As previously announced, TDS will hold a teleconference on August 11, 2025, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com. CHICAGO (August 11, 2025) — Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,186 million for the second quarter of 2025, versus $1,238 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(5) million ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Sphere Entertainment Co. reported a 3% revenue increase to $282.7 million, with operating loss narrowing by 30% and adjusted operating income surging 140% to $61.5 million, driven by strong Sphere segment performance Q2 2025 Key Financial Metrics (Consolidated) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $282.7M | $273.4M | +$9.3M | +3% | | **Operating Loss** | ($50.2M) | ($71.4M) | +$21.2M | +30% | | **Adjusted Operating Income** | $61.5M | $25.7M | +$35.8M | +140% | - Executive Chairman and CEO James L. Dolan stated the company is executing its strategic priorities for long-term growth and is making progress with global expansion plans[2](index=2&type=chunk) - Key operational highlights for the Sphere segment include surpassing **four million total tickets sold** for The Sphere Experience since its October 2023 opening and hosting multiple concert residencies and corporate events[5](index=5&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) The Sphere segment achieved **16% revenue growth** and positive adjusted operating income, while MSG Networks saw a **12% revenue decline** due to subscriber loss, partially offset by cost-cutting measures Q2 2025 Revenue by Segment (in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | Change (%) | | :--- | :--- | :--- | :--- | | Sphere | $175.6 | $151.2 | +16% | | MSG Networks | $107.1 | $122.2 | -12% | Q2 2025 Adjusted Operating Income by Segment (in millions) | Segment | Q2 2025 AOI | Q2 2024 AOI | Change ($) | | :--- | :--- | :--- | :--- | | Sphere | $24.9 | ($5.5) | +$30.4 | | MSG Networks | $36.5 | $31.1 | +$5.4 | [Sphere Segment](index=2&type=section&id=Sphere%20Segment) The Sphere segment's revenue grew **16%** to **$175.6 million**, driven by event-related revenues, with operating loss improving by **20%** and adjusted operating income turning positive at **$24.9 million** - Event-related revenues rose by **$26.7 million** due to more corporate events and nine additional concert residency shows compared to the prior year quarter[7](index=7&type=chunk) - Revenue from The Sphere Experience decreased by **$6.7 million**, as lower average per-show revenues offset an increase in the total number of performances[9](index=9&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$5.7 million (6%)** due to lower employee compensation and professional fees[12](index=12&type=chunk) Sphere Segment Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $175.6 | $151.2 | +16% | | Operating Loss | ($83.4) | ($104.5) | +20% | | Adjusted Operating Income | $24.9 | ($5.5) | +$30.4M | [MSG Networks Segment](index=2&type=section&id=MSG%20Networks%20Segment) MSG Networks' revenue declined **12%** to **$107.1 million** due to subscriber loss, but direct operating expenses fell **33%** due to restructured media rights, leading to increased operating and adjusted operating income - Distribution revenue fell by **$11.4 million**, primarily driven by an approximate **13.0% decrease** in total subscribers[14](index=14&type=chunk) - Direct operating expenses decreased significantly by **$26.7 million (33%)**, mainly due to a **$25.6 million reduction** in rights fees expense following amendments to media rights agreements[16](index=16&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **$11.7 million**, largely due to higher marketing costs and the absence of prior-year litigation-related insurance recoveries[17](index=17&type=chunk) [Other Matters](index=3&type=section&id=Other%20Matters) MSG Networks restructured its credit facilities, resulting in a **$346.1 million gain** on debt extinguishment, amended media rights agreements, and issued warrants for **19.9%** equity to Madison Square Garden Sports Corp - MSG Networks restructured its credit facilities, replacing an **$804 million term loan** with a new **$210 million term loan**, leading to a recorded **gain on debt extinguishment of $346.1 million** for the quarter[19](index=19&type=chunk) - Media rights agreements with the Knicks and Rangers were amended to reduce annual rights fees by **28% and 18%** respectively, effective January 1, 2025, and eliminate annual fee escalators[20](index=20&type=chunk) - MSG Networks issued penny warrants to Madison Square Garden Sports Corp. exercisable for **19.9%** of the equity interests in MSG Networks[20](index=20&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Consolidated statements show **net income of $151.8 million** for Q2 2025, driven by a **$346.1 million gain** on debt extinguishment, with total assets at **$4.2 billion** and liabilities at **$1.9 billion**, and negative operating cash flow [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenues were **$282.7 million** with an operating loss of **$50.2 million**, but a **$346.1 million gain** on debt extinguishment led to **net income of $151.8 million** or **$4.18 per basic share** Q2 2025 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $282,677 | $273,395 | | Operating loss | ($50,159) | ($71,377) | | Gain on extinguishment of debt | $346,092 | $— | | Net income (loss) | $151,816 | ($46,586) | | Basic income (loss) per share | $4.18 | ($1.31) | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$4.2 billion**, liabilities decreased to **$1.9 billion** due to debt restructuring, and total stockholders' equity increased to **$2.3 billion** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $368,927 | $515,633 | | Total Assets | $4,199,061 | $4,515,300 | | Total Liabilities | $1,885,374 | $2,313,881 | | Total Stockholders' Equity | $2,313,687 | $2,201,419 | [Selected Cash Flow Information](index=10&type=section&id=Selected%20Cash%20Flow%20Information) For the first six months of 2025, operating activities resulted in a **$52.7 million net cash outflow**, financing activities used **$111.1 million**, leading to a **$146.7 million net decrease in cash** Six Months Ended June 30 Cash Flow (in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($52,711) | $28,570 | | Net cash provided by (used in) investing activities | $16,441 | ($46,156) | | Net cash used in financing activities | ($111,059) | ($36,242) | | **Net decrease in cash** | **($146,706)** | **($54,604)** | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted Operating Income (Loss) is a key non-GAAP metric, defined by excluding depreciation, amortization, share-based compensation, and restructuring charges, with Q2 2025 consolidated Adjusted Operating Income at **$61.5 million** - Adjusted operating income (loss) is defined as operating income (loss) excluding depreciation, amortization, share-based compensation, restructuring charges, and other specific non-recurring or non-cash items[23](index=23&type=chunk) Q2 2025 Reconciliation of Operating Loss to Adjusted Operating Income (in thousands) | Description | Amount | | :--- | :--- | | **Operating loss** | **($50,159)** | | Share-based compensation | $18,850 | | Depreciation and amortization | $83,907 | | Other adjustments | $8,868 | | **Adjusted operating income** | **$61,466** |

[Company Overview and Q2 2025 Highlights](index=1&type=section&id=Company%20Overview%20%26%20Q2%202025%20Highlights) [Company Name Change and Earnings Announcement](index=1&type=section&id=Company%20Name%20Change%20and%20Earnings%20Announcement) Array Digital Infrastructure, Inc. (formerly United States Cellular Corporation) announced its Q2 2025 results, reporting a slight year-over-year decrease in total operating revenues but significant growth in net income and diluted earnings per share attributable to Array shareholders - United States Cellular Corporation was renamed **Array Digital Infrastructure, Inc.** on August 1, 2025[1](index=1&type=chunk) Q2 2025 Consolidated Financial Highlights (Year-over-Year) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------- | :-------- | :-------- | :--------- | | Total Operating Revenues | $916M | $927M | (1)% | | Service Revenues | $736M | $743M | (1)% | | Net Income Attributable to Array Shareholders | $31M | $17M | 82% | | Diluted Earnings Per Share | $0.36 | $0.20 | 80% | [Recent Highlights and Strategic Initiatives](index=1&type=section&id=Recent%20Highlights%20and%20Strategic%20Initiatives) Array completed its T-Mobile transaction, declared a special dividend, and is transitioning to a tower-centric business, with pending spectrum deals with Verizon and AT&T anticipated in H2 2025 and Q3 2026 - Array completed the sale of its wireless business and certain spectrum assets to T-Mobile on August 1, 2025, for a total consideration of **$4.3 billion** (including cash and assumed debt)[5](index=5&type=chunk) - A special dividend of **$23.00 per share** was declared, payable on August 19, 2025[5](index=5&type=chunk) - Third-party tower revenues increased by **12% year-over-year**[9](index=9&type=chunk) - Pending spectrum transactions with AT&T and Verizon are expected to close in **H2 2025** and **Q3 2026**, respectively[9](index=9&type=chunk) [About Array and Business Description](index=2&type=section&id=About%20Array%20and%20Business%20Description) Array Digital Infrastructure, Inc. is a leading US owner and operator of shared wireless communication infrastructure, managing over 4,400 cellular towers to support 5G and other wireless technologies, with Telephone and Data Systems, Inc. holding approximately 82% equity as of August 1, 2025 - Array is a leading US owner and operator of shared wireless communication infrastructure[11](index=11&type=chunk) - The company owns over **4,400 cellular towers**, supporting 5G and other wireless technology deployments[11](index=11&type=chunk) - As of August 1, 2025, Telephone and Data Systems, Inc. holds approximately **82% of Array's equity**[11](index=11&type=chunk) [Safe Harbor Statement](index=2&type=section&id=Safe%20Harbor%20Statement) This report contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially from expectations, including operational changes, strategic decisions for the tower business, tenant dependency, extreme weather, spectrum sale completion, and industry competition - Forward-looking statements are subject to risks and uncertainties, including Array's remaining business operations, strategic decisions for the tower business, revenue dependency on a few tenants, extreme weather events, completion of spectrum license sales to Verizon and AT&T, and competition in the tower industry[12](index=12&type=chunk) [Summary Operating Data](index=3&type=section&id=Summary%20Operating%20Data) [Retail Connections and ARPU/ARPA](index=3&type=section&id=Retail%20Connections%20and%20ARPU%2FARPA) In Q2 2025, Array experienced a quarter-over-quarter and year-over-year decline in postpaid and prepaid connections, while postpaid ARPU slightly decreased QoQ but increased YoY, and prepaid ARPU increased QoQ but decreased YoY Retail Connections (Quarter-over-Quarter and Year-over-Year) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | QoQ Change | YoY Change | | :-------------------- | :-------- | :-------- | :-------- | :--------- | :--------- | | Postpaid Total | 3,904,000 | 3,946,000 | 4,027,000 | (42,000) | (123,000) | | Postpaid Net Additions (Losses) | (42,000) | (39,000) | (24,000) | (3,000) | (18,000) | | Prepaid Total | 429,000 | 431,000 | 439,000 | (2,000) | (10,000) | | Prepaid Net Additions (Losses) | (2,000) | (17,000) | 3,000 | 15,000 | (5,000) | Average Revenue Per User (ARPU) and Average Revenue Per Account (ARPA) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | QoQ Change | YoY Change | | :-------------------- | :-------- | :-------- | :-------- | :--------- | :--------- | | Postpaid ARPU | $51.91 | $52.06 | $51.45 | ($0.15) | $0.46 | | Postpaid ARPA | $131.89 | $132.25 | $130.41 | ($0.36) | $1.48 | | Prepaid ARPU | $31.72 | $30.76 | $32.37 | $0.96 | ($0.65) | [Churn Rates](index=3&type=section&id=Churn%20Rates) Postpaid churn rates increased both quarter-over-quarter and year-over-year, primarily driven by handset churn, while prepaid churn rates significantly decreased QoQ but remained largely flat YoY Churn Rates (Quarter-over-Quarter and Year-over-Year) | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | QoQ Change (bps) | YoY Change (bps) | | :-------------------- | :-------- | :-------- | :-------- | :--------------- | :--------------- | | Postpaid Churn Rate | 1.29% | 1.21% | 1.16% | 8 | 13 | | Postpaid Handsets Churn | 1.12% | 1.03% | 0.97% | 9 | 15 | | Postpaid Connected Devices Churn | 2.36% | 2.40% | 2.47% | (4) | (11) | | Prepaid Churn Rate | 3.58% | 4.17% | 3.60% | (59) | (2) | [Infrastructure and Capital Expenditures](index=3&type=section&id=Infrastructure%20and%20Capital%20Expenditures) Array's owned towers and colocations continued to grow, with a slight improvement in tower tenancy rate, while Q2 2025 capital expenditures significantly decreased year-over-year, reflecting a shift in strategic focus Infrastructure and Tenancy Metrics | Metric | 6/30/2025 | 3/31/2025 | 6/30/2024 | QoQ Change | YoY Change | | :-------------------- | :-------- | :-------- | :-------- | :--------- | :--------- | | Total Cell Sites in Service | 7,061 | 7,009 | 6,990 | 52 | 71 | | Owned Towers | 4,418 | 4,413 | 4,388 | 5 | 30 | | Number of Colocations | 2,527 | 2,469 | 2,392 | 58 | 135 | | Tower Tenancy Rate | 1.57 | 1.56 | 1.55 | 0.01 | 0.02 | Capital Expenditures (in millions) | Period | 6/30/2025 | 3/31/2025 | 6/30/2024 | QoQ Change | YoY Change | | :----- | :-------- | :-------- | :-------- | :--------- | :--------- | | Q2 | $80 | $53 | $165 | $27 | ($85) | [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Operations](index=4&type=section&id=Consolidated%20Statement%20of%20Operations) Total operating revenues slightly decreased year-over-year in Q2 2025, mainly due to reduced equipment sales, yet net income attributable to Array shareholders surged by **80% to $31 million**, and diluted EPS grew by **81% to $0.36**, primarily driven by a substantial reduction in income tax expense Consolidated Statement of Operations Highlights (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change (%) | | :------------------------------------ | :------ | :------ | :------------- | | Total Operating Revenues | $916 | $927 | (1)% | | Service Revenues | $736 | $743 | (1)% | | Equipment Sales | $180 | $184 | (2)% | | Total Operating Expenses | $881 | $891 | (1)% | | Operating Income | $35 | $36 | (4)% | | Income Before Income Taxes | $36 | $32 | 13% | | Income Tax Expense | $4 | $14 | (73)% | | Net Income Attributable to Array Shareholders | $31 | $17 | 80% | | Diluted EPS Attributable to Array Shareholders | $0.36 | $0.20 | 81% | [Consolidated Statement of Cash Flows](index=5&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities slightly decreased to **$485 million**, net cash used in investing activities significantly reduced to **$150 million** due to lower capital expenditures, and net cash used in financing activities also decreased to **$93 million**, resulting in a substantial increase in cash, cash equivalents, and restricted cash to **$401 million** at period-end Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | YoY Change | | :------------------------------------ | :--- | :--- | :--------- | | Net Cash Provided by Operating Activities | $485 | $516 | ($31) | | Net Cash Used in Investing Activities | ($150) | ($284) | $134 | | Net Cash Used in Financing Activities | ($93) | ($196) | $103 | | Net Increase in Cash, Cash Equivalents and Restricted Cash | $242 | $36 | $206 | | Cash, Cash Equivalents and Restricted Cash, End of Period | $401 | $215 | $186 | [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, total assets slightly decreased to **$10,377 million** from December 31, 2024, with a significant increase in cash and cash equivalents offset by reductions in accounts receivable and inventory, while total liabilities also decreased, mainly due to lower current liabilities, and total equity attributable to Array shareholders increased to **$4,600 million** Consolidated Balance Sheet Highlights (June 30, 2025 vs December 31, 2024) | Metric (in millions) | June 30, 2025 | Dec 31, 2024 | Change | | :------------------------------------ | :------------ | :----------- | :----- | | **Assets:** | | | | | Cash and Cash Equivalents | $386 | $144 | $242 | | Total Current Assets | $1,509 | $1,345 | $164 | | Licenses | $4,583 | $4,579 | $4 | | Property, Plant and Equipment, net | $2,313 | $2,502 | ($189) | | Total Assets | $10,377 | $10,449 | ($72) | | **Liabilities & Equity:** | | | | | Total Current Liabilities | $808 | $884 | ($76) | | Long-Term Debt, net | $2,819 | $2,837 | ($18) | | Total Array Shareholders' Equity | $4,600 | $4,577 | $23 | | Total Liabilities and Equity | $10,377 | $10,449 | ($72) | [Segment Results](index=8&type=section&id=Segment%20Results) [Overall Segment Performance](index=8&type=section&id=Overall%20Segment%20Performance) In Q2 2025, Array's total operating revenues decreased by **1% year-over-year**, primarily due to a decline in wireless segment revenue offset by a **7% growth** in tower segment revenue, leading to a **4% decrease** in consolidated operating income, with wireless operating income declining and tower operating income rising Consolidated Segment Operating Performance (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change (%) | | :-------------------------- | :------ | :------ | :------------- | | **Operating Revenues:** | | | | | Wireless | $888 | $902 | (1)% | | Towers | $62 | $58 | 7% | | Total Operating Revenues | $916 | $927 | (1)% | | **Operating Income:** | | | | | Wireless | $14 | $17 | (21)% | | Towers | $21 | $19 | 11% | | Total Operating Income | $35 | $36 | (4)% | | **Adjusted OIBDA (Non-GAAP):** | | | | | Consolidated | $208 | $227 | (9)% | | **Adjusted EBITDA (Non-GAAP):** | | | | | Consolidated | $254 | $268 | (6)% | [Array Wireless Segment Performance](index=9&type=section&id=Array%20Wireless%20Segment%20Performance) The wireless segment's total operating revenues decreased by **1% year-over-year** in Q2 2025, driven by lower retail service revenues and equipment sales, with operating income declining by **21%** and capital expenditures significantly reduced by **52%** Array Wireless Segment Financial Data (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change (%) | | :------------------------------------ | :------ | :------ | :------------- | | Retail Service Revenues | $652 | $666 | (2)% | | Equipment Sales | $180 | $184 | (2)% | | Total Operating Revenues | $888 | $902 | (1)% | | Total Operating Expenses | $874 | $885 | (1)% | | Operating Income | $14 | $17 | (21)% | | Adjusted OIBDA (Non-GAAP) | $174 | $196 | (11)% | | Capital Expenditures | $77 | $160 | (52)% | [Array Towers Segment Performance](index=9&type=section&id=Array%20Towers%20Segment%20Performance) The tower segment demonstrated strong performance in Q2 2025, with total tower revenues growing by **7% year-over-year to $62 million**, including a **12% increase** in third-party revenues, while operating income rose by **11% to $21 million**, Adjusted OIBDA increased by **9%**, and capital expenditures decreased by **51%** Array Towers Segment Financial Data (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change (%) | | :------------------------------------ | :------ | :------ | :------------- | | Third-Party Revenues | $28 | $25 | 12% | | Intra-Company Revenues | $34 | $33 | 3% | | Total Tower Revenues | $62 | $58 | 7% | | Total Operating Expenses | $41 | $39 | 5% | | Operating Income | $21 | $19 | 11% | | Adjusted OIBDA (Non-GAAP) | $34 | $31 | 9% | | Capital Expenditures | $3 | $5 | (51)% | [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) [Free Cash Flow](index=10&type=section&id=Free%20Cash%20Flow) Array's Free Cash Flow (Non-GAAP) significantly increased to **$239 million** in Q2 2025, up from **$165 million** in Q2 2024, primarily due to reduced additions to property, plant, and equipment, with a substantial increase also observed for the six months ended June 30, 2025 Free Cash Flow (Non-GAAP) (in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------ | :------ | :------ | :--------- | | Cash flows from operating activities (GAAP) | $325 | $313 | $12 | | Cash paid for additions to property, plant and equipment | ($75) | ($137) | $62 | | Cash paid for software license agreements | ($11) | ($11) | $0 | | Free Cash Flow (Non-GAAP) | $239 | $165 | $74 | - Free Cash Flow is a non-GAAP financial measure used to assess liquidity, representing net cash generated from operations after deducting cash paid for additions to property, plant, and equipment and software license agreements[29](index=29&type=chunk) [EBITDA, Adjusted EBITDA, and Adjusted OIBDA Reconciliations](index=10&type=section&id=EBITDA%2C%20Adjusted%20EBITDA%2C%20and%20Adjusted%20OIBDA%20Reconciliations) Array provides reconciliations for non-GAAP metrics such as EBITDA, Adjusted EBITDA, and Adjusted OIBDA, which management uses to assess profitability and operational performance by excluding significant non-cash expenses, non-recurring items, and investing activities - EBITDA, Adjusted EBITDA, and Adjusted OIBDA are non-GAAP financial measures used by management as indicators of profitability, providing additional relevant and useful information for evaluating operating efficiency and potential business trends by excluding significant non-cash expenses, non-recurring charges, gains or losses, and other items[30](index=30&type=chunk) Consolidated EBITDA, Adjusted EBITDA, and Adjusted OIBDA (Q2 2025 vs Q2 2024) | Metric (in millions) | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------ | :------ | :------ | :--------- | | Net Income (GAAP) | $32 | $18 | $14 | | Income Before Income Taxes (GAAP) | $36 | $32 | $4 | | EBITDA (Non-GAAP) | $244 | $242 | $2 | | Adjusted EBITDA (Non-GAAP) | $254 | $268 | ($14) | | Adjusted OIBDA (Non-GAAP) | $208 | $227 | ($19) | Segment Adjusted EBITDA and Adjusted OIBDA (Q2 2025 vs Q2 2024) | Segment (in millions) | Q2 2025 Adjusted EBITDA/OIBDA | Q2 2024 Adjusted EBITDA/OIBDA | YoY Change | | :-------------------- | :---------------------------- | :---------------------------- | :--------- | | Array Wireless | $174 | $196 | ($22) | | Array Towers | $34 | $31 | $3 |

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36167 Karyopharm Therapeutics Inc. (Exact name of registrant as specified in its charter) (State or other juri ...

Exhibit 99.1 Karyopharm Reports Second Quarter 2025 Financial Results and Highlights Recent Company Progress – New Patient Screening for Phase 3 SENTRY Trial in Myelofibrosis Expected to Close This Week; Top-Line Results Anticipated in March 2026 – – Total Revenue was $37.9 Million; U.S. XPOVIO® (selinexor) Net Product Revenue was $29.7 Million, up 6% compared to Second Quarter of 2024 – – Reaffirms Full-Year 2025 Total Revenue Guidance of $140 Million to $155 Million; Updates U.S. XPOVIO Net Product Revenu ...

[FORM 8-K CURRENT REPORT](index=1&type=section&id=FORM%208-K%20CURRENT%20REPORT) This current report provides essential administrative and financial disclosures, including operational results and exhibit details, as mandated by SEC regulations [Filing Information](index=1&type=section&id=Filing%20Information) This section details the registrant's administrative information, including company name, jurisdiction, and stock exchange listing - Registrant is **Agenus Inc.**, incorporated in Delaware[2](index=2&type=chunk) Registered Securities Information | Title of each class | Symbol(s) | Name of each exchange on which registered | | :------------------ | :-------- | :---------------------------------------- | | Common Stock, $0.01 par value per share | AGEN | The Nasdaq Global Market | - The registrant is not an emerging growth company[5](index=5&type=chunk) [Item 2.02 Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This section reports Agenus Inc.'s financial results for the quarter ended June 30, 2025, furnished via a press release - Agenus Inc. announced financial results for the quarter ended **June 30, 2025**, on **August 11, 2025**[6](index=6&type=chunk) - A press release, **Exhibit 99.1**, detailing financial results is furnished with this Form 8-K[6](index=6&type=chunk) - Information in Item 2.02 and Exhibit 99.1 is furnished, not filed, exempting it from Section 18 liabilities of the Securities Exchange Act of 1934[7](index=7&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section identifies the exhibits furnished with the Form 8-K, specifically Exhibit 99.1, the Press Release - **Exhibit 99.1** is the Press Release dated **August 11, 2025**[8](index=8&type=chunk) [Signatures](index=4&type=section&id=SIGNATURES) This section confirms the report's official signing by Christine M. Klaskin, VP, Finance, on August 11, 2025 - The report was signed on **August 11, 2025**[11](index=11&type=chunk) - Signed by **Christine M. Klaskin**, VP, Finance[11](index=11&type=chunk)

PART I—FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company reported a $273.9 million net loss for Q2 2025, a reversal from prior year's income, due to lower revenue and higher operating expenses [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $5.03 billion from $5.44 billion, primarily due to a decrease in cash and an increase in marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,238,459 | $2,715,411 | | Marketable securities | $3,264,692 | $2,171,480 | | **Total Assets** | **$5,032,602** | **$5,436,940** | | **Liabilities & Equity** | | | | Total current liabilities | $113,866 | $149,411 | | Total liabilities | $216,696 | $249,742 | | Total shareholders' equity | $4,815,906 | $5,187,198 | | **Total Liabilities and Shareholders' Equity** | **$5,032,602** | **$5,436,940** | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 saw a $273.9 million net loss, a significant shift from prior year's $57.5 million net income, driven by lower revenue and higher operating expenses Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $2,170 | $7,990 | | Research and development | $152,919 | $120,507 | | General and administrative | $134,019 | $99,892 | | Loss from operations | ($284,922) | ($102,235) | | Gain on sale of Telavant net assets | — | $110,387 | | Net (loss) income | ($273,911) | $57,490 | | Net (loss) income per share, basic | ($0.33) | $0.13 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for Q2 2025 was $204.4 million, with significant cash used in investing activities for marketable securities Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($204,383) | ($192,829) | | Net cash used in investing activities | ($1,085,716) | ($965) | | Net cash used in financing activities | ($187,768) | ($660,616) | | **Net change in cash, cash equivalents and restricted cash** | **($1,477,052)** | **($857,150)** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business, liquidity, and accounting policies, including a $110.4 million gain from Telavant sale and completion of a $1.5 billion share repurchase program - As of June 30, 2025, the Company had approximately **$4.5 billion** in cash, cash equivalents, and marketable securities. It incurred a net loss from continuing operations of **$273.9 million** for the quarter[43](index=43&type=chunk) - In June 2024, a one-time milestone related to the Telavant sale was achieved, resulting in the company recognizing a gain of **$110.4 million** for its pro rata portion[85](index=85&type=chunk) - The company completed its **$1.5 billion** share repurchase program as of June 30, 2025, having repurchased **20.3 million shares** for **$208.3 million** during the quarter. A **new $500 million** repurchase program was authorized in June 2025[93](index=93&type=chunk)[94](index=94&type=chunk) - The company's subsidiary, Immunovant, has a minimum purchase commitment of approximately **$43.1 million** with Samsung Biologics for the manufacturing of batoclimab[113](index=113&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the biopharmaceutical business, pipeline, $4.5 billion in cash, and Q2 2025 net loss driven by increased R&D and G&A expenses [Overview and Recent Developments](index=29&type=section&id=Overview%20and%20Recent%20Developments) Roivant advances its pipeline via 'Vant' subsidiaries, with key candidates in Phase 3, and completed a $1.5 billion share repurchase program Selected Product Candidate Pipeline | Product Candidate | Indication | Vant | Modality | Phase | | :--- | :--- | :--- | :--- | :--- | | Brepocitinib | Dermatomyositis | Priovant | Small Molecule | Phase 3* | | Brepocitinib | Non-Infectious Uveitis | Priovant | Small Molecule | Phase 3* | | IMVT-1402 | Graves' Disease | Immunovant | Biologic | Phase 2/3* | | Batoclimab | Thyroid Eye Disease | Immunovant | Biologic | Phase 3* | | Mosliciguat | Pulmonary Hypertension associated with Interstitial Lung Disease | Pulmovant | Inhaled | Phase 2 | - The company reported consolidated cash, cash equivalents, and marketable securities of **$4.5 billion** at June 30, 2025, supporting a cash runway into profitability[153](index=153&type=chunk) - Roivant completed its **$1.5 billion** share repurchase program, reducing outstanding shares by **over 15%** from March 31, 2024. A **new $500 million** share repurchase program was approved in June 2025[153](index=153&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Q2 2025 revenue decreased, R&D expenses rose by $32.4 million, and G&A expenses increased by $34.1 million due to executive compensation R&D Expense Breakdown (in thousands) | Program-specific costs | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Anti-FcRn franchise (all indications) | $56,012 | $40,793 | $15,219 | | Brepocitinib | $15,020 | $10,594 | $4,426 | | Mosliciguat | $8,385 | $2,980 | $5,405 | | **Total R&D Expenses** | **$152,919** | **$120,507** | **$32,412** | - G&A expenses increased by **$34.1 million**, primarily due to a **$34.2 million** increase in share-based compensation expense, largely from long-term equity incentive awards under the 2024 Senior Executive Compensation Program[176](index=176&type=chunk) - Interest income decreased by **$23.8 million** due to lower cash equivalent balances and lower interest rates[180](index=180&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had $4.5 billion in cash and marketable securities, sufficient to fund operations, and completed a $1.5 billion share repurchase program - As of June 30, 2025, the company had cash, cash equivalents and marketable securities of approximately **$4.5 billion**[184](index=184&type=chunk) - The **$1.5 billion** common share repurchase program was completed as of June 30, 2025. A **new $500 million** program was authorized on June 24, 2025, with no purchases made under it as of the quarter's end[190](index=190&type=chunk)[191](index=191&type=chunk) Summary of Cash Flows (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($204,383) | ($192,829) | | Net cash used in investing activities | ($1,085,716) | ($965) | | Net cash used in financing activities | ($187,768) | ($660,616) | [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates, foreign currency, and equity prices, with a hypothetical 10% change in key investments impacting financials by $28.4 million - The company's primary market risks are related to **interest rates**, **foreign currency**, and **equity prices**[206](index=206&type=chunk) - A hypothetical **10%** increase or decrease in the fair value of investments in Arbutus and Datavant would have impacted their fair value as of June 30, 2025 by approximately **$28.4 million**[209](index=209&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Based on an evaluation as of June 30, 2025, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were **effective at a reasonable assurance level**[212](index=212&type=chunk) - There were **no material changes** in the company's internal control over financial reporting during the fiscal quarter ended June 30, 2025[213](index=213&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company does not expect any current legal or regulatory proceedings to materially adversely affect its business or financial condition - The company does not currently expect any legal proceedings to have a **material adverse effect** on its business, operating results or financial condition[217](index=217&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its business model, financial position, product development, regulatory approval, and intellectual property [Risks Related to Our Business and Industry](index=42&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Risks include limited operating history, 'Vant' structure complexities, reliance on in-licensed assets, capital allocation, and global economic instability - The company's **limited operating history** and the inherent uncertainties of biopharmaceutical development make it difficult to assess future prospects[220](index=220&type=chunk) - The **'Vant' structure** may result in increased costs, complexities, and key employee risks compared to a centralized model[236](index=236&type=chunk)[237](index=237&type=chunk) - Immunovant's rights to IMVT-1402 and batoclimab depend on the **HanAll Agreement**, and any termination or breach would severely impact their development and commercialization[228](index=228&type=chunk) - The company faces risks from its **significant holdings of cash and marketable securities**, including market volatility and potential for losses[249](index=249&type=chunk) [Risks Related to Our Intellectual Property](index=82&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success depends on obtaining and enforcing IP rights, facing risks from patent challenges, litigation (e.g., Moderna, Pfizer/BioNTech), and AI-related IP complexities - The company relies on a combination of **patents**, **trade secrets**, and **confidentiality agreements** to protect its intellectual property, but these may not be sufficiently broad or enforceable[424](index=424&type=chunk) - The company's subsidiary GSG and Arbutus are in **active litigation against Moderna and Pfizer/BioNTech** for alleged patent infringement related to COVID-19 vaccines. The **jury trial in the Moderna case is scheduled for March 2026**[455](index=455&type=chunk)[456](index=456&type=chunk) - The company may not be able to protect its **intellectual property rights throughout the world**, as laws and enforcement vary by country, potentially allowing competitors to use its technologies in some jurisdictions[472](index=472&type=chunk)[473](index=473&type=chunk) - The use of **AI in drug discovery** introduces unresolved legal questions about inventorship and ownership under current patent laws, which could hinder the ability to protect AI-generated innovations[499](index=499&type=chunk) [Risks Related to Our Securities, Our Jurisdiction of Incorporation and Certain Tax Matters](index=96&type=section&id=Risks%20Related%20to%20Our%20Securities%2C%20Our%20Jurisdiction%20of%20Incorporation%20and%20Certain%20Tax%20Matters) Investor risks include stock price volatility, anti-takeover provisions, dilution from future issuances, and adverse tax consequences from Bermuda incorporation and CFC/PFIC status - The company's **largest shareholders** own a significant percentage of common shares, allowing them to exert substantial control over matters subject to shareholder approval[509](index=509&type=chunk) - As a **Bermuda-incorporated company**, shareholder rights are governed by Bermuda law, which may offer less protection than U.S. laws, and it may be difficult for U.S. investors to enforce judgments against the company[517](index=517&type=chunk)[518](index=518&type=chunk) - The company's non-U.S. subsidiaries are classified as **Controlled Foreign Corporations (CFCs)**, which may result in adverse U.S. federal income tax consequences for U.S. shareholders holding **10% or more** of the company's shares[527](index=527&type=chunk)[528](index=528&type=chunk) - The company believes it was not a **Passive Foreign Investment Company (PFIC)** for the taxable year ended March 31, 2025, but its status is an annual determination and could change, which would have adverse tax consequences for U.S. holders[529](index=529&type=chunk)[531](index=531&type=chunk)[532](index=532&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=102&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 20.0 million shares for $205.2 million, completing its $1.5 billion program, and authorized a new $500 million repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Common Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased (in millions) | | :--- | :--- | :--- | :--- | | April 1 – 30, 2025 | 13,672,384 | $9.89 | $69.9 | | May 1 – 31, 2025 | 5,453,666 | $11.04 | $9.7 | | June 1 – 30, 2025 | 873,400 | $11.16 | $500.0 | | **Total** | **19,999,450** | | | - The company's **$1.5 billion** share repurchase program was **fully exhausted** as of June 30, 2025. A **new $500 million program** was authorized in June 2025[538](index=538&type=chunk) [Defaults Upon Senior Securities](index=103&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None - **None**[536](index=536&type=chunk) [Mine Safety Disclosures](index=103&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - **Not applicable**[536](index=536&type=chunk) [Other Information](index=103&type=section&id=Item%205.%20Other%20Information) None - **None**[536](index=536&type=chunk) [Exhibits](index=104&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including employment agreements, equity incentive plan documents, and officer certifications - The exhibits include various **employment agreements**, **equity plan documents**, and required **certifications** by the Principal Executive Officer and Principal Financial Officer[540](index=540&type=chunk)

[Cautionary Notice About Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20NOTICE%20ABOUT%20FORWARD-LOOKING%20STATEMENTS) This section advises readers on the inherent risks and uncertainties associated with forward-looking statements and the company's non-obligation to update them - This report contains forward-looking statements regarding the company's business, strategies, products, future results, and financial performance, which are subject to various risks and uncertainties[10](index=10&type=chunk) - Readers are advised not to place undue reliance on these statements, as actual results may differ materially from current expectations due to factors discussed under 'Risk Factors' and in other SEC filings[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[11](index=11&type=chunk) [PART I—FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents MAIA Biotechnology, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, equity changes, and cash flows, with detailed accounting notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time | Metric | June 30, 2025 (Unaudited) ($) | December 31, 2024 ($) | | :--------------------------------- | :------------------------ | :------------------ | | **ASSETS** | | | | Cash | $10,144,522 | $9,601,298 | | Total current assets | $11,043,054 | $10,152,479 | | Total assets | $11,045,854 | $10,155,279 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $5,043,952 | $3,830,038 | | Warrant liability | $2,125,218 | $2,690,605 | | Total liabilities | $7,169,170 | $6,520,643 | | Total stockholders' equity | $3,876,684 | $3,634,636 | - Cash increased by **$543,224** from December 31, 2024, to June 30, 2025[17](index=17&type=chunk) - Total current assets increased by **$890,575**, and total liabilities increased by **$648,527**[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net loss over specific reporting periods Three Months Ended June 30 | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--------------------------------- | :------------ | :------------ | | Research and development expenses | $3,110,867 | $2,052,233 | | General and administrative expenses | $2,055,191 | $1,763,029 | | Total operating expenses | $5,166,058 | $3,815,262 | | Net loss | $(5,346,963) | $(8,879,276) | | Net loss per share (Basic and diluted) | $(0.18) | $(0.40) | Six Months Ended June 30 | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--------------------------------- | :------------ | :------------ | | Research and development expenses | $6,308,399 | $4,372,975 | | General and administrative expenses | $4,283,090 | $3,391,163 | | Total operating expenses | $10,591,489 | $7,764,138 | | Net loss | $(9,864,222) | $(16,946,731) | | Net loss per share (Basic and diluted) | $(0.34) | $(0.85) | - Net loss decreased by **40%** for the three months ended June 30, 2025, and by **42%** for the six months ended June 30, 2025, compared to the prior year periods[20](index=20&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This statement presents the net loss and other comprehensive income or loss components for the reporting periods Three Months Ended June 30 | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--------------------------------- | :------------ | :------------ | | Net loss | $(5,346,963) | $(8,879,276) | | Foreign currency translation adjustment | $8,127 | $7,868 | | Comprehensive loss | $(5,338,836) | $(8,871,408) | Six Months Ended June 30 | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--------------------------------- | :------------ | :------------ | | Net loss | $(9,864,222) | $(16,946,731) | | Foreign currency translation adjustment | $587 | $(5,918) | | Comprehensive loss | $(9,863,635) | $(16,952,649) | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Deficit%29) This statement outlines the changes in the company's equity accounts, including stock issuances and accumulated deficit, over the reporting period - Total stockholders' equity increased from **$3,634,636** at December 31, 2024, to **$3,876,684** at June 30, 2025[25](index=25&type=chunk) - Additional paid-in capital increased significantly due to common stock issuances from At-The-Market (ATM) financing and private placement offerings[25](index=25&type=chunk) - The accumulated deficit increased from **$(87,234,833)** at December 31, 2024, to **$(97,099,055)** at June 30, 2025, primarily due to net losses[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities for the reporting periods Six Months Ended June 30 | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--------------------------------- | :------------ | :------------ | | Net cash used in operating activities | $(8,337,611) | $(8,271,571) | | Net cash provided by financing activities | $8,869,406 | $12,704,327 | | Net increase (decrease) in cash | $543,224 | $4,428,696 | | Cash at end of period | $10,144,522 | $11,579,391 | - Net cash provided by financing activities decreased by approximately **$3.8 million** from the six months ended June 30, 2024, to the same period in 2025[32](index=32&type=chunk) - Cash at the end of the period decreased from **$11,579,391** in 2024 to **$10,144,522** in 2025[32](index=32&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information regarding the figures presented in the financial statements [1. Nature of Business and Summary of Significant Accounting Policies](index=11&type=section&id=1.%20NATURE%20OF%20BUSINESS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes the company's operations, its biopharmaceutical focus, and the key accounting principles applied in preparing the financial statements - MAIA Biotechnology, Inc. is a biopharmaceutical company focused on developing oncology drug candidates, incorporated in Delaware in 2018, with subsidiaries in Australia and Romania[35](index=35&type=chunk)[41](index=41&type=chunk) - The company has incurred recurring losses and negative cash flow from operations, with an accumulated deficit of **$97,099,055** as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern without additional financing[37](index=37&type=chunk)[38](index=38&type=chunk) - The company operates as a single operating segment, dedicated to discovering and developing immunotherapies for cancer[43](index=43&type=chunk) [2. Related Party Transactions](index=17&type=section&id=2.%20RELATED%20PARTY%20TRANSACTIONS) This note details transactions between the company and its related parties, including common stock issuances and private placement participations - FGMK, LLC, a related party, received **$31,570** in common stock for accounting, tax, and valuation services and participated in the February 2025 private placement[75](index=75&type=chunk) - Company directors (Stan Smith, Ramiro Guerrero) participated in multiple private placements in February, March, May, and June 2025, purchasing common stock and warrants[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) [3. Accrued Expenses](index=18&type=section&id=3.%20ACCRUED%20EXPENSES) This note provides a breakdown of accrued expenses, including bonuses, professional fees, and research and development costs Accrued Expenses | Accrued Expense Category | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------- | :------------ | :---------------- | | Bonus | $595,506 | $941,098 | | Professional fees | $69,901 | $123,317 | | Research and development costs | $2,308,844 | $1,035,355 | | Other | $346,538 | $217,832 | | Total accrued expenses | $3,320,789 | $2,317,602 | - Research and development costs within accrued expenses more than doubled from December 31, 2024, to June 30, 2025, increasing by over **$1.2 million**[81](index=81&type=chunk) [4. Fair Value of Financial Liabilities](index=18&type=section&id=4.%20FAIR%20VALUE%20OF%20FINANCIAL%20LIABILITIES) This note outlines the fair value measurement of financial liabilities, specifically warrant liabilities, and changes over the reporting period Fair Value of Warrant Liabilities | Liability | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------- | :------------ | :---------------- | | Warrant liability | $2,125,218 | $2,690,605 | Changes in Fair Value of Warrant Liabilities (Six Months Ended June 30) | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--------------------------------- | :------------ | :------------ | | Balance, beginning of period | $2,690,605 | $2,152,188 | | Loss (gain) on fair value of warrant liability | $(565,387) | $9,338,791 | | Balance, end of period | $2,125,218 | $5,346,638 | - The company recognized a gain of **$565,387** on the fair value of warrant liability for the six months ended June 30, 2025, a significant improvement from a loss of **$9,338,791** in the prior year[82](index=82&type=chunk) [5. Stockholders' Equity](index=19&type=section&id=5.%20STOCKHOLDERS%27%20EQUITY) This note details changes in stockholders' equity, including authorized shares, stock issuances, warrant activity, and stock option awards - The number of authorized shares of Common Stock increased from **70,000,000** to **150,000,000** on May 22, 2025[83](index=83&type=chunk) - The company raised approximately **$1.42 million** in net proceeds from At-The-Market (ATM) offerings and approximately **$5.92 million** in gross proceeds from private placements during the first half of 2025[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) Stock Warrants Activity (Six Months Ended June 30) | Metric | June 30, 2025 (Units) | June 30, 2024 (Units) | | :----------------------- | :------------------ | :------------------ | | Warrants Outstanding (beginning) | 6,718,176 | 3,650,278 | | Issued | 3,644,299 | 2,949,169 | | Exercised | (219,283) | (1,157,201) | | Warrants Outstanding (end) | 10,143,192 | 5,442,246 | | Weighted Average Exercise Price (end) ($) | $2.17 | $2.37 | Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Options Outstanding (Units) | Weighted Average Exercise Price ($) | Aggregate Intrinsic Value ($) | | :----------------------- | :------------------ | :------------------------------ | :------------------------ | | Balance at January 1, 2025 | 9,769,992 | $2.43 | — | | Granted | 2,591,991 | $1.80 | | | Exercised | (570) | $1.48 | | | Cancelled/forfeited | (409,001) | $3.60 | | | Balance at June 30, 2025 | 11,952,412 | $2.25 | $627,620 | | Options exercisable at June 30, 2025 | 8,772,024 | $2.29 | $474,995 | - Total unrecognized compensation related to unvested stock option awards was **$4,339,230** as of June 30, 2025, expected to be recognized over approximately **2.94 years**[111](index=111&type=chunk) [6. Commitments and Contingencies](index=27&type=section&id=6.%20COMMITMENTS%20AND%20CONTINGENCIES) This note describes the company's contractual obligations, including patent licensing agreements and drug supply agreements for clinical trials - The company has patent licensing agreements with the University of Texas Southwestern (UTSW) for its compounds, including THIO, requiring milestone payments up to **$112 million** and royalties of **2-5%** on net sales[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - Drug supply agreements are in place with Regeneron, BeOne Medicines, and Roche, where these partners supply their respective drugs (cemiplimab, tislelizumab, atezolizumab) at no cost for MAIA's clinical trials, representing significant cost savings[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [7. Income Taxes](index=29&type=section&id=7.%20INCOME%20TAXES) This note explains the company's income tax position, including its valuation allowance against deferred tax assets due to recurring losses - The company maintains a full valuation allowance against its net deferred tax assets due to recurring losses and no taxable income[120](index=120&type=chunk)[121](index=121&type=chunk) - No income tax expense was recorded for the six months ended June 30, 2025, and 2024[121](index=121&type=chunk) [8. Segment Information](index=29&type=section&id=8.%20SEGMENT%20INFORMATION) This note clarifies that the company operates as a single reportable segment focused on cancer immunotherapy development - MAIA Biotechnology operates as a single reportable segment, focused on discovering and developing immunotherapies for cancer[122](index=122&type=chunk) [9. Subsequent Events](index=29&type=section&id=9.%20SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the reporting period, including additional stock option grants and ATM offerings - From July 1 to August 11, 2025, the company issued **416,806** options at a weighted exercise price of **$1.91** to consultants[123](index=123&type=chunk) - Since July 1, 2025, the company sold **1,174,740** shares of common stock through the ATM Agreement, generating net proceeds of approximately **$2.19 million**[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition and results, focusing on ateganosine development, clinical milestones, liquidity, and changes in operating expenses and financing activities [Overview](index=30&type=section&id=Overview) This overview introduces MAIA Biotechnology as a clinical-stage biopharmaceutical company focused on developing ateganosine for cancer, highlighting key clinical milestones and future trial plans - MAIA Biotechnology is a clinical-stage biopharmaceutical company developing targeted immunotherapies for cancer, with ateganosine (THIO) as its lead asset, primarily targeting Non-Small Cell Lung Cancer (NSCLC)[126](index=126&type=chunk) - Key milestones in the first half of 2025 include positive updated data from the THIO-101 Phase 2 trial (median overall survival of **16.9 months** in 3L NSCLC patients), new clinical supply agreements with BeiGene and Roche, and Fast Track designation for ateganosine for NSCLC by the FDA[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) - The company plans to initiate a Phase 3 pivotal trial (THIO-104) in 2025 for NSCLC and Phase 2 trials in hepatocellular carcinoma (HCC), small cell lung cancer (SCLC), and colorectal cancer (CRC) in 2026[126](index=126&type=chunk)[128](index=128&type=chunk) [Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024](index=34&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes the financial performance for the three and six months ended June 30, 2025, compared to 2024, focusing on changes in expenses and net loss [Comparison of Three Months ended June 30, 2025 and 2024](index=34&type=section&id=Comparison%20of%20Three%20Months%20ended%20June%2030%2C%202025%20and%202024) This comparison highlights significant changes in research and development, general and administrative expenses, and net loss for the three months ended June 30 Key Financial Changes (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (Dollars) ($) | Change (%) | | :--------------------------------- | :------------ | :------------ | :--------------- | :--------- | | Research and development expenses | $3,110,867 | $2,052,233 | $1,058,634 | 52% | | General and administrative expenses | $2,055,191 | $1,763,029 | $292,162 | 17% | | Net loss | $(5,346,963) | $(8,879,276) | $3,532,313 | (40)% | - Research and development expenses increased by **52%** (**$1.06 million**) due to higher scientific and clinical research, stock-based compensation, and payroll[133](index=133&type=chunk) - Other income (expense), net, improved by approximately **$4.88 million** (**96%**) primarily due to a favorable change in the fair value of warrant liability[135](index=135&type=chunk) [Comparison of Six Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This comparison highlights significant changes in research and development, general and administrative expenses, and net loss for the six months ended June 30 Key Financial Changes (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (Dollars) ($) | Change (%) | | :--------------------------------- | :------------ | :------------ | :--------------- | :--------- | | Research and development expenses | $6,308,399 | $4,372,975 | $1,935,424 | 44% | | General and administrative expenses | $4,283,090 | $3,391,163 | $891,927 | 26% | | Net loss | $(9,864,222) | $(16,946,731) | $7,082,509 | (42)% | - Research and development expenses increased by **44%** (**$1.94 million**) due to higher scientific and clinical research, stock-based compensation, and payroll[137](index=137&type=chunk) - Other income (expense), net, improved by approximately **$9.91 million** (**108%**) primarily due to a favorable change in the fair value of warrant liability[139](index=139&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, its ability to continue as a going concern, and its strategies for raising capital [Our Ability to Continue as a Going Concern](index=36&type=section&id=Our%20Ability%20to%20Continue%20as%20a%20Going%20Concern) This subsection addresses the company's financial viability given its recurring losses and negative cash flows, emphasizing the need for additional financing - As of June 30, 2025, cash totaled approximately **$10.145 million**, an increase of **$543,000** compared to December 31, 2024[140](index=140&type=chunk) - The company has generated no revenue and continues to incur losses and negative cash flows from operations, leading to substantial doubt about its ability to continue as a going concern without raising additional equity or debt financing[140](index=140&type=chunk)[141](index=141&type=chunk) [Sales of Common Stock](index=36&type=section&id=Sales%20of%20Common%20Stock) This subsection details the capital raised through private placements and At-The-Market offerings to fund ongoing operations and development - In the first half of 2025, the company received approximately **$5.92 million** in gross proceeds from multiple private placement offerings[145](index=145&type=chunk)[146](index=146&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - The company also received approximately **$3.00 million** in gross proceeds from At-The-Market (ATM) offerings during the first half of 2025[147](index=147&type=chunk)[148](index=148&type=chunk) - Additional capital will be required to fund operations, develop ateganosine, and pursue other product development, with no assurance of availability or acceptable terms[151](index=151&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) This subsection analyzes the cash generated from or used in operating, investing, and financing activities for the reporting periods Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 ($) | 2024 ($) | | :--------------------------------- | :------------ | :------------ | | Net cash used in operating activities | $(8,337,611) | $(8,271,571) | | Net cash provided by financing activities | $8,869,406 | $12,704,327 | | Net increase in cash | $543,224 | $4,428,696 | - Operating activities consistently used cash, with approximately **$8.34 million** used in the first half of 2025[153](index=153&type=chunk) - Financing activities provided the majority of cash, totaling approximately **$8.87 million** in the first half of 2025, primarily from private placements and ATM offerings[157](index=157&type=chunk) - There were no cash flows from investing activities for the six months ended June 30, 2025, and 2024[156](index=156&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any significant off-balance sheet arrangements that could materially impact the company's financial position - The company has no significant off-balance sheet arrangements[159](index=159&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section states that there have been no material changes to the critical accounting estimates previously disclosed in the annual report - There have been no material changes to the critical accounting estimates previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, MAIA Biotechnology, Inc. is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide detailed market risk disclosures[162](index=162&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective, with no material changes in internal control over financial reporting identified - Disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of June 30, 2025[163](index=163&type=chunk) - No material changes in internal control over financial reporting were identified during the period covered by this Quarterly Report[164](index=164&type=chunk) [PART II—OTHER INFORMATION](index=40&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This part provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently party to any material legal proceedings, though it may be involved in routine claims incident to the ordinary course of business - The company is not party to any material legal proceedings[167](index=167&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Annual Report on Form 10-K for a comprehensive discussion of risk factors and states that no additional risk factors have been added as of the date of this Quarterly Report - No additional risk factors have been added to those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[168](index=168&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details recent unregistered sales of common stock for consulting and service fees, which were exempt under Section 4(a)(2) of the Securities Act - On June 2, 2025, **18,040** shares of common stock (valued at **$31,570**) were issued to FGMK, LLC for accounting and tax services[169](index=169&type=chunk) - On June 18, 2025, **17,083** shares of common stock (valued at **$30,751**) were issued to a service provider for services rendered[170](index=170&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - No defaults upon senior securities were reported[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to MAIA Biotechnology, Inc. - This item is not applicable to the company[173](index=173&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) The company reports that no Section 16 directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or Section 16 officers during the fiscal quarter ended June 30, 2025[174](index=174&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, warrant forms, securities purchase agreements, and certifications - The report includes various exhibits such as the Amended and Restated Certificate of Incorporation, Bylaws, forms of investor and director warrants, securities purchase agreements, and certifications[175](index=175&type=chunk) [Signatures](index=42&type=section&id=SIGNATURES) This section contains the official signatures of the company's Chief Executive Officer and Head of Finance, certifying the report - The report is signed by Vlad Vitoc, Chief Executive Officer, and Jeffrey C. Himmelreich, Head of Finance, on August 11, 2025[179](index=179&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38906 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 IMMUNOVANT, INC. (Exact name of registrant as specified in its charter) Delaware 83-2771572 (State or other jurisdiction of incorporation o ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section provides basic identification details for Sionna Therapeutics, Inc.'s Form 10-Q filing for the quarterly period ended June 30, 2025 [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides the basic identification details for Sionna Therapeutics, Inc.'s Form 10-Q filing for the quarterly period ended June 30, 2025, including its address, telephone number, and Nasdaq Global Market trading symbol 'SION', classifying the company as a non-accelerated filer, a smaller reporting company, and an emerging growth company - Sionna Therapeutics, Inc. is filing its Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) - The number of shares of registrant's common stock outstanding as of August 1, 2025, was **44,139,823**[5](index=5&type=chunk) Trading Symbol Information | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, $0.001 par value per share | SION | The Nasdaq Global Market | Filer Status | Filer Status | | | :---------------------- | :--- | | Large accelerated filer | o | | Accelerated filer | o | | Non-accelerated filer | x | | Smaller reporting company | x | | Emerging growth company | x | [Cautionary Note Regarding Forward-Looking Statements](index=2&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions readers about forward-looking statements in the report, which involve substantial risks and uncertainties [Nature of Forward-Looking Statements](index=2&type=section&id=Nature%20of%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements involving substantial risks and uncertainties, cautioning that actual results may differ materially - The Quarterly Report contains forward-looking statements about the company and its industry, involving substantial risks and uncertainties, made pursuant to safe harbor provisions[8](index=8&type=chunk) - Statements cover future results of operations, financial position, business strategy, product candidates, preclinical studies, clinical trials, research and development costs, regulatory approvals, commercial strategy, timing and likelihood of success, and management plans[8](index=8&type=chunk) - Actual results, performance, or achievements may be materially different from those expressed or implied by forward-looking statements due to known and unknown risks, uncertainties, and other important factors beyond the company's control[8](index=8&type=chunk) [Key Areas of Forward-Looking Statements](index=2&type=section&id=Key%20Areas%20of%20Forward-Looking%20Statements) This section details specific forward-looking statements regarding R&D, clinical trials, regulatory approvals, funding, market potential, and intellectual property - Initiation, timing, progress, and results of research and development programs, preclinical studies, and clinical trials[10](index=10&type=chunk) - Ability of clinical trials to demonstrate safety and efficacy of product candidates[10](index=10&type=chunk) - Timing, scope, and likelihood of regulatory filings and approvals[10](index=10&type=chunk) - Implementation of business model and strategic plans for product candidates[10](index=10&type=chunk) - Ability to obtain additional cash and sufficiency of existing cash to fund operations[10](index=10&type=chunk) - Accuracy of estimates regarding expenses, future revenue, capital requirements, and financing needs[10](index=10&type=chunk) - Size and growth potential of markets for product candidates and manufacturing capabilities[10](index=10&type=chunk) - Scope of intellectual property protection[10](index=10&type=chunk) - Developments relating to competitors and industry[10](index=10&type=chunk) - Existing regulations and regulatory developments, including changes in U.S. federal policy[10](index=10&type=chunk) - Expectations regarding future events under collaboration and licensing agreements[10](index=10&type=chunk) - General economic, industry, and market conditions, including elevated interest rates and inflation[10](index=10&type=chunk) - Ability to attract and retain key personnel[10](index=10&type=chunk) - Expectations regarding emerging growth company status[10](index=10&type=chunk) - Anticipated use of existing cash, cash equivalents, and marketable securities[10](index=10&type=chunk) - These statements are based on current expectations and projections but are not guarantees of future performance and are subject to risks described in the 'Risk Factors' section[9](index=9&type=chunk)[11](index=11&type=chunk) [Note Regarding Trademarks](index=4&type=section&id=NOTE%20REGARDING%20TRADEMARKS) This section clarifies the ownership and usage of trademarks within the report, including company and third-party marks [Trademark Ownership and Usage](index=4&type=section&id=Trademark%20Ownership%20and%20Usage) This section clarifies Sionna Therapeutics, Inc.'s trademark ownership and usage, noting that other trademarks belong to third parties - Sionna Therapeutics, Inc. owns the trademarks SIONNA and SIONNA THERAPEUTICS, and other design trademarks[15](index=15&type=chunk) - The absence of ™ and ® symbols does not indicate a lack of trademark rights[15](index=15&type=chunk) - References to 'Sionna,' 'Company,' 'we,' 'us,' and 'our' refer to Sionna Therapeutics, Inc. and its subsidiary[16](index=16&type=chunk) [Summary of Material Risks Associated with Our Business](index=5&type=section&id=SUMMARY%20OF%20MATERIAL%20RISKS%20ASSOCIATED%20WITH%20OUR%20BUSINESS) This section provides a high-level overview of the significant risks inherent in the company's business operations and financial outlook [Key Business Risks](index=5&type=section&id=Key%20Business%20Risks) This section summarizes key risks including operating losses, funding needs, dependence on NBD1 stabilizers, regulatory uncertainties, competition, and stock volatility - Incurred significant operating losses since inception, with net losses of **$34.6 million** and **$20.4 million** for the six months ended June 30, 2025, and 2024, respectively, and an accumulated deficit of **$215.6 million** as of June 30, 2025[18](index=18&type=chunk) - Requires substantial additional funding for product development and commercialization, with potential inability to raise capital on acceptable terms[19](index=19&type=chunk) - Substantially dependent on the success of NBD1 stabilizers; failure or delays would materially harm the business[19](index=19&type=chunk) - Developing combination treatments increases complexity and risk, including drug-drug interactions and unforeseen side effects[19](index=19&type=chunk) - Regulatory approval processes are lengthy, time-consuming, and unpredictable; failure to obtain approval would substantially harm the business[19](index=19&type=chunk) - Preclinical and interim clinical trial results are not necessarily predictive of later clinical trial outcomes[19](index=19&type=chunk) - Targeting the NBD1 domain of CFTR protein is novel, with no guarantee of successful product development[19](index=19&type=chunk) - Clinical trials may fail to demonstrate safety and efficacy, or identify serious adverse side effects[19](index=19&type=chunk) - Must prioritize development of certain product candidates due to limited resources, potentially missing more profitable opportunities[19](index=19&type=chunk) - Dependent on licensed intellectual property; loss of rights or breach of agreements could prevent development/commercialization[19](index=19&type=chunk) - Relies on third parties for manufacturing, increasing risks of insufficient quantities, unacceptable cost, or quality[19](index=19&type=chunk) - Inability to obtain, maintain, and enforce intellectual property rights could allow competitors to commercialize similar products[19](index=19&type=chunk) - Faces substantial competition, particularly from Vertex, which holds significant market share and greater resources[21](index=21&type=chunk) - The trading price of common stock may be volatile, leading to potential investment loss[21](index=21&type=chunk) [Part I - Financial Information](index=8&type=section&id=Part%20I%20-%20Financial%20Information) This section presents the unaudited interim condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited interim condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Assets (June 30, 2025) | Amount ($) | Assets (December 31, 2024) | Amount ($) | | :----------------------- | :--------- | :--------------------------- | :--------- | | Cash and cash equivalents | 40,985 | Cash and cash equivalents | 37,788 | | Marketable securities, current | 221,586 | Marketable securities, current | 109,750 | | Prepaid expenses and other current assets | 4,175 | Prepaid expenses and other current assets | 3,455 | | **Total current assets** | **266,746** | **Total current assets** | **150,993** | | Property and equipment, net | 2,246 | Property and equipment, net | 2,466 | | Marketable securities, noncurrent | 74,699 | Marketable securities, noncurrent | 20,505 | | Restricted cash | 962 | Restricted cash | 962 | | Operating lease right-of-use asset | 7,395 | Operating lease right-of-use asset | 7,832 | | Other assets | — | Other assets | 2,994 | | **Total assets** | **352,048** | **Total assets** | **185,752** | | Liabilities (June 30, 2025) | Amount ($) | Liabilities (December 31, 2024) | Amount ($) | | Accounts payable | 914 | Accounts payable | 1,186 | | Accrued expenses | 5,468 | Accrued expenses | 8,162 | | Operating lease liability, current | 1,168 | Operating lease liability, current | 1,072 | | **Total current liabilities** | **7,550** | **Total current liabilities** | **10,420** | | Operating lease liability, noncurrent | 8,069 | Operating lease liability, noncurrent | 8,677 | | **Total liabilities** | **15,619** | **Total liabilities** | **19,097** | | Total convertible preferred stock | — | Total convertible preferred stock | 330,368 | | Stockholders' equity (deficit) | 336,429 | Stockholders' equity (deficit) | (163,713) | | **Total liabilities, convertible preferred stock and stockholders' equity (deficit)** | **352,048** | **Total liabilities, convertible preferred stock and stockholders' equity (deficit)** | **185,752** | - Total assets increased significantly from **$185.8 million** at December 31, 2024, to **$352.0 million** at June 30, 2025, primarily driven by an increase in marketable securities[29](index=29&type=chunk) - Total liabilities decreased from **$19.1 million** to **$15.6 million**, while stockholders' equity shifted from a deficit of **$163.7 million** to a positive **$336.4 million**, largely due to the IPO and conversion of preferred stock[29](index=29&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details the company's revenues, expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development | $15,383 | $8,233 | $29,051 | $18,453 | | General and administrative | $6,523 | $3,059 | $12,514 | $5,986 | | **Total operating expenses** | **$21,906** | **$11,292** | **$41,565** | **$24,439** | | Loss from operations | $(21,906) | $(11,292) | $(41,565) | $(24,439) | | Interest income | $3,667 | $2,566 | $6,667 | $3,698 | | Other income | $171 | $174 | $348 | $342 | | **Total other income** | **$3,838** | **$2,740** | **$7,015** | **$4,040** | | **Net loss** | **$(18,068)** | **$(8,552)** | **$(34,550)** | **$(20,399)** | | Net loss per share, basic and diluted | $(0.41) | $(2.71) | $(0.98) | $(6.54) | | Weighted-average common shares outstanding | 44,116,997 | 3,159,815 | 35,404,928 | 3,121,225 | | Unrealized loss on marketable securities | $(118) | $(148) | $(185) | $(156) | | **Comprehensive loss** | **$(18,186)** | **$(8,700)** | **$(34,735)** | **$(20,555)** | - Net loss for the six months ended June 30, 2025, increased to **$34.6 million** from **$20.4 million** in the prior year, driven by higher operating expenses[31](index=31&type=chunk) - Research and development expenses increased by **$10.6 million (57.4%)** and general and administrative expenses increased by **$6.5 million (109.0%)** for the six months ended June 30, 2025, compared to the same period in 2024[31](index=31&type=chunk) - Interest income significantly increased to **$6.7 million** for the six months ended June 30, 2025, from **$3.7 million** in 2024, due to increased investment in debt securities following the IPO[31](index=31&type=chunk) [Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) This section outlines changes in the company's equity structure, including preferred stock conversion and IPO impact - Upon the closing of the initial public offering in February 2025, all outstanding convertible preferred stock (Series Seed, A, B, C) automatically converted into **27,149,206** shares of common stock[36](index=36&type=chunk)[42](index=42&type=chunk) - The IPO also resulted in the issuance of **12,176,467** shares of common stock, generating net proceeds of approximately **$199.6 million**[36](index=36&type=chunk)[42](index=42&type=chunk) - Total stockholders' equity (deficit) dramatically improved from a deficit of **$(163.7 million)** at December 31, 2024, to a positive **$336.4 million** at June 30, 2025[36](index=36&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the inflows and outflows of cash from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(34,441) | $(23,320) | | Net cash used in investing activities | $(164,439) | $(152,548) | | Net cash provided by financing activities | $202,077 | $181,371 | | **Net increase in cash, cash equivalents and restricted cash** | **$3,197** | **$5,503** | - Net cash used in operating activities increased to **$34.4 million** for the six months ended June 30, 2025, from **$23.3 million** in the prior year, primarily due to increased net loss[38](index=38&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - Net cash provided by financing activities was **$202.1 million** in 2025, mainly from the IPO, compared to **$181.4 million** in 2024 from Series C convertible preferred stock issuance[38](index=38&type=chunk)[121](index=121&type=chunk) - Cash, cash equivalents, and restricted cash at the end of the period were **$41.9 million** in 2025, a slight decrease from **$45.0 million** in 2024[38](index=38&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. Nature of the Business](index=15&type=section&id=1.%20Nature%20of%20the%20Business) This note describes Sionna Therapeutics, Inc.'s core focus, recent corporate actions, and financial viability - Sionna Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing novel medicines to normalize CFTR protein function for cystic fibrosis patients[39](index=39&type=chunk) - The company completed a **1-for-1.4611** reverse stock split on January 31, 2025, and an Initial Public Offering (IPO) in February 2025, raising approximately **$199.6 million** net proceeds[41](index=41&type=chunk)[42](index=42&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$215.6 million** but believes its existing cash, cash equivalents, and marketable securities of **$337.3 million** will fund operations beyond twelve months[44](index=44&type=chunk)[45](index=45&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and recent pronouncements relevant to the financial statements - No material changes to significant accounting policies since the Annual Report on Form 10-K for the year ended December 31, 2024[46](index=46&type=chunk) - The interim financial statements are unaudited and prepared on the same basis as audited annual statements, reflecting normal recurring adjustments[47](index=47&type=chunk) - ASU 2023-09 (Income Taxes): Effective for annual periods after December 15, 2024; not expected to have a material impact[48](index=48&type=chunk) - ASU 2024-03 (Income Statement Expenses): Effective for annual periods after December 15, 2026; currently evaluating the effect[49](index=49&type=chunk) [3. Marketable Securities](index=17&type=section&id=3.%20Marketable%20Securities) This note details the composition and fair value of the company's marketable securities portfolio Marketable Securities (in thousands) | Category | June 30, 2025 Fair Value ($) | December 31, 2024 Fair Value ($) | | :----------------------------- | :----------------------------- | :----------------------------- | | U.S. Treasury securities | 183,705 | 70,679 | | Commercial paper | 61,638 | 5,934 | | Government agency securities | 37,870 | 36,415 | | Corporate debt | 13,072 | 17,227 | | **Total marketable securities** | **296,285** | **130,255** | - Total marketable securities increased significantly from **$130.3 million** at December 31, 2024, to **$296.3 million** at June 30, 2025[50](index=50&type=chunk) - As of June 30, 2025, **$74.7 million** of marketable securities had remaining maturities between one and two years; all others matured in less than a year. No realized gains or losses were recorded in either period[50](index=50&type=chunk) [4. Fair Value Measurements](index=18&type=section&id=4.%20Fair%20Value%20Measurements) This note describes the fair value hierarchy and measurements applied to the company's financial assets Fair Value Measurements of Financial Assets (in thousands) | Asset Category | June 30, 2025 Total Fair Value ($) | December 31, 2024 Total Fair Value ($) | | :----------------------- | :--------------------------------- | :--------------------------------- | | Money market funds | 40,485 | 37,288 | | U.S. Treasury securities | 183,705 | 70,679 | | Commercial paper | 61,638 | 5,934 | | Government agency securities | 37,870 | 36,415 | | Corporate debt | 13,072 | 17,227 | | **Total financial assets** | **336,770** | **167,543** | - Total financial assets measured at fair value increased from **$167.5 million** at December 31, 2024, to **$336.8 million** at June 30, 2025[52](index=52&type=chunk) - The majority of assets are classified as Level 1 (money market funds, U.S. Treasury securities) or Level 2 (commercial paper, government agency securities, corporate debt) in the fair value hierarchy[52](index=52&type=chunk) [5. Property and Equipment, net](index=18&type=section&id=5.%20Property%20and%20Equipment,%20net) This note provides details on the company's property and equipment, including depreciation Property and Equipment, net (in thousands) | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------- | :---------------- | :-------------------- | | Leasehold improvements | 1,854 | 1,854 | | Laboratory equipment | 1,547 | 1,461 | | Furniture & fixtures | 722 | 722 | | **Total property and equipment** | **4,123** | **4,037** | | Less: accumulated depreciation | (1,877) | (1,571) | | **Property and equipment, net** | **2,246** | **2,466** | - Net property and equipment decreased from **$2.47 million** at December 31, 2024, to **$2.25 million** at June 30, 2025[53](index=53&type=chunk) - Depreciation expense was **$0.3 million** for both the six months ended June 30, 2025, and 2024[53](index=53&type=chunk) [6. Accrued Expenses](index=19&type=section&id=6.%20Accrued%20Expenses) This note details the composition and changes in the company's accrued expenses Accrued Expenses (in thousands) | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------------- | :---------------- | :-------------------- | | Accrued research and development | 2,660 | 3,961 | | Accrued compensation and benefits | 1,991 | 2,972 | | Accrued professional fees | 782 | 737 | | Accrued other | 35 | — | | Accrued offering costs | — | 492 | | **Total accrued expenses** | **5,468** | **8,162** | - Total accrued expenses decreased from **$8.16 million** at December 31, 2024, to **$5.47 million** at June 30, 2025, primarily due to decreases in accrued research and development and compensation and benefits, and the payment of accrued offering costs[54](index=54&type=chunk) [7. Commitments and Contingencies](index=19&type=section&id=7.%20Commitments%20and%20Contingencies) This note outlines the company's operating lease commitments, legal proceedings, and indemnification obligations - No material changes to operating lease commitments during the six months ended June 30, 2025[55](index=55&type=chunk) - The company was not subject to any material legal proceedings as of June 30, 2025, and is not aware of any pending or threatened[56](index=56&type=chunk) - The company provides indemnification to vendors, lessors, business partners, directors, and senior management, with potential unlimited future payments, but has not incurred material costs to date[59](index=59&type=chunk) [8. License Agreements](index=19&type=section&id=8.%20License%20Agreements) This note describes the company's various third-party license agreements and their financial implications - The company has various license agreements with third parties involving upfront, milestone, and royalty payments[60](index=60&type=chunk) - No material changes to the terms, conditions, or accounting conclusions of these license agreements since the Annual Report[60](index=60&type=chunk) [9. Stock-Based Compensation](index=20&type=section&id=9.%20Stock-Based%20Compensation) This note details the company's stock option plans and the associated compensation expense - The 2020 Stock Option and Grant Plan has no shares remaining for future issuance as of June 30, 2025[61](index=61&type=chunk) - The 2025 Stock Option and Incentive Plan became effective in February 2025, initially reserving **5,060,000** shares, subject to evergreen provisions[62](index=62&type=chunk) Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Number of Common Stock Options | Weighted-Average Exercise Price ($) | | :----------------------------- | :----------------------------- | :---------------------------------- | | Outstanding as of Dec 31, 2024 | 3,700,335 | 5.87 | | Granted | 2,305,760 | 17.40 | | Exercised | (7,944) | 0.76 | | Cancelled or forfeited | (24,000) | 10.16 | | **Outstanding as of June 30, 2025** | **5,974,151** | **10.31** | | Exercisable as of June 30, 2025 | 2,097,556 | 6.39 | Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Research and development | 1,084 | 396 | 1,888 | 675 | | General and administrative | 1,756 | 575 | 3,046 | 943 | | **Total** | **2,840** | **971** | **4,934** | **1,618** | - Total stock-based compensation expense increased to **$4.9 million** for the six months ended June 30, 2025, from **$1.6 million** in the prior year[66](index=66&type=chunk) [10. Segment Information](index=21&type=section&id=10.%20Segment%20Information) This note provides a breakdown of the company's net loss and expenses by operational categories Segment Net Loss and Expenses (in thousands) | Category | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :---------------------------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | External research and development expenses | 11,291 | 5,485 | 21,269 | 13,204 | | Personnel-related R&D (excl. stock-based comp) | 2,494 | 1,821 | 4,877 | 3,508 | | Facility and IT allocated R&D expenses | 464 | 460 | 904 | 924 | | Personnel-related G&A (excl. stock-based comp) | 2,417 | 1,267 | 4,649 | 2,467 | | General corporate and facility expenses | 1,902 | 876 | 3,845 | 1,971 | | Other segment items | (500) | (1,357) | (994) | (1,675) | | **Net loss** | **18,068** | **8,552** | **34,550** | **20,399** | - External research and development expenses increased significantly, reflecting increased clinical programs and combination development activities[67](index=67&type=chunk) - Personnel-related expenses for both R&D and G&A functions increased due to workforce expansion[67](index=67&type=chunk) [11. Net Loss Per Share](index=22&type=section&id=11.%20Net%20Loss%20Per%20Share) This note explains the calculation of net loss per share and the impact of anti-dilutive securities Shares Excluded from Diluted Net Loss Per Share Calculation | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :----------------------------- | :----------------------------- | | Convertible Preferred Stock | — | 27,149,206 | | Options to purchase common stock | 5,974,151 | 3,434,751 | | Unvested restricted common stock | — | 165,301 | | **Total** | **5,974,151** | **30,749,258** | - All convertible preferred stock converted to common stock upon the IPO in 2025, hence no preferred stock was excluded from diluted EPS calculation for the 2025 period[68](index=68&type=chunk) - Options to purchase common stock and unvested restricted common stock were excluded due to their anti-dilutive effect[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operations, product candidate progress, liquidity, and future funding needs [Overview](index=23&type=section&id=Overview) This section provides a high-level summary of the company's mission and recent clinical development milestones - Sionna Therapeutics is a clinical-stage biopharmaceutical company developing novel medicines to normalize CFTR protein function for cystic fibrosis patients[71](index=71&type=chunk) - The company announced positive topline data from two Phase 1 clinical trials for lead NBD1 stabilizer product candidates, SION-719 and SION-451, in June 2025[73](index=73&type=chunk) - Both SION-719 and SION-451 were well tolerated, with no serious adverse events, and met exposure thresholds predictive of clinically meaningful benefit in preclinical models[74](index=74&type=chunk) - SION-719 will advance into a Phase 2a proof-of-concept trial in CF patients as an add-on to standard of care, anticipated in H2 2025[75](index=75&type=chunk) - SION-451 will advance to a Phase 1 dual combination trial in healthy volunteers with galicaftor (SION-2222) and SION-109, anticipated in H2 2025[76](index=76&type=chunk) [Strategic In-Licensing & Complementary Modulators](index=24&type=section&id=Strategic%20In-Licensing%20%26%20Complementary%20Modulators) This section describes the company's strategy to expand its product pipeline through in-licensing and complementary modulators - The company in-licensed three clinical-stage compounds from AbbVie Global Enterprises Ltd. in 2024 to expand its portfolio of combination product opportunities[77](index=77&type=chunk) - This includes galicaftor (SION-2222), a complementary modulator targeting CFTR's TMD1, which has completed Phase 2 clinical trials[77](index=77&type=chunk) - A Phase 1 clinical trial for another complementary modulator, SION-109 (targeting CFTR's ICL4 region), was completed in December 2024[77](index=77&type=chunk) [Sources of Liquidity and Financing History](index=24&type=section&id=Sources%20of%20Liquidity%20and%20Financing%20History) This section reviews the company's funding sources, historical capital raises, and future liquidity outlook - Since inception in 2019, the company has not generated revenue and has funded operations primarily through preferred stock sales, raising **$330.4 million**[79](index=79&type=chunk) - In February 2025, the company completed its IPO, raising **$199.6 million** net proceeds from the sale of **12,176,467** common shares[79](index=79&type=chunk) - Net losses were **$34.6 million** and **$20.4 million** for the six months ended June 30, 2025, and 2024, respectively, with an accumulated deficit of **$215.6 million** as of June 30, 2025[80](index=80&type=chunk) - Expenses and operating losses are expected to increase substantially due to advancing clinical development, research, regulatory approvals, manufacturing, intellectual property, personnel, and public company costs[81](index=81&type=chunk) - The company expects to finance operations through equity offerings, debt financings, or strategic arrangements, as it does not have approved products for sale[82](index=82&type=chunk) - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled **$337.3 million**, projected to fund operations into 2028[83](index=83&type=chunk)[85](index=85&type=chunk) [Components of Results of Operations](index=25&type=section&id=Components%20of%20Results%20of%20Operations) This section explains the key revenue and expense categories contributing to the company's financial performance - The company has not generated any revenue to date and does not expect to for several years, if ever, relying on product sales from approved products or collaboration/license agreements in the future[87](index=87&type=chunk) - Research and development expenses include personnel, external costs (CROs, CDMOs, consultants), manufacturing, facility costs, and intellectual property protection[89](index=89&type=chunk)[90](index=90&type=chunk) - R&D expenses are expected to increase substantially as product candidates advance to later stages[91](index=91&type=chunk)[92](index=92&type=chunk) - General and administrative expenses include personnel, legal, professional fees, office, IT, and insurance costs, expected to increase with public company operations and pre-commercial activities[94](index=94&type=chunk)[95](index=95&type=chunk) - Interest income is from cash equivalents and marketable securities, while other income primarily consists of sublease income[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance over different reporting periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=28&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares the company's financial performance for the second quarter of 2025 against the same period in 2024 Results of Operations (Three Months Ended June 30, in thousands) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------- | :------- | :------- | :--------- | | Research and development | 15,383 | 8,233 | 7,150 | | General and administrative | 6,523 | 3,059 | 3,464 | | **Total operating expenses** | **21,906** | **11,292** | **10,614** | | Loss from operations | (21,906) | (11,292) | (10,614) | | Interest income | 3,667 | 2,566 | 1,101 | | Other income | 171 | 174 | (3) | | **Net loss** | **(18,068)** | **(8,552)** | **(9,516)** | - Net loss increased by **$9.5 million** to **$18.1 million** for Q2 2025, compared to **$8.6 million** for Q2 2024[102](index=102&type=chunk) - Research and development expenses increased by **$7.2 million**, primarily due to increased clinical programs and combination development activities, and a **$1.4 million** increase in personnel-related expenses[103](index=103&type=chunk) - General and administrative expenses increased by **$3.5 million**, driven by a **$2.3 million** increase in personnel-related expenses and a **$1.0 million** increase in professional services fees[104](index=104&type=chunk)[108](index=108&type=chunk) - Interest income increased by **$1.1 million** due to increased investment in debt securities from IPO proceeds[105](index=105&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=29&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares the company's financial performance for the first half of 2025 against the same period in 2024 Results of Operations (Six Months Ended June 30, in thousands) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------- | :------- | :------- | :--------- | | Research and development | 29,051 | 18,453 | 10,598 | | General and administrative | 12,514 | 5,986 | 6,528 | | **Total operating expenses** | **41,565** | **24,439** | **17,126** | | Loss from operations | (41,565) | (24,439) | (17,126) | | Interest income | 6,667 | 3,698 | 2,969 | | Other income | 348 | 342 | 6 | | **Net loss** | **(34,550)** | **(20,399)** | **(14,151)** | - Net loss increased by **$14.2 million** to **$34.6 million** for the six months ended June 30, 2025, compared to **$20.4 million** for the same period in 2024[107](index=107&type=chunk) - Research and development expenses increased by **$10.6 million**, primarily due to a **$7.3 million** increase in direct R&D for clinical programs and combination development, and a **$2.6 million** increase in personnel-related expenses[109](index=109&type=chunk)[112](index=112&type=chunk) - General and administrative expenses increased by **$6.5 million**, mainly from a **$4.3 million** increase in personnel-related expenses and a **$2.1 million** increase in professional services fees[110](index=110&type=chunk)[113](index=113&type=chunk) - Interest income increased by **$3.0 million** due to higher investment in debt securities following the IPO[111](index=111&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's current cash position, cash flow activities, and future funding requirements - As of June 30, 2025, the company had **$337.3 million** in cash, cash equivalents, and marketable securities[116](index=116&type=chunk) - Existing capital is believed to be sufficient to fund operations into 2028, but this is a forward-looking estimate subject to risks[122](index=122&type=chunk) - Net cash used in operating activities was **$34.4 million** for the six months ended June 30, 2025, primarily due to net loss[117](index=117&type=chunk)[118](index=118&type=chunk) - Net cash used in investing activities was **$164.4 million**, mainly from purchases of marketable securities[120](index=120&type=chunk) - Net cash provided by financing activities was **$202.1 million**, primarily from the IPO proceeds[121](index=121&type=chunk) - Future funding requirements depend on clinical trial progress, manufacturing costs, regulatory review, intellectual property, personnel, and commercialization efforts[123](index=123&type=chunk) [Contractual Obligations and Commitments](index=33&type=section&id=Contractual%20Obligations%20and%20Commitments) This section addresses the company's contractual obligations and commitments, noting no material changes - No material changes to contractual obligations and commitments during the six months ended June 30, 2025, as described in the Annual Report[126](index=126&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section discusses the significant judgments and assumptions used in preparing the financial statements - No material changes to critical accounting estimates during the six months ended June 30, 2025, as described in the Annual Report[128](index=128&type=chunk) - The preparation of financial statements requires estimates and assumptions affecting reported amounts, based on historical experience and reasonable factors[127](index=127&type=chunk) [Recent Accounting Pronouncements](index=33&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to disclosures regarding recently issued accounting standards and their potential impact - Information on recently issued accounting pronouncements is disclosed in Note 2, 'Summary of Significant Accounting Policies,' within the consolidated financial statements[129](index=129&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=33&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) This section explains the company's status as an emerging growth and smaller reporting company, and associated regulatory benefits - The company qualifies as an 'emerging growth company' and 'smaller reporting company,' allowing it to take advantage of reduced disclosure and governance requirements[130](index=130&type=chunk)[131](index=131&type=chunk) - The company has elected to use the extended transition period for complying with new or revised accounting standards[130](index=130&type=chunk) - Emerging growth company status will be maintained until the earlier of five years post-IPO, **$1.235 billion** in annual gross revenue, becoming a large accelerated filer, or issuing over **$1.0 billion** in non-convertible debt[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' Sionna Therapeutics, Inc. is not required to provide quantitative and qualitative disclosures about market risk under Item 305 of Regulation S-K - The company is exempt from providing quantitative and qualitative disclosures about market risk due to its 'smaller reporting company' status[132](index=132&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's disclosure controls and procedures and internal control over financial reporting, concluding that disclosure controls were effective as of June 30, 2025, with no material changes in internal control - Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[133](index=133&type=chunk) - No material changes in internal control over financial reporting occurred during the six months ended June 30, 2025[134](index=134&type=chunk) [Part II - Other Information](index=35&type=section&id=Part%20II%20-%20Other%20Information) This section provides additional information not covered in the financial statements, including legal, risk factors, and equity sales [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) This section states that Sionna Therapeutics, Inc. is not currently involved in any material legal proceedings that could significantly impact its financial position, results of operations, or cash flows as of June 30, 2025, and records liabilities for probable and estimable future losses from legal matters - The company is not aware of any material legal proceedings currently pending or threatened as of June 30, 2025[136](index=136&type=chunk) - Liabilities for legal matters are recorded when probable and reasonably estimable[136](index=136&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section comprehensively outlines various risks impacting the business, including financial, development, third-party dependence, intellectual property, regulatory, commercial, operational, and stock ownership factors [Risks Related to Our Limited Operating History, Financial Condition and Need for Additional Capital](index=35&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History,%20Financial%20Condition%20and%20Need%20for%20Additional%20Capital) This section details risks stemming from the company's limited operational history, significant losses, and ongoing need for substantial capital - The company is a clinical-stage biopharmaceutical company with a limited operating history, incurring significant operating losses since inception (**$34.6 million** net loss for H1 2025, **$215.6 million** accumulated deficit as of June 30, 2025)[138](index=138&type=chunk)[139](index=139&type=chunk) - Substantial additional funding is required to develop and commercialize product candidates, with no guarantee of raising capital on acceptable terms, potentially leading to delays or elimination of development programs[146](index=146&type=chunk)[148](index=148&type=chunk) - Raising additional capital may dilute stockholders' ownership, restrict operations, or require relinquishing rights to product candidates[149](index=149&type=chunk)[150](index=150&type=chunk) [Risks Related to the Discovery and Development of Our Product Candidates](index=38&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20Our%20Product%20Candidates) This section outlines risks associated with the R&D of product candidates, including clinical trial failures and regulatory hurdles - The company is substantially dependent on the success of its NBD1 stabilizers (SION-719 and SION-451); failure to advance or obtain regulatory approval would materially harm the business[152](index=152&type=chunk)[153](index=153&type=chunk) - Developing combination treatments increases complexity and risk, including potential drug-drug interactions, unforeseen side effects, or clinical trial failures[161](index=161&type=chunk)[162](index=162&type=chunk) - Regulatory approval processes are lengthy, time-consuming, and unpredictable, with no assurance of obtaining approval for any product candidate[164](index=164&type=chunk) - Preclinical, interim, topline, and preliminary results are not necessarily predictive of later clinical trial outcomes, and positive results may not be replicated[179](index=179&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - Targeting the NBD1 domain of the CFTR protein is novel, introducing uncertainty regarding successful product development and potential regulatory challenges[185](index=185&type=chunk)[186](index=186&type=chunk) - Clinical trials may fail to demonstrate safety and efficacy, or identify serious adverse side effects, potentially leading to abandonment, delays, or limitations on development[187](index=187&type=chunk) [Risks Related to Our Dependence on Third Parties](index=53&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) This section addresses risks arising from reliance on third parties for intellectual property, clinical trials, manufacturing, and collaborations - The company is dependent on licensed intellectual property from third parties (e.g., Sanofi, AbbVie); loss of these rights or breach of agreements could prevent development or commercialization[219](index=219&type=chunk)[220](index=220&type=chunk) - Reliance on CROs and other vendors for clinical trials means limited control over their performance, potentially leading to delays or compromised data quality[224](index=224&type=chunk)[225](index=225&type=chunk) - Reliance on CDMOs for manufacturing increases the risk of insufficient quantities, unacceptable cost/quality, or supply disruptions, potentially delaying development or commercialization[228](index=228&type=chunk)[229](index=229&type=chunk) - Establishing collaborations for development or commercialization is challenging; failure to secure favorable terms or unsuccessful arrangements could alter development plans[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) [Risks Related to Our Intellectual Property](index=58&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section covers risks concerning the company's ability to obtain, maintain, enforce, and protect its intellectual property rights - Inability to obtain, maintain, and enforce intellectual property rights (patents, trade secrets) could allow competitors to commercialize similar products, adversely affecting commercialization efforts[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - Patent terms may be inadequate to protect competitive position, and failure to obtain patent term extensions could shorten exclusivity and reduce revenue[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - Failure to comply with obligations in third-party intellectual property licenses could result in loss of material rights, impacting development and commercialization[253](index=253&type=chunk)[255](index=255&type=chunk) - Patent reform legislation (e.g., Leahy-Smith Act) and changes in patent laws could increase uncertainties and costs for patent prosecution and enforcement[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - Involvement in lawsuits to protect or enforce patents could be expensive, time-consuming, and unsuccessful, potentially leading to invalidation of patents or licensing requirements[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - Third parties may allege infringement of their intellectual property rights, leading to litigation, substantial damages, or the need to obtain costly licenses[267](index=267&type=chunk)[268](index=268&type=chunk) - Reliance on third parties necessitates sharing trade secrets, increasing the risk of misappropriation or unauthorized disclosure, which could harm competitive position[273](index=273&type=chunk)[275](index=275&type=chunk) - Limited geographical patent protection and varying enforceability of intellectual property rights in different countries could hinder global commercialization efforts[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk) [Risks Related to Legal and Regulatory Compliance Matters](index=69&type=section&id=Risks%20Related%20to%20Legal%20and%20Regulatory%20Compliance%20Matters) This section details risks associated with healthcare laws, regulatory oversight, reform initiatives, and potential misconduct - Business operations are subject to extensive healthcare laws (e.g., fraud and abuse laws); non-compliance could lead to substantial penalties, reputational harm, and significant defense costs[303](index=303&type=chunk)[304](index=304&type=chunk)[307](index=307&type=chunk) - Approved products remain subject to ongoing regulatory oversight, including manufacturing, labeling, promotion, and post-marketing requirements; failure to comply could result in restrictions or withdrawal from the market[308](index=308&type=chunk)[309](index=309&type=chunk)[311](index=311&type=chunk) - Healthcare reform initiatives in the U.S. and foreign jurisdictions could adversely impact business, leading to more rigorous coverage criteria, downward pressure on pricing, or other negative consequences[313](index=313&type=chunk)[314](index=314&type=chunk)[318](index=318&type=chunk) - Inadequate funding or disruptions at government agencies (FDA, SEC) could delay product development, regulatory approvals, or normal business functions[344](index=344&type=chunk)[345](index=345&type=chunk) - Misconduct by employees, contractors, or collaborators, including non-compliance with regulatory standards or healthcare laws, could lead to significant penalties and reputational damage[346](index=346&type=chunk)[348](index=348&type=chunk) [Risks Related to the Commercialization of Our Product Candidates](index=72&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) This section addresses risks concerning market competition, product acceptance, reimbursement, market size, and product liability - The company faces substantial competition, particularly from Vertex Pharmaceuticals, which holds significant market share and greater resources in the CF market[321](index=321&type=chunk)[324](index=324&type=chunk) - Even if approved, product candidates may fail to achieve sufficient market acceptance by physicians, patients, and third-party payors, especially against established standard-of-care therapies like Trikafta[326](index=326&type=chunk)[327](index=327&type=chunk) - Commercial success depends significantly on obtaining and maintaining coverage and adequate reimbursement from third-party payors; cost containment trends could adversely affect profitability[329](index=329&type=chunk)[330](index=330&type=chunk) - Estimates of the potential market for product candidates may be smaller than anticipated, limiting revenues and hindering profitability[333](index=333&type=chunk) - Clinical trial and product liability lawsuits could divert resources, incur substantial liabilities, and limit commercialization, with insurance potentially inadequate to cover all costs[334](index=334&type=chunk)[335](index=335&type=chunk) [Risks Related to Our Business Operations, Employee Matters and Managing Our Growth](index=76&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations,%20Employee%20Matters%20and%20Managing%20Our%20Growth) This section covers risks related to personnel retention, managing organizational growth, potential litigation, and business disruptions - Future success depends on retaining key executives and attracting/retaining qualified personnel; loss of key individuals could impede objectives[337](index=337&type=chunk)[338](index=338&type=chunk) - Expected expansion in clinical development, regulatory, and commercial capabilities may lead to difficulties in managing growth, disrupting operations and increasing costs[340](index=340&type=chunk) - The company could be affected by litigation, government investigations, and enforcement actions, leading to significant damages, fines, reputational harm, and diversion of resources[341](index=341&type=chunk)[343](index=343&type=chunk) - Business disruptions (e.g., natural disasters, cybersecurity incidents) affecting operations or those of suppliers/CROs could harm revenue, financial condition, and increase costs[354](index=354&type=chunk) [Risks Related to Ownership of Our Common Stock](index=79&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) This section addresses risks concerning stock price volatility, potential dilution, corporate governance, and dividend policy - Operating results may fluctuate significantly due to various factors (e.g., clinical trial outcomes, competition, regulatory changes), making future results difficult to predict and potentially causing stock price decline[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk) - The trading price of common stock may be highly volatile due to industry-specific and general market factors, leading to potential loss of investment[358](index=358&type=chunk)[359](index=359&type=chunk) - Sales of a substantial number of common stock shares by stockholders (e.g., after lock-up expiry) could significantly drop the market price[366](index=366&type=chunk) - Provisions in corporate charter documents and Delaware law may prevent or frustrate attempts to change management or acquire a controlling interest, potentially lowering stock price[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk) - Executive officers, directors, and principal stockholders own a significant percentage of stock, allowing them to exert substantial control over stockholder-approved matters[370](index=370&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future, making capital appreciation the sole source of gain for stockholders[372](index=372&type=chunk) [General Risk Factors](index=84&type=section&id=General%20Risk%20Factors) This section covers broad risks including cybersecurity, data privacy, compliance, internal controls, tax laws, and global economic conditions - Compromised information technology systems or data, or those of third parties, could lead to regulatory actions, litigation, fines, business disruptions, and reputational harm[375](index=375&type=chunk)[376](index=376&type=chunk)[386](index=386&type=chunk) - The company is subject to stringent and evolving data privacy and security laws (e.g., GDPR, HIPAA); non-compliance could result in investigations, fines, litigation, and operational disruptions[389](index=389&type=chunk)[390](index=390&type=chunk)[392](index=392&type=chunk)[397](index=397&type=chunk) - Compliance with governmental export/import controls, economic sanctions, and anti-corruption laws is required; violations could lead to criminal liability and severe consequences[399](index=399&type=chunk)[400](index=400&type=chunk) - Failure to maintain an effective system of internal controls over financial reporting could impair the ability to produce accurate financial statements, leading to stock price decline and sanctions[401](index=401&type=chunk)[404](index=404&type=chunk) - The company may not be able to utilize a significant portion of its net operating loss (NOL) carryforwards due to limitations under Section 382 of the IRC or future regulatory changes[406](index=406&type=chunk)[407](index=407&type=chunk) - New or changed tax laws (e.g., OBBBA) could materially adversely affect business, cash flows, financial condition, or results of operations[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk) - Unstable global economic and geopolitical conditions (e.g., inflation, conflicts, tariffs) could adversely affect business, financial condition, stock price, and ability to raise capital[418](index=418&type=chunk)[419](index=419&type=chunk)[420](index=420&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=92&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's initial public offering (IPO) completed on February 6, 2025, detailing the shares issued, net proceeds, and the current use of these funds - On February 6, 2025, the company completed its IPO, issuing and selling **12,176,467** shares of common stock at **$18.00** per share[422](index=422&type=chunk) - The IPO generated aggregate net proceeds of **$199.6 million**, after deducting underwriter discounts, commissions, and other offering expenses[422](index=422&type=chunk) - A significant portion of the net proceeds is held in money market funds, with no material change in the planned use of proceeds[423](index=423&type=chunk) [Item 3. Defaults Upon Senior Securities](index=92&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[425](index=425&type=chunk) [Item 4. Mine Safety Disclosures](index=92&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Sionna Therapeutics, Inc - This item is not applicable[426](index=426&type=chunk) [Item 5. Other Information](index=92&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by the company's executive officers during the three months ended June 30, 2025, specifying plans for common stock sales with expiration dates in 2026 Rule 10b5-1 Trading Arrangements Adopted by Executive Officers (Three Months Ended June 30, 2025) | Name (Title) | Action Taken (Date of Action) | Type of Trading Arrangement | Nature of Trading Arrangement | Expiration Date of Trading Arrangement | Aggregate Number of Securities | | :--------------------------------------- | :---------------------------- | :-------------------------- | :---------------------------- | :------------------------------------- | :----------------------------- | | Michael Cloonan (President and CEO) | Adoption (May 21, 2025) | Rule 10b5-1 trading arrangement | Sale | August 17, 2026 | Up to 200,000 | | Elena Ridloff (CFO and Head of Corporate Development) | Adoption (May 20, 2025) | Rule 10b5-1 trading arrangement | Sale | August 6, 2026 | Up to 85,000 | | Jennifer Fitzpatrick (Chief Legal Officer) | Adoption (June 5, 2025) | Rule 10b5-1 trading arrangement | Sale | September 15, 2026 | Up to 41,000 | [Item 6. Exhibits](index=94&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate charter documents, stock certificates, officer certifications, and Inline XBRL documents - Exhibit 3.1: Fifth Amended and Restated Certificate of Incorporation[430](index=430&type=chunk) - Exhibit 3.2: Amended and Restated Bylaws[430](index=430&type=chunk) - Exhibit 4.1: Specimen Common Stock Certificate[430](index=430&type=chunk) - Exhibit 31.1*: Certification of Principal Executive Officer (Section 302)[430](index=430&type=chunk) - Exhibit 31.2*: Certification of Principal Financial Officer (Section 302)[430](index=430&type=chunk) - Exhibit 32.1*+: Certification of Principal Executive Officer and Principal Financial Officer (Section 906)[430](index=430&type=chunk) - Exhibit 101.INS: Inline XBRL Instance Document[430](index=430&type=chunk) - Exhibit 101.SCH: Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents[430](index=430&type=chunk) - Exhibit 104: Cover Page Interactive Data File[430](index=430&type=chunk) [Signatures](index=95&type=section&id=SIGNATURES) This section contains the authorized signatures confirming the submission of the Form 10-Q report [Authorized Signatures](index=95&type=section&id=Authorized%20Signatures) This section contains the authorized signatures for the Form 10-Q report, confirming its submission on behalf of Sionna Therapeutics, Inc. by its President and Chief Executive Officer, Michael Cloonan, and its Chief Financial Officer and Head of Corporate Development, Elena Ridloff, both dated August 11, 2025 - The report is signed by Michael Cloonan, President and Chief Executive Officer (Principal Executive Officer), and Elena Ridloff, Chief Financial Officer and Head of Corporate Development (Principal Financial Officer and Principal Accounting Officer)[436](index=436&type=chunk) - The signing date for the report is August 11, 2025[436](index=436&type=chunk)