[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)

PART I. FINANCIAL INFORMATION [Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The consolidated financial statements for the quarter ended June 30, 2025, show a significant shift to a net income of $25.2 million from a net loss of $15.5 million in the prior year's quarter, primarily driven by a non-cash gain of $33.9 million from the exchange of intangible assets [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $359.6 million, an increase from $333.1 million at March 31, 2025, primarily due to a rise in intangible assets from $229.0 million to $265.3 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $41,432 | $47,374 | | Intangible assets | $265,319 | $228,983 | | **Total assets** | **$359,577** | **$333,104** | | **Liabilities & Equity** | | | | Contingent liability | $23,311 | $23,429 | | Deferred revenue | $128,214 | $124,672 | | **Total liabilities** | **$174,806** | **$176,503** | | **Total stockholders' equity** | **$184,771** | **$156,601** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported a net income of $25.2 million, a significant turnaround from a net loss of $15.5 million in the same period of 2024, primarily driven by a $33.9 million gain on the exchange of intangible assets Quarterly Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 (ended Jun 30) | Q1 2024 (ended Jun 30) | | :--- | :--- | :--- | | Spectrum revenue | $1,418 | $1,525 | | Total operating expenses | $13,806 | $16,630 | | Gain on exchange of intangible assets, net | $33,916 | $93 | | Income (loss) from operations | $22,481 | ($15,012) | | **Net income (loss)** | **$25,180** | **($15,524)** | | Net income (loss) per share basic | $1.35 | ($0.84) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended June 30, 2025, net cash used in operating activities was $3.1 million, compared to $2.4 million in the prior-year period, with overall cash and cash equivalents decreasing by $6.4 million Quarterly Cash Flow Summary (in thousands) | Cash Flow Activity | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,140) | ($2,361) | | Net cash used in investing activities | ($2,665) | ($5,400) | | Net cash used in financing activities | ($642) | ($1,071) | | **Net change in cash and cash equivalents** | **($6,447)** | **($8,832)** | [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide further information on financial statement items, including a $33.9 million gain on intangible asset exchange and $180.1 million in remaining performance obligations - The company operates as a **single operating and reportable segment**, focused on commercializing its **900 MHz spectrum assets** in the United States to utility and critical infrastructure customers[25](index=25&type=chunk)[36](index=36&type=chunk) - A significant **non-cash gain of $33.9 million** was recorded from exchanging narrowband licenses for new broadband licenses in 62 counties, which is the **primary driver of the company's net income** for the quarter[45](index=45&type=chunk) - As of June 30, 2025, the company had **$180.1 million in remaining performance obligations** from contracted revenue, which will be recognized over contract terms of up to 30 years[35](index=35&type=chunk) - The company has a share repurchase program with **$227.7 million remaining** as of June 30, 2025, and **no shares were repurchased** during the quarter[62](index=62&type=chunk)[64](index=64&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the $40.7 million year-over-year increase in net income primarily to a $33.8 million increase in the non-monetary gain on the exchange of intangible assets and a $2.4 million decrease in general and administrative expenses [Results of Operations](index=22&type=section&id=Results%20of%20Operations) The company's net income increased by $40.7 million to $25.2 million for the quarter ended June 30, 2025, compared to a net loss of $15.5 million in the prior-year period, mainly due to a $33.9 million gain on the exchange of intangible assets - The **primary driver** for the increase in net income was a **$33.8 million increase** in the gain on exchange of intangible assets, from $0.1 million in Q1 2024 to $33.9 million in Q1 2025[89](index=89&type=chunk) - General and administrative expenses **decreased by $2.4 million (19%)** due to lower headcount-related costs, stock compensation, and consulting fees[89](index=89&type=chunk) - Product development expenses **decreased by $0.6 million (36%)**, primarily from lower contract consulting fees and IT-related costs[89](index=89&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily sourced from its $41.4 million in cash and cash equivalents and customer contract proceeds, which management asserts are sufficient for at least the next 12 months - The company's principal source of liquidity is its cash and cash equivalents of **$41.4 million** as of June 30, 2025[88](index=88&type=chunk) - As of June 30, 2025, total estimated future payments for agreements with incumbents to acquire, retune, or swap wireless licenses are approximately **$44.2 million**[102](index=102&type=chunk) - The company has a guaranty agreement with Xcel Energy with a maximum potential liability of future undiscounted payments of approximately **$61.2 million** as of June 30, 2025[103](index=103&type=chunk) - The 2023 Share Repurchase Program has **$227.7 million remaining** available for repurchases through September 21, 2026[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company identifies its primary market risks as interest rate sensitivity and inflation, with interest rate risk considered immaterial and no exposure to foreign currency risk - The company's **primary market risk** is interest income sensitivity from changes in U.S. interest rates, but a 10% change is **not expected to have a material impact**[108](index=108&type=chunk) - The company has **no exposure to foreign currency exchange rate fluctuations** as all operations and transactions are denominated in U.S. dollars[109](index=109&type=chunk) - **Inflationary factors are a risk**, potentially increasing operating expenses and negatively impacting customers' businesses, which could harm commercialization efforts[110](index=110&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management 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 - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report (June 30, 2025)[112](index=112&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[113](index=113&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently involved in any material legal proceedings - The company is **not involved in any material legal proceedings** at this time[117](index=117&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - There have been **no material changes** from the risk factors as previously disclosed in the company's 2025 Annual Report[118](index=118&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any of its common stock during the three months ended June 30, 2025, with approximately $227.7 million remaining available for future repurchases under the 2023 Share Repurchase Program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Dollar Value that May Yet be Purchased ($ thousands) | | :--- | :--- | :--- | :--- | | April 2025 | — | $ — | $227,662 | | May 2025 | — | $ — | $227,662 | | June 2025 | — | $ — | $227,662 | | **Total** | **—** | **$ —** | **$227,662** | [Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - **None**[122](index=122&type=chunk) [Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[124](index=124&type=chunk) [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) During the quarter ended June 30, 2025, no director or executive officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - **No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement** during the three months ended June 30, 2025[125](index=125&type=chunk) [Exhibits](index=31&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 - Key exhibits filed include **CEO and CFO certifications** pursuant to Sarbanes-Oxley Sections 302 and 906[127](index=127&type=chunk) - Financial statements and notes are provided in **Inline XBRL format** as Exhibit 101[127](index=127&type=chunk)

Exhibit 99.1 SIMILARWEB ANNOUNCES SECOND QUARTER 2025 RESULTS Revenue growth of 17% in the second quarter Positive non-GAAP operating profit and free cash flow Customer base increased by 18% TEL AVIV, ISRAEL -- August 12, 2025 -- Similarweb Ltd. (NYSE: SMWB) ("Similarweb" or the "Company"), a leading digital data and analytics company powering critical business decisions, today announced financial results for its second quarter ended June 30, 2025. The Company published a letter to shareholders from managem ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40021 AEON Biopharma, Inc. (Exact name of registrant as specified in its charter) Delaware 85-3940478 (I.R.S. ...

[Company Overview and Q2 2025 Performance](index=1&type=section&id=Company%20Overview%20and%20Q2%202025%20Performance) [Q2 2025 Financial and Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Highlights) Q2 2025 saw an 8% revenue decrease to $31.7 million, yet gross profit rose 8% and operating losses improved significantly Q2 2025 vs Q2 2024 Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :-------------------------- | :----------------- | :----------------- | :--------- | | Revenue | $31.7 | $34.5 | -8% | | Gross Profit | $7.9 | $7.3 | +8% | | Gross Margin | 25% | 21% | +4 ppts | | GAAP Operating Expenses | $10.1 | $15.7 | -36% | | Non-GAAP Operating Expenses | $8.1 | $13.5 | -40% | | GAAP Operating Loss | $(2.2) | $(8.3) | +74% (Improvement) | | Non-GAAP Operating Loss | $(0.2) | $(6.2) | +97% (Improvement) | - Approximately **191,000 dispatches** completed in Q2 2025[5](index=5&type=chunk) - Consumer satisfaction score of **4.7 out of 5 stars**[5](index=5&type=chunk) - Launched **SPARK**, Urgently's proprietary AI-powered market analyzer designed to elevate service performance[5](index=5&type=chunk) [Year-to-Date 2025 Financial and Operational Highlights](index=1&type=section&id=Year-to-Date%202025%20Financial%20and%20Operational%20Highlights) Year-to-date revenue decreased 16% to $63.0 million, while gross margin improved and operating losses were substantially reduced YTD 2025 vs YTD 2024 Highlights | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | YoY Change | | :-------------------------- | :------------------ | :------------------ | :--------- | | Revenue | $63.0 | $74.6 | -16% | | Gross Profit | $15.9 | $16.7 | -5% | | Gross Margin | 25% | 22% | +3 ppts | | GAAP Operating Expenses | $20.5 | $33.4 | -38% | | Non-GAAP Operating Expenses | $16.5 | $28.0 | -41% | | GAAP Operating Loss | $(4.6) | $(16.7) | +72% (Improvement) | | Non-GAAP Operating Loss | $(0.6) | $(11.3) | +95% (Improvement) | - Approximately **380,000 dispatches** completed year-to-date 2025[10](index=10&type=chunk) - Consumer satisfaction score of **4.6 out of 5 stars** year-to-date[10](index=10&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO highlighted sequential revenue growth, reduced operating losses, and technology leadership driving customer satisfaction and renewals - Achieved **sequential quarterly revenue growth** for Q2 2025 compared to Q1 2025[2](index=2&type=chunk) - Delivered a reduction in GAAP and non-GAAP operating loss ahead of expectations, making progress towards **positive cash flow**[2](index=2&type=chunk) - Utilizes a digitally native platform leveraging **AI and machine learning** to create predictive models, enhancing performance[2](index=2&type=chunk) - Technology leadership is reflected in significant **contract renewals, expansions, and new customers**[2](index=2&type=chunk) [About Urgently](index=2&type=section&id=About%20Urgently) Urgently provides digital roadside and mobility assistance technology using an AI-powered platform for global transportation sectors - Urgently is a U.S.-based leading provider of **digital roadside and mobility assistance technology** and services[1](index=1&type=chunk) - Its mission is to help everyone move safely and without disruption through proactive technology[7](index=7&type=chunk) - Operates a digitally native software platform combining location-based services, real-time data, AI, and machine-to-machine communication[7](index=7&type=chunk) - Powers roadside assistance solutions for leading brands across **automotive, insurance, and telematics verticals** globally[7](index=7&type=chunk) [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The statements show declining revenue but improved gross margins and significantly lower operating losses due to reduced expenses [Three Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Q2 2025 revenue decreased 8%, but gross profit grew 8% and operating expenses fell 36%, improving net loss by 52% Statement of Operations (Quarterly) | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Revenue | $31,687 | $34,537 | -8.25% | | Cost of Revenue | $23,754 | $27,207 | -12.69% | | Gross Profit | $7,933 | $7,330 | +8.23% | | Operating Expenses | $10,086 | $15,670 | -35.76% | | Operating Loss | $(2,153) | $(8,340) | +74.18% (Improvement) | | Net Loss | $(5,612) | $(11,667) | +51.91% (Improvement) | | Loss per share, basic and diluted | $(4.50) | $(10.43) | +56.85% (Improvement) | [Six Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Year-to-date revenue fell 16%, but a 38% reduction in operating expenses led to a 72% improvement in operating loss Statement of Operations (Year-to-Date) | Metric (in thousands) | YTD 2025 | YTD 2024 | YoY Change | | :-------------------- | :------- | :------- | :--------- | | Revenue | $62,959 | $74,629 | -15.63% | | Cost of Revenue | $47,037 | $57,948 | -18.83% | | Gross Profit | $15,922 | $16,681 | -4.55% | | Operating Expenses | $20,522 | $33,369 | -38.52% | | Operating Loss | $(4,600) | $(16,688) | +72.44% (Improvement) | | Net Loss | $(11,096) | $(24,682) | +55.03% (Improvement) | | Loss per share, basic and diluted | $(9.18) | $(22.12) | +58.59% (Improvement) | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased while the stockholders' deficit widened, reflecting reduced cash and accumulated losses as of June 30, 2025 Balance Sheet Highlights | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------ | :---------------- | :----- | | Total Assets | $40,152 | $54,071 | -25.74% | | Cash and cash equivalents | $4,830 | $14,179 | -65.93% | | Accounts receivable, net | $19,873 | $22,890 | -13.18% | | Capitalized software costs, net | $5,943 | $4,637 | +28.17% | | Total Liabilities | $81,460 | $85,741 | -4.99% | | Revolving credit facility, net | $6,155 | — | N/A | | Current portion of long-term debt | $4,257 | $14,257 | -70.14% | | Long-term debt, net | $42,270 | $39,883 | +5.98% | | Total Stockholders' Deficit | $(41,308) | $(31,670) | -30.42% (Worsening) | [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) [Definition and Purpose of Non-GAAP Measures](index=2&type=section&id=Definition%20and%20Purpose%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures to provide a clearer view of core operating performance by excluding certain non-cash and non-recurring items - **Non-GAAP Operating Expenses** exclude depreciation, amortization, stock-based compensation, and non-recurring charges[9](index=9&type=chunk)[11](index=11&type=chunk) - **Non-GAAP Operating Loss** excludes depreciation, amortization, stock-based compensation, and non-recurring charges[11](index=11&type=chunk) - These measures are used to evaluate ongoing operations, for internal planning, and to provide comparability with past performance[8](index=8&type=chunk) - Investors are encouraged to review related GAAP financial measures and reconciliations and not rely on any single measure[9](index=9&type=chunk) [Reconciliation of Operating Expenses](index=6&type=section&id=Reconciliation%20of%20Operating%20Expenses) This reconciliation adjusts GAAP operating expenses for items like depreciation and stock-based compensation to derive non-GAAP figures [Three Months Ended June 30, 2025 vs 2024 (Operating Expenses)](index=6&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Expenses)) Q2 2025 Non-GAAP operating expenses were $8.1 million, a 40% year-over-year improvement after excluding $2.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Expenses (Quarterly) | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Operating expenses (GAAP) | $10,086 | $15,670 | -35.76% | | Less: Depreciation and amortization | $(1,079) | $(1,104) | -2.26% | | Less: Stock-based compensation | $(382) | $(438) | -12.78% | | Less: Non-recurring transaction costs | $(178) | $(207) | -13.99% | | Less: Restructuring costs | $(315) | $(425) | -25.88% | | Non-GAAP operating expenses | $8,132 | $13,496 | -39.75% | [Six Months Ended June 30, 2025 vs 2024 (Operating Expenses)](index=6&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Expenses)) Year-to-date Non-GAAP operating expenses were $16.5 million, a 41% improvement after excluding $4.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Expenses (Year-to-Date) | Metric (in thousands) | YTD 2025 | YTD 2024 | YoY Change | | :-------------------------------- | :------- | :------- | :--------- | | Operating expenses (GAAP) | $20,522 | $33,369 | -38.52% | | Less: Depreciation and amortization | $(2,065) | $(2,206) | -6.48% | | Less: Stock-based compensation | $(920) | $(1,156) | -20.42% | | Less: Non-recurring transaction costs | $(553) | $(933) | -40.73% | | Less: Restructuring costs | $(489) | $(1,124) | -56.49% | | Non-GAAP operating expenses | $16,495 | $27,950 | -41.05% | [Reconciliation of Operating Loss](index=6&type=section&id=Reconciliation%20of%20Operating%20Loss) This reconciliation adjusts GAAP operating loss for non-cash and non-recurring items to calculate the non-GAAP operating loss [Three Months Ended June 30, 2025 vs 2024 (Operating Loss)](index=6&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Loss)) Q2 2025 Non-GAAP operating loss was $(0.2) million, a 97% year-over-year improvement after adding back $2.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Loss (Quarterly) | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Operating loss (GAAP) | $(2,153) | $(8,340) | +74.18% (Improvement) | | Add: Depreciation and amortization | $1,079 | $1,104 | -2.26% | | Add: Stock-based compensation | $382 | $438 | -12.78% | | Add: Non-recurring transaction costs | $178 | $207 | -13.99% | | Add: Restructuring costs | $315 | $425 | -25.88% | | Non-GAAP operating loss | $(199) | $(6,166) | +96.77% (Improvement) | [Six Months Ended June 30, 2025 vs 2024 (Operating Loss)](index=6&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024%20(Operating%20Loss)) Year-to-date Non-GAAP operating loss was $(0.6) million, a 95% improvement after adding back $4.0 million in adjustments Reconciliation of GAAP to Non-GAAP Operating Loss (Year-to-Date) | Metric (in thousands) | YTD 2025 | YTD 2024 | YoY Change | | :-------------------------------- | :------- | :------- | :--------- | | Operating loss (GAAP) | $(4,600) | $(16,688) | +72.44% (Improvement) | | Add: Depreciation and amortization | $2,065 | $2,206 | -6.48% | | Add: Stock-based compensation | $920 | $1,156 | -20.42% | | Add: Non-recurring transaction costs | $553 | $933 | -40.73% | | Add: Restructuring costs | $489 | $1,124 | -56.49% | | Non-GAAP operating loss | $(573) | $(11,269) | +94.91% (Improvement) | [Corporate Information and Disclosures](index=2&type=section&id=Corporate%20Information%20and%20Disclosures) [Earnings Conference Call Details](index=2&type=section&id=Earnings%20Conference%20Call%20Details) The company will host a conference call on August 12, 2025, to discuss its Q2 2025 financial results - The conference call will be held on **August 12, 2025, at 5:00 p.m. Eastern Time**[6](index=6&type=chunk) - Live access is available via phone at 1-877-317-6789 (USA) or 1-412-317-6789 (International)[6](index=6&type=chunk) - A replay will be available via webcast on Urgently's Investor Relations website[6](index=6&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements subject to significant risks and uncertainties detailed in the company's SEC filings - The press release contains "forward-looking statements" subject to **substantial risks and uncertainties**[13](index=13&type=chunk) - Actual results could differ materially due to factors like ability to raise funds, history of losses, and customer retention[14](index=14&type=chunk) - Risks are detailed in SEC filings, including the **annual report on Form 10-K** and quarterly reports on Form 10-Q[14](index=14&type=chunk) - Urgently disclaims any obligation to update forward-looking statements[14](index=14&type=chunk)

[Q2 2025 Business Highlights and CEO Commentary](index=1&type=section&id=Fate%20Therapeutics%20Reports%20Second%20Quarter%202025%20Financial%20Results%20and%20Business%20Updates) The company reported significant clinical progress for FT819 in lupus, received FDA allowance for FT836, and extended its cash runway through 2027 [Q2 2025 Highlights](index=1&type=section&id=Q2%202025%20Highlights) The company reported significant clinical progress for its lead candidate FT819 in lupus, including positive 12-month durability data and initial FDA discussions for a registrational pathway. The FDA also allowed an Investigational New Drug (IND) application for FT836 in solid tumors. Operationally, the company extended its cash runway through year-end 2027, supported by $249 million in cash and investments - Demonstrated durability of response in a severe lupus nephritis patient at 12-month follow-up with FT819[1](index=1&type=chunk) - Held initial discussions with the FDA under FT819's RMAT designation to plan a registrational pathway in Systemic Lupus Erythematosus (SLE) and Lupus Nephritis (LN)[1](index=1&type=chunk) - FDA allowed the IND application for FT836, a MICA/B-targeted CAR T-cell therapy for solid tumors, featuring Sword and Shield™ technology for conditioning-free treatment[1](index=1&type=chunk) - Extended projected operating cash runway through the end of 2027, with **$249 million** in cash, cash equivalents, and investments[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Bob Valamehr highlighted the company's focus on patient enrollment for FT819 in autoimmune diseases, citing encouraging data with less-intensive conditioning. The company aims to start a registrational study for FT819 in 2026 under its RMAT designation. He also noted that proactive resource allocation has extended the company's cash runway, enabling execution across the pipeline - The company's priority is to drive patient enrollment for FT819 in autoimmune diseases to demonstrate its therapeutic differentiation and on-demand availability[2](index=2&type=chunk) - The goal is to commence a registrational study for FT819 in SLE and LN in 2026, following discussions with the FDA under the RMAT designation[2](index=2&type=chunk) - Proactive steps were taken to optimize resource allocation and extend the cash runway, positioning the company to execute on its pipeline goals[2](index=2&type=chunk) [Clinical Program Updates](index=2&type=section&id=Clinical%20Program%20Updates) This section details the progress of FT819 in autoimmune diseases, FT825/ONO-8250 in solid tumors, and next-generation CAR T-cell programs [FT819 Program in Autoimmune Disease](index=2&type=section&id=FT819%20iPSC-derived%20of%20-the-shelf%20CAR%20T-cell%20program%20in%20autoimmune%20disease) The FT819 program is advancing rapidly with ongoing FDA discussions for a registrational study in SLE and LN under its RMAT designation. Interim Phase 1 data showed promising responses, including a 12-month durable remission in one patient using a fludarabine-free regimen. The study is also exploring FT819 as an add-on therapy without conditioning and has been expanded to include other B cell-mediated autoimmune diseases like AAV, IIM, and SSc [FDA Discussions and RMAT Designation](index=2&type=section&id=FDA%20Discussions%20and%20RMAT%20Designation) The company is in discussions with the FDA regarding a potential registrational study design for FT819 in moderate-to-severe SLE and refractory LN. This follows the FDA granting Regenerative Medicine Advanced Therapy (RMAT) designation for this indication in April 2025, which is intended to expedite development and review - Met with the FDA in August under its RMAT designation to get preliminary feedback on a proposed registrational study design for FT819 in SLE and LN[3](index=3&type=chunk) - The RMAT designation, granted in April 2025, was created to expedite the development and review of regenerative medicine therapies for serious conditions[3](index=3&type=chunk) [Phase 1 SLE Interim Data](index=2&type=section&id=Phase%201%20SLE%20Interim%20Data) Interim Phase 1 data presented at EULAR 2025 showed positive results in patients with moderate-to-severe SLE. All three LN patients treated with a single 360 million cell dose and a fludarabine-free regimen achieved an objective renal response. Notably, the first LN patient demonstrated a durable remission (DORIS) at the 12-month follow-up - All three refractory active LN patients treated with a single **360 million cell dose** of FT819 following a flu-free conditioning regimen achieved an objective renal response[3](index=3&type=chunk) - The first LN patient achieved DORIS (drug-free definition of remission) and complete renal response at 6 months, which was sustained at the 12-month follow-up[3](index=3&type=chunk) [Add-on Therapy Trial](index=2&type=section&id=Add-on%20Therapy%20Trial) The Phase 1 study is also assessing FT819 as an add-on to standard-of-care maintenance therapy without any conditioning chemotherapy. The first patient treated in this cohort achieved Low Lupus Disease Activity State (LLDAS) at 3 and 6 months, along with a reduction in disease scores and steroid dosage - The first patient treated with FT819 as an add-on to maintenance therapy (without conditioning) achieved LLDAS at 3- and 6-months[3](index=3&type=chunk) - The patient also experienced a reduction in SLEDAI-2K score from 8 to 2 and was able to taper their steroid dose[3](index=3&type=chunk) [Study Expansion](index=3&type=section&id=Study%20Expansion) The Phase 1 trial of FT819 has been expanded to investigate its potential in other B cell-mediated autoimmune diseases. The company plans to initiate dose-expansion cohorts in the second half of 2025 for anti-neutrophil cytoplasmic antibody-associated vasculitis (AAV), idiopathic inflammatory myositis (IIM), and systemic sclerosis (SSc) - The Phase 1 clinical trial of FT819 has been expanded to include other B cell-mediated autoimmune diseases[4](index=4&type=chunk) - The company plans to initiate dose-expansion cohorts in H2 2025 for AAV, IIM, and SSc[4](index=4&type=chunk) [FT825 / ONO-8250 Program in Solid Tumors](index=3&type=section&id=FT825%20%2F%20ONO-8250%20iPSC-derived%20of%20-the-shelf%20CAR%20T-cell%20Program%20in%20Solid%20Tumors) The Phase 1 study of FT825 / ONO-8250, a HER2-targeting CAR T-cell therapy developed with Ono Pharmaceutical, is ongoing in patients with advanced solid tumors. Dose escalation is proceeding to the third level (900 million cells), and the therapy has shown a favorable safety profile with no dose-limiting toxicities reported to date - A Phase 1 study is ongoing for FT825 / ONO-8250, a HER2-targeting CAR T-cell candidate, in patients with advanced solid tumors[5](index=5&type=chunk) - Dose escalation is currently ongoing at the third dose level of **900 million cells**[5](index=5&type=chunk) - FT825 / ONO-8250 has demonstrated a favorable safety profile with no dose-limiting toxicities (DLTs) to date[5](index=5&type=chunk) [Next-Generation CAR T-cell Programs (Sword & Shield™ Technology)](index=3&type=section&id=Next-generation%20iPSC-derived%20of%20-the-shelf%20CAR%20T-cell%20Programs) The company is advancing its next-generation programs designed to reduce or eliminate the need for conditioning chemotherapy. The FDA has allowed the IND for FT836, a MICA/B-targeted CAR T-cell for solid tumors. Additionally, a master iPSC bank has been created for FT839, a dual CD19/CD38 CAR T-cell candidate, with clinical investigation planned to begin in 2026 - The FDA allowed the IND application for FT836, a MICA/B-targeted CAR T-cell product candidate, for Phase 1 testing in advanced solid tumors without conditioning chemotherapy[6](index=6&type=chunk) - A master iPSC bank has been generated for FT839, a CD19/CD38 dual-CAR T-cell product candidate[6](index=6&type=chunk) - The company is evaluating opportunities for clinical investigation of FT839 in hematological malignancies and autoimmunity, with plans to start in 2026[6](index=6&type=chunk) [Corporate and Financial Updates](index=4&type=section&id=Corporate%20and%20Financial%20Updates) This section covers the extension of the collaboration with Ono Pharmaceutical, strategic operational adjustments, and the company's second quarter 2025 financial performance [Corporate Developments](index=4&type=section&id=Corporate%20Developments) Fate Therapeutics extended its collaboration with Ono Pharmaceutical for a second solid tumor CAR T-cell candidate, securing co-funding through at least June 2026. The company also implemented a tactical operations plan, including a 12% headcount reduction and other cost-saving measures, to extend its cash runway through the end of 2027 - Extended the research term of its collaboration with Ono for a second iPSC-derived CAR T-cell candidate, with co-funding expected to continue through at least June 2026[9](index=9&type=chunk) - Implemented a tactical operations plan, including a **12% reduction in employee headcount**, to extend its cash runway through the end of 2027[9](index=9&type=chunk) [Second Quarter 2025 Financial Results](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Results) For the second quarter of 2025, Fate Therapeutics reported revenues of $1.9 million, derived from its collaboration with Ono Pharmaceutical. Total operating expenses were $38.9 million. The company ended the quarter with a strong cash, cash equivalents, and investments position of $248.9 million Q2 2025 Financial Highlights | Metric | Value | | :--- | :--- | | **Cash, Cash Equivalents & Investments** | $248.9 million | | **Total Revenue** | $1.9 million | | **Total Operating Expenses** | $38.9 million | | **Research & Development Expenses** | $27.4 million | | **General & Administrative Expenses** | $11.4 million | | **Non-cash Stock-based Compensation** | $7.2 million | [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents the condensed consolidated statements of operations and balance sheets for the second quarter of 2025 and comparative periods [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a net loss of $34.1 million, or $0.29 per share, for the three months ended June 30, 2025. This represents an improvement from a net loss of $38.4 million, or $0.33 per share, for the same period in 2024. The reduced loss was primarily driven by lower operating expenses, which decreased from $51.9 million in Q2 2024 to $38.9 million in Q2 2025 Statement of Operations (in thousands, except per share data) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | **Collaboration Revenue** | $1,907 | $6,772 | | **Total Operating Expenses** | $38,875 | $51,855 | | **Loss from Operations** | $(36,968) | $(45,083) | | **Net Loss** | $(34,070) | $(38,427) | | **Net Loss per Share** | $(0.29) | $(0.33) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Fate Therapeutics had total assets of $371.6 million and total stockholders' equity of $261.4 million. Cash, cash equivalents, and investments totaled $248.9 million, compared to $306.7 million at the end of 2024 Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Cash, Cash Equivalents & Investments** | $248,927 | $306,725 | | **Total Assets** | $371,632 | $440,694 | | **Total Liabilities** | $110,268 | $121,968 | | **Total Stockholders' Equity** | $261,364 | $318,726 | [Company Overview](index=5&type=section&id=Company%20Overview) This section provides an overview of Fate Therapeutics' proprietary iPSC product platform and its focus on developing iPSC-derived cellular immunotherapies [iPSC Product Platform](index=5&type=section&id=About%20Fate%20Therapeutics'%20iPSC%20Product%20Platform) The company's proprietary iPSC product platform utilizes multiplexed-engineered human induced pluripotent stem cells to create clonal master iPSC lines. This innovative approach allows for the mass production of well-defined, uniform, off-the-shelf cell therapy products, aiming to overcome the limitations associated with patient- or donor-sourced therapies. The platform is protected by a robust intellectual property portfolio of over 500 issued patents - The platform uses clonal master iPSC lines as a starting source to manufacture engineered cell products, analogous to master cell lines for biopharmaceuticals[10](index=10&type=chunk) - This method is designed to produce well-defined, uniform products that can be stored for off-the-shelf availability and administered to a broad patient population[10](index=10&type=chunk) - The platform is supported by an intellectual property portfolio of over **500 issued patents** and **500 pending patent applications**[10](index=10&type=chunk) [About Fate Therapeutics, Inc.](index=5&type=section&id=About%20Fate%20Therapeutics%2C%20Inc.) Fate Therapeutics is a clinical-stage biopharmaceutical company based in San Diego, CA, dedicated to developing iPSC-derived cellular immunotherapies. The company's pipeline includes engineered T-cell and natural killer (NK) cell product candidates designed to deliver multiple therapeutic mechanisms to patients - Fate Therapeutics is a clinical-stage biopharmaceutical company focused on iPSC-derived cellular immunotherapies[11](index=11&type=chunk) - The company's pipeline includes iPSC-derived T-cell and NK cell product candidates with novel synthetic controls[11](index=11&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains standard legal disclaimers regarding forward-looking statements, which involve risks and uncertainties. It cautions that actual results may differ materially from expectations due to various factors, including clinical trial outcomes, regulatory hurdles, manufacturing challenges, and other risks detailed in the company's SEC filings - The release contains forward-looking statements based on management's current expectations, which are subject to a number of risks and uncertainties[13](index=13&type=chunk) - Key risks include product candidates not demonstrating requisite safety or efficacy, delays in clinical trials or manufacturing, and potential failure to maintain collaboration agreements[13](index=13&type=chunk) - Readers are advised to review the company's periodic filings with the Securities and Exchange Commission for a more detailed discussion of risks[13](index=13&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) IZEA Worldwide, Inc. achieved a net income of $1.1 million for the first half of 2025, reversing a prior-year loss, driven by revenue growth and cost reductions [Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $59.6 million, while liabilities significantly reduced, leading to an increase in stockholders' equity to $49.4 million Balance Sheet Highlights | Balance Sheet Highlights | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $50,643,015 | $44,644,468 | | Accounts receivable, net | $6,177,880 | $7,781,824 | | Total current assets | $57,389,059 | $60,030,040 | | Total assets | $59,630,190 | $62,220,274 | | **Liabilities & Equity** | | | | Contract liabilities | $6,661,453 | $8,188,651 | | Total current liabilities | $10,250,106 | $13,434,521 | | Total liabilities | $10,250,106 | $13,438,555 | | Total stockholders' equity | $49,380,084 | $48,781,719 | [Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) The company achieved net income of $1.2 million in Q2 and $1.1 million in H1 2025, reversing prior-year losses due to significant operating expense reductions Income Statement Summary | Income Statement Summary | 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** | **$9,133,232** | **$9,093,816** | **$17,101,595** | **$16,046,699** | | Total costs and expenses | $8,395,422 | $11,983,124 | $17,019,637 | $22,994,662 | | Income (loss) from operations | $737,810 | ($2,889,308) | $81,958 | ($6,947,963) | | **Net income (loss)** | **$1,205,068** | **($2,194,828)** | **$1,062,268** | **($5,460,678)** | | **Diluted EPS** | **$0.07** | **($0.13)** | **$0.06** | **($0.33)** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash and cash equivalents increased by $6.0 million, driven by investing activities and a significant turnaround in operating cash flow to $1.2 million Cash Flow Summary (Six Months Ended June 30) | Cash Flow Summary (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,245,988 | ($7,256,857) | | Net cash provided by investing activities | $6,013,506 | $14,245,536 | | Net cash used in financing activities | ($1,128,145) | ($116,508) | | **Net increase in cash and cash equivalents** | **$5,998,547** | **$6,855,138** | | **Cash and cash equivalents, end of period** | **$50,643,015** | **$44,284,833** | [Notes to the Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue recognition, and equity, highlighting Managed Services, a $10 million share repurchase, and a new tax law - The company's business model is centered on the creator economy, providing Managed Services which include custom content workflow, creator search, bidding, analytics, and payment processing[27](index=27&type=chunk)[28](index=28&type=chunk) - A **$10.0 million** share repurchase program was authorized. As of June 30, 2025, **$1.3 million** had been used to repurchase 523,268 shares, with approximately **$8.7 million** remaining available[95](index=95&type=chunk)[98](index=98&type=chunk) Revenue by Type (Six Months Ended June 30) | Revenue by Type (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Managed Services Revenue | $16,960,441 | $15,547,005 | | SaaS Services Revenue | $141,154 | $499,694 | | **Total Revenue** | **$17,101,595** | **$16,046,699** | Revenue by Geography (Six Months Ended June 30) | Revenue by Geography (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | North America | $15,042,336 | $13,027,444 | | APAC | $1,855,012 | $2,139,422 | | Other | $204,247 | $879,833 | - The company operates and is managed as one reportable operating segment, with the CEO acting as the Chief Operating Decision Maker (CODM)[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) Profitability in H1 2025 resulted from cost savings and workforce reduction, despite a 29% decline in Managed Services Bookings, with a strong cash position of $50.6 million [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Net income of $1.2 million in Q2 and $1.1 million in H1 2025 was achieved, reversing prior losses due to significant reductions in sales, marketing, and G&A expenses - Excluding revenue from the divested Hoozu subsidiary, revenue grew **10.5%** in Q2 2025 and **19%** in H1 2025 compared to the prior year periods[159](index=159&type=chunk)[168](index=168&type=chunk) - Sales and marketing expenses saw a dramatic decrease of **$2.2 million (70%)** in Q2 and **$4.2 million (67%)** in H1, attributed to workforce reductions and a pause in advertising spend[161](index=161&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - General and administrative expenses decreased by **$0.5 million (14%)** in Q2 and **$1.3 million (18%)** in H1, also due to lower employee-related costs and reduced contractor use[162](index=162&type=chunk)[172](index=172&type=chunk) [Key Metrics and Non-GAAP Financial Measure](index=34&type=section&id=Key%20Metrics%20and%20Non-GAAP%20Financial%20Measure) Managed Services Bookings declined significantly to $5.6 million in Q2 and $13.1 million in H1, while Adjusted EBITDA dramatically improved to $1.3 million in Q2 2025 Managed Services Bookings | Managed Services Bookings | Three Months Ended June 30 | Six Months Ended June 30 | | :--- | :--- | :--- | | **2025** | **$5.6 million** | **$13.1 million** | | **2024** | **$10.3 million** | **$19.6 million** | Adjusted EBITDA Reconciliation (Non-GAAP) | Adjusted EBITDA Reconciliation (Non-GAAP) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $1,205,068 | ($2,194,828) | $1,062,268 | ($5,460,678) | | **Adjusted EBITDA** | **$1,326,460** | **($2,194,167)** | **$1,249,610** | **($5,615,828)** | | Adjusted EBITDA as a % of Revenue | 15% | (24)% | 7.3% | (35.0)% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity strengthened with cash increasing to $50.6 million, deemed sufficient for future growth, despite a decline in contract backlog to $11.6 million - Cash and cash equivalents increased to **$50.6 million** as of June 30, 2025, from **$44.6 million** at year-end 2024[185](index=185&type=chunk) - Contract backlog declined from **$15.5 million** to **$11.6 million** during the first half of 2025, which management attributes to a strategic shift to larger accounts, client caution due to economic uncertainty, and internal resource allocation during a transition[187](index=187&type=chunk)[190](index=190&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - Not applicable to smaller reporting companies[193](index=193&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[196](index=196&type=chunk) - No material changes to internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[199](index=199&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) As of August 12, 2025, the company is not involved in any legal proceedings expected to have a material adverse effect on its business - The company is not currently a party to any legal proceedings or claims that are expected to have a material adverse effect[201](index=201&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes have occurred to the risk factors previously described in the 2024 Form 10-K[202](index=202&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 121,788 shares at an average of $2.29 per share in Q2 2025, with $8.7 million remaining in the $10.0 million program Issuer Repurchases (Q2 2025) | Issuer Repurchases (Q2 2025) | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 56,796 | $1.85 | | May 2025 | 26,310 | $2.48 | | June 2025 | 38,682 | $2.80 | | **Total** | **121,788** | **$2.29** | - As of June 30, 2025, the approximate dollar value of shares that may yet be purchased under the company's repurchase program was **$8,675,299**[203](index=203&type=chunk) [Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable [Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) Not applicable [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and XBRL data files

[Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements, including assets, operations, cash flows, and investment schedules [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities%20as%20of%20June%2030%2C%202025%20and%20March%2031%2C%202025) Total assets increased to $1,053,909 thousand by June 30, 2025, while liabilities also rose, decreasing net assets and NAV per share to $12.99 | Metric (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------- | :------------ | :------------- | | **ASSETS** | | | | Investments at fair value | $1,036,745 | $979,320 | | Cash and cash equivalents | $4,118 | $14,298 | | Total Assets | $1,053,909 | $1,006,404 | | **LIABILITIES** | | | | Total borrowings | $518,625 | $455,709 | | Total Liabilities | $568,605 | $507,320 | | **NET ASSETS** | | | | Total Net Assets | $485,304 | $499,084 | | Net Asset Value Per Share | $12.99 | $13.55 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) Total investment income increased to $23,544 thousand, but higher expenses reduced net investment income, though net assets from operations turned positive due to significantly lower net unrealized depreciation | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Total investment income | $23,544 | $22,178 | | Total expenses, net of credits | $14,456 | $9,764 | | Net investment income | $9,088 | $12,414 | | Net realized gain | $0 | $2 | | Net unrealized depreciation | $(1,316) | $(18,942) | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | | Basic and Diluted EPS (Net investment income) | $0.25 | $0.34 | | Basic and Diluted EPS (Net increase (decrease) in net assets) | $0.21 | $(0.18) | [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets%20for%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) Net assets decreased by $13,780 thousand, driven by distributions offset by a net increase from operations and capital activity | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net Assets, March 31 | $499,084 | $492,711 | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | | Net decrease in net assets from distributions | $(28,788) | $(8,805) | | Net increase in net assets from capital activity | $7,236 | $0 | | Net decrease in net assets | $(13,780) | $(15,331) | | Net Assets, June 30 | $485,304 | $477,380 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) Operating activities used $50,181 thousand in cash due to increased investment purchases, while financing activities provided $40,382 thousand, resulting in a net decrease in cash | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(50,181) | $12,321 | | Net cash provided by (used in) financing activities | $40,382 | $(12,351) | | Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | $(9,799) | $(30) | | Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | $5,355 | $3,190 | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments%20as%20of%20June%2030%2C%202025%20and%20March%2031%2C%202025) The investment portfolio's fair value increased to $1,036,745 thousand, with new investments and a restructuring of PSI Molded Plastics, Inc | Investment Type | June 30, 2025 (Cost) | June 30, 2025 (Fair Value) | March 31, 2025 (Cost) | March 31, 2025 (Fair Value) | | :---------------- | :------------------- | :------------------------- | :-------------------- | :-------------------------- | | Secured first lien debt | $625,596 (62.7%) | $557,057 (53.7%) | $584,026 (62.2%) | $514,334 (52.5%) | | Secured second lien debt | $93,340 (9.4%) | $93,340 (9.0%) | $103,956 (11.1%) | $103,580 (10.6%) | | Total debt | $718,936 (72.1%) | $650,397 (62.7%) | $687,982 (73.3%) | $617,914 (63.1%) | | Preferred equity | $229,005 (23.0%) | $325,997 (31.5%) | $201,487 (21.5%) | $302,163 (30.9%) | | Common equity/equivalents | $49,597 (4.9%) | $60,351 (5.8%) | $49,597 (5.2%) | $59,243 (6.0%) | | Total equity/equivalents | $278,602 (27.9%) | $386,348 (37.3%) | $251,084 (26.7%) | $361,406 (36.9%) | | Total investments | $997,538 (100.0%) | $1,036,745 (100.0%) | $939,066 (100.0%) | $979,320 (100.0%) | - The top 5 portfolio investments by fair value as of June 30, 2025, including SFEG Holdings, Inc., Detroit Defense, Inc., The E3 Company, LLC, Nielsen-Kellerman Acquisition Corp., and Brunswick Bowling Products, Inc., collectively comprised **$403.1 million**, or **38.9%**, of the total investment portfolio[82](index=82&type=chunk) | Industry Classification | June 30, 2025 (Fair Value) | Percentage of Total Investments | | :---------------------- | :--------------------------- | :------------------------------ | | Diversified/Conglomerate Services | $188,845 | 18.2% | | Home and Office Furnishings, Housewares, and Durable Consumer Products | $150,749 | 14.5% | | Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) | $109,985 | 10.6% | | Aerospace and Defense | $105,170 | 10.1% | | Leisure, Amusement, Motion Pictures, and Entertainment | $79,588 | 7.7% | | Oil and Gas | $72,286 | 7.0% | | Electronics | $71,334 | 6.9% | | Buildings and Real Estate | $69,075 | 6.7% | | Chemicals, Plastics, and Rubber | $54,980 | 5.3% | | Healthcare, Education, and Childcare | $48,197 | 4.6% | | Mining, Steel, Iron and Non-Precious Metals | $43,505 | 4.2% | | Cargo Transport | $13,000 | 1.3% | | Printing and Publishing | $12,611 | 1.2% | | Other < 2.0% | $17,420 | 1.7% | | Total investments | $1,036,745 | 100.0% | - New investments in Q2 2025 included **Smart Chemical Solutions, LLC** for **$49.5 million** (secured first lien debt: **$35.7 million**, preferred equity: **$13.8 million**), a provider of production chemicals for onshore oil and gas operators[84](index=84&type=chunk) - Another new investment was **Sun State Nursery and Landscaping, LLC** for **$12.8 million** (secured first lien debt: **$9.8 million**, preferred equity: **$3.1 million**), a commercial landscaping installation and maintenance provider[84](index=84&type=chunk) - **PSI Molded Plastics, Inc.** restructured **$10.6 million** of debt into preferred equity in June 2025[84](index=84&type=chunk) [Notes to Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on organization, accounting policies, investment valuation, related party transactions, borrowings, capital, distributions, and commitments [Note 1. Organization](index=18&type=section&id=NOTE%201.%20ORGANIZATION) This note details the company's structure as a BDC and RIC, outlining its investment objectives and target portfolio composition - Gladstone Investment Corporation is an externally managed, closed-end, non-diversified management investment company, elected to be treated as a **Business Development Company (BDC)** and a **Regulated Investment Company (RIC)**[42](index=42&type=chunk) - Investment objectives include achieving and growing **current income from debt securities** and providing **long-term capital appreciation from equity securities**[42](index=42&type=chunk) - Target investment portfolio composition is approximately **75.0% debt** and **25.0% equity at cost**, with the current portfolio at **72.1% debt** and **27.9% equity** as of June 30, 2025[42](index=42&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=18&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines interim financial statement preparation, fair value investment valuation, revenue recognition, and segment reporting policies - Interim financial statements are prepared in accordance with **GAAP** for interim financial information and **SEC Regulation S-X** requirements[45](index=45&type=chunk) - Investments are recorded at **fair value** in accordance with **FASB ASC Topic 820** and the **1940 Act**, with the Board of Directors overseeing the valuation designee for fair value determinations[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Revenue recognition policies include accruing interest income to the extent expected to be collected, placing loans 90 days or more past due on **non-accrual status**, recognizing success fees upon cash receipt, and accruing dividend income if expected to be collected in cash[60](index=60&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - The company adopted **ASU 2023-07 (Segment Reporting)** as of March 31, 2025, and has **one reporting segment** with the Chief Executive Officer as the Chief Operating Decision Maker (CODM)[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 3. Investments](index=22&type=section&id=NOTE%203.%20INVESTMENTS) This note details investment valuation using Level 3 inputs, fair value measurements, unobservable inputs for debt, and changes in fair value measurements - All investments were valued using **Level 3 inputs** within the **ASC 820 fair value hierarchy** as of June 30, 2025 and March 31, 2025, except for the investment in Gladstone Alternative Income Fund, which was valued using NAV as a practical expedient[72](index=72&type=chunk) | Fair Value Measurements (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------- | :------------ | :------------- | | Secured first lien debt | $557,057 | $514,334 | | Secured second lien debt | $93,340 | $103,580 | | Preferred equity | $325,997 | $302,163 | | Common equity/equivalents | $55,341 | $54,268 | | Total investments at fair value using Level 3 inputs | $1,031,735 | $974,345 | | Unobservable Input (Secured first lien debt) | Range / Weighted-Average as of June 30, 2025 | | :------------------------------------------- | :------------------------------------------- | | EBITDA multiple | 3.7x – 8.0x / 6.0x | | EBITDA (in thousands) | $408 – $25,038 / $11,738 | | Revenue multiple | 0.3x – 0.6x / 0.4x | | Revenue (in thousands) | $21,248 – $94,874 / $75,263 | | Changes in Level 3 Fair Value Measurements (in thousands) | Secured First Lien Debt | Secured Second Lien Debt | Preferred Equity | Common Equity/Equivalents | Total | | :---------------------------------------- | :---------------------- | :----------------------- | :--------------- | :------------------------ | :------ | | Fair value as of March 31, 2025 | $514,334 | $103,580 | $302,163 | $54,268 | $974,345 | | Net unrealized appreciation (depreciation) | $1,152 | $376 | $(3,683) | $1,073 | $(1,082) | | Issuances / originations | $45,941 | $0 | $16,901 | $0 | $62,842 | | Settlements / repayments | $(4,370) | $0 | $0 | $0 | $(4,370) | | Transfers | $0 | $(10,616) | $10,616 | $0 | $0 | | Fair value as of June 30, 2025 | $557,057 | $93,340 | $325,997 | $55,341 | $1,031,735 | [Note 4. Related Party Transactions](index=29&type=section&id=NOTE%204.%20RELATED%20PARTY%20TRANSACTIONS) This note details base management and incentive fees paid to the Adviser, including credits, administration fees, and related party fees due - The company pays Gladstone Management Corporation (the "Adviser") a **base management fee** (2.0% annual rate on average gross assets) and an **incentive fee** (income-based and capital gains-based)[92](index=92&type=chunk)[95](index=95&type=chunk) - The Adviser non-contractually, unconditionally, and irrevocably credits **100% of certain fees** received for managerial assistance services against the base management fee[93](index=93&type=chunk) - Loan servicing fees paid to the Adviser (2.0% annual fee on monthly aggregate outstanding balance of loans pledged under the Credit Facility) are **100% credited back** to the company[94](index=94&type=chunk) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Base management fee | $5,080 | $4,618 | | Credits to fees from Adviser - other | $(1,399) | $(627) | | Net base management fee | $3,681 | $3,991 | | Loan servicing fee | $2,672 | $2,222 | | Credits to base management fee - loan servicing fee | $(2,672) | $(2,222) | | Net loan servicing fee | $0 | $0 | | Total incentive fee | $(209) | $(3,788) | - Administration fees paid to Gladstone Administration, LLC were **$0.4 million** for Q2 2025 and **$0.5 million** for Q2 2024[101](index=101&type=chunk) | Related Party Fees Due (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :------------ | :------------- | | Base management and loan servicing fee due to Adviser, net of credits | $1,696 | $2,027 | | Incentive fee due to Adviser | $39,115 | $41,663 | | Total related party fees due | $41,885 | $44,584 | [Note 5. Borrowings](index=33&type=section&id=NOTE%205.%20BORROWINGS) This note details the Credit Facility terms, outstanding borrowings, availability, compliance with covenants, and notes payable - The Credit Facility has a total commitment of **$270.0 million** with an accordion feature up to **$300.0 million**, a revolving period ending **October 30, 2026**, and final maturity on **October 30, 2028**[106](index=106&type=chunk) - Advances bear interest at **30-day Term SOFR** (floor 0.35%, 10 bps credit spread adjustment) plus a margin of **3.15%** (increasing to 3.40% and 3.65% thereafter), with unused commitment fees ranging from **0.50% to 1.00%**[107](index=107&type=chunk) | Credit Facility Metric (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :------------ | :------------- | | Commitment amount | $270,000 | $270,000 | | Borrowings outstanding at cost | $62,000 | $0 | | Availability | $208,000 | $270,000 | - The company was in compliance with all Credit Facility covenants as of June 30, 2025, including a net worth of **$940.4 million** (minimum **$416.6 million**) and asset coverage of **189.8%** (minimum **150%**)[109](index=109&type=chunk)[213](index=213&type=chunk) | Notes Payable (in thousands) | Principal Amount | Unamortized Discounts | Notes Payable, Net | | :--------------------------- | :--------------- | :-------------------- | :----------------- | | 5.00% Notes due 2026 | $127,938 | | | | 4.875% Notes due 2028 | $134,550 | | | | 8.00% Notes due 2028 | $74,750 | | | | 7.875% Notes due 2030 | $126,500 | | | | **Total as of June 30, 2025** | **$463,738** | **$(7,382)** | **$456,356** | | **Total as of March 31, 2025** | **$463,738** | **$(8,029)** | **$455,709** | [Note 6. Registration Statement and Common Equity Offerings](index=38&type=section&id=NOTE%206.%20REGISTRATION%20STATEMENT%20AND%20COMMON%20EQUITY%20OFFERINGS) This note details the registration statement for securities issuance and activity under the 2024 Common Stock ATM Program - A registration statement on Form N-2, effective **April 18, 2024**, permits the issuance of up to **$450.0 million** in various securities, with **$314.1 million** of this capacity remaining as of June 30, 2025[130](index=130&type=chunk) - Under the 2024 Common Stock ATM Program, the company sold **515,295 shares** for **$7.3 million** gross proceeds (weighted-average gross price of **$14.23 per share**) during the three months ended June 30, 2025, with **$65.6 million** capacity remaining[131](index=131&type=chunk)[133](index=133&type=chunk) [Note 7. Net Increase (Decrease) in Net Assets Resulting From Operations Per Weighted-Average Common Share](index=38&type=section&id=NOTE%207.%20NET%20INCREASE%20(DECREASE)%20IN%20NET%20ASSETS%20RESULTING%20FROM%20OPERATIONS%20PER%20WEIGHTED-AVERAGE%20COMMON%20SHARE) This note presents the net increase or decrease in net assets from operations per weighted-average common share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | | Weighted-average common shares outstanding | 36,908,943 | 36,688,667 | | Basic and diluted net increase (decrease) in net assets per share | $0.21 | $(0.18) | [Note 8. Distributions to Common Stockholders](index=38&type=section&id=NOTE%208.%20DISTRIBUTIONS%20TO%20COMMON%20STOCKHOLDERS) This note outlines the company's RIC distribution requirements, declared distributions for Q2 2025, and aggregate cash distributions - To qualify as a **RIC**, the company must distribute at least **90% of its Investment Company Taxable Income**, with distributions determined by the Board based on estimated taxable income and net long-term capital gains[136](index=136&type=chunk)[137](index=137&type=chunk) | Declaration Date | Record Date | Payment Date | Distribution per Common Share (Q2 2025) | | :--------------- | :---------- | :----------- | :-------------------------------------- | | April 8, 2025 | April 21, 2025 | April 30, 2025 | $0.08 | | April 8, 2025 | May 21, 2025 | May 30, 2025 | $0.08 | | April 8, 2025 | June 4, 2025 | June 13, 2025 | $0.54 (Supplemental) | | April 8, 2025 | June 20, 2025 | June 30, 2025 | $0.08 | | **Total for Q2 2025** | | | **$0.78** | - Aggregate cash distributions to common stockholders were **$28.8 million** for Q2 2025, compared to **$8.8 million** for Q2 2024[140](index=140&type=chunk) [Note 9. Commitments and Contingencies](index=40&type=section&id=NOTE%209.%20COMMITMENTS%20AND%20CONTINGENCIES) This note addresses legal proceedings, escrow holdbacks, and unused line of credit commitments - The company is party to certain legal proceedings but does not believe loss contingencies will have a **material adverse effect** on financial condition, results of operations, or cash flows[145](index=145&type=chunk) - Escrow holdbacks for investment exits are recorded in Restricted cash and cash equivalents or Other assets, net, with reserves against escrow amounts of **$1.0 million** as of June 30, 2025 and March 31, 2025[146](index=146&type=chunk) | Commitment (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------ | :------------ | :------------- | | Unused line of credit commitments | $3,596 | $3,440 | [Note 10. Financial Highlights](index=41&type=section&id=NOTE%2010.%20FINANCIAL%20HIGHLIGHTS) This note provides per common share data, including net asset value, investment income, distributions, and key financial ratios | Per Common Share Data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net asset value at beginning of period | $13.55 | $13.43 | | Net investment income | $0.25 | $0.34 | | Net unrealized depreciation | $(0.04) | $(0.52) | | Total from investment operations | $0.21 | $(0.18) | | Cash distributions to common stockholders from net investment income | $(0.27) | $(0.24) | | Cash distributions to common stockholders from net realized gains | $(0.51) | $0 | | Net asset value at end of period | $12.99 | $13.01 | | Total investment return | 12.76% | (0.08)% | | Common stock outstanding at end of period | 37,352,676 | 36,688,667 | | Ratios/Supplemental Data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | | Ratio of net expenses to average net assets – annualized | 11.72% | 8.01% | | Ratio of net investment income to average net assets – annualized | 7.37% | 10.18% | [Note 11. Unconsolidated Significant Subsidiaries](index=42&type=section&id=NOTE%2011.%20UNCONSOLIDATED%20SIGNIFICANT%20SUBSIDIARIES) This note confirms the absence of unconsolidated significant subsidiaries during the reporting period - The company did not have any unconsolidated subsidiaries that met the significance conditions under **Rule 1-02(w)(2) of SEC's Regulation S-X** as of or during the three months ended June 30, 2025 and 2024[150](index=150&type=chunk) [Note 12. Subsequent Events](index=42&type=section&id=NOTE%2012.%20SUBSEQUENT%20EVENTS) This note details a new investment in Global GRAB Technologies, Inc., declared monthly distributions, and common stock sales under the ATM program - In July 2025, the company invested **$67.6 million** in a new portfolio company, **Global GRAB Technologies, Inc.**, consisting of **$46.5 million** in secured first lien debt and **$21.1 million** in preferred equity[151](index=151&type=chunk) - The Board of Directors declared monthly distributions of **$0.08 per common share** for July, August, and September 2025, totaling **$0.24** for the quarter[152](index=152&type=chunk) - Subsequent to June 30, 2025, the company sold **866,554 shares** of common stock under its 2024 Common Stock ATM program, raising approximately **$12.1 million** in net proceeds at a weighted-average gross price of **$14.14 per share**[153](index=153&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of the company's financial condition and results of operations [Overview](index=44&type=section&id=Overview) Gladstone Investment Corporation operates as a BDC and RIC, focusing on debt and equity investments in U.S. lower middle market private businesses - Investment strategy focuses on lower middle market private businesses (EBITDA **$4 million-$15 million**) in the U.S., seeking management buyouts and growth capital[159](index=159&type=chunk) - From inception through June 30, 2025, the company invested in **64 companies** for approximately **$2.1 billion** and exited **33 portfolio companies**, generating **$353.4 million** in net realized gains and **$45.4 million** in other income[163](index=163&type=chunk)[165](index=165&type=chunk) - As of June 30, 2025, unrecognized, contractual success fees totaled **$55.6 million**, or **$1.49 per common share**[164](index=164&type=chunk) - The company's asset coverage ratio on senior securities representing indebtedness was **189.8%** as of June 30, 2025, exceeding the **150% requirement**[171](index=171&type=chunk) - As of June 30, 2025, the common stock closing market price was **$14.27 per share**, a **9.9% premium** to its NAV of **$12.99 per share**[167](index=167&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Total investment income increased, but higher expenses reduced net investment income, though net assets from operations turned positive due to significantly lower net unrealized depreciation | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Total investment income | $23,544 | $22,178 | $1,366 | 6.2% | | Total expenses, net of credits | $14,456 | $9,764 | $4,692 | 48.1% | | Net investment income | $9,088 | $12,414 | $(3,326) | (26.8)% | | Net realized gain on investments | $0 | $2 | $(2) | (100.0)% | | Net unrealized depreciation | $(1,316) | $(18,942) | $17,626 | (93.1)% | | Net increase (decrease) in net assets from operations | $7,772 | $(6,526) | $14,298 | NM | - Interest income increased by **$1.0 million (5.0%)** due to a higher weighted-average principal balance of interest-bearing investments (**$610.0 million** vs. **$571.0 million**)[176](index=176&type=chunk)[177](index=177&type=chunk) - Weighted-average yield on interest-bearing investments decreased to **14.1%** from **14.5%**[178](index=178&type=chunk) - Dividend and success fee income increased by **$0.3 million (22.1%)**, consisting of **$1.1 million** dividend income and **$0.8 million** success fee income[181](index=181&type=chunk) - Interest expense increased by **$2.0 million (31.2%)** due to the issuance of 7.785% 2030 Notes and an increase in the effective interest rate on the Credit Facility (**14.0%** vs. **10.8%**), despite decreased borrowings[184](index=184&type=chunk) - Net unrealized depreciation of investments was **$1.0 million** for Q2 2025, a significant improvement from **$18.9 million** in Q2 2024, primarily due to a decrease in the performance of certain portfolio companies, partially offset by increased performance of others and higher transaction multiples[188](index=188&type=chunk)[189](index=189&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) Operating activities used significant cash due to investment purchases, while financing activities provided cash, with the company maintaining compliance with debt covenants - Net cash used in operating activities was **$50.2 million** for Q2 2025, compared to **$12.3 million** provided in Q2 2024, mainly due to increased investment purchases (**$62.8 million** vs. **$0.6 million**)[192](index=192&type=chunk)[193](index=193&type=chunk) - Net cash provided by financing activities was **$40.4 million** for Q2 2025, primarily from **$62.0 million** net borrowings under the Credit Facility and **$7.3 million** from common stock issuance, partially offset by **$28.8 million** in distributions[196](index=196&type=chunk) - The company paid monthly cash distributions of **$0.08 per common share** and a supplemental distribution of **$0.54 per common share** in June 2025[198](index=198&type=chunk) - As of June 30, 2025, the Credit Facility had **$62.0 million** outstanding and **$208.0 million** in adjusted availability[213](index=213&type=chunk) | Contractual Obligations (in thousands) | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | | :----------------------------------- | :-------- | :--------------- | :-------- | :-------- | :---------------- | | Credit Facility | $62,000 | $0 | $0 | $62,000 | $0 | | Notes payable | $463,738 | $127,938 | $0 | $335,800 | $0 | | Interest payments on obligations | $114,704 | $34,701 | $59,125 | $20,878 | $0 | | **Total** | **$640,442** | **$162,639** | **$59,125** | **$418,678** | **$0** | - The Adviser's proprietary risk rating system for debt securities uses a scale of **0 to >10**, with **>10** being the lowest probability of default[232](index=232&type=chunk) - The weighted-average risk rating for the loan portfolio was **7.7** as of June 30, 2025 and March 31, 2025[233](index=233&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with its loan portfolio entirely at variable rates with a floor - Primary market risk is **interest rate risk**, affecting net investment income due to differences between variable borrowing rates (Credit Facility) and fixed/variable investment rates[237](index=237&type=chunk) - Target portfolio composition is approximately **90% variable-rate loans** (with floor) and up to **10% fixed-rate loans**[238](index=238&type=chunk) | Rates | June 30, 2025 | March 31, 2025 | | :------------ | :------------ | :------------- | | Variable rates with a floor | 100.0 % | 100.0 % | | Fixed rates | — % | — % | | Total | 100.0 % | 100.0 % | [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated as **effective** at a reasonable assurance level as of June 30, 2025[239](index=239&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[240](index=240&type=chunk) [PART II. OTHER INFORMATION:](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION%3A) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any material legal proceedings or threatened legal proceedings - No material legal proceedings are currently active or threatened against the company[241](index=241&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) For a comprehensive discussion of risks, refer to the Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - Refer to the **"Risk Factors"** section in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025, for a discussion of business risks[242](index=242&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading arrangements during the reporting period - No officers or directors adopted or terminated **Rule 10b5-1 trading arrangements** or non-Rule 10b5-1 trading arrangements during Q2 2025[246](index=246&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents and XBRL data - Exhibit list includes Amended and Restated Certificate of Incorporation, Bylaws, Specimen Stock Certificate, Indentures for various Notes, and Certifications (CEO, CFO)[248](index=248&type=chunk) - **XBRL Instance Document** and **Taxonomy Extension files** are attached as Exhibit 101[248](index=248&type=chunk) [SIGNATURE](index=63&type=section&id=SIGNATURE) The report is duly signed by Taylor Ritchie, Chief Financial Officer and Treasurer, on August 12, 2025 - Report signed by **Taylor Ritchie**, Chief Financial Officer and Treasurer, on **August 12, 2025**[253](index=253&type=chunk)

[CERTAIN TERMS](index=3&type=section&id=CERTAIN%20TERMS) The company, Silexion Therapeutics Corp, completed a business combination on August 15, 2024, and defines key financial instruments and agreements - The company, Silexion Therapeutics Corp (formerly Biomotion Sciences), is a Cayman Islands exempted company, with its securities trading on Nasdaq following the August 15, 2024 Business Combination where Moringa and Silexion became wholly-owned subsidiaries of New Silexion[8](index=8&type=chunk) - Key agreements include the A&R Sponsor Promissory Note for **$3,433,000**, the ELOC Agreement with White Lion Capital, LLC, and the Marketing Agreement with EarlyBirdCapital, Inc[8](index=8&type=chunk) - Financial instruments include ordinary shares (**$0.0135 par value**), private warrants, public warrants, and general warrants[11](index=11&type=chunk) [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights the presence of forward-looking statements concerning the company's future financial position, operations, and strategic objectives - The report contains forward-looking statements about the Company's financial position, business strategy, and future operations, identifiable by terms such as 'expect,' 'believe,' and 'anticipate'[10](index=10&type=chunk) - Forward-looking statements encompass expectations regarding Nasdaq listing, pre-clinical and clinical studies, regulatory approvals, market opportunity, and future capital requirements[11](index=11&type=chunk)[14](index=14&type=chunk) - Actual results may differ materially due to risks including limited operating history, absence of product sales revenue, the need for substantial additional funding, and the unproven nature of RNAi therapeutics for oncology[12](index=12&type=chunk)[14](index=14&type=chunk) [PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations - Financial statements for comparative periods, such as June 30, 2024, reflect Silexion Therapeutics Ltd. as the accounting acquirer and predecessor entity before the August 15, 2024 Business Combination, and New Silexion subsequently[16](index=16&type=chunk) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for Silexion Therapeutics Corp, including balance sheets, statements of operations, statements of changes in equity, and cash flow statements, along with comprehensive notes explaining the accounting policies and specific financial details [Condensed Consolidated Balance Sheets (unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28unaudited%29) This table presents the company's unaudited condensed consolidated balance sheets, detailing assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (U.S. dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (2025 vs 2024) | | :-------------------------------- | :-------------- | :---------------- | :-------------------- | | **Assets** | | | | | Cash and cash equivalents | $3,466 | $1,187 | +$2,279 | | Total Current Assets | $5,237 | $2,250 | +$2,987 | | Total Non-Current Assets | $560 | $613 | -$53 | | **TOTAL ASSETS** | **$5,797** | **$2,863** | **+$2,934** | | **Liabilities** | | | | | Total Current Liabilities | $2,150 | $3,523 | -$1,373 | | Total Non-Current Liabilities | $3,527 | $3,329 | +$198 | | **TOTAL LIABILITIES** | **$5,677** | **$6,852** | **-$1,175** | | **Shareholders' Equity (Capital Deficiency)** | | | | | Total Shareholders' Equity (Capital Deficiency) | $120 | $(3,989) | +$4,109 | [Condensed Consolidated Statements of Operations (unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%28unaudited%29) This table presents the company's unaudited condensed consolidated statements of operations, detailing revenues, expenses, and net loss for the six and three months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations (U.S. dollars in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Research and development | $1,608 | $1,727 | $1,018 | $766 | | General and administrative | $2,326 | $908 | $1,266 | $619 | | **TOTAL OPERATING EXPENSES** | **$3,934** | **$2,635** | **$2,284** | **$1,385** | | **OPERATING LOSS** | **$3,934** | **$2,635** | **$2,284** | **$1,385** | | Financial expenses, net | $301 | $270 | $216 | $102 | | **LOSS BEFORE INCOME TAX** | **$4,235** | **$2,905** | **$2,500** | **$1,487** | | Income tax | $3 | $7 | $3 | $2 | | **NET LOSS** | **$4,238** | **$2,912** | **$2,503** | **$1,489** | | LOSS PER SHARE, BASIC AND DILUTED | $8.21 | $381.09 | $4.32 | $197.80 | | WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING | 516,110 | 7,466 | 579,523 | 7,442 | [Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Shares and Shareholders' Equity (Capital Deficiency) (unaudited)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Redeemable%20Convertible%20Preferred%20Shares%20and%20Shareholders%27%20Equity%20%28Capital%20Deficiency%29%20%28unaudited%29) This section outlines the changes in the company's redeemable convertible preferred shares and shareholders' equity (or capital deficiency) for the six months ended June 30, 2025 Changes in Shareholders' Equity (Capital Deficiency) (U.S. dollars in thousands) | Metric | Balance at Jan 1, 2025 | Issuance of ordinary shares and warrants | Exercise of warrants | Issuance of ordinary shares and warrants upon inducement | Share-based compensation | Conversion of EarlyBird Promissory Note | Net loss | Balance at June 30, 2025 | | :-------------------------------- | :--------------------- | :------------------------------------- | :------------------- | :------------------------------------------------ | :----------------------- | :------------------------------------ | :------- | :----------------------- | | Ordinary shares | $2 | $3 | $3 | $2 | $* | $* | - | $8 | | Additional paid-in capital | $39,263 | $4,252 | $863 | $2,812 | $58 | $356 | - | $47,604 | | Accumulated deficit | $(43,254) | - | - | - | - | - | $(4,238) | $(47,492) | | **TOTAL SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)** | **$(3,989)** | **$4,255** | **$864** | **$2,814** | **$58** | **$356** | **$(4,238)** | **$120** | - Total shareholders' equity improved from a **$(3,989) thousand deficiency** at January 1, 2025, to a **positive $120 thousand** at June 30, 2025, primarily due to public offerings, warrant exercises, and inducement transactions[30](index=30&type=chunk) [Condensed Consolidated Statements of Cash Flows (unaudited)](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28unaudited%29) This table presents the company's unaudited condensed consolidated statements of cash flows, categorizing cash activities for the six and three months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (U.S. dollars in thousands) | Cash Flow Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(4,960) | $(2,817) | $(2,507) | $(1,065) | | Net cash used in investing activities | $(7) | $(6) | $(1) | $0 | | Net cash provided by (used in) financing activities | $7,237 | $* | $(195) | $0 | | **INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH** | **$2,270** | **$(2,823)** | **$(2,703)** | **$(1,065)** | | Balance at beginning of period | $1,270 | $4,645 | $6,233 | $2,831 | | **BALANCE AT END OF PERIOD** | **$3,544** | **$1,747** | **$3,544** | **$1,747** | - Cash and cash equivalents and restricted cash increased by **$2,270 thousand** for the six months ended June 30, 2025, primarily from **$7,237 thousand in financing activities**, offsetting **$4,960 thousand in operating cash outflows**[37](index=37&type=chunk)[175](index=175&type=chunk) [Notes to Condensed Consolidated Financial Statements (unaudited)](index=16&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering accounting policies, specific transactions, and financial instrument valuations [NOTE 1 - GENERAL](index=16&type=section&id=NOTE%201%20-%20GENERAL) This note provides general information about Silexion Therapeutics Corp, including its formation, Nasdaq listing, and going concern considerations - Silexion Therapeutics Corp (New Silexion) was formed for the Business Combination on August 15, 2024, operating as a publicly-traded holding company for Silexion Therapeutics Ltd., the accounting acquirer[44](index=44&type=chunk) - The company's ordinary shares and warrants are listed on the Nasdaq Global Market under the symbols 'SLXN' and 'SLXNW'[44](index=44&type=chunk) - The company incurred **losses of $4,238 thousand** for the six months ended June 30, 2025, and **$16,519 thousand** for the year ended December 31, 2024, alongside **negative operating cash flows of $4,960 thousand** for the six months ended June 30, 2025[47](index=47&type=chunk) - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern for at least 12 months from the financial statements' issuance date, owing to ongoing losses and negative cash flows[49](index=49&type=chunk) [NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES](index=17&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the significant accounting policies used in preparing the unaudited interim condensed consolidated financial statements, including fair value measurements and recent accounting pronouncement adoptions - The unaudited interim condensed consolidated financial statements adhere to U.S. GAAP for interim reporting and SEC requirements, omitting some information typically found in annual statements[50](index=50&type=chunk) - Fair value measurements are classified into a three-level hierarchy, distinguishing between quoted prices (Level 1), observable prices (Level 2), and unobservable inputs (Level 3), to ensure consistency and comparability[57](index=57&type=chunk)[58](index=58&type=chunk) - The company adopted ASU 2022-03 'Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions' on January 1, 2025, without material impact on its consolidated financial statements[61](index=61&type=chunk) [NOTE 3 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION](index=20&type=section&id=NOTE%203%20-%20SUPPLEMENTARY%20FINANCIAL%20STATEMENT%20INFORMATION) This note provides detailed breakdowns of research and development expenses, general and administrative expenses, and financial expenses, net, for the reported periods Research and Development Expenses (U.S. dollars in thousands) | Expense Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Payroll and related expenses | $854 | $476 | $485 | $216 | | Share-based compensation | $0 | $38 | $0 | $19 | | Subcontractors and consultants | $598 | $1,128 | $442 | $497 | | Rent and maintenance | $95 | $49 | $55 | $18 | | Other | $61 | $36 | $36 | $16 | | **Total R&D Expenses** | **$1,608** | **$1,727** | **$1,018** | **$766** | General and Administrative Expenses (U.S. dollars in thousands) | Expense Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Payroll and related expenses | $739 | $280 | $407 | $151 | | Share-based compensation | $58 | $26 | $37 | $13 | | Professional services | $1,111 | $448 | $586 | $369 | | Depreciation | $7 | $15 | $3 | $7 | | Rent and maintenance | $85 | $72 | $55 | $46 | | Patent registration | $51 | $25 | $47 | $16 | | Travel expenses | $91 | $16 | $37 | $7 | | Other | $184 | $26 | $94 | $10 | | **Total G&A Expenses** | **$2,326** | **$908** | **$1,266** | **$619** | Financial Expenses, Net (U.S. dollars in thousands) | Expense Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Change in fair value of financial liabilities | $277 | $145 | $198 | $64 | | Interest income, net | $(34) | $(25) | $(43) | $(6) | | Foreign currency exchange loss, net | $55 | $148 | $61 | $42 | | Other | $3 | $2 | $0 | $2 | | **Total Financial Expense (Income), Net** | **$301** | **$270** | **$216** | **$102** | [NOTE 4 - WARRANTS TO PURCHASE PREFERRED SHARES](index=20&type=section&id=NOTE%204%20-%20WARRANTS%20TO%20PURCHASE%20PREFERRED%20SHARES) This note details the company's warrant transactions, including public offerings, pre-funded warrants, and induced warrant exercises, along with their financial impact - In January 2025, the Company completed a public offering, selling **143,067 ordinary shares** and **143,067 ordinary warrants**, plus **103,847 pre-funded warrants** and **103,847 ordinary warrants**, generating approximately **$5,000 thousand in gross proceeds**[65](index=65&type=chunk) - Pre-funded warrants were immediately exercisable at **$0.0015 per share**, while ordinary warrants were exercisable at **$20.25 per share** for a five-year term[66](index=66&type=chunk) - As of June 30, 2025, **42,683 investor warrants** and all **103,847 pre-funded warrants** were exercised, yielding **$864 thousand in proceeds**[70](index=70&type=chunk) - An induced warrant exercise on January 29, 2025, resulted in holders exercising **148,102 ordinary warrants** at **$20.25 per share**, generating approximately **$3,276 thousand in gross proceeds**, and receiving new ordinary warrants[71](index=71&type=chunk) [NOTE 5 - UNDERWRITERS PROMISSORY NOTE](index=21&type=section&id=NOTE%205%20-%20UNDERWRITERS%20PROMISSORY%20NOTE) This note describes the repayment and extinguishment of the Underwriters Promissory Note and the EarlyBird Convertible Promissory Note - During January 2025, the Company repaid **$158 thousand** of the Underwriters Promissory Note principal[74](index=74&type=chunk) - On March 13, 2025, the Company agreed with EarlyBird to extinguish the remaining **$880 thousand** outstanding principal and accrued interest of the Convertible Promissory Note for a **$551 thousand cash payment** and **18,519 Ordinary Shares**[74](index=74&type=chunk) [NOTE 6 - SHARE-BASED COMPENSATION](index=22&type=section&id=NOTE%206%20-%20SHARE-BASED%20COMPENSATION) This note details the company's share-based compensation expenses, available shares for grant, and activity related to stock options and restricted stock units - Share-based compensation expenses amounted to **$58 thousand** for the six months ended June 30, 2025, a decrease from **$64 thousand** in the corresponding period of 2024[76](index=76&type=chunk) - As of June 30, 2025, **1,778 shares** were available for grant under the 2024 Incentive Option Plans, with an additional **84,791 shares** approved on July 14, 2025, bringing the total to **86,568 shares**[76](index=76&type=chunk)[77](index=77&type=chunk) Summary of Share-Based Compensation Activity (Six months ended June 30, 2025) | Metric | Number of options | Weighted average exercise price (U.S. dollars) | | :-------------------------- | :---------------- | :--------------------------------------------- | | Outstanding at January 1, 2025 | 1,608 | $897.47 | | Granted | 4,680 | $18.90 | | Expired | (20) | $907.57 | | **Outstanding at June 30, 2025** | **6,268** | **$241.40** | | Exercisable at June 30, 2025 | 1,588 | $897.34 | - In the six months ended June 30, 2025, Silexion granted **3,994 RSUs** to directors and service providers, including **3,966 RSUs** approved for directors on February 9, 2025[79](index=79&type=chunk) [NOTE 7 - FAIR VALUE MEASUREMENTS](index=23&type=section&id=NOTE%207%20-%20FAIR%20VALUE%20MEASUREMENTS) This note outlines the fair value measurements for financial liabilities, specifically private warrants and promissory notes, using Level 3 inputs and valuation models Financial Liabilities Measured at Fair Value (Level 3, U.S. dollars in thousands) | Financial Liabilities | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Private Warrants to ordinary shares | $* | $2 | | Promissory Notes | $3,190 | $3,965 | - The fair value of Promissory Notes is determined using a discount rate of **11.85%-13.39%** (including a credit spread of **6.67%-7.56%**) and the Company's forecasts for conversion/repayment timing[80](index=80&type=chunk) - Warrants' fair value is calculated using a Black-Scholes-Merton model with Level 3 inputs, incorporating volatility (**90.34% in 2025**, **74.82% in 2024**), term (**4.13 years in 2025**, **5.13 years in 2024**), and a zero dividend yield[82](index=82&type=chunk)[83](index=83&type=chunk) [NOTE 8 - NET LOSS PER SHARE](index=24&type=section&id=NOTE%208%20-%20NET%20LOSS%20PER%20SHARE) This note presents the calculation of basic and diluted net loss per share, along with the weighted-average number of ordinary shares outstanding for the reported periods Net Loss Per Share (U.S. dollars in thousands, except per share data) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :------------------------------------------------------------------------------------------------ | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Net loss attributable to ordinary shareholders | $4,238 | $2,845 | $2,503 | $1,472 | | Weighted-average shares outstanding | 516,110 | 7,466 | 579,523 | 7,442 | | **Net loss per share, basic and diluted** | **$8.21** | **$381.09** | **$4.32** | **$197.80** | - Diluted net loss per share equals basic net loss per share for all periods, as potential ordinary share equivalents would be anti-dilutive if included[86](index=86&type=chunk) - Anti-dilutive instruments excluded from diluted EPS calculations include warrants to purchase ordinary shares, share-based compensation, promissory notes, and redeemable convertible preferred shares and their associated warrants[88](index=88&type=chunk)[89](index=89&type=chunk) [NOTE 9 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES](index=25&type=section&id=NOTE%209%20-%20TRANSACTIONS%20AND%20BALANCES%20WITH%20RELATED%20PARTIES) This note provides a summary of transactions and balances with related parties, including share-based compensation, financial expenses, and promissory notes Transactions with Related Parties (U.S. dollars in thousands) | Transaction Type | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Share-based compensation (R&D) | $0 | $34 | $0 | $17 | | Share-based compensation (G&A) | $58 | $24 | $37 | $12 | | Financial expenses | $229 | $135 | $197 | $60 | Balances with Related Parties (U.S. dollars in thousands) | Balance Type | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Private warrants to purchase ordinary shares (Current) | $* | $1 | | Sponsor Promissory Note (Non-Current) | $3,190 | $2,961 | [NOTE 10 - SEGMENT INFORMATION](index=26&type=section&id=NOTE%2010%20-%20SEGMENT%20INFORMATION) This note clarifies that the company operates as a single operating segment focused on R&D of siRNA-based treatments, with performance reviewed on a consolidated basis - The Company operates as a single operating segment, concentrating on the research and development of siRNA-based treatments for pancreatic cancer[90](index=90&type=chunk) - The CEO, acting as the Chief Operating Decision Maker (CODM), reviews performance on a consolidated basis, aligning segment loss, assets, and liabilities with the consolidated net loss, assets, and liabilities[90](index=90&type=chunk)[92](index=92&type=chunk) Key Segment Expenses and Financials (U.S. dollars in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :---------------------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Clinical trials and other R&D service providers | $598 | $1,131 | $442 | $497 | | R&D payroll and related expenses (excl. share-based) | $854 | $476 | $485 | $216 | | G&A Professional services | $1,111 | $448 | $586 | $369 | | Operating loss | $3,934 | $2,635 | $2,284 | $1,385 | | Net loss | $4,238 | $2,912 | $2,503 | $1,489 | | Segment assets | $5,797 | $2,315 | $5,797 | $2,315 | | Segment liabilities | $5,677 | $2,372 | $5,677 | $2,372 | [NOTE 11 - SUBSEQUENT EVENTS](index=27&type=section&id=NOTE%2011%20-%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including an increase in the equity incentive plan, a reverse share split, and an induced warrant exercise transaction - On July 14, 2025, shareholders approved an increase of **84,791 ordinary shares** to the 2024 Equity Incentive Plan, bringing the total to **86,568 shares**[96](index=96&type=chunk) - On July 28, 2025, the Company executed a **1-for-15 reverse share split** to regain compliance with Nasdaq Listing Rule 5550(a)(2) and maintain its Nasdaq Capital Market listing[97](index=97&type=chunk)[98](index=98&type=chunk) - On July 31, 2025, an induced warrant exercise resulted in holders exercising **152,106 existing ordinary warrants** for cash at **$11.57 per share**, generating approximately **$1,800 thousand in gross proceeds**, and receiving new ordinary warrants to purchase **304,212 shares**[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, discussing its business overview, recent corporate actions like reverse share splits and Nasdaq listing efforts, detailed analysis of operating expenses and financial results, liquidity and capital resources, critical accounting policies, and regulatory status - Silexion Therapeutics Corp operates through its subsidiary Silexion, a clinical-stage oncology biotechnology company developing proprietary treatments for KRAS-driven cancers, with its lead product candidate **SIL204**, a second-generation siRNA[107](index=107&type=chunk) - The company has incurred significant operating losses, with **net losses of $4.2 million** and **$2.5 million** for the six and three months ended June 30, 2025, respectively, and an **accumulated deficit of $47.5 million** as of June 30, 2025[112](index=112&type=chunk) - The company anticipates continued significant expenses from R&D, clinical trials, potential new pipeline products, and increased costs associated with public company operations[113](index=113&type=chunk)[114](index=114&type=chunk) [Overview](index=28&type=section&id=Overview) This section provides a high-level overview of Silexion Therapeutics Corp, its focus on developing treatments for KRAS-driven cancers, its technology, funding sources, and financial performance - Silexion Therapeutics Corp (New Silexion) is a publicly-traded holding company for Silexion, a clinical-stage oncology biotechnology company developing treatments for KRAS-driven cancers, with **SIL204** as its lead product candidate[106](index=106&type=chunk)[107](index=107&type=chunk) - The company's technology utilizes small interfering RNA (siRNA) to silence the KRAS oncogene, preventing mutated KRAS protein production, and employs an Integrated Treatment Regimen (direct tumor injection and systemic administration) with standard chemotherapy[107](index=107&type=chunk) - Funding sources include private offerings, **$5.8 million** in Israeli Innovation Authority grants, **$2.0 million PIPE financing**, a **$15.0 million ELOC** (with **$3.1 million utilized**), a **$5.0 million gross January 2025 public offering**, and induced warrant exercises totaling **$3.3 million** and **$1.8 million gross** in January and August 2025, respectively[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - Net losses were **$4.2 million** for the six months ended June 30, 2025, and **$2.5 million** for the three months ended June 30, 2025, resulting in an **accumulated deficit of $47.5 million** as of June 30, 2025, with no revenue generated to date[112](index=112&type=chunk) [Reverse Share Splits](index=30&type=section&id=Reverse%20Share%20Splits) This section details the company's implementation of two reverse share splits and their retroactive adjustment across all historical share data in the report - The company implemented two reverse share splits: **1-for-9** on November 27, 2024, and **1-for-15** on July 28, 2025, with market effective dates of November 29, 2024, and July 29, 2025, respectively[115](index=115&type=chunk) - All historical share, per share, and related option/warrant data in the report have been retroactively adjusted to reflect these reverse share splits[115](index=115&type=chunk) [Continued Nasdaq Listing](index=30&type=section&id=Continued%20Nasdaq%20Listing) This section discusses the company's efforts to maintain its Nasdaq listing, including addressing delisting notices and implementing a reverse share split to meet compliance requirements - On May 22, 2025, Nasdaq issued a delisting notice due to the company's failure to maintain minimum Market Value of Listed Securities (**$50 million**) and Market Value of Publicly Held Shares (**$15 million**)[117](index=117&type=chunk) - A Nasdaq hearings panel granted the company's request to remain listed on July 7, 2025, leading to a transfer from the Nasdaq Global Market to the Nasdaq Capital Market[117](index=117&type=chunk) - Continued listing is contingent upon demonstrating at least **$2.5 million in shareholders' equity** by September 19, 2025, and adhering to all Nasdaq listing rules[118](index=118&type=chunk)[119](index=119&type=chunk) - The company executed a **1-for-15 reverse share split** on July 28, 2025, to address a bid price deficiency and maintain the minimum number of publicly held shares[118](index=118&type=chunk) [Components of our Results of Operations](index=31&type=section&id=Components%20of%20our%20Results%20of%20Operations) This section describes the key components of the company's results of operations, including research and development expenses, general and administrative expenses, and financial expenses, net - Research and development expenses, encompassing payroll, share-based compensation, subcontractor costs, and clinical trial costs, are projected to increase with further **SIL204** development and additional hiring[122](index=122&type=chunk)[123](index=123&type=chunk) - General and administrative expenses, covering personnel costs, patent fees, professional services, and travel, are anticipated to rise due to business growth and public company operating costs[124](index=124&type=chunk)[125](index=125&type=chunk) - Financial expenses, net, primarily comprise changes in the fair value of financial liabilities, interest expenses, and foreign currency exchange differences[126](index=126&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, detailing changes in operating expenses, financial expenses, and net loss for the six and three-month periods ended June 30, 2025 and 2024 - Net loss increased by **44.8%** to **$4.2 million** for the six months ended June 30, 2025, compared to **$2.9 million** in 2024, mainly due to higher general and administrative expenses associated with public company status[134](index=134&type=chunk) - Net loss increased by **66.7%** to **$2.5 million** for the three months ended June 30, 2025, compared to **$1.5 million** in 2024, primarily driven by increased general and administrative and research and development expenses[139](index=139&type=chunk) [Comparison of six-month periods ended June 30, 2025 and 2024](index=32&type=section&id=Comparison%20of%20six-month%20periods%20ended%20June%2030%2C%202025%20and%202024) This section compares the company's operating expenses and net loss for the six-month periods ended June 30, 2025, and 2024, highlighting key drivers of change Operating Expenses (Six-month period ended June 30, U.S. dollars in thousands) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------- | :--- | :--- | :--------- | :--------- | | Research and development | $1,608 | $1,727 | $(119) | -6.9% | | General and administrative | $2,326 | $908 | $1,418 | +156.2% | | **Total operating expenses** | **$3,934** | **$2,635** | **$1,299** | **+49.3%** | | Operating loss | $3,934 | $2,635 | $1,299 | +49.3% | | Financial expenses, net | $301 | $270 | $31 | +11.5% | | Net loss | $4,238 | $2,912 | $1,326 | +45.5% | - R&D expenses decreased by **$0.1 million (5.9%)** to **$1.6 million**, primarily due to a **$0.5 million reduction** in subcontractors/consultants as the development program shifted from API development to manufacturing, partially offset by a **$0.4 million increase** in payroll from headcount and salary increases[130](index=130&type=chunk) - G&A expenses rose by **$1.4 million (155.6%)** to **$2.3 million**, driven by a **$0.5 million increase** in payroll and a **$0.7 million increase** in professional services related to public company operations[132](index=132&type=chunk) [Comparison of three-month periods ended June 30, 2025 and 2024](index=33&type=section&id=Comparison%20of%20three-month%20periods%20ended%20June%2030%2C%202025%20and%202024) This section compares the company's operating expenses and net loss for the three-month periods ended June 30, 2025, and 2024, detailing the factors contributing to changes Operating Expenses (Three-month period ended June 30, U.S. dollars in thousands) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------- | :--- | :--- | :--------- | :--------- | | Research and development | $1,018 | $766 | $252 | +32.9% | | General and administrative | $1,266 | $619 | $647 | +104.5% | | **Total operating expenses** | **$2,284** | **$1,385** | **$899** | **+64.9%** | | Operating loss | $2,284 | $1,385 | $899 | +64.9% | | Financial expenses, net | $216 | $102 | $114 | +111.8% | | Net loss for the quarter | $2,503 | $1,489 | $1,014 | +68.1% | - R&D expenses increased by **$0.2 million (25.0%)** to **$1.0 million**, primarily due to higher payroll and related expenses from additional headcount, salary increases, and bonus accruals post-Business Combination[136](index=136&type=chunk) - G&A expenses increased by **$0.7 million (116.7%)** to **$1.3 million**, fueled by a **$0.3 million increase** in payroll and a **$0.2 million increase** in professional services for public company financing activities[137](index=137&type=chunk) - Financial expenses, net, increased by **$0.1 million (100.0%)** to **$0.2 million**, mainly due to higher revaluation expenses of financial instruments[138](index=138&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity position, capital resources, funding requirements, and various financing activities undertaken to support operations and development - As of June 30, 2025, cash and cash equivalents totaled **$3.5 million**, with net losses of **$4.2 million** and **$2.5 million** for the six and three months ended June 30, 2025, respectively[140](index=140&type=chunk) - Current cash and anticipated cash flow are insufficient for the next 12 months, raising substantial doubt about the company's ability to continue as a going concern without additional capital[142](index=142&type=chunk)[143](index=143&type=chunk) - Primary liquidity sources include private offerings, IIA grants, **$2.0 million PIPE financing**, **$3.1 million utilized ELOC**, a **$5.0 million gross January 2025 public offering**, and induced warrant exercises totaling **$3.3 million** and **$1.8 million gross**[141](index=141&type=chunk) - Future capital requirements depend on R&D, clinical trials, new product candidates, and public company operating costs; financing will likely involve public/private equity offerings, debt, strategic alliances, and licensing arrangements[179](index=179&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[187](index=187&type=chunk) [Public Offering via H.C. Wainwright](index=35&type=section&id=Public%20Offering%20via%20H.C.%20Wainwright) This section details the company's January 2025 public offering, including the securities sold, gross proceeds, warrant terms, and associated placement agent fees - On January 15 and 17, 2025, the company completed a public offering (HCW Offering) of **143,067 ordinary shares**, **103,847 pre-funded warrants**, and **246,914 ordinary warrants**, raising approximately **$5.0 million in gross proceeds**[146](index=146&type=chunk) - Pre-funded warrants were exercisable at **$0.0015 per share**, and ordinary warrants at **$20.25 per share**, both with a five-year term[148](index=148&type=chunk) - The company paid H.C. Wainwright a **7.0% cash placement agent fee** and a **1.0% management fee**, and issued **17,284 placement agent warrants** (7.0% of shares/pre-funded warrants sold) with an exercise price of **$25.3125**[151](index=151&type=chunk) - Net proceeds from the HCW Offering were approximately **$4.26 million**, designated for advancing pre-clinical clinical studies and general corporate purposes[152](index=152&type=chunk) [Induced Warrant Exercise Transactions](index=36&type=section&id=Induced%20Warrant%20Exercise%20Transactions) This section describes the induced warrant exercise transactions in January and July 2025, detailing the number of warrants exercised, gross proceeds generated, and new warrants issued - On January 29, 2025, and July 31, 2025, induced warrant exercise transactions involved holders exercising **148,102** and **152,106 existing ordinary warrants**, respectively, for cash[153](index=153&type=chunk) - These exercises generated gross proceeds of approximately **$3.3 million** (January 2025) and **$1.8 million** (August 2025), prior to deducting placement agent fees and other offering expenses[153](index=153&type=chunk) - In consideration, new ordinary warrants were issued to purchase **148,102** and **304,212 ordinary shares**, respectively, alongside placement agent warrants for **10,368** and **10,647 shares**, respectively[153](index=153&type=chunk)[154](index=154&type=chunk) - The company engaged H.C. Wainwright as the exclusive placement agent, paying cash fees (**7.0% placement**, **1.0% management**) and issuing placement agent warrants[154](index=154&type=chunk) [ELOC Financing](index=37&type=section&id=ELOC%20Financing) This section outlines the Equity Line of Credit (ELOC) Agreement with White Lion Capital, LLC, including the credit limit, commitment shares, and aggregate proceeds generated - The ELOC Agreement, effective August 15, 2024, provides an equity line of credit of up to **$15.0 million** from White Lion Capital, LLC, valid until December 31, 2025[158](index=158&type=chunk) - As consideration, the company issued **$337,500 worth of ELOC Commitment Shares** (**2,707 ordinary shares**) to the ELOC Investor on September 18, 2024[160](index=160&type=chunk) - Through the reporting date, the company has issued **50,915 ordinary shares** to the ELOC Investor under the ELOC Agreement, generating aggregate proceeds of approximately **$3.1 million**[161](index=161&type=chunk) [Settlement of Amounts Due Under Marketing Agreement with EarlyBird](index=37&type=section&id=Settlement%20of%20Amounts%20Due%20Under%20Marketing%20Agreement%20with%20EarlyBird) This section details the settlement of amounts due under the Marketing Agreement with EarlyBird, including cash payments, conversion of a promissory note into shares, and the note's retirement - Moringa and EarlyBird agreed to reduce the Marketing Agreement fee to **$1.6 million**, with **$350,000 paid in cash** at closing and a **$1.25 million EarlyBird Convertible Note** issued[162](index=162&type=chunk) - Through January 31, 2025, **$407,556** was paid on the EarlyBird Convertible Note[162](index=162&type=chunk) - On March 13, 2025, a letter agreement resulted in a **$400,000 cash payment** (plus **$15,000 legal expenses**), conversion of the remaining **$880,202 outstanding principal and interest** into **18,519 ordinary shares**, and a final cash payment of **$135,998**[163](index=163&type=chunk)[164](index=164&type=chunk) - The EarlyBird Convertible Note was fully retired on March 18, 2025[164](index=164&type=chunk) [Issuance of A&R Sponsor Promissory Note](index=38&type=section&id=Issuance%20of%20A%26R%20Sponsor%20Promissory%20Note) This section describes the issuance of the A&R Sponsor Promissory Note, its principal amount, maturity date, and conversion terms into ordinary shares - The A&R Sponsor Promissory Note for **$3,433,000** was issued to the Moringa sponsor at the Business Combination closing, superseding all prior promissory notes[165](index=165&type=chunk) - The note matures on February 15, 2027, with amounts repayable via conversion into ordinary shares (Note Shares)[165](index=165&type=chunk) - Conversion terms permit conversion at the price of subsequent equity financings (up to **30% of shares issued**) or at the sponsor's election after 24 months at the 20-day VWAP[165](index=165&type=chunk) - As of the reporting date, no amounts under the A&R Sponsor Promissory Note have been converted into ordinary shares[165](index=165&type=chunk) [Government Grants](index=38&type=section&id=Government%20Grants) This section details the royalty-bearing grants received from the Israeli Innovation Authority (IIA) for R&D efforts and the associated royalty payment obligations - The company has received approximately **$5.8 million** in royalty-bearing grants from the Israeli Innovation Authority (IIA) for R&D efforts as of June 30, 2025[166](index=166&type=chunk) - The company is committed to paying royalties to the IIA at a rate of **3.0% to 5.0%** on sales of products developed with IIA-funded know-how, up to the total grant amount plus interest[167](index=167&type=chunk) - The total royalty amount potentially payable by the company as of June 30, 2025, is approximately **$5.8 million** (**$6.6 million including interest**)[171](index=171&type=chunk) [Cash flows for the six-month periods ended June 30, 2025 and 2024](index=39&type=section&id=Cash%20flows%20for%20the%20six-month%20periods%20ended%20June%2030%2C%202025%20and%202024) This section analyzes the company's cash flow activities for the six-month periods ended June 30, 2025, and 2024, detailing changes in operating, investing, and financing cash flows Cash Flows (Six-month period ended June 30, U.S. dollars in thousands) | Cash Flow Activity | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :--- | :--- | :--------- | :--------- | | Net cash used in operating activities | $(4,960) | $(2,817) | $(2,143) | +76.1% | | Net cash used in investing activities | $(7) | $(6) | $(1) | +16.7% | | Net cash provided by financing activities | $7,237 | $0 | $7,237 | N/A | | **Net increase (decrease) in cash and cash equivalents and restricted cash** | **$2,270** | **$(2,823)** | **$5,093** | N/A | - Net cash used in operating activities increased by **$2.2 million (78.6%)** to **$5.0 million**, primarily due to a **$1.3 million increase** in net loss and a **$0.9 million increase** in net working capital[174](index=174&type=chunk) - Net cash provided by financing activities increased by **$7.2 million** to **$7.2 million**, primarily from **$5.0 million** (net of **$0.7 million costs**) from the HCW Offering, **$0.9 million** from warrant exercises, and **$3.3 million** (net of **$0.5 million costs**) from the January 2025 warrant inducement transaction, partially offset by **$0.7 million** in EarlyBird Convertible Note payments[175](index=175&type=chunk) [Cash flows for the quarters ended June 30, 2025 and 2024](index=39&type=section&id=Cash%20flows%20for%20the%20quarters%20ended%20June%2030%2C%202025%20and%202024) This section analyzes the company's cash flow activities for the three-month periods ended June 30, 2025, and 2024, detailing changes in operating, investing, and financing cash flows Cash Flows (Three-month period ended June 30, U.S. dollars in thousands) | Cash Flow Activity | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :--- | :--- | :--------- | :--------- | | Net cash used in operating activities | $(2,507) | $(1,065) | $(1,442) | +135.4% | | Net cash used in investing activities | $(1) | $0 | $(1) | N/A | | Net cash used in financing activities | $(195) | $0 | $(195) | N/A | | **Net increase (decrease) in cash and cash equivalents and restricted cash** | **$(2,703)** | **$(1,065)** | **$(1,638)** | +153.8% | - Net cash used in operating activities increased by **$1.4 million (127.3%)** to **$2.5 million**, primarily due to a **$1.0 million increase** in net loss and a **$0.6 million increase** in net working capital[177](index=177&type=chunk) - Net cash used in financing activities decreased by **$0.2 million** to **$0.2 million**, primarily due to cash issuance costs from the public offering paid in the three-month period ended June 30, 2025[178](index=178&type=chunk) [Funding Requirements](index=40&type=section&id=Funding%20Requirements) This section outlines the company's anticipated funding needs for ongoing and planned activities, particularly R&D and clinical trials, and addresses the going concern uncertainty - The company anticipates substantial financial resources will be allocated to ongoing and planned activities, especially the development of **SIL204** and pre-clinical/clinical trials[179](index=179&type=chunk) - As of June 30, 2025, existing cash and cash equivalents (**$3.5 million**) are projected to fund operations only into the first quarter of 2026[182](index=182&type=chunk)[185](index=185&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern for 12 months without additional financing, owing to operating losses and negative cash flows[182](index=182&type=chunk)[183](index=183&type=chunk) - Future funding will likely originate from public/private equity offerings, debt, strategic alliances, and licensing arrangements, potentially causing significant dilution to current shareholders[187](index=187&type=chunk)[188](index=188&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies the company's critical accounting estimates, specifically focusing on the fair value measurement of promissory notes - Critical accounting estimates include the valuation of promissory notes, which are measured at fair value[190](index=190&type=chunk)[191](index=191&type=chunk) - The fair value of promissory notes is determined using a discount rate of **11.85%-13.39%** (including a credit spread of **7.56%**) and management's forecasts for conversion/redemption timing[191](index=191&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) This section directs readers to Note 2 of the financial statements for details on recent accounting pronouncements relevant to the company's financial reporting - Refer to Note 2 of the financial statements for details on recent accounting pronouncements applicable to the current and prior year financial statements[192](index=192&type=chunk) [Smaller Reporting Company Status](index=42&type=section&id=Smaller%20Reporting%20Company%20Status) This section explains the company's status as a "smaller reporting company" and the associated reduced disclosure requirements - The company is a 'smaller reporting company' with a market value of ordinary shares held by non-affiliates less than **$700 million** and annual revenue less than **$100 million**[193](index=193&type=chunk) - This status permits the presentation of only the two most recent fiscal years of audited financial statements and reduced executive compensation disclosure[193](index=193&type=chunk) [Emerging Growth Company Status](index=42&type=section&id=Emerging%20Growth%20Company%20Status) This section describes the company's "emerging growth company" status, its election for an extended transition period for accounting standards, and the conditions for retaining this status - The company is an 'emerging growth company' and has opted for the extended transition period for new or revised financial accounting standards under the JOBS Act[195](index=195&type=chunk) - This status may affect the comparability of its financial results with other public companies[195](index=195&type=chunk) - The company will retain its emerging growth company status until specific thresholds are met (e.g., market value exceeding **$700 million**, revenue exceeding **$1.235 billion**, debt exceeding **$1.0 billion**) or December 31, 2029[195](index=195&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Silexion is exempt from detailed disclosures under this item, noting its funds are in demand-deposit interest-bearing bank accounts and no material impact from interest rate fluctuations is anticipated - As a 'smaller reporting company,' Silexion is exempt from detailed market risk disclosures[196](index=196&type=chunk) - Funds are invested in demand-deposit interest-bearing bank accounts, with no material impact from interest rate fluctuations anticipated[196](index=196&type=chunk) [Item 4. Control and Procedures](index=43&type=section&id=Item%204.%20Control%20and%20Procedures) Management, with the participation of the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025[199](index=199&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[200](index=200&type=chunk) [PART II - OTHER INFORMATION](index=43&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers other required disclosures, including legal proceedings, risk factors, unregistered sales of equity securities, defaults upon senior securities, mine safety disclosures, and a list of exhibits [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - The company has no legal proceedings to report[202](index=202&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the 'Risk Factors' section of the 2024 Annual Report for factors that could materially affect actual results, noting no material changes to those risk factors as of the date of this Quarterly Report - Refer to 'Part I, Item 1.A Risk Factors' of the 2024 Annual Report for factors that could materially affect actual results[203](index=203&type=chunk) - As of the date of this Quarterly Report, no material changes to previously disclosed risk factors have occurred[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section incorporates by reference disclosures from 'Management's Discussion and Analysis of Financial Condition and Results of Operations' regarding unregistered sales of equity securities, specifically induced warrant exercise transactions and the settlement of amounts due under the Marketing Agreement with EarlyBird, all made in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D - Disclosures regarding unregistered sales of equity securities, including induced warrant exercise transactions and settlement with EarlyBird, are incorporated by reference from Item 2 of Part I[204](index=204&type=chunk) - These sales were conducted in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D[204](index=204&type=chunk) - No disclosure is required for the use of proceeds from the initial registration statement on Form S-4 related to the Business Combination, as it qualified as a business combination under Rule 145(a)[205](index=205&type=chunk) [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - The company reported no defaults upon senior securities[207](index=207&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[208](index=208&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company reported no other information - The company reported no other information[209](index=209&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including certifications and XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[211](index=211&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) and the Cover Page Interactive Data File are filed as exhibits[211](index=211&type=chunk) [SIGNATURES](index=45&type=section&id=SIGNATURES) This section contains the signatures of the company's Chairman and Chief Executive Officer and Chief Financial Officer, certifying the report on August 12, 2025 - The report is signed by Ilan Hadar, Chairman and Chief Executive Officer, and Mirit Horenshtein-Hadar, Chief Financial Officer, on August 12, 2025[215](index=215&type=chunk)