UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q _________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 Delaware 85-3474065 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 5830 Granite Parkway, Suite 400 Plano, Texas 75024 (Address of principal executive offices) (Zip Code) OR ☐ TRAN ...

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[Business Highlights and Pipeline Update](index=1&type=section&id=Business%20Highlights%20and%20Pipeline%20Update) Sana reported positive clinical data for its UP421 therapy, advanced its CAR T pipeline with expected 2025 data, and secured $105 million, extending its cash runway into H2 2026 - Presented **positive 6-month clinical results** for its type 1 diabetes study (**UP421**), showing that hypoimmune-modified pancreatic islet cells transplanted without immunosuppression persist, function, and evade immune detection[1](index=1&type=chunk)[3](index=3&type=chunk) - The New England Journal of Medicine published **positive 12-week clinical results** from the **UP421** study[1](index=1&type=chunk)[3](index=3&type=chunk) - Received **positive FDA feedback** from an INTERACT meeting, increasing confidence in moving forward with the GMP master cell bank for **SC451** and filing an **Investigational New Drug (IND) application as early as 2026**[1](index=1&type=chunk)[2](index=2&type=chunk)[7](index=7&type=chunk) - Patient enrollment is ongoing for the **GLEAM trial (SC291)** for autoimmune diseases and **VIVID trial (SC262)** for B-cell malignancies, with **clinical data from both expected in 2025**[1](index=1&type=chunk)[7](index=7&type=chunk) - Plans to file an **IND for SG299** (in vivo CAR T) for a B-cell related disease **as early as 2026**[1](index=1&type=chunk)[7](index=7&type=chunk) Recent Capital Raise (July & August 2025) | Source | Gross Proceeds (Millions USD) | | :--- | :--- | | At-the-market (ATM) offering | $29.5 | | Public Equity Offering | $75.0 | | **Total** | **~$105** | [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Sana's Q2 2025 cash was $72.7 million, operating expenses decreased, and a $44.6 million impairment led to a $93.8 million GAAP net loss [GAAP Financial Results](index=2&type=section&id=GAAP%20Financial%20Results) Q2 2025 GAAP R&D and G&A expenses decreased, and a $44.6 million impairment charge resulted in a $93.8 million net loss Cash Position | Date | Cash, Cash Equivalents, and Marketable Securities (Millions USD) | | :--- | :--- | | June 30, 2025 | $72.7 | | December 31, 2024 | $152.5 | Q2 2025 vs Q2 2024 Operating Expenses (GAAP, in millions) | Expense Category | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (Millions USD) | | :--- | :--- | :--- | :--- | | Research & Development | $29.8 | $60.9 | ($31.1) | | General & Administrative | $10.3 | $16.4 | ($6.1) | - Recorded a **$44.6 million non-cash impairment** of long-lived assets in Q2 2025, primarily related to manufacturing facilities, as the company will now use CDMOs for near-term needs[9](index=9&type=chunk) Q2 2025 vs Q2 2024 Net Loss (GAAP) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | | :--- | :--- | :--- | | Net Loss | ($93.8) | ($50.3) | | Net Loss per Share | ($0.39) | ($0.21) | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Q2 2025 non-GAAP net loss was $38.9 million, a significant improvement, with year-to-date non-GAAP operating cash burn at $79.0 million Q2 2025 vs Q2 2024 Net Loss (Non-GAAP) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | | :--- | :--- | :--- | | Non-GAAP Net Loss | ($38.9) | ($74.2) | | Non-GAAP Net Loss per Share | ($0.16) | ($0.32) | YTD 2025 vs YTD 2024 Operating Cash Burn (Non-GAAP) | Period | Non-GAAP Operating Cash Burn (Millions USD) | | :--- | :--- | | Six Months Ended June 30, 2025 | ($79.0) | | Six Months Ended June 30, 2024 | ($104.6) | - **Non-GAAP measures** are used by management to exclude highly variable non-cash items, such as changes in fair value of success payments and contingent consideration, and one-time expenses like impairment charges[19](index=19&type=chunk)[20](index=20&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited Consolidated Balance Sheet and Statements of Operations for June 30, 2025, supporting reported financial results [Selected Consolidated Balance Sheet Data](index=6&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Data) As of June 30, 2025, total assets were $361.6 million, total liabilities $239.1 million, and stockholders' equity $122.6 million Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 (Thousands USD) | December 31, 2024 (Thousands USD) | | :--- | :--- | :--- | | Cash, cash equivalents, and marketable securities | $72,674 | $152,497 | | Total assets | $361,645 | $501,020 | | Total liabilities | $239,089 | $250,516 | | Total stockholders' equity | $122,556 | $250,504 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, total operating expenses were $95.0 million, resulting in a net loss of $93.8 million, or $0.39 per share Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 (Thousands USD) | Six Months Ended June 30, 2025 (Thousands USD) | | :--- | :--- | :--- | | Total operating expenses | $94,975 | $145,605 | | Loss from operations | ($94,975) | ($145,605) | | Net loss | ($93,800) | ($143,189) | | Net loss per common share | ($0.39) | ($0.60) | [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section details the reconciliation of GAAP to non-GAAP financial measures, including operating cash burn and net loss, with non-cash adjustments [Reconciliation of Non-GAAP Operating Cash Burn](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Operating%20Cash%20Burn) For the six months ended June 30, 2025, non-GAAP operating cash burn was $79.0 million, after adjustments for cash changes and financing Reconciliation to Non-GAAP Operating Cash Burn (Six Months Ended June 30, 2025, in thousands) | Line Item | Amount (Thousands USD) | | :--- | :--- | | Change in cash, cash equivalents, and marketable securities | ($79,823) | | Adjustments (Financing, Capex, etc.) | $832 | | **Operating cash burn – Non-GAAP** | **($78,991)** | [Reconciliation of Non-GAAP Net Loss](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Net%20Loss) Q2 2025 GAAP net loss of $93.8 million was adjusted for non-cash items and a $44.6 million impairment, yielding a non-GAAP net loss of $38.9 million Reconciliation to Non-GAAP Net Loss (Three Months Ended June 30, 2025, in thousands) | Line Item | Amount (Thousands USD) | | :--- | :--- | | Net loss – GAAP | ($93,800) | | Adjustment: Change in fair value of liabilities | $10,262 | | Adjustment: Impairment of long-lived assets | $44,611 | | **Net loss – Non-GAAP** | **($38,927)** |

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[Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) REPAY reported Q2 2025 revenue of $75.6 million, a slight increase, but incurred a significant net loss primarily due to a non-cash goodwill impairment, while achieving strong Free Cash Flow with a high conversion rate Q2 2025 Key Financial Metrics ($ in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $75.6M | $74.9M | +0.9% | | Gross Profit | $57.2M | $58.6M | -2.4% | | Net Loss | $(108.0)M | $(4.2)M | N/A | | Adjusted EBITDA | $31.8M | $33.7M | -5.6% | | Free Cash Flow | $22.6M | $19.3M | +17.1% | | Free Cash Flow Conversion | 71% | 57% | +14 p.p. | - The net loss in Q2 2025 was primarily driven by a non-cash goodwill impairment loss of **$103.8 million**, mainly related to the Consumer Payments segment[3](index=3&type=chunk)[10](index=10&type=chunk) [Second Quarter 2025 Business Highlights](index=1&type=section&id=Second%20Quarter%202025%20Business%20Highlights) REPAY's Q2 2025 business performance was mixed, with gross profit declines due to client losses, yet strong growth in its AP supplier network and instant funding volumes, alongside expanded partnerships - Reported and normalized gross profit declined by **2%** and **1% YoY**, respectively, due to the impact of previously announced client losses[6](index=6&type=chunk) - The AP supplier network grew to over **440,000**, an increase of approximately **47% year-over-year**[10](index=10&type=chunk) - Instant funding volumes increased by approximately **38% year-over-year**[10](index=10&type=chunk) - The company added **3 new integrated software partners**, reaching a total of **286**, and added **10 new credit unions**, for a total of **353**[10](index=10&type=chunk) [Management Commentary and Capital Allocation](index=1&type=section&id=Management%20Commentary%20and%20Capital%20Allocation) CEO John Morris emphasized strategic investments for reaccelerating growth and operational excellence, with a key capital allocation being the repurchase of approximately 5% of outstanding shares - Management is focused on strategic investments to reaccelerate growth, expecting momentum from these initiatives to build towards the end of the year[5](index=5&type=chunk) - The company repurchased **4.8 million shares** for **$22.6 million** during Q2 2025[1](index=1&type=chunk) - Through August 11, 2025, a total of **$38 million** has been used for share repurchases during the year[5](index=5&type=chunk) [Business Segments & Outlook](index=2&type=section&id=Business%20Segments%20%26%20Outlook) [2025 Outlook](index=2&type=section&id=2025%20Outlook) REPAY reiterates its full-year 2025 outlook, anticipating sequential quarterly acceleration in normalized gross profit growth and significant improvement in Free Cash Flow Conversion by Q4 - The company reiterates its previously provided outlook for fiscal year 2025[7](index=7&type=chunk) - Expects sequential quarterly acceleration of normalized gross profit growth, with a Q4 YoY growth rate of **high-single digits to low double-digits**[10](index=10&type=chunk) - Free Cash Flow Conversion is projected to accelerate to **over 60%** by the fourth quarter of 2025[10](index=10&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) In Q2 2025, Consumer Payments saw 2% revenue growth but flat gross profit, while Business Payments had 3% revenue growth but a 5% gross profit decline, with Business Payments showing stronger growth over six months Segment Financials for Three Months Ended June 30 ($ in millions) | Segment | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | **Consumer Payments** | Revenue | $70.5M | $69.3M | +2% | | | Gross Profit | $55.4M | $55.5M | 0% | | **Business Payments** | Revenue | $10.9M | $10.6M | +3% | | | Gross Profit | $7.6M | $8.0M | -5% | Segment Financials for Six Months Ended June 30 ($ in millions) | Segment | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | **Consumer Payments** | Revenue | $142.4M | $145.4M | -2% | | | Gross Profit | $112.1M | $115.1M | -3% | | **Business Payments** | Revenue | $21.9M | $20.3M | +8% | | | Gross Profit | $15.1M | $15.1M | +1% | - The Consumer Payments segment provides solutions for collecting payments from and disbursing funds to consumers in verticals like personal/auto loans and receivables management[9](index=9&type=chunk) - The Business Payments segment provides B2B payment solutions, including AP automation, in verticals such as automotive, healthcare, and media[10](index=10&type=chunk)[11](index=11&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Operations](index=6&type=section&id=Consolidated%20Statement%20of%20Operations) REPAY's Q2 2025 total revenue slightly increased to $75.6 million, but operating expenses surged to $180.5 million due to a $103.8 million impairment loss, resulting in a significant net loss of $102.3 million or $(1.15) per share Q2 Statement of Operations Highlights ($ in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $75,626 | $74,906 | | Total operating expenses | $180,530 | $78,327 | | Impairment loss | $103,781 | $0 | | Loss from operations | $(104,904) | $(3,421) | | Net loss attributable to the Company | $(102,251) | $(4,071) | | Loss per Class A share | $(1.15) | $(0.04) | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, REPAY's total assets decreased to $1.41 billion, primarily due to a goodwill impairment, while total liabilities and stockholders' equity also declined Balance Sheet Summary ($ in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $162,615 | $189,530 | | Goodwill | $613,012 | $716,793 | | Total Assets | $1,413,374 | $1,571,908 | | Total Liabilities | $773,970 | $798,739 | | Total Equity | $639,404 | $773,169 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities decreased to $35.6 million, while significant cash was used in financing activities for share repurchases and Tax Receivable Agreement payments, leading to a decrease in cash and cash equivalents Six Months Cash Flow Summary ($ in thousands) | Metric | 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) | | Increase in cash, cash equivalents and restricted cash | $(27,729) | $29,891 | - Key uses of cash in financing activities for the first half of 2025 included **$22.6 million** for treasury share repurchases and **$16.3 million** for payment of the Tax Receivable Agreement[29](index=29&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Reconciliation of Net Income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $31.8 million, down from Q2 2024, with reconciliation from net loss including significant add-backs for non-cash impairment, depreciation, amortization, and share-based compensation Adjusted EBITDA Reconciliation for Q2 ($ in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss | $(108,032) | $(4,237) | | Add: Non-cash impairment loss | $103,781 | $0 | | Add: Depreciation and amortization | $25,481 | $26,771 | | Add: Share-based compensation | $3,049 | $5,874 | | **Adjusted EBITDA** | **$31,811** | **$33,728** | [Reconciliation of Net Income to Adjusted Net Income](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted Net Income for Q2 2025 was $19.1 million or $0.20 per share, with key adjustments to GAAP net loss including impairment, amortization of intangibles, and share-based compensation Adjusted Net Income Reconciliation for Q2 ($ in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss | $(108,032) | $(4,237) | | Add: Amortization of acquisition-related intangibles | $19,506 | $19,702 | | Add: Non-cash impairment loss | $103,781 | $0 | | **Adjusted Net Income** | **$19,083** | **$21,762** | | **Adjusted Net Income per share** | **$0.20** | **$0.22** | [Reconciliation of Operating Cash Flow to Free Cash Flow](index=14&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Free%20Cash%20Flow) REPAY generated $22.6 million in Free Cash Flow in Q2 2025, an increase from the prior year, calculated from operating cash flow minus capital expenditures, with the conversion rate significantly improving to 71% Free Cash Flow Reconciliation for Q2 ($ in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $33,065 | $30,979 | | Total capital expenditures | $(10,465) | $(11,691) | | **Free cash flow** | **$22,600** | **$19,288** | | **Free cash flow conversion** | **71%** | **57%** | [Reconciliation of Gross Profit Growth to Normalized Gross Profit Growth](index=14&type=section&id=Reconciliation%20of%20Gross%20Profit%20Growth%20to%20Normalized%20Gross%20Profit%20Growth) REPAY presents normalized gross profit growth, adjusting for political media spending, showing a total normalized decline of -1% for Q2 2025 compared to a reported -2% decline Normalized Gross Profit Growth Reconciliation for Q2 2025 vs Q2 2024 | Segment | Gross Profit Growth | Less: Political Media Impact | Normalized Gross Profit Growth | | :--- | :--- | :--- | :--- | | Consumer Payments | (0%) | — | (0%) | | Business Payments | (5%) | (6%) | 1% | | **Total** | **(2%)** | **(1%)** | **(1%)** |

Part I – Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Popular, Inc.'s unaudited consolidated financial statements as of June 30, 2025, show total assets increased to $76.1 billion, with Q2 2025 net income rising to $210.4 million and six-month net income to $387.9 million, driven by loan growth and higher net interest income Consolidated Financial Position Highlights | Financial Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Assets | $76,065,090 | $73,045,383 | | Total Loans Held-in-Portfolio, net | $37,415,693 | $36,361,628 | | Total Deposits | $67,217,491 | $64,884,345 | | Total Liabilities | $70,111,072 | $67,432,317 | | Total Stockholders' Equity | $5,954,018 | $5,613,066 | Consolidated Operational Highlights | Financial Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | 6 Months 2025 (in thousands) | 6 Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $631,549 | $568,312 | $1,237,146 | $1,119,056 | | Provision for Credit Losses | $48,941 | $46,794 | $113,022 | $119,392 | | Net Income | $210,440 | $177,789 | $387,942 | $281,072 | | Net Income per Common Share – Diluted | $3.09 | $2.46 | $5.64 | $3.90 | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, financial instruments, and segment performance, highlighting **$20.5 billion** in available-for-sale securities, a **$38.2 billion** loan portfolio, **$769.5 million** in credit loss allowance, **$67.2 billion** in deposits, and BPPR as the primary profit driver [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=133&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q2 2025 performance to increased net interest income and margin, loan growth, and deposit increases, with improved credit quality and a robust capital position supporting a dividend increase and new stock repurchase program - Net income for Q2 2025 was **$210.4 million**, a **$32.6 million** increase from Q2 2024, primarily due to a **$63.2 million** rise in net interest income[329](index=329&type=chunk)[331](index=331&type=chunk) - The net interest margin (NIM) expanded by **27 basis points** year-over-year to **3.49%**, driven by loan growth, higher yields on U.S. Treasuries, and lower deposit costs[331](index=331&type=chunk)[348](index=348&type=chunk) - Total assets grew by **$3.1 billion** to **$76.1 billion** since year-end 2024, while deposits increased by **$2.3 billion** to **$67.2 billion**, largely from Puerto Rico public deposits[331](index=331&type=chunk) - On July 16, 2025, the Corporation announced a quarterly dividend increase to **$0.75 per share** and a new **$500 million** stock repurchase program[324](index=324&type=chunk)[326](index=326&type=chunk) [Statement of Operations Analysis](index=138&type=section&id=Statement%20of%20Operations%20Analysis) Q2 2025 saw net interest income rise to $631.5 million due to loan growth and lower deposit costs, with slight increases in credit loss provision, non-interest income, and operating expenses, while the effective tax rate remained stable Key Operating Metrics (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | Variance | | :--- | :--- | :--- | :--- | | Net Interest Income | $631.5 | $568.3 | $63.2 | | Provision for Credit Losses | $48.9 | $46.8 | $2.1 | | Non-Interest Income | $168.5 | $166.3 | $2.2 | | Operating Expenses | $492.8 | $469.6 | $23.2 | | Income Before Tax | $258.3 | $218.2 | $40.1 | - The increase in operating expenses was primarily driven by a **$31.9 million** rise in personnel costs due to higher incentives and salaries, partially offset by a **$9.6 million** decrease in professional fees[365](index=365&type=chunk)[368](index=368&type=chunk) [Statement of Financial Condition Analysis](index=148&type=section&id=Statement%20of%20Financial%20Condition%20Analysis) Total assets grew to $76.1 billion by June 30, 2025, driven by increases in available-for-sale securities and the loan portfolio, while deposits rose to $67.2 billion, and stockholders' equity reached $6.0 billion due to strong earnings - Loans held-in-portfolio grew by **$1.1 billion** since year-end 2024, with notable increases in commercial (**+$428M**), construction (**+$204M**), and mortgage (**+$330M**) portfolios[385](index=385&type=chunk)[386](index=386&type=chunk) - Puerto Rico public deposits increased by **$1.5 billion** to **$20.9 billion**, representing **31%** of total deposits as of June 30, 2025[389](index=389&type=chunk) - Stockholders' equity increased to **$6.0 billion**, driven by **$387.9 million** in net income and a **$261.8 million** positive change in accumulated other comprehensive income, net of tax, for the six-month period[17](index=17&type=chunk)[395](index=395&type=chunk) [Capital](index=154&type=section&id=Capital) The Corporation maintains a well-capitalized position with all ratios exceeding regulatory requirements, including a **15.91%** CET1 ratio, and saw its tangible book value per common share increase to **$75.41** Regulatory Capital Ratios | Ratio | June 30, 2025 | December 31, 2024 | Well-Capitalized Minimum | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 | 15.91% | 16.03% | 6.5% | | Tier 1 Capital | 15.96% | 16.08% | 8.0% | | Total Capital | 17.70% | 17.83% | 10.0% | | Tier 1 Leverage | 8.51% | 8.66% | 5.0% | - Tangible book value per common share increased to **$75.41** at June 30, 2025, from **$68.16** at December 31, 2024[405](index=405&type=chunk) [Risk Management](index=157&type=section&id=Risk%20Management) The Corporation actively manages market and interest rate risks, maintains an asset-sensitive position, improved credit quality with reduced non-performing assets, and boasts strong liquidity sources totaling **$26.1 billion** - The Corporation's Net Interest Income (NII) is asset-sensitive. A **+100 basis point** parallel shift in interest rates is projected to increase NII by **$10.5 million** over one year[411](index=411&type=chunk)[412](index=412&type=chunk) - Total non-performing assets (NPAs) decreased by **$50.3 million** to **$357.8 million** at June 30, 2025, from December 31, 2024. The ratio of non-performing loans (NPLs) to total loans improved to **0.82%** from **0.95%**[482](index=482&type=chunk)[483](index=483&type=chunk) - Total available liquidity sources increased to **$26.1 billion** as of June 30, 2025, up from **$21.6 billion** at year-end 2024, enhanced by the ability to pledge auto loans as collateral at the Federal Reserve's discount window[423](index=423&type=chunk)[424](index=424&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=178&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20aboutMarket%20Risk) The report refers to the Market Risk section within Management's Discussion and Analysis for quantitative and qualitative disclosures about market risk, indicating no material changes beyond what is discussed there and in the 2024 Form 10-K - Disclosures regarding market risk for the current period are located in the Market Risk section of the MD&A[515](index=515&type=chunk) [Controls and Procedures](index=178&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the Corporation's disclosure controls and procedures were effective as of the end of the reporting period[516](index=516&type=chunk) - No material changes occurred in the Corporation's internal control over financial reporting during the quarter ended June 30, 2025[517](index=517&type=chunk) Part II – Other Information [Legal Proceedings](index=178&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with estimated reasonably possible losses ranging from **$0** to approximately **$7.1 million** as of June 30, 2025, as detailed in Note 20 of the Consolidated Financial Statements - The estimated range of reasonably possible losses for current legal proceedings, beyond existing accruals, is between **$0** and approximately **$7.1 million** as of June 30, 2025[229](index=229&type=chunk) [Risk Factors](index=178&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the Corporation's 2024 Form 10-K, advising readers to consider those discussed in that report - No material changes have been made to the risk factors disclosed in the Corporation's 2024 Form 10-K[520](index=520&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=179&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20andUse%20of%20Proceeds) During Q2 2025, the Corporation repurchased **1,136,390** common shares for approximately **$112.0 million**, with about **$48.4 million** remaining available under the 2024 repurchase program as of June 30, 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Approx. Dollar Value Remaining | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 357,832 | $87.37 | 355,539 | $129,330,233 | | May 2025 | 447,956 | $101.50 | 417,666 | $86,774,331 | | June 2025 | 380,593 | $105.93 | 363,185 | $48,375,729 | | **Total Q2** | **1,186,381** | **$98.66** | **1,136,390** | **$48,375,729** | - As of June 30, 2025, the Corporation has repurchased a total of **$451.5 million** under its **$500 million** share repurchase authorization announced in July 2024[523](index=523&type=chunk) [Exhibits](index=179&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications pursuant to the Sarbanes-Oxley Act, compensation agreements, and XBRL data files

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[Executive Summary](index=1&type=section&id=Executive%20Summary) Assertio reported strong Q2 2025 net product sales and cash growth, narrowing full-year guidance amidst strategic transformation [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Assertio reported Q2 2025 total net product sales of $28.8 million, with cash and investments increasing to $98.2 million. The company narrowed its full-year guidance, reflecting first-half performance and improved operational efficiencies - Assertio reported Q2 2025 total net product sales of **$28.8 million**[1](index=1&type=chunk)[3](index=3&type=chunk) - Cash and investments increased to **$98.2 million** as of June 30, 2025[1](index=1&type=chunk)[3](index=3&type=chunk)[4](index=4&type=chunk) - The company is narrowing its full-year guidance for Net Product Sales and Adjusted EBITDA[1](index=1&type=chunk)[7](index=7&type=chunk) [Strategic Priorities and Transformation](index=1&type=section&id=Strategic%20Priorities%20and%20Transformation) Assertio is executing 2025 transformation priorities to achieve sustainable near-term growth and long-term value, including operational streamlining, divestment of Assertio Therapeutics, and product consolidation to optimize cost structure - The company is implementing 2025 transformation priorities to create sustainable near-term growth and increased long-term value[2](index=2&type=chunk) - Steps include streamlining operations, divesting Assertio Therapeutics, and consolidating products from previously acquired subsidiaries to optimize cost structure[2](index=2&type=chunk) [Financial Highlights (Unaudited)](index=1&type=section&id=Financial%20Highlights%20(Unaudited)) This section details Q2 2025 GAAP and Non-GAAP financial metrics, balance sheet position, cash flow, and product-specific sales performance [Key Financial Metrics (GAAP & Non-GAAP)](index=1&type=section&id=Key%20Financial%20Metrics%20(GAAP%20%26%20Non-GAAP)) For Q2 2025, Net Product Sales (GAAP) decreased to $28.8 million from $30.7 million YoY. Net Loss (GAAP) widened to $(16.4) million from $(3.7) million. Adjusted EBITDA (Non-GAAP) increased to $5.6 million from $3.1 million Three Months Ended June 30, 2025 vs. 2024 | Metric | June 30, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | | :----------------------------- | :------------ | :------------ | :----------- | | Net Product Sales (GAAP) | $28.8 | $30.7 | (6.19%) | | Net Loss (GAAP) | $(16.4) | $(3.7) | (343.24%) | | Loss Per Share (GAAP) | $(0.17) | $(0.04) | (325.00%) | | Adjusted EBITDA (Non-GAAP) | $5.6 | $3.1 | 80.65% | | Adjusted Earnings Per Share (Non-GAAP) | $0.02 | $0.01 | 100.00% | Six Months Ended June 30, 2025 vs. 2024 | Metric | June 30, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | | :----------------------------- | :------------ | :------------ | :----------- | | Net Product Sales (GAAP) | $54.8 | $62.6 | (12.46%) | | Net Loss (GAAP) | $(29.9) | $(8.2) | (264.63%) | | Loss Per Share (GAAP) | $(0.31) | $(0.09) | (244.44%) | | Adjusted EBITDA (Non-GAAP) | $5.9 | $10.4 | (43.27%) | | Adjusted Earnings Per Share (Non-GAAP) | $(0.03) | $0.05 | (160.00%) | [Balance Sheet and Cash Flow](index=1&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) As of June 30, 2025, cash, cash equivalents, and short-term investments increased to $98.2 million from $87.3 million as of March 31, 2025, driven by Adjusted EBITDA performance and favorable working capital, despite an $8.2 million transfer due to the Assertio Therapeutics divestment. Debt remained at $40.0 million - Cash, cash equivalents, and short-term investments totaled **$98.2 million** as of June 30, 2025, an increase from **$87.3 million** as of March 31, 2025[4](index=4&type=chunk) - The increase in cash was driven by Adjusted EBITDA performance and favorable working capital, partially offset by an **$8.2 million** transfer related to the Assertio Therapeutics divestment[4](index=4&type=chunk)[5](index=5&type=chunk) - Debt as of June 30, 2025, was **$40.0 million**, consisting of 6.5% convertible notes with no maturities until September 2027[5](index=5&type=chunk) [Product Sales Performance](index=1&type=section&id=Product%20Sales%20Performance) Rolvedon net product sales increased to $16.1 million (YoY), driven by higher volume and a favorable adjustment, while Sympazan sales grew to $3.2 million due to increased sales support. Indocin sales decreased to $3.0 million due to generic competition, as expected Q2 2025 Product Net Sales Performance | Product | Q2 2025 Net Sales (in millions) | Q2 2024 Net Sales (in millions) | Change (YoY) | Key Drivers | | :-------- | :---------------- | :---------------- | :----------- | :---------- | | Rolvedon | $16.1 | $15.1 | 6.62% | Higher volume, $5.4 million favorable adjustment to prior period returns reserve, partially offset by lower pricing | | Sympazan | $3.2 | $2.7 | 18.52% | Impact of additional in-person sales support in key markets | | Indocin | $3.0 | $6.9 | (56.52%) | Previously announced generic competition affecting both volume and pricing, in line with expectations | [Operational Highlights and Strategic Execution](index=2&type=section&id=Operational%20Highlights%20and%20Strategic%20Execution) This section details core product performance, portfolio optimization efforts, cost savings initiatives, and ongoing corporate structure simplification for future growth [Core Product Performance](index=2&type=section&id=Core%20Product%20Performance) Rolvedon achieved its highest quarterly unit demand and market share, while Sympazan recorded its third consecutive quarter of new prescription growth, supported by an expanded prescriber base and upcoming presentation of new real-world evidence data - Rolvedon delivered the highest quarterly unit demand and achieved the highest market share to date in its competitive segment[11](index=11&type=chunk) - Sympazan produced its 3rd consecutive quarter of new prescription growth, driven by a substantial increase in the prescriber base during the first half of 2025[11](index=11&type=chunk) - Plans were announced to present a Sympazan abstract at ANA2025 in September, showcasing new real-world evidence data for patients with Lennox-Gastaut Syndrome[11](index=11&type=chunk) [Portfolio Optimization and Cost Savings](index=2&type=section&id=Portfolio%20Optimization%20and%20Cost%20Savings) Assertio ceased commercialization efforts for Otrexup to improve operating expenses and focus on core growth assets. The company also reduced legal exposure by resolving multiple prior legal matters and continued to simplify its corporate structure, leading to lower operating costs - Ceased commercialization efforts for Otrexup to improve operating expenses and focus on core growth assets[11](index=11&type=chunk) - Reduced legal exposure and associated operating expenses by resolving multiple prior legal matters[11](index=11&type=chunk) - Continued steps to simplify its corporate structure, resulting in a nimbler organization with lower operating costs[11](index=11&type=chunk) [Corporate Structure and Future Growth](index=2&type=section&id=Corporate%20Structure%20and%20Future%20Growth) Assertio is actively identifying and executing opportunities to integrate new growth drivers into its commercial platform through acquisitions, licensing, or other transactions, alongside its ongoing corporate simplification efforts - Continued strategic activities to identify and execute opportunities to bring new growth drivers into Assertio's commercial platform through acquisition, licensing or other transactions[11](index=11&type=chunk) [Outlook Update](index=2&type=section&id=Outlook%20Update) This section provides an updated full-year 2025 guidance for Net Product Sales and Adjusted EBITDA, reflecting recent performance and strategic decisions [Full-Year 2025 Guidance](index=2&type=section&id=Full-Year%202025%20Guidance) Assertio narrowed its full-year 2025 guidance for Net Product Sales and Adjusted EBITDA, reflecting strong first-half performance, the decision to cease Otrexup commercialization, and improved operational efficiencies Full-Year 2025 Guidance Update | Metric | Previous Guidance (in millions) | Updated Guidance (in millions) | | :----------------- | :---------------- | :--------------- | | Net Product Sales (GAAP) | $108.0 to $123.0 | $108.0 to $118.0 | | Adjusted EBITDA (Non-GAAP) | $10.0 to $19.0 | $11.0 to $19.0 | - The guidance narrowing reflects first-half performance, the decision to cease commercialization of Otrexup, and improved operational efficiencies[7](index=7&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of Assertio's business, investor contact details, and information regarding the Q2 2025 conference call and webcast [About Assertio](index=2&type=section&id=About%20Assertio) Assertio is a pharmaceutical company with comprehensive commercial capabilities, offering differentiated products to address patient needs, primarily in oncology, neurology, and pain management - Assertio is a pharmaceutical company with comprehensive commercial capabilities[10](index=10&type=chunk) - The company focuses on marketing differentiated products in oncology, neurology, and pain management[10](index=10&type=chunk) [Investor Relations](index=3&type=section&id=Investor%20Relations) Investor inquiries are directed to Matt Kreps, Managing Director at Darrow Associates - Investor contact is Matt Kreps, Managing Director at Darrow Associates[12](index=12&type=chunk) [Conference Call and Webcast](index=2&type=section&id=Conference%20Call%20and%20Webcast) Assertio's management hosted a conference call on August 11, 2025, at 4:30 p.m. Eastern Time to discuss Q2 2025 financial results and corporate strategy, with webcast and dial-in details provided - A conference call was hosted on Monday, August 11, 2025, at 4:30 p.m. Eastern Time to discuss Q2 2025 financial results and corporate strategy[8](index=8&type=chunk)[9](index=9&type=chunk) - Webcast and replay information is available on Assertio's investor relations website[9](index=9&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section outlines the inherent risks and uncertainties associated with forward-looking statements, emphasizing that actual results may differ materially due to various factors, including market acceptance of products, generic competition, execution of strategic plans, and regulatory compliance - Forward-looking statements discuss future plans, trends, events, results, or financial condition based on current beliefs and involve risks and uncertainties[13](index=13&type=chunk) - Key risks include the ability to grow sales and commercial success of products (e.g., Rolvedon), impact of generic competition (e.g., Indocin), ability to execute corporate structure simplification and business development, and compliance with legal and regulatory requirements[13](index=13&type=chunk) - Assertio disclaims any obligation to update forward-looking statements, except as required by law[13](index=13&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section defines non-GAAP financial measures, their purpose in supplementing GAAP results, and details specified items excluded from these calculations [Definition and Purpose](index=5&type=section&id=Definition%20and%20Purpose) Non-GAAP measures are used to supplement GAAP results, offering useful operating metrics for analysts, investors, lenders, and management to assess performance, and are not intended as substitutes for GAAP measures - Non-GAAP measures (EBITDA, Adjusted EBITDA, Adjusted Earnings, Adjusted EPS) supplement GAAP results as useful operating metrics[14](index=14&type=chunk) - These measures provide supplementary information for analysts, investors, lenders, and management to assess performance and are used internally for understanding, managing, and evaluating performance, including bonus determination[14](index=14&type=chunk) - Non-GAAP measures should be considered in addition to, not a substitute for, or superior to, GAAP financial measures[14](index=14&type=chunk) [Specified Items and Revisions](index=5&type=section&id=Specified%20Items%20and%20Revisions) Specified items, considered significant and non-indicative of current operations, are excluded from non-GAAP measures. Beginning Q1 2025, legal settlement costs are also excluded, with prior periods recast for consistency - Specified items, such as adjustments to interest, income tax, depreciation, amortization, sales reserves, stock-based compensation, legal settlements, divestiture losses, restructuring charges, and transaction-related costs, are excluded from non-GAAP measures[15](index=15&type=chunk) - Beginning Q1 2025, legal settlement costs incurred during the period are excluded from Adjusted EBITDA, and prior period amounts have been recast to conform to this presentation[16](index=16&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated statements of comprehensive loss, balance sheets, and cash flows for the reported periods [Statements of Comprehensive Loss](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) For Q2 2025, total revenues were $29.2 million, down from $31.1 million YoY. Net loss was $(16.4) million, significantly higher than $(3.7) million in Q2 2024, primarily due to a loss on Assertio Therapeutics divestiture Condensed Consolidated Statements of Comprehensive Loss (Three Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change (YoY) | | :-------------------- | :--- | :--- | :----------- | | Product sales, net | $28,822 | $30,695 | (6.10%) | | Royalty revenue | $400 | $431 | (7.19%) | | Total revenues | $29,222 | $31,126 | (6.12%) | | Total costs and expenses | $37,257 | $34,743 | 7.24% | | Loss from operations | $(8,035) | $(3,617) | (122.14%) | | Loss on Assertio Therapeutics divestiture | $(8,174) | $0 | N/A | | Net loss and comprehensive loss | $(16,352) | $(3,674) | (344.99%) | | Basic and diluted net loss per share | $(0.17) | $(0.04) | (325.00%) | Condensed Consolidated Statements of Comprehensive Loss (Six Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change (YoY) | | :-------------------- | :--- | :--- | :----------- | | Product sales, net | $54,818 | $62,557 | (12.45%) | | Royalty revenue | $894 | $1,017 | (12.19%) | | Total revenues | $55,712 | $63,574 | (12.37%) | | Total costs and expenses | $76,977 | $71,528 | 7.62% | | Loss from operations | $(21,265) | $(7,954) | (167.35%) | | Loss on Assertio Therapeutics divestiture | $(8,174) | $0 | N/A | | Net loss and comprehensive loss | $(29,893) | $(8,184) | (265.27%) | | Basic and diluted net loss per share | $(0.31) | $(0.09) | (244.44%) | [Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets were $273.8 million, a decrease from $284.7 million at December 31, 2024. Total liabilities increased to $180.5 million from $163.7 million, while total shareholders' equity decreased to $93.3 million from $121.1 million Condensed Consolidated Balance Sheets (as of June 30, 2025 vs. December 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $47,086 | $50,588 | (6.92%) | | Short-term investments | $51,097 | $49,466 | 3.30% | | Total current assets | $210,209 | $202,549 | 3.78% | | Intangible assets, net | $62,006 | $80,471 | (22.94%) | | Total assets | $273,780 | $284,732 | (3.85%) | | Total current liabilities | $132,529 | $114,688 | 15.56% | | Long-term debt | $39,046 | $38,813 | 0.60% | | Total liabilities | $180,482 | $163,651 | 10.29% | | Total shareholders' equity | $93,298 | $121,081 | (22.80%) | [Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash provided by operating activities was $6.6 million, a decrease from $14.9 million YoY. Net cash used in investing activities was $(9.9) million, significantly less than $(43.3) million YoY, primarily due to proceeds from maturities of short-term investments Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change (YoY) | | :-------------------- | :--- | :--- | :----------- | | Net cash provided by operating activities | $6,553 | $14,895 | (55.99%) | | Net cash used in investing activities | $(9,875) | $(43,320) | 77.18% | | Net cash used in financing activities | $(180) | $(281) | 35.94% | | Net decrease in cash and cash equivalents | $(3,502) | $(28,706) | 87.79% | | Cash and cash equivalents at end of period | $47,086 | $44,735 | 5.26% | - The significant decrease in net cash used in investing activities in 2025 was partly due to **$57.6 million** in proceeds from maturities of short-term investments, compared to none in 2024[22](index=22&type=chunk) [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP net loss and EPS to non-GAAP EBITDA, Adjusted EBITDA, Adjusted Earnings, and Adjusted EPS [GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA](index=9&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20LOSS%20TO%20NON-GAAP%20EBITDA%20and%20ADJUSTED%20EBITDA) For Q2 2025, GAAP Net Loss was $(16.4) million, leading to an EBITDA of $(6.3) million. After various adjustments, Adjusted EBITDA was $5.6 million, an increase from $3.1 million in Q2 2024 Reconciliation of GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA (Three Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change (YoY) | | :-------------------- | :--- | :--- | :----------- | | GAAP Net Loss | $(16,352) | $(3,674) | (344.99%) | | EBITDA (Non-GAAP) | $(6,259) | $3,944 | (258.69%) | | Adjusted EBITDA (Non-GAAP) | $5,605 | $3,050 | 83.77% | Reconciliation of GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA (Six Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | Change (YoY) | | :-------------------- | :--- | :--- | :----------- | | GAAP Net Loss | $(29,893) | $(8,184) | (265.27%) | | EBITDA (Non-GAAP) | $(9,523) | $6,019 | (258.20%) | | Adjusted EBITDA (Non-GAAP) | $5,890 | $10,428 | (43.52%) | - Significant adjustments for Q2 2025 included **$9.2 million** for loss on Assertio Therapeutics divestiture and related charges, and **$3.8 million** for expenses related to decommercialization of Otrexup[23](index=23&type=chunk)[25](index=25&type=chunk) [GAAP Net Loss and EPS to Non-GAAP Adjusted Earnings and EPS (Three Months)](index=10&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20LOSS%20and%20NET%20LOSS%20PER%20SHARE%20TO%20NON-GAAP%20ADJUSTED%20EARNINGS%20and%20ADJUSTED%20EARNINGS%20PER%20SHARE%20(Three%20Months)) For Q2 2025, GAAP Net Loss was $(16.4) million, resulting in Adjusted Earnings (Non-GAAP) of $1.5 million, or $0.02 per diluted share, an increase from $0.7 million, or $0.01 per diluted share, in Q2 2024 Reconciliation of GAAP Net Loss and EPS to Non-GAAP Adjusted Earnings and EPS (Three Months Ended June 30) | Metric | 2025 Amount (in thousands) | 2025 Diluted EPS | 2024 Amount (in thousands) | 2024 Diluted EPS | | :-------------------------------- | :------------------------- | :--------------- | :------------------------- | :--------------- | | Net loss (GAAP) | $(16,352) | $(0.17) | $(3,674) | $(0.04) | | Adjusted earnings (Non-GAAP) | $1,514 | $0.02 | $659 | $0.01 | - Key adjustments included amortization of intangible assets (**$9.2 million**), loss on Assertio Therapeutics divestiture and related charges (**$9.2 million**), and expenses related to decommercialization of Otrexup (**$3.8 million**)[27](index=27&type=chunk) [GAAP Net Loss and EPS to Non-GAAP Adjusted Earnings and EPS (Six Months)](index=11&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20LOSS%20and%20NET%20LOSS%20PER%20SHARE%20TO%20NON-GAAP%20ADJUSTED%20EARNINGS%20and%20ADJUSTED%20EARNINGS%20PER%20SHARE%20(Six%20Months)) For the six months ended June 30, 2025, GAAP Net Loss was $(29.9) million, leading to an Adjusted Loss (Non-GAAP) of $(2.4) million, or $(0.03) per diluted share, compared to Adjusted Earnings of $4.3 million, or $0.05 per diluted share, in the prior year Reconciliation of GAAP Net Loss and EPS to Non-GAAP Adjusted Earnings and EPS (Six Months Ended June 30) | Metric | 2025 Amount (in thousands) | 2025 Diluted EPS | 2024 Amount (in thousands) | 2024 Diluted EPS | | :-------------------------------- | :------------------------- | :--------------- | :------------------------- | :--------------- | | Net loss (GAAP) | $(29,893) | $(0.31) | $(8,184) | $(0.09) | | Adjusted (loss) earnings (Non-GAAP) | $(2,441) | $(0.03) | $4,349 | $0.05 | - Key adjustments for the six months included amortization of intangible assets (**$18.5 million**), loss on Assertio Therapeutics divestiture and related charges (**$9.3 million**), and expenses related to decommercialization of Otrexup (**$3.8 million**)[31](index=31&type=chunk)

[Business Highlights](index=1&type=section&id=Business%20Highlights) Tempest Therapeutics achieved significant clinical and regulatory milestones for its oncology pipeline, including pivotal trial clearances and orphan drug designations, while pursuing strategic alternatives and strengthening its cash position - Received clearance to proceed with a pivotal trial of amezalpat combination therapy for first-line hepatocellular carcinoma (HCC) in China, expanding on previous clearances from the FDA (U.S.) and EMA (Europe)[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - Amezalpat was granted orphan drug designation by the European Medicines Agency (EMA) for treating HCC[5](index=5&type=chunk)[7](index=7&type=chunk) - TPST-1495 received Orphan Drug designation from the FDA for the treatment of familial adenomatous polyposis (FAP)[5](index=5&type=chunk)[7](index=7&type=chunk) - The company is actively engaged in a strategic alternatives process and has implemented cost-cutting measures to maximize stockholder value[3](index=3&type=chunk)[7](index=7&type=chunk) - Strengthened its cash position with a **$4.6 million** registered direct offering of common stock in June 2025[7](index=7&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Tempest Therapeutics reported an improved net loss in Q2 2025, ending with **$14.3 million** cash, driven by reduced R&D expenses and strategic reprioritization [Second Quarter 2025](index=2&type=section&id=Second%20Quarter%202025) Q2 2025 financial performance is detailed, focusing on cash position, net loss, and shifts in R&D and G&A expenses - Ended Q2 2025 with **$14.3 million** in cash and cash equivalents, a decrease from **$30.3 million** at the end of 2024. The decrease was primarily due to cash used in operations, partially offset by proceeds from stock offerings[7](index=7&type=chunk) Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change | | :--- | :--- | :--- | :--- | | Net Loss | $7.9 million | $9.6 million | Decreased | | Net Loss Per Share | $2.07 | $5.52 | Decreased | | R&D Expenses | $3.9 million | $5.8 million | Decreased | | G&A Expenses | $4.1 million | $3.7 million | Increased | - The **$1.9 million** decrease in R&D expenses was primarily due to a reduction in costs as the company re-prioritized efforts towards exploring strategic alternatives[7](index=7&type=chunk) - The **$0.4 million** increase in G&A expenses was mainly related to one-time separation costs for terminated employees[7](index=7&type=chunk) [Year-to-Date (Six Months Ended June 30, 2025)](index=3&type=section&id=Year-to-Date%20(Six%20Months%20Ended%20June%2030%2C%202025)) Year-to-date financial performance is presented, detailing cash usage, net loss, and changes in R&D and G&A expenses - Cash used in operating activities for the first six months of 2025 was **$16.5 million**[11](index=11&type=chunk) YTD 2025 vs YTD 2024 Financial Performance | Metric | YTD 2025 (USD) | YTD 2024 (USD) | Change | | :--- | :--- | :--- | :--- | | Net Loss | $18.7 million | $17.5 million | Increased | | Net Loss Per Share | $5.17 | $10.15 | Decreased | | R&D Expenses | $11.5 million | $10.2 million | Increased | | G&A Expenses | $7.4 million | $7.4 million | Unchanged | - The **$1.3 million** increase in YTD R&D expenses was primarily due to costs from contract research and manufacturing organizations in preparation for the pivotal Phase 3 trial of amezalpat[11](index=11&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Consolidated financial statements detail the balance sheet, showing **$24.5 million** in total assets, and the statement of operations [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets summarize key asset, liability, and equity figures for June 30, 2025, and December 31, 2024 Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | **$14,280** | **$30,268** | | Total current assets | $15,103 | $31,474 | | **Total assets** | **$24,484** | **$41,488** | | Total current liabilities | $7,141 | $14,220 | | **Total liabilities** | **$14,701** | **$22,362** | | **Total stockholders' equity** | **$9,783** | **$19,126** | - Total assets decreased by **41%** from December 31, 2024, to June 30, 2025, primarily driven by a **53%** reduction in cash and cash equivalents[14](index=14&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements of operations detail R&D, G&A expenses, operating loss, and net loss for Q2 and YTD 2025 and 2024 Statement of Operations Summary (in thousands) | Account | 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 | $3,871 | $5,837 | $11,498 | $10,177 | | General and administrative | $4,095 | $3,745 | $7,404 | $7,379 | | **Operating loss** | **($7,966)** | **($9,582)** | **($18,902)** | **($17,556)** | | **Net loss** | **($7,870)** | **($9,570)** | **($18,730)** | **($17,474)** | | **Net loss per share** | **($2.07)** | **($5.52)** | **($5.17)** | **($10.15)** | [About Tempest Therapeutics](index=3&type=section&id=About%20Tempest%20Therapeutics) Tempest Therapeutics is a clinical-stage biotechnology company developing small molecule cancer treatments via tumor-targeted and immune-mediated mechanisms - Tempest is a clinical-stage biotechnology company developing small molecule product candidates for cancer treatment[9](index=9&type=chunk) - The company's portfolio utilizes tumor-targeted and/or immune-mediated mechanisms[9](index=9&type=chunk) - Programs range from early research to a later-stage randomized global study in first-line cancer patients[9](index=9&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section provides a legal disclaimer for forward-looking statements, outlining risks for future plans and product development - The press release includes forward-looking statements concerning the company's evaluation of strategic alternatives and the anticipated therapeutic benefit and regulatory development of its product candidates[10](index=10&type=chunk)[12](index=12&type=chunk) - Identified risks include capital market volatility, the company's ability to operate as a going concern, the availability and success of strategic transactions, and unexpected safety or efficacy data from clinical trials[12](index=12&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Report Announcement](index=1&type=section&id=Report%20Announcement) Gaia, Inc. announced its financial results for the second quarter ended June 30, 2025, on August 11, 2025 - Gaia, Inc. (NASDAQ: GAIA) reported financial results for Q2 ended June 30, 2025, on August 11, 2025[1](index=1&type=chunk)[2](index=2&type=chunk) [Key Business and Financial Highlights](index=1&type=section&id=Highlights) Gaia achieved positive free cash flow and double-digit growth for the sixth consecutive quarter, with revenue increasing 12% to $24.6 million and gross profit rising 16% to $21.3 million, while EPS improved to $(0.07) - Sixth consecutive quarter of **double-digit revenue and gross profit increases**[6](index=6&type=chunk) - Generated **positive operating and free cash flow**[5](index=5&type=chunk)[6](index=6&type=chunk) - Annualized gross profit per employee increased to **$814,000** from $695,000 in Q2 2024[3](index=3&type=chunk) - Subsidiary Igniton raised **$6 million** in private common equity financing in July, increasing its implied post-money valuation to **$106 million** from $40 million last year; Gaia now owns approximately **two-thirds** of Igniton equity[3](index=3&type=chunk)[6](index=6&type=chunk) Q2 2025 Key Financial Highlights (YoY) | Metric | Q2 2025 | Q2 2024 | Change | | :----- | :------ | :------ | :----- | | Revenue | $24.6M | $21.9M | +12% | | Gross Profit | $21.3M | $18.5M | +16% | | Gross Margin | 86.7% | 84.5% | +2.2 pp | | Net Loss per Share | $(0.07) | $(0.09) | +$0.02 | | Operating Cash Flow | $2.3M | N/A | N/A | | Free Cash Flow | $1.6M | N/A | N/A | [Company Overview](index=2&type=section&id=Company%20Overview) [About Gaia](index=2&type=section&id=About%20Gaia) Gaia is a member-supported global video streaming service offering conscious media across four channels in four languages to members in 185 countries, with a library of over 10,000 titles, predominantly exclusive and owned content - Gaia is a **member-supported global video streaming service and community**[8](index=8&type=chunk) - Offers conscious media through **four channels**: Seeking Truth, Transformation, Alternative Healing, and Yoga[8](index=8&type=chunk) - Content available in **four languages** (English, Spanish, French, German) to members in **185 countries**[8](index=8&type=chunk) - Library includes over **10,000 titles**, with over **88% exclusive** to Gaia and approximately **75% of viewership from owned content**[8](index=8&type=chunk) [Financial Performance for Second Quarter 2025](index=1&type=section&id=Financial%20Performance%20for%20Second%20Quarter%202025) [Summary of Q2 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Gaia reported a 12% increase in revenue to $24.6 million, driven by member growth, with gross profit rising 16% to $21.3 million, and net loss improving to $(1.8) million, while generating positive operating and free cash flow Q2 2025 Financial Performance Summary | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Revenue | $24.6M | $21.9M | +12% | | Gross Profit | $21.3M | $18.5M | +16% | | Gross Margin | 86.7% | 84.5% | +2.2 pp | | Net Loss | $(1.8)M | $(2.2)M | -$0.4M | | EPS | $(0.07) | $(0.09) | +$0.02 | | Operating Cash Flow | $2.3M | N/A | N/A | | Free Cash Flow | $1.6M | N/A | N/A | - Total members increased to **878,000**, contributing to revenue growth[4](index=4&type=chunk) - Cash balance stood at **$13.9 million** as of June 30, 2025, with a renewed **$10 million** line of credit with improved terms[5](index=5&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Gaia's total assets increased to $147.0 million from $141.2 million at December 31, 2024, primarily due to a significant increase in cash and cash equivalents, while total liabilities and equity also grew Selected Balance Sheet Data (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :-------------------------- | :------------ | :----------- | :----- | | Cash and cash equivalents | $13,924 | $5,860 | +$8,064 | | Total current assets | $23,492 | $15,742 | +$7,750 | | Total assets | $146,981 | $141,217 | +$5,764 | | Total current liabilities | $43,437 | $41,834 | +$1,603 | | Total liabilities | $48,390 | $47,204 | +$1,186 | | Total equity | $98,591 | $94,013 | +$4,578 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, net revenues increased 12% year-over-year to $24.6 million, resulting in a 16% rise in gross profit to $21.3 million, and an improved net loss attributable to common shareholders of $(1.8) million Q2 2025 Statements of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------ | :------ | :------ | :--------- | | Revenues, net | $24,632 | $21,856 | +$2,776 | | Cost of revenues | $3,285 | $3,385 | -$100 | | Gross profit | $21,347 | $18,471 | +$2,876 | | Total operating expenses | $23,543 | $20,464 | +$3,079 | | Loss from operations | $(2,196) | $(1,993) | -$203 | | Net loss attributable to common shareholders | $(1,801) | $(2,193) | +$392 | | Basic loss per share | $(0.07) | $(0.09) | +$0.02 | YTD June 30, 2025 Statements of Operations (in thousands) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :------------------------------------ | :------- | :------- | :--------- | | Revenues, net | $48,472 | $43,169 | +$5,303 | | Gross profit | $42,252 | $36,651 | +$5,601 | | Net loss attributable to common shareholders | $(2,815) | $(3,238) | +$423 | | Basic loss per share | $(0.11) | $(0.14) | +$0.03 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q2 2025, Gaia generated $2.3 million in net cash from operating activities, a significant improvement from the prior year, with overall cash, cash equivalents, and restricted cash increasing by $0.8 million Q2 2025 Statements of Cash Flows (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------ | :------ | :------ | :--------- | | Net cash provided by (used in) operating activities | $2,284 | $(2,081) | +$4,365 | | Net cash used in investing activities | $(1,404) | $(11,447) | +$10,043 | | Net cash provided by (used in) financing activities | $(46) | $6,388 | -$6,434 | | Net change in cash, cash equivalents, and restricted cash | $834 | $(7,140) | +$7,974 | YTD June 30, 2025 Statements of Cash Flows (in thousands) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :------------------------------------------ | :------- | :------- | :--------- | | Net cash provided by (used in) operating activities | $3,582 | $3,855 | -$273 | | Net cash used in investing activities | $(2,434) | $(12,520) | +$10,086 | | Net cash provided by (used in) financing activities | $6,916 | $6,358 | +$558 | | Net change in cash, cash equivalents, and restricted cash | $8,064 | $(2,307) | +$10,371 | [Reconciliation of Free Cash Flow](index=6&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) Gaia reported a free cash flow of $1.6 million for Q2 2025, a significant increase from $0.7 million in Q2 2024, driven by positive operating cash flow and changes in non-core business activities Q2 2025 Free Cash Flow Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------ | :------ | :------ | :--------- | | Net cash provided by (used in) operating activities | $2,284 | $(2,081) | +$4,365 | | Cash paid for interest | $81 | $154 | -$73 | | Net cash used in investing activities | $(1,404) | $(11,447) | +$10,043 | | Change in cash from non-core business activities | $683 | $14,096 | -$13,413 | | Free cash flow | $1,644 | $722 | +$922 | YTD June 30, 2025 Free Cash Flow Reconciliation (in thousands) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :------------------------------------------ | :------- | :------- | :--------- | | Net cash provided by (used in) operating activities | $3,582 | $3,855 | -$273 | | Cash paid for interest | $218 | $262 | -$44 | | Net cash used in investing activities | $(2,434) | $(12,520) | +$10,086 | | Change in cash from non-core business activities | $974 | $10,101 | -$9,127 | | Free cash flow | $2,340 | $1,698 | +$642 | [Additional Information](index=2&type=section&id=Additional%20Information) [Conference Call Information](index=2&type=section&id=Conference%20Call) Details for the conference call held on Monday, August 11, 2025, at 4:30 p.m. Eastern time, including dial-in numbers and replay information - Conference call held on **August 11, 2025, at 4:30 p.m. ET**[7](index=7&type=chunk) - Replay available until **August 25, 2025**[8](index=8&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section contains cautionary statements regarding forward-looking information, highlighting that actual results may differ materially due to various risks and uncertainties detailed in SEC filings, and the company undertakes no obligation to update such information - Press release contains **forward-looking statements** subject to risks and uncertainties[9](index=9&type=chunk) - Actual results may differ materially from anticipated results due to factors like ability to attract/retain members, competition, service disruptions, and general economic conditions[9](index=9&type=chunk)[10](index=10&type=chunk) - Company undertakes **no obligation to update** forward-looking information[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Measures) The report includes non-GAAP financial measures, specifically Free Cash Flow, defined as net cash from operating activities plus cash paid for interest, less cash used in investing activities, plus cash from non-core business activities, presented as a supplement to GAAP results for performance assessment - Financial information includes **non-GAAP measures**, such as Free Cash Flow[11](index=11&type=chunk) - Free Cash Flow is defined as net cash provided by operating activities plus cash paid for interest payments, less cash used in investing activities, plus cash from non-core business activities[11](index=11&type=chunk) - Non-GAAP measures should not be considered a substitute for GAAP results and are used by management and investors for assessing performance[11](index=11&type=chunk) [Contact Information](index=3&type=section&id=Company%20Contact) Provides contact details for Gaia's Chief Financial Officer, Ned Preston, and for Investor Relations through Gateway Group, Inc - Company contact: **Ned Preston, CFO, Investors@gaia.com**[12](index=12&type=chunk) - Investor Relations: **Cody Slach, Gateway Group, Inc., GAIA@gateway-grp.com, (949) 574-3860**[12](index=12&type=chunk)