UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 814-01363 Kayne Anderson BDC, Inc. | Delaware | 83-0531326 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification ...

[Company Overview & Key Highlights](index=1&type=section&id=Company%20Overview%20%26%20Key%20Highlights) Babcock & Wilcox achieved strong Q2 and H1 2025 financial performance, strategic growth, and improved financial stability [Q2 2025 Continuing Operations Financial Highlights](index=1&type=section&id=Q2%202025%20Continuing%20Operations%20Financial%20Highlights) Q2 2025 saw 31% global parts and services revenue growth, adjusted EBITDA exceeding expectations, and a significant reduction in net loss - Global parts and services revenue increased by **31% year-over-year**[5](index=5&type=chunk) - Adjusted EBITDA (including Diamond Power International) reached **$21.6 million**, exceeding market expectations of $12.3 million by **76%**[5](index=5&type=chunk) - Net loss from continuing operations was **$6.1 million**, a significant improvement from **$20.1 million** in Q2 2024[5](index=5&type=chunk) - Backlog from continuing operations reached **$418.1 million**, a **49% increase year-over-year**[5](index=5&type=chunk) - Completed the sale of Diamond Power International, generating **$177 million in total proceeds**[5](index=5&type=chunk) [First Half 2025 Continuing Operations Financial Highlights](index=1&type=section&id=First%20Half%202025%20Continuing%20Operations%20Financial%20Highlights) H1 2025 revenue grew to $299.9 million, global parts and services revenue increased, operating profit turned positive, and adjusted EBITDA doubled First Half 2025 Continuing Operations Financial Highlights | Metric | H1 2025 (million USD) | H1 2024 (million USD) | Change | | :-------------------------------- | :---------------------- | :---------------------- | :----- | | Revenue | $299.9 | $292.3 | 2.6% | | Global Parts & Services Revenue | $131.9 | $105.1 | 25.5% | | Operating Profit (Loss) | $8.4 | $(3.5) | Turned Positive | | Net Loss from Continuing Operations | $(20.1) | $(38.2) | 47.4% Improvement | | Loss Per Share from Continuing Operations | $(0.28) | $(0.51) | 45.0% Improvement | | Adjusted EBITDA from Continuing Operations | $21.2 | $10.8 | 96.3% | [CEO Commentary & Strategic Outlook](index=2&type=section&id=CEO%20Commentary%20%26%20Strategic%20Outlook) CEO Kenneth Young highlighted B&W's strong position in baseload power demand, robust Q2 performance, 49% backlog growth, and improved financial stability - B&W is uniquely positioned to capitalize on growing North American and global baseload power demand, driven by AI, data centers, and economic expansion[7](index=7&type=chunk) - Q2 operating performance was strong, with adjusted EBITDA significantly exceeding company and market expectations, and backlog growing **49% year-over-year**[7](index=7&type=chunk) - Through asset sales, debt reduction, and improved cash flow, the company has eliminated prior substantial doubt about its ability to continue as a going concern, positioning it to win new plant upgrades and data center projects[7](index=7&type=chunk) - Completed the sale of Diamond Power International, generating **$177 million in total proceeds**, further strengthening the balance sheet and used to repay existing debt[7](index=7&type=chunk)[9](index=9&type=chunk) - Private note exchange reduced annual interest expense by **$1.1 million** and extended debt maturity to 2030[9](index=9&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) This section details the company's Q2 and H1 2025 financial results, including statements of operations, balance sheets, and cash flows [Q2 2025 Continuing Operations Financial Summary](index=3&type=section&id=Q2%202025%20Continuing%20Operations%20Financial%20Summary) Q2 2025 revenue slightly decreased to $144.1 million due to project timing, but global parts and services revenue grew significantly, leading to positive operating profit and improved adjusted EBITDA Q2 2025 Continuing Operations Financial Summary | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change | | :-------------------------------- | :---------------------- | :---------------------- | :----- | | Revenue | $144.1 | $151.4 | (4.8%) | | Global Parts & Services Revenue | $64.8 | $49.3 | 31.4% | | Operating Profit (Loss) | $8.1 | $(4.4) | Turned Positive | | Net Loss | $(6.1) | $(20.5) | 70.2% Improvement | | Loss Per Share | $(0.10) | $(0.26) | 61.5% Improvement | | Adjusted EBITDA | $15.1 | $8.0 | 88.8% | [First Half 2025 Continuing Operations Financial Summary](index=3&type=section&id=First%20Half%202025%20Continuing%20Operations%20Financial%20Summary) H1 2025 revenue increased to $299.9 million, driven by global parts and services, with operating profit turning positive, net loss significantly narrowing, and adjusted EBITDA doubling First Half 2025 Continuing Operations Financial Summary | Metric | H1 2025 (million USD) | H1 2024 (million USD) | Change | | :-------------------------------- | :---------------------- | :---------------------- | :----- | | Revenue | $299.9 | $292.3 | 2.6% | | Global Parts & Services Revenue | $131.9 | $105.1 | 25.5% | | Operating Profit (Loss) | $8.4 | $(3.5) | Turned Positive | | Net Loss | $(20.1) | $(38.2) | 47.4% Improvement | | Loss Per Share | $(0.28) | $(0.51) | 45.0% Improvement | | Adjusted EBITDA | $21.2 | $10.8 | 96.3% | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed consolidated statements show a net loss attributable to shareholders of $58.5 million for Q2 2025 and $80.5 million for H1 2025, primarily due to losses from discontinued operations, despite improved operating profit from continuing operations Condensed Consolidated Statements of Operations (Selected Items) | Metric (million USD) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Revenue | $144.1 | $151.4 | $299.9 | $292.3 | | Operating Profit (Loss) | $8.1 | $(4.4) | $8.4 | $(3.5) | | Loss from Continuing Operations | $(6.1) | $(20.5) | $(20.1) | $(38.2) | | (Loss) Income from Discontinued Operations, Net of Tax | $(52.4) | $46.0 | $(60.4) | $46.7 | | Net (Loss) Income Attributable to Shareholders | $(58.5) | $25.4 | $(80.5) | $8.6 | | Basic (Loss) Earnings Per Share (Continuing Operations) | $(0.10) | $(0.26) | $(0.28) | $(0.51) | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $703.5 million, while total shareholders' deficit worsened to $308.7 million, driven by accumulated deficit, with current liabilities increasing and long-term senior notes decreasing due to debt exchange Condensed Consolidated Balance Sheets (Selected Items) | Metric (million USD) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Current Assets | $526.9 | $552.5 | | Total Assets | $703.5 | $727.0 | | Total Current Liabilities | $529.3 | $406.7 | | Senior Notes, Net of Current Portion | $102.2 | $340.2 | | Senior Notes Due 2030 | $124.9 | — | | Total Liabilities | $1,012.2 | $1,010.2 | | Total Shareholders' Deficit | $(308.7) | $(283.2) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In H1 2025, net cash used in operating activities increased to $33.8 million, net cash provided by investing activities significantly decreased to $10.6 million, and net cash provided by financing activities fell to $2.6 million, resulting in a net decrease in cash of $20.3 million Condensed Consolidated Statements of Cash Flows (Selected Items) | Metric (million USD) | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | | Net Cash Used in Operating Activities | $(33.8) | $(26.7) | | Net Cash Provided by Investing Activities | $10.6 | $76.0 | | Net Cash Provided by Financing Activities | $2.6 | $81.6 | | Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | $(20.3) | $130.7 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $110.8 | $202.1 | [Segmental Performance](index=12&type=section&id=Segmental%20Performance)

[PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company reported a $108.0 million net loss in Q2 2025, largely due to a $103.8 million goodwill impairment Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $162,615 | $189,530 | ($26,915) | | Goodwill | $613,012 | $716,793 | ($103,781) | | Intangible assets, net | $359,827 | $389,034 | ($29,207) | | Total Assets | $1,413,374 | $1,571,908 | ($158,534) | | Total Liabilities | $773,970 | $798,739 | ($24,769) | | Total Equity | $639,404 | $773,169 | ($133,765) | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | Y/Y Change | H1 2025 | H1 2024 | Y/Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $75,626 | $74,906 | +0.9% | $152,951 | $155,626 | -1.7% | | Impairment loss | $103,781 | $0 | N/A | $103,781 | $0 | N/A | | Loss from operations | ($104,904) | ($3,421) | +2878.8% | ($108,524) | ($5,925) | +1731.6% | | Net loss | ($108,032) | ($4,237) | +2449.7% | ($116,200) | ($9,602) | +1110.2% | | Net loss attributable to the Company | ($102,251) | ($4,071) | +2411.7% | ($110,198) | ($9,283) | +1087.1% | | Basic and diluted EPS | ($1.15) | ($0.04) | +2775.0% | ($1.24) | ($0.10) | +1140.0% | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $35,568 | $55,780 | | Net cash used in investing activities | ($21,002) | ($22,820) | | Net cash used in financing activities | ($42,295) | ($3,069) | [Note 3. Revenue](index=11&type=section&id=Note%203.%20Revenue) Total revenue for Q2 2025 increased slightly to $75.6 million, with Consumer Payments remaining the primary driver Revenue by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Consumer Payments | $70,474 | $69,292 | $142,417 | $145,428 | | Business Payments | $10,945 | $10,592 | $21,933 | $20,269 | | Elimination of intersegment | ($5,793) | ($4,978) | ($11,399) | ($10,071) | | **Total Revenue** | **$75,626** | **$74,906** | **$152,951** | **$155,626** | [Note 7. Goodwill](index=17&type=section&id=Note%207.%20Goodwill) A $103.8 million goodwill impairment was recorded, mainly in Consumer Payments, due to stock price and valuation changes - A goodwill impairment loss of **$103.8 million** was recorded in Q2 2025, with **$103.2 million** attributed to the Consumer Payments segment and **$0.6 million** to the Business Payments segment[56](index=56&type=chunk)[58](index=58&type=chunk) - The impairment was triggered by a decline in the company's stock price, leading to a quantitative analysis that confirmed the impairment, with fair value impacted by changes in the discount rate and lower comparable company multiples[56](index=56&type=chunk)[58](index=58&type=chunk) [Note 8. Borrowings](index=19&type=section&id=Note%208.%20Borrowings) Total borrowings reached $498.4 million, including convertible notes, with a $250.0 million undrawn revolving credit facility Borrowings Summary (in thousands) | Debt Instrument | Principal Amount | Carrying Value (June 30, 2025) | Fair Value (June 30, 2025) | | :--- | :--- | :--- | :--- | | 2026 Notes | $220,000 | $219,389 | $210,760 | | 2029 Notes | $287,500 | $280,736 | $235,750 | | Revolving credit facility | $0 | ($1,727) | $0 | | **Total** | **$507,500** | **$498,398** | **$446,510** | - The company entered into a Second Amended and Restated Revolving Credit Agreement for a **$250.0 million** facility maturing in July 2029, with no amounts drawn as of June 30, 2025[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 13. Segments](index=27&type=section&id=Note%2013.%20Segments) Consumer Payments revenue increased 1.7% to $70.5 million, while Business Payments revenue grew 3.8% to $10.9 million in Q2 2025 Segment Performance (in thousands) | Segment | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Consumer Payments** | Revenue | $70,474 | $69,292 | $142,417 | $145,428 | | | Gross Profit | $55,429 | $55,546 | $112,139 | $115,136 | | **Business Payments** | Revenue | $10,945 | $10,592 | $21,933 | $20,269 | | | Gross Profit | $7,586 | $8,017 | $15,143 | $15,065 | - The Consumer Payments segment accounted for approximately **86%** of total revenue in Q2 2025, consistent with the prior year[91](index=91&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 2025 revenue increased 0.9%, but net loss significantly widened to $102.3 million due to a $103.8 million goodwill impairment [Results of Operations](index=32&type=section&id=MD%26A_Results_of_Operations) Q2 2025 revenue increased 0.9% to $75.6 million, but a $103.8 million goodwill impairment led to a substantial net loss - Q2 2025 revenue increased **0.9%** YoY to **$75.6 million**, driven by new and existing client growth, partially offset by client losses and lower political media spending[111](index=111&type=chunk) - A non-cash impairment loss of **$103.8 million** was recognized in Q2 2025, with **$103.2 million** related to the Consumer Payments segment's goodwill, primarily driving the significant increase in net loss[115](index=115&type=chunk) - Selling, general and administrative expenses decreased by **6.8%** YoY, primarily due to a **$3.6 million** reduction in equity compensation expenses[113](index=113&type=chunk) [Segments](index=35&type=section&id=MD%26A_Segments) Consumer Payments revenue grew 1.7% to $70.5 million, while Business Payments revenue increased 3.8% to $10.9 million in Q2 2025 Segment Gross Profit (in thousands) | Segment | Q2 2025 | Q2 2024 | Y/Y Change | | :--- | :--- | :--- | :--- | | Consumer Payments | $55,429 | $55,546 | -0.2% | | Business Payments | $7,586 | $8,017 | -5.0% | | **Total Gross Profit (after eliminations)** | **$57,222** | **$58,585** | **-2.3%** | [Non-GAAP Financial Measures](index=37&type=section&id=MD%26A_Non-GAAP_Financial_Measures) Adjusted EBITDA decreased 5.7% to $31.8 million, and Adjusted Net Income fell 12.3% to $19.1 million in Q2 2025 Non-GAAP Performance (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | Y/Y Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $31,811 | $33,728 | -5.7% | | Adjusted Net Income | $19,083 | $21,762 | -12.3% | | Adjusted Net Income per share | $0.20 | $0.22 | -9.1% | - The main adjustments from Net Loss to Adjusted EBITDA include adding back the **$103.8 million** non-cash impairment loss, **$25.5 million** in depreciation & amortization, and **$3.0 million** in share-based compensation expense[149](index=149&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=MD%26A_Liquidity_and_Capital_Resources) The company maintains strong liquidity with $162.6 million in cash and a $250.0 million undrawn credit facility - The company's liquidity position as of June 30, 2025, includes **$162.6 million** in cash and **$250.0 million** in available borrowing capacity[163](index=163&type=chunk) - The board of directors increased the authorized Share Repurchase Program to **$75 million** in May 2025, with **4.8 million** shares repurchased for **$22.6 million** in Q2 2025[165](index=165&type=chunk) - Net cash from operating activities for the first six months of 2025 was **$35.6 million**, a decrease from **$55.8 million** in the same period of 2024[167](index=167&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its undrawn variable-rate revolving credit facility - The primary market risk is interest rate risk associated with the floating-rate revolving credit facility, where increases in interest rates could increase the cost of debt if utilized[182](index=182&type=chunk) - The company does not expect significant impact from inflation or foreign currency exchange rate risk[180](index=180&type=chunk)[184](index=184&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[186](index=186&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter[187](index=187&type=chunk) [PART II – OTHER INFORMATION](index=49&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company does not anticipate any material adverse effects from ongoing legal proceedings - The company states that it does not expect any currently pending legal proceedings to have a material adverse effect on its business, prospects, or financial results[189](index=189&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the quarter - No material changes to risk factors were reported for the quarter[190](index=190&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased over 5 million shares at an average price of $4.72 per share during Q2 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | April 2025 | 619 | $4.39 | — | | May 2025 | 1,667,033 | $4.39 | 1,411,298 | | June 2025 | 3,356,296 | $4.88 | 3,353,168 | | **Total** | **5,023,948** | **$4.72** | **4,764,466** | [Other Information](index=49&type=section&id=Item%205.%20Other%20Information) The General Counsel adopted a Rule 10b5-1 trading plan for the potential sale of up to 90,000 shares - The company's General Counsel, Tyler B. Dempsey, adopted a Rule 10b5-1 trading plan on June 13, 2025, for the sale of up to **90,000** shares of Class A common stock[195](index=195&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) The report includes required exhibits and certifications from key executive officers

[PART I – FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the unaudited financial statements, management's discussion and analysis of financial condition and results of operations, market risk disclosures, and internal controls and procedures [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed financial statements, highlighting changes in financial position, operations, and cash flows for the period [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) Condensed Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $60,536 | $71,546 | | Total current assets | $81,721 | $88,220 | | Total assets | $93,698 | $101,424 | | **Liabilities and Stockholders' Deficit** | | | | Total current liabilities | $23,155 | $18,865 | | Total liabilities | $166,288 | $161,580 | | Total stockholders' deficit | $(72,590) | $(60,156) | | Total liabilities and stockholders' deficit | $93,698 | $101,424 | [Condensed Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Statements of Operations (in thousands, except per share data) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | Revenues | $10,003 | $20,099 | $18,723 | $32,152 | | Total costs and expenses | $21,371 | $20,044 | $49,456 | $41,054 | | Loss from operations | $(11,368) | $55 | $(30,733) | $(8,902) | | Net loss | $(13,548) | $(2,745) | $(36,478) | $(15,573) | | Loss per share (basic and diluted) | $(0.14) | $(0.03) | $(0.37) | $(0.19) | [Condensed Statements of Cash Flows](index=10&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Condensed Statements of Cash Flows (in thousands) | | Six Months Ended June 30, | | :--- | :--- | | | **2025** | **2024** | | Net cash used for operating activities | $(31,314) | $(17,390) | | Net cash used for investing activities | $(242) | $(64) | | Net cash provided by financing activities | $20,546 | $83,452 | | Net (decrease) increase in cash and cash equivalents | $(11,010) | $65,998 | | Cash and cash equivalents at beginning of period | $71,546 | $23,872 | | Cash and cash equivalents at end of period | $60,536 | $89,870 | [Notes to Unaudited Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) - For the six months ended June 30, 2025, the company sold **7,457,627 shares** of common stock through its At-The-Market (ATM) facility, generating net proceeds of approximately **$21.3 million**[26](index=26&type=chunk) - In June 2024, the company terminated its licensing agreements with Haisco and Mitsubishi Tanabe Pharma America (MTPA), resulting in the one-time recognition of **$7.0 million** and **$3.3 million** in deferred revenue, respectively[79](index=79&type=chunk)[83](index=83&type=chunk) - The company is involved in multiple legal proceedings, including litigation with Neurelis, Inc. regarding Libervant's FDA approval and numerous product liability lawsuits related to Suboxone, for which Indivior has agreed to defend the company[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&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 discusses the company's financial performance, liquidity, and capital resources, highlighting key operational developments and future outlook [Overview](index=36&type=section&id=Overview) - The company is advancing its pipeline, focusing on Anaphylm™ (epinephrine) Sublingual Film for severe allergic reactions and the Adrenaverse™ epinephrine prodrug platform[164](index=164&type=chunk) - The New Drug Application (NDA) for Anaphylm was accepted by the FDA on June 16, 2025, with a PDUFA target action date of **January 31, 2026** The company plans for a product launch in **Q1 2026** if approved[180](index=180&type=chunk) - A U.S. District Court ruling on February 14, 2025, vacated the FDA's approval of Libervant® for patients aged two to five, converting it to a "tentative approval" Consequently, Aquestive has ceased marketing activities for Libervant in the United States[182](index=182&type=chunk) - The company is pursuing development of AQST-108, a topical gel for alopecia areata, with plans to open an IND in **Q4 2025** and initiate a Phase 2a clinical trial in the **first half of 2026**[180](index=180&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Revenue Comparison (in thousands) | Revenue Category | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Manufacture and supply | $9,583 | $8,123 | 18% | $16,776 | $18,641 | (10%) | | License and royalty | $839 | $11,220 | (93%) | $1,629 | $12,352 | (87%) | | Co-development and research | $378 | $756 | (50%) | $796 | $1,159 | (31%) | | Proprietary product, net | $(797) | $— | N/M | $(478) | $— | N/M | | **Total revenues** | **$10,003** | **$20,099** | **(50%)** | **$18,723** | **$32,152** | **(42%)** | - The significant decrease in license and royalty revenue for Q2 and YTD 2025 was primarily due to the one-time recognition of **$10.3 million** in deferred revenues in Q2 2024 from the termination of agreements with Haisco and MTPA[218](index=218&type=chunk)[223](index=223&type=chunk) Expense Comparison (in thousands) | Expense Category | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Manufacture and supply | $4,561 | $4,526 | 1% | $8,213 | $8,915 | (8%) | | Research and development | $4,105 | $4,162 | (1%) | $9,466 | $10,094 | (6%) | | Selling, general and administrative | $12,705 | $11,356 | 12% | $31,777 | $22,045 | 44% | - Selling, general and administrative expenses for the six months ended June 30, 2025 increased by **44%** (**$9.7 million**) year-over-year, driven by the Anaphylm PDUFA fee (~**$4.3M**), increased commercial spending (~**$4.2M**), and higher regulatory fees for Libervant (~**$1.1M**)[240](index=240&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$60.5 million** in cash and cash equivalents[245](index=245&type=chunk) - The company believes its existing cash, expense management, and access to equity capital markets (including a **$100 million** ATM facility with **$78 million** remaining) provide sufficient liquidity to fund operations for at least the next twelve months[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used for operating activities | $(31,314) | $(17,390) | | Net cash used for investing activities | $(242) | $(64) | | Net cash provided by financing activities | $20,546 | $83,452 | - Net cash from financing activities decreased significantly in the first six months of 2025 compared to 2024, primarily because the 2024 period included **$72.0 million** in net proceeds from an underwritten public offering, whereas 2025 financing was mainly from ATM proceeds of **$21.2 million**[256](index=256&type=chunk)[247](index=247&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company, as a smaller reporting entity, is exempt from providing quantitative and qualitative disclosures about market risk - The company is a "smaller reporting company" and is therefore exempt from providing quantitative and qualitative disclosures about market risk[267](index=267&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that 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 June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[269](index=269&type=chunk) - No material changes in internal control over financial reporting were identified during the last fiscal quarter[270](index=270&type=chunk) [PART II – OTHER INFORMATION](index=54&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, updated risk factors, and disclosures regarding equity sales and other relevant corporate matters [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 20 of the financial statements for detailed information on ongoing legal proceedings - For detailed information on legal proceedings, the report directs readers to Note 20 of the financial statements[271](index=271&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) The company identifies risks related to tariffs and trade restrictions that could increase operating costs and negatively impact financial performance - The company faces risks from tariffs and trade restrictions imposed by the U.S. and other countries, which could increase costs for foreign-sourced raw materials and adversely impact operations[273](index=273&type=chunk)[275](index=275&type=chunk) - The current U.S. administration has expressed intent to impose tariffs on pharmaceutical imports, and the Department of Commerce has initiated an investigation into the national security effects of importing pharmaceuticals, which could lead to new tariffs[274](index=274&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report for the period[276](index=276&type=chunk) [Item 5. Other Information](index=54&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the quarter ended June 30, 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the fiscal quarter ended June 30, 2025[279](index=279&type=chunk)

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) Presents Assertio Holdings, Inc.'s unaudited condensed consolidated financial statements for H1 2025, covering balance sheets, comprehensive loss, equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$273.8 million** by June 30, 2025, while total liabilities increased, resulting in lower shareholders' equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $47,086 | $50,588 | | Total current assets | $210,209 | $202,549 | | Intangible assets, net | $62,006 | $80,471 | | Total assets | $273,780 | $284,732 | | Total current liabilities | $132,529 | $114,688 | | Total liabilities | $180,482 | $163,651 | | Total shareholders' equity | $93,298 | $121,081 | [Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Net loss significantly increased for H1 2025, primarily due to the Assertio Therapeutics divestiture loss and higher intangible asset amortization | Metric (in thousands, except per share data) | 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 | $29,222 | $31,126 | $55,712 | $63,574 | | Total costs and expenses | $37,257 | $34,743 | $76,977 | $71,528 | | Loss from operations | $(8,035) | $(3,617) | $(21,265) | $(7,954) | | Loss on Assertio Therapeutics divestiture | $(8,174) | — | $(8,174) | — | | Net loss and comprehensive loss | $(16,352) | $(3,674) | $(29,893) | $(8,184) | | Basic and diluted net loss per share | $(0.17) | $(0.04) | $(0.31) | $(0.09) | [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity decreased significantly to **$93.3 million** by June 30, 2025, primarily due to a **$29.9 million** net loss | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Common Stock (Shares) | 95,537 | 96,217 | | Additional Paid-In Capital | $794,196 | $796,306 | | Accumulated Deficit | $(673,124) | $(703,017) | | Total Shareholders' Equity | $121,081 | $93,298 | - Net loss for the six months ended June 30, 2025, was **$(29,893) thousand**, contributing to the decrease in accumulated deficit and total shareholders' equity[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to **$6.6 million** for H1 2025, while net cash used in investing activities significantly reduced | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $6,553 | $14,895 | | Net cash used in investing activities | $(9,875) | $(43,320) | | Net cash used in financing activities | $(180) | $(281) | | Net decrease in cash and cash equivalents | $(3,502) | $(28,706) | | Cash and cash equivalents at end of period | $47,086 | $44,735 | - The decrease in operating cash flow was primarily due to lower net product sales and higher selling, general and administrative expenses, including increased legal expenses and one-time costs from the Otrexup decommercialization and Therapeutics Transaction[173](index=173&type=chunk) - Investing activities for H1 2025 included an **$8.2 million** outflow from the Assertio Therapeutics divestiture and **$59.3 million** in short-term investment purchases, partially offset by **$57.6 million** from maturities[177](index=177&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain the company's organization, significant transactions, financial statement components, accounting policies, and estimates [NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION](index=9&type=section&id=NOTE%201.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) Assertio Holdings, Inc. is a pharmaceutical company that divested Assertio Therapeutics and ceased Otrexup commercialization, with financials prepared under U.S. GAAP - Assertio Holdings, Inc. is a pharmaceutical company focused on oncology, neurology, and pain management, with products like ROLVEDON, Sympazan, INDOCIN, SPRIX, and CAMBIA[19](index=19&type=chunk)[20](index=20&type=chunk) - The company divested Assertio Therapeutics on **May 9, 2025**, transferring all equity interests to ATIH Industries, LLC, and ceased commercializing Otrexup starting **July 2025**[20](index=20&type=chunk)[24](index=24&type=chunk) - A reverse stock split proposal was approved by shareholders on **May 7, 2025**, allowing the Board to effect a split between **1-for-2** and **1-for-15**, though it has not yet been effected[23](index=23&type=chunk) [NOTE 2. DIVESTITURES AND STRATEGIC TRANSACTIONS](index=9&type=section&id=NOTE%202.%20DIVESTITURES%20AND%20STRATEGIC%20TRANSACTIONS) Assertio divested Assertio Therapeutics for an **$8.2 million** loss and ceased Otrexup commercialization, incurring **$3.8 million** in related expenses - Assertio Therapeutics was divested on **May 9, 2025**, transferring equity interests to ATIH Industries, LLC, resulting in a net loss of **$8.2 million** for the three and six months ended June 30, 2025, and removing Assertio Holdings from opioid-related litigation[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The company ceased commercialization of Otrexup in **July 2025**, incurring **$3.8 million** in expenses for the three and six months ended June 30, 2025, mainly from inventory write-offs (**$2.5 million** in Cost of sales) and an accrual for minimum purchase obligations (**$1.3 million** in SG&A)[27](index=27&type=chunk)[28](index=28&type=chunk) [NOTE 3. REVENUE](index=10&type=section&id=NOTE%203.%20REVENUE) Total revenues decreased to **$55.7 million** for H1 2025, mainly due to lower INDOCIN sales, partially offset by ROLVEDON and Sympazan, and a **$5.4 million** returns reserve adjustment | Product Sales, net (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 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | ROLVEDON | $16,128 | $15,144 | $29,249 | $29,622 | | INDOCIN products | $3,033 | $6,913 | $8,578 | $15,596 | | Sympazan | $3,244 | $2,668 | $5,423 | $5,285 | | SPRIX | $1,976 | $2,147 | $3,565 | $3,584 | | Other products | $4,441 | $3,823 | $8,003 | $8,470 | | Total product sales, net | $28,822 | $30,695 | $54,818 | $62,557 | | Royalty revenue | $400 | $

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) H1 2025 unaudited financials report a $143.2 million net loss, $361.6 million total assets, and a $44.6 million impairment [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Financial Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $71,271 | $127,566 | | Total current assets | $82,502 | $160,808 | | Total Assets | $361,645 | $501,020 | | Total Liabilities | $239,089 | $250,516 | | Total Stockholders' Equity | $122,556 | $250,504 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric (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 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $29,761 | $60,874 | $66,950 | $117,322 | | Impairment of long-lived assets | $44,611 | - | $44,611 | - | | Total operating expenses | $94,975 | $49,372 | $145,605 | $160,096 | | Net loss | $(93,800) | $(50,291) | $(143,189) | $(157,766) | | Net loss per share | $(0.39) | $(0.21) | $(0.60) | $(0.70) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(81,758) | $(124,173) | | Net cash provided by (used in) investing activities | $24,283 | $(71,410) | | Net cash provided by financing activities | $1,543 | $197,024 | | Net decrease in cash, cash equivalents, and restricted cash | $(55,932) | $1,441 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - As of June 30, 2025, the company had **$72.7 million** in cash, cash equivalents, and marketable securities. Subsequent financing, including a **$70.0 million** public offering in August 2025 and **$28.6 million** from an ATM facility, is expected to fund operations for at least one year, removing substantial doubt about its ability to continue as a going concern[30](index=30&type=chunk)[33](index=33&type=chunk) - In Q2 2025, the company recognized a **$44.6 million** non-cash impairment loss on long-lived assets. This was primarily related to its manufacturing facilities in Bothell and Seattle, following a decision to suspend the build-out of internal manufacturing capabilities due to increased availability of third-party capacity[75](index=75&type=chunk)[121](index=121&type=chunk) - The fair value of the Cobalt Contingent Consideration liability increased to **$117.1 million** as of June 30, 2025, from **$109.0 million** at year-end 2024. The change in fair value is recognized in R&D expenses[52](index=52&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) H1 2025 net loss decreased to $143.2 million due to portfolio prioritization, offset by a $44.6 million impairment, with recent financing bolstering liquidity [Overview](index=27&type=section&id=Overview) - Sana is developing ex vivo and in vivo cell engineering platforms to treat a broad array of therapeutic areas, including type 1 diabetes, B-cell mediated autoimmune diseases, and oncology[91](index=91&type=chunk) - The clinical pipeline includes three ongoing trials: SC291 in autoimmune diseases (GLEAM study), SC262 in B-cell malignancies (VIVID study), and an investigator-sponsored trial of UP421 for type 1 diabetes. Data from the GLEAM and VIVID trials are expected in 2025[93](index=93&type=chunk) - In November 2024, the company prioritized its portfolio to focus on T1D, autoimmune diseases, refractory B-cell malignancies, and the fusogen platform for in vivo CAR T cells. Development of SC291 in oncology and the SC379 glial progenitor program were suspended to seek partnerships[99](index=99&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20operations) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $67.0 | $117.3 | | General and administrative | $21.8 | $32.7 | | Impairment of long-lived assets | $44.6 | $0.0 | | **Total operating expenses** | **$145.6** | **$160.1** | | **Net loss** | **$(143.2)** | **$(157.8)** | - R&D expenses for the first six months of 2025 decreased by **$50.4 million** compared to the same period in 2024, primarily due to lower headcount and reduced laboratory, research, and clinical development costs following the November 2024 portfolio prioritization[124](index=124&type=chunk)[126](index=126&type=chunk) - G&A expenses for the first six months of 2025 decreased by **$10.9 million** compared to the prior year period, mainly due to lower personnel-related costs and reduced legal and consulting fees as a result of the portfolio prioritization[129](index=129&type=chunk)[131](index=131&type=chunk) [Liquidity, Capital Resources, and Capital Requirements](index=37&type=section&id=Liquidity,%20capital%20resources,%20and%20capital%20requirements) - As of June 30, 2025, the company had **$72.7 million** in cash, cash equivalents, and marketable securities[135](index=135&type=chunk) - Subsequent to the quarter end, the company raised approximately **$70.0 million** in net proceeds from a public offering in August 2025 and an additional **$28.6 million** from its ATM facility[136](index=136&type=chunk)[137](index=137&type=chunk) - Management believes that existing cash, combined with recent financing proceeds, will be sufficient to fund planned operations for at least one year from the filing of the report[141](index=141&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks primarily involve interest rate sensitivities and stock price volatility, with a 20% change in market capitalization materially impacting liabilities - The company's exposure to interest rate risk is not considered significant due to the short-term duration of its **$1.4 million** in marketable securities as of June 30, 2025[159](index=159&type=chunk) - The fair value of success payment liabilities is highly sensitive to the company's stock price and market capitalization. A hypothetical **20% increase** in market capitalization as of June 30, 2025, would have increased the related Q2 expense by **$1.9 million**[162](index=162&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[166](index=166&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[167](index=167&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) A putative class action lawsuit filed March 21, 2025, alleges false and misleading statements, which the company intends to vigorously defend - A putative class action complaint was filed against the company and its executives on March 21, 2025, alleging false and misleading statements concerning the company's business, operations, and prospects[170](index=170&type=chunk) - The lawsuit, captioned *In re Sana Biotechnology, Inc. Securities Litigation*, covers the period from March 17, 2023, to November 4, 2024. The company intends to defend itself vigorously[170](index=170&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) Significant risks include unproven cell engineering platforms, funding needs, third-party reliance, intellectual property, regulatory hurdles, and limited operating history [Risks Related to Our Business and Industry](index=49&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) - The company's ex vivo and in vivo cell engineering platforms are based on novel, unproven technologies, which makes predicting development time, cost, and ultimate success difficult and exposes the company to unforeseen risks[175](index=175&type=chunk) - The company may not realize the expected benefits from acquired or in-licensed technologies, such as the fusogen platform from Cobalt, due to portfolio reprioritizations and development challenges[185](index=185&type=chunk)[187](index=187&type=chunk) - Negative public opinion and increased regulatory scrutiny of gene editing and cell engineering technologies could damage public perception and hinder the ability to conduct business or obtain approvals[213](index=213&type=chunk) [Risks Related to the Development and Clinical Testing of Our Product Candidates](index=61&type=section&id=Risks%20Related%20to%20the%20Development%20and%20Clinical%20Testing%20of%20Our%20Product%20Candidates) - Clinical drug development is a lengthy, expensive, and uncertain process; positive results in early studies may not be predictive of future trial success[215](index=215&type=chunk)[217](index=217&type=chunk) - The manufacture of product candidates is complex and may encounter difficulties in production and scaling, which could delay or halt supply for clinical trials or commercial sale[248](index=248&type=chunk) - The supply chain for materials is subject to risks, including reliance on sole-source vendors and potential shortages of key reagents, consumables, and equipment, which could disrupt manufacturing[253](index=253&type=chunk)[256](index=256&type=chunk) [Risks Related to Our Dependence on Third Parties](index=76&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) - The company relies on a limited number of Contract Development and Manufacturing Organizations (CDMOs) for manufacturing, which poses risks related to capacity, regulatory compliance (cGMP), and potential production delays[263](index=263&type=chunk)[264](index=264&type=chunk) - The company depends on third parties like CROs and clinical trial sites to conduct studies; failure of these parties to perform their duties or comply with regulations (GCP) could compromise data and delay programs[272](index=272&type=chunk) [Risks Related to Intellectual Property and Information Technology](index=81&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20and%20Information%20Technology) - The company's success depends on protecting its intellectual property, but it may not be able to protect these rights in all countries, and enforcement is costly and uncertain[276](index=276&type=chunk) - The company depends on intellectual property licensed from third parties (e.g., Harvard, Cobalt); breaching these agreements could result in the loss of significant rights[280](index=280&type=chunk)[281](index=281&type=chunk) - Internal computer systems and those of third-party vendors are vulnerable to security breaches and cyberattacks, which could compromise confidential information, including trade secrets and clinical trial data[322](index=322&type=chunk)[323](index=323&type=chunk) [Risks Related to Our Regulatory Environment](index=102&type=section&id=Risks%20Related%20to%20Our%20Regulatory%20Environment) - The regulatory approval process for biopharmaceutical products is lengthy, expensive, and unpredictable, and the company has no experience submitting a Biologics License Application (BLA)[336](index=336&type=chunk)[338](index=338&type=chunk) - Even if approved, products will be subject to ongoing regulatory review, post-marketing requirements, and potential restrictions, which could be costly and limit commercialization[351](index=351&type=chunk) - Recent and future healthcare legislation, such as the Inflation Reduction Act (IRA), could increase costs, affect drug pricing, and negatively impact the company's ability to generate revenue[364](index=364&type=chunk)[367](index=367&type=chunk) [Risks Related to Our Limited Operating History, Financial Condition, and Need for Additional Capital](index=124&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History,%20Financial%20Condition,%20and%20Need%20for%20Additional%20Capital) - The company will require substantial additional funding to finance operations and could be forced to delay, reduce, or eliminate programs if unable to raise capital on acceptable terms[399](index=399&type=chunk) - The company has a history of significant losses (**$1.7 billion** accumulated deficit as of June 30, 2025) and may never achieve or maintain profitability[408](index=408&type=chunk) - Success payment and contingent consideration obligations to Harvard and Cobalt could result in stockholder dilution, drain cash resources, and cause significant fluctuations in reported financial results[413](index=413&type=chunk)[416](index=416&type=chunk) [Risks Related to Commercialization of Our Product Candidates](index=132&type=section&id=Risks%20Related%20to%20Commercialization%20of%20Our%20Product%20Candidates) - The biotechnology industry is highly competitive, and competitors with greater resources may develop and commercialize products more successfully or render the company's technology obsolete[419](index=419&type=chunk)[420](index=420&type=chunk) - The addressable patient populations for the company's product candidates may be smaller than estimated, limiting market opportunity[424](index=424&type=chunk) - The company currently lacks marketing, sales, and distribution infrastructure and faces substantial risks whether it chooses to build its own or outsource these functions[427](index=427&type=chunk) [Risks Related to Ownership of Our Common Stock](index=135&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) - As of June 30, 2025, principal stockholders and management owned approximately **59.9%** of the company's stock, allowing them to exert significant control over corporate matters[434](index=434&type=chunk) - Future sales of securities by the company or existing stockholders could cause the stock price to fall due to dilution and market pressure[435](index=435&type=chunk)[438](index=438&type=chunk) - Provisions in the company's charter and bylaws, along with Delaware law, could discourage or prevent a change in control, potentially depressing the market price of the stock[440](index=440&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=153&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any unregistered securities during the three months ended June 30, 2025 - The company did not sell any unregistered securities in the three months ended June 30, 2025[479](index=479&type=chunk) [Defaults Upon Senior Securities](index=153&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable [Mine Safety Disclosures](index=153&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=153&type=section&id=Item%205.%20Other%20Information) During the last fiscal quarter, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter[482](index=482&type=chunk) [Exhibits](index=154&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's certificate of incorporation, bylaws, forms of stock and warrant certificates, a license agreement amendment, a sales agreement, and officer certifications

[AMENDMENT NO. 10 TO TERM LOAN CREDIT AGREEMENT](index=1&type=section&id=AMENDMENT%20NO.%2010%20TO%20TERM%20LOAN%20CREDIT%20AGREEMENT) [Preliminary Statements](index=1&type=section&id=PRELIMINARY%20STATEMENTS) This section introduces Amendment No. 10 to the Term Loan Credit Agreement, identifying parties and the Borrower's requested amendments - Amendment No. 10, dated **August 10, 2025**, is between **Rumbleon, Inc.** (Borrower), Subsidiary Guarantors, **Oaktree Fund Administration, LLC** (Agent), and Lenders[2](index=2&type=chunk) - It amends the Term Loan Credit Agreement dated August 31, 2021, which had already been amended **nine times** previously[4](index=4&type=chunk) - The Borrower requested amendments to certain provisions of the Existing Credit Agreement, and Lenders agreed[5](index=5&type=chunk) [Section 1. Definitions](index=1&type=section&id=Section%201.%20Definitions) Capitalized terms in Amendment No. 10, if undefined, retain meanings from the Existing Credit Agreement as modified - Capitalized terms not defined in this Amendment retain their meanings from the Existing Credit Agreement, as amended[6](index=6&type=chunk) [Section 2. Amendments to Existing Credit Agreement](index=1&type=section&id=Section%202.%20Amendments%20to%20Existing%20Credit%20Agreement) This section details specific changes to the Existing Credit Agreement, including textual modifications and new Exhibits - The Existing Credit Agreement is amended by deleting stricken text and adding double-underlined text as detailed in Exhibit A[7](index=7&type=chunk) - New Exhibits N and O are added to the Existing Credit Agreement as Exhibit B and Exhibit C, respectively[8](index=8&type=chunk) [Section 3. Conditions of Effectiveness](index=2&type=section&id=Section%203.%20Conditions%20of%20Effectiveness) Section 2's effectiveness requires execution, fee payment, Q4 2024 financials, a **$10,000,000** capital raise commitment, and a solvency certificate - Effectiveness of Section 2 is conditional on the "Tenth Amendment Effective Date" when specific conditions are met[9](index=9&type=chunk) - Conditions include execution of the Amendment by all parties, payment of all required fees and expenses by **August 10, 2025**[9](index=9&type=chunk)[10](index=10&type=chunk) - Loan Parties must deliver quarterly financial statements for the fiscal quarter ending **December 31, 2024**[11](index=11&type=chunk) - Administrative Agent must receive a commitment letter for a capital raise of at least **$10,000,000** through common equity or subordinated debt[12](index=12&type=chunk) - A Responsible Officer of the Borrower must certify the solvency of the Borrower and its Subsidiaries, consolidated, before and after the transactions[13](index=13&type=chunk) [Section 4. Post-Closing Covenants](index=2&type=section&id=Section%204.%20Post-Closing%20Covenant) Borrower must fulfill post-closing covenants by **August 26, 2025**, including capital raise, loan repayment, and lease/warrant amendments - Borrower must consummate the Tenth Amendment Capital Raise Transactions and receive at least **$10,000,000** by **August 26, 2025**[15](index=15&type=chunk) - Borrower must repay an aggregate of not less than **$20,000,000** of loans by **August 26, 2025**, with at least **$10,000,000** from the capital raise[16](index=16&type=chunk)[17](index=17&type=chunk) - Lease agreements must be extended to **August 31, 2034**, and the Floor Plan Facility Agreement's "Commitment Termination Date" extended to **September 30, 2029**, by **August 26, 2025**[18](index=18&type=chunk) - Warrant Agreements must be amended by **August 26, 2025**, to reset the strike price at a **25%** premium to the 30-day post-announcement VWAP of Class B Common Stock and extend the term to **five years** from the Tenth Amendment Effective Date[19](index=19&type=chunk) - Failure to comply with these covenants constitutes an immediate Event of Default[14](index=14&type=chunk) [Section 5. Representations and Warranties](index=3&type=section&id=Section%205.%20Representations%20and%20Warranties) Borrower warrants due authorization, legal compliance, no continuing default, and accuracy of Credit Agreement representations - Borrower represents that the Amendment's execution and performance are duly authorized and do not violate organizational documents, material contractual obligations, or applicable law[20](index=20&type=chunk) - The Amendment constitutes a legal, valid, and binding obligation of the Borrower[21](index=21&type=chunk) - After the Tenth Amendment Effective Date, no Default or Event of Default has occurred and is continuing[22](index=22&type=chunk) - Representations and warranties in Article V of the Credit Agreement are true and correct in all material respects as of the Tenth Amendment Effective Date[23](index=23&type=chunk) [Section 6. Reference to and Effect on the Existing Credit Agreement and the Loan Documents](index=4&type=section&id=Section%206.%20Reference%20to%20and%20Effect%20on%20the%20Existing%20Credit%20Agreement%20and%20the%20Loan%20Documents) Amendment No. 10 ratifies existing Loan Documents, constitutes a Loan Document itself, and is not a novation - This Amendment does not limit, impair, or waive rights under the Existing Credit Agreement or other Loan Documents, which are ratified and affirmed[25](index=25&type=chunk) - The Collateral Documents continue to secure all Loan Party obligations[25](index=25&type=chunk) - This Amendment constitutes a Loan Document from the Tenth Amendment Effective Date[26](index=26&type=chunk) - The amendment is not a novation, and no Default or Event of Default exists after the Tenth Amendment Effective Date[25](index=25&type=chunk) [Section 7. Execution in Counterparts](index=4&type=section&id=Section%207.%20Execution%20in%20Counterparts) The Amendment may be executed in multiple counterparts, with electronic delivery of signatures being effective - The Amendment may be executed in counterparts, and electronic signatures (e.g., .pdf) are effective[27](index=27&type=chunk) [Section 8. Notices](index=4&type=section&id=Section%208.%20Notices) All communications and notices for this Amendment must follow procedures in Section 10.02 of the Credit Agreement - Notices and communications are governed by Section 10.02 of the Credit Agreement[28](index=28&type=chunk) [Section 9. Severability](index=4&type=section&id=Section%209.%20Severability) Invalid Amendment provisions do not affect others; parties will negotiate replacements for similar economic effect - If any provision is illegal, invalid, or unenforceable, the rest of the Amendment remains valid, and parties will negotiate replacements[29](index=29&type=chunk) [Section 10. Successors](index=5&type=section&id=Section%2010.%20Successors) This Amendment's provisions bind and benefit parties and their permitted successors and assigns per Section 10.07 of the Credit Agreement - Provisions are binding on and benefit parties and their permitted successors and assigns[30](index=30&type=chunk) [Section 11. Governing Law, Jurisdiction, Service of Process; Waiver of Right to Trial by Jury](index=5&type=section&id=Section%2011.%20Governing%20Law,%20Jurisdiction,%20Service%20of%20Process;%20Waiver%20of%20Right%20to%20Trial%20by%20Jury) Sections 10.14 and 10.15 of the Credit Agreement, covering governing law, jurisdiction, and jury trial waiver, are incorporated - Sections 10.14 and 10.15 of the Credit Agreement (governing law, jurisdiction, service of process, jury trial waiver) are incorporated by reference[31](index=31&type=chunk) [Section 12. Required Lenders](index=5&type=section&id=Section%2012.%20Required%20Lenders) The Agent notifies the Borrower that Lenders party to this Amendment represent all Lenders under the Existing Credit Agreement - The Lenders party to this Amendment represent all Lenders under the Existing Credit Agreement[31](index=31&type=chunk) [Section 13. Change of Name and Address for Notices](index=5&type=section&id=Section%2013.%20Change%20of%20Name%20and%20Address%20for%20Notices) Borrower notifies of name change to **RideNow Group, Inc.**, symbol to **RDNW**, and new notice address, effective **August 13, 2025** - Borrower intends to change its name to "**RideNow Group, Inc.**" and its Nasdaq trading symbol to "**RDNW**", effective **August 13, 2025**[32](index=32&type=chunk) - A new address and telephone number for notices are designated, effective **August 13, 2025**[32](index=32&type=chunk) [TERM LOAN CREDIT AGREEMENT (AS AMENDED)](index=56&type=section&id=TERM%20LOAN%20CREDIT%20AGREEMENT) [Table of Contents](index=57&type=section&id=Table%20of%20Contents) This section provides the Term Loan Credit Agreement's table of contents, outlining its structure and guiding detailed provisions - The Table of Contents lists Articles I through X, covering definitions, commitments, taxes, conditions, representations, covenants, events of default, administrative agent roles, and miscellaneous provisions[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - It also details various schedules (e.g., Collateral Documents, Guarantors, Litigation) and exhibits (e.g., Committed Loan Notice, Term Note, Compliance Certificate, Cash Flow Projection)[100](index=100&type=chunk)[101](index=101&type=chunk) [ARTICLE I - Definitions and Accounting Terms](index=64&type=section&id=ARTICLE%20I%20Definitions%20and%20Accounting%20Terms) This article establishes foundational terminology and accounting principles for the Credit Agreement, defining terms and setting rules for consistent application - Defines key terms such as "Adjusted Term SOFR," "Administrative Agent," "Affiliate," "Applicable Rate," "Benchmark Replacement," "Consolidated EBITDA," "Consolidated Total Net Debt," "Event of Default," "Loan Parties," "Material Adverse Effect," "Permitted Liens," "Required Lenders," and "Term Loans"[113](index=113&type=chunk)[114](index=114&type=chunk)[117](index=117&type=chunk)[124](index=124&type=chunk)[137](index=137&type=chunk)[182](index=182&type=chunk)[193](index=193&type=chunk)[215](index=215&type=chunk)[307](index=307&type=chunk)[346](index=346&type=chunk)[371](index=371&type=chunk)[420](index=420&type=chunk) - Establishes accounting principles (GAAP or IFRS election), rounding rules for financial ratios, and guidelines for currency conversions[448](index=448&type=chunk)[450](index=450&type=chunk)[452](index=452&type=chunk)[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk) Applicable Rate Changes (on and after Tenth Amendment Effective Date) | Loan Type | Rate (Prior to Tenth Amendment) | Rate (On and after Tenth Amendment) | | :---------- | :------------------------------ | :---------------------------------- | | SOFR Loans | **8.25%** | **7.75%** | | Base Rate Loans | **7.25%** | **6.75%** | Floor Rate Changes (on and after Tenth Amendment Effective Date) | Period | Floor Rate | | :----- | :--------- | | Prior to Tenth Amendment Effective Date | **1.00%** | | On and after Tenth Amendment Effective Date | **3.00%** | [ARTICLE II - The Commitments and Credit Extensions](index=127&type=section&id=ARTICLE%20II%20The%20Commitments%20and%20Credit%20Extensions) This article details loan issuance, interest rates, prepayments, commitment termination, and defaulting lenders, ensuring clarity on funding and repayment - Initial Term Loans are a single borrowing, not reborrowable. Delayed Draw Term Loans can be made up to **five times**, also not reborrowable, and become part of the Initial Term Loans upon funding[464](index=464&type=chunk)[465](index=465&type=chunk) - Optional prepayments of any Class of Term Loans are permitted without premium or penalty (except as per Section 2.03(e)), with specific notice requirements[473](index=473&type=chunk)[474](index=474&type=chunk) - Mandatory prepayments are required for Excess Cash Flow (**50%** if > **$2.5M**), Net Cash Proceeds from asset Dispositions/Casualty Events (**100%** if > **$250K** single or **$1M** aggregate), and Net Cash Proceeds from certain Indebtedness/Equity Issuances[476](index=476&type=chunk)[478](index=478&type=chunk)[486](index=486&type=chunk) - A Call Premium (Make-Whole Amount or Repayment Fee) is applicable for certain prepayments or accelerations, with rates varying based on the timing relative to the Make-Whole Expiry Date[502](index=502&type=chunk)[503](index=503&type=chunk) - Unused Delayed Draw Term Commitments terminate on the earlier of **18 months** after Closing Date or specific termination events[505](index=505&type=chunk) [ARTICLE III - Taxes, Increased Costs Protection and Illegality](index=145&type=section&id=ARTICLE%20III%20Taxes,%20Increased%20Costs%20Protection%20and%20Illegality) This article addresses tax implications, increased costs, and legal changes, outlining Borrower indemnification, Lender compensation, and benchmark rate replacement - Borrower indemnifies Agents and Lenders for "Indemnified Taxes" and "Other Taxes," ensuring net payments are received[539](index=539&type=chunk)[540](index=540&type=chunk) - Lenders can request additional compensation for increased costs or reduced returns due to changes in law affecting loans or capital adequacy[552](index=552&type=chunk)[553](index=553&type=chunk) - If a benchmark rate (e.g., Term SOFR) becomes unavailable or unlawful, the Administrative Agent and Borrower may amend the agreement to replace it with a "Benchmark Replacement" and make "Conforming Changes"[569](index=569&type=chunk)[571](index=571&type=chunk) [ARTICLE IV - Conditions Precedent to Credit Extensions](index=155&type=section&id=ARTICLE%20IV%20Conditions%20Precedent%20to%20Credit%20Extensions) This article specifies mandatory conditions for credit extensions, including Loan Document execution, fee payment, acquisition, financial statements, and accurate representations - Conditions for the Closing Date include executed Loan Documents, payment of fees, consummation of the Equity Contribution (**$170M** minimum) and Acquisition, delivery of audited/unaudited financial statements, and true/correct Specified Acquisition Agreement Representations and Specified Representations[577](index=577&type=chunk)[578](index=578&type=chunk)[579](index=579&type=chunk)[580](index=580&type=chunk)[582](index=582&type=chunk)[583](index=583&type=chunk) - Conditions for subsequent Delayed Draw Term Loans include true/correct representations and warranties (Specified Representations for Permitted Acquisitions), no Default (no Event of Default for Permitted Acquisitions), receipt of a Credit Extension Request, Consolidated Total Net Leverage Ratio not exceeding **2.50:1.00** (Pro Forma Basis), and use of proceeds for Permitted Acquisitions/investments[586](index=586&type=chunk)[588](index=588&type=chunk)[589](index=589&type=chunk)[590](index=590&type=chunk) [ARTICLE V - Representations and Warranties](index=158&type=section&id=ARTICLE%20V%20Representations%20and%20Warranties) This article contains comprehensive representations and warranties by the Borrower regarding legal, financial, and operational standing, including solvency and loan proceeds - Borrower warrants its legal existence, power, and authority, and compliance with all applicable laws (including USA PATRIOT Act and anti-money laundering laws)[596](index=596&type=chunk) - Financial statements are presented fairly in all material respects, and no Material Adverse Effect has occurred since the most recent audited financial statement[600](index=600&type=chunk)[601](index=601&type=chunk) - Borrower and its Subsidiaries are Solvent on a consolidated basis after giving effect to the Transaction[617](index=617&type=chunk) - Proceeds of Initial Term Loans are for Transactions and upfront fees; Incremental Facility proceeds for working capital, acquisitions, investments, and general corporate purposes; Delayed Draw Term Loans for Permitted Acquisitions and earn-outs[619](index=619&type=chunk)[620](index=620&type=chunk) - No Covered Entity or Covered Entity Controlling Person is a Sanctioned Person, and proceeds will not be used in violation of Anti-Terrorism Laws or FCPA[621](index=621&type=chunk)[622](index=622&type=chunk) [ARTICLE VI - Affirmative Covenants](index=164&type=section&id=ARTICLE%20VI%20Affirmative%20Covenants) This article outlines the Borrower's ongoing positive obligations, including financial reporting, legal compliance, security interests, loan proceeds, and critical milestones - Borrower must deliver audited annual financial statements (within **120 days**) and unaudited quarterly financial statements (within **60 days**), along with Compliance Certificates and management's discussion and analysis[626](index=626&type=chunk)[627](index=627&type=chunk)[631](index=631&type=chunk) - Monthly cash reports and Cash Flow Projections (with variance reports) are required, commencing after the Tenth Amendment Effective Date[629](index=629&type=chunk)[630](index=630&type=chunk) - Borrower must ensure the Collateral and Guarantee Requirement is satisfied, including pledging Equity Interests and granting perfected Liens on assets[645](index=645&type=chunk)[646](index=646&type=chunk) - Borrower must use commercially reasonable best efforts to dispose of "Specified Property" by **December 31, 2023**, and use Net Cash Proceeds to prepay loans[665](index=665&type=chunk) - Borrower must consummate a Rights Offering by **December 1, 2023**, to raise at least **$100,000,000** and use Net Cash Proceeds to prepay loans[666](index=666&type=chunk) - Borrower must deliver a "no outs" commitment letter for a capital raise of at least **$30,000,000** by **December 1, 2024**, with specific equity and floor plan financing components[671](index=671&type=chunk)[672](index=672&type=chunk) - Refinancing Commitment Milestones require commencing a refinancing process and receiving a bona fide offer by **September 30, 2026**, and full repayment of outstanding Loans by **November 30, 2026**[675](index=675&type=chunk) [ARTICLE VII - Negative Covenants](index=176&type=section&id=ARTICLE%20VII%20Negative%20Covenants) This article imposes strict limitations on the Borrower, restricting Liens, Investments, Indebtedness, corporate changes, asset dispositions, and restricted payments - Prohibits Liens except for permitted categories, including those under Loan Documents, existing Liens, tax Liens, purchase money Liens, and Liens securing Floor Plan Financings[677](index=677&type=chunk)[678](index=678&type=chunk)[679](index=679&type=chunk)[680](index=680&type=chunk)[681](index=681&type=chunk) - Restricts Investments to specified categories, including Cash Equivalents, intercompany investments, Permitted Acquisitions (subject to conditions), and limited other investments[682](index=682&type=chunk)[683](index=683&type=chunk)[684](index=684&type=chunk)[685](index=685&type=chunk)[686](index=686&type=chunk) - Limits Indebtedness to specific types, such as Loan Document Indebtedness, Permitted Refinancings, certain Guarantee Obligations, Floor Plan Financings, and the Convertible Notes (with specific conditions)[688](index=688&type=chunk)[689](index=689&type=chunk)[690](index=690&type=chunk)[691](index=691&type=chunk)[692](index=692&type=chunk) - Restricts fundamental changes (mergers, liquidations) and dispositions of assets, with exceptions for intercompany transactions, Permitted Acquisitions, and the 2023 Specified Property Disposition[696](index=696&type=chunk)[697](index=697&type=chunk)[698](index=698&type=chunk) - Limits Restricted Payments (dividends, share repurchases) to specific exceptions, including payments to the Borrower/Restricted Subsidiaries, equity issuances, and limited repurchases for employees[699](index=699&type=chunk)[700](index=700&type=chunk)[701](index=701&type=chunk) - Prohibits transactions with Affiliates unless on arm's-length terms or specifically permitted[702](index=702&type=chunk) - Restricts prepayments of "Specified Debt" (including Convertible Notes) with exceptions for Permitted Refinancings and limited other prepayments based on leverage ratios[704](index=704&type=chunk) Maximum Consolidated Total Net Leverage Ratio | Four Fiscal Quarters Ending | Maximum Consolidated Total Net Leverage Ratio | | :-------------------------- | :------------------------------------------ | | December 31, 2023 | **5.50 to 1.00** |\ | March 31, 2024 | **5.00 to 1.00** |\ | June 30, 2024 | **5.50 to 1.00** |\ | September 30, 2024 | **5.50 to 1.00** |\ | December 31, 2024 | **9.50 to 1.00** |\ | March 31, 2025 | **9.50 to 1.00** |\ | June 30, 2025 | **7.00 to 1.00** |\ | September 30, 2025 | **6.75 to 1.00** |\ | December 31, 2025 | **6.50 to 1.00** |\ | March 31, 2026 | **6.50 to 1.00** |\ | June 30, 2026 | **6.25 to 1.00** |\ | September 30, 2026 | **6.00 to 1.00** |\ | December 31, 2026 | **5.75 to 1.00** |\ | March 31, 2027 | **5.50 to 1.00** |\ | June 30, 2027 | **5.25 to 1.00** | Maximum Consolidated Senior Secured Net Leverage Ratio | Four Fiscal Quarters Ending | Maximum Consolidated Senior Secured Net Leverage Ratio | | :-------------------------- | :--------------------------------------------------- | | December 31, 2023 | **5.50 to 1.00** |\ | March 31, 2024 | **5.00 to 1.00** |\ | June 30, 2024 | **5.00 to 1.00** |\ | September 30, 2024 | **5.00 to 1.00** |\ | December 31, 2024 | **9.00 to 1.00** |\ | March 31, 2025 | **9.00 to 1.00** |\ | June 30, 2025 | **6.75 to 1.00** |\ | September 30, 2025 | **6.50 to 1.00** |\ | December 31, 2025 | **6.25 to 1.00** |\ | March 31, 2026 | **6.25 to 1.00** |\ | June 30, 2026 | **6.00 to 1.00** |\ | September 30, 2026 | **5.75 to 1.00** |\ | December 31, 2026 | **5.50 to 1.00** |\ | March 31, 2027 | **5.25 to 1.00** |\ | June 30, 2027 | **5.00 to 1.00** | Minimum Liquidity Requirements (On and after Tenth Amendment Effective Date) | Calendar Months Ending | Minimum Liquidity | | :--------------------- | :---------------- | | August 31, 2025 - November 30, 2025 | **$20,000,000** | | December 31, 2025 - February 28, 2026 | **$20,000,000** | | March 31, 2026 - May 31, 2026 | **$22,000,000** | | June 30, 2026 - August 31, 2026 | **$24,000,000** | | September 30, 2026 - November 30, 2026 | **$26,000,000** | | December 31, 2026 - February 28, 2027 | **$28,000,000** | | March 31, 2027 - August 31, 2027 | **$30,000,000** | - Prohibits engaging in any other form of consumer warehouse lending outside of the existing Consumer Warehouse Facility[719](index=719&type=chunk) [ARTICLE VIII - Events of Default and Remedies](index=197&type=section&id=ARTICLE%20VIII%20Events%20of%20Default%20and%20Remedies) This article defines events of default, specifies remedies for Agents and Lenders, including loan acceleration, and outlines a "Cure Right" for financial defaults - Events of Default include failure to pay principal (when due) or interest/other amounts (within **5 Business Days**), breach of specific covenants (e.g., financial statements, capital raise, Article VII), incorrect representations, cross-default on Indebtedness > $Threshold Amount, insolvency proceedings, inability to pay debts, judgments > $Threshold Amount, invalidity of Collateral Documents, Change of Control, ERISA Events, and failure to meet Refinancing Commitment Milestones[721](index=721&type=chunk)[722](index=722&type=chunk)[723](index=723&type=chunk)[724](index=724&type=chunk)[725](index=725&type=chunk) - Upon an Event of Default, the Administrative Agent (at Required Lenders' request) can terminate commitments, accelerate all outstanding loans and other obligations (including Call Premium)[726](index=726&type=chunk) - A "Specified Event of Default" (including bankruptcy/insolvency) automatically triggers the Call Premium, which is deemed liquidated damages[727](index=727&type=chunk)[728](index=728&type=chunk) - Borrower has a "Cure Right" for Financial Covenant Defaults by making a Specified Cure Equity Contribution or receiving Specified Cure Debt Proceeds within a "Cure Period," which increases Consolidated EBITDA or Liquidity for recalculation[734](index=734&type=chunk)[735](index=735&type=chunk) - Limitations on Cure Right: at least **two fiscal quarters** without exercise in any four consecutive quarters, not more than **four times** during the agreement term, and specific rules for applying cure amounts to leverage vs. liquidity[738](index=738&type=chunk) [ARTICLE IX - Administrative Agent and Other Agents](index=203&type=section&id=ARTICLE%20IX%20Administrative%20Agent%20and%20Other%20Agents) This article defines the roles, responsibilities, and protections for the Administrative Agent and Collateral Agent, covering appointment, liability, and erroneous payments - Lenders irrevocably appoint and authorize the Administrative Agent to act on their behalf under Loan Documents, including as collateral agent for Liens on Collateral[741](index=741&type=chunk)[742](index=742&type=chunk) - Agents are not liable for actions taken or omitted (except for gross negligence/willful misconduct) and can rely on information and advice[745](index=745&type=chunk)[746](index=746&type=chunk) - Lenders indemnify Agent-Related Persons for Indemnified Liabilities (unless due to gross negligence/willful misconduct)[751](index=751&type=chunk) - The Administrative Agent may resign, with a successor appointed by Required Lenders (with Borrower's consent outside of Event of Default)[753](index=753&type=chunk) - Collateral Liens are automatically released upon full payment of Obligations, transfer of property, or release of a Guarantor under permitted conditions[759](index=759&type=chunk) - Provisions for handling "Erroneous Payments" ensure such payments remain the property of the Administrative Agent and do not discharge Borrower's obligations, with mechanisms for recovery and subrogation[769](index=769&type=chunk)[770](index=770&type=chunk)[772](index=772&type=chunk)[773](index=773&type=chunk) [ARTICLE X - Miscellaneous](index=213&type=section&id=ARTICLE%20X%20Miscellaneous) This article contains general provisions governing the Credit Agreement, including amendments, waivers, notices, indemnification, assignments, governing law, and fiduciary responsibility - Amendments or waivers generally require written consent of Required Lenders and the Borrower, with specific actions requiring consent of all affected Lenders (e.g., extending maturity, reducing principal/interest)[778](index=778&type=chunk)[779](index=779&type=chunk) - Borrower indemnifies Indemnitees for losses, liabilities, damages, claims, and expenses related to the Loan Documents and transactions, with exceptions for gross negligence, bad faith, or willful misconduct[796](index=796&type=chunk) - Lenders can assign rights to "Eligible Assignees" or sell "Participations," subject to conditions, including restrictions on assignments to natural persons or "Specified Competitors"[800](index=800&type=chunk)[801](index=801&type=chunk)[807](index=807&type=chunk) - Governing law is **New York State**, with specific carve-outs for **Delaware law** regarding the Acquisition Agreement. Parties waive the right to trial by jury[821](index=821&type=chunk)[824](index=824&type=chunk) - Borrower acknowledges that the Administrative Agent and Lenders act solely as principals and have no advisory or fiduciary responsibility[832](index=832&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | | --- | --- | --- | | Common Stock, par value $0.0001 per share | ATRA | The Nasdaq Stock Market LLC | ☒ 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 tr ...

PART I—FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited financial statements show discontinued China operations, reduced net loss for continuing operations, and substantial doubt about going concern without the pending sale Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $23,367 | $50,482 | | Total current assets | $162,322 | $196,509 | | Total assets | $178,055 | $214,525 | | **Liabilities & Deficit** | | | | Total current liabilities | $155,895 | $133,306 | | Senior secured term loan facilities, non-current | $0 | $73,092 | | Total liabilities | $359,085 | $398,160 | | Total stockholders' deficit | ($222,997) | ($225,602) | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $1,348 | $998 | $4,088 | $26,363 | | Research and development | $5,865 | $32,360 | $15,040 | $68,848 | | Selling, general and administrative | $7,057 | $14,906 | $15,164 | $31,622 | | Loss from continuing operations | ($13,683) | ($47,095) | ($30,449) | ($96,141) | | Income from discontinued operations, net of tax | $6,080 | $31,551 | $27,485 | $47,664 | | Net loss | ($7,603) | ($15,544) | ($2,964) | ($48,477) | | Net loss per share - basic and diluted | ($1.88) | ($3.89) | ($0.73) | ($12.19) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $15,401 | ($99,157) | | Net cash provided by (used in) investing activities | ($29) | $123,515 | | Net cash used in financing activities | ($97) | ($133) | | Net increase in cash and cash equivalents | $17,663 | $27,026 | - The company has determined there is **substantial doubt about its ability to continue as a going concern** within 12 months, as it may not have sufficient liquidity for U.S. operations or be able to comply with its debt covenant without completing the sale of FibroGen International or raising additional capital[39](index=39&type=chunk) - On February 20, 2025, FibroGen agreed to sell all its roxadustat assets in China (FibroGen International) to AstraZeneca, with this transaction treated as a **discontinued operation** and related assets and liabilities classified as **'held for sale'**[31](index=31&type=chunk)[36](index=36&type=chunk)[47](index=47&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic focus on FG-3246 and roxadustat, noting reduced operating expenses and critical dependence on the China business sale for liquidity - The company's strategic focus is on developing **FG-3246**, a first-in-class ADC for metastatic castration-resistant prostate cancer (mCRPC), with a **Phase 2 study anticipated to start in Q3 2025**[137](index=137&type=chunk) - FibroGen had a **positive Type-C meeting with the FDA in July 2025** and reached alignment on key elements for a **proposed Phase 3 study of roxadustat for anemia associated with lower-risk myelodysplastic syndromes (MDS)**[139](index=139&type=chunk)[156](index=156&type=chunk) Operating Costs and Expenses Comparison (in thousands) | Expense Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of goods sold | $337 | $21,483 | ($21,146) | (98)% | | Research and development | $15,040 | $68,848 | ($53,808) | (78)% | | Selling, general and administrative | $15,164 | $31,622 | ($16,458) | (52)% | | **Total operating costs and expenses** | **$31,060** | **$121,953** | **($90,893)** | **(75)%** | - The **significant decrease in operating expenses** for H1 2025 compared to H1 2024 was primarily driven by **lower employee-related costs** from a reduction in force, **termination of pamrevlumab programs**, and a **one-time $21.1 million cost of goods sold** in 2024 related to the AstraZeneca U.S./RoW agreement termination[141](index=141&type=chunk)[151](index=151&type=chunk)[206](index=206&type=chunk) - The company's liquidity is **critically dependent on the sale of its China operations**, as without completing the sale or raising additional capital, FibroGen will **not have sufficient funds for U.S. operations for the next 12 months** and will **violate its debt covenant**, raising **substantial doubt about its ability to continue as a going concern**[238](index=238&type=chunk)[414](index=414&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, FibroGen is not required to provide quantitative and qualitative disclosures about market risk - As a **smaller reporting company** defined in Rule 12b-2 of the Exchange Act, FibroGen is **not required to provide the information for this item**[244](index=244&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were **effective at the reasonable assurance level** as of June 30, 2025[246](index=246&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[247](index=247&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions, with no material accruals as of June 30, 2025, due to unestimable outcomes - The company did not have any **material accruals** for active legal actions as of June 30, 2025, because the outcomes could not be predicted or reasonably estimated[250](index=250&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including dependence on lead products, drug development uncertainties, reliance on collaborators, and critical going concern issues tied to the China operations sale - The company is **substantially dependent on the success of its lead products, roxadustat and FG-3246**, and failure in these programs would materially harm the business[255](index=255&type=chunk)[260](index=260&type=chunk) - A **critical risk is the company's ability to continue as a going concern**; failure to complete the sale of FibroGen International, access cash from China, or raise new capital would lead to **insufficient liquidity for U.S. operations** and a **breach of debt covenants**[379](index=379&type=chunk)[414](index=414&type=chunk) - The company faces **significant risks related to its operations in China**, including regulatory changes, geopolitical tensions, intellectual property protection challenges, and restrictions on cash repatriation, pending the sale of these operations[259](index=259&type=chunk)[380](index=380&type=chunk) - FibroGen **relies heavily on third-party collaborations** with partners like Astellas, and termination of these agreements or failure by partners to perform would adversely affect the development and commercialization of roxadustat[254](index=254&type=chunk)[306](index=306&type=chunk)[309](index=309&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=98&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - **None**[478](index=478&type=chunk) [Defaults Upon Senior Securities](index=98&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - **Not applicable**[479](index=479&type=chunk) [Mine Safety Disclosures](index=98&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - **Not applicable**[480](index=480&type=chunk) [Other Information](index=98&type=section&id=Item%205.%20Other%20Information) There were no Rule 10b5-1 trading arrangements to report for the period - **None**[481](index=481&type=chunk) [Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate amendments, financing agreements, officer certifications, and XBRL data

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) Serina Therapeutics reported **Q2 2025** results, highlighting clinical program advancements for **SER-252** and **SER-270**, supported by the **POZ Platform** and strategic financing [Second Quarter 2025 Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) Serina Therapeutics announced its **Q2 2025** financial results, highlighting significant progress in its clinical development programs, particularly for **SER-252** for Parkinson's disease and the advancement of **SER-270** for tardive dyskinesia, both leveraging its proprietary **POZ Platform** - Serina Therapeutics reported **Q2 2025** financial results and business highlights, emphasizing progress in its clinical programs for **SER-252** and **SER-270**, enabled by the **POZ Platform**[1](index=1&type=chunk)[2](index=2&type=chunk) - CEO Steve Ledger highlighted the momentum in development programs, with **SER-252** on track for clinic entry later this year and **SER-270** advancing for tardive dyskinesia, demonstrating the **POZ Platform**'s ability to create differentiated, long-acting therapies for neurological conditions with high unmet needs[2](index=2&type=chunk) [Key Business Highlights](index=1&type=section&id=Key%20Business%20Highlights) Serina Therapeutics achieved several key milestones in **Q2 2025** and shortly thereafter, including advancing **SER-270** for tardive dyskinesia, appointing a new board member with extensive neuroscience experience, securing **$5 million** in funding for **SER-252**, and initiating an "at-the-market" (ATM) offering program [Advancement of SER-270 for Tardive Dyskinesia](index=1&type=section&id=Advancement%20of%20SER-270%20for%20Tardive%20Dyskinesia) Serina advanced **SER-270**, a once-weekly injectable for tardive dyskinesia, also exploring its potential for Huntington's disease chorea - In **July 2025**, Serina advanced **SER-270** (**POZ-VMAT2i**), a once-weekly injectable therapy for tardive dyskinesia, designed to address unmet needs in TD treatment, particularly for institutional use and adherence challenges[4](index=4&type=chunk) - **SER-270** is also being considered for evaluation in Huntington's disease chorea, an indication with high need and limited long-acting injectable options[4](index=4&type=chunk) [Board Appointments](index=1&type=section&id=Board%20Appointments) Stephen Brannan, M.D., a neuroscience and neuropsychiatry drug development expert, joined Serina's Board of Directors in **May 2025** - Stephen (Steve) Brannan, M.D., with over three decades of experience in neuroscience and neuropsychiatry drug development, was appointed to Serina's Board of Directors in **May 2025**[4](index=4&type=chunk) - Dr. Brannan's experience includes leading clinical programs from early development through regulatory approval and commercialization, notably at Karuna Therapeutics where he led the clinical strategy for KarXT, contributing to Karuna's **$14 billion** acquisition[4](index=4&type=chunk) [Funding and Financing Activities](index=1&type=section&id=Funding%20and%20Financing%20Activities) Serina secured **$5 million** in funding for **SER-252** development and initiated an "at-the-market" offering program for up to **$13.3 million** in common stock - Serina secured **$5 million** in funding from strategic shareholders in **April 2025** to support the continued development of **SER-252**, its lead clinical candidate for Advanced Parkinson's disease, ahead of a planned Phase 1 clinical trial in **Q4 2025**[4](index=4&type=chunk) - In **April 2025**, Serina entered an ATM offering program to sell up to **$13.3 million** of common stock, and as of August 8, **2025**, had issued **199,562 shares** at an average price of **$5.95**, generating **$1.2 million** in net proceeds[4](index=4&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Serina Therapeutics reported increased revenues but significantly higher operating expenses, leading to a net loss for **Q2 2025** [Operating Results Summary](index=1&type=section&id=Operating%20Results%20Summary) Serina Therapeutics reported increased revenues for **Q2 2025**, primarily from grant revenues, but also saw a significant rise in operating expenses, leading to a higher operating loss compared to the same period in **2024** Q2 2025 vs Q2 2024 Operating Results (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | | Revenues | $130 | $51 | +$79 | | Operating Expenses | $5,695 | $3,917 | +$1,778 | | Loss from Operations| $(5,565)| $(3,866)| $(1,699) | - Revenues were entirely comprised of grant revenues from the **National Institutes of Health**[3](index=3&type=chunk) [Detailed Operating Expenses](index=2&type=section&id=Detailed%20Operating%20Expenses) Both Research and Development (R&D) and General and Administrative (G&A) expenses increased significantly in **Q2 2025** compared to **Q2 2024**, driven by increased research services, headcount, stock-based compensation, and financial consulting, partially offset by decreases in patent maintenance and legal fees [Research and Development (R&D) Expenses](index=2&type=section&id=Research%20and%20Development%20(R%26D)%20Expenses) R&D expenses increased significantly in **Q2 2025** due to higher outside research services, consultant spend, and increased headcount, partially offset by reduced patent maintenance R&D Expenses (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | | R&D Expenses | $3,152 | $1,594 | +$1,558 | - The increase was primarily driven by increases in outside research services, consultant spend for research programs, and an increase in salaries, payroll-related expenses, and stock-based compensation due to increased headcount[5](index=5&type=chunk) - These increases were partially offset by decreases in professional fees for patent and intellectual property maintenance and severance-related costs[5](index=5&type=chunk) [General and Administrative (G&A) Expenses](index=2&type=section&id=General%20and%20Administrative%20(G%26A)%20Expenses) G&A expenses rose in **Q2 2025** primarily due to increased stock-based compensation and financial consulting, partially offset by lower legal fees G&A Expenses (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------ | :------ | :------ | :----------- | | G&A Expenses | $2,543 | $2,323 | +$220 | - The increase was primarily due to increases in stock-based compensation expenses from new option grants and financial consulting expenses related to new platforms and software[6](index=6&type=chunk) - These increases were partially offset by a decrease in legal fees following the conclusion of post-merger compliance and reporting activities[6](index=6&type=chunk) [Other (Expense) Income, Net](index=2&type=section&id=Other%20(Expense)%20Income,%20Net) Serina reported a net other expense of **$0.9 million** in **Q2 2025**, a significant shift from a **$9.0 million** net income in **Q2 2024**, primarily due to a **$10.3 million** change in the fair value of liability classified warrants Other (Expense) Income, Net (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | | Total other (expense) income, net | $(897) | $9,043 | $(9,940) | | Change in fair value of warrants | $(956) | $9,294 | $(10,250) | - The **$9.9 million** increase in expenses was primarily attributable to a **$10.3 million** change in the fair value of liability classified warrants, partially offset by a **$0.3 million** decrease in interest expense[7](index=7&type=chunk) [Net (Loss) Income](index=2&type=section&id=Net%20(Loss)%20Income) Serina Therapeutics reported a net loss of **$6.4 million**, or **$(0.66)** per basic and diluted share, for **Q2 2025**, a significant decline from a net income of **$5.2 million**, or **$0.61** per basic share, in **Q2 2024** Net (Loss) Income (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | | Net (Loss) Income attributable to Serina | $(6,448)| $5,204 | $(11,652) | | Basic EPS | $(0.66) | $0.61 | $(1.27) | | Diluted EPS | $(0.66) | $0.51 | $(1.17) | [Liquidity and Financial Position](index=2&type=section&id=Liquidity%20and%20Financial%20Position) Serina Therapeutics held **$6.0 million** in cash and cash equivalents as of **June 30, 2025**, projected to fund operations into the **fourth quarter of 2025** [Liquidity Information](index=2&type=section&id=Liquidity%20Information) As of **June 30, 2025**, Serina Therapeutics had **$6.0 million** in cash and cash equivalents and projects this to fund operations into the **fourth quarter of 2025** Cash and Cash Equivalents (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :---------------------- | :-------------- | :---------------- | :----- | | Cash and cash equivalents | $6,041 | $3,672 | +$2,369| - The Company projects its cash and cash equivalents as of **June 30, 2025**, to fund operations into the **fourth quarter of 2025**[10](index=10&type=chunk) [Company and Platform Overview](index=2&type=section&id=Company%20and%20Platform%20Overview) Serina Therapeutics is a clinical-stage biotechnology company developing drug candidates for neurological diseases using its proprietary **POZ Platform** [About Serina Therapeutics](index=2&type=section&id=About%20Serina%20Therapeutics) Serina Therapeutics is a clinical-stage biotechnology company based in Huntsville, Alabama, focused on developing a pipeline of wholly-owned drug candidates for neurological diseases and other indications, utilizing its proprietary **POZ Platform** - Serina Therapeutics is a clinical-stage biotechnology company developing a pipeline of wholly-owned drug product candidates to treat neurological diseases and other indications[11](index=11&type=chunk) - The company is headquartered in Huntsville, Alabama, on the campus of the HudsonAlpha Institute of Biotechnology[11](index=11&type=chunk) [About the POZ Platform™](index=2&type=section&id=About%20the%20POZ%20Platform%E2%84%A2) Serina's proprietary **POZ Platform**, based on poly(2-oxazoline), is designed to optimize drug delivery by providing greater control in drug loading and precision in release rates for subcutaneous injections, aiming to improve efficacy and safety profiles of various therapeutic modalities. The platform has potential for broad applications, including a non-exclusive license agreement with Pfizer for LNP drug delivery - Serina's **POZ technology** uses a synthetic, water-soluble, low-viscosity polymer called poly(2-oxazoline) to provide greater control in drug loading and more precision in the rate of release of attached drugs delivered via subcutaneous injection[12](index=12&type=chunk) - The platform aims to improve the integrated efficacy and safety profile of multiple modalities, including small molecules, RNA-based therapeutics, and antibody-based drug conjugates (ADCs), by maintaining more desirable and stable drug levels in the blood[11](index=11&type=chunk)[12](index=12&type=chunk) - Serina intends to advance additional applications of the **POZ Platform** through out-licensing, co-development, or other partnerships, including a non-exclusive license agreement with Pfizer, Inc. for use in lipid nanoparticle drug (LNP) delivery formulations[13](index=13&type=chunk) [Pipeline Candidates](index=2&type=section&id=Pipeline%20Candidates) Serina is advancing **SER-252** for advanced Parkinson's disease and **SER-270** for tardive dyskinesia, both utilizing its **POZ Platform** for improved drug delivery [About SER-252 (POZ-apomorphine)](index=2&type=section&id=About%20SER-252%20(POZ-apomorphine)) **SER-252** (**POZ-apomorphine**) is an investigational therapy for advanced Parkinson's disease, designed to provide continuous dopaminergic stimulation and reduce motor complications - **SER-252** (**POZ-apomorphine**) is an investigational therapy designed to provide continuous dopaminergic stimulation (CDS) for advanced Parkinson's disease, which has been shown to reduce the severity of levodopa-related motor complications[14](index=14&type=chunk) - Preclinical studies indicate **SER-252**'s potential to provide CDS without skin reactions, and Serina plans to advance it to clinical testing in **2025**[14](index=14&type=chunk) [About SER-270 (POZ-VMAT2i)](index=3&type=section&id=About%20SER-270%20(POZ-VMAT2i)) **SER-270** (**POZ-VMAT2i**) is an investigational once-weekly VMAT2 inhibitor developed with the **POZ Platform** to address adherence and access challenges in tardive dyskinesia - **SER-270** (**POZ-VMAT2i**) is an investigational once-weekly VMAT2 inhibitor developed with the **POZ Platform** to address adherence and access challenges in tardive dyskinesia (TD)[15](index=15&type=chunk) - The subcutaneous formulation is designed for patients on long-acting injectable antipsychotics, those with dysphagia, and institutionalized populations, and Serina is also exploring its development for Huntington's disease chorea[16](index=16&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Serina Therapeutics' condensed consolidated balance sheets, statements of operations, and statements of cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Serina Therapeutics' balance sheet as of **June 30, 2025**, shows an increase in total assets and liabilities compared to **December 31, 2024**, with a notable increase in cash and cash equivalents and stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :-------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $6,041 | $3,672 | | Total current assets | $7,991 | $5,676 | | TOTAL ASSETS | $8,941 | $6,724 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $3,561 | $2,366 | | Warrant liability | $3,549 | $3,582 | | TOTAL LIABILITIES | $7,295 | $6,216 | | Total stockholders' equity | $1,646 | $508 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $8,941 | $6,724 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three and six months ended **June 30, 2025**, Serina Therapeutics reported increased revenues but also significantly higher operating expenses, leading to a net loss for both periods, contrasting with a net income in the prior year's three-month period Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Grant revenues | $130 | $51 | $130 | $56 | | Total operating expenses | $5,695 | $3,917 | $11,553 | $6,243 | | Loss from operations | $(5,565) | $(3,866) | $(11,423) | $(6,187) | | Total other (expense) income, net | $(897) | $9,043 | $139 | $(3,651) | | NET (LOSS) INCOME attributable to Serina | $(6,448) | $5,204 | $(11,261) | $(9,811) | | Basic EPS | $(0.66) | $0.61 | $(1.15) | $(1.74) | | Diluted EPS | $(0.66) | $0.51 | $(1.15) | $(1.74) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended **June 30, 2025**, Serina Therapeutics experienced a net cash outflow from operating activities but a significant net cash inflow from financing activities, resulting in a positive net change in cash and cash equivalents, increasing its cash balance compared to the beginning of the period Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(8,072) | $(9,586) | | Net cash used in investing activities | $(46) | $(14) | | Net cash provided by financing activities | $10,487 | $8,095 | | NET CHANGE IN CASH AND CASH EQUIVALENTS | $2,369 | $(1,505) | | Cash and cash equivalents at end of period | $6,041 | $6,114 | [Additional Information](index=3&type=section&id=Additional%20Information) This section provides important disclosures regarding forward-looking statements and contact information for investor inquiries [Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section advises readers that the release contains forward-looking statements subject to substantial risks and uncertainties, including those related to R&D, clinical trials, regulatory approvals, and financing. Actual results may differ materially, and Serina disclaims any obligation to update these statements - The release contains forward-looking statements regarding future plans, beliefs, and forecasts, which are subject to substantial risks and uncertainties that could cause actual results to differ materially[19](index=19&type=chunk) - Risks include uncertainties inherent in research and development, ability to meet clinical endpoints, regulatory approval processes, Serina's ability to continue as a going concern, and competitive developments[19](index=19&type=chunk) - Serina disclaims any intent or obligation to update these forward-looking statements, which speak only as of the date they are made[19](index=19&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) Provides contact details for investor inquiries, specifically Stefan Riley, with an email address and phone number - For inquiries, contact Stefan Riley at sriley@serinatherapeutics.com or (256) 327-9630[20](index=20&type=chunk)