GYRE THERAPEUTICS, INC.

Previous wording

In addition to IPF, pirfenidone is undergoing one additional Phase 3 trial in the PRC for the treatment of pneumoconiosis to broaden its indications and market. In March 2025, we received approval from the PRC’s National Medical Products Administration (the “NMPA”) for a clinical trial application for the treatment of radiation-induced lung injury with or without immune-related pneumonitis. We are currently preparing to initiate the anticipated clinical trial in the second half of 2025.

Current wording

Gyre Pharmaceuticals successfully advanced pirfenidone from research and development to commercialization in the PRC for the treatment of IPF. In addition to IPF, pirfenidone is undergoing one additional Phase 3 trial in the PRC for the treatment of pneumoconiosis to broaden its indications and market, and in the third quarter of 2025, this trial completed patient enrollment. In March 2025, we received approval from the PRC’s National Medical Products Administration (the “NMPA”) for a clinical trial application for the treatment of radiation-induced lung injury, including cases complicated by immune-related pneumonitis. We are currently preparing to initiate the anticipated adaptive Phase 2/3 clinical trial, which will combine dose exploration with efficacy confirmation, to efficiently evaluate pirfenidone's potential in this new indication. This Phase 2/3 clinical trial is expected to initiate in the fourth quarter of 2025.

Previous wording

Gyre Pharmaceuticals successfully advanced pirfenidone from research and development to commercialization in the PRC for the treatment of IPF. In May 2024, Gyre Pharmaceuticals executed a comprehensive agreement with Jiangsu Wangao Pharmaceuticals Co., Ltd. to acquire the commercial rights to Etorel (nintedanib, ethanesulfonate soft capsules). Etorel has been approved for the treatment of patients with SSc-ILD and PF-ILD. Etorel is expected to provide patients with more choices and benefits. Gyre Pharmaceuticals successfully initiated a commercial launch of Etorel in the PRC in the second quarter of 2025, which has and we expect will continue to help offset declines in ETUARY® sales as a result of increased competition in the IPF treatment market and the fluctuations in the Chinese economy that have weakened overall healthcare spending. We believe that this launch can drive meaningful revenue growth, expand our market penetration, and enhance brand recognition within the respiratory disease space. Additionally, the commercialization of Etorel aligns with our broader strategy of building a comprehensive pulmonary care portfolio, potentially creating opportunities for synergies with our existing and future product offerings. We expect to continue to invest in commercialization efforts, including market access, physician education, and patient support programs, to optimize uptake and maximize the long-term value of this product.

Current wording

In May 2024, Gyre Pharmaceuticals executed a comprehensive agreement with Jiangsu Wangao Pharmaceuticals Co., Ltd. to acquire the commercial rights to Etorel® (nintedanib, ethanesulfonate soft capsules). Etorel® has been approved for the treatment of patients with systemic sclerosis-associated interstitial lung disease (“SSc-ILD”) and progressive fibrosing interstitial lung disease (“PF-ILD”). Etorel® is expected to provide patients with more choices and benefits. Gyre Pharmaceuticals successfully initiated a commercial launch of Etorel® in the PRC in the second quarter of 2025. We believe that this launch can drive meaningful revenue growth, expand our market penetration, and enhance brand recognition within the respiratory disease space. Additionally, the commercialization of Etorel® aligns with our broader strategy of building a comprehensive pulmonary care portfolio, potentially creating opportunities for synergies with our existing and future product offerings. We expect to continue to invest in commercialization efforts, including market access, physician education, and patient support programs, to optimize uptake and maximize the long-term value of this product.

Previous wording

In March 2025, Gyre Pharmaceuticals initiated commercialization of Contiva in the PRC for thrombocytopenia (“TCP”) in adults with chronic liver disease (“CLD”) and immune thrombocytopenic purpura (“ITP”). Gyre Pharmaceuticals received approval from the NMPA for Contiva maleate tablets for the treatment of CLD-associated TCP and ITP. TCP is the most common hematologic complication in patients with CLD and can be life threatening in severe cases. Contiva is an oral thrombopoietin receptor agonist. Contiva was approved by the U.S. Food and Drug Administration for the treatment of adults with CLD-associated TCP in May 2018, and its indication was subsequently expanded to include the treatment of ITP in June 2019. Gyre Pharmaceuticals acquired Contiva under a transfer agreement with Nanjing Healthnice Pharmaceutical Technology, Co., Ltd. (“Nanjing Healthnice”) in June 2021.

Current wording

In March 2025, Gyre Pharmaceuticals initiated commercialization of Contiva® in the PRC for the treatment of thrombocytopenia (“TCP”) in adults with chronic liver disease (“CLD”) and immune thrombocytopenic purpura (“ITP”). Gyre Pharmaceuticals received approval from the NMPA for Contiva® maleate tablets for the treatment of CLD-associated TCP and ITP. TCP is the most common hematologic complication in patients with CLD and can be life threatening in severe cases. Contiva® is an oral thrombopoietin receptor agonist. Contiva® was approved by the U.S. Food and Drug Administration for the treatment of adults with CLD-associated TCP in May 2018, and its indication was subsequently expanded to include the treatment of ITP in June 2019. Gyre Pharmaceuticals acquired Contiva® under a transfer agreement with Nanjing Healthnice Pharmaceutical Technology, Co., Ltd. (“Nanjing Healthnice”) in June 2021.

Previous wording

Gyre Pharmaceuticals completed a pivotal Phase 3 trial of Hydronidone in the PRC evaluating its safety and efficacy for the treatment of liver fibrosis in patients with chronic hepatitis B (“CHB”) associated liver fibrosis. The 52-week, multicenter, double-blind, placebo-controlled trial enrolled 248 patients with CHB fibrosis across 39 hospitals in the PRC. Patients were randomized 1:1 to receive either entecavir anti-viral therapy plus Hydronidone (270 mg/day, orally) or entecavir antiviral therapy alone. The trial met its primary endpoint, with a statistically significant proportion of patients receiving Hydronidone achieving a ≥1-stage regression in liver fibrosis compared to placebo (P=0.0002). In addition, Hydroindone met a key secondary endpoint with statistically significant inflammation improvement without fibrosis progression at Week 52 versus the placebo arm. Hydronidone was well tolerated with a comparable incidence of serious adverse events (4.88% vs. 6.45% in the placebo group) and no discontinuations due to adverse events in either group.

Current wording

Gyre Pharmaceuticals completed a pivotal Phase 3 trial of Hydronidone in the PRC evaluating its safety and efficacy for the treatment of liver fibrosis in patients with chronic hepatitis B (“CHB”) associated liver fibrosis. Building on the positive Phase 3 trial results, Gyre Pharmaceuticals is actively engaging with the NMPA to confirm Priority Review eligibility for Hydronidone’s New Drug Application. The 52-week, multicenter, double-blind, placebo-controlled trial enrolled 248 patients with CHB fibrosis across 39 hospitals in the PRC. Patients were randomized 1:1 to receive either entecavir anti-viral therapy plus Hydronidone (270 mg/day, orally) or entecavir antiviral therapy alone. The trial met its primary endpoint, with a statistically significant proportion of patients receiving Hydronidone achieving a ≥1-stage regression in liver fibrosis compared to placebo (P=0.0002). In addition, Hydronidone met a key secondary endpoint with statistically significant inflammation improvement without fibrosis progression at Week 52 versus the placebo arm. Hydronidone was well tolerated with a comparable incidence of serious adverse events (4.88% vs. 6.45% in the placebo group) and no discontinuations due to adverse events in either group.

Previous wording

Based on these positive results, we plan to file a New Drug Application with the NMPA in the third quarter of 2025. In parallel, we are actively preparing to file an investigational new drug application (“IND”) with the U.S. Federal Food and Drug Administration in the third quarter of 2025 and, subject to IND clearance, plan to initiate a Phase 2 trial in the United States evaluating Hydronidone for the treatment of MASH-associated fibrosis in the second half of 2025. A prior U.S. Phase 1 trial in healthy volunteers confirmed Hydronidone’s tolerability and demonstrated a pharmacokinetic profile consistent with the results of clinical trials of Hydronidone in the PRC.

Current wording

Based on these positive results, we plan to file a New Drug Application with the NMPA and the submission process is ongoing. In parallel, we continue to engage with the U.S. Federal Food and Drug Administration regarding the investigational new drug application (“IND”) requirements for a Phase 2 trial evaluating Hydronidone for the treatment of metabolic dysfunction-associated steatohepatitis ("MASH")-associated liver fibrosis. Pending regulatory feedback, we plan to file the U.S. IND for Hydronidone for the treatment of MASH-associated liver fibrosis in 2026 and, subject to clearance, initiate a Phase 2 clinical trial. We plan to conduct a hepatic impairment study in U.S. subjects under our active U.S. IND. Results from this study are expected to help optimize dose selection and safe enrollment criteria in populations with reduced hepatic function, supporting a more robust Phase 2 development plan. A prior U.S. Phase 1 trial in healthy volunteers confirmed Hydronidone’s tolerability and demonstrated a pharmacokinetic profile consistent with the results of clinical trials of Hydronidone in the PRC.

Previous wording

We are also conducting a randomized, double-blind, placebo-controlled Phase 2 clinical trial in the PRC to assess the safety and efficacy of F573, a caspase inhibitor for the treatment of acute/acute on-chronic liver failure. Completion of the Phase 2 clinical trial is expected in 2026. In June 2025, we successfully dosed the first volunteer in a Phase 1 in the PRC trial evaluating F230, a selective endothelin receptor agonist, for the treatment of pulmonary arterial hypertension. We are also evaluating F528, a novel anti-inflammation agent that targets the inhibition of multiple inflammatory cytokines, in preclinical studies as a potential first-line therapy for the treatment of chronic obstructive pulmonary disease.

Current wording

We are currently enrolling patients in a randomized, double-blind, placebo-controlled Phase 2 clinical trial in the PRC to assess the safety and efficacy of F573, a caspase inhibitor for the treatment of acute/acute on-chronic liver failure. In June 2025, we successfully dosed the first volunteer in a Phase 1 in the PRC trial evaluating F230, a selective endothelin receptor agonist, for the treatment of pulmonary arterial hypertension. We are also evaluating F528, a novel anti-inflammation agent that targets the inhibition of multiple inflammatory cytokines, in preclinical studies as a potential first-line therapy for the treatment of chronic obstructive pulmonary disease.

Previous wording

During the three months ended June 30, 2025, we had net income of $1.6 million and net income attributable to common stockholders of $0.4 million. For the six months ended June 30, 2025, we had net income of $5.3 million and net income attributable to common stockholders of $3.1 million. During the three months ended June 30, 2024, we had net income of $4.5 million and net income attributable to common stockholders of $3.5 million. For the six months ended June 30, 2024, we had net income of $14.5 million and net income attributable to common stockholders of $11.1 million. As of June 30, 2025, we had an accumulated deficit of $70.3 million and cash and cash equivalents of $36.5 million. As of December 31, 2024, we had an accumulated deficit of $73.5 million and cash and cash equivalents of $11.8 million.

Current wording

During the three months ended September 30, 2025, we had net income of $5.9 million and net income attributable to common stockholders of $3.6 million. For the nine months ended September 30, 2025, we had net income of $11.2 million and net income attributable to common stockholders of $6.8 million. During the three months ended September 30, 2024, we had net income of $2.9 million and net income attributable to common stockholders of $1.1 million. For the nine months ended September 30, 2024, we had net income of $17.3 million and net income attributable to common stockholders of $12.2 million. As of September 30, 2025, we had an accumulated deficit of $66.7 million and cash and cash equivalents of $40.4 million. As of December 31, 2024, we had an accumulated deficit of $73.5 million and cash and cash equivalents of $11.8 million.

Previous wording

We continue to anticipate revenue growth over the remainder of the year, driven by the commercial launch of Etorel in June 2025 and the continued expansion of Contiva.

Current wording

Revenues for the three months ended September 30, 2025 and 2024 were $30.6 million and $25.5 million, respectively. The $5.1 million, or 20%, increase was primarily due to $1.5 million from Etorel® sales, $1.2 million from Contiva® sales and a $2.4 million increase in revenue from ETUARY® sales. The increase in ETUARY® sales was mainly driven by a shift in marketing focus in the third quarter. We continue to anticipate revenue growth over the remainder of the year, driven by the growth of ETUARY® sales and supplemented by the commercialization of Etorel® and Contiva® in 2025.

Previous wording

Cost of revenues for the six months ended June 30, 2025 and 2024 was $2.0 million and $1.7 million, respectively. The$0.3 million, or 17%, increasewas driven by a $0.1 million increase in stock-based compensation and a $0.2 million increase in the costs of Etorel and Contiva, in line with the corresponding increase in their sales.

Current wording

Cost of revenues for the three months ended September 30, 2025 and 2024 was $1.6 million and $1.0 million, respectively. The$0.6 million, or 70%, increase was primarily attributable to a $0.2 million increase in the costs associated with Contiva®and Etorel®, in line with the corresponding increase in their sales, and a $0.5 million increase in costs associated with ETUARY® due to higher sales and increased production costs for the product batch related to such sales, partially offset by a $0.1 million decrease in costs associated with generic drugs due to the decrease of sales.

Previous wording

Selling and marketing expenses increased by $0.8 million, or 5%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily attributable to a $0.9 million increase in payroll costs, driven by higher headcount and increase of sales in the three months ended June 30, 2025, partially offset by $0.1 million decrease in promotion and conference expenses.

Current wording

Selling and marketing expenses increased by $1.6 million, or 12%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily attributable to a $0.5 million increase in payroll costs, driven by higher headcount and an increase of sales in the three months ended September 30, 2025 and a $1.1 million increase in promotion and conference expenses.

Previous wording

General and administrative expenses increased by $1.4 million, or 41%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily driven by a $0.5 million increase in professional fees and a $0.9 million increase in functional and administrative department's personnel and stock compensation costs.

Current wording

General and administrative expenses increased by $0.5 million, or 13%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by a $1.1 million increase in functional and administrative department's personnel and stock compensation costs and a $0.2 million increase in miscellaneous expenses, partially offset by a $0.8 million decrease in professional fees.

Previous wording

Change in fair value of warrant liability decreased $2.7 million, or 93%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was related to the remeasurement of the Preferred Stock Warrants liability.

Current wording

Change in fair value of warrant liability increased $0.2 million, or 90%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was related to the remeasurement of the Preferred Stock Warrants liability.

Previous wording

Provision for income taxes was $0.7 million and $1.5 million for the three months ended June 30, 2025 and 2024, respectively. The decrease was primarily attributable to a lower profit from Gyre Pharmaceuticals’ operations for the three months ended June 30, 2025.

Current wording

Provision for income taxes was $1.7 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively. The increase was primarily attributable to a higher profit from Gyre Pharmaceuticals’ operations for the three months ended September 30, 2025.

Previous wording

We continue to anticipate revenue growth over the remainder of the year, driven by the continued expansion of our Contiva and Etorel commercial franchises.

Current wording

We anticipate revenue growth over the remainder of the year, driven by the continued expansion of new products commercial franchises.

Previous wording

Cost of revenues for the three months ended June 30, 2025 and 2024 was $1.2 million and $0.8 million, respectively. The$0.4 million, or 49%, increase was primarily attributable to a $0.2 million increase in the costs associated with Contivaand Etorel, in line with the corresponding increase in their sales, and a $0.2 million increase in ETUARY®’s cost due to the higher plant, property and equipment depreciation from a plant renovation.

Current wording

Cost of revenues for the nine months ended September 30, 2025 and 2024 was $3.7 million and $2.7 million, respectively. The$1.0 million, or 36%, increasewas driven by a $0.1 million increase in stock-based compensation and a $0.4 million increase in the costs of Etorel® and Contiva®, in line with the corresponding increase in their sales, as well as a $0.8 million increase in ETUARY®'s cost due to the higher plant, property and equipment depreciation from a plant renovation, partially offset by a $0.3 million decrease in costs related to generic drugs due to the decrease of sales.

Previous wording

Research and development expenses increased by $0.1 million, or 2%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily attributable a $0.1 million increase in clinical trial costs, primarily related to data analysis costs for Hydronidone, and a $0.1 million increase in staff costs. These increases were partially offset by a $0.1 million decrease in materials and utilities expenses.

Current wording

Selling and marketing expenses increase by $0.7 million, or 2%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily driven by a $0.9 million increase in conference expenses and a $0.1 million increase in stock compensation costs, partially offset by a $0.3 million reduction in staff costs.

Previous wording

Research and development expenses increased by $1.0 million, or 18%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily attributable to a $1.5 million increase in clinical trial costs, primarily as a result of data analysis costs for Hydronidone. This increase was offset by a $0.3 million decrease in materials and utilities expenses and a $0.1 million decrease in facilities, depreciation and other.

Current wording

Research and development expenses increased by $0.6 million, or 7%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily attributable to a $1.0 million increase in clinical trial costs, primarily as a result of data analysis costs for Hydronidone in the first half of 2025. This increase was offset by a $0.2 million decrease in materials and utilities expenses and a $0.2 million decrease in pre-clinical research expenses.

Previous wording

General and administrative expenses increased by $3.0 million, or 43%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily driven by a $0.6 million increase in professional fees, a $1.6 million increase in functional and administrative department's personnel and stock compensation costs, and a $0.8 million increase in miscellaneous expense, mainly due to the increase for the annual meeting expense.

Current wording

General and administrative expenses increased by $3.5 million, or 32%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily driven by a $2.8 million increase in functional and administrative department's personnel and stock compensation costs, and a $0.9 million increase in miscellaneous expense, mainly due to the increase in expenses related to Gyre Pharmaceuticals' annual employee appreciation event, partially offset by a $0.2 million decrease in professional fees.

Previous wording

Change in fair value of warrant liability decreased $4.7 million, or 66%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was related to the remeasurement of the Preferred Stock Warrants liability.

Current wording

Change in fair value of warrant liability decreased $4.5 million, or 65%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was related to the remeasurement of the Preferred Stock Warrants liability.

Previous wording

Provision for income taxes was $1.6 million and $4.0 million for the six months ended June 30, 2025 and 2024, respectively. The decrease was primarily attributable to a lower profit from Gyre Pharmaceuticals’ operations for the six months ended June 30, 2025.

Current wording

Provision for income taxes was $3.3 million and $5.1 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease was primarily attributable to a lower profit from Gyre Pharmaceuticals’ operations and impact of the option exercising for the nine months ended September 30, 2025.

Previous wording

As of June 30, 2025, we had cash and cash equivalents of $36.5 million, short-term bank deposits of $17.9 million and long-term certificates of deposit of $21.5 million, which are available to fund operations, and an accumulated deficit of $70.3 million. Our net income during the three and six months ended June 30, 2025 was $1.6 million and $5.3 million, respectively, while cash provided by operating activities was $2.1 million and $2.0 million, respectively. We believe that our existing cash and cash equivalents, cash flows from operations, and access to capital markets will be sufficient to fund our operating activities and obligations for at least the next 12 months following the filing date of this Quarterly Report and thereafter for the foreseeable future.

Current wording

As of September 30, 2025, we had cash and cash equivalents of $40.4 million, short-term bank deposits of $19.6 million and long-term certificates of deposit of $20.3 million, which are available to fund operations, and an accumulated deficit of $66.7 million. Our net income during the three and nine months ended September 30, 2025 was $5.9 million and $11.2 million, respectively, while cash provided by operating activities was $4.7 million and $6.6 million, respectively. We believe that our existing cash and cash equivalents, cash flows from operations, and access to capital markets will be sufficient to fund our operating activities and obligations for at least the next 12 months following the filing date of this Quarterly Report and thereafter for the foreseeable future.

Previous wording

Cash provided by operating activities for the six months ended June 30, 2025 was $2.0 million, reflecting our net income of $5.3 million and non-cash items of $0.3 million, which primarily includes $1.4 million in stock-based compensation and $1.2 million in depreciation and amortization, offset by $2.5 million related to the change in the fair value of warrant liability. Additionally, cash used in operating activities reflected changes in net operating assets and liabilities of $3.6 million.

Current wording

Cash provided by operating activities for the nine months ended September 30, 2025 was $6.6 million, reflecting our net income of $11.2 million and non-cash items of $1.5 million, which primarily includes $2.6 million in stock-based compensation and $1.8 million in depreciation and amortization, offset by $2.4 million related to the change in the fair value of warrant liability. Additionally, cash used in operating activities reflected changes in net operating assets and liabilities of $6.1 million.

Previous wording

Cash used in operating activities for the six months ended June 30, 2024 was $2.6 million, reflecting our net income of $14.5 million, offset by non-cash items of $6.9 million primarily related to the change in fair value of warrant liability of $7.2 million. Additionally, cash used in operating activities reflected changes in net operating assets and liabilities of $10.1 million.

Current wording

Cash used in operating activities for the nine months ended September 30, 2024 was $0.9 million, reflecting our net income of $17.3 million, offset by non-cash items of $6.1 million primarily related to the change in fair value of warrant liability of $7.0 million. Additionally, cash used in operating activities reflected changes in net operating assets and liabilities of $12.1 million.

Previous wording

Cash used in investing activities for the six months ended June 30, 2025 was $1.1 million, which consisted of $11.2 million in purchases of certificates of deposit, $0.4 million in purchases of property and equipment, and $0.7 million in acquisition of intangible assets, partially offset by $11.2 million of proceeds from the maturity of certificates of deposit.

Current wording

Cash used in investing activities for the nine months ended September 30, 2025 was $2.3 million, which consisted of $11.2 million in purchases of certificates of deposit, $1.0 million in purchases of property and equipment, $0.7 million in acquisition of intangible assets, and $0.6 million in purchase of short-term investments, partially offset by $11.2 million of proceeds from the maturity of certificates of deposit.

Previous wording

Cash used in investing activities for the six months ended June 30, 2024 was $15.5 million, which consisted of $14.1 million in purchases of certificates of deposit and $1.7 million in purchases of property and equipment, partially offset by $0.3 million in proceeds from sale of equipment.

Current wording

Cash used in investing activities for the nine months ended September 30, 2024 was $17.9 million, which consisted of $14.1 million in purchases of certificates of deposit, $2.4 million in purchases of property and equipment, and $1.7 million in equity method investment, partially offset by $0.3 million in proceeds from sale of equipment.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2025 was $23.7 million due to $23.0 million in proceeds from the issuance of common stock pursuant to our public offering of 2,555,555 shares of common stock, $2.0 million in proceeds from the exercise of stock options, and $0.5 million in proceeds from the issuance of common stock under our at-the-market offering program with Jefferies LLC, partially offset by $1.8 million of cash used in connection with deferred offering costs.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2025 was $24.1 million due to $23.0 million in proceeds from the issuance of common stock pursuant to our public offering of 2,555,555 shares of common stock, $2.0 million in proceeds from the exercise of stock options, and $0.5 million in proceeds from the issuance of common stock under our at-the-market offering program with Jefferies LLC, partially offset by $1.5 million of cash used in connection with deferred offering costs.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2024 was $0.8 million due to $0.9 million in proceeds from the exercise of stock options, offset by $0.1 million in cash paid for offering cost.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2024 was $1.1 million due to deferred financing costs, as well as proceeds from the exercise of stock options.

Previous wording

Under PRC laws and regulations, Gyre Pharmaceuticals is subject to restrictions on foreign exchange and cross-border cash transfers, including to parent companies and U.S. stockholders. The ability to distribute earnings to the parent companies and U.S. stockholders is also limited. Current PRC regulations permit Gyre Pharmaceuticals to pay dividends to BJC only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. Amounts restricted include paid-in capital and the statutory reserves of Gyre Pharmaceuticals. The aggregate amounts of restricted capital and statutory reserves of the relevant subsidiaries not available for distribution were $64.7 million and $64.3 million as of June 30, 2025 and December 31, 2024, respectively. We do not expect the restrictions described above to have a material impact on our ability to meet our cash obligations.

Current wording

Under PRC laws and regulations, Gyre Pharmaceuticals is subject to restrictions on foreign exchange and cross-border cash transfers, including to parent companies and U.S. stockholders. The ability to distribute earnings to the parent companies and U.S. stockholders is also limited. Current PRC regulations permit Gyre Pharmaceuticals to pay dividends to BJC only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. Amounts restricted include paid-in capital and the statutory reserves of Gyre Pharmaceuticals. The aggregate amounts of restricted capital and statutory reserves of the relevant subsidiaries not available for distribution were $66.4 million and $64.3 million as of September 30, 2025 and December 31, 2024, respectively. We do not expect the restrictions described above to have a material impact on our ability to meet our cash obligations.

Previous wording

We have entered into lease arrangements in (1) San Diego, California for our headquarters, which expires on the last day of the 38th full calendar month beginning on or after November 11, 2023, and (2) the PRC, for office and laboratory spaces through May 2027. As of June 30, 2025, our fixed lease payment obligations were $1.5 million, with $0.5 million payable within the remaining six months of 2025.

Current wording

We have entered into lease arrangements in (1) San Diego, California for our headquarters, which expires on the last day of the 38th full calendar month beginning on or after November 11, 2023, and (2) the PRC, for office and laboratory spaces through May 2027. As of September 30, 2025, our fixed lease payment obligations were $1.2 million, with $0.3 million payable within the remaining three months of 2025.

Previous wording

As of June 30, 2025, we have committed to allocate $34.7 million toward future research and development activities for various programs.

Current wording

As of September 30, 2025, we have committed to allocate $37.6 million toward future research and development activities for various programs, including the Hydronidone program.

Previous wording

Our commitments related to the purchase of property and equipment contracted but not yet reflected in the unaudited condensed consolidated financial statements were $4.0 million as of June 30, 2025 and are expected to be incurred within one year.

Current wording

Our commitments related to the purchase of property and equipment contracted but not yet reflected in the unaudited condensed consolidated financial statements were $4.6 million as of September 30, 2025 and are expected to be incurred within one year.

Previous wording

We are committed to annual payments to the Etorel IP Rights transferor over eight years following the commencement of commercial sales. See Note 12 —Commitments and Contingencies. As of June 30, 2025, the commercial sales of Etorel have commenced.

Current wording

We are committed to annual payments to the Etorel® IP Rights transferor over eight years following the commencement of commercial sales. See Note 12 —Commitments and Contingencies.

Previous wording

Based on the aggregate market value of our common stock held by non-affiliates as of June 30, 2024, we remain a smaller reporting company, but became an “accelerated filer” as of December 31, 2024. As a result of our transition to accelerated filer status, we were required, pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), to include in our Annual Report an attestation report from our independent registered public accounting firm regarding the effectiveness of our internal control over financial reporting, and we have complied with this requirement by including the attestation report in our Annual Report. However, we expect to continue to take advantage of the reduced reporting requirements applicable to smaller reporting companies.

Current wording

Based on the aggregate market value of our common stock held by non-affiliates as of June 30, 2025, we remain a smaller reporting company and continue to qualify as an “accelerated filer”. As a result of our accelerated filer status, we were required, pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), to include in our Annual Report an attestation report from our independent registered public accounting firm regarding the effectiveness of our internal control over financial reporting, and we have complied with this requirement by including the attestation report in our Annual Report. However, we expect to continue to take advantage of the reduced reporting requirements applicable to smaller reporting companies.