PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ended June 30, 2025, reflect a significant increase in net loss, no revenue, and a strong cash position of **$122.8 million** Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $23,241,199 | $11,286,996 | | Marketable securities | $99,559,482 | $140,228,881 | | **Total Assets** | **$133,569,011** | **$170,481,086** | | **Total Liabilities** | **$28,591,955** | **$25,018,750** | | **Total Stockholders' Equity** | **$104,977,056** | **$145,462,336** | Condensed Consolidated Statements of Operations Highlights (Unaudited) | 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 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $0 | $3,971,438 | $0 | $8,878,315 | | Research and development | $22,047,254 | $12,504,769 | $40,962,826 | $23,605,782 | | General and administrative | $5,671,880 | $3,057,888 | $11,739,256 | $7,129,654 | | **Net Loss** | **($25,910,791)** | **($10,999,782)** | **($50,302,385)** | **($20,793,855)** | | Net loss per share | ($0.57) | ($0.35) | ($1.10) | ($0.66) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($26,555,731) | ($13,556,939) | | Net cash provided by investing activities | $38,440,000 | $5,193,130 | | Net cash provided by financing activities | $69,934 | $4,357,315 | | **Net increase (decrease) in cash** | **$11,954,203** | **($4,006,494)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the FDA's **Complete Response Letter** for deramiocel, ongoing HOPE-3 trial, and the exosome platform, while reporting a **$50.3 million** net loss and **$122.8 million** in liquidity - In **July 2025**, the company received a **Complete Response Letter (CRL)** from the FDA for its deramiocel BLA, stating that the application did not meet the requirement for substantial evidence of effectiveness and required **additional clinical data**. A Type A meeting with the FDA is scheduled for August 2025[159](index=159&type=chunk)[160](index=160&type=chunk) - The company expects to report topline results from its ongoing **Phase 3 HOPE-3 clinical trial** in the **fourth quarter of 2025**. The study protocol was amended to designate **left ventricular ejection fraction (LVEF)** as the primary endpoint to focus on cardiac efficacy, in alignment with FDA feedback[164](index=164&type=chunk) - As of June 30, 2025, the company had approximately **$122.8 million** in cash, cash equivalents, and marketable securities. Management estimates these funds are sufficient to support operations and capital expenditures into the **fourth quarter of 2026**[173](index=173&type=chunk)[197](index=197&type=chunk) Financial Performance Summary (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $0 | $8.9 million | | R&D Expenses | $41.0 million | $23.6 million | | G&A Expenses | $11.7 million | $7.1 million | | Net Loss | ($50.3 million) | ($20.8 million) | [Company Overview and Product Pipeline](index=39&type=section&id=Company%20Overview%20and%20Product%20Pipeline) Capricor, a clinical-stage biotech, focuses on cell and exosome therapies, with lead candidate deramiocel receiving an FDA CRL and StealthX™ entering Phase 1 trials - The company's lead program, **deramiocel**, is an **allogeneic cell therapy** for treating cardiomyopathy in **DMD patients**. Its therapeutic effect is primarily mediated by secreted exosomes that are immunomodulatory, anti-inflammatory, and anti-fibrotic[155](index=155&type=chunk) - Following a rolling BLA submission in December 2024, the FDA granted Priority Review but later issued a **CRL** in **July 2025**, requesting **additional clinical data** to demonstrate substantial evidence of effectiveness[157](index=157&type=chunk)[159](index=159&type=chunk) - The company's **StealthX™ exosome platform** is being developed for vaccines and other therapies. A **Phase 1 trial** for its COVID-19 vaccine, sponsored by NIAID under Project NextGen, initiated in **August 2025**[170](index=170&type=chunk)[171](index=171&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) The company reported no revenue for Q2 2025, with R&D expenses increasing **76%** to **$22.0 million** and G&A expenses rising **85%** to **$5.7 million** due to higher operational costs - The company recognized **no clinical development income** in Q2 2025, as the **$50.0 million** in development milestone payments from the U.S. Distribution Agreement with Nippon Shinyaku had been fully recognized by the end of 2024[180](index=180&type=chunk) Research & Development Expenses Breakdown (Three Months Ended June 30) | Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Compensation & personnel | $7,510,545 | $3,596,825 | 109% | | DMD program (deramiocel) | $9,838,927 | $5,965,495 | 65% | | Stock-based compensation | $1,930,467 | $852,472 | 126% | | **Total R&D Expenses** | **$22,047,254** | **$12,504,769** | **76%** | General & Administrative Expenses Breakdown (Three Months Ended June 30) | Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Compensation & personnel | $2,139,615 | $837,474 | 155% | | Stock-based compensation | $1,716,687 | $1,300,321 | 32% | | Other corporate expenses | $1,043,895 | $328,363 | 218% | | **Total G&A Expenses** | **$5,671,880** | **$3,057,888** | **85%** | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Capricor held **$122.8 million** in liquidity as of June 30, 2025, projected to fund operations into **Q4 2026**, despite increased cash usage in operating activities Liquidity and Capital Resources Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $23,241 | $11,287 | | Marketable securities | $99,559 | $140,229 | | Working capital | $95,729 | $142,359 | - Cash used in operating activities increased to **$26.6 million** for the six months ended June 30, 2025, compared to **$13.6 million** for the same period in 2024, primarily due to a higher net loss[201](index=201&type=chunk) - In February 2025, the company elected to convert its approximately **$3.4 million** CIRM grant award into a loan. The terms are under discussion, and accrued interest could reach up to approximately **$7.1 million**[220](index=220&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's market risk primarily stems from interest rate sensitivity on its **$122.8 million** cash and marketable securities portfolio, with minimal impact from rate changes due to short-term investments - The company's market risk is primarily from interest rate sensitivity on its **$122.8 million** portfolio of cash, cash equivalents, and marketable securities[248](index=248&type=chunk) - The investment policy focuses on **high credit quality issuers** and **short-term maturities** to mitigate default and market risk. The company does not currently hedge interest rate exposure[249](index=249&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective** at the **reasonable assurance level**[251](index=251&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the quarter ended June 30, 2025[252](index=252&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company faces new legal challenges, including a securities class action filed July 17, 2025, and a derivative action filed August 1, 2025, both alleging federal securities law violations or fiduciary duty breaches - A putative **securities class action** was filed on **July 17, 2025**, against the company and its CEO, alleging violations of U.S. federal securities laws[255](index=255&type=chunk) - A **derivative action** was filed on **August 1, 2025**, against the company's Board of Directors, alleging breaches of fiduciary duties[256](index=256&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor highlights the potential for significant costs and management distraction from recently filed securities class action and derivative lawsuits, which could harm the business - A new risk factor has been identified concerning the costs and management distraction associated with defending against the recently filed **securities class action** and **derivative claims**[258](index=258&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025 - No directors or executive officers adopted or terminated any **Rule 10b5-1 trading arrangements** during the three months ended June 30, 2025[262](index=262&type=chunk)

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Hallador Energy reported a **$18.2 million** net income for the six months ended June 30, 2025, reversing a prior-year loss due to higher revenues and operational efficiencies [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$409.5 million** and stockholders' equity improved to **$122.2 million** as of June 30, 2025, reflecting recent profitability Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $139,874 | $104,858 | | **Total Assets** | $409,513 | $369,120 | | **Total Current Liabilities** | $209,255 | $152,903 | | **Total Liabilities** | $287,360 | $264,835 | | **Total Stockholders' Equity** | $122,153 | $104,285 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved profitability in H1 2025 with **$18.2 million** net income, reversing prior-year losses due to increased revenues and decreased operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total sales and operating revenues | $220,676 | $205,619 | | Income (Loss) from Operations | $25,808 | $(4,553) | | Net Income (Loss) | $18,227 | $(11,900) | | Diluted EPS | $0.42 | $(0.32) | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was **$49.8 million** for H1 2025, leading to a **$20.2 million** increase in cash, cash equivalents, and restricted cash Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $49,783 | $39,891 | | Net cash used in investing activities | $(24,897) | $(25,570) | | Net cash used in financing activities | $(4,669) | $(10,716) | | **Increase in cash, cash equivalents, and restricted cash** | **$20,217** | **$3,605** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the company's two operating segments, a **$215.1 million** impairment charge, a credit agreement amendment, a new **$35.0 million** prepaid power contract, and a 2024 Coal segment restructuring - The company's business is organized into two reportable segments: **Electric Operations** (Merom Power Plant) and **Coal Operations** (Oaktown 1 mining complex)[21](index=21&type=chunk)[23](index=23&type=chunk) - In 2024, the company recorded a **$215.1 million** non-cash impairment charge in its Coal Operations segment due to lower quality coal at the Oaktown 2 mine, leading to its temporary sealing[32](index=32&type=chunk) - On June 27, 2025, the company amended its credit agreement for additional operating flexibility, with total bank debt at **$45.0 million** as of June 30, 2025[37](index=37&type=chunk)[38](index=38&type=chunk) - During Q2 2025, the company entered into a 17-month, **$35.0 million** prepaid physically delivered power contract with a significant financing component[59](index=59&type=chunk) - In February 2024, the company reorganized its Coal Operations segment, reducing its workforce by approximately **110 employees (12%)** and idling higher-cost surface mines to improve efficiency[83](index=83&type=chunk) Unsatisfied Performance Obligations as of June 30, 2025 (in thousands) | Revenue Stream | Total Remaining Obligation | | :--- | :--- | | Delivered energy revenues | $436,530 | | Capacity revenues | $183,200 | | Coal Operations revenues | $371,540 | | **Total Revenue** | **$991,270** | [Management's Discussion and Analysis (MD&A)](index=23&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management reported strong Q2 2025 results, pursuing long-term PPAs and strategic acquisitions, benefiting from Coal Operations restructuring, and maintaining **$42.0 million** total liquidity - Q2 2025 generated **$102.9 million** in revenue with a **$17.6 million** EBITDA margin, an improvement of **$9.1 million** year-over-year[110](index=110&type=chunk) - The company is in discussions with data center developers and utilities for a long-term PPA for the Merom plant's capacity and energy[113](index=113&type=chunk) - Strategic initiatives include seeking acquisitions of additional dispatchable generation and evaluating natural gas co-firing capability at the Merom plant to enhance flexibility and reliability[114](index=114&type=chunk)[116](index=116&type=chunk) - The 2024 organizational restructuring in the Coal Operations segment has led to improved operational expenses, more efficient recoveries, and accelerating shipments[119](index=119&type=chunk) Liquidity Position as of June 30, 2025 | Metric | Amount (in millions) | | :--- | :--- | | Cash provided by operations (YTD) | $49.8 | | Bank Debt | $45.0 | | Additional borrowing capacity | $32.8 | | **Total Liquidity** | **$42.0** | [Results of Operations - Electric Operations](index=29&type=section&id=Results%20of%20Operations%20-%20Electric%20Operations) The Electric Operations segment's income before income taxes increased **41.9%** to **$30.8 million** for H1 2025, driven by new PPA contracts and lower fuel costs Electric Operations Performance (YTD 2025 vs YTD 2024) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--- | :--- | :--- | | Electric Sales | $145.9 | $120.9 | | EBITDA Margin | $41.8 | $31.3 | | Income before Income Taxes | $30.8 | $21.7 | | MWh Sold (thousands) | 2,392 | 1,730 | - The increase in delivered energy revenue for YTD 2025 is attributed to new PPA contracts that started in Q1 2025[149](index=149&type=chunk) [Results of Operations - Coal Operations](index=31&type=section&id=Results%20of%20Operations%20-%20Coal%20Operations) The Coal Operations segment significantly reduced its loss before income taxes to **$3.7 million** for H1 2025, driven by decreased depreciation from the 2024 asset impairment and reduced labor costs Coal Operations Performance (YTD 2025 vs YTD 2024) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--- | :--- | :--- | | Coal Sales | $100.3 | $111.7 | | EBITDA Margin | $8.3 | $(4.0) | | Loss before Income Taxes | $(3.7) | $(29.2) | | Tons Sold (thousands) | 1,961 | 2,063 | - Labor costs decreased by **$8.8 million** YTD due to the February 2024 restructuring, which reduced the segment's headcount from **924 to 655**[162](index=162&type=chunk) - Depreciation, depletion, and amortization costs decreased by **$9.5 million** YTD as a direct result of the **$215.1 million** non-cash impairment charge recognized in Q4 2024[165](index=165&type=chunk) [Critical Accounting Estimates](index=34&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates, requiring significant judgment, include coal reserves, asset retirement obligations, deferred taxes, inventory valuation, and long-lived asset impairment analysis - Key critical accounting estimates include **coal reserves**, **asset retirement obligations**, **deferred taxes**, **inventory valuation**, and **impairment analysis**[173](index=173&type=chunk) - Asset retirement obligations are discounted using credit-adjusted risk-free rates ranging from **7% to 10%**[176](index=176&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes to the company's market risk disclosures since its 2024 Annual Report on Form 10-K - There were no material changes from the market risk disclosure in the 2024 Annual Report on Form 10-K[182](index=182&type=chunk) [Controls and Procedures](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded the company's disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective[184](index=184&type=chunk) - No changes to internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[185](index=185&type=chunk) [PART II - OTHER INFORMATION](index=37&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Mine Safety Disclosures](index=37&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Exhibit 95.1 provides a comprehensive listing of the company's mine safety violations - A listing of the company's mine safety violations is provided in Exhibit 95.1 to the Form 10-Q[193](index=193&type=chunk) [Exhibits](index=37&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including the Third Amendment to the Credit Agreement and required SOX certifications - Key exhibits filed include the Third Amendment to the Fourth Amended and Restated Credit Agreement and SOX 302 and 906 certifications[194](index=194&type=chunk)

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1 - Financial Statements](index=5&type=section&id=Item%201%20-%20Financial%20Statements) Unaudited condensed consolidated financial statements for Primis Financial Corp. as of June 30, 2025, including balance sheets, income, and cash flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to **$3.87 billion** by June 30, 2025, driven by loan growth, while liabilities and equity also increased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,871,726** | **$3,690,115** | | Total cash and cash equivalents | $94,074 | $64,505 | | Net loans | $3,084,536 | $2,833,723 | | Goodwill | $93,459 | $93,459 | | **Total Liabilities** | **$3,495,311** | **$3,325,133** | | Total deposits | $3,342,673 | $3,171,035 | | **Total Stockholders' Equity** | **$376,415** | **$364,982** | [Condensed Consolidated Statements of Income and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Six-month net income surged to **$25.1 million** due to a **$32.0 million** gain on the Panacea investment, despite a Q2 decline Key Income Statement Data (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $25,180 | $24,853 | $51,544 | $50,122 | | Provision for credit losses | $8,303 | $3,119 | $9,899 | $9,627 | | Total Noninterest Income | $18,030 | $10,852 | $50,365 | $21,158 | | *Gains on Panacea Financial Holdings investment* | *$7,450* | *$—* | *$32,028* | *$—* | | Total Noninterest Expenses | $31,942 | $29,786 | $64,458 | $57,323 | | **Net income attributable to Primis' common stockholders** | **$2,437** | **$3,436** | **$25,073** | **$5,902** | | **Earnings per share, diluted** | **$0.10** | **$0.14** | **$1.01** | **$0.24** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$6.6 million** for H1 2025, with investing activities using **$119.9 million** Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(6,587) | $51,297 | | Net cash used in investing activities | $(119,889) | $(173,857) | | Net cash provided by financing activities | $156,045 | $111,587 | | **Net change in cash and cash equivalents** | **$29,569** | **$(10,973)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies and financial data, covering PFH deconsolidation, loan portfolio, and fair value - On March 31, 2025, the Company deconsolidated Panacea Financial Holdings (PFH) after determining it was no longer the primary beneficiary of the VIE, resulting in a recognized gain of **$24.6 million** for the six months ended June 30, 2025[28](index=28&type=chunk)[30](index=30&type=chunk) - On June 12, 2025, the Company signed a term sheet to sell a portion of its retained PFH common shares, generating proceeds of **$22.1 million**, and a further gain of **$7.5 million** in Q2 2025 from this sale and fair value adjustments[32](index=32&type=chunk) - In June 2025, the company repurchased **79,549 shares** of its common stock under its authorized Stock Repurchase Program at an average cost of **$10.00 per share**, for a total of **$807 thousand**[43](index=43&type=chunk) [Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations](index=57&type=section&id=Item%202%20-%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting increased net income from PFH deconsolidation, growth in key divisions, and asset quality [Operational Highlights](index=63&type=section&id=Operational%20Highlights) Operational highlights include significant growth in Mortgage Warehouse and Panacea Financial divisions, and substantial gains from PFH - Mortgage Warehouse outstanding loan balances grew **189%** to **$184.5 million** as of June 30, 2025, from **$63.8 million** at year-end 2024[158](index=158&type=chunk) - Panacea Financial Division outstanding loan balances grew **16%** (**$71.5 million**) during the first half of 2025[158](index=158&type=chunk) - The deconsolidation of PFH on March 31, 2025, resulted in a **$24.6 million** gain, with a subsequent sale of retained shares in June 2025 generating proceeds of **$22.1 million** and a further gain of **$7.5 million**[156](index=156&type=chunk)[157](index=157&type=chunk) [Results of Operations](index=64&type=section&id=Results%20of%20Operations) Six-month net income surged to **$25.1 million** due to a **$32.0 million** PFH gain, while Q2 net income declined due to higher credit loss provisions - Six-month net income available to common shareholders increased to **$25.1 million** in 2025 from **$5.9 million** in 2024, largely due to a **$24.6 million** gain on PFH deconsolidation and a **$7.5 million** gain on the sale and fair value adjustment of PFH shares[159](index=159&type=chunk) - Q2 2025 net income decreased to **$2.4 million** from **$3.4 million** in Q2 2024, primarily due to a **166%** increase in the provision for loan losses, driven by impairment on a single commercial real estate loan[159](index=159&type=chunk) - Core net interest margin, excluding the impact of the Consumer Program portfolio, was **3.12%** for both the second quarter and first six months of 2025[159](index=159&type=chunk) [Financial Condition](index=80&type=section&id=Financial%20Condition) Total assets grew to **$3.87 billion** by June 30, 2025, driven by loan growth, though asset quality deteriorated - Total loans held for investment increased by **8%** to **$3.1 billion** at June 30, 2025, from December 31, 2024, driven by growth in Commercial and Consumer loans[161](index=161&type=chunk)[192](index=192&type=chunk) - Nonperforming assets as a percentage of total assets increased significantly to **1.90%** as of June 30, 2025, compared to **0.29%** at year-end 2024, driven by two relationships totaling **$63.6 million**[161](index=161&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - The allowance for credit losses (ACL) to total loans ratio decreased to **1.47%** from **1.86%** at year-end, largely due to charge-offs in the Consumer Program portfolio[161](index=161&type=chunk)[210](index=210&type=chunk) [Capital Resources](index=92&type=section&id=Capital%20Resources) Both Primis Financial Corp. and Primis Bank exceeded all regulatory capital requirements as of June 30, 2025 Regulatory Capital Ratios | Ratio | Actual (June 30, 2025) | Well-Capitalized Minimum (Bank) | | :--- | :--- | :--- | | **Primis Financial Corp.** | | | | Common equity tier 1 | 8.92% | n/a | | Tier 1 risk-based capital | 9.22% | n/a | | Total risk-based capital | 12.43% | n/a | | **Primis Bank** | | | | Common equity tier 1 | 10.37% | 6.50% | | Tier 1 risk-based capital | 10.37% | 8.00% | | Total risk-based capital | 11.62% | 10.00% | [Item 3 – Quantitative and Qualitative Disclosures about Market Risk](index=95&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk, with EVE projected to decrease by **11.57%** in a +200 bps rate shock Sensitivity of Economic Value of Equity (EVE) as of June 30, 2025 | Rate Shock (Basis Points) | EVE % Change From Base | | :--- | :--- | | Up 400 | (23.66)% | | Up 200 | (11.57)% | | Up 100 | (3.52)% | | Down 100 | 1.14% | | Down 200 | (1.90)% | Sensitivity of Net Interest Income (NII) as of June 30, 2025 | Rate Shock (Basis Points) | NII $ Change From Base (in thousands) | | :--- | :--- | | Up 400 | $143 | | Up 200 | $(224) | | Up 100 | $913 | | Down 100 | $(688) | | Down 200 | $(2,842) | [Item 4 – Controls and Procedures](index=98&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Disclosure controls and procedures were not effective as of June 30, 2025, due to ongoing remediation of material weaknesses - The CEO and CFO concluded that disclosure controls and procedures are not effective as of June 30, 2025, due to the continued remediation of previously identified material weaknesses in internal controls over financial reporting[250](index=250&type=chunk) - The company is continuing its efforts to remediate the material weaknesses, and no new material changes to internal controls were reported during the period[252](index=252&type=chunk) [PART II - OTHER INFORMATION](index=99&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1 – Legal Proceedings](index=99&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company is involved in various legal proceedings, but no material adverse effect on financial condition is anticipated - As of June 30, 2025, there are no legal proceedings pending or threatened that represent a significant risk to Primis or Primis Bank[254](index=254&type=chunk) [Item 1A – Risk Factors](index=99&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) No material changes to previously disclosed risk factors from the 2024 Form 10-K were reported during the period - No material changes to the risk factors disclosed in the 2024 Form 10-K were reported during the period covered by this report[256](index=256&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased **79,549 shares** of common stock at an average price of **$10.00** per share Issuer Purchases of Equity Securities - Q2 2025 | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1-30, 2025 | — | $— | | May 1-30, 2025 | — | $— | | June 1-30, 2025 | 79,549 | $10.00 | | **Total** | **79,549** | **$10.00** |

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited H1 2025 financial statements reflect improved operations, positive cash flow, and alleviated going concern doubts [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased, liabilities rose due to a new convertible loan, and stockholders' equity decreased | Balance Sheet Items | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 434,591 | 428,026 | | **Total Assets** | **1,004,692** | **951,867** | | **Total Current Liabilities** | 524,663 | 330,153 | | **Total Liabilities** | **648,562** | **563,972** | | **Total Equity** | **356,130** | **387,895** | - A significant change in liabilities is the appearance of a convertible loan measured at fair value, which is classified as a current liability of **$181.5 million** as of June 30, 2025, compared to a non-current liability of **$104.6 million** at the end of 2024[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) H1 2025 operations show increased revenue, improved gross profit, and operating profit, offset by fair value losses | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | 91,339 | 83,675 | 207,830 | 165,026 | | **Gross Profit** | 31,723 | 27,195 | 74,739 | 44,420 | | **Profit/(Loss) from Operations** | 16,214 | (98,741) | 35,146 | (121,859) | | **Net Loss** | (106,058) | (101,556) | (44,268) | (126,381) | | **Basic and Diluted EPS** | ($0.33) | ($0.32) | ($0.14) | ($0.40) | - A significant impairment loss of **$88.0 million** was recorded in the three and six months ended June 30, 2024, which did not recur at the same scale in 2025 (**$1.4 million**), contributing to the improved operating profit[18](index=18&type=chunk) - Changes in the fair value of warrant liability and convertible loan resulted in a substantial loss of **$121.5 million** for the three months ended June 30, 2025, and **$78.4 million** for the six months ended June 30, 2025, heavily impacting the net loss[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw significant positive operating cash flow, with overall cash and equivalents increasing to **$138.8 million** | Cash Flow Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | **Net cash generated from operating activities** | 44,323 | 2,142 | | **Net cash used in investing activities** | (5,078) | (7,442) | | **Net cash (used in)/ generated from financing activities** | (6,799) | 28,488 | | **Increase in cash, cash equivalents and restricted cash** | 29,219 | 16,295 | | **Cash, cash equivalents and restricted cash at end of period** | 138,820 | 104,484 | - The positive operating cash flow was driven by improved operational performance and non-cash charges, including a **$78.4 million** change in fair value of warrant liability and convertible loan, despite a net loss of **$44.3 million**[33](index=33&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, going concern alleviation, revenue sources, convertible loan, and legal proceedings - The company concluded that it is probable that management's plans, including forecasted cash inflow from operations and refinancing of short-term debt, will alleviate the substantial doubt about its ability to continue as a going concern[50](index=50&type=chunk)[51](index=51&type=chunk) | Geographic Region | Revenue for Six Months Ended June 30, 2025 ($ thousands) | Revenue for Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | China | 78,969 | 60,474 | | Other Asia & Pacific | 18,740 | 25,665 | | Europe | 98,935 | 75,666 | | U.S. | 11,186 | 3,221 | | **Total** | **207,830** | **165,026** | - The company is involved in multiple legal proceedings, including corporate governance actions, securities litigation, and other contract disputes; the potential financial exposure cannot be reasonably estimated at this time[125](index=125&type=chunk)[129](index=129&type=chunk)[140](index=140&type=chunk) - On May 28, 2024, the company entered into a **$25 million** convertible loan agreement with its CEO, Mr. Yang Wu, resulting in a recorded loss of **$78.2 million** on fair value changes for the six months ended June 30, 2025[114](index=114&type=chunk)[119](index=119&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2025 performance, strategic initiatives, and liquidity, noting going concern alleviation [Business and Strategy](index=36&type=section&id=Business%20and%20Strategy) Microvast specializes in advanced battery technology, pivoting to U.S. LFP production and advancing ASSB - The company is strategically pivoting its Clarksville, TN facility from NMC to LFP battery production to better serve the U.S. ESS market, citing lower costs, enhanced safety, and better environmental performance[157](index=157&type=chunk)[158](index=158&type=chunk) - In January 2025, Microvast announced a breakthrough in all-solid-state battery (ASSB) technology, demonstrating a 48-volt monolithic cell prototype that eliminates liquid electrolytes and offers improved energy density and safety[160](index=160&type=chunk) - As of the end of Q2 2025, the company's order backlog stood at **$320.0 million**, with most orders expected to be fulfilled in 2025 and 2026[161](index=161&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) H1 2025 saw revenue growth, improved gross margin, and operating profit, offset by fair value losses | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | 207,830 | 165,026 | 25.9% | | **Gross Profit** | 74,739 | 44,420 | 68.3% | | **Gross Margin** | 36.0% | 26.9% | N/A | | **Profit/(Loss) from Operations** | 35,146 | (121,859) | (128.8)% | | **Net Loss** | (44,268) | (126,381) | (65.0)% | - The increase in revenue for the first six months of 2025 was primarily driven by a significant increase in sales volume from **654.9 MWh** in 2024 to **947.2 MWh** in 2025[205](index=205&type=chunk) - General and administrative expenses for the six-month period decreased by **$32.9 million** (**69.5%**), mainly due to a **$14.8 million** reduction in share-based compensation and a **$10.9 million** positive foreign exchange impact[208](index=208&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by cash and positive operating cash flow, but additional financing is needed for U.S. expansion - Management has concluded that it is probable that its plans will alleviate substantial doubt about the company's ability to continue as a going concern, based on positive operating cash flow, a strong order backlog, and debt refinancing capabilities[217](index=217&type=chunk)[224](index=224&type=chunk) - The company's cash position as of June 30, 2025, was **$138.8 million**, including **$67.4 million** held by Chinese subsidiaries and **$17.3 million** by European subsidiaries, which are not readily available for U.S. operations[213](index=213&type=chunk)[214](index=214&type=chunk) - The Clarksville, TN expansion project requires additional financing to resume progress; the company is seeking alternative capital sources as proceeds from the Business Combination were insufficient and cash cannot be repatriated from China[226](index=226&type=chunk)[227](index=227&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from international trade, interest rates, and foreign currency, notably Renminbi and Euro - The company faces significant foreign currency exchange risk, with a large portion of transactions in Chinese Renminbi and Euros; a hypothetical **10%** adverse change in exchange rates could have resulted in a loss of **$16.4 million** as of June 30, 2025[242](index=242&type=chunk)[243](index=243&type=chunk) - The company is exposed to interest rate risk through its project finance loans in China and a convertible loan in the U.S., which are tied to the Loan Prime Rate and Term SOFR, respectively[240](index=240&type=chunk) - Ongoing trade developments between the U.S. and China, such as tariffs and import/export controls, may impact the company's ability to rely on its manufacturing centers in China[239](index=239&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective as of June 30, 2025, due to a material weakness in IT general controls; remediation is underway - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were not effective as of June 30, 2025[249](index=249&type=chunk) - A material weakness persists related to information technology general controls (GITC) for the ERP system, specifically concerning developer access and monitoring of privileged users[252](index=252&type=chunk) - The company is executing a remediation plan that includes removing inappropriate system access and establishing more robust monitoring processes for user activities and permissions[253](index=253&type=chunk)[256](index=256&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with uncertain outcomes and unestimable potential financial impact - The company is defending against various legal proceedings, but the outcome and potential financial impact cannot be reasonably estimated at this stage[259](index=259&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for FY2024 have occurred - The report refers to the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, indicating no material changes[260](index=260&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) Yixin Pan adopted a Rule 10b5-1 trading plan to sell shares, with no other similar plans by directors or officers - Yixin Pan adopted a Rule 10b5-1 trading plan on June 11, 2025, to sell up to **12,595** shares of common stock[264](index=264&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with or incorporated by reference into the Form 10-Q, including key agreements and certifications

[Financial Highlights](index=1&type=section&id=Financial_Highlights) CPS reported a 14.5% revenue increase to $109.8 million in Q2 2025, with net income slightly up to $4.8 million, and similar growth for the first half Q2 2025 vs. Q2 2024 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $109.8 million | $95.9 million | +14.5% | | Pretax Income | $7.0 million | $6.7 million | +4.5% | | Net Income | $4.8 million | $4.7 million | +2.1% | | Diluted EPS | $0.20 | $0.19 | +5.3% | Six Months Ended June 30, 2025 vs. 2024 Financial Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $216.6 million | $187.6 million | +15.5% | | Pretax Income | $13.8 million | $13.2 million | +4.5% | | Net Income | $9.5 million | $9.3 million | +2.2% | [Operational Highlights & Credit Quality](index=1&type=section&id=Operational_Highlights_%26_Credit_Quality) The receivables portfolio grew to **$3.708 billion**, with stable new contract purchases, while net charge-offs slightly increased and delinquencies improved - Total receivables grew to **$3.708 billion** as of June 30, 2025, a significant increase from **$3.173 billion** as of June 30, 2024[6](index=6&type=chunk) - New contract purchases in Q2 2025 were **$433.0 million**, remaining relatively flat compared to **$431.9 million** in Q2 2024[6](index=6&type=chunk) Credit Quality Metrics (as of June 30) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Annualized Net Charge-offs | 7.45% | 7.26% | | Delinquencies > 30 days (incl. repo) | 13.14% | 13.29% | [Management Commentary](index=1&type=section&id=Management_Commentary) CEO Charles E. Bradley highlighted improved earnings and operational efficiencies, emphasizing focus on new credit quality and existing loan performance as the portfolio grows - The CEO, Charles E. Bradley, identified "Improvements in earnings and operating efficiencies" as the key highlights of the second quarter[8](index=8&type=chunk) - The company's strategic focus is on maintaining the quality of originated credit and ensuring the strong performance of existing loans as the portfolio grows[8](index=8&type=chunk) [Financial Statements Analysis](index=3&type=section&id=Financial_Statements_Analysis) Financial statements show revenue growth from higher interest income, offset by rising interest expenses, with balance sheet expansion driven by finance receivables and securitization trust debt, impacting net interest margin [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed_Consolidated_Statements_of_Operations) Q2 2025 saw interest income rise 19.2% to **$105.4 million**, but faster 25.7% growth in interest expense to **$58.7 million** compressed margins, leading to a modest pre-tax income increase Q2 Statement of Operations (in thousands) | Line Item | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Interest Income | $105,362 | $88,367 | +19.2% | | Interest Expense | $58,704 | $46,710 | +25.7% | | Employee Costs | $24,362 | $23,725 | +2.7% | | Income Before Taxes | $6,952 | $6,672 | +4.2% | | Net Income | $4,797 | $4,672 | +2.7% | H1 Statement of Operations (in thousands) | Line Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Interest Income | $207,295 | $172,655 | +20.1% | | Interest Expense | $113,622 | $88,678 | +28.1% | | Income Before Taxes | $13,754 | $13,229 | +4.0% | | Net Income | $9,491 | $9,262 | +2.5% | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed_Consolidated_Balance_Sheets) Total assets reached **$3.76 billion** as of June 30, 2025, driven by a **$245 million** increase in finance receivables, funded by a **$219 million** rise in securitization trust debt, with shareholders' equity exceeding **$300 million** Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Finance receivables, fair value | $3,559,029 | $3,313,767 | +$245,262 | | Total Assets | $3,763,790 | $3,493,868 | +$269,922 | | Securitization trust debt | $2,813,234 | $2,594,384 | +$218,850 | | Shareholders' equity | $303,101 | $292,770 | +$10,331 | - Shareholder's equity achieved a record high, surpassing **$300 million** for the first time[9](index=9&type=chunk)[18](index=18&type=chunk) [Operating and Performance Data](index=5&type=section&id=Operating_and_Performance_Data) The total portfolio balance grew 16.9% to **$3.71 billion**, while annualized net charge-offs increased to **7.45%**, and net interest margin compressed to **5.5%** due to higher interest expenses Key Performance Indicators (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total portfolio balance | $3,708.38 M | $3,173.28 M | | Annualized Net Charge-offs | 7.45% | 7.26% | | Total Delinquencies & Repo. | 13.14% | 13.29% | | Net interest margin (% of avg. portfolio) | 5.5% | 6.3% | - The decline in net interest margin from **6.3%** to **5.5%** YoY was primarily driven by interest expense rising as a percentage of the average portfolio from **-6.0%** to **-6.4%**[19](index=19&type=chunk) [Corporate Information](index=2&type=section&id=Corporate_Information) CPS will hold a conference call on August 12, 2025, to discuss Q2 results, operating as a specialty finance provider offering indirect auto financing to individuals with limited credit histories - A conference call to discuss Q2 2025 results will be held on August 12, 2025, at 1:00 p.m. ET[10](index=10&type=chunk) - CPS's business model involves providing indirect automobile financing to individuals with past credit problems or limited credit histories by purchasing contracts from franchised dealerships[12](index=12&type=chunk)

[Earnings Highlights](index=1&type=section&id=Earnings%20Highlights) RGC Resources reported a significant increase in earnings for the third quarter and first nine months of fiscal 2025, primarily driven by higher earnings from its investment in the Mountain Valley Pipeline Q3 Earnings Comparison (Ended June 30) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | **Consolidated Earnings ($)** | $0.54 million | $0.16 million | +243.6% | | **Earnings Per Share (EPS)** | $0.05 | $0.02 | +150.0% | Nine-Month Earnings Comparison (Ended June 30) | Metric | Nine Months 2025 | Nine Months 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Income ($)** | $13.48 million | $11.62 million | +16.0% | | **Earnings Per Share (EPS)** | $1.31 | $1.15 | +13.9% | - The primary driver for the earnings increase in both the third quarter and the first nine months of fiscal 2025 was higher earnings from the company's investment in the Mountain Valley Pipeline, LLC (MVP)[2](index=2&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Paul Nester highlighted the Mountain Valley Pipeline's significant contribution to value and energy delivery, alongside Roanoke Gas's strong financial and operational performance - CEO Paul Nester stated that the Mountain Valley Pipeline (MVP) has been a successful and meaningful part of delivering value for a full year, and that Roanoke Gas continues to produce strong financial results from prudent system investment and exemplary operations[3](index=3&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) This section presents the unaudited Condensed Consolidated Statements of Income and Condensed Consolidated Balance Sheets for the periods ended June 30, 2025, and June 30, 2024 [Condensed Consolidated Statements of Income](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For Q3 2025, operating revenues increased, but operating income declined due to higher expenses, while significant equity earnings from MVP boosted net income Condensed Consolidated Statements of Income (Unaudited) | | Three Months Ended June 30, | Nine Months Ended June 30, | | :--- | :--- | :--- | | | **2025 ($)** | **2024 ($)** | **2025 ($)** | **2024 ($)** | | **Operating revenues** | $17.26 million | $14.46 million | $81.02 million | $71.54 million | | **Operating expenses** | $16.07 million | $12.90 million | $62.09 million | $54.70 million | | **Operating income** | $1.20 million | $1.56 million | $18.92 million | $16.84 million | | **Equity in earnings of unconsolidated affiliate** | $0.77 million | $0.28 million | $2.43 million | $2.98 million | | **Other income (expense), net** | $0.24 million | $(0.07 million) | $1.18 million | $0.14 million | | **Interest expense** | $1.51 million | $1.57 million | $4.92 million | $4.77 million | | **Income before income taxes** | $0.70 million | $0.20 million | $17.61 million | $15.19 million | | **Income tax expense** | $0.16 million | $0.05 million | $4.13 million | $3.57 million | | **Net income** | **$0.54 million** | **$0.16 million** | **$13.48 million** | **$11.62 million** | | **Basic EPS** | $0.05 | $0.02 | $1.31 | $1.15 | | **Diluted EPS** | $0.05 | $0.02 | $1.31 | $1.15 | - Cash dividends per common share increased year-over-year for both the third quarter (from **$0.2000 to $0.2075**) and the nine-month period (from **$0.6000 to $0.6225**)[9](index=9&type=chunk) [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $324.8 million, driven by net utility property growth, supported by increases in long-term debt and stockholders' equity Condensed Consolidated Balance Sheets (Unaudited) | | June 30, 2025 ($) | June 30, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Current assets | $21.60 million | $25.41 million | | Utility property, net | $270.54 million | $257.94 million | | Other non-current assets | $32.62 million | $30.81 million | | **Total Assets** | **$324.76 million** | **$314.15 million** | | **Liabilities and Stockholders' Equity** | | | | Current liabilities | $20.70 million | $23.78 million | | Long-term debt, net | $139.74 million | $136.31 million | | Deferred credits and other non-current liabilities | $48.06 million | $45.29 million | | **Total Liabilities** | **$208.50 million** | **$205.39 million** | | **Stockholders' Equity** | **$116.26 million** | **$108.77 million** | | **Total Liabilities and Stockholders' Equity** | **$324.76 million** | **$314.15 million** | - Year-over-year, Total Assets grew by **3.4%**, Total Liabilities increased by **1.5%**, and Stockholders' Equity rose by **6.9%**[11](index=11&type=chunk)

Part I [Business](index=3&type=section&id=Item%201.%20Business) Mercury Systems delivers mission-critical processing solutions for the aerospace and defense industry, focusing on secure, open, and modular platforms - Mercury Systems is a technology company providing mission-critical processing solutions for the aerospace and defense sectors, with products deployed in over **300 programs** across **35 countries**[12](index=12&type=chunk) Fiscal Year 2025 vs. 2024 Key Financials | Metric | Fiscal 2025 | Fiscal 2024 | | :--- | :--- | :--- | | **Consolidated Revenues** | $912.0 million | $835.3 million | | **Net Loss** | $(37.9) million | $(137.6) million | | **Diluted Loss Per Share** | $(0.65) | $(2.38) | | **Adjusted EPS** | $0.64 | $(0.69) | | **Adjusted EBITDA** | $119.4 million | $9.4 million | - The company's business strategy focuses on four key areas: Performance Excellence, Thriving Growth Engine, Margin Expansion, and Cash Release[20](index=20&type=chunk)[21](index=21&type=chunk) - As of June 27, 2025, the company's order backlog was approximately **$1.4 billion**, an increase from **$1.3 billion** as of June 28, 2024, with **$807.8 million** expected as revenue within the next twelve months[68](index=68&type=chunk) Revenue Concentration by Major Customer | Customer | FY2025 Revenue % | FY2024 Revenue % | FY2023 Revenue % | | :--- | :--- | :--- | :--- | | RTX Corporation | 13% | 10% | 14% | | Lockheed Martin | 10% | 11% | 13% | | United States Navy | 10% | <10% | <10% | | L3Harris | <10% | 12% | <10% | | Northrop Grumman | <10% | <10% | 11% | [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from defense program dependence, customer concentration, intense competition, supply chain disruptions, and M&A integration - The company is heavily dependent on defense electronics programs, with sales to the U.S. government and its prime contractors accounting for approximately **97%** of total net revenues in fiscal 2025[82](index=82&type=chunk) - A small number of customers, including RTX Corporation (**13%**), Lockheed Martin (**10%**), and the U.S. Navy (**10%**), accounted for a significant portion of total net revenues in fiscal 2025[86](index=86&type=chunk) - The company operates in highly competitive markets with rapid technological changes, and failure to innovate or operational challenges could lead to customer loss[88](index=88&type=chunk)[94](index=94&type=chunk) - As of June 27, 2025, the company had **$591.5 million** of outstanding borrowings, which could limit operational flexibility and increase vulnerability to interest rate changes[125](index=125&type=chunk)[126](index=126&type=chunk) - The company faces risks from cybersecurity threats, which could lead to financial loss and reputational damage[141](index=141&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[151](index=151&type=chunk) [Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity risk is managed through an enterprise risk management process overseen by the CIO and Board of Directors - Cybersecurity risk is managed through an enterprise risk management (ERM) process, overseen by the CIO and the Board of Directors' management Compliance Committee[152](index=152&type=chunk)[157](index=157&type=chunk) - The company actively collaborates with government agencies like the DoD, NSA, and FBI to share real-time threat information and best practices[154](index=154&type=chunk) - To date, no cybersecurity incidents have had a material effect on the company's financial position, results of operations, or cash flows[160](index=160&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) The company's significant properties are leased facilities primarily in the United States, with major sites in Andover, Phoenix, and Hudson Significant Leased Properties (as of June 27, 2025) | Location | Size (Sq. Feet) | Lease Expiration | | :--- | :--- | :--- | | Andover, MA | 145,262 | 2032 | | Phoenix, AZ | 125,756 | 2033 | | Hudson, NH | 121,553 | 2030 | | Torrance, CA | 58,405 | 2029 | | Oxnard, CA | 47,774 | 2027 | [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to various legal proceedings but does not expect a material impact on its financial condition - The company is subject to litigation, claims, and investigations in the ordinary course of business but believes the outcomes will not have a material impact on its financial position[162](index=162&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[163](index=163&type=chunk) [Information About Our Executive Officers](index=26&type=section&id=Item%204.1.%20Information%20About%20Our%20Executive%20Officers) This section provides biographical information for the company's executive officers, including the President, CEO, CFO, and Chief Legal Officer - William L. Ballhaus was appointed President and CEO effective August 15, 2023, and became Chairman of the Board in October 2023[165](index=165&type=chunk) - David E. Farnsworth joined as Executive Vice President and Chief Financial Officer in July 2023[167](index=167&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, has never paid cash dividends, and had no active share repurchase programs in fiscal 2025 - The company's common stock (MRCY) is listed on the Nasdaq Global Select Market[172](index=172&type=chunk) - The company has never paid cash dividends and does not plan to in the foreseeable future, retaining earnings for growth[174](index=174&type=chunk) - There were no active share repurchase programs during fiscal 2025[176](index=176&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2025, revenues increased 9.2% to $912.0 million, gross margin improved to 27.9%, and net loss significantly decreased to $(37.9) million Results of Operations: Fiscal 2025 vs. Fiscal 2024 (in thousands) | Line Item | Fiscal 2025 | Fiscal 2024 | | :--- | :--- | :--- | | **Net revenues** | $912,020 | $835,275 | | **Gross margin** | $254,494 (27.9%) | $195,901 (23.5%) | | **Loss from operations** | $(19,627) | $(147,754) | | **Net loss** | $(37,904) | $(137,640) | - Total revenues increased by **9.2%** in fiscal 2025, driven by a pivot to executing on production programs after prioritizing challenged programs in fiscal 2024[197](index=197&type=chunk)[198](index=198&type=chunk) - Gross margin increased by **440 basis points** to **27.9%** in fiscal 2025, primarily due to a significantly smaller negative net impact from changes in estimates on contracts[200](index=200&type=chunk)[201](index=201&type=chunk) - Research and development expenses decreased by **33.3%** to **$67.6 million** in fiscal 2025, mainly due to savings from headcount reductions[203](index=203&type=chunk) - The company executed a workforce reduction in January 2025, eliminating approximately **145 positions** and incurring **$4.9 million** in restructuring charges, with expected annualized savings of **$15 million**[187](index=187&type=chunk) Cash Flow Summary: Fiscal 2025 vs. Fiscal 2024 (in thousands) | Cash Flow Activity | Fiscal 2025 | Fiscal 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $138,851 | $60,382 | | **Net cash used in investing activities** | $(13,500) | $(34,291) | | **Net cash provided by financing activities** | $1,412 | $82,680 | [Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks include interest rates, credit concentration, and foreign currency exposure - The company is exposed to interest rate risk through its variable-rate borrowings, partially mitigated by an interest rate swap fixing the rate on **$300.0 million** of its **$591.5 million** outstanding borrowings[281](index=281&type=chunk)[130](index=130&type=chunk) - Significant credit risk concentration exists, with five customers accounting for **48%** of total receivables, unbilled receivables, and costs in excess of billings as of June 27, 2025[283](index=283&type=chunk) - The company is subject to foreign currency risk from its subsidiaries in Switzerland, the United Kingdom, and Spain, but does not currently use derivative instruments to hedge this exposure[284](index=284&type=chunk)[285](index=285&type=chunk) [Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal years 2025 and 2024, including balance sheets and statements of operations Consolidated Balance Sheet Highlights (in thousands) | Account | June 27, 2025 | June 28, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,058,178 | $953,784 | | **Goodwill** | $938,093 | $938,093 | | **Total Assets** | $2,434,764 | $2,378,905 | | **Total Current Liabilities** | $300,377 | $234,416 | | **Long-term Debt** | $591,500 | $591,500 | | **Total Liabilities** | $961,303 | $906,130 | | **Total Shareholders' Equity** | $1,473,461 | $1,472,775 | Consolidated Statement of Operations Highlights (in thousands) | Account | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | **Net Revenues** | $912,020 | $835,275 | $973,882 | | **Gross Margin** | $254,494 | $195,901 | $316,728 | | **Loss from Operations** | $(19,627) | $(147,754) | $(21,685) | | **Net Loss** | $(37,904) | $(137,640) | $(28,335) | | **Diluted Net Loss Per Share** | $(0.65) | $(2.38) | $(0.50) | - Revenue recognized at a point in time was **53%** of total revenues in fiscal 2025, up from **45%** in fiscal 2024, reflecting a shift from development to production contracts[253](index=253&type=chunk) - The company's goodwill of **$938.1 million** was tested for impairment in the fourth quarter of fiscal 2025 and was concluded not to be impaired[389](index=389&type=chunk)[390](index=390&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=77&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[489](index=489&type=chunk) [Controls and Procedures](index=77&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 27, 2025 - Management concluded that disclosure controls and procedures were effective as of June 27, 2025[490](index=490&type=chunk) - Management's assessment concluded that internal control over financial reporting was effective as of June 27, 2025, which was audited by KPMG LLP[492](index=492&type=chunk) [Other Information](index=77&type=section&id=Item%209B.%20Other%20Information) No directors or executive officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in the fourth quarter of fiscal 2025 - No directors or executive officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in the fourth quarter of fiscal 2025[494](index=494&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=77&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[495](index=495&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=78&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors and corporate governance is incorporated by reference from the company's 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's 2025 Proxy Statement[497](index=497&type=chunk) [Executive Compensation](index=78&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's 2025 Proxy Statement[498](index=498&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=78&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the company's 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's 2025 Proxy Statement[499](index=499&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=78&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related transactions and director independence is incorporated by reference from the company's 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's 2025 Proxy Statement[500](index=500&type=chunk) [Principal Accountant Fees and Services](index=78&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's 2025 Proxy Statement. The independent auditor is KPMG LLP[501](index=501&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=78&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits included in or incorporated by reference into the Form 10-K - This section lists all financial statements, schedules, and exhibits included in or incorporated by reference into the Form 10-K[503](index=503&type=chunk) [Form 10-K Summary](index=78&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[504](index=504&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-41578 HORIZON SPACE ACQUISITION I CORP. (Exact name of registrant as specified in its charter) Cayman Islands N/A (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-41578 HORIZON SPACE ACQUISITION I CORP. (Exact name of registrant as specified in its charter) Cayman Islands N/A (State or other jurisdiction ...

[Report Overview & Highlights](index=1&type=section&id=Report%20Overview%20%26%20Highlights) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Summit Therapeutics achieved significant clinical milestones for ivonescimab in Q2 2025, including positive Phase III results for NSCLC and a new collaboration - The global Phase III HARMONi trial showed that ivonescimab with chemotherapy significantly improved **Progression-Free Survival (PFS)** in patients with EGFRm NSCLC after TKI therapy, with a positive trend in Overall Survival (OS) also observed[1](index=1&type=chunk) - In China, the HARMONi-2 study showed a positive OS trend for ivonescimab versus pembrolizumab, leading to NMPA approval for 1L PD-L1 positive advanced NSCLC[1](index=1&type=chunk) - The HARMONi-6 study in China demonstrated that ivonescimab with chemotherapy achieved statistically significant and clinically meaningful superiority in **PFS** compared to tislelizumab (a PD-1 inhibitor) plus chemotherapy in 1L squamous NSCLC[1](index=1&type=chunk) - Summit entered a clinical collaboration with Revolution Medicines to evaluate ivonescimab in combination with three different RAS(ON) inhibitors for RAS mutant tumors[1](index=1&type=chunk) [Operational & Corporate Updates](index=1&type=section&id=Operational%20%26%20Corporate%20Updates) [Ivonescimab (SMT112) Development Progress](index=1&type=section&id=Ivonescimab%20(SMT112)%20Development%20Progress) Ivonescimab, a bispecific antibody, is being advanced globally in three Phase III NSCLC trials following its in-licensing - Ivonescimab is an investigational bispecific antibody that blocks both PD-1 (immunotherapy) and VEGF (anti-angiogenesis)[2](index=2&type=chunk) - Over **2,800 patients** have been treated with ivonescimab in global clinical studies since Summit in-licensed the drug from Akeso in January 2023[2](index=2&type=chunk) - Summit is conducting three main Phase III trials for NSCLC: - **HARMONi**: For EGFR-mutated NSCLC post-TKI therapy - **HARMONi-3**: For first-line metastatic NSCLC - **HARMONi-7**: For first-line metastatic NSCLC with high PD-L1 expression[2](index=2&type=chunk)[3](index=3&type=chunk) [Key Clinical Trial Results](index=2&type=section&id=Key%20Clinical%20Trial%20Results) Recent Phase III trials, including global HARMONi and China's HARMONi-2 and HARMONi-6, reported significant positive results for ivonescimab in NSCLC HARMONi Trial Topline Results (May 2025) | Metric | Result | p-value | | :--- | :--- | :--- | | **Progression-Free Survival (PFS)** | Hazard Ratio: 0.52 (95% CI: 0.41 - 0.66) | <0.00001 | | **Overall Survival (OS)** | Hazard Ratio: 0.79 (95% CI: 0.62 - 1.01) | 0.057 | - Based on the HARMONi results, Summit intends to file a Biologics License Application (BLA) with the FDA[3](index=3&type=chunk) - Akeso's HARMONi-6 trial in China showed ivonescimab plus chemotherapy had statistically significant and clinically meaningful improvement in **PFS** versus tislelizumab (PD-1 inhibitor) plus chemotherapy in squamous NSCLC[4](index=4&type=chunk) - Akeso's HARMONi-2 trial in China led to NMPA approval for ivonescimab monotherapy after a requested interim OS analysis showed a positive trend with a hazard ratio of **0.777**[4](index=4&type=chunk) [Collaborations and Ongoing Trials](index=3&type=section&id=Collaborations%20and%20Ongoing%20Trials) Summit is expanding ivonescimab's clinical evaluation through a new collaboration with Revolution Medicines and ongoing global Phase III trials - Announced a clinical collaboration with Revolution Medicines in June 2025 to evaluate ivonescimab with three RAS(ON) inhibitors in solid tumors with RAS mutations[4](index=4&type=chunk) - Enrollment is ongoing in Summit's global Phase III trials, HARMONi-3 and HARMONi-7[4](index=4&type=chunk) - Partner Akeso is enrolling patients in several Phase III studies in China for indications beyond NSCLC, including biliary-tract cancer, triple-negative breast cancer, and pancreatic cancer[4](index=4&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) [Financial Position](index=4&type=section&id=Financial%20Position) Summit's cash position decreased to **$297.9 million** by Q2 2025, prompting an ATM offering for up to **$360.0 million** in common stock Cash and Short-term Investments (in millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | $297.9 | | December 31, 2024 | $412.3 | - On August 11, 2025, the company established an at-the-market (ATM) offering to potentially sell up to **$360.0 million** of its common stock[8](index=8&type=chunk) [Stock-Based Compensation Modification](index=4&type=section&id=Stock-Based%20Compensation%20Modification) A Q2 2025 modification of **44.5 million** stock options to service-based vesting resulted in a **$466.6 million** non-cash compensation expense - On April 29, 2025, the company modified **44.5 million** unvested performance-based stock options to require only service-based vesting[8](index=8&type=chunk) - This modification led to a total non-cash stock-based compensation expense of **$466.6 million** being recognized in Q2 2025[8](index=8&type=chunk) - An additional **$454.6 million** in unrecognized non-cash stock-based compensation expense will be recognized over the future service period[8](index=8&type=chunk) [Operating Expenses, R&D, G&A, and Net Loss](index=4&type=section&id=Operating%20Expenses%2C%20R%26D%2C%20G%26A%2C%20and%20Net%20Loss) Q2 2025 GAAP operating expenses and net loss significantly increased due to a **$466.6 million** stock-based compensation charge, while Non-GAAP figures reflected rising clinical costs Q2 2025 vs Q2 2024 Financial Summary (in millions, except per share data) | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Q2 2025 (Non-GAAP) | Q2 2024 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Operating Expenses** | $568.4 | $59.6 | $89.6 | $48.5 | | **R&D Expenses** | $208.0 | $30.8 | $79.4 | $27.3 | | **G&A Expenses** | $360.4 | $13.8 | $10.2 | $6.2 | | **Net Loss** | $(565.7) | $(60.4) | $(86.9) | $(49.3) | | **Net Loss Per Share** | $(0.76) | $(0.09) | $(0.12) | $(0.07) | - The primary driver for the increase in GAAP expenses was the non-cash stock-based compensation expense of **$466.6 million** resulting from the stock option modification[8](index=8&type=chunk) - The increase in Non-GAAP operating and R&D expenses was due to the expansion of clinical studies and development costs for ivonescimab[8](index=8&type=chunk)[12](index=12&type=chunk) [About Ivonescimab and Summit Therapeutics](index=6&type=section&id=About%20Ivonescimab%20and%20Summit%20Therapeutics) [About Ivonescimab (SMT112)](index=6&type=section&id=About%20Ivonescimab%20(SMT112)) Ivonescimab is a novel bispecific antibody targeting PD-1 and VEGF, designed with a tetravalent structure for enhanced tumor microenvironment targeting - Ivonescimab is a novel bispecific antibody targeting both PD-1 and VEGF[14](index=14&type=chunk) - It features a tetravalent structure (four binding sites) and exhibits cooperative binding, meaning its affinity for PD-1 increases in the presence of VEGF, which may better target the drug to tumor tissue[14](index=14&type=chunk)[15](index=15&type=chunk) - The drug has a half-life of **6 to 7 days** after the first dose, and over **2,800 patients** have been treated with it in global clinical studies[15](index=15&type=chunk)[16](index=16&type=chunk) [Clinical Development Program for Ivonescimab](index=6&type=section&id=Clinical%20Development%20Program%20for%20Ivonescimab) Summit is advancing ivonescimab in three global Phase III NSCLC trials, complemented by Akeso's successful completion of three Phase III NSCLC trials in China - Summit is conducting two multiregional Phase III trials, HARMONi and HARMONi-3, and began enrolling for a third, HARMONi-7, in early 2025[17](index=17&type=chunk) - Akeso has completed three positive Phase III trials in China: HARMONi-A, HARMONi-2, and HARMONi-6, all in NSCLC[20](index=20&type=chunk) - Ivonescimab has received Fast Track designation from the US FDA for the HARMONi clinical trial setting[23](index=23&type=chunk) [About Summit Therapeutics](index=7&type=section&id=About%20Summit%20Therapeutics) Summit Therapeutics is an oncology-focused biopharmaceutical company, founded in 2003 and listed on Nasdaq under "SMMT" - Summit is a biopharmaceutical oncology company focused on developing therapies for serious unmet medical needs[24](index=24&type=chunk) - Founded in 2003, it is headquartered in Miami, Florida, with additional offices in California and the UK[25](index=25&type=chunk) - The company's stock is listed on the Nasdaq Global Market with the symbol "**SMMT**"[25](index=25&type=chunk) [Financial Statements and Non-GAAP Reconciliation](index=9&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliation) [GAAP Condensed Consolidated Financial Statements](index=9&type=section&id=GAAP%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q2 2025 GAAP financial statements show a **$565.7 million** net loss, **$324.0 million** in total assets, and **$127.9 million** cash used in operations Condensed Statement of Operations (Three Months Ended June 30, 2025, in millions) | Line Item | Amount | | :--- | :--- | | Total operating expenses | $568.4 | | Other income, net | $2.7 | | **Net loss** | **$(565.7)** | | **Net loss per share** | **$(0.76)** | Condensed Balance Sheet (As of June 30, 2025, in millions) | Line Item | Amount | | :--- | :--- | | Cash, cash equivalents, and short-term investments | $297.9 | | Total assets | $324.0 | | Total liabilities | $64.6 | | **Total stockholders' equity** | **$259.4** | Condensed Statement of Cash Flows (Six Months Ended June 30, 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net cash used in operating activities | $(127.9) | | Net cash provided by investing activities | $310.9 | | Net cash provided by financing activities | $9.9 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to Non-GAAP financial results, primarily adjusting for a **$478.8 million** stock-based compensation expense in Q2 2025 GAAP to Non-GAAP Reconciliation for Q2 2025 (in millions) | Metric | GAAP | Stock-based Compensation Adjustment | Non-GAAP | | :--- | :--- | :--- | :--- | | **Operating Expenses** | $568.4 | $(478.8) | $89.6 | | **Net Loss** | $(565.7) | $478.8 | $(86.9) | - Non-GAAP measures are provided to investors for comparing prior periods and analyzing ongoing business trends by excluding non-cash charges like stock-based compensation[38](index=38&type=chunk)[39](index=39&type=chunk) [Appendix](index=13&type=section&id=Appendix) [Glossary of Critical Terms](index=13&type=section&id=Glossary%20of%20Critical%20Terms) This glossary defines critical scientific and clinical terms used in the report, enhancing clarity for the reader - Defines **PD-1** as a protein on T cells that can act as a brake, preventing them from attacking cancer cells[44](index=44&type=chunk) - Defines **VEGF** (Vascular Endothelial Growth Factor) as a signaling protein that promotes angiogenesis (the formation of blood vessels), which tumors need to grow[49](index=49&type=chunk) - Defines **PFS** (Progression-Free Survival) as a key clinical trial endpoint measuring the time during and after treatment that a patient lives with the disease but it does not get worse[45](index=45&type=chunk)