Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

Unless the context indicates otherwise, in this Quarterly Report, the terms "Indaptus," "the Company," "we," "us" and "our" refer to Indaptus Therapeutics, Inc. (formerly Intec Parent, Inc., the successor of Intec Pharma Ltd. following the domestication merger) and, where appropriate, its consolidated subsidiaries following the domestication merger and the reverse merger described in our previous periodic reports. References to "Intec Israel" refer to Intec Pharma Ltd., the predecessor of Indaptus prior to the domestication merger, and references to "Decoy" refer to Decoy Biosystems, Inc., the entity acquired by Indaptus in connection with the reverse merger.

You should read the following discussion and analysis of our financial condition and results of operations along with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("SEC") on March 13, 2025 (the "2024 Annual Report on Form 10-K"). The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions. You should review the sections titled "Summary Risk Factors" and Part II. Item 1A. Risk Factors in this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described below. Please also see the "Cautionary Note Regarding Forward-Looking Statements" section in the forepart of this Quarterly Report.

All information in this Quarterly Report relating to shares or price per share reflects the 1-for-28 reverse stock split effected by us on June 26, 2025 which began trading on a post-split basis on the Nasdaq Capital Market on June 27, 2025.

Overview

We are a clinical biotechnology company developing a novel and patented systemically-administered anti-cancer and anti-viral immunotherapy. We have evolved from more than a century of immunotherapy advances. Our approach is based on the hypothesis that efficient activation of both innate and adaptive immune cells and associated anti-tumor and anti-viral immune responses will require a multi-targeted package of immune system activating signals that can be administered safely intravenously. Our patented technology is composed of single strains of attenuated and killed, non-pathogenic, Gram-negative bacteria, designed to have reduced i.v. toxicity, but largely uncompromised ability to prime or activate many of the cellular components of innate and adaptive immunity. This approach has led to broad anti-tumor and anti-viral activity in preclinical models, including durable anti-tumor response synergy observed with each of four different classes of existing agents, including NSAIDs, checkpoint therapy, targeted antibody therapy and low-dose chemotherapy. Tumor eradication by our technology was associated with induction of both innate and adaptive immunological memory and, importantly, did not require provision of or targeting a tumor antigen in preclinical models. We have carried out successful current Good Manufacturing Practice (cGMP) manufacturing of our lead clinical candidate, Decoy20.

In May 2022, the U.S. Food and Drug Administration, or the FDA, allowed us to proceed under our IND for a Phase 1 clinical trial in participants with advanced solid tumors where currently approved therapies have failed. In December 2022, we initiated an open label, multi-center, dose escalation and expansion, single arm (monotherapy) Phase 1 study conducted in 2 parts. The Phase 1 study began with single dose administration and has now been followed with continuous weekly dosing of Decoy20 in tumor-specific expansion cohorts. The study is enrolling participants with any one of six advanced/metastatic solid tumors, who have exhausted approved treatment options. The study's objectives are to assess the safety and tolerability of Decoy20, to determine the maximum tolerated dose, the optimal biologically active and recommended Phase 2 dose, as well as to assess Decoy20 pharmacokinetics (PK), pharmacodynamics and clinical activity. The primary endpoints of the study are incidence, relatedness and severity of adverse events and treatment-emergent adverse events and determining the number of subjects per cohort with dose limiting toxicity-based adverse events. Secondary endpoints include the incidence of anti-drug antibodies and neutralizing antibodies pre- and post-treatment, change in Decoy20 PK parameters over time, objective response rate and duration of response.

In August 2023, we evaluated the first four participants who received a single dose of 7 x 10^7 Decoy20 in Part 1 of the Phase 1 clinical trial. All four participants who enrolled were evaluable in the first cohort. These participants experienced generally anticipated transient adverse events including hemodynamic changes such as changes in pulse or blood pressure that resolved within 30 minutes and laboratory abnormalities such as grade 1-3 elevations in transaminases (liver function tests) and grade 4 reductions in lymphocytes that generally resolved within three days. One participant had a dose-limiting toxicity of grade 3 bradycardia (slow heart rate) and grade 2 hypotension (low blood pressure) which resolved within approximately 90 minutes with i.v. fluids. Participants also experienced transient induction of over 50 different biomarkers associated with innate and adaptive anti-tumor immune responses. After the end of infusion, Decoy20 was cleared from the blood within 30 to 120 minutes. Peak cytokine and chemokine induction occurred within ~4 to 24 hours and most cytokine/chemokines returned to the participant's respective baseline by 24-72 hours. This rapid clearance and associated transient cytokine/chemokine induction are desired to avoid prolonged toxicity, often associated with longer term cytokine exposure.

In September 2023, we began the second cohort of the Phase 1 clinical trial after receiving authorization from the Safety Review Committee. The second cohort dose was a reduction from 7 x 10^7 Decoy20 dose to 3 x 10^7 Decoy20. In March 2024, we completed the second cohort of participants who received a single dose of 3 x 10^7 Decoy20 in Part 1 of the clinical trial. Participants on the second (lower dose) cohort experienced adverse events similar in frequency and severity to the higher dose cohort with one dose-limiting toxicity of grade 3 ALT elevation that required one week to resolve. Pharmacodynamic effects included transient induction of multiple biomarkers. Clearance of Decoy20 was similarly rapid. Following authorization from the Safety Review Committee, we advanced into the weekly dosing part of the trial.

In May and June 2024, we enrolled two additional participants in the first cohort who received a single dose of 7 x 10^7 Decoy20, and in August 2024 we received the authorization from the Safety Review Committee to initiate the weekly dosing with 7 x 10^7 Decoy20.

As of October 2024, we completed one month of the weekly dosing part in the first six participants at the 3 x 10^7 Decoy20 dose and following the review of the safety data by the Safety Review Committee we received the authorization to initiate unrestricted enrollment of participants at the 3 x 10^7 Decoy20 dose. By May 2025, we had enrolled 13 participants on Decoy20 as a single dose and 32 participants in the weekly dosing among the two Decoy20 dose levels. In May 2025, we decided to conclude enrollment in the weekly dosing and focus on the combination study of Decoy20 with Tislelizumab, as further described below. We have observed early signs of potential benefits emerging with some participants with stable disease. As expected with the mechanism of action of Decoy20, we have seen adverse events of cytokine release syndrome (CRS) in six participants that have resolved within 24-72 hours.

In October 2024, we entered into a clinical supply agreement, or the Supply Agreement, with BeOne Medicines (formerly known as BeiGene Switzerland GmbH), to advance clinical evaluation of Decoy20 in combination with BeOne's anti-PD-1 antibody, Tislelizumab, or the BeOne Product, for the treatment of participants with advanced solid tumors, or the Combination Study. This Combination Study builds on preclinical results where Decoy20, combined with a PD-1 inhibitor, demonstrated tumor eradication. By November 2025, we had enrolled six evaluable participants in the Combination Study, and we have seen one related serious adverse event of CRS in one participant that has resolved within 72 hours. Following efficacy evaluations, we had three participants who experienced disease progression and had to discontinue from the study, and we had evidence of stable disease at the first re-staging assessment in three subjects. Of the three stable disease participants, one subject developed disease progression at the next restaging assessment and has discontinued from the study; one subject continues dosing with Decoy20 alone with stable disease - this subject developed an immune-related adverse event and has not been receiving tislelizumab since the emergence of that adverse event; and the third subject continues dosing with both Decoy20 and tislelizumab with stable disease and is scheduled for further re-staging assessments. The Safety Review Committee has reviewed all available safety data from this cohort and determined that the Decoy20 and tislelizumab combination appears to be tolerable at the current dose and schedule. The Combination Study will assess safety, dose optimization, and early signs of anti-tumor activity in participants with advanced solid tumors, previously treated with a checkpoint inhibitor or with tumors typically unresponsive to checkpoint inhibitors. Currently, we have paused enrollment pending additional efficacy evaluations of the remaining participants and to further assess our next development options.

Under the terms of the Supply Agreement, we will pay for all costs associated with the Combination Study (other than the cost of the BeOne Product), BeOne will supply the BeOne Product to us for the purposes of the study, and we will supply Decoy20 for the purposes of the Combination Study. The Supply Agreement will terminate upon the earlier of (i) the one-year anniversary of the date that we provide BeOne with the Combination Study's final clinical study report or (ii) the date of termination of the Combination Study, subject to early termination in certain circumstances.

Impact of Macroeconomic Conditions on our Operations

Economic developments such as inflation, interest rates and tariffs have negatively affected the global financial markets and may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity. The ultimate impact of current economic conditions is highly uncertain and subject to change. While it is unknown how long these conditions will last and what the complete financial effect will be to us, capital raise efforts and additional development of our technologies may be negatively affected. In addition, our business operations expose us to risks associated with public health crises and epidemics/pandemics.

Components of Operating Results

Research and Development Expenses

Research and development expenses account for a significant portion of our operating expenses. Research and development expenses consist primarily of fees paid to contract research organizations, or CROs, and contract manufacturing organizations, or CMOs, as well as compensation expenses for certain employees involved in the planning, managing, and analyzing the work of the CROs and CMOs and materials used for research and development activities. We expense research and development costs as incurred.

We accrue expenses for manufacturing, preclinical studies and clinical trial activities performed by third parties based on estimates of services received and efforts expended pursuant to agreements with CROs, CMOs, and other outside service providers. We determine these estimates based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. In the event advance payments are made to a CRO, CMO, or outside service provider, we record the payments as a prepaid asset, which will be amortized or expensed as the contracted services are performed. However, actual costs and timing of these activities are highly uncertain, subject to risks and may change depending upon a number of factors, including our clinical development plan.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to ramp up our clinical development activities and incur expenses associated with hiring additional personnel to support our research and development efforts. Our expenditures on future nonclinical and clinical development programs are subject to numerous uncertainties in timing and cost to completion. The duration, costs and timing of preclinical studies and clinical trials and development of product candidates will depend on a variety of factors, including:

	●	the timing and receipt of regulatory approvals;
	●	the scope, rate of progress and expenses of preclinical studies and clinical trials and other research and development activities;
	●	potential safety monitoring and other studies requested by regulatory agencies; and
	●	significant and changing government regulation.

The process of conducting the necessary clinical research to obtain FDA and other regulatory approval is costly and time consuming and the successful development of product candidates is highly uncertain. These risks and uncertainties associated with our research and development projects are discussed more fully in Part II. Item 1A. "Risk Factors - We expect to continue to incur significant research and development expenses and other operating expenses, which may make it difficult for us to attain profitability." As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects, or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates.

General and Administrative Expenses

General and administrative expenses include compensation, employee benefits, and stock-based compensation, finance administration and human resources, facility costs (including rent), professional service fees, and other general overhead costs to support our operations.

We expect our general and administrative expenses to increase for the foreseeable future as we continue to increase our headcount to support our research and development activities and operations generally, the growth of our business and, if any of our product candidates receive marketing approval, commercialization activities. We also expect to continue to incur expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, additional director and officer insurance expenses, investor relations activities, and other administrative and professional services.

Other Income, Net

Other income, net includes interest earned on deposits and investments and other items of income and gain and loss that are incidental to the core operations of the Company.

Results of Operations

Three months ended September 30, 2025 compared to three months ended September 30, 2024

The following tables set forth our results of operations for the three months ended September 30, 2025 and 2024 and the relative dollar change between the two periods.

		Three months ended
		September 30,								Change
		2025				2024				($)				%
Operating expenses:
Research and development		$	1,517,723			$	1,466,037			$	51,686				3.5	%
General and administrative			1,130,764				1,676,020				(545,256	)			(32.5	)%
Total operating expenses			2,648,487				3,142,057				(493,570	)			(15.7	)%
Loss from operations			(2,648,487	)			(3,142,057	)			493,570				(15.7	)%
Other income, net			39,088				73,021				(33,933	)			(46.5	)%
Change in fair value of convertible promissory notes			(365,718	)			-				(365,718	)			100	%
Net loss		$	(2,975,117	)		$	(3,069,036	)		$	93,919				3.1	%
Net loss attributable to common stockholders per share, basic and diluted		$	(2.98	)		$	(9.04	)		$	6.06				(67.0	)%
Weighted average number of shares used in calculating net loss per share, basic and diluted			997,038				339,659

Research and Development Expenses

Research and development expenses were approximately $1.52 million for the three months ended September 30, 2025, compared to approximately $1.47 million for the three months ended September 30, 2024, representing an increase of approximately $50,000, or 3.5%. The change was primarily driven by higher clinical trial costs of approximately $0.35 million related to our ongoing Phase 1 study. This increase was partially offset by a decrease of approximately $0.3 million in payroll and related expenses and stock-based compensation.

General and Administrative Expenses

General and administrative expenses were approximately $1.1 million for the three months ended September 30, 2025, compared to approximately $1.7 million for the three months ended September 30, 2024, representing a decrease of approximately $0.6 million, or 32.5%. The decrease was primarily attributable to a reduction of approximately $0.7 million in stock-based compensation, payroll and related expenses, board of directors fees, investor relations costs and directors and officers insurance policy. This decrease was partially offset by an increase of approximately $0.1 million in professional fees.

Other Income, Net

During the three months ended September 30, 2025, our other income, net was approximately $0.04 million, which represented a decrease of approximately $0.03 million, or approximately 46.5%, compared to approximately $0.07 million for the three months ended September 30, 2024. The other income generated in the period consists primarily of income earned on our cash and cash equivalent accounts, the balances of which were lower during the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Nine months ended September 30, 2025 compared to nine months ended September 30, 2024

The following tables set forth our results of operations for the nine months ended September 30, 2025 and 2024 and the relative dollar change between the two periods.

		Nine months ended
		September 30,								Change
		2025				2024				($)				%
Operating expenses:
Research and development		$	6,495,677			$	4,771,152			$	1,724,525				36.1	%
General and administrative			5,182,132				6,423,029				(1,240,897	)			(19.3	)%
Total operating expenses			11,677,809				11,194,181				483,628				4.3	%
Loss from operations			(11,677,809	)			(11,194,181	)			(483,628	)			4.3	%
Other income, net			94,764				303,201				(208,437	)			(68.7	)%
Change in fair value of convertible promissory notes			(1,153,421	)			-				(1,153,421	)			100	%
Net loss		$	(12,736,466	)		$	(10,890,980	)		$	(1,845,486	)			16.9	%
Net loss attributable to common stockholders per share, basic and diluted		$	(18.48	)		$	(34.53	)		$	16.05				(46.5	)%
Weighted average number of shares used in calculating net loss per share, basic and diluted			689,174				315,451

Research and Development Expenses

Research and development expenses were approximately $6.5 million for the nine months ended September 30, 2025, compared to approximately $4.8 million for the nine months ended September 30, 2024, representing an increase of approximately $1.7 million, or 36.1%. The increase was primarily driven by higher clinical trial costs of approximately $2.6 million related to our ongoing Phase 1 study. This increase was partially offset by a decrease of approximately $0.9 million in payroll and related expenses and stock-based compensation.

General and Administrative Expenses

General and administrative expenses were approximately $5.2 million for the nine months ended September 30, 2025, compared to approximately $6.4 million for the nine months ended September 30, 2024, representing a decrease of approximately $1.2 million, or 19.3%. The decrease was primarily attributable to a reduction of approximately $2.1 million in stock-based compensation, payroll and related expenses, board of directors fees, investor relations costs and directors and officers insurance policy. This decrease was partially offset by an increase of approximately $0.9 million in transaction-related expenses associated with the private placement of convertible notes and warrants completed in June 2025 and professional fees.

Other Income, Net

During the nine months ended September 30, 2025, our other income, net was approximately $0.1 million, which represented a decrease of approximately $0.2 million, or approximately 68.7%, compared to approximately $0.3 million for the nine months ended September 30, 2024. The other income generated in the period consists primarily of income earned on our cash and cash equivalent accounts, the balances of which were lower during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Liquidity and Resources

We do not currently have any approved products and have never generated any revenue from product sales. Since our inception, we have funded our operations primarily through public and private offerings of our equity securities.

In June 2025, we completed a private placement (the "June 2025 Financing") of convertible notes to certain investors, including our Chief Executive Officer, which automatically converted in July 2025 into 501,566 shares of our common stock and pre-funded warrants to purchase 190,795 shares of our common stock at a conversion price of $8.302 per share. In connection with the offering, we also issued to the investors warrants to purchase 1,384,722 shares of our common stock, exercisable at $8.302 per share and expiring on July 27, 2030. The total gross proceeds were approximately $5.7 million and placement agent fees and other offering expenses were approximately $0.8 million As of the date hereof, pre-funded warrants have been exercised into an aggregate of 124,634 shares of common stock.

In February 2025, we entered into a Standby Equity Purchase Agreement (the "SEPA") with YA II PN, LTD., a Cayman Islands exempt limited company ("Yorkville"), pursuant to which we have the right, but not the obligation, to sell up to $20.0 million of our common stock during a 36 months period, subject to the restrictions and satisfaction of the conditions in the SEPA. Upon execution of the SEPA, we issued to Yorkville 10,927 commitment shares. During the first nine months of 2025, we sold 89,902 shares of common stock under the SEPA for aggregate net proceeds of approximately $1.75 million, after deducting offering expenses in the amount of approximately $0.1 million.

In January 2025, we completed a private placement (the "January 2025 Financing") for the sale and issuance by us of an aggregate of: (i) 75,335 shares of our common stock and (ii) warrants to purchase 75,335 shares of common stock. The shares and warrants were sold on a combined basis for consideration of $29.82 for one share and one warrant for aggregate gross proceeds of approximately $2.25 million.

In June 2022, we entered into an At The Market Offering Agreement (the "ATM Agreement") which was amended on September 1, 2022 with H.C. Wainwright & Co., LLC, as sales agent ("Wainwright"), pursuant to which we may offer and sell, from time to time through Wainwright, shares of our common stock for aggregate gross proceeds of up to $3.7 million. The issuance and sale of common stock by us under the ATM Agreement is currently being made pursuant to our effective "shelf" registration statement on Form S-3 filed with the SEC on August 13, 2025 and declared effective on August 20, 2025. In 2024, we sold 5,428 shares of our common stock for aggregate gross proceeds of approximately $0.4 million. On September 2, 2025, we filed a prospectus supplement to increase the amount of shares registered under the prospectus for the ATM Agreement to $2.34 million. In September 2025, we sold 520,000 shares of our common stock for aggregate gross proceeds of approximately $2.34 million.

We believe that our cash and cash equivalents of approximately $5.8 million that we had as of September 30, 2025 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2026 based on our current operating plan. We will need to increase our capital resources through equity or debt financings, and we may need to do so sooner than we expect. We may also seek to finance our cash needs through collaborations, strategic alliances, or license agreements with third parties. If sources of financing are available, they may result in substantial dilution to our stockholders. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. If we are unable to consummate a financing or other transaction, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations. These conditions raise substantial doubt regarding our ability to continue as a going concern within one year after the date of the filing of this Quarterly Report. For additional information, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

We have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years.

Cash Flows

Operating Activities

Net cash used in operating activities was approximately $11.6 million for the nine months ended September 30, 2025, compared with net cash used in operating activities of approximately $8.9 million for the nine months ended September 30, 2024. The increase in net cash used was primarily attributable to an increase in our research and development activities which were mostly related to our Phase 1 clinical trial and an increase in transaction-related expenses associated with the private placement of convertible notes and warrants completed in June 2025.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025 was approximately $11.7 million, which was provided by the issuance and sale of our common stock and warrants in the January 2025 Financing, the issuance and sale of our common stock under the SEPA, the issuance of convertible notes and warrants in the June 2025 Financing and issuance and sale of our common stock under the ATM Agreement. Net cash provided by financing activities for the nine months ended September 30, 2024 was approximately $2.9 million, which was provided by issuance and sale of our common stock under the ATM Agreement and issuance and sale of our common stock and warrants in a registered direct offering and concurrent private placement that we completed in August 2024.

Funding Requirements

Our operating expenses are expected to continue to increase in the future in connection with our ongoing activities, particularly as we expect to continue to ramp up our clinical development activities and incur expenses associated with hiring additional personnel to support our research and development efforts. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Furthermore, we expect to continue to incur significant costs associated with operating as a public company.

We believe that our existing cash and cash equivalents as of September 30, 2025 are adequate to fund our ongoing activities into the first quarter of 2026 based on our current operating plan. In addition, in May 2025, we began implementing a cost-reduction plan that included a focus on the Combination Study, the elimination of non-essential expenses, and accepted a voluntary temporary reduction of the base salaries of certain officers and temporary elimination of board fees. The temporary reduction of base salaries and board fees was discontinued effective November 1, 2025.

Our future capital requirements will depend on many factors, including, but not limited to:

	●	the scope, progress, results and costs of preclinical studies and clinical trials;
	●	the scope, prioritization and number of our clinical trials and other research and development programs;
	●	the amount of revenues we receive under future licensing, collaboration, development and commercialization arrangements with respect to our product candidates;

	●	the impact of any pandemic, epidemic or other future health crisis on our business and operations;
	●	the costs of the development and expansion of our operational infrastructure;
	●	the costs, timing and outcome of regulatory review of our product candidates;
	●	the ability of us, or our collaborators, to achieve development milestones, marketing approval and other events or developments under our potential future licensing agreements;
	●	the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;
	●	the costs and timing of securing manufacturing arrangements for clinical or commercial production;
	●	the costs of contracting with third parties to provide sales and marketing capabilities for us or establishing such capabilities ourselves;
	●	the costs of acquiring or undertaking development and commercialization efforts for any future products, product candidates or technology;
	●	the magnitude of our general and administrative expenses; and
	●	any cost that we may incur under future in- and out-licensing arrangements relating to one or more of our product candidates.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available for the next couple of years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. For example, the trading prices for our and other biopharmaceutical companies' stock have been highly volatile as a result of current macroeconomic conditions and market volatility. As a result, we may face difficulties raising capital through sales of our common stock on acceptable terms, if at all. If we are unsuccessful in securing sufficient financing, we may need to delay, reduce, or eliminate our research and development programs, which could adversely affect our business prospects, or cease operations. For additional information, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Contractual Obligations

Operating lease liabilities represent our commitment for future rent made under a non-cancelable lease for our offices in San Diego, CA. As of September 30, 2025, the total remaining payments under this operating lease obligation were approximately $9,000. The lease expired on October 31, 2025. For additional details regarding our lease, see Note 8 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under the SEC rules.

Critical Accounting Policies

This discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates that affect the reported amounts of our assets, liabilities and expenses. Significant accounting policies employed, including the use of estimates, are presented in the notes to our annual financial statements included in our 2024 Annual Report on Form 10-K. We periodically evaluate our estimates, which are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require our subjective or complex judgments, resulting in the need to make estimates about the effect of matters that are inherently uncertain. If actual performance should differ from historical experience or if the underlying assumptions were to change, our financial condition and results of operations may be materially impacted.

Our critical accounting policies are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies" in our 2024 Annual Report on Form 10-K. During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies from those discussed in our 2024 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

Certain recently issued accounting pronouncements are discussed in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report.