Larimar Therapeutics, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”), and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 19, 2026 (the “2025 Annual Report”) . Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. We undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events or otherwise. You should read the “Risk Factors” section included in our 2025 Annual Report, in addition to the“Cautionary Note Regarding Forward-Looking Statements” sections of this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview We are a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using our novel cell penetrating peptide (“CPP”) technology platform. Our lead product candidate, nomlabofusp, is a subcutaneously administered, recombinant fusion protein intended to deliver frataxin (“FXN”), an essential protein, to the mitochondria of patients with Friedreich's ataxia (“FA”). FA is a rare, progressive, and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality. Currently, there are no treatment options that address the core deficit of FA, low levels of FXN. Nomlabofusp represents the first potential therapy designed to systemically increase FXN levels in patients with FA. We believe that our CPP platform, which enables a therapeutic molecule to cross a cell membrane in order to reach intracellular targets, also has the potential to enable the treatment of other rare and orphan diseases. We intend to use our proprietary platform to target additional orphan indications characterized by deficiencies in or alterations of intracellular content or activity. Since our inception, we have devoted substantially all of our resources to developing nomlabofusp, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, raising capital, developing sales and marketing capacities, and providing general and administrative support for such operations. Nomlabofusp Program Update We have Orphan Drug Designation, Fast Track Designation, Pediatric Rare Disease Designation and Breakthrough Therapy Designation from the FDA and have been granted orphan drug designation and access to the European Medicines Agency’s (“EMA’s”) Priority Medicines Program (“PRIME”) scheme in the European Union (the “EU”). We have also received access in the United Kingdom (the “UK”) to the Medicines and Healthcare Regulatory Agency’s (“MHRA”) Innovative Licensing and Access Pathway (“ILAP”). These programs are designed to facilitate development of certain therapeutics such as those for rare and serious diseases, and those that have the potential to meet an unmet medical need. The FDA’s Center for Drug Evaluation and Research selected nomlabofusp as one of a few drug development programs for participation in the Support for Clinical Trials Advancing Rare Disease Therapeutics (“START”) Pilot Program. The objective of the program is to accelerate the development of drugs for rare diseases that lead to significant disability or death by facilitating frequent advice and regular communication with the FDA staff to expedite the review process of biologics and drugs. We have engaged in multiple discussions and interactions with the FDA in connection with our clinical development of nomlabofusp and communications remain ongoing. We have also had numerous interactions with the EMA, the MHRA, and Canada’s Health Canada regarding the clinical development of nomlabofusp. 22 We have completed four clinical studies: (i) two Phase 1 clinical studies in adults, (ii) a Phase 2 dose exploration study in adults and (iii) a Phase 1 pharmacokinetic (“PK”) run-in study in adolescents (12-17 years old). We currently have an ongoing open label (“OL”) study (previously referred to as the Open Label Extension, (“OLE”) study) in adults and adolescents with FA. Recent significant developments are as follows: • In February 2026, the FDA granted Breakthrough Therapy Designation (“BTD”) ”) to nomlabofusp for the treatment of adults and children with FA. The designation was based on the FDA’s review of available clinical data from our ongoing OL study evaluating nomlabofusp in adult and pediatric patients with FA. BTD is intended to expedite the development and regulatory review of a drug intended to treat a serious condition. A drug is eligible for BTD if preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available treatments in one or more clinically significant endpoints. • In February 2026, as a result of a START pilot program meeting with the FDA, we announced continued alignment with the FDA to consider the use of skin FXN as a novel surrogate endpoint reasonably likely to predict clinical benefit to support a planned Biologics License Application (“BLA”) submission seeking accelerated approval and that the use of FXN as a novel surrogate endpoint to support accelerated approval. There was also agreement on the type of analyses required to support the exposure response relationships for the nomlabofusp program. The FDA also stated that the adequacy of the safety database will be a matter of review at the time of BLA submission. • In June 2026, following minutes from a multidisciplinary Type B pre-BLA meeting and FDA review of the nomlabofusp briefing package, we announced continued agreement with the FDA on key elements of a potential BLA submission including: o confirmed that the existing data package appears capable of supporting submission and review of a BLA seeking accelerated approval based on data from the OL study; approval will be a matter of review; o reaffirmed its willingness to consider FXN as a novel surrogate endpoint and confirmed that our exposure-response analysis linking nomlabofusp exposure to clinical outcomes may support the BLA submission; o stated that the prospectively collected gene expression and lipid biomarker data may provide an opportunity to further characterize the biological activity of nomlabofusp beyond FXN tissue concentrations; o agreed to a rolling BLA submission. • In June 2026, we submitted the first module of our rolling BLA submission and expect that the remaining modules will be submitted in the second half of 2026. • In June 2026, we reported open label study data. As of June 2026, 43 adolescent and adult participants in the OL study received at least one dose of nomlabofusp and 22 participants remain in the study with a maximum treatment duration of more than 800 days. More than 10,000 doses of nomlabofusp have been administered. o Consistent Long-term Safety Profile: ▪ Longer-term dosing was generally well tolerated with thirteen adults on treatment for one year, seven for 18 months and three for two years; ▪ The most common adverse events remained mild-to-moderate local injection site reactions, which decreased in frequency over time and did not lead to any withdrawals from the study; ▪ Twenty-one participants discontinued since study initiation in January 2024; • Ten participants experienced anaphylaxis and discontinued the study, including nine participants with prior nomlabofusp exposure; all participants who experienced 23 anaphylaxis responded to standard therapy and all returned to their usual state of health with no further sequelae; • Three participants experienced generalized urticaria and discontinued the study, with no new occurrences observed following initiation of antihistamine therapy; • Other discontinuations included three associated with other adverse events and five discontinuations unrelated to treatment, primarily due to logistical factors such as the inconvenience of participating in a long-term study; ▪ Of the eleven participants who had previously not been exposed to nomlabofusp, one had anaphylaxis; o Sustained Increases in Skin FXN Levels Comparable to Asymptomatic Carriers. Skin FXN levels increased following nomlabofusp administration, with 82% (9/11) of participants achieving levels above those in asymptomatic carriers by six months, 100% (9/9) reaching this threshold at one year, and 100% (3/3) maintaining it through 18 months; o Improvements in Key Clinical Outcome Measures Relative to FACOMS Natural History Population. ▪ Directional improvement across key clinical endpoints, including the Modified Friedreich Ataxia Rating Scale (mFARS), the Friedreich Ataxia Rating Scale-Activities of Daily Living (FARS-ADL), 9-hole peg test (9-HPT) was sustained following one year of nomlabofusp treatment (n=13) relative to a worsening in those outcomes observed in the FACOMS reference population. Nomlabofusp led to a 2.6-point benefit in mFARS at one year; ▪ Improvement in clinical outcomes was associated with increased skin FXN levels, supporting the potential for nomlabofusp to provide clinical benefit across a broad spectrum of patients with FA, including those with advanced disease; For our global confirmatory Phase 3 study, we are planning sites in the U.S., E.U., U.K., Canada and Australia. We have obtained feedback from both the FDA and the EMA on the study protocol. We plan to initiate dosing of the first patient in the third quarter of 2026. Critical Accounting Policies and Significant Judgments and Estimates Our condensed, consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, costs and expenses, and related disclosures. We believe that the estimates and assumptions involved in the accounting policies described below may have the greatest potential impact on our consolidated financial statements and, therefore, consider these to be our critical accounting policies. We evaluate these estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions. Research and Development Expense Costs for certain research and development activities, such as manufacturing, non-clinical studies, and clinical trials are generally recognized based on the evaluation of the progress of completion of specific tasks using information and data provided by our vendors and collaborators, and accordingly, are considered an area of significant judgment and management’s review of manufacturing, non-clinical, and clinical expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel, and outside vendors to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. We work with vendors and suppliers to ensure that our estimates of our research and development expenses are reasonable. We expect to increase our investment in research and development in order to advance nomlabofusp through additional clinical trials. As a result, we expect that our research and development expenses will continue to increase in the foreseeable future as we pursue clinical development of nomlabofusp, including manufacturing activities, and/or any other product candidates we develop. 24 Stock Compensation Expense We measure all stock options granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards. The assumptions used in our option-pricing model represent management’s best estimates. These estimates are complex, involve a number of variables, uncertainties, and assumptions and the application of management’s judgment, and thus are inherently subjective. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. We measure restricted stock options and performance-based restricted stock units based on the grant-date fair value of based on the closing price of the Company’s common stock on the date of grant (or, if the grant date is not a business day, the closing price on the preceding business day). For restricted stock unit awards, we recognize expense over the expected service period of the recipient. For restricted performance-based restricted stock awards we recognize expense over the estimated period the awards are expected to be earned; that period is the period once the performance objective is determined to be likely, once the performance goal is achieved. Prior to May 28, 2020, we were a private company and lacked company-specific historical and implied volatility information for our common stock. Prior to January 1, 2023, we estimated our expected common stock price volatility solely based on the historical volatility of publicly traded peer companies with comparable characteristics including enterprise value, risk profiles, and position within the industry. Beginning on January 1, 2023, we began blending our historical data starting in June 2020 (following our merger with Zafgen in 2020) with its historical peer group. We regularly evaluate our peer group to assess changes in circumstances where identified companies may no longer be similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. We expect to continue to do so until we have full historical data regarding the volatility of our own traded stock price. The expected term of our stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield considers the fact that we have never paid cash dividends on common stock and do not expect to pay any cash dividends in the foreseeable future. Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. Typically, we issue awards with only service-based vesting conditions and record the expense for these awards using the straight-line method. We account for forfeitures as they occur. In January 2025, our Board of Directors (“Board”) approved the issuance of an aggregate of 200,000 performance-based restricted stock units (“RSUs”) to certain of our executive officers (the “January 2025 PSU Awards”). The Board established specified performance criteria and a corresponding performance period over which such performance criteria must be achieved, the satisfaction of which are conditions to earning the January 2025 PSU Awards, and vesting of the underlying RSUs. As of June 30, 2026, the underlying performance criteria of the January 2025 PSU Awards were determined to be not probable of achievement for accounting purposes and no stock-based compensation expense was recognized for the three months ended June 30, 2026. We classify stock-based compensation expense in our consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Financial Operations Overview Revenue To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts result in clinical success and regulatory approval or collaboration agreements with third parties for our product candidates, we may generate revenue from those product candidates or collaborations. 25 Operating Expenses The majority of our operating expenses since inception have consisted primarily of research and development activities, and general and administrative costs. Research and Development Expenses Research and development expenses, which consist primarily of costs associated with our product research and development efforts, are expensed as incurred. Research and development expenses consist primarily of: • third-party contract costs relating to research, formulation, manufacturing, non-clinical studies and clinical trial activities; • employee related costs, including salaries, benefits and stock-based compensation expenses for employees engaged in scientific research and development functions; • external costs of outside consultants and vendors; • payments made under our third-party licensing agreements; • laboratory consumables; and • allocated facility-related costs. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the clinical and commercial development of nomlabofusp, or any other product candidates we develop. We are also unable to predict when, if ever, material net cash inflows will commence from sales of our product candidates. The duration, costs, and timing of clinical trials and development of nomlabofusp or any other product candidates we develop will depend on a variety of factors, including: • the scope, rate of progress and expense of clinical trials and other research and development activities; • clinical trial results; • uncertainties in clinical trial enrollment rate or design; • significant and changing government regulation; • the timing and receipt of any regulatory approvals; • the influence of the FDA or other regulatory authorities on our clinical trial design and timing; • establishing manufacturing capabilities or making arrangements with third-party manufacturers and risk involved with development of manufacturing processes, FDA pre-approval inspection practices and successful completion of manufacturing batches for clinical development and other regulatory purposes; • our ability to obtain and maintain patent and trade secret protection and regulatory exclusivity for our product candidates; and • our ability to recruit and retain key research and development personnel. A change in the outcome of one or more of these variables with respect to the development of a product candidate could significantly change the costs, timing, and viability associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct additional non-clinical or clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. 26 General and Administrative Expenses General and administrative expenses consist primarily of personnel costs, consisting of salaries, related benefits and stock-based compensation, costs related to our executive, finance, commercial, information technology, and costs related to other administrative functions. General and administrative expenses also include insurance expenses and professional fees for auditing, commercial readiness costs, tax, and legal services, including legal expenses to pursue patent protection for our intellectual property and related costs. We expect that our general and administrative expenses will increase in the foreseeable future as we hire additional employees to implement, improve, and scale our operational, financial, commercial and management systems. Results of Operations Comparison of three months ended June 30, 2026 and 2025 The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, Increase 2026 2025 (Decrease) (in thousands) Statement of Operations Data: Operating expenses: Research and development $ 28,000 $ 23,368 $ 4,632 General and administrative 6,351 4,424 1,927 Total operating expenses 34,351 27,792 6,559 Loss from operations (34,351 ) (27,792 ) (6,559 ) Other income (expense), net 1,569 1,610 (41 ) Net loss $ (32,782 ) $ (26,182 ) $ (6,600 ) Research and Development Expenses Research and development expenses for the three months ended June 30, 2026 increased $4.6 million compared to the three months ended June 30, 2025. The increase in research and development expenses was primarily driven by a $2.3 million increase in process performance qualification, and other drug manufacturing activities at our third-party manufacturers and a $2.0 million increase in professional and consulting fees associated with our ongoing and planned clinical trials, data analysis costs, FDA inspection readiness expenditures, as well as Biologics License Application preparation costs. General and Administrative expenses General and administrative expenses for the three months ended June 30, 2026 increased $1.9 million compared to the three months ended June 30, 2025. The increase in general and administrative expenses primarily related to the acceleration of commercial activities as we prepare for the planned mid-2027 launch of nomlabofusp, if approved. This included an increase of $0.7 million of increased compensation costs associated with additional commercial and related headcount, an increase of $0.5 million of market development activities and commercial readiness efforts as well as an increase of $0.5 million in legal fees supporting commercialization and development efforts. Other Income (expense), net Other income (expense), net was $1.6 million in the three months ended June 30, 2026 compared to $1.6 million income in the three months ended June 30, 2025. 27 Comparison of six months ended June 30, 2026 and 2025 The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, Increase 2026 2025 (Decrease) (in thousands) Statement of Operations Data: Operating expenses: Research and development $ 53,031 $ 49,919 $ 3,112 General and administrative 12,437 9,060 3,377 Total operating expenses 65,468 58,979 6,489 Loss from operations (65,468 ) (58,979 ) (6,489 ) Other income (expense), net 3,073 3,516 (443 ) Net loss $ (62,395 ) $ (55,463 ) $ (6,932 ) Research and Development Expenses Research and development expenses for the six months ended June 30, 2026 increased $3.1 million compared to the six months ended June 30, 2025. This increase was driven by a $3.7 million increase in professional and consulting fees associated with our ongoing and planned clinical trials, data analysis costs, inspection readiness expenditures as well as Biologics License Application preparation costs partially offset by lower manufacturing activities and there related costs in the six month period ended June 30, 2026 compared to the six month period ended June 30, 2026. General and administrative expenses for the six months ended June 30, 2026 increased $3.4 million compared to the six months ended June 30, 2025. The increase in general and administrative expenses primarily related to the acceleration of commercial activities as we prepare for the planned mid-2027 launch of nomlabofusp, if approved. This included an increase of $1.6 million in market research, market development and other commercial readiness activities, an increase of $1.0 million of increased compensation costs associated with additional commercial and related headcount,as well as an increase of $0.5 million in legal fees supporting commercialization and development efforts. Other Income (expense), net Other income (expense), net was $3.1 million income in the six months ended June 30, 2026 compared to $3.5 million income in the six months ended June 30, 2025. The decrease was primarily driven by lower interest and accretion income due to lower interest yields and lower average investable cash, cash equivalents, and marketable securities balances. Liquidity and Capital Resources Financing Activities, including Recent Material Financings We have funded our operations to date primarily with proceeds from sales of common stock, proceeds from the sale of prefunded warrants for the purchase of common stock, the acquisition in 2020 of cash, cash equivalents, marketable securities, and restricted cash upon the merger with Zafgen, Inc. (“Zafgen”) and, prior to the 2020 merger with Zafgen, capital contributions from Chondrial Holdings, LLC. In July 2025, we completed an underwritten public offering in which we issued and sold 21,562,500 shares of our common stock, including the exercise in full of the underwriters' option to purchase additional shares, at a public offering price of $3.20 per share. We received net proceeds of approximately $65.0 million, after deducting underwriting discounts, commissions and other offering expenses. In February 2026, we completed an underwritten public offering in which we issued and sold 23,000,000 shares of our common stock, including the exercise in full of the underwriters' option to purchase additional shares, at a public offering price of $5.00 per share. We received net proceeds of approximately $107.6 million, after deducting underwriting discounts, commissions, and other offering expenses. 28 Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented below: Six Months Ended June 30, 2026 2025 (in thousands) Net cash used in operating activities $ (88,644 ) $ (45,921 ) Net cash provided by (used in) investing activities (11,911 ) 33,290 Net cash provided by financing activities 107,680 — Net increase in cash, cash equivalents and restricted cash $ 7,125 $ (12,631 ) Net cash used in operating activities During the six months ended June 30, 2026, operating activities used $88.6 million of cash, resulting from our net loss of $62.4 million, adjusted for noncash expenses of $3.7 million and changes in our operating assets and liabilities resulting in a use of cash of $30.0 million. Our net loss was primarily attributed to research and development activities related to our nomlabofusp program and our general and administrative expenses as described above. Noncash expenses primarily relate to stock-based compensation expenses. The change in operating assets and liabilities was primarily due to decreases in prepaid expenses and accrued expenses, partially offset by an increase in accounts payable. During the six months ended June 30, 2025, operating activities used $45.9 million of cash, resulting from our net loss of $55.5 million, adjusted for noncash expenses of $2.5 million and changes in our operating assets and liabilities resulting in a source of cash of $7.1 million. Our net loss was primarily attributed to research and development activities related to our nomlabofusp program and our general and administrative expenses as described above. Noncash expenses primarily relate to stock-based compensation expenses. The change in operating assets and liabilities was primarily due to increases in prepaid expenses, accounts payable and accrued expenses. Net cash provided by (used in) investing activities During the six months ended June 30, 2026, investing activities used $11.9 million. This use of cash resulted from purchases of $63.3 million of marketable securities, partially offset by the maturities of $51.5 million of marketable securities. During the six months ended June 30, 2025, investing activities provided $33.3 million. This source of cash resulted from the maturities of $113.5 million of marketable securities partially offset by purchases of $80.1 million of marketable securities. Net cash provided by financing activities During the six months ended June 30, 2026, financing activities provided $107.7 million of cash flows from an offering of common stock. During the six months ended June 30, 2025, there were no financing activities. Operating Capital Requirements Since our inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations. We have incurred net losses of approximately $62.4 million and $55.5 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $497.2 million. We have devoted substantially all of our resources to developing nomlabofusp, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, capital raising, and providing general and administrative support for such operations. As of June 30, 2026, we had approximately $156.3 million of cash, cash equivalents and marketable securities. In accordance with Accounting Standards Update (“ASU”) No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, we have evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. These cash resources are not sufficient to fund our planned operations for a period of at least one year from the date these 29 financial statements are issued. While we expect our cash, cash equivalents and marketable securities will fund our forecasted operating expenses and capital expenditure requirements into the third quarter of 2027, if we encounter unexpected delays in our clinical trials or if there are other unanticipated changes to our operating plan from our current assumptions that negatively impact our operations, we may reduce expenditures in order to further extend our existing cash resources. We expect to incur significant expenses and operating losses for the foreseeable future as we expect to continue to incur expenses in connection with our ongoing activities, if and as we: • continue to advance the development of nomlabofusp through additional clinical trials, including related manufacturing costs; • seek to identify and advance development of additional product candidates into clinical development and identify additional indications for our product candidates; • seek to obtain regulatory approvals for nomlabofusp and other potential product candidates; • identify, acquire or in-license other product candidates and technologies; • maintain, leverage and expand our intellectual property portfolio; and • expand our operational, financial, commercial and management systems and personnel, including personnel to support our clinical development and future commercialization efforts and our operations as a public company. Until we can generate substantial revenue, if ever, we will need to raise additional capital to fund our ongoing operations, and continue to evaluate opportunities to further finance our operating cash needs through a combination of some, or all, of the following: equity, debt and royalty offerings, collaborations, strategic alliances, and/or marketing, distribution or licensing arrangements. There is no assurance, however, that additional financing will be available when needed or that we will be able to obtain financing on terms acceptable to us. If we are unable to obtain funding when required in the future, we could be required to delay, reduce, or eliminate research and development programs, or commercialization efforts, which could adversely affect our business prospects. These conditions raise substantial doubt about our ability to continue as a going concern. Off-Balance Sheet Arrangements During the periods presented we did not have, and we currently do not have, any off-balance sheet arrangements, as defined under applicable SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets. Recently Issued Accounting Pronouncements Please read Note 2 to our condensed consolidated financial statements included in Part I of Item 1 of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business, if any. Other Company Information None. 30 Item 3. Quantitative and Qualitati ve Disclosures about Market Risk We are a "smaller reporting company" as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and are not required to provide the information under this item.