[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the period [Item 1. Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, and 2024, reflecting a decrease in Q2 2025 revenue but a significant improvement in operating income [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenues decreased to $144.1 million, while operating income significantly improved to $8.1 million from a prior-year loss, driven by reduced costs | Indicator (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $144,054 | $151,414 | $299,860 | $292,288 | | **Operating income (loss)** | $8,128 | $(4,448) | $8,362 | $(3,459) | | **Loss from continuing operations** | $(6,052) | $(20,547) | $(20,057) | $(38,169) | | **Net (loss) income attributable to stockholders** | $(58,492) | $25,406 | $(80,499) | $8,573 | | **Basic (loss) earnings per share** | $(0.63) | $0.24 | $(0.89) | $0.01 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $703.5 million, with a significant reclassification of $108.6 million in senior notes to current liabilities, widening the stockholders' deficit | Indicator (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $526,901 | $552,514 | | **Total assets** | $703,490 | $726,987 | | **Total current liabilities** | $529,293 | $406,651 | | **Total liabilities** | $1,012,176 | $1,010,159 | | **Total stockholders' deficit** | $(308,686) | $(283,172) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities increased to $33.8 million, while investing activities provided $10.6 million, primarily from asset sales | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(33,787) | $(26,745) | | **Net cash provided by investing activities** | $10,649 | $76,036 | | **Net cash provided by financing activities** | $2,580 | $81,620 | | **Net (decrease) increase in cash** | $(20,257) | $130,720 | | **Cash at end of period** | $110,807 | $202,089 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, divestitures, debt restructuring, and subsequent events, including going concern considerations and strategic actions to improve liquidity - Management acknowledges that operating losses and debt service costs raise substantial doubt about the company's ability to continue as a going concern, but believes strategic actions will provide sufficient liquidity for the next twelve months[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - The company is actively divesting non-core assets to reduce debt and improve liquidity, having sold its Vølund business and the Diamond Power business, which are now classified as discontinued operations[43](index=43&type=chunk)[47](index=47&type=chunk)[50](index=50&type=chunk) - In May 2025, the company exchanged **$131.8 million** of its 2026 Senior Notes for **$100.7 million** of new 8.75% Senior Secured Notes due 2030, extending a significant portion of its debt maturity[83](index=83&type=chunk)[85](index=85&type=chunk) - Subsequent to the quarter's end, the company closed the sale of its Diamond Power business for **$177 million** on July 31, 2025, and amended its Credit Agreement on August 8, 2025, to extend the maturity date to November 30, 2026[139](index=139&type=chunk)[144](index=144&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 5% decrease in Q2 2025 revenue but a significant turnaround in operating income, driven by improved margins and a favorable product mix, alongside its liquidity strategy and backlog [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Consolidated revenues for Q2 2025 decreased by $7.4 million year-over-year due to lower large project volume, offset by increased parts sales, leading to a $12.6 million improvement in operating income - Q2 2025 revenue decreased by **$7.4 million** YoY, driven by a **$20.0 million** decline in large project volume, partially offset by a **$15.5 million** increase in parts sales[160](index=160&type=chunk) - Operating income for Q2 2025 improved by **$12.6 million** to an **$8.1 million** profit, primarily due to lower cost of operations from a favorable product mix and reduced costs on certain projects[161](index=161&type=chunk)[163](index=163&type=chunk) | Segment | Q2 2025 Revenue (in millions) | Q2 2024 Revenue (in millions) | Q2 2025 Adj. EBITDA (in millions) | Q2 2024 Adj. EBITDA (in millions) | | :--- | :--- | :--- | :--- | :--- | | B&W Thermal | $104.3 | $107.3 | $17.5 | $9.9 | | B&W Renewable | $19.0 | $15.4 | $0.5 | $0.4 | | B&W Environmental | $20.8 | $28.7 | $2.3 | $1.7 | [Bookings and Backlog](index=47&type=section&id=Bookings%20and%20Backlog) The company's total backlog significantly increased to $418.1 million as of June 30, 2025, despite a decrease in Q2 2025 bookings compared to the prior year | Metric (in millions) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Total Backlog** | $418.1 | $280.8 | | B&W Thermal | $345.9 | $177.4 | | B&W Renewable | $33.9 | $20.2 | | B&W Environmental | $35.6 | $70.8 | - Bookings in Q2 2025 were **$112.9 million**, a decrease from **$135.9 million** in Q2 2024, with year-to-date bookings also lower than the prior year period[178](index=178&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company addresses its liquidity requirements for debt service and working capital, outlining strategic actions including asset sales, equity offerings, and debt exchanges to ensure sufficient funding despite going concern doubts - The company has implemented several strategies to improve liquidity, including: - Selling non-core businesses for **$197.1 million** in net proceeds - Selling **10.2 million** common shares for **$15.0 million** net proceeds - Exchanging **$131.8 million** of 2026 notes for new 2030 notes - Extending its credit facility maturity to November 2026[219](index=219&type=chunk)[223](index=223&type=chunk) | Metric (in millions) | June 30, 2025 | | :--- | :--- | | **Cash, cash equivalents, and restricted cash** | $110.8 | | **Total Debt** | $471.3 | | **Gross preferred stock outstanding** | $191.7 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes to its market risk exposures since its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the company's market risk exposures since its 2024 Annual Report[229](index=229&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses, but a remediation plan is underway to address these issues - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025, because of existing material weaknesses[232](index=232&type=chunk) - A remediation plan is in progress to address the material weaknesses, focusing on hiring, training, enhancing controls over accounting and IT, and implementing a monitoring program[234](index=234&type=chunk)[238](index=238&type=chunk) [PART II - OTHER INFORMATION](index=56&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, and other significant corporate events and disclosures [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material changes or new litigation to disclose since its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in legal proceedings since the 2024 year-end report[239](index=239&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) A primary risk is the potential inability to obtain additional capital or refinance debt on commercially reasonable terms, which could materially harm the business and potentially lead to bankruptcy - A primary risk is the potential inability to obtain additional capital or refinance debt on commercially reasonable terms, which could materially harm the business and potentially lead to bankruptcy[241](index=241&type=chunk)[243](index=243&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares related to employee restricted stock plans during the quarter ended June 30, 2025, and does not have a general share repurchase program in place - No share repurchases were made during the quarter, and no general repurchase program is active[244](index=244&type=chunk) [Item 5. Other Information](index=57&type=section&id=Item%205.%20Other%20Information) This section discloses the departure of the EVP and COO, significant executive bonus opportunities tied to asset sales, and an amendment to the Credit Agreement extending its maturity date - Chris Riker, Executive Vice President and Chief Operating Officer, announced he is stepping down, effective August 31, 2025[245](index=245&type=chunk) - The Compensation Committee approved bonus opportunities for executive officers related to the sale of Diamond Power, with the CEO eligible for up to **$2,750,000** and the CFO for up to **$1,500,000**[246](index=246&type=chunk)[247](index=247&type=chunk) - On August 8, 2025, the company amended its Credit Agreement, extending the maturity date to November 30, 2026, and deferring an increase in a key debt covenant ratio[248](index=248&type=chunk)

[Part I FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Harrow, Inc.'s unaudited condensed consolidated financial statements for Q2 and H1 2025 highlight debt reclassification, Q2 profitability, and improved operating cash flow Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$345,033,000** | **$388,971,000** | | Cash and cash equivalents | $52,963,000 | $47,247,000 | | Accounts receivable, net | $78,822,000 | $116,373,000 | | Intangible assets, net | $176,666,000 | $184,949,000 | | **Total Liabilities** | **$295,734,000** | **$319,674,000** | | Current portion of notes payable | $183,619,000 | $0 | | Notes payable, non-current | $38,484,000 | $219,539,000 | | **Total Stockholders' Equity** | **$49,299,000** | **$69,297,000** | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$63,742,000** | **$48,939,000** | **$111,573,000** | **$83,526,000** | | Gross Profit | $47,512,000 | $36,400,000 | $79,819,000 | $60,434,000 | | Income (Loss) from Operations | $11,409,000 | $1,530,000 | $177,000 | $(5,398,000) | | **Net Income (Loss)** | **$4,995,000** | **$(6,473,000)** | **$(12,785,000)** | **$(20,038,000)** | | Diluted EPS | $0.13 | $(0.18) | $(0.35) | $(0.56) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $18,865,000 | $(7,374,000) | | Net Cash from Investing Activities | $(505,000) | $4,993,000 | | Net Cash from Financing Activities | $(12,644,000) | $(736,000) | | **Net Change in Cash** | **$5,716,000** | **$(3,117,000)** | [Note 2: Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details significant accounting policies, emphasizing liquidity risk from upcoming 2026 debt maturities that raise going concern doubts without successful refinancing - The Oaktree Loan and 2026 Notes, totaling **$182.5 million** in principal, mature in January and April 2026, respectively. The company's ability to continue as a going concern is contingent on refinancing these obligations[21](index=21&type=chunk) - Management is in discussions with current and potential lenders to refinance the debt and believes it is probable they will succeed based on collateral strength and expected cash flows. However, there is no guarantee of success[22](index=22&type=chunk) - As an alternative to refinancing, management is considering the sale of one or more company assets, though the timing and terms of any potential sale are uncertain[23](index=23&type=chunk) [Note 3: Revenues](index=13&type=section&id=NOTE%203.%20REVENUES) Revenue is primarily from product sales, detailing the five-step ASC 606 recognition process and significant judgments for variable consideration like rebates and returns Revenue by Source | Revenue Source | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $63,657,000 | $48,871,000 | $111,402,000 | $83,379,000 | | Other revenues | $85,000 | $68,000 | $171,000 | $147,000 | | **Total revenues** | **$63,742,000** | **$48,939,000** | **$111,573,000** | **$83,526,000** | - Sales of branded pharmaceutical products are subject to variable consideration, including chargebacks, government rebates, returns, and co-pay assistance, which require significant estimation[42](index=42&type=chunk) [Note 10: Debt](index=19&type=section&id=NOTE%2010.%20DEBT) This note details the company's **$222.75 million** total debt, with **$183.6 million** reclassified as current liabilities due to early 2026 maturities - The Oaktree Loan has a principal of **$107.5 million**, matures in January 2026, and carries an interest rate of SOFR + 6.5% (**10.84%** at June 30, 2025)[68](index=68&type=chunk)[69](index=69&type=chunk) - The **8.625%** Senior Notes (HROWL) have a principal of **$75 million** and mature in April 2026[72](index=72&type=chunk) - The **11.875%** Senior Notes (HROWM) have a principal of **$40.25 million** and mature in December 2027[75](index=75&type=chunk) Debt Classification | Debt Portion | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Portion | $183,619,000 | $0 | | Non-Current Portion | $38,484,000 | $219,539,000 | [Note 13: Commitments and Contingencies](index=26&type=section&id=NOTE%2013.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines legal proceedings, including a **$34.9 million** jury verdict for ImprimisRx, and contractual commitments, such as **$8.5 million** for 2025 manufacturing - In November 2024, a jury awarded the company's subsidiary, ImprimisRx, **$34.9 million** (**$20.4 million** punitive, **$14.5 million** actual damages) in a trademark infringement and unfair competition lawsuit against OSRX. The company has not recognized any gain due to uncertainty of collection[105](index=105&type=chunk) - The company entered into a license and supply agreement with Formosa Pharmaceuticals for BYQLOVI in June 2025, which includes a **$500,000** payment upon first commercial sale and potential future milestones and royalties[108](index=108&type=chunk) - The company has committed to approximately **$8.527 million** in payments for contract manufacturing agreements for the year ending December 31, 2025[112](index=112&type=chunk) [Note 14: Segments and Concentrations](index=29&type=section&id=NOTE%2014.%20SEGMENTS%20AND%20CONCENTRATIONS) The company operates in Branded and ImprimisRx segments, with Q2 2025 revenues of **$42.3 million** and **$21.5 million** respectively, and faces significant customer concentration risk Segment Performance (Three Months Ended June 30, 2025) | Segment | Total Revenues | Gross Profit | Segment Contribution | | :--- | :--- | :--- | :--- | | Branded | $42,274,000 | $33,540,000 | $10,820,000 | | ImprimisRx | $21,468,000 | $13,972,000 | $6,432,000 | Revenue by Key Products (Q2 2025 vs Q2 2024) | Product | Q2 2025 Revenue | Q2 2024 Revenue | | :--- | :--- | :--- | | IHEEZO | $18,336,000 | $11,295,000 | | VEVYE | $18,641,000 | $4,315,000 | - Significant customer concentration exists, with two customers representing **87%** of total consolidated accounts receivable at June 30, 2025[118](index=118&type=chunk) [Note 15: Subsequent Events](index=31&type=section&id=NOTE%2015.%20SUBSEQUENT%20EVENTS) Subsequent events include a July 2025 agreement with Samsung Bioepis for U.S. rights to BYOOVIZ and OPUVIZ, and the grant of **1.3 million** performance stock units to executives - In July 2025, Harrow entered into a development and commercialization agreement with Samsung Bioepis for the U.S. rights to BYOOVIZ (ranibizumab-nuna) and OPUVIZ (aflibercept-yszy). The agreement includes an upfront payment, sales-based milestones, and a share of net sales for Samsung[123](index=123&type=chunk) - In July 2025, the company granted **1,295,249** performance stock units to its CEO and CFO, which vest based on achieving stock price targets from **$50** to **$100** per share and a minimum three-year service period[124](index=124&type=chunk)[125](index=125&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses **30%** Q2 2025 revenue growth to **$63.7 million**, strategic initiatives, and plans to address upcoming 2026 debt maturities and liquidity challenges - Recent strategic developments include a commercialization agreement with Samsung for BYOOVIZ and OPUVIZ, the acquisition of U.S. rights to BYQLOVI, and the launch of the 'VEVYE Access for All' program[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - The company initiated 'Project Beagle' to transition ImprimisRx compounding customers to Harrow's FDA-approved products, discontinuing the Klarity-C compounded formulation in favor of VEVYE[134](index=134&type=chunk) Total Revenue Growth (Q2 and H1 2025 vs 2024) | Period | 2025 Revenue | 2024 Revenue | $ Variance | % Variance | | :--- | :--- | :--- | :--- | :--- | | **Q2** | $63,742,000 | $48,939,000 | $14,803,000 | +30.2% | | **H1** | $111,573,000 | $83,526,000 | $28,047,000 | +33.6% | - The company faces significant liquidity challenges with the Oaktree Loan (**$107.5 million** principal) and 2026 Notes (**$75 million** principal) maturing in early 2026. Management believes refinancing is probable but acknowledges the risk and is also considering asset sales[150](index=150&type=chunk)[157](index=157&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure from its variable-rate Oaktree Loan, where a **100 basis point** SOFR increase would raise annual interest expense by **$1.075 million** - The company is exposed to interest rate risk through its Oaktree Loan, which has a variable interest rate based on SOFR plus a **6.5%** spread[162](index=162&type=chunk)[164](index=164&type=chunk) - A **100 basis point** increase in SOFR would increase annual interest expense by approximately **$1.075 million**[164](index=164&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that 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 principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[166](index=166&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025[167](index=167&type=chunk) [Part II OTHER INFORMATION](index=39&type=section&id=Part%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 for legal matters, highlighting the **$34.9 million** jury verdict awarded to ImprimisRx in a trademark infringement lawsuit - For detailed information on legal proceedings, the company refers to Note 13 in the financial statements[169](index=169&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section updates key risk factors, including potential FDA enforcement, pricing pressures, global economic conditions, and increased costs from U.S. trade policy and tariffs - The company details a history of FDA inspections and warning letters concerning its NJOF, noting that discussions with the federal government regarding a 2024 inspection are now closed after the company took remedial actions[175](index=175&type=chunk)[177](index=177&type=chunk) - Sales are dependent on third-party payer reimbursement, which is under pressure from cost-containment initiatives and legislation like the Inflation Reduction Act, potentially limiting the company's pricing power and profitability[179](index=179&type=chunk) - Global economic conditions, including inflation and higher interest rates, may reduce demand for products and increase operating costs[182](index=182&type=chunk) - Potential U.S. tariffs on imported active pharmaceutical ingredients (APIs) and other components could significantly increase costs and disrupt the supply chain[183](index=183&type=chunk)[184](index=184&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[186](index=186&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the six months ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the six months ended June 30, 2025[190](index=190&type=chunk)

Catheter Precision, Inc. Reports Results of Operations for Second Quarter 2025 Revenue Increased 128% Year Over Year and 48% Sequentially Fort Mill, SC, AUGUST 11, 2025 – Catheter Precision, Inc. (VTAK - NYSE/American), a US based medical device company focused on developing technologically advanced products for the cardiac electrophysiology market, today announced its results of operations for the three and six months ended June 30, 2025. Highlights of the second quarter include: ● Revenue from product sal ...

[Catheter Precision, Inc. Second Quarter 2025 Results of Operations](index=1&type=section&id=Catheter%20Precision%2C%20Inc.%20Reports%20Results%20of%20Operations%20for%20Second%20Quarter%202025) Catheter Precision, Inc. achieved strong Q2 2025 operational and financial growth, driven by revenue increase, product approvals, and strategic acquisitions, despite liquidity and control challenges [Q2 2025 Operational and Strategic Highlights](index=1&type=section&id=Q2%202025%20Operational%20and%20Strategic%20Highlights) Catheter Precision achieved significant Q2 2025 operational momentum through strong revenue growth, European LockeT approval, positive clinical data, and strategic acquisitions - The company achieved significant revenue growth, with a **128% increase year-over-year for Q2** and a **48% increase sequentially** over the previous quarter[1](index=1&type=chunk) - Received the **CE Mark for the LockeT product**, enabling sales to commence in Europe during the third quarter of 2025[1](index=1&type=chunk) - Presented significant positive clinical data at the Heart Rhythm Society symposium, demonstrating **VIVO's high accuracy (over 94%)** in localizing ventricular arrhythmias and **LockeT's safety and efficacy** in large-bore access procedures[1](index=1&type=chunk) - Completed the acquisition of Cardionomic's heart failure assets through its new subsidiary, Cardionomix, and formed Kardionav, Inc., a joint venture to develop a new software product for treating ventricular tachyarrhythmia[1](index=1&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) Catheter Precision reported Q2 2025 revenue growth of **128% to $212 thousand**, alongside a **$5.4 million net loss** primarily due to non-cash charges, ending with **$838 thousand cash** Q2 2025 Financial Summary | Metric | Q2 2025 ($) | Q2 2024 ($) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $212 thousand | $93 thousand | +128% | | Net Loss | ($5.4 million) | N/A | N/A | | Metric | H1 2025 ($) | H1 2024 ($) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $355 thousand | $175 thousand | +103% | | Net Loss | ($9.5 million) | N/A | N/A | | Balance Sheet (as of June 30, 2025) | ($) | | | :--- | :--- | :--- | :--- | | Total Assets | $25.6 million | | | | Total Shareholders' Equity | $6.5 million | | | | Cash Position | $838 thousand | | | - Non-cash charges constituted a significant portion of the net loss, amounting to **$3.2 million for the three months** and **$4.4 million for the six months** ended June 30, 2025[7](index=7&type=chunk) [Company and Product Overview](index=2&type=section&id=Company%20and%20Product%20Overview) Catheter Precision is a U.S. medical device company focused on improving cardiac arrhythmia treatment, with key commercial products LockeT and VIVO™ both holding FDA clearance and CE Mark approval - **LockeT:** A Class 1 suture retention device used for wound closure after percutaneous venous punctures, registered with the FDA and holding CE Mark approval[4](index=4&type=chunk) - **VIVO™ (View Into Ventricular Onset):** A non-invasive 3D imaging system that helps physicians locate the origin of ventricular arrhythmias pre-procedure, with both U.S. FDA marketing clearance and CE Mark approval[5](index=5&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The company's forward-looking statements are subject to significant risks, including the need for additional financing, ineffective internal controls, and challenges related to clinical trials, competition, and supply chain - The company lacks sufficient liquidity to fund operations through December 31, 2025, necessitating additional financing or a strategic transaction[8](index=8&type=chunk) - Material weaknesses in internal and disclosure controls as of June 30, 2025, may impair accurate financial reporting or fraud prevention[8](index=8&type=chunk) - Development of assets acquired by KardioNav and Cardionomix is contingent upon obtaining additional financing, which may not be available[8](index=8&type=chunk) - Other significant risks include dependence on successful clinical trials, competition from larger companies, supply chain vulnerabilities, and pervasive FDA regulatory requirements[8](index=8&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ 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: 001-39130 TELA Bio, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other ...

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's interim financial statements, management's analysis of operations, market risk disclosures, and internal controls [Item 1. FINANCIAL STATEMENTS](index=6&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited interim condensed consolidated financial statements and their detailed explanatory notes [Interim Condensed Consolidated Balance Sheets](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $29,082 | $18,498 | | Marketable securities | $125,568 | $143,117 | | Total current assets | $208,808 | $216,341 | | Total assets | $302,842 | $308,948 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $24,342 | $30,529 | | Total long-term liabilities | $12,608 | $11,863 | | Total stockholders' equity | $265,892 | $266,556 | | Total liabilities and stockholders' equity | $302,842 | $308,948 | [Interim Condensed Consolidated Statements of Loss](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Loss) This section details the company's revenues, gross profit, operating loss, and net loss over specific periods | (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $25,678 | $28,437 | $49,923 | $50,509 | | Gross profit | $22,129 | $25,504 | $42,887 | $45,073 | | Operating loss | $(4,482) | $(35) | $(8,864) | $(4,995) | | Net loss | $(3,704) | $(291) | $(7,031) | $(5,739) | | Basic and diluted net loss per share | $(0.15) | $(0.01) | $(0.30) | $(0.24) | [Interim Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the company's net loss and other comprehensive income or loss, leading to total comprehensive loss | (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(7,031) | $(5,739) | $(3,704) | $(291) | | Other comprehensive income (loss), net of taxes | $1,674 | $(565) | $1,452 | $(174) | | Comprehensive loss | $(5,357) | $(6,304) | $(2,252) | $(465) | [Interim Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines changes in the company's stockholders' equity, including net loss, comprehensive income, and stock transactions | (in thousands) | Balance as of Jan 1, 2025 | Net loss | Other comprehensive income, net | Equity-based compensation | Purchase of treasury stock | Issuance of common stock | Issuance of treasury stock | Balance as of Jun 30, 2025 | | :------------- | :------------------------ | :------- | :---------------------------- | :------------------------ | :------------------------- | :----------------------- | :------------------------- | :------------------------- | | Total stockholders' equity | $266,556 | $(7,031) | $1,674 | $9,225 | $(6,162) | $1,358 | $272 | $265,892 | - The company purchased **300,000 shares** of treasury stock for **$6.162 million** during the six months ended June 30, 2025[23](index=23&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities | (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(6,221) | $(4,970) | | Net cash provided by investing activities | $20,786 | $8,184 | | Net cash used in financing activities | $(4,532) | $(1,722) | | Increase in cash and cash equivalents | $10,584 | $1,415 | | Cash and cash equivalents at the end of the period | $29,082 | $24,702 | [Notes to the Interim Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the interim condensed consolidated financial statements [NOTE 1: BUSINESS](index=15&type=section&id=NOTE%201:%20BUSINESS) This note describes Ceva's business as a leader in silicon and software IP solutions for smart edge products - Ceva is a leader in silicon and software IP solutions, enabling smart edge products to connect, sense, and infer data. Its IP powers connectivity, sensing, and inference in consumer IoT, automotive, industrial, infrastructure, mobile, and PC markets[28](index=28&type=chunk) - The company's comprehensive portfolio includes advanced wireless connectivity solutions (Bluetooth, Wi-Fi, UWB, cellular IoT, 5G-Advanced) and scalable Edge AI capabilities (NPU IP, sensor fusion processors, embedded application software)[30](index=30&type=chunk)[34](index=34&type=chunk) - Since 2003, over **20 billion smart edge products** have shipped with Ceva IP, with approximately **2 billion** shipped in 2024 alone[28](index=28&type=chunk) [NOTE 2: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=NOTE%202:%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of financial statement preparation and summarizes the company's significant accounting policies - The interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP and are consistent with the Company's Annual Report on Form 10-K for December 31, 2024[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - The Company's financial instruments, including cash, bank deposits, marketable securities, and trade receivables, are subject to credit risk, with the majority of trade receivables in the Asia Pacific region[35](index=35&type=chunk)[37](index=37&type=chunk) - New FASB ASUs (2023-09, 2025-05) related to income tax disclosures, expense disaggregation, and credit loss measurement for accounts receivable are effective for fiscal years beginning after December 15, 2024, or later, and are currently being evaluated for impact[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [NOTE 3: ACQUISITION](index=18&type=section&id=NOTE%203:%20ACQUISITION) This note details Ceva's acquisition of a Greece-based radio frequency design company in January 2024 - In January 2024, Ceva acquired a Greece-based radio frequency design company for approximately **$0.753 million** at closing and an additional **$2.1 million** contingent on employment and performance milestones. The acquisition was accounted for as an asset acquisition[45](index=45&type=chunk) [NOTE 4: SALE OF INTRINSIX CORP.](index=18&type=section&id=NOTE%204:%20SALE%20OF%20INTRINSIX%20CORP.) This note describes the sale of Ceva's subsidiary, Intrinsix Corp., and the subsequent release of escrow funds - On October 2, 2023, Ceva sold its wholly-owned subsidiary, Intrinsix Corp., to Cadence Design Systems, Inc. for **$35.0 million** in cash. During Q2 2025, **$3.47 million** was released from escrow and paid to the Company[46](index=46&type=chunk) [NOTE 5: REVENUE RECOGNITION](index=18&type=section&id=NOTE%205:%20REVENUE%20RECOGNITION) This note explains the company's policies for recognizing revenue from IP licenses, services, and royalties, including disaggregated data - Revenue from IP licenses is recognized at a point in time upon delivery, while customization and implementation services are recognized over time using cost inputs. Post-contract support services revenue is recognized ratably over the service period[47](index=47&type=chunk) - Royalty revenues, derived from sales of licensee products incorporating Ceva's IP, are recognized in the quarter of product sale, based on actual or estimated sales data[48](index=48&type=chunk) | Disaggregated Revenue (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | **By Geography:** | | | | | | United States | $9,163 | $3,903 | $5,544 | $1,365 | | Europe and Middle East | $3,494 | $8,954 | $2,010 | $7,442 | | Asia Pacific | $37,266 | $37,639 | $18,124 | $19,630 | | **By Use Case:** | | | | | | Connect | $36,722 | $43,055 | $16,277 | $25,049 | | Sense & Infer | $13,201 | $7,454 | $9,401 | $3,388 | | **By Timing:** | | | | | | Products transferred at a point in time | $42,005 | $46,540 | $21,412 | $26,429 | | Products and services transferred over time | $7,918 | $3,969 | $4,266 | $2,008 | [NOTE 6: LEASES](index=21&type=section&id=NOTE%206:%20LEASES) This note details the company's operating lease arrangements for office space and vehicles, including lease costs and commitments - The Company leases office space and vehicles under operating leases, with a weighted average remaining lease term of **4.79 years** and a weighted average discount rate of **3.84%** as of June 30, 2025[55](index=55&type=chunk) | Lease Costs (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Operating lease cost | $1,426 | $1,357 | $716 | $694 | | Cash payments for operating leases | $1,826 | $1,309 | $837 | $687 | - A new operating lease agreement for offices in Israel was signed in March 2025, adding approximately **$9.9 million** in lease commitment, expected to commence in 2025 and run until December 30, 2035[55](index=55&type=chunk) [NOTE 7: MARKETABLE SECURITIES](index=22&type=section&id=NOTE%207:%20MARKETABLE%20SECURITIES) This note provides information on the company's available-for-sale marketable securities, including amortized cost and fair value | Available-for-sale Marketable Securities (in thousands) | June 30, 2025 (Unaudited) | | :-------------------------------------- | :------------------------ | | Amortized cost | $126,057 | | Gross unrealized gains | $440 | | Gross unrealized losses | $(929) | | Fair value | $125,568 | - As of June 30, 2025, investments with unrealized losses totaled **$47.762 million**, with gross unrealized losses of **$(0.929) million**. The Company intends to hold these securities until maturity or recovery of cost basis[36](index=36&type=chunk)[57](index=57&type=chunk) [NOTE 8: FAIR VALUE MEASUREMENT](index=23&type=section&id=NOTE%208:%20FAIR%20VALUE%20MEASUREMENT) This note describes the company's fair value measurements for financial instruments, categorized by a three-tier hierarchy - The Company measures marketable securities, investments in marketable equity securities, and foreign currency derivative contracts at fair value, classifying them within a three-tier hierarchy (Level I, II, III)[59](index=59&type=chunk)[60](index=60&type=chunk) - Investments in marketable equity securities are Level I, while marketable securities and foreign currency derivative contracts are Level II, based on observable market data[60](index=60&type=chunk) | Assets Measured at Fair Value (in thousands) | June 30, 2025 | Level I | Level II | Level III | | :----------------------------------------- | :------------ | :------ | :------- | :-------- | | Marketable securities: Corporate bonds | $125,568 | $— | $125,568 | $— | | Foreign exchange contracts | $785 | $— | $785 | $— | | Investments in marketable equity securities | $50 | $50 | $— | $— | [NOTE 9: GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER DATA](index=24&type=section&id=NOTE%209:%20GEOGRAPHIC%20INFORMATION%20AND%20MAJOR%20CUSTOMER%20DATA) This note presents revenue data disaggregated by geographic region and identifies major customer contributions - Ceva operates as one operating segment, with financial performance evaluated on a consolidated basis by the CEO[63](index=63&type=chunk) | Revenues by Customer Location (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | United States | $9,163 | $3,903 | $5,544 | $1,365 | | Europe and Middle East | $3,494 | $8,954 | $2,010 | $7,442 | | Asia Pacific | $37,266 | $37,639 | $18,124 | $19,630 | | China (subset of Asia Pacific) | $29,844 | $29,025 | $13,778 | $15,433 | - Customer A accounted for **17%** of total revenues for the first half of 2025 and **23%** of total trade receivables as of June 30, 2025[66](index=66&type=chunk)[67](index=67&type=chunk) [NOTE 10: FINANCIAL INCOME, NET](index=27&type=section&id=NOTE%2010:%20FINANCIAL%20INCOME,%20NET) This note details the components of the company's financial income, net, including interest income and foreign exchange gains or losses | Financial Income, Net (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Interest income | $2,571 | $2,546 | $1,320 | $1,291 | | Foreign exchange gain (loss), net | $1,174 | $(279) | $574 | $(86) | | Total | $4,221 | $2,663 | $2,121 | $1,406 | [NOTE 11: NET LOSS PER SHARE OF COMMON STOCK](index=27&type=section&id=NOTE%2011:%20NET%20LOSS%20PER%20SHARE%20OF%20COMMON%20STOCK) This note provides the calculation of basic and diluted net loss per share, along with relevant share counts | Net Loss Per Share | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(7,031) | $(5,739) | $(3,704) | $(291) | | Basic and diluted weighted average common stock outstanding (in thousands) | 23,832 | 23,568 | 23,898 | 23,628 | | Basic and diluted net loss per share | $(0.30) | $(0.24) | $(0.15) | $(0.01) | - **1,943,497 shares** related to outstanding equity-based awards were excluded from diluted net loss per share calculation for the three and six months ended June 30, 2025, due to the net loss[69](index=69&type=chunk) [NOTE 12: COMMON STOCK AND STOCK-BASED COMPENSATION PLANS](index=27&type=section&id=NOTE%2012:%20COMMON%20STOCK%20AND%20STOCK-BASED%20COMPENSATION%20PLANS) This note describes the company's equity-based compensation plans and the associated expense recognition - The Company grants stock options, Restricted Stock Units (RSUs), and Performance-based Stock Units (PSUs) under its equity plans. RSUs generally vest in three equal annual installments, while PSUs have performance goals related to license revenue and total shareholder return[70](index=70&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk) | Equity-based Compensation Expense (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Cost of revenue | $325 | $394 | $166 | $191 | | Research and development, net | $5,139 | $4,445 | $2,673 | $2,438 | | Sales and marketing | $1,164 | $816 | $598 | $451 | | General and administrative | $2,597 | $1,816 | $1,465 | $820 | | Total equity-based compensation expense | $9,225 | $7,471 | $4,902 | $3,900 | - As of June 30, 2025, there was **$29.728 million** of unrecognized compensation expense related to unvested RSUs and PSUs, expected to be recognized over a weighted-average period of **1.6 years**[78](index=78&type=chunk) [NOTE 13: DERIVATIVES AND HEDGING ACTIVITIES](index=31&type=section&id=NOTE%2013:%20DERIVATIVES%20AND%20HEDGING%20ACTIVITIES) This note explains the company's use of derivative instruments for foreign currency hedging and their fair value - Ceva uses foreign exchange forward and option contracts as cash flow hedges to mitigate foreign currency exposure, primarily for non-U.S. dollar denominated payroll[81](index=81&type=chunk) - As of June 30, 2025, the notional principal amount of Hedging Contracts to sell U.S. dollars was **$9.65 million**, with a total fair value of derivative assets at **$0.785 million**[82](index=82&type=chunk)[83](index=83&type=chunk) | Unrealized Gains (Losses) on Derivatives (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :---------------------------------------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Foreign exchange option contracts | $282 | $16 | $378 | $16 | | Foreign exchange forward contracts | $864 | $(355) | $1,054 | $(160) | | Total | $1,146 | $(339) | $1,432 | $(144) | [NOTE 14: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=32&type=section&id=NOTE%2014:%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) This note details the components of accumulated other comprehensive income or loss, including unrealized gains and losses | Accumulated Other Comprehensive Income (Loss) (in thousands) | Beginning balance (Jan 1, 2025) | Net current period other comprehensive income (loss) | Ending balance (Jun 30, 2025) | | :--------------------------------------------------------- | :------------------------------ | :--------------------------------------------------- | :---------------------------- | | Unrealized gains (losses) on available-for-sale marketable securities | $(1,330) | $889 | $(441) | | Unrealized gains (losses) on cash flow hedges | $— | $785 | $785 | | Total | $(1,330) | $1,674 | $344 | - Reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2025, totaled **$0.376 million**, primarily impacting cost of revenues and operating expenses[87](index=87&type=chunk) [NOTE 15: SHARE REPURCHASE PROGRAM](index=34&type=section&id=NOTE%2015:%20SHARE%20REPURCHASE%20PROGRAM) This note provides information on the company's share repurchase activities and remaining authorization - During the six months ended June 30, 2025, the Company repurchased **300,000 shares** of common stock at an average price of **$20.54 per share**, totaling **$6.162 million**[88](index=88&type=chunk) - As of June 30, 2025, **724,781 shares** of common stock remained available for repurchase under the Company's share repurchase program[88](index=88&type=chunk) [NOTE 16: SUBSEQUENT EVENTS](index=34&type=section&id=NOTE%2016:%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the balance sheet date, such as new tax legislation - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing changes to U.S. federal tax law. The Company is assessing its effect on consolidated financial statements but does not expect a material impact on its financial position[90](index=90&type=chunk)[128](index=128&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operational results, and future outlook [BUSINESS OVERVIEW](index=35&type=section&id=BUSINESS%20OVERVIEW) This section describes Ceva's market position, IP solutions, and strategic focus on key technology trends - Ceva is a leader in silicon and software IP solutions for smart edge products, holding **68% of the wireless connectivity market share** based on IP design revenues in 2024[92](index=92&type=chunk) - The company's IP portfolio addresses megatrends like 5G expansion, generative AI, embedded AI, industrial automation, and vehicle electrification, with a total addressable market of **$5 billion by 2027**[92](index=92&type=chunk)[96](index=96&type=chunk) - In Q2 2025, Ceva concluded thirteen IP licensing deals, including four for NeuPro family of NPUs, marking a pivotal moment for its Edge AI business's broad adoption phase[96](index=96&type=chunk) [CURRENT TRENDS](index=37&type=section&id=CURRENT%20TRENDS) This section discusses current market trends, Ceva's strategic focus, and updated revenue guidance due to macroeconomic conditions - Ceva focuses on three main use cases for smart edge devices (connect, sense, infer) across consumer IoT, automotive, industrial, and infrastructure markets, aiming for long-term growth[100](index=100&type=chunk) - The company expects licensing and related revenues to expand into new IIoT and consumer IoT markets in 2025, with strong IP expansion into AI, evidenced by four AI-related deals in Q2 2025[101](index=101&type=chunk) - Due to macroeconomic conditions and lower-than-anticipated Q1 revenues, Ceva lowered its 2025 revenue guidance from a high-single digits range to a low-single digits range for growth over 2024 annual revenues[102](index=102&type=chunk) [RESULTS OF OPERATIONS](index=38&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a detailed analysis of the company's revenues, costs, and expenses for the reported periods [Total Revenues](index=38&type=section&id=Total%20Revenues) This section analyzes the company's total revenues, highlighting changes and customer concentration | Total Revenues (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------- | :------ | :------ | :------ | :------ | | Total Revenues | $25.7 | $28.4 | $49.9 | $50.5 | - Total revenues decreased by **10%** in Q2 2025 and **1%** in H1 2025 compared to the corresponding periods in 2024[104](index=104&type=chunk) - The five largest customers accounted for **42%** of total revenues for both Q2 and H1 2025, a decrease from **66%** and **50%** in comparable 2024 periods, indicating reduced customer concentration[105](index=105&type=chunk) [Licensing and Related Revenues](index=38&type=section&id=Licensing%20and%20Related%20Revenues) This section details revenues from IP licensing and related services, noting key technology drivers and strategic deals | Licensing and Related Revenues (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------------------- | :------ | :------ | :------ | :------ | | Licensing and related revenues | $15.0 | $17.3 | $30.1 | $28.7 | - Licensing revenues decreased by **13%** in Q2 2025 but increased by **5%** in H1 2025, driven by Edge AI technologies and new Wi-Fi 7 and Bluetooth 7 solutions[107](index=107&type=chunk) - Q2 2025 marked a pivotal moment for the AI business with four strategic NPU customer agreements, including two NeuPro-Nano deals for audio and two NeuPro-M deals for communications/data processing acceleration and LLM compute support[107](index=107&type=chunk) [Royalty Revenues](index=38&type=section&id=Royalty%20Revenues) This section analyzes royalty revenues, attributing changes to market conditions and product shipments | Royalty Revenues (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------- | :------ | :------ | :------ | :------ | | Royalty revenues | $10.7 | $11.2 | $19.9 | $21.8 | - Royalty revenues decreased by **5%** in Q2 2025 and **9%** in H1 2025, primarily due to softness in the lower end of the smartphone market[109](index=109&type=chunk)[110](index=110&type=chunk) - Consumer IoT shipments showed strong sequential (**21%**) and year-over-year (**16%**) growth, driven by record high cellular IoT and Wi-Fi 6 shipments[110](index=110&type=chunk) [Geographic Revenue Analysis](index=40&type=section&id=Geographic%20Revenue%20Analysis) This section presents a breakdown of revenues by geographic region, identifying major contributors | Geographic Revenue (in millions, except percentages) | H1 2025 | % | H1 2024 | % | Q2 2025 | % | Q2 2024 | % | | :------------------------------------------------- | :------ | :- | :------ | :- | :------ | :- | :------ | :- | | United States | $9.2 | 18% | $3.9 | 8% | $5.6 | 22% | $1.4 | 5% | | Europe and Middle East | $3.5 | 7% | $9.0 | 18% | $2.0 | 8% | $7.4 | 26% | | Asia Pacific | $37.2 | 75% | $37.6 | 74% | $18.1 | 70% | $19.6 | 69% | | China (subset of Asia Pacific) | $29.8 | 60% | $29.0 | 57% | $13.8 | 54% | $15.4 | 54% | - Asia Pacific remains the largest revenue contributor, accounting for **75%** of total revenues in H1 2025, with China representing **60%** of total revenues[112](index=112&type=chunk) [Cost of Revenues](index=40&type=section&id=Cost%20of%20Revenues) This section discusses the cost of revenues and factors influencing its changes, such as customization work | Cost of Revenues (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------- | :------ | :------ | :------ | :------ | | Cost of revenues | $3.5 | $2.9 | $7.0 | $5.4 | - Cost of revenues increased for both Q2 and H1 2025, primarily due to higher customization and implementation work associated with strategic 5G-Advanced deals[113](index=113&type=chunk) [Gross Margin](index=40&type=section&id=Gross%20Margin) This section analyzes the company's gross margin and the factors contributing to its fluctuations | Gross Margin | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------- | :------ | :------ | :------ | :------ | | Gross margin | 86% | 90% | 86% | 89% | - Gross margin decreased for both Q2 and H1 2025, mainly reflecting higher cost of revenues and lower total revenues[114](index=114&type=chunk) [Operating Expenses](index=40&type=section&id=Operating%20Expenses) This section details the company's total operating expenses and the primary drivers of their changes | Total Operating Expenses (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------------- | :------ | :------ | :------ | :------ | | Total operating expenses | $26.6 | $25.5 | $51.8 | $50.1 | - Total operating expenses increased for both Q2 and H1 2025, primarily due to higher salaries, employee-related costs, and non-cash equity-based compensation expenses[115](index=115&type=chunk) [Research and Development Expenses, Net](index=40&type=section&id=Research%20and%20Development%20Expenses,%20Net) This section analyzes R&D expenses, their proportion of revenues, and personnel changes | R&D Expenses (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------- | :------ | :------ | :------ | :------ | | R&D expenses, net | $18.8 | $18.8 | $36.4 | $36.7 | - R&D expenses as a percentage of total revenues were **73%** for both Q2 and H1 2025, up from **66%** in Q2 2024, mainly due to lower revenues[116](index=116&type=chunk) - The number of R&D personnel decreased slightly to **323** at June 30, 2025, from **332** at June 30, 2024[117](index=117&type=chunk) [Sales and Marketing Expenses](index=41&type=section&id=Sales%20and%20Marketing%20Expenses) This section discusses sales and marketing expenses, attributing changes to personnel and compensation | Sales and Marketing Expenses (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | | Sales and marketing expenses | $3.3 | $3.1 | $6.8 | $5.9 | - Sales and marketing expenses increased due to higher salaries, more personnel (**34** at June 30, 2025 vs. **30** at June 30, 2024), and increased equity-based compensation[118](index=118&type=chunk)[119](index=119&type=chunk) [General and Administrative Expenses](index=41&type=section&id=General%20and%20Administrative%20Expenses) This section details general and administrative expenses, noting increases due to compensation and professional services | G&A Expenses (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------- | :------ | :------ | :------ | :------ | | G&A expenses | $4.4 | $3.5 | $8.3 | $7.1 | - G&A expenses increased primarily due to higher non-cash equity-based compensation expenses and professional services costs[120](index=120&type=chunk) - The number of G&A personnel increased to **47** at June 30, 2025, from **45** at June 30, 2024[121](index=121&type=chunk) [Amortization of Intangible Assets](index=41&type=section&id=Amortization%20of%20Intangible%20Assets) This section explains amortization charges related to intangible assets from past acquisitions | Amortization Charges (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------- | :------ | :------ | :------ | :------ | | Amortization charges | $0.2 | $0.1 | $0.3 | $0.3 | - Amortization charges remained consistent, related to intangible assets from the acquisitions of Hillcrest Labs and VisiSonics[122](index=122&type=chunk) [Financial Income, Net](index=41&type=section&id=Financial%20Income,%20Net) This section analyzes financial income, net, including interest income and foreign exchange gains or losses | Financial Income, Net (in millions) | H1 2025 | H1 2024 | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Financial income, net | $4.22 | $2.66 | $2.12 | $1.40 | | Interest income and gains/losses from marketable securities, net | $3.05 | $2.94 | $1.55 | $1.49 | | Foreign exchange gain (loss) | $1.17 | $(0.28) | $0.57 | $(0.09) | - Financial income, net, increased due to higher interest yields and a foreign exchange gain of **$1.17 million** in H1 2025 (compared to a loss of **$0.28 million** in H1 2024)[124](index=124&type=chunk)[125](index=125&type=chunk) [Remeasurement of Marketable Equity Securities](index=41&type=section&id=Remeasurement%20of%20Marketable%20Equity%20Securities) This section discusses losses from the remeasurement of marketable equity securities | Remeasurement Loss (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Loss from remeasurement | $208 | $58 | $262 | $118 | - The Company recorded higher losses from the remeasurement of marketable equity securities in Q2 and H1 2025 compared to 2024[126](index=126&type=chunk) [Provision for Income Taxes](index=43&type=section&id=Provision%20for%20Income%20Taxes) This section details income tax expense, explaining changes and benefits from preferential tax regimes | Income Tax Expense (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------- | :------ | :------ | :------ | :------ | | Income tax expense | $1.1 | $1.6 | $2.1 | $3.3 | - Income tax expense decreased for both Q2 and H1 2025, primarily due to lower withholding tax expenses in Israel and lower tax expenses under the French IP Box regime[127](index=127&type=chunk) - The Israeli subsidiary benefits from a **12% tax rate** on IP-derived profits, and the French subsidiary qualifies for a preferential **10% CIT rate** on qualifying IP income under the French IP Box regime[131](index=131&type=chunk)[133](index=133&type=chunk) [Critical Accounting Policies and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights critical accounting policies and estimates, noting any material changes - Critical accounting policies and estimates include revenue recognition, equity-based compensation, and credit losses. No material changes have occurred since the December 31, 2024, Annual Report on Form 10-K[135](index=135&type=chunk)[136](index=136&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=44&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's liquidity position, cash flow activities, and capital adequacy | Liquidity (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Cash and cash equivalents | $29.1 | $18.5 | | Short-term bank deposits | $2.8 | $2.0 | | Marketable securities | $125.6 | $143.1 | | Total liquidity | $157.5 | $163.6 | - Total liquidity decreased by **$6.1 million** in H1 2025, primarily due to cash used in operations and share repurchases, partially offset by **$3.5 million** from the Intrinsix sale escrow release[137](index=137&type=chunk) | Cash Flow Activities (in millions) | H1 2025 | H1 2024 | | :--------------------------------- | :------ | :------ | | Net cash used in operating activities | $(6.2) | $(5.0) | | Net cash provided by investing activities | $20.8 | $8.2 | | Net cash used in financing activities | $(4.5) | $(1.7) | - The Company believes its current cash, deposits, and marketable securities, along with cash from operations, will provide sufficient capital for at least the next **12 months**[148](index=148&type=chunk) [Contractual Obligations and Commitments](index=45&type=section&id=Contractual%20Obligations%20and%20Commitments) This section states that contractual obligations have not materially changed from previous disclosures - The Company states that its contractual obligations and commitments have not materially changed from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the company's exposure to market risks, including foreign currency and interest rate fluctuations, and hedging strategies - The Company is exposed to foreign currency exchange rate fluctuations, particularly for expenses denominated in NIS and Euro. It uses a foreign currency cash flow hedging program for non-U.S. dollar payroll[151](index=151&type=chunk)[153](index=153&type=chunk) - A foreign exchange gain of **$1.17 million** was recorded for H1 2025, compared to a loss of **$0.28 million** for H1 2024, partly due to French research tax credits increasing Euro cash balances[151](index=151&type=chunk)[152](index=152&type=chunk) - As of June 30, 2025, unrealized losses on marketable securities were approximately **$0.5 million** due to interest rate changes, but the Company intends to hold these investments to maturity or recovery[155](index=155&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and the absence of material internal control changes - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[158](index=158&type=chunk) - There have been no material changes in internal control over financial reporting during the most recent fiscal quarter[159](index=159&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses ongoing legal proceedings and claims, including any provisions made - As of June 30, 2025, the Company's interim condensed consolidated balance sheet includes a provision of approximately **$0.3 million** for legal proceedings and claims[160](index=160&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section updates previously disclosed risk factors, emphasizing new or heightened risks related to trade and geopolitics - No material changes to previously disclosed risk factors were identified, except for those related to the U.S. trade environment, global tariffs, and economic uncertainty associated with geopolitics[162](index=162&type=chunk)[163](index=163&type=chunk) - Trade restrictions and rising political tensions could reduce trade volume and investment, potentially causing customers to delay projects or resulting in lower licensing and royalty revenues[163](index=163&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases under its share repurchase program | Period (Q2 2025) | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | :--------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | Month 1 (April) | — | — | — | 1,024,781 | | Month 2 (May) | 235,000 | $20.70 | 235,000 | 789,781 | | Month 3 (June) | 65,000 | $19.96 | 65,000 | 724,781 | | TOTAL | 300,000 | $20.54 | 300,000 | 724,781 | - During Q2 2025, Ceva repurchased **300,000 shares** of common stock at an average price of **$20.54 per share**[166](index=166&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company for the reporting period [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company for the reporting period [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section confirms no director or officer trading arrangements were adopted or terminated during the period - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the six months ended June 30, 2025[169](index=169&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q - Exhibits include Amended and Restated 2011 Stock Incentive Plan, Amended and Restated 2002 Employee Stock Purchase Plan, Rule 13a-14(a)/15d-14(a) Certifications of CEO and CFO, Section 1350 Certification, and iXBRL formatted financial statements[171](index=171&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) This section confirms the official signing of the report by the Chief Executive Officer and Chief Financial Officer

[Part I - Financial Information](index=6&type=section&id=Part%201-%20Financial%20Statements) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited H1 2025 financials show strong revenue growth, a $910.4 million net loss primarily from IPO stock compensation, and a strengthened balance sheet [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a significant increase in cash and a shift to positive stockholders' equity following the IPO and preferred stock conversion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $868,284 | $337,697 | +157.1% | | Total current assets | $1,736,079 | $1,287,036 | +34.9% | | Total assets | $1,902,474 | $1,461,037 | +30.2% | | **Liabilities & Equity** | | | | | Total liabilities | $474,376 | $501,516 | -5.4% | | Redeemable convertible preferred stock | $0 | $2,890,121 | -100.0% | | Total stockholders' equity (deficit) | $1,428,098 | $(1,930,600) | Positive Swing | - Following the IPO in June 2025, all redeemable convertible preferred stock was converted to common stock, eliminating the **$2.89 billion liability** from the balance sheet[17](index=17&type=chunk)[25](index=25&type=chunk) - Total stockholders' equity shifted from a deficit of **$1.93 billion** to a positive equity of **$1.43 billion**, driven by the IPO proceeds and conversion of preferred stock[17](index=17&type=chunk)[25](index=25&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations show substantial revenue growth but a significant net loss in H1 2025, primarily due to a surge in operating expenses Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$528,149** | **$384,214** | **+37.5%** | **$1,046,893** | **$776,186** | **+34.9%** | | Gross Profit | $461,029 | $333,710 | +38.2% | $919,355 | $678,235 | +35.5% | | Total Operating Expenses | $1,391,667 | $343,151 | +305.6% | $1,840,856 | $682,644 | +169.7% | | **Net Income (Loss)** | **$(923,376)** | **$385** | **N/A** | **$(910,437)** | **$16,288** | **N/A** | | Net Income (Loss) per Share | $(7.29) | $0.00 | N/A | $(9.44) | $0.00 | N/A | - The significant net loss in Q2 and H1 2025 was primarily driven by a massive increase in operating expenses, particularly **Technology and Development ($621.8M in Q2 2025 vs $75.4M in Q2 2024)** and **General and Administrative ($279.7M in Q2 2025 vs $41.6M in Q2 2024)**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows indicate a significant increase in cash from financing activities post-IPO, despite a decrease in operating cash flow Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | **$2,743** | **$70,837** | | Net Cash from Investing Activities | $79,126 | $(5,174) | | **Net Cash from Financing Activities** | **$449,930** | **$7** | | Net Increase in Cash | $531,799 | $65,670 | | Cash, end of period | $881,799 | $305,415 | - Financing activities provided **$449.9 million** in cash, primarily from **$772.6 million** in net IPO proceeds, partially offset by **$322.6 million** used for taxes paid related to net share settlement of restricted stock units (RSUs)[31](index=31&type=chunk) - Cash from operating activities decreased significantly to **$2.7 million** from **$70.8 million** YoY, despite a large non-cash stock-based compensation adjustment (**$918.8M**), due to the net loss and changes in working capital[31](index=31&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the IPO's $770.6 million net proceeds, significant stock-based compensation expense recognition, disaggregated revenue growth, and credit facility expansion - The company closed its IPO on June 13, 2025, receiving net proceeds of approximately **$770.6 million** after deducting underwriting discounts and offering expenses[37](index=37&type=chunk) - Upon the IPO, all redeemable convertible preferred stock was converted into common stock, and a multi-class stock structure (Class A, B, C) was established[38](index=38&type=chunk)[39](index=39&type=chunk) Disaggregated Revenue (in thousands) | Revenue Stream | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Payments revenue | $741,413 | $625,275 | +18.6% | | Platform-related revenue | $305,480 | $150,911 | +102.4% | | **Total revenue** | **$1,046,893** | **$776,186** | **+34.9%** | - In Q2 2025, the company recognized **$910.1 million** in stock-based compensation expense, a dramatic increase from **$6.4 million** in Q2 2024. This was triggered by the IPO satisfying the liquidity condition for RSUs and PSUs, leading to the recognition of cumulative expense[110](index=110&type=chunk) - On March 31, 2025, the company terminated its prior credit facility and entered into a new, larger **$475.0 million** senior secured revolving credit facility maturing in 2030[80](index=80&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses revenue growth driven by active members and purchase volume, explains the net loss by IPO-related stock compensation, and highlights strong post-IPO liquidity [Key Metrics and Non-GAAP Financial Measures](index=35&type=section&id=Key%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Key operating metrics show growth in purchase volume and active members, alongside positive non-GAAP financial measures like Adjusted EBITDA Key Operating Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Purchase Volume (in millions) | $32,430 | $27,582 | +17.6% | | Active Members (in millions) | 8.7 | 7.1 | +22.5% | | ARPAM (annualized) | $245 | $218 | +12.4% | Non-GAAP Financial Measures (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Transaction Profit | $362,782 | $298,710 | $711,963 | $607,197 | | Transaction Margin | 69% | 78% | 68% | 78% | | Adjusted EBITDA | $16,003 | $3,095 | $41,094 | $18,536 | | Adjusted EBITDA Margin | 3% | 1% | 4% | 2% | [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Results show strong revenue growth, particularly in platform-related revenue, offset by a surge in operating expenses due to IPO-related stock compensation - Total revenue increased **37% YoY** in Q2 2025, driven by a **19% increase** in payments revenue and a **113% increase** in platform-related revenue. The growth in platform-related revenue was primarily due to the full launch of the MyPay product in July 2024[182](index=182&type=chunk)[187](index=187&type=chunk) - Total operating expenses surged **306% YoY** in Q2 2025, primarily due to the recognition of stock-based compensation and related payroll tax of **$928.1 million** following the IPO[137](index=137&type=chunk)[191](index=191&type=chunk) - Transaction and risk losses increased **181% YoY** for Q2 2025, largely driven by the MyPay product, which contributed **$49.3 million** to the increase[192](index=192&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is strong, primarily from $868.3 million in cash and $770.6 million in IPO net proceeds, supplemented by a $475.0 million credit facility - As of June 30, 2025, principal sources of liquidity were **$868.3 million** in cash and cash equivalents and **$225.1 million** in marketable securities[198](index=198&type=chunk) - The company received net proceeds of approximately **$770.6 million** from its IPO in June 2025[198](index=198&type=chunk) - The company has access to a **$475.0 million** senior secured revolving credit facility, with **$443.6 million** in borrowing capacity remaining as of June 30, 2025[80](index=80&type=chunk)[199](index=199&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Primary market risks are interest rate and foreign currency fluctuations, both deemed minimal for current assets and operations, but future variable-rate borrowings pose exposure - The company's primary market risks are interest rate changes and foreign currency fluctuations[218](index=218&type=chunk) - Interest rate risk on current cash and marketable securities is considered low due to their short-term nature. A hypothetical **100 basis point change** in interest rates would not have a material effect[219](index=219&type=chunk) - Foreign currency risk is not material as all revenue is earned in U.S. dollars, and operations in Canada are limited[221](index=221&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that as of the end of the quarter, the company's disclosure controls and procedures were **effective at a reasonable assurance level**[222](index=222&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[223](index=223&type=chunk) [Part II - Other Information](index=51&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not currently subject to legal proceedings that would materially adversely affect its business, though it faces ordinary course legal and regulatory actions - The company is not currently subject to any legal proceedings that it believes would have a **material and adverse effect** on its business[225](index=225&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) Key risks include attracting members, dependence on bank partners, interchange fee changes, regulatory scrutiny, and concentrated co-founder voting power - The company's business is highly dependent on its ability to attract and retain **Active Members** and increase the revenue generated from them[228](index=228&type=chunk)[229](index=229&type=chunk) - Relationships with bank partners (The Bancorp Bank, N.A. and Stride Bank, N.A.) are crucial, as Chime is a technology company, not a bank. Loss of these partners could **severely impact operations**[228](index=228&type=chunk)[234](index=234&type=chunk) - A significant portion of revenue comes from interchange fees, which are subject to changes in rules, practices, and regulations (like the Durbin Amendment) that could **adversely affect the business**[228](index=228&type=chunk)[240](index=240&type=chunk) - The business is subject to a wide range of complex and evolving laws and regulations, with significant oversight from agencies like the CFPB, which could lead to **enforcement actions and fines**[231](index=231&type=chunk)[317](index=317&type=chunk) - The multi-class stock structure concentrates significant voting power with the company's **Co-Founders**, limiting the influence of Class A common stockholders[231](index=231&type=chunk)[387](index=387&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=102&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details include the grant of 7.2 million RSUs, exchange of 32.2 million Class A for Class B shares, and use of $770.6 million IPO proceeds for tax obligations - From April 1, 2025, to June 12, 2025, the company granted an aggregate of **7,213,334 RSUs** under its 2012 Equity Incentive Plan[414](index=414&type=chunk) - The company received net proceeds of approximately **$770.6 million** from its IPO, which were used to satisfy tax withholding and remittance obligations for equity award settlements[417](index=417&type=chunk)[419](index=419&type=chunk) [Other Information](index=103&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter - No officers or directors adopted or terminated a Rule 10b5-1 trading plan during the last fiscal quarter[422](index=422&type=chunk)

[Introduction and Non-US GAAP Financial Measures](index=1&type=section&id=Introduction%20and%20Non-US%20GAAP%20Financial%20Measures) This section introduces the company's non-US GAAP financial measures, explaining their purpose for performance assessment and providing detailed definitions of key metrics [Purpose and Use of Non-US GAAP Measures](index=1&type=section&id=Purpose%20and%20Use%20of%20Non-US%20GAAP%20Measures) The company provides this supplemental document to help investors and analysts assess its financial performance using non-US GAAP measures, which management believes are important for period-to-period comparisons. These measures, which cover two business segments (Engineered Materials and the Acetyl Chain), should be considered supplemental to, and not a replacement for, US GAAP results - The purpose of this document is to provide supplemental financial information and reconciliations for non-US GAAP financial measures to investors and analysts[3](index=3&type=chunk) - The company's business is presented in two segments: Engineered Materials and the Acetyl Chain[4](index=4&type=chunk) - Management believes non-GAAP measures are important supplemental tools for assessing financial results, evaluating financial condition, and making period-to-period comparisons[6](index=6&type=chunk) [Definitions of Non-US GAAP Measures](index=2&type=section&id=Definitions%20of%20Non-US%20GAAP%20Measures) This section defines key non-GAAP metrics used by the company. Adjusted EBIT and Operating EBITDA are performance measures excluding certain non-operational items to assess core operating results. Adjusted EPS removes these items and tax effects to show underlying earnings power. Free Cash Flow measures liquidity and long-term cash generation, while Net Debt assesses capital structure. Return on Invested Capital (adjusted) evaluates the efficiency of capital deployment - Adjusted EBIT is defined as net earnings adjusted for discontinued operations, interest, taxes, and "Certain Items" to show primary operating results[13](index=13&type=chunk) - Operating EBITDA is defined as Adjusted EBIT plus depreciation and amortization, used for evaluating operating performance relative to peers[13](index=13&type=chunk) - Adjusted earnings per share is defined as earnings from continuing operations adjusted for "Certain Items" and related tax effects, using a normalized tax rate[13](index=13&type=chunk) - Free cash flow is defined as net cash from operations, less capital expenditures, and adjusted for NCI contributions/distributions to measure liquidity[18](index=18&type=chunk) - Net debt is defined as total debt less cash and cash equivalents, used to evaluate the company's capital structure[18](index=18&type=chunk) - Return on invested capital (adjusted) is defined as tax-effected Adjusted EBIT divided by average invested capital to assess income generation from capital[18](index=18&type=chunk) [Financial Performance and Reconciliations](index=5&type=section&id=Financial%20Performance%20and%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including Adjusted EBIT, Operating EBITDA, and Adjusted EPS, alongside analyses of segment performance, net sales, cash flow, capital structure, and return on invested capital [Reconciliation of Adjusted EBIT and Operating EBITDA (Table 1)](index=5&type=section&id=Table%201%20Reconciliation%20of%20Adjusted%20EBIT%20and%20Operating%20EBITDA) This table reconciles the company's GAAP Net Earnings to the non-GAAP measures of Adjusted EBIT and Operating EBITDA. For Q2 2025, Net Earnings of $199 million were adjusted to an Adjusted EBIT of $344 million and an Operating EBITDA of $532 million. The adjustments primarily include adding back interest, taxes, depreciation, and $42 million in "Certain Items" Reconciliation of Net Earnings to Adjusted EBIT & Operating EBITDA (In $ millions) | Metric | Q2 '25 | 2024 | | :--- | :--- | :--- | | Net earnings (loss) attributable to Celanese Corporation | 199 | (1,531) | | Adjustments (Interest, Tax, Certain Items, etc.) | 145 | 3,167 | | **Adjusted EBIT** | **344** | **1,636** | | Depreciation and amortization expense | 188 | 728 | | **Operating EBITDA** | **532** | **2,364** | [Segment Performance Analysis (Table 2)](index=6&type=section&id=Table%202%20Segment%20Performance%20Analysis) This section provides a detailed breakdown of financial performance for the Engineered Materials and Acetyl Chain segments. In Q2 2025, Engineered Materials generated an Adjusted EBIT of $214 million (14.8% margin), while the Acetyl Chain produced $196 million (17.6% margin), contributing to a total company Adjusted EBIT of $344 million Adjusted EBIT by Segment (In $ millions) | Segment | Q2 '25 | Q2 '25 Margin | 2024 | 2024 Margin | | :--- | :--- | :--- | :--- | :--- | | Engineered Materials | 214 | 14.8% | 847 | 15.1% | | Acetyl Chain | 196 | 17.6% | 1,102 | 23.1% | | Other Activities | (66) | N/A | (313) | N/A | | **Total** | **344** | **13.6%** | **1,636** | **15.9%** | Operating EBITDA by Segment (In $ millions) | Segment | Q2 '25 | Q2 '25 Margin | 2024 | 2024 Margin | | :--- | :--- | :--- | :--- | :--- | | Engineered Materials | 326 | 22.6% | 1,284 | 22.9% | | Acetyl Chain | 260 | 23.3% | 1,346 | 28.3% | | Other Activities | (54) | N/A | (266) | N/A | | **Total** | **532** | **21.0%** | **2,364** | **23.0%** | [Reconciliation of Adjusted Earnings Per Share (Table 3 & 3a)](index=8&type=section&id=Table%203%20%26%203a%20Reconciliation%20of%20Adjusted%20Earnings%20Per%20Share) This section reconciles GAAP earnings per share to the non-GAAP Adjusted EPS. For Q2 2025, GAAP EPS of $1.90 was adjusted to $1.44, primarily by removing the impact of "Certain Items" and applying a normalized adjusted tax rate of 9%. The adjusted tax rate itself is reconciled from the estimated US GAAP rate, accounting for various discrete and operational tax items Adjusted Earnings Per Share Reconciliation | Metric | Q2 '25 | 2024 | | :--- | :--- | :--- | | GAAP EPS from continuing operations | $1.90 | $(13.94) | | Adjustments (Certain Items, etc.) | $(0.46) | $22.21 | | **Adjusted EPS** | **$1.44** | **$8.27** | - The company uses a consistent adjusted effective tax rate of **9%** for both its 2025 quarterly and full-year 2024 adjusted earnings calculations[23](index=23&type=chunk)[24](index=24&type=chunk) [Net Sales Analysis (Table 4, 4a, 4b, 4c)](index=10&type=section&id=Table%204%2C%204a%2C%204b%2C%204c%20Net%20Sales%20Analysis) This section provides a comprehensive analysis of net sales, detailing segment contributions and examining sequential and year-over-year changes driven by volume, price, and currency impacts [Net Sales by Segment (Table 4)](index=10&type=section&id=Table%204%20Net%20Sales%20by%20Segment) In Q2 2025, the company reported total net sales of $2,532 million. The Engineered Materials segment contributed $1,442 million, and the Acetyl Chain segment contributed $1,115 million. For the full year 2024, total net sales were $10,268 million Net Sales by Segment (In $ millions) | Segment | Q2 '25 | 2024 | | :--- | :--- | :--- | | Engineered Materials | 1,442 | 5,595 | | Acetyl Chain | 1,115 | 4,763 | | **Total Net Sales** | **2,532** | **10,268** | [Sequential (QoQ) Net Sales Analysis (Table 4a)](index=11&type=section&id=Table%204a%20Sequential%20%28QoQ%29%20Net%20Sales%20Analysis) In Q2 2025 compared to Q1 2025, total company net sales increased by 6%. This was driven by a 12% increase in Engineered Materials sales (9% volume, 3% currency) and flat sales in the Acetyl Chain, where a volume and price decline was offset by a currency benefit Q2'25 vs Q1'25 Net Sales Change (%) | Segment | Volume | Price | Currency | Total | | :--- | :--- | :--- | :--- | :--- | | Engineered Materials | 9% | 0% | 3% | 12% | | Acetyl Chain | -1% | -2% | 3% | 0% | | **Total Company** | **4%** | **-1%** | **3%** | **6%** | [Year-over-Year (YoY) Net Sales Analysis (Table 4b & 4c)](index=12&type=section&id=Table%204b%20%26%204c%20Year-over-Year%20%28YoY%29%20Net%20Sales%20Analysis) Compared to Q2 2024, total company net sales in Q2 2025 decreased by 4%, driven by declines in both volume (-2%) and price (-4%). For the full year 2024 versus 2023, net sales decreased by 6%, primarily due to a 4% price decline and a 1% volume decline Q2'25 vs Q2'24 Net Sales Change (%) | Segment | Volume | Price | Currency | Total | | :--- | :--- | :--- | :--- | :--- | | Engineered Materials | -3% | -1% | 2% | -2% | | Acetyl Chain | -2% | -7% | 2% | -7% | | **Total Company** | **-2%** | **-4%** | **2%** | **-4%** | FY 2024 vs FY 2023 Net Sales Change (%) | Segment | Volume | Price | Currency | Total | | :--- | :--- | :--- | :--- | :--- | | Engineered Materials | -5% | -3% | -1% | -9% | | Acetyl Chain | 4% | -6% | 0% | -2% | | **Total Company** | **-1%** | **-4%** | **-1%** | **-6%** | [Cash Flow and Liquidity Analysis (Table 5 & 6)](index=14&type=section&id=Table%205%20%26%206%20Cash%20Flow%20and%20Liquidity%20Analysis) The company generated $311 million in free cash flow in Q2 2025, a significant improvement from negative $73 million in Q1 2025 and $173 million in Q2 2024. This was derived from $410 million in cash from operations less $93 million in capital expenditures. The company also received $62 million in cash dividends from its equity investments during the quarter Free Cash Flow (In $ millions) | Metric | Q2 '25 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | 410 | 966 | | Capital expenditures | (93) | (435) | | Contributions from/(Distributions) to NCI | (6) | (33) | | **Free cash flow** | **311** | **498** | - The company received **$62 million** in cash dividends from its equity investments in Q2 2025, contributing to a total of **$288 million** for the full year 2024[44](index=44&type=chunk) [Capital Structure and Debt (Table 7)](index=15&type=section&id=Table%207%20Capital%20Structure%20and%20Debt) As of the end of Q2 2025, the company's net debt stood at $11,768 million. This represents a slight decrease from $11,833 million at the end of Q1 2025. The total debt of $12,941 million was offset by $1,173 million in cash and cash equivalents Net Debt Calculation (In $ millions) | Metric | Q2 '25 | 2024 | | :--- | :--- | :--- | | Total debt | 12,941 | 12,579 | | Cash and cash equivalents | (1,173) | (962) | | **Net debt** | **11,768** | **11,617** | [Analysis of "Certain Items" (Table 8)](index=16&type=section&id=Table%208%20Analysis%20of%20%22Certain%20Items%22) This table details the specific charges excluded from non-GAAP measures. In Q2 2025, "Certain Items" totaled $42 million, primarily consisting of $27 million in exit and shutdown costs. For the full year 2024, these items amounted to $2,009 million, dominated by a $1,638 million asset impairment charge related to goodwill and trade names Certain Items Breakdown (In $ millions) | Item | Q2 '25 | 2024 | | :--- | :--- | :--- | | Exit and shutdown costs | 27 | 236 | | Asset impairments | — | 1,638 | | Mergers, acquisitions and dispositions | 12 | 80 | | Other | 3 | 55 | | **Total Certain Items** | **42** | **2,009** | - The significant **$1.6 billion** asset impairment in 2024 was primarily related to goodwill and the Zytel® trade name[47](index=47&type=chunk) [Return on Invested Capital (Adjusted) (Table 9)](index=17&type=section&id=Table%209%20Return%20on%20Invested%20Capital%20%28Adjusted%29) For the full year 2024, the company's Return on Invested Capital (Adjusted) was 7.7%. This non-GAAP measure is calculated using tax-effected Adjusted EBIT of $1,489 million and an average invested capital base of $19,241 million. This contrasts sharply with the GAAP-based return of -8.0%, which was impacted by significant impairment charges Return on Invested Capital (Adjusted) - 2024 | Metric | Amount (In $ millions) | | :--- | :--- | | Adjusted EBIT | 1,636 | | Adjusted EBIT tax effected | 1,489 | | Average Invested capital | 19,241 | | **Return on invested capital (adjusted)** | **7.7%** | - The GAAP-based return on invested capital for 2024 was **-8.0%**, highlighting the significant difference between GAAP and non-GAAP performance metrics for the year[49](index=49&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-39712 OLEMA PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in its Charter) Delawar ...

Exhibit 99.1 BigBear.ai Announces Second Quarter 2025 Results; Updates Financial Outlook McLean, VA– August 11, 2025 – BigBear.ai Holdings, Inc. (NYSE: BBAI) ("BigBear.ai" or the "Company"), a leader in AI-powered decision intelligence solutions, today announced financial results for the second quarter of 2025 and issued an investor presentation that has been posted to the Investor Relations section of the Company's website. "Our robust balance sheet allows us to make significant transformational investment ...