GYRE THERAPEUTICS, INC.

Previous wording

In this Quarterly Report on Form 10-Q (this “Quarterly Report”), unless otherwise specified, references to “we,” “our,” “us” and “our company” refer to Gyre Therapeutics, Inc. ("Gyre") and our majority indirectly owned subsidiary, Beijing Continent Pharmaceuticals Co., Ltd. (d/b/a Gyre Pharmaceuticals Co., Ltd.) (“Gyre Pharmaceuticals”). The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes that appear in this Quarterly Report and with the audited consolidated financial statements and related notes that are included as part of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”).

Current wording

In this Quarterly Report on Form 10-Q (this “Quarterly Report”), unless otherwise specified, references to “we,” “our,” “us” and “our company” refer to Gyre Therapeutics, Inc. ("Gyre"), its directly owned subsidiary, Cullgen Inc. (“Cullgen”), and our majority indirectly owned subsidiary, Beijing Continent Pharmaceuticals Co., Ltd. (d/b/a Gyre Pharmaceuticals Co., Ltd.) (“Gyre Pharmaceuticals”). The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes that appear in this Quarterly Report and with the audited consolidated financial statements and related notes that are included as part of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”).

Previous wording

In May 2026, we acquired Cullgen Inc., a Delaware corporation (“Cullgen”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated March 2, 2026 (the “Merger Agreement”), by and among the Company, Helix Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Cullgen. Pursuant to the Merger Agreement, among other matters, Merger Sub merged with and into Cullgen, with Cullgen continuing as a wholly owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”). The related transaction costs were expensed as incurred. See Note 16 —Subsequent Events to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

In May 2026, we acquired Cullgen Inc., a Delaware corporation (“Cullgen”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated March 2, 2026 (the “Merger Agreement”), by and among the Company, Helix Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Cullgen. Pursuant to the Merger Agreement, among other matters, Merger Sub merged with and into Cullgen, with Cullgen continuing as a wholly owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”). The related transaction costs were expensed as incurred.

Previous wording

The Company has been, and continues to be, engaged in an evaluation of its pipeline and clinical development strategy, including in connection with the Cullgen acquisition, to optimize capital allocation and prioritize programs across the organization. As a result of the Cullgen acquisition, the Company intends to leverage Cullgen’s capabilities in the PRC for the development and early-stage clinical trials of various product candidates.

Current wording

As always, we are in the process of reviewing our programs and evaluating our pipeline and clinical development strategy, including in connection with the Cullgen acquisition, to optimize capital allocation and prioritize programs across the organization. As a result of the Cullgen acquisition, we intend to leverage Cullgen’s capabilities in the PRC for the development and early-stage clinical trials of various product candidates.

Previous wording

Hydronidone is our lead development candidate for the treatment of liver fibrosis. It is a structurally modified derivative of pirfenidone designed to optimize metabolic properties while targeting the transforming growth factor (“TGF”)-β1 signaling pathway, a key mediator of fibrogenesis. We are developing Hydronidone for two primary indications: chronic hepatitis B (“CHB”)-associated liver fibrosis in the PRC and metabolic dysfunction-associated steatohepatitis (“MASH”)-associated liver fibrosis in the United States. Hydronidone represents our primary liver-focused development program and reflects our commitment to advancing therapies targeting both viral- and metabolic-associated liver fibrosis.

Current wording

F351 is our lead development candidate for the treatment of liver fibrosis. It is a structurally modified derivative of pirfenidone designed to optimize metabolic properties while targeting the transforming growth factor (“TGF”)-β1 signaling pathway, a key mediator of fibrogenesis. We are developing F351 for two primary indications: chronic hepatitis B (“CHB”)-associated liver fibrosis in the PRC and metabolic dysfunction-associated steatohepatitis (“MASH”)-associated liver fibrosis in the United States. F351 represents our primary liver-focused development program and reflects our commitment to advancing therapies targeting both viral- and metabolic-associated liver fibrosis.

Previous wording

For CHB-associated liver fibrosis, antiviral therapy may suppress viral infection but is not able to prevent, slow or reverse fibrosis progression, and anti-fibrotic treatment is recommended for intermediate and advanced liver fibrosis and early-stage cirrhosis. As of December 31, 2025, no small molecule or biologic drugs treating CHB-associated liver fibrosis have been approved globally. In recognition of the severity of the disease and the preliminary clinical evidence generated to date, the Center for Drug Evaluation (“CDE”) of the NMPA granted Hydronidone Breakthrough Therapy designation in March 2021.

Current wording

For CHB-associated liver fibrosis, antiviral therapy may suppress viral infection but is not able to prevent, slow or reverse fibrosis progression, and anti-fibrotic treatment is recommended for intermediate and advanced liver fibrosis and early-stage cirrhosis. As of December 31, 2025, no small molecule or biologic drugs treating CHB-associated liver fibrosis have been approved globally. In recognition of the severity of the disease, lack of current therapies and the preliminary clinical evidence generated to date, the Center for Drug Evaluation (“CDE”) of the NMPA granted F351 Breakthrough Therapy designation in March 2021.

Previous wording

We conducted a Phase 3 randomized, double-blind, placebo controlled, Entecavir-based, multi-center trial in the PRC assessing Hydronidone in CHB-associated liver fibrosis. This trial was designed to randomize 248 patients, with a primary endpoint of ≥1-stage reduction in Ishak fibrosis score at Week 52 for Hydronidone in combination with Entecavir.

Current wording

We conducted a Phase 3 randomized, double-blind, placebo controlled, entecavir-based, multi-center trial in the PRC assessing F351 in CHB-associated liver fibrosis. This trial was designed to randomize 248 patients, with a primary endpoint of ≥1-stage reduction in Ishak fibrosis score at Week 52 for F351 in combination with entecavir.

Previous wording

In May 2025, we reported that in the pivotal Phase 3 trial, Hydronidone met its primary endpoint: 52.85% of treated patients achieved ≥1-stage fibrosis regression at Week 52, compared with 29.84% in the placebo group (p=0.0002), based on centralized, blinded Ishak histologic assessment. Hydronidone also met a key secondary endpoint with statistically significant inflammation improvement without fibrosis progression at Week 52 versus placebo. Hydronidone was well tolerated, with a comparable incidence of serious adverse events (4.88% vs. 6.45% in placebo) and no discontinuations due to adverse events in the Hydronidone group.

Current wording

In May 2025, we reported that in the pivotal Phase 3 trial, F351 met its primary endpoint and also met a key secondary endpoint with statistically significant inflammation improvement without fibrosis progression at Week 52 versus placebo. F351 was well tolerated in the study, with a comparable incidence of serious adverse events and no patient discontinuations due to adverse events in the F351 group.

Previous wording

The CDE of the NMPA granted priority review status to the New Drug Application (“NDA”) for Hydronidone in March 2026. On March 22, 2026, Gyre Pharmaceuticals submitted its NDA to the CDE of the NMPA to seek conditional approval for Hydronidone, the Company’s lead product candidate, for the treatment of CHB-induced liver fibrosis. The submission of the NDA will be subject to initial formatting and completeness verification, and the Company plans to work with the CDE to submit any supplementary materials, if requested by the CDE. Thereafter, the CDE is anticipated to issue to the Company an acceptance number before initiating its technical review process.

Current wording

The CDE of the NMPA granted priority review status to the New Drug Application (“NDA”) for F351 in March 2026. On March 22, 2026, Gyre Pharmaceuticals submitted its NDA to the CDE of the NMPA to seek conditional approval for F351, the Company’s lead product candidate, for the treatment of CHB-induced liver fibrosis. On May 12, 2026, the Company announced that the NMPA accepted its NDA.

Previous wording

In the United States, we have completed a Phase 1 clinical trial in healthy volunteers evaluating Hydronidone’s safety, tolerability, and PK. We continue to engage with the U.S. Food and Drug Administration regarding investigational new drug (“IND”) requirements for a Phase 2 clinical trial in MASH-associated liver fibrosis. Pending regulatory feedback, we intend to file a U.S. IND in 2026 and, if the IND becomes effective, initiate a Phase 2 clinical trial.

Current wording

In the United States, we have completed a Phase 1 clinical trial in healthy volunteers evaluating F351’s safety, tolerability, and pharmacokinetics (“PK”). We continue to engage with the U.S. Food and Drug Administration regarding investigational new drug (“IND”) requirements for a Phase 2 clinical trial in MASH-associated liver fibrosis.

Previous wording

In May 2024, Gyre Pharmaceuticals entered into an agreement with Jiangsu Wangao Pharmaceuticals Co., Ltd. (the “Jiangsu Wangao Agreement”), effective from May 7, 2024 to May 6, 2035. Pursuant to the Jiangsu Wangao Agreement, Gyre Pharmaceuticals obtained the drug registration certificate for and became the marketing authorization holder of Etorel TM (nintedanib, ethanesulfonate soft capsules), a small-molecule drug for the treatment of IPF, SSc-ILD and progressive pulmonary fibrosis, within the PRC. The total minimum payments under the Jiangsu Wangao Agreement are Chinese Renminbi (“RMB”) 35.0 million, or approximately $5.1 million, based on the March 31, 2026 spot exchange rate. This includes an upfront transfer fee of RMB 15.0 million, or approximately $2.1 million, payable in three installments, and subsequent payments based on annual sales over eight years following the commencement of commercial sales. Additionally, Gyre Pharmaceuticals will bear the costs associated with relocating the production site to a designated location and will cover all expenses related to the manufacturing process. As of March 31, 2026, we had paid three installments totaling RMB 15.0 million, or approximately $2.2 million, based on the March 31, 2026 spot exchange rate.

Current wording

In May 2024, Gyre Pharmaceuticals entered into an agreement with Jiangsu Wangao Pharmaceuticals Co., Ltd. (the “Jiangsu Wangao Agreement”), effective from May 7, 2024 to May 6, 2035. Pursuant to the Jiangsu Wangao Agreement, Gyre Pharmaceuticals obtained the drug registration certificate for and became the marketing authorization holder of Etorel TM (nintedanib, ethanesulfonate soft capsules), a small-molecule drug for the treatment of IPF, SSc-ILD and progressive pulmonary fibrosis, within the PRC. The total minimum payments under the Jiangsu Wangao Agreement are Chinese Renminbi (“RMB”) 35.0 million, or approximately $5.1 million, based on the June 30, 2026 spot exchange rate. This includes an upfront transfer fee of RMB 15.0 million, or approximately $2.2 million, payable in three installments, and subsequent payments based on annual sales over eight years following the commencement of commercial sales. Additionally, Gyre Pharmaceuticals will bear the costs associated with relocating the production site to a designated location and will cover all expenses related to the manufacturing process. As of June 30, 2026, we had paid four installments totaling RMB 23.0 million, or approximately $3.4 million, based on the June 30, 2026 spot exchange rate.

Previous wording

On June 28, 2024, Gyre Pharmaceuticals entered into a partnership agreement as a limited partner and is obligated to pay $4.2 million for an 18.93% equity interest in the partnership. In April 2025, a new investor joined the partnership agreement, and as a result, Gyre Pharmaceuticals’ equity interest was adjusted to 18.35%. Pursuant to the partnership agreement, Gyre Pharmaceuticals, as a limited partner, shall not participate in any activities related to the management of the investment business. However, Gyre Pharmaceuticals may appoint a member to the advisory committee of the partnership.

Current wording

On June 28, 2024, Gyre Pharmaceuticals entered into a partnership agreement as a limited partner and is obligated to pay $4.4 million for an 18.93% equity interest in the partnership. In April 2025, a new investor joined the partnership agreement, and as a result, Gyre Pharmaceuticals’ equity interest was adjusted to 18.35%. Pursuant to the partnership agreement, Gyre Pharmaceuticals, as a limited partner, shall not participate in any activities related to the management of the investment business. However, Gyre Pharmaceuticals may appoint a member to the advisory committee of the partnership.

Previous wording

As of March 31, 2026 and 2025, our total investment into the partnership was $1.7 million and $1.7 million, respectively, and the carrying value of the Company’s long-term investment in this affiliate was $1.6 million and $1.6 million, respectively.

Current wording

As of June 30, 2026 and December 31, 2025, our total investment into the partnership was $1.8 million and $1.7 million, respectively, and the carrying value of the Company’s long-term investment in this affiliate was $1.6 million and $1.6 million, respectively.

Previous wording

During the three months ended March 31, 2026, we had a net loss of $9.9 million and net loss attributable to common stockholders of $8.7 million. During the three months ended March 31, 2025, we had net income of $3.7 million and net income attributable to common stockholders of $2.7 million. As of March 31, 2026, we had an accumulated deficit of $77.7 million and cash and cash equivalents of $37.5 million. As of December 31, 2025, we had an accumulated deficit of $68.4 million and cash and cash equivalents of $37.1 million.

Current wording

During the three months ended June 30, 2026, we had a net loss of $14.3 million and net loss attributable to common stockholders of $11.7 million. For the six months ended June 30, 2026, we had net loss of $32.8 million and net loss attributable to common stockholders of $24.8 million. During the three months ended June 30, 2025, we had net loss of $2.2 million and net loss attributable to common stockholders of $2.0 million. For the six months ended June 30, 2025, we had net income of $2.7 million and net income attributable to common stockholders of $0.1 million. As of June 30, 2026, we had an accumulated deficit of $138.0 million and cash and cash equivalents of $43.3 million. As of December 31, 2025, we had an accumulated deficit of $112.6 million and cash and cash equivalents of $49.2 million.

Previous wording

Provision for income taxes are comprised primarily of current income tax provision, mainly attributable to the profitable Gyre Pharmaceuticals operations in the PRC, and deferred income tax provision, mainly including deferred tax recognized for temporary differences in relation to research and development tax credit and net operating loss carryforwards for U.S. tax purposes and fixed and intangible assets, net of valuation allowances.

Current wording

Provision for income taxes is comprised primarily of current income tax provision, mainly attributable to the profitable Gyre Pharmaceuticals operations in the PRC, and deferred income tax provision, mainly including deferred tax recognized for temporary differences in relation to research and development tax credit and net operating loss carryforwards for U.S. tax purposes and fixed and intangible assets, net of valuation allowances.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law, which introduced several U.S. income tax provisions that have and may continue to potentially impact our provision for income taxes. The provisions include, but are not limited to, the immediate expensing of domestic research and development expenses beginning in 2025, as well as a modification to the Global Intangible Low-Taxed Income effective in 2026. We have recognized the effects of the OBBBA provisions on our financial results to the extent they are applicable to the three months ended March 31, 2026. We will continue to evaluate the impact of the OBBBA on our condensed consolidated financial statements.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law, which introduced several U.S. income tax provisions that have and may continue to potentially impact our provision for income taxes. The provisions include, but are not limited to, the immediate expensing of domestic research and development expenses beginning in 2025, as well as a modification to the Global Intangible Low-Taxed Income effective in 2026. We have recognized the effects of the OBBBA provisions on our financial results to the extent they are applicable to the six months ended June 30, 2026. We will continue to evaluate the impact of the OBBBA on our unaudited condensed consolidated financial statements.

Previous wording

Cost of revenues for the three months ended March 31, 2026 and 2025 were $1.2 million and $0.9 million, respectively. The $0.3 million, or 37%, increase was primarily driven by a $0.3 million rise in early production costs of Etorel TM and a $0.2 million increase in stock-based compensation expense, partially offset by a $0.2 million decrease in ETUARYTM cost of sales.

Current wording

General and administrative expenses increased by $0.6 million, or 8%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by a $0.9 million increase in personnel costs related to the Company's internal restructuring, and a $0.2 million increase in miscellaneous expenses, partially offset by a $0.2 million decrease in stock-based compensation expenses and a $0.3 million decrease in professional fees.

Previous wording

For the three months ended March 31, 2026, $2.5 million in transaction costs were incurred in connection with the acquisition of Cullgen. As the Merger closed in early May 2026, we expect there will be additional non-recurring transaction costs incurred after the first quarter of 2026.

Current wording

For the three months ended June 30, 2026, $0.5 million in transaction costs were incurred in connection with the acquisition of Cullgen closed in early May 2026.

Previous wording

Change in fair value of warrant liability decreased $2.2 million, or 96%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was related to the remeasurement of the Preferred Stock Warrants liability.

Current wording

Change in fair value of warrant liability decreased by $80 thousand, or 38%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was related to the remeasurement of the preferred stock warrants liability.

Previous wording

Selling and marketing expenses increased by $3.3 million, or 30%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by a $2.9 million increase in promotion expenses for Etorel TM and Contiva TM and early-stage preparation activities for F351 commercial launch, and a $1.0 million increase in stock-based compensation expense, partially offset by a $0.5 million decrease in staff cost due to a decrease in bonus and a $0.1 million decrease in travel and other expenses.

Current wording

Selling and marketing expenses increased by $1.9 million, or 7%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to a $1.6 million increase in stock-based compensation expense, and a $0.4 million increase in promotional and conference expenses, partially offset by a $0.1 million decrease in travel and other expense.

Previous wording

General and administrative expenses increased by $2.3 million, or 46%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by a $0.8 million increase in stock-based compensation costs, a $0.9 million increase in staff costs due to our internal realignment of responsibilities and compensation adjustments, and a $0.6 million increase in miscellaneous expenses.

Current wording

General and administrative expenses increased by $2.6 million, or 17%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by a $2.7 million increase in personnel costs related to the Company's internal restructuring, a $0.9 million increase in miscellaneous expenses, a $0.6 million increase in stock-based compensation expenses, partially offset by a $1.6 million decrease in professional fees.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $37.5 million, short-term bank deposits of $12.3 million and long-term certificates of deposit of $29.4 million, which are available to fund operations, and an accumulated deficit of $77.7 million. Our net loss during the three months ended March 31, 2026 was $9.9 million, while cash provided by operating activities was $3.2 million. 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 June 30, 2026, we had cash and cash equivalents of $43.3 million, short-term bank deposits of $14.1 million, short-term investment of $17.5 million, and long-term certificates of deposit of $28.4 million, which are available to fund operations, and an accumulated deficit of $138.0 million. Our net loss during the six months ended June 30, 2026 was $32.8 million, while cash used in operating activities was $13.5 million. 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

We expect to use cash provided by operating activities, short-term deposits, and long-term certificate of deposits, as well as potential cash issuances to meet our current and future financial obligations, including funding our operations, research and development activities, clinical pipelines, and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic, regulatory, and other factors, many of which we cannot control. In particular, pending approval of an IND submission, we expect to initiate a Phase 2 trial to evaluate Hydronidone for the treatment of MASH-associated liver fibrosis in 2026. We cannot guarantee that a Phase 2 trial will be initiated or estimate the funding needed for such trial at this time, but may need to raise additional capital to fund this program. In addition, we anticipate that we will incur expenses related to and in connection with the integration between our business and Cullgen. Factors that may affect financing requirements include, but are not limited to:

Current wording

We expect to use cash provided by operating activities, short-term deposits, and long-term certificates of deposits, as well as potential cash issuances to meet our current and future financial obligations, including funding our operations, research and development activities, clinical pipelines, and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic, regulatory, and other factors, many of which we cannot control. In addition, we anticipate that we will incur expenses related to and in connection with the integration between our business and Cullgen. Factors that may affect financing requirements include, but are not limited to:

Previous wording

Cash provided by operating activities for the three months ended March 31, 2026 was $3.2 million, reflecting our net loss of $9.9 million, offset by non-cash items of $3.5 million primarily driven by a $2.6 million increase in stock-based compensation, $0.7 million in depreciation and amortization, $0.2 million in non-cash lease expense, $0.6 million in accrued interest, and $0.2 million of bad debt expenses and other non-cash items, offset by $0.7 million decrease in deferred income taxes, net, and $0.1 million decrease in change in fair value of derivative liabilities. Additionally, cash provided by operating activities reflected changes in net operating assets and liabilities of $9.5 million.

Current wording

Cash used in operating activities for the six months ended June 30, 2026 was $13.5 million, reflecting our net loss of $32.8 million and offset by non-cash items of $5.2 million, which was primarily driven by a $4.7 million increase in stock-based compensation. Additionally, $14.1 million cash provided by changes in net operating assets and liabilities was primarily driven by an $11.5 million decrease in receivables and prepaid and other assets, $4.8 million increase in related party payable, partially offset by an increase in inventories and a decrease in various payables and accrued liabilities.

Previous wording

Cash used in operating activities for the three months ended March 31, 2025 was $0.1 million, reflecting our net income of $3.7 million, offset by non-cash items of $0.5 million primarily driven by a $2.3 million change in the fair value of warrant liability, $0.5 million in stock-based compensation, $0.5 million in depreciation and amortization, $0.5 million in accrued interest, and $0.2 million in non-cash lease expense. Additionally, cash used in operating activities reflected changes in net operating assets and liabilities of $3.3 million.

Current wording

Cash used in operating activities for the six months ended June 30, 2025 was $7.6 million, reflecting our net income of $2.7 million and non-cash charges of $1.6 million, which primarily included $1.9 million in stock-based compensation and $1.5 million in depreciation and amortization, partially offset by a $2.5 million change in the fair value of warrant liability. Additionally, $11.9 million cash used in changes in net operating assets and liabilities was primarily driven by a $8.2 million increase in accounts receivable, inventories, prepaid and other assets and a $10.5 million decrease in deferred revenue, income tax payable, and other operating lease liabilities, partially offset by a $3.9 million decrease in notes receivable and a $2.9 million increase in accounts payable and accrued liabilities.

Previous wording

The increase in cash provided by operating activities for the three months ended March 31, 2026 compared with cash used in operating activities for the three months ended March 31, 2025 was primarily attributable to higher customer collections and lower tax payments.

Current wording

The increase in cash used in operating activities for the six months ended June 30, 2026 compared with cash used in operating activities for the six months ended June 30, 2025 was primarily attributable to less cash received under the Astellas Agreement that ended in March 2026 combined with the transaction costs associated with the Merger that closed in May 2026, as well as overall higher spending in clinical and other research programs.

Previous wording

Cash used in investing activities for the three months ended March 31, 2026 was $3.1 million, which consisted of $10.1 million of cash acquired in connection with the maturity of certificates of deposit, offset by $13.0 million in purchases of certificates of deposit and $0.2 million in purchases of property and equipment.

Current wording

Cash provided by investing activities for the six months ended June 30, 2026 was $6.7 million, which consisted primarily of $13.0 million of proceeds from available-for-sale securities and $13.0 million of proceeds from the maturity of certificates of deposit, partially offset by $15.9 million in purchases of certificates of deposit, $1.0 million in acquisitions of intangible assets, $2.0 million in purchases of available-for-sale securities, and $0.4 million in purchases of property and equipment.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2025 was $2.0 million, which consisted of $11.2 million of cash acquired in connection with the maturity of certificates of deposit, partially offset by $8.4 million in purchases of certificates of deposit, $0.1 million in purchases of property and equipment, and $0.7 million in acquisition of intangible assets.

Current wording

Cash provided by investing activities for the six months ended June 30, 2025 was $3.3 million, which consisted primarily of $23.2 million of proceeds from the maturity of certificates of deposit and $11.7 million of proceeds from available-for-sale securities, partially offset by $19.2 million in purchases of certificates of deposit, $11.2 million in purchases of available-for-sale securities, $0.7 million in acquisitions of intangible assets, and $0.5 million in purchases of property and equipment.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2026 was $21 thousand due to proceeds from the exercise of stock options.

Current wording

Cash provided by financing activities for the six months ended June 30, 2026 was $13 thousand, primarily due to proceeds from stock options exercised, partially offset by listing expense.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2025 was $1.3 million due to $0.9 million in proceeds from the exercise of stock options and $0.5 million in proceeds from the issuance of common stock under our ATM Program with Jefferies LLC, partially offset by $0.1 million of cash used in connection with deferred financing costs.

Current wording

Cash provided by financing activities for the six months ended June 30, 2025 was $21.6 million, primarily due to $23.0 million in proceeds from the issuance 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 ATM program with Jefferies LLC, partially offset by $2.1 million in payments of listing expenses and $1.8 million of cash used for deferred financing costs.

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 $72.4 million and $70.1 million as of March 31, 2026 and December 31, 2025. 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 and Cullgen are 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 $131.6 million and $128.1 million as of June 30, 2026 and December 31, 2025. We do not expect the restrictions described above to have a material impact on our ability to meet our cash obligations.

Previous wording

We expect to satisfy these contractual obligations and commitments through a combination of cash on hand, cash provided by operating activities, short-term deposits, and long-term certificate of deposits.

Current wording

We expect to satisfy these contractual obligations and commitments through a combination of cash on hand, cash provided by operating activities, short-term deposits, and long-term certificates of deposits.

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 March 31, 2026, our fixed lease payment obligations were $0.8 million, with $0.5 million payable within the remaining nine months.

Current wording

We have entered into lease arrangements in (1) San Diego, California for our headquarters and subsidiary, the latest of which expires in July 2028, and (2) the PRC, for office and laboratory spaces through February 2037. As of June 30, 2026, our fixed lease payment obligations were $4.3 million, with $0.9 million payable within the remaining six months.

Previous wording

As of March 31, 2026, we have committed to allocate $64.1 million toward future research and development activities for various programs.

Current wording

As of June 30, 2026, we have committed to allocate $53.0 million toward future research and development activities for various programs.

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 $1.5 million as of March 31, 2026 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 $1.2 million as of June 30, 2026 and are expected to be incurred within one year.