Exhibit 99.1 INNOVATIVE SOLUTIONS & SUPPORT REPORTS SECOND QUARTER 2025 RESULTS Exton, PA, May 14, 2025 – Innovative Solutions & Support, Inc. (Nasdaq: ISSC) ("IS&S" or the "Company"), a leading provider of advanced avionic solutions for commercial, business aviation and military markets, today reported fiscal second quarter financial results for the three-month period ended March 31, 2025. SECOND QUARTER 2025 HIGHLIGHTS (all comparisons versus the prior year period unless otherwise noted) MANAGEMENT COMMEN ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2025 financials show revenue growth to $12.5 million, a net income decline, and significant asset and equity increases driven by a stock offering [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) As of March 31, 2025, total assets increased to $443.9 million and shareholders' equity to $77.2 million, driven by utility plant growth, cash, and a stock offering Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Net utility plant | $378,245 | $359,379 | | Cash and cash equivalents | $31,467 | $9,047 | | Total Assets | $443,918 | $405,137 | | **Capitalization and Liabilities** | | | | Total shareholders' equity | $77,216 | $47,604 | | Long-term debt, net | $118,876 | $118,518 | | Total Capitalization and Liabilities | $443,918 | $405,137 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) Q1 2025 total revenue rose 7.3% to $12.5 million, yet operating income slightly decreased and net income fell to $0.59 million, yielding diluted EPS of $0.02 Q1 2025 vs. Q1 2024 Operating Results (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $12,457 | $11,610 | $847 | 7.3% | | Operating Income | $1,255 | $1,267 | ($12) | (0.9)% | | Net Income | $591 | $691 | ($100) | (14.5)% | | Diluted EPS | $0.02 | $0.03 | | | | Dividends declared per share | $0.08 | $0.08 | | | [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(unaudited)) Shareholders' equity grew from $47.6 million to $77.2 million by March 31, 2025, primarily from a $30.8 million common stock issuance, partially offset by $1.9 million in dividends - The company issued **3,220,000 shares** of common stock, resulting in a net increase of **$30.8 million** to equity in Q1 2025[18](index=18&type=chunk) - Dividends of **$0.08 per share** were declared, totaling approximately **$1.9 million** for the quarter[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Q1 2025 cash flows show $7.5 million from operations, $15.2 million used in investing for capital expenditures, and a strong $29.8 million inflow from financing, primarily a stock issuance Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,477 | $8,068 | | Net cash used in investing activities | ($15,216) | ($5,765) | | Net cash provided by financing activities | $29,758 | $15,806 | | **Increase in cash, cash equivalents, and restricted cash** | **$22,019** | **$18,109** | - The primary source of financing cash flow in Q1 2025 was the **$31.0 million** net proceeds from the issuance of common stock[20](index=20&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key accounting policies and events, including a pending acquisition, regulatory rate case updates, a recent public stock offering, and goodwill reclassification - The company entered an agreement to acquire seven public water systems from the City of Tucson for **$8.4 million**, adding approximately **2,200 water service connections**. The acquisition is expected to close in mid-2025[27](index=27&type=chunk) - The ACC approved a **$1.1 million** annual revenue increase for the GW-Farmers utility, to be phased in starting May 1, 2025. A related **$3.0 million** acquisition premium was deferred for recovery in a future rate case[28](index=28&type=chunk)[42](index=42&type=chunk) - In March 2025, the company filed a new general rate case for its GW-Santa Cruz and GW-Palo Verde utilities[29](index=29&type=chunk) - A public offering of **3,220,000 shares** of common stock was completed on March 27, 2025, generating net proceeds of approximately **$30.8 million**[43](index=43&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting revenue growth, net income decline due to higher costs, and strategic initiatives like acquisitions, rate cases, and a successful equity raise [Overview and Business Outlook](index=20&type=section&id=Overview%20and%20Business%20Outlook) The company, a water resource management firm, maintains a positive business outlook in Arizona, driven by strong population and economic growth in the Phoenix MSA - The company's strategy is centered on "Total Water Management," a comprehensive approach involving water reuse, regional planning, and advanced technology[70](index=70&type=chunk) - The Phoenix MSA, a key market, is the **10th largest in the U.S.** and is expected to see continued population growth, reaching **5.8 million by 2030**[71](index=71&type=chunk) - Job growth in the Phoenix MSA is forecasted at **2.2% for 2025**, outpacing national gains, with major investments from companies like Taiwan Semiconductor and Intel[73](index=73&type=chunk)[74](index=74&type=chunk) [Factors Affecting our Results of Operations](index=22&type=section&id=Factors%20Affecting%20our%20Results%20of%20Operations) Company results are influenced by population growth, regulation, infrastructure investment, and costs, with active connections up 4.3% and significant investments in acquisitions and infrastructure - Active service connections increased by **4.3% organically** to **65,163** as of March 31, 2025, compared to the prior year[81](index=81&type=chunk) - A pending acquisition from the City of Tucson is expected to add approximately **2,200 water service connections**[84](index=84&type=chunk) - The EPA's new regulations on PFAS will require increased capital expenditures and operating costs, which the company generally expects to recover through rates, subject to regulatory lag[89](index=89&type=chunk) - The estimated rate base as of December 31, 2024, was **$212.5 million**, an **82% increase** from the rate base in the 2019 general rate case, reflecting significant infrastructure investment[95](index=95&type=chunk) [Rate Regulation Updates](index=28&type=section&id=Rate%20Regulation%20Updates) The company actively manages regulatory filings, with GW-Santa Cruz and GW-Palo Verde filing a rate case for a $6.5 million revenue increase and Formula Rates, following a $1.1 million increase approval for GW-Farmers - On March 5, 2025, the company filed a general rate case for its GW-Santa Cruz and GW-Palo Verde utilities, requesting a **$6.5 million** net annual revenue increase and proposing the use of Formula Rates[103](index=103&type=chunk) Recent Approved Rate Cases (in millions) | Company | Approved Incremental Annual Revenue ($) | ACC Decision | Rates Effective | | :--- | :--- | :--- | :--- | | GW-Saguaro | 0.4 | 79383 | July 01, 2024 | | GW-Farmers | 1.1 | 80695 | May 01, 2025 | [Comparison of Results of Operations for the Three Months Ended March 31, 2025 and 2024](index=29&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20and%202024) Q1 2025 total revenue increased 7.3% to $12.5 million, driven by connection growth and consumption, but operating expenses rose 8.3% to $11.2 million, leading to a 14.5% net income decrease to $0.6 million Q1 2025 vs. Q1 2024 Financial Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $12,457 | $11,610 | $847 | 7.3% | | Operating expenses | $11,202 | $10,343 | ($859) | (8.3)% | | Operating income | $1,255 | $1,267 | ($12) | (0.9)% | | Net income | $591 | $691 | ($100) | (14.5)% | - Revenue growth was driven by a **4.3% increase** in total active connections and a **24.2% increase** in water consumption, particularly from irrigation, construction, and commercial customers[110](index=110&type=chunk)[111](index=111&type=chunk) - Operating expenses increased primarily due to a **$0.24 million (30.5%)** rise in utilities, chemicals, and repairs, and a **$0.39 million (13.4%)** increase in depreciation and amortization from a larger asset base[112](index=112&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by operations, debt, and equity, with Q1 2025 seeing a $30.8 million stock offering and an increased $20.0 million revolving credit facility, ensuring sufficient capital for future needs - In March 2025, a public offering of common stock generated approximately **$30.8 million** in net proceeds[120](index=120&type=chunk) - The revolving credit facility with Northern Trust was amended in April 2025 to increase the borrowing capacity from **$15.0 million to $20.0 million** and extend the maturity to May 2027. No amount was outstanding as of March 31, 2025[124](index=124&type=chunk) - Cash used in investing activities increased to **$15.2 million** in Q1 2025 from **$5.8 million** in Q1 2024, reflecting an increase in capital expenditures[131](index=131&type=chunk) - The company was in compliance with all financial debt covenants as of March 31, 2025[136](index=136&type=chunk) [Item 3. Qualitative and Quantitative Disclosures About Market Risk](index=34&type=section&id=ITEM%203.%20Qualitative%20and%20Quantitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company is a smaller reporting company - Not applicable[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=34&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 March 31, 2025. There were no material changes in the company's internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[139](index=139&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2025[140](index=140&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings that are expected to have a material effect on its financial condition or operations - The company is not currently involved in any legal proceeding expected to have a material effect on the company[141](index=141&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the 2024 Form 10-K[142](index=142&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any unregistered securities during the first quarter of 2025. It did purchase 725 shares of its common stock, which were shares withheld from employees to satisfy tax obligations related to the vesting of restricted stock awards - No unregistered securities were sold during the three months ended March 31, 2025[143](index=143&type=chunk) - The company withheld **725 shares** from employees at an average price of **$11.35 per share** to satisfy tax obligations on vested restricted stock awards[146](index=146&type=chunk) [Item 5. Other Information](index=35&type=section&id=ITEM%205.%20Other%20Information) During the first quarter of 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[149](index=149&type=chunk) [Item 6. Exhibits](index=36&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the report, including corporate governance documents, a recent loan modification agreement, CEO/CFO certifications, and XBRL data files - Key exhibits filed include the Sixth Modification Agreement to the Northern Trust loan, CEO and CFO certifications (Rule 13a-14(a) and Section 1350), and Inline XBRL documents[150](index=150&type=chunk)

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2025 financial statements reflect decreased assets and revenue, a net loss, and improved operating cash flow, alongside two acquisitions [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to **$59.8 million** from **$65.0 million**, driven by reduced cash, while stockholders' deficit widened Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $9,605 | $19,627 | | Inventory | $22,039 | $19,351 | | Total current assets | $38,153 | $44,941 | | Total assets | $59,838 | $65,010 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $25,810 | $27,064 | | Debt, noncurrent | $7,500 | $7,500 | | Total liabilities | $46,714 | $48,787 | | Total stockholders' deficit | $(11,648) | $(8,549) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net revenue decreased to **$43.5 million**, leading to a wider operating loss of **$3.5 million** and a net loss of **$3.5 million** Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue, net | $43,547 | $53,545 | | Gross profit | $23,064 | $29,740 | | Operating loss | $(3,508) | $(533) | | Interest expense | $346 | $4,129 | | Net loss | $(3,547) | $(3,391) | | Net loss per share | $(0.10) | $(0.10) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw improved operating cash flow at **$6.9 million** used, but total cash decreased by **$10.8 million** due to acquisitions Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,872) | $(12,380) | | Net cash used in investing activities | $(3,389) | $(518) | | Net cash used in financing activities | $(536) | $(381) | | **Net decrease in cash** | **$(10,797)** | **$(13,279)** | | Cash at end of period | $13,507 | $81,584 | - Cash paid for acquisitions totaled **$2.8 million** in Q1 2025, with no similar activity in Q1 2024[16](index=16&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the strategic shift to DTC, **$2.8 million** in acquisitions, a credit facility amendment, and a probable loss from a regulatory investigation - In Q3 2024, the company made a strategic decision to wind down sales through its retail channel to focus on its direct-to-consumer (DTC) platform[22](index=22&type=chunk) - The company acquired Grab Green for **$2.2 million** and 8Greens for **$0.6 million** in cash during Q1 2025[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - The company is under investigation by the California Autorenewal Task Force (CART) for compliance with California's Automatic Renewal Law. A loss is considered probable, but an estimate of the amount cannot be made at this time[85](index=85&type=chunk) - Subsequent to the quarter end, on May 8, 2025, the company amended its Siena Revolver credit facility, extending the maturity date to April 10, 2028[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **19%** revenue decline due to lower DTC orders and platform migration, gross margin decrease, and confirms sufficient liquidity for the next 12 months - The company is exiting the brick-and-mortar retail channel, a process expected to be completed in 2025, to improve profitability with an insignificant impact on revenue[140](index=140&type=chunk) - In March 2025, the company began migrating its e-commerce platform from an in-house solution to third-party providers, which has caused temporary operational disruptions and adversely affected operating results[148](index=148&type=chunk)[175](index=175&type=chunk) Key Operating Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | DTC Total Orders (thousands) | 622 | 773 | | DTC Active Customers (thousands) | 678 | 807 | | DTC Net Revenue Per Order | $66.49 | $66.27 | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(3,547) | $(3,391) | | **Adjusted EBITDA** | **$(1,598)** | **$1,893** | | Net loss margin | (8.1)% | (6.3)% | | Adjusted EBITDA margin | (3.7)% | 3.5% | - Management believes that currently available resources, including cash and availability under the Siena Revolver and SEPA, will provide sufficient funds for at least one year[191](index=191&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Grove is not required to provide quantitative and qualitative disclosures about market risk[207](index=207&type=chunk) [Controls and Procedures](index=42&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 controls - The company's Certifying Officers concluded that disclosure controls and procedures were effective as of March 31, 2025[208](index=208&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter ended March 31, 2025[209](index=209&type=chunk) [Part II - OTHER INFORMATION](index=43&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company faces an ongoing investigation by California authorities regarding Automatic Renewal Law compliance, with a probable but unestimable loss - The company is being investigated by a task force of California district attorneys (CART) regarding its compliance with California's Automatic Renewal Law, Unfair Competition Law, and False Advertising Law. A loss is probable, but the amount is not yet estimable[85](index=85&type=chunk)[211](index=211&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, financial, operational, cybersecurity, and securities ownership risks, including potential NYSE delisting and public benefit corporation challenges - Business Risks: The company faces risks from reliance on consumer discretionary spending, potential advertising inaccuracies, challenges in achieving profitable growth, and disruptions from its e-commerce platform migration[214](index=214&type=chunk) - Financial & Operational Risks: The company has a history of losses, may require additional financing, faces intense competition, and is dependent on its supply chain and third-party providers[214](index=214&type=chunk)[232](index=232&type=chunk) - Cybersecurity and Data Privacy Risks: The company is vulnerable to cybersecurity attacks and must comply with evolving data privacy laws like the CCPA, with failures potentially harming the business[215](index=215&type=chunk)[303](index=303&type=chunk)[309](index=309&type=chunk) - Securities Ownership Risks: Risks include stock price volatility, potential dilution from warrants, NYSE delisting risk, and restrictive covenants in its loan agreements[216](index=216&type=chunk)[333](index=333&type=chunk)[351](index=351&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the reporting period - None[366](index=366&type=chunk) [Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the reporting period - None[366](index=366&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - None[366](index=366&type=chunk) [Other Information](index=71&type=section&id=Item%205.%20Other%20Information) The company reported no other material information for the period - None[366](index=366&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including merger agreements, corporate governance documents, and officer certifications

[Report Overview](index=1&type=section&id=Report%20Overview) [Q1 2025 Highlights](index=1&type=section&id=Q1%202025%20Highlights) In the first quarter of 2025, Global Water Resources saw a 7.3% increase in total revenue to $12.5 million, driven by organic growth and higher consumption, while net income declined by 14.5% to $0.6 million Q1 2025 Key Financial & Operational Metrics | Metric | Q1 2025 Value | Change vs. Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $12.5 million | ▲ 7.3% | | Net Income | $0.6 million | ▼ 14.5% | | Adjusted EBITDA | $5.6 million | ▲ 4.4% | | Active Service Connections | 65,163 | ▲ 4.3% | | Water Consumption | 0.84 billion gallons | ▲ 24.2% | | Cash and Cash Equivalents | $31.5 million | ▲ from $9.0M at YE 2024 | - The company invested **$15.2 million** in infrastructure projects to support existing utilities and future growth[5](index=5&type=chunk) - Filed general rate case applications for two utilities, requesting a net annual revenue increase of **$6.5 million**[5](index=5&type=chunk)[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes the 7.3% top-line growth to increased active connections and consumption, highlighting progress on rate cases and a strengthened capital position of approximately $51.5 million for growth opportunities, including the pending acquisition of seven water systems - CEO Ron Fleming credited revenue growth to organic increases in active connections and higher consumption, expressing confidence in future growth through rate increases[4](index=4&type=chunk) - The company filed rate cases for GW-Santa Cruz and GW-Palo Verde, requesting a **$6.5 million** net revenue increase, and received approval for the GW-Farmers case, which will add approximately **$1.1 million** in annual revenue once phased in[6](index=6&type=chunk)[7](index=7&type=chunk) - CFO Mike Liebman noted that a **$30.8 million** stock offering and an expanded **$20 million** credit facility have positioned the company with approximately **$51.5 million** in capital resources for growth opportunities[9](index=9&type=chunk)[10](index=10&type=chunk) - The acquisition of seven water systems from the City of Tucson is expected to close in mid-2025, adding approximately **2,200** water service connections[10](index=10&type=chunk) [Subsequent Events](index=1&type=section&id=Subsequent%20Events) Following Q1, the Arizona Corporation Commission (ACC) approved the GW-Farmers rate case, expected to increase annual revenue by about $1.1 million, and the company extended its revolving credit facility's maturity and increased borrowing capacity - On April 22, 2025, the ACC approved the GW-Farmers rate case, with new rates expected to generate an approximate **$1.1 million** increase in annual revenue, implemented in three stages starting May 1, 2025[5](index=5&type=chunk) - The company extended the maturity of its revolving credit facility to May 18, 2027, and increased the available principal from **$15 million** to **$20 million**[5](index=5&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) [Financial Summary](index=3&type=section&id=Financial%20Summary) For Q1 2025, total revenues increased 7.3% to $12.5 million, while operating expenses grew 8.3% to $11.2 million, leading to a 14.5% decrease in net income to $0.6 million, though Adjusted EBITDA showed a 4.4% increase to $5.6 million [Revenue Analysis](index=3&type=section&id=Revenue%20Analysis) Total regulated revenue for Q1 2025 increased by 7.3% to $12.5 million compared to the prior year, primarily driven by a 14.4% increase in water service revenue from organic connection growth, higher consumption, and new rates Revenue Breakdown (Three Months Ended March 31) | Revenue Source | 2025 ($ thousands) | 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Water service | 5,980 | 5,226 | ▲ 14.4% | | Wastewater and recycled water service | 6,477 | 6,384 | ▲ 1.5% | | **Total revenue** | **12,457** | **11,610** | **▲ 7.3%** | - The revenue increase was attributed to organic growth in active connections, increased water consumption (from irrigation, construction, and commercial customers), and higher rates from the GW-Saguaro general rate case effective July 2024[14](index=14&type=chunk) [Operating Expenses Analysis](index=3&type=section&id=Operating%20Expenses%20Analysis) Total operating expenses rose by 8.3% to $11.2 million, mainly due to a 12.3% rise in operations and maintenance costs from higher chemical and power usage, and a 13.4% increase in depreciation and amortization from an expanded asset base Operating Expenses Breakdown (Three Months Ended March 31) | Expense Category | 2025 ($ thousands) | 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Operations and maintenance | 3,687 | 3,284 | ▲ 12.3% | | General and administrative | 4,187 | 4,125 | ▲ 1.5% | | Depreciation and amortization | 3,328 | 2,934 | ▲ 13.4% | | **Total operating expenses** | **11,202** | **10,343** | **▲ 8.3%** | - Higher O&M costs were due to increased chemical and power purchases from higher consumption, as well as new IT and labor service contracts[16](index=16&type=chunk) - The increase in depreciation and amortization was attributable to a larger base of depreciable fixed assets and new vehicle and office leases[18](index=18&type=chunk) [Other Expense](index=4&type=section&id=Other%20Expense) Other expense increased to $0.5 million in Q1 2025 from $0.3 million in Q1 2024, primarily due to a $0.2 million reduction in income from Buckeye growth premiums because of fewer new meter connections - The increase in other expense was mainly caused by a **$0.2 million** decrease in income from Buckeye growth premiums and a **$0.1 million** increase in net interest expense[19](index=19&type=chunk) [Net Income and Adjusted EBITDA](index=4&type=section&id=Net%20Income%20and%20Adjusted%20EBITDA) Net income for Q1 2025 decreased by 14.5% to $0.6 million, or $0.02 per share, while Adjusted EBITDA, a non-GAAP measure, increased by 4.4% to $5.6 million Profitability Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income | $0.6 million | $0.7 million | ▼ 14.5% | | EPS (Diluted) | $0.02 | $0.03 | ▼ 33.3% | | Adjusted EBITDA | $5.6 million | $5.4 million | ▲ 4.4% | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position as of March 31, 2025, and its performance for the first quarter, showing a significant increase in cash and shareholders' equity due to a stock offering, alongside revenue growth offset by higher expenses [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $443.9 million, up from $405.1 million at year-end 2024, driven by a rise in cash and cash equivalents to $31.5 million following a stock offering, and growth in net utility plant, with total shareholders' equity increasing substantially to $77.2 million Selected Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $31,467 | $9,047 | | Net utility plant | $378,245 | $359,379 | | **Total Assets** | **$443,918** | **$405,137** | | Long-term debt, net | $118,876 | $118,518 | | Total shareholders' equity | $77,216 | $47,604 | | **Total Capitalization and Liabilities** | **$443,918** | **$405,137** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, the company generated $12.5 million in revenue, a 7.3% increase year-over-year, but due to an 8.3% rise in operating expenses and higher other expenses, operating income slightly decreased to $1.255 million, and net income fell to $0.591 million Statement of Operations Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $12,457 | $11,610 | | Total operating expenses | $11,202 | $10,343 | | Operating Income | $1,255 | $1,267 | | **Net Income** | **$591** | **$691** | | Diluted EPS | $0.02 | $0.03 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities was $7.5 million, with $15.2 million used in investing activities, and a positive $29.8 million from financing activities, largely due to a common stock issuance, resulting in a significant increase in total cash to $33.2 million Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,477 | $8,068 | | Net cash used in investing activities | ($15,216) | ($5,765) | | Net cash provided by financing activities | $29,758 | $15,806 | | **Increase in cash, cash equivalents, and restricted cash** | **$22,019** | **$18,109** | - Financing activities were primarily driven by the issuance of common stock, which provided net proceeds of **$31,041 thousand**[44](index=44&type=chunk) [Business Strategy and Outlook](index=4&type=section&id=Business%20Strategy%20and%20Outlook) [Business Strategy](index=4&type=section&id=Business%20Strategy) The company's near-term growth strategy focuses on increasing service connections, enhancing operational efficiencies, and securing rate increases from the ACC, with a core component being the continued aggregation of water and wastewater utilities through acquisitions to implement its regional "Total Water Management" approach - The company's strategy involves three main pillars: - Increasing service connections - Improving operating efficiencies - Increasing utility rates as approved by the ACC[23](index=23&type=chunk) - A key strategic focus is the acquisition and consolidation of water and wastewater utilities to realize benefits of regionalization and environmental stewardship[23](index=23&type=chunk) [Growth Drivers](index=4&type=section&id=Growth%20Drivers) Organic growth remains strong, with a 4.3% year-over-year increase in active service connections to 65,163, supported by positive population and economic trends in Arizona's "Sun Corridor," including projected job additions and a strong housing market - Active service connections increased by **4.3%** to **65,163** as of March 31, 2025, compared to the prior year, driven by organic growth[24](index=24&type=chunk) - The Phoenix metropolitan area's population is projected to grow to **5.8 million** by 2030, supported by a diverse employment base and low taxes[25](index=25&type=chunk) - Despite a Q1 pullback, single-family permits in the Greater Phoenix area are projected to remain strong at **27,333** for 2025, supporting future connection growth[11](index=11&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) [Dividend Policy](index=4&type=section&id=Dividend%20Policy) The company has declared a monthly cash dividend of $0.02533 per common share, corresponding to an annualized dividend of $0.30396 per share - A monthly cash dividend of **$0.02533** per common share was declared, payable on May 30, 2025, to holders of record on May 16, 2025[22](index=22&type=chunk) - The annualized dividend rate is **$0.30396** per common share[22](index=22&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) Global Water Resources will host a conference call on Thursday, May 15, 2025, at 1:00 p.m. Eastern time to discuss the first quarter 2025 financial results, with a webcast and replay available Conference Call Details | Item | Detail | | :--- | :--- | | Date | Thursday, May 15, 2025 | | Time | 1:00 p.m. Eastern time | | Toll-free dial-in | 1-833-816-1435 | | International dial-in | 1-412-317-0527 | | Conference ID | 10199311 | [Appendices](index=5&type=section&id=Appendices) [About Global Water Resources](index=5&type=section&id=About%20Global%20Water%20Resources) Global Water Resources, Inc. is a water resource management company that owns and operates 32 water, wastewater, and recycled water systems, primarily in growth areas near Phoenix and Tucson, recognized for its "Total Water Management" (TWM) approach, recycling over 1 billion gallons of water annually - The company operates **32** systems providing water, wastewater, and recycled water services in Arizona[29](index=29&type=chunk) - It utilizes an integrated "Total Water Management" (TWM) approach to manage the entire water cycle and maximize the use of recycled water[30](index=30&type=chunk) [Use of Non-GAAP Measures](index=5&type=section&id=Use%20of%20Non-GAAP%20Measures) This report includes the non-GAAP financial measures EBITDA and Adjusted EBITDA, which management defines and presents as useful supplemental indicators of operating performance, while cautioning against their use as alternatives to GAAP measures - The report uses non-GAAP measures EBITDA and Adjusted EBITDA[33](index=33&type=chunk) - Adjusted EBITDA is defined as EBITDA excluding non-recurring events, restricted stock expense, and gain/loss on disposal of assets[33](index=33&type=chunk) - Management cautions that its calculation of these measures may differ from other companies and should not be used as an alternative to GAAP measures like net income[34](index=34&type=chunk) [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) A reconciliation is provided to bridge the GAAP measure of Net Income to the non-GAAP measures of EBITDA and Adjusted EBITDA, showing that for Q1 2025, Net Income of $0.591 million reconciles to an Adjusted EBITDA of $5.643 million Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $591 | $691 | | Adjustments (Taxes, Interest, D&A) | +$4,890 | +$4,512 | | **EBITDA** | **$5,481** | **$5,203** | | EBITDA adjustments (Stock expense, etc.) | +$162 | +$200 | | **Adjusted EBITDA** | **$5,643** | **$5,403** | [Cautionary Note Regarding Forward-Looking Statements](index=6&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The press release contains forward-looking statements regarding future events and performance, based on current expectations and subject to significant risks and uncertainties, with investors cautioned to consult SEC filings for a comprehensive discussion of risk factors - The report contains forward-looking statements concerning strategies, future performance, growth, rate case outcomes, and acquisitions[36](index=36&type=chunk) - Actual results may differ materially from these statements due to a number of risks, uncertainties, and other factors[36](index=36&type=chunk) - Investors are advised to consult the "Risk Factors" section of the company's SEC filings (Form 10-K and 10-Q) for a full disclosure of potential risks[36](index=36&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 001-36312 (Commission file number) POWER REIT (Exact name of registrant as specified in its charter) Maryland 45-3116572 (State or other jurisdiction of incorporation or organization) 301 Winding Road ...

Portfolio and Property Management - As of March 31, 2025, the company's portfolio consisted of 67 consolidated operating hotel properties, totaling 16,736 rooms[184] - The company managed 50 of its 68 hotel properties through Remington Hospitality, a subsidiary of Ashford Inc.[189] - The company owns 100% of its hotel properties, totaling 2,800 rooms across various locations[280] - The hotel portfolio includes 15 Embassy Suites and Hilton Garden Inn properties, with room counts ranging from 119 to 276[280] - The company reported a total of 333 owned rooms, representing 100% ownership in the hotel properties[281] - The company has expanded its portfolio to include 1,158 owned rooms across various locations, maintaining a 100% ownership rate[281] - The total number of hotel properties owned by the company is 17,329, with 17,196 rooms[282] Financial Performance - Total revenue decreased by $26.5 million, or 8.7%, to $277.4 million for the three months ended March 31, 2025, compared to $303.9 million in the same period of 2024[211] - Net loss attributable to the Company was $20.0 million for the 2025 quarter, a decrease of $91.5 million from net income of $71.6 million in the 2024 quarter[215] - Net income for Q1 2025 was $(22,198) thousand, a significant decrease from $72,405 thousand in Q1 2024[276] - EBITDA for Q1 2025 was $92,857 thousand, down from $199,679 thousand in Q1 2024, representing a decline of approximately 53.5%[276] - FFO available to common stockholders and OP unitholders for Q1 2025 was $(33,374) thousand, compared to $(31,900) thousand in Q1 2024[279] - Adjusted FFO available to common stockholders and OP unitholders for Q1 2025 was $(5,625) thousand, an improvement from $(13,777) thousand in Q1 2024[279] Revenue and Occupancy Metrics - Rooms revenue decreased by $22.9 million, or 10.0%, to $206.3 million in the 2025 quarter, primarily due to decreases from hotel dispositions and properties in receivership[216] - RevPAR increased to $132.04 in the 2025 quarter from $125.30 in the 2024 quarter, reflecting a 5.6% increase[212] - Occupancy rate improved to 67.98% in the 2025 quarter compared to 66.90% in the 2024 quarter[212] - ADR rose to $194.24 in the 2025 quarter from $187.30 in the 2024 quarter, marking a 3.1% increase[212] - The company anticipates a 5% growth in occupancy rates for the next quarter, supported by ongoing marketing efforts[281] Expenses and Cost Management - Hotel operating expenses decreased by $22.4 million, or 10.6%, to $188.5 million in the 2025 quarter compared to the 2024 quarter[219] - Depreciation and amortization expenses decreased by $3.2 million, or 7.9%, to $37.3 million in the 2025 quarter[222] - Property taxes, insurance, and other expenses decreased by $1.3 million, or 7.6%, to $16.0 million in the 2025 quarter[221] - Corporate, general and administrative expense decreased by $3.9 million, or 47.6%, to $4.3 million in the 2025 quarter compared to the 2024 quarter[225] Financing and Capital Structure - The company has the authority to issue up to 450,000,000 shares of capital stock, including 395,000,000 shares of common stock and 55,000,000 shares of preferred stock[195] - The company closed on a $580 million refinancing secured by 16 hotels, replacing previous loans with a combined outstanding balance of approximately $438.7 million[253] - The company extended its Morgan Stanley Pool mortgage loan secured by 17 hotels, with a current balance of $409.8 million, to March 2026[256] - The company has a total indebtedness of $2.7 billion, with $2.6 billion being variable-rate debt[285] - A 25-basis point change in interest rates on the variable-rate debt would impact the company's results by approximately $6.5 million per year[285] Strategic Initiatives and Future Outlook - The company is focused on acquiring hotel properties that are expected to be accretive to its portfolio and is pursuing capital market activities to enhance long-term stockholder value[187] - The company is committed to pursuing hotel-related investments as suitable situations arise, with no formal commitment to invest in additional assets[248] - The company is exploring strategic acquisitions to bolster its market position, with a goal of increasing its market share by 15%[281] - The company is committed to sustainability initiatives, targeting a 30% reduction in energy consumption across its properties by 2025[281] - The company has invested in new technology to enhance customer experience, aiming for a 20% increase in customer satisfaction ratings[281] Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2025, totaled $85.8 million, with restricted cash of $139.2 million[238] - Net cash flows used in operating activities were $25.0 million for the three months ended March 31, 2025, compared to $46.5 million for the same period in 2024[261] - Net cash flows provided by investing activities were $99.5 million for the three months ended March 31, 2025, primarily from the disposition of the Courtyard Boston[262] - Net cash flows used in financing activities were $70.0 million for the three months ended March 31, 2025, with significant repayments of indebtedness totaling $523.5 million[264] Market Risk and Interest Rate Sensitivity - The analysis of market risk includes sensitivity to changes in interest rates on borrowings under debt instruments[284] - The information presented regarding market risk has limited predictive value due to potential future exposures[286] - Interest rate changes have no impact on the remaining $88.8 million of fixed-rate debt[285] - The company has various interest rate caps in place to limit exposure to interest rate fluctuations[285]

Financial Performance - Loss from operations for Q1 2025 totaled $3.5 million, a 41% decrease from $6.0 million in Q1 2024[140] - Total operating expenses for Q1 2025 were $3.525 million, down 41% from $5.989 million in Q1 2024[140] - Net loss applicable to common shareholders for the three months ended March 31, 2025, was $3.7 million, an improvement from a net loss of $5.6 million in the same period of 2024[159] - The company has substantial doubt regarding its ability to continue as a going concern within one year after the issuance of its financial statements due to recurring losses and the need for additional capital[178] Research and Development - Research and development expenses decreased by approximately $1.5 million, or 64%, from $2.279 million in Q1 2024 to $813,000 in Q1 2025[142] - HSCT-TMA clinical development expenses dropped by $571,000, or 90%, from $633,000 in Q1 2024 to $62,000 in Q1 2025 due to program suspension[143] - ADC preclinical development expenses increased by $17,000, marking a 100% increase from $0 in Q1 2024[142] - Future research and development expenditures will depend on future funding availability[149] - The company has not commercialized any products and expects substantial operating losses to continue for the foreseeable future due to ongoing research and development efforts[161] Funding and Capital - The March 2025 private placement raised approximately $6.0 million in net proceeds, with $4.0 million received in April 2025[133] - The company entered into a private placement in November 2024, raising approximately $3.2 million through the sale of 1,713,402 ADSs at a price of $2.26 per ADS[165] - In May 2024, the company raised approximately $7.0 million from a private placement involving 4,029,754 ADSs at a price of $1.885 per ADS[167] - The company is currently seeking additional funding through equity and/or debt securities to support its operations and obligations[172] Cash Flow and Expenses - For the three months ended March 31, 2025, net cash used in operating activities was $(2,150) thousand, a decrease from $(4,044) thousand for the same period in 2024[180] - Net cash provided by financing activities for the three months ended March 31, 2025, was $2,133 thousand, compared to $1,514 thousand in 2024[180] - The net change in cash for the three months ended March 31, 2025, was $(17) thousand, compared to $(2,535) thousand in 2024[180] - The decrease in cash used in operating activities was primarily due to deferrals of payables to preserve cash until additional capital is raised[180] Workforce and Restructuring - A reduction-in-force of approximately 67% of the workforce was implemented in May 2024 as part of an operational restructuring plan[136] Other Financial Information - As of March 31, 2025, the company had $2.6 million in cash and an accumulated deficit of $251.0 million, with no revenue generated to date[160] - The company recorded a non-cash revaluation loss of less than $0.1 million on warrant liabilities for the three months ended March 31, 2025, compared to a gain of $0.6 million in the same period of 2024[156] - The company incurred a total of $204,000 in placement agent fees related to the November 2024 private placement, with net proceeds of approximately $2.8 million after expenses[166] - As of March 31, 2025, principal payments expected from debt obligations assumed during the Merger amount to approximately $1.6 million[183] - The company entered into a short-term financing arrangement in January 2025, financing insurance premiums totaling $0.5 million[182] - There were no investing activities reported for the three months ended March 31, 2025 and 2024[181] - The company has not reported any material changes to its critical accounting policies and estimates since December 31, 2024[187] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[188]

[Financial Information](index=4&type=section&id=PART%20I%2E%20Financial%20Information) This section presents the company's condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls assessment [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%2E%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q1 2025 financials show reduced net loss, but liquidity issues persist, raising going concern doubts Condensed Consolidated Balance Sheets (in thousands) | | (unaudited) March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Cash | $1,017 | $1,389 | | Total current assets | $3,278 | $3,451 | | Total assets | $17,785 | $16,996 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $4,331 | $4,271 | | Total liabilities | $6,087 | $4,902 | | Total stockholders' equity | $11,698 | $12,094 | | Total liabilities and stockholders' equity | $17,785 | $16,996 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net sales | $4,929 | $3,432 | | Gross profit | $2,140 | $920 | | Operating loss | $(859) | $(2,074) | | Net loss | $(884) | $(2,079) | | Basic and diluted loss per common share | $(0.59) | $(1.46) | Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(44) | $(667) | | Net cash used in investing activities | $(138) | — | | Net cash used in financing activities | $(190) | $(59) | | Net change in cash | $(372) | $(726) | | Cash at end of period | $1,017 | $776 | - The company is a healthcare biotechnology firm focused on developing diagnostic products and services to address cancer misdiagnoses[19](index=19&type=chunk) - The company has incurred substantial operating losses, has a working capital deficit of **$1.1 million**, and an accumulated deficit of **$103.3 million** as of March 31, 2025, raising **substantial doubt about its ability to continue as a going concern**[26](index=26&type=chunk)[27](index=27&type=chunk) - In April 2025, the company received an initial payment of approximately **$0.4 million** related to an Employee Retention Credit (ERC) claim, which will be recorded as other income in Q2 2025[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2025 sales growth to increased diagnostic cases, improving gross margin, while addressing working capital and going concern risks Net Sales Comparison (in thousands) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change $ (in thousands) | Change % | | :--- | :--- | :--- | :--- | :--- | | Service revenue, net | $4,275 | $2,775 | $1,500 | 54% | | Product revenue | $654 | $657 | $(3) | -% | | **Net Sales** | **$4,929** | **$3,432** | **$1,497** | **44%** | - The increase in service revenue was driven by processing **3,021 cases** in Q1 2025, a **47% increase** from the **2,062 cases** processed in Q1 2024[142](index=142&type=chunk) Gross Profit and Margin Comparison | (Dollars in Thousands) | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Gross Profit | $2,140 | $920 | | Gross Margin % | 43% | 27% | - Operating expenses remained flat at **$3.0 million** for Q1 2025 compared to Q1 2024[145](index=145&type=chunk) Working Capital Position (in thousands) | | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Current assets | $3,278 | $3,451 | $(173) | | Current liabilities | $4,331 | $4,271 | $60 | | **Working capital** | **$(1,053)** | **$(820)** | **$(233)** | - Net cash used in operating activities significantly decreased to **$44 thousand** in Q1 2025 from **$667 thousand** in Q1 2024, primarily due to a smaller net loss and changes in working capital[149](index=149&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative market risk disclosures - As a smaller reporting company, Precipio is not required to provide the information under this item[158](index=158&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls were effective with no material changes to internal controls during Q1 2025 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective at a reasonable assurance level** as of March 31, 2025[161](index=161&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[162](index=162&type=chunk) [Other Information](index=50&type=section&id=PART%20II%2E%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, and a list of exhibits [Legal Proceedings](index=50&type=section&id=Item%201%2E%20Legal%20Proceedings) The company is involved in a legal proceeding with a former employee, which management disputes and does not expect to have a material financial impact - The company is involved in a legal proceeding brought by a former employee alleging unfair dismissal, which it is defending vigorously and **does not expect to have a material financial impact**[168](index=168&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A%2E%20Risk%20Factors) No material changes to risk factors have occurred since the company's most recent Annual Report on Form 10-K - There have been no material changes from the risk factors disclosed in the company's most recent Annual Report on Form 10-K[171](index=171&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no sales of unregistered equity securities during the three months ended March 31, 2025 - During the three months ended March 31, 2025, the company did not have any sales of unregistered securities[173](index=173&type=chunk) [Defaults Upon Senior Securities](index=52&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[174](index=174&type=chunk) [Mine Safety Disclosures](index=52&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - Not applicable[175](index=175&type=chunk) [Other Information](index=52&type=section&id=Item%205%2E%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or other trading plans during Q1 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement during the fiscal quarter[177](index=177&type=chunk) [Exhibits](index=53&type=section&id=Item%206%2E%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, SOX certifications, and Inline XBRL files - The report includes a list of filed exhibits, such as the Certificate of Incorporation, Bylaws, Sarbanes-Oxley certifications (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents[180](index=180&type=chunk)

Financial Performance - The company has incurred significant net losses, with an accumulated deficit of $67.6 million as of March 31, 2025, and net losses of $9.3 million and $2.2 million for the three months ended March 31, 2025, and 2024, respectively [103]. - The total operating expenses for the three months ended March 31, 2025, were $10.5 million, compared to $2.2 million in 2024, resulting in a loss from operations of $10.5 million [125]. - The company reported a net loss of $9.3 million in Q1 2025, compared to a net loss of $2.2 million in Q1 2024 [138]. - The accumulated deficit as of March 31, 2025, was $67.6 million, with expectations of continued losses for the foreseeable future [133]. Funding and Capital - The company completed its IPO in February 2025, raising approximately $87.5 million from the sale of 6,120,661 shares at an IPO price of $16.00 per share [104]. - The company raised a total of $129.1 million in gross proceeds from the sale of convertible preferred stock prior to its IPO in February 2025, which generated net proceeds of $87.5 million from the sale of 6,120,661 shares at an IPO price of $16.00 per share [130]. - Net cash provided by financing activities was $88.9 million in Q1 2025, primarily from proceeds of $91.1 million from the IPO [140]. Cash and Investments - As of March 31, 2025, the company had cash, cash equivalents, and short-term investments totaling $151.3 million, which is expected to fund operations into 2027 [104]. - The company had cash, cash equivalents, and short-term investments of $151.3 million as of March 31, 2025, which is expected to fund operations into 2027 [131]. - Net cash used in operating activities increased to $11.4 million for Q1 2025 from $2.2 million in Q1 2024, primarily due to a reported net loss of $9.3 million [138]. - Net cash used in investing activities was $112.6 million in Q1 2025, mainly due to the purchase of short-term investments [139]. Research and Development - The company has no products approved for sale and does not expect to generate revenue until regulatory approval is obtained for its product candidates [105]. - The lead product candidate, ARD-101, is currently in a Phase 3 clinical trial for hyperphagia associated with Prader-Willi Syndrome, with topline data anticipated in early 2026 [96]. - The company has focused on developing small-molecule therapeutics targeting Bitter Taste Receptors (TAS2Rs) to alleviate hunger, with ongoing research into additional product candidates [96]. - The company plans to continue its development of ARD-101 and other candidates, conduct ongoing clinical trials, and expand its clinical management and regulatory capabilities [107]. - Research and development (R&D) expenses for the three months ended March 31, 2025, were $7.8 million, a $6.5 million increase from $1.2 million in the same period of 2024, primarily due to increased external costs related to ARD-101 [126]. - The company anticipates substantial increases in R&D expenses as it continues ongoing R&D activities and clinical trials for its product candidates [116]. Operational Strategy - The company relies on third parties for the manufacture of its product candidates and plans to maintain this strategy to focus on research and development [106]. - The company expects to incur significant commercialization expenses if regulatory approval is obtained for its product candidates [103]. Economic and Market Conditions - Macroeconomic conditions, including inflation and geopolitical conflicts, may negatively impact the company's financial position and growth prospects [110]. - The impact of foreign currency costs on operations has been negligible, with no formal hedging program in place [146]. - Inflation has not had a material effect on the company's results of operations during the periods presented [147]. Future Outlook - Future capital requirements are uncertain and depend on various factors, including the costs and timing of clinical trials and regulatory approvals [134]. - The company does not believe that a hypothetical 100 basis point change in interest rates would have a material impact on its financial statements [145]. - There have been no material changes to contractual obligations and other commitments as of March 31, 2025 [141]. - The company continues to evaluate its critical accounting estimates and policies, with no material changes reported [144].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the transition period from _____ to _____ Commission File Number: 001-41690 U.S. GOLDMINING INC. (Exact name of registrant as specified in its charter) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Nevada 37-1792147 (State or other jurisdicti ...