Exhibit 99.1 John Kiernan, President and Chief Executive Officer of the Company, stated, "We successfully completed our final major citrus harvest during the third quarter, marking a significant milestone in our strategic transformation to become a diversified land company. This harvest concludes the majority of our capital- intensive citrus production operations, allowing us to focus our resources on our long-term land development and diversified usage strategy. During the third quarter, we generated over ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-38360 Solid Biosciences Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 90-0943402 (State ...

PART I – FINANCIAL INFORMATION This section covers condensed financial statements, MD&A, and controls and procedures [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) H1 2025 net loss of $5.1 million contrasts with H1 2024 net income, primarily due to a non-recurring royalty gain [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $15.2 million by June 30, 2025, driven by a $3.7 million cash reduction, impacting shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands USD) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $13,211 | $16,950 | -$3,739 | | Total current assets | $13,526 | $17,503 | -$3,977 | | Total assets | $15,152 | $18,974 | -$3,822 | | **Liabilities & Equity** | | | | | Total current liabilities | $1,226 | $1,046 | +$180 | | Total liabilities | $1,255 | $1,067 | +$188 | | Total shareholders' equity | $13,897 | $17,907 | -$4,010 | [Condensed Consolidated Statements of Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%28Loss%29) H1 2025 net loss of $5.1 million contrasts with H1 2024 net income, primarily due to the absence of a $16.9 million royalty gain Financial Performance Summary (in thousands USD, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Exploration & property costs | $(1,784) | $(629) | $(3,322) | $(1,381) | | Gain on grant of royalty | $— | $16,909 | $— | $16,909 | | Total operating income (expense) | $(2,485) | $15,487 | $(5,343) | $14,269 | | **Net Income (Loss)** | **$(2,356)** | **$15,633** | **$(5,064)** | **$14,560** | | Net Income (Loss) per share (basic) | $(0.02) | $0.13 | $(0.04) | $0.12 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash decreased by $3.7 million in H1 2025, driven by increased operating costs and reduced investing inflows Six Months Ended June 30, Cash Flow Comparison (in thousands USD) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,115) | $(2,695) | | Net cash provided by (used in) investing activities | $(200) | $16,692 | | Net cash provided by financing activities | $576 | $159 | | **Net increase (decrease) in cash** | **$(3,739)** | **$14,156** | | Cash and cash equivalents, end of period | $13,211 | $20,225 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Mt Todd project, external financing reliance, 2024 royalty gain, ATM equity, and potential Mexican tax liabilities - The company's flagship asset is the 100% owned Mt Todd gold project in Northern Territory, Australia, where it is focused on exploration, evaluation, engineering, and permitting[15](index=15&type=chunk) - The financial statements are prepared on a going concern basis, but the company acknowledges its reliance on external financing (equity, royalties, debt) to fund operations as it does not generate recurring cash inflows[17](index=17&type=chunk) - In June 2024, the company recognized a gain of **$16.9 million** from a royalty agreement with Wheaton Precious Metals related to the Mt Todd project[26](index=26&type=chunk) - The company raised net proceeds of **$821 thousand** in the first six months of 2025 through its At-The-Market (ATM) equity offering program[30](index=30&type=chunk) - The company faces a potential liability of up to approximately **$3.7 million** from a tax assessment by Mexican authorities against its subsidiary, Minera Gold Stake[46](index=46&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=18&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A covers development-stage status, Mt Todd Feasibility Study, period net loss, and liquidity, with management asserting sufficient working capital [Overview](index=18&type=section&id=Overview) Vista Gold, a development-stage company, focuses on its Mt Todd Gold Project, completing a 2025 Feasibility Study for a smaller 15,000 tpd operation - The company's flagship asset is the Mt Todd Gold Project, a development-stage gold deposit in Northern Territory, Australia[54](index=54&type=chunk) - In December 2024, Vista began a new feasibility study (2025 FS) for a smaller 15,000 tpd operation to reduce initial capital and risk. The results were announced on July 29, 2025[58](index=58&type=chunk)[59](index=59&type=chunk) [Results from Operations](index=20&type=section&id=Results%20from%20Operations) H1 2025 net loss resulted from the absence of a $16.9 million royalty gain and increased exploration costs for the 2025 Feasibility Study - The significant decrease in net income year-over-year is primarily due to a **$16.9 million** gain on a royalty interest grant recognized in June 2024, which did not recur in 2025[63](index=63&type=chunk) - Exploration, property evaluation, and holding costs increased to **$3.3 million** for the six months ended June 30, 2025, from **$1.4 million** in the prior year, largely due to costs of **$1.6 million** for the 2025 Feasibility Study[64](index=64&type=chunk) [Financial Position, Liquidity and Capital Resources](index=21&type=section&id=Financial%20Position%2C%20Liquidity%20and%20Capital%20Resources) Liquidity decreased in H1 2025, with cash falling by $3.7 million, but management asserts sufficient working capital for the next year Liquidity Position (in thousands USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $13,211 | $16,950 | | Working Capital | $12,300 | $16,457 | - Net cash used in operating activities increased to **$4.1 million** in H1 2025 from **$2.7 million** in H1 2024, largely due to expenditures for the 2025 FS[68](index=68&type=chunk) - Management expects existing Working Capital to be sufficient to fund estimated net recurring expenditures of **~$7.1 million** and Mt Todd work plans of **~$1.8 million** over the next 12 months[74](index=74&type=chunk)[80](index=80&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=31&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[100](index=100&type=chunk) - There were no material changes to the company's internal control over financial reporting during the six months ended June 30, 2025[101](index=101&type=chunk) PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, mine safety disclosures, and the list of exhibits [ITEM 1. LEGAL PROCEEDINGS](index=33&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Legal proceedings refer to Note 8, detailing a potential $3.7 million tax dispute with Mexican authorities - Information regarding legal proceedings is incorporated by reference from Note 8 of the financial statements[104](index=104&type=chunk) - The company's Mexican subsidiary is in a dispute with the Mexican tax authorities (SAT) over a 2024 assessment, with a potential liability estimated up to **$3.7 million**[46](index=46&type=chunk) [ITEM 1A. RISK FACTORS](index=33&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors were reported from those disclosed in the Annual Report on Form 10-K for FY2024 - There have been no material changes from the risk factors set forth in the company's Annual Report on Form 10-K for the year ended December 31, 2024[105](index=105&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURE](index=33&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURE) No U.S. mining properties were subject to MSHA regulation during H1 2025, thus requiring no mine safety disclosures - During the six months ended June 30, 2025, the company had no U.S. properties subject to MSHA regulation and therefore has no mine safety information to disclose[109](index=109&type=chunk) [ITEM 6. EXHIBITS](index=34&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed, including corporate governance documents, qualified person consent, CEO/CFO certifications, and XBRL data - The report includes standard exhibits such as CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL data files (101 series)[111](index=111&type=chunk)

[Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) [PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company presents unaudited financial statements for H1 2025, showing a net loss alongside changes in revenue and balance sheet items [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a reduced net loss of $15.56 million for H1 2025 despite an 11.5% revenue decrease from continuing operations Condensed Consolidated Statements of Operations and Comprehensive Loss (Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $8,549,976 | $9,657,747 | $(1,107,771) | -11.5% | | Cost of goods sold | $(8,247,353) | $(7,910,923) | $(336,430) | 4.3% | | Gross (loss) profit | $302,623 | $1,746,824 | $(1,444,201) | -82.7% | | Total operating expenses | $(14,574,601) | $(16,741,724) | $2,167,123 | -12.9% | | Loss from operations | $(14,271,978) | $(14,994,900) | $722,922 | -4.8% | | Net loss from continuing operations | $(13,551,663) | $(15,458,812) | $1,907,149 | -12.3% | | Loss from discontinued operations, net of tax | $(2,009,202) | $(2,965,206) | $956,004 | -32.2% | | Net loss | $(15,560,865) | $(18,424,018) | $2,863,153 | -15.5% | | Net loss attributable to the Company's shareholders | $(15,543,673) | $(18,412,978) | $2,869,305 | -15.6% | | Loss per common share - basic and diluted | $(0.46) | $(0.60) | $0.14 | -23.3% | - Gross profit for the six months ended June 30, 2025, **decreased significantly by 82.7%** to **$0.30 million** from $1.75 million in the prior year, primarily due to a decrease in vehicle sales gross profit and spare-part sales gross profit, partially offset by a decrease in inventory write-down[15](index=15&type=chunk)[204](index=204&type=chunk) - Net loss attributable to the Company's shareholders **improved by 15.6%** for the six months ended June 30, 2025, reaching **$(15.54) million** compared to $(18.41) million in the same period last year[15](index=15&type=chunk)[186](index=186&type=chunk) [Condensed Consolidated Balance Sheet](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Total assets decreased to $124.40 million due to lower cash, while total liabilities also declined significantly Condensed Consolidated Balance Sheet (As of June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $5,992,986 | $12,547,168 | | Total current assets | $58,601,262 | $65,916,446 | | Total non-current assets | $65,797,241 | $66,649,868 | | **Total Assets** | **$124,398,503** | **$132,566,314** | | **LIABILITIES** | | | | Total current liabilities | $32,622,266 | $29,114,024 | | Total non-current liabilities | $12,029,990 | $25,492,788 | | **Total Liabilities** | **$44,652,256** | **$54,606,812** | | **EQUITY** | | | | Total Equity attributable to shareholders | $79,627,518 | $77,837,290 | | **Total Liabilities and Equity** | **$124,398,503** | **$132,566,314** | - Cash and cash equivalents **decreased by $6.55 million (52.2%)** from $12.55 million at December 31, 2024, to **$5.99 million** at June 30, 2025[18](index=18&type=chunk)[231](index=231&type=chunk) - Total non-current liabilities **decreased significantly by $13.46 million (52.8%)** from $25.49 million to $12.03 million, primarily due to the exercise of investor warrants and changes in derivative liabilities[18](index=18&type=chunk)[120](index=120&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to $79.63 million, driven by warrant exercises and bond conversions that offset the net loss Changes in Equity (Six Months Ended June 30, 2025) | Item | Amount (USD) | | :--- | :--- | | Balance as of December 31, 2024 | $77,837,290 | | Share-based compensation | $1,459,588 | | Conversion of convertible bonds into shares | $1,826,131 | | Cashless exercise of warrant | $12,487,838 | | Net loss | $(15,543,673) | | Unrealized holding gains for available-for-sale securities | $15,000 | | Disposal of a subsidiary | $58,122 | | Foreign currency translation adjustment | $1,487,222 | | Balance as of June 30, 2025 | $79,627,518 | - The cashless exercise of warrants contributed **$12.49 million** to additional paid-in capital, reflecting a significant equity transaction during the period[19](index=19&type=chunk) - The conversion of convertible bonds into shares added **$1.83 million** to equity, indicating a shift from debt to equity[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations decreased to $9.36 million, while financing activities provided $2.93 million from loans Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | 2025 (Unaudited) | 2024 (Unaudited) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(9,360,191) | $(12,710,460) | $3,350,269 | | Net cash used in investing activities | $(601,069) | $(349,921) | $(251,148) | | Net cash provided by financing activities | $2,934,554 | $461,636 | $2,472,918 | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | $157,307 | $(546,408) | $703,715 | | Net decrease in cash, cash equivalents and restricted cash | $(6,869,399) | $(13,145,153) | $6,275,754 | | Cash, cash equivalents and restricted cash at end of period | $6,091,089 | $16,426,744 | $(10,335,655) | - Net cash used in operating activities **decreased by $3.35 million (26.3%)** year-over-year, primarily due to adjustments for non-cash items and changes in working capital components[22](index=22&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - Net cash provided by financing activities **increased significantly by $2.47 million**, driven by proceeds from bank loans ($1.35 million), third-party loans ($1.12 million), and related party loans ($1.00 million)[22](index=22&type=chunk)[244](index=244&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, discontinued European operations, and specific financial statement line items [NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES](index=12&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20PRINCIPAL%20ACTIVITIES) Cenntro Inc is a Nevada holding company that designs and manufactures ECVs and has restructured its European operations - Cenntro Inc was incorporated in Nevada on March 9, 2023, and operates through subsidiaries in the US, Australia, Europe, Mexico, Hong Kong, and PRC, focusing on designing and manufacturing purpose-built ECVs[23](index=23&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - On February 27, 2024, CEGL completed redomiciliation, changing the ultimate parent company's incorporation jurisdiction from Australia to Nevada, making CEGL a subsidiary of Cenntro Inc[34](index=34&type=chunk)[35](index=35&type=chunk) - In November 2024, the Company decided to restructure its European operations, phasing out the direct sales model for a centralized dealership distribution system, leading to the classification of CEGE, CAE, and Cenntro EV Center Italy S.R.L as discontinued operations[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=16&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of presentation, use of estimates, fair value hierarchy, and revenue recognition policies - The financial statements are prepared in conformity with U.S GAAP, requiring management to make significant estimates and assumptions, particularly for credit losses, inventory valuation, impairment losses, deferred tax assets, and fair value measurements[44](index=44&type=chunk)[46](index=46&type=chunk) - The Company applies the fair value option to convertible promissory notes, convertible loan receivables, and currency-cross swaps, measuring them at fair value on a recurring basis[51](index=51&type=chunk) - Revenue is recognized when control of goods or services is transferred to customers, primarily from sales of light-duty ECVs, ECV parts, and off-road electric vehicles, with consideration recorded net of sales returns and VAT[57](index=57&type=chunk)[58](index=58&type=chunk)[61](index=61&type=chunk) Net Revenues by Product Line (Six Months Ended June 30) | Product Line | 2025 (Unaudited) | 2024 (Unaudited) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Vehicles sales | $7,976,499 | $9,610,536 | $(1,634,037) | -17.0% | | Spare-parts sales | $505,779 | $1,978,161 | $(1,472,382) | -74.4% | | Other service income | $229,877 | $123,794 | $106,083 | 85.7% | | Net revenues (total) | $8,712,155 | $11,712,491 | $(2,990,336) | -25.5% | | Less: Discontinued operations | $(162,179) | $(2,054,744) | $1,892,565 | -92.1% | | Net revenues (continuing operations) | $8,549,976 | $9,657,747 | $(1,107,771) | -11.5% | Net Revenues by Geographical Market (Continuing Operations, Six Months Ended June 30) | Market | 2025 (Unaudited) | 2024 (Unaudited) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Asia | $1,931,593 | $2,294,674 | $(363,081) | -15.8% | | Europe | $5,786,495 | $3,654,430 | $2,132,065 | 58.3% | | America | $960,227 | $5,763,387 | $(4,803,160) | -83.3% | | Others | $33,840 | $- | $33,840 | N/A | | Total | $8,712,155 | $11,712,491 | $(2,990,336) | -25.5% | | Less: Discontinued operations | $(162,179) | $(2,054,744) | $1,892,565 | -92.1% | | Net revenues (continuing operations) | $8,549,976 | $9,657,747 | $(1,107,771) | -11.5% | [NOTE 3 - ACCOUNTS RECEIVABLE, NET](index=20&type=section&id=NOTE%203%20-%20ACCOUNTS%20RECEIVABLE%2C%20NET) Net accounts receivable for continuing operations remained stable, while the provision for credit losses increased significantly Accounts Receivable, Net (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Accounts receivable, net | $3,236,747 | $3,281,865 | | Provision for credit losses (total) | $3,593,840 | $2,018,042 | | Provision for credit losses (continuing operations) | $1,410,296 | $485,016 | - The provision for credit losses for continuing operations increased from $485,016 at December 31, 2024, to **$1,410,296** at June 30, 2025, reflecting significant additions of **$1,346,762** during the period[75](index=75&type=chunk) [NOTE 4 - INVENTORIES](index=20&type=section&id=NOTE%204%20-%20INVENTORIES) Net inventories for continuing operations increased to $25.44 million, with a corresponding rise in the valuation allowance Inventories, Net (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Inventories, net | $25,437,768 | $24,012,504 | | Inventory valuation allowance (total) | $9,096,992 | $8,255,880 | - Raw material inventory remained stable, while finished goods inventory slightly decreased; the overall increase in net inventories for continuing operations was **$1.43 million**[76](index=76&type=chunk) [NOTE 5 – PREPAYMENT AND OTHER CURRENT ASSETS](index=20&type=section&id=NOTE%205%20%E2%80%93%20PREPAYMENT%20AND%20OTHER%20CURRENT%20ASSETS) Prepayment and other current assets for continuing operations increased slightly to $18.61 million Prepayment and Other Current Assets (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Advance to suppliers | $12,916,541 | $13,435,558 | | Deductible input value added tax | $5,934,505 | $5,284,726 | | Others | $1,034,514 | $390,617 | | Total prepayment and other current assets (continuing operations) | $18,610,258 | $18,075,415 | [NOTE 6 – LONG-TERM INVESTMENTS](index=22&type=section&id=NOTE%206%20%E2%80%93%20LONG-TERM%20INVESTMENTS) Long-term investments for continuing operations remained stable at approximately $3.11 million Long-Term Investments (Continuing Operations) | Investment Type | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Equity method investment, net | $2,108,108 | $2,068,951 | | Equity investment without readily determinable fair values, net | $1,000,000 | $1,000,000 | | Debt security investments | $656,712 | $641,712 | - The debt security investment in Acton, Inc (a **$600,000** convertible note) had its maturity date extended to July 24, 2026[80](index=80&type=chunk) [NOTE 7 – INVESTMENT IN EQUITY SECURITY](index=23&type=section&id=NOTE%207%20%E2%80%93%20INVESTMENT%20IN%20EQUITY%20SECURITY) The investment in MineOne Fix Income Investment I L.P increased to $27.12 million due to fair value adjustments Investment in Equity Security (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | MineOne Fix Income Investment I L.P | $27,120,596 | $26,604,319 | | Upward adjustment for changes in fair value (6 months) | $516,277 | $494,451 | [NOTE 8 – PROPERTY, PLANT AND EQUIPMENT, NET](index=23&type=section&id=NOTE%208%20%E2%80%93%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT%2C%20NET) Net property, plant, and equipment for continuing operations decreased slightly to $17.27 million Property, Plant and Equipment, Net (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment, net | $17,269,071 | $17,401,006 | | Accumulated depreciation | $(6,897,624) | $(6,019,046) | | Impairment | $(1,079,648) | $(949,485) | | Depreciation expenses (6 months) | $894,429 | $765,295 | [NOTE 9 – INTANGIBLE ASSETS, NET](index=23&type=section&id=NOTE%209%20%E2%80%93%20INTANGIBLE%20ASSETS%2C%20NET) Net intangible assets for continuing operations remained stable at $6.24 million Intangible Assets, Net (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Intangible assets, net | $6,244,650 | $6,225,302 | | Accumulated amortization | $(1,050,296) | $(766,239) | | Amortization expenses (6 months) | $211,496 | $202,949 | [NOTE 10 – ACCOUNTS PAYABLE](index=25&type=section&id=NOTE%2010%20%E2%80%93%20ACCOUNTS%20PAYABLE) Accounts payable for continuing operations decreased to $3.92 million due to lower professional fees and supplier payables Accounts Payable (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Professional fees payable | $2,263,892 | $2,861,695 | | Payable to suppliers | $2,993,354 | $3,697,743 | | Total accounts payable (continuing operations) | $3,922,891 | $5,135,710 | [NOTE 11 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=25&type=section&id=NOTE%2011%20%E2%80%93%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) Accrued expenses for continuing operations increased to $4.29 million, driven by higher third-party loans Accrued Expenses and Other Current Liabilities (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Accrued litigation compensation | $1,784,688 | $1,761,275 | | Loan from third parties | $1,403,178 | $626,516 | | Accrued interest for convertible promissory note | $51,349 | $270,690 | | Total accrued expenses and other current liabilities (continuing operations) | $4,294,403 | $3,647,503 | - Loans from third parties **significantly increased** from $626,516 to **$1,403,178**, including new interest-free loans and loans with interest rates ranging from 3.45% to 7.50%[88](index=88&type=chunk) [NOTE 12 –SHORT-TERM AND LONG-TERM BANK LOANS](index=25&type=section&id=NOTE%2012%20%E2%80%93SHORT-TERM%20AND%20LONG-TERM%20BANK%20LOANS) Short-term loans for continuing operations increased to $1.22 million due to a new bank facility Short-Term and Long-Term Bank Loans (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Short-term loans and current portion of long-term loans | $1,221,453 | $249,614 | | Long-term loans | $- | $362,386 | | Total borrowings (continuing operations) | $1,221,453 | $612,000 | - A new bank facility of approximately **$1.40 million** (RMB10,000,000) was granted by the Industrial and Commercial Bank of China in May 2025, with **$1.22 million** borrowed and due in May and June 2026, secured by plants and building and land with a net value of approximately $16.78 million[91](index=91&type=chunk) [NOTE 13 - INCOME TAXES](index=27&type=section&id=NOTE%2013%20-%20INCOME%20TAXES) The company is subject to varying income tax rates across jurisdictions, with total pre-tax losses of $13.58 million Losses Before Income Taxes by Region (Continuing Operations, Six Months Ended June 30) | Region | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | PRC | $5,217,096 | $4,842,423 | | US | $5,187,770 | $4,834,603 | | Europe | $3,401,675 | $6,359,899 | | Australia | $1,498,725 | $1,703,066 | | Others | $282,639 | $718,742 | | Total losses before income taxes | $15,587,905 | $18,458,733 | | Less: Discontinued operations | $(2,009,202) | $(2,983,173) | | Losses before income taxes (continuing operations) | $13,578,703 | $15,475,560 | - European operations saw a **significant decrease in losses** before income taxes for continuing operations, from **$6.36 million** in 2024 to **$3.40 million** in 2025[100](index=100&type=chunk) [NOTE 14 - LEASES](index=28&type=section&id=NOTE%2014%20-%20LEASES) Operating lease costs for continuing operations decreased to $1.77 million, with a remaining lease term of 4.03 years Operating Lease Costs (Continuing Operations, Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Operating leases cost excluding short-term lease expenses | $1,703,582 | $2,235,290 | | Short-term lease expenses | $70,559 | $183,679 | | Total | $1,774,141 | $2,418,969 | - Total operating lease costs for continuing operations **decreased by $0.64 million (26.7%)** year-over-year[103](index=103&type=chunk) Operating Lease Supplemental Information (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Cash paid for amounts included in lease liabilities | $754,386 | $1,531,851 | | Weighted average remaining lease term | 4.03 years | 5.99 years | | Weighted average discount rate | 7.35% | 6.36% | [NOTE 15 - CONVERTIBLE PROMISSORY NOTE AND WARRANT](index=30&type=section&id=NOTE%2015%20-%20CONVERTIBLE%20PROMISSORY%20NOTE%20AND%20WARRANT) The convertible note's due date was extended, and investor warrants were fully exercised during the period - The convertible promissory note's due date was extended to January 19, 2026, and its conversion floor price was amended to **$0.202 per share**[106](index=106&type=chunk)[113](index=113&type=chunk) Convertible Promissory Note and Warrant Balances | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Convertible promissory notes (liability component) | $10,279,000 | $9,952,000 | | Investor warrants component | $- | $12,137,087 | | Placement agent warrants component | $3,456,797 | $3,455,829 | - Investor warrants, originally for 2,473,334 shares, were **fully exercised** during the six months ended June 30, 2025, resulting in a **$12.49 million decrease in liability**[120](index=120&type=chunk) [NOTE 16- SHARE-BASED COMPENSATION](index=33&type=section&id=NOTE%2016-%20SHARE-BASED%20COMPENSATION) Share-based compensation expenses decreased to $1.46 million for the first half of 2025 Share-Based Compensation Expenses (Six Months Ended June 30) | Expense Category | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | General and administrative expenses | $1,285,083 | $1,500,783 | | Selling and marketing expenses | $31,103 | $96,970 | | Research and development expenses | $143,402 | $175,367 | | Total share-based compensation expenses | $1,459,588 | $1,773,120 | - Total share-based compensation expenses **decreased by $0.31 million (17.7%)** year-over-year[124](index=124&type=chunk) Share Options Activity | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Outstanding share options | 1,647,568 | 1,733,052 | | Weighted average exercise price | $14.05 | $13.80 | | Unrecognized compensation cost | $2,159,811 | N/A | [NOTE 17 - CONCENTRATIONS](index=34&type=section&id=NOTE%2017%20-%20CONCENTRATIONS) The company has significant customer and supplier concentrations for both continuing and discontinued operations Customer Concentration (Continuing Operations, Six Months Ended June 30, 2025) | Customer | % of Total Net Revenue | | :--- | :--- | | Customer A | 41% | | Total (top customers) | 41% | Supplier Concentration (Continuing Operations, Six Months Ended June 30, 2025) | Supplier | % of Total Purchases | | :--- | :--- | | Supplier A | 52% | | Total (top suppliers) | 52% | Customer Concentration (Discontinued Operations, Six Months Ended June 30, 2025) | Customer | % of Total Net Revenue | | :--- | :--- | | Customer I | 20% | | Customer J | 19% | | Customer K | 15% | | Customer L | 14% | | Customer M | 12% | | Total (top customers) | 80% | [NOTE 18 - COMMITMENTS AND CONTINGENCIES](index=38&type=section&id=NOTE%2018%20-%20COMMITMENTS%20AND%20CONTINGENCIES) The company is involved in various legal proceedings but does not expect a material adverse impact on its financials - CAE is involved in an IP infringement lawsuit in Belgium, where a court ruled against it, ordering cessation of METRO model distribution and imposing fines up to **EUR1,000,000**; CAE has filed an appeal[146](index=146&type=chunk)[300](index=300&type=chunk) - A lawsuit filed by Xiongjian Chen against the Company and its CEO, Peter Z Wang, for stock options claims, will proceed solely on a promissory estoppel claim against Peter Wang, with remote financial consequences anticipated for the Company[147](index=147&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - CAC is preparing for arbitration against Anhui Deepway Technology Co, Ltd for **RMB320,000** in economic damages and continuation of a Strategic Cooperation Agreement[149](index=149&type=chunk) - BAL Freeway Associates, LLC filed an Unlawful Detainer against CAC for non-payment of rents, seeking damages no lower than **$4,400,000**, with negotiations ongoing[154](index=154&type=chunk) [NOTE 19 - RELATED PARTY TRANSACTIONS AND BALANCES](index=40&type=section&id=NOTE%2019%20-%20RELATED%20PARTY%20TRANSACTIONS%20AND%20BALANCES) The company engaged in several transactions with related parties, including loans from and to entities controlled by the CEO Related Party Transactions (Six Months Ended June 30, 2025) | Transaction Type | Related Party | Amount (USD) | | :--- | :--- | :--- | | Interest expense | Zhongchai | $16,042 | | Interests-bearing loan from | Zhongchai | $1,000,000 | | Interests-bearing loan to | Greenland | $27,760 | | Prepayment of operating fund to | Billy Rafael Romero Del Rosario | $25,378 | | Reimbursement from | Billy Rafael Romero Del Rosario | $88,646 | Amounts Due From/To Related Parties (Continuing Operations) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Amounts due from related parties | $40,056 | $11,729 | | Amounts due to related parties | $1,016,042 | $26,226 | - A **$1.0 million** interest-bearing loan was received from Zhongchai Holding (Hongkong) Limited, controlled by the CEO, with a maturity date of April 14, 2026, and an interest rate of **7.50%** per annum[163](index=163&type=chunk)[164](index=164&type=chunk) [NOTE 20 - SUBSEQUENT EVENT](index=42&type=section&id=NOTE%2020%20-%20SUBSEQUENT%20EVENT) A portion of the company's convertible note was converted into common stock after the reporting period - On July 17, 2025, Investment Pte Ltd converted **$1,165,180** of its convertible note into **2,000,000 shares** of Cenntro Inc common stock[165](index=165&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results for H1 2025, highlighting decreased revenues, an improved net loss, and strategic operational shifts [A. Key Components of Results of Operations](index=43&type=section&id=A.%20Key%20Components%20of%20Results%20of%20Operations) Revenue is driven by ECV sales, with a strategic shift to a distributor model in Europe and ongoing cost management efforts - Net revenues are primarily generated from sales of various ECV models (e.g, Metro®, Logistar™, Avantier™) and ECV spare parts, as well as other services[169](index=169&type=chunk)[170](index=170&type=chunk) - The company has returned to a distributor-focused model in Europe and implemented a hybrid approach (direct sales + distributor partnerships) in North America to optimize go-to-market strategies[169](index=169&type=chunk) - Operating expenses, particularly general and administrative, are expected to decrease over the next two years due to efficiency improvements, combining EV centers with local distribution networks, and utilizing proven OEMs and supply chains[177](index=177&type=chunk) - Provision for credit losses is expected to decrease in the future as the company shifts sales to FOB terms, requiring material payments before goods delivery[179](index=179&type=chunk) [Key Operating Metrics](index=46&type=section&id=Key%20Operating%20Metrics) The gross margin of vehicle sales declined significantly to 1.33% in H1 2025 from 21.4% in the prior year Key Performance Indicators (Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Gross margin of vehicle sales | 1.33% | 21.4% | - The gross margin of vehicle sales **decreased substantially** from **21.4%** in 2024 to **1.33%** in 2025, reflecting a significant decline in profitability from vehicle sales[185](index=185&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) H1 2025 net revenues fell 11.5% to $8.55 million, while gross profit dropped 82.7%, though operating expenses also decreased Net Revenues by Category (Six Months Ended June 30) | Category | 2025 (Unaudited) | 2024 (Unaudited) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Vehicle Sales | $7,890,062 | $7,697,504 | $192,558 | 2.5% | | Spare-part sales | $430,037 | $1,885,903 | $(1,455,866) | -77.2% | | Other sales | $229,877 | $74,340 | $155,537 | 209.2% | | Total net revenues | $8,549,976 | $9,657,747 | $(1,107,771) | -11.5% | - Net revenues for the six months ended June 30, 2025, **decreased by $1.1 million (11.5%)** to $8.5 million, primarily due to a **$1.5 million decrease** in spare-part sales, partially offset by a $0.2 million increase in vehicle sales[188](index=188&type=chunk) Operating Expenses (Six Months Ended June 30) | Expense Category | 2025 (Unaudited) | 2024 (Unaudited) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Selling and marketing expenses | $(1,004,297) | $(1,213,969) | $209,672 | -17.3% | | General and administrative expenses | $(10,101,922) | $(12,986,881) | $2,884,959 | -22.2% | | Research and development expenses | $(1,433,039) | $(2,540,874) | $1,107,835 | -43.6% | | Provision for credit losses | $(2,035,343) | $- | $(2,035,343) | N/A | - General and administrative expenses **decreased by $2.9 million (22.2%)**, driven by reductions in salary, office, leasing, freight, rental expenses, and share-based compensation[208](index=208&type=chunk) - Research and development expenses **decreased by $1.1 million (43.6%)**, mainly due to lower design and development expenditures and salary expenses[211](index=211&type=chunk) - The Company recognized a **gain of approximately $1.2 million** from the disposal of Cenntro Electric CICS, SRL's equity for the six months ended June 30, 2025[221](index=221&type=chunk) [Non-GAAP Financial Measures](index=53&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA improved to $(10.85) million in H1 2025 from $(15.68) million in the prior year, reflecting better core performance Adjusted EBITDA Reconciliation (Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net loss | $(15,560,865) | $(18,424,018) | $2,863,153 | | Interest expense, net | $275,084 | $24,546 | $250,538 | | Income tax benefit | $(27,040) | $(16,748) | $(10,292) | | Depreciation and amortization | $1,105,925 | $975,244 | $130,681 | | Share-based compensation expense | $1,459,588 | $1,773,120 | $(313,532) | | Change in fair value of convertible promissory notes and derivative liability | $137,290 | $(8,532) | $145,822 | | Gain from Note Amendment | $1,756,137 | $- | $1,756,137 | | Adjusted EBITDA | $(10,853,881) | $(15,676,388) | $4,622,807 | - Adjusted EBITDA **improved by $4.62 million (29.5%)** for the six months ended June 30, 2025, indicating a stronger core operating performance compared to the previous year[228](index=228&type=chunk) [B. Liquidity and Capital Resources](index=55&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Cash decreased to $6.0 million, with the company focusing on operational efficiency and inventory management to meet liquidity needs - Cash and cash equivalents **decreased to approximately $6.0 million** as of June 30, 2025, from $12.5 million at December 31, 2024[231](index=231&type=chunk) - Working capital **decreased by approximately $10.8 million** to $26.0 million as of June 30, 2025, primarily due to decreased cash and increased inventories and various liabilities[237](index=237&type=chunk) - Short-term liquidity requirements will be met through operating efficiency, increased inventory turns, and existing cash, with plans for continued rollout of new ECV models and establishment of local assembly facilities[232](index=232&type=chunk)[233](index=233&type=chunk) - Long-term liquidity plans include regionalizing manufacturing and supply chains, expanding the channel partner network, and increasing R&D expenditure, funded by cash on hand, operations, and future equity/debt financings[234](index=234&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) [Cash Flow](index=57&type=section&id=Cash%20Flow) Net cash used in operations decreased to $9.36 million, while financing activities provided $2.93 million from loans Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,360,191) | $(12,710,460) | | Net cash used in investing activities | $(601,069) | $(349,921) | | Net cash provided by financing activities | $2,934,554 | $461,636 | | Net decrease in cash, cash equivalents, and restricted cash | $(6,869,399) | $(13,145,153) | - Net cash used in operating activities **decreased by $3.35 million**, primarily due to adjustments for non-cash items like share-based compensation, depreciation, and the gain from disposal of a subsidiary, partially offset by increases in inventories and accounts receivable[241](index=241&type=chunk) - Net cash provided by financing activities **increased by $2.47 million**, mainly from proceeds of **$1.4 million** from bank loans, **$1.0 million** from related parties, and **$1.1 million** from third parties[244](index=244&type=chunk) [Contractual Obligations](index=58&type=section&id=Contractual%20Obligations) The company holds several non-cancellable operating leases for facilities in China, Germany, Mexico, and the US - The Company has non-cancellable operating lease agreements for facilities in Hangzhou, China (annual rent $144,528, ends May 2026), Dusseldorf, Germany (annual rent approx $373,630, ends December 2024), Ontario, California (first-year monthly rent $115,200, ends five years from April 2023), Howell, New Jersey (first annual rent $493,920, ends five years from February 2023), and Mexico (monthly rent $29,225.38, ends 8.5 years from January 2023)[245](index=245&type=chunk)[246](index=246&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - New lease agreements were signed in September 2024 for Jiangsu, China (monthly rent approx $22,435, ends December 2026), March 2025 for Barstow, California (first-year monthly rent $12,000, ends three years), and May 2025 for Barcelona, Spain (monthly rent approx $2,357, ends eighteen months)[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) - The Company has not entered into any off-balance sheet financial guarantees, other off-balance sheet commitments, or derivative contracts indexed to its shares[258](index=258&type=chunk) [Critical Accounting Policies and Estimates](index=60&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management relies on significant estimates for credit losses, inventory valuation, and fair value of complex financial instruments - Significant accounting estimates include provision for credit losses, lower of cost and net realizable value of inventories, impairment losses for long-lived assets and investments, valuation allowance for deferred tax assets, and fair value measurement for share-based compensation, convertible promissory notes, and warrants[263](index=263&type=chunk) - The Company applies the fair value option to convertible promissory notes, convertible loan receivables, and currency-cross swaps, using a three-tier fair value hierarchy (Level 1, 2, 3) for measurement[264](index=264&type=chunk)[269](index=269&type=chunk) - Revenue recognition follows a five-step analysis, primarily from sales of light-duty ECVs, ECV parts, and off-road electric vehicles, with revenue recognized upon transfer of control to customers[274](index=274&type=chunk)[275](index=275&type=chunk)[277](index=277&type=chunk) - The Company adopted ASU 2023-07 (Segment Reporting) for the year ended December 31, 2024, with no significant impact, and is assessing the impact of ASU 2024-03 (Disaggregation of Income Statement Expenses) and ASU 2025-05 (Expected Credit Losses for Current Accounts Receivable)[286](index=286&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) As a smaller reporting company, Cenntro Inc is not required to provide these disclosures [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were not effective due to unresolved material weaknesses in internal control - As of June 30, 2025, the Company's disclosure controls and procedures were **not effective** due to existing material weaknesses in internal control over financial reporting[294](index=294&type=chunk) - The Company is implementing a remediation plan to address the material weaknesses, but they remain unresolved as of the reporting date[296](index=296&type=chunk) - Unremediated material weaknesses could lead to material misstatements, reporting delays, regulatory actions, and adverse impacts on stock valuation and business prospects[297](index=297&type=chunk) [PART II - OTHER INFORMATION](index=65&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but expects no material adverse financial impact - CAE is facing an IP infringement lawsuit in Belgium, where a court ruled against it, ordering cessation of METRO model distribution and imposing fines up to **EUR1,000,000**; CAE has filed an appeal[146](index=146&type=chunk)[300](index=300&type=chunk) - A lawsuit by Xiongjian Chen against the Company and its CEO, Peter Z Wang, for stock options claims, will proceed solely on a promissory estoppel claim against Peter Wang, with remote financial consequences anticipated for the Company[147](index=147&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - CAC is preparing for arbitration against Anhui Deepway Technology Co, Ltd for **RMB320,000** in economic damages and continuation of a Strategic Cooperation Agreement[149](index=149&type=chunk) - BAL Freeway Associates, LLC filed an Unlawful Detainer against CAC for non-payment of rents, seeking damages no lower than **$4,400,000**, with negotiations ongoing[154](index=154&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) Investors should consider the risks detailed in the company's Form 10-K, which could materially affect business results [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company made no previously undisclosed unregistered sales of equity securities during the reporting period [Item 3. Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the quarter ended June 30, 2025 [Item 4. Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) No directors or certain officers modified Rule 10b5-1 trading arrangements during the quarter - No Section 16 reporting persons (directors and certain officers) engaged in or modified Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[308](index=308&type=chunk) [Item 6. Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL documents - Exhibits include certifications (31.1, 31.2, 32.1) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[310](index=310&type=chunk) [SIGNATURES](index=68&type=section&id=SIGNATURES)

[Executive Summary](index=1&type=section&id=Executive%20Summary) ALX Oncology reported Q2 2025 financial results and corporate updates, highlighting significant progress in evorpacept and ALX2004 clinical programs, cash runway extension, and new board appointment - ASPEN-06 trial data indicates **CD47 expression** as a key predictive biomarker for better evorpacept response in HER2+ gastric cancer patients; updated data to be presented in Q4 2025[1](index=1&type=chunk) - The Phase 2 ASPEN-Breast evorpacept trial design is updated to a single-arm study with a CD47 and HER2 biomarker-driven strategy; interim data expected in Q3 2026[1](index=1&type=chunk) - The ALX2004 Phase 1 clinical trial is on track to enroll its first patient in August[1](index=1&type=chunk) - The company focuses on advancing ASPEN-Breast and ALX2004 data milestones within its cash runway, now extended to **Q1 2027**[1](index=1&type=chunk)[2](index=2&type=chunk) - Dr Daniel Curran appointed to the Board of Directors[1](index=1&type=chunk)[2](index=2&type=chunk) [Q2 2025 Highlights and Recent Developments](index=2&type=section&id=Q2%202025%20Highlights%20and%20Recent%20Developments) The company achieved significant clinical and strategic progress in Q2 2025, including positive evorpacept biomarker data, revised breast cancer trial design, ALX2004 IND approval, and strategic prioritization to extend financial runway [Evorpacept Clinical Program Updates](index=2&type=section&id=Evorpacept%20Clinical%20Program%20Updates) [ASPEN-06 Trial (HER2+ Gastric Cancer)](index=2&type=section&id=ASPEN-06%20Trial%20(HER2%2B%20Gastric%20Cancer)) - In a pre-planned exploratory analysis of the ASPEN-06 clinical trial, **CD47 overexpression** was identified as a key predictive biomarker for response and durable clinical benefit[3](index=3&type=chunk) ASPEN-06 Trial Results | Patient Group (n) | Combination Therapy | ORR | vs. TRP alone ORR | | :-------------------- | :------------------ | :-- | :---------------- | | HER2+, CD47-high (43) | Evorpacept + TRP | 65% | 26% | | HER2+, CD47-low (47) | Evorpacept + TRP | 39% | 25% | - In CD47-high expressing patients, evorpacept demonstrated significant benefits in **Duration of Response (DOR)**, **Progression-Free Survival (PFS)**, and **Overall Survival (OS)**[3](index=3&type=chunk) - The full dataset will be presented at an upcoming medical conference in **Q4 2025**[3](index=3&type=chunk) [ASPEN-Breast Trial (HER2+ Breast Cancer)](index=2&type=section&id=ASPEN-Breast%20Trial%20(HER2%2B%20Breast%20Cancer)) - Based on significant benefits in CD47-high expressing patients with HER2+ gastric cancer, the ASPEN-Breast study has been revised to a single-arm design evaluating evorpacept in all previously treated HER2-positive patients, assessed by CD47 expression[3](index=3&type=chunk) - The revised study design is expected to optimize enrollment and allow for an interim data readout in **Q3 2026**[3](index=3&type=chunk)[6](index=6&type=chunk) - The goal is for these study results to support a biomarker-driven registrational study in HER2-positive breast cancer[3](index=3&type=chunk) [UMBRELLA Study (Multiple Myeloma)](index=2&type=section&id=UMBRELLA%20Study%20(Multiple%20Myeloma)) - Sanofi and ALX Oncology announced the completion of the dose-escalation portion of the UMBRELLA randomized Phase 1/2 study, combining evorpacept with SARCLISA® (isatuximab-irfc) and dexamethasone in previously treated multiple myeloma patients[3](index=3&type=chunk) - Sanofi will initiate the dose-optimization portion of the study[3](index=3&type=chunk) [ALX2004 Clinical Program Update (EGFR-expressing Solid Tumors)](index=2&type=section&id=ALX2004%20Clinical%20Program%20Update%20(EGFR-expressing%20Solid%20Tumors)) - The company received FDA IND approval in April to advance ALX2004 for clinical evaluation in epidermal growth factor receptor (EGFR)-positive solid tumors, with the first patient in the Phase 1 clinical trial expected to be dosed in August[3](index=3&type=chunk) - The Phase 1 dose-escalation trial will include patients with relapsed/refractory EGFR-expressing solid tumors, including non-small cell lung cancer, colorectal cancer, head and neck squamous cell carcinoma, and esophageal squamous cell carcinoma[3](index=3&type=chunk) - Preliminary safety data from the Phase 1 trial are anticipated in **H1 2026**[3](index=3&type=chunk)[6](index=6&type=chunk) - ALX2004 utilizes a proprietary topoisomerase I inhibitor payload and linker-payload platform, designed to provide enhanced bystander effect and improved linker stability for targeted payload delivery[3](index=3&type=chunk) - Preclinical model results showed no EGFR-related skin toxicity or payload-related interstitial lung disease at clinically relevant doses, suggesting a potentially differentiated safety profile[3](index=3&type=chunk) [Strategic Prioritizations and Cash Runway Extension](index=2&type=section&id=Strategic%20Prioritizations%20and%20Cash%20Runway%20Extension) - The company prioritized evorpacept development, focusing on breast cancer and pausing the ASPEN-CRC study in colorectal cancer to extend its cash runway[3](index=3&type=chunk) - Through these strategic prioritizations, the company extended its cash runway into **Q1 2027**[2](index=2&type=chunk)[6](index=6&type=chunk) [Corporate and Leadership Changes](index=1&type=section&id=Corporate%20and%20Leadership%20Changes) - Dr Daniel Curran, a physician executive with extensive experience in business development, corporate strategy, drug discovery, and development, was appointed to the Board of Directors[1](index=1&type=chunk)[2](index=2&type=chunk)[6](index=6&type=chunk) - Dr Allison Dillon, previously Chief Business Officer, was appointed Chief Operating Officer, effective immediately[6](index=6&type=chunk) [Upcoming Clinical Milestones](index=3&type=section&id=Upcoming%20Clinical%20Milestones) Key upcoming clinical milestones include ASPEN-Breast patient dosing in Q4 2025 with interim data in Q3 2026, and ALX2004 patient dosing in August with preliminary safety data in H1 2026 - ASPEN-Breast cancer: Patient dosing expected to commence in **Q4 2025**; interim data from this trial are anticipated in **Q3 2026**[6](index=6&type=chunk) - ALX2004: Patient dosing expected to commence in **August**; preliminary safety data from the Phase 1 trial in EGFR-expressing solid tumors are anticipated in **H1 2026**[6](index=6&type=chunk) [Second Quarter 2025 Financial Results](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Results) ALX Oncology reported a reduced net loss in Q2 2025, driven by lower R&D and G&A expenses, partially offset by an impairment charge, with cash sufficient to fund operations until Q1 2027 [Financial Summary and Cash Position](index=3&type=section&id=Financial%20Summary%20and%20Cash%20Position) Cash, Cash Equivalents and Investments | Metric | Amount (June 30, 2025) | | :----------------------------------- | :--------------------- | | Cash, cash equivalents and investments | **$83.5 million** | - The company believes its cash, cash equivalents, and investments are sufficient to support planned operations into **Q1 2027**[7](index=7&type=chunk) [Operating Expenses Analysis](index=3&type=section&id=Operating%20Expenses%20Analysis) [Research and Development (R&D) Expenses](index=3&type=section&id=Research%20and%20Development%20(R%26D)%20Expenses)) R&D Expenses Overview | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------- | :----------------- | :----------------- | :---------------- | | R&D Expenses | **$18.0** | **$34.7** | **$(16.6)** | - The decrease in R&D expenses was primarily due to a **$8.5 million reduction** in clinical and development costs (mainly from decreased clinical trial material manufacturing for evorpacept), a **$4.1 million decrease** in stock-based compensation, a **$2.1 million reduction** in personnel and related costs, and a **$1.7 million decrease** in preclinical costs due to pipeline prioritization[7](index=7&type=chunk)[8](index=8&type=chunk) [General and Administrative (G&A) Expenses](index=4&type=section&id=General%20and%20Administrative%20(G%26A)%20Expenses)) G&A Expenses Overview | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------- | :----------------- | :----------------- | :---------------- | | G&A Expenses | **$5.5** | **$6.9** | **$(1.4)** | - The decrease in G&A expenses was primarily attributable to a reduction in stock-based compensation expense[11](index=11&type=chunk) [Net Loss and Per Share Data](index=4&type=section&id=Net%20Loss%20and%20Per%20Share%20Data) Net Loss and Per Share Summary | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :---------------------- | :----------------- | :----------------- | :---------------- | | GAAP Net Loss | **$(25.9)** | **$(39.4)** | **$13.5** | | GAAP Net Loss per Share | **$(0.49)** | **$(0.76)** | **$0.27** | | Non-GAAP Net Loss | **$(23.7)** | **$(32.1)** | **$8.4** | - The decrease in net loss was primarily due to lower R&D expenses, partially offset by a **$3.2 million impairment charge** on long-lived assets recorded in Q2 2025, related to leased laboratory space following preclinical research staff reductions announced in March 2025[11](index=11&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated statements of operations, balance sheet data, and GAAP to non-GAAP reconciliation for the three and six months ended June 30, 2025 and 2024 [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $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) | | Interest income | $1,106 | $2,563 | $2,589 | $5,185 | | Interest expense | $(405) | $(429) | $(811) | $(856) | | Other (expense) income, net | $(2) | $(8) | $(13) | $(22) | | Net loss | $(25,949) | $(39,399) | $(56,703) | $(74,980) | | Net loss per share, basic and diluted | $(0.49) | $(0.76) | $(1.05) | $(1.47) | | Weighted-average shares of common stock used to compute net loss per shares, basic and diluted | 53,445,631 | 51,831,157 | 54,031,176 | 50,969,089 | [Condensed Consolidated Balance Sheet Data](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet%20Data) Condensed Consolidated Balance Sheet Data (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Cash, cash equivalents and investments | $83,546 | $131,281 | | Total assets | $95,320 | $147,775 | | Total liabilities | $30,905 | $34,157 | | Accumulated deficit | $(677,825) | $(621,122) | | Total stockholders' equity | $64,415 | $113,618 | [GAAP to Non-GAAP Reconciliation](index=5&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) GAAP to Non-GAAP Reconciliation (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net loss, as reported | $(25,949) | $(39,399) | $(56,703) | $(74,980) | | Stock-based compensation expense | $2,136 | $7,252 | $7,352 | $14,283 | | Accretion of term loan discount and issuance costs | $69 | $66 | $136 | $130 | | Total adjustments | $2,205 | $7,318 | $7,488 | $14,413 | | Non-GAAP net loss | $(23,744) | $(32,081) | $(49,215) | $(60,567) | [Use of Non-GAAP Financial Measures](index=6&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section explains that non-GAAP financial measures provide additional information for management's business assessment but are not GAAP compliant and should not be considered in isolation or as substitutes for GAAP results - Non-GAAP financial measures provide additional information reflecting the amounts and financial basis on which management assesses and operates the business[18](index=18&type=chunk) - These non-GAAP financial measures are not in accordance with GAAP and should not be viewed in isolation or as a substitute for reported GAAP net loss[18](index=18&type=chunk) - "Non-GAAP net loss" is GAAP net loss adjusted to exclude stock-based compensation expense and accretion of term loan discount and issuance costs[19](index=19&type=chunk) [About ALX Oncology](index=4&type=section&id=About%20ALX%20Oncology) ALX Oncology is a clinical-stage biotechnology company advancing a pipeline of novel therapies to treat cancer and extend patient lives, with evorpacept as its lead candidate and ALX2004 as its second pipeline candidate - ALX Oncology is a clinical-stage biotechnology company dedicated to advancing a pipeline of novel therapies designed to treat cancer and extend patient lives[9](index=9&type=chunk) - ALX Oncology's lead therapeutic candidate, evorpacept, has shown potential as a cornerstone immuno-oncology therapy and is being evaluated in multiple ongoing clinical trials across a broad range of cancer indications[9](index=9&type=chunk) - ALX Oncology's second pipeline candidate, ALX2004, is a novel EGFR-targeted antibody-drug conjugate with a differentiated mechanism of action, expected to enter Phase 1 trials in mid-2025[9](index=9&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns that the press release contains forward-looking statements involving significant risks and uncertainties, where actual results may differ materially from those expressed or implied - This press release contains forward-looking statements involving significant risks and uncertainties[10](index=10&type=chunk) - Forward-looking statements are based on ALX Oncology's beliefs and assumptions and may involve known and unknown risks, uncertainties, and other factors that could cause ALX Oncology's actual results, performance, or achievements to differ materially from those expressed or implied[10](index=10&type=chunk) - Except as required by law, ALX Oncology undertakes no obligation to update such statements to reflect events or circumstances occurring after their publication date[10](index=10&type=chunk) [Investor and Media Contacts](index=6&type=section&id=Investor%20and%20Media%20Contacts) This section provides contact information for investor relations and media inquiries - Investor Relations Contact: Elhan Webb, CFA, IR Consultant, ewebb@alxoncology.com[20](index=20&type=chunk) - Media Contact: Audra Friis, Sam Brown LLC, audrafriis@sambrown.com, (917) 519-9577[20](index=20&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q _________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _______________ Commission file number 001-42271 _________________________ BICARA THERAPEUTICS INC. (Exact name of re ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37467 Astria Therapeutics, Inc. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdict ...

Smart Sand, Inc. Announces Second Quarter 2025 Results YARDLEY, Pennsylvania, August 12, 2025 – Smart Sand, Inc. (NASDAQ: SND) (the "Company" or "Smart Sand"), a leading supplier of premium Northern White frac sand and industrial sand and a proppant logistics solutions provider, today announced results for the second quarter of 2025. "Smart Sand delivered robust sales volumes and improved profitability in the second quarter" stated Charles Young, Smart Sand's Chief Executive Officer. "Our sales volumes rose ...

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, and disclosures on market risk and internal controls [Item 1. Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity (deficit), and statements of cash flows, along with their accompanying notes, providing a detailed financial overview for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $190,574 | $81,949 | | Restricted cash equivalents | $2,413 | — | | Marketable securities | $9,991 | $9,977 | | Total current assets | $204,927 | $96,507 | | Total assets | $205,371 | $142,891 | | **Liabilities** | | | | Accounts payable | $669 | $1,505 | | Accrued liabilities | $58,104 | $12,892 | | Warrant liabilities | $1,652,298 | — | | Total liabilities | $1,711,071 | $46,227 | | **Stockholders' Equity (Deficit)** | | | | Total stockholders' equity (deficit) | $(1,505,700) | $96,664 | | Accumulated deficit | $(2,063,149) | $(456,994) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expenses | $261,499 | $21,823 | $288,200 | $46,145 | | General and administrative expenses | $12,785 | $7,212 | $19,375 | $15,216 | | Total operating expenses | $274,284 | $29,035 | $307,575 | $61,361 | | Loss from operations | $(274,284) | $(29,035) | $(307,575) | $(61,361) | | Interest income | $537 | $1,196 | $1,342 | $2,718 | | Change in fair value of warrant liabilities | $(1,299,922) | — | $(1,299,922) | — | | Net loss | $(1,573,669) | $(27,839) | $(1,606,155) | $(58,643) | | Net loss per share, basic and diluted | $(12.56) | $(0.41) | $(12.84) | $(0.86) | | Weighted-average common shares outstanding | 125,271,447 | 68,299,170 | 125,049,032 | 68,165,068 | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Changes in Stockholders' Equity (Deficit) (in thousands, except share amounts) | Item | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :------------------------------------------ | :---------------------- | :--------------------- | | Common Stock Shares | 124,776,152 | 125,645,952 | | Common Stock Amount | $13 | $13 | | Additional Paid-In Capital | $553,623 | $557,422 | | Accumulated Other Comprehensive Income | $22 | $14 | | Accumulated Deficit | $(456,994) | $(2,063,149) | | Total Stockholders' Equity (Deficit) | $96,664 | $(1,505,700) | **Key Changes for Six Months Ended June 30, 2025:** * Net loss: **$(1,606,155) thousand** (includes **$(32,486) thousand** for Q1 2025 and **$(1,573,669) thousand** for Q2 2025) * Issuance of common stock upon vesting of RSUs, net of shares withheld for taxes, exercise of stock options, and issuance of common stock under ESPP: **869,790 shares**, resulting in **$10 thousand** increase in Additional Paid-In Capital * Stock-based compensation expense: **$3,777 thousand** * Other comprehensive loss: **$(8) thousand** [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(66,250) | $(52,312) | | Net cash provided by investing activities | $416 | $96,963 | | Net cash provided by financing activities | $174,459 | $65 | | Net increase in cash, cash equivalents and restricted cash equivalents | $108,625 | $44,716 | | Cash, cash equivalents and restricted cash equivalents, beginning of period | $84,362 | $33,773 | | Cash, cash equivalents and restricted cash equivalents, end of period | $192,987 | $78,489 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Nature of the Business](index=13&type=section&id=1.%20Nature%20of%20the%20Business) - Vor Biopharma Inc. is a clinical-stage biotechnology company focused on advancing telitacicept, a novel dual-target recombinant fusion protein that inhibits BLyS and APRIL for autoimmune diseases. The company was incorporated on December 30, 2015, and is headquartered in Massachusetts[29](index=29&type=chunk) - The Company has incurred significant operating losses and anticipates continued losses, making its operations dependent on raising additional funding. As of June 30, 2025, the Company had **$200.6 million** in cash, cash equivalents, and marketable securities, and an accumulated deficit of **$2,063.1 million**[31](index=31&type=chunk)[32](index=32&type=chunk) - The issuance of **$174.4 million** in net cash proceeds from the 2025 PIPE Warrants in June 2025 has alleviated substantial doubt about the Company's ability to continue as a going concern for the next twelve months[32](index=32&type=chunk)[33](index=33&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The condensed consolidated financial statements are prepared in conformity with GAAP, requiring management to make estimates and assumptions, particularly for accrued expenses, stock-based compensation, fair value of financial instruments (including warrants), and R&D expenses[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - Warrants are classified as either equity or liability based on specific terms and accounting guidance. Liability-classified warrants are revalued at each balance sheet date, with changes in fair value recorded in the statement of operations[40](index=40&type=chunk)[41](index=41&type=chunk) - Restructuring costs, including employee severance, are recognized based on whether benefits are ongoing or one-time, in accordance with ASC 712 or ASC 420[43](index=43&type=chunk) [3. Marketable Securities](index=14&type=section&id=3.%20Marketable%20Securities) Marketable Securities (in thousands) | Item | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :---------------- | :------------------------- | :----------------------------- | | U.S. Treasuries | $9,991 | $9,977 | | Maturing in one year or less | $9,991 | $4,993 | | Maturing after one year through five years | — | $4,984 | * No individual securities were in an unrealized loss position as of June 30, 2025, or December 31, 2024 * No impairments or credit loss reserves were recorded for marketable securities during the periods presented [4. Fair Value Measurements](index=15&type=section&id=4.%20Fair%20Value%20Measurements) Fair Value Measurements (in thousands) as of June 30, 2025 | Item | Level 1 | Level 2 | Level 3 | Total | | :------------------------ | :------ | :------ | :------ | :------ | | Cash equivalents (Money market funds) | $190,508 | — | — | $190,508 | | Marketable securities (U.S. Treasuries) | — | $9,991 | — | $9,991 | | Restricted cash equivalents (Money market funds) | $2,413 | — | — | $2,413 | | Warrant liabilities | — | $1,652,298 | — | $1,652,298 | * Fair value of cash equivalents and restricted cash equivalents is based on quoted market prices (Level 1) * Fair value of marketable securities and warrant liabilities is based on observable market inputs (Level 2) * No transfers between fair value levels occurred during the six months ended June 30, 2025 [5. Property and Equipment, Net](index=16&type=section&id=5.%20Property%20and%20Equipment,%20Net) Property and Equipment, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Laboratory equipment | — | $9,625 | | Manufacturing equipment | — | $7,082 | | Computer equipment | — | $446 | | Furniture, fixtures and other | — | $606 | | Construction in progress | — | $36 | | Total | — | $17,795 | | Less: Accumulated depreciation | — | $(11,214) | | Property and equipment, net | $— | $6,581 | * Depreciation expense for the six months ended June 30, 2025, was **$2.9 million**, compared to **$1.8 million** for the same period in 2024 * In connection with the Restructuring Plan, the Company recognized a **$3.3 million** loss on disposal of long-lived assets and accelerated depreciation of approximately **$1.5 million** during the three and six months ended June 30, 2025[48](index=48&type=chunk)[49](index=49&type=chunk) [6. Accrued Liabilities](index=16&type=section&id=6.%20Accrued%20Liabilities) Accrued Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Employee-related expenses (including Restructuring Liability) | $11,136 | $5,852 | | Professional fees | $1,615 | $1,461 | | Clinical expenses | $79 | $3,835 | | Manufacturing expenses | $50 | $516 | | Research and development expenses | $83 | $872 | | Accrued up-front license payment (Note 10) | $45,000 | — | | Other | $141 | $356 | | Total accrued liabilities | $58,104 | $12,892 | [7. Stockholders' Equity and Warrants](index=16&type=section&id=7.%20Stockholders'%20Equity%20and%20Warrants) - In December 2024, the Company completed a private placement, issuing **55,871,260 common shares** and warrants (2024 Warrants) to purchase up to **69,839,075 shares**, generating **$52.7 million** in net proceeds. These warrants are equity-classified[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - In June 2025, the Company issued 2025 PIPE Warrants (**700,000,000 shares**) and RemeGen Warrants (**320,000,000 shares**) in a private placement, raising **$174.4 million** in net proceeds. These 2025 Warrants are liability-classified and had a fair value of **$1,652.3 million** as of June 30, 2025, resulting in a **$1,299.9 million** change in fair value recognized as an expense[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - Neither the 2024 nor 2025 Warrants were included in diluted net loss per share for the period ended June 30, 2025, as their effect would be antidilutive[57](index=57&type=chunk) [8. Stock-Based Compensation](index=17&type=section&id=8.%20Stock-Based%20Compensation) - As of June 30, 2025, the Company had **69,668,889 shares** available under the 2023 Inducement Plan and **6,027,849 shares** under the Amended and Restated 2021 Equity Incentive Plan[58](index=58&type=chunk)[59](index=59&type=chunk) - During the six months ended June 30, 2025, the Company granted **87,549,888 stock options** (weighted-average fair value **$0.73/share**) and **1,224,000 restricted stock units** (weighted-average fair value **$1.33/share**). Total unrecognized compensation expense for stock options was **$66.3 million** (**2.1 years** weighted-average period) and for RSUs was **$2.9 million** (**2.3 years** weighted-average period)[60](index=60&type=chunk)[61](index=61&type=chunk)[65](index=65&type=chunk) - An Option Repricing in February 2025 reduced the exercise price of approximately **6.76 million options** to **$1.34/share**, but the associated incremental compensation cost of **$1.9 million** was reversed as conditions for modified terms were not met[63](index=63&type=chunk)[64](index=64&type=chunk) Stock-Based Compensation Expense (in thousands) | Allocation | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $599 | $1,272 | $1,641 | $2,677 | | General and administrative | $1,245 | $1,521 | $2,136 | $3,197 | | Total stock-based compensation expense | $1,844 | $2,793 | $3,777 | $5,874 | [9. Leases](index=20&type=section&id=9.%20Leases) - In June 2025, the Company entered into an early termination agreement for its Cambridgepark Lease, effective August 4, 2025, incurring an **$8.5 million** non-refundable termination fee. This resulted in accelerated amortization of the right-of-use asset and de-recognition of remaining balances[70](index=70&type=chunk) Lease Costs (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $13,085 | $1,951 | $15,036 | $3,902 | | Variable lease cost | $774 | $679 | $1,485 | $1,209 | | Total lease cost | $13,859 | $2,630 | $16,521 | $5,111 | **Lease Liabilities (in thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $24 | $35,007 | | Total lease liabilities | $— | $31,830 | * Weighted-average remaining lease term decreased from **5.7 years** (Dec 31, 2024) to **0.1 years** (June 30, 2025) [10. Significant Agreements](index=22&type=section&id=10.%20Significant%20Agreements) - On June 25, 2025, the Company entered into a license agreement with RemeGen Co., Ltd. for exclusive rights to develop and commercialize telitacicept outside Greater China. The Company is responsible for all development, regulatory, and commercialization activities in the licensed territory[72](index=72&type=chunk)[73](index=73&type=chunk) - Consideration for the license included an upfront cash payment of **$45.0 million** (accrued as of June 30, 2025) and the issuance of RemeGen Warrants initially valued at **$177.4 million**. The agreement was accounted for as an asset acquisition, resulting in a **$222.6 million** charge to R&D expense[74](index=74&type=chunk)[75](index=75&type=chunk) - RemeGen is eligible for up to **$330 million** in regulatory milestone payments, up to **$3.775 billion** in sales milestone payments, and tiered royalties on net sales. No milestone or royalty payments have been accrued as of June 30, 2025[76](index=76&type=chunk) [11. Net Loss Per Share](index=22&type=section&id=11.%20Net%20Loss%20Per%20Share) Net Loss Per Share Attributable to Common Stockholders (in thousands, except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders | $(1,573,669) | $(27,839) | $(1,606,155) | $(58,643) | | Weighted-average common shares outstanding | 125,271,447 | 68,299,170 | 125,049,032 | 68,165,068 | | Net loss per share, basic and diluted | $(12.56) | $(0.41) | $(12.84) | $(0.86) | * Potentially dilutive securities (stock options, RSUs, warrants) were excluded from diluted EPS calculation as their effect would be anti-dilutive[79](index=79&type=chunk)[80](index=80&type=chunk) [12. Restructuring Plan](index=24&type=section&id=12.%20Restructuring%20Plan) - On May 5, 2025, the Board approved a Restructuring Plan to wind down existing clinical and manufacturing operations and explore strategic alternatives, publicly announced on May 8, 2025[81](index=81&type=chunk) - The plan included a workforce reduction of **154 full-time employees** (approximately **99% of the employee base**), incurring **$14.1 million** in severance and benefit costs as of June 30, 2025[82](index=82&type=chunk) Total Restructuring Costs (in thousands) for Three and Six Months Ended June 30, 2025 | Item | Research and Development Expense | General and Administrative Expense | Total Restructuring Costs | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------ | | Severance and Benefits Costs | $8,957 | $5,188 | $14,145 | | Stock-based Compensation | — | $549 | $549 | | Accelerated Depreciation on Long-lived Assets | $1,230 | $284 | $1,514 | | Accelerated Amortization on Right-of-use Assets | $10,159 | $1,064 | $11,223 | | Loss on Disposal of Long-lived Assets | $3,303 | — | $3,303 | | **Total** | **$23,649** | **$7,085** | **$30,734** | * The restructuring resulted in a total of **$30.7 million** in costs for the three and six months ended June 30, 2025[84](index=84&type=chunk) - The remaining restructuring liability included in accrued liabilities as of June 30, 2025, was **$11.5 million**[85](index=85&type=chunk) [13. Segments](index=26&type=section&id=13.%20Segments) - The Company operates as a single reportable and operating segment, with the CEO serving as the Chief Operating Decision Maker (CODM). The CODM reviews consolidated operating results and net loss to make resource allocation decisions[86](index=86&type=chunk)[87](index=87&type=chunk) Segment Expenses (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Trem-cel (external R&D) | $3,095 | $3,619 | $9,477 | $8,480 | | VCAR33 (external R&D) | $2,419 | $1,762 | $6,055 | $4,362 | | Other research and development | $225,144 | $3,177 | $228,139 | $6,294 | | Salaries and benefits | $17,863 | $10,404 | $29,476 | $22,517 | | General corporate activities | $16,694 | $4,947 | $21,863 | $10,246 | | Other segment items | $1,308,454 | $3,930 | $1,311,145 | $6,744 | | **Total Segment Expenses** | **$1,573,669** | **$27,839** | **$1,606,155** | **$58,643** | | **Segment Net Loss** | **$(1,573,669)** | **$(27,839)** | **$(1,606,155)** | **$(58,643)** | * Other segment items primarily include changes in fair value of warrant liabilities, stock-based compensation, depreciation, and non-cash lease expense[88](index=88&type=chunk)[89](index=89&type=chunk) [14. Related Party Transactions](index=26&type=section&id=14.%20Related%20Party%20Transactions) - In June 2025, RA Capital Healthcare Fund, L.P., an affiliate of a board member, purchased warrants to acquire up to **200,000,000 shares** of the Company's common stock for **$50.0 million** in gross proceeds as part of the 2025 Private Placement[91](index=91&type=chunk) [15. Subsequent Events](index=26&type=section&id=15.%20Subsequent%20Events) - On August 12, 2025, the Company entered into a new lease agreement for approximately **8,391 square feet** of office space in Boston, Massachusetts, with a term expiring **72 months** after the September 1, 2025 commencement date. Aggregate base rental payments are expected to be **$3.8 million** during the initial term[92](index=92&type=chunk)[93](index=93&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive discussion and analysis of the Company's financial condition and results of operations, highlighting key events such as the in-licensing of telitacicept, the restructuring plan, and the financial performance for the three and six months ended June 30, 2025, compared to the same periods in 2024 [Overview](index=28&type=section&id=Overview) - Vor Bio is a clinical-stage biopharmaceutical company focused on autoimmune diseases, having in-licensed telitacicept from RemeGen Co., Ltd. in June 2025[95](index=95&type=chunk) - Telitacicept is a novel fusion protein approved in China for systemic lupus erythematosus (SLE), rheumatoid arthritis (RA), and generalized myasthenia gravis (gMG), and is currently in a global Phase 3 clinical trial for gMG[95](index=95&type=chunk)[96](index=96&type=chunk) - The Company holds exclusive development and commercialization rights for telitacicept outside of Greater China[97](index=97&type=chunk) [Our Clinical Development Programs & Pipeline](index=28&type=section&id=Our%20Clinical%20Development%20Programs%20%26%20Pipeline) - The Company's broader development plan includes exploring telitacicept in additional autoantibody-driven diseases where BAFF/APRIL signaling is a validated target, leveraging prior clinical experience and mechanistic rationale[98](index=98&type=chunk) [Our Team](index=28&type=section&id=Our%20Team) - Jean-Paul Kress, M.D., was appointed CEO and Chairman in June 2025, bringing extensive experience in autoimmune disease drug development and corporate leadership[99](index=99&type=chunk) - Sandy Mahatme, J.D., LL.M., joined as Chief Financial Officer and Chief Business Officer in July 2025, with a background in biomanufacturing and biopharmaceutical finance[99](index=99&type=chunk)[100](index=100&type=chunk) - Qing Zuraw, M.D., M.P.H., M.B.A., joined as Chief Development Officer in July 2025, having led global clinical development programs for telitacicept at RemeGen[104](index=104&type=chunk) - Dallan Murray, M.B.A., joined as Chief Commercial Officer in August 2025, bringing over **20 years** of commercial leadership experience in the biopharmaceutical industry[104](index=104&type=chunk) [Our Strategy](index=30&type=section&id=Our%20Strategy) - The Company's strategic priorities include rapid global development of telitacicept, pipeline expansion into additional B cell-driven autoimmune diseases, and building global commercial capabilities for potential launches[104](index=104&type=chunk) [Our Product Candidate (Telitacicept)](index=30&type=section&id=Our%20Product%20Candidate%20(Telitacicept)) This section details telitacicept, its mechanism of action, current approvals in China, ongoing global clinical trials for gMG, regulatory designations, commercialization strategy, manufacturing approach, competitive landscape, and intellectual property protection [Telitacicept Overview and gMG](index=30&type=section&id=Telitacicept%20Overview%20and%20gMG) - Telitacicept is approved in China for SLE, RA, and gMG, and is a novel recombinant fusion protein that dual-targets BLyS (BAFF) and APRIL to inhibit B cell survival and plasma cell function[101](index=101&type=chunk)[108](index=108&type=chunk) - Generalized Myasthenia Gravis (gMG) is a rare, chronic autoimmune neuromuscular disorder with a prevalence of approximately **150-250 individuals per million** worldwide, and an estimated **100,000 individuals** in the United States[102](index=102&type=chunk)[103](index=103&type=chunk) - Current gMG treatments include acetylcholinesterase inhibitors, traditional immunosuppressives, FcRn antagonists, and complement inhibitors, but none directly modulate the cytokine environment sustained by BAFF and APRIL[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) [Phase 3 Clinical Trial in patients with gMG in China](index=32&type=section&id=Phase%203%20Clinical%20Trial%20in%20patients%20with%20gMG%20in%20China) - RemeGen's Phase 3 trial in China for gMG enrolled **114 patients**, demonstrating significant improvements in MG-ADL and QMG scores for the telitacicept group compared to placebo at week **24**[109](index=109&type=chunk)[111](index=111&type=chunk) Key Results from China Phase 3 gMG Trial (Week 24) | Endpoint | Telitacicept Group | Placebo Group | | :------------------------------------------ | :----------------- | :------------ | | MG-ADL score decrease from baseline | 5.74 points | 0.91 points | | QMG score decrease from baseline | 8.66 points | 2.27 points | | Patients with ≥3-point MG-ADL improvement | 98.1% | 12.0% | | Patients with ≥5-point QMG improvement | 87.0% | 16.0% | * Telitacicept was well-tolerated, with an overall adverse event rate comparable to placebo [Global Phase 3 Clinical Trial in patients with gMG](index=34&type=section&id=Global%20Phase%203%20Clinical%20Trial%20in%20patients%20with%20gMG) - Telitacicept is currently being evaluated in a global Phase 3 clinical trial for gMG, with the Company assuming responsibility from RemeGen. The trial is recruiting in the United States, Canada, Europe, Australia, and South America[112](index=112&type=chunk) - The primary endpoint is change from baseline in MG-ADL at week **24**, with key secondary endpoints including QMG score reduction and MG Quality of Life (MG-QoL15r) scale changes[112](index=112&type=chunk) - The first patient in the United States was enrolled in July 2024[113](index=113&type=chunk) [Regulatory Overview (Product Candidate)](index=34&type=section&id=Regulatory%20Overview%20(Product%20Candidate)) - Telitacicept has received Orphan Drug Designation (ODD) from both the U.S. FDA and European Medicines Agency (EMA) for the treatment of gMG[114](index=114&type=chunk) - In January 2024, the FDA cleared the Investigational New Drug (IND) application for a global multi-center Phase 3 clinical trial of telitacicept for adult patients with primary Sjögren's syndrome (pSS), and granted Fast-Track Designation (FTD) in March 2024[115](index=115&type=chunk) [Sales and Marketing](index=34&type=section&id=Sales%20and%20Marketing) - The Company plans to build focused commercial capabilities and infrastructure in regions like the United States, South America, Europe, Japan, the Middle East, and North Africa to commercialize telitacicept, if approved[116](index=116&type=chunk) [Manufacturing](index=34&type=section&id=Manufacturing) - The Company plans to rely on third-party contract manufacturers for clinical manufacturing of raw materials, devices, active pharmaceutical ingredients, and finished products, and expects to enter into long-term agreements for future clinical trials and commercialization[117](index=117&type=chunk) [Competition (Product Candidate)](index=34&type=section&id=Competition%20(Product%20Candidate)) - The autoimmune field is highly competitive, with numerous monoclonal antibodies, biologics, CAR T cells, and small molecules from companies like Alexion, Amgen, Argenx, Dianthus, Johnson & Johnson, and UCB already marketed or in development[118](index=118&type=chunk) [Intellectual Property (Product Candidate)](index=34&type=section&id=Intellectual%20Property%20(Product%20Candidate)) - The licensed patent portfolio from RemeGen includes a first patent family for telitacicept's composition of matter, with granted patents in key regions (US, China, Europe, Japan, Korea, Russia, Brazil, India) expected to expire in **2028**[119](index=119&type=chunk) - Additional licensed families cover telitacicept formulations (expiring **2040-2044**) and methods/uses for specific conditions like SLE, IgA nephropathy, Sjögren's syndrome, myasthenia gravis, and other autoimmune diseases (expiring **2039-2045**)[120](index=120&type=chunk)[121](index=121&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) [Government Regulation](index=36&type=section&id=Government%20Regulation) This section outlines the extensive regulatory framework governing drug and biological product development, approval, and commercialization in the United States and the European Union, including preclinical and clinical trial requirements, review processes, special designations, and post-approval obligations [Regulatory Approval in the United States](index=36&type=section&id=Regulatory%20Approval%20in%20the%20United%20States) - Pharmaceutical and biological products in the U.S. are extensively regulated by the FDA under the FDCA and PHSA, requiring considerable data for quality, safety, and efficacy before marketing[127](index=127&type=chunk)[128](index=128&type=chunk) - The approval process for biologics involves extensive preclinical studies, submission of an Investigational New Drug (IND) application, well-controlled human clinical trials, and submission of a Biologics License Application (BLA) for marketing approval[129](index=129&type=chunk) [Preclinical Studies (US)](index=38&type=section&id=Preclinical%20Studies%20(US)) - Preclinical studies involve laboratory and animal testing to assess product chemistry, formulation, potential adverse events, and therapeutic rationale, conducted in accordance with GLP regulations[131](index=131&type=chunk) - An IND must be submitted to the FDA and become effective before human clinical trials can begin, allowing interstate shipment of unapproved product candidates for investigational use[132](index=132&type=chunk) [Clinical Trials (US)](index=38&type=section&id=Clinical%20Trials%20(US)) - Clinical trials involve administering investigational products to volunteers or patients under qualified investigators, adhering to federal regulations, GCPs, and IRB-approved protocols[133](index=133&type=chunk)[134](index=134&type=chunk) - Trials are generally conducted in **three sequential phases** (Phase 1, 2, 3) to assess safety, pharmacokinetics, efficacy, and establish the overall benefit/risk relationship for product labeling[139](index=139&type=chunk)[145](index=145&type=chunk) - Regulatory agencies require extensive monitoring, auditing, and reporting of clinical activities, data, and adverse events, with trials potentially suspended or terminated for non-compliance or health risks[142](index=142&type=chunk)[143](index=143&type=chunk) [FDA Review Processes](index=41&type=section&id=FDA%20Review%20Processes) - After clinical trials, a BLA is submitted to the FDA, including preclinical and clinical results, proposed labeling, and manufacturing information, requiring a substantial user fee[146](index=146&type=chunk)[147](index=147&type=chunk) - The FDA reviews the BLA for safety, purity, potency, and cGMP compliance, with standard review goals of **10 months** (**6 months** for priority review), which can be extended[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Approval may be limited to specific indications or conditions, and the FDA may issue a Complete Response Letter for deficiencies or require a REMS program to manage risks[152](index=152&type=chunk)[153](index=153&type=chunk) [Orphan Drug Designation (US)](index=41&type=section&id=Orphan%20Drug%20Designation%20(US)) - Orphan drug designation is granted for products treating rare diseases (fewer than **200,000 U.S. individuals**) or conditions where development costs are unlikely to be recovered from sales[155](index=155&type=chunk) - Designation, requested before BLA submission, does not shorten the review process but grants **seven years** of market exclusivity upon first FDA approval for the designated indication, with limited exceptions[156](index=156&type=chunk)[157](index=157&type=chunk) [Expedited Development and Review Programs (US)](index=43&type=section&id=Expedited%20Development%20and%20Review%20Programs%20(US)) - The FDA offers expedited review programs for products addressing unmet medical needs in serious or life-threatening conditions, including Fast Track, Breakthrough Therapy, Priority Review, and Accelerated Approval[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Fast Track allows for greater FDA interaction and rolling review; Breakthrough Therapy provides intensive guidance; Priority Review aims for a **six-month** review; and Accelerated Approval uses surrogate endpoints for earlier approval, contingent on confirmatory studies[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - These programs may expedite development but do not change approval standards, and qualification can be revoked or review times may not be shortened[164](index=164&type=chunk) [Additional Controls for Biologics (US)](index=45&type=section&id=Additional%20Controls%20for%20Biologics%20(US)) - The PHSA emphasizes manufacturing controls for biologics to reduce the risk of adventitious agents and grants the FDA authority to suspend licenses for public health dangers[165](index=165&type=chunk) - Approved biologics may be subject to official lot release, requiring manufacturers to submit samples and test results to the FDA, which may also perform confirmatory tests[166](index=166&type=chunk) [Post-Approval Requirements (US)](index=45&type=section&id=Post-Approval%20Requirements%20(US)) - After BLA approval, products are subject to ongoing FDA regulation, including marketing and promotion standards, adverse event reporting, and cGMP compliance[167](index=167&type=chunk)[168](index=168&type=chunk) - The FDA may require post-marketing testing (Phase 4), REMS, or surveillance, and can withdraw approvals or request recalls for non-compliance or newly discovered problems, leading to various sanctions[168](index=168&type=chunk)[169](index=169&type=chunk)[173](index=173&type=chunk) [U.S. Marketing Exclusivity](index=47&type=section&id=U.S.%20Marketing%20Exclusivity) - The BPCIA established an abbreviated approval pathway for biosimilar or interchangeable biological products[170](index=170&type=chunk) - Reference biological products receive **12 years** of data exclusivity from first licensure, preventing FDA from accepting biosimilar/interchangeable applications for **four years**, and market entry for **10 years**[171](index=171&type=chunk) [Regulatory Approval in the European Union](index=47&type=section&id=Regulatory%20Approval%20in%20the%20European%20Union) - The EMA coordinates the evaluation and monitoring of centrally authorized medicinal products in the EU, responsible for scientific evaluation of marketing authorization applications[172](index=172&type=chunk) - The EU approval process involves preclinical tests, submission of a Clinical Trial Application (CTA), well-controlled clinical trials, and submission of a Marketing Authorization Application (MAA)[174](index=174&type=chunk)[183](index=183&type=chunk) [Preclinical Studies (EU)](index=49&type=section&id=Preclinical%20Studies%20(EU)) - Preclinical tests in the EU involve laboratory evaluations of product chemistry, formulation, stability, and animal toxicity studies, complying with international, EU, and national regulations[176](index=176&type=chunk) [Clinical Trials (EU)](index=49&type=section&id=Clinical%20Trials%20(EU)) - Clinical trials in the EU are governed by the Clinical Trials Regulation (CTR), which harmonizes authorizations, simplifies adverse-event reporting, and increases transparency through a single-entry EU portal (CTIS)[177](index=177&type=chunk)[178](index=178&type=chunk) - The CTR introduced a streamlined application procedure and a harmonized assessment process, with a **three-year** transition period ending January 31, 2025, after which all trials are subject to its provisions[178](index=178&type=chunk)[179](index=179&type=chunk) [Review and Approval (EU)](index=49&type=section&id=Review%20and%20Approval%20(EU)) - Medicinal products in the EU require a Marketing Authorization (MA), obtainable through a centralized procedure administered by the EMA or national procedures[180](index=180&type=chunk) - The centralized procedure, compulsory for specific products like biotechnological or orphan medicinal products, grants a single MA valid across the European Economic Area (EEA) based on the CHMP's opinion and European Commission's decision[181](index=181&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) [Validity of Marketing Authorizations (EU)](index=51&type=section&id=Validity%20of%20Marketing%20Authorizations%20(EU)) - An MA typically has an initial validity of **five years**, renewable based on a re-evaluation of the risk-benefit balance. After definitive renewal, it can be valid for an unlimited period[186](index=186&type=chunk) - A 'sunset clause' dictates that an authorization not followed by actual placing of the product on the EU market within **three years** will cease to be valid[186](index=186&type=chunk) [Manufacturing Regulation in the EU](index=51&type=section&id=Manufacturing%20Regulation%20in%20the%20EU) - Manufacturing and importing medicinal products in the EU require specific authorizations and compliance with EU cGMP standards and distribution regulations[187](index=187&type=chunk) - Non-compliance can lead to civil, criminal, or administrative sanctions, including suspension of manufacturing authorization[187](index=187&type=chunk) [Data and Market Exclusivity (EU)](index=51&type=section&id=Data%20and%20Market%20Exclusivity%20(EU)) - Innovative medicinal products in the EU generally receive **eight years** of data exclusivity and **10 years** of market exclusivity, preventing generic/biosimilar referencing and commercialization[188](index=188&type=chunk) - A special regime exists for biosimilars, requiring appropriate preclinical or clinical trial results to support marketing authorization applications[189](index=189&type=chunk) [Orphan Drug Designation (EU)](index=51&type=section&id=Orphan%20Drug%20Designation%20(EU)) - Orphan medicinal product designation in the EU is for products treating life-threatening or chronically debilitating conditions affecting not more than **five in 10,000 persons**, or where development costs are not justified by sales[190](index=190&type=chunk)[191](index=191&type=chunk) - Designation provides incentives like fee reductions, protocol assistance, and **10 years** of market exclusivity, which can be reduced to **six years** under certain conditions or if a similar, clinically superior product is approved[193](index=193&type=chunk) [Post-Authorization Requirements (EU)](index=53&type=section&id=Post-Authorization%20Requirements%20(EU)) - MA holders in the EU must comply with regulatory requirements for manufacturing, marketing, promotion, and sale, including establishing a pharmacovigilance system and submitting periodic safety update reports (PSURs)[194](index=194&type=chunk) - New MAAs require a risk management plan (RMP), and advertising/promotion must comply with EU and Member State laws, adhering to the product's Summary of Product Characteristics (SmPC)[195](index=195&type=chunk)[196](index=196&type=chunk) [European Data Collection and Processing](index=53&type=section&id=European%20Data%20Collection%20and%20Processing) - Processing of health-related and personal data in Europe is governed by the EU GDPR, imposing strict requirements on disclosures, consents, data security, breach notifications, and individual rights[197](index=197&type=chunk) - Non-compliance with EU GDPR can lead to private litigation, processing prohibitions, and heavy fines, potentially increasing compliance costs and limiting activities in Europe[198](index=198&type=chunk) [Marketing (EU)](index=55&type=section&id=Marketing%20(EU)) - The EU prohibits benefits or advantages to healthcare professionals to induce product prescription, with interactions governed by national anti-bribery laws, sunshine rules, and industry codes[199](index=199&type=chunk) - Payments to physicians in certain EU Member States must be publicly disclosed, and non-compliance can result in reputational risk, administrative penalties, fines, or imprisonment[200](index=200&type=chunk) [International Regulation](index=55&type=section&id=International%20Regulation) - Foreign regulations govern clinical trials, commercial sales, and distribution of product candidates, with approval processes varying by country and potentially differing from FDA or European Commission timelines[201](index=201&type=chunk) [Other Healthcare Laws and Regulations and Legislative Reform](index=55&type=section&id=Other%20Healthcare%20Laws%20and%20Regulations%20and%20Legislative%20Reform) - The Company's operations are subject to various U.S. federal and state healthcare fraud and abuse laws, including the Anti-Kickback Statute, False Claims Act, HIPAA, and Physician Payments Sunshine Act, which broadly regulate interactions with healthcare providers and third-party payors[202](index=202&type=chunk)[205](index=205&type=chunk) - Violations of these laws can lead to significant civil, criminal, and administrative penalties, including fines, imprisonment, exclusion from government healthcare programs, and reputational harm[204](index=204&type=chunk)[206](index=206&type=chunk) - Recent legislative reforms, such as the Affordable Care Act (ACA) and the Inflation Reduction Act of 2022 (IRA), have significantly impacted healthcare financing and drug pricing, including Medicare drug price negotiation and rebates for price increases[208](index=208&type=chunk)[209](index=209&type=chunk)[211](index=211&type=chunk) - The U.S. Supreme Court's decision in Loper Bright Enterprises v. Raimondo, overturning the Chevron doctrine, could lead to increased regulatory uncertainty and legal challenges to federal agency regulations, including those from the FDA[213](index=213&type=chunk) [Pharmaceutical Coverage, Pricing and Reimbursement](index=61&type=section&id=Pharmaceutical%20Coverage,%20Pricing%20and%20Reimbursement) - Sales of product candidates depend on coverage and adequate reimbursement by governmental and private third-party payors, which is a time-consuming and costly process requiring scientific, clinical, and cost-effectiveness data[215](index=215&type=chunk)[216](index=216&type=chunk) - Coverage and reimbursement decisions in the U.S. are often influenced by CMS, while in Europe, pricing and reimbursement schemes vary widely by country, potentially involving pricing negotiations and Health Technology Assessments (HTA)[219](index=219&type=chunk)[220](index=220&type=chunk) - Downward pressure on healthcare costs globally, including increased discounts and reference pricing, creates higher barriers to entry for new products and could negatively impact the Company's revenues and profitability[221](index=221&type=chunk)[222](index=222&type=chunk) [Restructuring Plan (MD&A)](index=65&type=section&id=Restructuring%20Plan%20(MD%26A)) - On May 5, 2025, the Company approved a Restructuring Plan to wind down existing clinical and manufacturing operations and reduce its workforce by approximately **99%** (**154 full-time employees**)[223](index=223&type=chunk) - Restructuring costs incurred during the three and six months ended June 30, 2025, totaled **$30.7 million**, including severance, stock-based compensation modifications, and asset disposals/accelerated depreciation[224](index=224&type=chunk) - The Company incurred net losses of **$1,573.7 million** and **$1,606.2 million** for the three and six months ended June 30, 2025, respectively, with an accumulated deficit of **$2,063.1 million** as of June 30, 2025[225](index=225&type=chunk) - Existing cash, cash equivalents, and marketable securities of **$200.6 million** as of June 30, 2025, are expected to fund operating expenses and capital expenditure requirements into the **first quarter of 2027**[226](index=226&type=chunk) [Critical Accounting Estimates](index=65&type=section&id=Critical%20Accounting%20Estimates) - The preparation of financial statements requires management to make judgments and estimates affecting reported amounts, particularly for accrued R&D expenses, stock-based compensation, and fair value of financial instruments[227](index=227&type=chunk) - In connection with the restructuring, certain estimates related to accrued research and development have been revised, but no other material changes to critical accounting estimates were reported from the 2024 Annual Report[227](index=227&type=chunk) [Financial Operations Overview](index=65&type=section&id=Financial%20Operations%20Overview) - The Company has not generated any revenue since inception and does not expect to generate product sales revenue in the near future, if at all, relying on potential future product sales or collaboration/license agreements[228](index=228&type=chunk) - Research and development expenses, expensed as incurred, consist of external costs (CROs, consultants, supplies, manufacturing, licensing payments) and internal costs (personnel, facilities, depreciation). These expenses are expected to increase significantly as product candidates advance[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[233](index=233&type=chunk) - General and administrative expenses primarily include personnel costs, professional services (legal, audit), facility-related expenses, and are expected to increase with business expansion[237](index=237&type=chunk)[238](index=238&type=chunk) - Other income (expense) includes interest income on cash and marketable securities, and changes in the fair value of liability-classified warrant liabilities[239](index=239&type=chunk)[240](index=240&type=chunk) [Results of Operations](index=69&type=section&id=Results%20of%20Operations) Summary of Results of Operations (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (2025 vs 2024) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :-------------------- | | Research and development | $261,499 | $21,823 | $239,676 | | General and administrative | $12,785 | $7,212 | $5,573 | | Total operating expenses | $274,284 | $29,035 | $245,249 | | Loss from operations | $(274,284) | $(29,035) | $(245,249) | | Interest income | $537 | $1,196 | $(659) | | Change in fair value of warrant liabilities | $(1,299,922) | — | $(1,299,922) | | Net loss | $(1,573,669) | $(27,839) | $(1,545,830) | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (2025 vs 2024) | | :------------------------------------------ | :----------------------------- | :----------------------------- | :-------------------- | | Research and development | $288,200 | $46,145 | $242,055 | | General and administrative | $19,375 | $15,216 | $4,159 | | Total operating expenses | $307,575 | $61,361 | $246,214 | | Loss from operations | $(307,575) | $(61,361) | $(246,214) | | Interest income | $1,342 | $2,718 | $(1,376) | | Change in fair value of warrant liabilities | $(1,299,922) | — | $(1,299,922) | | Net loss | $(1,606,155) | $(58,643) | $(1,547,512) | - Research and development expenses increased by **$239.7 million** for the three months and **$242.1 million** for the six months ended June 30, 2025, primarily due to the **$222.6 million** upfront consideration for the Telitacicept License Agreement, **$3.3 million** loss on asset disposal, and **$11.2 million** in accelerated depreciation/amortization[242](index=242&type=chunk)[243](index=243&type=chunk) - General and administrative expenses increased by **$5.6 million** for the three months and **$4.2 million** for the six months ended June 30, 2025, mainly due to increased personnel costs from termination payments and higher facilities/other expenses from accelerated depreciation and asset disposals[244](index=244&type=chunk)[245](index=245&type=chunk) - Other income (expense) decreased by **$1,300.6 million** for the three months and **$1,301.3 million** for the six months ended June 30, 2025, primarily due to the change in fair value of liability-classified warrant liabilities[246](index=246&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) - Since inception, the Company has funded operations primarily through equity sales, raising approximately **$691.5 million** in net proceeds as of June 30, 2025[247](index=247&type=chunk) - As of June 30, 2025, the Company had **$200.6 million** in cash, cash equivalents, and marketable securities, expected to fund operations into the **first quarter of 2027**[250](index=250&type=chunk)[251](index=251&type=chunk) - Future expenses are expected to increase substantially with continued R&D, clinical trials, manufacturing, regulatory approvals, and commercialization efforts, necessitating additional funding through equity, debt, or collaborations[252](index=252&type=chunk)[254](index=254&type=chunk) Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(66,250) | $(52,312) | | Net cash provided by investing activities | $416 | $96,963 | | Net cash provided by financing activities | $174,459 | $65 | | Net increase in cash, cash equivalents and restricted cash equivalents | $108,625 | $44,716 | * Net cash used in operating activities increased by **$14.0 million** in 2025, driven by higher net loss partially offset by non-cash charges (warrant liabilities, in-process R&D acquisition)[256](index=256&type=chunk)[257](index=257&type=chunk)[259](index=259&type=chunk) - Financing activities provided **$174.5 million** in 2025, primarily from **$175.0 million** in proceeds from pre-funded warrants, compared to **$0.1 million** in 2024[261](index=261&type=chunk) - Contractual obligations include ongoing payments under license and collaboration agreements, such as the Telitacicept License Agreement, which require payments upon achievement of milestones and royalties on sales[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[267](index=267&type=chunk) [Item 4. Controls and Procedures](index=76&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the management's evaluation of the effectiveness of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - Management, with CEO and CFO participation, concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[268](index=268&type=chunk)[269](index=269&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, the Company's internal control over financial reporting[270](index=270&type=chunk) PART II. OTHER INFORMATION This section includes information on legal proceedings, risk factors, other disclosures, exhibits, and required signatures [Item 1. Legal Proceedings](index=78&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company is not currently involved in any material legal proceedings - The Company is not currently a party to any material legal proceedings[273](index=273&type=chunk) [Item 1A. Risk Factors](index=78&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks that could materially affect the Company's business, financial condition, results of operations, cash flows, and access to liquidity, categorized by financial position, development, regulatory, third-party relationships, intellectual property, legal compliance, employee matters, and common stock ownership [Risks Related to Our Financial Position and Need for Additional Capital](index=78&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) - The Company has incurred significant net losses since inception (**$1,606.2 million** for the six months ended June 30, 2025) and expects to continue incurring losses, potentially never achieving or maintaining profitability[275](index=275&type=chunk)[276](index=276&type=chunk) - Substantial additional funding will be needed to support ongoing operations and growth strategy, and inability to raise capital on acceptable terms could force delays or elimination of R&D programs or commercialization efforts[277](index=277&type=chunk)[278](index=278&type=chunk)[282](index=282&type=chunk) - Raising additional capital through equity or convertible debt securities, including warrants (e.g., 2024 and 2025 Warrants), will cause significant dilution to existing stockholders[283](index=283&type=chunk)[284](index=284&type=chunk) - The Company has a limited operating history and no history of commercializing products, making it difficult to evaluate future viability and success[286](index=286&type=chunk)[287](index=287&type=chunk) - The ability to utilize net operating loss carryforwards (federal **$243.9 million**, state **$234.7 million** as of Dec 31, 2024) may be limited by ownership changes under Section 382 of the Internal Revenue Code, potentially increasing future tax obligations[292](index=292&type=chunk) [Risks Related to Discovery, Development, Manufacturing and Commercialization](index=83&type=section&id=Risks%20Related%20to%20Discovery,%20Development,%20Manufacturing%20and%20Commercialization) - The Company is substantially dependent on the success of its lead product candidate, telitacicept, and failure to complete its development, obtain approval, or commercialize it in a timely manner would harm the business[293](index=293&type=chunk)[295](index=295&type=chunk) - Reliance on clinical trial data from RemeGen in China for telitacicept carries risks, as access to data may be limited, and there's no assurance the FDA or other regulatory authorities will accept or consider such data[296](index=296&type=chunk)[298](index=298&type=chunk) - Clinical trials may fail to demonstrate safety and efficacy, or serious adverse effects may be identified, leading to increased costs, abandonment of development, or limitations on use[300](index=300&type=chunk)[301](index=301&type=chunk)[303](index=303&type=chunk) - Interim, topline, or preliminary clinical trial data may change upon full analysis, and discrepancies could harm reputation and business prospects[302](index=302&type=chunk)[304](index=304&type=chunk)[306](index=306&type=chunk) - The Company's limited resources may be expended on less profitable or successful product candidates or indications, leading to missed opportunities[307](index=307&type=chunk) - Even if approved, product candidates may fail to achieve sufficient market acceptance by physicians, patients, and payors due to factors like efficacy, safety, pricing, or competition[308](index=308&type=chunk)[309](index=309&type=chunk) - Failure to establish internal sales and marketing capabilities or secure third-party agreements could hinder commercialization efforts[310](index=310&type=chunk)[312](index=312&type=chunk) - The Company faces significant competition from major pharmaceutical and biotechnology companies, with competitors potentially achieving regulatory approval faster or developing superior therapies[313](index=313&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk)[320](index=320&type=chunk) - Negative developments in protein-based therapies, especially fusion proteins like telitacicept, could damage public perception and adversely affect the business[322](index=322&type=chunk)[323](index=323&type=chunk) - Product liability lawsuits could result in substantial liabilities, requiring commercialization limits or significant monetary awards, and insurance coverage may be inadequate[324](index=324&type=chunk)[325](index=325&type=chunk) - Manufacturing fusion proteins is complex and difficult; problems could lead to delays in development or commercialization, and reliance on third-party CMOs increases risks of insufficient quantities, quality, or regulatory non-compliance[326](index=326&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk)[330](index=330&type=chunk) - Failure to comply with environmental, health, and safety laws by the Company or its contractors could result in fines, penalties, or costs, materially affecting business success[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk)[334](index=334&type=chunk) - Success in preclinical studies or early clinical trials, including those by RemeGen, may not be indicative of results in future clinical trials, especially with small patient numbers, potentially leading to abandonment of product candidates[335](index=335&type=chunk) [Risks Related to Regulatory Review](index=97&type=section&id=Risks%20Related%20to%20Regulatory%20Review) - Clinical trials may fail to demonstrate safety and efficacy to regulatory authorities' satisfaction, leading to additional costs, delays, or inability to complete development and commercialization[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - Numerous unforeseen events during clinical trials, such as regulatory delays, enrollment difficulties, negative results, or third-party contractor failures, could delay or prevent marketing approval[339](index=339&type=chunk)[340](index=340&type=chunk) - Even with successful clinical trials, obtaining timely regulatory approval for telitacicept or other product candidates in the U.S. or other jurisdictions is uncertain, and approvals may be for narrower indications or subject to significant limitations[342](index=342&type=chunk)[343](index=343&type=chunk) - Marketing approval in one country does not guarantee approval in others, and seeking foreign regulatory approval involves additional costs, testing, and risks, potentially reducing the target market[344](index=344&type=chunk) - Significant delays or difficulties in patient enrollment or retention in clinical trials could increase development costs and delay or prevent necessary regulatory approvals[346](index=346&type=chunk)[347](index=347&type=chunk) [Risks Related to Our Relationships with Third Parties](index=103&type=section&id=Risks%20Related%20to%20Our%20Relationships%20with%20Third%20Parties) - Reliance on third parties (CROs, data management, investigators) for research, preclinical testing, and clinical trials reduces control over these activities and may lead to unsatisfactory performance, delays, or non-compliance with regulatory requirements[348](index=348&type=chunk)[349](index=349&type=chunk)[352](index=352&type=chunk)[353](index=353&type=chunk) - Dependence on third-party manufacturers for materials and product candidates increases the risk of insufficient quantities, quality, or acceptable cost, potentially delaying or impairing development and commercialization efforts[356](index=356&type=chunk)[357](index=357&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) - Collaborations with third parties for R&D and commercialization of product candidates may not be successful, as collaborators may not dedicate sufficient resources, delay trials, or abandon programs, impacting revenue generation[364](index=364&type=chunk)[365](index=365&type=chunk)[366](index=366&type=chunk) - Inability to establish collaborations on commercially reasonable terms could force alterations to development and commercialization plans, requiring increased expenditures or delays[368](index=368&type=chunk)[369](index=369&type=chunk)[371](index=371&type=chunk)[373](index=373&type=chunk) [Risks Related to Our Intellectual Property](index=111&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - High dependence on intellectual property licensed from third parties, particularly the Telitacicept License Agreement with RemeGen, means termination or invalidation of these licenses could result in loss of significant rights and harm commercialization ability[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[381](index=381&type=chunk) - Commercial success relies on obtaining, maintaining, and protecting intellectual property through patents, trademarks, and trade secrets; inadequate protection could allow competitors to erode competitive advantage[382](index=382&type=chunk)[383](index=383&type=chunk) - Patent protection may be insufficient or challenged, as patents may not provide meaningful protection, be circumvented, or be invalidated due to procedural defects, prior art, or legal challenges[387](index=387&type=chunk)[388](index=388&type=chunk)[392](index=392&type=chunk)[394](index=394&type=chunk) - Failure to protect the confidentiality of trade secrets could harm business and competitive position, as unauthorized disclosure or independent discovery by competitors could occur despite protective measures[396](index=396&type=chunk)[397](index=397&type=chunk)[398](index=398&type=chunk) - Inability to acquire or in-license necessary rights to key technologies from third parties on acceptable terms could force abandonment of relevant programs or product candidates[399](index=399&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk) - Third-party claims of intellectual property infringement, misappropriation, or other violations could prevent or delay product development, leading to substantial damages, injunctions, or costly litigation[403](index=403&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk)[407](index=407&type=chunk) - Compliance with procedural, document submission, and fee payment requirements for patents is critical; non-compliance can lead to abandonment or lapse of patent rights[408](index=408&type=chunk) - Intellectual property licensed from government-funded programs may be subject to federal regulations like 'march-in' rights and U.S.-based manufacturing preferences, limiting exclusive rights and manufacturing options[409](index=409&type=chunk)[410](index=410&type=chunk)[411](index=411&type=chunk) - Lawsuits to protect or enforce patents or other intellectual property can be expensive, time-consuming, and unsuccessful, potentially resulting in invalidation of patents or limited enforcement ability[412](index=412&type=chunk)[413](index=413&type=chunk) - Changes to patent law in the U.S. and other jurisdictions, including recent Supreme Court rulings, could diminish the value of patents and weaken the ability to protect product candidates[414](index=414&type=chunk) - Inability to protect intellectual property rights globally, due to varying laws and enforcement challenges, could allow competitors to use technologies in other jurisdictions and export infringing products[415](index=415&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk)[418](index=418&type=chunk) - Patent terms may be inadequate to protect competitive position for a sufficient time, as patents might expire before or shortly after commercialization, leading to competition from generics[419](index=419&type=chunk) - Failure to obtain patent term extension and data exclusivity for product candidates could shorten the period of exclusive rights, allowing competitors to market sooner and reducing revenue[420](index=420&type=chunk) - Claims that employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets could lead to litigation, loss of intellectual property, or personnel[421](index=4

```markdown PART I – Financial Information [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The company reported a net loss of $3.9 million for the six months ended June 30, 2025, an increase from a $3.4 million loss in the same period of 2024. As of June 30, 2025, the company had a working capital deficiency of $5.0 million and an accumulated deficit of $31.0 million. These factors, along with historical reliance on affiliate financing, have led management to conclude there is substantial doubt about the company's ability to continue as a going concern. The financial statements include condensed balance sheets, statements of operations, stockholders' equity, cash flows, and accompanying notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $12.3 million from $16.6 million at year-end 2024, primarily due to a significant reduction in cash and cash equivalents. Total liabilities also decreased to $9.7 million from $10.9 million, while total stockholders' equity fell from $5.7 million to $2.6 million, driven by the accumulated deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,682 | $6,869 | | Total current assets | $3,855 | $8,779 | | Total assets | $12,308 | $16,625 | | **Liabilities & Equity** | | | | Total current liabilities | $8,880 | $10,168 | | Total liabilities | $9,678 | $10,904 | | Accumulated deficit | $(31,011) | $(27,143) | | Total stockholders' equity | $2,630 | $5,721 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the six months ended June 30, 2025, revenues increased to $13.7 million from $12.3 million year-over-year. However, total operating expenses also rose to $17.4 million from $15.6 million, resulting in a larger loss from operations of $3.7 million compared to $3.3 million in the prior year. The net loss for the six-month period widened to $3.9 million from $3.4 million Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues, net | $6,936 | $5,803 | $13,707 | $12,310 | | Total operating expenses | $7,438 | $7,283 | $17,421 | $15,615 | | Loss from operations | $(502) | $(1,480) | $(3,714) | $(3,305) | | Net loss | $(592) | $(1,504) | $(3,868) | $(3,353) | | Net loss per share | $(0.07) | $(0.21) | $(0.46) | $(0.48) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities significantly increased to $4.4 million from $1.1 million in the prior-year period. Net cash used in investing activities was slightly higher at $296 thousand. Financing activities used $90 thousand in cash, a reversal from providing $337 thousand in the same period of 2024. Overall, cash, cash equivalents, and restricted cash decreased by $4.3 million during the period Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,448) | $(1,130) | | Net cash used in investing activities | $(296) | $(242) | | Net cash (used in)/provided by financing activities | $(90) | $337 | | **Net change in cash, cash equivalents, and restricted cash** | **$(4,338)** | **$(824)** | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Key notes highlight the company's operational structure, including the recent incorporation of several subsidiaries for licensing in Curacao and Ontario. A significant disclosure is the management's conclusion of substantial doubt about the company's ability to continue as a going concern due to a working capital deficiency and accumulated deficit. Revenue is primarily generated from net gaming revenue, with Finland being the largest market. The notes also detail significant related-party transactions, particularly with Spike Up for marketing services, and provide reconciliations for non-GAAP measures like Adjusted EBITDA - Management has concluded there is **substantial doubt** about the Company's ability to continue as a going concern due to a **$5.0 million** working capital deficiency, a **$31.0 million** accumulated deficit, and historical reliance on affiliate financing[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) Revenue by Geography (Six Months Ended June 30) | Country | 2025 Revenue (in thousands) | % of Total | 2024 Revenue (in thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Finland | $7,942 | 57% | $4,813 | 39% | | New Zealand | $2,954 | 22% | $3,096 | 25% | | Canada | $1,355 | 10% | $1,776 | 14% | | Norway | $909 | 7% | $1,878 | 15% | - The company has significant related-party balances, with **$1.3 million** due from affiliates and **$2.4 million** due to affiliates as of June 30, 2025, primarily with Spike Up and Happy Hour Entertainment Holdings[100](index=100&type=chunk) - The company has pending litigation in Austria and Germany regarding player claims, for which it has recorded a provision in accrued expenses[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's evolution as an iCasino operator, focusing on European markets with plans for North American expansion. Key performance indicators showed mixed results, with a decrease in quarterly active users and wagers in Q2 2025 compared to prior quarters. Revenue for the first six months of 2025 increased 11% to $13.7 million, driven by a strategic shift to more profitable markets, particularly Finland. However, increased operating expenses, mainly from marketing, led to a higher net loss of $3.9 million. The discussion reiterates the significant liquidity challenges and the 'going concern' warning, highlighting the company's negative working capital and reliance on future financing [Our Business and Key Performance Indicators](index=30&type=section&id=Our%20Business%20and%20Key%20Performance%20Indicators) The company operates as a growth-oriented iCasino company, primarily under the HighRoller.com and Fruta.com domains. Its strategy involves a multi-brand approach, focusing on regulated markets in Europe with intentions to enter North America. Key performance indicators for Q2 2025 showed a decline, with quarterly active users dropping to 19,675 from 29,946 in Q1 2025, and wagers remaining flat at approximately $153 million - The company is implementing a multi-brand strategy, having soft-launched its second brand, Fruta.com, in December 2023, to target new demographics and leverage its existing platform and licenses[127](index=127&type=chunk) Key Performance Indicators (Q1 2025 vs Q2 2025) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Quarterly Active Users | 19,675 | 29,946 | (34.3)% | | Quarterly UDCs | 17,036 | 27,289 | (37.6)% | | Quarterly Wagers (in thousands) | $153,150 | $153,298 | (0.1)% | - User deposits increased to **$24.4 million** in Q2 2025 from **$21.3 million** in Q2 2024, while active users decreased from 22,505 to 19,675 over the same period[132](index=132&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2025, revenue grew 11% year-over-year to $13.7 million, largely due to a 841% increase in intra-group services revenue and a strategic focus on more profitable markets like Finland. Despite this, net loss widened to $3.9 million from $3.4 million, driven by a $2.0 million increase in advertising and promotions expenses. For Q2 2025, the company saw a significant improvement, with the loss from operations narrowing to $502 thousand from $1.5 million in Q2 2024, reflecting a new marketing strategy focused on cost-effectiveness - Revenue for the six months ended June 30, 2025, increased by **11%** to **$13.7 million**, primarily due to a strategic focus on more favorable markets and a **$2.4 million** (**841%**) increase in net revenue from intra-group services arrangements[148](index=148&type=chunk)[150](index=150&type=chunk) - Advertising and promotions expenses for the six months ended June 30, 2025, increased by **$2.0 million** to **$5.9 million** compared to the prior year, attributed to increased marketing spend utilizing funds from the initial public offering[167](index=167&type=chunk)[168](index=168&type=chunk) - Loss from operations for Q2 2025 improved to **$502 thousand** from **$1.5 million** in Q2 2024, attributed to an updated marketing strategy and better cost management[175](index=175&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity challenges, with cash and cash equivalents at $2.7 million as of June 30, 2025, an accumulated deficit of $31.0 million, and negative working capital of $5.0 million. Net cash used in operations for the first six months of 2025 was $4.4 million. The independent auditor's report includes a 'going concern' explanatory paragraph, indicating substantial doubt about the company's ability to continue operations without securing additional financing - As of June 30, 2025, the company had **$2.7 million** in cash and cash equivalents, an accumulated deficit of **$31.0 million**, and negative working capital of **$5.0 million**[186](index=186&type=chunk) - The independent auditor's report for fiscal year 2023 included a 'going concern' paragraph, expressing **substantial doubt** about the company's ability to continue[188](index=188&type=chunk) Cash Flow Summary (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,448) | $(1,130) | | Net cash used in investing activities | $(296) | $(242) | | Net cash (used in) provided by financing activities | $(90) | $337 | [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, High Roller Technologies, Inc. is not required to provide the information for this item - The company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[211](index=211&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that as of June 30, 2025, the company's disclosure controls and procedures were not effective. This is due to a previously identified material weakness in internal control over financial reporting related to the company's internal ability to prepare consolidated financial statements. The company is implementing a remediation plan, which includes expanding its financial and accounting staff and retaining outside consultants, a process expected to continue through 2025 - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were **not effective** at a reasonable assurance level[212](index=212&type=chunk) - The ineffectiveness is due to a material weakness in internal control over financial reporting, specifically related to the internal ability to prepare consolidated financial statements[212](index=212&type=chunk)[217](index=217&type=chunk) - Remediation measures are underway, including hiring a CFO, Controller, and other staff, and retaining outside consultants. The process is expected to continue through 2025[214](index=214&type=chunk)[217](index=217&type=chunk) PART II – Other Information [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to legal claims in the normal course of business. Specifically, its subsidiary, Ellmount Entertainment, Ltd., has pending litigation in Austria and Germany related to player claims and legal fees. The company has made provisions for these claims and is not currently targeting these markets - The company's subsidiary, Ellmount Entertainment, Ltd., has pending litigation in Austria and Germany concerning player claims and associated legal fees[220](index=220&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) A material new risk factor has emerged. On June 4, 2025, the company was notified by NYSE American LLC that it is no longer in compliance with the exchange's continued listing standards due to its stockholders' equity falling below the required $4 million threshold. The company has submitted a compliance plan, but there is no assurance it will be accepted or that compliance will be regained, which could lead to the delisting of its securities - On June 4, 2025, the company was notified by NYSE American LLC of non-compliance with continued listing standards because its stockholders' equity of approximately **$2.8 million** was below the required **$4 million** minimum[223](index=223&type=chunk) - The company has submitted a plan to regain compliance by December 4, 2026, but if the plan is not accepted or if compliance is not achieved, the company's stock will be subject to **delisting** procedures[223](index=223&type=chunk) - Potential **delisting** could negatively impact the stock's liquidity and market price, and hinder the company's ability to raise equity financing[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - **None**[225](index=225&type=chunk) [Item 3. Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - **None**[228](index=228&type=chunk) [Item 4. Mine Safety Disclosure](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - **Not applicable**[229](index=229&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) During the last fiscal quarter, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the last fiscal quarter[230](index=230&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and Inline XBRL documents ```