Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-Q _________________________________________ ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State of incorporation or organization) (I.R.S. Employer Identification No.) Illinois 36-3873352 For the quarterly period ended September 30, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193 ...

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 transition period from____ to ____. Commission file number: 1-34167 ePlus inc. (Exact name of registrant as specified in its charter) Delaware 54-1817218 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSU ...

Financial Performance - Revenue for the nine months ended September 30, 2025, was $229.8 million, a decrease of $99.8 million, or 30%, from $329.6 million for the same period in 2024[137]. - Net loss for the nine months ended September 30, 2025, was $316.6 million, with a net loss per share of $3.85, compared to a net income of $2.0 million and earnings per share of $0.03 for the same period in 2024[138]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $20.9 million, down from $67.2 million for the same period in 2024[147]. - Total revenue decreased by $44.3 million, or 38%, to $73.0 million for the three months ended September 30, 2025, from $117.3 million in the comparable period in 2024[167]. - Total revenue decreased by $99.8 million, or 30%, to $229.8 million for the nine months ended September 30, 2025, from $329.6 million in the comparable period in 2024[188]. - Gross profit decreased by $66.9 million, or 49%, to $68.9 million for the nine months ended September 30, 2025, from $135.8 million in the comparable period in 2024[198]. Revenue Breakdown - Sales of PyroThin thermal barriers were $306.8 million, $110.1 million, and $55.6 million for the fiscal years 2024, 2023, and 2022, respectively, indicating a decline in thermal barrier revenues in 2025 compared to the prior year[130]. - Thermal barrier revenue decreased by $84.0 million, or 35%, to $152.8 million for the nine months ended September 30, 2025, from $236.8 million in the comparable period in 2024[194]. - Thermal barrier revenue decreased by $41.9 million, or 46%, to $48.7 million for the three months ended September 30, 2025, compared to $90.6 million in the same period in 2024[172]. - Energy industrial revenue decreased by $15.9 million, or 17%, to $76.9 million for the nine months ended September 30, 2025, from $92.8 million in the comparable period in 2024[189]. - Energy industrial revenue decreased by $2.4 million, or 9%, to $24.3 million for the three months ended September 30, 2025, from $26.7 million in the same period in 2024[168]. Cost and Expenses - Total cost of revenue decreased by $33.0 million, or 17%, to $160.8 million for the nine months ended September 30, 2025, from $193.8 million in the comparable period in 2024[195]. - Gross profit decreased by $28.2 million, or 58%, to $20.8 million for the three months ended September 30, 2025, from $49.0 million in the comparable period in 2024[177]. - Manufacturing costs for thermal barriers decreased by $7.0 million due to lower volumes and cost-cutting efforts in 2025[176]. - Research and development expenses decreased by $3.0 million, or 22%, to $10.6 million for the nine months ended September 30, 2025, from $13.6 million in the comparable period in 2024[199]. - Sales and marketing expenses decreased by $5.2 million, or 19%, to $21.9 million for the nine months ended September 30, 2025, from $27.1 million in the comparable period in 2024[201]. - General and administrative expenses decreased by $12.1 million, or 23%, to $40.4 million for the nine months ended September 30, 2025, from $52.5 million in the comparable period in 2024[203]. Cash Flow and Financing - Net cash provided by operating activities increased by $6.8 million to $16.7 million for the nine months ended September 30, 2025, compared to $9.9 million in the comparable period in 2024[220]. - Net cash used in investing activities was $35.0 million for the nine months ended September 30, 2025, compared to $71.5 million in the comparable period in 2024[221]. - Net cash used in financing activities totaled $50.6 million for the nine months ended September 30, 2025, primarily for the repayment of the Revolving Facility and Term Loan Facility[222]. - The cash and cash equivalents balance as of September 30, 2025, was $150.7 million, sufficient to support current operating requirements for at least the next twelve months[216]. - As of September 30, 2025, the company had unrestricted cash and cash equivalents of $150.7 million, primarily for working capital and capital expansion purposes[233]. Restructuring and Costs - Restructuring and demobilization costs amounted to $1.6 million for the three months ended September 30, 2025, due to a restructuring plan initiated in February 2025[184]. - Restructuring and demobilization costs for the nine months ended September 30, 2025, included severance and other personnel costs of $7.3 million[205]. - Impairment of property, plant, and equipment costs increased by $284.9 million, to $287.6 million for the nine months ended September 30, 2025, from $2.7 million in the comparable period in 2024[207]. Market and Strategic Initiatives - The company has entered into multi-year production contracts with several automotive EV OEM customers, including General Motors and Toyota, to supply thermal barriers for their EV battery systems[129]. - The company’s thermal barrier technology aims to enhance battery performance and safety in EVs by impeding thermal runaway in lithium-ion battery systems[128]. - The company is focused on expanding its market presence in the EV sector and believes in the commercial potential of its technology[228]. - The company anticipates future revenues and profit margins from its supply relationships with automotive OEMs in the EV market[228]. - The East Providence facility was converted in 2024 to support the growth of the thermal barrier program, with a flexible supply strategy in place to meet demand[135]. Tax and Regulatory - The company incurred $2.5 million in income tax expense for the nine months ended September 30, 2025, related to its maquiladora operations in Mexico[211]. - Income tax expense increased by $0.3 million, or 122%, to $0.6 million for the three months ended September 30, 2025, from $0.3 million in the comparable period in 2024[187]. Other Financial Considerations - The company does not believe inflation has had a material effect on its results of operations during the periods presented, but acknowledges potential future impacts[236]. - The company is exposed to interest rate fluctuations, but a hypothetical 100 basis point change would not have a material effect on operations[234]. - The company has $1.7 million of restricted cash to support outstanding letters of credit for commercial contracts[235]. - The company evaluates its critical accounting policies and estimates on an ongoing basis, which may impact reported financial results[226]. - Foreign currency transaction losses were $0.2 million for the nine months ended September 30, 2025, compared to $2.3 million for the same period in 2024[237].

Regulatory Approvals and Product Development - The INTERCEPT Blood System is intended for use with blood components and has received regulatory approvals in multiple regions, including the U.S. and Europe [123]. - The platelet system is FDA approved for ex vivo preparation of pathogen-reduced apheresis platelet components, reducing the risk of transfusion-transmitted infection [124]. - The red blood cell system is currently in development, with a CE application resubmitted in July 2025 after previous data was deemed insufficient [127]. - The ReCePI study, assessing INTERCEPT-treated red blood cells, met its primary efficacy endpoint, demonstrating non-inferiority compared to conventional red blood cells [127]. - FDA approval for the INTERCEPT Blood System for Cryoprecipitation was received in November 2020, with ongoing efforts to support blood centers in obtaining necessary licenses [129]. - The company anticipates that additional clinical trial data will be required for the red blood cell system's potential approval, delaying the planned PMA submission [127]. - The company is required to obtain new PMAs for its INTERCEPT Blood System with a new LED-based illuminator, which may limit U.S. usage if data requirements are not met [134]. Financial Performance - Product revenue for the three months ended September 30, 2025, was $52,698, a 15% increase from $46,017 in 2024, and for the nine months, it was $148,382, also a 15% increase from $129,461 in 2024 [151]. - Government contract revenue increased by 63% to $7,539 for the three months ended September 30, 2025, and by 38% to $20,837 for the nine months compared to the same periods in 2024 [152]. - Total revenue for the three months ended September 30, 2025, was $60,237, a 19% increase from $50,656 in 2024, and for the nine months, it was $169,219, a 17% increase from $144,570 in 2024 [151]. - Cost of product revenue increased by 24% to $24,558 for the three months ended September 30, 2025, and by 15% to $65,843 for the nine months compared to the same periods in 2024 [154]. - Gross margin on product sales was 53% for the three months ended September 30, 2025, down from 57% in 2024, while it remained at 56% for the nine months in both years [155]. - Research and development expenses increased by 13% to $15,825 for the three months ended September 30, 2025, and by 18% to $51,330 for the nine months compared to the same periods in 2024 [158]. - Selling, general and administrative expenses rose by 5% to $18,618 for the three months ended September 30, 2025, and by 6% to $60,086 for the nine months compared to the same periods in 2024 [161]. Funding and Capital Management - The company has two agreements with BARDA for funding, with the 2016 agreement expiring in September 2026 and the 2024 agreement expiring in September 2030 [128]. - The company has entered into agreements with blood center manufacturing partners for the sale of INTERCEPT Blood System for Cryoprecipitation kits, but sales are limited until sufficient quantities are produced [130]. - The company may borrow additional capital under existing credit agreements, which could include restrictive covenants and high effective interest rates, potentially impacting working capital [131]. - Economic uncertainty and inflationary pressures may limit the company's ability to access additional capital, negatively affecting liquidity and planned development activities [132]. - The company has entered into government contracts, including the 2016 BARDA Agreement, with a total funding commitment of up to $185.5 million for the development of the red blood cell system [144]. - The 2024 BARDA Agreement aims to advance the red blood cell system's development with committed funding of up to $32.1 million, potentially increasing to $188.4 million [145]. - The company has a five-year agreement with the FDA for the development of next-generation compounds, with a total contract value of $11.1 million [146]. - The company has an agreement with the U.S. Department of Defense, with a total contract value increased to $25.0 million for the development of pathogen-reduced, lyophilized cryoprecipitate [147]. - The company expects to continue seeking access to equity capital markets to support development efforts, which may lead to substantial dilution for existing shareholders [178]. - The company anticipates that available cash and cash equivalents will be sufficient to meet capital requirements for at least the next 12 months [176]. - The company has not sold any shares under the amended Sales Agreement allowing for the issuance of up to $96.8 million of common stock [179]. Risks and Challenges - The company faces risks related to regulatory approvals, market acceptance, and the ability to secure adequate clinical supplies for the INTERCEPT Blood System [121]. - The company faces risks related to government funding cuts and potential delays in obtaining expected funding from BARDA, which could significantly impact revenues and cash flows [180]. - The company does not currently engage in hedging contracts to mitigate foreign exchange fluctuations, which could materially affect future results [183]. Cash Flow and Working Capital - Cash and cash equivalents as of September 30, 2025, were $15,670, down from $20,266 as of December 31, 2024, while total cash, short-term investments, and restricted cash amounted to $79,651 [169]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(1.36) million, compared to $6.43 million provided in the same period in 2024 [171]. - Net cash used in investing activities increased to $(4.79) million for the nine months ended September 30, 2025, from $(0.84) million in the same period in 2024 [172]. - Net cash provided by financing activities decreased to $1.26 million for the nine months ended September 30, 2025, down from $4.22 million in the same period in 2024 [173]. - Working capital decreased to $80.03 million as of September 30, 2025, from $88.89 million as of December 31, 2024, primarily due to increases in accounts payable and accrued liabilities [174]. - Total debt as of September 30, 2025, is $84.9 million, a slight increase from $84.2 million as of December 31, 2024 [171].

Nuclear Fuel Development - Lightbridge Corporation is developing next-generation nuclear fuel that aims to improve the economics and safety of nuclear power plants while enhancing proliferation resistance of spent nuclear fuel [120]. - The company has successfully completed the loading of capsules containing Lightbridge Fuel material samples for irradiation testing, which began in October 2025 [128]. - A memorandum of understanding was signed with Oklo, Inc. to explore collaboration on co-locating a commercial-scale fuel fabrication facility and recycling spent uranium-zirconium fuel [129]. - The feasibility study indicated that Lightbridge Fuel™ can double the discharged burnup in CANDU reactors at U-235 enrichment levels of less than 3% compared to conventional uranium dioxide fuel [142]. - The company is engaged in a 3-year study of its nuclear fuel with Texas A&M University, which is expected to be completed in 2026, with TAMU awarded $1.0 million for the study [144]. - The initial phase of work under agreements with Idaho National Laboratory aims to generate irradiation performance data for Lightbridge's delta-phase uranium-zirconium alloy [131]. - Lightbridge plans to continue further evaluation of its fuel in CANDU reactors following favorable initial results from the feasibility study [142]. - The company anticipates beginning demonstration of lead test rods in commercial reactors in the 2030s, with initial fuel reload batches expected 15-20 years from now [151]. Financial Performance - Total operating expenses for the three months ended September 30, 2025, increased to $5.2 million, a 73% increase from $3.0 million in the same period in 2024 [158]. - Research and development expenses rose to $2.0 million for the three months ended September 30, 2025, reflecting a 54% increase from $1.3 million in 2024, driven by increased activities related to Lightbridge Fuel™ [164]. - General and administrative expenses increased by $1.5 million to $3.2 million for the three months ended September 30, 2025, an 88% increase compared to $1.7 million in 2024 [162]. - Interest income surged by 267% to $1.1 million for the three months ended September 30, 2025, up from $0.3 million in the same period in 2024 [160]. - The net loss for the three months ended September 30, 2025, was $4.1 million, a 52% increase from a net loss of $2.7 million in 2024 [160]. - Total operating expenses for the nine months ended September 30, 2025, reached $14.5 million, a 63% increase from $8.9 million in the same period in 2024 [169]. - Research and development expenses for the nine months ended September 30, 2025, increased to $5.3 million, a 66% rise from $3.2 million in 2024 [169]. - General and administrative expenses for the nine months ended September 30, 2025, increased by $3.5 million to $9.2 million, a 61% increase compared to $5.7 million in 2024 [170]. - The net loss for the nine months ended September 30, 2025, was $12.4 million, a 57% increase from a net loss of $7.9 million in 2024 [169]. Cash Flow and Funding - As of September 30, 2025, cash and cash equivalents totaled $153.3 million, an increase of $113.3 million from $40.0 million as of December 31, 2024 [177]. - Net cash used in operating activities was $8.1 million for the nine months ended September 30, 2025, compared to $5.7 million in 2024, reflecting increased R&D and G&A expenses [188]. - Cash provided by financing activities increased by $117.7 million to $121.4 million for the nine months ended September 30, 2025, primarily from the ATM offering [190]. - The company raised net proceeds of $120.4 million from the sale of approximately 9.9 million shares of common stock during the nine months ended September 30, 2025 [191]. - The company expects to continue funding operations primarily through its ATM equity offering, with uncertainties regarding future capital availability [183]. - Future R&D activities and capital requirements are dependent on market conditions and the ability to secure funding through various sources [179]. - The company has no debt and has historically funded operations through equity sales, with potential dilution risks for existing shareholders [184]. Research and Development - The company is utilizing AI tools to enhance research capabilities related to nuclear fuel development and industry trends [126]. - Lightbridge has entered into an agreement for safety analysis codes and services with Numerical Advisory Solutions, with a total contract value of approximately $0.8 million [139]. - The company anticipates investing approximately $12.0 million in R&D for nuclear fuel for the full year 2025, subject to change [173]. - R&D expenses increased by $2.1 million to $5.3 million for the nine months ended September 30, 2025, compared to $3.2 million in 2024, primarily due to increased activities related to Lightbridge Fuel™ [172].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________ FORM 10-Q ______________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-37879 _______________ ...

Financial Performance - The company reported a net loss of $144.3 million for the nine months ended September 30, 2025, compared to a net loss of $155.0 million for the same period in 2024[155]. - The accumulated deficit as of September 30, 2025, was $931.2 million, indicating significant ongoing financial challenges[155]. - The company reported a net loss of $56.9 million for the three months ended September 30, 2025, compared to a net loss of $48.8 million in the same period of 2024, representing an increase in loss of 17%[173]. - Cash used in operating activities for the nine months ended September 30, 2025, was $150.8 million, compared to $119.8 million in the same period of 2024[202]. - Cash used in operating activities for the nine months ended September 30, 2024, was $119.8 million, with a net loss of $155.0 million[204]. Revenue and Expenses - Total revenue for the three months ended September 30, 2025, increased by $1.2 million, or 14%, to $9.7 million compared to $8.5 million in the same period of 2024[174]. - Revenues for the nine months ended September 30, 2025, increased by 92% to $90.8 million compared to $47.2 million in the same period of 2024[183]. - Total revenue for the nine months ended September 30, 2025, was $90.8 million, an increase of $43.6 million or 92% compared to $47.2 million in the same period of 2024[185]. - Research and development expenses include costs for salaries, laboratory supplies, and outsourced services, reflecting the company's focus on product development[161]. - Research and development expenses decreased by $22.3 million, or 36%, to $39.9 million for the three months ended September 30, 2025, compared to $62.1 million in 2024[176]. - Research and development expenses for the nine months ended September 30, 2025, decreased by $51.2 million, or 28%, to $129.8 million compared to $181.0 million in 2024[183]. - General and administrative expenses decreased by $5.6 million, or 39%, to $8.7 million for the three months ended September 30, 2025, compared to $14.3 million in 2024[177]. - General and administrative expenses decreased by $7.1 million, or 18%, during the nine months ended September 30, 2025, compared to the same period in 2024[187]. - Total operating expenses for the three months ended September 30, 2025, decreased by $18.3 million, or 24%, to $58.2 million compared to $76.4 million in 2024[173]. - Total restructuring and related costs for the nine months ended September 30, 2025, amounted to $47.3 million, including $24.6 million for clinical trial expenses related to the deprioritization of the luvelta program[188]. Strategic Initiatives - The company plans to initiate clinical development for its lead product candidate, STRO-004, by the end of 2025 after receiving IND clearance[147]. - The company is prioritizing its preclinical pipeline, specifically STRO-004 and STRO-006, while deprioritizing late-stage clinical development[154]. - The company has entered into collaborations with major pharmaceutical companies, including Astellas and Vaxcyte, to support its product development efforts[150]. - The company anticipates filing an IND for its dual-payload ADC targeting PTK7 in 2027, indicating ongoing development in its pipeline[149]. - The company expects to continue recognizing expenses related to the deprioritization of the luvelta program, with significant portions anticipated in 2025[189]. Cost Management - The company has implemented restructuring plans to reduce operating costs and extend its cash runway, including workforce reductions[154]. - The company expects operating expenses to increase if it advances its product candidates through clinical development and seeks regulatory approvals[155]. - Restructuring costs related to the March 2025 Restructuring Plan totaled $7.8 million for the three months ended September 30, 2025[178]. Cash and Investments - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $167.6 million, with an accumulated deficit of $931.2 million[193]. - The company had cash, cash equivalents, and marketable securities of $167.6 million as of September 30, 2025, down from $316.9 million as of December 31, 2024[214]. - Interest income decreased by $6.2 million during the nine months ended September 30, 2025, primarily due to lower average investment balances and rates of return[190]. - Non-cash interest expense related to the sale of future royalties increased by $1.8 million during the three months ended September 30, 2025, compared to the same period in 2024[181]. - Non-cash interest expense related to the sale of future royalties increased by $6.3 million during the nine months ended September 30, 2025[191]. - The company recognized a net change in operating assets and liabilities of $24.6 million, influenced by a decrease of $29.4 million in accounts receivable[204].

Financial Performance - Net revenue for the three months ended September 30, 2025 was $80.5 million, a decrease of $13.9 million or 14.7% from $94.4 million in the same period of 2024, primarily due to reduced market demand for computer gaming accessories [115]. - For the nine months ended September 30, 2025, net revenue was $201.1 million, a decrease of $25.6 million or 11.3% from $226.7 million in the same period of 2024 [117]. - Adjusted EBITDA for the three months ended September 30, 2025, was $10.975 million, a decrease from $16.268 million in the same period of 2024 [133]. Gross Profit and Margin - Gross profit for the three months ended September 30, 2025 was $30.1 million, with a gross margin of 37.4%, an increase from 36.2% in the prior year period [116]. - Gross margin for the nine months ended September 30, 2025 improved to 35.6% from 33.1% in the comparable prior year period [118]. Operating Expenses - Operating expenses for the three months ended September 30, 2025 totaled $24.7 million, a decrease of $3.0 million or 10.8% from $27.7 million in the same period of 2024 [119]. - General and administrative expenses increased by $1.2 million or 18.7% for the three months ended September 30, 2025, primarily due to higher public company costs [123]. Cash Flow and Financing - Net cash provided by operating activities for the nine months ended September 30, 2025, was $22.121 million, an increase of $30.7 million compared to a cash outflow of $8.553 million for the same period in 2024 [137]. - Cash and cash equivalents at the end of the period on September 30, 2025, were $12.257 million, down from $13.803 million at the end of September 30, 2024 [136]. - Net cash used for financing activities was $24.476 million during the nine months ended September 30, 2025, compared to net cash provided of $82.665 million in the same period of 2024 [139]. - The Company recorded a loss on extinguishment of debt of $1.7 million related to the repayment of the Term Loan Facility on August 1, 2025 [149]. - As of September 30, 2025, the Company had excess borrowing availability of approximately $34.5 million under the Credit Agreement [155]. - The Revolving Credit Facility was amended to extend the maturity date to March 13, 2027, and incorporated PDP acquisition assets into the U.S. Borrowing Base [144]. - Cash provided by investing activities was $1.346 million for the nine months ended September 30, 2025, compared to a cash outflow of $80.686 million in the same period of 2024 [138]. - The Company believes current cash and cash equivalents, along with cash flows from operations, will be sufficient for anticipated funding needs [140]. Market Conditions and Risks - The global gaming accessories market is estimated to be an $11 billion business, driven by major game launches and franchises [110]. - The launch of the Nintendo Switch 2 in June 2025 marked the fastest-selling video game console launch of all time [113]. - The Company has exposure to market risk primarily due to fluctuations in interest rates, foreign currency exchange rates, and inflation [160]. - As of September 30, 2025, and December 31, 2024, the Company did not have any derivative financial instruments to manage foreign currency risks [161]. - A hypothetical 10% change in foreign currency exchange rates is not expected to have a material impact on the Company's earnings or cash flows due to immaterial monetary assets and liabilities [162]. - Inflationary pressures have negatively impacted consumer demand, leading to reduced sales [164]. - Trade policy actions in 2025 have increased import tariffs, adversely affecting the Company's operations [163]. - The Company continues to face higher costs due to a higher interest rate environment, impacting profit margins if selling prices do not increase accordingly [166]. - Global supply chain constraints and economic conditions have caused volatility in demand and pricing of the Company's products [165]. Acquisition - The company acquired Performance Designed Products LLC in March 2024, expanding its product portfolio to include gaming controllers and accessories [109].

Financial Performance - Total revenues for the three months ended September 30, 2025, were $78.6 million, a decrease of 12% compared to $89.2 million for the same period in 2024[17]. - Net income for the three months ended September 30, 2025, was a loss of $51.6 million, compared to a net income of $33.9 million for the same period in 2024[17]. - For the nine months ended September 30, 2025, the net income was a loss of $21,885,905 compared to a net income of $61,812,795 for the same period in 2024[21]. - The company reported a net loss of $51.63 million compared to a net income of $33.88 million for the same period in 2024[93]. - For the three months ended September 30, 2025, oil, natural gas, and natural gas liquids revenues were $78,601,336, a decrease from $89,244,383 in the same period of 2024[144]. - Oil revenues decreased by $11.5 million, or 13%, from $90.4 million to $78.9 million, primarily due to a price variance of $(12.4) million from a decrease in the average realized price per barrel from $74.43 to $64.32[168]. - For the nine months ended September 30, 2025, total sales decreased by approximately $42.6 million, or 15%, to $240.3 million compared to $282.9 million in 2024[171]. Assets and Liabilities - Total current assets increased to $55.8 million as of September 30, 2025, compared to $50.4 million as of December 31, 2024, reflecting a growth of 10%[15]. - The company's total assets reached $1.43 billion as of September 30, 2025, up from $1.41 billion as of December 31, 2024[15]. - Total liabilities increased to $587.0 million as of September 30, 2025, compared to $549.5 million as of December 31, 2024, marking an increase of 7%[15]. - The company’s retained earnings decreased to $36.1 million as of September 30, 2025, down from $58.0 million as of December 31, 2024[15]. - The company’s total stockholders' equity was $847.7 million as of September 30, 2025, compared to $858.6 million as of December 31, 2024[15]. Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $106,160,584, down from $147,144,031 in 2024[21]. - Total cash used in investing activities for the nine months ended September 30, 2025, was $144,231,398, compared to $113,166,061 in 2024[21]. - The cash at the end of the period for September 30, 2025, was $286,907, compared to no cash at the end of the period in 2024[21]. - The company reported cash paid for interest of $23,559,423 for the nine months ended September 30, 2025, down from $30,208,974 in 2024[23]. Impairments and Expenses - The company reported a ceiling test impairment of $72.9 million for the three months ended September 30, 2025[17]. - The Company recorded impairments on oil and natural gas properties of $72,912,330 for both the three and nine months ended September 30, 2025, due to lower oil prices impacting the present value of estimated future net revenues[54]. - General and administrative expenses increased by approximately $2.3 million from $21.6 million to $23.9 million, driven by higher salaries and bonuses[193]. - The depletion expense for the three months ended September 30, 2025, was $24,902,199, with a depletion rate of $13.02 per barrel-of-oil-equivalent[52]. Derivative Instruments and Hedging - The company utilized derivative strategies to manage cash flow variability associated with future oil and natural gas production[101]. - The company recorded a current state income tax provision of $(39,816) for the three months ended September 30, 2025, compared to $(74,899) in 2024[67]. - The total gain or loss on derivative contracts is reflected as an adjustment to net cash provided by operating activities[75]. - The company recorded a gain on derivative contracts of $14.2 million for the nine months ended September 30, 2025, compared to a gain of $3.9 million for the same period in 2024[201]. Operational Activities - The company drilled and completed three 1-mile horizontal wells in the Northwest Shelf and multiple vertical wells in the Central Basin Platform, demonstrating ongoing operational activity and resource development[156][157][158]. - The company plans to reduce long-term debt primarily through excess cash flow and potential sales of non-core assets, aiming to strengthen its balance sheet[153][154]. - The company intends to employ industry-leading drilling and completion techniques to maximize returns and build future development opportunities[154]. Tax Provisions - The provision for income taxes changed from a provision of $10.1 million for the three months ended September 30, 2024, to a benefit of $12.8 million for the same period in 2025, representing a change of $22.9 million or 227%[203]. - For the nine months ended September 30, 2025, the provision for income taxes changed from a provision of $18.6 million in 2024 to a benefit of $3.7 million in 2025, reflecting a change of $22.3 million or 120%[204]. Future Outlook - The Company expects ongoing oil price volatility, which could materially impact oil revenue, although hedge contracts provide some mitigation[33]. - The company aims to maximize cash flow in 2025 through cost monitoring and prudent capital allocation, focusing on high-return projects in the current commodity price environment[206]. - The company is actively pursuing acquisitions and business combinations to enhance its portfolio with high-margin properties[206].

Revenue Performance - Net revenue for Q3 2025 was $22.6 million, a 1% increase from $22.4 million in Q3 2024[4] - Year-to-date revenue for the first nine months of 2025 increased by 25% to $71.9 million from $57.6 million in the same period of 2024[7] Profitability - Gross profit for Q3 2025 decreased by 15% to $16.6 million, resulting in a gross margin of 73.4%, down from 88.4% in Q3 2024[5] - The net loss for Q3 2025 narrowed to $1.7 million, or $0.12 per share, compared to a net loss of $2 million, or $0.15 per share, in Q3 2024[6] - Adjusted EBITDA for Q3 2025 was a loss of $0.7 million, compared to a loss of $0.4 million in the same period last year[9] Operating Expenses - Operating expenses in Q3 2025 were $18.2 million, a decline of 16% from $21.7 million in the prior-year period[7] - Marketing costs decreased to $13.4 million in Q3 2025 from $17.0 million in Q3 2024, reflecting lower revenue from the largest Platform client[8] Client Acquisition - The company onboarded 23 new clients in Q3 2025, contributing to a total of 65 new clients in the first nine months of 2025[7] Financial Position - As of September 30, 2025, the company had $3.4 million in cash and cash equivalents and access to a $10.0 million working capital facility[9] Future Outlook - The company expects to drive sustainable long-term scalable growth despite Q3 performance being less than anticipated due to compliance adjustments[3]