PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial health significantly declined in Q1 2025, marked by substantial decreases in total assets and shareholders' equity, a **28.9%** revenue drop, increased operating and net losses, and significant cash outflow from operations [Consolidated Balance Sheets](index=3&type=section&id=HEARTCORE%20ENTERPRISES%2C%20INC.%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets decreased to **$10.22 million** from **$13.97 million** at year-end 2024, driven by reduced cash and marketable securities, while total shareholders' equity plummeted to **$0.60 million** due to an increased accumulated deficit Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $738,984 | $2,121,089 | | Investments in marketable securities | $2,251,276 | $4,495,703 | | Total current assets | $6,064,299 | $9,417,365 | | Total assets | $10,223,007 | $13,965,034 | | **Liabilities & Equity** | | | | Total current liabilities | $6,695,271 | $7,421,722 | | Total liabilities | $9,622,720 | $10,503,019 | | Accumulated deficit | $(19,331,835) | $(16,244,843) | | Total shareholders' equity | $600,287 | $3,462,015 | [Unaudited Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=HEARTCORE%20ENTERPRISES%2C%20INC.%20UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) For Q1 2025, revenues decreased **28.9%** to **$3.59 million**, leading to a widened operating loss of **$1.24 million** and a net loss of **$3.14 million**, more than double the prior-year quarter, worsening net loss per share to **$(0.14)** Statement of Operations Summary (For the Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenues | $3,587,026 | $5,046,732 | | Gross Profit | $1,100,284 | $2,032,189 | | Loss from Operations | $(1,244,157) | $(682,955) | | Net Loss | $(3,137,381) | $(1,478,002) | | Net Loss Attributable to HeartCore | $(3,086,992) | $(1,333,350) | | Basic and Diluted Net Loss per Share | $(0.14) | $(0.06) | [Unaudited Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=HEARTCORE%20ENTERPRISES%2C%20INC.%20UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS%27%20EQUITY) Shareholders' equity decreased from **$3.46 million** at year-end 2024 to **$0.60 million** by March 31, 2025, primarily due to a **$3.14 million** net loss for the quarter, partially offset by common share issuances and option exercises - Total shareholders' equity decreased by **$2.86 million** during the first quarter of 2025[14](index=14&type=chunk) - The decrease was primarily driven by a net loss of **$3.14 million**[14](index=14&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=HEARTCORE%20ENTERPRISES%2C%20INC.%20UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities significantly increased to **$2.0 million** in Q1 2025 due to a higher net loss, leading to an overall **$1.38 million** decrease in cash and cash equivalents despite a net inflow from financing activities Consolidated Cash Flow Summary (For the Three Months Ended March 31) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash flows used in operating activities | $(2,000,791) | $(898,619) | | Net cash flows provided by investing activities | $473,061 | $1,650,814 | | Net cash flows provided by (used in) financing activities | $142,940 | $(474,752) | | **Net change in cash and cash equivalents** | **$(1,382,105)** | **$206,772** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=HEARTCORE%20ENTERPRISES%2C%20INC.%20NOTES%20TO%20UNAUDITED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes detail the company's organizational structure, accounting policies, revenue disaggregation showing declines in on-premise software and consulting, customer credit risk concentrations, related party transactions, investment value changes, debt obligations, and stock-based compensation plans - The company operates through its primary subsidiary HeartCore Japan, its **51% owned subsidiary Sigmaways**, and newly formed entities HeartCore Financial and HeartCore Luvina in Vietnam[21](index=21&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk) Disaggregation of Revenues (For the Three Months Ended March 31) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Revenues from on-premise software | $334,882 | $1,078,736 | | Revenues from maintenance and support services | $567,619 | $627,764 | | Revenues from SaaS | $172,844 | $139,700 | | Revenues from customized software development | $1,840,781 | $2,177,593 | | Revenues from consulting services | $245,543 | $575,481 | | **Total revenues** | **$3,587,026** | **$5,046,732** | - For Q1 2025, one customer (Customer B) represented **18.7%** of total revenues[50](index=50&type=chunk) - As of March 31, 2025, another customer (Customer A) represented **17.9%** of total accounts receivable[50](index=50&type=chunk) - The company determines its operations constitute a single operating segment[112](index=112&type=chunk) - Geographically, revenues are split between Japan (**$1.74M**) and the United States (**$1.74M**), with a smaller portion from international markets[114](index=114&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **28.9%** Q1 2025 revenue decline to reduced software sales and consulting, leading to a **45.9%** gross profit drop, wider operating loss, and a **112.3%** increase in net loss, further weakening liquidity and resulting in a Nasdaq minimum bid price deficiency notice [Business Overview](index=27&type=section&id=Business%20Overview) The company operates two main software development business units, Customer Experience (CX) and Digital Transformation (DX), and since 2022, a 'GO IPO' consulting business assisting Japanese companies with U.S. listings - The company has two primary business units: the CX division (CXM Platform) and the DX division (digital transformation and automation)[119](index=119&type=chunk)[120](index=120&type=chunk) - The 'GO IPO' business, started in 2022, assists Japanese companies with U.S. listings and has secured agreements with **14 companies** as of March 31, 2025[122](index=122&type=chunk) - The company expanded through the acquisition of a **51% stake** in Sigmaways, Inc. in 2023 and the formation of HeartCore Luvina in Vietnam and HeartCore Financial in the U.S.[124](index=124&type=chunk)[125](index=125&type=chunk) [Recent Developments](index=28&type=section&id=Recent%20Developments) In Q1 2025, the company lost its 'controlled company' status due to the CEO's reduced voting power, leading to the formation of new board committees, and subsequently received a Nasdaq deficiency notice for failing to meet the **$1.00** minimum bid price requirement - The company is no longer a 'controlled company' as the CEO's voting power dropped below **50%** due to at-the-market stock sales[131](index=131&type=chunk) - As a result, the company formed a Compensation Committee and a Nominating and Corporate Governance Committee composed of independent directors[127](index=127&type=chunk)[133](index=133&type=chunk) - On May 6, 2025, the company received a notice from Nasdaq for failing to meet the **$1.00** minimum bid price requirement[135](index=135&type=chunk) - The company has **180 calendar days**, until November 3, 2025, to regain compliance with the minimum bid price rule[136](index=136&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) In Q1 2025, revenues fell **28.9%** to **$3.6 million** due to reduced software and consulting sales, leading to a **45.9%** gross profit decline and an **82.2%** increase in operating loss, with a **131.5%** rise in net loss attributable to the company due to increased losses on marketable securities Comparison of Operations (Three Months Ended March 31) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $3,587,026 | $5,046,732 | -28.9% | | Gross Profit | $1,100,284 | $2,032,189 | -45.9% | | Loss from Operations | $(1,244,157) | $(682,955) | 82.2% | | Net Loss Attributable to HeartCore | $(3,086,992) | $(1,333,350) | 131.5% | - The revenue decrease was primarily driven by a **$743,854** drop in on-premise software sales, a **$336,812** decline in customized software services, and a **$329,938** reduction from GO IPO consulting services[143](index=143&type=chunk) - General and administrative expenses decreased by **19.8%** (**$476,915**), mainly due to lower salaries after employee restructuring and reduced amortization expenses[149](index=149&type=chunk) - Other expenses increased by **109.8%** (**$961,374**), largely due to a **$1,547,582** increase in losses from the change in fair value of marketable securities[153](index=153&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly weakened in Q1 2025, with cash and cash equivalents falling to **$0.74 million** from **$2.12 million** due to a **$2.0 million** net cash outflow from operating activities, partially offset by investing and financing inflows Cash Flow Summary (Three Months Ended March 31, 2025) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash flows used in operating activities | $(2,000,791) | | Net cash flows provided by investing activities | $473,061 | | Net cash flows provided by financing activities | $142,940 | | **Net change in cash and cash equivalents** | **$(1,382,105)** | - Cash and cash equivalents decreased to **$738,984** as of March 31, 2025, from **$2,121,089** as of December 31, 2024[158](index=158&type=chunk) - Net cash used in operating activities of **$2.0 million** was primarily due to the net loss of **$3.1 million**, offset by non-cash charges like a **$1.8 million** loss on marketable securities[160](index=160&type=chunk) [Contractual Obligations](index=33&type=section&id=Contractual%20Obligations) As of March 31, 2025, the company has significant contractual obligations, including **$1.94 million** in total future lease liabilities (**$1.88 million** operating, **$58,786** finance) and **$1.55 million** in future minimum principal payments for long-term debt Future Minimum Lease Payments (as of March 31, 2025) | Year Ended Dec 31, | Operating Leases | Finance Lease | | :--- | :--- | :--- | | Remaining of 2025 | $232,733 | $13,199 | | 2026 | $274,468 | $17,599 | | 2027 | $274,468 | $17,599 | | 2028 | $274,468 | $11,733 | | 2029 | $274,468 | - | | Thereafter | $637,857 | - | | **Total Lease Payments** | **$1,968,462** | **$60,130** | - As of March 31, 2025, future minimum principal payments for long-term debts total **$1,545,983**[164](index=164&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has indicated that this item is not applicable - Not applicable[167](index=167&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2025, management concluded that the company's disclosure controls and procedures were not effective, consistent with the prior annual report, with no material changes to internal control over financial reporting identified during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2025[168](index=168&type=chunk) - There were no changes in the Company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the controls[169](index=169&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not currently involved in any legal proceedings that would have a material effect on its business, financial position, or results of operations - To the knowledge of management, there are no pending legal proceedings that would have a material effect on the company[171](index=171&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, the company is not required to disclose material changes to the risk factors previously reported in its Annual Report on Form 10-K - As a smaller reporting company, disclosure of material changes to risk factors is not required in this report[172](index=172&type=chunk) [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 reported no unregistered sales of equity securities during the period - None[173](index=173&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) The company reports no material changes to procedures for security holders to recommend board nominees, and no director or officer adopted or terminated a Rule 10b5-1 trading plan during the quarter ended March 31, 2025 - There have been no material changes to the procedures by which security holders may recommend nominees to the Company's Board of Directors[176](index=176&type=chunk) - During the quarter, no director or officer adopted or terminated a Rule 10b5-1 trading plan[177](index=177&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) The report lists the exhibits filed, which include certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents - Filed exhibits include Rule 13a-14(a) certifications for the CEO and CFO, Section 906 certifications, and various Inline XBRL files[179](index=179&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from to Commission file number 001-36548 ATARA BIOTHERAPEUTICS, INC. (Exact Name of Registrant as Specified in its Charter) | Delaware | 46-0920988 | | --- | --- | | (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | | 1280 Rancho Conejo Boulevard | | | Thousand Oaks, CA | 91320 | | (Address of Principal Executive Offices) | (Zip Code) | | Registrant's Teleph ...

[Q1 2025 Financial Results and Operational Progress](index=1&type=section&id=Atara%20Biotherapeutics%20Announces%20First%20Quarter%20Financial%20Results%20and%20Operational%20Progress) The company secured new financing and implemented major cost reductions to extend its cash runway while focusing resources on its lead program, tab-cel - Atara secured **$16 million in financing**, which is expected to extend its cash runway through the first quarter of 2026[2](index=2&type=chunk)[7](index=7&type=chunk)[13](index=13&type=chunk) - The company is implementing significant cost reductions, including workforce and program cuts, and expects to **reduce operating expenses by approximately 65%** year-over-year in 2025[1](index=1&type=chunk)[6](index=6&type=chunk)[13](index=13&type=chunk) - All manufacturing responsibilities and costs for its lead candidate, tabelecleucel, have been **transferred to partner Pierre Fabre Laboratories**[1](index=1&type=chunk)[4](index=4&type=chunk) - Development of the company's CAR T programs (ATA3219 and ATA3431) has been **discontinued to focus resources on tabelecleucel**[3](index=3&type=chunk) [Operational Highlights & Pipeline Update](index=1&type=section&id=Operational%20Highlights%20%26%20Pipeline%20Update) Atara is advancing tab-cel® by addressing FDA feedback and transferring manufacturing, while discontinuing CAR T programs to conserve resources [Tabelecleucel (tab-cel® or EbvalloTM)](index=1&type=section&id=Tabelecleucel%20(tab-cel%C2%AE%20or%20EbvalloTM)%20for%20Post-Transplant%20Lymphoproliferative%20Disease%20(PTLD)) The company is actively working with the FDA to advance its lead program, tab-cel®, towards a Biologics License Application resubmission - The FDA has **lifted the clinical holds** on EBVALLOTM studies, and Atara plans to resume enrollment in its Phase 3 and Phase 2 studies[4](index=4&type=chunk) - A **Type A meeting with the FDA is scheduled for Q2 2025** to discuss the path for resubmitting the EBVALLOTM Biologics License Application (BLA)[4](index=4&type=chunk) - As of March 2025, all worldwide **manufacturing responsibility for tab-cel has been transferred** to partner Pierre Fabre Laboratories[4](index=4&type=chunk) - Atara remains eligible for **significant milestone payments and royalties** from Pierre Fabre upon potential FDA approval and commercial sales of EBVALLOTM[4](index=4&type=chunk) [CAR T Programs](index=1&type=section&id=CAR%20T%20Programs%20Discontinued) Development of the company's CAR T programs has been paused to prioritize resources for its lead asset - Atara has **paused the development of its CAR T programs** (ATA3219 and ATA3431), with wind-down activities expected to be completed in the second quarter of 2025[3](index=3&type=chunk) [Corporate and Financial Updates](index=2&type=section&id=Corporate%20and%20Financial%20Updates) The company executed a strategic restructuring and secured new financing, resulting in a significant Q1 2025 revenue increase and a return to profitability [Corporate Updates](index=2&type=section&id=Corporate%20Updates) The company undertook a major restructuring, including workforce reductions and new financing, to strengthen its financial position - In May 2025, Atara implemented a strategic restructuring that resulted in a **30% workforce reduction**, retaining approximately 23 essential personnel[6](index=6&type=chunk) - The company entered into an underwriting agreement for an offering with expected **gross proceeds of $16 million** to fund activities towards tab-cel BLA approval and for general corporate purposes[7](index=7&type=chunk) - Atara has **paused its review of strategic options**, such as a merger or sale, pending the outcome of the Type A meeting with the FDA scheduled for Q2 2025[5](index=5&type=chunk) [First Quarter 2025 Financial Results](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results) Q1 2025 saw a dramatic revenue increase and a shift to net income, driven by the Pierre Fabre agreement Q1 2025 Financial Highlights | Financial Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Revenues | $98.1M | $27.4M | +$70.7M | | R&D Expenses | $27.4M | $45.5M | -$18.1M | | G&A Expenses | $11.5M | $11.1M | +$0.4M | | Net Income (Loss) | $38.0M | $(31.8)M | +$69.8M | | Diluted EPS | $3.50 | $(5.65) | +$9.15 | - The significant increase in total revenues was primarily due to **revenue recognized from the Pierre Fabre agreement** following the transfer of manufacturing responsibilities[8](index=8&type=chunk) - Cash, cash equivalents, and short-term investments totaled **$13.8 million** as of March 31, 2025, compared to $42.5 million as of December 31, 2024[8](index=8&type=chunk) [2025 Outlook and Cash Runway](index=3&type=section&id=2025%20Outlook%20and%20Cash%20Runway) Atara projects a 65% reduction in 2025 operating expenses and has extended its cash runway into Q1 2026 with recent financing - The company projects that its cash position as of March 31, 2025, combined with the **$16M gross proceeds** from the May 2025 offering, will fund planned operations into the first quarter of 2026[13](index=13&type=chunk) - Full-year 2025 operating expenses are expected to **decrease by approximately 65%** from 2024, with the largest reduction anticipated in Q2 2025[1](index=1&type=chunk)[13](index=13&type=chunk) - The company has **reduced its headcount by approximately 85%** since December 31, 2024, as part of its cost reduction initiatives[13](index=13&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section provides the unaudited Consolidated Balance Sheets and Statements of Operations as of and for the period ended March 31, 2025 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet reflects a decrease in total assets and a significant reduction in liabilities, primarily from deferred revenue recognition Consolidated Balance Sheet Summary | Balance Sheet Item (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $13,841 | $25,030 | | Total current assets | $27,182 | $64,894 | | **Total assets** | **$62,038** | **$109,098** | | **Liabilities & Equity** | | | | Deferred revenue (current) | $15,983 | $95,092 | | Total current liabilities | $47,892 | $134,574 | | **Total liabilities** | **$117,110** | **$206,381** | | **Total stockholders' (deficit) equity** | **$(55,072)** | **$(97,283)** | - Total assets decreased to **$62.0 million** as of March 31, 2025, from $109.1 million at December 31, 2024[15](index=15&type=chunk) - Total liabilities decreased significantly to **$117.1 million** from $206.4 million, primarily due to a reduction in deferred revenue from $95.1 million to $16.0 million[15](index=15&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company achieved a significant net income of $38.0 million in Q1 2025, a stark contrast to the net loss in the prior-year period Consolidated Statement of Operations Summary | Statement of Operations (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Commercialization revenue | $98,149 | $27,357 | | Total costs and operating expenses | $59,347 | $58,604 | | Income (loss) from operations | $38,802 | $(31,247) | | **Net income (loss)** | **$38,010** | **$(31,752)** | - The company reported a **net income of $38.0 million** for Q1 2025, a significant turnaround from a net loss of $31.8 million in Q1 2024[9](index=9&type=chunk)[17](index=17&type=chunk) - Diluted net income per common share was **$3.50 for Q1 2025**, compared to a diluted net loss per share of $5.65 in the same period of 2024[9](index=9&type=chunk)[17](index=17&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ 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 For the transition period from ___________ to ___________ Commission File Number: 001-39536 Taysha Gene Therapies, Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | 84- ...

PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Q1 2025 revenue increased to **$4.25 million** with positive gross profit, but net loss widened to **$14.1 million** as total assets decreased to **$104.6 million** and liabilities to **$58.0 million**, indicating going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$104.6 million** by March 31, 2025, primarily due to reduced cash, while total liabilities significantly decreased to **$58.0 million**, boosting stockholders' equity Condensed Consolidated Balance Sheet Summary (Unaudited) | Balance Sheet Items | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $25,363,853 | $29,958,106 | | Total current assets | $43,396,551 | $47,520,551 | | Goodwill, net | $27,751,921 | $27,751,921 | | Total assets | **$104,600,639** | **$109,622,288** | | **Liabilities & Equity** | | | | Total current liabilities | $50,417,322 | $50,576,622 | | Total long-term liabilities | $7,533,698 | $23,101,154 | | Total liabilities | **$57,951,020** | **$73,677,776** | | Redeemable noncontrolling interest | $20,568,332 | $19,361,205 | | Total stockholders' equity | $26,081,287 | $16,583,307 | | Total liabilities and stockholders' equity | **$104,600,639** | **$109,622,288** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenues surged to **$4.25 million** with a **$1.49 million** gross profit, but increased operating expenses led to a wider net loss of **$14.1 million** compared to the prior year Consolidated Statement of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Revenues, net | $4,248,182 | $625,009 | | Gross profit (loss) | $1,488,550 | $(394,982) | | Operating loss | $(10,310,438) | $(9,127,195) | | Net loss | $(14,136,350) | $(9,876,084) | | Net loss per share - basic and diluted | $(0.15) | $(0.17) | | Weighted average shares outstanding | 105,004,818 | 63,035,122 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to **$6.7 million** in Q1 2025, but a sharp decline in financing activities led to a **$4.6 million** decrease in total cash, ending at **$25.4 million** Consolidated Statement of Cash Flows Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Net cash flows used in operating activities | $(6,659,264) | $(7,455,524) | | Net cash flows used in investing activities | $(195,019) | $(1,212,413) | | Net cash flows provided by financing activities | $2,264,936 | $8,236,646 | | **Decrease in cash, cash equivalents, and restricted cash** | **$(4,589,347)** | **$(431,291)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's segment structure, significant customer concentration, complex debt instruments, and critically, management's conclusion of substantial doubt about its ability to continue as a going concern - The company operates through two business segments: Ondas Networks (private wireless solutions) and Ondas Autonomous Systems (OAS) (drone and automated data solutions)[23](index=23&type=chunk) - Due to a history of losses, a working capital deficit of approximately **$7.0 million**, and reliance on external financing, there is substantial doubt about the Company's ability to continue as a going concern for one year from May 15, 2025[31](index=31&type=chunk)[34](index=34&type=chunk) - Revenue is highly concentrated. For Q1 2025, three customers accounted for **43%**, **36%**, and **14%** of total revenue[109](index=109&type=chunk) - The company has multiple complex debt instruments, including convertible notes with related parties, which are detailed in Note 7 and Note 13[125](index=125&type=chunk)[139](index=139&type=chunk)[216](index=216&type=chunk) - Subsequent to the quarter end, the company increased its authorized common stock from **300 million** to **400 million** shares and increased the shares available under its 2021 Equity Incentive Plan[231](index=231&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=50&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights **579%** revenue growth from OAS multi-drone sales, improving gross margin to **35%**, but operating expenses rose to **$11.8 million**, exacerbating liquidity concerns and substantial doubt about going concern [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Q1 2025 revenues increased by **$3.6 million** driven by OAS multi-drone sales, improving gross profit, but a **$3.1 million** rise in operating expenses led to a wider net loss of **$14.1 million** Q1 2025 vs Q1 2024 Performance | Metric | Q1 2025 ($) | Q1 2024 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Revenue, net | $4,248,182 | $625,009 | $3,623,173 | | Gross Profit (Loss) | $1,488,550 | $(394,982) | $1,883,532 | | Operating Expenses | $11,798,988 | $8,732,213 | $3,066,775 | | Operating Loss | $(10,310,438) | $(9,127,195) | $(1,183,243) | | Net Loss | $(14,136,350) | $(9,876,084) | $(4,260,266) | - The increase in revenue was primarily driven by approximately **$3.2 million** in increased product sales and **$0.5 million** in increased service revenue at the OAS segment, related to multi-drone sales[246](index=246&type=chunk) - Operating expenses increased mainly due to a **$2.9 million** rise in human resource costs, which included a **$1.2 million** increase in stock-based compensation and a **$1.3 million** increase in taxable fringe benefit expense at OAS resulting from an Israeli government audit[251](index=251&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces a **$7.0 million** working capital deficit and **$25.4 million** in cash, with management concluding substantial doubt about its going concern ability, relying on revenue growth and future financing - As of March 31, 2025, the company had cash and restricted cash of approximately **$25.4 million** and a working capital deficit of about **$7.0 million**[261](index=261&type=chunk) - The company has raised significant capital through various financing activities in 2024 and early 2025, including convertible notes, common stock sales, and redeemable preference shares[262](index=262&type=chunk)[263](index=263&type=chunk) - The company explicitly states there is substantial doubt about its ability to continue as a going concern, and future funding depends on revenue growth and the ability to raise additional capital[264](index=264&type=chunk)[265](index=265&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Company's CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025[272](index=272&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended March 31, 2025[273](index=273&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company won a **$2.14 million** judgment in an Abu Dhabi legal dispute, but collection is not guaranteed and no receivable has been recorded - On October 9, 2024, the Abu Dhabi Civil Court of Appeals ruled in favor of Airobotics for **$2,138,945** plus interest and expenses in a non-payment case against a customer. Collection is being pursued, but success is not guaranteed and no receivable is recorded[212](index=212&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for a new risk concerning U.S. trade policy, which could increase costs and disrupt the supply chain - A new risk factor was added regarding changes in U.S. trade policy, including tariffs, which could increase costs, disrupt the supply chain, and adversely impact business operations and financial condition[280](index=280&type=chunk)[281](index=281&type=chunk) [Other Information](index=61&type=section&id=Item%205.%20Other%20Information) Director Joseph Popolo resigned from the board, and the Compensation Committee approved a **$400,000** annual salary and **$50,000** discretionary bonus for CEO Eric Brock - Director Joseph Popolo resigned from the board effective May 14, 2025, in connection with his nomination to be a U.S. Ambassador[286](index=286&type=chunk) - The Compensation Committee approved a **$400,000** annual salary (effective April 1, 2025) and a **$50,000** discretionary bonus for CEO Eric Brock[287](index=287&type=chunk)

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2025 financial statements show decreased cash and assets, increased liabilities, a higher net loss, and subsequent capital raising [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, the company's cash, total assets, and stockholders' equity decreased, while total liabilities increased Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,281 | $5,028 | | Total current assets | $3,930 | $5,615 | | Total assets | $4,042 | $5,739 | | **Liabilities & Equity** | | | | Total current liabilities | $2,779 | $1,636 | | Total liabilities | $2,837 | $1,707 | | Total stockholders' equity | $1,205 | $4,032 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2025, the company reported a net loss of $3.0 million, up from $1.9 million in Q1 2024, driven by increased operating expenses Quarterly Operating Results (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $1,640 | $933 | | General and administrative | $1,411 | $962 | | **Total operating expenses** | **$3,051** | **$1,895** | | **Loss from operations** | **($3,051)** | **($1,895)** | | **Net loss** | **($3,046)** | **($1,887)** | | Net loss per share, basic and diluted | ($5.80) | ($101.05) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash used in operations decreased, but financing activities shifted to usage, leading to a net cash decrease Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Cash used in operating activities | ($1,736) | ($2,203) | | Cash (used in) provided by financing activities | ($11) | $4,486 | | **Net (decrease) increase in cash** | **($1,747)** | **$2,283** | | Cash and cash equivalents at end of period | $3,281 | $4,091 | [Notes to Unaudited Interim Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) Notes detail the company's biopharmaceutical focus, significant going concern doubt, and recent financing activities including an April 2025 public offering - The company is a clinical-stage biopharmaceutical firm developing therapies for inflammatory, fibrotic, and autoimmune disorders. Its lead product, **GRI-0621**, targets idiopathic pulmonary fibrosis (**IPF**), while **GRI-0803** targets autoimmune disorders like **lupus** and **MS**[21](index=21&type=chunk) - There is **substantial doubt** about the company's ability to continue as a **going concern**. Existing cash of **$3.3 million** (as of March 31, 2025) is projected to fund operations only through the **third quarter of 2025**, necessitating additional capital raising[23](index=23&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - In **April 2025**, the company executed a **public offering**, raising gross proceeds of **$5.0 million** through the sale of common stock, pre-funded warrants, and several series of common stock warrants[65](index=65&type=chunk) - The company has engaged in multiple financing activities, including a **February 2024 offering** (net proceeds **$4.4M**), a **May 2024 At-The-Market (ATM) offering** (gross proceeds **$3.6M** as of Q1 2025), a **June 2024 offering** (net proceeds **$3.2M**), and an **October 2024 warrant repricing**[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses GRI-0621 development, increased Q1 2025 net loss from higher expenses, and critical funding needs due to going concern doubt [Overview and Recent Developments](index=19&type=section&id=Overview%20and%20Recent%20Developments) The company is advancing GRI-0621 for IPF, with GRI-0803 on hold; recent developments include a reverse stock split and a $5.0 million capital raise - The company is advancing its lead product, **GRI-0621**, in a **Phase 2a study** for **IPF**, with interim data anticipated in **Q2 2025** and topline results in **Q3 2025**[72](index=72&type=chunk) - Development of the second product candidate, **GRI-0803** for **lupus** and **MS**, is **on hold** pending additional funding, with plans to file an **IND in 2025** if capital is secured[73](index=73&type=chunk) - A **1-for-17 reverse stock split** was effected in **February 2025**, and the company regained **Nasdaq compliance** in **March 2025**[74](index=74&type=chunk)[79](index=79&type=chunk) - In **April 2025**, the company entered into a securities purchase agreement for gross proceeds of **$5.0 million**[75](index=75&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 saw R&D expenses increase by $0.7 million and G&A expenses by $0.4 million, leading to a higher net loss of $3.0 million Comparison of Operating Results (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $1,640 | $933 | +$707 | | General and administrative | $1,411 | $962 | +$449 | | **Net loss** | **($3,046)** | **($1,887)** | +($1,159) | - The **$0.7 million increase** in **R&D expenses** was mainly due to increased costs for the **GRI-0621** registration development program[87](index=87&type=chunk) - The **$0.4 million increase** in **G&A expenses** was primarily due to a **$0.3 million rise** in **personnel expenses** (including stock compensation) and a **$0.2 million increase** in **professional fees**[88](index=88&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity challenges with limited cash, an accumulated deficit, and a critical need for additional funding, raising substantial doubt about its going concern ability - The company had **$3.3 million** in cash and an accumulated deficit of **$42.8 million** as of March 31, 2025[91](index=91&type=chunk)[97](index=97&type=chunk) - Existing cash and cash equivalents are expected to fund operating expenses and capital requirements only through the **third quarter of 2025**[98](index=98&type=chunk) - The company will need to obtain **substantial additional funding** to continue operations. Failure to secure financing may force it to **delay or discontinue development programs or cease operations entirely**[99](index=99&type=chunk)[100](index=100&type=chunk) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in Operating activities | ($1,736) | ($2,203) | | Net cash (used in) provided by Financing activities | ($11) | $4,486 | [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not applicable as the company qualifies as a smaller reporting company - Disclosure is **not required** as the company is a **smaller reporting company**[105](index=105&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective due to a material weakness in accounting for a warrant repricing, with a remediation plan underway - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2025[108](index=108&type=chunk) - A **material weakness** was identified related to the **inaccurate accounting** for a **warrant repricing transaction**, specifically the computation of the **non-cash deemed dividend**[109](index=109&type=chunk) - A **remediation plan** has been implemented, involving the engagement of **third-party experts** and **refinement of internal communication and documentation processes** for complex transactions[110](index=110&type=chunk)[112](index=112&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, nor is it aware of any pending or threatened actions - The company is **not currently involved** in any **material legal proceedings**[115](index=115&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K - **No material changes** from the risk factors disclosed in the Annual Report[116](index=116&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or issuer purchases were reported during the period - **None reported**[117](index=117&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - **No directors or officers** adopted or terminated **Rule 10b5-1 trading arrangements** during the quarter[120](index=120&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and documents incorporated by reference

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ____________________________________ FORM 10-Q ____________________________________ (Mark One) ☐ 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: 001-40034 _________________ ...

[GRI Bio First Quarter 2025 Financial Results and Corporate Update](index=1&type=section&id=GRI%20Bio%20First%20Quarter%202025%20Financial%20Results%20and%20Corporate%20Update) [Corporate and Clinical Highlights](index=1&type=section&id=Recent%20Highlights) GRI Bio reported positive interim Phase 2a data for GRI-0621 in IPF, strengthened intellectual property, and extended its cash runway with a $5.0 million public offering - Reported **positive interim 2-week safety and biomarker results** from the ongoing Phase 2a study of GRI-0621 for IPF[1](index=1&type=chunk)[3](index=3&type=chunk)[5](index=5&type=chunk) - **Completed patient enrollment for the 6-week interim analysis (n=24)** and has enrolled over two-thirds of the total trial participants[1](index=1&type=chunk)[5](index=5&type=chunk) - **Strengthened its global intellectual property portfolio** with the granting of patents in Europe and Japan[5](index=5&type=chunk) - Closed a **$5.0 million public offering**, extending the company's cash runway[5](index=5&type=chunk)[11](index=11&type=chunk) [Clinical Program Update: GRI-0621 for IPF](index=1&type=section&id=Clinical%20Program%20Update) The Phase 2a study of GRI-0621 for IPF demonstrated safety and tolerability in early patients, with interim biomarker data suggesting an anti-fibrotic effect - GRI-0621 is a **small molecule RAR-βɣ dual agonist** designed to inhibit iNKT cell activity for treating IPF, a chronic progressive pulmonary disease with limited treatment options[5](index=5&type=chunk)[6](index=6&type=chunk) - A pre-planned interim analysis of the first 12 patients showed GRI-0621 (4.5mg orally once daily) to be **safe and well-tolerated**, with **no hyperlipidemia** observed at the 2-week visit[7](index=7&type=chunk) - Interim biomarker results from the first 12 subjects showed a change from baseline in PRO-C3 that is **suggestive of an anti-fibrotic effect**, leading the IDMC to recommend the study continue as planned[8](index=8&type=chunk) [Upcoming Milestones](index=2&type=section&id=Expected%20GRI-0621%20Upcoming%20Milestones) GRI Bio anticipates reporting significant data from its Phase 2a trial of GRI-0621 in the second and third quarters of 2025, marking key catalysts for the program - **Q2 2025**: Report **6-week interim results** from the Phase 2a biomarker study[11](index=11&type=chunk) - **Q3 2025**: Report **topline results** from the Phase 2a biomarker study[9](index=9&type=chunk)[11](index=11&type=chunk) [First Quarter 2025 Financial Results](index=2&type=section&id=Summary%20of%20Financial%20Results%20for%20First%20Quarter%202025) GRI Bio reported a **$3.0 million net loss** for Q1 2025, with increased R&D and G&A expenses, and an extended cash runway through Q3 2025 after a **$5.0 million public offering** Key Financial Metrics | Financial Metric | Q1 2025 | | :--- | :--- | | Net Loss | $3.0 million | | Cash and Cash Equivalents (as of Mar 31) | $3.3 million | Operating Expenses | Expense Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research & Development | $1.6 million | $0.9 million | | General & Administrative | $1.4 million | $1.0 million | - The company's existing cash, supplemented by a subsequent **$5.0 million public offering**, is expected to fund operations and capital expenditures through **Q3 2025**[1](index=1&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) [Company Overview](index=3&type=section&id=About%20GRI%20Bio%2C%20Inc.) GRI Bio is a clinical-stage biopharmaceutical company developing NKT cell-targeted therapies for inflammatory, fibrotic, and autoimmune diseases, with lead program GRI-0621 for IPF - GRI Bio is a **clinical-stage biopharmaceutical company** focused on modulating **Natural Killer T (NKT) cells** to treat inflammatory, fibrotic, and autoimmune diseases[2](index=2&type=chunk)[13](index=13&type=chunk) - The lead program, **GRI-0621**, is an **oral inhibitor** of type 1 invariant NKT (iNKT) cell activity being developed for **Idiopathic Pulmonary Fibrosis (IPF)**[13](index=13&type=chunk) - The company's pipeline also includes **novel type 2 diverse NKT (dNKT) agonists** for **systemic lupus erythematosus** and is supported by a **proprietary library of over 500 compounds**[13](index=13&type=chunk)

Exhibit 99.1 GRI Bio Reports First Quarter 2025 Financial Results and Confirms GRI-0621 Phase 2a IPF Trial on Track for 6-Week Interim Data in Q2 2025 and Topline Data in Q3 2025 Positive interim 2-week safety and biomarker results from its ongoing Phase 2a study evaluating GRI- 0621 for the treatment of Idiopathic Pulmonary Fibrosis ("IPF") Continued momentum with completed patient enrollment for the 6-week interim analysis (n=24) and over two-thirds enrollment completed for the overall trial Cash runway e ...

PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) The unaudited condensed consolidated financial statements for the period ended March 31, 2025, show a significant increase in cash and cash equivalents to $7.06 million, primarily due to financing activities [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to **$20.2 million** from **$15.6 million**, driven by a rise in cash and cash equivalents from **$1.8 million** to **$7.1 million**, while total liabilities decreased, leading to increased stockholders' equity Condensed Consolidated Balance Sheet Highlights (in USD) | Balance Sheet Item | March 31, 2025 (Unaudited) | June 30, 2024 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $7,058,020 | $1,848,295 | | Total current assets | $8,988,564 | $3,520,289 | | Goodwill | $10,857,600 | $10,857,600 | | **Total assets** | **$20,244,730** | **$15,558,603** | | **Liabilities & Equity** | | | | Total current liabilities | $3,497,372 | $2,427,598 | | Total liabilities | $3,516,823 | $4,020,118 | | Total stockholders' equity | $16,727,907 | $11,538,485 | | **Total liabilities and stockholders' equity** | **$20,244,730** | **$15,558,603** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, revenue decreased to **$1.42 million** with a net loss of **$1.50 million**, while the nine-month revenue remained flat at **$7.03 million** with a slight increase in net loss to **$2.49 million** Operating Results (in USD) | Metric | Q3 FY2025 (3 months ended Mar 31, 2025) | Q3 FY2024 (3 months ended Mar 31, 2024) | Nine Months FY2025 (ended Mar 31, 2025) | Nine Months FY2024 (ended Mar 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$1,422,235** | **$1,895,643** | **$7,029,538** | **$7,076,948** | | Software services | $1,283,287 | $1,466,397 | $6,641,652 | $6,510,740 | | Software license/SaaS | $138,948 | $429,246 | $387,886 | $566,208 | | **Gross Profit** | **$1,020,026** | **$1,326,182** | **$4,968,019** | **$4,670,469** | | **Loss from operations** | **($1,584,663)** | **($1,603,307)** | **($2,610,208)** | **($2,586,600)** | | **Net Loss** | **($1,502,202)** | **($1,542,256)** | **($2,490,522)** | **($2,400,066)** | | **Basic and Diluted EPS** | **($0.07)** | **($0.09)** | **($0.13)** | **($0.15)** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2025, net cash used in operating activities significantly improved to **($0.13 million)**, with net cash provided by financing activities of **$6.88 million**, resulting in a **$5.21 million** net increase in cash Cash Flow Summary (Nine Months Ended March 31, in USD) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($126,134) | ($4,282,895) | | Net cash used in investing activities | ($1,541,453) | ($19,346) | | Net cash provided by financing activities | $6,877,312 | $2,968,501 | | **Net change in cash and cash equivalents** | **$5,209,725** | **($1,333,740)** | | **Cash and cash equivalents, end of period** | **$7,058,020** | **$4,285,343** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's immersive technology business, liquidity, accounting policies, and significant events including subsidiary divestitures and a **$6.79 million** financing agreement - The company is an Immersive technology company providing Virtual Reality (VR), Augmented Reality (AR), and Spatial Computing software and services[27](index=27&type=chunk) - In December 2024 and January 2025, the company raised approximately **$6.79 million** in net cash proceeds from a Securities Purchase Agreement (SPA)[29](index=29&type=chunk)[30](index=30&type=chunk) - Effective October 1, 2024, the company divested its subsidiary QReal and Glimpse Turkey in a management buyout, retaining revenue from QReal's largest customer up to a **$1.35 million** milestone[71](index=71&type=chunk)[73](index=73&type=chunk) - As of March 31, 2025, the company had approximately **$3.34 million** in unfulfilled performance obligations on executed contracts[65](index=65&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic shift to 'Spatial Core' technologies, stable revenue, decreased operating expenses, and improved liquidity driven by a **$6.79 million** financing, leading to a reduced Adjusted EBITDA loss [Overview](index=28&type=section&id=Overview) The company operates as an enterprise-focused Immersive technology provider, initiating a strategic shift in fiscal year 2024 to prioritize 'Spatial Core' solutions integrating Spatial Computing, Cloud, and AI - The company is an Immersive technology company focused on enterprise VR, AR, and Spatial Computing software and services[143](index=143&type=chunk) - A strategic shift in FY2024 focuses the business on 'Spatial Core' solutions, integrating Spatial Computing, Cloud, and Artificial Intelligence (AI)[146](index=146&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) For the nine months ended March 31, 2025, total revenue was flat at **$7.03 million**, gross profit increased by **6%** to **$4.97 million** with a **71%** gross margin, and operating expenses decreased by **30%** (excluding impairments and fair value changes) Revenue by Category (Nine Months Ended March 31, in millions USD) | Category | 2025 | 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Software Services | $6.64 | $6.51 | $0.13 | 2% | | Software License/SaaS | $0.39 | $0.57 | ($0.18) | -32% | | **Total Revenue** | **$7.03** | **$7.08** | **($0.05)** | **-1%** | - Gross profit margin for the nine months ended March 31, 2025, increased to **71%** from 66% in the prior year, reflecting a revenue mix with less third-party costs[159](index=159&type=chunk) - Operating expenses, excluding impairments and fair value changes, decreased by **30%** for the nine months ended March 31, 2025, compared to the prior year, reflecting the strategic shift and divestitures[160](index=160&type=chunk)[161](index=161&type=chunk) - Customer concentration remains high, with two customers accounting for **58%** of total gross revenues during the nine months ended March 31, 2025[158](index=158&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA to evaluate core operating performance, with the loss significantly improving to **$1.22 million** for the nine months ended March 31, 2025, from **$3.50 million** in the prior year Reconciliation of Net Loss to Adjusted EBITDA (in millions USD) | Metric | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net loss | $(2.49) | $(2.40) | | Depreciation and amortization | $0.39 | $1.04 | | EBITDA loss | $(2.10) | $(1.36) | | Stock based compensation expenses | $0.71 | $1.83 | | Loss on subsidiary divestiture | $0.11 | - | | Non cash change in fair value of acquisition contingent consideration | $0.09 | $(4.32) | | Intangible asset and goodwill impairment | - | $0.90 | | **Adjusted EBITDA loss** | **$(1.22)** | **$(3.50)** | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, cash and cash equivalents increased to **$7.06 million**, driven by **$6.88 million** from financing activities, with net cash used in operating activities improving by **97%** to **($0.13 million)** - Cash and cash equivalents stood at **$7.06 million** as of March 31, 2025[179](index=179&type=chunk) - Net cash used in operating activities for the nine months ended March 31, 2025, improved by **97%** to **($0.13 million)** from ($4.28 million) in the prior-year period[175](index=175&type=chunk)[176](index=176&type=chunk) - The company raised approximately **$6.88 million** from financing activities during the nine months ended March 31, 2025[178](index=178&type=chunk) - As of March 31, 2025, the company had no outstanding debt obligations[180](index=180&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This disclosure is not required for smaller reporting companies - Not required for smaller reporting companies[183](index=183&type=chunk) [Controls and Procedures](index=36&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[185](index=185&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[187](index=187&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reported no legal proceedings - None[189](index=189&type=chunk) [Risk Factors](index=37&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 fiscal year ended June 30, 2024 - There have been no material changes to the risks described in the Annual Report on Form 10-K for the fiscal year ended June 30, 2024[190](index=190&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During the three months ended March 31, 2025, the company issued **11,750 shares** of common stock for compensation and vendor expenses, valued at **$29,023**, exempt from registration under Section 4(a)(2) of the Securities Act - During the three months ended March 31, 2025, the Company issued **11,750 shares** of common stock for compensation and vendor expenses with a value of **$29,023**[191](index=191&type=chunk) [Exhibits](index=38&type=section&id=ITEM%206.%20EXHIBITS) The report includes several exhibits, primarily certifications from the Principal Executive Officer and Principal Financial Officer as required by the Exchange Act, and Inline XBRL documents - Filed exhibits include CEO and CFO certifications (31.1, 31.2, 32.1) and Inline XBRL data files (101 series)[197](index=197&type=chunk)