Anteris Technologies Global Corp.: Form 10-Q for the period ended Jun 30, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report. Except for historical information, the matters discussed in this MD&A contain various forward-looking statements that involve risks and uncertainties and are based upon judgments concerning various factors beyond our control. Our actual results could differ materially from those anticipated in these forward-looking statements. Please also see the section of this Form 10-Q titled “Cautionary Note Regarding Forward-Looking Statements.

Overview

Anteris is a structural heart company dedicated to revolutionizing cardiac care by pioneering science-driven and measurable advancements to restore heart valve patients to healthy function. Our lead product, the DurAVR® THV system, represents a unique product opportunity in a new THV class of single-piece heart valves, for the treatment of aortic stenosis. Our DurAVR® THV system consists of a single-piece, biomimetic valve made with our proprietary ADAPT® tissue-enhancing technology and deployed with our ComASUR® balloon-expandable delivery system. ADAPT® is our proprietary anti-calcification tissue shaping technology that is designed to reengineer xenograft tissue into a pure, single-piece collagen bioscaffold. Our proprietary ADAPT® tissue has been clinically demonstrated to be calcium free for up to 10 years post-procedure, according to Performance of the ADAPT-Treated CardioCel™ Scaffold in Pediatric Patients With Congenital Cardiac Anomalies: Medium to Long-Term Outcomes, published by William Neethling et. al., and has been distributed for use in over 55,000 patients globally in other indications. Our ComASUR® balloon-expandable delivery system, which was developed in consultation with physicians, is designed to provide precise alignment with the heart’s native commissures to achieve accurate placement of the DurAVR® THV system.

We clinically developed our DurAVR® THV system over several years with significant physician input with the goal of addressing hemodynamic limitations of the current standard-of-care products. As of June 2025, a total of 130 patients have been treated with the DurAVR® THV worldwide. In November 2021, we commenced our first-in-human (“FIH”) study at the Tbilisi Heart and Vascular Clinic in Tbilisi, Georgia.

On December 12, 2024, our Registration Statement relating to our initial public offering (the “IPO”) became effective pursuant to which we issued and sold 14,800,000 shares of Common Stock at a public offering price of $6.00 per share. On January 14, 2025, TD Cowen, Barclays and Cantor (the underwriters’ representatives) partially exercised the over-allotment option granted by the Company, pursuant to which we issued and sold an additional 78,481 shares of Common Stock at the purchase price of $6.00 per share. We received net proceeds of $80.0 million for the IPO and subsequent over-allotment option, after deducting the underwriting discounts, commissions and offering expenses.

In the first quarter of 2025, an investigational device exemption (“IDE”) for the PARADIGM Trial was submitted to the FDA. It is anticipated that the primary end point of the PARADIGM Trial will be to demonstrate non-inferiority of the DurAVR® THV system compared with commercially available TAVR systems (SAPIEN or Evolut series THV) for treatment of subjects with severe calcific aortic stenosis. We anticipate that the design of the PARADIGM Trial will be a prospective, randomized, controlled multicenter, international study wherein subjects will be randomized to receive either TAVR using the DurAVR® THV or TAVR using a commercially available and approved THV from competitors. We anticipate that the subjects will include a broad array of risk profiles. We anticipate that subjects with a failed surgical bioprosthesis in need of a valve-in-valve TAVR will be enrolled in a separate parallel registry. If we obtain IDE approval from the FDA, we intend to perform site activation and seek Institutional Review Board (“IRB”) approval for commencement of the study at each site. Subject to the foregoing, we anticipate enrollment to begin in the third quarter of 2025. Such a trial would be designed to provide the primary clinical evidence on which the FDA could base a decision for the Premarket Approval (“PMA”) that is required for commercialization of the DurAVR® THV system in the United States. We anticipate CE Mark approval will progress in parallel to the PMA.

In the second quarter of 2025, the Anteris team made considerable progress strengthening its clinical infrastructure and manufacturing capabilities in preparation for the PARADIGM Trial. A key focus was the qualification of trial sites, including feasibility assessments to confirm each site’s access to a suitable aortic stenosis patient population and their capacity to conduct the PARADIGM Trial to the highest standards. Preparatory activities, including site contracting with planned centers across the U.S., Europe and Canada, are well advanced, with 79 sites now qualified to participate. Ongoing collaborative work with the FDA to progress the IDE application has been a major focus this quarter, in addition to proactively scaling the manufacturing of all key products to meet the anticipated inventory demands of the upcoming PARADIGM Trial.

Financial Overview

As a development-stage company, we have incurred losses since our inception. We anticipate that we will continue to incur losses for the foreseeable future and there can be no assurance that we will ever achieve or maintain profitability.

We expect expenses for our research, clinical validation, development, design, manufacturing and marketing will increase and, as a result, we will need additional capital to fund our operations. Any future funding could involve a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements, strategic alliances and licensing arrangements. We may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

Any failure to raise capital or enter into such other arrangements as and when needed could have a negative impact on our financial condition and our ability to market our products.

Principles of Consolidation and Operating Segments

The condensed consolidated financial statements include the accounts for our company, our wholly-owned subsidiaries, and entities for which we have a controlling financial interest, and for periods prior to the series of reorganization transactions we completed prior to our U.S. initial public offering (the “Reorganization”), the accounts of Anteris Technologies Pty Ltd (“ATPL”, formerly Anteris Technologies Ltd), its wholly-owned subsidiaries, and entities for which ATPL had a controlling financial interest. Intercompany transactions, balances and unrealized gains and losses on transactions between such entities are eliminated.

Our management has determined that the activities of the business as reviewed by the Vice Chairman and CEO, the chief operating decision maker, are one segment, being the development and commercialization of the ADAPT® anti-calcification tissue. This is focused on the DurAVR® THV system.

Components of Results of Operations

Revenue and Other Income

We currently derive revenue from the sale of regenerative tissue products. Such sales have historically been made principally to 4C Medical Technologies, Inc. (“4C”) and to LeMaitre Vascular, Inc. (“LeMaitre”), a distributor of medical products, to whom we sold the distribution rights for CardioCel™ and VascuCel™ in 2019 in order to focus on development of our proprietary ADAPT® tissue for the DurAVR® THV system. Concurrent with such sale, we entered into a Transition Services Agreement pursuant to which we manufactured and sold CardioCel™ and VascuCel™ products to LeMaitre. The Transition Services Agreement with LeMaitre expired in January 2025. We do not expect to receive any significant future revenues from LeMaitre. The Supply and License Agreement with 4C, which had an initial seven-year term that ended on June 1, 2025, and was automatically renewed for a one-year term in accordance with its renewal provisions. Successive one-year terms automatically renew under the Transition Services Agreement absent prior indication to the contrary. Either we or 4C may terminate the 4C Agreement upon 180 days written notice to the other party at the end of the initial term or any renewal term or in the event of an uncured breach or if the other party becomes insolvent, files a petition for bankruptcy or upon the occurrence of similar events.

We earn other income primarily from tax incentive payments under the Australian Government’s R&D Tax Incentive Plan for R&D activities conducted in Australia that meet specified regulatory criteria. A refundable tax offset is available to eligible companies with an annual aggregate turnover of less than AUD $20.0 million. Eligible companies can receive a refundable tax offset for a percentage of their R&D spending.

Expenses

Our most significant expenses are R&D and selling, general and administrative expenses.

Cost of products sold reflects the manufacturing cost from the sale of regenerative tissue products to 4C and to LeMaitre. These expenditures include raw materials and consumables, plus other costs attributable to the manufacturing of these products.

R&D Expense

R&D has been a significant focus for us with investments in the DurAVR® THV system, including the DurAVR® THV, the ComASUR® delivery system, a disposable crimper, and an expandable access sheath, as we advance towards commercial use. These components are collectively managed as part of the overall DurAVR® THV system rather than as separate projects. Since late 2021, when our DurAVR® THV was first used in human trials in Tbilisi, Georgia, R&D efforts have focused on incorporating feedback from the clinical trials and progressing towards commercialization. These costs have included, among others, preclinical and clinical studies, design iterations, lab services, clinical data monitoring, project and site management, travel, data management and safety of the study.

During the first and secound quarters of 2025, the Anteris team continued to expand global manufacturing capacity to scale for the PARADIGM Trial. All production (DurAVR® THV, ComASUR® Delivery System, crimper, E-sheath) is being scaled into new ISO Qualified Clean Room facilities, increasing manufacturing capacity to at least three times the 2024 capacity levels. The transition to the new facilities aims for a reliable and scaled inventory supply to support the anticipated commencement of the PARADIGM Trial. In addition, the gold-standard ADAPT® tissue for the DurAVR® THV will be sourced from both the U.S. and Australia moving forward to help mitigate supply chain risks. This progress reflects the strategic deployment of capital into infrastructure that supports operational readiness and long-term growth capacity for clinical and commercial success.

In the second quarter of 2025, the qualification of trial sites was a key focus, including feasibility assessments to confirm each site’s access to a suitable aortic stenosis patient population and their capacity to conduct the PARADIGM Trial to the highest standards. Preparatory activities, including site contracting with planned centers across the U.S., Europe and Canada, are well advanced, with 79 sites now qualified to participate. Ongoing collaborative work with the FDA to progress the IDE application has been a major focus this quarter, in addition to proactively scaling the manufacturing of all key products to meet the anticipated inventory demands of the upcoming PARADIGM Trial.

Going Concern

Our ability to continue as a going concern is dependent upon securing additional funds. Our ability to access capital may be impacted by various factors including economic conditions, a decline in investor confidence and sub-optimal preclinical or clinical outcomes from trials and studies. Limited access to capital may delay the development of our product portfolio, extend the timeline to commercialization, or lead to other operational impacts.

We believe that we have the ability to raise additional funds. Notwithstanding the above factors, our future success is dependent on our ability to attract additional capital and, ultimately, on our ability to develop future profitable operations. If we do not receive sufficient cash inflows, there is substantial doubt as to whether we will be able to continue as a going concern.

The audit report covering the December 31, 2024 and 2023 consolidated financial statements contains a paragraph that states that our recurring losses from operations raise substantial doubt about our ability to continue as a going concern. See Note 3 Going Concern to the consolidated financial statements included in our Annual Report and Note 3 Going Concern to the condensed consolidated financial statements included in this Quarterly Report.

Initial Public Offering and Reorganization

On December 12, 2024, our registration statement on Form S-1 (File No. 333-283414) (the “Registration Statement”) relating to our IPO became effective pursuant to which we issued and sold 14,878,481 shares of Common Stock at a public offering price of $6.00 per share. We received net proceeds of $80.0 million, after deducting the underwriting discounts, commissions and offering expenses and giving effect to the exercise of the underwriters’ option to purchase additional shares. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to our affiliates.

Prior to the consummation of the IPO, we completed the Reorganization pursuant to which we received all of the issued and outstanding shares of ATPL, which was formerly an Australian public company originally registered in Western Australia, Australia and listed on the ASX, pursuant to a scheme of arrangement under Australian law between ATPL and its shareholders (the “Scheme”) under Part 5.1 of the Australian Corporations Act 2001 (Cth) (the “Corporations Act”). Contemporaneously with implementation of the Scheme, ATPL also cancelled all existing options it had on issue in exchange for our company issuing replacement options to acquire Common Stock pursuant to a scheme of arrangement between ATPL and its optionholders (the “Option Scheme”) under Part 5.1 of the Corporations Act. The Scheme was approved by ATPL’s shareholders at a general meeting of shareholders, which was held on December 3, 2024. The Option Scheme was approved by ATPL’s optionholders at a general meeting of optionholders held on the same day. ATPL obtained approval of the Scheme and the Option Scheme by the Supreme Court of Queensland on December 4, 2024. As a result of the Reorganization, ATPL became a wholly owned subsidiary of our company and the shareholders of ATPL immediately prior to the consummation of the IPO became holders of either one share of Common Stock for every ordinary share of ATPL or one CDI for every one ordinary share of ATPL for each share held as of the record date.

In connection with the Reorganization, on December 16, 2024, we issued (i) 21,139,816 shares of Common Stock to shareholders of ATPL, 20,360,496 of which were represented by CDIs, pursuant to the Scheme and (ii) 6,118,807 options to purchase shares of Common Stock pursuant to the Option Scheme. The foregoing issuances were made pursuant to an exemption from registration under Section 3(a)(10) of the Securities Act. Each option is exercisable into one share of Common Stock, including as represented by a CDI, upon the payment of the relevant exercise price.

Results of Operations

The following tables set forth our results of operations (in thousands, except percentages).

Net Sales

Net sales during the three months ended June 30, 2025 was $0.6 million, compared to $0.6 million for the same period in the prior year. Net sales during the six months ended June 30, 2025 was $1.2 million, a decrease of $0.2 million (16%), compared to $1.4 million for the same period in the prior year. The movements in each period are primarily due to the Transition Services Agreement with LeMaitre, which included sales of CardioCel™ and VascuCel™ products, expiring in January 2025, partly offset by increased demand for other higher-yielding tissue products in 2025.

Cost of Products Sold

Cost of products sold during the three months ended June 30, 2025 was $0.1 million, a decrease of $0.2 million (53%), compared to $0.3 million for the same period in the prior year. Cost of products sold during the six months ended June 30, 2025 was $0.4 million, a decrease of $0.4 million (55%), compared to $0.8 million for the same period in the prior year. The movements in each period are primarily due to a reduction in net sales following the LeMaitre Transition Services Agreement expiring in January 2025, partly offset by increased demand for other higher-yielding tissue products in 2025.

R&D Expense

R&D expenses during the three months ended June 30, 2025 were $16.3 million, an increase of $3.7 million (29%), compared to $12.6 million for the same period in the prior year. This is primarily due to an increase of $5.0 million relating to the upscaling of manufacturing and quality capabilities, including process design and validation activities and the expansion of headcount, and a further $0.6 million related to preparatory activities linked to the PARADIGM Trial, including clinical costs associated with the enrollment of additional patients and the scaling of our field based clinical team. These variances were partly offset by reduced DurAVR® product research costs of $2.2 million in the second quarter of 2025 as we shift our focus to clinical, regulatory and manufacturing activities ahead of the PARADIGM Trial.

R&D expenses during the six months ended June 30, 2025 were $32.8 million, an increase of $8.6 million (36%), compared to $24.2 million for the same period in the prior year. This is primarily due to an increase of $9.1 million relating to the upscaling of manufacturing and quality capabilities including process design and validation activities and the expansion of headcount, and a further $2.5 million relating to preparatory activities linked to the PARADIGM Trial, including clinical costs associated with the enrollment of additional patients and the scaling of our field based clinical team. These variances were partly offset by lower DurAVR® product research costs of $3.1 million in the first six months of 2025 as we shift our focus to clinical, regulatory and manufacturing activities ahead of the PARADIGM Trial.

Selling, General and Administrative Expense

Selling, general and administrative expenses during the three months ended June 30, 2025 were $5.0 million, a decrease of $1.1 million (19%) compared to $6.2 million for the same period in the prior year, primarily due to a reduction of $0.5 million in share-based payment expenses associated with directors and executive management and $0.4 million lower marketing spend. Expenses relating to legal, tax and compliance were relatively flat and included additional fees related to compliance with dual listing requirements and other operational matters in 2025 compared to 2024, which included costs related to our re-domiciliation, listing of our common stock on Nasdaq and conducting our initial public offering.

Selling, general and administrative expenses during the six months ended June 30, 2025 were $10.7 million, a decrease of $2.0 million (16%) compared to $12.7 million for the same period in the prior year, primarily due to a $1.0 million decline in share-based payment expenses associated with directors and executive management, $0.6 million lower marketing spend and a $0.1 million decrease in legal, tax and compliance costs, which included additional fees related to compliance with dual listing requirements and other operational matters in 2025, and in 2024 included costs related to re-domiciliation, listing of our common stock on Nasdaq and conducting our initial public offering.

Net Foreign Exchange (Losses)/Gains

Net foreign exchange losses during the three months ended June 30, 2025 were $0.3 million compared to $0.4 million of net foreign exchange losses for the same period in the prior year, a decrease of $0.1 million (23%), primarily due to the change in foreign exchange rates on intercompany and cash balances. In the second quarter of 2025, the United States dollar depreciated by 4% relative to the Australian dollar. In the second quarter of 2024, the United States dollar depreciated by 1% relative to the Australian dollar.

Net foreign exchange losses during the six months ended June 30, 2025 were $0.5 million compared to $0.8 million of net foreign exchange gains for the same period in the prior year, a change of $1.4 million (163%), primarily due to the change in foreign exchange rates on intercompany and cash balances. In the first half of 2025, the United States dollar depreciated by 5% relative to the Australian dollar. In the first half of 2024, the United States dollar appreciated by 3% relative to the Australian dollar.

Liquidity and Capital Resources

Capital Requirements and Sources of Liquidity

We have experienced recurring operating losses and cash outflows from operating activities since inception. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $319.1 million and $276.4 million, respectively.

In recent years, our operations have mainly been financed through the issuance of capital stock, including in the IPO on the Nasdaq Global Market, debt financing, convertible notes, sales of regenerative tissue products and R&D tax incentives from the Australian government. Additional funding has been derived from interest earned from cash deposits. As of June 30, 2025 and December 31, 2024, we had cash, cash equivalents and restricted cash of $28.4 million and $70.5 million, respectively. As of June 30, 2025 and December 31, 2024, we had capital commitments relating to the lease of properties of $2.4 million and $1.4 million, respectively. We did not have any other material capital expenditure commitments or contingent liabilities as of June 30, 2025 or December 31, 2024. We do not believe that our current cash on hand would fund our cash needs for the 12 months following June 30, 2025. We will need additional capital to fund our operations. However, our forecast of the period of time through which our financial resources will be adequate to support our operations involves risks and uncertainties, and actual results could vary materially.

We anticipate that we will require additional funds in order to achieve our long-term goals including completing the research and development of our current products and commercialization thereof. We do not expect to generate significant revenue until we obtain regulatory approval to market and sell our products and sales of our products have commenced. We therefore expect to continue to incur losses in the near future. In order to address our short-term capital needs, we intend to raise funds through the issuance of our capital stock or other securities.

Our future capital requirements are difficult to forecast and will depend on many factors, including:

the scope, results and timing of clinical trials;

the costs of preparing and completing the PARADIGM Trial of our DurAVR® THV system;

the costs and time required to obtain pre-market approval from the FDA for our DurAVR® THV system; and

the costs of establishing marketing, sales and distribution capabilities.

We may seek to raise any necessary capital through a combination of public or private equity offerings or debt financings. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we decide to raise capital by issuing equity securities, the issuance of such equity securities may result in dilution to our existing stockholders. We cannot give any assurance that we will be successful in completing any financings or that any such equity or debt financing will be available to us if and when required or on satisfactory terms.

Cash Flows

The following table summarizes our primary sources and uses of cash for the periods presented (in thousands, except percentages):

Operating Activities

Net cash used in operating activities during the six months ended June 30, 2025 was $41.0 million, an increase of $12.1 million (42%), compared to $28.9 million in the same period in the prior year, primarily due to an increase in R&D expenses relating to the upscaling of manufacturing capabilities including process design and validation activities, preparatory activities linked to the PARADIGM Trial, clinical costs associated with the enrollment of additional patients and an increase in salaries and wages linked to growth in headcount. This increase was partly offset by a reduction in selling, general and administrative expenses relating to lower marketing spending and a decrease in legal, tax and compliance costs linked to a reduction in costs from 2024, which included our re-domiciliation, listing of our common stock on Nasdaq and conducting our initial public offering, relative to 2025, which included additional costs related to compliance with dual listing requirements and other operational matters.

Investing Activities

Net cash provided by investing activities during the six months ended June 30, 2025 was $0.6 million, a change of $1.9 million (142%), compared to cash outflows of $1.4 million in the same period in the prior year. This is primarily due to the receipt of $1.4 million deferred proceeds from LeMaitre relating to the sale of distribution rights in 2019. We did not have a corresponding cash inflow in 2024. Investing cash outflows for plant and equipment were $0.6 million lower than in the same period in 2024.

Financing Activities

Net cash used in financing activities during the six months ended June 30, 2025 was $1.5 million, a change of $17.5 million (110%), compared to cash inflows of $15.9 million in the same period in the prior year. In the first half of 2025, we received net cash proceeds of $0.6 million from the issuance of shares of Common Stock, offset by net cash outflows of $1.2 million in transaction costs relating to our U.S. initial public offering, completed in December 2024, which were paid during the period. $0.9 million cash outflows were associated with supplier financing arrangements to fund our annual insurance premiums, which was an increase of $0.5 million on the same period in the prior year. In the first half of 2024, net cash provided by financing activities was $15.9 million relating to proceeds from share issuances including the exercise of options for new shares in ATPL of $17.4 million, partly offset by $1.1 million in related transaction costs.

Contractual Obligations and Commitments

Leases

We lease laboratory and manufacturing facilities and offices. The leases typically include options to renew at which time the lease payments are subject to market adjustments and/or set price increases. Extension and termination options are included in a number of the leases to allow for flexibility in terms of corporate growth and managing the assets used in our operations. The leases expire between April 2026 and April 2030 and some include options to extend. At June 30, 2025, we had contractual commitments (on an undiscounted basis) for property leases of $3.0 million, which were recognized on a discounted basis at $2.4 million.

The locations and uses of our material properties are as follows:

(1) Predominantly used for R&D, manufacturing of the DurAVR® valve and regulatory compliance teams. On April 30, 2025, we cancelled our sublease of the building without incurring a termination fee and entered into a new 5-year lease agreement directly with the landlord. As a result, we recognized a right-of-use asset and a corresponding lease liability of $1.6 million on the lease commencement date. This change provides longer-term access to the premises.

Commitments

At June 30, 2025, we had commitments to purchase $0.2 million of plant and equipment.

Off-Balance Sheet Arrangements

We currently do not have, and did not have during the periods presented, any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

We have used various accounting policies to prepare the condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States (“United States GAAP”).

The preparation of condensed consolidated financial statements in conformity with United States GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes thereto. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments, estimates and assumptions on historical experience and on other various factors, including expectations regarding future events that management believes to be reasonable under the circumstances. Actual results could differ from those estimates due to risks and uncertainties and may be material.

Our significant accounting policies are discussed in Note 2, “Basis of Preparation and Summary of Significant Accounting Policies” in our Annual Report. There were no significant changes to these policies during the six months ended June 30, 2025.

Consolidation of VIEs

We consolidate a VIE when the reporting entity (a) has an economic interest in another legal entity (known as a “variable interest”) that conveys more than insignificant exposure to potential losses of or benefits from the other legal entity; and (b) has power over the most significant economic activities of the legal entity. There is significant judgment over the analysis to determine whether an entity is a VIE, to determine whether we have a variable interest and to determine whether we are the primary beneficiary of a VIE.

We determined that v2vmedtech, inc. (“v2v”) is a VIE and that we are the primary beneficiary of v2v. This determination is based on our having both power over the most significant activities of v2v, primarily through holding a majority of the positions on v2v’s board of directors (although v2v’s non-Anteris shareholder representative on the v2v board of directors presently maintains certain veto rights), controlling the appointment of the chief executive officer and chief financial officer roles, being the exclusive partner to develop v2v’s products, and benefits through equity ownership.

New Accounting Standards Not Yet Adopted

See Note 2 to our condensed financial statements included in Item 1 of this Quarterly Report on Form 10-Q for more information.

Emerging Growth Company and Smaller Reporting Company Status

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period for any new or revised accounting standards during the period in which we remain an emerging growth company.

As a result, the information that we provide to our investors may be different than what you might receive from other public reporting companies. However, we may adopt certain new or revised accounting standards early.

We are also a “smaller reporting company,” as defined in the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies. As a smaller reporting company, we will present only two years of audited annual financial statements, plus any required unaudited interim condensed financial statements, and related management’s discussion and analysis of financial condition and results of operations.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company, as defined by Rule 12b-2 under the Exchange Act, as amended and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2025, management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, solely as a result of the material weaknesses in our internal control over financial reporting described below, as of June 30, 2025, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There are 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 three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control financial reporting.

Previously Reported Material Weakness

In connection with the preparation of our financial statements for the years ended December 31, 2024 and 2023, our management and our independent auditors identified material weaknesses in the design and operating effectiveness of our internal control over financial reporting, which remained unremediated as of June 30, 2025. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified by our management and our independent auditors related to (i) a lack of appropriately designed, implemented and documented procedures and controls, and (ii) deficiencies in the segregation of duties.

To remediate these material weaknesses, we are in the process of implementing measures designed to improve our internal control over financial reporting, including supplementing automated controls with additional manual controls and documentation thereof. We have an active project to complete documentation of our entity-level and key financial reporting processes and controls. This includes the preparation and review of account reconciliations, journal entries and information technology systems. In addition, we are undertaking a review of segregation of duties across financial reporting streams. As of June 30, 2025, we have completed the design and implementation of certain controls and have begun testing their operating effectiveness, but they have not operated for a sufficient period of time to evaluate and confirm their effectiveness.

The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. These remediation measures have been and will be time consuming and require financial and operational resources. If one or both of these material weaknesses are not remediated, they could result in a material misstatement of our annual or interim financial statements that might not be prevented or detected.

While we believe that these efforts will improve our internal control over financial reporting, the design and implementation of our remediation is ongoing and will require validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting cycles. The actions that we are taking are subject to ongoing senior management review, as well as oversight by the Audit and Risk Committee. We will not be able to conclude whether the steps we are taking will fully remediate the material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness.

Risk Factors

We face a number of risks that could materially and adversely affect our business, results of operations, cash flow, liquidity, or financial condition. Please consider the factors discussed in Part I, Item 1A. “Risk Factors” in the Annual Report. There have been no material changes or additions to our risk factors discussed in such report which could materially affect our business, financial condition, or future results.