Executive Summary [**Operational Highlights**](index=1&type=section&id=Operational_Highlights) Empery Digital initiated a Bitcoin treasury strategy, raising over $481 million in net proceeds and acquiring 4,026.71 BTC. The company also increased its ATM program capacity by $1 billion and approved a $100 million share repurchase program. New digital platforms were launched for enhanced communication, while the mobility business continues to evaluate the impact of tariffs. - Adopted **BTC** treasury strategy as of July 17, 2025, aiming to be a leading, low-cost, capital-efficient **BTC** aggregator[2](index=2&type=chunk) Capital Raising & BTC Acquisition | Item | Details | | :--- | :--- | | Private Placement Net Proceeds | **~$481 million** | | BTC Acquired | **4,026.71 BTC** | | Aggregate BTC Purchase Price | **~$473 million** | | Average BTC Purchase Price | **$117,546** per BTC | | ATM Program Increase | **$1 billion** (added to existing **$90 million**) | | Share Repurchase Program | **$100 million** approved | - Launched EmperyDigital.com with real-time portfolio metrics and various social media accounts to expand company communications[5](index=5&type=chunk)[6](index=6&type=chunk) - Continuing to evaluate the impact of tariffs on mobility products, with potential for modest margin reduction and increased retail pricing due to a **20%** Vietnam tariff rate[6](index=6&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [**Financial Highlights**](index=2&type=section&id=Financial_Highlights) For Q2 2025, revenue was $0.7 million, consistent with Q1 2025 but down from Q4 2024. The company reported a net loss of $3.9 million, an increase from Q1 2025 but an improvement from Q4 2024. Cash used in operations remained generally consistent across periods. Q2 2025 Key Financials (vs. prior quarters) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Revenue | **$702,936** | **$736,049** | **$986,916** | | Gross Margin | **$(148,540)** | **$(45,334)** | **$(2,151,643)** | | Net Loss | **$(3,899,897)** | **$(2,460,430)** | **$(5,217,369)** | | Cash used in operations | **$(3,718,211)** | **$(3,512,713)** | **$(3,765,549)** | - Gross margin is trending close to break-even, excluding significant Q4 2024 adjustments related to supply agreement terminations and inventory write-downs[10](index=10&type=chunk) Company Highlights & Strategic Initiatives [**Bitcoin Treasury Strategy Adoption**](index=1&type=section&id=Bitcoin_Treasury_Strategy_Adoption) Empery Digital officially adopted a Bitcoin treasury strategy on July 17, 2025, aiming to become a leading, low-cost, capital-efficient, globally trusted aggregator of Bitcoin. This marks a significant strategic shift for the company, formerly known as Volcon. - Strategy adopted July 17, 2025, with the goal of becoming a leading, low-cost, capital-efficient, globally trusted aggregator of **BTC**[2](index=2&type=chunk)[13](index=13&type=chunk) Initial BTC Acquisition Details | Metric | Value | | :--- | :--- | | BTC Acquired | **4,026.71 BTC** | | Aggregate Purchase Price | **~$473 million** | | Average Purchase Price per BTC | **$117,546** | [**Capital Raising and Shareholder Programs**](index=1&type=section&id=Capital_Raising_and_Shareholder_Programs) The company completed private placements, raising approximately $481 million in net cash proceeds. It also significantly increased its At-The-Market (ATM) issuance sales agreement capacity by $1 billion and approved a $100 million common stock repurchase program. Capital Raising & Shareholder Programs | Activity | Details | | :--- | :--- | | Private Placements (July 21, 2025) | **44,414,189** common shares + **5,728,662** pre-funded warrants | | Net Cash Proceeds from Private Placements | **~$481 million** | | ATM Program Increase | **$1 billion** (added to existing **$90 million**) | | Common Stock Repurchase Program | **$100 million** approved | - In Q2 2025, **$0.1 million** was used to purchase shares under the repurchase program. Q1 2025 financing activities included **$8.8 million** net from **ATM** sales and **$10.7 million** net from a public offering, offset by **$0.4 million** for share repurchases[15](index=15&type=chunk) [**Digital Communication and Investor Engagement**](index=1&type=section&id=Digital_Communication_and_Investor_Engagement) Empery Digital launched a new website, EmperyDigital.com, featuring a real-time treasury dashboard for BTC holdings and valuation metrics. The company also established various social media accounts to provide updates and engage with the blockchain ecosystem, intending these channels for material disclosures under Regulation FD. - Launched EmperyDigital.com with real-time portfolio metrics and a treasury dashboard[5](index=5&type=chunk)[6](index=6&type=chunk) - Established social media accounts (X, Instagram, YouTube) for updates on **BTC** treasury strategy and blockchain ecosystem insights[5](index=5&type=chunk)[6](index=6&type=chunk) - These channels are intended for broad, non-exclusionary distribution of information, including material disclosures under Regulation **FD**[7](index=7&type=chunk) [**Mobility Business and Tariff Impact**](index=2&type=section&id=Mobility_Business_and_Tariff_Impact) The company's original business, Empery Mobility (formerly Volcon), continues to be impacted by U.S. tariffs on imports from countries like China and Vietnam. Management is evaluating strategic alternatives, including U.S. assembly, shifting production, or adjusting selling prices to mitigate the impact on margins. - U.S. imposed reciprocal tariffs on imports from China and Vietnam starting April 2, 2025, with a **10%** baseline[8](index=8&type=chunk) - Expected Vietnam tariff rate of **20%** could lead to modest margin reduction and increased retail pricing for mobility products[9](index=9&type=chunk) - Company is evaluating strategic alternatives: U.S. assembly, shifting production, or adjusting selling prices to offset elevated import costs[9](index=9&type=chunk) - Empery Mobility continues to operate as the powersports brand, sourcing high-quality and sustainable electric vehicles[13](index=13&type=chunk) Second Quarter 2025 Financial Performance [**Statement of Operations Analysis**](index=2&type=section&id=Statement_of_Operations_Analysis) Empery Digital reported Q2 2025 revenue of $0.7 million, consistent with Q1 2025 but a decrease from Q4 2024. The gross margin remained negative, though significantly improved from Q4 2024 due to the absence of large one-time charges. Net loss for Q2 2025 was $3.9 million, an increase from Q1 2025, primarily due to higher general and administrative costs. Revenue & Gross Margin Trends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Revenue | **$702,936** | **$736,049** | **$986,916** | | Cost of Goods Sold | **$(851,476)** | **$(781,383)** | **$(3,138,559)** | | Gross Margin | **$(148,540)** | **$(45,334)** | **$(2,151,643)** | - Q2 2025 revenue breakdown: Brats (**$0.2M**), HF1s (**$0.3M**), MN1-Adventurers (**$0.1M**), and MN1-Tradesman (**$0.1M**)[10](index=10&type=chunk) - Q4 2024 Cost of Goods Sold included a **$2.5M** charge for supply agreement terminations and a **$0.3M** write-down of finished goods, offset by a **$0.7M** settlement reduction. Excluding these, gross margin is near break-even[10](index=10&type=chunk) Operating Expenses & Net Loss Trends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Sales & Marketing | **$622,772** | **$510,957** | **$774,026** | | Product Development | **$221,159** | **$388,523** | **$519,483** | | General & Administrative | **$2,879,335** | **$1,561,657** | **$1,660,627** | | Total Operating Expenses | **$3,723,266** | **$2,461,137** | **$2,954,136** | | Loss from Operations | **$(3,871,806)** | **$(2,506,471)** | **$(5,105,779)** | | Net Loss | **$(3,899,897)** | **$(2,460,430)** | **$(5,217,369)** | - General & Administrative costs increased by **~$1.3M** in Q2 2025, primarily due to **$1.1M** in share-based compensation for CEO/CFO stock options and **$0.1M** for the annual stockholders meeting and reverse stock split costs[14](index=14&type=chunk) - Product development costs continued to decline in Q2 2025 due to no longer developing vehicles, reducing prototype and payroll costs[14](index=14&type=chunk) [**Statement of Cash Flows Analysis**](index=3&type=section&id=Statement_of_Cash_Flows_Analysis) Cash used in operations remained generally consistent across all periods presented. Cash used in investing activities significantly increased in Q2 2025 due to the purchase of a $2 million certificate of deposit. Financing activities in Q2 2025 primarily involved cash used for share repurchases, contrasting with significant cash provided by financing in Q1 2025 from stock sales. Cash Flow Trends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Cash used in operations | **$(3,718,211)** | **$(3,512,713)** | **$(3,765,549)** | | Cash used in investing activities | **$(1,943,911)** | **$(261,016)** | **$(31,668)** | | Cash (used in) provided by financing activities | **$(111,812)** | **$19,147,118** | **$183,159** | | Net change in cash and restricted cash | **$(5,773,934)** | **$15,373,389** | **$(3,614,058)** | | Cash at end of period | **$11,898,028** | **$17,671,962** | **$2,298,573** | - Cash used in investing activities in Q2 2025 includes a **$2 million** certificate of deposit for dealer floor plan financing collateral[15](index=15&type=chunk) - Q1 2025 financing activities included **$8.8 million** net from **ATM** sales and **$10.7 million** net from a public offering, offset by **$0.4 million** for share repurchases[15](index=15&type=chunk) About Empery Digital Inc. [**Company Overview and Strategic Shift**](index=3&type=section&id=Company_Overview_and_Strategic_Shift) Empery Digital Inc., formerly Volcon, has transitioned its core strategy to a Bitcoin treasury model, aiming to be a leading Bitcoin aggregator. Concurrently, it continues to operate its original business under the Empery Mobility brand, focusing on all-electric, off-road powersports vehicles. - Company adopted a **Bitcoin** treasury strategy as of July 17, 2025, with the goal of becoming a leading, low-cost, capital-efficient, globally trusted aggregator of **Bitcoin**[13](index=13&type=chunk) - Formerly Volcon, the company was founded as the first all-electric powersports company[13](index=13&type=chunk) - The powersports brand now operates under "Empery Mobility," focusing on high-quality, sustainable electric vehicles for the outdoor community[13](index=13&type=chunk) Forward-Looking Statements and Risk Factors [**Forward-Looking Statements and Associated Risks**](index=4&type=section&id=Forward-Looking_Statements_and_Associated_Risks) The report contains forward-looking statements regarding the execution of the BTC treasury strategy, ATM utilization, share repurchases, tariff impacts, and cost reduction efforts. These statements are subject to various risks and uncertainties, including market conditions, Bitcoin price volatility, increased competition, and regulatory uncertainties regarding digital assets. - Forward-looking statements cover **BTC** treasury strategy execution, **ATM** utilization, common stock repurchases, tariff changes, and cost reduction[16](index=16&type=chunk) - Risks include changes in business, market, financial, political, and regulatory conditions; high volatility of **Bitcoin** price; correlation of stock price to digital asset prices; increased competition; and legal/regulatory uncertainty for digital assets[16](index=16&type=chunk) - Investors are cautioned not to place considerable reliance on forward-looking statements and are encouraged to review **SEC** filings for a discussion of risks[17](index=17&type=chunk) Investor Relations and Company Contacts [**Investor Information and Communication Channels**](index=3&type=section&id=Investor_Information_and_Communication_Channels) Empery Digital provides various contact channels for media, dealers, investors, marketing, and digital inquiries. Investor information, including press releases and SEC filings, is available on its investor relations website. - Investor information, press releases, and **SEC** filings are available at http://ir.emperydigital.com[12](index=12&type=chunk) - Contact information provided for Media, Dealers, Investors, Marketing, and Digital inquiries[16](index=16&type=chunk) - Company website www.emperydigital.com offers treasury dashboard and vehicle line-up information[16](index=16&type=chunk)

[Form 8-K Filing Details](index=1&type=section&id=Form%208-K%20Filing%20Details) This section details the administrative information of the Form 8-K filing, including registrant identification and securities registration [Registrant Information and Filing Context](index=1&type=section&id=Registrant%20Information%20and%20Filing%20Context) This section outlines the registrant's identification, report date, registered securities, and emerging growth company status for the Form 8-K filing - The report date is **August 12, 2025**, filed by Autolus Therapeutics plc[1](index=1&type=chunk) Registered Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :---------------------------------------------------------- | :---------------- | :---------------------------------------- | | American Depositary Shares, each representing one ordinary share, nominal value $0.000042 per share | AUTL | The Nasdaq Global Select Market | | Ordinary shares, nominal value $0.000042 per share* | * | The Nasdaq Stock Market LLC* | - The registrant is **not indicated as an emerging growth company**[4](index=4&type=chunk) [Item 2.02 Results of Operations and Financial Conditions](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Conditions) This item reports Autolus Therapeutics plc's financial results for the quarter ended June 30, 2025, and a corporate update announced via press release - On **August 12, 2025**, Autolus Therapeutics plc announced its financial results for the quarter ended **June 30, 2025**, and provided a corporate update[5](index=5&type=chunk) - A copy of the press release is furnished as **Exhibit 99.1** and incorporated by reference[5](index=5&type=chunk) - This information is furnished, not deemed 'filed' for Section 18 of the Exchange Act, and not incorporated by reference in other filings unless expressly set forth[6](index=6&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) This item discloses the use of an updated corporate presentation for the company's Q2 2025 results conference call - The Company will utilize an updated corporate presentation during its conference call on **August 12, 2025**, to discuss **Q2 2025** results[7](index=7&type=chunk) - A copy of the corporate presentation is furnished as **Exhibit 99.2** to this Current Report on Form 8-K[7](index=7&type=chunk) - Similar to Item 2.02, this information is furnished and not deemed 'filed' for Section 18 of the Exchange Act[8](index=8&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K filing, including the referenced press release and corporate presentation Exhibits | Exhibit No. | Description of Exhibit | | :------------ | :-------------------------------------- | | 99.1 | Press release dated August 12, 2025 | | 99.2 | Corporate Presentation dated August 12, 2025 | | 104 | Cover Page Interactive Date File (embedded within the Inline XBRL document) | [Signatures](index=3&type=section&id=SIGNATURES) This section contains the official signature confirming the due authorization and submission of the report - The report was signed by **Christian Itin, Ph.D., Chief Executive Officer** of Autolus Therapeutics plc, on **August 12, 2025**[12](index=12&type=chunk)

"I am pleased to report that we have successfully completed production of the first phase of a major initial order from one of the largest U.S.-based multinational and omnichannel retailers, through our strategic collaboration with Hansoll Textile. Shipments are scheduled to begin in September and continue through February 2026. We continue to seek further collaborations that create mutual value and strengthen long-term partnerships. "As previously announced, the expansion of our existing manufacturing faci ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents Hour Loop, Inc.'s unaudited consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2025 [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Hour Loop's unaudited consolidated financial statements, including balance sheets, income statements, equity, and cash flows, with detailed accounting notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of Hour Loop's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Total Assets | $22,960,533 | $19,966,964 | | Total Liabilities | $15,797,869 | $14,807,222 | | Total Stockholders' Equity | $7,162,664 | $5,159,742 | | Cash | $325,354 | $2,119,581 | | Inventory, net | $20,940,746 | $14,640,632 | [Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section outlines Hour Loop's financial performance, presenting revenues, net income, and earnings per share for the three and six months ended June 30, 2025 and 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues, net | $27,103,106 | $28,070,707 | $52,940,196 | $52,751,829 | | Net income | $1,177,001 | $649,150 | $1,831,518 | $1,714,964 | | Basic and diluted income per share | $0.04 | $0.02 | $0.06 | $0.05 | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in Hour Loop's stockholders' equity, including common stock and retained earnings, for the periods ended June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Common Stock Shares Outstanding | 35,160,190 | 35,143,460 | | Total Stockholders' Equity | $7,162,664 | $5,159,742 | - The company issued **8,750 shares** of common stock during the three months ended June 30, 2025, contributing **$15,001** to additional paid-in capital[13](index=13&type=chunk) - Net income for the three months ended June 30, 2025, was **$1,177,001**, increasing retained earnings[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Hour Loop's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(925,430) | $949,175 | | Net cash used in investing activities | $(801) | $(34,593) | | Net cash used in financing activities | $(839,000) | $-0- | | Net change in cash | $(1,794,227) | $862,744 | | Cash at end of the period | $325,354 | $3,346,897 | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations of Hour Loop's business operations, significant accounting policies, and specific financial statement line items, including inventory, leases, and income taxes [NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%201%20-%20Nature%20of%20Operations%20and%20Summary%20of%20Significant%20Accounting%20Policies) Hour Loop operates as a technology-enabled consumer products company primarily through online retail, with significant reliance on Amazon, detailing its accounting policies and business nature - Hour Loop, Inc. is a technology-enabled consumer products company operating predominantly through online retail channels such as Amazon, Walmart, and Hourloop.com, with a single e-commerce segment[19](index=19&type=chunk) - Approximately **99%** of the Company's revenue for the six months ended June 30, 2025 and 2024, was generated through the Amazon sales platform[56](index=56&type=chunk) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Sales returns rate (of gross sales) | 6.92% | 5.94% | | Shipping and handling costs | $11,659,356 | $11,886,764 | | Advertising and promotion expenses | $964,824 | $1,953,155 | [NOTE 2 - Recent Accounting Pronouncements Adopted](index=14&type=section&id=NOTE%202%20-%20Recent%20Accounting%20Pronouncements%20Adopted) Hour Loop adopted ASU 2023-07 for segment disclosures and will adopt ASU 2023-09 for income tax disclosures in 2025, with no material financial impact expected - The Company adopted ASU 2023-07 on Improvements to Reportable Segment Disclosures beginning with interim periods in the fiscal year starting January 1, 2025, with no material impact expected on consolidated financial statements[63](index=63&type=chunk) - The Company will adopt ASU 2023-09 on Improvements to Income Tax Disclosures in fiscal year 2025 and is currently assessing the disclosure impact, with no material impact expected on results of operations, cash flows, and financial condition at the time of adoption[64](index=64&type=chunk) [NOTE 3 - Inventory](index=14&type=section&id=NOTE%203%20-%20Inventory) Inventory, primarily finished goods, is valued at the lower of cost or net realizable value, with an allowance for obsolete and slow-moving items | Inventory Component | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :------------------ | | Inventory | $17,097,686 | $12,716,062 | | Inventory-in-transit | $4,259,256 | $2,484,863 | | Allowance | $(416,196) | $(560,293) | | **Total Inventory** | **$20,940,746** | **$14,640,632** | - The inventory allowance decreased from **$560,293** as of December 31, 2024, to **$416,196** as of June 30, 2025[65](index=65&type=chunk) [NOTE 4 - Prepaid Expenses and Other Current Assets](index=15&type=section&id=NOTE%204%20-%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets significantly increased, mainly due to higher advances to suppliers and other prepaid items | Asset Category | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :------------------ | | Advance to suppliers | $231,572 | $71,934 | | Prepaid expenses-insurance | $22,500 | $2,174 | | Prepaid expenses-other | $92,300 | $33,501 | | Lease refundable deposit | $70,212 | $49,939 | | Tax receivable | $95,925 | $157,538 | | Other current assets | $12,778 | $12,808 | | **Total** | **$525,287** | **$327,894** | [NOTE 5 - Property and Equipment](index=15&type=section&id=NOTE%205%20-%20Property%20and%20Equipment) Net property and equipment decreased due to depreciation, with lower depreciation expenses recorded for the six months ended June 30, 2025 | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Property and equipment, gross | $427,280 | $381,067 | | Accumulated depreciation and amortization | $(386,706) | $(324,270) | | **Total property and equipment, net** | **$40,574** | **$56,797** | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Purchases of property and equipment | $801 | $34,593 | | Depreciation expense | $23,517 | $70,920 | [NOTE 6 - Accounts Payable and Credit Cards Payable](index=15&type=section&id=NOTE%206%20-%20Accounts%20Payable%20and%20Credit%20Cards%20Payable) Accounts payable significantly increased, while credit cards payable decreased, indicating shifts in operational liabilities and payment timing | Liability Category | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :------------------ | | Accounts payable | $8,584,090 | $4,176,305 | | Credit cards payable | $2,980,539 | $3,389,880 | [NOTE 7 - Short-Term Loan](index=16&type=section&id=NOTE%207%20-%20Short-Term%20Loan) Flywheel's line of credit with Taishin International Bank was extended to November 2025 at 3.33% interest, with an increased outstanding balance - The line of credit with Taishin International Bank has an annual interest rate of **3.33%** and was extended to mature on November 19, 2025[75](index=75&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :------------------ | | Outstanding balance | $683,760 | $610,967 | [NOTE 8 - Accrued Expenses and Other Current Liabilities](index=16&type=section&id=NOTE%208%20-%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Total accrued expenses and other current liabilities significantly decreased, mainly due to the elimination of refund liability and reduced accrued bonuses | Liability Category | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :------------------ | | Refund liability | $-0- | $766,721 | | Accrued payroll | $332,820 | $302,685 | | Accrued bonus | $102,564 | $963,800 | | Accrued expenses | $195,311 | $255,154 | | Accrued interest | $80,491 | $-0- | | Other payables | $21,181 | $34,175 | | **Total** | **$732,367** | **$2,322,535** | [NOTE 9 - Leases](index=16&type=section&id=NOTE%209%20-%20Leases) Hour Loop holds two operating leases for Taiwan office space, with increased right-of-use assets, liabilities, amortization, and lease payments | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Operating lease right-of-use assets | $137,465 | $111,409 | | Operating lease liabilities-current | $75,897 | $114,540 | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Amortization of operating lease right-of-use asset | $122,018 | $98,773 | | Lease payments | $125,712 | $92,899 | | Future Minimum Lease Payments | Amount | | :---------------------------- | :----- | | 2025 | $42,003 | | 2026 | $70,330 | | 2027 | $29,304 | | Total minimum lease payments | $141,637 | [NOTE 10 - Related Party Balances and Transactions](index=17&type=section&id=NOTE%2010%20-%20Related%20Party%20Balances%20and%20Transactions) Amounts due to related parties decreased due to repayments, and affiliated stockholder loans were extended to December 2025 at 5.5% interest | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------------ | | Due to related parties | $2,660,418 | $4,192,995 | - The company made repayments to related parties totaling **$1,532,577** for the six months ended June 30, 2025, which included **$839,000** in principal and **$693,577** in bonus[87](index=87&type=chunk) - The affiliated loan from stockholders bears an annual interest rate of **5.5%** and was extended to mature on December 31, 2025[86](index=86&type=chunk) [NOTE 11 - Disaggregation of Revenue](index=17&type=section&id=NOTE%2011%20-%20Disaggregation%20of%20Revenue) Revenue disaggregation shows slight six-month net revenue growth driven by U.S. and International sales, despite increased returns, while three-month net revenue decreased | Revenue Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue-U.S. | $28,308,512 | $29,285,554 | $54,911,059 | $54,745,245 | | Revenue-International | $1,138,830 | $889,278 | $2,090,269 | $1,758,973 | | Sales returns | $(2,198,454) | $(1,912,838) | $(3,966,013) | $(3,375,923) | | Discounts | $(183,149) | $(399,991) | $(434,740) | $(705,726) | | **Total** | **$27,103,106** | **$28,070,707** | **$52,940,196** | **$52,751,829** | [NOTE 12 - Income Tax](index=18&type=section&id=NOTE%2012%20-%20Income%20Tax) Total income tax expense and effective tax rate decreased for the six months, with a reduction in federal and state deferred tax assets and recognition of foreign deferred tax assets | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | | Total tax expense | $687,099 | $717,886 | | Effective Tax Rate | 27.28% | 29.51% | | Deferred Tax Assets Summary | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Federal | $435,417 | $908,691 | | State | $58,271 | $151,413 | | Foreign (non-U.S.) | $19,464 | $-0- | | **Total** | **$513,152** | **$1,060,104** | - As of June 30, 2025, the Company recognized deferred tax assets of **$19,464** primarily related to deductible temporary differences at its foreign subsidiaries[93](index=93&type=chunk) [NOTE 13 - Stockholders' Equity](index=19&type=section&id=NOTE%2013%20-%20Stockholders'%20Equity) Common stock outstanding increased slightly due to shares issued as stock-based compensation to executives and directors in 2024 and 2025 | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Common Stock Shares Outstanding | 35,160,190 | 35,143,460 | - The company issued **1,596 shares** of common stock on January 2, 2025, and **1,750 shares** on April 1, 2025, as stock-based compensation to executives and directors[100](index=100&type=chunk)[101](index=101&type=chunk) [NOTE 14 - Commitments and Contingencies](index=20&type=section&id=NOTE%2014%20-%20Commitments%20and%20Contingencies) As of June 30, 2025, Hour Loop had no material commitments or pending legal proceedings requiring financial statement accrual - The Company had no material or significant commitments outstanding as of June 30, 2025, and December 31, 2024[102](index=102&type=chunk) - No pending legal proceedings were identified that would require accrual in the unaudited consolidated financial statements as of June 30, 2025, and December 31, 2024[103](index=103&type=chunk) [NOTE 15 - Subsequent Events](index=20&type=section&id=NOTE%2015%20-%20Subsequent%20Events) On July 2, 2025, Hour Loop issued **2,275 shares** of common stock to five executives/directors as compensation for services - On July 2, 2025, the Company issued **2,275 shares** of common stock to each of Sam Lai, Maggie Yu, Michael Lenner, Alan Gao, and Hillary Bui as compensation for their services[104](index=104&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Hour Loop's financial performance, condition, e-commerce model, market opportunities, competitive advantages, and responses to external factors for the periods ended June 30, 2025 [Overview](index=21&type=section&id=Overview) Hour Loop, an online retailer primarily on Amazon, leverages a wholesale model, operational advantages, and proprietary software, while proactively managing tariff impacts [Our Business](index=21&type=section&id=Our%20Business) Hour Loop operates as a U.S. online retailer, primarily on Amazon and Walmart, managing over **100,000 SKUs** across diverse categories, with plans for expansion - Hour Loop operates as an online retailer in the U.S. market, primarily as a third-party seller on Amazon.com since 2013 and Walmart.com since 2020[110](index=110&type=chunk) - The company manages over **100,000 Stock-Keeping Units (SKUs)** across categories including home/garden décor, toys, kitchenware, apparel, and electronics[110](index=110&type=chunk) [Business Model](index=21&type=section&id=Business%20Model) Hour Loop utilizes a wholesale reselling model on Amazon, buying products in bulk for resale, offering advantages in scalability and brand presence - Hour Loop's business model is wholesale (reselling), involving buying products in bulk directly from brands or manufacturers at wholesale prices and selling them on Amazon[111](index=111&type=chunk) - Advantages of the wholesale model include purchasing lower unit quantities, easier scalability compared to retail arbitrage, and the ability to provide broader Amazon presence for brands[112](index=112&type=chunk) [Market Description/Opportunities](index=22&type=section&id=Market%20Description/Opportunities) The U.S. retail market reached **$7.42 trillion** in 2024, with e-commerce at **16.07%** of sales, and Amazon dominating **40%** of U.S. e-commerce | Metric | 2024 | 2023 | | :--------------------------------- | :----------- | :----------- | | Total U.S. retail sales | $7.42 trillion | $7.24 trillion | | Online spending with U.S. merchants | $1,192.29 billion | - | | E-commerce % of total U.S. retail sales | 16.07% | 15.45% | - Amazon accounts for approximately **40%** of all e-commerce in the United States[114](index=114&type=chunk) [Formation](index=22&type=section&id=Formation) Founded in 2013, Hour Loop achieved significant sales growth by 2024, incorporated in Washington, established a Taiwan subsidiary, and converted to a Delaware corporation - Hour Loop was founded in 2013 by Sam Lai and Maggie Yu, with sales growing from **$0** in 2013 to **$138,252,861** in 2024[115](index=115&type=chunk) - The company formed Flywheel Consulting Ltd., a wholly-owned subsidiary in Taiwan, in 2019 to provide exclusive business operating consulting services[116](index=116&type=chunk) [Competitive Advantage](index=22&type=section&id=Competitive%20Advantage) Hour Loop's competitive advantages include strong operations and sales teams, complemented by proprietary software that optimizes operations and inventory management - The Company's competitive advantages include strong operations and sales teams experienced in listing, shipment, advertising, reconciliation, and sales[120](index=120&type=chunk) - A proprietary software system provides an advantage by collecting and processing large amounts of data daily to optimize operations and sales, identifying product gaps and ensuring year-round stock[120](index=120&type=chunk) [Tariff Impact and Response Measures](index=22&type=section&id=Tariff%20Impact%20and%20Response%20Measures) Hour Loop responded to tariffs by expanding domestic inventory coverage, strategically front-loading China exports during a relief window, and implementing price increases to manage costs - In response to tariff increases, the Company expanded its domestic inventory procurement policy to keep inventory coverage from **1.5-2 months** to **3-6 months** as of April 2025[118](index=118&type=chunk)[121](index=121&type=chunk) - The Company initially suspended containerized exports from China but resumed and front-loaded 2025 sales-related inventory during a 90-day tariff relief window to avoid elevated duties[122](index=122&type=chunk) - Measured price increases were implemented on select finished goods inventory to offset increased input costs and reduce the risk of stockouts, successfully securing adequate inventory for 2025 sales projections[123](index=123&type=chunk)[124](index=124&type=chunk) [Our Financial Position](index=23&type=section&id=Our%20Financial%20Position) For Q2 2025, Hour Loop reported **$27.1 million** net revenues and **$1.18 million** net income, with **$901,539** cash used in operations; six-month figures were **$52.9 million** net revenues and **$1.83 million** net income | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net revenues | $27,103,106 | $28,070,707 | | Net income | $1,177,001 | $649,150 | | Cash flow (used in) provided by operating activities | $(901,539) | $456,232 | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net revenues | $52,940,196 | $52,751,829 | | Net income | $1,831,518 | $1,714,964 | | Cash flow (used in) provided by operating activities | $(925,430) | $949,175 | - As of June 30, 2025, the company had retained earnings of **$1,236,343**[127](index=127&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Three-month revenues decreased by **3.45%** but net income rose by **81.3%** due to margin focus; six-month revenues increased by **0.36%** and net income by **6.8%** from growth and expense reductions [For the three months ended June 30, 2025 compared to the three months ended June 30, 2024](index=24&type=section&id=For%20the%20three%20months%20ended%20June%2030,%202025%20compared%20to%20the%20three%20months%20ended%20June%2030,%202024) Three-month revenues decreased by **3.45%** to **$27.1 million** due to a margin expansion strategy, yet net income increased by **81.3%** from reduced operating expenses | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Revenues, net | $27,103,106 | $28,070,707 | $(967,601) | -3.45% | | Total orders | 1,253,975 | 1,268,890 | (14,915) | -1.18% | | Net income | $1,177,001 | $649,150 | $527,851 | 81.3% | | Operating expenses | $13,876,501 | $14,688,214 | $(811,713) | -5.53% | - The decrease in revenues and orders was attributed to the Company's strategic shift toward prioritizing margin expansion in response to ongoing tariff uncertainties[130](index=130&type=chunk) - The decrease in operating expenses was caused by an increase in reimbursements paid by Amazon, reflecting enhanced recovery for lost shipments[132](index=132&type=chunk) [For the six months ended June 30, 2025 compared to the six months ended June 30, 2024](index=24&type=section&id=For%20the%20six%20months%20ended%20June%2030,%202025%20compared%20to%20the%20six%20months%20ended%20June%2030,%202024) Six-month revenues increased by **0.36%** to **$52.9 million** and net income by **6.8%**, driven by order growth, reduced operating expenses, and lower interest payments | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Revenues, net | $52,940,196 | $52,751,829 | $188,367 | 0.36% | | Total orders | 2,483,767 | 2,392,094 | 91,673 | 3.83% | | Net income | $1,831,518 | $1,714,964 | $116,554 | 6.8% | | Operating expenses | $27,100,934 | $27,602,248 | $(501,314) | -1.82% | | Other expenses, net | $23,099 | $42,518 | $(19,419) | -45.67% | - The increase in revenues was attributed to continued growth and maturity in the operating model, despite an overall e-commerce traffic slowdown and intense competition[135](index=135&type=chunk) - The decrease in other expenses, net, was due to the repayment of part of the loans from stockholders, leading to a reduction in interest expenses[138](index=138&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Hour Loop's cash balance decreased due to increased cash used in operating and financing activities, relying on revenues, debt, and equity for liquidity, with existing contractual obligations | Metric | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------ | | Cash at end of the period | $325,354 | $3,346,897 | - Primary uses of cash include inventory, payments to Amazon for sales and shipping, marketing and advertising, and employee salaries[141](index=141&type=chunk) - Liquidity is generated from ongoing business revenues, and from debt and equity issuances[142](index=142&type=chunk) [Net Cash Used in Operating Activities](index=26&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) Cash used in operating activities for the six months ended June 30, 2025, totaled **$925,430**, a significant increase in outflow driven by inventory purchases | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(925,430) | $949,175 | - The **$1,874,605** increase in cash used in operating activities was primarily driven by an increase in inventory purchases[144](index=144&type=chunk) [Net Cash Used in Investing Activities](index=26&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) Cash used in investing activities significantly decreased to **$801** for the six months ended June 30, 2025, reflecting lower property and equipment purchases | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in investing activities | $(801) | $(34,593) | - The decrease in cash used in investing activities primarily reflects lower purchases of property and equipment[145](index=145&type=chunk) [Net Cash Used in Financing Activities](index=26&type=section&id=Net%20Cash%20Used%20in%20Financing%20Activities) Cash used in financing activities totaled **$839,000** for the six months ended June 30, 2025, primarily due to repayments to related parties | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in financing activities | $(839,000) | $-0- | - The increase in cash outflows from financing activities was primarily due to repayments made to related parties[146](index=146&type=chunk) [Off-balance sheet financing arrangements](index=26&type=section&id=Off-balance%20sheet%20financing%20arrangements) Hour Loop has no off-balance sheet arrangements, special purpose entities, guaranteed debts, or non-financial asset purchases - The Company has no obligations, assets, or liabilities considered off-balance sheet arrangements[147](index=147&type=chunk) [Contractual Obligations](index=26&type=section&id=Contractual%20Obligations) Contractual obligations include a **$683,760** line of credit with Taishin International Bank and **$2,660,418** in affiliated stockholder loans, both maturing in 2025 - The Taishin International Bank line of credit has an outstanding balance of **$683,760** as of June 30, 2025, and was extended to mature on November 19, 2025, bearing a **3.33%** annual interest rate[149](index=149&type=chunk)[150](index=150&type=chunk) - As of June 30, 2025, the Company had **$2,660,418** due to related parties from affiliated loans, which were extended to mature on December 31, 2025, with an annual interest rate of **5.5%**[151](index=151&type=chunk)[153](index=153&type=chunk) | Future Minimum Lease Payments | Amount | | :---------------------------- | :----- | | 2025 | $42,003 | | 2026 | $70,330 | | 2027 | $29,304 | | Total minimum lease payments | $141,637 | [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section reiterates Hour Loop's critical accounting policies and estimates, requiring significant management judgment across areas like revenue recognition, inventory, leases, and income taxes - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts, including collectability of accounts receivable, useful life of property and equipment, inventory valuation, and deferred tax assets[156](index=156&type=chunk)[27](index=27&type=chunk) - The Company's revenue recognition follows a five-step model, recognizing revenue when control of the product is transferred to the customer, typically at shipment date[171](index=171&type=chunk)[174](index=174&type=chunk) - The Company has only one operating segment, online retail (e-commerce), and uses the 'management approach' for determining reportable segments[178](index=178&type=chunk)[179](index=179&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Quantitative and qualitative disclosures regarding market risk are not applicable to Hour Loop, Inc - This item is not applicable to Hour Loop, Inc[190](index=190&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Hour Loop's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Interim Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[191](index=191&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[192](index=192&type=chunk) [PART II - OTHER INFORMATION](index=34&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, defaults, and other disclosures for Hour Loop, Inc [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) Hour Loop is involved in ordinary course legal actions, but management is unaware of any pending proceedings that would materially affect its business or financial position - There are no legal proceedings currently pending against Hour Loop, Inc. that management believes would have a material effect on its business, financial position, or results of operations[194](index=194&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Hour Loop is not required to update risk factors in this quarterly report, referring readers to its 2024 Annual Report on Form 10-K - As a smaller reporting company, Hour Loop is not required to disclose material changes to risk factors in this Quarterly Report on Form 10-Q[195](index=195&type=chunk) - Readers are referred to the Annual Report on Form 10-K for the year ended December 31, 2024, for risk factor disclosures[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On July 2, 2025, Hour Loop issued **2,275 shares** of common stock to five executives/directors as compensation, exempt from registration requirements - On July 2, 2025, the Company issued **2,275 shares** of common stock to each of Sam Lai, Maggie Yu, Michael Lenner, Alan Gao, and Hillary Bui as compensation for services[196](index=196&type=chunk) - These shares were issued pursuant to an exemption from the registration requirements of the Securities Act available by Section 4(a)(2)[196](index=196&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There have been no material defaults on senior securities payments during the covered period - There have been no defaults in any material payments during the covered period[197](index=197&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Hour Loop, Inc - This item is not applicable to Hour Loop, Inc[198](index=198&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section confirms no other material information, no changes to director nominee procedures, and no Rule 10b5-1 trading arrangement changes by directors or officers - There have been no material changes to the procedures by which security holders may recommend nominees to the Board of Directors[199](index=199&type=chunk) - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the registrant's last fiscal quarter[200](index=200&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including Rule 13a-14(a) certifications, Section 1350 certifications, and Inline XBRL documents - Exhibits include Rule 13a-14(a) Certifications of Principal Executive Officer and Principal Financial Officer, and Certification Pursuant to 18 U.S.C. Section 1350[201](index=201&type=chunk) - Various Inline XBRL documents (Instance, Schema, Calculation, Definition, Labels, Presentation Linkbases) and the Cover Page Interactive Data File are also listed as exhibits[201](index=201&type=chunk) [Signatures](index=36&type=section&id=Signatures) The report was signed on August 12, 2025, by Sam Lai, serving as Chief Executive Officer, Interim Chief Financial Officer, and principal accounting officer - The report was signed on August 12, 2025, by Sam Lai, Chief Executive Officer and Interim Chief Financial Officer (principal executive officer, principal financial officer, and principal accounting officer)[207](index=207&type=chunk)

PART I: FINANCIAL INFORMATION [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements are presented, highlighting a **$16.5 million** cash balance and going concern doubt Condensed Consolidated Balance Sheet Data (Unaudited) | Indicator | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $16,532,199 | $22,849,885 | | Total current assets | $16,927,210 | $23,576,139 | | Total assets | $17,309,710 | $23,979,493 | | Total current liabilities | $3,167,668 | $3,360,975 | | Total stockholders' equity | $13,414,681 | $19,307,455 | Condensed Consolidated Statements of Operations (Unaudited) | Indicator | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | :--- | :--- | | Grant revenue | $118,111 | $561,574 | $280,574 | $942,143 | | Research and development | $1,912,213 | $2,557,679 | $4,395,279 | $4,158,052 | | General and administrative | $1,593,671 | $1,850,819 | $3,358,650 | $3,780,685 | | Net loss | $(3,238,870) | $(3,470,052) | $(7,171,529) | $(6,280,143) | | Net loss per share | $(0.53) | $(0.58) | $(1.19) | $(1.24) | Condensed Consolidated Statements of Cash Flows (Unaudited, Six Months Ended June 30) | Indicator | 2025 (USD) | 2024 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,761,917) | $(7,577,512) | | Net cash provided by financing activities | $440,728 | $14,688,645 | - The company has concluded that its cash balance of approximately **$16.5 million** as of June 30, 2025, is not sufficient to fund operations for at least twelve months, raising substantial doubt about its ability to continue as a going concern[33](index=33&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analysis of financial condition and operations, noting a **$16.5 million** cash position insufficient for twelve months and raising going concern issues [Overview](index=19&type=section&id=Overview) Aprea focuses on precision oncology with lead candidates APR-1051 and ATRN-119 in Phase 1 trials, anticipating initial data in H2 2025 - The company's primary focus is on its two clinical-stage synthetic lethality product candidates: **APR-1051** (WEE1 inhibitor) and **ATRN-119** (ATR inhibitor)[83](index=83&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Key clinical milestones include the enrollment of the first patient in the ACESOT-1051 (**APR-1051**) Phase 1 study in **Q2 2024** and ongoing enrollment in the ABOYA-119 (**ATRN-119**) Phase 1/2a trial[85](index=85&type=chunk)[86](index=86&type=chunk) - Aprea anticipates releasing open-label safety/efficacy data for both **APR-1051** and **ATRN-119** in the **second half of 2025** and determining the Recommended Phase 2 Dose (RP2D) for both in the **first half of 2026**[85](index=85&type=chunk)[86](index=86&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Net loss decreased to **$3.2 million** for Q2 2025 but increased to **$7.2 million** for the six-month period, due to lower grant revenue and higher R&D Comparison of Operations (Three Months Ended June 30) | Indicator | 2025 (USD) | 2024 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | Grant revenue | $118,111 | $561,574 | $(443,463) | | Research and development | $1,912,213 | $2,557,679 | $(645,466) | | General and administrative | $1,593,671 | $1,850,819 | $(257,148) | | Net loss | $(3,238,870) | $(3,470,052) | $231,182 | Comparison of Operations (Six Months Ended June 30) | Indicator | 2025 (USD) | 2024 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | Grant revenue | $280,574 | $942,143 | $(661,569) | | Research and development | $4,395,279 | $4,158,052 | $237,227 | | General and administrative | $3,358,650 | $3,780,685 | $(422,035) | | Net loss | $(7,171,529) | $(6,280,143) | $(891,386) | - The **$0.2 million** increase in R&D expenses for the six months ended June 30, 2025, was primarily driven by a **$0.5 million** increase in costs for the ABOYA-119 clinical trial for **ATRN-119**, partially offset by a decrease in non-program consulting expenses[121](index=121&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds **$16.5 million** in cash, insufficient for twelve months, raising going concern doubts, despite recent capital raises - The company's cash and cash equivalents were **$16.5 million** as of June 30, 2025, which is not sufficient to fund operations for at least the next twelve months[124](index=124&type=chunk)[136](index=136&type=chunk) - In March 2024, the company raised approximately **$16.0 million** in gross proceeds through a securities purchase agreement involving common stock and warrants[126](index=126&type=chunk) - During the six months ended June 30, 2025, the company sold **243,139 shares** of common stock under its At the Market (ATM) agreement, resulting in net proceeds of approximately **$0.4 million**[129](index=129&type=chunk)[134](index=134&type=chunk) - Net cash used in operating activities decreased to **$6.8 million** for the first six months of 2025, compared to **$7.6 million** for the same period in 2024, primarily due to changes in operating assets and liabilities[131](index=131&type=chunk)[132](index=132&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks include interest rate sensitivity on cash and foreign currency exposure from its Swedish subsidiary, with no derivative use or material inflation impact - The primary market risk is interest income sensitivity on cash and cash equivalents, affected by U.S. interest rate changes[151](index=151&type=chunk) - The company faces foreign currency exchange rate risk from its Swedish subsidiary, Aprea AB, whose functional currency is the Swedish Krona[152](index=152&type=chunk) - The company does not believe that inflation has had a material effect on its business during the six months ended June 30, 2025[154](index=154&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[156](index=156&type=chunk) - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[157](index=157&type=chunk) PART II: OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - As of the reporting date, Aprea Therapeutics is not a party to any material legal proceedings[159](index=159&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) Significant risks include financial instability, high development risks for lead candidates, reliance on third parties, IP challenges, regulatory uncertainty, and stock volatility [Risks Related to Financial Position and Need for Additional Capital](index=46&type=section&id=Risks%20related%20to%20our%20financial%20position%20and%20the%20need%20for%20additional%20capital) Ongoing significant net losses, no commercial revenue, and insufficient cash raise going concern doubts, necessitating substantial additional funding - The company has incurred significant losses since inception, with a net loss of **$7.2 million** for the six months ended June 30, 2025, and an accumulated deficit of **$328.2 million**[172](index=172&type=chunk) - Management has identified conditions that raise substantial doubt about the company's ability to continue as a going concern, as its cash of **$16.5 million** is insufficient to fund operations for the next year[176](index=176&type=chunk)[178](index=178&type=chunk) - The company will need substantial additional funding to continue operations, and if unable to raise capital, it may be forced to delay, reduce, or eliminate its drug development programs[185](index=185&type=chunk)[187](index=187&type=chunk) [Risks Related to Discovery, Development, and Commercialization](index=58&type=section&id=Risks%20related%20to%20the%20discovery%2C%20development%20and%20commercialization%20of%20our%20product%20candidates) Success depends on lead candidates ATRN-119 and APR-1051, facing high development risks, unpredictable trial outcomes, patient enrollment challenges, and intense competition - The company's future success is substantially dependent on its ability to obtain marketing approval for and commercialize its two lead product candidates, **ATRN-119** and **APR-1051**[212](index=212&type=chunk) - There is a high risk of failure, as results from early-stage clinical trials may not be predictive of future results in later, larger studies[216](index=216&type=chunk)[232](index=232&type=chunk) - The company faces substantial competition from major pharmaceutical and biotechnology companies with greater financial resources and expertise in developing and marketing cancer treatments[260](index=260&type=chunk)[261](index=261&type=chunk) [Risks Related to Dependence on Third Parties](index=85&type=section&id=Risks%20related%20to%20our%20dependence%20on%20third%20parties) Aprea relies on third-party CROs for clinical trials and a single manufacturer for API, increasing supply chain risk and reducing direct control - The company relies on third parties like CROs and medical institutions to conduct its clinical trials, which reduces its control over these activities but does not relieve it of its regulatory responsibilities[289](index=289&type=chunk)[290](index=290&type=chunk) - The company is dependent on a single contract manufacturer for the API and drug product for its product candidates and does not currently have redundant supply arrangements in place[298](index=298&type=chunk)[299](index=299&type=chunk) [Risks Related to Intellectual Property](index=90&type=section&id=Risks%20related%20to%20our%20intellectual%20property) IP risks include limited patent protection for eprenetapopt and the potential for current DDR inhibitor patents to be challenged or invalidated by competitors - The chemical structure of **eprenetapopt** is in the public domain, meaning the company does not have composition of matter patents and relies on method-of-use and formulation patents, which may not prevent competitors from using the same compound for other uses[310](index=310&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) - The company's patents could be challenged in court or before administrative bodies and be found invalid or unenforceable, which would limit its ability to stop competitors from commercializing similar products[319](index=319&type=chunk)[324](index=324&type=chunk) [Risks Related to Regulatory and Marketing Approval](index=110&type=section&id=Risks%20related%20to%20regulatory%20and%20marketing%20approval%20and%20other%20legal%20compliance%20matters) Significant risks exist in the expensive, lengthy, and uncertain regulatory approval process, with no prior approvals and ongoing compliance challenges post-approval - The company has never obtained marketing approval for a product candidate and has limited experience in conducting the clinical trials necessary to obtain such approvals[362](index=362&type=chunk)[365](index=365&type=chunk) - The marketing approval process is expensive, time-consuming, and uncertain, and regulatory authorities have substantial discretion to delay, limit, or deny approval[364](index=364&type=chunk)[366](index=366&type=chunk) - Even if a product is approved, it will be subject to extensive ongoing regulation, and failure to comply could lead to significant penalties, including withdrawal of the product from the market[276](index=276&type=chunk)[380](index=380&type=chunk) [Risks Related to Common Stock](index=141&type=section&id=Risks%20related%20to%20our%20common%20stock) Stock price volatility is expected, with significant insider ownership influencing decisions, and a risk of Nasdaq delisting impacting liquidity and price - As of June 30, 2025, executive officers, directors, and principal stockholders beneficially owned approximately **50.9%** of the common stock, giving them substantial influence over corporate matters[459](index=459&type=chunk) - The company's stock price has been and is likely to continue to be volatile due to factors such as clinical trial results, regulatory actions, and market conditions[463](index=463&type=chunk) - The company is required to meet Nasdaq's continued listing requirements and may be subject to delisting if it fails to do so, which would negatively affect the stock's price and liquidity[477](index=477&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=149&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales or repurchases occurred during the quarter or six months ended June 30, 2025, beyond prior 8-K disclosures - There were no sales of unregistered equity securities during the quarter ended June 30, 2025, other than those previously disclosed on Form 8-K[478](index=478&type=chunk) [Defaults Upon Senior Securities](index=149&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company - Not applicable[480](index=480&type=chunk) [Mine Safety Disclosures](index=149&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[481](index=481&type=chunk) [Other Information](index=149&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the company - Not applicable[482](index=482&type=chunk) [Exhibits](index=150&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL data files - The exhibits filed with this report include certifications from the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files[485](index=485&type=chunk)

[Report Highlights and Corporate Update](index=1&type=section&id=Report%20Highlights%20and%20Corporate%20Update) The company advanced its TSHA-102 program for Rett syndrome and extended its cash runway into 2028 with a successful financing - Commenced site activation for the REVEAL pivotal trial for Rett syndrome, with patient enrollment anticipated to begin in **Q4 2025**, following a No Objection Letter from Health Canada and feedback from the FDA[1](index=1&type=chunk)[3](index=3&type=chunk) - TSHA-102 continues to be **generally well-tolerated**, with no treatment-related serious adverse events (SAEs) or dose-limiting toxicities (DLTs) in the 12 patients treated in Part A of the Phase 1/2 trials[1](index=1&type=chunk)[7](index=7&type=chunk) - Data from the REVEAL Phase 1/2 trials showed a **100% response rate** for the pivotal trial's primary endpoint, which is the gain or regain of at least one developmental milestone[1](index=1&type=chunk) - Completed a public follow-on offering with gross proceeds of **$230 million**, extending the company's cash runway into **2028**[1](index=1&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [TSHA-102 Program Highlights](index=2&type=section&id=TSHA-102%20Program%20Highlights) The company finalized the REVEAL pivotal trial design for TSHA-102 following alignment with the FDA on key study parameters - **REVEAL Pivotal Trial Design:** - **Study Type:** Single-arm, open-label, with each patient as their own control - **Dose:** Single high dose of TSHA-102 (1x10¹⁵ total vector genomes) via lumbar intrathecal injection - **Patient Population:** 15 females aged 6 to <22 years in the developmental plateau stage of Rett syndrome - **Primary Endpoint:** Response rate, defined as the percentage of patients who gain or regain at least one developmental milestone from a predefined list of 28 - **Analysis:** A 12-month primary analysis and a 6-month interim analysis are planned[4](index=4&type=chunk) - The FDA has provided written alignment on an **extrapolation approach** for a safety-focused study in females aged 2 to <6 years, which is intended to enable access for a broader patient population[4](index=4&type=chunk) - Data presented at the IRSF Scientific Meeting highlighted **positive clinical results**, caregiver research supporting the trial's primary endpoint, and preclinical data on biodistribution[7](index=7&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) The company reported a higher net loss driven by increased R&D expenses but maintained a strong cash position Q2 2025 vs Q2 2024 Performance | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Research & Development Expenses | $20.1M | $15.1M | +$5.0M | | General & Administrative Expenses | $8.6M | $7.3M | +$1.3M | | Net Loss | $26.9M | $20.9M | +$6.0M | | Net Loss Per Share | $0.09 | $0.09 | $0.00 | - The increase in R&D expenses was primarily driven by BLA-enabling manufacturing initiatives, REVEAL clinical trial activities, and higher compensation from increased headcount[5](index=5&type=chunk) - As of June 30, 2025, the company had **$312.8 million in cash and cash equivalents**, which is expected to support operations into **2028**[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Operating expenses of $28.7 million resulted in a net loss of $26.9 million for the three months ended June 30, 2025 | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $1,986 | $1,112 | | Total operating expenses | $28,739 | $22,411 | | Loss from operations | $(26,753) | $(21,299) | | **Net loss** | **$(26,882)** | **$(20,928)** | | Net loss per common share | $(0.09) | $(0.09) | [Condensed Consolidated Balance Sheet Data](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheet%20Data) Total assets grew to $333.3 million, driven by a significant increase in cash and cash equivalents to $312.8 million | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | **$312,761** | **$139,036** | | Total current assets | $316,264 | $142,130 | | **Total assets** | **$333,331** | **$160,364** | | Total current liabilities | $25,349 | $26,227 | | **Total liabilities** | **$84,604** | **$88,839** | | **Total stockholders' equity** | **$248,727** | **$71,525** | [Outlook and Corporate Information](index=3&type=section&id=Outlook%20and%20Corporate%20Information) The company outlines key upcoming milestones for its lead candidate TSHA-102, an AAV9-based gene therapy for Rett syndrome - **Anticipated Milestones for Q4 2025:** - Begin patient enrollment for the REVEAL pivotal trial - Report new supplemental clinical data from Part A of the REVEAL Phase 1/2 trials[7](index=7&type=chunk) - TSHA-102 is an investigational gene therapy for Rett syndrome that uses a novel **miRARE technology** to regulate MECP2 gene expression and has received **Regenerative Medicine Advanced Therapy (RMAT)**, **Fast Track**, and **Orphan Drug** designations from the FDA[10](index=10&type=chunk) - Rett syndrome is a rare genetic disorder affecting an estimated **15,000 to 20,000 patients** in the U.S., EU, and U.K., with no currently approved therapies that treat the genetic root cause[11](index=11&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR Table of Contents ☐ 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: 001-41305 Bitcoin Depot Inc. (Exact name of registrant as specified in its charter) Delaware ...

[PART I – Financial Information](index=3&type=section&id=PART%20I%20%E2%80%93%20Financial%20Information) This section presents the company's financial information, including statements and management's discussion [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed interim financial statements and detailed notes [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) This table provides a snapshot of the company's financial position, including assets, liabilities, and equity Condensed Balance Sheets (as of June 30, 2025, and December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $29,757,328 | $38,339,762 | | Total current assets | $33,427,647 | $44,308,428 | | Total assets | $33,452,555 | $44,347,016 | | Total current liabilities | $4,501,104 | $3,824,474 | | Total liabilities | $5,142,262 | $4,769,921 | | Total stockholders' equity | $28,310,293 | $39,577,095 | [Condensed Unaudited Interim Statements of Operations](index=4&type=section&id=Condensed%20Unaudited%20Interim%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific interim periods Condensed Unaudited Interim Statements of Operations | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Collaboration revenue | $163,616 | $3,425,271 | $421,500 | $3,552,109 | | Research and development expenses | $3,663,103 | $4,566,152 | $8,877,179 | $7,704,311 | | General and administrative expenses | $2,908,191 | $2,088,404 | $5,622,081 | $4,528,245 | | Total operating expenses | $6,578,134 | $6,661,396 | $14,512,940 | $12,271,236 | | Loss from operations | $(6,414,518) | $(3,236,125) | $(14,091,440) | $(8,719,127) | | Net loss | $(6,094,977) | $(2,891,680) | $(13,401,734) | $(7,943,593) | | Net loss per share, basic and diluted | $(0.36) | $(0.19) | $(0.80) | $(0.54) | [Condensed Unaudited Interim Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Unaudited%20Interim%20Statements%20of%20Stockholders'%20Equity) This statement outlines changes in the company's equity, including stock-based compensation and net loss Condensed Unaudited Interim Statements of Stockholders' Equity | Metric | Balance as of Dec 31, 2024 | Stock-based compensation expense | Exercise of stock options | Net loss | Balance as of June 30, 2025 | | :-------------------------------- | :------------------------- | :------------------------------- | :---------------------- | :--------- | :-------------------------- | | Common Stock Shares | 16,707,441 | - | 17,557 | - | 16,724,998 | | Common Stock Amount | $1,671 | - | $2 | - | $1,673 | | Additional Paid-In Capital | $80,312,594 | $2,115,795 | $19,135 | - | $82,447,524 | | Accumulated Deficit | $(40,737,170) | - | - | $(13,401,734) | $(54,138,904) | | Total Stockholders' Equity | $39,577,095 | $2,115,795 | $19,137 | $(13,401,734) | $28,310,293 | [Condensed Unaudited Interim Statements of Cash Flows](index=6&type=section&id=Condensed%20Unaudited%20Interim%20Statements%20of%20Cash%20Flows) This statement summarizes the company's cash inflows and outflows from operating, investing, and financing activities Condensed Unaudited Interim Statements of Cash Flows | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(8,601,571) | $(2,417,693) | | Net cash used in investing activities | $- | $(25,000) | | Net cash provided by financing activities | $19,137 | $6,391,014 | | Net (decrease) increase in cash and cash equivalents | $(8,582,434) | $3,948,321 | | Cash and cash equivalents as of end of period | $29,757,328 | $36,575,089 | [Notes to the Condensed Unaudited Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Unaudited%20Interim%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, commitments, and recent events - The Company is a clinical-stage biotechnology company focused on developing proprietary new therapies to enhance the function of Regulatory T cells ("Tregs")[19](index=19&type=chunk) - The Company has incurred losses since inception, negative cash flows from operations, and has an **accumulated deficit** of **$54.1 million** as of June 30, 2025[20](index=20&type=chunk) - **Cash and cash equivalents** of **$29.8 million** as of June 30, 2025, are expected to enable the Company to fund its operating expenses and capital expenditure requirements for at least one year[21](index=21&type=chunk) [1. Organization and description of business](index=7&type=section&id=1.%20Organization%20and%20description%20of%20business) This note describes the company's core business, financial status, and future funding requirements - Coya Therapeutics, Inc. is a clinical-stage biotechnology company developing therapies to enhance Regulatory T cells (Tregs) for neurodegenerative, chronic inflammatory, autoimmune, and metabolic diseases[19](index=19&type=chunk) - The company has an **accumulated deficit** of **$54.1 million** as of June 30, 2025, and anticipates further losses until significant product sales are generated[20](index=20&type=chunk) - **Current cash** of **$29.8 million** is expected to cover operating expenses for at least one year, but substantial additional financing will be needed[21](index=21&type=chunk) [2. Basis of presentation and significant accounting policies](index=7&type=section&id=2.%20Basis%20of%20presentation%20and%20significant%20accounting%20policies) This note outlines the accounting principles, estimates, and revenue recognition policies applied in the financial statements - Financial statements are prepared in conformity with U.S. GAAP and include all normal and recurring adjustments[24](index=24&type=chunk)[25](index=25&type=chunk) - Management makes estimates and assumptions, particularly for stock options, DRL Development Agreement transaction price allocation, and R&D expenses[26](index=26&type=chunk)[27](index=27&type=chunk) - The Company operates as one segment, with the CEO managing operations on a consolidated basis and assessing performance based on **net loss** and cash burn[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - Collaboration revenue is primarily from the DRL Development Agreement, recognized by analogizing to ASC 606, including **upfront license fees**, **milestone payments**, and **royalties**[32](index=32&type=chunk)[33](index=33&type=chunk) - Research and development costs are expensed as incurred, including third-party services, clinical/preclinical development, manufacturing, regulatory compliance, and personnel costs[40](index=40&type=chunk) - Stock-based compensation is measured at grant-date fair value and expensed over the vesting period, using the Black-Scholes model with subjective assumptions[43](index=43&type=chunk)[44](index=44&type=chunk) - A full valuation allowance is applied to all net deferred tax assets due to the unlikelihood of realization[46](index=46&type=chunk) - Potentially dilutive securities (warrants, stock options) are excluded from diluted EPS calculation due to anti-dilutive effect from **net loss**[47](index=47&type=chunk)[48](index=48&type=chunk) - The company is evaluating the impact of recently issued FASB ASUs on income tax disclosures (ASU 2023-09) and expense disaggregation (ASU 2024-03)[49](index=49&type=chunk)[50](index=50&type=chunk) [3. Fair value measurements](index=11&type=section&id=3.%20Fair%20value%20measurements) This note details the fair value hierarchy and measurements for the company's financial instruments Fair Value of Financial Instruments (Cash and Cash Equivalents) | Asset | Input Level | Fair Value (June 30, 2025) | Carrying Value (June 30, 2025) | Fair Value (Dec 31, 2024) | Carrying Value (Dec 31, 2024) | | :-------------------------------- | :---------- | :------------------------- | :--------------------------- | :------------------------ | :-------------------------- | | Cash and cash equivalents (money market funds) | Level 1 | $29,757,328 | $29,757,328 | $38,339,762 | $38,339,762 | [4. Prepaids and other current assets](index=12&type=section&id=4.%20Prepaids%20and%20other%20current%20assets) This table presents a breakdown of the company's prepaid expenses and other current assets Prepaids and Other Current Assets | Asset | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Prepaid research and development | $3,141,396 | $4,005,246 | | Prepaid insurance | $409,101 | $805,469 | | Prepaid other | $119,822 | $427,370 | | Income tax receivable | $- | $730,581 | | Total | $3,670,319 | $5,968,666 | [5. Accrued expenses](index=12&type=section&id=5.%20Accrued%20expenses) This table provides a summary of the company's accrued liabilities, including R&D and payroll Accrued Expenses | Expense | June 30, 2025 | December 31, 2024 | | :------------------------ | :-------------- | :---------------- | | Accrued research and development | $1,999,432 | $46,667 | | Accrued payroll | $591,464 | $1,132,422 | | Accrued professional fees | $247,789 | $208,971 | | Total | $2,838,685 | $1,388,060 | [6. Commitments and contingencies, including license and sponsored research agreements](index=13&type=section&id=6.%20Commitments%20and%20contingencies,%20including%20license%20and%20sponsored%20research%20agreements) This note describes the company's contractual obligations and potential liabilities from various agreements - DRL Agreement: In-licensed DRL's abatacept biosimilar for COYA 302 development, paid **$0.4M upfront**, with potential pre-approval regulatory milestones up to **$2.9M** and other development/sales milestones up to **$20.0M**[56](index=56&type=chunk) - ARS License Agreement: Exercised option for exclusive license for two patents, with potential developmental **milestone payments** up to **$13.3M** for the first Combination Product in a new indication, and **royalties** on net sales (low to mid-single digit percentages)[57](index=57&type=chunk)[58](index=58&type=chunk) - Methodist License Agreement: Pays annual license maintenance fee, potential **milestone payments** up to **$0.4M** per product candidate, and tiered **royalties** (high-single digit to low-double digit percentages) on net sales. Minimum annual payment of **$0.1M** once commercialization occurs (effective Jan 1, 2025)[59](index=59&type=chunk)[60](index=60&type=chunk) - Sponsored Research Agreement (SRA) with HMRI: Amended in Oct 2024 to increase **total funding** to **$1.2M**. As of June 30, 2025, **$1.0M** has been funded[62](index=62&type=chunk) [7. Stockholders' equity](index=15&type=section&id=7.%20Stockholders'%20equity) This note details the company's common stock, warrants, and equity incentive plan - As of June 30, 2025, the Company had 815,677 common stock warrants outstanding with **exercise prices** ranging from **$6.00** to **$9.15** and expiration dates between December 2025 and November 2029[67](index=67&type=chunk) - No warrants were granted during the three and six months ended June 30, 2025[65](index=65&type=chunk) [8. Stock-based compensation](index=16&type=section&id=8.%20Stock-based%20compensation) This note explains the company's stock option plan and the related compensation expense recognition - The 2021 Equity Incentive Plan authorized 3,239,368 shares as of June 30, 2025, with 170,221 shares available for future issuance[68](index=68&type=chunk) Stock-based Compensation Expense | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $677,926 | $373,919 | $1,373,319 | $641,357 | | Research and development | $357,787 | $288,402 | $742,476 | $456,627 | | Total | $1,035,713 | $662,321 | $2,115,795 | $1,097,984 | - As of June 30, 2025, **unrecognized compensation cost** for stock options was **$7.1 million**, to be recognized over an estimated weighted-average amortization period of **1.9 years**[71](index=71&type=chunk) - The fair value of options is estimated using the Black-Scholes model with a **risk-free interest rate** of **4.5%** (2025) vs **4.2%** (2024), **expected term** of **5.75 years** (2025) vs **5.74 years** (2024), and **expected volatility** of **96.82%** (2025) vs **106.20%** (2024)[73](index=73&type=chunk) [9. DRL Development Agreement](index=17&type=section&id=9.%20DRL%20Development%20Agreement) This note outlines the key terms, payments, and revenue recognition related to the DRL collaboration agreement - In December 2023, Coya granted Dr. Reddy's an exclusive license to commercialize COYA 302 for ALS in the US, Canada, EU, and UK[74](index=74&type=chunk) - Received an **upfront payment** of **$7.5 million** in January 2024[78](index=78&type=chunk) - Entitled to additional payments of **$4.2 million** upon FDA IND acceptance for COYA 302 in ALS and another **$4.2 million** upon dosing the first patient in the Phase 2 clinical trial[78](index=78&type=chunk) - Potential **development milestones** up to **$40.0 million** and **sales milestones** up to **$677.3 million**, plus **royalties** on Net Sales in the low to mid-teens[78](index=78&type=chunk) - In June 2024, an amendment resulted in a one-time payment of **$3.9 million** to Coya, in exchange for Dr. Reddy's not having to pay the first **$6.0 million** in **royalty payments**[76](index=76&type=chunk)[78](index=78&type=chunk) - **Collaboration revenue** from R&D Services and License was **$0.2 million** for Q2 2025, a significant decrease from **$3.4 million** in Q2 2024, primarily due to immediate recognition of License revenue in Q2 2024[82](index=82&type=chunk)[117](index=117&type=chunk) [10. Subsequent events](index=21&type=section&id=10.%20Subsequent%20events) This note discloses significant events that occurred after the reporting period, impacting future operations - On July 14, 2025, the **FDA informed the Company** that it would not meet the initial review goal date for the re-submitted IND for COYA 302 in ALS due to workload and resource limitations[83](index=83&type=chunk) - The **FDA expects to provide a decision** on **IND approval** no later than August 29, 2025[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operations, and liquidity - Coya Therapeutics is a clinical-stage biotechnology company focused on developing therapies to enhance Regulatory T cells (Tregs) for neurodegenerative, autoimmune, and metabolic diseases[90](index=90&type=chunk)[91](index=91&type=chunk) - The lead asset, COYA 302 (low dose IL-2 and CTLA4-Ig), is a Treg-enhancing biologic, with a Phase 1 and Phase 2a study completed for ALS[92](index=92&type=chunk)[93](index=93&type=chunk) - **Net losses** were **$6.1 million** and **$2.9 million** for the three months ended June 30, 2025 and 2024, respectively, and **$13.4 million** and **$7.9 million** for the six months ended June 30, 2025 and 2024, respectively[93](index=93&type=chunk) - As of June 30, 2025, the company had an **accumulated deficit** of **$54.1 million** and expects to incur significant expenses and operating losses for the foreseeable future[93](index=93&type=chunk)[95](index=95&type=chunk) - Substantial additional capital will be needed to fund operations, advance product candidates, and pursue growth strategies[97](index=97&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=22&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns readers about the inherent risks and uncertainties associated with forward-looking statements - The report contains forward-looking statements subject to risks and uncertainties, which may cause actual results to differ materially from expectations[86](index=86&type=chunk) - Factors include ability to develop/commercialize products, timing of clinical trials, success of preclinical studies, impact of global health events, and ability to obtain/protect intellectual property[87](index=87&type=chunk) - The company disclaims any obligation to update or revise forward-looking statements[89](index=89&type=chunk) [Overview](index=23&type=section&id=Overview) This overview introduces Coya Therapeutics' focus on Treg-enhancing therapies and its financial position - Coya Therapeutics is a clinical-stage biotechnology company focused on developing therapies to enhance Regulatory T cells (Tregs) for neurodegenerative, chronic inflammatory, autoimmune, and metabolic diseases[90](index=90&type=chunk)[91](index=91&type=chunk) - The lead asset, COYA 302, is a Treg-enhancing biologic combining low dose interleukin-2 (COYA 301) and CTLA4-Ig, intended for neurodegenerative disorders like ALS[92](index=92&type=chunk)[93](index=93&type=chunk) - The company has incurred **net losses** of **$13.4 million** for the six months ended June 30, 2025, and has an **accumulated deficit** of **$54.1 million**, expecting continued significant expenses[93](index=93&type=chunk)[95](index=95&type=chunk) - Future operations will require substantial additional capital, to be financed through equity, debt, or collaborations[97](index=97&type=chunk) [Recent Developments](index=25&type=section&id=Recent%20Developments) This section highlights key clinical and patent developments, including IND resubmission and FDA feedback - Published results for COYA 303 (LD IL-2 and GLP-1RA) in April 2025, showing a **statistically significant 42% increase** in Treg suppressive function in inflammatory microenvironments, compared to single agents[98](index=98&type=chunk) - Announced issuance of a U.S. patent on June 2, 2025, for a highly stable liquid formulation of IL-2 (aldesleukin), for which Coya has **exclusive in-vivo rights**[100](index=100&type=chunk) - Re-submitted an IND for COYA 302 in ALS on June 30, 2025, including previously requested non-clinical data for a planned Phase 2 study[101](index=101&type=chunk) - **FDA informed the company** on July 29, 2025, that it would not meet the initial IND review goal date for COYA 302 in ALS due to workload, expecting a decision by August 29, 2025[102](index=102&type=chunk) [Components of Results of Operations](index=26&type=section&id=Components%20of%20Results%20of%20Operations) This section explains the key revenue and expense categories contributing to the company's operating results - Collaboration Revenue: Currently derived solely from the DRL Development Agreement, with no product sales revenue expected in the foreseeable future[103](index=103&type=chunk) - Research and Development Expenses: Expensed as incurred, covering discovery, preclinical/clinical studies, sponsored research, personnel, manufacturing, regulatory activities, and facility costs[104](index=104&type=chunk)[106](index=106&type=chunk) - In-Process Research and Development: Costs for technology licenses are expensed if the technology has not reached technological feasibility and has no alternative future use[110](index=110&type=chunk) - General and Administrative Expenses: Includes personnel, facility costs, legal, accounting, and consulting services, expected to increase with continued R&D, potential commercialization, and public company operations[111](index=111&type=chunk)[112](index=112&type=chunk) - Other Income: Consists of interest earned on excess cash[114](index=114&type=chunk) - Income Taxes: No income tax benefits recorded for net operating losses (NOLs) or R&D tax credits due to a full valuation allowance, as realization is not considered probable[115](index=115&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section compares the company's financial performance across different interim periods, highlighting key changes - **Net loss** for the three months ended June 30, 2025, was **$(6.1) million**, compared to **$(2.9) million** for the same period in 2024, an increase of **$(3.2) million**[116](index=116&type=chunk) - **Net loss** for the six months ended June 30, 2025, was **$(13.4) million**, compared to **$(7.9) million** for the same period in 2024, an increase of **$(5.5) million**[123](index=123&type=chunk) [Comparison of the three months ended June 30, 2025 and 2024](index=29&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030,%202025%20and%202024) This section analyzes the financial performance for the three-month periods, detailing revenue and expense changes Financial Performance (Three Months Ended June 30, 2025 vs 2024) | Metric | 2025 | 2024 | Change | | :-------------------------- | :----------- | :----------- | :----------- | | Collaboration revenue | $163,616 | $3,425,271 | $(3,261,655) | | Research and development | $3,663,103 | $4,566,152 | $(903,049) | | General and administrative | $2,908,191 | $2,088,404 | $819,787 | | Total operating expenses | $6,578,134 | $6,661,396 | $(83,262) | | Loss from operations | $(6,414,518) | $(3,236,125) | $(3,178,393) | | Net loss | $(6,094,977) | $(2,891,680) | $(3,203,297) | - **Collaboration revenue decreased** by **$3.2 million**, primarily due to the immediate recognition of License revenue from the DRL Development Agreement amendment in Q2 2024[117](index=117&type=chunk) - **R&D expenses decreased** by **$0.9 million**, mainly due to a **$1.2 million** decrease in preclinical expenses, partially offset by increases in internal R&D and sponsored research[118](index=118&type=chunk) - **General and administrative expenses increased** by **$0.8 million**, driven by higher stock-based compensation (**$0.3M**), professional services (**$0.4M**), and investor relations expenses (**$0.1M**)[121](index=121&type=chunk) [Comparison of the six months ended June 30, 2025 and 2024](index=30&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030,%202025%20and%202024) This section analyzes the financial performance for the six-month periods, detailing revenue and expense changes Financial Performance (Six Months Ended June 30, 2025 vs 2024) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :------------- | :------------- | :------------- | | Collaboration revenue | $421,500 | $3,552,109 | $(3,130,609) | | Research and development | $8,877,179 | $7,704,311 | $1,172,868 | | In-process research and development | $- | $25,000 | $(25,000) | | General and administrative | $5,622,081 | $4,528,245 | $1,093,836 | | Total operating expenses | $14,512,940 | $12,271,236 | $2,241,704 | | Loss from operations | $(14,091,440) | $(8,719,127) | $(5,372,313) | | Net loss | $(13,401,734) | $(7,943,593) | $(5,458,141) | - **Collaboration revenue decreased** by **$3.2 million**, primarily due to the immediate recognition of License revenue from the DRL Development Agreement amendment in H1 2024[124](index=124&type=chunk) - **R&D expenses increased** by **$1.2 million**, driven by increases in preclinical expenses (**$0.3M**), internal R&D (**$0.6M**), and sponsored research (**$0.3M**)[125](index=125&type=chunk) - **General and administrative expenses increased** by **$1.1 million**, mainly due to higher stock-based compensation (**$0.8M**), professional services (**$0.4M**), and investor relations expenses (**$0.2M**), partially offset by a decrease in board fees and taxes (**$0.2M**)[127](index=127&type=chunk) - Other income decreased by **$0.1 million** due to a decline in interest and dividend income[128](index=128&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding requirements, and cash flow activities - Since inception through June 30, 2025, the company has incurred operating losses and an **accumulated deficit** of **$54.1 million**[129](index=129&type=chunk) - **Cash and cash equivalents** were **$29.8 million** as of June 30, 2025, expected to fund operations for at least one year[129](index=129&type=chunk) - The company will need significant additional funds for operational needs, clinical trials, R&D, and business development, with no current credit facility or committed capital sources[132](index=132&type=chunk) - Future funding is expected through equity offerings, debt financings, collaborations, or licensing arrangements, which may dilute ownership or impose restrictions[133](index=133&type=chunk) [Overview (Liquidity)](index=32&type=section&id=Overview%20(Liquidity)) This section summarizes the company's financial position and expected funding duration - Since inception through June 30, 2025, the company has incurred operating losses and an **accumulated deficit** of **$54.1 million**[129](index=129&type=chunk) - **Cash and cash equivalents** were **$29.8 million** as of June 30, 2025, expected to fund operations for at least one year[129](index=129&type=chunk) [Funding Requirements](index=32&type=section&id=Funding%20Requirements) This section outlines the company's need for additional capital to support its ongoing operations and development - The company's primary use of cash is to fund operating expenses, mainly research and development expenditures[130](index=130&type=chunk) - Significant additional funds are needed for operational needs, clinical trials, R&D, and business development, with no current credit facility or committed capital sources[132](index=132&type=chunk) - Future funding is expected through equity offerings, debt financings, collaborations, or licensing arrangements, which may dilute ownership or impose restrictions[133](index=133&type=chunk) [Cash Flows](index=34&type=section&id=Cash%20Flows) This section provides a detailed breakdown of cash flows from operating, investing, and financing activities Summary of Cash Flows (Six Months Ended June 30, 2025 vs 2024) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Cash used in operating activities | $(8,601,571) | $(2,417,693) | | Cash used in investing activities | $- | $(25,000) | | Cash provided by financing activities | $19,137 | $6,391,014 | | Net (decrease) increase in cash and cash equivalents | $(8,582,434) | $3,948,321 | - **Cash used in operating activities increased** to **$8.6 million** in H1 2025 from **$2.4 million** in H1 2024, reflecting a higher **net loss** partially offset by changes in operating assets/liabilities and non-cash charges[135](index=135&type=chunk)[136](index=136&type=chunk) - **Financing activities provided** **$19,137** in H1 2025, significantly down from **$6.4 million** in H1 2024, which included proceeds from common stock sales and warrant exercises[140](index=140&type=chunk) [DRL Development Agreement (Liquidity)](index=36&type=section&id=DRL%20Development%20Agreement%20(Liquidity)) This section reiterates the financial implications of the DRL agreement on the company's liquidity - The DRL Development Agreement grants Dr. Reddy's an exclusive license to commercialize COYA 302 for ALS in the US, Canada, EU, and UK[141](index=141&type=chunk) - The agreement includes an **upfront payment** of **$7.5 million** (received Jan 2024), potential **development milestones** up to **$40.0 million**, **sales milestones** up to **$677.3 million**, and **royalties**[143](index=143&type=chunk) - A June 2024 amendment involved a **$3.9 million** payment to Coya, in exchange for Dr. Reddy's not having to pay the first **$6.0 million** in **royalty payments**[143](index=143&type=chunk) [Commitments and Contingencies, including License and Sponsored Research Agreements (Liquidity)](index=36&type=section&id=Commitments%20and%20Contingencies,%20including%20License%20and%20Sponsored%20Research%20Agreements%20(Liquidity)) This section summarizes the company's contractual obligations and potential liabilities impacting future cash flows - Commitments include annual license fees, **milestone payments**, and **royalties** under agreements with Methodist, ARScience, and DRL[144](index=144&type=chunk)[145](index=145&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Patent Know How and License Agreement with The Methodist Hospital](index=36&type=section&id=Patent%20Know%20How%20and%20License%20Agreement%20with%20The%20Methodist%20Hospital) This agreement outlines the company's licensing terms, including fees, milestones, and royalties with Methodist Hospital - The Methodist License Agreement requires annual license maintenance fees, potential **milestone payments** up to **$0.4 million** per product candidate, and tiered **royalties** (**1%** to **10%**) on net sales[144](index=144&type=chunk)[145](index=145&type=chunk) - A minimum annual payment of **$0.1 million** is owed once commercialization occurs, effective January 1, 2025[146](index=146&type=chunk) [Sponsored Research Agreement with Houston Methodist Research Institute](index=38&type=section&id=Sponsored%20Research%20Agreement%20with%20Houston%20Methodist%20Research%20Institute) This agreement details the funding and scope of the sponsored research collaboration with HMRI - The Sponsored Research Agreement (SRA) with HMRI was amended in October 2024 to increase **total funding** from **$1.0 million** to **$1.2 million**[148](index=148&type=chunk) [ARScience License Agreement](index=38&type=section&id=ARScience%20License%20Agreement) This agreement grants Coya exclusive rights to IL-2 formulations, including milestone and royalty payments - The ARS License Agreement grants Coya an exclusive, royalty-bearing license for two patents related to IL-2 formulations (COYA 301)[149](index=149&type=chunk)[150](index=150&type=chunk) - Potential developmental **milestone payments** include up to **$13.3 million** for the first Combination Product in a new indication, and **royalties** on net sales ranging from low to mid-single digit percentages[151](index=151&type=chunk) [Dr. Reddy's License and Supply Agreement](index=38&type=section&id=Dr.%20Reddy's%20License%20and%20Supply%20Agreement) This agreement details the in-licensing of DRL's biosimilar for COYA 302 development and commercialization - The DRL Agreement, effective April 1, 2023, involves in-licensing DRL_AB for COYA 302 development and commercialization in various territories[152](index=152&type=chunk) - Coya paid a **$0.4 million upfront fee** and may pay up to **$2.9 million** in pre-approval regulatory milestones and an additional **$20.0 million** for other development/sales milestones, plus single-digit **royalties** on Net Sales[152](index=152&type=chunk) [Recent Accounting Pronouncements (Liquidity)](index=38&type=section&id=Recent%20Accounting%20Pronouncements%20(Liquidity)) This section refers to the notes for details on recently issued accounting standards and their potential impact - The company refers to Note 2 of its financial statements for a description of recent accounting pronouncements applicable to its financial statements[154](index=154&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms the absence of applicable market risk disclosures for the company - **Not applicable**[155](index=155&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and internal financial reporting controls - Disclosure controls and procedures were evaluated as **effective at the reasonable assurance level** as of June 30, 2025[156](index=156&type=chunk) - **No material changes** in internal control over financial reporting occurred during the period[157](index=157&type=chunk) [PART II – Other Information](index=40&type=section&id=PART%20II%20%E2%80%93%20Other%20Information) This section covers other information, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms no reportable legal proceedings during the current quarter - **No legal proceedings to report**[160](index=160&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section updates previously disclosed risk factors, particularly regarding regulatory changes in the biopharmaceutical industry - **No material changes** to risk factors from the Annual Report on Form 10-K, except for an updated discussion on regulatory obligations and policies[161](index=161&type=chunk) - The biopharmaceutical industry is **highly regulated** and subject to changes, including judicial challenges, which could impact regulatory approval timelines and funding[162](index=162&type=chunk) - A recent U.S. Supreme Court decision (June 28, 2024) may increase **increased litigation and judicial scrutiny** of agency interpretations of law, potentially affecting FDA and other regulatory agencies[162](index=162&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered equity sales or use of proceeds to report - **None to report**[163](index=163&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults on senior securities during the reporting period - **None to report**[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - **Not applicable**[165](index=165&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) This section reports on director and officer trading arrangements during the quarter - **No directors or officers adopted or terminated** Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[166](index=166&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the certifications and XBRL documents filed as exhibits to the report - **Includes certifications** from Principal Executive Officer (31.1) and Principal Financial Officer (31.2) pursuant to Sarbanes-Oxley Act[167](index=167&type=chunk) - **Includes XBRL Instance Document**, Taxonomy Extension Schema, and Cover page formatted as Inline XBRL[167](index=167&type=chunk) [Signatures](index=42&type=section&id=Signatures) This section contains the required certifications and signatures from the company's executive officers - Report **Signed by** Arun Swaminathan Ph.D., **Chief Executive Officer**, and David Snyder, **Chief Financial Officer** and **Chief Operating Officer**, on August 12, 2025[173](index=173&type=chunk)

[Corporate Update and Business Highlights](index=1&type=section&id=Corporate%20Update%20and%20Business%20Highlights) Coya Therapeutics highlights recent achievements, including an FDA submission for COYA 302 in ALS and a new patent, anticipating key catalysts and an **$8.4 million** milestone payment [Recent Corporate Highlights](index=1&type=section&id=Recent%20Corporate%20Highlights) Coya submitted additional nonclinical data for COYA 302 in ALS, published Parkinson's research, and secured a U.S. patent for an IL-2 formulation - Submitted additional nonclinical data to the FDA on June 30, 2025, to support the initiation of the COYA 302 Phase 2 trial for Amyotrophic Lateral Sclerosis (ALS)[4](index=4&type=chunk) - Published research in *Frontiers of Immunology* demonstrating a correlation between peripheral pro-inflammatory mechanisms and the progression and severity of Parkinson's Disease (PD)[4](index=4&type=chunk) - Announced U.S. patent (US 12,312,389 B2) for a stable ready-to-use liquid IL-2 formulation, for which Coya holds exclusive in-vivo rights across multiple indications[4](index=4&type=chunk) [Upcoming Expected Catalysts for 2025](index=1&type=section&id=Upcoming%20Expected%20Catalysts%20for%202025) Coya anticipates an FDA decision on COYA 302 IND for ALS by August 29, 2025, triggering an **$8.4 million** milestone payment, alongside other key data releases and IND filings - An FDA decision on the IND for COYA 302 in ALS is expected by or before August 29, 2025[4](index=4&type=chunk) - Upon IND acceptance and first patient dosing for COYA 302 in ALS, Coya is set to receive **$8.4 million** in milestone payments from its strategic partner, Dr. Reddy's Laboratories (DRL)[4](index=4&type=chunk) - Key data releases expected include ALS biomarker data, new proteomics data from a Phase 2 study in Alzheimer's disease, and top-line clinical data from a trial in Frontotemporal Dementia (FTD)[4](index=4&type=chunk) - The company plans to file an IND for a Phase 2 trial of COYA-302 in patients with FTD[9](index=9&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management emphasizes the upcoming FDA decision for COYA 302 in ALS as a key catalyst, confirming readiness for the Phase 2 trial and planning an FTD IND submission - Management is focused on the FDA's decision for the COYA 302 IND in ALS, anticipated by the end of August, as a primary upcoming catalyst[5](index=5&type=chunk) - The company is prepared to initiate its controlled Phase 2 clinical trial in ALS pending IND clearance from the FDA[5](index=5&type=chunk) - An IND for Frontotemporal Dementia (FTD) is planned for submission by the end of the year[5](index=5&type=chunk) [Q2 2025 Financial Performance](index=2&type=section&id=Financial%20Results) Coya Therapeutics reported a significant decrease in Q2 2025 collaboration revenue to **$0.2 million**, a net loss of **$6.1 million**, and ended the quarter with **$29.8 million** in cash - As of June 30, 2025, Coya had cash and cash equivalents of **$29.8 million**[6](index=6&type=chunk) Q2 2025 vs. Q2 2024 Financial Highlights (in millions) | Financial Metric | Q2 2025 | Q2 2024 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Collaboration Revenue | $0.2 | $3.4 | -$3.2 | Decrease due to immediate revenue recognition from DRL agreement in Q2 2024 | | R&D Expenses | $3.7 | $4.6 | -$0.9 | Primarily a $1.2M decrease in preclinical expenses for COYA 302 | | G&A Expenses | $2.9 | $2.1 | +$0.8 | Increases in stock-based compensation, professional services, and investor relations | | Net Loss | $6.1 | $2.9 | +$3.2 | Driven by lower revenue and higher G&A expenses | [Product Pipeline Overview](index=3&type=section&id=Product%20Pipeline%20Overview) Coya's pipeline focuses on enhancing regulatory T cell function, with lead candidate COYA 302 for ALS and COYA 303 showing additive anti-inflammatory effects [About COYA 302](index=3&type=section&id=About%20COYA%20302) COYA 302 is an investigational subcutaneous biologic for ALS, combining LD IL-2 and CTLA-4 Ig for dual immunomodulatory effects to enhance Treg function and suppress inflammation - COYA 302 is a combination therapy of low dose interleukin-2 (LD IL-2) and CTLA-4 Ig[11](index=11&type=chunk) - It has a dual mechanism of action: enhancing anti-inflammatory Treg function and suppressing inflammation from activated monocytes and macrophages[11](index=11&type=chunk) - The therapy is being developed for subcutaneous administration to treat patients with ALS and is not yet approved by the FDA[11](index=11&type=chunk)[12](index=12&type=chunk) [About COYA 303](index=3&type=section&id=About%20COYA%20303) COYA 303 is an investigational biologic combining COYA 301 and a GLP-1 RA, showing additive or synergistic anti-inflammatory effects in preclinical studies - COYA 303 combines COYA 301 with a glucagon-like-peptide-1 receptor agonist (GLP-1 RA) for subcutaneous administration[13](index=13&type=chunk) - Preclinical studies showed a dual immunomodulatory mechanism with additive/synergistic anti-inflammatory effects[13](index=13&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) Unaudited financial statements for Q2 2025 show decreased cash and total assets, a higher net loss due to lower collaboration revenue, and significant cash used in operating activities [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, Coya Therapeutics reported total assets of **$33.5 million**, a decrease from year-end 2024, primarily due to lower cash and cash equivalents of **$29.8 million** Balance Sheet Summary (as of June 30, 2025) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $29,757,328 | $38,339,762 | | Total Assets | $33,452,555 | $44,347,016 | | Total Liabilities | $5,142,262 | $4,769,921 | | Total Stockholders' Equity | $28,310,293 | $39,577,095 | [Condensed Unaudited Interim Statements of Operations](index=7&type=section&id=Condensed%20Unaudited%20Interim%20Statements%20of%20Operations) For Q2 2025, Coya reported collaboration revenue of **$163,616**, a significant decline, leading to a widened net loss of **$6.1 million** or **($0.36)** per share Statement of Operations Summary (Three Months Ended June 30) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Collaboration revenue | $163,616 | $3,425,271 | | Research and development | $3,663,103 | $4,566,152 | | General and administrative | $2,908,191 | $2,088,404 | | Total operating expenses | $6,578,134 | $6,661,396 | | Net loss | $(6,094,977) | $(2,891,680) | | Net loss per share | $(0.36) | $(0.19) | [Condensed Unaudited Interim Statements of Cash Flows](index=8&type=section&id=Condensed%20Unaudited%20Interim%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **$8.6 million**, resulting in a net decrease in cash and cash equivalents to **$29.8 million** Statement of Cash Flows Summary (Six Months Ended June 30) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,601,571) | $(2,417,693) | | Net cash provided by financing activities | $19,137 | $6,391,014 | | Net (decrease) increase in cash | $(8,582,434) | $3,948,321 | | Cash and cash equivalents at end of period | $29,757,328 | $36,575,089 | [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements regarding Coya's financial performance, business plans, and clinical development, which are subject to various risks and uncertainties - The report includes forward-looking statements concerning financial performance, business plans, clinical trial timing and success, regulatory approvals, and market opportunities[16](index=16&type=chunk) - These statements are subject to significant risks and uncertainties, including those related to clinical trial outcomes, funding, regulatory approvals, market acceptance, and competition[17](index=17&type=chunk)

[Overview and Business Updates](index=1&type=section&id=Overview%20and%20Business%20Updates) [Q2 2025 Highlights](index=1&type=section&id=Q2%202025%20Highlights) BioXcel Therapeutics completed its SERENITY At-Home Phase 3 trial, with topline data expected in August 2025, and is preparing for an FDA meeting to discuss a potential sNDA for IGALMI's at-home use, suggesting a larger addressable market - Topline data from the SERENITY At-Home Phase 3 trial for treating agitation in bipolar disorders or schizophrenia is expected in August 2025[1](index=1&type=chunk)[3](index=3&type=chunk) - An FDA meeting is scheduled for August 2025 to support a potential sNDA submission for IGALMI's label expansion into the at-home setting[1](index=1&type=chunk) - The company's research suggests the target addressable market for at-home agitation is **meaningfully larger** than the original estimate of **23 million annual episodes**[4](index=4&type=chunk) - The company has strengthened its cash position through at-the-market sales and warrant exercises subsequent to the quarter's end[2](index=2&type=chunk)[14](index=14&type=chunk) [Clinical Program Updates](index=1&type=section&id=Clinical%20Program%20Updates) The company provided updates on its late-stage clinical programs for BXCL501, including the completed SERENITY At-Home Phase 3 trial, the advancing TRANQUILITY program, and new non-clinical data supporting BXCL501's potential in broader chronic stress-related disorders [SERENITY Program (BXCL501 for Bipolar/Schizophrenia)](index=1&type=section&id=SERENITY%20Program%20(BXCL501%20for%20Bipolar%2FSchizophrenia)) The SERENITY At-Home Phase 3 trial, evaluating a 120 mcg dose of BXCL501 for agitation in bipolar disorders or schizophrenia, has completed enrollment and dosing, collecting data from over 2,200 agitation episodes across more than 200 patients with two favorable DSMB recommendations SERENITY At-Home Phase 3 Trial Statistics | Metric | Value | | :--- | :--- | | Patients Enrolled | >200 | | Study Sites | 22 | | Agitation Episodes Data | >2,200 | | Patient Populations | Balanced (Bipolar & Schizophrenia) | | DSMB Recommendations | 2 (Favorable) | - The vast majority of patients who were dosed completed the full **12-week** study[5](index=5&type=chunk) [TRANQUILITY Program (BXCL501 for Alzheimer's Dementia)](index=2&type=section&id=TRANQUILITY%20Program%20(BXCL501%20for%20Alzheimer's%20Dementia)) The TRANQUILITY In-Care Phase 3 trial, assessing a 60 mcg dose of BXCL501 for acute agitation in Alzheimer's dementia, remains a key strategy, with BioXcel currently evaluating Contract Research Organizations to initiate the trial - The TRANQUILITY program is designed to evaluate a **60 mcg dose** of BXCL501 for agitation in Alzheimer's dementia within care settings[13](index=13&type=chunk) - The company is currently evaluating CROs for trial initiation, indicating the program is moving forward[13](index=13&type=chunk) [BXCL501 in Chronic Conditions](index=2&type=section&id=BXCL501%20in%20Chronic%20Conditions) Recently published non-clinical research in *Frontiers in Pharmacology* demonstrated that BXCL501 significantly reduced stress-induced behaviors in animal models, supporting its mechanism of action and potential utility in broader stress-related psychiatric disorders - Research published in *Frontiers in Pharmacology* showed BXCL501 reduced stress-induced behaviors, supporting its potential for use in chronic stress-related disorders[6](index=6&type=chunk) [Corporate Updates](index=2&type=section&id=Corporate%20Updates) BioXcel is maintaining the market presence of its approved drug, IGALMI, for institutional use, continuing to supply the product and build brand awareness with minimal commercial resources - The company continues to supply IGALMI in the institutional setting and build brand awareness with minimal commercial resources[7](index=7&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) [Financial Performance Summary](index=2&type=section&id=Financial%20Performance%20Summary) In Q2 2025, BioXcel reported a significant decrease in IGALMI net revenue to $120 thousand from $1.1 million in Q2 2024, with net loss increasing to $19.2 million, while R&D expenses rose due to clinical trial activity and SG&A expenses fell from cost-saving measures Q2 2025 vs. Q2 2024 Financial Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $0.12 | $1.1 | -89% | | R&D Expenses | $10.3 | $8.0 | +28.8% | | SG&A Expenses | $5.6 | $9.5 | -41.1% | | Operating Loss | $15.9 | $17.3 | -8.1% | | Net Loss | $19.2 | $8.3 | +131.3% | - The increase in R&D expenses was primarily driven by clinical trial activity for the SERENITY at-home Phase 3 studies[10](index=10&type=chunk) - The decrease in SG&A expenses was attributed to lower personnel costs, professional fees, and marketing costs following reprioritization actions in **2024**[11](index=11&type=chunk) - Cost of Goods Sold in Q2 2025 included a **$95 thousand** charge for reserves for excess or obsolete inventory, which was not present in the same period of **2024**[9](index=9&type=chunk) [Financial Position](index=2&type=section&id=Financial%20Position) The company ended Q2 2025 with $18.6 million in cash, cash equivalents, and restricted cash, subsequently raising an additional $11.5 million from at-the-market sales and $3.6 million from warrant exercises, with an operating cash burn of $12.6 million for the quarter Cash Position as of June 30, 2025 | Item | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents (June 30, 2025) | $18.6 | | Gross proceeds from ATM (post-Q2) | $11.5 | | Proceeds from warrant exercises (post-Q2) | $3.6 | | **Pro-forma Cash** | **$33.7** | - The company used **$12.6 million** in operating cash during the second quarter of **2025**[12](index=12&type=chunk) [Detailed Financial Statements](index=7&type=section&id=Detailed%20Financial%20Statements) This section provides the unaudited condensed statements of operations for the three and six months ended June 30, 2025 and 2024, and the condensed balance sheets as of June 30, 2025, and December 31, 2024 Statements of Operations (Unaudited, in thousands) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | Product revenues | $120 | $1,104 | $288 | $1,686 | | Total operating expenses | $15,972 | $18,400 | $26,239 | $43,145 | | Loss from operations | $(15,852) | $(17,296) | $(25,951) | $(41,459) | | Net loss | $(19,187) | $(8,299) | $(26,441) | $(35,090) | | Net loss per share | $(2.45) | $(3.30) | $(4.17) | $(15.78) | Condensed Balance Sheets (Unaudited, in thousands) | | **June 30, 2025** | **December 31, 2024** | | :--- | :--- | :--- | | Cash and cash equivalents and restricted cash | $18,575 | $29,854 | | Total assets | $25,789 | $38,338 | | Total liabilities | $133,456 | $131,439 | | Total stockholders' equity (deficit) | $(107,667) | $(93,101) | [Product and Trial Information](index=3&type=section&id=Product%20and%20Trial%20Information) [About BXCL501](index=3&type=section&id=About%20BXCL501) BXCL501 is an investigational, proprietary, orally dissolving film of dexmedetomidine, currently under investigation for acute agitation in Alzheimer's dementia and at-home use in bipolar disorder or schizophrenia, having received FDA Breakthrough Therapy and Fast Track designations - BXCL501 is an investigational, orally dissolving film of dexmedetomidine, a selective alpha-2 adrenergic receptor agonist[15](index=15&type=chunk) - It is being investigated for acute treatment of agitation in Alzheimer's dementia and at-home use for bipolar disorder or schizophrenia[15](index=15&type=chunk) - BXCL501 has received FDA Breakthrough Therapy designation for agitation in dementia and Fast Track designation for agitation in schizophrenia, bipolar disorders, and dementia[15](index=15&type=chunk) [About IGALMI (Approved Drug)](index=4&type=section&id=About%20IGALMI%20(Approved%20Drug)) IGALMI, the FDA-approved dexmedetomidine sublingual film, is indicated for acute agitation in adults with schizophrenia and bipolar I or II disorder, requiring healthcare provider supervision due to potential risks like low blood pressure and significant drowsiness - IGALMI is a prescription medicine for the acute treatment of agitation associated with schizophrenia and bipolar disorder I or II in adults[18](index=18&type=chunk) - It must be administered under the supervision of a healthcare provider, and its safety has not been studied beyond **24 hours** from the first dose[18](index=18&type=chunk) - Important safety risks include decreased blood pressure, slower heart rate, QT interval prolongation, and sleepiness/drowsiness; patients should not drive or operate machinery for at least **8 hours** after taking it[24](index=24&type=chunk) [Clinical Trial Designs](index=3&type=section&id=Clinical%20Trial%20Designs) This section outlines the design of two pivotal Phase 3 trials for BXCL501: the SERENITY At-Home trial evaluating the safety of a 120 mcg dose, and the TRANQUILITY In-Care trial assessing the efficacy of a 60 mcg dose for Alzheimer's-related agitation [SERENITY At-Home Phase 3 Trial Design](index=3&type=section&id=SERENITY%20At-Home%20Phase%203%20Trial%20Design) The SERENITY At-Home trial is a double-blind, placebo-controlled study focused on the safety of a 120 mcg dose of BXCL501, enrolling 200 patients with bipolar disorders or schizophrenia to self-administer the drug at home over a 12-week period, with efficacy as an exploratory endpoint - The trial is a double-blind, placebo-controlled study evaluating the safety of a **120 mcg dose** of BXCL501 for at-home use[16](index=16&type=chunk) - It involves **200 patients** self-administering the drug or placebo during agitation episodes over a **12-week period**, with safety data as the primary collection point[16](index=16&type=chunk) [TRANQUILITY In-Care Phase 3 Trial Design](index=3&type=section&id=TRANQUILITY%20In-Care%20Phase%203%20Trial%20Design) The TRANQUILITY In-Care trial is a double-blind, placebo-controlled study designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501, aiming to enroll approximately 150 patients aged 55 and older with Alzheimer's dementia in care facilities, with the primary endpoint being the change in PEC score two hours after the first dose - The trial is designed to evaluate the efficacy and safety of a **60 mcg dose** of BXCL501 for agitation in Alzheimer's dementia in a care setting[17](index=17&type=chunk) - The primary endpoint is the change from baseline in the Positive and Negative Syndrome Scale-Excitatory Component (PEC) total score at **two hours** post-dose[17](index=17&type=chunk)