[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)

[Business and Clinical Update](index=1&type=section&id=Business%20and%20Clinical%20Update) Aprea Therapeutics reported positive progress in its two lead clinical programs, APR-1051 and ATRN-119, showing early clinical activity and disease control in Phase 1 trials - CEO Oren Gilad highlighted emerging data from both lead programs (APR-1051 and ATRN-119) showing evidence of clinical activity, strengthening confidence in the company's DDR (DNA Damage Response) assets[2](index=2&type=chunk) [ACESOT-1051: WEE1 inhibitor, APR-1051](index=1&type=section&id=ACESOT-1051%3A%20WEE1%20inhibitor%2C%20APR-1051) The Phase 1 trial for oral WEE1 inhibitor APR-1051 shows early disease control, with three patients achieving stable disease, expanded enrollment for HPV+ tumors, and further data expected in H2 2025 - **Three patients** achieved stable disease: one in the 70mg cohort and two in the 100mg cohort, including patients with HPV+ head and neck, rectal, and uterine cancers[1](index=1&type=chunk)[2](index=2&type=chunk) - The trial is currently enrolling patients at a **100 mg once-daily dose**, with plans to escalate to 150 mg, following a 2025 revision to optimize the therapeutic window[4](index=4&type=chunk) - Enrollment criteria expanded to include HPV+ tumors after a patient with HPV+ HNSCC showed stable disease with a **5% tumor reduction** at a 70 mg dose[4](index=4&type=chunk) - A collaboration with MD Anderson Cancer Center demonstrated potent single-agent activity of APR-1051 in head and neck cancer cell lines and significant synergy with anti-PD-1 therapies in preclinical models[5](index=5&type=chunk) - Future plans include releasing additional data in **H2 2025**, completing dose-escalation in **H1 2026**, and potentially evaluating APR-1051 in combination with checkpoint inhibitors[8](index=8&type=chunk) [ABOYA-119: ATR inhibitor, ATRN-119](index=2&type=section&id=ABOYA-119%3A%20ATR%20inhibitor%2C%20ATRN-119) The Phase 1/2a trial for ATR inhibitor ATRN-119 shows early activity with seven patients achieving stable disease, and three patients at 550 mg showing tumor shrinkage, leading to a dose reduction to 400 mg due to toxicity - In the ongoing Phase 1/2a trial, **seven patients** with advanced solid tumors demonstrated stable disease[2](index=2&type=chunk)[9](index=9&type=chunk) - **Three patients** in the 550 mg twice-daily cohort showed meaningful tumor shrinkage of **7%, 14%, and 21%**[9](index=9&type=chunk) - Dose-limiting toxicity observed in two patients at the 550 mg level led to a dose reduction to **400 mg twice daily** to optimize the therapeutic profile[9](index=9&type=chunk) - Additional safety and efficacy data are expected in **H2 2025**, with the recommended Phase 2 dose anticipated in **H1 2026**[9](index=9&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Aprea reported a net loss of **$3.2 million** for Q2 2025, an improvement from Q2 2024, driven by decreased operating expenses, with **$16.5 million** in cash expected to fund operations into Q2 2026 [Financial Performance](index=2&type=section&id=Financial%20Performance) The company's Q2 2025 operating loss narrowed to **$3.4 million** from **$3.8 million** year-over-year, driven by reduced R&D and G&A expenses, with net loss per share improving to **$0.53** Q2 2025 vs. Q2 2024 Statement of Operations | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Loss | $3.4 million | $3.8 million | Decreased | | Net Loss | $3.2 million | $3.5 million | Decreased | | Net Loss Per Share | $0.53 | $0.58 | Improved | | R&D Expenses | $1.9 million | $2.6 million | Decreased | | G&A Expenses | $1.6 million | $1.9 million | Decreased | - The decrease in R&D expenses was mainly due to higher study start-up costs in 2024 for the ACESOT-1051 trial and lower personnel costs in 2025[9](index=9&type=chunk) - The decrease in G&A expenses was primarily driven by lower professional fees, particularly legal expenses, and a reduction in personnel costs[9](index=9&type=chunk)[10](index=10&type=chunk) [Financial Position and Cash Runway](index=2&type=section&id=Financial%20Position%20and%20Cash%20Runway) As of June 30, 2025, Aprea held **$16.5 million** in cash and cash equivalents, projected to fund operations into Q2 2026 Cash and Cash Equivalents | Date | Amount | | :--- | :--- | | June 30, 2025 | $16.5 million | | December 31, 2024 | $22.8 million | - The company believes its current cash and cash equivalents are sufficient to meet operating and capital expenditure requirements into **Q2 2026**[9](index=9&type=chunk) [Corporate Information and Forward-Looking Statements](index=4&type=section&id=Corporate%20Information%20and%20Forward-Looking%20Statements) Aprea is a clinical-stage biopharmaceutical company focused on cancer treatment through targeted therapies like APR-1051 and ATRN-119, with the report including standard forward-looking statement disclaimers - Aprea's strategy is to develop treatments that exploit vulnerabilities in cancer cell mutations to kill tumors while minimizing effects on healthy cells[11](index=11&type=chunk) - The company's lead programs, **APR-1051** (WEE1 inhibitor) and **ATRN-119** (ATR inhibitor), are in clinical development for solid tumor indications[11](index=11&type=chunk) - The press release contains forward-looking statements concerning clinical trials, regulatory submissions, and financial projections, which are subject to inherent risks and uncertainties, cautioning readers against undue reliance[13](index=13&type=chunk)[14](index=14&type=chunk)

Profitability Continues Despite Challenges for the Overall Economy Redmond, WA, Aug 12, 2025 – Hour Loop, Inc. (NASDAQ: HOUR) ("Hour Loop"), a leading online retailer, announces its financial and operational results for the quarter ended June 30, 2025. Financial Highlights for Second Quarter of 2025: Management Commentary Exhibit 99.1 Hour Loop Reports Second Quarter of 2025 Results "The second quarter of 2025 brought meaningful disruption to the retail sector as new U.S. trade actions targeting Chinese imp ...

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Bitcoin Depot reported strong Q2 2025 growth with increased revenue and significant improvements in net income and Adjusted EBITDA, driven by operational leverage and strategic financial management [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Bitcoin Depot reported strong year-over-year growth in the second quarter of 2025, with a **6% increase** in revenue to **$172.1 million**. Profitability saw significant improvement, as net income surged by **183%** to **$12.3 million** and Adjusted EBITDA grew by **46%** to **$18.5 million** Q2 2025 Key Financial Metrics (Year-over-Year) | Metric | Q2 2025 | Growth vs Q2 2024 | | :--- | :--- | :--- | | Revenue | $172.1 Million | 6% ↑ | | Net Income | $12.3 Million | 183% ↑ | | Gross Profit | $30.9 Million | 32% ↑ | | Adjusted EBITDA | $18.5 Million | 46% ↑ | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes the strong quarterly performance to operating leverage from kiosk expansion, higher transaction volumes, and disciplined cost management. The company has improved profitability, strengthened its balance sheet with nearly **$60 million** in cash and digital assets, and simplified its corporate structure to enhance transparency and shareholder alignment. Strategic initiatives include continued Bitcoin accumulation for its treasury - The company's performance demonstrates operating leverage driven by kiosk expansion, higher transaction volumes, and disciplined cost management[2](index=2&type=chunk) - Bitcoin Depot holds nearly **$60 million** in cash and digital assets, positioning it for U.S. and international growth opportunities[2](index=2&type=chunk) - The company eliminated its UP-C corporate structure to simplify governance and improve transparency[2](index=2&type=chunk) - The company continued to strategically add Bitcoin to its treasury as part of its capital allocation strategy[2](index=2&type=chunk) [Detailed Financial Results](index=1&type=section&id=Detailed%20Financial%20Results) The company achieved significant revenue growth and profitability improvements in Q2 2025, alongside a strengthened balance sheet and robust cash flow from operations [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) In Q2 2025, revenue grew **6%** to **$172.1 million**, driven by more kiosks and larger transaction sizes. Operating expenses fell **9%** to **$17.0 million** due to cost optimization. This led to a **183% increase** in net income to **$12.3 million** and a **32% rise** in gross profit to **$30.9 million**, with gross margin expanding by **360 basis points** to **17.9%** Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $172.1M | $163.1M | +6% | | Operating Expenses | $17.0M | $18.8M | -9% | | Net Income | $12.3M | $4.4M | +183% | | Gross Profit | $30.9M | $23.4M | +32% | | Gross Profit Margin | 17.9% | 14.3% | +360 bps | - Net income attributable to common shareholders was **$6.1 million**, or **$0.16 per share**, a significant improvement from a net loss of **$2.6 million**, or **($0.13) per share**, in Q2 2024[5](index=5&type=chunk) - Adjusted EBITDA increased **46%** to **$18.5 million**, primarily due to higher revenue and gross profit[7](index=7&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) As of June 30, 2025, the company's financial position strengthened, with cash, cash equivalents, and cryptocurrencies totaling **$59.6 million**, up from **$31.0 million** at year-end 2024. The company continued to invest in Bitcoin, holding **100.35 BTC**. Net cash from operations for the first six months of 2025 more than doubled to **$26.4 million** compared to the same period in 2024 Key Balance Sheet and Cash Flow Items | Metric | June 30, 2025 | Dec 31, 2024 / H1 2024 | Change | | :--- | :--- | :--- | :--- | | Cash, equivalents, & crypto | $59.6M | $31.0M | +$28.6M | | Bitcoin held for investment | 100.35 BTC | - | +6.00 BTC in Q2 | | Net cash from operations (H1) | $26.4M | $11.5M | +129.6% | [Business Outlook](index=2&type=section&id=Business%20Outlook) The company anticipates continued high-single-digit revenue growth and a substantial increase in Adjusted EBITDA for the third quarter of 2025 [Third Quarter 2025 Outlook](index=2&type=section&id=Third%20Quarter%202025%20Outlook) The company anticipates continued growth in the third quarter of 2025, forecasting **high-single-digit** percentage revenue growth and a **20% to 30%** increase in Adjusted EBITDA compared to the third quarter of 2024 - Q3 2025 revenue is expected to grow by **high-single digits** year-over-year[9](index=9&type=chunk) - Q3 2025 Adjusted EBITDA is expected to be **20% to 30%** above the prior year's quarter[9](index=9&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) The financial statements reflect significant improvements in net income and cash flow from operations, alongside a strengthened balance sheet with increased assets and positive stockholders' equity [Consolidated Statements of (Loss) Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20%28LOSS%29%20INCOME) The consolidated statements of income show a significant increase in profitability for the three and six months ended June 30, 2025. For the second quarter, net income rose to **$12.3 million** from **$4.4 million** in the prior year. For the six-month period, net income was **$24.5 million**, a substantial increase from **$122 thousand** in the same period of 2024 Consolidated Statements of (Loss) Income (Unaudited, in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Revenue** | **$172,108** | **$163,066** | **$336,334** | **$301,605** | | Cost of revenue (excl. D&A) | 139,382 | 136,708 | 270,473 | 257,995 | | Total operating expenses | 16,978 | 18,754 | 32,315 | 35,307 | | **Income from operations** | **15,748** | **7,604** | **33,546** | **8,303** | | Other (expense) income, net | (2,263) | (2,984) | (6,433) | (8,049) | | Income before taxes | 13,485 | 4,620 | 27,113 | 254 | | Income tax (expense) | (1,162) | (270) | (2,614) | (132) | | **Net income** | **$12,323** | **$4,350** | **$24,499** | **$122** | | Net income (loss) attributable to common stockholders | $6,070 | $(2,561) | $10,264 | $(4,099) | | **Net income per share - basic and diluted** | **$0.16** | **$(0.13)** | **$0.35** | **$(0.23)** | [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet as of June 30, 2025, shows total assets of **$109.1 million**, an increase from **$80.1 million** at the end of 2024. This was driven by a significant rise in cash and cryptocurrencies. Total liabilities increased to **$104.4 million** from **$96.6 million**, while total stockholders' equity turned positive to **$4.7 million** from a deficit of **$16.5 million** Consolidated Balance Sheets (Unaudited, in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | **$62,691** | **$34,333** | | Cash and cash equivalents | $48,038 | $29,472 | | Cryptocurrencies | $11,563 | $1,510 | | Total property and equipment, net | $24,541 | $26,847 | | **Total assets** | **$109,053** | **$80,104** | | **Total current liabilities** | **$44,543** | **$40,629** | | **Total Liabilities** | **$104,360** | **$96,590** | | **Total Stockholders' Equity (Deficit)** | **$4,693** | **$(16,486)** | | **Total Liabilities and Stockholders' Equity** | **$109,053** | **$80,104** | [Consolidated Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first six months of 2025, net cash provided by operating activities was **$26.4 million**, more than double the **$11.5 million** from the same period in 2024. Net cash used in investing activities was **$9.2 million**, primarily for BTC acquisitions. Net cash provided by financing activities was **$1.4 million**. The company ended the period with **$48.0 million** in cash and cash equivalents Consolidated Statements of Cash Flows (Unaudited, in thousands) | | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | | **Net Cash Flows Provided by Operations** | **$26,403** | **$11,475** | | **Net Cash Flows Used In Investing Activities** | **$(9,159)** | **$(3,190)** | | **Net Cash Flows Provided by Financing Activities** | **$1,436** | **$5,851** | | Net change in cash and cash equivalents | $18,566 | $14,183 | | Cash and cash equivalents - beginning of period | $29,472 | $29,759 | | **Cash and cash equivalents - end of period** | **$48,038** | **$43,942** | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP measures like Adjusted EBITDA and Adjusted Gross Profit to provide clearer insights into core operational performance and profitability, with detailed reconciliations provided [Explanation of Non-GAAP Measures](index=8&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Bitcoin Depot uses non-GAAP measures like Adjusted EBITDA and Adjusted Gross Profit to supplement its GAAP results. The company believes these metrics offer a better understanding of its core operational performance by excluding non-cash items, unpredictable expenses, and non-recurring costs, thus facilitating period-to-period comparisons - Adjusted EBITDA is defined as net income before interest, taxes, depreciation, amortization, non-recurring expenses, share-based compensation, and certain financing costs[26](index=26&type=chunk) - Adjusted Gross Profit is defined as revenue less cost of revenue, with depreciation and amortization added back[26](index=26&type=chunk) - Management uses these non-GAAP measures internally for operating decisions, performance evaluation, and financial planning[26](index=26&type=chunk) [Reconciliation of Net (loss) income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20%28loss%29%20income%20to%20Adjusted%20EBITDA) For Q2 2025, the company reconciled a net income of **$12.3 million** to an Adjusted EBITDA of **$18.5 million**. This compares to a net income of **$4.4 million** and an Adjusted EBITDA of **$12.7 million** in Q2 2024, representing a **46% increase** in Adjusted EBITDA. The Adjusted EBITDA margin improved to **10.8%** from **7.8%** Reconciliation of Net Income to Adjusted EBITDA (Unaudited, in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | (in thousands) | **2025** | **2024** | **2025** | **2024** | | **Net income** | **$12,323** | **$4,350** | **$24,499** | **$122** | | Interest expense | 4,726 | 2,880 | 7,794 | 7,824 | | Income tax expense | 1,162 | 270 | 2,614 | 132 | | Depreciation and amortization | 1,869 | 2,992 | 3,766 | 5,939 | | Unrealized loss on crypto | (2,315) | — | (1,221) | — | | Non-recurring expenses | 43 | 444 | 282 | 907 | | Share-based compensation | 704 | 1,728 | 1,072 | 2,625 | | **Adjusted EBITDA** | **$18,512** | **$12,664** | **$38,806** | **$17,549** | | **Adjusted EBITDA margin** | **10.8%** | **7.8%** | **11.5%** | **5.8%** | [Reconciliation of revenue to Adjusted Gross Profit](index=9&type=section&id=Reconciliation%20of%20revenue%20to%20Adjusted%20Gross%20Profit) The company reconciled its GAAP Gross Profit of **$30.9 million** to an Adjusted Gross Profit of **$32.7 million** for Q2 2025. This resulted in an Adjusted Gross Profit Margin of **19.0%**, up from **16.2%** in the prior-year quarter, highlighting improved profitability at the gross level when excluding depreciation Reconciliation of Revenue to Adjusted Gross Profit (Unaudited, in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | (in thousands) | **2025** | **2024** | **2025** | **2024** | | **Revenue** | **$172,108** | **$163,066** | **$336,334** | **$301,605** | | **Gross Profit** | **$30,864** | **$23,382** | **$62,108** | **$37,753** | | Adjustments (D&A) | $1,862 | $2,976 | $3,753 | $5,857 | | **Adjusted Gross Profit** | **$32,726** | **$26,358** | **$65,861** | **$43,610** | | **Gross Profit Margin** | **17.9%** | **14.3%** | **18.5%** | **12.5%** | | **Adjusted Gross Profit Margin** | **19.0%** | **16.2%** | **19.6%** | **14.5%** | [Other Information](index=2&type=section&id=Other%20Information) This section provides details on the upcoming earnings call, an overview of Bitcoin Depot's business, and a cautionary statement regarding forward-looking information [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) Bitcoin Depot will host a conference call and webcast on August 12, 2025, at 10:00 a.m. Eastern time to discuss its second-quarter financial results. The release provides toll-free and toll numbers, a conference ID, and a webcast link for participation, along with details for a replay available until August 19, 2025 - A conference call to discuss Q2 2025 results is scheduled for Tuesday, August 12, 2025, at 10:00 a.m. ET[10](index=10&type=chunk) - Dial-in and webcast details are provided for live participation, and a replay will be available through August 19, 2025[10](index=10&type=chunk)[11](index=11&type=chunk) [About Bitcoin Depot](index=2&type=section&id=About%20Bitcoin%20Depot) Founded in 2016, Bitcoin Depot Inc. (Nasdaq: BTM) aims to connect cash-based consumers to the digital financial system. It is the largest Bitcoin ATM operator in North America, with over **8,800 kiosk locations** as of June 2025, allowing users to convert cash into Bitcoin - Bitcoin Depot's mission is to provide simple and intuitive means for converting cash into Bitcoin[12](index=12&type=chunk) - The company has the largest market share in North America with over **8,800 kiosk locations** as of June 2025[12](index=12&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section serves as a legal disclaimer, warning that statements about future plans, strategies, and financial performance are forward-looking and not guarantees of future results. These statements are based on current management beliefs and are subject to numerous risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on management's current beliefs and are not guarantees of future performance[13](index=13&type=chunk) - Actual results may differ due to risks such as market conditions, regulatory changes, competition, and other factors detailed in SEC filings[14](index=14&type=chunk) - The company cautions readers not to place undue reliance on these statements and undertakes no obligation to update them[15](index=15&type=chunk)

[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) [Registrant Information](index=1&type=section&id=Registrant%20Information) Details Smithfield Foods, Inc.'s identification, incorporation, address, stock exchange listing, and filer status for its Q2 2025 Form 10-Q - Smithfield Foods, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 29, 2025[1](index=1&type=chunk) Registrant Details | Detail | Value | | :--- | :--- | | Exact name of registrant | SMITHFIELD FOODS, INC. | | State of incorporation | Virginia | | Address of principal executive offices | 200 Commerce Street, Smithfield, Virginia 23430 | | Registrant's telephone number | (757) 365-3000 | | Commission file number | 001-15321 | | Trading Symbol | SFD | | Exchange Registered | The Nasdaq Global Select Market | | Filer Status | Non-accelerated filer | | Common Stock Outstanding (as of Aug 11, 2025) | 393,112,711 shares | [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) The Table of Contents outlines the structure of the Form 10-Q, dividing it into Part I (Financial Information) and Part II (Other Information), with specific items and their corresponding page numbers - The report is structured into two main parts: Part I for Financial Information and Part II for Other Information, detailing specific items and their page references[4](index=4&type=chunk)[5](index=5&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) Presents Smithfield's unaudited condensed consolidated financial statements and detailed notes on accounting policies, segment performance, and financial instruments [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Provides a comparative overview of Smithfield's sales, gross profit, operating profit, and net income for the three and six months ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Income (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Sales | $3,786 | $3,412 | $374 | 11.0% | | Cost of sales | $3,288 | $2,885 | $403 | 14.0% | | Gross profit | $499 | $527 | $(28) | (5.3%) | | Operating profit | $260 | $334 | $(74) | (22.2%) | | Net income attributable to Smithfield | $188 | $301 | $(113) | (37.5%) | | Basic and diluted EPS (Continuing operations) | $0.48 | $0.67 | $(0.19) | (28.4%) | | Basic and diluted EPS (Total) | $0.48 | $0.79 | $(0.31) | (39.2%) | Condensed Consolidated Statements of Income (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Sales | $7,558 | $6,856 | $702 | 10.2% | | Cost of sales | $6,549 | $5,967 | $582 | 9.8% | | Gross profit | $1,008 | $889 | $119 | 13.4% | | Operating profit | $582 | $498 | $84 | 16.9% | | Net income attributable to Smithfield | $412 | $457 | $(45) | (9.8%) | | Basic and diluted EPS (Continuing operations) | $1.05 | $0.97 | $0.08 | 8.2% | | Basic and diluted EPS (Total) | $1.05 | $1.20 | $(0.15) | (12.5%) | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Details Smithfield's net income and other comprehensive income components, including foreign currency translation and hedge accounting, for the three and six months ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Comprehensive Income (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Net income | $188 | $306 | $(118) | (38.6%) | | Foreign currency translation | $47 | $(81) | $128 | NM | | Pension accounting | $4 | $3 | $1 | 33.3% | | Hedge accounting | $(58) | $62 | $(120) | NM | | Total other comprehensive income (loss) | $(8) | $(16) | $8 | (50.0%) | | Comprehensive income attributable to Smithfield | $165 | $306 | $(141) | (46.1%) | Condensed Consolidated Statements of Comprehensive Income (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Net income | $415 | $460 | $(45) | (9.8%) | | Foreign currency translation | $45 | $(87) | $132 | NM | | Pension accounting | $7 | $7 | $0 | 0.0% | | Hedge accounting | $(17) | $19 | $(36) | NM | | Total other comprehensive income (loss) | $35 | $(61) | $96 | NM | | Comprehensive income attributable to Smithfield | $432 | $412 | $20 | 4.9% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents Smithfield's financial position, including assets, liabilities, and equity, as of June 29, 2025, and December 29, 2024 Condensed Consolidated Balance Sheets (as of) | Asset/Liability/Equity | June 29, 2025 (in millions) | December 29, 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Cash and cash equivalents | $928 | $943 | $(15) | | Accounts receivable, net | $773 | $558 | $215 | | Inventories, net | $2,288 | $2,412 | $(124) | | Total current assets | $4,292 | $4,202 | $90 | | Total assets | $11,186 | $11,054 | $132 | | **LIABILITIES** | | | | | Accounts payable | $444 | $777 | $(333) | | Total current liabilities | $1,339 | $1,706 | $(367) | | Long-term debt and finance lease obligations | $2,001 | $1,999 | $2 | | Total liabilities and equity | $11,186 | $11,054 | $132 | | **EQUITY** | | | | | Total shareholders' equity | $6,301 | $5,834 | $467 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines Smithfield's cash flows from operating, investing, and financing activities for the six months ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Cash Flows (Six Months Ended) | Cash Flow Activity | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash flows from (used in) operating activities of continuing operations | $108 | $(9) | $117 | | Net cash flows used in investing activities of continuing operations | $(171) | $(215) | $44 | | Net cash flows from (used in) financing activities of continuing operations | $38 | $(202) | $240 | | Net change in cash, cash equivalents and restricted cash | $(15) | $(467) | $452 | | Cash, cash equivalents and restricted cash at end of period | $928 | $215 | $713 | [Condensed Consolidated Statements of Shareholder's Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholder's%20Equity) Details changes in Smithfield's shareholders' equity, including net income, dividends, and other comprehensive income, for the three and six months ended June 29, 2025 Changes in Shareholders' Equity (Three Months Ended June 29, 2025) | Item | Additional Paid-in Capital (in millions) | Retained Earnings (in millions) | Accumulated Other Comprehensive Loss (in millions) | Total Shareholders' Equity (in millions) | | :--- | :--- | :--- | :--- | :--- | | Balance, March 30, 2025 | $3,325 | $3,308 | $(408) | $6,225 | | Dividend | — | $(99) | — | $(99) | | Net income attributable to Smithfield | — | $188 | — | $188 | | Other comprehensive loss, net of tax | — | — | $(23) | $(23) | | Balance, June 29, 2025 | $3,335 | $3,398 | $(432) | $6,301 | Changes in Shareholders' Equity (Six Months Ended June 29, 2025) | Item | Additional Paid-in Capital (in millions) | Retained Earnings (in millions) | Accumulated Other Comprehensive Loss (in millions) | Total Shareholders' Equity (in millions) | | :--- | :--- | :--- | :--- | :--- | | Balance, December 29, 2024 | $3,102 | $3,184 | $(452) | $5,834 | | Net proceeds from issuance of common stock | $236 | — | — | $236 | | Net income attributable to Smithfield | — | $412 | — | $412 | | Other comprehensive income, net of tax | — | — | $20 | $20 | | Balance, June 29, 2025 | $3,335 | $3,398 | $(432) | $6,301 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for significant accounting policies, segment information, and other financial statement items [NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%201%3A%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines Smithfield's core business, fiscal year, consolidation principles, seasonality, and recently issued accounting pronouncements - Smithfield Foods, Inc. produces fresh pork and packaged meats, operating in a cyclical industry affected by commodity price fluctuations, and is a majority-owned subsidiary of Hong Kong-based WH Group Limited[18](index=18&type=chunk) - The company's fiscal year ends on the Sunday nearest to December 31, with the second quarter of 2025 and 2024 each consisting of 13 weeks, and the six-month periods consisting of 26 weeks[21](index=21&type=chunk) - Sales and profitability are generally higher in the fourth quarter due to holiday demand, while cash use is highest in the first quarter due to working capital needs[24](index=24&type=chunk) - New accounting pronouncements (ASU 2023-09, ASU 2024-03, ASU 2025-03) are effective for fiscal years 2025 and 2027, primarily impacting disclosures and presentation, but not financial position, results of operations, or cash flows[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [NOTE 2: REPORTABLE SEGMENTS](index=11&type=section&id=NOTE%202%3A%20REPORTABLE%20SEGMENTS) Details Smithfield's three reportable segments: Packaged Meats, Fresh Pork, and Hog Production, and their sales performance - Smithfield's operations are structured into three reportable segments: Packaged Meats, Fresh Pork, and Hog Production, with 'Other' including Mexico and Bioscience operations[30](index=30&type=chunk) Sales by Reportable Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $2,079 | $1,945 | $134 | 6.9% | | Fresh Pork | $2,080 | $1,981 | $99 | 5.0% | | Hog Production | $840 | $776 | $65 | 8.4% | | Other | $120 | $119 | $1 | 1.2% | | Consolidated Sales | $3,786 | $3,412 | $374 | 11.0% | Sales by Reportable Segment (Six Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $4,103 | $3,944 | $159 | 4.0% | | Fresh Pork | $4,114 | $3,920 | $194 | 5.0% | | Hog Production | $1,772 | $1,482 | $291 | 19.6% | | Other | $224 | $233 | $(8) | (3.6%) | | Consolidated Sales | $7,558 | $6,856 | $701 | 10.2% | - Hog Production segment sales increased significantly due to a **$116 million increase in grain and feed sales** and **$103 million in other sales** to Murphy Family Farms and VisionAg in Q2 2025, despite a **24% decrease in market hogs sold**[192](index=192&type=chunk)[198](index=198&type=chunk) [NOTE 3: DISCONTINUED OPERATIONS](index=15&type=section&id=NOTE%203%3A%20DISCONTINUED%20OPERATIONS) Explains the carve-out of Smithfield's European operations to WH Group and their presentation as discontinued operations - Smithfield completed the carve-out and distribution of its European operations to WH Group on August 26, 2024, which is now reported as discontinued operations[41](index=41&type=chunk) Net Income from Discontinued Operations (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Sales | $— | $926 | | Gross profit | $— | $143 | | Operating profit | $— | $90 | | Net income from discontinued operations | $— | $47 | Net Income from Discontinued Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Sales | $— | $1,735 | | Gross profit | $— | $240 | | Operating profit | $— | $146 | | Net income from discontinued operations | $— | $89 | [NOTE 4: ACQUISITION AND DISPOSITIONS](index=16&type=section&id=NOTE%204%3A%20ACQUISITION%20AND%20DISPOSITIONS) Describes Smithfield's acquisition of a dry sausage facility and the closure of two other facilities to optimize production - Acquired a dry sausage production facility in Nashville, Tennessee, for **$38 million** on July 30, 2024, to grow the value-added packaged meats business[47](index=47&type=chunk) - Closed the Elizabeth, New Jersey dry sausage production facility on June 30, 2025, and the Altoona, Iowa ham boning facility on August 30, 2024, to consolidate production and improve manufacturing efficiencies, with associated charges being immaterial[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) [NOTE 5: OPERATING GAINS AND NON-OPERATING (GAINS) LOSSES](index=17&type=section&id=NOTE%205%3A%20OPERATING%20GAINS%20AND%20NON-OPERATING%20%28GAINS%29%20LOSSES) Details the components of operating gains and non-operating gains/losses, primarily from insurance recoveries and retirement plan assets Operating Gains (Three Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Insurance recoveries | $(29) | $(1) | | Other operating gains | $(1) | $(1) | | Total Operating gains | $(30) | $(2) | Non-operating (Gains) Losses (Three Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Gain on nonqualified retirement plan assets | $(8) | $(3) | | Net pension and postretirement benefits cost | $4 | $2 | | Total Non-operating (gains) losses | $(4) | $(2) | - Operating gains in Q2 2025 included a **$29 million gain** from a litigation insurance settlement and a **$6 million gain** from a 2021 fire insurance settlement in Q1 2025[52](index=52&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) [NOTE 6: RESTRUCTURING](index=17&type=section&id=NOTE%206%3A%20RESTRUCTURING) Outlines the Hog Production Reform initiatives, including partnerships, workforce reductions, and office closures, and associated charges - Hog Production Reform involved ceasing certain farm operations, terminating agreements with underperforming contract farmers, and reducing the size of the hog production business[53](index=53&type=chunk) - Became a member of Murphy Family Farms LLC (**25% minority interest**) and VisionAg Hog Production, LLC (**9% minority interest**), which now supply approximately **3.2 million** and **600,000 hogs annually**, respectively[54](index=54&type=chunk)[55](index=55&type=chunk) Hog Production Reform Charges (Six Months Ended) | Type of Cost | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Accelerated depreciation | $1 | $— | | Contract termination costs | $— | $8 | | Employee termination benefits | $— | $2 | | Total | $1 | $10 | - Implemented a workforce reduction in Q1 2025, recognizing **$9 million in employee termination benefits** (**$6 million in SG&A**, **$2 million in cost of sales**)[58](index=58&type=chunk) - Announced closure of Lisle, Illinois and Kansas City, Missouri satellite offices in Q2 2025, accruing **$4 million in employee termination benefits** in SG&A[59](index=59&type=chunk) [NOTE 7: EMPLOYEE RETENTION TAX CREDITS](index=18&type=section&id=NOTE%207%3A%20EMPLOYEE%20RETENTION%20TAX%20CREDITS) Reports the recognition of employee retention tax credits under the CARES Act and their classification in cost of sales Employee Retention Tax Credits Recognized | Period | Amount (in millions) | | :--- | :--- | | Three Months Ended June 29, 2025 | $10 | | Three Months Ended June 30, 2024 | $87 | | Six Months Ended June 29, 2025 | $10 | | Six Months Ended June 30, 2024 | $87 | - The majority of these credits were classified in cost of sales, with **$1 million in Q2 2024** classified in SG&A[61](index=61&type=chunk) [NOTE 8: ACCOUNTS RECEIVABLE](index=18&type=section&id=NOTE%208%3A%20ACCOUNTS%20RECEIVABLE) Provides details on the composition and changes in Smithfield's net accounts receivable Accounts Receivable, Net | Metric | June 29, 2025 (in millions) | December 29, 2024 (in millions) | | :--- | :--- | :--- | | Accounts receivable, net | $773 | $558 | | Receivables from contracts with customers | $718 | $494 | - The allowance for credit losses was not material for the periods presented[63](index=63&type=chunk) [NOTE 9: INVENTORIES](index=19&type=section&id=NOTE%209%3A%20INVENTORIES) Details the composition and changes in Smithfield's net inventories, including fresh meats, livestock, and grains Inventories, Net (in millions) | Category | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Fresh and packaged meats | $1,221 | $1,006 | | Livestock | $710 | $949 | | Grains | $100 | $208 | | Maintenance parts | $119 | $115 | | Manufacturing supplies | $116 | $115 | | Other | $22 | $19 | | **Inventories, net** | **$2,288** | **$2,412** | [NOTE 10: DERIVATIVE FINANCIAL INSTRUMENTS](index=19&type=section&id=NOTE%2010%3A%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) Explains Smithfield's use of derivative instruments to manage commodity, interest rate, and foreign currency risks, and their fair values - Smithfield hedges commodity prices (live hogs, corn, soybean meal, wheat, fuel, energy), interest rates, and foreign exchange rates to mitigate price risk[65](index=65&type=chunk) Fair Values of Open Derivative Financial Instruments (in millions) | Category | June 29, 2025 (Assets) | December 29, 2024 (Assets) | June 29, 2025 (Liabilities) | December 29, 2024 (Liabilities) | | :--- | :--- | :--- | :--- | :--- | | Commodity contracts (hedge accounting) | $12 | $13 | $74 | $37 | | Commodity contracts (mark-to-market) | $1 | $2 | $16 | $7 | | **Total fair value of derivative instruments** | **$13** | **$15** | **$91** | **$44** | Derivative Impact on Condensed Consolidated Statements of Income (Three Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Total derivative loss recognized in sales | $(25) | $(5) | | Total derivative gain (loss) recognized in cost of sales | $4 | $(5) | | Total derivative loss | $(23) | $(9) | Derivative Impact on Condensed Consolidated Statements of Income (Six Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Total derivative loss recognized in sales | $(27) | $(17) | | Total derivative gain (loss) recognized in cost of sales | $8 | $(10) | | Total derivative loss | $(22) | $(25) | [NOTE 11: EQUITY METHOD INVESTMENTS](index=23&type=section&id=NOTE%2011%3A%20EQUITY%20METHOD%20INVESTMENTS) Describes Smithfield's minority interests in Murphy Family Farms and VisionAg, and the sale process for Monarch Bio Energy - Smithfield acquired a **25% minority interest** in Murphy Family Farms and a **9% minority interest** in VisionAg, both accounted for using the equity method[79](index=79&type=chunk)[80](index=80&type=chunk) - A sale notice was delivered for Monarch Bio Energy, LLC, requiring the joint venture to pursue a sale by January 17, 2026, after which TPG may require Monarch to purchase its ownership interests[82](index=82&type=chunk) [NOTE 12: DEBT](index=24&type=section&id=NOTE%2012%3A%20DEBT) Details Smithfield's refinanced Senior Revolving Credit Facility, Accounts Receivable Securitization Facility, and the termination of its Monetization Facility - Refinanced the **$2,100 million Senior Revolving Credit Facility** in February 2025, extending maturity to February 12, 2030, with no subsidiary guarantors[83](index=83&type=chunk) - Maintains a **$225 million Accounts Receivable Securitization Facility**, maturing in November 2027, with **$28 million in letters of credit** issued as of June 29, 2025[85](index=85&type=chunk) - Terminated the **$250 million Accounts Receivable Monetization Facility** on July 22, 2025, as it was no longer cost-effective or necessary given the company's liquidity position[89](index=89&type=chunk) Charges from Monetization Facility (in millions) | Period | Charges | | :--- | :--- | | Three Months Ended June 29, 2025 | $3 | | Three Months Ended June 30, 2024 | $4 | | Six Months Ended June 29, 2025 | $6 | | Six Months Ended June 30, 2024 | $7 | [NOTE 13: LEASES](index=25&type=section&id=NOTE%2013%3A%20LEASES) Reports the amendment of hog farmer contracts, extending lease terms and increasing lease obligations - Amended terms of approximately **700 contracts** with independent hog farmers in Q2 2025, extending the noncancellable term to three years[90](index=90&type=chunk) - The incremental lease obligation associated with these agreements was **$58 million** as of June 29, 2025, with **$13 million** recorded as current and the remainder as long-term[90](index=90&type=chunk) [NOTE 14: GUARANTEES](index=25&type=section&id=NOTE%2014%3A%20GUARANTEES) Notes Smithfield's release from its guaranty of Monarch Bio Energy, LLC's debt following refinancing - Smithfield was released from its guaranty of Monarch Bio Energy, LLC's debt in June 2025 after Monarch refinanced its debt facility[91](index=91&type=chunk) [NOTE 15: INCOME TAXES](index=25&type=section&id=NOTE%2015%3A%20INCOME%20TAXES) Discusses Smithfield's effective tax rate for continuing operations and the impact of new tax legislation Effective Tax Rate Attributable to Continuing Operations | Period | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Second Quarter | 24.6% | 18.2% | | First Six Months | 24.0% | 20.5% | - The increase in the effective tax rate was driven by increased profitability, a settlement with state tax authorities, and the disallowance of certain officers' compensation[92](index=92&type=chunk) - The 'One Big Beautiful Bill' (Tax Relief for American Families and Workers Act of 2025) was signed into law on July 4, 2025, permanently reinstating **100% bonus depreciation**, immediate expensing of R&D, and restoring EBITDA-based limitation for interest deduction; Smithfield is evaluating its impact for Q3 2025[93](index=93&type=chunk)[94](index=94&type=chunk) [NOTE 16: PENSION AND OTHER RETIREMENT PLANS](index=26&type=section&id=NOTE%2016%3A%20PENSION%20AND%20OTHER%20RETIREMENT%20PLANS) Details the net periodic pension cost and its components for Smithfield's retirement plans Net Periodic Pension Cost (in millions) | Component | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Interest cost | $25 | $25 | $50 | $49 | | Amortization | $5 | $5 | $11 | $9 | | Service cost | $3 | $3 | $6 | $6 | | Expected return on plan assets | $(26) | $(28) | $(53) | $(55) | | **Net periodic pension cost** | **$7** | **$5** | **$14** | **$10** | [NOTE 17: REDEEMABLE NONCONTROLLING INTERESTS](index=26&type=section&id=NOTE%2017%3A%20REDEEMABLE%20NONCONTROLLING%20INTERESTS) Explains the classification and changes in redeemable noncontrolling interests, primarily related to Altosano - Redeemable noncontrolling interests are classified outside of equity on the condensed consolidated balance sheets and are adjusted to redemption value at the end of each period[97](index=97&type=chunk) Changes in Redeemable Noncontrolling Interests (in millions) | Item | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Beginning balance | $225 | $246 | | Attribution of net income | $4 | $2 | | Attribution of comprehensive income (loss) | $15 | $(16) | | Adjustment to redemption value | $1 | $34 | | **Ending balance** | **$245** | **$265** | [NOTE 18: EQUITY](index=26&type=section&id=NOTE%2018%3A%20EQUITY) Details Smithfield's stock split, IPO, equity-based incentive awards, and changes in accumulated other comprehensive loss - A **380,069.232-for-one stock split** was approved and effected on January 17, 2025, retroactively adjusting all share and per share amounts[99](index=99&type=chunk)[101](index=101&type=chunk) - Completed an IPO on January 29, 2025, issuing **13,043,479 shares of common stock at $20.00 per share**, generating net proceeds of **$236 million**[102](index=102&type=chunk) - Granted stock options (**9,822,467 shares**) and RSUs (**1,527,000 units**) in connection with the IPO, recognizing **$2 million** and **$4 million** in compensation expense for the three and six months ended June 29, 2025, respectively[103](index=103&type=chunk) Accumulated Other Comprehensive Loss (in millions) | Component | June 29, 2025 | December 30, 2024 | | :--- | :--- | :--- | | Foreign Currency Translation | $21 | $(8) | | Pension Accounting | $(410) | $(418) | | Hedge Accounting | $(43) | $(26) | | **Total Accumulated Other Comprehensive Loss** | **$(432)** | **$(452)** | [NOTE 19: EARNINGS PER SHARE](index=31&type=section&id=NOTE%2019%3A%20EARNINGS%20PER%20SHARE) Explains the calculation of basic and diluted EPS, including the impact of the IPO and stock options Weighted-Average Shares Outstanding | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic weighted-average shares outstanding | 393,112,711 | 380,069,232 | 390,962,687 | 380,069,232 | | Diluted weighted-average shares outstanding | 393,751,294 | 380,069,232 | 391,410,859 | 380,069,232 | - Approximately **7.7 million** and **6.5 million stock options** were excluded from diluted EPS computation for the three and six months ended June 29, 2025, respectively, as their effect would have been anti-dilutive[116](index=116&type=chunk) [NOTE 20: FAIR VALUE MEASUREMENTS](index=32&type=section&id=NOTE%2020%3A%20FAIR%20VALUE%20MEASUREMENTS) Describes Smithfield's fair value measurements for financial instruments and the valuation of noncontrolling interests using a three-level hierarchy - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[115](index=115&type=chunk)[117](index=117&type=chunk) Assets and Liabilities Measured at Fair Value on a Recurring Basis (June 29, 2025, in millions) | Category | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets:** | | | | | | Commodity derivative contracts | $5 | $8 | $— | $13 | | Mutual funds | $67 | $— | $— | $77 | | Insurance contracts | $— | $110 | $— | $110 | | **Total Assets** | **$72** | **$118** | **$—** | **$200** | | **Liabilities:** | | | | | | Commodity derivative contracts | $64 | $26 | $— | $90 | | **Total Liabilities** | **$64** | **$26** | **$—** | **$91** | Significant Unobservable Level 3 Inputs for Altosano Valuation | Unobservable Inputs | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Weighted-average cost of capital | 10 % | 9 % | | Growth rate | 3 % | 3 % | | EBITDA multiple | 9.25x | 10x | | Control premium | 25 % | 25 % | Fair Value and Carrying Value of Debt (in millions) | Item | June 29, 2025 (Fair Value) | June 29, 2025 (Carrying Value) | December 29, 2024 (Fair Value) | December 29, 2024 (Carrying Value) | | :--- | :--- | :--- | :--- | :--- | | Debt | $1,882 | $1,984 | $1,821 | $1,983 | [NOTE 21: REGULATION AND CONTINGENCIES](index=35&type=section&id=NOTE%2021%3A%20REGULATION%20AND%20CONTINGENCIES) Details Smithfield's contingent liabilities from litigation, including antitrust lawsuits, and insurance recoveries - Contingent liabilities related to litigation matters totaled **$194 million** as of June 29, 2025, an increase from **$141 million** at December 29, 2024[133](index=133&type=chunk) - Recorded **$80 million in charges** for litigation matters in SG&A for the three and six months ended June 29, 2025[133](index=133&type=chunk) - Settled all class claims in the antitrust price-fixing litigation with aggregate payments of **$194 million**, with 22 non-class cases currently pending that the company intends to vigorously defend against[134](index=134&type=chunk)[135](index=135&type=chunk) - The Maxwell Foods litigation, involving breach of contract claims, was dismissed with prejudice on June 30, 2025, ending the litigation[144](index=144&type=chunk) - Received **$29 million in insurance proceeds** in Q2 2025 for recovery of losses from past litigation and **$6 million in Q1 2025** for a 2021 fire, recognized as operating gains[146](index=146&type=chunk)[147](index=147&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=38&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Smithfield's financial performance, condition, and operational results for Q2 and H1 2025, covering key factors, segment performance, liquidity, and non-GAAP measures [Overview](index=38&type=section&id=Overview) Describes Smithfield Foods, Inc. as an American food company with operations in Packaged Meats, Fresh Pork, and Hog Production, and a majority-owned subsidiary of WH Group - Smithfield Foods, Inc. is an American food company with approximately **32,000 employees in the U.S.** and **2,500 in Mexico**[149](index=149&type=chunk) - The company operates through three reportable segments: Packaged Meats, Fresh Pork, and Hog Production, with additional operations in Mexico and Bioscience aggregated as 'Other'[150](index=150&type=chunk) - The Packaged Meats segment sources approximately **80% of its raw materials** from the Fresh Pork segment, while the Fresh Pork segment sourced approximately **40% of its raw materials** from Hog Production in H1 2025 (down from 50% in H1 2024)[150](index=150&type=chunk)[151](index=151&type=chunk) [Growth Strategies](index=39&type=section&id=Growth%20Strategies) Outlines Smithfield's strategies for profitable growth in Packaged Meats, enhancing Fresh Pork profitability, innovation, operational efficiency, and M&A - Key growth strategies include driving growth in the Packaged Meats segment, enhancing Fresh Pork profitability, investing in innovation, optimizing operational and supply chain efficiencies, and executing synergistic M&A[154](index=154&type=chunk)[158](index=158&type=chunk) [Key Factors and Recent Developments Affecting Our Results of Operations and Financial Condition](index=39&type=section&id=Key%20Factors%20and%20Recent%20Developments%20Affecting%20Our%20Results%20of%20Operations%20and%20Financial%20Condition) Details the primary drivers influencing Smithfield's financial performance, including sales strategies, raw material costs, tariffs, litigation, tax legislation, and corporate actions [Sales Drivers](index=39&type=section&id=Sales%20Drivers) Explains how Smithfield drives sales in Packaged Meats through market penetration and innovation, and in Fresh Pork through global consumption and diverse channels - Packaged Meats sales are driven by increasing household penetration, consumption, price point, and product offerings, with a shift towards value-added and margin-accretive products[155](index=155&type=chunk) - Fresh Pork external sales are driven by consistent global pork consumption, maximizing hog value, and leveraging retail, foodservice, industrial, and export channels[157](index=157&type=chunk) [Cost Factors](index=39&type=section&id=Cost%20Factors) Discusses raw material costs as the largest component of COGS, hedging strategies, and the optimization of hog production - Raw materials (feed ingredients, hogs, pork) are the largest component of cost of goods sold, with prices fluctuating based on market dynamics[158](index=158&type=chunk)[159](index=159&type=chunk) - The company uses hedging transactions to mitigate commodity price risks[159](index=159&type=chunk) - Smithfield is optimizing hog production, reducing internal production from **17.6 million head in 2019** to an expected **11.5 million head in 2025**, representing approximately **40% of Fresh Pork's processed hogs**[160](index=160&type=chunk) [Tariffs](index=40&type=section&id=Tariffs) Addresses the impact of tariffs on Smithfield's export sales to China and the associated trade uncertainties - Export sales to China accounted for approximately **2% of total sales** in the first six months of 2025[163](index=163&type=chunk) - Products exported to China face tariffs ranging from **25% to 57%**, with most products subject to **57% rates**[163](index=163&type=chunk) - Uncertainty exists regarding future tariff rates and trade relations between the U.S. and China[164](index=164&type=chunk) [Litigation](index=40&type=section&id=Litigation) Covers Smithfield's contingent liabilities from litigation, including antitrust matters, and recent charges and insurance recoveries - Contingent liabilities related to litigation matters totaled **$194 million** as of June 29, 2025[167](index=167&type=chunk) - Recorded **$80 million in litigation charges** in SG&A for the three and six months ended June 29, 2025[167](index=167&type=chunk) - Received **$29 million in insurance proceeds** in Q2 2025 for recovery of losses incurred in connection with past litigation, recognized as an operating gain[169](index=169&type=chunk) [One Big Beautiful Bill](index=41&type=section&id=One%20Big%20Beautiful%20Bill) Describes the newly enacted tax legislation, "One Big Beautiful Bill," and its potential impact on Smithfield's financial reporting - The 'One Big Beautiful Bill' was signed into law on July 4, 2025, permanently reinstating **100% bonus depreciation**, immediate expensing of R&D, and restoring EBITDA-based interest deduction limitations[171](index=171&type=chunk)[175](index=175&type=chunk) - Smithfield is evaluating the impact of this legislation and will account for its effects in the third quarter of fiscal year 2025[171](index=171&type=chunk) [Employee Retention Tax Credits](index=41&type=section&id=Employee%20Retention%20Tax%20Credits) Reports the recognition of employee retention tax credits and their classification in cost of sales Employee Retention Tax Credits Recognized (in millions) | Period | Amount | | :--- | :--- | | Second Quarter 2025 | $10 | | Second Quarter 2024 | $87 | - Substantially all credits were classified in cost of sales[172](index=172&type=chunk) [Elizabeth, New Jersey Facility Closure](index=41&type=section&id=Elizabeth%2C%20New%20Jersey%20Facility%20Closure) Details the closure of Smithfield's Elizabeth, New Jersey dry sausage production facility to consolidate operations - Closed the Elizabeth, New Jersey dry sausage production facility on June 30, 2025, to consolidate production across its network[173](index=173&type=chunk) - Costs associated with the closure, primarily equipment disposal, were not material[173](index=173&type=chunk) [Office Closures](index=41&type=section&id=Office%20Closures) Announces Smithfield's plans to close satellite offices in Lisle, Illinois, and Kansas City, Missouri, and consolidate operations - Announced plans in Q2 2025 to close satellite offices in Lisle, Illinois, and Kansas City, Missouri, moving operations to Smithfield, Virginia[174](index=174&type=chunk) - Accrued **$4 million in employee termination benefit costs** in SG&A for personnel not expected to relocate[174](index=174&type=chunk) [Workforce Reduction](index=41&type=section&id=Workforce%20Reduction) Describes Smithfield's Q1 2025 workforce reduction initiative to streamline operations and reduce expenses - Implemented a workforce reduction initiative in Q1 2025 to streamline operations and reduce operating expenses[175](index=175&type=chunk) - Recognized **$9 million in employee termination benefit costs**, with **$6 million in SG&A** and **$2 million in cost of sales**[176](index=176&type=chunk) [Initial Public Offering](index=42&type=section&id=Initial%20Public%20Offering) Details Smithfield's January 2025 IPO, including shares issued, net proceeds, and equity-based incentive awards - Completed an IPO on January 29, 2025, issuing **13,043,479 shares of common stock at $20.00 per share**, resulting in **393,112,711 total outstanding shares**[177](index=177&type=chunk) - Received net proceeds of **$236 million** from the IPO[177](index=177&type=chunk) - Granted **9,822,467 stock options** and **1,527,000 RSUs**, recognizing **$2 million** and **$4 million** in compensation expense for the three and six months ended June 29, 2025, respectively[177](index=177&type=chunk) [Altoona, Iowa Facility Closure](index=42&type=section&id=Altoona%2C%20Iowa%20Facility%20Closure) Reports the closure of Smithfield's Altoona, Iowa ham boning facility to consolidate production and improve efficiencies - Closed the Altoona, Iowa ham boning facility on August 30, 2024, to consolidate production volume into other locations[178](index=178&type=chunk) - Costs associated with the closure, primarily related to operating lease assets and equipment disposal, were not material[178](index=178&type=chunk) [European Carve-Out](index=42&type=section&id=European%20Carve-Out) Explains the completion of Smithfield's European operations carve-out to WH Group and their reporting as discontinued operations - Completed the carve-out and transfer of European operations to WH Group on August 26, 2024, with no gain or loss recognized[179](index=179&type=chunk) - Historical results of European operations are reported as discontinued operations in the condensed consolidated financial statements[179](index=179&type=chunk) [Dry Sausage Facility Acquisition](index=42&type=section&id=Dry%20Sausage%20Facility%20Acquisition) Details Smithfield's acquisition of a dry sausage production facility in Nashville, Tennessee, to expand its value-added packaged meats business - Acquired a dry sausage production facility in Nashville, Tennessee, for **$38 million** on July 30, 2024[180](index=180&type=chunk) - The acquisition is part of a strategy to grow the value-added packaged meats business and meet demand for dry sausage products[180](index=180&type=chunk) [Hog Production Reform](index=42&type=section&id=Hog%20Production%20Reform) Outlines Smithfield's Hog Production Reform initiatives, including partnerships and associated charges, to optimize operations - Hog Production Reform began in 2023 to optimize operations and improve cost structure, involving cessation of farm operations and termination of underperforming contract farmer agreements[181](index=181&type=chunk) - Became a member of Murphy Family Farms LLC (**25% minority interest**) and VisionAg Hog Production, LLC (**9% minority interest**), which now supply approximately **3.2 million** and **600,000 hogs annually**, respectively[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - Recognized **$10 million in charges** associated with Hog Production Reform in cost of sales for the six months ended June 30, 2024[185](index=185&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Analyzes Smithfield's consolidated and segment-specific sales, operating profit, and net income for Q2 and H1 2025 [Consolidated Results of Continuing Operations](index=43&type=section&id=Consolidated%20Results%20of%20Continuing%20Operations) Presents Smithfield's consolidated sales, gross profit, operating profit, and net income from continuing operations for Q2 and H1 2025 Consolidated Results of Continuing Operations (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales | $3,786 | $3,412 | $374 | 11.0% | | Cost of sales | $3,288 | $2,885 | $403 | 14.0% | | Gross profit | $499 | $527 | $(28) | (5.4%) | | Operating profit | $260 | $334 | $(74) | (22.2%) | | Net income from continuing operations attributable to Smithfield | $188 | $256 | $(68) | (26.4%) | Consolidated Results of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales | $7,558 | $6,856 | $701 | 10.2% | | Cost of sales | $6,549 | $5,967 | $582 | 9.8% | | Gross profit | $1,008 | $889 | $119 | 13.4% | | Operating profit | $582 | $498 | $84 | 16.8% | | Net income from continuing operations attributable to Smithfield | $412 | $370 | $42 | 11.3% | [Operating Profit by Segment](index=44&type=section&id=Operating%20Profit%20by%20Segment) Provides a breakdown of operating profit (loss) for Smithfield's Packaged Meats, Fresh Pork, Hog Production, and Other segments Operating Profit (Loss) by Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $301 | $330 | $(29) | (8.7%) | | Fresh Pork | $35 | $58 | $(23) | (39.3%) | | Hog Production | $22 | $(2) | $24 | NM | | Other | $7 | $7 | $1 | 8.5% | | Corporate expenses | $(26) | $(32) | $6 | 17.9% | | Unallocated | $(80) | $(27) | $(53) | (200.1%) | | **Operating profit** | **$260** | **$334** | **$(74)** | **(22.2%)** | Operating Profit (Loss) by Segment (Six Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $567 | $616 | $(49) | (7.9%) | | Fresh Pork | $117 | $168 | $(51) | (30.4%) | | Hog Production | $23 | $(176) | $199 | NM | | Other | $22 | $(2) | $23 | NM | | Corporate expenses | $(55) | $(64) | $9 | 13.6% | | Unallocated | $(92) | $(44) | $(47) | (106.4%) | | **Operating profit** | **$582** | **$498** | **$84** | **16.8%** | [Sales Analysis](index=44&type=section&id=Sales%20Analysis) Analyzes sales performance across Smithfield's segments, highlighting drivers such as volume, pricing, and new partnerships Sales by Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $2,079 | $1,945 | $134 | 6.9% | | Fresh Pork | $2,080 | $1,981 | $99 | 5.0% | | Hog Production | $840 | $776 | $65 | 8.4% | | Other | $120 | $119 | $1 | 1.2% | | Consolidated sales | $3,786 | $3,412 | $374 | 11.0% | - Packaged Meats sales increased by **6.9% in Q2 2025** due to a **4.5% increase in sales volume** (higher holiday ham sales) and a **2.3% increase in average sales price**[190](index=190&type=chunk) - Hog Production sales increased by **8.4% in Q2 2025**, driven by a **$116 million increase in grain and feed sales** and **$103 million in other sales** to Murphy Family Farms and VisionAg, offsetting a **24% decrease in market hogs sold**[192](index=192&type=chunk)[198](index=198&type=chunk) - Hog Production sales increased by **19.6% in H1 2025**, driven by **$271 million in sales** to Murphy Family Farms and VisionAg, a **$189 million increase in grain and feed sales**, and an **8.2% increase in average market hog sales price**, offsetting a **22% decrease in market hogs sold**[196](index=196&type=chunk)[199](index=199&type=chunk) [Cost of Sales Analysis](index=46&type=section&id=Cost%20of%20Sales%20Analysis) Examines the factors influencing Smithfield's cost of sales, including raw material prices, sales volume, and employee retention tax credits Cost of Sales by Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $1,690 | $1,518 | $173 | 11.4% | | Fresh Pork | $2,005 | $1,878 | $127 | 6.8% | | Hog Production | $808 | $766 | $42 | 5.5% | | Other | $107 | $107 | $— | 0.0% | | Consolidated cost of sales | $3,288 | $2,885 | $403 | 14.0% | - Packaged Meats cost of sales increased by **$173 million in Q2 2025** due to a **$146 million increase in raw material costs** and a **$32 million decrease in employee retention tax credits**[201](index=201&type=chunk)[202](index=202&type=chunk) - Hog Production cost of sales increased by **$42 million in Q2 2025**, driven by **$115 million in grain and feed sales costs** and **$108 million in other goods/services sales costs** to Murphy Family Farms and VisionAg, partially offset by a **$103 million decrease in raw material costs** from reduced hog production[201](index=201&type=chunk)[202](index=202&type=chunk) - Hog Production cost of sales increased by **$93 million in H1 2025**, driven by **$260 million in sales costs** to Murphy Family Farms and VisionAg and a **$187 million increase in grain and feed sales costs**, partially offset by a **$227 million decrease in raw material costs** from reduced hog production[204](index=204&type=chunk) [Selling, General and Administrative Expenses Analysis](index=47&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses%20Analysis) Selling, general and administrative (SG&A) expenses increased by $74 million (38.1%) in Q2 2025 and $72 million (18.3%) in H1 2025, primarily due to an $80 million increase in litigation charges and $10 million in employee termination benefits from workforce reduction and office closures Selling, General and Administrative Expenses (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $268 | $194 | $74 | 38.1% | | Six Months Ended | $465 | $393 | $72 | 18.3% | - The increase was primarily driven by an **$80 million increase in the accrual for litigation charges** and **$10 million in employee termination benefits** for workforce reduction and office closures[207](index=207&type=chunk)[209](index=209&type=chunk) [Operating Gains Analysis](index=48&type=section&id=Operating%20Gains%20Analysis) Operating gains significantly increased to $(30) million in Q2 2025 and $(39) million in H1 2025, primarily due to insurance recoveries related to past litigation and a 2021 fire Operating Gains (in millions) | Item | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Insurance recoveries | $(29) | $(1) | $(35) | $(1) | | Gain on disposal of assets | $— | $— | $(2) | $(1) | | Other operating gains | $(1) | $(1) | $(2) | $(1) | | **Operating gains** | **$(30)** | **$(2)** | **$(39)** | **$(3)** | - Operating gains included a **$29 million gain** from a litigation insurance settlement in Q2 2025 and a **$6 million gain** from a 2021 fire insurance settlement in Q1 2025[210](index=210&type=chunk) [Interest Expense, Net Analysis](index=48&type=section&id=Interest%20Expense%2C%20Net%20Analysis) Net interest expense decreased by $9 million (45.0%) in Q2 2025 and $13 million (37.1%) in H1 2025, primarily due to higher levels of cash and cash equivalents earning interest Interest Expense, Net (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $11 | $19 | $(9) | (45.0%) | | Six Months Ended | $22 | $35 | $(13) | (37.1%) | - The decrease was driven by higher levels of cash and cash equivalents earning interest[211](index=211&type=chunk) [Non-operating (Gains) Losses Analysis](index=48&type=section&id=Non-operating%20%28Gains%29%20Losses%20Analysis) Non-operating (gains) losses shifted to a loss of $4 million in Q2 2025 and a gain of $2 million in H1 2025, primarily influenced by gains on nonqualified retirement plan assets and net pension and postretirement benefits costs Non-operating (Gains) Losses (in millions) | Item | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Gain on nonqualified retirement plan assets | $(8) | $(3) | $(6) | $(9) | | Net pension and postretirement benefits cost | $4 | $2 | $8 | $3 | | **Non-operating (gains) losses** | **$(4)** | **$(2)** | **$2** | **$(6)** | [Income Tax Expense Analysis](index=48&type=section&id=Income%20Tax%20Expense%20Analysis) Income tax expense increased by $5 million (8.4%) in Q2 2025 and $38 million (39.1%) in H1 2025, primarily due to higher earnings. The effective tax rate for continuing operations increased to 24.6% in Q2 2025 and 24.0% in H1 2025, driven by increased profitability, a state tax settlement, and disallowance of certain officers' compensation Income Tax Expense (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $62 | $58 | $5 | 8.4% | | Six Months Ended | $134 | $96 | $38 | 39.1% | Effective Tax Rate Attributable to Continuing Operations | Period | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Second Quarter | 24.6% | 18.2% | | First Six Months | 24.0% | 20.5% | [Loss from Equity Method Investments Analysis](index=48&type=section&id=Loss%20from%20Equity%20Method%20Investments%20Analysis) Loss from equity method investments increased by $3 million in Q2 2025 and $7 million in H1 2025, primarily due to losses incurred by Murphy Family Farms Loss from Equity Method Investments (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | | :--- | :--- | :--- | :--- | | Three Months Ended | $3 | $— | $3 | | Six Months Ended | $8 | $1 | $7 | - The increase in loss was primarily due to losses incurred by Murphy Family Farms[214](index=214&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses Smithfield's liquidity position, credit facilities, cash flow activities, and anticipated cash requirements [Overview of Liquidity](index=49&type=section&id=Overview%20of%20Liquidity) Provides an overview of Smithfield's strong liquidity position, including cash and committed credit facilities - As of June 29, 2025, Smithfield had **$3,225 million of available liquidity**, comprising **$928 million in cash and cash equivalents** and **$2,297 million from committed credit facilities**[216](index=216&type=chunk)[217](index=217&type=chunk) - The company believes its current liquidity is strong and sufficient to meet working capital needs and financial obligations for at least the next twelve months[216](index=216&type=chunk) [Credit Facilities](index=49&type=section&id=Credit%20Facilities) Details Smithfield's refinanced Senior Revolving Credit Facility and Accounts Receivable Securitization Facility, and covenant compliance - Refinanced the **$2,100 million Senior Revolving Credit Facility** in February 2025, extending maturity to February 12, 2030[218](index=218&type=chunk) - The Senior Revolving Credit Facility includes financial maintenance covenants for a maximum total consolidated leverage ratio of **0.50 to 1.00** and a minimum interest coverage ratio of **3.50 to 1.00**[218](index=218&type=chunk) - Maintains a **$225 million Accounts Receivable Securitization Facility**, maturing in November 2027, with **$28 million in letters of credit** issued as of June 29, 2025[220](index=220&type=chunk)[221](index=221&type=chunk) [Monetization Facility](index=50&type=section&id=Monetization%20Facility) Explains the termination of Smithfield's Accounts Receivable Monetization Facility due to sufficient liquidity and cost-effectiveness - Terminated the uncommitted **$250 million Accounts Receivable Monetization Facility** on July 22, 2025[224](index=224&type=chunk) - The termination was due to Smithfield's strong liquidity position and internal capital resources, making the facility no longer cost-effective or necessary[224](index=224&type=chunk) Charges from Monetization Facility (in millions) | Period | Charges | | :--- | :--- | | Three Months Ended June 29, 2025 | $3 | | Three Months Ended June 30, 2024 | $4 | | Six Months Ended June 29, 2025 | $6 | | Six Months Ended June 30, 2024 | $7 | [Cash Flows From Operating Activities of Continuing Operations](index=51&type=section&id=Cash%20Flows%20From%20Operating%20Activities%20of%20Continuing%20Operations) Net cash flows from operating activities of continuing operations significantly increased to $108 million for the six months ended June 29, 2025, from a use of $9 million in the prior year. This improvement was driven by changes in working capital, deferred taxes, and hedging activity, as well as higher earnings Net Cash Flows from Operating Activities of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Net income from continuing operations | $415 | $372 | | Net cash flows from (used in) operating activities of continuing operations | $108 | $(9) | - The increase was primarily driven by changes in working capital (accounts receivable increase due to sales to Murphy Family Farms and VisionAg, inventory decrease due to Hog Production Reform, accounts payable decrease due to seasonal payments, and accrued expenses decrease due to variable compensation payout and litigation accruals)[225](index=225&type=chunk) [Cash Flows From Investing Activities of Continuing Operations](index=52&type=section&id=Cash%20Flows%20From%20Investing%20Activities%20of%20Continuing%20Operations) Net cash flows used in investing activities of continuing operations decreased to $171 million for the six months ended June 29, 2025, from $215 million in the prior year. This was mainly due to lower capital expenditures and reduced net expenditures from breeding stock transactions Net Cash Flows Used in Investing Activities of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Capital expenditures | $(158) | $(173) | | Net expenditures from breeding stock transactions | $(13) | $(42) | | **Net cash flows used in investing activities of continuing operations** | **$(171)** | **$(215)** | - Capital expenditures primarily consisted of plant automation and improvement projects[226](index=226&type=chunk) [Cash Flows From Financing Activities of Continuing Operations](index=52&type=section&id=Cash%20Flows%20From%20Financing%20Activities%20of%20Continuing%20Operations) Net cash flows from financing activities of continuing operations significantly improved to $38 million for the six months ended June 29, 2025, compared to a use of $202 million in the prior year. This was primarily driven by net proceeds from the issuance of common stock (IPO) and lower principal payments on debt, partially offset by dividend payments Net Cash Flows From Financing Activities of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Net proceeds from issuance of common stock | $236 | $— | | Principal payments on long-term debt and finance lease obligations | $(1) | $(19) | | Payment of dividends | $(197) | $(182) | | **Net cash flows from (used in) financing activities of continuing operations** | **$38** | **$(202)** | [Other Anticipated or Potential Cash Requirements](index=52&type=section&id=Other%20Anticipated%20or%20Potential%20Cash%20Requirements) Outlines Smithfield's anticipated capital expenditures, dividend payments, and potential cash requirements related to investments and litigation - Anticipates capital expenditures in the range of **$400 million to $500 million for 2025**, including profit improvement projects like packaged meats capacity expansion and automation[228](index=228&type=chunk) - Announced a quarterly dividend of **$0.25 per share** for August 28, 2025, with an anticipated annual dividend rate of **$1.00 per share** for fiscal 2025[229](index=229&type=chunk) - TPG may require Monarch Bio Energy, LLC to purchase TPG's ownership interests if a sale of the joint venture is not consummated by January 17, 2026[230](index=230&type=chunk)[231](index=231&type=chunk) - Noncontrolling interest holders in Altosano have a put option to obligate Smithfield to redeem a portion or all of their interest, valued at **$245 million** as of June 29, 2025[232](index=232&type=chunk) [Risk Management Activities](index=53&type=section&id=Risk%20Management%20Activities) Describes Smithfield's exposure to market risks from commodity prices, interest rates, and foreign exchange rates, and its use of derivatives - Exposed to market risks primarily from changes in commodity prices, and to a lesser degree, interest rates and foreign exchange rates[234](index=234&type=chunk) - Utilizes derivative instruments to hedge exposure to changing prices and rates[234](index=234&type=chunk) - Changes in derivative portfolio value can impact liquidity through margin deposit requirements, with a maximum of **$121 million** held by brokers/counterparties over the past two fiscal years[235](index=235&type=chunk) [Guarantees](index=53&type=section&id=Guarantees) Notes Smithfield's release from its joint and several guaranty of Monarch Bio Energy, LLC's debt - Smithfield was released from its joint and several guaranty of Monarch Bio Energy, LLC's debt in June 2025 after Monarch refinanced its debt[237](index=237&type=chunk) [Non-GAAP Measures](index=53&type=section&id=Non-GAAP%20Measures) Explains Smithfield's use of non-GAAP financial measures to provide a clearer understanding of underlying performance and debt sustainability [Adjusted Net Income from Continuing Operations Attributable to Smithfield and Adjusted Net Income from Continuing Operations per Common Share Attributable to Smithfield](index=54&type=section&id=Adjusted%20Net%20Income%20from%20Continuing%20Operations%20Attributable%20to%20Smithfield%20and%20Adjusted%20Net%20Income%20from%20Continuing%20Operations%20per%20Common%20Share%20Attributable%20to%20Smithfield) Defines adjusted net income and EPS as non-GAAP measures that exclude unusual or infrequent items for better year-over-year comparison - Non-GAAP measures are used to exclude items that are unusual in nature, infrequent in occurrence, or stem from strategic restructuring decisions[240](index=240&type=chunk) Adjusted Net Income from Continuing Operations Attributable to Smithfield (in millions, except per share data) | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income from continuing operations attributable to Smithfield | $188 | $256 | $412 | $370 | | Litigation charges | $73 | $— | $73 | $— | | Reduction in workforce (SG&A) | $— | $— | $6 | $— | | Reduction in workforce (Cost of sales) | $— | $— | $2 | $— | | Office closures | $4 | $— | $4 | $— | | Hog Production Reform (Cost of sales) | $— | $— | $2 | $10 | | Employee retention tax credits (Cost of sales) | $(10) | $(86) | $(10) | $(86) | | Insurance recoveries | $(29) | $(1) | $(35) | $(1) | | Adjusted net income from continuing operations attributable to Smithfield | $217 | $192 | $443 | $315 | | Adjusted net income from continuing operations attributable to Smithfield per diluted common share | $0.55 | $0.51 | $1.13 | $0.83 | [EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations](index=56&type=section&id=EBITDA%20from%20Continuing%20Operations%2C%20Adjusted%20EBITDA%20from%20Continuing%20Operations%20and%20Adjusted%20EBITDA%20Margin%20from%20Continuing%20Operations) Explains EBITDA and Adjusted EBITDA as non-GAAP measures for assessing operating performance, debt capacity, and efficiency - EBITDA from continuing operations excludes financing and investing activities to provide a comparable year-over-year analysis[242](index=242&type=chunk) - Adjusted EBITDA from continuing operations further excludes discontinued operations, non-operating gains/losses, and other unusual or infrequent items[242](index=242&type=chunk) Adjusted EBITDA from Continuing Operations (in millions, except percentages) | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income from continuing operations | $188 | $259 | $415 | $372 | | Interest expense, net | $11 | $19 | $22 | $35 | | Income tax expense | $62 | $58 | $134 | $96 | | Depreciation and amortization | $82 | $83 | $165 | $165 | | **EBITDA from continuing operations** | **$344** | **$419** | **$736** | **$668** | | Litigation charges | $73 | $— | $73 | $— | | Employee retention tax credits | $(10) | $(86) | $(10) | $(86) | | Insurance recoveries | $(29) | $(1) | $(35) | $(1) | | **Adjusted EBITDA from continuing operations** | **$381** | **$333** | **$777** | **$594** | | Adjusted EBITDA margin from continuing operations | 10.1 % | 9.7 % | 10.3 % | 8.7 % | [Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations](index=57&type=section&id=Net%20Debt%20and%20Ratio%20of%20Net%20Debt%20to%20Adjusted%20EBITDA%20from%20Continuing%20Operations) Defines net debt and its ratio to adjusted EBITDA as non-GAAP measures for understanding financial position and debt sustainability - Net debt is a non-GAAP measure that helps investors understand the financial position and is used to calculate leverage ratios[246](index=246&type=chunk) - The ratio of net debt to adjusted EBITDA from continuing operations monitors debt sustainability and ability to take on additional debt[246](index=246&type=chunk) Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations (in millions, except ratios) | Metric | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Total debt and finance lease obligations | $2,003 | $2,002 | | Cash and cash equivalents | $(928) | $(943) | | **Net debt** | **$1,075** | **$1,059** | | Adjusted EBITDA from continuing operations (LTM) | $1,562 | $1,379 | | **Ratio of net debt to adjusted EBITDA from continuing operations** | **0.7x** | **0.8x** | [Adjusted Operating Profit and Adjusted Operating Profit Margin](index=57&type=section&id=Adjusted%20Operating%20Profit%20and%20Adjusted%20Operating%20Profit%20Margin) Explains adjusted operating profit and margin as non-GAAP measures to provide a clearer view of underlying operating results by excluding unusual items - Adjusted operating profit and margin provide a better understanding of underlying operating results by excluding unusual or infrequent items and strategic restructuring impacts[248](index=248&type=chunk) Adjusted Operating Profit (Loss) by Segment (Three Months Ended June 29, 2025, in millions, except percentages) | Segment | Operating profit (loss) | Litigation charges | Office closures | Employee retention tax credits | Insurance recoveries | Adjusted operating profit (loss) | Adjusted operating profit (loss) margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $301 | $— | $— | $(5) | $— | $296 | 14.2 % | | Fresh Pork | $35 | $— | $— | $(5) | $— | $30 | 1.4 % | | Hog Production | $22 | $— | $— | $— | $— | $22 | 2.6 % | | Other | $7 | $— | $— | $— | $— | $7 | 6.1 % | | Corporate | $(26) | $— | $— | $— | $— | $(26) | NM | | Unallocated | $(80) | $73 | $4 | $— | $(29) | $(31) | NM | | **Consolidated** | **$260** | **$73** | **$4** | **$(10)** | **$(29)** | **$298** | **7.9 %** | Adjusted Operating Profit (Loss) by Segment (Six Months Ended June 29, 2025, in millions, except percentages) | Segment | Operating profit (loss) | Litigation charges | Workforce reduction | Office closures | Plant closure | Hog Production Reform | Employee retention tax credits | Insurance recoveries | Adjusted operating profit (loss) | Adjusted operating profit (loss) margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $567 | $— | $— | $— | $— | $— | $(5) | $— | $562 | 13.7 % | | Fresh Pork | $117 | $— | $— | $— | $— | $— | $(5) | $— | $112 | 2.7 % | | Hog Production | $23 | $— | $— | $— | $— | $— | $— | $— | $23 | 1.3 %

[Filing Information](index=1&type=section&id=Filing%20Information) Provides essential identification details for Monopar Therapeutics Inc., including its registration, securities, and company status [Registrant Information](index=1&type=section&id=Registrant%20Information) Details Monopar Therapeutics Inc.'s fundamental identification, including incorporation state, principal offices, and contact information - Registrant: **MONOPAR THERAPEUTICS INC.**[2](index=2&type=chunk) - State of Incorporation: Delaware[3](index=3&type=chunk) - Principal Executive Offices: 1000 Skokie Blvd., Suite 350, Wilmette, IL 60091[3](index=3&type=chunk) [Securities Registered](index=1&type=section&id=Securities%20Registered) Lists Monopar Therapeutics Inc.'s Common Stock registered under Section 12(b), including its trading symbol and exchange Registered Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :--------------------------------------- | | Common Stock, $0.001 par value | MNPR | The Nasdaq Stock Market LLC (Nasdaq Capital Market) | [Emerging Growth Company Status](index=1&type=section&id=Emerging%20Growth%20Company%20Status) Indicates that Monopar Therapeutics Inc. is not an emerging growth company - Monopar Therapeutics Inc. is not an emerging growth company[5](index=5&type=chunk) [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Reports the announcement of Monopar Therapeutics Inc.'s financial results for the second quarter ended June 30, 2025 [Announcement of Financial Results](index=2&type=section&id=Announcement%20of%20Financial%20Results) Monopar Therapeutics Inc. announced Q2 2025 financial results via an August 12, 2025 press release, furnished but not legally "filed" - Monopar Therapeutics Inc. issued a press release on August 12, 2025, announcing financial results for the second quarter ended June 30, 2025[6](index=6&type=chunk) - A copy of the press release is attached as Exhibit 99.1[6](index=6&type=chunk) - The information in this item and exhibit is furnished and not deemed 'filed' under Section 18 of the Securities Exchange Act of 1934[7](index=7&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) Provides a comprehensive list of financial statements and exhibits accompanying the filing [Exhibits List](index=2&type=section&id=Exhibits%20List) Lists all exhibits accompanying the Form 8-K filing, including the press release and interactive data file Exhibits | Exhibit No. | Description | | :------------ | :---------------------------------------------------- | | 99.1 | Press Release Dated August 12, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [Signature](index=3&type=section&id=Signature) Confirms the official authorization and signatory details for the filed report [Authorization and Signatory](index=3&type=section&id=Authorization%20and%20Signatory) The report is duly signed on behalf of Monopar Therapeutics Inc. by its Chief Financial Officer, Quan Vu, confirming authorization - The report was signed on August 12, 2025[12](index=12&type=chunk) - Signatory: Quan Vu, Chief Financial Officer of Monopar Therapeutics Inc.[12](index=12&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File Number: 001-39070 MONOPAR THERAPEUTICS INC. (Exact name of registrant as specified in its charter) Delaware 32-0463781 (State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number) 1000 Skokie Blvd., Suite 350, Wilmette, IL 60091 (Address of principal executive offices) (zip code) (847) 388-0349 (Registrant's telephone number, including area ...

[Business Highlights](index=1&type=section&id=First%20Quarter%202026%20Corporate%20Highlights) Grace Therapeutics announced the submission of a New Drug Application (NDA) to the U.S. FDA for its lead candidate, GTx-104, for the treatment of aneurysmal Subarachnoid Hemorrhage (aSAH), a key milestone supported by positive Phase 3 STRIVE-ON trial data - Submitted a New Drug Application (NDA) to the FDA for GTx-104 in treating aSAH, based on positive Phase 3 STRIVE-ON trial results[2](index=2&type=chunk)[3](index=3&type=chunk)[6](index=6&type=chunk) - The NDA submission has the potential to trigger the exercise of warrants from a September 2023 private placement, which could provide up to **$7.6 million** in proceeds[6](index=6&type=chunk)[11](index=11&type=chunk) - GTx-104 has received Orphan Drug Designation from the FDA, which provides seven years of marketing exclusivity in the U.S. upon approval[6](index=6&type=chunk)[19](index=19&type=chunk) - The FDA has a 60-day period to determine if the NDA is complete and acceptable for filing and formal review[6](index=6&type=chunk) [Financial Performance](index=1&type=section&id=First%20Quarter%202026%20Financial%20Results) For the quarter ended June 30, 2025, Grace Therapeutics reported a net loss of **$3.4 million**, an increase from **$2.6 million** in the prior year, primarily due to changes in derivative warrant liabilities, partially offset by a **$1.8 million** decrease in R&D expenses [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Net loss increased to **$3.4 million**, primarily due to derivative warrant liabilities, partially offset by reduced R&D expenses Q1 2026 vs Q1 2025 Financial Results | Metric | Q1 2026 (ended June 30, 2025) | Q1 2025 (ended June 30, 2024) | | :--- | :--- | :--- | | **Net Loss** | $3.4 million | $2.6 million | | **Loss Per Share** | $0.21 | $0.24 | - The increase in net loss was mainly driven by a **$1.9 million** difference in the change in fair value of derivative warrant liabilities and a **$0.7 million** decrease in income tax benefit[5](index=5&type=chunk) - The higher net loss was partially offset by a **$1.8 million** decrease in R&D expenses and a **$0.1 million** decrease in G&A expenses[5](index=5&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Operating expenses decreased, with **R&D down $1.8 million** following GTx-104 trial completion, and G&A slightly reduced Operating Expenses Comparison (in millions) | Expense Category | Q1 2026 (ended June 30, 2025) | Q1 2025 (ended June 30, 2024) | Change | | :--- | :--- | :--- | :--- | | **Research & Development** | $0.9 | $2.7 | -$1.8 | | **General & Administrative** | $2.1 | $2.2 | -$0.1 | - R&D expenses decreased by **$1.8 million**, primarily due to a **$1.9 million** reduction in research activities following the completion of the GTx-104 pivotal Phase 3 STRIVE-ON trial[7](index=7&type=chunk) - G&A expenses decreased slightly by **$0.1 million**, resulting from lower professional fees related to the company's 2024 continuance and domestication[8](index=8&type=chunk) [Financial Position and Cash Runway](index=2&type=section&id=Cash%20Runway) The company maintains a cash position of **$20.0 million**, projecting a runway through at least the next twelve months, with potential extension from warrant exercises - As of June 30, 2025, the company held **$20.0 million** in cash and cash equivalents[9](index=9&type=chunk) - Management believes current cash provides a runway through at least the next twelve months, potentially extending into Q2 2027 if all common warrants from the February 2025 and September 2023 private placements are exercised[12](index=12&type=chunk) - The company has potential gross proceeds of **$22.6 million** from the exercise of outstanding warrants (**$15.0 million** from the Feb 2025 placement and **$7.6 million** from the Sep 2023 placement)[10](index=10&type=chunk)[11](index=11&type=chunk) [Clinical Pipeline and Trials](index=2&type=section&id=About%20the%20STRIVE-ON%20Trial) The company's lead asset, GTx-104, demonstrated positive results in the Phase 3 STRIVE-ON trial, meeting its primary endpoint by reducing drug-induced hypotension compared to oral nimodipine, while other pipeline assets have been deprioritized [GTx-104 and the STRIVE-ON Trial](index=2&type=section&id=GTx-104%20and%20the%20STRIVE-ON%20Trial) GTx-104, an injectable nimodipine formulation, met its primary endpoint in the STRIVE-ON trial, significantly reducing hypotension and improving patient outcomes - GTx-104 is a novel, injectable formulation of nimodipine for IV infusion in patients with aSAH, designed to overcome limitations of oral administration[15](index=15&type=chunk)[16](index=16&type=chunk) - The Phase 3 STRIVE-ON trial met its primary endpoint, with GTx-104 showing a **19% reduction** in clinically significant hypotension compared to oral nimodipine (**28% vs. 35%**)[13](index=13&type=chunk) Key Secondary Outcomes from STRIVE-ON Trial (GTx-104 vs. Oral Nimodipine) | Metric | GTx-104 | Oral Nimodipine | | :--- | :--- | :--- | | **Relative Dose Intensity (RDI) ≥ 95%** | 54% of patients | 8% of patients | | **Favorable Functional Outcomes at 90 days** | 29% more patients | Baseline | | **Other Benefits** | Fewer ICU readmissions, ICU days, and ventilator days | Baseline | [Other Pipeline Assets](index=3&type=section&id=Other%20Pipeline%20Assets) Development of GTx-102 and GTx-101 has been deprioritized to focus on GTx-104, with potential licensing or sale opportunities being explored - The development of GTx-102 (for Ataxia-Telangiectasia) and GTx-101 (for postherpetic neuralgia) has been deprioritized to focus resources on the lead asset, GTx-104[17](index=17&type=chunk)[18](index=18&type=chunk) - The company may pursue licensing or sale opportunities for both GTx-102 and GTx-101[17](index=17&type=chunk)[18](index=18&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for Grace Therapeutics, Inc. as of June 30, 2025, and for the three-month period then ended, including the Balance Sheets and Statements of Loss and Comprehensive Loss [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and March 31, 2025 Condensed Consolidated Balance Sheets (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $20,005 | $22,133 | | Total current assets | $20,525 | $22,712 | | Total assets | $69,805 | $71,993 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $2,315 | $1,930 | | Total liabilities | $6,255 | $5,383 | | Total stockholders' equity | $63,550 | $66,610 | | Total liabilities and stockholders' equity | $69,805 | $71,993 | [Condensed Consolidated Statements of Loss and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) The statement of loss details the company's revenues and expenses, resulting in a net loss for the three months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Loss (in thousands) | Account | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Research and development expenses | $(955) | $(2,708) | | General and administrative expenses | $(2,135) | $(2,255) | | Loss from operating activities | $(3,090) | $(4,963) | | **Net loss and total comprehensive loss** | **$(3,362)** | **$(2,617)** | | **Basic and diluted loss per share** | **$(0.21)** | **$(0.24)** |

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) [Overview and Key Announcements](index=1&type=section&id=Overview%20and%20Key%20Announcements) Grace Therapeutics submitted GTx-104 NDA for aSAH to FDA, backed by positive Phase 3 STRIVE-ON data - Grace Therapeutics submitted an NDA to the FDA for GTx-104 for aSAH, marking a significant milestone for the company's clinical and corporate objectives[2](index=2&type=chunk)[3](index=3&type=chunk) - The GTx-104 NDA is supported by positive Phase 3 STRIVE-ON safety trial data, which met its primary endpoint and demonstrated improved clinical outcomes for aSAH patients, along with potential medical and pharmacoeconomic benefits[2](index=2&type=chunk)[3](index=3&type=chunk) - CEO Prashant Kohli stated that GTx-104 could be a potential breakthrough for aSAH patient care, as standard treatments have seen no significant innovation in nearly 40 years[3](index=3&type=chunk) [First Quarter 2026 Corporate Highlights](index=1&type=section&id=First%20Quarter%202026%20Corporate%20Highlights) Q1 highlights include GTx-104 NDA submission to FDA, potential **$7.6 million** warrant exercises, and Orphan Drug Designation - The company submitted GTx-104's NDA to the FDA, which includes positive data from the Phase 3 STRIVE-ON safety trial, demonstrating GTx-104's clinical benefits over oral nimodipine[6](index=6&type=chunk) - The NDA submission may trigger the exercise of warrants from the September 2023 private placement, potentially generating up to **$7.6 million** at an exercise price of **$3.003 per share**[6](index=6&type=chunk) - GTx-104 has received FDA Orphan Drug Designation, which, if approved, typically grants seven years of marketing exclusivity in the US market, with additional protection from US and international patents[6](index=6&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) [First Quarter 2026 Financial Results](index=1&type=section&id=First%20Quarter%202026%20Financial%20Results) Grace Therapeutics reported a **$3.4 million** net loss for Q1 FY2026, an **$0.8 million** increase year-over-year, driven by derivative warrant liability changes and reduced tax benefits First Quarter 2026 Key Financial Data | Metric | June 30, 2025 ($ in thousands) | June 30, 2024 ($ in thousands) | Change ($ in thousands) | Change Rate | | :--------------------------------- | :----------------------------- | :----------------------------- | :---------------------- | :---------- | | Net Loss | (3,362) | (2,617) | (745) | 28.47% | | Basic and Diluted Loss Per Share | (0.21) | (0.24) | 0.03 | -12.50% | | Research and Development Expenses | (955) | (2,708) | 1,753 | -64.73% | | General and Administrative Expenses | (2,135) | (2,255) | 120 | -5.32% | | Change in Fair Value of Derivative Warrant Liability | (487) | 1,395 | (1,882) | -134.91% | | Income Tax Benefit | — | 724 | (724) | -100.00% | - Research and development expenses decreased by **$1.8 million** year-over-year, primarily due to the completion of the GTx-104 pivotal Phase 3 STRIVE-ON safety clinical trial, partially offset by increased professional fees related to NDA preparation and submission[7](index=7&type=chunk) - General and administrative expenses decreased by **$0.1 million** year-over-year, mainly due to reduced legal, accounting, tax, audit, and other professional fees related to the continuation and domestication completed in October 2024, partially offset by increased payroll and benefits and GTx-104 commercial assessment costs[8](index=8&type=chunk) [Cash Position and Runway](index=2&type=section&id=Cash%20Position%20and%20Runway) As of June 30, 2025, cash and cash equivalents were **$20 million**, a **$2.1 million** decrease, with existing funds projected to cover operations for at least twelve months, extending to Q2 2027 upon warrant exercise Cash and Cash Equivalents | Metric | June 30, 2025 ($ in thousands) | March 31, 2025 ($ in thousands) | Change ($ in thousands) | Change Rate | | :----------------- | :----------------------------- | :----------------------------- | :---------------------- | :---------- | | Cash and Cash Equivalents | 20,005 | 22,133 | (2,128) | -9.61% | - Common stock warrants from the February 2025 private placement, if exercised, could generate aggregate proceeds of **$15 million** at an exercise price of **$3.395 per share**[10](index=10&type=chunk) - Common stock warrants from the September 2023 private placement, if exercised, could generate aggregate proceeds of **$7.6 million** at an exercise price of **$3.003 per share**[11](index=11&type=chunk) - The company anticipates that its existing cash and cash equivalents will provide a cash runway for at least the next twelve months, extending to the second quarter of 2027 if all warrants are exercised[12](index=12&type=chunk) [Product Pipeline & Clinical Development](index=2&type=section&id=Product%20Pipeline%20%26%20Clinical%20Development) [GTx-104 and STRIVE-ON Trial Details](index=2&type=section&id=GTx-104%20and%20STRIVE-ON%20Trial%20Details) The STRIVE-ON trial, comparing GTx-104 to oral nimodipine in aSAH patients, met its primary endpoint, showing GTx-104 reduced clinically significant hypotension by **19%** and demonstrated superior or comparable outcomes in other key metrics - The STRIVE-ON trial was a prospective, randomized, open-label study comparing GTx-104 to oral nimodipine in 102 hospitalized aSAH patients (50 in the GTx-104 arm, 52 in the oral nimodipine arm)[13](index=13&type=chunk) - The trial met its primary endpoint, with GTx-104 patients experiencing a **19%** reduction in clinically significant hypotension (28% vs 35%) and superior performance in relative dose intensity (RDI ≥ 95%: 54% vs 8%) and 90-day good functional outcomes (29% more patients)[13](index=13&type=chunk) - GTx-104 patients had fewer ICU readmissions, ICU days, and ventilator days compared to the oral nimodipine group, with comparable adverse events and no new safety concerns, as all deaths were related to the severity of the patients' underlying conditions[13](index=13&type=chunk) [Disease Background: aneurysmal Subarachnoid Hemorrhage (aSAH)](index=3&type=section&id=Disease%20Background%3A%20aneurysmal%20Subarachnoid%20Hemorrhage%20(aSAH)) aSAH is a relatively rare stroke type, accounting for **5%** of all strokes, with approximately **42,500** US hospitalizations annually, primarily caused by ruptured brain aneurysms - aSAH is bleeding into the subarachnoid space on the brain's surface, primarily caused by a ruptured brain aneurysm[14](index=14&type=chunk) - aSAH is a relatively rare type of stroke, accounting for approximately **5%** of all strokes, with about **42,500** US patients hospitalized annually[14](index=14&type=chunk) [Grace Therapeutics Asset Portfolio](index=3&type=section&id=Grace%20Therapeutics%20Asset%20Portfolio) Grace Therapeutics' portfolio includes GTx-104, GTx-102, and GTx-101, with GTx-104 as the core focus for aSAH, while further development of GTx-102 and GTx-101 has been deprioritized for potential out-licensing or sale [GTx-104 (aSAH)](index=3&type=section&id=GTx-104%20(aSAH)) GTx-104 is a novel injectable nimodipine formulation using nanoparticle technology for intravenous infusion, addressing unmet needs in aSAH patients by potentially eliminating nasogastric tube administration, reducing food effects and drug interactions, and better managing hypotension - GTx-104 is a novel injectable formulation of nimodipine, utilizing unique nanoparticle technology for standard peripheral intravenous infusion, designed to address significant unmet medical needs in aSAH patients[15](index=15&type=chunk) - GTx-104 offers convenient intravenous administration, potentially eliminating the need for nasogastric tube administration in comatose or dysphagic patients, and may reduce food effects, drug interactions, and medication errors[16](index=16&type=chunk) - GTx-104 has been administered to over **200** patients and healthy volunteers, demonstrating good tolerability, significantly reduced inter- and intra-subject pharmacokinetic variability compared to oral nimodipine, and the potential for better management of hypotension in aSAH patients[16](index=16&type=chunk) [GTx-102 (Ataxia-Telangiectasia)](index=3&type=section&id=GTx-102%20(Ataxia-Telangiectasia)) GTx-102 is a novel, concentrated betamethasone oral mucosal spray for neurological symptoms of Ataxia-Telangiectasia (A-T), a condition with no FDA-approved therapies, though its development has been deprioritized to focus on GTx-104 - GTx-102 is a novel, concentrated betamethasone oral mucosal spray designed to improve neurological symptoms of Ataxia-Telangiectasia (A-T), for which there are currently no FDA-approved therapies[17](index=17&type=chunk) - The FDA has provided guidance on the NDA pathway for GTx-102, including design recommendations for a pivotal efficacy and safety trial[17](index=17&type=chunk) - Further development of GTx-102 has been deprioritized to focus on GTx-104 development, and the company may also consider out-licensing or selling GTx-102[17](index=17&type=chunk) [GTx-101 (Postherpetic Neuralgia)](index=3&type=section&id=GTx-101%20(Postherpetic%20Neuralgia)) GTx-101 is a non-narcotic, topical bio-adhesive film-forming bupivacaine spray for Postherpetic Neuralgia (PHN) symptom relief, offering rapid onset and up to eight hours of sustained analgesia, with its development deprioritized to focus on GTx-104 - GTx-101 is a non-narcotic, topical bio-adhesive film-forming bupivacaine spray designed to relieve symptoms in patients with Postherpetic Neuralgia (PHN)[18](index=18&type=chunk) - Administered via a metered spray, GTx-101 forms a thin, bio-adhesive topical film on the skin surface, offering a touch-free, non-greasy application with the potential for rapid onset and up to eight hours of sustained analgesia[18](index=18&type=chunk) - Further development of GTx-101 has been deprioritized to focus on GTx-104 development, and the company may also consider out-licensing or selling GTx-101[18](index=18&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [About Grace Therapeutics](index=3&type=section&id=About%20Grace%20Therapeutics) Grace Therapeutics is a late-stage biopharmaceutical company focused on developing drug candidates for rare and orphan diseases, leveraging novel drug delivery technologies to enhance existing drug performance - Grace Therapeutics is a late-stage biopharmaceutical company focused on developing drug candidates for rare and orphan diseases[19](index=19&type=chunk) - The company's novel drug delivery technologies aim to improve the performance of existing drugs, enabling faster onset, enhanced efficacy, reduced side effects, and more convenient drug delivery[19](index=19&type=chunk) - Grace Therapeutics' primary clinical assets, including GTx-104, have received FDA Orphan Drug Designation, providing seven years of US market exclusivity, and are protected by over **40** issued and pending patents for additional intellectual property protection[19](index=19&type=chunk) [Disclaimers & Financial Statements](index=4&type=section&id=Disclaimers%20%26%20Financial%20Statements) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements involving known and unknown risks, uncertainties, and other factors that could cause Grace Therapeutics' actual results to differ materially from historical results or future results expressed or implied by such statements - Statements in this press release constitute "forward-looking statements," involving known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations[21](index=21&type=chunk) - Forward-looking statements are based on Grace Therapeutics' current expectations and assumptions, which may not be realized or prove to be incorrect, and readers should not place undue reliance on these statements[21](index=21&type=chunk) - The company undertakes no obligation to update such statements to reflect events or circumstances occurring after the date of their release, unless required by applicable securities laws[21](index=21&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) Contact details are provided for Grace Therapeutics CEO Prashant Kohli and Investor Relations via LifeSci Advisors, including phone numbers and email addresses - Grace Therapeutics contact: Prashant Kohli, CEO, Phone: **609-322-1602**, Email: info@gracetx.com[22](index=22&type=chunk) - Investor Relations contact: Mike Moyer, Managing Director, LifeSci Advisors, Phone: **617-308-4306**, Email: mmoyer@lifesciadvisors.com[22](index=22&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Grace Therapeutics' total assets were **$69,805 thousand**, a decrease from **$71,993 thousand** on March 31, 2025, driven by reduced cash and cash equivalents, and increased derivative warrant liabilities and trade and other payables Condensed Consolidated Balance Sheets (Unaudited) | (in thousands of USD, except share data) | June 30, 2025 | March 31, 2025 | | :--------------------------------- | :------------ | :------------- | | **Assets** | | | | Cash and cash equivalents | 20,005 | 22,133 | | Accounts receivable | 20 | 126 | | Prepaid expenses | 500 | 453 | | **Total Current Assets** | **20,525** | **22,712** | | Equipment, net | 14 | 15 | | Intangible assets | 41,128 | 41,128 | | Goodwill | 8,138 | 8,138 | | **Total Assets** | **69,805** | **71,993** | | **Liabilities and Stockholders' Equity** | | | | Trade and other payables | 2,315 | 1,930 | | **Total Current Liabilities** | **2,315** | **1,930** | | Derivative warrant liability | 1,628 | 1,141 | | Deferred tax liability | 2,312 | 2,312 | | **Total Liabilities** | **6,255** | **5,383** | | Additional paid-in capital | 293,636 | 293,334 | | Accumulated other comprehensive loss | (6,038) | (6,038) | | Accumulated deficit | (224,049) | (220,687) | | **Total Stockholders' Equity** | **63,550** | **66,610** | | **Total Liabilities and Stockholders' Equity** | **69,805** | **71,993** | [Condensed Consolidated Statements of Loss and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) For the three months ended June 30, 2025, Grace Therapeutics reported a net loss of **$3,362 thousand**, compared to a net loss of **$2,617 thousand** in the prior year, with the increased loss primarily due to a shift from gain to loss in derivative warrant liability fair value and the absence of an income tax benefit, despite reduced R&D and G&A expenses Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) | (in thousands of USD, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | **Operating Expenses** | | | | Research and development expenses | (955) | (2,708) | | General and administrative expenses | (2,135) | (2,255) | | **Loss from Operations** | **(3,090)** | **(4,963)** | | Foreign exchange gain (loss) | 10 | (8) | | Change in fair value of derivative warrant liability | (487) | 1,395 | | Interest and other income, net | 205 | 235 | | Other (expense) income, net | (272) | 1,622 | | **Loss Before Income Tax Benefit** | **(3,362)** | **(3,341)** | | Income tax benefit | — | 724 | | **Net Loss and Total Comprehensive Loss** | **(3,362)** | **(2,617)** | | Basic and diluted loss per share | (0.21) | (0.24) | | Weighted average shares outstanding | 15,924,522 | 10,928,543 |