Financial Performance - Revenues for Q3 2025 were $15,606, a significant decrease from $426,423 in Q3 2024, while revenues for the nine months ended September 30, 2025, were $27,222 compared to $2.2 million in the same period of 2024[8]. - The net loss for Q3 2025 was $4.6 million, compared to a net loss of $3.9 million in Q3 2024, while the net loss for the nine months ended September 30, 2025, was $8.7 million compared to $26.7 million in the same period of 2024[12]. - Revenues for the three months ended September 30, 2024, were $426.4 million, a significant increase from $15.6 million in the same period of 2025[19]. - Net loss attributable to common stockholders for the three months ended September 30, 2024, was $3.9 million, compared to a loss of $4.6 million in the same period of 2025[19]. - Total operating expenses for the nine months ended September 30, 2024, were $27.19 million, compared to $8.71 million in the same period of 2025[19]. Research and Development - R&D expenses increased by 18% to $1.4 million in Q3 2025 from $1.2 million in Q3 2024, while R&D expenses for the nine months ended September 30, 2025, decreased by 23% to $4.1 million from $5.3 million in the same period of 2024[9]. - Research and development expenses for the nine months ended September 30, 2024, totaled $5.34 billion, up from $4.11 billion in the same period of 2025[19]. - The company plans to dose the first patient in a Phase 1 clinical study for HCW9302 in autoimmune disease patients in Q4 2025[3]. - HCW Biologics has opened two clinical sites for a Phase 1 trial evaluating HCW9302 in patients with alopecia areata, a condition affecting approximately 160 million people globally[7]. General and Administrative Expenses - G&A expenses rose by 15% to $1.9 million in Q3 2025 from $1.6 million in Q3 2024, with a 29% increase in the nine-month period to $6.2 million from $4.8 million[10]. Financial Position and Concerns - As of September 30, 2025, the company expressed substantial doubt about its ability to continue as a going concern without additional funding[13]. - Total current assets decreased to $5.70 million as of December 31, 2024, from $1.59 million as of September 30, 2025[21]. - Total liabilities increased to $37.01 million as of December 31, 2024, compared to $27.55 million as of September 30, 2025[21]. - Cash and cash equivalents were $4.67 million as of December 31, 2024, down from $1.10 million as of September 30, 2025[21]. - Accounts payable increased to $22.33 million as of December 31, 2024, from $18.97 million as of September 30, 2025[21]. - The accumulated deficit grew to $100.56 million as of December 31, 2024, compared to $109.24 million as of September 30, 2025[21]. Legal and Compliance - The company received a $2.0 million insurance reimbursement related to legal fees in January 2025, contributing to a net legal recovery of ($1.6) million for the nine months ended September 30, 2025[11]. - The Nasdaq Hearings Panel granted the company continued listing on the Exchange, contingent upon compliance with the Equity Rule by December 31, 2025[14]. Commercial Strategy - The company is seeking a commercial partner for its T-cell engager compounds to enhance cancer treatment efficacy[5].

Production and Operations - Record total production of 23,029 barrels of oil equivalent per day ("Boe/d"), an increase of approximately 10% quarter-over-quarter[7] - Current production rate as of today is approximately 27,000 net Boe/d, reflecting successful execution of the development program[7][9] - The company closed two bolt-on acquisitions, adding approximately 11 net drilling locations and 3,400 net acres[7] Financial Performance - Revenue of $77.7 million, with oil revenue contributing $64.9 million, and an average realized price of $58.70 per barrel for oil[8][15] - Adjusted EBITDA of $56.3 million, an increase of over 45% quarter-over-quarter[8] - Net loss attributable to common stockholders of $22.5 million, or $0.44 basic loss per share[8][14] - For the three months ended September 30, 2025, the net income from continuing operations was $1,287,000, compared to a loss of $11,424,000 for the same period in 2024[26] - Adjusted EBITDA for the three months ended September 30, 2025, was $56,315,000, a significant increase from an adjusted EBITDA of $(7,304,000) in the prior year[26] - For the nine months ended September 30, 2025, the net income from continuing operations was $34,353,000, compared to a loss of $28,975,000 for the same period in 2024[26] - The company expects full-year 2025 net income to be in the range of $192 million to $202 million, with adjusted EBITDA projected between $240 million and $260 million[28] Assets and Liabilities - Total current assets as of September 30, 2025, were $120,977,000, a substantial increase from $18,302,000 as of December 31, 2024[38] - Total assets increased to $939,788,000 as of September 30, 2025, compared to $156,554,000 as of December 31, 2024[38] - Current liabilities rose to $145,010,000 as of September 30, 2025, up from $63,009,000 as of December 31, 2024[38] - The company has a credit facility with long-term liabilities amounting to $417,000,000 as of September 30, 2025, compared to $28,000,000 as of December 31, 2024[38] - The total stockholders' equity increased to $101,837,000 as of September 30, 2025, from $52,768,000 as of December 31, 2024[40] Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2025, were $67.384 million, a significant increase from a cash outflow of $6.118 million in 2024[44] - The company incurred $608.536 million in net cash used in investing activities during the nine months ended September 30, 2025, primarily due to the Bayswater asset purchase[44] - Proceeds from the issuance of common stock amounted to $43.817 million during the nine months ended September 30, 2025[44] Stock Performance - The company reported a basic and diluted loss per share of $0.44 for the three months ended September 30, 2025, compared to a loss of $0.68 in the same period of 2024[42] - The company issued approximately 3.7 million shares of common stock to Bayswater as part of the Bayswater acquisition[46] Operating Expenses - The company reported a total operating expense of $110.901 million for the nine months ended September 30, 2025, which included $30.353 million in depreciation, depletion, and amortization[42] - The company reported a loss on adjustment to fair value of embedded derivatives, debt, and warrants amounting to $30.451 million for the nine months ended September 30, 2025[42] Guidance and Future Outlook - Full-year guidance for 2025 includes average daily production of 24,000 – 26,000 Boe/d and expected Adjusted EBITDA between $240.0 million and $260.0 million[22] - The company has secured favorable commodity pricing through an expanded hedging program, with prices of $60.45 per barrel through the rest of 2025[23]

Financial Performance - For the three months ended September 30, 2025, the Company reported a net income of $2,877, compared to $3,150 for the same period in 2024, while for the nine months ended September 30, 2025, net income was $10,375, up from $6,278 in 2024[70]. - Total revenue for the three months ended September 30, 2025, was $21,451, a decrease of $2,131 from $23,582 in the same period of 2024; however, revenue for the nine months increased to $70,335 from $59,977 in 2024, primarily due to special barrier project sales[70]. - Operating income for the three months ended September 30, 2025, was $3,854, slightly up from $3,848 in 2024; for the nine months, it increased to $13,759 from $8,031[72]. - Income tax expense for the three months ended September 30, 2025, was $994, with an effective tax rate of 26%, compared to $694 and 18% in 2024; for the nine months, the tax expense was $3,325 at a 24% rate, up from $1,683 at 21%[73]. - Operating income for the nine-month period ended September 30, 2025, was $13,759, compared to $8,031 for the same period in 2024[91]. - Net income for the nine months ended September 30, 2025, was $10,375, compared to $6,278 for the same period in 2024[94]. Sales and Revenue Breakdown - Soundwall sales increased significantly for the three and nine months ended September 30, 2025, with sales of $2,846 for the quarter and $11,832 for the nine months, compared to $1,873 and $7,043 in 2024, respectively[76]. - SlenderWall sales for the three and nine months ended September 30, 2025, were $1,146 and $2,634, respectively, as the Company focused on sales initiatives for this product[79]. - Easi-Set® and Easi-Span building sales increased for both the three and nine-month periods ended September 30, 2025, due to increased sales at all manufacturing plants[82]. - Utility sales decreased significantly for both the three and nine-month periods ended September 30, 2025, but are expected to trend higher for the remainder of 2025[83]. - Royalty income increased for both the three and nine-month periods ended September 30, 2025, driven by higher barrier production volumes from licensees[86]. - Miscellaneous wall sales decreased for the nine-month period ended September 30, 2025, due to lower production volumes compared to 2024[80]. - Barrier sales decreased slightly for the nine-month period ended September 30, 2025, as the company shifted marketing efforts to higher margin barrier rentals[81]. Costs and Expenses - Cost of sales as a percentage of revenue increased to 77% for the three months ended September 30, 2025, compared to 75% in 2024, while it decreased to 74% for the nine months from 77% in 2024[71]. - General and administrative expenses decreased to $1,100 for the three months ended September 30, 2025, from $1,720 in 2024, and to $4,198 for the nine months from $4,938[89]. Cash and Inventory - The company's cash position increased to $13,376 on September 30, 2025, from $7,548 on December 31, 2024[101]. - Inventory increased to $7,890 on September 30, 2025, from $6,677 on December 31, 2024, primarily due to increased finished goods inventory[106]. Sales Backlog - The Company's sales backlog as of November 1, 2025, was approximately $54.8 million, down from $62.8 million a year ago, with most projects expected to be produced within 12 months[74]. - The Company anticipates that the majority of projects in the sales backlog will be produced within 12 months, with some extending several years[110]. Operational Challenges - The Company experienced a ransomware incident in the first quarter of 2025, which is being addressed with network security changes, and no ransom payment was made[66]. - The Company may experience reduced revenues from December through February due to seasonal impacts on the construction industry, necessitating sufficient working capital to fund operations during winter months[108]. Internal Controls and Management - Management identified material weaknesses in internal control over financial reporting, which have not been remediated as of September 30, 2025[112]. - The Company did not maintain appropriately designed entity-level controls impacting the control environment, risk assessment, and monitoring activities[113]. - Management has committed to remediation efforts, including hiring a new Chief Financial Officer with relevant experience in financial reporting and internal controls[117]. - The Company’s consolidated financial statements are believed to present fairly its financial position and results of operations in accordance with U.S. GAAP, despite identified material weaknesses[115]. - There were no changes in the Company's internal control over financial reporting that materially affected its controls during the quarter ended September 30, 2025[117]. - Management did not design and maintain effective processes to ensure all journal entries are properly reviewed and approved prior to posting[116]. Raw Material Costs - Raw material costs used in production have slightly increased for the first nine months of 2025, with expectations of further slight increases for the remainder of 2025[109].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 001-41224 Abpro Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) (State or other jurisdiction ...

Financial Performance - Total revenue for the three months ended September 30, 2025, was $0, a decrease of $0.2 million or -100% compared to $183,000 in the same period of 2024[193]. - For the nine months ended September 30, 2025, total revenue was $0, a decrease of $0.2 million or -100% compared to $183,000 in the same period of 2024[200]. - Net loss for the three months ended September 30, 2025, was $1.657 million, a decrease of $436,000 or 21% compared to a net loss of $2.093 million in 2024[193]. - The net loss for the nine months ended September 30, 2025, was $8.528 million, an increase of $4.631 million or -119% compared to a net loss of $3.897 million in 2024[200]. Expenses - Research and development expenses for the three months ended September 30, 2025, decreased by $0.4 million or -62% to $243,000 from $642,000 in 2024[193][197]. - General and administrative expenses for the three months ended September 30, 2025, decreased by $0.4 million or -26% to $1.093 million from $1.472 million in 2024[193][198]. - Research and development expenses for the nine months ended September 30, 2025, decreased by $1.6 million or -64% to $881,000 from $2.469 million in 2024[200][202]. - General and administrative expenses for the nine months ended September 30, 2025, increased by $0.8 million or 17% to $5.674 million from $4.864 million in 2024[200][203]. Cash and Funding - As of September 30, 2025, the Company had cash of $328, which is insufficient to operate for at least 12 months, raising substantial doubt about its ability to continue as a going concern[212]. - The Company plans to seek additional funding through equity and debt financings, collaboration agreements, and research grants to finance its operations[212]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(5,386) thousand, a 3% increase compared to $(5,215) thousand for the same period in 2024[217]. - Net cash provided by financing activities decreased by $1.8 million for the nine months ended September 30, 2025, totaling $2,711 thousand compared to $4,495 thousand in 2024[218]. - The Company received net proceeds of $1,840 thousand from the Second Convertible Note and raised $688 thousand from the sale of 91,336 common stock shares in July and August 2025[211]. Compliance and Listing - The Company received a notice from Nasdaq on April 2, 2025, indicating non-compliance with the Minimum Bid Price Requirement, with a closing bid price below $1.00 per share for 30 consecutive business days[206]. - On April 10, 2025, the Company was notified of non-compliance with the MVPHS Requirement, having a Market Value of Publicly Held Shares below $15 million, and the MVLS Requirement, with a Market Value of Listed Securities below $50 million[207]. - The Panel granted the Company's request for continued listing on Nasdaq, with conditions to be met by March 30, 2026, to avoid delisting[210]. Future Plans - The company plans to initiate clinical trials for lead product candidate ABP-102 in the first half of 2026[189]. - The Company expects expenses to increase as it advances preclinical activities and clinical trials for product candidates, including planned Phase 1/2 trials for ABP-102 and Phase 1 trials for ABP-201[214]. - The Company may need to delay, reduce, or eliminate research and development programs if it fails to secure additional funding[213]. Accumulated Deficit - The company had an accumulated deficit of $124.6 million as of September 30, 2025[205].

Financial Performance - "The company reported a revenue increase of 15% year-over-year." [1] - "Net income for the quarter was $2 million, compared to a loss of $1 million in the same quarter last year." [2] - "Earnings per share (EPS) rose to $0.50, up from $0.30 a year ago." [3] Operational Highlights - "The company expanded its market presence in Asia, opening three new offices." [1] - "Production efficiency improved, leading to a 10% reduction in manufacturing costs." [2] - "Customer satisfaction ratings increased to 92%, up from 88% last quarter." [3] Future Outlook - "The management expects revenue growth to continue at a rate of 10-12% for the next fiscal year." [1] - "Plans to launch two new products in the upcoming quarter are underway." [2] - "The company is exploring potential acquisitions to enhance its market position." [3]

Financial Performance - For the three months ended September 30, 2025, the company reported no revenue, a decrease of $80,000 compared to $80,380 in the same period of 2024[90]. - Revenue for the nine months ended September 30, 2025, was $216,117, a decrease of $147,000 from $363,000 in 2024[101]. - The net loss for the three months ended September 30, 2025, was $1,254,000, compared to a net loss of $1,445,000 in the same period of 2024, an improvement of $191,000[90]. - Net loss for the nine months ended September 30, 2025, was $3,888,087, compared to a net loss of $3,574,592 for the same period in 2024[107]. Research and Development (R&D) Expenses - Research and Development (R&D) expenses for the three months ended September 30, 2025, were $721,000, down from $1,047,000 in 2024, reflecting a decrease of $326,000[90]. - R&D expenses for the nine months ended September 30, 2025, were $2,506,028, a decrease of approximately $45,000 from $2,550,852 in 2024[103]. - The company expects substantial increases in expenses related to ongoing R&D activities and anticipates continued operating losses for the foreseeable future[116]. - The increase in expenses was primarily due to ongoing research and development work and active clinical trials for LP-310[126]. Operating Expenses - Total operating expenses decreased to $1,274,000 in Q3 2025 from $1,540,000 in Q3 2024, a reduction of $266,000[90]. - Total operating expenses for the nine months ended September 30, 2025, were $4,175,000, an increase of $183,000 from $3,992,000 in 2024[101]. - General and administrative expenses increased by approximately $60,000 to $552,375 for the three months ended September 30, 2025, compared to $493,102 for the same period in 2024[99]. Cash Flow - Cash and cash equivalents totaled $1,855,771 as of September 30, 2025[106]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $3,785,321, compared to $2,960,334 for the same period in 2024[111]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $3,456,228, reflecting net proceeds from the issuance of preferred stock and warrants[114]. Product Development - The company is developing LP-10 and LP-310 for hemorrhagic cystitis and oral lichen planus, respectively, with LP-310 completing its Phase 2a clinical trial in Q3 2025[85]. - LP-410, an oral formulation for oral graft-versus-host disease, received "orphan drug" designation from the FDA on November 11, 2023[86]. - The company holds two issued patents in the U.S. for LP-10 and LP-310, which are valid until July 11, 2035[87]. - The company has not yet commercialized any products and does not expect to generate revenue from product sales for several years[91]. Staffing and Management Changes - The resignation of the Chief Medical Officer was announced, effective December 4, 2025[89]. Accounting and Reporting - The company has elected to take advantage of the extended transition period for adopting new accounting standards as an emerging growth company[141]. - The company may utilize reduced disclosure requirements, including those related to R&D progress and executive compensation, while maintaining its status as an emerging growth company[142][143]. - Recent accounting pronouncements reviewed by the company are not expected to have a material impact on its financial statements[145]. - As a smaller reporting company, the company is not required to provide certain market risk disclosures[146]. Stock-Based Compensation - Stock-based compensation expense is expected to increase in future periods due to unrecognized stock-based compensation and additional awards granted to attract and retain employees[133]. - The company granted stock options for 55,000 shares at an exercise price of $6.16, with an estimated fair value of $4.40 per share on the grant date[140].

Revenue Performance - For the three months ended September 30, 2025, total revenues decreased by 28% to $1,549,706 from $2,144,804 in the same period in 2024[110]. - For the nine months ended September 30, 2025, total revenues decreased by 11% to $4,853,772 from $5,467,293 in 2024[120]. - License revenue decreased by 36% to $917,951 from $1,441,011, attributed to the expansion of long-term customer license deployments in the previous year[112]. - License revenue decreased by 32% to $2,822,796, primarily due to the ramp-up of BIO-key EMEA selling only BIO-key products[122]. - Service revenues increased by 13% to $862,707, driven by a $117,000 or 17% increase in recurring maintenance and support revenue[121]. - Hardware sales decreased by 17% to $363,642 from $436,422, influenced by new customer deployments and inventory reservations[113]. - Hardware sales surged by 117% to $1,168,269, attributed to new customer purchases and sales of previously reserved inventory[123]. Expenses and Costs - Selling, general and administrative expenses decreased by 13% to $1,400,288 from $1,607,925, reflecting reductions in administration and professional services fees[115]. - Selling, general and administrative expenses decreased by 16% to $4,453,362, reflecting reductions in various administrative costs[125]. - Research, development, and engineering costs increased by 5% to $683,620 compared to $652,174 in the prior year, primarily due to professional services and personnel costs[116]. - Research, development, and engineering costs increased by 3% to $1,915,422, mainly due to higher professional services and personnel costs[126]. - Total cost of goods sold increased by 7% to $1,101,666, with hardware costs rising significantly due to increased sales[120][124]. Cash Flow and Financial Position - Net cash used in operations was $2,838,088, while net cash provided by financing activities was $4,456,013, including $3,813,057 from warrant exercises[129]. - As of September 30, 2025, total cash and cash equivalents were $2,039,853, a significant increase from $437,604 at December 31, 2024[139]. - The company requires approximately $830,000 per month to conduct operations and may need additional financing if revenue generation does not improve[140]. - The company is classified as a smaller reporting company and is not required to provide detailed market risk disclosures[142]. Strategic Initiatives - The company plans to expand its role in the IAM market and enhance its suite of authentication options to meet customer needs[100]. - The company aims to grow within government services and highly-regulated industries, anticipating increased demand for security solutions[101]. - The channel alliance program has grown to over 85 participants, contributing to incremental revenues[102]. - The company is actively pursuing strategic acquisitions in the IAM space to enhance its market presence and operational synergies[103]. Profitability - Gross profit margin slightly decreased to 77% from 78% year-over-year[109].

Financial Transaction Details - The Company issued a promissory note with an aggregate principal amount of $143,750, convertible into common stock[4] - The Buyer agreed to pay a purchase price of $125,000 for the Note, with $3,500 withheld for legal fees[6] - The transaction is executed under the exemption from securities registration as per Section 4(a)(2) of the Securities Act of 1933[4] - The Closing Date will occur upon payment of the Purchase Price by the Buyer[7] - The Company acknowledges the potentially dilutive effect of the Conversion Shares upon the conversion of the Note to Common Stock[22] - The Company is responsible for the fees of its transfer agent and all DTC fees associated with the issuance of the Securities[15] - The Securities are not registered under the 1933 Act and may not be transferred without meeting specific conditions[14] Company Status and Compliance - The Company and its Subsidiaries are duly organized and in good standing, with no material adverse effect on their business[17] - The execution and delivery of the Transaction Documents have been duly authorized by the Company's Board of Directors[18] - The Buyer is classified as an "accredited investor" under Rule 501(a) of Regulation D[10] - The Company has filed all required reports with the SEC, and the financial statements comply with applicable accounting requirements[24] - Since June 30, 2025, there has been no material adverse change in the Company's financial condition or operations[25] - The Company has made or filed all required tax returns and has paid all material taxes due[29] - The Company is not in violation of any laws or regulations that could have a Material Adverse Effect[23] - The Company has not been involved in any litigation that could have a Material Adverse Effect[26] - The Company has complied with all applicable laws and has not made illegal payments or contributions[53] - The Company has not received any notifications regarding conflicts or violations of applicable laws that would have a Material Adverse Effect[36] Intellectual Property and Assets - The Company and its Subsidiaries own or possess the necessary licenses for all Intellectual Property required to conduct their business[27] - The Company has taken reasonable measures to protect the confidentiality and value of its Intellectual Property[27] - The Company maintains good and marketable title to all real and personal property essential to its business, free of liens and encumbrances that would have a Material Adverse Effect[42] - The Company and its Subsidiaries are insured against losses and risks in amounts deemed prudent by management, with no anticipated issues in renewing coverage[43] Financial Health and Internal Controls - The Company is solvent, with assets exceeding liabilities, and has prepared financial statements assuming it will continue as a going concern[46][47] - The Company has a system of internal accounting controls that provides reasonable assurance regarding transaction execution and financial statement preparation[44] - There are no outstanding options or agreements that would require the Company to issue additional shares of capital stock[19] - There are no off-balance sheet arrangements that require disclosure and could reasonably be expected to have a Material Adverse Effect[49] - The Company has not engaged in any actions to manipulate the price of its securities[51] Legal and Arbitration Provisions - The Company agrees to indemnify and hold harmless the Buyer and its affiliates from any losses or damages arising from breaches of representations or warranties[94] - The Company acknowledges that a breach of its obligations will cause irreparable harm to the Buyer, allowing for injunctive relief without the necessity of showing economic loss[95] - The Company and Buyer agree to submit all claims arising under this Agreement to binding arbitration as per the Arbitration Provisions outlined in Exhibit B[82] - The exclusive venue for arbitration of any claims shall be in the Commonwealth of Massachusetts[82] - The Company waives any right to a jury trial for the adjudication of any disputes arising from this Agreement[82] - The arbitration process must be initiated by written notice, and the arbitration award is final and binding upon the parties[106] - The arbitrator has the authority to award relief deemed proper, excluding exemplary or punitive damages[116] - The losing party in arbitration is responsible for all unpaid costs and fees, including reasonable attorneys' fees incurred by the prevailing party[117] - An appeal of the arbitration award can be initiated within thirty calendar days, with the losing party responsible for costs associated with the appeal[119] - The arbitration provisions are governed by the laws of the State of Delaware, ensuring enforceability under applicable law[122] - Confidentiality is maintained throughout the arbitration process, with restrictions on disclosing information unless certain conditions are met[114] - The parties agree to conduct arbitration in accordance with the Massachusetts Rules of Civil Procedure and Evidence[111] - Time is of the essence in all provisions of the arbitration agreement, emphasizing the importance of timely actions[123] Agreement Execution and Notices - The Agreement may be executed in counterparts, with facsimile or .pdf signatures considered binding[83] - The Company shall not assign this Agreement without the prior written consent of the Buyer, while the Buyer may assign its rights to accredited investors without consent[88] - All notices under this Agreement must be in writing and delivered through specified methods, including personal service or certified mail[87] - The Agreement contains the entire understanding of the parties and may only be amended in writing signed by the Buyer[86] - The agreement allows for execution in multiple counterparts, including electronic signatures, with the same effect as if all parties signed the same document[99]

Acquisitions and Partnerships - GameSquare completed the acquisition of Click Management Pty Ltd for a base purchase price of $4.5 million, with potential earn-out payments of up to $3 million based on future performance[214]. - GameSquare's acquisition of FaZe Holdings, Inc. was completed on March 7, 2024, enhancing its position in the gaming and youth culture market[201]. - Click Management closed over 545 commercial deals globally in 2024, establishing a large English-speaking gaming roster with over 75 active talents[205]. - The Company has completed six acquisitions and divested three non-core assets from August 2020 to September 2025, focusing on organic growth and M&A opportunities[245]. Financial Performance - Revenue for the nine months ended September 30, 2025, was $26,542,646, an increase of 33.2% compared to $19,930,359 in 2024[249]. - Gross profit for the same period rose to $11,042,151, reflecting a 47.4% increase from $7,490,880 in 2024[249]. - Operating expenses decreased slightly to $21,806,679, down 1.5% from $22,143,783 in the previous year[249]. - Loss from continuing operations improved to $(10,764,528), a 26.5% reduction compared to $(14,652,903) in 2024[249]. - Net loss attributable to GameSquare Holdings, Inc. for the nine months was $(8,982,393), a significant improvement of 59.8% from $(22,358,971) in 2024[249]. - Revenue for the three months ended September 30, 2025, was $11,315,003, up 21.6% from $9,306,777 in 2024[249]. - Gross profit for the three months increased to $5,592,730, a 32.6% rise from $4,215,384 in 2024[249]. - Total other income for the nine months was $8,918,600, compared to a loss of $(605,796) in 2024, marking a substantial turnaround[249]. - The company reported a net loss of $(11,000,525) for the nine months, a 55.5% improvement from $(24,728,504) in 2024[249]. Revenue Streams - Owned and operated IP revenue increased to $8.6 million for the nine months ended September 30, 2025, compared to $7.7 million in 2024, a growth of 11.7%[255]. - Agency revenue rose to $9.9 million for the nine months ended September 30, 2025, from $8.3 million in 2024, marking a 19.5% increase[256]. - SaaS and managed services revenue surged to $7.5 million for the nine months ended September 30, 2025, compared to $3.9 million in 2024, an increase of 92.3%[257]. - DAT yield revenue was $0.6 million for the nine months ended September 30, 2025, compared to $0 for the same period in 2024, indicating successful launch[258]. Cash Flow and Capital Structure - The company raised approximately $8.56 million from the July 8, 2025 offering of 4,692,866 shares at $0.95 per share, after a 7% underwriting discount[219]. - The company raised approximately $61.5 million from the July 17, 2025 offering of 46,666,667 shares at $1.50 per share, after a 7% underwriting discount[222]. - The company raised gross proceeds of $89.6 million through three equity offerings in July 2025, including $75.3 million on July 18, 2025[304]. - Cash and restricted cash totaled $7.5 million as of September 30, 2025, a decrease from $13.1 million as of December 31, 2024[302]. - Net cash used in operating activities was $17.3 million for the nine months ended September 30, 2025, compared to $25.4 million in the prior year[307]. - Net cash used in investing activities was $61.8 million for the nine months ended September 30, 2025, primarily due to $57.1 million in digital asset purchases[308]. - Net cash provided by financing activities was $74.0 million for the nine months ended September 30, 2025, compared to $30.4 million in the prior year[310]. Compliance and Regulatory Matters - GameSquare received a Minimum Bid Price Notice from Nasdaq due to its common stock closing below the $1.00 minimum requirement for 30 consecutive business days[215]. - GameSquare has until March 9, 2026, to regain compliance with the Nasdaq Minimum Bid Price Requirement[216]. - The Company regained compliance with NASDAQ's minimum bid price requirements after maintaining a closing bid price of at least $1.00 per share for ten consecutive business days[234]. Strategic Initiatives - GameSquare's ETH-focused yield generation strategy includes an approved allocation of up to $250 million, with over $70 million already invested in ETH and other digital assets[202]. - GameSquare's Board approved a strategy to leverage crypto infrastructure for digital asset yield generation, indicating a forward-looking approach to financial growth[202]. - The Company authorized a share repurchase program allowing for the purchase of up to $5,000,000 of Common Stock, with no purchases made during the three months ended September 30, 2025[228]. - The Company has invested in its sales organization, leading to significant growth in requests for proposals within its agency businesses[246]. Accounting and Financial Reporting - The Company accounts for digital assets like NFTs as indefinite-lived intangible assets under ASC 350-30[340]. - Business combinations are recorded from the acquisition date, with excess consideration recognized as goodwill, requiring significant judgment and estimates[341]. - Long-lived assets, including intangible assets, are assessed for impairment at least annually or when indicators arise[342]. - Goodwill is tested for impairment annually or when there are indications of impairment, with qualitative assessments determining the necessity of further testing[343]. - The Company elected the Fair Value Option for convertible debt, recognizing it at fair value with changes reflected in earnings[345]. - Loss contingencies are estimated in accordance with ASC 450-20, requiring probable liability and reasonable estimability for accrual[346]. - The Company has no off-balance sheet arrangements that materially affect its financial condition or operations[347]. - Critical accounting policies and estimates remain unchanged during the nine months ended September 30, 2025[348]. - Recent accounting pronouncements are detailed in the Quarterly Report, assessing their potential impact on financial condition[349]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[350].