PART I [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Adverum Biotechnologies reported a widened net loss and significant decline in cash and equity for H1 2025, raising substantial doubt about its going concern ability [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased significantly, liabilities increased, and stockholders' equity shifted to a $20.2 million deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $42,418 | $60,652 | | Short-term investments | $1,979 | $65,039 | | Total current assets | $48,391 | $131,300 | | Total assets | $96,179 | $179,841 | | **Liabilities & Equity** | | | | Total current liabilities | $31,356 | $22,898 | | Total liabilities | $116,398 | $109,127 | | Total stockholders' (deficit) equity | $(20,219) | $70,714 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss widened significantly for both the three and six months ended June 30, 2025, primarily due to increased research and development expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $37,125 | $17,097 | $65,872 | $32,507 | | General and administrative | $12,730 | $15,807 | $32,204 | $29,596 | | **Operating loss** | **$(49,855)** | **$(32,904)** | **$(98,076)** | **$(62,103)** | | **Net loss** | **$(49,191)** | **$(30,498)** | **$(96,210)** | **$(57,645)** | | Net loss per share | $(2.34) | $(1.46) | $(4.59) | $(3.08) | [Condensed Consolidated Statements of Stockholders' (Deficit) Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20(Deficit)%20Equity) Stockholders' equity transitioned from a positive balance to a $20.2 million deficit by June 30, 2025, primarily due to the net loss incurred - Stockholders' equity decreased from **$70.7 million** at December 31, 2024, to a deficit of **$20.2 million** at June 30, 2025[18](index=18&type=chunk) - The primary driver for the decrease in equity was the net loss of **$96.2 million** for the six months ended June 30, 2025[15](index=15&type=chunk)[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities nearly doubled for H1 2025, leading to an overall decrease in cash despite investing inflows, with no significant financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(81,538) | $(43,089) | | Net cash provided by (used in) investing activities | $63,184 | $(24,354) | | Net cash provided by financing activities | $120 | $119,764 | | **Net (decrease) increase in cash** | **$(18,234)** | **$52,321** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight substantial doubt about going concern, limited cash runway into Q4 2025, a significant subtenant lease default, and a recent $10.0 million private placement - There is substantial doubt regarding the Company's ability to continue as a going concern, as its cash, cash equivalents, and proceeds from an August 2025 financing are insufficient to fund operations for at least twelve months[28](index=28&type=chunk) - The company's cash runway, including proceeds from the August 2025 private placement, is expected to fund operations only into the **fourth quarter of 2025**[29](index=29&type=chunk) - A subtenant for the company's North Carolina premises defaulted on rent payments in March 2025, and Adverum remains obligated under the head lease with a total future rent obligation of **$118.3 million** and has initiated a lawsuit to recover damages[45](index=45&type=chunk)[47](index=47&type=chunk) - On August 11, 2025, the company entered into an agreement for a private placement to raise gross proceeds of **$10.0 million**[68](index=68&type=chunk)[69](index=69&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Ixo-vec's clinical progress, increased R&D expenses, and reiterates substantial doubt about the company's going concern ability due to limited cash runway [Overview](index=17&type=section&id=Overview) Adverum is a clinical-stage company developing Ixo-vec gene therapy for wet AMD, with the ARTEMIS Phase 3 trial initiated and AQUARIUS planned, holding key regulatory designations - The lead product candidate is ixoberogene soroparvovec (Ixo-vec), a single, in-office intravitreal injection gene therapy for wet AMD[71](index=71&type=chunk) - The first Phase 3 trial, ARTEMIS, was initiated in February 2025, with enrollment expected to complete in Q1 2026 and top-line data in H1 2027[71](index=71&type=chunk)[77](index=77&type=chunk) - The second Phase 3 trial, AQUARIUS, is planned for Q4 2025, but is subject to the availability of additional funding[71](index=71&type=chunk)[77](index=77&type=chunk) - Ixo-vec has received several key regulatory designations: FDA Fast Track, FDA RMAT, EMA PRIME, and UK MHRA Innovation Passport[78](index=78&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Operating expenses significantly increased for H1 2025, driven by higher R&D for Ixo-vec's Phase 3 development and G&A expenses related to a defaulted sublease Comparison of Operating Expenses (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $37,125 | $17,097 | $65,872 | $32,507 | | General and administrative | $12,730 | $15,807 | $32,204 | $29,596 | | **Total operating expenses** | **$49,855** | **$32,904** | **$98,076** | **$62,103** | - The increase in R&D expense was primarily driven by a **$27.3 million** increase in spending on Ixo-vec for the six-month period, mainly due to Phase 3 clinical development activities[96](index=96&type=chunk) [Liquidity, Capital Resources and Plan of Operations](index=22&type=section&id=Liquidity,%20Capital%20Resources%20and%20Plan%20of%20Operations) Liquidity is severely constrained, with cash expected to fund operations only into Q4 2025, leading to substantial doubt about going concern and necessitating significant additional capital - As of June 30, 2025, the company had **$44.4 million** in cash, cash equivalents, and short-term investments[101](index=101&type=chunk) - Management has determined there is substantial doubt about the company's ability to continue as a going concern for the next twelve months[101](index=101&type=chunk)[105](index=105&type=chunk) - Existing cash, combined with the **$10.0 million** gross proceeds from the August 2025 Private Placement, is expected to fund operations only into the **fourth quarter of 2025**[105](index=105&type=chunk) - The company will need to raise substantial additional funding to finance its operations and continue clinical development, with partnering discussions active and ongoing[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Adverum Biotechnologies, Inc. is not required to provide the information for this item - The company is not required to provide information on market risk as it qualifies as a smaller reporting company[119](index=119&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of June 30, 2025, due to a material weakness in lease accounting controls, with remediation ongoing - A material weakness in internal control over financial reporting was identified as of December 31, 2024, related to controls over lease accounting[121](index=121&type=chunk) - As a result of this material weakness, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were not effective as of June 30, 2025[124](index=124&type=chunk) - A remediation plan is underway, involving increased rigor, engagement of outside experts, and enhanced monitoring of lease agreements and subtenant creditworthiness[122](index=122&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company initiated a lawsuit against its subtenant and guarantor for defaulting on a North Carolina sublease, leaving Adverum responsible for a $118.3 million head lease obligation - On April 10, 2025, the company initiated a lawsuit against its subtenant (AMP) and the guarantor (Jaguar) for defaulting on a sublease for its North Carolina (NC) Premises[127](index=127&type=chunk) - The default occurred after the subtenant failed to remit rent payments from March 2025 onwards, and Adverum assumed responsibility for the payments, with a total future rent obligation of **$118.3 million** for the property[127](index=127&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including substantial doubt about its going concern ability, dependence on a single product candidate, high development costs, and a material weakness in internal controls [Risks Related to Financial Position and Need for Capital](index=26&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Capital) Substantial doubt exists about the company's going concern ability, with cash funding operations only into Q4 2025, necessitating significant additional capital that may cause dilution - There is substantial doubt regarding the company's ability to continue as a going concern, with cash expected to fund operations only into the **fourth quarter of 2025**[129](index=129&type=chunk)[130](index=130&type=chunk) - The company has incurred significant operating losses since inception and expects them to continue for the foreseeable future, having accumulated a deficit of **$1.2 billion** as of June 30, 2025[10](index=10&type=chunk)[138](index=138&type=chunk) - The company is exposed to risks from subtenant defaults, as evidenced by the default on its NC Premises lease, leaving Adverum with a future rent obligation of **$118.3 million**[140](index=140&type=chunk) [Risks Related to Discovery and Development](index=28&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20Our%20Product%20Candidates) Business success depends on Ixo-vec, a single clinical candidate, facing long, expensive, and uncertain development with high failure risk, potential side effects, and unpredictable timelines for novel gene therapy - The business depends substantially on the success of its one clinical product candidate, Ixo-vec[141](index=141&type=chunk) - A dose-limiting toxicity was observed at the 6E11 dose in the prior INFINITY trial in DME subjects, leading to the discontinuation of that indication and highlighting safety risks[147](index=147&type=chunk) - The company's gene therapy platform is a novel technology, making it difficult to predict the time, cost, and probability of obtaining regulatory approval, especially for a broad patient population like wet AMD[157](index=157&type=chunk)[158](index=158&type=chunk) [Risks Related to Manufacturing](index=36&type=section&id=Risks%20Related%20to%20Manufacturing) Significant manufacturing risks for gene therapy include developing scalable processes, reliance on limited third-party contractors, potential production delays, and costly comparability studies for method changes - Developing a commercially viable, robust, and reliable manufacturing process for gene therapy is difficult, expensive, and time-consuming[179](index=179&type=chunk) - The company relies on a limited number of vendors, including single-source vendors, for manufacturing and testing, who are subject to significant regulation and may not meet requirements or have sufficient capacity[187](index=187&type=chunk) - Manufacturing is susceptible to product loss from contamination, equipment failure, or operator error, and any deviations could lead to supply disruptions, recalls, or termination of development programs[200](index=200&type=chunk)[202](index=202&type=chunk) [Risks Related to Reliance on Third Parties](index=41&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Heavy reliance on third parties for R&D and manufacturing reduces control, and their poor performance or delays could significantly impact clinical trials and regulatory submissions - The company relies on third parties for vector production, manufacturing, testing, clinical trials, and other R&D activities, reducing its control over these functions[203](index=203&type=chunk)[204](index=204&type=chunk) - If third-party CROs or investigators fail to meet deadlines, adhere to protocols, or meet regulatory requirements, clinical development could be delayed or unsuccessful[206](index=206&type=chunk)[208](index=208&type=chunk) [Risks Relating to Intellectual Property](index=42&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) Success depends on uncertain patent and trade secret protection in a litigious landscape, reliance on potentially terminable third-party licenses, and U.S. government rights over some intellectual property - Commercial success depends on obtaining and maintaining patent and trade secret protection, which is uncertain and may not provide a competitive advantage[210](index=210&type=chunk) - The company relies on licenses from third parties for key technology, and the loss of these licenses could materially harm the business[227](index=227&type=chunk) - Some in-licensed intellectual property was developed with U.S. government funding and is subject to federal regulations, including "march-in" rights[246](index=246&type=chunk) [Risks Related to Commercialization](index=50&type=section&id=Risks%20Related%20to%20Commercialization%20of%20Our%20Product%20Candidates) Commercial success of Ixo-vec is not guaranteed due to approval uncertainties, market acceptance challenges, intense competition, uncertain reimbursement, and the company's lack of sales and marketing capabilities - The company faces intense competition from established therapies like Eylea and Vabysmo, as well as other gene therapies in development from companies like 4D Molecular Therapeutics and REGENXBIO[263](index=263&type=chunk)[267](index=267&type=chunk) - Market acceptance and sales will depend significantly on obtaining adequate coverage and reimbursement from third-party payers, which is a costly and uncertain process[272](index=272&type=chunk) - The company has no internal sales, marketing, or distribution capabilities and would need to build them or partner with a third party, which involves significant cost and risk[295](index=295&type=chunk) [Risks Related to Business Operations](index=59&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations) Operational risks include negative public perception of gene therapy, dependence on key personnel, intense competition for talent, significant cybersecurity risks, and complex data privacy and healthcare law compliance - Negative public opinion and increased regulatory scrutiny of gene therapy could damage perception of the company's products and delay approvals[296](index=296&type=chunk) - The company is dependent on retaining key executives and scientific staff and faces intense competition for qualified personnel[300](index=300&type=chunk) - The company and its partners are subject to significant risks from cyber-attacks and must comply with stringent, evolving data privacy and security laws globally, with non-compliance carrying heavy penalties[304](index=304&type=chunk)[331](index=331&type=chunk) [Risks Related to Common Stock](index=68&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Common stock faces high volatility, potential negative impact from a material weakness in internal controls, anti-takeover provisions, and exclusive forum provisions limiting stockholder litigation options - The trading price of the company's common stock has been and is expected to continue to be highly volatile[353](index=353&type=chunk) - The identified material weakness in internal control over financial reporting could erode investor confidence and negatively impact the stock price[356](index=356&type=chunk)[360](index=360&type=chunk) - Anti-takeover provisions in the company's charter documents and under Delaware law may delay or prevent an acquisition[355](index=355&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the reporting period that were not previously disclosed in a Form 8-K - No unregistered sales of equity securities were made during the period that had not been previously reported[367](index=367&type=chunk) [Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None - The company reported no defaults upon senior securities[368](index=368&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - This item is not applicable to the company[369](index=369&type=chunk) [Other Information](index=71&type=section&id=Item%205.%20Other%20Information) On August 11, 2025, the company entered a private placement agreement for $10.0 million gross proceeds from common stock and pre-funded warrants, intended for R&D and general corporate purposes - On August 11, 2025, the company entered into a securities purchase agreement for a private placement with Frazier Life Sciences[371](index=371&type=chunk) August 2025 Private Placement Details | Security | Quantity | | :--- | :--- | | Common Stock Shares | 1.0 million | | Pre-Funded Warrants (to purchase common stock) | 3.5 million | | **Total Gross Proceeds** | **$10.0 million** | [Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, compensatory plans, forms of agreements related to the recent private placement, and officer certifications - The report includes an index of all exhibits filed, such as the Restated Certificate of Incorporation, Bylaws, equity incentive plans, and forms of the Securities Purchase Agreement and Registration Rights Agreement[379](index=379&type=chunk)

[Hydrofarm Holdings Group Q2 2025 Earnings Release](index=1&type=section&id=Hydrofarm%20Holdings%20Group%20Q2%202025%20Earnings%20Release) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) The company saw a significant revenue decline in Q2 2025 due to industry headwinds but continued cost reductions and generated positive free cash flow Q2 2025 Key Financial Metrics vs Prior Year | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $39.2 million | $54.8 million | -28.4% | | Gross Profit Margin | 7.1% | 19.8% | -12.7 p.p. | | Adjusted Gross Profit Margin | 19.2% | 24.4% | -5.2 p.p. | | Adjusted SG&A Expense | $9.8 million | $11.6 million | -15.7% | | Net Loss | $(16.9) million | $(23.5) million | Improved | | Adjusted EBITDA | $(2.3) million | $1.7 million | Decreased | | Free Cash Flow | $1.4 million | $3.4 million | Decreased | - The company initiated a new restructuring plan designed to further reduce costs by optimizing its product portfolio and right-sizing its manufacturing and distribution footprint[4](index=4&type=chunk) - Management highlighted the **12th consecutive quarter** of significant year-over-year Adjusted SG&A expense reductions, which helped generate positive Free Cash Flow of **$1.4 million**[4](index=4&type=chunk) [Detailed Financial Results (Q2 2025)](index=1&type=section&id=Detailed%20Financial%20Results%20(Q2%202025)) The company experienced a 28.4% decrease in net sales, a significant gross profit impact from restructuring costs, and reduced SG&A expenses [Net Sales](index=1&type=section&id=Net%20Sales) - Net sales decreased by **28.4% to $39.2 million** from $54.8 million in the prior year period[5](index=5&type=chunk) - The decline was driven by a **27.9% decrease in volume/mix** of products sold, mainly due to industry oversupply, and a 0.4% decrease in price[5](index=5&type=chunk) [Gross Profit](index=1&type=section&id=Gross%20Profit) Gross Profit Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Gross Profit | $2.8 million | $10.9 million | | Gross Profit Margin | 7.1% | 19.8% | | Adjusted Gross Profit | $7.5 million | $13.3 million | | Adjusted Gross Profit Margin | 19.2% | 24.4% | - Gross profit was negatively impacted by **$3.3 million in non-cash restructuring costs** in Q2 2025, with the margin decline also driven by lower sales and an unfavorable product mix[6](index=6&type=chunk) [Selling, General and Administrative (SG&A) Expense](index=2&type=section&id=Selling%2C%20General%20and%20Administrative%20(SG%26A)%20Expense) SG&A Expense Reduction (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | SG&A Expense (GAAP) | $16.1 million | $18.7 million | | Adjusted SG&A (Non-GAAP) | $9.8 million | $11.6 million | - The reduction in SG&A was mainly driven by the company's restructuring actions and cost-saving initiatives, leading to lower compensation, insurance, and facility costs[8](index=8&type=chunk) [Net Loss and Adjusted EBITDA](index=2&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) Profitability Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss | $(16.9) million | $(23.5) million | | Diluted EPS | $(3.63) | $(5.10) | | Adjusted EBITDA | $(2.3) million | $1.7 million | - The net loss improved year-over-year, partially due to SG&A expense reductions and a prior-year loss on an asset sale; however, **Adjusted EBITDA decreased**, reflecting lower sales and gross profit[8](index=8&type=chunk)[9](index=9&type=chunk) [Strategic Initiatives and Outlook](index=2&type=section&id=Strategic%20Initiatives%20and%20Outlook) The company initiated a new restructuring plan to yield annual savings while reaffirming its full-year 2025 financial expectations [Restructuring Plan](index=2&type=section&id=Restructuring%20Plan) - A new restructuring plan was initiated in Q2 2025 to narrow the product portfolio, reduce the operational footprint, and improve efficiency[9](index=9&type=chunk) - The company incurred estimated restructuring costs of **$3.3 million** in Q2 2025, primarily from non-cash inventory write-downs[9](index=9&type=chunk) - The plan is expected to generate annual cost savings exceeding **$3 million**, plus additional working capital reductions[9](index=9&type=chunk) [Reaffirmed Full Year 2025 Expectations](index=2&type=section&id=Reaffirmed%20Full%20Year%202025%20Expectations) - The company reaffirmed its guidance for fiscal year 2025, which includes improved Adjusted Gross Profit Margin, reduced Adjusted SG&A, positive free cash flow for the final nine months, and capital expenditures under $2 million[11](index=11&type=chunk)[12](index=12&type=chunk) - Potential high tariffs on imported products from China or other countries are noted as a risk that could negatively impact 2025 financial performance[11](index=11&type=chunk) [Balance Sheet, Liquidity and Cash Flow](index=2&type=section&id=Balance%20Sheet%2C%20Liquidity%20and%20Cash%20Flow) The company maintained a stable liquidity position, generated positive free cash flow, and made a prepayment on its term loan Liquidity and Debt Position as of June 30, 2025 | Metric | Amount | | :--- | :--- | | Cash | $11.0 million | | Available Borrowing Capacity | ~$9 million | | Term Loan Principal Outstanding | $114.5 million | | Revolving Credit Facility Balance | $0 | - The company was in compliance with all debt covenants and extended the maturity of its Revolving Credit Facility to June 30, 2027[10](index=10&type=chunk) Q2 2025 Cash Flow Summary | Metric | Amount | | :--- | :--- | | Cash from Operating Activities | $1.7 million | | Capital Expenditures | $0.3 million | | Free Cash Flow | $1.4 million | [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the unaudited condensed consolidated Statement of Operations and Balance Sheet as of June 30, 2025 [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Highlights (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $39,245 | $54,793 | | Gross profit | $2,794 | $10,851 | | Selling, general and administrative | $16,140 | $18,659 | | Loss from operations | $(13,346) | $(19,328) | | Net loss | $(16,861) | $(23,450) | | Net loss per share, diluted | $(3.63) | $(5.10) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (As of) | (In thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $10,991 | $26,111 | | Inventories | $44,164 | $50,633 | | Total current assets | $73,040 | $95,212 | | Total assets | $389,875 | $426,104 | | Total current liabilities | $31,479 | $34,987 | | Long-term debt | $111,559 | $114,693 | | Total liabilities | $194,866 | $202,382 | | Total stockholders' equity | $195,009 | $223,722 | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) The company provides reconciliations from GAAP to non-GAAP measures to offer additional information for evaluating performance [Reconciliation of Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Reconciliation of Net Loss to Adjusted EBITDA (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss (GAAP) | $(16,861) | $(23,450) | | Interest expense | $3,391 | $3,811 | | Income tax (benefit) expense | $(98) | $390 | | Depreciation, depletion and amortization | $7,412 | $7,776 | | Restructuring expenses | $3,321 | $927 | | Stock-based compensation | $289 | $769 | | Loss on asset disposition | $— | $11,520 | | **Adjusted EBITDA (Non-GAAP)** | **$(2,272)** | **$1,725** | Reconciliation of Free Cash Flow (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities (GAAP) | $1,716 | $3,784 | | Capital expenditures | $(281) | $(368) | | **Free Cash Flow (Non-GAAP)** | **$1,435** | **$3,416** | [Definitions of Non-GAAP Measures](index=10&type=section&id=Definitions%20of%20Non-GAAP%20Measures) - Adjusted EBITDA is defined as net loss excluding interest expense, taxes, depreciation and amortization, stock-based compensation, restructuring expenses, and other non-cash or infrequent costs[30](index=30&type=chunk) - Free Cash Flow is defined as net cash from operating activities less capital expenditures for property, plant, and equipment[35](index=35&type=chunk)

[Management Remarks](index=1&type=section&id=Management%20Remarks) The CEO highlights excellent progress and ahead-of-schedule enrollment in the ARTEMIS Phase 3 trial for Ixo-vec, driven by strong interest from retina specialists - Enrollment in the ARTEMIS Phase 3 trial is progressing well ahead of schedule, with patient and specialist interest surpassing projections[3](index=3&type=chunk) - A recent survey of nearly 1,000 retina specialists indicated that almost **50%** view gene therapy as the most exciting advancement in the wet AMD field, far surpassing other treatment modalities like TKIs[4](index=4&type=chunk) - The company is engaged in active and ongoing partnering discussions, supported by the clinical progress of Ixo-vec[3](index=3&type=chunk) - Two-year follow-up data from the LUNA Phase 2 study is expected to be presented later in the year, aiming to reinforce the long-term safety and efficacy profile of Ixo-vec[5](index=5&type=chunk) [Pipeline and Corporate Highlights](index=1&type=section&id=Pipeline%20and%20Corporate%20Highlights) Adverum provided key updates on its Ixo-vec program, including accelerated ARTEMIS enrollment, LUNA and AQUARIUS study plans, and a **$10 million** private placement [Ixo-vec Program Update](index=1&type=section&id=Ixo-vec%20Program%20Update) ARTEMIS Phase 3 trial enrollment is ahead of schedule, with completion expected in Q1 2026 and topline data in H1 2027, alongside planned AQUARIUS initiation and LUNA data presentation - ARTEMIS Phase 3 trial enrollment is ahead of schedule, with completion expected in **Q1 2026** and topline data anticipated in **H1 2027**[7](index=7&type=chunk)[8](index=8&type=chunk) - The AQUARIUS Phase 3 study is expected to be initiated in **Q4 2025**, contingent on securing necessary funding[11](index=11&type=chunk) - Two-year long-term follow-up data from the LUNA Phase 2 study is planned for presentation in **Q4 2025**[7](index=7&type=chunk)[11](index=11&type=chunk) [Private Placement with Frazier Life Sciences](index=2&type=section&id=Private%20Placement%20with%20Frazier%20Life%20Sciences) Adverum secured approximately **$10 million** through a PIPE financing from Frazier Life Sciences, involving common stock and pre-funded warrants, expected to close by August 12, 2025 PIPE Financing Details | Metric | Value | | :--- | :--- | | **Investor** | Frazier Life Sciences | | **Amount** | ~$10 million | | **Type** | Private Investment in Public Equity (PIPE) | | **Price per Share** | $2.24 | | **Price per Pre-funded Warrant** | $2.2399 | | **Expected Closing Date** | August 12, 2025 | [Upcoming Anticipated Milestones](index=2&type=section&id=Upcoming%20Anticipated%20Milestones) The company outlined key upcoming milestones including LUNA data presentation, AQUARIUS trial initiation, ARTEMIS enrollment completion, and ARTEMIS topline data announcement through H1 2027 - **4Q 2025:** Present Phase 2 LUNA two-year long-term follow-up data[11](index=11&type=chunk) - **4Q 2025:** Initiate AQUARIUS Phase 3 trial, pending funding availability[11](index=11&type=chunk) - **1Q 2026:** Complete enrollment in the ARTEMIS Phase 3 trial[11](index=11&type=chunk) - **1H 2027:** Announce topline data from the ARTEMIS Phase 3 trial[11](index=11&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Adverum reported a **net loss of $49.2 million** in Q2 2025, widening from **$30.5 million** due to increased R&D expenses, with cash decreasing to **$44.4 million** expected to fund operations into Q4 2025 [Statement of Operations Analysis](index=2&type=section&id=Statement%20of%20Operations%20Analysis) Q2 2025 R&D expenses more than doubled to **$37.1 million** due to the ARTEMIS trial, leading to a **net loss of $49.2 million** or **$2.34 per share** Q2 2025 vs. Q2 2024 Statement of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Research and development | $37,125 | $17,097 | | General and administrative | $12,730 | $15,807 | | **Total operating expenses** | **$49,855** | **$32,904** | | **Net loss** | **$(49,191)** | **$(30,498)** | | **Net loss per share** | **$(2.34)** | **$(1.46)** | - The increase in R&D expenses was primarily due to higher clinical trial expenses and personnel-related costs associated with the ARTEMIS Phase 3 trial[11](index=11&type=chunk) - The decrease in G&A expenses was driven by lower facilities expenses and reduced stock-based compensation[15](index=15&type=chunk) [Balance Sheet and Cash Position](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Position) As of June 30, 2025, Adverum held **$44.4 million** in cash, a significant reduction from **$125.7 million** at year-end 2024, expected to fund operations into Q4 2025 Selected Balance Sheet Data (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and marketable securities | $44,397 | $125,691 | | Total Assets | $96,179 | $179,841 | | Total Stockholders' (Deficit) Equity | $(20,219) | $70,714 | - The company's current cash, cash equivalents, and short-term investments are expected to fund operations into the fourth quarter of 2025[11](index=11&type=chunk) [Company and Product Overview](index=3&type=section&id=Company%20and%20Product%20Overview) Adverum Biotechnologies is a clinical-stage company developing single-administration gene therapies for ocular diseases, with lead candidate Ixo-vec for wet AMD receiving key regulatory designations [About Ixo-vec in Wet AMD](index=3&type=section&id=About%20Ixo-vec%20in%20Wet%20AMD) Ixo-vec is Adverum's one-time, in-office intravitreal gene therapy for wet AMD, utilizing a proprietary AAV.7m8 vector for long-term efficacy, and holds multiple significant regulatory designations - Ixo-vec is designed as a one-time, in-office intravitreal injection, differentiating it from gene therapies requiring sub-retinal surgery[12](index=12&type=chunk) - The therapy utilizes a proprietary vector (AAV.7m8) to carry an aflibercept coding sequence, aiming for long-term efficacy[12](index=12&type=chunk) - Ixo-vec has received multiple significant regulatory designations, including FDA Fast Track, RMAT, EMA PRIME, and a UK Innovation Passport[12](index=12&type=chunk) [About Adverum Biotechnologies](index=3&type=section&id=About%20Adverum%20Biotechnologies) Adverum Biotechnologies is a clinical-stage company focused on establishing gene therapy as a new standard of care for prevalent eye diseases through durable, single-administration treatments - Adverum is a clinical-stage company focused on developing gene therapies for highly prevalent ocular diseases[13](index=13&type=chunk) - The company's strategic goal is to create durable, single-administration treatments to eliminate the need for frequent ocular injections[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-looking%20Statements) This section provides a legal disclaimer, cautioning that forward-looking statements regarding Ixo-vec's potential, clinical timelines, and financial sufficiency are subject to significant risks and uncertainties - Statements regarding Ixo-vec's potential, clinical milestones, cash runway, and partnering discussions are considered forward-looking[14](index=14&type=chunk) - Key risks include uncertainties inherent to novel technology, clinical trial completion, regulatory approvals, potential side effects, and the company's ability to continue as a going concern[16](index=16&type=chunk)

Exhibit 99.1 BKV Corporation Reports Second Quarter 2025 Financial and Operational Results, Updated 2025 Guidance, Strategic Barnett Shale Acquisition, and Carbon Sequestered Gas Deal DENVER, Colorado – August 12, 2025 – BKV Corporation ("BKV" or the "Company") (NYSE: BKV), today reported financial and operational results for the second quarter of 2025 and updated guidance for the third quarter and full year of 2025. In addition, we are announcing a pending strategic transaction in the Barnett Shale with Be ...

Exhibit 99.1 MANAGEMENT COMMENTS "U.S. Energy delivered significant progress in the second quarter of 2025 as we advance our transformation into an integrated industrial gas company," said Ryan Smith, Chief Executive Officer of U.S. Energy. "Our Montana project continues to move forward with disciplined execution across upstream development, infrastructure design, and carbon management planning. The scale and strategic location of the Kevin Dome position us as a leader in a high-growth segment of the energy ...

PART I— FINANCIAL INFORMATION [Item 1. Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and stockholders' equity, along with detailed notes explaining the company's organization, accounting policies, segment performance, commitments, debt, stock-based compensation, asset acquisitions, and subsequent events. The financial statements show significant growth in revenue, net income, and cash from operations for the nine months ended June 29, 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheets reflect significant increases in cash and stockholders' equity, alongside a decrease in total liabilities | Metric | June 29, 2025 (Thousands) | September 29, 2024 (Thousands) | Change (Thousands) | % Change | | :-------------------------- | :-------------------------- | :----------------------------- | :----------------- | :------- | | Cash and Cash Equivalents | $4,871 | $1,009 | $3,862 | 382.8% | | Total Assets | $29,180 | $25,518 | $3,662 | 14.4% | | Total Liabilities | $6,046 | $6,710 | ($664) | (9.9)% | | Stockholders' Equity | $23,134 | $18,808 | $4,326 | 23.0% | | Retained Earnings (Accumulated Deficit) | $1,458 | ($2,664) | $4,122 | N/A | [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The statements of operations show strong revenue and net income growth for both the three and nine months ended June 29, 2025 | Metric | Three months ended June 29, 2025 (Thousands) | Three months ended June 30, 2024 (Thousands) | % Change | | :-------------------- | :--------------------------------------- | :--------------------------------------- | :------- | | Revenue | $11,110 | $9,060 | 22.6% | | Gross Profit | $3,168 | $2,881 | 10.0% | | Operating Income | $1,911 | $1,615 | 18.3% | | Net Income | $1,510 | $1,261 | 19.7% | | Basic income per share | $0.22 | $0.19 | 15.8% | | Diluted income per share | $0.22 | $0.18 | 22.2% | | Metric | Nine months ended June 29, 2025 (Thousands) | Nine months ended June 30, 2024 (Thousands) | % Change | | :-------------------- | :-------------------------------------- | :-------------------------------------- | :------- | | Revenue | $30,038 | $24,552 | 22.3% | | Gross Profit | $8,658 | $7,122 | 21.6% | | Operating Income | $5,065 | $3,523 | 43.8% | | Net Income | $4,122 | $2,754 | 49.7% | | Basic income per share | $0.60 | $0.41 | 46.3% | | Diluted income per share | $0.60 | $0.40 | 50.0% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The cash flow statements indicate a substantial increase in net cash provided by operating activities and a significant rise in cash and cash equivalents | Cash Flow Activity | Nine months ended June 29, 2025 (Thousands) | Nine months ended June 30, 2024 (Thousands) | Change (Thousands) | % Change | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------- | :------- | | Net Cash provided by Operating Activities | $5,368 | $1,028 | $4,340 | 422.2% | | Net Cash used in Investing Activities | ($463) | ($1,503) | $1,040 | (69.2)% | | Net Cash used in Financing Activities | ($1,043) | ($243) | ($800) | 329.2% | | Net Increase (Decrease) in Cash and Cash Equivalents | $3,862 | ($718) | $4,580 | N/A | | Cash and Cash Equivalents at End of Period | $4,871 | $486 | $4,385 | 902.3% | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) The statements of stockholders' equity detail changes in total equity, retained earnings, and additional paid-in capital | Metric | June 29, 2025 (Thousands) | September 29, 2024 (Thousands) | Change (Thousands) | | :-------------------------- | :-------------------------- | :----------------------------- | :----------------- | | Total Stockholders' Equity | $23,134 | $18,808 | $4,326 | | Retained Earnings (Accumulated Deficit) | $1,458 | ($2,664) | $4,122 | | Additional Paid in Capital | $21,669 | $21,465 | $204 | - The company issued **16,181 shares** for vesting of restricted stock units and restricted shares during the three and nine months ended June 29, 2025[95](index=95&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENT%20FOOTNOTES) These notes provide essential details on the company's organization, accounting policies, segment performance, and other financial commitments [Note 1 - Organization and Operations](index=9&type=section&id=Note%201%20-%20Organization%20and%20Operations) This note describes the company's primary business, customer base, and revenue sources - Optex Systems Holdings manufactures optical sighting systems and assemblies primarily for the U.S. Department of Defense, foreign military applications, and commercial markets[20](index=20&type=chunk) - For the nine months ended June 29, 2025, **94% of total revenue** was from domestic customers and **6%** from foreign customers (Canada and Israel)[20](index=20&type=chunk) - The company's revenue sources include the U.S. government (**32%**), four major U.S. defense contractors (**18%**, **7%**, **6%**, **5%**), and other customers (**32%**)[20](index=20&type=chunk) [Note 2 - Accounting Policies](index=9&type=section&id=Note%202%20-%20Accounting%20Policies) This note outlines the company's significant accounting policies, including inventory, accounts receivable, and various liabilities | Inventory Component | June 29, 2025 (Thousands) | September 29, 2024 (Thousands) | | :------------------ | :-------------------------- | :----------------------------- | | Raw Material | $7,536 | $9,460 | | Work in Process | $7,577 | $5,954 | | Finished Goods | $466 | $556 | | Gross Inventory | $15,579 | $15,970 | | Less: Inventory Reserves | ($1,065) | ($1,107) | | Net Inventory | $14,514 | $14,863 | - Accounts receivable as of June 29, 2025, are concentrated with U.S. government agencies (**17%**) and five major U.S. defense contractors (**26%**, **14%**, **13%**, **5%**, and **5%**)[25](index=25&type=chunk) | Metric | June 29, 2025 (Thousands) | September 29, 2024 (Thousands) | | :-------------------- | :-------------------------- | :----------------------------- | | Accrued Warranty Liability | $173 | $52 | | Contract Loss Reserves | $423 | $259 | | Deferred Tax Asset (Net) | $852 | $947 | | Service Contract Revenue | Three months ended June 29, 2025 (Thousands) | Three months ended June 30, 2024 (Thousands) | Nine months ended June 29, 2025 (Thousands) | Nine months ended June 30, 2024 (Thousands) | | :----------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Service Contract Revenue | $133 | $126 | $385 | $357 | [Note 3 - Segment Reporting](index=12&type=section&id=Note%203%20-%20Segment%20Reporting) This note details the company's two reportable segments, their operational differences, and revenue contributions - The company operates two reportable segments: Optex Richardson and Applied Optics Center (AOC), managed separately due to differences in manufacturing technology, equipment, and product mix[40](index=40&type=chunk) | Segment | Nine months ended June 29, 2025 External Revenue (Thousands) | % of Total Consolidated Revenue | | :-------------------- | :--------------------------------------------------- | :------------------------------ | | Optex Richardson | $16,572 | 55% | | Applied Optics Center | $13,466 | 45% | - Optex Richardson's external segment revenue for the nine months ended June 29, 2025, was approximately **89% domestic military** and **11% foreign military**[42](index=42&type=chunk) - Applied Optics Center's external segment revenue for the nine months ended June 29, 2025, was approximately **89% military** and **11% commercial**[44](index=44&type=chunk) [Note 4 - Commitments and Contingencies](index=15&type=section&id=Note%204%20-%20Commitments%20and%20Contingencies) This note describes the company's lease obligations and other potential liabilities - The company leases its office and manufacturing facilities for both Optex Richardson and Applied Optics Center locations, with leases extending to May 2028 and December 2028, respectively[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) | Metric | June 29, 2025 (Thousands) | | :-------------------------- | :-------------------------- | | Total Operating Lease Liability | $1,991 | | Short-term portion | $645 | | Long-term portion | $1,346 | | Right-of-use Asset | $1,836 | | Lease Expense | Three months ended June 29, 2025 (Thousands) | Three months ended June 30, 2024 (Thousands) | Nine months ended June 29, 2025 (Thousands) | Nine months ended June 30, 2024 (Thousands) | | :-------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Facility Leases | $233 | $223 | $703 | $681 | | Office Equipment | $6 | $6 | $20 | $19 | [Note 5 - Debt Financing](index=16&type=section&id=Note%205%20-%20Debt%20Financing) This note provides information on the company's revolving credit facility and outstanding debt balances - The company renewed its **$3 million** revolving credit facility with Texas Capital Bank, extending the commitment period to May 22, 2027[65](index=65&type=chunk) - The outstanding balance under the Texas Capital Facility was **zero** as of June 29, 2025, compared to **$1.0 million** as of September 29, 2024[67](index=67&type=chunk) - The interest rate on advances is a variable rate equal to SOFR plus a specified margin, currently **7.10% per annum**[65](index=65&type=chunk) [Note 6 - Stock Based Compensation](index=16&type=section&id=Note%206%20-%20Stock%20Based%20Compensation) This note details the company's stock-based compensation plans, outstanding awards, and related expenses - As of June 29, 2025, there were **75,000 unvested restricted stock units** and **22,800 unvested restricted shares** outstanding[75](index=75&type=chunk)[78](index=78&type=chunk) - All performance shares granted on May 3, 2023, to the CEO and CFO have fully vested as of June 29, 2025[83](index=83&type=chunk) | Stock Compensation Expense | Three months ended June 29, 2025 (Thousands) | Three months ended June 30, 2024 (Thousands) | Nine months ended June 29, 2025 (Thousands) | Nine months ended June 30, 2024 (Thousands) | | :------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Total Stock Compensation | $83 | $90 | $247 | $360 | [Note 7 - Asset Purchase of Intellectual Property](index=20&type=section&id=Note%207%20-%20Asset%20Purchase%20of%20Intellectual%20Property) This note describes the acquisition of intellectual property and its impact on intangible assets - On January 18, 2024, the company acquired intellectual property for the Speedtracker Mach product line for **$1 million cash**[87](index=87&type=chunk) - The company decided to move the manufacturing operations for Speedtracker Mach products in-house, discontinuing orders for assembled units from RUB Aluminium s.r.o[87](index=87&type=chunk)[155](index=155&type=chunk) - The potential earnout payment of **$238 thousand** was deemed unachievable as of September 29, 2024, and its fair value was set to **zero**[88](index=88&type=chunk)[156](index=156&type=chunk) | Intangible Assets | June 29, 2025 (Thousands) | September 29, 2024 (Thousands) | | :-------------------------------- | :-------------------------- | :----------------------------- | | Intangible Assets – Intellectual Property Acquisition | $1,030 | $1,030 | | Software App Development | $30 | $20 | | Amortization of Intangible Assets | ($215) | ($99) | | Net Intangible Assets | $845 | $951 | [Note 8 - Stockholders' Equity](index=21&type=section&id=Note%208%20-%20Stockholders'%20Equity) This note provides details on changes in common shares outstanding and dividend policies - No dividends were declared or paid during the three and nine months ended June 29, 2025, or the twelve months ended September 29, 2024[92](index=92&type=chunk) - Total outstanding common shares increased to **6,912,919** as of June 29, 2025, from **6,873,938** as of September 29, 2024[96](index=96&type=chunk) [Note 9 - Subsequent Events](index=22&type=section&id=Note%209%20-%20Subsequent%20Events) This note reports significant events occurring after the balance sheet date, including executive appointments - Effective August 10, 2025, the Board amended the company's Bylaws to create a new Chief Executive Officer position, allowing for separate CEO and President roles[97](index=97&type=chunk) - Effective August 11, 2025, Chad George was appointed as the new President, while Danny Schoening continues as Chairman and Chief Executive Officer[98](index=98&type=chunk) - Mr. George's employment agreement includes an initial annual base salary of **$300,000**, eligibility for a performance bonus, and a grant of **10,000 restricted shares** vesting on January 1, 2026[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, liquidity, and capital resources. It highlights significant increases in revenue, net income, and Adjusted EBITDA, driven by increased customer demand and improved production. Challenges include commodity cost increases and past supply chain issues, but the company is actively managing these. New orders and backlog have seen some fluctuations, with a decrease in overall orders but strategic new contract awards. The company maintains a strong liquidity position and has renewed its credit facility [Cautionary Note Regarding Forward-Looking Information](index=23&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Information) This note advises readers about forward-looking statements, their inherent risks, and uncertainties that could affect actual results - The report contains forward-looking statements about future events, including growth strategy, financial performance, orders, and product development[107](index=107&type=chunk) - These statements involve risks and uncertainties, such as defense funding, economic conditions, competition, supply chain challenges, and integration of acquisitions, which could cause actual results to differ materially[108](index=108&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements and are advised to review the 'Risk Factors' section in the Annual Report on Form 10-K[108](index=108&type=chunk)[109](index=109&type=chunk) [Background](index=24&type=section&id=Background) This section provides an overview of Optex Systems' core business, its primary customers, and the regulatory environment for its contracts - Optex Systems, Inc. manufactures optical sighting systems and assemblies primarily for the Department of Defense, serving as both a prime and sub-prime contractor[110](index=110&type=chunk) - Products are installed on U.S. military land vehicles (e.g., Abrams, Bradley, Stryker) and supplied to foreign governments (e.g., Israel, Australia)[110](index=110&type=chunk)[111](index=111&type=chunk) - Contracts are subject to Federal Acquisition Regulation (FAR) clauses, including those for termination for convenience or default[113](index=113&type=chunk)[114](index=114&type=chunk) [Material Trends and Recent Developments](index=24&type=section&id=Material%20Trends%20and%20Recent%20Developments) This section discusses key operational trends, including commodity cost impacts, past supply chain issues, and improvements in production levels - Increased costs of aluminum, steel, and acrylic commodities since 2021 have negatively affected Optex Richardson segment margins for older fixed-price contracts, with impacts expected through **Q1 2026**[115](index=115&type=chunk) - Past material and labor shortages in fiscal year 2023 and early 2024 impacted periscope production and delivery dates[116](index=116&type=chunk) - Periscope production levels increased by **74%** in the first nine months of fiscal year 2025 compared to the prior year, due to improvements in supplier performance and increased labor force[117](index=117&type=chunk) - The company does not anticipate significant material risks from recent tariff uncertainties, as defense products are primarily domestically sourced or duty-free[118](index=118&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, gross profit, operating income, and net income trends [Non-GAAP Adjusted EBITDA](index=25&type=section&id=Non-GAAP%20Adjusted%20EBITDA) This section presents Adjusted EBITDA as a non-GAAP measure to evaluate business performance, excluding specific non-cash and financing items - Adjusted EBITDA is used as a supplemental measure to evaluate business performance, excluding non-cash compensation, depreciation, amortization, interest, and taxes[120](index=120&type=chunk) | Metric | Three months ended June 29, 2025 (Thousands) | Three months ended June 30, 2024 (Thousands) | % Change | | :-------------------- | :--------------------------------------- | :--------------------------------------- | :------- | | Net Income (GAAP) | $1,510 | $1,261 | 19.7% | | Adjusted EBITDA (Non-GAAP) | $2,125 | $1,837 | 15.7% | | Metric | Nine months ended June 29, 2025 (Thousands) | Nine months ended June 30, 2024 (Thousands) | % Change | | :-------------------- | :-------------------------------------- | :-------------------------------------- | :------- | | Net Income (GAAP) | $4,122 | $2,754 | 49.7% | | Adjusted EBITDA (Non-GAAP) | $5,698 | $4,224 | 34.9% | [Selective Financial Information](index=26&type=section&id=Selective%20Financial%20Information) This section provides a detailed breakdown of key financial metrics, including revenue, gross profit, and operating income, for specific periods | Metric | Three months ended June 29, 2025 (Thousands) | Three months ended June 30, 2024 (Thousands) | % Change | | :-------------------- | :--------------------------------------- | :--------------------------------------- | :------- | | Total Revenue | $11,110 | $9,060 | 22.6% | | Gross Profit | $3,168 | $2,881 | 10.0% | | Gross Margin % | 28.5% | 31.8% | (3.3) pp | | Operating Income | $1,911 | $1,615 | 18.3% | | Metric | Nine months ended June 29, 2025 (Thousands) | Nine months ended June 30, 2024 (Thousands) | % Change | | :-------------------- | :-------------------------------------- | :-------------------------------------- | :------- | | Total Revenue | $30,038 | $24,552 | 22.3% | | Gross Profit | $8,658 | $7,122 | 21.6% | | Gross Margin % | 28.8% | 29.0% | (0.2) pp | | Operating Income | $5,065 | $3,523 | 43.8% | - Optex Richardson revenue increased by **46.3%** for the three months and **34.3%** for the nine months ended June 29, 2025, primarily due to increased periscope production[141](index=141&type=chunk)[146](index=146&type=chunk) - Applied Optics Center revenue decreased by **2.6%** for the three months but increased by **10.3%** for the nine months ended June 29, 2025, driven by military filters, day windows, and other products, partially offset by lower optical assembly demand[142](index=142&type=chunk)[147](index=147&type=chunk) [New Orders and Backlog](index=29&type=section&id=New%20Orders%20and%20Backlog) This section discusses trends in new customer orders and the company's total backlog, highlighting segment-specific changes and recent contract awards - New orders for the nine months ended June 29, 2025, decreased by **14.8%** to **$24.1 million** compared to the prior year period[135](index=135&type=chunk)[136](index=136&type=chunk) - The decrease in new orders was primarily due to a **43.2% decrease** in Optex Richardson segment orders, partially offset by a **38.8% increase** at the Applied Optics Center[135](index=135&type=chunk) | Metric | June 29, 2025 (Millions) | June 30, 2024 (Millions) | % Change | | :-------------------- | :----------------------- | :----------------------- | :------- | | Total Customer Orders | $24.1 | $28.3 | (14.8)% | | Total Backlog | $38.3 | $45.6 | (16.0)% | - Optex Richardson backlog decreased by **21.4%** to **$25.7 million**, while Applied Optics Center backlog decreased by **2.3%** to **$12.6 million**[138](index=138&type=chunk) - The company announced a **$2.8 million order** for the XM30 combat vehicle and a five-year requirement-type contract for Abrams-based optical sighting systems in July 2025[136](index=136&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's working capital, cash flow generation, available credit, and future capital allocation plans - Working capital increased to **$19.4 million** as of June 29, 2025, from **$15.1 million** as of September 29, 2024[150](index=150&type=chunk) - The company generated **$5.4 million** in operating cash flow for the nine months ended June 29, 2025, driven by increased net income, inventory reductions, and higher accounts payable[150](index=150&type=chunk) - As of June 29, 2025, the company had **$4.9 million in cash** and no outstanding draws against its **$3 million revolving credit line**, which was renewed until May 22, 2027[153](index=153&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) - Future plans include utilizing cash and credit for inventory purchases, potential product line acquisitions, and common stock repurchases[154](index=154&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section explains the company's critical accounting estimates, including warranty costs, contract loss reserves, and deferred tax asset valuation - Critical accounting estimates include warranty costs, contract loss reserves, and deferred tax asset valuation[164](index=164&type=chunk) - Accrued warranty costs increased to **$173 thousand** as of June 29, 2025, primarily due to a potential warranty issue on Applied Optics Day Windows[165](index=165&type=chunk) - Contract loss reserves increased to **$423 thousand** as of June 29, 2025, due to inflationary pressures on material and labor, increased manufacturing overhead, rework, and labor inefficiencies on older fixed-price contracts[167](index=167&type=chunk) - A deferred tax asset valuation allowance of **($0.8) million** is maintained against deferred tax assets of **$1.6 million** due to historical losses and IRS Section 382 limitations[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this item is not applicable, indicating no material quantitative or qualitative disclosures about market risk are required - This section is not applicable to the company[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective as of June 29, 2025. No material changes in internal control over financial reporting occurred during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of June 29, 2025[170](index=170&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended June 29, 2025[171](index=171&type=chunk) PART II— OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material litigation pending or threatened against it - The company is not aware of any material litigation pending or threatened[172](index=172&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Form 10-K for the year ended September 29, 2024 - No material changes in risk factors since the Form 10-K filed for the year ended September 29, 2024[173](index=173&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no purchases of equity securities by the issuer or any affiliated purchaser during the three months ended June 29, 2025 - No purchases of equity securities by the issuer or any affiliated purchaser during the three months ended June 29, 2025[174](index=174&type=chunk) [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities[175](index=175&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine safety disclosures are not applicable to the company[176](index=176&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the company - This item is not applicable to the company[177](index=177&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including the Business Loan Agreement, certifications, and XBRL documents - Key exhibits include the Business Loan Agreement (effective May 22, 2025), Certifications pursuant to Section 302 and 906 of Sarbanes Oxley Act of 2002, and Inline XBRL documents[178](index=178&type=chunk)

[Cautionary Note About Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20About%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements subject to risks and uncertainties, not guarantees of future results - This report contains forward-looking statements regarding future operations and financial performance, which are subject to risks and uncertainties and are not guarantees of future results[9](index=9&type=chunk)[10](index=10&type=chunk) - Examples of forward-looking statements include plans for capital expenditures, drilling activities, future cash flows, potential acquisitions, and the ability to raise additional financing[12](index=12&type=chunk) Part I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for U.S. Energy Corp. as of June 30, 2025, and for the three and six-month periods then ended [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows a slight increase in total assets to $51.0 million from $49.7 million at year-end 2024, primarily driven by an increase in unevaluated industrial gas properties Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $8,215 | $9,724 | | **Oil, natural gas and industrial gas properties, net** | $41,718 | $38,455 | | **Total Assets** | **$50,993** | **$49,667** | | **Total Current Liabilities** | $10,767 | $12,348 | | **Total Liabilities** | **$23,033** | **$25,846** | | **Total Shareholders' Equity** | **$27,960** | **$23,821** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue decreased to $2.0 million from $6.0 million in Q2 2024, widening the net loss to $6.1 million due to lower sales and an impairment charge Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,028 | $6,046 | $4,222 | $11,437 | | **Operating Loss** | $(6,239) | $(1,716) | $(9,326) | $(9,738) | | **Net Loss** | **$(6,058)** | **$(1,974)** | **$(9,169)** | **$(11,511)** | | **Basic and Diluted Loss Per Share** | **$(0.19)** | **$(0.08)** | **$(0.27)** | **$(0.45)** | - The company recorded a **$2.8 million impairment charge** on oil and natural gas properties in Q2 2025, contributing significantly to the operating loss[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $6.1 million for the six months ended June 30, 2025, with financing activities providing $9.6 million from an equity offering Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $(6,126) | $326 | | **Net cash used in investing activities** | $(4,509) | $(2,696) | | **Net cash provided by financing activities** | $9,641 | $1,242 | | **Net decrease in cash and equivalents** | $(995) | $(1,128) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, acquisitions, revenue recognition, including an industrial gas acreage acquisition, an impairment charge, and a January 2025 equity issuance - On January 7, 2025, the Company acquired **24,000 net operated acres** in Montana from Synergy Offshore LLC, a related party, for total consideration of **$4.7 million**, consisting of cash, common stock, and a carried working interest[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - A **$2.8 million ceiling test write-down** of oil and natural gas properties was recorded in Q2 2025 due to a decrease in crude oil prices and reserve reductions from recent divestitures[44](index=44&type=chunk) - In January 2025, the Company completed an underwritten offering of **4,871,400 shares of common stock**, generating approximately **$11.9 million in net proceeds** to be used for development of its Montana assets and general corporate purposes[54](index=54&type=chunk)[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 66% revenue decrease in Q2 2025, driven by lower production and prices, alongside strategic shifts to industrial gas development and an equity offering [Material Developments](index=29&type=section&id=Material%20Developments) Key events include the acquisition of 24,000 net acres of industrial gas properties, an $11.9 million equity offering, and an extended share repurchase program - Acquired **24,000 net operated acres** in the Kevin Dome structure in Montana from Synergy Offshore LLC, a related party[99](index=99&type=chunk)[100](index=100&type=chunk) - Closed an underwritten offering of **4,871,400 shares of common stock** on January 23, 2025, generating net proceeds of approximately **$11.9 million**[103](index=103&type=chunk)[104](index=104&type=chunk) - Extended the ongoing share repurchase program for up to **$5.0 million**, now scheduled to expire on June 30, 2026, with **$3.5 million** remaining available as of June 30, 2025[107](index=107&type=chunk)[109](index=109&type=chunk) - Drilled **2 new industrial gas wells** in Montana during Q2 2025, targeting first production in 2026[111](index=111&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Financial results worsened in H1 2025, with Q2 revenue down 66% to $2.0 million and a net loss of $6.1 million, primarily due to divestitures and lower commodity prices Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,028k | $6,046k | (66)% | | **Production (BOE)** | 48,816 | 111,091 | (56)% | | **Average Sales Price ($/BOE)** | $41.54 | $54.42 | (24)% | | **Lease Operating Expense ($/BOE)** | $32.14 | $27.69 | 16% | Six Months 2025 vs Six Months 2024 Performance | Metric | 6M 2025 | 6M 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $4,222k | $11,437k | (63)% | | **Production (BOE)** | 95,824 | 220,890 | (57)% | | **Average Sales Price ($/BOE)** | $44.06 | $51.78 | (15)% | | **Lease Operating Expense ($/BOE)** | $33.16 | $28.35 | 17% | - The decrease in production quantities is primarily attributed to divestitures of properties in the Karnes County, East Texas, and Mid-con regions during the second half of 2024, as well as natural production declines[119](index=119&type=chunk)[130](index=130&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity was strengthened by an $11.9 million equity offering, with planned industrial gas development costs of $1.0-$2.5 million for the remainder of 2025 - The company raised **$11.9 million in net proceeds** from an equity offering in January 2025 to fund capital expenditures[142](index=142&type=chunk) - Anticipated industrial gas development costs for the remainder of 2025 are projected to be between **$1.0 million and $2.5 million**[141](index=141&type=chunk) - As of June 30, 2025, there were no amounts outstanding on the credit facility, which has a borrowing base of **$20 million**[143](index=143&type=chunk)[145](index=145&type=chunk) - Effective August 1, 2025, the company agreed to an amended Credit Agreement with a reduced borrowing base of **$10.0 million** and an extended maturity date of May 31, 2029[90](index=90&type=chunk)[114](index=114&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," U.S. Energy Corp. is exempt from providing market risk disclosures - The Company is a "smaller reporting company" and is not required to provide the information requested by this item[152](index=152&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of June 30, 2025, due to a material weakness in the accounting system, now being remediated by outsourcing - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2025[154](index=154&type=chunk) - The ineffectiveness is due to a **material weakness** in internal control over financial reporting related to the accounting system, as identified on December 31, 2024[154](index=154&type=chunk)[155](index=155&type=chunk) - In January 2025, the company initiated remediation by outsourcing much of its day-to-day accounting to a third-party provider using a new system, which is expected to resolve the material weakness by year-end 2025[157](index=157&type=chunk) Part II. OTHER INFORMATION [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - The Company is not currently involved in any legal proceedings that it believes could reasonably be expected to have a material adverse effect on its business, prospects, financial condition or results of operations[160](index=160&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have occurred from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[162](index=162&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales occurred, but 71,800 shares were repurchased in Q2 2025, and the program was extended to June 30, 2026, with $3.5 million remaining Share Repurchase Activity for Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1 - April 30, 2025 | 71,800 | $1.153 | | May 1 - May 31, 2025 | — | $— | | June 1 - June 30, 2025 | — | $— | | **Total** | **71,800** | **$1.153** | - The share repurchase program was extended and is scheduled to expire on June 30, 2026, with approximately **$3.5 million** remaining for repurchases as of April 30, 2025[164](index=164&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the quarter ended June 30, 2025[168](index=168&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with this report include certifications from the Chief Executive Officer and Chief Financial Officer, as well as Inline XBRL documents[169](index=169&type=chunk) [Signatures](index=31&type=section&id=Signatures) The report was signed on August 12, 2025, by Ryan L. Smith, Chief Executive Officer, and Mark L. Zajac, Chief Financial Officer - The report was signed on **August 12, 2025**, by Ryan L. Smith, Chief Executive Officer, and Mark L. Zajac, Chief Financial Officer[172](index=172&type=chunk)[174](index=174&type=chunk)

[Q2 2025 Financial and Operational Highlights](index=1&type=section&id=SECOND%20QUARTER%202025%20RESULTS) Broadwind reported a 7.6% year-over-year revenue increase to $39.2 million, driven by growth in the Heavy Fabrications and Industrial Solutions segments, despite swinging to a net loss of ($1.0) million and a decline in adjusted EBITDA to $2.1 million - Revenue growth was primarily driven by increased sales in the wind and industrial verticals, specifically from the Heavy Fabrications and Industrials Solutions segments[4](index=4&type=chunk) - Total orders increased by **14% YoY** to **$21.0 million**, boosted by demand from power generation and oil & gas customers, though the consolidated backlog fell **31.5% YoY** to **$95.3 million**[5](index=5&type=chunk)[8](index=8&type=chunk) - The company's net debt to trailing twelve-month Adjusted EBITDA ratio increased to **3.0x** from **1.4x** in the previous quarter, attributed to higher working capital needs for wind tower production[6](index=6&type=chunk) Q2 2025 Financial Summary | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $39.2 | $36.5 | +7.6% YoY | | **Net (Loss)/Income** | ($1.0) | $0.5 | - | | **Diluted EPS** | ($0.04) | $0.02 | - | | **Adjusted EBITDA** | $2.1 | $3.6 | -41.7% YoY | [Management Commentary](index=1&type=section&id=MANAGEMENT%20COMMENTARY) Management highlighted progress in its diversification strategy, capitalizing on investments in power generation and electrification, with the pending sale of Manitowoc operations optimizing its footprint and strengthening the balance sheet - The company announced the pending sale of its Manitowoc industrial fabrication operations, expected to close in Q3 2025, anticipated to add approximately **$13 million** in cash and reduce annual costs by an estimated **$8 million**[7](index=7&type=chunk) - Customer demand is strengthening, particularly for natural gas turbine content and oil & gas aftermarket products, with a **$6 million** follow-on order for gearing products secured in July for early 2026 deliveries[7](index=7&type=chunk) - Q2 2025 margins were temporarily compressed due to: - Early production process inefficiencies at Manitowoc and Abilene facilities - Additional overhead to support higher production volumes - Lower capacity utilization in the Gearing segment[7](index=7&type=chunk) - Management expressed confidence that its domestic production footprint, expansion into higher-value markets, and strategic actions position the company for sustained profitable growth[9](index=9&type=chunk) [Segment Performance Analysis](index=2&type=section&id=SEGMENT%20RESULTS) Segment performance was mixed in the second quarter, with Heavy Fabrications and Industrial Solutions segments showing revenue growth, while the Gearing segment experienced a sharp decline and operating loss [Heavy Fabrications Segment](index=2&type=section&id=Heavy%20Fabrications%20Segment) - Revenue growth was driven by an increase in wind tower sections and repowering adapters sold, partially offset by lower demand from the mining end-market[11](index=11&type=chunk) Heavy Fabrications Segment Performance | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | Change | | :--- | :--- | :--- | :--- | | **Sales** | $25.0 | $19.6 | +27.4% YoY | | **Operating Income** | $1.7 | $1.6 | +6.3% YoY | | **Adjusted EBITDA** | $2.8 | $2.8 | Flat YoY | [Gearing Segment](index=2&type=section&id=Gearing%20Segment) - The significant decline in sales was primarily driven by lower demand from oil & gas customers[13](index=13&type=chunk) Gearing Segment Performance | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | Change | | :--- | :--- | :--- | :--- | | **Sales** | $7.3 | $10.5 | -30.3% YoY | | **Operating (Loss)/Income** | ($0.8) | $0.5 | - | | **Adjusted EBITDA** | ($0.1) | $1.2 | - | [Industrial Solutions Segment](index=2&type=section&id=Industrial%20Solutions%20Segment) - Revenue growth was primarily driven by increased sales of natural gas turbine content, with this segment also setting records for both orders and backlog for the third consecutive quarter[5](index=5&type=chunk)[15](index=15&type=chunk) Industrial Solutions Segment Performance | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | Change | | :--- | :--- | :--- | :--- | | **Sales** | $7.4 | $6.5 | +13.9% YoY | | **Operating Income** | $0.5 | $0.6 | -16.7% YoY | | **Adjusted EBITDA** | $0.7 | $0.8 | -12.5% YoY | [Financial Guidance](index=2&type=section&id=FINANCIAL%20GUIDANCE) Broadwind has suspended its previously issued financial guidance for the full year 2025 due to the pending sale of its Manitowoc operations, with updated guidance expected after the transaction closes - The company is suspending its full-year 2025 financial guidance due to the pending sale of its Manitowoc operations, which is expected to close in Q3 2025[16](index=16&type=chunk)[17](index=17&type=chunk) - For the full-year 2024, the Manitowoc operations being sold generated approximately **$25 million** in revenue with EBITDA margins of **8-9%**[17](index=17&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for the period ended June 30, 2025, including Balance Sheets, Statements of Operations, and Statements of Cash Flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Item (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Cash** | $1,037 | $7,721 | | **Total Current Assets** | $78,301 | $66,868 | | **Total Assets** | $130,511 | $128,290 | | **Total Current Liabilities** | $51,307 | $43,557 | | **Total Liabilities** | $71,558 | $68,890 | | **Total Stockholders' Equity** | $58,953 | $59,400 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Condensed Consolidated Statements of Operations (in thousands) | Income Statement Item (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Revenues** | $39,235 | $36,452 | | **Gross Profit** | $3,975 | $5,566 | | **Operating (Loss) Income** | ($165) | $1,257 | | **Net (Loss) Income** | ($989) | $482 | | **Diluted EPS** | ($0.04) | $0.02 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Item (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | ($20,498) | ($3,427) | | **Net cash used in investing activities** | ($2,115) | ($2,375) | | **Net cash provided by financing activities** | $15,929 | $5,641 | | **Net decrease in cash** | ($6,684) | ($161) | | **Cash, end of period** | $1,037 | $938 | [Non-GAAP Financial Measures Reconciliation](index=7&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) This section provides a detailed reconciliation of the non-GAAP measure, Adjusted EBITDA, to the most directly comparable GAAP measure, Net (Loss) Income, on both a consolidated and segment basis Consolidated Adjusted EBITDA Reconciliation (in thousands) | Reconciliation Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net (Loss) Income** | **($989)** | **$482** | | Interest Expense | $783 | $726 | | Income Tax Provision | $33 | $53 | | Depreciation and Amortization | $1,643 | $1,718 | | Share-based Compensation | $615 | $663 | | **Adjusted EBITDA (Non-GAAP)** | **$2,085** | **$3,642** |

[Passage Bio Q2 2025 Financial Results and Business Highlights](index=1&type=section&id=Passage%20Bio%20Q2%202025%20Financial%20Results%20and%20Business%20Highlights) [Business Highlights and Outlook](index=1&type=section&id=Business%20Highlights%20and%20Outlook) Passage Bio advanced its upliFT-D trial for PBFT02, completing dosing for the second cohort and reporting positive interim data, with a cash runway into Q1 2027 - **Completed dosing** of the second FTD-GRN patient cohort (Cohort 2) in the upliFT-D study in July[1](index=1&type=chunk)[6](index=6&type=chunk) - Reported updated interim data showing **PBFT02 robustly increases CSF PGRN levels** and **reduces plasma NfL**, a disease progression biomarker[1](index=1&type=chunk)[6](index=6&type=chunk) - Submitted an amended clinical trial protocol to global authorities, introducing prophylactic anticoagulation and revising inclusion criteria for earlier-stage patients[1](index=1&type=chunk)[3](index=3&type=chunk)[6](index=6&type=chunk) - Anticipates key milestones including seeking regulatory feedback on manufacturing in 2H 2025, reporting updated interim safety and biomarker data from Dose 2 in 1H 2026, and seeking regulatory feedback on registrational trial design in 1H 2026[5](index=5&type=chunk)[6](index=6&type=chunk) [Clinical Program Overview](index=3&type=section&id=Clinical%20Program%20Overview) The company's lead program, PBFT02, is an AAV1 gene therapy for FTD, evaluated in the upliFT-D trial, aiming to elevate PGRN levels - **upliFT-D (NCT04747431)** is a Phase 1/2 global, multi-center, open-label clinical trial of PBFT02 for FTD-GRN or FTD-C9orf72 patients aged 35 to 75[8](index=8&type=chunk) - The upliFT-D trial's primary endpoint is **safety and tolerability of PBFT02**, with secondary endpoints including disease biomarkers and clinical outcome measures[8](index=8&type=chunk) - **PBFT02** is an AAV1 gene replacement therapy designed to deliver a functional GRN gene, elevating PGRN levels in the CNS to alter neurodegenerative disease progression[10](index=10&type=chunk) - Collaboration with InformedDNA provides **no-cost genetic counseling and testing** for FTD patients, supporting clinical trial recruitment[9](index=9&type=chunk) [Second Quarter 2025 Financial Results](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Results) Passage Bio reported a reduced net loss of $9.4 million in Q2 2025, driven by lower operating expenses, with a cash runway into Q1 2027 Q2 2025 Financial Highlights (vs. Q2 2024) | Financial Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Cash, Cash Equivalents & Marketable Securities | $57.6 | $91.8 | -37.2 | | R&D Expenses | $5.8 | $10.4 | -44.1 | | G&A Expenses | $4.5 | $6.5 | -30.8 | | Net Loss | ($9.4) | ($16.0) | +41.3 | | Net Loss Per Share | ($2.96) | ($5.09) | +41.8 | - Current **cash, cash equivalents, and marketable securities of $57.6 million** are expected to fund operations into the first quarter of 2027[1](index=1&type=chunk)[12](index=12&type=chunk) - **Total assets decreased to $79.2 million** as of June 30, 2025, from $102.4 million as of December 31, 2024[17](index=17&type=chunk) - All share and per-share data reflect a **1-for-20 reverse stock split** effected on July 14, 2025[12](index=12&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) [Corporate Information](index=5&type=section&id=Corporate%20Information) Passage Bio is a clinical-stage genetic medicines company focused on developing PBFT02 for neurodegenerative diseases, with forward-looking statements subject to inherent risks - Passage Bio's mission is to develop **one-time therapies for neurodegenerative diseases**, targeting underlying pathology to improve patient lives[13](index=13&type=chunk) - **PBFT02**, the lead product candidate, is designed to treat neurodegenerative conditions like frontotemporal dementia by elevating progranulin levels[13](index=13&type=chunk) - The press release includes **forward-looking statements** concerning clinical trial progress, regulatory feedback, and cash runway, subject to risks detailed in SEC filings[15](index=15&type=chunk)

[Overview and Key Announcements](index=1&type=section&id=Veru%20Reports%20Fiscal%202025%20Third%20Quarter%20Financial%20Results%20and%20Clinical%20Program%20Progress) Veru Inc. reported Q3 FY2025 financial results and clinical program advancements, including a new enobosarm formulation and anticipated FDA feedback [Report Highlights](index=1&type=section&id=Report%20Highlights) Key updates include a new enobosarm formulation, awaited FDA guidance, and positive Phase 2b QUALITY study results for lean mass preservation - A novel modified-release oral formulation of enobosarm has been selected after a successful pharmacokinetic clinical study[1](index=1&type=chunk) - The company is awaiting FDA feedback to clarify the regulatory pathway for enobosarm for preserving lean mass in conjunction with chronic weight loss treatments[1](index=1&type=chunk)[3](index=3&type=chunk) - Positive efficacy and safety data were reported from the Phase 2b QUALITY study, showing enobosarm with semaglutide preserved muscle, increased fat loss, and reduced GI side effects compared to semaglutide alone[4](index=4&type=chunk) - The Phase 2b QUALITY Maintenance Extension study demonstrated that enobosarm significantly reduced body weight regain and preserved lean mass after discontinuing semaglutide[4](index=4&type=chunk) [Enobosarm Clinical Program Update](index=2&type=section&id=Enobosarm%20for%20Chronic%20Weight%20Loss%20Management%20Program) This section details the latest clinical trial results and formulation advancements for enobosarm in chronic weight loss management [Phase 2b QUALITY Study Results](index=2&type=section&id=Phase%202b%20QUALITY%20study) The Phase 2b QUALITY study demonstrated enobosarm's efficacy in preserving lean mass and enhancing fat loss when combined with semaglutide - The primary endpoint was met, with the enobosarm 3mg + semaglutide group showing a statistically significant **100% average preservation of total lean mass** compared to the placebo + semaglutide group at 16 weeks (p<0.001)[7](index=7&type=chunk) - The tissue composition of weight lost was **100% fat** for the enobosarm 3mg group, compared to 66% fat and 34% lean mass for the placebo group[7](index=7&type=chunk) - Enobosarm treatment provided a **59.8% relative reduction** in the proportion of subjects who experienced a clinically significant decline (>10%) in stair climb power compared to the placebo group (p=0.006)[7](index=7&type=chunk) - The combination of enobosarm and semaglutide demonstrated a positive safety profile in the Phase 2b trial[7](index=7&type=chunk) [Phase 2b Maintenance Extension Study Results](index=2&type=section&id=Phase%202b%20QUALITY%20Maintenance%20Extension%20study) The Maintenance Extension study showed enobosarm monotherapy significantly reduced weight regain and preserved lean mass after semaglutide discontinuation - Enobosarm 3mg monotherapy significantly reduced body weight regain by **46%** after semaglutide was discontinued (p=0.038)[9](index=9&type=chunk) - The tissue composition of regained weight was **100% lean mass** in the enobosarm groups, versus 28% fat and 72% lean mass in the placebo group[9](index=9&type=chunk) - By the end of the full study, the enobosarm 6mg group showed a **93% greater loss of fat** compared to the placebo group (p=0.008)[9](index=9&type=chunk) - Enobosarm monotherapy had a positive safety profile with virtually no gastrointestinal side effects and no other significant adverse events of special interest after semaglutide discontinuation[9](index=9&type=chunk) [Novel Modified Release Oral Enobosarm Formulation](index=4&type=section&id=Novel%20Modified%20Release%20Oral%20Enobosarm%20Formulation) A new modified-release enobosarm formulation with a distinct pharmacokinetic profile has been selected, enhancing intellectual property protection - The new formulation demonstrated a distinct release profile with reduced Cmax, delayed Tmax, and a secondary peak concentration, while maintaining similar overall absorption (AUC)[10](index=10&type=chunk) - The novel formulation is planned for future clinical studies and commercialization[10](index=10&type=chunk) - Intellectual property has been strengthened, with new patent filings on the modified-release formulation potentially extending expiry to **2046**[10](index=10&type=chunk) [Financial Performance](index=4&type=section&id=Financial%20Performance) This section provides an overview of Veru's financial results for Q3 and year-to-date fiscal 2025, including key statements [Financial Summary](index=4&type=section&id=Financial%20Summary) Veru reported reduced Q3 FY2025 operating and net losses, with year-to-date net loss also decreasing, and a cash position of $15.0 million Q3 Fiscal 2025 vs Q3 Fiscal 2024 | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | R&D Expenses | $3.0M | $4.8M | -37.5% | | SG&A Expenses | $5.0M | $5.8M | -13.8% | | Operating Loss (Continuing Ops) | $7.5M | $10.5M | -28.6% | | Net Loss (Continuing Ops) | $7.3M | $10.3M | -29.1% | | Net Loss per Share (Continuing Ops) | $0.50 | $0.71 | -29.6% | YTD Fiscal 2025 vs YTD Fiscal 2024 | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | R&D Expenses | $12.7M | $9.5M | +33.7% | | SG&A Expenses | $15.4M | $18.4M | -16.3% | | Operating Loss (Continuing Ops) | $25.9M | $26.8M | -3.4% | | Net Loss (Continuing Ops) | $17.0M | $26.7M | -36.3% | | Net Loss per Share (Continuing Ops) | $1.16 | $2.04 | -43.1% | - Cash, cash equivalents, and restricted cash stood at **$15.0 million** as of June 30, 2025, down from $24.9 million as of September 30, 2024[13](index=13&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) Condensed consolidated financial statements detail the company's financial position, operational performance, and cash flows for Q3 and YTD FY2025 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets, liabilities, and stockholders' equity as of June 30, 2025, primarily due to discontinued operations Key Balance Sheet Items (unaudited) | Metric | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $15,010,154 | $24,916,285 | | Total current assets | $16,193,177 | $35,223,224 | | Total assets | $27,330,758 | $60,418,772 | | Total current liabilities | $6,682,015 | $11,867,968 | | Total liabilities | $11,986,125 | $28,102,060 | | Total stockholders' equity | $15,344,633 | $32,316,712 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations shows a reduced net loss for both the three and nine months ended June 30, 2025, with a significant debt extinguishment gain Key Statement of Operations Items (unaudited) | Metric | Three Months Ended June 30, 2025 | Nine Months Ended June 30, 2025 | | :--- | :--- | :--- | | Research and development | $3,020,563 | $12,669,495 | | Selling, general and administrative | $5,010,528 | $15,402,074 | | Operating loss | $(7,546,476) | $(25,917,435) | | Net loss from continuing operations | $(7,323,101) | $(16,985,397) | | Net loss | $(7,332,820) | $(24,179,786) | | Net loss per share | $(0.50) | $(1.65) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statement indicates net cash used in operating activities, offset by investing activities, resulting in a net cash decrease for the nine months Key Cash Flow Items (Nine Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(24,551,752) | $(17,316,239) | | Net cash provided by investing activities | $18,867,232 | $14,714 | | Net cash (used in) provided by financing activities | $(4,221,611) | $36,826,910 | | Net (decrease) increase in cash | $(9,906,131) | $19,525,385 | | Cash at end of period | $15,010,154 | $29,150,879 | [Corporate Information and Forward-Looking Statements](index=4&type=section&id=About%20Veru%20Inc.) This section provides an overview of Veru Inc. and includes standard forward-looking statements with associated risk disclosures [Company Overview](index=4&type=section&id=Company%20Overview) Veru Inc. is a late clinical-stage biopharmaceutical company focused on cardiometabolic and inflammatory diseases with key pipeline assets enobosarm and sabizabulin - Veru is a late clinical stage biopharmaceutical company[14](index=14&type=chunk) - The company's focus is on cardiometabolic and inflammatory diseases[14](index=14&type=chunk) - Key pipeline assets are enobosarm for body composition and sabizabulin for cardiovascular inflammation[14](index=14&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains standard forward-looking statements, outlining risks related to clinical trials, regulatory approvals, funding, competition, and intellectual property - The press release includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995[16](index=16&type=chunk) - Key risks include potential for unsuccessful clinical trials, uncertainty of FDA approval, ability to fund operations, and competition[16](index=16&type=chunk)[17](index=17&type=chunk)