Cullinan Therapeutics, Inc.: Form 10-Q for the period ended Jun 30, 2025

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2025. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results could differ materially from those discussed in these forward-looking statements. Please also refer to those factors described in “Part I, Item 1A. Risk Factors” of our 2024 10-K and "Part II. Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q for important factors that we believe could cause actual results to differ materially from those in our forward-looking statements.

Overview

We are a clinical-stage biopharmaceutical company dedicated to creating new standards of care for patients. Our strategy is to identify high-impact targets, which we define as those that inhibit key drivers of disease or harness the immune system to eliminate diseased cells in both autoimmune diseases and cancer, and then select what we believe is the optimal therapeutic modality for those targets. We source innovation both internally and externally, focusing on product candidates with novel technology or differentiated mechanisms. Before we advance a product candidate into clinical development, we evaluate its potential for activity as a single agent as well as its ability to generate an immune response or to inhibit disease processes. Using this strategy, we have built a broad and deep pipeline of targeted immunology and oncology programs that includes multiple distinct clinical-stage product candidates.

Immunology

• CLN-978 is a CD19xCD3 bispecific T cell engager that we are developing for autoimmune diseases. CLN-978 is being investigated in patients with systemic lupus erythematosus (“SLE”), rheumatoid arthritis (“RA”) and Sjögren’s disease (“SjD”). The global Phase 1 clinical trial in patients with moderate to severe SLE is enrolling in the United States, Europe, and Australia, and we plan to share initial safety data and B cell depletion data from Part A of the study in the fourth quarter of 2025. The Phase 1 clinical trial in patients with active, difficult-to-treat RA is enrolling in Europe, and we plan to share initial clinical data during the first half of 2026. This company-sponsored study is being led by sites at the Friedrich-Alexander University of Erlangen-Nuremberg in Germany and Università Cattolica del Sacro Cuore in Italy. The Phase 1 clinical trial in patients with active, moderate to severe SjD is ongoing in the U.S. and Europe.
• Velinotamig is a BCMAxCD3 bispecific T cell engager that we are developing for autoimmune diseases. Chongqing Genrix Biopharmaceutical Co., Ltd. ("Genrix"), from whom we licensed velinotamig, plans to initiate a Phase 1 clinical trial in China in patients with autoimmune diseases by the end of 2025. We intend to use the data generated from this Phase 1 clinical trial to accelerate global clinical development of the program. Following the completion of the Genrix Phase 1 clinical trial, we will conduct all further development of velinotamig in autoimmune diseases.

Oncology

• Zipalertinib (CLN-081/TAS6417), which we are co-developing with an affiliate of Taiho Pharmaceutical Co., Ltd. ("Taiho"), is an orally-available small-molecule, irreversible epidermal growth factor receptor ("EGFR") inhibitor that is designed to selectively target cells expressing EGFR exon 20 insertion mutations (“EGFR ex20ins”) with relative sparing of cells expressing wild-type EGFR.
• We are evaluating zipalertinib in a pivotal Phase 2b portion of the REZILIENT1 clinical trial in patients with EGFR ex20ins non-small cell lung cancer ("NSCLC") who progressed after prior systemic therapy. In January 2025, we announced the Phase 2b portion of the REZILIENT1 trial met the primary endpoint of overall response rate in patients with EGFR ex20ins NSCLC who have received prior therapy. The results were shared at the 2025 American Society of Clinical Oncology Annual Meeting and published simultaneously in the Journal of Clinical Oncology. We plan to share updated efficacy and safety data in patients previously treated with amivantamab during a mini oral abstract session at the International Association for the Study of Lung Cancer ("IASLC") 2025 World Conference on Lung Cancer ("WCLC") in September 2025. Pending discussions with the U.S. Food and Drug Administration, Taiho plans to submit a new drug application for zipalertinib in relapsed EGFR ex20ins NSCLC by the end of 2025.
• Taiho is evaluating zipalertinib in a global Phase 3 clinical trial (“REZILIENT3”) in combination with chemotherapy as a potential first-line treatment for EGFR ex20ins NSCLC adult patients. Taiho expects to complete enrollment of the trial in the first half of 2026.
• Taiho is also evaluating zipalertinib in a Phase 2 parallel cohort study (“REZILIENT2”). Taiho plans to share initial data from the REZILIENT2 cohort exploring zipalertinib in patients with uncommon EGFR mutations during a mini oral abstract session at the IASLC 2025 WCLC in September 2025. Taiho also plans to share initial data from the REZILIENT2 cohort exploring zipalertinib in patients with active brain metastases at the European Society for Medical Oncology Congress 2025 in October 2025.
• CLN-049 is a FLT3xCD3 bispecific T cell engager. CLN-049 is being investigated in an ongoing Phase 1 clinical trial in patients with relapsed/refractory acute myeloid leukemia ("AML") or myelodysplastic syndrome, and we plan to share clinical data in the fourth quarter of 2025. CLN-049 is also being evaluated in a Phase 1 clinical trial in patients with measurable minimal residual disease positive AML.
• CLN-619 is a monoclonal antibody that stabilizes expression of MICA/B on the tumor cell surface to promote tumor cell lysis mediated by both cytotoxic innate and adaptive immune cells. Our Phase 1 clinical trial of CLN-619 continues with the disease-specific expansion cohorts in patients with NSCLC. We also continue to evaluate CLN-619 in a Phase 1 clinical trial in patients with relapsed/refractory multiple myeloma.
• CLN-617 is a fusion protein combining two potent antitumor cytokines, interleukin-2 and interleukin-12, with tumor retention domains for the treatment of solid tumors. CLN-617 is being investigated in a Phase 1 clinical trial in patients with advanced solid tumors.

Preclinical Programs

In addition to the product candidates described above, we are actively developing several preclinical programs by leveraging our own internal expertise and through partnerships with external collaborators.

Recently Discontinued

In May 2025, following a review of the CLN-619 data from the disease-specific expansion cohorts for endometrial and cervical cancers, we announced discontinuation of further development of CLN-619 in patients with gynecological cancers as preliminary results did not meet our internal threshold for advancement.

Previously, we were evaluating CLN-418, a fully human bispecific immune activator targeting B7H4 and 4-1BB that we licensed from Harbour BioMed US Inc. (“Harbour”), in a Phase 1 clinical trial. In August 2024, following a review of the data from the Phase 1 clinical trial, we notified Harbour of our decision to terminate the license and collaboration agreement for CLN-418 (the “Harbour License Agreement”), effective November 2024. In connection with the termination of the Harbour License Agreement, we discontinued development of CLN-418 and returned development and commercial rights for CLN-418 to Harbour to focus our resources on our other product candidates.

Intellectual Property

We hold the worldwide intellectual property rights for CLN-978 and the worldwide, excluding mainland China, Hong Kong, Macau and Taiwan (collectively referred to as "greater China"), intellectual property rights for velinotamig. We also hold the worldwide intellectual property rights or exclusive options for worldwide intellectual property for our earlier-stage programs. We have a controlling interest in the worldwide intellectual property rights for CLN-619, CLN-049, and CLN-617. We are co-developing zipalertinib, for which Taiho holds the intellectual property rights, with an affiliate of Taiho. The following table shows our ownership interest as of June 30, 2025 in product candidates in which we have a controlling interest in the worldwide intellectual property rights:

Financing and Business Operations

Since our inception in 2016, we have focused all of our efforts and financial resources on raising capital, organizing and staffing our company, identifying, acquiring or in-licensing and developing product and technology rights, establishing and protecting our intellectual property portfolio, and developing and advancing our programs. We do not have any products approved for sale and have not generated any revenue from product sales.

We have funded our operations primarily through the sale of equity securities and from licensing or selling the rights to our product candidates. As of June 30, 2025, we have received net proceeds of $842.2 million from equity financings. We have received $18.9 million in revenue from a previous license agreement and cash proceeds of $275.0 million from the sale of our equity interest in our former zipalertinib development subsidiary to Taiho.

As of June 30, 2025, we had cash, cash equivalents, and short-term investments of $265.5 million, and long-term investments and interest receivable of $245.4 million. Interest receivable is included in prepaid expenses and other current assets on the consolidated balance sheets and represents accrued and unpaid interest on our marketable securities. We have a history of significant operating losses and have had negative cash flows from operations since our inception. As of June 30, 2025, we had an accumulated deficit of $486.8 million. We expect to continue to generate operating losses for the foreseeable future. Our future viability is dependent on the success of our research and development and our ability to access additional capital to fund our operations. There can be no assurance that our current operating plan will be achieved or that additional funding will be available on terms acceptable to us, or at all.

In June 2025, we entered into a license and collaboration agreement (the “Genrix License Agreement”) with Genrix, pursuant to which Genrix granted us a global (excluding greater China), exclusive license to develop and commercialize velinotamig, a BCMAxCD3 bispecific T cell engager, in all fields of use. Under the terms of the Genrix License Agreement, we paid Genrix an upfront license fee of $20.0 million in June 2025. Refer to Note 5 of our notes to the consolidated financial statements in this Quarterly Report on Form 10-Q for additional detail regarding the Genrix License Agreement.

We are subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on third parties, compliance with government regulations, and the ability to obtain additional capital to fund operations. Our current and future product candidates will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require additional capital, adequate personnel and extensive compliance-reporting capabilities. There can be no assurance that our research and development will be successfully completed, that adequate protection for our intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval, or that any approved products will be commercially viable.

Global Economic Conditions

As we continue to pursue commercial opportunities in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not had a material impact on our business to date, future changes in trade regulations or tariff structures could have an impact on our business and operations, including our expenses, supply chain, manufacturing processes, preclinical studies and clinical trials. We continue to monitor these developments closely.

Components of Our Results of Operations

Revenue

We have not generated any revenue from the sale of products since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the research and development of our product candidates and programs. These expenses include:

• compensation costs for employees engaged in research and development functions;
• expenses incurred under agreements with organizations that support our drug discovery and development activities;
• expenses incurred in connection with the preclinical and clinical development of our product candidates and programs, including under agreements with contract research organizations ("CROs");
• costs related to contract manufacturing organizations that are primarily engaged to provide drug substance, raw materials, and drug product for our clinical trials, research and development programs, as well as investigative sites and consultants that conduct our clinical trials, nonclinical studies, and other scientific development services;
• the costs of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches;
• costs related to compliance with quality and regulatory requirements;
• payments made under third-party licensing agreements; and
• direct and allocated costs related to facilities, information technology, personnel and other overhead.

Development costs and any future potential pre-tax profits from U.S. sales of zipalertinib are shared equally between us and Taiho.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation costs for personnel in executive management, finance, legal, corporate and business development, and other administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax, and administrative consulting services; insurance costs; administrative travel expenses; marketing expenses; and other operating costs.

Other Income

Other income consists primarily of interest income earned on our cash, cash equivalents, and investments.

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

The following table presents our results of operations for the three and six months ended June 30, 2025 and 2024 (in thousands):

Research and Development Expenses

In the fourth quarter of 2024, we began disclosing research and development personnel costs without the effect of intercompany allocations to product candidates held by our development subsidiaries and also began disclosing license agreement obligations separately from the related product candidate. We have recast prior period financial information to conform to the new presentation. The following table summarizes our research and development expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

The $24.8 million increase in research and development expenses in the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to the one-time upfront in-licensing fee for velinotamig ($20.0 million), and increases in clinical costs ($3.7 million), personnel costs relating to additional headcount ($2.3 million), equity-based compensation costs ($0.3 million), and chemistry, manufacturing and controls costs ($0.2 million), offset partially by a decrease in preclinical costs ($1.9 million).

The $35.6 million increase in research and development expenses in the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to the one-time upfront in-licensing fee for velinotamig ($20.0 million), and increases in clinical costs ($9.7 million), personnel costs relating to additional headcount ($5.6 million), equity-based compensation costs ($1.1 million), and chemistry, manufacturing and controls costs ($0.8 million), offset partially by a decrease in preclinical costs ($1.9 million).

General and Administrative Expenses

The $1.0 million increase in general and administrative expenses in the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to increases in other professional fees ($1.3 million) and legal costs ($0.9 million), partially offset by decreases in equity-based compensation costs ($1.0 million).

The $2.2 million increase in general and administrative expenses in the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to increases in other professional fees ($1.8 million) and legal costs ($1.5 million), partially offset by decreases in personnel costs ($0.7 million) and equity-based compensation costs ($0.6 million).

Other Income

The $2.3 million and $1.4 million decreases in other income for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024 was primarily related to lower investment income.

Net Loss Attributable to Noncontrolling Interests

Net loss attributable to noncontrolling interests is the difference in the noncontrolling interests in the consolidated balance sheets between the start and end of each reporting period, after taking into account any capital transactions between our development subsidiaries and third parties.

Liquidity and Capital Resources

Overview

We have a history of significant operating losses and have had negative cash flows from operations since our inception and expect to continue to generate operating losses for the foreseeable future. We have not yet commercialized any products, and we do not expect to generate revenue from sales of products for several years, if at all. To date, we have funded our operations primarily with proceeds from the sale of equity securities and from licensing or selling the rights to our product candidates. As of June 30, 2025, we had cash, cash equivalents, and short-term investments of $265.5 million, and long-term investments and interest receivable of $245.4 million.

Based on our current operational plans and assumptions, we expect that our current cash, cash equivalents, investments, and interest receivable, will be sufficient to fund operations through at least twelve months from the date of issuance of our consolidated financial statements. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We cannot guarantee that we will be able to raise additional capital on reasonable terms or at all.

In June 2025, we entered into the Genrix License Agreement with Genrix, pursuant to which Genrix granted us a global (excluding greater China), exclusive license to develop and commercialize velinotamig, a BCMAxCD3 bispecific T cell engager, in all fields of use. Under the terms of the Genrix License Agreement, we paid Genrix an upfront license fee of $20.0 million in June 2025. Refer to Note 5 of our notes to the consolidated financial statements in this Quarterly Report on Form 10-Q for additional detail regarding the Genrix License Agreement.

In April 2024, we completed the 2024 Private Placement, in which we issued approximately 14.4 million shares of our common stock and pre-funded warrants to purchase approximately 0.3 million additional shares of our common stock. We received net proceeds of $262.7 million from the 2024 Private Placement, after deducting offering costs of $17.3 million.

We have an at-the-market equity offering program (the "ATM") through an agreement with Cowen and Company, LLC (“Cowen”), pursuant to which we may offer and sell up to $125.0 million of our common stock from time to time through Cowen, acting as our sales agent. We made no sales under the ATM in the six months ended June 30, 2025. Through June 30, 2025, we have sold approximately 3.3 million shares under the ATM and received net proceeds of $38.4 million, after deducting commissions. As of June 30, 2025, we had $85.6 million in shares of our common stock remaining under the ATM.

Comparison of Cash Flows for the Six Months Ended June 30, 2025 and 2024

The following table summarizes our sources and uses of cash for the six months ended June 30, 2025 and 2024 (in thousands):

Cash Flow from Operating Activities

For the six months ended June 30, 2025, our operating activities used $100.8 million of cash, which primarily consisted of our operating expenses, excluding non-cash items, of $111.4 million and a $0.6 million net change in our non-tax operating assets and liabilities, partially offset by interest income, excluding accretion on marketable securities, of $8.5 million, and an income tax refund of $3.0 million related to the utilization of federal research and development credits generated during 2023 that were carried back to tax year 2022. The non-cash operating expenses primarily consisted of equity-based compensation expense.

For the six months ended June 30, 2024, our operating activities used $74.5 million of cash, which primarily consisted of our operating expenses, excluding non-cash items, of $74.1 million and a $9.3 million net change in our non-tax operating assets and liabilities, partially offset by interest income, excluding accretion on marketable securities, of $6.7 million, and a net income tax refund of $2.3 million. The non-cash operating expenses primarily consisted of equity-based compensation expense.

Cash Flow from Investing Activities

For the six months ended June 30, 2025, our investing activities provided $90.2 million of cash, which consisted of $294.6 million of proceeds from the maturities of marketable securities, partially offset by $204.4 million of purchases of marketable securities.

For the six months ended June 30, 2024, our investing activities used $172.2 million of cash, which primarily consisted of $456.3 million of purchases of marketable securities, partially offset by $284.1 million of proceeds from the maturities of marketable securities.

Cash Flow from Financing Activities

For the six months ended June 30, 2025, our financing activities provided $0.4 million of cash, which consisted of net proceeds from the issuance of common stock under equity-based compensation plans.

For the six months ended June 30, 2024, our financing activities provided $263.3 million of cash, which primarily consisted of $262.7 million of net proceeds from the issuance of common stock under a private placement and $4.4 million in net proceeds from the issuance of common stock under equity-based compensation plans, partially offset by $3.8 million paid to acquire shares of our CLN-619 development subsidiary that were held by noncontrolling interests.

Future Funding Requirements

We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we:

• continue our research and development of our current and future product candidates and programs;
• conduct preclinical studies and clinical trials for our current and future product candidates;
• experience any delays or encounter any issues with any of the above, including but not limited to failed studies, or trials, complex results, safety issues, or other regulatory challenges;
• develop the necessary processes, controls, and manufacturing capabilities to obtain marketing approval for our current and future product candidates and to support manufacturing on a commercial scale;
• develop and implement plans to establish and operate in-house manufacturing operations and facilities, if deemed appropriate;
• seek regulatory approvals for our current and future product candidates that successfully complete clinical trials;
• hire and retain additional personnel, such as nonclinical, clinical, pharmacovigilance, quality assurance, regulatory affairs, manufacturing, distribution, legal, compliance, medical affairs, finance, general and administrative, commercial, and scientific personnel; and
• develop, maintain, expand, and protect our intellectual property portfolio.

Based on our current operational plans and assumptions, we expect that our current cash, cash equivalents, investments, and interest receivable will be sufficient to fund operations through at least twelve months from the date of issuance of our consolidated financial statements. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. As we progress with our development programs and the regulatory review process, we expect to incur significant expenses related to product manufacturing, pre-commercial activities and commercialization. We may also require additional capital to pursue in-licenses or acquisitions of other programs to further expand our pipeline.

Because of the numerous risks and uncertainties associated with research, development and commercialization of our product candidates and programs, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:

• the scope, progress, results, and costs of drug discovery, laboratory testing, and preclinical and clinical development for our current and future product candidates;
• timely completion of our preclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;
• the prevalence, duration, and severity of potential side effects or other safety issues experienced by patients receiving our current and future product candidates;
• our ability to establish and maintain collaborations and license agreements on favorable terms, if at all, and the extent to which we acquire or in-license technologies or programs, if at all;
• our ability to enroll clinical trials in a timely manner and to quickly resolve any delays or clinical holds that may be imposed on our development programs;
• the costs of expanding our facilities to accommodate our expected growth in personnel;
• our ability and the ability of third parties with whom we contract to manufacture adequate clinical and commercial supplies of our current and future product candidates, remain in good standing with regulatory authorities and develop, validate, and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices;
• the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;
• the extent to which we acquire or in-license technologies or programs;
• the sales price and availability of adequate third-party coverage and reimbursement for our product candidates, if and when approved; and
• the ongoing costs of operating as a public company.

Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through equity offerings, debt financings, government or other third-party funding, marketing and distribution arrangements, and other collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity, current ownership interests will be diluted. If we raise additional funds through government or third-party funding, collaboration agreements, strategic alliances, licensing arrangements, or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Other Commitments

We have certain payment obligations that are contingent upon future events under various license and collaboration agreements. Under these agreements, we will be required to make milestone payments upon successful completion and achievement of certain intellectual property, clinical, regulatory, and sales milestones, and we will be required to make royalty payments in connection with the sale of products developed under these agreements. As the achievement and timing of these future payment obligations are not probable or estimable, such amounts have not been included in our consolidated balance sheets as of June 30, 2025 and December 31, 2024.

As of June 30, 2025, total future minimum lease payments were $1.6 million with $1.5 million payable within twelve months. See Note 10 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for further detail on our lease obligations and the timing of expected future payments.

In addition, we enter into agreements in the normal course of business with CROs for clinical trials and with other vendors for preclinical studies, manufacturing services, and other services and products for operating purposes, which are generally cancelable upon written notice.

Critical Accounting Policies and Estimates

Our critical accounting policies have not materially changed from those described in the 2024 10-K.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued and adopted accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 of our consolidated financial statements included in this Quarterly Report on Form 10-Q.

Information required by this Item is not applicable as we are electing scaled disclosure requirements available to smaller reporting companies with respect to this Item.

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (as amended, the "Exchange Act") were effective as of June 30, 2025 to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K"), which could materially affect our business, financial condition or future results. The risk factors disclosure in our 2024 10-K is qualified by the information that is described in this Quarterly Report on Form 10-Q. The risks described in our 2024 10-K are not our only risks. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes to our risk factors as previously disclosed in the 2024 10-K except as follows:

Commencing on December 31, 2025, we will be a smaller reporting company due to our qualification at June 30, 2025. We cannot be certain if the reduced reporting requirements applicable to smaller reporting companies could make our common stock less attractive to investors.

As of January 1, 2025, we were a large accelerated filer and were subject to all of the related compliance or disclosure requirements applicable to a large accelerated filer. Based on the market value of our common stock that was held by non-affiliates as of June 30, 2025 and our annual revenues for the fiscal year ended December 31, 2024, we will be a smaller reporting company effective December 31, 2025 and are able to immediately avail ourselves of the reduced disclosure requirements permitted for smaller reporting companies. As a smaller reporting company, we will be permitted and intend to rely on exemptions from certain compliance and disclosure requirements that are applicable to other public companies that are not smaller reporting companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We may take advantage of scaled disclosures available to smaller reporting companies until the fiscal year following the determination that either (i) the market value of our voting and non-voting common stock held by non-affiliates is greater than $700 million, as measured on the last business day of the most recently completed second fiscal quarter, or (ii) the market value of our voting and non-voting common stock held by non-affiliates, as measured on the last business day of our most recently completed second fiscal quarter, is less than $700 million but greater than $250 million and our annual revenues during our most recently completed fiscal year are greater than $100 million. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.