Vera Therapeutics, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 28, 2025 (the Annual Report).

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on February 28, 2025 (the Annual Report).

Previous wording

We are a late clinical-stage biotechnology company focused on developing and commercializing transformative treatments for patients with serious immunological diseases. Our lead product candidate, atacicept, a fully humanized TACI-Fc fusion protein that binds both B-cell activating factor (BAFF) and A proliferation-inducing ligand (APRIL) and is self-administered subcutaneously, is currently being evaluated for the treatment of immunoglobulin A nephropathy (IgAN). We completed full enrollment of ORIGIN 3, the pivotal Phase 3 trial of atacicept 150 mg in IgAN, in April 2025, and in September 2024 completed enrollment of the initial cohort of 200 participants that will provide data for the 36-week urine protein creatinine ratio (UPCR) primary efficacy endpoint. We expect to announce primary endpoint results in the second quarter of 2025, supporting our planned submission for regulatory approval later in 2025. The Phase 2b ORIGIN clinical trial evaluated the safety and efficacy of atacicept in 116 participants with IgAN and reported positive results at 24 weeks in January 2023, 36 weeks in June 2023, and 96 weeks in October 2024. The trial remained blinded through 36 weeks, after which all participants were eligible for the open label extension portion of the study and received atacicept 150 mg through 96 weeks. At 24 and 36 weeks, atacicept met its primary and key secondary endpoints, respectively, with statistically significant reductions in UPCR, and stable estimated glomerular filtration rate (eGFR) was observed with clinically meaningful and statistically significant difference for participants on atacicept versus placebo. Participants treated with atacicept demonstrated reductions in galactose-deficient IgA1 (Gd-IgA1), the autoantigen produced by B cells in patients with IgAN, and a reduction in hematuria. The improvements in Gd-IgA1, hematuria, UPCR and eGFR represent the quartet of findings consistent with IgAN disease modification. The 96-week open-label extension results showed consistent and sustained reductions in Gd-IgA1, hematuria, and UPCR, with continued eGFR stabilization at a rate similar to the general population without kidney disease. Additionally, atacicept’s safety profile was comparable to placebo. We have also committed to providing long-term access to atacicept for all ORIGIN participants by initiating ORIGIN EXTEND, a long-term Phase 2 extension study that offers open-label atacicept to participants who completed ORIGIN Phase 2b or 3 until commercial availability in their country or region. We believe that atacicept has pipeline in a molecule potential, with potential application in multiple diseases. Based on data from the Phase 2b ORIGIN trial, the U.S. FDA granted Breakthrough Therapy Designation to atacicept for the treatment of IgAN. We will be evaluating atacicept in non-IgAN autoimmune kidney diseases, including primary membranous nephropathy (pMN), focal segmental glomerulosclerosis (FSGS) and minimal change diseas…

Excerpt shortened here; the source contains the full paragraph.

Current wording

We are a late clinical-stage biotechnology company focused on developing and commercializing transformative treatments for patients with serious immunological diseases. Our lead product candidate, atacicept, a fully humanized TACI-Fc fusion protein that binds both B-cell activating factor (BAFF) and A proliferation-inducing ligand (APRIL) and is self-administered subcutaneously, is currently being evaluated for the treatment of immunoglobulin A nephropathy (IgAN). In April 2025, we completed full enrollment of ORIGIN 3, the pivotal Phase 3 trial of atacicept 150 mg in IgAN. The primary efficacy endpoint evaluated 36-week urine protein creatinine ratio (UPCR) in the initial cohort of 200 participants. We announced primary endpoint results in the second quarter of 2025, supporting our planned submission for regulatory approval in the fourth quarter of 2025. The Phase 2b ORIGIN clinical trial evaluated the safety and efficacy of atacicept in 116 participants with IgAN and reported positive results at 24 weeks in January 2023, 36 weeks in June 2023, and 96 weeks in October 2024. The trial remained blinded through 36 weeks, after which all participants were eligible for the open label extension portion of the study and received atacicept 150 mg through 96 weeks. At 24 and 36 weeks, atacicept met its primary and key secondary endpoints, respectively, with statistically significant reductions in UPCR, and stable estimated glomerular filtration rate (eGFR) was observed with clinically meaningful and statistically significant difference for participants on atacicept versus placebo. Participants treated with atacicept demonstrated reductions in galactose-deficient IgA1 (Gd-IgA1), the autoantigen produced by B cells in patients with IgAN, and a reduction in hematuria. The improvements in Gd-IgA1, hematuria, UPCR and eGFR represent the quartet of findings consistent with IgAN disease modification. The 96-week open-label extension results showed consistent and sustained reductions in Gd-IgA1, hematuria, and UPCR, with continued eGFR stabilization at a rate similar to the general population without kidney disease. Additionally, atacicept’s safety profile was comparable to placebo. We have also committed to providing long-term access to atacicept for all ORIGIN participants by initiating ORIGIN EXTEND, a long-term Phase 2 extension study that offers open-label atacicept to participants who completed ORIGIN Phase 2b or 3 until commercial availability in their country or region. We believe that atacicept has pipeline in a molecule potential, with potential application in multiple diseases. Based on data from the Phase 2b ORIGIN trial, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation to atacicept for the treatment of IgAN. In the Phase 2 PIONEER clinical trial, we are evaluating atacicept in non-IgAN autoimmune kidney diseases, including primary membranous nephropathy (pMN), focal segmental glomerulosclerosis (FSGS) and minimal …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

To date, we have funded our operations primarily through proceeds from the sale of shares of our common stock, redeemable convertible preferred stock, debt financing and convertible promissory notes. As of March 31, 2025, we had $589.8 million in cash, cash equivalents and marketable securities, compared to $640.9 million as of December 31, 2024.

Current wording

To date, we have funded our operations primarily through proceeds from the sale of shares of our common stock, redeemable convertible preferred stock, debt financing and convertible promissory notes. As of June 30, 2025, we had $556.8 million in cash, cash equivalents and marketable securities, compared to $640.9 million as of December 31, 2024.

Previous wording

We have incurred significant operating losses since the commencement of our operations. Our net losses were $51.7 million and $28.4 million for the three months ended March 31, 2025 and 2024, respectively, and we expect to incur significant and increasing losses for the foreseeable future as we continue to advance our product candidates toward commercialization. Our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our research and development activities. As of March 31, 2025, we had an accumulated deficit of $512.9 million, compared to $461.3 million as of December 31, 2024. Our primary use of cash is to fund operating expenses, which consist of research and development and general and administrative expenditures. Cash used to fund operating expenses depends on the timing of when we pay these expenses, as reflected in the changes in our working capital balances.

Current wording

We have incurred significant operating losses since the commencement of our operations. Our net losses were $76.5 million and $33.7 million for the three months ended June 30, 2025 and 2024, respectively, and we expect to incur significant and increasing losses for the foreseeable future as we continue to advance our product candidates toward commercialization. Our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our research and development activities. As of June 30, 2025, we had an accumulated deficit of $589.5 million, compared to $461.3 million as of December 31, 2024. Our primary use of cash is to fund operating expenses, which consist of research and development and general and administrative expenditures. Cash used to fund operating expenses depends on the timing of when we pay these expenses, as reflected in the changes in our working capital balances.

Previous wording

Due to geopolitical and macroeconomic events, including tariffs and trade tensions, supply chain challenges, ongoing military conflicts, related sanctions, changes in U.S.-China relations, elevated inflation rates and the responses by central banking authorities to control such inflation, and bank failures, the U.S. and global financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity globally. As a result of these factors and other geopolitical and macroeconomic developments described in this Quarterly Report, our business and results of operations may be adversely affected.

Current wording

Due to geopolitical and macroeconomic events, including tariffs and trade tensions, supply chain challenges, ongoing military conflicts, related sanctions, changes in U.S.-China relations, elevated inflation rates and the responses by central banking authorities to control such inflation, and bank failures, the U.S. and global financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity globally. As a result of these factors and other geopolitical and macroeconomic developments described in this Quarterly Report on Form 10-Q, our business and results of operations may be adversely affected.

Previous wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Current wording

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

Previous wording

Research and development expenses increased by $18.1 million, or 78%, to $41.3 million in the three months ended March 31, 2025, from $23.2 million in the three months ended March 31, 2024, primarily due to an increase of $1.8 million in contract drug manufacturing costs for clinical and potential commercial use as we scaled up manufacturing activities for process performance qualification runs, an increase of $5.2 million in clinical trial expenses due to greater numbers of active sites and participants enrolling in ORIGIN 3 and preparations to initiate the PIONEER trial, an increase of $4.0 million in consulting and professional services, including a $2.9 million increase in medical affairs and commercial planning expenses as we prepare for potential regulatory approval and commercialization of atacicept, an increase of $6.4 million for compensation and related benefit expenses, including a $1.7 million increase in stock-based compensation expense, due to growth in research and development headcount, and an increase of $0.7 million in facilities and other, including a $0.5 million increase in primarily conference-related travel expenses to support R&D activities.

Current wording

Research and development expenses increased by $47.0 million, or 89%, to $99.5 million in the six months ended June 30, 2025, from $52.5 million in the six months ended June 30, 2024, primarily due to an increase of $12.5 million in contract drug manufacturing costs for clinical and potential commercial use, an increase of $11.0 million in clinical trial expenses due to greater numbers of active sites and participants enrolled in ORIGIN 3 and expenses incurred for the PIONEER and ORIGIN EXTEND trials, an increase of $7.4 million in consulting and professional services, including a $5.3 million increase in medical affairs and commercial planning expenses as we prepare for potential regulatory approval and commercialization of atacicept, an increase of $14.6 million for employee compensation and related benefit expenses, including a $4.2 million increase in stock-based compensation expense, due to growth in research and development headcount, and an increase of $1.4 million in facilities and other, including a $0.9 million increase in travel expenses to support research and development activities, including travel associated with medical conferences.

Previous wording

We expect our research and development expenses to increase in future periods as we prepare applications for regulatory approval of atacicept in IgAN, conduct additional clinical trials of atacicept, including the ORIGIN EXTEND trial and the PIONEER trial we plan to initiate in 2025, and if we expand development of atacicept in other indications or product configurations, or other product candidates.

Current wording

We expect our research and development expenses to increase in future periods as we prepare applications for regulatory approval of atacicept in IgAN, conduct additional clinical trials of atacicept, and if we expand development of atacicept in other indications or product configurations, or other product candidates.

Previous wording

General and administrative expenses increased by $8.0 million, or 101%, to $15.9 million in the three months ended March 31, 2025, from $7.9 million in the three months ended March 31, 2024, primarily due to an increase of $4.4 million in payroll and related expenses, including stock-based compensation, as a result of increased general and administrative employee headcount, an increase of $1.1 million in consulting expenses primarily related to increases in non-employee director stock-based compensation, and an increase of $1.3 million in commercial expenses related to increased market research and market access activities.

Current wording

General and administrative expenses increased by $21.9 million, or 137%, to $37.9 million in the six months ended June 30, 2025, from $15.9 million in the six months ended June 30, 2024, primarily due to an increase of $10.9 million in employee compensation and related benefits expenses, including stock-based compensation, as a result of increased general and administrative employee headcount, an increase of $1.4 million in consulting expenses, including non-employee director stock-based compensation, an increase of $5.1 million in commercial and medical affairs expenses related to market research, market access and health economics activities, and an increase of $0.8 million in accounting and audit fees.

Previous wording

Other income and expenses, net, increased by $2.8 million, or 102%, to $5.5 million in the three months ended March 31, 2025, from $2.7 million in the three months ended March 31, 2024, primarily due to an increase of $2.7 million in interest income from greater balances of marketable securities held.

Current wording

Other income, net, increased by $2.7 million, or 43%, to $9.1 million in the six months ended June 30, 2025, from $6.4 million in the six months ended June 30, 2024, primarily due to an increase of $3.9 million in interest income from greater balances of marketable securities held, partially offset by $0.9 million from debt issuance costs related to refinancing of credit facility in June 2025.

Previous wording

To date, we have funded our operations primarily through proceeds from the sale of shares of our common stock, redeemable convertible preferred stock, debt financing and convertible notes. From our inception through March 31, 2025, we have raised aggregate net cash proceeds of approximately $1.0 billion from the issuance and sale of redeemable convertible preferred stock, convertible notes and common stock, and proceeds from our Loan Agreement with Oxford Finance LLC (Oxford). Since the date of our incorporation, we have not generated any revenue from product sales and have incurred substantial operating losses and negative cash flows from operations.

Current wording

To date, we have funded our operations primarily through proceeds from the sale of shares of our common stock, redeemable convertible preferred stock, debt financing and convertible notes. From our inception through June 30, 2025, we have raised aggregate net cash proceeds of approximately $1.0 billion from the issuance and sale of redeemable convertible preferred stock, convertible notes and common stock, and proceeds from our Loan Agreements with Oxford. Since the date of our incorporation, we have not generated any revenue from product sales and have incurred substantial operating losses and negative cash flows from operations.

Previous wording

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $589.8 million, as compared to $640.9 million as of December 31, 2024. We believe, based on our current operating plan, that our cash, cash equivalents and marketable securities as of March 31, 2025 will be sufficient to fund our planned operations and capital expenditure requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

Current wording

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $556.8 million, as compared to $640.9 million as of December 31, 2024. We believe, based on our current operating plan, that our cash, cash equivalents and marketable securities as of June 30, 2025 will be sufficient to fund our planned operations and capital expenditure requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

Previous wording

In the three months ended March 31, 2025, we used $54.4 million of cash in operating activities, attributable to a net loss of $51.7 million, offset by adjustments for non-cash charges of $6.0 million, $0.8 million in license fees attributable to investing activities, and a decrease in our net operating assets and liabilities of $9.4 million. Non-cash charges primarily consisted of $7.7 million of stock-based compensation, non-cash interest income of $2.5 million related to amortization of discount on purchases of marketable securities, and a $0.5 million reduction in the carrying amount of operating lease right-of-use assets. The change in our net operating assets and liabilities was primarily due to a decrease of $4.8 million in accrued and other current liabilities, an increase of $1.6 million in accounts payable, an increase of $5.9 million in prepaid expense and other current assets, and a decrease of $0.4 million in operating lease liabilities.

Current wording

In the six months ended June 30, 2025, we used $109.2 million of cash in operating activities, attributable to a net loss of $128.2 million, offset by adjustments for non-cash charges of $14.3 million, $0.8 million in license fees attributable to investing activities, and a decrease in our net operating assets and liabilities of $3.9 million. Non-cash charges primarily consisted of $17.2 million of stock-based compensation, non-cash interest income of $4.4 million related to amortization of discount on purchases of marketable securities, and a $0.9 million reduction in the carrying amount of operating lease right-of-use assets. The change in our net operating assets and liabilities was primarily due to an increase of $3.3 million in accrued and other current liabilities, an increase of $5.5 million in accounts payable, an increase of $4.2 million in prepaid expense and other current assets, and a decrease of $0.9 million in operating lease liabilities.

Previous wording

In the three months ended March 31, 2024, we used $33.8 million of cash in operating activities, attributable to a net loss of $28.4 million and a net change in our net operating assets and liabilities of $8.6 million, partially offset by non-cash charges of $3.2 million. Non-cash charges primarily consisted of $4.1 million of stock-based compensation expense, $1.5 million of depreciation, amortization, and accretion, and a $0.5 million reduction in the carrying amount of operating lease right-of-use assets. The change in our net operating assets and liabilities was primarily due to a $0.6 million decrease in operating lease liabilities, a decrease of $1.7 million in accrued and other current liabilities, a decrease of $5.9 million in accounts payable, and an increase of $0.4 million in prepaid expense and other current assets.

Current wording

In the six months ended June 30, 2024, we used $58.6 million of cash in operating activities, attributable to a net loss of $62.1 million, $4.5 million of non-cash interest income and an increase in our net operating assets and liabilities of $2.5 million, partially offset by non-cash operating expenses of $10.4 million. Non-cash charges primarily consisted of $9.0 million of stock-based compensation expense and a $1.0 million reduction in the carrying amount of operating lease right-of-use assets. The net change in operating assets and liabilities was primarily due to a decrease of $6.5 million in accounts payable and a decrease of $1.3 million in operating lease liabilities, partially offset by an increase in $2.9 million in accrued and other current liabilities and a decrease of $2.3 million in prepaid expense and other current assets.

Previous wording

The increase in cash used in operating activities from the three months ended March 31, 2024 to the three months ended March 31, 2025 was primarily attributable to increased research and development and general and administrative expenses.

Current wording

The increase in cash used in operating activities from the six months ended June 30, 2024 to the six months ended June 30, 2025 was primarily attributable to increased research and development and general and administrative expenses.

Previous wording

In the three months ended March 31, 2025, our investing activities provided $15.3 million of cash, primarily resulting from $90.0 million for purchases of marketable securities, offset by $106.2 million provided by maturities of marketable securities.

Current wording

In the six months ended June 30, 2025, our investing activities provided $43.9 million of cash, primarily resulting from $187.3 million for purchases of marketable securities, offset by $232.3 million provided by maturities of marketable securities.

Previous wording

In the three months ended March 31, 2024, our investing activities used $219.3 million of cash, primarily resulting from $255.0 million for purchases of marketable securities, partially offset by $35.7 million provided by sales and maturities of marketable securities.

Current wording

In the six months ended June 30, 2024, our investing activities used $242.0 million of cash, primarily resulting from $336.1 million for purchases of marketable securities, offset by $94.2 million provided by sales and maturities of marketable securities.

Previous wording

In the three months ended March 31, 2025, our financing activities provided $1.5 million of cash, resulting from proceeds from exercise of stock options and issuance of shares under our employee stock purchase plan.

Current wording

In the six months ended June 30, 2025, our financing activities provided $21.8 million of cash, resulting from $23.3 million in net proceeds from borrowings from the initial funding under the 2025 Loan Agreement in June 2025, after repayment of borrowings under the 2021 Loan Agreement, $2.0 million in proceeds from exercise of stock options and issuance of shares under our employee stock purchase plan, and $3.5 million in payment of deferred issuance costs related to unfunded loan commitments under the 2025 Loan Agreement.

Previous wording

In the three months ended March 31, 2024, our financing activities provided $276.5 million of cash, resulting from $287.5 million of gross proceeds from our February 2024 follow-on offering, $6.9 million of proceeds from exercise of stock options and issuance of shares under our employee stock purchase plan, partially offset by payment of $17.9 million in offering costs related to the February 2024 follow-on offering, including underwriting fees.

Current wording

In the six months ended June 30, 2024, our financing activities provided $280.0 million of cash, resulting from $287.5 million of gross proceeds from our February 2024 follow-on offering, $10.4 million of proceeds from exercise of stock options and issuance of shares under our employee stock purchase plan, partially offset by payment of $17.9 million in offering costs related to the February 2024 follow-on offering, including underwriting fees.

Previous wording

During the three months ended March 31, 2025, there were no material changes to our contractual obligations and commitments from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report.

Current wording

During the six months ended June 30, 2025, there were no material changes to our contractual obligations and commitments from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report.

Previous wording

$50.0 million, of which $5.0 million was funded on December 17, 2021, $20.0 million was funded on November 4, 2022, and the remaining $25.0 million was funded in December 2023.

Current wording

On December 17, 2021, we entered into a Loan and Security Agreement (the 2021 Loan Agreement) with a loan syndicate involving Oxford Finance LLC, Oxford Finance Credit Fund II LP (OFCF II), and Oxford Finance Credit Fund III LP (OFCF III). The 2021 Loan Agreement provided for term loans (collectively, the Loan) in an aggregate maximum principal amount of $50.0 million, of which $5.0 million was funded on December 17, 2021, $20.0 million was funded on November 4, 2022, and the remaining $25.0 million was funded in December 2023.

Previous wording

In March 2023, we opted to extend the final maturity date of the Loan from December 2026, to December 2027, based on positive Phase 2b clinical trial data of atacicept in IgAN, as provided in the Loan Agreement. We are required to make monthly interest-only payments for 60 months followed by full amortization through maturity.

Current wording

In March 2023, we opted to extend the final maturity date of the Loan from December 2026 to December 2027, based on positive Phase 2b clinical trial data of atacicept in IgAN, as provided in the 2021 Loan Agreement. We were required to make monthly interest-only payments for 60 months followed by full amortization through maturity.

Previous wording

Initially, through December 30, 2021, the Loan incurred interest at a per annum rate of 8.254%. Thereafter, the Loan bears interest at a floating per annum rate (based on the actual number of days elapsed divided by a year of 360 days) equal to the greater of (i) 8.25% and (ii) the sum of (a) 1-Month CME Term SOFR as reported by CME Group Benchmark Administration Limited on the last business day of the month that immediately precedes the month in which the interest will accrue, and (b) 8.25%.

Current wording

The 2025 Loan incurs interest at a floating per annum rate (based on the actual number of days elapsed divided by a year of 360 days) equal to the sum of (a) the greater of (i) the 1-Month CME Term Secured Overnight Financing Rate (SOFR) and (ii) 3.75%, plus (b) 4.95%.

Previous wording

We are permitted to prepay the Loan in full or in part at any time upon 10 business days’ written notice to the Lender, subject to the applicable Prepayment Fee (as defined below). Upon the earliest to occur of the maturity date, acceleration of the Loan or prepayment of the Loan, we are required to make a final payment equal to 7.0% of the aggregate principal amount of the Loan (the Final Fee). Any prepayments of the Loan, whether mandatory or voluntary, must include an amount equal to the sum of (a) the portion of the outstanding principal of the Loan being prepaid plus accrued and unpaid interest thereon through the prepayment date, (b) the Final Fee, (c) the Lender’s expenses and all other obligations that are due and payable to the Lender, and (d) a prepayment fee of (i) 3.0% of the portion of the Loan being prepaid if the repayment is on or before the first anniversary of the funding date of such term loan or (ii) 2.0% of the portion of the Loan being prepaid if the repayment is after the first anniversary of the funding date but on or before the second anniversary of the funding date of such term loan (the Prepayment Fee). There is no Prepayment Fee for any prepayments occurring after the second anniversary of the funding date of such term loan.

Current wording

We are permitted to prepay the 2025 Loan in full or in part at any time upon 10 business days’ written notice to Oxford, subject to payment of the applicable Prepayment Fee (as defined below). Upon the earliest to occur of the maturity date, acceleration of the 2025 Loan or prepayment of the 2025 Loan, we are required to make a final payment equal to 5.0% of the aggregate principal amount of the 2025 Loan (the Final Fee). Any prepayments of the 2025 Loan must be accompanied by (a) accrued and unpaid interest thereon, (b) the Final Fee and (c) prepayment fee of (i) 2.0% of the portion of the 2025 Loan being prepaid if the repayment is on or before June 4, 2027 or (ii) 1.0% of the portion of the 2025 Loan being prepaid if the repayment is after June 4, 2027 through June 4, 2028. There is no Prepayment Fee for any prepayments occurring after June 4, 2028.

Previous wording

Our obligations under the Loan Agreement are secured by a security interest in all of our assets, other than our intellectual property, which is subject to a negative pledge. The Loan Agreement does not contain any financial related covenants. Included in the Loan Agreement are customary representations and covenants that, subject to exceptions, restrict our ability to, among other things: declare dividends or redeem or repurchase equity interests; incur additional liens; make loans and investments; incur additional indebtedness; engage in mergers, acquisitions and asset sales; transact with affiliates; undergo a change in control; add or change business locations; and engage in businesses that are not related to our existing business.

Current wording

Our obligations under the 2025 Loan Agreement are secured by a security interest in substantially all of our assets, other than our intellectual property, which is subject to a negative pledge. The 2025 Loan Agreement contains two financial related covenants. Also included in the 2025 Loan Agreement are customary representations and covenants that, subject to exceptions, restrict our ability to, among other things: declare dividends or redeem or repurchase equity interests; incur additional liens; make loans and investments; incur additional indebtedness; engage in mergers, acquisitions, and asset sales; transact with affiliates; undergo a change in control; add or change business locations; and engage in businesses that are not related to our existing business.

Previous wording

Upon the occurrence of an event of default, a default interest rate of an additional 5.0% may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. Events of default under the Loan Agreement include customary events of default, including, but not limited to: (i) failure to (a) make any payment of principal or interest on its due date, or (b) pay any other obligations within three business days after such obligations are due and payable; (ii) failure to perform any obligation under specified covenants; (iii) the occurrence of a material adverse change; (iv) we or any of our subsidiaries being or becoming insolvent, beginning an insolvency proceeding, or becoming subject to an insolvency proceeding that is not dismissed or stayed within 45 days; (v) a default under any agreement with a third party resulting in a right by such third party to accelerate the maturity of any indebtedness in an amount in excess of $500,000 or that could reasonably be expected to have a material adverse change; (vi) the rendering of judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least $500,000 that remain unsatisfied, unvacated, or unstayed for a period of 10 days after the entry thereof; (vii) revocation, rescission, suspension or adverse modification of any governmental approval, or non-renewal of a governmental approval in the ordinary course for a full term, that could reasonably be expected to result in a material adverse change; and (viii) failure of a lien created under the Loan Agreement or any other loan document to constitute a valid and perfected lien on any of the collateral purported to be secured thereby, subject to no prior or equal lien, other than permitted liens.

Current wording

Upon the occurrence of an event of default, a default interest rate of an additional 4.0% may be applied to the outstanding loan balances, and Oxford may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the 2025 Loan Agreement. Events of default under the 2025 Loan Agreement include customary events of default, including, but not limited to: (i) non-payment; (ii) failure to perform any obligation under the 2025 Loan Agreement and related documents; (iii) the occurrence of a material adverse change; (iv) bankruptcy and other insolvency events; (v) cross-defaults; and (vi) judgment defaults.

Previous wording

Our critical accounting policies are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Judgments and Estimates” in the Annual Report and the notes to our unaudited condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the three months ended March 31, 2025, there were no material changes to our critical accounting policies and estimates from those discussed in the Annual Report.

Current wording

Our critical accounting policies are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Judgments and Estimates” in the Annual Report and the notes to our unaudited condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the six months ended June 30, 2025, there were no material changes to our critical accounting policies and estimates from those discussed in the Annual Report.