](index=156&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are related to interest rate sensitivity on its $83.5 million in cash and investments and $10.0 million in floating-rate debt, and credit risk managed through highly-rated securities - The company is exposed to interest rate risk on its **$83.5 million** in cash, cash equivalents, and investments, and on its **$10.0 million** in floating-rate debt[171](index=171&type=chunk)[172](index=172&type=chunk) - Borrowings under the Loan Agreement bear interest at a floating rate equal to the greater of 1-month term SOFR or **2.33%**, plus **6.25%**[172](index=172&type=chunk) - Credit risk is concentrated in cash and investments, mitigated by investing in highly-rated securities, though deposits may exceed federally insured limits[173](index=173&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[178](index=178&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[180](index=180&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings, while acknowledging potential involvement in legal matters in the ordinary course of business - As of the filing date, the company is not a party to any material legal proceedings[182](index=182&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A%20Risk%20Factors) This section details significant risks including a history of net losses, the need for substantial additional capital, dependence on evorpacept's success, clinical trial uncertainties, reliance on third-party manufacturers, competition, intellectual property challenges, potential Nasdaq delisting, and regulatory hurdles [Risks Related to Financial Position and Need for Additional Capital](index=36&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company has a history of significant net losses and expects them to continue, requiring substantial additional capital to fund operations, with existing cash projected to last into Q1 2027, subject to restrictive loan covenants - The company has incurred significant net losses since inception, with an accumulated deficit of **$677.8 million** as of June 30, 2025, and expects to continue incurring losses[186](index=186&type=chunk) - The company will require substantial additional capital, with existing cash of **$83.5 million** projected to fund operations into **Q1 2027**, though this estimate is subject to change[188](index=188&type=chunk)[189](index=189&type=chunk) - The company's Loan Agreement contains covenants that restrict its ability to, among other things, incur additional debt, make acquisitions, or pay dividends, and a default could lead to acceleration of obligations[197](index=197&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [Risks Related to Product Discovery, Development, and Commercialization](index=39&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) The company's success is heavily dependent on its lead candidate, evorpacept, facing inherent risks in clinical development, potential adverse side effects, substantial competition, and reliance on third-party manufacturers for supply and quality - The business is substantially dependent on the success of its lead product candidate, evorpacept, which has not completed a pivotal trial[202](index=202&type=chunk) - Early clinical trial outcomes are not predictive of later success, as evidenced by the company's April 2025 announcement that Phase 2 trials for evorpacept in HNSCC (ASPEN-03 and ASPEN-04) did not meet their primary endpoints[203](index=203&type=chunk)[205](index=205&type=chunk) - The company relies on third-party contract manufacturers for its product candidates and has no manufacturing facilities of its own, creating risks related to supply, quality, and regulatory compliance[233](index=233&type=chunk) - The company faces substantial competition from major pharmaceutical and biotech companies, many of whom are also developing drugs targeting the CD47 pathway, including Pfizer and Gilead Sciences[220](index=220&type=chunk)[221](index=221&type=chunk) [Risks Related to Government Regulation](index=50&type=section&id=Risks%20Related%20to%20Government%20Regulation) The company is subject to extensive, costly, and unpredictable government regulation, including lengthy approval processes, post-marketing requirements, potential impacts from healthcare reform, and compliance with fraud, abuse, data privacy, and anti-corruption laws - The regulatory approval process is lengthy and unpredictable, and there is no guarantee of approval for any product candidate[271](index=271&type=chunk) - While the company has received Fast Track and Orphan Drug designations for evorpacept, these may not lead to a faster review or approval and do not increase the likelihood of receiving marketing approval[276](index=276&type=chunk)[278](index=278&type=chunk) - Current and future legislation, including the Inflation Reduction Act of 2022, may increase the difficulty and cost of commercialization and negatively affect drug pricing[280](index=280&type=chunk)[285](index=285&type=chunk) - The company is subject to complex data privacy laws like GDPR in Europe and CCPA/CPRA in California, which impose significant compliance costs and potential liabilities for non-compliance[303](index=303&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) [Risks Related to Intellectual Property](index=61&type=section&id=Risks%20Related%20to%20Intellectual%20Property) The company's success depends on its ability to obtain, maintain, and enforce patent protection, facing an uncertain and litigious patent landscape, global protection challenges, infringement claims from third parties, and difficulties in protecting trade secrets - The company's ability to protect its product candidates through patents is uncertain and may not prevent competitors from developing similar products[313](index=313&type=chunk)[315](index=315&type=chunk) - The company may not be able to protect its intellectual property rights globally, as laws in some foreign countries are less protective than in the U.S[318](index=318&type=chunk) - The company is aware of third-party patents, such as those owned by University Health Network (UHN) and licensed to Pfizer, that could potentially be construed to cover evorpacept and limit its ability to commercialize in certain indications and geographies[343](index=343&type=chunk) - The company relies on trade secrets and confidentiality agreements, but these may be breached, and enforcing claims of misappropriation is difficult and costly[334](index=334&type=chunk)[335](index=335&type=chunk) [Risks Related to Operations](index=69&type=section&id=Risks%20Related%20to%20Our%20Operations) The company faces operational risks including managing growth, hiring and retaining key personnel, potential adverse effects from a recent reduction in force, reliance on third parties for critical services, challenges with novel technology, and potential product liability claims - The company is highly dependent on key personnel and faces significant competition for talent, with a recently announced reduction in force (RIF) potentially harming morale and leading to loss of expertise[361](index=361&type=chunk) - The company relies on third parties for crucial services, including clinical trial management and manufacturing, and any failure by these parties could delay or terminate development programs[358](index=358&type=chunk) - The company's product candidates are based on novel technology, making it difficult to predict the time and cost of development[360](index=360&type=chunk) - The company may be exposed to costly product liability claims from clinical trials or commercial use, and its insurance may not be sufficient to cover all damages[371](index=371&type=chunk)[373](index=373&type=chunk) [Risks Related to Ownership of Our Common Stock](index=74&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Ownership of the company's common stock involves significant risk due to high price volatility, non-compliance with Nasdaq's minimum bid price requirement, potential dilution from future equity financings, significant insider control, and a history of material weaknesses in internal controls - The trading price of the company's common stock is highly volatile[389](index=389&type=chunk) - The company is not in compliance with the Nasdaq Global Select Market's minimum bid price requirement and faces a risk of delisting if it cannot regain compliance by October 20, 2025[394](index=394&type=chunk) - Future sales of common stock, including under the ATM facility or upon exercise of warrants, will cause dilution to stockholders[388](index=388&type=chunk)[414](index=414&type=chunk) - As of June 30, 2025, executive officers, directors, and affiliated 5% holders beneficially owned approximately **21.3%** of the stock, allowing them to exert significant control[410](index=410&type=chunk) - The company has identified and remediated material weaknesses in internal control over financial reporting in the past and may identify others in the future, which could harm investor confidence[422](index=422&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no material change in the planned use of proceeds from its initial public offering and no unregistered sales of equity securities during the period - There has been no material change in the planned use of proceeds from the company's initial public offering[438](index=438&type=chunk) - There were no unregistered sales of equity securities in the reported quarter[439](index=439&type=chunk) [Item 3. Defaults Upon Senior Securities](index=83&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) This item is not applicable as the company has not defaulted upon any senior securities - Not applicable[441](index=441&type=chunk) [Item 4. Mine Safety Disclosures](index=83&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[442](index=442&type=chunk) [Item 5. Other Information](index=83&type=section&id=Item%205%20Other%20Information) The company reports that none of its officers or directors adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the last fiscal quarter - No officers or directors adopted or terminated a Rule 10b5-1 trading arrangement during the last fiscal quarter[443](index=443&type=chunk) [Item 6. Exhibits](index=84&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and XBRL data files - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and Inline XBRL documents[445](index=445&type=chunk)