Part I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Paychex is a leading Human Capital Management (HCM) company providing a full suite of technology and advisory solutions in HR, benefits, insurance, and payroll to approximately 800,000 clients - Paychex is an industry-leading Human Capital Management (HCM) company serving approximately **800,000 clients** across the U.S. and parts of Europe as of May 31, 2025[18](index=18&type=chunk) - On April 14, 2025, the company completed its acquisition of Paycor HCM, Inc. to enhance its capabilities in the upmarket segment, expand its sales force, and bolster its AI-driven HCM solutions[22](index=22&type=chunk) - The company's strategy is centered on four key elements: growing its client base, expanding share of wallet with a full suite of solutions, driving technology innovation with AI, and pursuing strategic acquisitions[24](index=24&type=chunk)[30](index=30&type=chunk) - Client retention for fiscal 2025 was strong, remaining in the range of **82% to 83%** of the beginning client base[26](index=26&type=chunk) [Our Solutions](index=7&type=section&id=Our%20Solutions) Paychex provides comprehensive Human Capital Management solutions, including technology platforms for payroll, HR, and benefits, alongside PEO and insurance services, notably as the largest 401(k) recordkeeper for small businesses - Paychex offers a comprehensive portfolio of solutions categorized into Management Solutions and PEO/Insurance Solutions, including HCM technology platforms and modules for payroll, HR, talent, and benefits administration[31](index=31&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk) - The company is the largest **401(k) recordkeeper** for small businesses in the U.S., offering a variety of retirement solutions including 401(k) plans, SIMPLE and SEP IRAs, and Pooled Employer Plans[36](index=36&type=chunk) [Sales and Marketing](index=9&type=section&id=Sales%20and%20Marketing) The company leverages a direct sales force and significant referral channels, including a key partnership with the AICPA, to drive new client acquisition - The company utilizes a direct sales force and indirect channels, including referrals from existing clients, CPAs, benefit brokers, and banks, with over **50% of new payroll clients** originating from these referral sources[34](index=34&type=chunk)[35](index=35&type=chunk) - Paychex has a long-standing partnership with the AICPA as the preferred payroll provider, with the current agreement in place through September 2027[37](index=37&type=chunk) [Human Capital](index=10&type=section&id=Human%20Capital) As of May 31, 2025, Paychex employed approximately 19,000 people, with compensation representing 55% of total expenses, and has been consistently recognized for its ethical practices - As of May 31, 2025, Paychex employed approximately **19,000 people**, primarily in the U.S. on a full-time basis, with none covered by collective bargaining agreements[48](index=48&type=chunk) - For fiscal year 2025, compensation-related expenses accounted for approximately **55% of the company's total expenses**[52](index=52&type=chunk) - Paychex was recognized by Ethisphere as one of the World's Most Ethical Companies for the **17th consecutive time** in 2025[49](index=49&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company identifies several key risks that could materially affect its business, including operational, financial, regulatory, and general macroeconomic factors - **Business & Operational Risks:** The company faces risks from rapid technological changes, potential software defects, cyberattacks targeting its vast data stores, and challenges related to the successful integration of acquisitions, specifically mentioning Paycor[62](index=62&type=chunk)[64](index=64&type=chunk)[72](index=72&type=chunk) - **Financial Risks:** Key financial risks include potential losses if clients have insufficient funds for payroll, the impact of regulatory changes on interest earned from client funds, and risks associated with its **$4.2 billion** in corporate bonds issued in April 2025 to fund the Paycor acquisition, requiring adherence to debt covenants including a maximum leverage ratio of **3.5:1.0**[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[80](index=80&type=chunk) - **Legal & Regulatory Risks:** The business is subject to complex and changing government regulations, including data privacy laws (like GDPR and CCPA), anti-money laundering rules, and employment laws, with failure to comply potentially resulting in significant penalties and reputational damage[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) - **General Risks:** Macroeconomic factors such as inflation and interest rate changes can adversely impact Paychex's small and medium-sized business clients, potentially reducing demand for its services, and the company also faces risks from political volatility and competition for qualified talent[93](index=93&type=chunk)[94](index=94&type=chunk)[97](index=97&type=chunk) [Item 1C. Cybersecurity](index=23&type=section&id=Item%201C.%20Cybersecurity) Paychex's cybersecurity program is aligned with the NIST Cybersecurity Framework 2.0, employing a layered controls approach to manage threats, overseen by the Audit Committee and managed by the Enterprise Security Organization - The company's security program is aligned with the National Institute of Standards and Technology Version 2.0 Cybersecurity Framework (NIST CSF) and uses a layered controls approach[101](index=101&type=chunk) - Cybersecurity governance is handled by the Audit Committee of the Board, which receives quarterly updates from the Chief Information Security Officer (CISO), with management's implementation overseen by a Security Governance Council (SGC) chaired by the CISO[107](index=107&type=chunk)[108](index=108&type=chunk) - The Enterprise Security Organization (ESO) includes the Paychex Cyber Fusion Center, which provides **24x7x365** cybersecurity monitoring and incident response[103](index=103&type=chunk) - As of May 31, 2025, the company is not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[106](index=106&type=chunk) [Item 2. Properties](index=25&type=section&id=Item%202.%20Properties) As of May 31, 2025, Paychex owned approximately 998,000 square feet of facility space, primarily in Rochester, NY, and leased approximately 1,198,000 square feet across the U.S. and international locations Owned and Leased Properties as of May 31, 2025 | Facility Type | Location | Square Feet | | :--- | :--- | :--- | | **Owned** | Rochester, NY | 832,000 | | | Other U.S. locations | 166,000 | | | **Total Owned** | **998,000** | | **Leased** | Rochester, NY | 53,000 | | | Other U.S. locations | 865,000 | | | International locations | 280,000 | | | **Total Leased** | **1,198,000** | Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Paychex common stock trades on the NASDAQ Global Select Market under the symbol 'PAYX', with the company having a history of paying quarterly dividends and a share repurchase program approved in January 2024 Fiscal 2025 Share Repurchases | Period | Total Shares Purchased (millions) | Average Price Paid per Share | Total Dollars (millions) | Approximate Value Remaining for Purchase (millions) | | :--- | :--- | :--- | :--- | :--- | | First Quarter | 0.8 | $125.50 | $104.0 | $296.0 | | Second Quarter | — | $— | $— | $296.0 | | Third Quarter | — | $— | $— | $296.0 | | Fourth Quarter | — | $— | $— | $296.0 | | **Fiscal Year Total** | **0.8** | **$125.50** | **$104.0** | **$296.0** | Five-Year Cumulative Total Return Comparison | Date | Paychex | S&P 500 | Peer Group | | :--- | :--- | :--- | :--- | | May 31, 2020 | $100.00 | $100.00 | $100.00 | | May 31, 2021 | $144.16 | $140.30 | $127.00 | | May 31, 2022 | $180.70 | $139.86 | $118.53 | | May 31, 2023 | $157.41 | $143.91 | $121.82 | | May 31, 2024 | $185.79 | $184.45 | $153.68 | | May 31, 2025 | $251.16 | $209.35 | $186.69 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2025, Paychex's total revenue grew 6% to $5.6 billion, driven by growth in both Management Solutions and PEO and Insurance Solutions, along with higher interest on funds held for clients, with the Paycor acquisition contributing to this growth Fiscal 2025 Financial Highlights vs. Fiscal 2024 | Metric | Fiscal 2025 (in millions) | Fiscal 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5,571.7 | $5,278.3 | 6% | | Operating Income | $2,207.7 | $2,174.1 | 2% | | Adjusted Operating Income | $2,370.0 | $2,213.6 | 7% | | Net Income | $1,657.3 | $1,690.4 | (2)% | | Adjusted Net Income | $1,802.9 | $1,709.1 | 5% | | Diluted EPS | $4.58 | $4.67 | (2)% | | Adjusted Diluted EPS | $4.98 | $4.72 | 6% | - The acquisition of Paycor on April 14, 2025, is a key event, extending the company's upmarket position and expanding its suite of HR technology and advisory solutions[134](index=134&type=chunk) HR Solutions Client Metrics | Metric (as of May 31) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Paychex HR solutions (ASO and PEO) client worksite employees | 2,460,000 | 2,332,000 | 5% | | Retirement solutions plans | 124,000 | 121,000 | 3% | | Asset value of retirement solutions participants' funds (in billions) | $55.7 | $51.8 | 8% | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) In fiscal 2025, total revenue increased 6% to $5.57 billion, primarily from service revenue and interest on client funds, while adjusted operating margin improved despite a slight decline in reported operating margin Revenue Breakdown (Fiscal Year 2025 vs 2024) | Revenue Source | FY 2025 (in millions) | FY 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Management Solutions | $4,067.1 | $3,866.4 | 5% | | PEO and Insurance Solutions | $1,342.9 | $1,265.6 | 6% | | **Total Service Revenue** | **$5,410.0** | **$5,132.0** | **5%** | | Interest on funds held for clients | $161.7 | $146.3 | 10% | | **Total Revenue** | **$5,571.7** | **$5,278.3** | **6%** | Expense Breakdown (Fiscal Year 2025 vs 2024) | Expense Category | FY 2025 (in millions) | FY 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Compensation-related expenses | $1,853.0 | $1,810.4 | 2% | | PEO direct insurance costs | $520.1 | $471.3 | 10% | | Other expenses | $659.8 | $606.5 | 9% | | Acquisition-related costs | $162.3 | $— | n/m | | Cost optimization initiatives | $— | $39.5 | n/m | | **Total Expenses** | **$3,364.0** | **$3,104.2** | **8%** | - Operating margin for fiscal 2025 was **39.6%**, down from **41.2%** in fiscal 2024, however, the adjusted operating margin, which excludes acquisition costs and other non-core items, increased to **42.5%** from **41.9%**[148](index=148&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong financial position with $1.7 billion in cash and investments, supported by $5.0 billion in long-term debt, primarily from financing the Paycor acquisition - The company's financial position remains strong with **$1.7 billion** in cash, restricted cash, and total corporate investments as of May 31, 2025, and it has **$5.0 billion** in long-term borrowings outstanding[157](index=157&type=chunk) - To finance the Paycor acquisition, the company issued **$4.2 billion** in fixed-rate corporate bonds in April 2025 and entered into a bridge loan commitment which was subsequently canceled[167](index=167&type=chunk)[168](index=168&type=chunk) Cash Flow Summary (Fiscal Year 2025 vs 2024) | Cash Flow Activity (in millions) | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $1,900.9 | $1,897.7 | $3.2 | | Net cash used in investing activities | $(3,356.8) | $(260.9) | $(3,095.9) | | Net cash provided by/(used in) financing activities | $2,293.2 | $(1,874.7) | $4,167.9 | - The significant increase in cash used in investing activities and cash provided by financing activities in FY2025 is primarily due to the acquisition of Paycor and the related debt issuance[181](index=181&type=chunk)[190](index=190&type=chunk) [Critical Accounting Policies and Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies encompass revenue recognition, PEO insurance reserves, goodwill and intangible asset impairment, stock-based compensation, and business combinations, with significant judgment applied to PEO reserves and acquisition accounting - Key critical accounting policies include revenue recognition, accounting for PEO insurance reserves, goodwill and intangible asset impairment testing, stock-based compensation valuation, and accounting for business combinations[186](index=186&type=chunk) - PEO insurance reserves are a critical estimate, particularly for workers' compensation, which involves using independent actuarial estimates based on historical claims, loss development factors, and future cost trends[194](index=194&type=chunk) - For business combinations, the company uses the acquisition method, which requires significant judgment in allocating the purchase price to the fair values of assets acquired and liabilities assumed, with the excess recorded as goodwill[206](index=206&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Paychex is primarily exposed to market risk from changes in interest rates, affecting earnings on client funds and corporate investments, which it manages by investing in high-quality, short- to intermediate-term instruments - The average interest rate earned on the combined funds held for clients and corporate investment portfolios was **3.7%** in fiscal 2025, down from **3.8%** in fiscal 2024[212](index=212&type=chunk) - A **25-basis-point change** in short-term interest rates is estimated to affect after-tax earnings by approximately **$6.0 million to $6.5 million** over a twelve-month period[217](index=217&type=chunk) - As of May 31, 2025, the combined funds held for clients and corporate available-for-sale securities had net unrealized losses of **$53.6 million**, a significant improvement from **$162.5 million** at the end of fiscal 2024[219](index=219&type=chunk) - The company is also exposed to credit risk through its investments and client receivables, but believes its high-quality portfolio (predominantly **AA rated or higher**) and monitoring procedures mitigate this risk, with no investments deemed impaired due to credit risk as of May 31, 2025[224](index=224&type=chunk)[225](index=225&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=52&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for the fiscal year ended May 31, 2025, and the preceding two years, along with the auditor's report and notes - Management concluded that the company maintained effective internal control over financial reporting as of May 31, 2025, with the assessment excluding the recently acquired Paycor, which represented approximately **8% of total assets** and **2% of revenues**[233](index=233&type=chunk)[234](index=234&type=chunk) - The independent auditor, PricewaterhouseCoopers LLP, identified two Critical Audit Matters: (1) the valuation of PEO workers' compensation insurance reserves due to significant management judgment, and (2) the valuation of customer relationships acquired in the Paycor acquisition due to the subjectivity of assumptions like revenue growth and discount rates[247](index=247&type=chunk)[249](index=249&type=chunk)[252](index=252&type=chunk) [Consolidated Financial Statements](index=57&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's audited consolidated financial statements, including income statements, balance sheets, and cash flow statements, for the fiscal years ended May 31, 2025, 2024, and 2023 Consolidated Statement of Income (in millions, except per share) | Metric | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Total Revenue | $5,571.7 | $5,278.3 | $5,007.1 | | Operating Income | $2,207.7 | $2,174.1 | $2,033.1 | | Net Income | $1,657.3 | $1,690.4 | $1,557.3 | | Diluted EPS | $4.58 | $4.67 | $4.30 | Consolidated Balance Sheet (in millions) | Metric | As of May 31, 2025 | As of May 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $8,916.5 | $7,251.5 | | Goodwill | $4,514.1 | $1,882.7 | | **Total Assets** | **$16,564.1** | **$10,383.1** | | Total Current Liabilities | $6,956.3 | $5,309.1 | | Long-term Debt, net | $4,548.4 | $798.6 | | **Total Liabilities** | **$12,436.1** | **$6,582.1** | | **Total Stockholders' Equity** | **$4,128.0** | **$3,801.0** | [Notes to Consolidated Financial Statements](index=61&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the $4.1 billion Paycor acquisition, which significantly impacted goodwill and intangible assets, an increase in stock-based compensation, and the company's $5.0 billion long-term debt structure - **Note D (Business Combinations):** On April 14, 2025, Paychex acquired Paycor for total consideration of approximately **$4.1 billion**, adding **$2.6 billion** in goodwill and **$1.8 billion** in identifiable intangible assets, primarily customer relationships (**$1.1 billion**) and developed technology (**$367 million**)[337](index=337&type=chunk)[346](index=346&type=chunk)[348](index=348&type=chunk) - **Note F (Stock-Based Compensation):** Total stock-based compensation expense was **$111.8 million** in FY2025, up from **$61.1 million** in FY2024, partly due to replacement awards issued in the Paycor acquisition[356](index=356&type=chunk)[361](index=361&type=chunk) - **Note N (Long-term Financing):** As of May 31, 2025, total long-term debt was **$5.0 billion**, consisting of **$0.8 billion** in Senior Notes and **$4.2 billion** in Corporate Bonds issued in April 2025 to finance the Paycor acquisition[414](index=414&type=chunk) [Item 9A. Controls and Procedures](index=100&type=section&id=Item%209A.%20Controls%20and%20Procedures) Based on an evaluation as of May 31, 2025, the company's principal executive officer and principal financial officer concluded that Paychex's disclosure controls and procedures were effective - The company's principal executive and financial officers concluded that as of May 31, 2025, the company's disclosure controls and procedures were effective[437](index=437&type=chunk) - No changes occurred during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[438](index=438&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=102&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on the company's executive officers as of May 31, 2025, including their ages, positions, and business experience, with new executives joining from the Paycor acquisition Key Executive Officers as of May 31, 2025 | Name | Age | Position | | :--- | :--- | :--- | | John B. Gibson | 59 | President and CEO | | Robert L. Schrader | 53 | Chief Financial Officer | | Mason Argiropoulos | 47 | Chief Human Resources Officer | | Sipi Bhandari | 54 | Chief Legal Officer, Chief Ethics Officer and Secretary | | Adam Ante | 44 | Senior Vice President, Paycor | | Ryan Bergstrom | 46 | Chief Product Officer | [Item 11. Executive Compensation](index=104&type=section&id=Item%2011.%20Executive%20Compensation) All detailed information regarding executive compensation, including the Compensation Discussion and Analysis, executive and director compensation tables, and the Compensation and Leadership Committee Report, is incorporated by reference from the company's forthcoming 2025 Proxy Statement - All detailed information regarding executive compensation is incorporated by reference from the company's forthcoming 2025 Proxy Statement[448](index=448&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=104&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides details on the company's equity compensation plans as of May 31, 2025, including securities to be issued upon option exercise and those remaining available for future issuance Equity Compensation Plan Information as of May 31, 2025 | Plan Category | Number of securities to be issued upon exercise of outstanding options (in millions) | Weighted-average exercise price of outstanding options | Number of securities remaining available for future issuance (in millions) | | :--- | :--- | :--- | :--- | | Equity compensation plan approved by security holders | 3.0 | $84.33 | 12.0 | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=105&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) All detailed information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's forthcoming 2025 Proxy Statement - All detailed information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's forthcoming 2025 Proxy Statement[452](index=452&type=chunk) [Item 14. Principal Accounting Fees and Services](index=105&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) All detailed information regarding principal accounting fees and services is incorporated by reference from the company's forthcoming 2025 Proxy Statement - All detailed information regarding principal accounting fees and services is incorporated by reference from the company's forthcoming 2025 Proxy Statement[453](index=453&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K, including the Paycor merger agreement and debt agreements - This section contains a comprehensive list of all exhibits filed with the Form 10-K, including material contracts, debt instruments, and governance documents[455](index=455&type=chunk) [Item 16. Form 10-K Summary](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable as the report indicates there is no Form 10-K summary provided - The registrant has provided no summary for Form 10-K[459](index=459&type=chunk)

Part I [Business](index=7&type=section&id=Item%201.%20Business) UY Scuti Acquisition Corp. is a blank check company seeking a business combination, with management's China ties introducing specific risks - The company is a blank check company formed for the purpose of effecting a business combination and has not commenced any operations or generated any revenue to date[21](index=21&type=chunk) Initial Public Offering (IPO) and Private Placement Details | Item | Details | | :--- | :--- | | **IPO Units Sold** | 5,750,000 Units (including over-allotment) | | **Price per Unit** | $10.00 | | **Total IPO Proceeds** | $57,500,000 | | **Private Placement Units** | 240,848 Units to Sponsor | | **Private Placement Proceeds** | $2,408,480 | | **Amount in Trust Account** | $57,500,000 | - The company's business strategy is to target one or more growth businesses with a total enterprise value between **$200 million** and **$400 million**, focusing on strong management teams and potential for free cash flow generation[30](index=30&type=chunk) - The company has 12 months from the IPO closing to consummate a business combination, which can be extended up to two times by three months each (total 18 months), provided the sponsor deposits **$575,000** into the trust account for each extension[49](index=49&type=chunk) - A majority of the company's executive officers and directors are located in or have significant ties to China, which may lead to increased legal and operational risks, especially if the company pursues a business combination with a China-based target. These risks include potential PRC government intervention and compliance with cybersecurity and data privacy laws[115](index=115&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The company faces inherent SPAC risks, including lack of operating history, competition, conflicts of interest, and significant regulatory challenges, especially those related to its management's ties to China - The company has no operating history or revenues, making it difficult for investors to evaluate its ability to achieve its business objective[151](index=151&type=chunk) - A majority of the company's executive officers and directors have significant ties to China, which may subject the company to risks related to PRC laws, regulations, and potential government intervention, which could hinder its ability to offer securities or cause their value to decline[160](index=160&type=chunk) - The company faces the risk of being deemed an investment company under the Investment Company Act, which could force it to liquidate. To mitigate this, the company may liquidate securities in the trust account and hold cash, which would reduce interest income[202](index=202&type=chunk)[204](index=204&type=chunk)[207](index=207&type=chunk) - The sponsor's founder shares and private placement units will be worthless if a business combination is not completed, creating a conflict of interest that may incentivize them to complete a transaction that is not in the best interest of public shareholders[354](index=354&type=chunk)[356](index=356&type=chunk) - If a business combination with a China-based entity is pursued, the combined company would face significant risks related to PRC regulations, including cybersecurity reviews by the CAC, potential CSRC filing requirements for overseas listings, and the enforceability of judgments[275](index=275&type=chunk)[280](index=280&type=chunk)[295](index=295&type=chunk) - The company will not acquire a target whose financial statements are audited by a firm that the PCAOB is unable to inspect for two consecutive years. However, risks remain regarding future regulatory changes under the HFCAA that could lead to delisting if the combined company's auditor becomes non-inspectable[251](index=251&type=chunk)[254](index=254&type=chunk)[257](index=257&type=chunk) [Unresolved Staff Comments](index=116&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[426](index=426&type=chunk) [Cybersecurity](index=116&type=section&id=Item%201C.%20Cybersecurity) As a blank check company, it has no formal cybersecurity program, but its board oversees risks, with no material incidents reported - The company, being a blank check entity, does not consider itself to have significant cybersecurity risk and has not implemented a formal cybersecurity program[426](index=426&type=chunk) - The board of directors is responsible for the oversight of cybersecurity risks. As of the report date, no material cybersecurity incidents have affected the company[427](index=427&type=chunk) [Properties](index=116&type=section&id=Item%202.%20Properties) The company uses leased office space in New York, with costs covered by a monthly administrative fee to a sponsor affiliate - The company's main office is at 39 E Broadway, Suite 603, New York, New York. The rent is part of a **$10,000** monthly administrative services fee paid to a sponsor affiliate[428](index=428&type=chunk)[106](index=106&type=chunk) [Legal Proceedings](index=116&type=section&id=Item%203.%20Legal%20Proceedings) As of March 31, 2025, no material litigation, arbitration, or governmental proceedings are pending against the company or its management - There is no material litigation, arbitration or governmental proceeding currently pending against the company or its management team[429](index=429&type=chunk) [Mine Safety Disclosures](index=116&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not applicable[430](index=430&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=117&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20SHAREHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's securities trade on Nasdaq, with **7,658,348** ordinary shares outstanding, and IPO proceeds of **$57.5 million** held in trust - The company's securities trade on The Nasdaq Capital Market: Units (UYSCU), Ordinary Shares (UYSC), and Rights (UYSCR)[432](index=432&type=chunk) - As of June 26, 2025, there were **7,658,348** ordinary shares issued and outstanding[433](index=433&type=chunk) - The company has not paid and does not intend to pay cash dividends prior to completing an initial business combination[434](index=434&type=chunk) - Gross proceeds from the IPO and private placement totaled **$59,908,480**, with **$57,500,000** placed in a trust account. Transaction costs amounted to **$3,019,884**[439](index=439&type=chunk)[440](index=440&type=chunk)[441](index=441&type=chunk) [Reserved](index=118&type=section&id=ITEM%206.%20RESERVED) This item is not applicable [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=119&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) The pre-operational blank check company reported a **$156,520** net loss and a **$138,268** working capital deficit, with going concern doubts due to mandatory liquidation risk Financial Highlights | Metric | For the fiscal year ended March 31, 2025 | | :--- | :--- | | **Net Loss** | $156,520 | | **Cash and Cash Equivalents (as of Mar 31, 2025)** | $17,221 | | **Working Capital Deficit (as of Mar 31, 2025)** | $138,268 | | **Shareholders' Deficit (as of Mar 31, 2025)** | $163,268 | - Management has determined that the mandatory liquidation requirement if a business combination is not completed raises substantial doubt about the company's ability to continue as a going concern[454](index=454&type=chunk)[463](index=463&type=chunk) - Prior to the IPO, liquidity was satisfied by a **$25,000** payment for founder shares and a **$500,000** loan from the Sponsor, which was repaid upon the IPO's closing[455](index=455&type=chunk) - The company has no off-balance sheet arrangements. Its primary contractual obligation is a **$10,000** monthly fee to a Sponsor affiliate for administrative services, which began on April 1, 2025[465](index=465&type=chunk)[466](index=466&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=127&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company has no material interest rate risk exposure, as trust account proceeds are invested in short-term U.S. government obligations - The company believes there is no material exposure to interest rate risk due to the short-term nature of the investments held in the trust account, which consist of U.S. government treasury bills or money market funds investing in such obligations[480](index=480&type=chunk) [Financial Statements and Supplementary Data](index=127&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates the company's financial statements and related notes by reference, located at the end of the report - This item refers to the full financial statements which appear after Item 15 of the report[481](index=481&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=127&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on accounting principles, financial disclosure, or auditing scope - None[482](index=482&type=chunk) [Controls and Procedures](index=127&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal controls during the last quarter - Management concluded that disclosure controls and procedures were effective as of March 31, 2025[483](index=483&type=chunk) - The annual report does not include a management assessment of internal control over financial reporting, as allowed for newly public companies[485](index=485&type=chunk) - No material changes to internal control over financial reporting occurred during the last fiscal quarter[486](index=486&type=chunk) [Other Information](index=127&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 or other non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements[487](index=487&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=127&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[488](index=488&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=128&type=section&id=Item%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE.) This section details the company's executive officers and five-member board, including independent committees, and discloses significant conflicts of interest - The company's executive team includes Jialuan Ma (CEO), Shaokang Lu (CFO), and Jiawen Zhao (CIO)[490](index=490&type=chunk) - The Board of Directors has five members, with three determined to be independent (Yan Liang, Sze Wai Lee, Daniel John Paul Peart), satisfying NASDAQ requirements[500](index=500&type=chunk) - The Board has three standing committees: Audit, Compensation, and Nominating, all composed of independent directors[504](index=504&type=chunk) - The company has adopted a Code of Ethics and an Insider Trading Policy[515](index=515&type=chunk)[516](index=516&type=chunk) - Significant conflicts of interest are disclosed, stemming from officers' and directors' obligations to other entities and the financial incentive for the sponsor to complete a business combination, as their investment would be worthless otherwise[519](index=519&type=chunk)[523](index=523&type=chunk)[528](index=528&type=chunk) [Executive Compensation](index=141&type=section&id=Item%2011.%20EXECUTIVE%20COMPENSATION.) No executive officers received cash compensation for FY2025, with administrative services paid to a sponsor affiliate, and a clawback policy adopted for incentive compensation - No executive officer received cash compensation for services rendered during the fiscal year ended March 31, 2025[537](index=537&type=chunk) - An affiliate of the sponsor receives **$10,000** per month for office space, administrative, and support services[501](index=501&type=chunk) - The company has adopted an Executive Compensation Clawback Policy, allowing for the recovery of erroneously awarded incentive-based compensation from executive officers if a financial restatement is required[541](index=541&type=chunk)[542](index=542&type=chunk) [Security Ownership of Certain Beneficial Owners and Management](index=141&type=section&id=Item%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS.) This section details beneficial ownership as of June 26, 2025, with the sponsor holding **21.92%** and other significant owners disclosed, alongside late Section 16(a) filings Beneficial Ownership as of June 26, 2025 | Name of Beneficial Owner | Percentage of Outstanding Ordinary Shares | | :--- | :--- | | UY Scuti Investments Limited (Sponsor) | 21.92% | | All directors and officers as a group | 21.92% | | Harraden Circle Investments, LLC | 9.96% | | Feis Equities LLC / Lawrence M. Feis | 7.24% | | Mizuho Financial Group, Inc. | 8.3% | - The company reported late Form 3 filings for its CFO (Shaokang Lu), its Sponsor (UY Scuti Investments Limited), and an independent director (Daniel John Paul Peart), which were attributed to administrative oversight[549](index=549&type=chunk) [Certain Relationships and Related Transactions](index=143&type=section&id=Item%2013.%20Certain%20Relationships%2C%20and%20Related%20Transactions%20and%20Director%20Independence) This section details related party transactions, including the sponsor's purchase of founder shares and private placement units, a repaid loan, and ongoing administrative service fees - The sponsor purchased **1,437,500** founder shares for an aggregate price of **$25,000**[550](index=550&type=chunk) - The sponsor purchased **240,848** private placement units at **$10.00** per unit in a private placement[551](index=551&type=chunk) - The company pays an affiliate of the sponsor **$10,000** per month for office space and administrative services[553](index=553&type=chunk) - The sponsor provided a loan of up to **$500,000** to cover offering-related expenses, which was non-interest bearing and repaid upon the closing of the IPO[558](index=558&type=chunk) - The audit committee is responsible for reviewing and approving all related party transactions[564](index=564&type=chunk) [Principal Accountant Fees and Services](index=147&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services.) The company changed its auditor from WWC, P.C. to Audit Alliance LLP on June 5, 2025, with the audit committee pre-approving all services Accountant Fees | Accountant | Service Period | Fees Paid | | :--- | :--- | :--- | | WWC, P.C. | Jan 18, 2024 - Jun 5, 2025 | $82,500 (Audit Fees) | | Audit Alliance LLP | FYE Mar 31, 2025 & 2024 | $45,000 (Audit Fees) | - On June 5, 2025, the company dismissed WWC, P.C. and engaged Audit Alliance LLP as its new independent registered public accounting firm[569](index=569&type=chunk)[574](index=574&type=chunk) - The audit committee pre-approves all auditing and permitted non-audit services provided by the auditors[575](index=575&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=148&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K, including financial statements and various exhibits - This item lists all exhibits filed with the Form 10-K, including underwriting agreements, corporate governance documents, and various certifications[578](index=578&type=chunk)[580](index=580&type=chunk) [Form 10-K Summary](index=149&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) The company indicates that no Form 10-K summary is provided - None[582](index=582&type=chunk) Financial Statements The audited financial statements for FY2025 show a **$156,520** net loss and **$138,268** shareholders' deficit, with the auditor highlighting a material uncertainty regarding going concern [Report of Independent Registered Public Accounting Firm](index=152&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Audit Alliance LLP's report provides a fair opinion but highlights a 'Material Uncertainty Related to Going Concern' due to net loss, working capital deficit, and liquidation risk - The auditor's report contains a 'Material Uncertainty Related to Going Concern' paragraph, citing the company's net loss of **$156,520**, working capital deficit of **$138,268**, and the risk of mandatory liquidation[593](index=593&type=chunk) [Financial Statements Tables](index=153&type=section&id=Financial%20Statements%20Tables) The financial tables show total assets of **$239,316**, a shareholders' deficit of **$138,268**, a net loss of **$156,520**, and negative cash flow from operations of **$203,779** for FY2025 Balance Sheet as of March 31 | | 2025 | 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $17,221 | $0 | | Total Assets | $239,316 | $90,000 | | **Liabilities and Shareholders' (Deficit) Equity** | | | | Total Current Liabilities | $377,584 | $71,748 | | Total Shareholders' (Deficit) Equity | ($138,268) | $18,252 | Statement of Operations | | For the fiscal year ended March 31, 2025 | For the period from Jan 18, 2024 to Mar 31, 2024 | | :--- | :--- | :--- | | Formation and operating costs | $156,520 | $6,748 | | **Net loss** | **($156,520)** | **($6,748)** | | Basic and diluted net loss per ordinary share | ($0.11) | ($0.01) | [Notes to the Financial Statements](index=157&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes detail accounting policies, IPO and private placement specifics, related party transactions, and commitments, reiterating the going concern issue - The company is an emerging growth company and has elected to use the extended transition period for complying with new or revised financial accounting standards[633](index=633&type=chunk) - Related party transactions include the sale of **1,437,500** Founder Shares to the Sponsor for **$25,000** and a promissory note from the Sponsor for up to **$500,000** to cover IPO costs, which was repaid post-IPO[659](index=659&type=chunk)[664](index=664&type=chunk) - The company has an agreement to pay an affiliate of the Sponsor **$10,000** per month for administrative support services, commencing on the effective date of the IPO registration[668](index=668&type=chunk) - Subsequent events include the consummation of the IPO in April 2025, raising **$57.5 million** in gross proceeds, and the simultaneous private placement, with **$57.5 million** deposited into the Trust Account[685](index=685&type=chunk)[687](index=687&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 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 No. 001-42577 UY Scuti Acquisition Corporation (Exact name of registrant as specified in its charter) | Cayman Islands | N/A | | --- | --- ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) Culp, Inc. is a leading North American marketer of mattress and upholstery fabrics, undergoing a significant restructuring in fiscal 2025 to enhance efficiency - Culp is one of the largest marketers of mattress and upholstery fabrics in North America, serving leading bedding and furniture companies globally[15](index=15&type=chunk) Fiscal 2025 Restructuring Overview | Action | Description | | :--- | :--- | | **NA Mattress Ops Consolidation** | Phased wind-down and closure of the Quebec, Canada manufacturing plant, with knitting operations moved to Stokesdale, NC | | **Weaving Operation Transition** | Transitioned internal weaving to a strategic sourcing model, primarily with a partner in Turkey | | **Haiti Consolidation** | Consolidated the sewn mattress cover operation in Haiti into a single building to reduce expenses | | **China Finishing Rationalization** | Aligned the upholstery fabrics finishing operation in China with demand, leveraging supply relationships | | **Corporate Expense Reduction** | Targeted annualized savings of $1.5 million in unallocated corporate and shared services expenses | - The company incurred approximately **$9.4 million** in total restructuring and related costs in fiscal 2025[23](index=23&type=chunk) Net Sales by Segment (in Millions) | Segment | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | | :--- | :--- | :--- | :--- | | Mattress Fabrics | $113.9 (53%) | $116.4 (52%) | $111.0 (47%) | | Upholstery Fabrics | $99.3 (47%) | $108.9 (48%) | $123.9 (53%) | | **Total** | **$213.2 (100%)** | **$225.3 (100%)** | **$234.9 (100%)** | Net Sales by Geographic Area (FY2025) | Geographic Area | Sales (in thousands) | Percentage of Total | | :--- | :--- | :--- | | United States | $143,713 | 67.4% | | North America (Excl. USA) | $32,912 | 15.4% | | Far East and Asia | $30,586 | 14.3% | | All other areas | $6,026 | 2.8% | | **Total** | **$213,237** | **100.0%** | [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from economic uncertainty, intense competition, global supply chain issues, and activist shareholders - Economic uncertainty, inflationary pressures, and declines in consumer confidence negatively affect demand for furniture and bedding, which has adversely impacted sales and may continue to do so[120](index=120&type=chunk)[121](index=121&type=chunk) - The business is highly competitive and fragmented, with significant competition from low-cost foreign producers, increasing deflationary price pressures and market share loss risks[123](index=123&type=chunk)[124](index=124&type=chunk) - Increased U.S. tariffs on imports, especially from China, have compelled price increases and are likely to impact sales and gross margins, potentially affecting customer sales[131](index=131&type=chunk)[132](index=132&type=chunk) - Significant reliance on foreign operations and sourcing, particularly in China and Turkey, exposes the company to supply chain disruptions, political instability, and regulatory changes[136](index=136&type=chunk) - The company faces risks from activist shareholders, with an agreement made in June 2025 with 22NW, LP, including board appointments and a strategy committee formation[164](index=164&type=chunk) - The company's two largest customers, Serta-Simmons Bedding and La-Z-Boy Incorporated, accounted for approximately **13%** and **11%** of consolidated net sales in fiscal 2025, with loss of either significantly impacting sales and earnings[157](index=157&type=chunk) [Unresolved Staff Comments](index=44&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments from the SEC - None[182](index=182&type=chunk) [Cybersecurity](index=44&type=section&id=Item%201C.%20Cybersecurity) The Board's Audit Committee oversees the company's cybersecurity risk management program, with no material incidents identified - The Board's Audit Committee has primary oversight responsibility for cybersecurity risks and receives quarterly presentations on the program[190](index=190&type=chunk) - The company's cybersecurity strategy includes a security operations program, third-party risk management, an incident response plan, annual assessments by specialists, and security awareness training[192](index=192&type=chunk) - The company has not identified any cybersecurity incidents that have materially affected or are reasonably likely to materially affect its business, results of operations, or financial condition[189](index=189&type=chunk) [Properties](index=49&type=section&id=Item%202.%20Properties) Culp owned or leased thirteen facilities as of FY2025, with restructuring leading to plant closures and consolidations - The company owns its primary manufacturing and distribution facilities in Stokesdale, North Carolina[197](index=197&type=chunk) - As part of restructuring, the manufacturing facility in Quebec, Canada was closed and sold effective April 30, 2025[201](index=201&type=chunk) - The company plans to close its leased facility in Burlington, North Carolina, and transition its activities to the owned facility in Stokesdale, North Carolina, as part of its segment integration strategy[201](index=201&type=chunk) [Legal Proceedings](index=49&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no legal proceedings that are required to be disclosed under this item - There are no material legal proceedings to which the company or its subsidiaries are a party[200](index=200&type=chunk) [Mine Safety Disclosure](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - Not applicable[203](index=203&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Culp, Inc.'s common stock trades on NYSE; dividends are suspended, and no shares were repurchased in fiscal 2025 - The company's quarterly cash dividend has been suspended since June 29, 2022, and no dividends were paid in fiscal 2025[209](index=209&type=chunk) - No shares of common stock were repurchased during fiscal 2025, with approximately **$3.2 million** remaining available for future repurchases under the authorized program as of April 27, 2025[208](index=208&type=chunk)[326](index=326&type=chunk) [RESERVED]](index=54&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Consolidated net sales decreased to **$213.2 million** in fiscal 2025, resulting in a **$19.1 million** net loss due to restructuring and weak demand Consolidated Results of Operations (in thousands) | Metric | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $213,237 | $225,333 | (5.4)% | | Gross profit | $25,067 | $27,939 | (10.3)% | | Loss from operations | $(18,377) | $(11,308) | 62.5% | | Net loss | $(19,103) | $(13,819) | 38.2% | - The increase in operating loss was significantly impacted by restructuring expenses, which totaled approximately **$9.4 million** in fiscal 2025 compared to **$676,000** in fiscal 2024[236](index=236&type=chunk) - Cash and cash equivalents decreased by **$4.4 million** to **$5.6 million** as of April 27, 2025, primarily due to **$17.7 million** in cash used for operating activities and **$2.9 million** in capital expenditures[243](index=243&type=chunk) - As of April 27, 2025, the company had outstanding borrowings of **$12.7 million** under its line of credit agreements[245](index=245&type=chunk) [Segment Analysis - Mattress Fabrics Segment](index=61&type=section&id=Segment%20Analysis%20-%20Mattress%20Fabrics%20Segment) Mattress Fabrics net sales decreased 2.1% to **$113.9 million**, but operating loss improved due to restructuring cost reductions Mattress Fabrics Segment Performance (in thousands) | Metric | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $113,906 | $116,370 | (2.1)% | | Gross profit | $7,936 | $6,289 | 26.2% | | Loss from operations | $(5,235) | $(6,845) | (23.5)% | - Operating performance improved due to fixed cost reductions and efficiency gains from the Fiscal 2025 restructuring, despite being significantly affected by **$8.5 million** in restructuring and related expenses for the segment[253](index=253&type=chunk)[258](index=258&type=chunk) Mattress Fabrics Segment Assets (in thousands) | Asset | April 27, 2025 | April 28, 2024 | % Change | | :--- | :--- | :--- | :--- | | Accounts receivable | $10,576 | $10,003 | 5.7% | | Inventory | $33,293 | $27,671 | 20.3% | | Property, plant & equipment | $23,259 | $31,472 | (26.1)% | | **Total segment assets** | **$69,430** | **$70,773** | **(1.9)%** | [Segment Analysis - Upholstery Fabrics Segment](index=67&type=section&id=Segment%20Analysis%20-%20Upholstery%20Fabrics%20Segment) Upholstery Fabrics net sales fell 8.8% to **$99.3 million** due to market downturn, with operating income decreasing 29.9% Upholstery Fabrics Segment Performance (in thousands) | Metric | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $99,331 | $108,963 | (8.8)% | | Gross profit | $18,752 | $21,690 | (13.5)% | | Income from operations | $4,057 | $5,787 | (29.9)% | - The decline in sales reflects a continued downturn in the home furnishings market and was exacerbated by tariff-related market uncertainty in the fourth quarter[271](index=271&type=chunk) - As part of a strategic transformation, the company will close its leased facility in Burlington, NC, and transition activities to its owned facility in Stokesdale, NC, to streamline costs[277](index=277&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity weakened in fiscal 2025, with cash decreasing to **$5.6 million** due to operating activities and capital expenditures - Cash and cash equivalents decreased by **$4.4 million**, from **$10.0 million** at FYE 2024 to **$5.6 million** at FYE 2025[318](index=318&type=chunk) - Net cash used in operating activities was **$17.7 million**, an increase of **$9.5 million** from the prior year, reflecting lower cash earnings and an increase in inventory purchases during restructuring[319](index=319&type=chunk) - The company had outstanding borrowings of **$12.7 million** as of April 27, 2025, and available borrowings of **$21.4 million** under its domestic credit facility[320](index=320&type=chunk)[508](index=508&type=chunk) - The dividend program remains suspended, and no shares were repurchased in fiscal 2025[323](index=323&type=chunk)[326](index=326&type=chunk) [Critical Accounting Estimates](index=81&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates include Inventory Valuation, Income Taxes Valuation Allowance, and Stock-Based Compensation, requiring significant judgment - For Inventory Valuation, management continually examines inventory for obsolescence, with a **$1.7 million** non-cash credit to cost of sales in Q4 FY2025 due to a change in accounting estimate for the finished goods markdown reserve[350](index=350&type=chunk)[351](index=351&type=chunk) - For Income Taxes, the company recorded a full valuation allowance of **$26.3 million** against its U.S. net deferred tax assets as of April 27, 2025, concluding they are more-likely-than-not not fully realizable[355](index=355&type=chunk)[305](index=305&type=chunk) - Stock-Based Compensation expense recognition requires significant judgment, including forecasting future financial results and using complex assumptions in valuation models for performance-based awards[358](index=358&type=chunk)[359](index=359&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=84&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to interest rate and foreign currency risks, with **$12.7 million** in variable-rate borrowings outstanding - The company is exposed to interest rate risk on its variable-rate credit agreements in the U.S. and China, with outstanding borrowings totaling **$4.6 million** under the U.S. facility and approximately **$8.1 million** under China facilities as of April 27, 2025[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) - The company is exposed to foreign currency risk from its operations in Canada, China, and Vietnam, attempting to manage this risk through a natural hedge, and a **10%** change in exchange rates is not expected to have a material impact[371](index=371&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=85&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal 2025, with an unqualified auditor's opinion - The independent auditor, Grant Thornton LLP, issued an unqualified opinion on the consolidated financial statements[373](index=373&type=chunk) Consolidated Balance Sheet Summary (in thousands) | | April 27, 2025 | April 28, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $83,534 | $80,881 | | **Total Assets** | **$123,370** | **$132,054** | | **Total Current Liabilities** | $46,964 | $38,107 | | **Total Liabilities** | $65,730 | $55,925 | | **Total Shareholders' Equity** | $57,640 | $76,129 | | **Total Liabilities and Equity** | **$123,370** | **$132,054** | Consolidated Statement of Net Loss Summary (in thousands) | | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Net Sales | $213,237 | $225,333 | $234,934 | | Gross Profit | $25,067 | $27,939 | $10,896 | | Loss from Operations | $(18,377) | $(11,308) | $(28,478) | | **Net Loss** | **$(19,103)** | **$(13,819)** | **$(31,520)** | | **Net Loss Per Share** | **$(1.53)** | **$(1.11)** | **$(2.57)** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=91&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on accounting or financial disclosure matters - There were no disagreements with accountants on accounting principles or financial disclosure[594](index=594&type=chunk) [Controls and Procedures](index=91&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of April 27, 2025 - Management concluded that disclosure controls and procedures were effective as of April 27, 2025[596](index=596&type=chunk) - Management concluded that internal control over financial reporting was effective as of April 27, 2025, based on the COSO 2013 framework[598](index=598&type=chunk) [Other Information](index=91&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements in the fourth quarter of fiscal 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement in the fourth quarter[602](index=602&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=91&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not Applicable[603](index=603&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=92&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement - This information is incorporated by reference from the company's definitive Proxy Statement[605](index=605&type=chunk) [Executive Compensation](index=92&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement - This information is incorporated by reference from the company's definitive Proxy Statement[607](index=607&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=92&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the Proxy Statement, including equity compensation plan details - This information is incorporated by reference from the company's definitive Proxy Statement[608](index=608&type=chunk) Equity Compensation Plan Information (as of April 27, 2025) | Plan Category | Securities to be issued upon exercise (a) | Weighted-average exercise price (b) | Securities remaining available for future issuance (c) | | :--- | :--- | :--- | :--- | | Approved by security holders | 846,119 | $ — | 668,353 | | Not approved by security holders | — | — | — | | **Total** | **846,119** | **$ —** | **668,353** | [Certain Relationships and Related Transactions, and Director Independence](index=93&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement - This information is incorporated by reference from the company's definitive Proxy Statement[613](index=613&type=chunk) [Principal Accountant Fees and Services](index=93&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's definitive Proxy Statement - This information is incorporated by reference from the company's definitive Proxy Statement[615](index=615&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=94&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and all exhibits filed with the Form 10-K report - This section lists the consolidated financial statements and all exhibits filed with the Form 10-K[618](index=618&type=chunk)[621](index=621&type=chunk) [Form 10-K Summary](index=96&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that no Form 10-K summary is provided - None[623](index=623&type=chunk)

[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's financial statements, management's discussion and analysis, and disclosures on market risk and controls [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Delta's unaudited condensed consolidated financial statements, detailing financial position and performance for Q2 and H1 2025 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of Delta's financial position, detailing assets, liabilities, and equity as of June 30, 2025 Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$78,395** | **$75,372** | | Total current assets | $10,982 | $9,844 | | Property and equipment, net | $38,926 | $37,595 | | **Total Liabilities** | **$60,955** | **$60,079** | | Air traffic liability | $8,893 | $7,094 | | Total debt and finance leases | $15,056 | $16,194 | | **Total Stockholders' Equity** | **$17,440** | **$15,293** | [Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section details Delta's financial performance, including revenues, expenses, and net income for Q2 and H1 2025 Q2 2025 vs Q2 2024 Performance (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total operating revenue | $16,648 | $16,658 | | Total operating expense | $14,546 | $14,391 | | **Operating Income** | **$2,102** | **$2,267** | | **Net Income** | **$2,130** | **$1,305** | | Diluted Earnings Per Share | $3.27 | $2.01 | H1 2025 vs H1 2024 Performance (in millions, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total operating revenue | $30,688 | $30,406 | | Total operating expense | $28,017 | $27,525 | | **Operating Income** | **$2,671** | **$2,881** | | **Net Income** | **$2,370** | **$1,342** | | Diluted Earnings Per Share | $3.63 | $2.08 | [Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines Delta's cash inflows and outflows from operating, investing, and financing activities for H1 2025 Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $4,235 | $4,857 | | Net cash used in investing activities | ($2,423) | ($1,446) | | Net cash used in financing activities | ($1,704) | ($2,299) | | **Net Increase in Cash** | **$108** | **$1,112** | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, significant transactions, and segment performance - Total cash sales from marketing agreements related to the loyalty program were **$4.0 billion** for the six months ended June 30, 2025, up from **$3.6 billion** in the same period of 2024[38](index=38&type=chunk) - Total debt decreased from **$15.3 billion** at the end of 2024 to **$14.4 billion** as of June 30, 2025. In June 2025, the company issued **$2.0 billion** in new unsecured notes to repay a higher-cost PSP loan and for general corporate purposes[52](index=52&type=chunk)[53](index=53&type=chunk) - As of June 30, 2025, the company had future aircraft purchase commitments of approximately **$16.8 billion** for **275 aircraft**, with deliveries scheduled through 2029 and beyond[62](index=62&type=chunk)[65](index=65&type=chunk) - The refinery segment reported an operating loss of **$10 million** for the six months ended June 30, 2025, a decrease from the **$108 million** operating income in the same period of 2024[73](index=73&type=chunk) [Management's Discussion and Analysis (MD&A)](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Delta's financial performance, condition, and liquidity, highlighting key drivers and strategic initiatives for Q2 and H1 2025 [Q2 2025 Financial Highlights](index=19&type=section&id=June%202025%20Quarter%20Financial%20Highlights) This section summarizes Delta's key financial performance metrics for the second quarter of 2025, including income, revenue, expenses, and liquidity - Operating income for Q2 2025 was **$2.1 billion**, a decrease of **$165 million** compared to Q2 2024[79](index=79&type=chunk) - Total revenue was flat, with an increase in premium product and loyalty revenue offset by a decline in main cabin demand due to macroeconomic uncertainty[80](index=80&type=chunk) - Total operating expense increased by **1%** (**$155 million**) YoY, driven by higher wages and landing fees, but partially offset by lower fuel costs. Non-fuel unit cost (CASM-Ex) increased **2.7%**[81](index=81&type=chunk)[82](index=82&type=chunk) - Total liquidity stood at **$6.4 billion** as of June 30, 2025. The company generated **$733 million** in free cash flow during the quarter[82](index=82&type=chunk)[84](index=84&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) This section analyzes Delta's operating revenue and expense trends for Q2 and H1 2025, highlighting key drivers by product, region, and cost category Q2 2025 vs Q2 2024 Passenger Revenue by Product (in millions) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Ticket - Main cabin | $6,347 | $6,716 | (5)% | | Ticket - Premium products | $5,899 | $5,633 | 5% | | Loyalty travel awards | $1,092 | $975 | 12% | Q2 2025 vs Q2 2024 Passenger Revenue Change by Region | Region | Revenue Change | Capacity (ASM) Change | | :--- | :--- | :--- | | Domestic | (1)% | 4% | | Atlantic | 2% | 4% | | Latin America | (1)% | (1)% | | Pacific | 11% | 11% | Q2 2025 vs Q2 2024 Key Operating Expenses (in millions) | Expense Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Salaries and related costs | $4,402 | $4,012 | 10% | | Aircraft fuel and related taxes | $2,458 | $2,813 | (13)% | | Landing fees and other rents | $878 | $766 | 15% | [Financial Condition and Liquidity](index=28&type=section&id=Financial%20Condition%20and%20Liquidity) This section details Delta's financial position, liquidity, cash flow generation, debt management, and capital allocation strategies as of June 30, 2025 - Total liquidity as of June 30, 2025 was **$6.4 billion**, which includes cash, cash equivalents, short-term investments, and **$3.1 billion** available under revolving credit facilities[123](index=123&type=chunk)[124](index=124&type=chunk) - In H1 2025, net cash from operations was **$4.2 billion**. Capital expenditures were **$2.4 billion**, with a full-year forecast of approximately **$5.0 billion**[125](index=125&type=chunk)[132](index=132&type=chunk) - The company repaid **$3.5 billion** of debt and finance lease obligations in H1 2025. In June 2025, it issued **$2.0 billion** in new, lower-rate unsecured notes to repay a PSP loan[133](index=133&type=chunk)[134](index=134&type=chunk) - The Board of Directors increased the quarterly dividend to **$0.1875 per share** and authorized a new **$1.0 billion** share repurchase program, open through June 2028[137](index=137&type=chunk) [Fleet Information](index=27&type=section&id=Fleet%20Information) This section provides an overview of Delta's mainline and regional aircraft fleet, including current count, average age, and future purchase commitments Mainline Fleet Summary as of June 30, 2025 | Category | Count | | :--- | :--- | | Total Mainline Aircraft | 980 | | Average Fleet Age (Years) | 14.8 | | Aircraft Purchase Commitments | 275 | | Aircraft Purchase Options | 120 | - The company has **275 mainline aircraft** on order, including **100 B-737-10**, **79 A321-200neo**, and **67 A220-300 aircraft**[65](index=65&type=chunk)[121](index=121&type=chunk) - In addition to the mainline fleet, regional carriers operate **322 aircraft** on behalf of Delta[122](index=122&type=chunk) [Market Risk Disclosures](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes in its market risk exposures from the information provided in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in market risk from the disclosures in the 2024 Form 10-K[149](index=149&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. No material changes were made to the internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[150](index=150&type=chunk) - No material changes were made to internal controls over financial reporting during the second quarter of 2025[151](index=151&type=chunk) [Part II. Other Information](index=33&type=section&id=Part%20II.%20Other%20Information) This section provides updates on legal proceedings, risk factors, and equity-related activities not covered in the financial statements [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material changes from the legal proceedings that were described in its 2024 Annual Report on Form 10-K - There have been no material changes from the legal proceedings described in the 2024 Form 10-K[152](index=152&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes from the risk factors described in the 2024 Form 10-K[153](index=153&type=chunk) [Share Repurchases and Equity Sales](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the authorization of a new share repurchase program and other equity-related activities during the second quarter of 2025 - In the June 2025 quarter, the Board of Directors authorized a **$1.0 billion** opportunistic share repurchase program, valid through June 30, 2028[155](index=155&type=chunk) - No shares were repurchased under the new program in the June 2025 quarter[155](index=155&type=chunk)

Part I [Business](index=4&type=section&id=Item%201.%20Business) PetVivo Holdings, Inc. is an emerging biomedical device company focused on innovative medical devices and therapeutics for animals, particularly companion animals like dogs and horses [Overview and Business Description](index=4&type=section&id=Item%201.%20Business%23Overview) PetVivo is a biomedical device company commercializing and licensing medical products for animals, with a pipeline of 18 products protected by patents and trade secrets - The company's lead product is **Spryng** with OsteoCushion Technology, an intraarticular injection for managing lameness and osteoarthritis in dogs and horses[18](index=18&type=chunk) - **Spryng** is designed to provide a bio-integrative scaffold in the joint, mimicking natural cartilage to restore proper joint mechanics and improve biomechanics[23](index=23&type=chunk) - Osteoarthritis affects an estimated **14 million** dogs and **1 million** horses in the U.S. Current treatments like NSAIDs manage symptoms but have potential side effects and do not halt joint degeneration, a gap **Spryng** aims to fill[24](index=24&type=chunk)[25](index=25&type=chunk) [Commercialization and Distribution](index=6&type=section&id=Item%201.%20Business%23Commercialization%20and%20Distribution) The company began selling Spryng in Q2 of fiscal 2022, initially with MWI and Covetrus, both agreements later terminated, and now partners with Vedco and Clipper - The company commenced sales of **Spryng** in the second quarter of fiscal 2022[28](index=28&type=chunk) - In March 2025, the company mutually terminated its non-exclusive distribution agreement with MWI. In February 2025, it also terminated its agreement with Covetrus North America, LLC[30](index=30&type=chunk) - In December 2024, PetVivo entered into new wholesale distribution partnerships with Vedco Inc. and Clipper Distributing, LLC[31](index=31&type=chunk) [Product Pipeline and Clinical Development](index=6&type=section&id=Item%201.%20Business%23Product%20Pipeline%20and%20Clinical%20Development) PetVivo has a pipeline of 17 additional therapeutic devices for veterinary and human use and is conducting multiple clinical studies to support its products, including a recently licensed Platelet-Rich Plasma (PRP) product - The company has a pipeline of **17** other therapeutic devices for veterinary and human applications, in addition to its commercialized **Spryng** product[34](index=34&type=chunk) - In February 2025, the Company signed an exclusive licensing agreement with VetStem, Inc. to market and sell their Precise PRP (Platelet-Rich Plasma) product for canine and equine use, with revenues anticipated in fiscal year 2026[35](index=35&type=chunk) Veterinary Product Pipeline Status | Product | Indication | Species | Commercial Launch | | :--- | :--- | :--- | :--- | | VD-01 | Osteoarthritis (Spryng) | Canine | Q2 2022 | | VD-02 | Osteoarthritis (Spryng) | Equine | Q2 2022 | | VD-03 | Digital Cushion Lameness | Equine & Bovine | Q2 2022 | | VD-06 | Osteoarthritis (Spryng) | Feline | Q1 2024 | [Intellectual Property](index=8&type=section&id=Item%201.%20Business%23Intellectual%20Property) The company's intellectual property portfolio includes six issued U.S. patents, two pending patent applications, four international patents, and six documented trade secrets - The company holds **six** issued U.S. patents and has **two** pending applications, along with **four** patents in Canada and the EU[42](index=42&type=chunk) - PetVivo relies on **six** documented trade secrets covering ingredient compositions, production techniques, and quality control procedures[45](index=45&type=chunk) - The company owns **two** U.S. federally registered trademarks: **Spryng®** and **OsteoCushion®**[49](index=49&type=chunk) [Regulation](index=12&type=section&id=Item%201.%20Business%23Regulation) Spryng® is classified as a veterinary medical device in the U.S., not requiring pre-market FDA approval, but future human-use products will face extensive regulatory scrutiny - In the U.S., the FDA does not require pre-market approval (510(k) or PMA) for devices used in veterinary medicine, such as **Spryng®**[86](index=86&type=chunk) - Future human-use medical devices will be subject to comprehensive FDA regulation, likely requiring either a 510(k) submission to demonstrate substantial equivalence to a predicate device or a more stringent Pre-Market Approval (PMA) application with extensive clinical data[78](index=78&type=chunk)[79](index=79&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including substantial financial losses, delisting from Nasdaq, heavy dependence on its single commercial product, and concentrated stock ownership - The company has a history of substantial losses, with a net loss of approximately **$8.0 million** for the year ended March 31, 2025, and an accumulated deficit of **$90.8 million**[95](index=95&type=chunk) - As of March 31, 2025, the company had only **$228 thousand** in cash, sufficient for only one month of operations, highlighting a critical need for additional financing[96](index=96&type=chunk) - The company's common stock and warrants were delisted from The Nasdaq Capital Market and now trade on the OTCQB market[94](index=94&type=chunk) - The business is substantially dependent on the success of its lead product, **Spryng®**, and faces significant competition from major industry players like Zoetis, Merck, and Elanco[99](index=99&type=chunk)[100](index=100&type=chunk) - As of June 1, 2025, officers and directors beneficially own or control approximately **27%** of the company's outstanding common stock, concentrating control[122](index=122&type=chunk) [Cybersecurity](index=23&type=section&id=Item%201C.%20Cybersecurity) PetVivo has established policies and processes for managing cybersecurity risks, overseen by the Board and managed by the CFO, with no material incidents reported to date - The company has established processes for assessing and managing cybersecurity threats, which are integrated into its overall risk management system[137](index=137&type=chunk) - The Board of Directors, assisted by the Audit Committee, oversees cybersecurity risk, with the CFO and a management committee responsible for day-to-day management[145](index=145&type=chunk)[146](index=146&type=chunk) - The company has not experienced any cybersecurity incidents that have been determined to be material[144](index=144&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) The company leases three facilities in Edina, Minnesota, for office, lab, warehouse, and production space, which management deems adequate for current needs - The company leases approximately **3,600 sq. ft.** of office, lab, and warehouse space expiring in November 2026[149](index=149&type=chunk) - An additional **2,400 sq. ft.** of office space is leased, with the lease expiring in March 2027[150](index=150&type=chunk) - A new lease for **14,073 sq. ft.** of production and warehouse space commenced on April 1, 2023, and will terminate on June 30, 2033[151](index=151&type=chunk) [Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) The company may be involved in ordinary course legal proceedings but does not anticipate any to have a material adverse effect - The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition[153](index=153&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the OTCQB market, has 258 stockholders of record, has never paid cash dividends, and has issued various unregistered securities to raise capital - The Company's common stock is traded on the OTCQB Nasdaq Capital Market under the symbol '**PETV**'[156](index=156&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future[157](index=157&type=chunk) Equity Compensation Plan Information as of March 31, 2025 | Plan category | Number of securities to be issued upon exercise | Weighted average exercise price | Number of securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Plans approved by shareholders | 1,140,933 | **$2.58** | 822,605 | | Plans not approved by shareholders | 562,817 | **$2.00** | — | [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) For fiscal year 2025, revenues increased to $1.13 million, operating expenses decreased to $9.1 million, and the net loss improved to $8.4 million, though the auditor expressed going concern doubt, which management believes is mitigated by recent financing [Results of Operation (FY 2025 vs. FY 2024)](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation%23Results%20of%20Operation) In fiscal 2025, revenues grew by **17%** to **$1.13 million**, total operating expenses fell to **$9.1 million**, resulting in a net loss of **($8.40 million)**, an improvement from **($11.0 million)** in fiscal 2024 Fiscal Year Financial Comparison (2025 vs. 2024) | Metric | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Revenues | **$1,132,533** | **$968,706** | | Total Cost of Sales | **$137,677** | **$101,823** | | Total Operating Expenses | **$9,050,575** | **$11,488,223** | | Net Loss | **($8,399,166)** | **($10,955,295)** | | Net Loss Per Share | **($0.41)** | **($0.78)** | - Revenue increased primarily due to sales to new distributors Vedco and Clipper, and sales of the PrecisePRP product licensed from VetStem[191](index=191&type=chunk) - Operating expenses decreased mainly due to lower legal expenses, reduced investor relations consulting fees, termination of an expensive marketing agency relationship, and reduced trade show participation[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation%23Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had a working capital deficit of **$320,709** and **$87,403** in cash, but a recent **$5 million** Series B Preferred Offering is expected to provide sufficient cash for at least the next three months - The company entered into a **$5 million** Series B Preferred Offering subscription agreement on March 26, 2025, receiving **$600 thousand** by fiscal year-end and the remaining **$4.4 million** in May and June 2025[199](index=199&type=chunk) - Management believes it has sufficient cash to meet operating and capital requirements for at least the next three months following the recent financing, but will need to raise additional capital in the future[200](index=200&type=chunk) FY 2025 Cash Flow Summary | Cash Flow Activity | Amount | | :--- | :--- | | Net Cash Used in Operating Activities | **($4.52 million)** | | Net Cash Used in Investing Activities | **($1.06 million)** | | Net Cash Provided by Financing Activities | **$5.73 million** | [Controls and Procedures](index=32&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were not effective as of March 31, 2025, due to a material weakness related to derivative liabilities and warrant discounts - Management concluded that the company's disclosure controls and procedures were not effective as of the end of the period[217](index=217&type=chunk) - A material weakness was identified due to a material audit adjustment for derivative liabilities and warrant discounts with convertible notes[221](index=221&type=chunk) - Due to the material weakness, management concluded that its internal control over financial reporting (ICFR) was not effective as of March 31, 2025[221](index=221&type=chunk)[222](index=222&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=34&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) This section provides biographies for executive officers and the eight-member Board of Directors, which includes a majority of independent directors and has established Audit, Compensation, and Nominating committees, along with a Code of Ethics - The Board of Directors has **six** independent members, constituting a majority, in compliance with Nasdaq rules[241](index=241&type=chunk) - The company has an Audit Committee, Compensation Committee, and Nominating Committee, all composed of independent directors[243](index=243&type=chunk) - A Code of Ethics has been adopted that applies to the board, executive officers, and employees[244](index=244&type=chunk) [Executive Compensation](index=38&type=section&id=Item%2011.%20Executive%20Compensation) This section details compensation for Named Executive Officers, including CEO John Lai (**$493,279**) and CFO Garry Lowenthal (**$491,170**) for fiscal 2025, and notes executive changes including the termination of the COO Summary Compensation Table (Fiscal 2025) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Comp ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | John Lai, CEO and President | 2025 | **$166,667** | **$25 thousand** | **$297,700** | **$3,912** | **$493,279** | | Garry Lowenthal, CFO | 2025 | **$200 thousand** | **$25 thousand** | **$257,950** | **$8,220** | **$491,170** | | Randall Meyer, COO | 2025 | **$153,750** | — | — | **$13,008** | **$166,758** | - Garry Lowenthal was appointed CFO on March 8, 2024, with an annual salary of **$200 thousand**[281](index=281&type=chunk) - Randall Meyer's position as Chief Operating Officer was eliminated, and his employment was terminated on January 31, 2025[282](index=282&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=44&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of July 10, 2025, the company had **24,388,731** shares outstanding, with directors and executive officers owning **14.74%** and two external shareholders owning over **5%** Beneficial Ownership as of July 10, 2025 | Name of Beneficial Owner | Beneficial Ownership (%) | | :--- | :--- | | John Lai (CEO) | **7.12%** | | All Directors and Executive Officers as a Group (9 Persons) | **14.74%** | | Alan Sarroff | **23.13%** | | Stanley Cruden | **9.93%** | [Certain Relationships and Related Transactions and Director Independence](index=46&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20And%20Director%20Independence) This section details a **$180 thousand** settlement with former employee David Masters and a prior escrow agreement with CEO John Lai for share release - The company settled threatened litigation with former employee and director David Masters for a one-time payment of **$180 thousand**[291](index=291&type=chunk)[292](index=292&type=chunk) - A prior escrow agreement with CEO John Lai resulted in the release of **254,018** shares to him in August 2021 after the company met specific financing and Nasdaq listing conditions[293](index=293&type=chunk) [Principal Accounting Fees and Services](index=47&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The company's principal accountants were Stephano Slack LLC for FY2025 and Assurance Dimensions for FY2024, with audit fees of **$47 thousand** and **$34,486** respectively, and all services pre-approved by the Audit Committee Audit Fees by Fiscal Year | Fiscal Year | Principal Accountant | Audit Fees | | :--- | :--- | :--- | | 2025 | Stephano Slack LLC | **$47,000** | | 2024 | Assurance Dimensions | **$34,486** | - The Audit Committee's policy is to pre-approve all audit and permissible non-audit services, and **100%** of all services were pre-approved in fiscal 2025 and 2024[300](index=300&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=49&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including corporate documents, employment agreements, and required certifications from executive officers - Lists key corporate documents, including employment agreements for executive officers, the 2020 Equity Compensation Plan, and distribution services agreements[304](index=304&type=chunk)[306](index=306&type=chunk) - Includes required certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act[306](index=306&type=chunk) Financial Statements and Supplementary Data [Report of Independent Registered Public Accounting Firm](index=53&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The report includes opinions from two independent auditors, both expressing substantial doubt about the company's ability to continue as a going concern due to recurring negative cash flows, net losses, and a significant accumulated deficit - The auditor for the fiscal year 2025, Stephano Slack LLC, expressed substantial doubt about the Company's ability to continue as a going concern due to negative cash flows from operations[317](index=317&type=chunk) - The auditor for the fiscal year 2024, Assurance Dimensions, also expressed substantial doubt about the Company's ability to continue as a going concern due to recurring losses and an accumulated deficit[325](index=325&type=chunk) [Consolidated Financial Statements](index=56&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show a net loss of **($8.40 million)** in FY2025, an improvement from **($11.0 million)** in FY2024, with total assets increasing to **$9.34 million** and total liabilities to **$5.12 million** Consolidated Balance Sheets (as of March 31) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Current Assets | **$5,610** | **$1,042** | | Total Assets | **$9,339** | **$3,115** | | **Liabilities & Equity** | | | | Total Current Liabilities | **$4,317** | **$1,412** | | Total Liabilities | **$5,120** | **$2,429** | | Total Stockholders' Equity | **$4,219** | **$686** | Consolidated Statements of Operations (for the Year Ended March 31) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Revenues | **$1,133** | **$969** | | Gross Profit | **$995** | **$867** | | Total Operating Expenses | **$9,051** | **$11,488** | | Operating Loss | **($8,056)** | **($10,621)** | | Net Loss | **($8,399)** | **($10,955)** | | Net Loss Per Share | **($0.41)** | **($0.78)** | Consolidated Statements of Cash Flows (for the Year Ended March 31) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | **($5,322)** | **($7,420)** | | Net Cash Used in Investing Activities | **($563)** | **($309)** | | Net Cash Provided by Financing Activities | **$6,026** | **$7,341** | | Net increase (decrease) in Cash | **$140** | **($388)** | | Cash at End of the Year | **$228** | **$87** | [Notes to Consolidated Financial Statements](index=61&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail revenue concentration, accounting for convertible notes and derivative liabilities, stock-based compensation, lease obligations, going concern uncertainty, and a **$44.3 million** net operating loss carryforward, with subsequent financing events - For FY2025, revenue from key distributors was: MWI (**38%**), Vedco (**26%**), Clipper (**17%**), and Covetrus (**4%**)[361](index=361&type=chunk)[363](index=363&type=chunk)[365](index=365&type=chunk)[366](index=366&type=chunk) - The company entered into a five-year exclusive licensing agreement with VetStem, Inc. in February 2025 for a total fee of **$2 million**, paid with cash, stock, and future payments[385](index=385&type=chunk) - As of March 31, 2025, the company had total convertible notes payable of **$1.77 million**. Certain notes contained embedded conversion features that were bifurcated and accounted for as derivative liabilities with a fair value of **$448,089**[397](index=397&type=chunk)[399](index=399&type=chunk) - The company has a net operating loss carryforward of approximately **$44.3 million** as of March 31, 2025, but a full valuation allowance has been recorded against the resulting deferred tax asset[454](index=454&type=chunk) - Subsequent to year-end, in May and June 2025, the company received the remaining **$4.4 million** from its Series B Preferred Stock financing[464](index=464&type=chunk)

PART I [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company reported a narrowed net loss for the nine months ended March 31, 2025, driven by reduced expenses, with **$162.9 million** in assets and **$70.9 million** in liabilities, while facing going concern doubts [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (as of March 31, 2025 vs. June 30, 2024) | Account | March 31, 2025 ($) | June 30, 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | 48,792,729 | 58,772,587 | -17.0% | | Accounts receivable, net | 22,429,490 | 16,493,068 | +36.0% | | Inventories, net | 32,800,755 | 37,826,456 | -13.3% | | Total current assets | 124,770,422 | 127,685,890 | -2.3% | | Total assets | 162,867,992 | 163,246,683 | -0.2% | | **Liabilities & Equity** | | | | | Total current liabilities | 63,963,646 | 61,291,253 | +4.4% | | Long-term loans | 6,957,290 | 1,856,250 | +274.8% | | Total liabilities | 70,920,936 | 63,147,503 | +12.3% | | Total stockholders' equity | 91,947,056 | 100,099,180 | -8.1% | - As of March 31, 2025, the company held **no digital assets (Bitcoin)**, compared to **$53,693** as of June 30, 2024[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statement of Operations Highlights (Nine Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | 56,498,794 | 73,136,293 | -22.7% | | Gross profit | 12,412,652 | 14,319,251 | -13.3% | | General and administrative expenses | 14,111,497 | 26,961,424 | -47.7% | | Loss from operations | (7,156,853) | (18,147,376) | +60.6% | | Net loss | (7,850,097) | (18,055,480) | +56.5% | | Basic net loss per share | (0.53) | (1.32) | +59.8% | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Nine Months Ended March 31) | Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (7,339,968) | (7,316,276) | | Net cash used in investing activities | (5,743,345) | (4,101,010) | | Net cash provided by financing activities | 3,242,621 | 1,330,251 | | **Net decrease in cash and cash equivalents** | **(9,979,858)** | **(9,546,431)** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures detail the company's PRC VIE structure, going concern doubts, Bitcoin mining venture, share repurchases, related party loans, cryptocurrency litigation, and subsequent leadership changes for blockchain expansion - The company's business primarily involves fertilizer and agricultural products in the PRC, with recent expansion into **Bitcoin mining** in the U.S. via its Antaeus subsidiary[24](index=24&type=chunk)[29](index=29&type=chunk) - Recurring operating losses and negative cash flows raise **substantial doubt** about the company's ability to continue as a going concern[51](index=51&type=chunk) - As of March 31, 2025, the company held **no digital assets**, having mined **$181,377** and disposed of **$245,607** during the period, realizing a **$10,536** gain[63](index=63&type=chunk)[64](index=64&type=chunk) - A share repurchase program authorized in January 2025 allows for up to **2 million shares**, with **345,980 shares** repurchased for **$398,526** during the nine-month period[90](index=90&type=chunk)[91](index=91&type=chunk) - A lawsuit filed in May 2024 against the company and its former co-CEO alleges misuse of funds for cryptocurrency mining site purchases[97](index=97&type=chunk) - Subsequent to the period, Jian Huang was appointed Co-CEO in June 2025 to lead the company's expansion into the **blockchain and cryptocurrency sectors**[119](index=119&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **22.7%** revenue decrease to lower fertilizer sales, with a narrowed net loss driven by reduced G&A expenses, while liquidity tightened and strategic expansion into Bitcoin mining continues amid PRC operational risks [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Net sales for the nine months ended March 31, 2025, decreased **22.7%** to **$56.5 million** due to lower fertilizer sales, while the net loss narrowed **56.5%** to **$7.9 million**, primarily from a **47.7%** reduction in G&A expenses Results of Operations Comparison (Nine Months Ended March 31, 2025 vs 2024) | Metric | 2025 ($) | 2024 ($) | Change (%) | Commentary | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 56,498,794 | 73,136,293 | -22.7% | Decrease driven by lower sales in Jinong and Gufeng fertilizer segments | | Gross Profit | 12,412,652 | 14,319,251 | -13.3% | Gross margin improved to 22.0% from 19.6% | | G&A Expenses | 14,111,497 | 26,961,424 | -47.7% | Main driver of improved bottom line | | Net Loss | (7,850,097) | (18,055,480) | +56.5% | Significantly narrowed loss due to lower operating expenses | Fertilizer Sales Volume (Nine Months Ended March 31) | Segment | 2025 (metric tons) | 2024 (metric tons) | Change (%) | | :--- | :--- | :--- | :--- | | Jinong | 28,271 | 21,087 | +34.1% | | Gufeng | 58,581 | 83,184 | -29.6% | | **Total** | **86,852** | **104,271** | **-16.7%** | - The Antaeus (Bitcoin) segment's net sales decreased by **82.9%** to **$181,746** for the nine-month period, attributed to a strategic adjustment[187](index=187&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, cash and cash equivalents decreased **17.0%** to **$48.8 million**, driven by cash used in operating and investing activities, partially offset by financing, with total loans payable increasing to **$12.6 million** - Cash and cash equivalents decreased by **$9,979,858**, or **17.0%**, to **$48,792,729** as of March 31, 2025[216](index=216&type=chunk) - Net cash used in operating activities totaled **$7.3 million**, primarily due to net loss, partially offset by non-cash charges including **$7.1 million** for accounts receivable losses and **$2.2 million** for inventory impairment[23](index=23&type=chunk)[219](index=219&type=chunk) - Net cash provided by financing activities increased to **$3.2 million**, primarily from **$7.1 million** in new loans, offset by **$3.8 million** in loan repayments and **$0.4 million** in share repurchases[23](index=23&type=chunk)[221](index=221&type=chunk) [Risks Related to Doing Business in the PRC](index=37&type=section&id=Risks%20Related%20to%20Doing%20Business%20in%20the%20PRC) The company faces significant risks in its PRC operations, including legal system uncertainties, potential government intervention, and the untested nature of its VIE structure, alongside recent regulatory actions impacting businesses in China - Operating through a VIE structure in China poses unique risks, as Chinese regulatory authorities could disallow it, potentially causing a **material adverse change** in operations and stock value[145](index=145&type=chunk) - The PRC government maintains significant oversight and intervention power, with recent regulatory actions creating uncertainty for all businesses operating in China[148](index=148&type=chunk)[149](index=149&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks including foreign currency fluctuations (RMB to USD), interest rate changes on short-term loans, heightened credit risk due to COVID-19 impacts, and general inflation affecting operating costs - Substantially all revenues and expenses are in RMB, creating foreign currency risk, with an accumulated other comprehensive loss from currency translation of **$26 million** as of March 31, 2025[239](index=239&type=chunk)[240](index=240&type=chunk) - Heightened credit risk stems from increased overdue accounts receivable due to the **COVID-19 pandemic's impact** on PRC customers[243](index=243&type=chunk) - Interest rate risk primarily relates to **$5.6 million** in short-term bank loans, with fixed rates subject to change upon renewal[241](index=241&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[249](index=249&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2025[250](index=250&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a pending lawsuit filed in May 2024 in Texas state court, alleging misuse of funds for cryptocurrency mining site purchases, with a motion to dismiss currently pending - A lawsuit filed in Texas state court on May 28, 2024, against the Company and its former co-CEO alleges misuse of funds for cryptocurrency mining site purchases, with a motion to dismiss pending[252](index=252&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section incorporates by reference two June 2025 Form 8-K filings detailing the termination of the Lonestar acquisition and the appointment of a new Co-Chief Executive Officer - The company incorporates by reference its Form 8-K filings from June 13, 2025, regarding the **Lonestar acquisition termination**, and June 23, 2025, regarding the **Co-CEO appointment**[257](index=257&type=chunk)

Part I [Business Overview](index=3&type=section&id=Item%201.%20Business) Conagra Brands is a leading North American branded food company operating across four segments, focusing on innovation and managing risks, with a significant portion of sales concentrated with Walmart [Reporting Segments](index=3&type=section&id=Reporting%20Segments) Conagra's operations are structured into four distinct reporting segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice - The company's four reporting segments are Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) [Business Operations and Environment](index=5&type=section&id=Business%20Operations%20and%20Environment) Conagra navigates a competitive food industry, managing fluctuating raw material costs, seasonal demand, intellectual property, and extensive government regulation - The company experiences intense competition from both branded and private label food items, competing on quality, innovation, value, and brand loyalty[21](index=21&type=chunk) - The company's largest customer, Walmart, Inc. and its affiliates, accounted for approximately **29% of consolidated net sales for fiscal 2025**, up from **28% in fiscal 2024 and 2023**[26](index=26&type=chunk) - The company's intellectual property, including owned trademarks (e.g., Healthy Choice®, Slim Jim®) and licensed trademarks (e.g., P.F. Chang's®, Wendy's®), is of material importance[23](index=23&type=chunk) [Human Capital Resources](index=7&type=section&id=Human%20Capital%20Resources) Conagra manages approximately 18,300 employees, with a focus on health, safety, and human capital development, including collective bargaining agreements and ERGs - As of May 25, 2025, the company had approximately **18,300 employees**, with about **44%** being parties to collective bargaining agreements[28](index=28&type=chunk) - The OSHA Incident Rate has shown consistent improvement, decreasing from **1.58 in FY2023 to 1.40 in FY2024**, and further to **1.32 in FY2025**, with no employee fatalities in the last three fiscal years[30](index=30&type=chunk)[31](index=31&type=chunk) [Executive Officers](index=12&type=section&id=Information%20About%20Our%20Executive%20Officers) The executive leadership team, led by Sean M. Connolly, comprises experienced professionals overseeing key functions including finance and operations - Sean M. Connolly has served as President and CEO since April 2015[45](index=45&type=chunk) - David S. Marberger has served as Executive Vice President and Chief Financial Officer since August 2016[46](index=46&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) Conagra faces diverse risks including economic downturns, commodity price volatility, supply chain disruptions, high debt levels, intense competition, evolving consumer preferences, and cybersecurity threats - Deterioration of general economic conditions, inflation, and rising interest rates could reduce consumer spending and harm business operations[59](index=59&type=chunk)[61](index=61&type=chunk) - The company is subject to price increases in raw materials and other inputs; it may not be able to fully offset this inflation in a timely manner[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - Supply chain disruptions, such as those experienced in recent years due to transportation issues and labor challenges, could continue to negatively impact profitability[71](index=71&type=chunk) - The company's debt of approximately **$8.07 billion** as of May 25, 2025, could limit cash flow for business needs and restrict its ability to return cash to stockholders[83](index=83&type=chunk) - Failure to identify and adapt to changing consumer preferences, including health and wellness trends and the growing use of weight loss medication, could negatively impact sales[96](index=96&type=chunk) - Impairment of the **$10.50 billion** in goodwill or **$2.42 billion** in other intangibles could result in significant charges and negatively impact net worth[136](index=136&type=chunk) [Cybersecurity](index=39&type=section&id=Item%201C.%20Cybersecurity) Conagra maintains a comprehensive cybersecurity program, integrated with ERM and overseen by the Board, focusing on risk management, monitoring, and training to mitigate threats - The cybersecurity program is integrated with the company's Enterprise Risk Management (ERM) and is overseen by the Board of Directors and its Audit/Finance Committee[150](index=150&type=chunk)[158](index=158&type=chunk)[164](index=164&type=chunk) - The program includes ongoing monitoring, annual employee training, vulnerability assessments like penetration testing, and engagement with law enforcement and intelligence-sharing organizations[149](index=149&type=chunk)[153](index=153&type=chunk) - The cybersecurity team is led by a Chief Information Security Officer (CISO) with over **25 years of experience**, who reports to the Chief Information Officer (CIO)[160](index=160&type=chunk) - While threats have been experienced, the company is not aware of any cybersecurity breach to date that has had a material impact on its operations or business[154](index=154&type=chunk) [Properties](index=43&type=section&id=Item%202.%20Properties) Conagra operates 38 domestic and international manufacturing facilities, primarily owned, with headquarters in Chicago, Illinois - As of July 10, 2025, Conagra operated **38 domestic manufacturing facilities** and also has international facilities in Canada and Mexico[168](index=168&type=chunk) - The company owns most of its manufacturing facilities but leases a limited number of plants, transportation equipment, and distribution centers[169](index=169&type=chunk) [Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings) Conagra is involved in product liability and legacy litigation, with an accrual of $204.5 million for all matters as of May 25, 2025 - The company is party to product liability claims regarding cooking spray products and has settled most matters, paying **$25 million in fiscal 2025** with an additional **$185 million** to be paid in fiscal 2026 and 2027[422](index=422&type=chunk) - The total accrual for all litigation matters was **$204.5 million** as of May 25, 2025[425](index=425&type=chunk) Part II [Market for Common Equity and Shareholder Matters](index=46&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Conagra's common stock trades on the NYSE under CAG, with no share repurchases in the fourth quarter of fiscal 2025 - The company's common stock is listed on the NYSE under the ticker symbol CAG[174](index=174&type=chunk) - No shares of common stock were repurchased during the fourth quarter of fiscal 2025[175](index=175&type=chunk) [Management's Discussion and Analysis (MD&A)](index=46&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 saw a 3.6% net sales decrease and significant diluted EPS growth driven by a tax benefit, as Conagra navigates inflation, supply chain pressures, and manages its $8.07 billion debt Fiscal 2025 vs. 2024 Key Financial Results | Metric | Fiscal 2025 | Fiscal 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $11,612.8 M | $12,050.9 M | (3.6)% | | Gross Profit | $3,003.5 M | $3,333.4 M | (9.9)% | | Operating Profit | $1,364.6 M | $852.8 M | 60.0% | | Net Income | $1,152.5 M | $347.7 M | 231.5% | | Diluted EPS | $2.40 | $0.72 | 233.3% | - The company anticipates continued challenges in fiscal 2026 from supply chain issues, commodity cost volatility, and economic pressures on consumers, which are expected to negatively impact volumes[186](index=186&type=chunk) [Segment Performance Review](index=49&type=section&id=Segment%20Review) In fiscal 2025, most segments experienced net sales and operating profit declines, with Refrigerated & Frozen particularly impacted by manufacturing challenges and inflation Net Sales by Segment (Fiscal 2025 vs. 2024) | Reporting Segment | FY2025 Net Sales ($M) | FY2024 Net Sales ($M) | % Change | | :--- | :--- | :--- | :--- | | Grocery & Snacks | $4,899.3 | $4,958.7 | (1.2)% | | Refrigerated & Frozen | $4,662.3 | $4,865.5 | (4.2)% | | International | $956.5 | $1,078.3 | (11.3)% | | Foodservice | $1,094.7 | $1,148.4 | (4.7)% | | **Total** | **$11,612.8** | **$12,050.9** | **(3.6)%** | Operating Profit by Segment (Fiscal 2025 vs. 2024) | Reporting Segment | FY2025 Operating Profit ($M) | FY2024 Operating Profit ($M) | % Change | | :--- | :--- | :--- | :--- | | Grocery & Snacks | $1,017.0 | $1,100.3 | (7.6)% | | Refrigerated & Frozen | $651.7 | $815.9 | (20.1)% | | International | $143.9 | $155.1 | (7.1)% | | Foodservice | $131.0 | $151.3 | (13.4)% | - The Refrigerated & Frozen segment's operating profit was significantly impacted by manufacturing challenges at a primary facility for chicken, leading to increased costs from using third-party manufacturers and temporary production stoppages[205](index=205&type=chunk) [Consolidated Results of Operations](index=53&type=section&id=Consolidated%20Results%20of%20Operations) Fiscal 2025 saw increased SG&A, decreased net interest expense, and a significant income tax benefit of $225.8 million, which substantially boosted diluted EPS - Income tax expense for fiscal 2025 was **$3.7 million**, a steep decline from **$262.5 million in fiscal 2024**, principally due to a **$225.8 million tax benefit** from the release of a valuation allowance related to a federal audit settlement[211](index=211&type=chunk) - The effective tax rate was **0.3% in fiscal 2025**, compared to **43.0% in fiscal 2024**, with an expectation of approximately **23% for fiscal 2026**[211](index=211&type=chunk)[212](index=212&type=chunk) - Net interest expense decreased by **3.2% to $416.7 million** in fiscal 2025, driven by an overall reduction in debt balances[209](index=209&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) Conagra manages liquidity through operations, a $2.0 billion credit facility, and commercial paper, with total debt at $8.07 billion and decreased operating cash flow in fiscal 2025 - As of May 25, 2025, the company had total debt of approximately **$8.07 billion**[83](index=83&type=chunk) - The company has a **$2.0 billion revolving credit facility**, which was extended to June 27, 2030, subsequent to the fiscal year-end, with no borrowings outstanding as of May 25, 2025[217](index=217&type=chunk)[350](index=350&type=chunk) - Cash generated from operating activities decreased to **$1.69 billion in fiscal 2025** from **$2.02 billion in fiscal 2024**, primarily due to lower operating profits and higher inventory balances[238](index=238&type=chunk) - During fiscal 2025, the company repurchased **2.1 million shares for $64.0 million**, with **$852.6 million** remaining under the share repurchase authorization[228](index=228&type=chunk) [Critical Accounting Estimates](index=61&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates involve significant judgment, particularly for marketing costs, income taxes, employee benefits, and the annual impairment testing of goodwill and intangible assets - Goodwill and other intangible assets, valued at **$10.50 billion and $2.42 billion** respectively, are tested annually for impairment using methods that require significant management judgment on future cash flows, growth rates, and discount rates[136](index=136&type=chunk)[263](index=263&type=chunk) - For brands with less than **10% excess fair value** over carrying amount, a **50-basis-point increase** in the discount rate would decrease their aggregate fair value by **$70.9 million**, while a **100-basis-point decrease** in the royalty rate would decrease it by **$247.9 million**, indicating sensitivity to these assumptions[264](index=264&type=chunk)[265](index=265&type=chunk) - Pension benefit accounting requires significant estimates, including a weighted-average discount rate of **6.17%** for service and interest expense for fiscal 2026 and an expected long-term rate of return on plan assets of **5.89%**[255](index=255&type=chunk)[256](index=256&type=chunk) [Market Risk Disclosures](index=67&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Conagra manages market risks from commodity prices, interest rates, and foreign currency using derivatives, with a 1% interest rate increase impacting fixed-rate debt by $302.8 million - A **1% increase in interest rates** would decrease the fair value of the company's fixed-rate debt by approximately **$302.8 million** as of May 25, 2025[272](index=272&type=chunk) Fair Value Impact of a Hypothetical 10% Fluctuation | In Millions | Average During FY Ended May 25, 2025 | Average During FY Ended May 26, 2024 | | :--- | :--- | :--- | | Energy commodities | $5.7 | $4.4 | | Agriculture commodities | $8.4 | $4.5 | | Foreign exchange | $9.6 | $10.0 | [Financial Statements and Supplementary Data](index=70&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents consolidated financial statements and notes for fiscal years 2023-2025, audited by KPMG LLP, with the Birds Eye intangible asset valuation noted as a critical audit matter [Consolidated Financial Statements](index=70&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show fiscal 2025 net sales of $11.61 billion, a significant increase in net income to $1.15 billion, and total assets of $20.93 billion Consolidated Statement of Earnings Highlights (FY2025) | Metric (in millions) | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Net sales | $11,612.8 | $12,050.9 | $12,277.0 | | Gross profit | $3,003.5 | $3,333.4 | $3,264.8 | | Operating profit | $1,364.6 | $852.8 | $1,075.3 | | Net income attributable to Conagra | $1,152.4 | $347.2 | $683.6 | Consolidated Balance Sheet Highlights (at year-end) | Metric (in millions) | May 25, 2025 | May 26, 2024 | | :--- | :--- | :--- | | Total Current Assets | $3,071.0 | $3,149.5 | | Total Assets | $20,933.9 | $20,862.3 | | Senior Long-Term Debt | $6,234.1 | $7,492.6 | | Total Liabilities | $12,001.2 | $12,351.0 | | Total Stockholders' Equity | $8,932.7 | $8,511.3 | [Selected Notes to Consolidated Financial Statements](index=77&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes to financial statements detail fiscal 2025 acquisitions, significant divestitures, intangible asset impairments, a $225.8 million tax benefit, litigation accruals, and a major pension de-risking action - In fiscal 2025, the company acquired Sweetwood Smoke & Co. for **$179.4 million** and a contract manufacturer for **$51.2 million**, adding **$176.3 million** to goodwill[327](index=327&type=chunk)[328](index=328&type=chunk)[369](index=369&type=chunk) - Subsequent to fiscal year-end, the company completed the sale of its Chef Boyardee® business for **$601.2 million** and its frozen fish business (Van De Kamp's®, Mrs. Paul's®) for **$42.4 million**[356](index=356&type=chunk)[359](index=359&type=chunk) - In fiscal 2025, the company recorded **$72.1 million** in brand intangible impairment charges, primarily related to its spreads businesses (Earth Balance®, Smart Balance®), following significant impairments of **$430.2 million in FY2024** and **$589.2 million in FY2023**[374](index=374&type=chunk)[377](index=377&type=chunk)[379](index=379&type=chunk) - During fiscal 2025, the company transferred **$760.6 million** of its U.S. defined benefit pension plan obligations to an insurance company via an annuity contract, resulting in a noncash pre-tax settlement gain of **$13.0 million**[447](index=447&type=chunk) [Report of Independent Registered Public Accounting Firm](index=141&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued an unqualified opinion on financial statements and internal controls, identifying the Birds Eye intangible asset valuation as a critical audit matter - The auditor, KPMG LLP, issued an unqualified opinion on the financial statements and internal controls[507](index=507&type=chunk) - A critical audit matter was identified concerning the evaluation of the recoverability of the Birds Eye indefinite-lived intangible asset, highlighting the subjective and challenging nature of the assumptions used in its valuation[516](index=516&type=chunk)[517](index=517&type=chunk) [Controls and Procedures](index=146&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of May 25, 2025, management concluded that disclosure controls and internal control over financial reporting were effective, with no material changes in the fourth quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures and its internal control over financial reporting were effective as of May 25, 2025[521](index=521&type=chunk)[524](index=524&type=chunk) Part III [Directors, Executive Compensation, and Corporate Governance](index=149&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) This section incorporates information on directors, executive compensation, and security ownership by reference from the forthcoming 2025 Proxy Statement - Information regarding directors, executive compensation, security ownership, and related transactions is incorporated by reference from the forthcoming 2025 Proxy Statement[531](index=531&type=chunk)[537](index=537&type=chunk)[538](index=538&type=chunk) Equity Compensation Plan Information (as of May 25, 2025) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining Available for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 7,876,676 | $33.76 | 13,798,410 | | Equity compensation plans not approved by security holders | — | — | — | | **Total** | **7,876,676** | **$33.76** | **13,798,410** | Part IV [Exhibits and Financial Statement Schedules](index=151&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides a comprehensive list of all exhibits filed with the Form 10-K, including governance documents, debt agreements, and compensation plans - This section provides a comprehensive list of all exhibits filed with the annual report, including the Restated Certificate of Incorporation, debt indentures, credit agreements, and various management and compensation plans[547](index=547&type=chunk)[550](index=550&type=chunk)[552](index=552&type=chunk)

[PART I. Financial Information](index=6&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarter ended May 31, 2025, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes, showing a net loss of **$15.5 million** and total assets of **$2.38 billion** Condensed Consolidated Balance Sheet Highlights (as of May 31, 2025) | Metric | May 31, 2025 ($ in thousands) | February 28, 2025 ($ in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | 230,197 | 197,350 | | Total current assets | 383,928 | 379,596 | | Goodwill | 1,243,848 | 1,213,794 | | Total assets | 2,377,809 | 2,371,035 | | Total liabilities | 1,476,985 | 1,493,865 | | Total stockholders' equity | 900,657 | 876,979 | Condensed Consolidated Statement of Operations Highlights (Three Months Ended May 31) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | | :--- | :--- | :--- | | Total revenue | 152,610 | 151,163 | | Gross Profit | 73,591 | 72,660 | | Loss from operations | (2,447) | (16,845) | | Net loss | (15,523) | (42,788) | | Net loss per share (Diluted) | (0.05) | (0.13) | Condensed Consolidated Statement of Cash Flows Highlights (Three Months Ended May 31) | Metric | 2025 ($ in thousands) | 2024 ($ in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 41,795 | 35,916 | | Net cash used in investing activities | (7,326) | (6,084) | | Net cash used in financing activities | (3,896) | (3,006) | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations for the financial statements, including the pending acquisition by WiseTech Global Limited for **$3.30 per share**, an amendment to the Tax Receivable Agreement for a **$52.5 million** settlement resulting in a **$20.7 million** gain, and remaining performance obligations of **$916.2 million** - On May 25, 2025, the company entered into an agreement to be acquired by WiseTech Global Limited for **$3.30 per share** in cash[41](index=41&type=chunk) - In connection with the WiseTech merger, the Tax Receivable Agreement (TRA) was amended to be settled for a fixed sum of **$52.5 million**, resulting in a recorded gain of **$20.7 million** for the quarter[50](index=50&type=chunk)[77](index=77&type=chunk)[81](index=81&type=chunk) - No impairment charge was taken for goodwill or intangible assets during the three months ended May 31, 2025, following a significant impairment of **$614.1 million** for goodwill and **$18.5 million** for intangibles in the prior fiscal year[64](index=64&type=chunk)[69](index=69&type=chunk) - As of May 31, 2025, the company had **$1.05 billion** in outstanding term loans, and its revolving credit facility was amended, extending maturity to February 2028 and reducing availability to **$123.8 million**[85](index=85&type=chunk)[87](index=87&type=chunk)[91](index=91&type=chunk) - Total remaining performance obligations, representing future revenue from existing contracts, were approximately **$916.2 million** as of May 31, 2025[114](index=114&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting a **1% YoY** revenue increase to **$152.6 million**, a narrowed net loss due to a **$20.7 million** gain from the Tax Receivable Agreement liability revaluation, and a **3%** increase in Adjusted EBITDA to **$52.2 million**, with sufficient liquidity of **$230.2 million** in cash [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Total revenue for Q1 FY2026 increased by **1% YoY** to **$152.6 million**, with gross profit slightly increasing to **$73.6 million**, while operating expenses decreased significantly due to a **$14.5 million** reduction in amortization of acquired intangibles, contributing to a reduced net loss of **$15.5 million** Revenue Breakdown (Three Months Ended May 31) | Revenue Type | 2025 ($ in thousands) | 2024 ($ in thousands) | % Change | | :--- | :--- | :--- | :--- | | Subscriptions | 132,870 | 131,404 | 1% | | Professional services and other | 19,740 | 19,759 | 0% | | **Total revenue** | **152,610** | **151,163** | **1%** | - Operating expenses decreased, driven by a **72% reduction** in amortization of acquired intangible assets within operating expenses (from **$20.1 million** to **$5.6 million** YoY)[188](index=188&type=chunk)[189](index=189&type=chunk) - Acquisition-related expenses increased to **$5.5 million** from **$0.3 million** YoY, primarily due to costs associated with the strategic review and the announced merger with WiseTech[188](index=188&type=chunk) - A gain of **$20.7 million** was recorded from the change in the Tax Receivable Agreement liability, driven by the TRA Amendment related to the WiseTech merger, contrasting with a loss of **$4.0 million** in the prior-year period[191](index=191&type=chunk) - A loss of **$12.1 million** was recorded from the change in fair value of contingent consideration, an increase from a **$2.3 million** loss in the prior year[195](index=195&type=chunk) [Non-GAAP Financial Measures](index=46&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Non-GAAP measures like Adjusted EBITDA and Non-GAAP gross profit to evaluate core performance, with Adjusted EBITDA at **$52.2 million** (a **3%** increase YoY) and Non-GAAP gross profit at **$102.4 million** for Q1 FY2026 Adjusted EBITDA Reconciliation (Three Months Ended May 31) | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss | (15,523) | (42,788) | | EBITDA | 45,436 | 33,605 | | Adjustments | 6,796 | 17,120 | | **Adjusted EBITDA** | **52,232** | **50,725** | Non-GAAP Gross Profit Reconciliation (Three Months Ended May 31) | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Reported gross profit | 73,591 | 72,660 | | Adjustments | 28,797 | 29,893 | | **Non-GAAP gross profit** | **102,388** | **102,553** | - Adjusted EBITDA increased **3% YoY** to **$52.2 million**, with an Adjusted EBITDA margin of **34.2%** for Q1 FY2026, compared to **33.6%** in the prior year[205](index=205&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) As of May 31, 2025, the company had **$230.2 million** in cash and cash equivalents and **$123.8 million** available under its revolving credit facility, with net cash from operations increasing to **$41.8 million** and the **$1.05 billion** term loan and amended Tax Receivable Agreement (to be settled for **$52.5 million**) detailed - The company had **$230.2 million** in cash and cash equivalents and **$123.8 million** of unused borrowing capacity under its 2021 Revolving Credit Facility as of May 31, 2025[208](index=208&type=chunk) - Net cash provided by operating activities increased by **$5.9 million** to **$41.8 million** for the quarter, primarily driven by an increase in subscriptions revenue and changes in working capital[217](index=217&type=chunk) - The Tax Receivable Agreement liability is expected to be settled for **$52.5 million** in cash upon the closing of the WiseTech merger, with the full amount now classified as a current liability[222](index=222&type=chunk)[223](index=223&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes in its market risks from those disclosed in its Annual Report on Form 10-K for the fiscal year ended February 28, 2025 - There have been no material changes in market risks since the last Annual Report (Form 10-K for fiscal year ended February 28, 2025)[250](index=250&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of May 31, 2025, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[252](index=252&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the quarter ended May 31, 2025[253](index=253&type=chunk) [PART II. Other Information](index=59&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to contingencies that arise in the ordinary course of business but does not currently believe the resolution of any such matters will have a material adverse effect on its financial statements - The company states that it is not currently subject to any legal proceedings that are expected to have a material adverse effect on its financial condition or results of operations[255](index=255&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new risks specifically related to the proposed merger with WiseTech, including uncertainties affecting business operations, the potential failure to complete the merger (which could result in a **$37.5 million** termination fee), limitations on pursuing alternative transactions, restrictions on business conduct, and the possibility of merger-related lawsuits - Uncertainties related to the pending merger with WiseTech could disrupt business, vendor, customer, and employee relationships[258](index=258&type=chunk)[259](index=259&type=chunk) - Failure to complete the merger could cause the stock price to decline and may require the company to pay a termination fee of **$37.5 million** to WiseTech[260](index=260&type=chunk)[261](index=261&type=chunk) - The merger agreement restricts the company's ability to solicit alternative acquisition proposals and imposes limitations on its business operations until the merger is complete[263](index=263&type=chunk)[264](index=264&type=chunk) - The company may face lawsuits related to the merger, which could be costly and divert management's attention[265](index=265&type=chunk) [Other Information](index=61&type=section&id=Item%205.%20Other%20Information) The company reports that none of its directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended May 31, 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter[266](index=266&type=chunk) [Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the merger agreement with WiseTech, an amendment to the credit agreement, an amendment to the tax receivable agreement, and CEO/CFO certifications - Key exhibits filed include the Agreement and Plan of Merger with WiseTech, Amendment No 5 to the Credit Agreement, and Tax Receivable Agreement Amendment No 1[268](index=268&type=chunk)

Exhibit 99.1 www.e2open.com Press Release E2open Announces Fiscal 2026 First Quarter Financial Results Q1-FY26 GAAP subscription revenue of $132.9 million, above high end of Q1 guidance range Financial Outlook for Fiscal Year 2026 As of July 10, 2025, e2open is reiterating full year 2026 guidance previously provided on April 29, 2025, as follows: Continued strong cash generation in Q1-FY26 DALLAS – July 10, 2025 – E2open Parent Holdings, Inc. (NYSE: ETWO) ("e2open" or the "Company"), the connected supply ch ...