Financial Performance - Fiscal 2025 consolidated revenue was $18.5 billion, a 6% increase year-over-year, with organic revenue growth of 7%[8] - Annualized gross new business reached $1.6 billion, over 12% higher than fiscal 2024, with a client retention rate of 96.3%[21] - Operating income increased 12% year-over-year to $792 million, while adjusted operating income (AOI) grew 12% to $981 million[10] - Fourth quarter revenue was $5.0 billion, a 14% increase year-over-year, with organic revenue growth also at 14%[12] - GAAP EPS for fiscal 2025 was $1.22, compared to $0.99 in fiscal 2024, while adjusted EPS increased 19% to $1.82[11] - Net cash from operations rose 27% to $921 million, and free cash flow grew 41% to $454 million in fiscal 2025[17] - Revenue for the fiscal year ended October 3, 2025, increased to $18,506.3 million, up 6.4% from $17,400.7 million in the previous year[53] - Operating income for the fiscal year was $791.8 million, representing a growth of 12.1% compared to $706.5 million in the prior year[53] - Net income attributable to Aramark stockholders rose to $326.4 million, a 24.3% increase from $262.5 million year-over-year[53] - Basic earnings per share increased to $1.24, up from $1.00, reflecting a 24% growth[53] - For the three months ended October 3, 2025, revenue was $5,048.5 million, a 14.3% increase from $4,416.9 million in the same period last year[55] - Operating income for the three-month period was $217.8 million, slightly down from $218.8 million year-over-year[55] - Cash flows from operating activities for the fiscal year were $921.0 million, compared to $726.5 million in the previous year, indicating a 26.7% increase[59] - Total current assets increased to $3,522.9 million from $3,406.6 million, reflecting a growth of 3.4%[57] - Total liabilities decreased to $10,156.6 million from $10,270.0 million, a reduction of 1.1%[57] - Adjusted operating income margin for the fiscal year was 5.3%, compared to 5.1% in the previous year, indicating improved operational efficiency[61] - Total revenue for the three months ended October 3, 2025, was $5,048,464, representing a 14.3% increase compared to the same period last year[63] - Adjusted operating income for the same period was $288,552, with an adjusted operating income margin of 5.7%[63] - Adjusted net income attributable to Aramark stockholders for the three months ended October 3, 2025, was $151,715, reflecting a 5.6% growth compared to the previous year[65] - Free cash flow for the three months ended October 3, 2025, was $1,051,703, significantly higher than the $889,047 reported in the same period last year[75] - Revenue growth for FSS United States was 13.6%, while FSS International saw a growth of 16.1%[63] - Adjusted earnings per share for the three months ended October 3, 2025, was $0.57, compared to $0.54 in the same period last year, marking a 5.6% increase[65] - Operating income for the three months ended October 3, 2025, was $217,820, with a reported operating income margin of 4.3%[63] - The company reported an adjusted operating income growth of 6.3% for the three months ended October 3, 2025[63] Future Outlook - The company's leverage ratio improved to 3.25x, the lowest level in nearly 20 years[18] - Aramark repurchased over 4 million shares and raised its quarterly dividend by 14% to $0.12 per share[20] - The company anticipates achieving net new business of at least 4% to 5% of prior year revenue in fiscal 2026[22] - Significant new business opportunities are expected to drive profitability through enhanced supply chain capabilities and disciplined cost management[23] - Aramark anticipates fiscal 2026 revenue between $19,550 million and $19,950 million, representing a year-over-year organic growth of +7% to +9%[25] - Adjusted Operating Income for fiscal 2026 is projected to be between $1,100 million and $1,150 million, reflecting a year-over-year increase of +12% to +17%[25] - Adjusted EPS is expected to range from $2.18 to $2.28, indicating a year-over-year growth of +20% to +25%[25] - The company aims to reduce its leverage ratio to under 3x by fiscal 2026, down from 3.25x[25] - Fiscal 2026 revenue guidance includes approximately $100 million of expected favorability from foreign currency translation[25] - Aramark is focused on driving performance by leveraging enterprise-wide capabilities and starting operations for a record number of new clients[25] - The company is maintaining retention momentum and optimizing Global Supply Chain strategies to pursue significant growth opportunities[25] Corporate Responsibility - Aramark has been recognized for its commitment to diversity and social responsibility, appearing on several prestigious lists[27] Financial Metrics - The company uses various financial metrics, including Adjusted Revenue (Organic) and Free Cash Flow, to evaluate performance and profitability[40] Currency Impact - The effect of currency translation negatively impacted revenue by $21,674 for the three months ended October 3, 2025[63] Special Considerations - Estimated impact of the 53rd week on revenue was a reduction of $326,691[77] - Adjusted organic revenue for the fiscal year was $18,179,608[77]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41389 ConnectM Technology Solutions, Inc. (Exact name of registrant as specified in its charter) | Delaware | 87-289834 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from to Commission File Number: 001-41389 ConnectM Technology Solutions, Inc. (Exact name of registrant as specified in its charter) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | Delaware | 87-289834 ...

Financial Performance - For the three months ended September 30, 2025, total revenue decreased by 3% to $12.4 million, with streaming and digital revenue declining by 5% to $9.6 million [146]. - The company experienced a 39% increase in base distribution revenue for the three months ended September 30, 2025, totaling $1.8 million, primarily due to theatrical releases [146]. - For the six months ended September 30, 2025, total revenue increased by 7% to $23.5 million, with streaming and digital revenue rising by 5% to $18.7 million [154]. - The company reported a net loss attributable to common stockholders of $9.3 million for the three months ended September 30, 2025 [139]. - The company reported a net loss of $9.1 million for the six months ended September 30, 2025, compared to a net loss of $4.3 million in 2024 [165]. - Adjusted EBITDA for the six months ended September 30, 2025, was a loss of $5.8 million, compared to a loss of $0.9 million in the same period of 2024 [165]. Expenses - Direct operating expenses decreased by 17% to $5.2 million for the three months ended September 30, 2025, driven by lower variable costs [150]. - Selling, general and administrative expenses increased by 79% to $11.4 million for the three months ended September 30, 2025, largely due to higher compensation and marketing expenses [151]. - For the six months ended September 30, 2025, total Selling, General and Administrative expenses increased by $7.4 million, or 57%, compared to the same period in 2024, reaching $20.4 million [157]. - Compensation expenses rose by $2.6 million, or 31%, primarily due to an increase in employee headcount [157]. - Marketing expenses surged by $3.3 million, or 7427%, largely attributed to the promotion of Toxic Avenger [157]. - Interest expense decreased by $0.2 million to $0.1 million for the three months ended September 30, 2025, due to a lower average balance on the Line of Credit Facility [153]. - Interest expense decreased by $0.9 million for the six months ended September 30, 2025, primarily due to higher outstanding debt balances and increased interest rates in 2024 [160]. - Amortization of intangible assets increased by $0.5 million, or 31%, during the six months ended September 30, 2025, primarily due to higher capitalized content costs [159]. Cash Flow and Financing - Net cash used in operating activities for the six months ended September 30, 2025, was $21.7 million, compared to $2.4 million in 2024 [166]. - Net cash provided by financing activities increased to $11.0 million for the six months ended September 30, 2025, from $0.5 million in 2024 [166]. - The company has a Line of Credit Facility with East West Bank, allowing borrowings of up to $12.5 million, with $6.6 million outstanding as of September 30, 2025 [140]. - The company plans to continue investing in content development and acquisitions, with short-term content advances of $5.4 million as of September 30, 2025 [141]. Accumulated Deficit and Working Capital - As of September 30, 2025, the company reported an accumulated deficit of $510.2 million and negative working capital of $1.3 million [139].

Financial Performance - For the three months ended September 30, 2025, total revenue decreased by 3% to $12.4 million, with streaming and digital revenue declining by 5% to $9.6 million [146]. - The company experienced a 39% increase in base distribution revenue for the three months ended September 30, 2025, totaling $1.8 million, primarily due to theatrical releases [146]. - For the six months ended September 30, 2025, total revenue increased by 7% to $23.5 million, with streaming and digital revenue rising by 5% to $18.7 million [154]. - The company reported a net loss attributable to common stockholders of $9.3 million for the three months ended September 30, 2025 [139]. - Adjusted EBITDA for the six months ended September 30, 2025, was a loss of $5.8 million, compared to a loss of $0.9 million in the same period of 2024 [165]. Expenses - Direct operating expenses decreased by 17% to $5.2 million for the three months ended September 30, 2025, driven by lower variable costs [150]. - Selling, general and administrative expenses increased by 79% to $11.4 million for the three months ended September 30, 2025, largely due to higher compensation and marketing expenses [151]. - For the six months ended September 30, 2025, Selling, General and Administrative expenses increased by $7.4 million, or 57%, compared to the same period in 2024, totaling $20.4 million [157]. - Compensation expenses rose by $2.6 million, or 31%, primarily due to an increase in employee headcount [157]. - Marketing expenses surged by 7427%, increasing by $3.3 million, largely attributed to the Toxic Avenger campaign [157]. - Interest expense decreased by $0.2 million to $0.1 million for the three months ended September 30, 2025, due to a lower average balance on the Line of Credit Facility [153]. - Interest expense decreased by $0.9 million for the six months ended September 30, 2025, primarily due to higher outstanding debt balances and increased interest rates in 2024 [160]. - Amortization of intangible assets increased by $0.5 million, or 31%, totaling $2.0 million for the six months ended September 30, 2025 [159]. Cash Flow - Net cash used in operating activities for the six months ended September 30, 2025, was $21.7 million, compared to $2.4 million in 2024 [166]. - Net cash provided by financing activities was $11.0 million for the six months ended September 30, 2025, compared to $0.5 million in 2024 [166]. - Cash used in investing activities was $0.9 million for the six months ended September 30, 2025, compared to $0.8 million in 2024, mainly for long-lived intangible and fixed assets [167]. Debt and Financing - The company has a Line of Credit Facility with East West Bank, allowing borrowings of up to $12.5 million, with $6.6 million outstanding as of September 30, 2025 [140]. - The company plans to continue investing in content development and acquisitions, with short-term content advances of $5.4 million as of September 30, 2025 [141]. Equity Interest - The company holds a 100% equity interest in CDF2 Holdings, an unconsolidated variable interest entity, but is not the primary beneficiary [169]. Accumulated Deficit - As of September 30, 2025, the company reported an accumulated deficit of $510.2 million and negative working capital of $1.3 million [139].

Clinical Trial Results - Benitec Biopharma achieved a 100% responder rate in Cohort 1 of the Phase 1b/2a trial for BB-301, with all six patients meeting the formal statistical criteria for response[1]. - The first patient in Cohort 2 of the BB-301 trial was successfully treated in Q4 2025[1]. - The FDA granted Fast Track Designation to BB-301 for the treatment of dysphagia associated with Oculopharyngeal Muscular Dystrophy[5]. Financial Performance - Total expenses for Q1 2026 were $9.8 million, up from $5.8 million in Q1 2025, with general and administrative expenses increasing to $6.4 million from $2.2 million[6]. - The net loss attributable to shareholders for Q1 2026 was $9.0 million, or $(0.22) per share, compared to a net loss of $5.1 million, or $(0.18) per share in Q1 2025[7]. - Benitec's total comprehensive loss for Q1 2026 was $8.9 million, compared to a loss of $5.2 million in Q1 2025[7]. - Benitec's accumulated deficit as of September 30, 2025, was $(237.1) million, up from $(228.2) million as of June 30, 2025[9]. Funding and Financial Strategy - The company raised approximately $100 million in an oversubscribed public offering to fund the advancement of the BB-301 program[2]. - The company plans to use net proceeds from the recent financing to support the continued development and registration of BB-301, working capital, and other general corporate purposes[5]. - As of September 30, 2025, the company had $94.5 million in cash and cash equivalents[7].

Accounts Receivable and Inventory - Accounts receivable increased to $2,807,406 as of September 30, 2025, compared to $1,696,436 as of December 31, 2024, reflecting a growth of 65.6%[108] - The allowance for doubtful accounts decreased to $69,181 from $81,772, indicating improved credit quality[108] - Inventory rose to $340,018 at September 30, 2025, up from $126,400 at December 31, 2024, representing a 168.5% increase[112] - Bad debt expense for the nine months ended September 30, 2025, was $(5,654), a significant improvement compared to $50,581 for the same period in 2024[108] - The company did not record any provisions for inventory obsolescence or impairment for the nine months ended September 30, 2025, and 2024[111] Revenue and Sales - For the nine months ended September 30, 2025, the Company reported total sales of $58,824,282, a significant increase from $20,977,860 in the same period of 2024, representing a growth of approximately 179%[163] - Fuel sales accounted for $56,758,393, or 96.49% of total revenues in the nine months ended September 30, 2025, compared to $20,249,066, or 96.53% in 2024[163] - Customer A accounted for 48.85% of total sales for the nine months ended September 30, 2025, significantly impacting revenue concentration[118] - Revenue from fuel sales is recognized at the time of delivery, while membership revenue is recognized at the end of each month, reflecting a one-month membership cycle[145] Expenses and Costs - Total Sales and Marketing expenses for the nine months ended September 30, 2025, were $300,181, compared to $168,068 for the same period in 2024, representing an increase of approximately 78.5%[178] - Depreciation and amortization expense for the nine months ended September 30, 2025, was $1,826,259, compared to $1,173,269 for the same period in 2024, indicating an increase of approximately 55.7%[212] - The Company recognized marketing and advertising costs during the nine months ended September 30, 2025, which were classified within general and administrative expenses[178] Assets and Liabilities - The total property and equipment, net as of September 30, 2025, was $2,481,963, down from $7,539,507 as of December 31, 2024[208] - As of September 30, 2025, total accounts payable and accrued liabilities increased to $4,806,220 from $1,721,527 as of December 31, 2024, representing a growth of approximately 179%[217] - The total accounts payable and accrued liabilities to related parties rose to $3,292,100 as of September 30, 2025, compared to $1,546,451 as of December 31, 2024, marking an increase of approximately 113%[217] Debt and Financing - The company has multiple unsecured loans with a 0% interest rate, with various maturity dates extending into 2027[222] - The company executed an asset purchase agreement with Shell for 73 vehicles and storage tanks, totaling $5,219,877, as part of its growth and expansion plan[209] - The company reported a repayment obligation that typically exceeds the net funds received under MCA agreements[224] - The company executed a loan for $5,000,100 in December 2024, due March 31, 2025, and is currently negotiating an extension[246] Stock and Equity - The Company increased its authorized common stock from 50,000,000 to 500,000,000 shares on June 14, 2024, to support future equity financings[279] - The Company has four classes of stock, including undesignated preferred stock, which provides flexibility for future corporate financing[280] - The Company recognized stock-based compensation costs over the requisite service period, typically the vesting period, in accordance with ASC 718[179] Lease Agreements - The operating lease - ROU asset - non-current increased to $3,426,961 as of September 30, 2025, compared to $61,151 in 2024[268] - Total operating lease costs for the nine months ended September 30, 2025, were $295,555, an increase from $184,333 in the same period of 2024[268] - The present value of operating lease liability as of September 30, 2025, is $239,481, with a long-term operating lease liability of $126,427[276] Legal and Compliance - As of September 30, 2025, the Company is not aware of any pending litigation or transactions requiring accrual or disclosure[278] - The Company records litigation accruals for legal matters that are probable and estimable, without reducing liabilities for potential recoveries[277]

Revenue and Financial Performance - Revenue for the three months ended September 30, 2025, was $0, consistent with the same period in 2024, primarily derived from the PURE EP™ Platform and related services [267]. - Revenue for the nine months ended September 30, 2025, was $0, down from $27 in the same period of 2024 [275]. - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $15,586 compared to a net loss of $1,940 for the same period in 2024 [274]. - Net loss attributable to common shareholders for the nine months ended September 30, 2025, was $38,774 compared to a net loss of $9,395 for the same period in 2024 [283]. Expenses - Research and development expenses for the three months ended September 30, 2025, were $6, a decrease of $150, or 96%, from $156 in the same period of 2024 [268]. - General and administrative expenses for the three months ended September 30, 2025, were $4,619, an increase of $1,856 or 67% from $2,763 in the prior year [269]. - Depreciation and amortization expense for the three months ended September 30, 2025, totaled $1,488, an increase of $1,457, or 4700%, over the expense of $31 in the same period of 2024 [270]. - Research and development expenses for the nine months ended September 30, 2025, were $31, a decrease of $705, or 96%, from $736 in the prior year [276]. - General and administrative expenses for the nine months ended September 30, 2025, were $27,365, an increase of $16,806 or 159% from $10,559 in the same period of 2024 [277]. Capital and Financing - As of September 30, 2025, the company had a working capital deficit of approximately $111 million and cash of $11.0 million [284]. - The company entered into a Secured Convertible Debenture Purchase Agreement allowing for up to $100 million in secured convertible debentures, with the first closing resulting in a $25 million issuance [290]. - A public offering completed on August 15, 2025, generated gross proceeds of approximately $15 million from the sale of 3,852,149 shares at a price of $3.90 per share [302]. - For the nine months ended September 30, 2025, the company sold 4,403,166 At The Market Offering Shares at an average price of $0.91 per share, generating net proceeds of approximately $3.88 million [303]. Internal Controls and Compliance - The company has identified material weaknesses in internal controls over financial reporting, including inadequate segregation of duties and ineffective review processes [320]. - Management plans to add sufficient staff and oversight in 2026 to address identified deficiencies in internal controls [323]. - The company identified a material weakness related to ineffective review controls over accounting for business combinations and related financial instruments [326]. - Management plans to implement remediation plans in 2025 to address the identified material weakness [326]. - There have been no changes in internal control over financial reporting that materially negatively affected the company during the last completed fiscal quarter [326]. Legal Proceedings - The company believes that ongoing legal proceedings will not have a material adverse effect on its financial position, results of operations, or liquidity [327]. - No material changes in legal proceedings have occurred since the last quarterly report filed on August 15, 2025 [328]. Future Outlook - The company expects to incur operating losses and negative cash flows until its products achieve sustained commercial success, with initial revenue anticipated from the launch of a tokenized gold financing product currently under development [287]. - The liquidity forecast indicates that delays in product commercialization or capital raising could materially impact the company's ability to continue as a going concern [300]. - As of September 30, 2025, the aggregate stated value of the Series C Preferred Stock was $105 million, with triggering events that may require redemption at the option of the holders [291]. - The fair value of the derivative liability associated with Exchangeable Shares was $115.7 million as of September 30, 2025, with a change of $10.2 million recognized in other income [308].

Portfolio Performance - As of September 30, 2025, approximately 60% of the portfolio's annualized base rent (ABR) was derived from tenants with an investment grade credit rating of "BBB-" or better[147] - The portfolio is 98.6% leased and occupied, indicating strong demand for the properties[147] - Average effective annual rental per square foot is $16.30, reflecting the rental income potential of the portfolio[147] - Approximately 92% of the leases in the current portfolio provide for increases in contractual base rent during future years[147] - The largest tenants contributing to the portfolio's ABR include the General Service Administration, Dollar General, and Kohl's Corporation, with the City of San Antonio contributing approximately 59% of the ABR[147] Financial Performance - Total revenue for the three months ended September 30, 2025, was $2,470,109, an increase of $69,827 (approximately 2.9%) compared to $2,400,282 for the same period in 2024[165] - Total revenue for the nine months ended September 30, 2025, was $7,283,974, an increase of $191,284 (approximately 2.7%) compared to $7,092,690 for the same period in 2024[165] - Total operating expenses for the three months ended September 30, 2025, were $4,169,441, an increase of $399,726 (approximately 10.6%) compared to $3,769,715 for the same period in 2024[166] - Total operating expenses for the nine months ended September 30, 2025, were $12,832,102, an increase of $1,698,716 (approximately 15.3%) compared to $11,133,386 for the same period in 2024[166] - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $2,826,960, compared to a net loss of $2,969,596 for the same period in 2024[169] - Net loss attributable to common shareholders for the nine months ended September 30, 2025, was $9,981,447, compared to a net loss of $8,151,538 for the same period in 2024[169] Cash and Debt Management - As of September 30, 2025, the company had total cash of $281,788 and outstanding mortgage loans with a principal balance of $55,762,746[170] - The company entered into a loan agreement for $21.0 million on August 10, 2023, to finance the acquisition of the Modiv Portfolio, with a fixed interest rate of 7.47% per annum[173] - The company incurred interest expense, net of $4,429,454 for the nine months ended September 30, 2025, an increase of $1,286,965 (approximately 41%) compared to $3,142,489 for the same period in 2024[166] - As of September 30, 2025, the company had outstanding mortgage loans payable totaling $71,599,000, with various interest rates and maturity dates[185] - The company recorded a related party payable of $2,912,300 upon execution of a Redemption Agreement, which was paid in full by September 30, 2025[180] Equity and Financing Activities - The company completed an underwritten public offering of 1,665,000 units at $10 per unit, generating net proceeds of $13.8 million[145] - The company primarily obtains capital through equity offerings, debt financings, and undistributed operational funds[182] - The company has the right to extend the Mandatory Redemption Date for the Preferred Interest for two consecutive 12-month periods, with an extension fee of 0.01% of the outstanding amount[191] Concerns and Compliance - The company expressed substantial doubt about its ability to continue as a going concern due to recurring losses and liquidity concerns[183] - The company’s projected cash needs are less than the principal balance of its obligations, indicating potential liquidity challenges[183] - The company maintained compliance with all covenants related to mortgage loans, including a debt service coverage ratio (DSCR) requirement of 1.50[188] Operational Metrics - Net cash provided by operating activities was $415,553 for the nine months ended September 30, 2025, compared to $783,511 for the same period in 2024[198] - Net cash provided by investing activities was $10,333,595 for the nine months ended September 30, 2025, contrasting with a cash outflow of ($5,960,892) in 2024[199] - Net cash used in financing activities was ($11,114,799) for the nine months ended September 30, 2025, compared to a cash inflow of $3,607,045 in 2024[200] Funds From Operations - Funds From Operations (FFO) for Q3 2025 was $(419,486), a decline from $(301,352) in Q3 2024, indicating a 39.2% increase in losses[208] - Core Funds From Operations (Core FFO) for Q3 2025 was $47,548, compared to $(145,885) in Q3 2024, showing a significant recovery[208] - Adjusted Funds From Operations (AFFO) for Q3 2025 was $(117,838), a decrease from $5,509 in Q3 2024, reflecting a 2,174.5% decline[208] - Core Adjusted Funds From Operations for Q3 2025 was $175,647, up from $100,444 in Q3 2024, indicating a 74.7% increase[208] Other Financial Metrics - Depreciation and amortization expenses increased to $1,287,112 in Q3 2025 from $1,068,081 in Q3 2024, a rise of 20.5%[208] - Loss on derivative valuation for Q3 2025 was $11,256, compared to a gain of $734,116 in Q3 2024, indicating a significant shift in valuation[208] - Total adjustments to net loss amounted to $1,600,016 in Q3 2025, compared to $2,109,058 in Q3 2024, a decrease of 24.1%[208] - Non-cash stock compensation for Q3 2025 was $0, down from $94,935 in Q3 2024, reflecting a complete elimination of this expense[208] - The company reported a loss on extinguishment of debt of $926,398 for the nine months ended September 30, 2025, with no such loss reported in the same period of 2024[208]

Revenue Performance - Total revenues for the three months ended September 30, 2025, were $6.9 million, a decrease from $8.8 million in the same period of 2024, while total revenues for the nine months ended September 30, 2025, were $21.4 million, down from $24.0 million in 2024[158]. - Recurring treatment revenue for the three months ended September 30, 2025, was $5.5 million, representing approximately 67,000 XTRAC treatments, compared to $5.4 million for approximately 64,000 treatments in the same period of 2024[159]. - Dermatology procedures equipment revenues for Q3 2025 were $1.4 million, a decrease from $3.4 million in Q3 2024, representing a 58.8% decline[164]. - Dermatology recurring procedures revenues for Q3 2025 were $5.5 million, slightly up from $5.4 million in Q3 2024, with a gross profit percentage of 61.6% compared to 65.4%[170]. Device Placement and Usage - The number of XTRAC systems placed in dermatologists' offices decreased from 864 as of December 31, 2024, to 838 as of September 30, 2025[146]. - As of September 30, 2025, there were 161 TheraClear devices placed in dermatologists' offices, an increase from 135 devices in the same period of 2024[161]. - International sales included 8 systems in Q3 2025 (6 XTRAC and 2 VTRAC) compared to 20 systems in Q3 2024 (20 XTRAC)[165]. Financial Performance - Gross profit for Q3 2025 decreased to $4.2 million from $5.3 million in Q3 2024, with a gross profit percentage of 60.4% compared to 60.1%[168]. - For the nine months ended September 30, 2025, gross profit was $12.3 million, down from $13.5 million in the same period in 2024, with a gross profit percentage increase to 57.3% from 56.1%[169]. - As of September 30, 2025, the company reported a net loss of $1.622 million, an improvement from a net loss of $2.074 million for the same period in 2024[182]. - The company had negative working capital of $0.8 million as of September 30, 2025, compared to positive working capital of $3.2 million as of December 31, 2024[183]. - Cash and cash equivalents decreased to $7.1 million as of September 30, 2025, down from $8.6 million as of December 31, 2024[183]. - Net cash used in operating activities increased to $2.6 million for the nine months ended September 30, 2025, compared to $0.5 million for the same period in 2024[191]. Expenses and Gains - Selling and marketing expenses increased to $3.2 million in Q3 2025 from $3.0 million in Q3 2024, driven by higher employee-related expenses and advertising campaigns[175]. - General and administrative expenses decreased to $2.7 million in Q3 2025 from $3.6 million in Q3 2024, primarily due to an increase in sales tax accrual in 2024[177]. - Settlement gains for Q3 2025 were $0.7 million, compared to no settlement gains in Q3 2024, due to supplier obligation settlements[178]. - Engineering and product development expenses for the nine months ended September 30, 2025, were $0.4 million, down from $0.7 million in the same period in 2024[174]. - Interest expense remained stable at $0.5 million for Q3 2025 and Q3 2024, with a total of $1.5 million for the nine months ended September 30, 2025, compared to $1.6 million in the same period in 2024[179]. Market and Operational Challenges - The impact of the COVID-19 pandemic has led to the suspension of elective procedures and the temporary closure of many physician practices, affecting operational and financial performance[150]. - The company has faced supply chain challenges due to the Russia-Ukraine war, impacting the availability and price of essential gases for laser operations[151]. - The U.S. introduced trade policy actions in 2025 that increased import tariffs, potentially affecting product costs and demand in the dermatology procedures equipment segment[153]. Future Plans and Financing - The company plans to increase direct-to-patient advertising for XTRAC treatments targeting psoriasis and vitiligo patients through various media, including social media platforms[162]. - The company expects to write off a product technology intangible asset with a net carrying value of $0.7 million and derecognize a liability for contingent consideration of $1.2 million in Q4 2025[187]. - Net cash provided by financing activities was $2.2 million for the nine months ended September 30, 2025, compared to $1.9 million for the same period in 2024[193]. - The company amended its credit facility in November 2025, pausing the measurement of net revenue for financial covenant compliance through September 30, 2026[186]. - The company has the potential to incur a royalty of 5% on sales of TheraClear® X devices starting January 1, 2027, contingent on achieving certain revenue milestones[188]. - The company may sell up to an additional $6.5 million of its common stock under an existing equity distribution agreement as of September 30, 2025[189].