[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents Trilogy Metals Inc.'s unaudited condensed interim consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed interim consolidated financial statements for Trilogy Metals Inc., including the balance sheets, statements of loss and comprehensive loss, statements of changes in shareholders' equity, and statements of cash flows, along with their accompanying notes. These statements provide a snapshot of the company's financial position, performance, and cash flows for the period ended August 31, 2025 [Condensed Interim Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Interim%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific dates Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | **Assets** | | | | | | Total current assets | 23,733 | 26,045 | (2,312) | -8.88% | | Investment in Ambler Metals LLC | 105,261 | 107,497 | (2,236) | -2.08% | | Total assets | 129,120 | 133,697 | (4,577) | -3.42% | | **Liabilities** | | | | | | Total current liabilities | 373 | 793 | (420) | -53.00% | | Total liabilities | 455 | 903 | (448) | -49.61% | | **Shareholders' Equity** | | | | | | Total shareholders' equity | 128,665 | 132,794 | (4,129) | -3.11% | [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) This statement details the company's revenues, expenses, and net loss over specific reporting periods Metric Summary | Metric | Three months ended Aug 31, 2025 ($ thousands) | Three months ended Aug 31, 2024 ($ thousands) | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Total expenses | 1,165 | 1,141 | 6,063 | 5,179 | | Interest income and other income | (311) | (152) | (741) | (200) | | Share of loss on equity investment | 891 | 624 | 2,236 | 2,019 | | Loss and comprehensive loss for the period | (1,747) | (1,591) | (7,547) | (6,951) | | Basic loss per common share | (0.01) | (0.01) | (0.05) | (0.04) | - The company reported an increased net loss for both the three-month period (**$1.7 million** vs **$1.6 million** YoY) and the nine-month period (**$7.5 million** vs **$7.0 million** YoY) ended August 31, 2025[11](index=11&type=chunk) [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This statement outlines changes in the company's equity components, including share capital and deficit, over time Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | Share capital | 192,898 | 190,503 | 2,395 | 1.26% | | Contributed surplus – options | 29,712 | 28,801 | 911 | 3.16% | | Contributed surplus – units | 3,884 | 3,772 | 112 | 2.97% | | Deficit | (97,947) | (90,400) | (7,547) | 8.35% | | Total shareholders' equity | 128,665 | 132,794 | (4,129) | -3.11% | - The deficit increased by **$7.5 million** from November 30, 2024, to August 31, 2025, reflecting the loss for the period[13](index=13&type=chunk) [Condensed Interim Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Activity Summary | Cash Flow Activity | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | Change ($ thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :------------------- | | Cash flows used in operating activities | (2,690) | (1,854) | (836) | | Cash flows from financing activities | 224 | — | 224 | | Cash flows from investing activities | — | 25,000 | (25,000) | | Change in cash | (2,466) | 23,146 | (25,612) | | Cash – end of the period | 23,372 | 25,738 | (2,366) | - The company experienced a significant decrease in cash from investing activities, primarily due to a **$25 million** return of capital from Ambler Metals LLC in the prior year period that did not recur in the current period[15](index=15&type=chunk) [Notes to the Condensed Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Consolidated%20Financial%20Statements) This section provides detailed explanations and supplementary information for the condensed interim consolidated financial statements, covering the company's operations, accounting policies, investment in Ambler Metals LLC, lease arrangements, share capital, and other financial commitments and events [Note 1) Nature of operations](index=9&type=section&id=Note%201)%20Nature%20of%20operations) This note describes Trilogy Metals Inc.'s primary business activities, focusing on mineral exploration and development through its joint venture - Trilogy Metals Inc. is engaged in the exploration and development of mineral properties, primarily through its 50/50 joint venture, Ambler Metals LLC, focusing on the Upper Kobuk Mineral Projects (UKMP) in Northwest Alaska, US, including the Arctic and Bornite Projects[16](index=16&type=chunk) [Note 2) Summary of significant accounting policies](index=9&type=section&id=Note%202)%20Summary%20of%20significant%20accounting%20policies) This note outlines the key accounting principles and estimates used in preparing the financial statements - The financial statements are prepared using U.S. GAAP and include Trilogy and its wholly-owned subsidiaries, with intercompany transactions eliminated. The equity method is used for variable interest entities where Trilogy is not the primary beneficiary, such as Ambler Metals LLC[17](index=17&type=chunk) - Management makes significant estimates for income taxes and stock-based compensation, and assesses impairment of its equity investment in Ambler Metals LLC based on recoverability and changes in development plans[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company is evaluating the impact of new FASB ASUs on reportable segment disclosures (ASU 2023-07, effective FY2025) and income tax disclosures (ASU 2023-09, effective FY2026)[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 3) Investment in Ambler Metals LLC](index=11&type=section&id=Note%203)%20Investment%20in%20Ambler%20Metals%20LLC) This note details Trilogy Metals Inc.'s equity method investment in its 50/50 joint venture, Ambler Metals LLC - Trilogy Metals formed a 50/50 joint venture, Ambler Metals LLC, with South32 Limited on February 11, 2020, contributing its UKMP assets while South32 contributed **$145.0 million** cash[27](index=27&type=chunk) - Trilogy uses the equity method for its investment in Ambler Metals, as it has significant influence but is not the primary beneficiary. Its maximum exposure to loss is limited to the carrying amount of its investment[28](index=28&type=chunk) Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | Investment in Ambler Metals LLC | 105,261 | 107,497 | (2,236) | -2.08% | | Share of loss on equity investment (9-month period) | (2,236) | (2,019) | (217) | 10.75% | Ambler Metals LLC Balances (100% basis) Summary | Ambler Metals LLC Balances (100% basis) | August 31, 2025 ($ thousands) | | :-------------------------------------- | :---------------------------- | | Cash and cash equivalents | 3,749 | | Mineral properties | 30,899 | | Total assets | 35,414 | | Total liabilities | 685 | | Members' equity | 34,729 | Ambler Metals LLC Loss (100% basis) Summary | Ambler Metals LLC Loss (100% basis) | Nine months ended Aug 31, 2025 ($ thousands) | | :---------------------------------- | :------------------------------------------- | | Corporate salaries and wages | 209 | | General and administrative | 379 | | Mineral property expense - exclude Ambler Access Project | 2,126 | | Professional fees | 1,124 | | Ambler Access Project | 710 | | Depreciation | 88 | | Foreign exchange (gain)/loss | 1 | | Interest and other income | (166) | | Comprehensive loss | 4,471 | - Trilogy charged Ambler Metals **$102,250** for administrative and accounting services during the nine-month period ended August 31, 2025, an increase from **$47,000** in the prior year[37](index=37&type=chunk) [Note 4) Accounts payable and accrued liabilities](index=13&type=section&id=Note%204)%20Accounts%20payable%20and%20accrued%20liabilities) This note provides a breakdown of the company's short-term financial obligations to vendors and for accrued expenses Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | Trade accounts payable | 141 | 196 | (55) | -28.06% | | Accrued liabilities | 112 | 62 | 50 | 80.65% | | Accrued salaries and vacation | 80 | 498 | (418) | -83.94% | | Total accounts payable and accrued liabilities | 333 | 756 | (423) | -55.95% | [Note 5) Leases](index=13&type=section&id=Note%205)%20Leases) This note describes the company's lease arrangements, including right-of-use assets and lease liabilities Lease Metric Summary | Lease Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Right-of-use asset | 126 | 155 | | Current portion of lease liability | 40 | 37 | | Long-term portion of lease liability | 82 | 110 | | Total lease liability | 122 | 147 | - The company entered a new four-year operating lease for its corporate office on July 1, 2024, expiring in June 2028, with current monthly payments of approximately **CDN$9,500**[40](index=40&type=chunk) Lease Expense Summary | Lease Expense | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :------------------- | :--------- | | Operating lease costs | 38 | 122 | (84) | -68.85% | | Variable lease costs | 13 | 103 | (90) | -87.38% | | Total lease expense | 51 | 225 | (174) | -77.33% | [Note 6) Share capital](index=14&type=section&id=Note%206)%20Share%20capital) This note details the company's share capital activities, including common shares, stock options, and unit plans Share Capital Activity Summary | Share Capital Activity | Number of shares (thousands) | Value ($ thousands) | | :-------------------------------- | :--------------------------- | :------------------ | | Balance – November 30, 2024 | 161,085 | 190,503 | | Exercise of options | 400 | 337 | | Shares issued from Restricted Share Units | 2,768 | 2,008 | | Services settled by common shares | 38 | 50 | | Balance – August 31, 2025 | 164,291 | 192,898 | - The company has an effective Base Shelf Prospectus allowing for future issuance of up to **$50 million** in securities and established an At-The-Market (ATM) equity program to sell up to **$25 million** of common shares, neither of which has been utilized as of August 31, 2025[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) Stock Option Activity (9-month period) Summary | Stock Option Activity (9-month period) | Number of options | Weighted average exercise price (CDN$) | | :------------------------------------- | :---------------- | :------------------------------------- | | Balance – beginning of the year | 13,630,234 | 1.77 | | Granted | 2,125,000 | 1.52 | | Exercised | (400,000) | 0.79 | | Expired | (3,640,000) | 2.75 | | Balance – end of the period | 11,715,234 | 1.45 | - For the nine-month period ended August 31, 2025, Trilogy recognized a stock-based compensation charge of **$1.0 million** for stock options and **$2.0 million** for RSUs and DSUs[45](index=45&type=chunk)[53](index=53&type=chunk) Unit Plan Activity (9-month period) Summary | Unit Plan Activity (9-month period) | Number of RSUs | Number of DSUs | Number of Fixed DSUs | | :---------------------------------- | :------------- | :------------- | :------------------- | | Balance – beginning of the year | 2,793,339 | 3,133,412 | — | | Granted | 1,811,096 | 72,943 | 304,605 | | Settled in common shares | (2,806,097) | — | — | | Balance – end of the period | 1,798,338 | 3,206,355 | 304,605 | [Note 7) Fair value accounting](index=17&type=section&id=Note%207)%20Fair%20value%20accounting) This note explains the fair value measurement of the company's financial instruments - The fair value of the company's financial instruments (cash, receivables, payables) approximates their carrying value due to their short-term nature[55](index=55&type=chunk)[56](index=56&type=chunk) [Note 8) Commitment](index=18&type=section&id=Note%208)%20Commitment) This note outlines the company's significant contractual obligations and future financial commitments - The company has commitments related to its office lease, with future minimum lease payments detailed in Note 5(b)[57](index=57&type=chunk) [Note 9) Supplemental cash flow information](index=18&type=section&id=Note%209)%20Supplemental%20cash%20flow%20information) This note provides additional details on specific non-cash transactions and other cash flow items Metric Summary | Metric | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :------------------- | :--------- | | Interest received | 741 | 200 | 541 | 270.50% | [Note 10) Subsequent events](index=18&type=section&id=Note%2010)%20Subsequent%20events) This note discloses significant events that occurred after the reporting period but before the financial statements were issued - On September 2, 2025, the Board of Directors were granted **49,343** DSUs in settlement of approximately **$82,000** of director fees[59](index=59&type=chunk) [Item 2. 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) This section provides management's perspective on Trilogy Metals Inc.'s financial condition and operational results for the quarter ended August 31, 2025, discussing key financial metrics, corporate activities, liquidity, and critical accounting estimates, alongside cautionary notes regarding forward-looking statements and associated risks [Cautionary Notes and Forward-Looking Statements](index=19&type=section&id=Cautionary%20notes) This section highlights the inherent risks and uncertainties associated with forward-looking statements in the report - The MD&A contains forward-looking statements regarding work programs, budgets, funding, mineral estimates, timelines, and market prices, which are based on management's beliefs and expectations but are subject to significant risks and uncertainties[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Key risks include the ability to achieve production, financing development, obtaining permits for the Ambler Access Project, commodity price fluctuations, and regulatory changes[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [General Information and Business Description](index=24&type=section&id=General) This section provides an overview of Trilogy Metals Inc.'s business, including its focus on mineral exploration and stock listings - Trilogy Metals Inc. is a base metals exploration company focused on the Ambler mining district in Alaska, USA, operating through its 50/50 joint venture, Ambler Metals LLC, which includes the Arctic and Bornite Projects[76](index=76&type=chunk) - The company's shares are listed on the TSX and NYSE American under the symbol "TMQ"[75](index=75&type=chunk) [Corporate and Project Activities](index=25&type=section&id=Corporate%20and%20project%20activities) This section details the company's recent corporate initiatives and project-related expenditures - Trilogy filed a Base Shelf Prospectus allowing for the future issuance of up to **$50 million** in securities and established an At-The-Market (ATM) equity program to sell up to **$25 million** of common shares, with anticipated proceeds for UKMP development and general corporate purposes. Neither program has been utilized as of August 31, 2025[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) Budget Category Summary | Budget Category | 2025 Fiscal Year Budget ($ millions) | 9-month period ended Aug 31, 2025 Actual Spend ($ millions) | Variance ($ millions) | | :-------------------------------- | :----------------------------------- | :---------------------------------------------------------- | :-------------------- | | Trilogy Corporate Budget | 3.1 | 3.1 | 0.0 | | Ambler Metals LLC Initial Budget | 5.8 | 3.8 | (2.0) | | Ambler Access Project Supplemental Budget | 0.8 | 0.7 | (0.1) | - Ambler Metals LLC's expenditures for the nine-month period were **$0.2 million** under budget, mainly due to delayed hiring and lower general administrative expenses[81](index=81&type=chunk) [Summary of Results](index=26&type=section&id=Summary%20of%20results) This section provides a concise overview of the company's financial performance for the reporting periods Metric Summary | Metric | Three months ended Aug 31, 2025 ($ thousands) | Three months ended Aug 31, 2024 ($ thousands) | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Comprehensive loss for the period | (1,747) | (1,591) | (7,547) | (6,951) | | Basic and diluted loss per common share | (0.01) | (0.01) | (0.05) | (0.04) | - The increase in comprehensive loss for the three-month period was primarily due to Ambler Metals' site activities for environmental baseline work and a core re-boxing program[85](index=85&type=chunk) - The increase in net loss for the nine-month period was driven by higher regulatory expenses and legal fees related to the Base Shelf Prospectus and ATM Program, and increased share of losses from Ambler Metals, partially offset by lower office expenses and higher interest income[86](index=86&type=chunk)[87](index=87&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20capital%20resources) This section discusses the company's cash position, working capital, and ability to meet its short-term and long-term financial obligations Metric Summary | Metric | August 31, 2025 ($ millions) | | :-------------------------------- | :--------------------------- | | Cash and cash equivalents | 23.4 | | Working capital | 23.4 | - The company used **$2.7 million** in operating activities during the nine-month period, primarily for corporate salaries, professional fees, and regulatory costs related to the Base Shelf Prospectus and ATM Program[88](index=88&type=chunk) - Management believes current cash is sufficient for the next 12 months, but additional funds may be needed beyond that to support operations and contributions to Ambler Metals[91](index=91&type=chunk) [Outstanding Share Data](index=28&type=section&id=Outstanding%20share%20data) This section provides a summary of the company's issued and outstanding equity securities Security Type Summary | Security Type | As of September 30, 2025 | | :-------------------------------- | :----------------------- | | Common shares issued and outstanding | 164,311,410 | | Stock options outstanding | 11,695,234 | | DSUs outstanding | 3,206,355 | | Fixed DSUs outstanding | 353,948 | | RSUs outstanding | 1,798,338 | | NovaGold DSUs | 5,144 | | Total common shares upon exercise of convertible securities | 17,054,734 | [New Accounting Pronouncements](index=28&type=section&id=New%20accounting%20pronouncements) This section outlines the impact of recently issued accounting standards on the company's financial reporting - The company is evaluating the impact of ASU 2023-07 (Segment Reporting) effective for FY2025 and ASU 2023-09 (Income Tax Disclosures) effective for FY2026[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Critical Accounting Estimates](index=29&type=section&id=Critical%20accounting%20estimates) This section describes the accounting estimates that require significant management judgment and can materially affect financial results - Critical accounting estimates include the recoverability of the equity method investment in Ambler Metals, income taxes, and the valuation of stock-based compensation, all requiring significant management judgment[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=30&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 August 31, 2025, and reported 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 August 31, 2025[104](index=104&type=chunk) - There were no material changes in internal controls over financial reporting during the fiscal quarter ended August 31, 2025[106](index=106&type=chunk) [PART II - OTHER INFORMATION](index=31&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material current, pending, or threatened litigation, beyond routine proceedings that are part of its ordinary course of business - The company is not aware of any material current, pending, or threatened litigation[109](index=109&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.Risk%20Factors) This section refers to the risk factors outlined in the company's Form 10-K, with an additional emphasis on the potential adverse impact of changes in U.S. laws and policies regulating international trade, such as tariffs, on revenues, costs, and mineral resource estimates - No material changes to risk factors from the Form 10-K, except for the addition of risks related to changes in U.S. laws and policies regulating international trade[110](index=110&type=chunk)[111](index=111&type=chunk) - Potential impacts of trade policy changes include increases or decreases in revenues due to metal prices, increased costs, and uncertainty over mineral resources and reserve estimates[112](index=112&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds were reported[113](index=113&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[114](index=114&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to Trilogy Metals Inc - Mine safety disclosures are not applicable to the company[115](index=115&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section confirms that no director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended August 31, 2025[117](index=117&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, certifications from the CEO and CFO, and interactive data files in XBRL format - The report includes various exhibits such as corporate organizational documents, CEO and CFO certifications (Rule 13a-14(a) and 18 U.S.C. Section 1350), and Interactive Data Files in XBRL format[118](index=118&type=chunk)

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) ReposiTrak achieved significant revenue and net income growth in FY2025, driven by a strategic shift to a supplier-centric model and efficient operations [Fiscal Year 2025 & Q4 Highlights](index=1&type=section&id=Fiscal%20Year%202025%20%26%20Q4%20Highlights) ReposiTrak reported an 11% increase in full-year revenue to $22.6 million and a 17% increase in net income to $7.0 million for fiscal year 2025. Earnings per share grew by 21%. The company ended the fiscal year with a strong cash position of $28.6 million and no debt. Fourth-quarter results also showed an 11% revenue increase and 14% net income growth Full-Year Fiscal 2025 Financial Highlights: | Metric | FY2025 (Millions) | FY2024 (Millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Total Revenue | $22.6 | $20.5 | 11% | | Recurring Revenue (% of total) | ~99% | N/A | N/A | | Operating Expense | $16.4 | $15.4 | 6% | | Operating Income | $6.2 | $5.0 | 24% | | GAAP Net Income | $7.0 | $6.0 | 17% | | Net Income to Common Shareholders | $6.6 | $5.4 | 22% | | Basic EPS | $0.36 | $0.30 | 20% | | Diluted EPS | $0.35 | $0.29 | 21% | | Cash from Operations | $8.4 | $6.9 | 21% | | Cash at Year-End | $28.6 | N/A | N/A | | Bank Debt | $0 | N/A | N/A | Fourth Fiscal Quarter Financial Highlights: | Metric | Q4 FY2025 (Millions) | Q4 FY2024 (Millions) | Change (%) | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total Revenue | $5.8 | $5.2 | 11% | | Recurring Revenue (% of total) | ~99% | N/A | N/A | | Operating Expense | $4.2 | $3.9 | 8% | | Operating Income | $1.6 | $1.3 | 20% | | GAAP Net Income | $1.8 | $1.6 | 14% | | Net Income to Common Shareholders | $1.7 | $1.5 | 18% | | EPS | $0.09 | $0.08 | 12.5% | [CEO Commentary & Strategic Direction](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Direction) CEO Randall K. Fields highlighted a strategic shift from a hub-centric to a supplier-centric traceability model, which has increased engagement and expanded the addressable market. Investments in infrastructure and automation are improving efficiency, enabling growth without increasing headcount, and enhancing cross-selling opportunities. The company aims for 10-20% average annualized revenue growth and significantly greater profitability growth - ReposiTrak shifted from a hub-centric to a supplier-centric traceability model, solving problems for individual suppliers, which has increased engagement and expanded the addressable market for compliance and supply chain solutions[5](index=5&type=chunk) - The company invested in infrastructure to expand automation and accelerate customer onboarding, leading to increased revenue per employee and a greater number of deals without expanding headcount[5](index=5&type=chunk) - ReposiTrak maintains a goal of **10-20% average annualized revenue growth** and significantly greater growth in profitability, leveraging its efficient operational model and strong balance sheet[7](index=7&type=chunk) [Company Overview](index=3&type=section&id=Company%20Overview) ReposiTrak provides cloud-based solutions for risk management, compliance, and supply chain optimization to retailers, suppliers, and wholesalers [About ReposiTrak](index=3&type=section&id=About%20ReposiTrak) ReposiTrak (formerly Park City Group) provides cloud-based solutions for retailers, suppliers, and wholesalers to manage risk, ensure regulatory compliance, enhance operational controls, and increase sales. Its product families include food traceability, compliance and risk management, and supply chain solutions - ReposiTrak offers a robust solution suite to help retailers, suppliers, and wholesalers reduce risk, comply with regulations, enhance operational controls, and increase sales[15](index=15&type=chunk) - The company's integrated, cloud-based applications are categorized into three product families: food traceability, compliance and risk management, and supply chain solutions[15](index=15&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) This section presents a comprehensive analysis of ReposiTrak's financial results for fiscal year 2025, including income statements, balance sheets, and cash flow statements [Full-Year Fiscal 2025 Financial Results](index=2&type=section&id=Full-Year%20Fiscal%202025%20Financial%20Results) For the full fiscal year ended June 30, 2025, ReposiTrak reported an 11% increase in total revenue to $22.6 million. Operating expenses rose by 6% to $16.4 million, while GAAP net income increased by 17% to $7.0 million. Net income attributable to common shareholders grew by 22% to $6.6 million, resulting in diluted EPS of $0.35 Full-Year Financial Results (YoY Comparison): | Metric | FY2025 (Millions) | FY2024 (Millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Total Revenue | $22.6 | $20.5 | 11% | | Total Operating Expense | $16.4 | $15.4 | 6% | | GAAP Net Income | $7.0 | $6.0 | 17% | | Net Income to Common Shareholders | $6.6 | $5.4 | 22% | | Diluted EPS | $0.35 | $0.29 | 21% | [Fourth Fiscal Quarter Financial Results](index=2&type=section&id=Fourth%20Fiscal%20Quarter%20Financial%20Results) In the fourth fiscal quarter ended June 30, 2025, total revenue increased 11% to $5.8 million. Total operating expense grew 8% to $4.2 million, with SG&A expense up 7% to $2.9 million. GAAP net income reached $1.8 million, and net income to common shareholders increased 18% to $1.7 million, translating to $0.09 per diluted share Fourth Fiscal Quarter Financial Results (YoY Comparison): | Metric | Q4 FY2025 (Millions) | Q4 FY2024 (Millions) | Change (%) | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total Revenue | $5.8 | $5.2 | 11% | | Total Operating Expense | $4.2 | $3.9 | 8% | | SG&A Expense | $2.9 | $2.7 | 7% | | GAAP Net Income | $1.8 | $1.6 | 14% | | Net Income to Common Shareholders | $1.7 | $1.5 | 18% | | Diluted EPS | $0.09 | $0.08 | 12.5% | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, ReposiTrak maintained a strong balance sheet with $28.6 million in cash and cash equivalents and no bank debt. Total assets increased to $55.3 million from $51.6 million in the prior year, while total liabilities also increased to $5.8 million from $4.7 million. Total stockholders' equity grew to $49.5 million Consolidated Balance Sheet Highlights: | Metric | June 30, 2025 (Dollars) | June 30, 2024 (Dollars) | | :-------------------------------- | :---------------------- | :---------------------- | | Cash | $28,568,805 | $25,153,862 | | Total Current Assets | $33,685,800 | $29,300,167 | | Total Assets | $55,329,047 | $51,596,732 | | Total Current Liabilities | $5,531,118 | $4,543,142 | | Total Liabilities | $5,809,866 | $4,742,114 | | Total Stockholders' Equity | $49,519,181 | $46,854,618 | - The company reported **$28.6 million** in cash and cash equivalents at June 30, 2025, an increase from **$25.2 million** at June 30, 2024, and had no bank debt[13](index=13&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations show a robust increase in revenue and profitability for fiscal year 2025. Revenue grew to $22.6 million, leading to an income from operations of $6.2 million, up 24%. Net income reached $7.0 million, and diluted EPS was $0.35, reflecting strong operational efficiency and financial performance Consolidated Statements of Operations (FY2025 vs. FY2024): | Metric | FY2025 (Dollars) | FY2024 (Dollars) | | :-------------------------------- | :--------------- | :--------------- | | Revenue | $22,606,066 | $20,453,320 | | Total Operating Expense | $16,378,923 | $15,429,089 | | Income from Operations | $6,227,143 | $5,024,231 | | Net Income | $6,978,127 | $5,958,290 | | Net Income Applicable to Common Shareholders | $6,617,821 | $5,408,645 | | Basic Earnings Per Share | $0.36 | $0.30 | | Diluted Earnings Per Share | $0.35 | $0.29 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities significantly increased by 21% to $8.4 million in fiscal 2025, demonstrating strong operational cash generation. Investing activities resulted in a net cash inflow of $169, a notable improvement from a net outflow in the prior year. Financing activities used $5.0 million, primarily due to preferred share redemptions and dividends paid, leading to a net increase in cash and cash equivalents of $3.4 million Consolidated Statements of Cash Flows (FY2025 vs. FY22024): | Cash Flow Activity | FY2025 (Dollars) | FY2024 (Dollars) | | :-------------------------------- | :--------------- | :--------------- | | Net Cash Provided by Operating Activities | $8,420,132 | $6,964,401 | | Net Cash (Used in) Provided by Investing Activities | $169 | $(100,707) | | Net Cash Used in Financing Activities | $(5,005,358) | $(5,700,711) | | Net (Decrease) Increase in Cash and Cash Equivalents | $3,414,943 | $1,162,983 | | Cash and Cash Equivalents at End of Period | $28,568,805 | $25,153,862 | - Cash from operations increased **21% to $8.4 million** from $6.9 million last year, reflecting efficient operational performance[6](index=6&type=chunk) [Capital Allocation & Shareholder Returns](index=2&type=section&id=Capital%20Allocation%20%26%20Shareholder%20Returns) ReposiTrak demonstrates its commitment to shareholder value through preferred share redemptions, common share buybacks, and consistent dividend increases [Preferred Share Redemption](index=2&type=section&id=Preferred%20Share%20Redemption) ReposiTrak continued its program of returning capital to shareholders by redeeming 70,093 preferred shares for $749,995 in Q4 fiscal 2025. Cumulatively, the company has redeemed 501,679 preferred shares totaling $5.4 million, with an anticipated full redemption of remaining preferred shares by December 2026 - In Q4 FY2025, ReposiTrak redeemed **70,093 preferred shares for $749,995**. For the full fiscal year, **280,372 preferred shares were redeemed for $3 million**[6](index=6&type=chunk)[10](index=10&type=chunk) - Since inception, the company has redeemed **501,679 preferred shares for a total of $5.4 million**, with **$3.6 million** remaining to be redeemed by December 2026[10](index=10&type=chunk) [Common Share Buyback](index=2&type=section&id=Common%20Share%20Buyback) During fiscal 2025, ReposiTrak repurchased 8,681 common shares for approximately $200,033 at an average price of $23.13 per share. The company still has approximately $8 million remaining under its $21 million common share buyback authorization - During fiscal 2025, the Company repurchased **8,681 common shares for a total of $200,033**, at an average of **$23.13 per share**[11](index=11&type=chunk) - Approximately **$8 million** remains of the **$21 million** total common share buyback authorization[11](index=11&type=chunk) [Dividends](index=2&type=section&id=Dividends) The Board of Directors declared a quarterly dividend of $0.02 per share ($0.08 annually), payable around November 14, 2025. This marks the third 10% increase in ReposiTrak's dividend since its establishment, demonstrating a commitment to returning capital to shareholders - On September 19, 2025, the board declared a quarterly dividend of **$0.02 per quarter ($0.08 per share annually)**, representing the **third 10% increase** since the dividend was established[6](index=6&type=chunk)[12](index=12&type=chunk) - The cash dividends will be paid to shareholders of record on or about November 14, 2025, for those on record as of September 30, 2025[6](index=6&type=chunk)[12](index=12&type=chunk) [Corporate Information & Disclosures](index=2&type=section&id=Corporate%20Information%20%26%20Disclosures) This section provides essential corporate communications, forward-looking statements, and investor contact details [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) ReposiTrak hosted a conference call on September 29, 2025, at 4:15 p.m. ET to discuss the financial results. Details for live participation and replay access were provided, including dial-in numbers and a webcast link via the company's investor relations website - A conference call was hosted on Monday, September 29, 2025, at 4:15 p.m. ET to discuss the company's results, with a webcast available on www.parkcitygroup.com[14](index=14&type=chunk)[15](index=15&type=chunk) Conference Call Access Information: | Type | Detail | | :---------------- | :-------------------------------- | | Date | Monday, September 29, 2025 | | Time | 4:15 p.m. ET (1:15 p.m. PT) | | Toll-Free Dial-In | 1-877-407-9716 | | International Dial-In | 1-201-493-6779 | | Conference ID | 13755695 | | Replay Toll-Free | 1-844-512-2921 | | Replay International | 1-412-317-6671 | | Replay Expiry | Wednesday, October 29, 2025, 11:59 PM ET | [Forward-Looking Statement](index=3&type=section&id=Forward-Looking%20Statement) The document includes a standard forward-looking statement disclaimer, cautioning readers that any non-historical statements are subject to risks and uncertainties. It advises against undue reliance on these statements and refers to SEC filings for a discussion of risk factors - Statements not historical facts are forward-looking, identified by words like 'anticipate,' 'believe,' 'estimate,' and 'expect,' and are subject to change and material differences from final reported results[16](index=16&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of their making dates, and should refer to SEC filings for risk factors[16](index=16&type=chunk) [Investor Relations Contact](index=3&type=section&id=Investor%20Relations%20Contact) Contact information for investor relations is provided for inquiries, including the CFO's email and details for FNK IR - Investor relations inquiries can be directed to John Merrill, CFO, via investor-relations@repositrak.com, or to Rob Fink of FNK IR at 646.809.4048 or rob@fnkir.com[17](index=17&type=chunk)

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) ReposiTrak achieved significant revenue and net income growth in FY2025, driven by a strategic shift to a supplier-centric model and efficient operations [Fiscal Year 2025 & Q4 Highlights](index=1&type=section&id=Fiscal%20Year%202025%20%26%20Q4%20Highlights) ReposiTrak reported an 11% increase in full-year revenue to $22.6 million and a 17% increase in net income to $7.0 million for fiscal year 2025. Earnings per share grew by 21%. The company ended the fiscal year with a strong cash position of $28.6 million and no debt. Fourth-quarter results also showed an 11% revenue increase and 14% net income growth Full-Year Fiscal 2025 Financial Highlights: | Metric | FY2025 (Millions) | FY2024 (Millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Total Revenue | $22.6 | $20.5 | 11% | | Recurring Revenue (% of total) | ~99% | N/A | N/A | | Operating Expense | $16.4 | $15.4 | 6% | | Operating Income | $6.2 | $5.0 | 24% | | GAAP Net Income | $7.0 | $6.0 | 17% | | Net Income to Common Shareholders | $6.6 | $5.4 | 22% | | Basic EPS | $0.36 | $0.30 | 20% | | Diluted EPS | $0.35 | $0.29 | 21% | | Cash from Operations | $8.4 | $6.9 | 21% | | Cash at Year-End | $28.6 | N/A | N/A | | Bank Debt | $0 | N/A | N/A | Fourth Fiscal Quarter Financial Highlights: | Metric | Q4 FY2025 (Millions) | Q4 FY2024 (Millions) | Change (%) | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total Revenue | $5.8 | $5.2 | 11% | | Recurring Revenue (% of total) | ~99% | N/A | N/A | | Operating Expense | $4.2 | $3.9 | 8% | | Operating Income | $1.6 | $1.3 | 20% | | GAAP Net Income | $1.8 | $1.6 | 14% | | Net Income to Common Shareholders | $1.7 | $1.5 | 18% | | EPS | $0.09 | $0.08 | 12.5% | [CEO Commentary & Strategic Direction](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Direction) CEO Randall K. Fields highlighted a strategic shift from a hub-centric to a supplier-centric traceability model, which has increased engagement and expanded the addressable market. Investments in infrastructure and automation are improving efficiency, enabling growth without increasing headcount, and enhancing cross-selling opportunities. The company aims for 10-20% average annualized revenue growth and significantly greater profitability growth - ReposiTrak shifted from a hub-centric to a supplier-centric traceability model, solving problems for individual suppliers, which has increased engagement and expanded the addressable market for compliance and supply chain solutions[5](index=5&type=chunk) - The company invested in infrastructure to expand automation and accelerate customer onboarding, leading to increased revenue per employee and a greater number of deals without expanding headcount[5](index=5&type=chunk) - ReposiTrak maintains a goal of **10-20% average annualized revenue growth** and significantly greater growth in profitability, leveraging its efficient operational model and strong balance sheet[7](index=7&type=chunk) [Company Overview](index=3&type=section&id=Company%20Overview) ReposiTrak provides cloud-based solutions for risk management, compliance, and supply chain optimization to retailers, suppliers, and wholesalers [About ReposiTrak](index=3&type=section&id=About%20ReposiTrak) ReposiTrak (formerly Park City Group) provides cloud-based solutions for retailers, suppliers, and wholesalers to manage risk, ensure regulatory compliance, enhance operational controls, and increase sales. Its product families include food traceability, compliance and risk management, and supply chain solutions - ReposiTrak offers a robust solution suite to help retailers, suppliers, and wholesalers reduce risk, comply with regulations, enhance operational controls, and increase sales[15](index=15&type=chunk) - The company's integrated, cloud-based applications are categorized into three product families: food traceability, compliance and risk management, and supply chain solutions[15](index=15&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) This section presents a comprehensive analysis of ReposiTrak's financial results for fiscal year 2025, including income statements, balance sheets, and cash flow statements [Full-Year Fiscal 2025 Financial Results](index=2&type=section&id=Full-Year%20Fiscal%202025%20Financial%20Results) For the full fiscal year ended June 30, 2025, ReposiTrak reported an 11% increase in total revenue to $22.6 million. Operating expenses rose by 6% to $16.4 million, while GAAP net income increased by 17% to $7.0 million. Net income attributable to common shareholders grew by 22% to $6.6 million, resulting in diluted EPS of $0.35 Full-Year Financial Results (YoY Comparison): | Metric | FY2025 (Millions) | FY2024 (Millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Total Revenue | $22.6 | $20.5 | 11% | | Total Operating Expense | $16.4 | $15.4 | 6% | | GAAP Net Income | $7.0 | $6.0 | 17% | | Net Income to Common Shareholders | $6.6 | $5.4 | 22% | | Diluted EPS | $0.35 | $0.29 | 21% | [Fourth Fiscal Quarter Financial Results](index=2&type=section&id=Fourth%20Fiscal%20Quarter%20Financial%20Results) In the fourth fiscal quarter ended June 30, 2025, total revenue increased 11% to $5.8 million. Total operating expense grew 8% to $4.2 million, with SG&A expense up 7% to $2.9 million. GAAP net income reached $1.8 million, and net income to common shareholders increased 18% to $1.7 million, translating to $0.09 per diluted share Fourth Fiscal Quarter Financial Results (YoY Comparison): | Metric | Q4 FY2025 (Millions) | Q4 FY2024 (Millions) | Change (%) | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total Revenue | $5.8 | $5.2 | 11% | | Total Operating Expense | $4.2 | $3.9 | 8% | | SG&A Expense | $2.9 | $2.7 | 7% | | GAAP Net Income | $1.8 | $1.6 | 14% | | Net Income to Common Shareholders | $1.7 | $1.5 | 18% | | Diluted EPS | $0.09 | $0.08 | 12.5% | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, ReposiTrak maintained a strong balance sheet with $28.6 million in cash and cash equivalents and no bank debt. Total assets increased to $55.3 million from $51.6 million in the prior year, while total liabilities also increased to $5.8 million from $4.7 million. Total stockholders' equity grew to $49.5 million Consolidated Balance Sheet Highlights: | Metric | June 30, 2025 (Dollars) | June 30, 2024 (Dollars) | | :-------------------------------- | :---------------------- | :---------------------- | | Cash | $28,568,805 | $25,153,862 | | Total Current Assets | $33,685,800 | $29,300,167 | | Total Assets | $55,329,047 | $51,596,732 | | Total Current Liabilities | $5,531,118 | $4,543,142 | | Total Liabilities | $5,809,866 | $4,742,114 | | Total Stockholders' Equity | $49,519,181 | $46,854,618 | - The company reported **$28.6 million** in cash and cash equivalents at June 30, 2025, an increase from **$25.2 million** at June 30, 2024, and had no bank debt[13](index=13&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations show a robust increase in revenue and profitability for fiscal year 2025. Revenue grew to $22.6 million, leading to an income from operations of $6.2 million, up 24%. Net income reached $7.0 million, and diluted EPS was $0.35, reflecting strong operational efficiency and financial performance Consolidated Statements of Operations (FY2025 vs. FY2024): | Metric | FY2025 (Dollars) | FY2024 (Dollars) | | :-------------------------------- | :--------------- | :--------------- | | Revenue | $22,606,066 | $20,453,320 | | Total Operating Expense | $16,378,923 | $15,429,089 | | Income from Operations | $6,227,143 | $5,024,231 | | Net Income | $6,978,127 | $5,958,290 | | Net Income Applicable to Common Shareholders | $6,617,821 | $5,408,645 | | Basic Earnings Per Share | $0.36 | $0.30 | | Diluted Earnings Per Share | $0.35 | $0.29 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities significantly increased by 21% to $8.4 million in fiscal 2025, demonstrating strong operational cash generation. Investing activities resulted in a net cash inflow of $169, a notable improvement from a net outflow in the prior year. Financing activities used $5.0 million, primarily due to preferred share redemptions and dividends paid, leading to a net increase in cash and cash equivalents of $3.4 million Consolidated Statements of Cash Flows (FY2025 vs. FY22024): | Cash Flow Activity | FY2025 (Dollars) | FY2024 (Dollars) | | :-------------------------------- | :--------------- | :--------------- | | Net Cash Provided by Operating Activities | $8,420,132 | $6,964,401 | | Net Cash (Used in) Provided by Investing Activities | $169 | $(100,707) | | Net Cash Used in Financing Activities | $(5,005,358) | $(5,700,711) | | Net (Decrease) Increase in Cash and Cash Equivalents | $3,414,943 | $1,162,983 | | Cash and Cash Equivalents at End of Period | $28,568,805 | $25,153,862 | - Cash from operations increased **21% to $8.4 million** from $6.9 million last year, reflecting efficient operational performance[6](index=6&type=chunk) [Capital Allocation & Shareholder Returns](index=2&type=section&id=Capital%20Allocation%20%26%20Shareholder%20Returns) ReposiTrak demonstrates its commitment to shareholder value through preferred share redemptions, common share buybacks, and consistent dividend increases [Preferred Share Redemption](index=2&type=section&id=Preferred%20Share%20Redemption) ReposiTrak continued its program of returning capital to shareholders by redeeming 70,093 preferred shares for $749,995 in Q4 fiscal 2025. Cumulatively, the company has redeemed 501,679 preferred shares totaling $5.4 million, with an anticipated full redemption of remaining preferred shares by December 2026 - In Q4 FY2025, ReposiTrak redeemed **70,093 preferred shares for $749,995**. For the full fiscal year, **280,372 preferred shares were redeemed for $3 million**[6](index=6&type=chunk)[10](index=10&type=chunk) - Since inception, the company has redeemed **501,679 preferred shares for a total of $5.4 million**, with **$3.6 million** remaining to be redeemed by December 2026[10](index=10&type=chunk) [Common Share Buyback](index=2&type=section&id=Common%20Share%20Buyback) During fiscal 2025, ReposiTrak repurchased 8,681 common shares for approximately $200,033 at an average price of $23.13 per share. The company still has approximately $8 million remaining under its $21 million common share buyback authorization - During fiscal 2025, the Company repurchased **8,681 common shares for a total of $200,033**, at an average of **$23.13 per share**[11](index=11&type=chunk) - Approximately **$8 million** remains of the **$21 million** total common share buyback authorization[11](index=11&type=chunk) [Dividends](index=2&type=section&id=Dividends) The Board of Directors declared a quarterly dividend of $0.02 per share ($0.08 annually), payable around November 14, 2025. This marks the third 10% increase in ReposiTrak's dividend since its establishment, demonstrating a commitment to returning capital to shareholders - On September 19, 2025, the board declared a quarterly dividend of **$0.02 per quarter ($0.08 per share annually)**, representing the **third 10% increase** since the dividend was established[6](index=6&type=chunk)[12](index=12&type=chunk) - The cash dividends will be paid to shareholders of record on or about November 14, 2025, for those on record as of September 30, 2025[6](index=6&type=chunk)[12](index=12&type=chunk) [Corporate Information & Disclosures](index=2&type=section&id=Corporate%20Information%20%26%20Disclosures) This section provides essential corporate communications, forward-looking statements, and investor contact details [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) ReposiTrak hosted a conference call on September 29, 2025, at 4:15 p.m. ET to discuss the financial results. Details for live participation and replay access were provided, including dial-in numbers and a webcast link via the company's investor relations website - A conference call was hosted on Monday, September 29, 2025, at 4:15 p.m. ET to discuss the company's results, with a webcast available on www.parkcitygroup.com[14](index=14&type=chunk)[15](index=15&type=chunk) Conference Call Access Information: | Type | Detail | | :---------------- | :-------------------------------- | | Date | Monday, September 29, 2025 | | Time | 4:15 p.m. ET (1:15 p.m. PT) | | Toll-Free Dial-In | 1-877-407-9716 | | International Dial-In | 1-201-493-6779 | | Conference ID | 13755695 | | Replay Toll-Free | 1-844-512-2921 | | Replay International | 1-412-317-6671 | | Replay Expiry | Wednesday, October 29, 2025, 11:59 PM ET | [Forward-Looking Statement](index=3&type=section&id=Forward-Looking%20Statement) The document includes a standard forward-looking statement disclaimer, cautioning readers that any non-historical statements are subject to risks and uncertainties. It advises against undue reliance on these statements and refers to SEC filings for a discussion of risk factors - Statements not historical facts are forward-looking, identified by words like 'anticipate,' 'believe,' 'estimate,' and 'expect,' and are subject to change and material differences from final reported results[16](index=16&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of their making dates, and should refer to SEC filings for risk factors[16](index=16&type=chunk) [Investor Relations Contact](index=3&type=section&id=Investor%20Relations%20Contact) Contact information for investor relations is provided for inquiries, including the CFO's email and details for FNK IR - Investor relations inquiries can be directed to John Merrill, CFO, via investor-relations@repositrak.com, or to Rob Fink of FNK IR at 646.809.4048 or rob@fnkir.com[17](index=17&type=chunk)

[FORM 10-K Cover Page](index=1&type=section&id=FORM%2010-K) The cover page provides essential identifying information for the annual report on Form 10-K [INDEX](index=3&type=section&id=INDEX) This section serves as the table of contents for the entire annual report [PART I](index=4&type=section&id=PART%20I) This part details the company's business operations, risk factors, properties, and legal proceedings [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Kentucky First Federal Bancorp operates two independent savings institutions, focusing on deposits and real estate-secured loans in Kentucky, subject to extensive regulation - **Total Assets**: **$371.2 million** as of June 30, 2025[17](index=17&type=chunk) - **Deposits**: **$277.6 million** as of June 30, 2025[17](index=17&type=chunk) - **Stockholders' Equity**: **$48.4 million** as of June 30, 2025[17](index=17&type=chunk) - The company operates First Federal of Hazard and First Federal of Kentucky as two independent, community-oriented savings institutions, following its incorporation in 2005 and subsequent acquisitions[14](index=14&type=chunk)[15](index=15&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section identifies forward-looking statements and outlines inherent risks that could cause actual results to differ materially from projections - Forward-looking statements are identified by words like 'believe,' 'expect,' 'anticipate,' 'plan,' 'estimate,' 'intend,' and 'potential,' or future/conditional verbs such as 'should,' 'could,' or 'may'[12](index=12&type=chunk) - Actual results may materially differ due to risks including general economic conditions, real estate prices, interest rate environment, ability to increase earnings and core deposits, regulatory approvals for dividends, competitive conditions, inflation, demand for financial services, credit losses, employee retention, data security, litigation, and changes in law and regulations[12](index=12&type=chunk) [General Company Overview](index=4&type=section&id=General) Kentucky First Federal Bancorp, incorporated in 2005, operates two independent savings institutions, First Federal of Hazard and First Federal of Kentucky, regulated by the OCC and FDIC - Kentucky First Federal Bancorp was incorporated on March 2, 2005, following the reorganization of First Federal Savings and Loan Association of Hazard and the acquisition of Frankfort First Bancorp, Inc[14](index=14&type=chunk) - On December 31, 2012, Kentucky First Federal acquired CFK Bancorp, Inc., expanding its customer base in central Kentucky[15](index=15&type=chunk) Bank Financials (June 30, 2025) | Bank | Total Assets | Net Loans | Deposits | Total Capital | | :----------------------------- | :--------------------------- | :------------------------ | :----------------------- | :---------------------------- | | First Federal of Hazard | $85.8 million | $77.2 million | $59.5 million | $17.9 million | | First Federal of Kentucky | $286.1 million | $250.0 million | $219.4 million | $29.3 million | [Market Areas](index=5&type=section&id=Market%20Areas) First Federal of Hazard operates in economically distressed eastern Kentucky, while First Federal of Kentucky serves more affluent central Kentucky counties - First Federal of Hazard's market area in eastern Kentucky is economically distressed, with a median household income of **$46,572** and a July 2025 unemployment rate of **6.9%**, higher than state and national averages[22](index=22&type=chunk) First Federal of Kentucky Market Area Demographics | County (First Federal of Kentucky) | Population | Median Household Income | Unemployment Rate | | :--------------------------------- | :--------- | :---------------------- | :---------------- | | Franklin County | 51,913 | $66,095 | 4.4% | | Boyle County | 31,139 | $58,397 | 5.5% | | Garrard County | 17,916 | $61,034 | 5.0% | [Lending Activities](index=7&type=section&id=Lending%20Activities) The company's loan portfolio is primarily residential mortgages, with 83.6% of the total and 93.8% of these being adjustable-rate loans, and it implemented the CECL model for credit losses - Residential mortgage loans, including construction and multi-family, totaled **$276.2 million**, representing **83.6%** of the total loan portfolio at June 30, 2025[27](index=27&type=chunk) - Adjustable-rate residential mortgage loans constituted **$258.9 million**, or **93.8%**, of the Company's residential mortgage loan portfolio at June 30, 2025[28](index=28&type=chunk) Loan Portfolio Composition (June 30, 2025) | Loan Type (June 30, 2025) | Amount (in millions) | % of Total Loan Portfolio | | :------------------------ | :------------------- | :------------------------ | | Construction Loans | $9.3 | 2.8% | | Multi-Family Loans | $15.5 | 4.7% | | Nonresidential Loans | $31.7 | 9.6% | | Commercial Non-mortgage | $0.7 | 0.2% | | Consumer Loans | $16.3 | 5.0% | - Upon implementation of ASU 2016-13 (CECL model) at July 1, 2023, the Banks began utilizing a separate liability for anticipated credit losses on loan commitments, which totaled **$59,000** at June 30, 2025[46](index=46&type=chunk) [Investment Activities](index=10&type=section&id=Investment%20Activities) The company invests in low-risk liquid assets like mortgage-backed securities to maintain liquidity, manage interest rate risk, and generate returns - Investment objectives include providing an alternate source of low-risk investments, maintaining liquidity, diversifying investments, providing collateral, managing interest rate risk, and generating favorable returns[54](index=54&type=chunk) - At June 30, 2025, the investment portfolio consisted of mortgage-backed securities issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae[53](index=53&type=chunk) [Bank Owned Life Insurance](index=10&type=section&id=Bank%20Owned%20Life%20Insurance) First Federal of Kentucky holds **$3.0 million** in BOLI policies to offset employee benefit costs, generating tax-exempt income, but faces risks from insurer failure and tax law changes - First Federal of Kentucky owns **$3.0 million** in Bank Owned Life Insurance (BOLI) policies as of June 30, 2025, to offset future non-salary employee benefit costs[55](index=55&type=chunk) - The income from BOLI policies is exempt from federal income taxes, and the cash value growth is recorded as other operating income[55](index=55&type=chunk) - Key risks include insurer failure, changes in tax laws, crediting rate not keeping pace with market rates, and potential regulatory prohibition of such plans[56](index=56&type=chunk) [Deposit Activities and Other Sources of Funds](index=11&type=section&id=Deposit%20Activities%20and%20Other%20Sources%20of%20Funds) The company primarily funds operations through deposits, loan repayments, and securities, supplementing with **$44.0 million** in brokered funds and FHLB borrowings - Major sources of funds include deposits, loan repayments, and maturities/redemptions/sales of investment and mortgage-backed securities[57](index=57&type=chunk) - The company began utilizing brokered funds in June 2023, with **$44.0 million** in such deposits at June 30, 2025[58](index=58&type=chunk) - First Federal of Hazard and First Federal of Kentucky borrow from the FHLB-Cincinnati to supplement investable funds and meet deposit withdrawal requirements[59](index=59&type=chunk) [Subsidiary Activities](index=11&type=section&id=Subsidiary%20Activities) Kentucky First Federal Bancorp's wholly-owned subsidiaries are First Federal of Hazard and First Federal of Kentucky, with authorized subsidiary investment limits based on assets - Kentucky First Federal Bancorp's wholly-owned subsidiaries are First Federal of Hazard and Frankfort First Bancorp, which owns First Federal of Kentucky[60](index=60&type=chunk) Authorized Subsidiary Investment (as of June 30, 2025) | Bank | Authorized Subsidiary Investment | | :----------------------------- | :--------------------------------------------------- | | First Federal of Hazard | Up to $1.7 million | | First Federal of Kentucky | Up to $5.0 million | [Competition](index=11&type=section&id=Competition) The company faces intense competition for deposits and loans from larger financial institutions, with competition expected to increase due to industry changes and consolidation - The company faces significant competition for deposits and loans from banks, credit unions, and other financial services companies, with larger competitors having greater resources[62](index=62&type=chunk) - Competition is expected to increase due to legislative, regulatory, and technological changes, and the continuing trend of consolidation in the financial services industry[62](index=62&type=chunk) Deposit Market Share (June 30, 2025) | Bank | Market Area | Deposit Market Share | | :----------------------------- | :---------- | :----------------------------------- | | First Federal of Hazard | Perry County | 7.2% | | First Federal of Kentucky | Franklin County | 8.2% | | First Federal of Kentucky | Boyle County | 8.2% | | First Federal of Kentucky | Garrard County | 17.5% | [Personnel](index=12&type=section&id=Personnel) As of June 30, 2025, the company employed 56 individuals, none of whom are unionized, maintaining a positive relationship with its workforce - At June 30, 2025, the company had **54 full-time** and **two part-time** employees[65](index=65&type=chunk) - No employees were represented by a collective bargaining unit, and the company believes its relationship with employees is good[65](index=65&type=chunk) [Regulation and Supervision](index=12&type=section&id=Regulation%20and%20Supervision) The company and its subsidiaries are extensively regulated by federal agencies, with First Federal of Kentucky currently under an OCC agreement and subject to Individual Minimum Capital Requirements - First Federal of Hazard and First Federal of Kentucky are subject to extensive regulation by the OCC and FDIC, while Kentucky First and First Federal MHC are supervised by the Federal Reserve Board[66](index=66&type=chunk) - The Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA) have significantly impacted the regulatory regime for financial institutions[67](index=67&type=chunk)[68](index=68&type=chunk) - First Federal of Kentucky entered a formal written agreement with the OCC on August 13, 2024, placing it in 'troubled condition' and imposing Individual Minimum Capital Requirements (IMCRs)[69](index=69&type=chunk) [Agreements with Regulators](index=13&type=section&id=Agreements%20with%20Regulators) First Federal of Kentucky is classified as in 'troubled condition' under an August 2024 OCC agreement, mandating specific capital ratios and corrective actions - First Federal of Kentucky entered a formal written agreement with the OCC on August 13, 2024, resulting in its classification as in 'troubled condition'[69](index=69&type=chunk) Individual Minimum Capital Requirements (IMCRs) | Individual Minimum Capital Requirements (IMCRs) | | :---------------------------------------------- | | Common Equity Tier 1 Capital Ratio: ≥ 9.0% | | Tier 1 Capital Ratio: ≥ 11.0% | | Total Capital Ratio: ≥ 12.0% | | Leverage Ratio: ≥ 9.0% | - Required actions include establishing a compliance committee, submitting revised strategic and succession plans, and adopting enhanced liquidity and interest rate risk management programs[71](index=71&type=chunk) [Regulation of Federal Savings Associations](index=14&type=section&id=Regulation%20of%20Federal%20Savings%20Associations) Federal savings associations are governed by federal laws and OCC regulations, including minimum capital standards and prompt corrective actions, with First Federal of Kentucky exceeding its higher IMCRs - Federal savings associations are subject to federal laws and OCC regulations governing business activities, including lending authority limits[72](index=72&type=chunk) Minimum Capital Standards (Effective Jan 1, 2015) | Minimum Capital Standards (Effective Jan 1, 2015) | | :---------------------------------------------- | | Tier 1 Leverage Ratio: 4.0% | | Common Equity Tier 1 Ratio: 4.5% | | Tier 1 Capital to Risk-Weighted Assets Ratio: 6.0% | | Total Capital to Risk-Weighted Assets Ratio: 8.0% | | Capital Conservation Buffer: 2.5% | - First Federal of Kentucky's capital levels at June 30, 2025, exceeded its IMCRs: common equity tier 1 (**16.83%**), tier 1 (**16.83%**), total capital (**16.83%**), and leverage ratio (**9.97%**)[77](index=77&type=chunk) - Both First Federal of Hazard and First Federal of Kentucky received a 'Satisfactory' rating in their most recent Community Reinvestment Act assessments[94](index=94&type=chunk) [Holding Company Regulation](index=18&type=section&id=Holding%20Company%20Regulation) Kentucky First and First Federal MHC are regulated by the Federal Reserve Board as savings and loan holding companies, exempt from consolidated capital requirements, and have suspended quarterly dividends - Kentucky First and First Federal MHC are regulated by the Federal Reserve Board as savings and loan holding companies[99](index=99&type=chunk) - Savings and loan holding companies with less than **$3.0 billion** in assets, such as Kentucky First, are exempt from consolidated capital requirements[105](index=105&type=chunk) - The company announced the suspension of quarterly dividends indefinitely on January 16, 2024, and First Federal MHC suspended efforts to seek member approval for dividend waivers[108](index=108&type=chunk) [Federal and State Taxation](index=22&type=section&id=Federal%20and%20State%20Taxation) The company is subject to a 21% federal income tax rate, with potential recapture of **$5.2 million** in bad debt reserves for First Federal of Kentucky, and is also subject to Kentucky corporate income tax - The federal statutory tax rate was **21%** for the fiscal years ended June 30, 2025 and 2024[112](index=112&type=chunk) - Approximately **$5.2 million** of First Federal of Kentucky's accumulated bad debt reserves would be recaptured into taxable income if 'non-dividend distributions' are made[114](index=114&type=chunk) - Effective January 1, 2021, the Savings and Loan Tax no longer applies to financial institutions in Kentucky, which are now subject to the corporate income tax[117](index=117&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including interest rate fluctuations, lending activity exposures, liquidity challenges, regulatory compliance, and operational and holding company structure risks - Net interest income decreased by **$1.8 million (20.3%)** in the year ended June 30, 2024, compared to the prior fiscal year, but improved to **$8.3 million** in the year ended June 30, 2025, from **$6.9 million** in the prior year, primarily due to higher asset returns and declining cost of funds[119](index=119&type=chunk) - At June 30, 2025, **93.8%** of the residential real estate loan portfolio consisted of adjustable-rate loans, increasing default risk during rising interest rates[122](index=122&type=chunk) - The company had **$29.2 million** in available liquidity, including **$19.5 million** in cash and cash equivalents, and **$80.3 million** in off-balance sheet liquidity sources, including **$71.0 million** in FHLB-Cincinnati borrowing capacity, as of June 30, 2025[130](index=130&type=chunk) - The company announced the indefinite suspension of quarterly dividends on January 16, 2024, which could adversely impact the market price of its common stock[132](index=132&type=chunk) [Interest Rate Risk](index=24&type=section&id=Interest%20Rate%20Risk) Rising interest rates pose a significant risk by potentially reducing net interest income, decreasing loan demand, and impairing borrower repayment ability for adjustable-rate loans - Net interest income decreased **$1.8 million (20.3%)** in the year ended June 30, 2024, compared to the prior fiscal year, but improved to **$8.3 million** in the year ended June 30, 2025, from **$6.9 million** in the prior year, due to higher asset returns and declining cost of funds[119](index=119&type=chunk) - At June 30, 2025, accumulated other comprehensive loss, representing the decrease in fair value of available-for-sale securities due to rising interest rates, totaled **$145,000**, or **1.5%** of the securities portfolio[121](index=121&type=chunk) - **93.8%** of the residential real estate loan portfolio at June 30, 2025, consisted of adjustable-rate loans, increasing the risk of default if interest rates rise and borrower payments increase[122](index=122&type=chunk) [Risks Related to Our Lending Activities](index=25&type=section&id=Risks%20Related%20to%20Our%20Lending%20Activities) Lending activities face risks from inflation, adequacy of credit loss allowance, high concentration in real estate collateral, and volatility in mortgage banking revenue - Inflationary pressures are expected to remain elevated throughout 2025, potentially increasing costs for customers and making loan repayment more difficult[123](index=123&type=chunk) - Approximately **99.3%** of the loan portfolio at June 30, 2025, was collateralized by real estate, exposing the company to significant risk from real estate market disruptions[125](index=125&type=chunk) - Residential mortgage loans secured by one-to-four family real estate constituted **$275.3 million**, or **83.6%**, of the loan portfolio at June 30, 2025, making the company sensitive to regional and local economic conditions[126](index=126&type=chunk) - Non-interest income increased **$249,000 (99.2%)** to **$500,000** in the fiscal year ended June 30, 2025, primarily due to increased net gains on sales of loans of **$187,000**[128](index=128&type=chunk) [Liquidity Risk](index=26&type=section&id=Liquidity%20Risk) The company faces liquidity risk from potential deposit outflows, with **$37.1 million** in uninsured deposits, and has indefinitely suspended dividends, impacting stock price and future payments - At June 30, 2025, uninsured deposits were approximately **$37.1 million**, or **13.4%** of total deposits[130](index=130&type=chunk) Liquidity Metrics (June 30, 2025) | Liquidity Metric (June 30, 2025) | Amount (in millions) | | :------------------------------- | :------------------- | | Available Liquidity | $29.2 | | Cash and Cash Equivalents | $19.5 | | Off-Balance Sheet Liquidity Sources | $80.3 | | FHLB-Cincinnati Borrowing Capacity | $71.0 | - The company announced the indefinite suspension of quarterly dividends on January 16, 2024, which could adversely impact the market price of its common stock[132](index=132&type=chunk) - First Federal MHC suspended efforts to seek member approval to obtain the dividend waiver for periods after the third quarter of 2024, and prior regulatory approval has expired[135](index=135&type=chunk) [Risks Related to Our Business and Industry Generally](index=28&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry%20Generally) The company faces intense competition for loans and deposits from larger, more resourced financial institutions, which is expected to intensify due to industry changes and consolidation - The company faces intense competition for loans and deposits, which could reduce net interest income due to price competition[136](index=136&type=chunk) - Competition is expected to increase due to legislative, regulatory, and technological changes, and the continuing trend of consolidation in the financial services industry[136](index=136&type=chunk) [Risks Related to Laws and Regulations](index=28&type=section&id=Risks%20Related%20to%20Laws%20and%20Regulations) First Federal of Kentucky is under an OCC agreement with IMCRs, and the company is broadly affected by regulatory changes, compliance costs, and federal monetary and tax policies - First Federal of Kentucky is in 'troubled condition' due to a formal written agreement with the OCC, effective August 13, 2024, and is subject to IMCRs[137](index=137&type=chunk) First Federal of Kentucky Capital Ratios vs. IMCR Requirement (June 30, 2025) | First Federal of Kentucky Capital Ratios (June 30, 2025) | IMCR Requirement | | :------------------------------------------------------- | :--------------- | | Common Equity Tier 1 Capital Ratio: 16.83% | ≥ 9.0% | | Tier 1 Capital Ratio: 16.83% | ≥ 11.0% | | Total Capital Ratio: 16.83% | ≥ 12.0% | | Leverage Ratio: 9.97% | ≥ 9.0% | - Changes in tax laws, such as the Tax Cuts and Jobs Act and the 'One Big Beautiful Bill Act,' may adversely affect the market for residential properties and demand for mortgage loans[145](index=145&type=chunk)[146](index=146&type=chunk) - Federal law requires a holding company to act as a source of financial and managerial strength to its subsidiary banks, potentially requiring capital injections even when resources are limited[149](index=149&type=chunk) [Risks Related to Accounting Matters](index=32&type=section&id=Risks%20Related%20to%20Accounting%20Matters) The company's financial statements rely on significant management estimates, and changes in accounting standards can materially impact reported financial condition and operating results - Significant estimates and assumptions are made in evaluating the adequacy of the allowance for loan losses, the valuation of mortgage servicing rights, and the fair value of financial instruments[150](index=150&type=chunk) - Changes in accounting standards by bodies like the FASB and SEC can materially impact reported financial condition and results of operations, potentially retroactively[151](index=151&type=chunk) [Risks Related to Operational Matters](index=33&type=section&id=Risks%20Related%20to%20Operational%20Matters) The company faces operational risks from technology reliance, including cyber attacks, system failures, and third-party provider issues, necessitating continuous investment in security and personnel - The security of computer systems and networks is vulnerable to breaches, unauthorized access, misuse, computer viruses, and cyber attacks, which could jeopardize confidential information and disrupt operations[152](index=152&type=chunk) - Outsourcing data processing and other operational functions to third-party providers introduces risks if these providers encounter difficulties or communication issues arise[154](index=154&type=chunk) - Failure to keep pace with technological advances and invest in new technology could materially adversely impact the business and financial condition[156](index=156&type=chunk) [Risks Related to Our Holding Company Structure](index=34&type=section&id=Risks%20Related%20to%20Our%20Holding%20Company%20Structure) First Federal MHC's majority ownership grants voting control, potentially conflicting with other stockholders' interests, and the company's ability to pay dividends is constrained by regulatory approvals and MHC waivers - First Federal MHC owns a majority of the common stock and can exercise voting control, potentially preventing transactions favorable to other stockholders[157](index=157&type=chunk) - The ability to pay future dividends depends on the Banks' capital distributions to Kentucky First Federal and First Federal MHC's waiver of dividends[158](index=158&type=chunk) - The company announced the indefinite suspension of dividend payments on January 16, 2024[163](index=163&type=chunk) [Item 1B. Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the SEC - There are no unresolved staff comments[165](index=165&type=chunk) [Item 1C. Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cybersecurity program with Board oversight, risk management, continuous investment, and an Incident Response Plan, reporting no material losses in FY2025 - The company employs comprehensive methodologies for risk assessment, identifying and evaluating potential cybersecurity threats and vulnerabilities[167](index=167&type=chunk) - An Incident Response Plan is in place to guide actions for real and suspected information security incidents, with material threats escalated to the Incident Response Team[169](index=169&type=chunk) - The company has not experienced any material losses relating to cybersecurity threats or incidents for the year ended June 30, 2025[172](index=172&type=chunk) - The Board of Directors has oversight responsibilities for cybersecurity risk management, and the Information Security Officer (ISO) reports directly to the CEO and provides regular briefings to the Board and Audit Committee[173](index=173&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk) [Cybersecurity Risk Management and Strategy](index=36&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) The company safeguards information and data through comprehensive risk assessments, continuous security investments, end-user training, and enhanced monitoring - The company regards information and data as valuable assets and has implemented safeguards to protect their integrity, availability, and privacy[166](index=166&type=chunk) - Comprehensive methodologies are used for risk assessment, including regular examinations of emerging threats, penetration tests, vulnerability scanning, and analysis of industry-specific risks[167](index=167&type=chunk) - Investments in information technology security are expanding, focusing on end-user training, layered defenses, critical asset protection, and strengthening monitoring and alerting[168](index=168&type=chunk) [Integration into Overall Risk Management System](index=36&type=section&id=Integration%20into%20Overall%20Risk%20Management%20System) Cybersecurity is integrated into the company's overall risk management through comprehensive threat identification, an Incident Response Plan, and regular tabletop exercises - The company employs comprehensive methodologies for risk assessment, diligently identifying and evaluating potential cybersecurity threats and vulnerabilities[167](index=167&type=chunk) - An Incident Response Plan guides actions for real and suspected information security incidents, including Distributed Denial of Service attacks, Corporate Account Takeover schemes, or ransomware[169](index=169&type=chunk) - Tabletop exercises are held regularly at senior and executive management levels to validate roles, responsibilities, and response protocols for cybersecurity threats[170](index=170&type=chunk) [Third-party Access](index=36&type=section&id=Third-party%20Access) The company manages third-party cybersecurity risks through a dedicated program, assigning risk ratings to vendors and contractually requiring appropriate security measures - The company has a fully integrated third-party risk management program to identify, assess, monitor, and mitigate cybersecurity risks associated with vendors[171](index=171&type=chunk) - Risk ratings are assigned to vendors based on their access to networks, systems, and confidential information[171](index=171&type=chunk) - Third parties with access to company systems or customer data must have appropriate security measures and agree by contract to manage their cybersecurity risks[171](index=171&type=chunk) [Material Cybersecurity Threat Risks](index=36&type=section&id=Material%20Cybersecurity%20Threat%20Risks) The company reported no material losses from cyber threats in FY2025 and is unaware of any risks likely to materially affect its business, but acknowledges that absolute security cannot be guaranteed - The company has not experienced any material losses relating to cybersecurity threats or incidents for the year ended June 30, 2025[172](index=172&type=chunk) - The company is not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition[172](index=172&type=chunk) - Despite a robust cybersecurity program, absolute surety against vulnerabilities or incidents cannot be provided, and future incidents could harm the business, reputation, or lead to regulatory actions or litigation[172](index=172&type=chunk) [Cybersecurity Governance](index=37&type=section&id=Cybersecurity%20Governance) The Board of Directors oversees cybersecurity risk management, with the ISO reporting directly to the CEO and regularly informing the Board and Audit Committee on risks and initiatives - The Board of Directors is responsible for the oversight of cybersecurity risk management, with members possessing expertise in risk management, technology, and finance[174](index=174&type=chunk) - The Information Security Officer (ISO) reports directly to the CEO and regularly informs the Board and Audit Committee on cybersecurity risks, initiatives, incidents, and compliance[175](index=175&type=chunk)[177](index=177&type=chunk) - The Board actively participates in strategic decisions related to cybersecurity, offering guidance and approval for major initiatives[176](index=176&type=chunk) [Item 2. Properties](index=38&type=section&id=Item%202.%20Properties) The company operates through seven owned offices across Kentucky, with a total net book value of premises and equipment at **$4.2 million** as of June 30, 2025 - The company conducts its business through seven owned offices[181](index=181&type=chunk) Office Locations and Details (June 30, 2025) | Office Location | Year Opened/Acquired | Ownership | Net Book Value (in thousands) | Approximate Square Footage | | :-------------------------------- | :------------------- | :-------- | :------------------------------------------- | :------------------------- | | First Federal of Hazard Main Office: 655 Main Street, Hazard, Kentucky 41701 | 2016 | Owned | $630 | 5,600 | | First Federal of Kentucky Main Office: 216 West Main Street, Frankfort, Kentucky 40601 | 2005 | Owned | $722 | 14,000 | | First Federal of Kentucky: 194 Versailles Road, Frankfort, Kentucky 40601 | 2015 | Owned | $748 | 2,700 | | First Federal of Kentucky: 1220 US 127 South, Frankfort, Kentucky 40601 | 2005 | Owned | $404 | 2,480 | | First Federal of Kentucky: 340 West Main Street, Danville, Kentucky 40422 | 2012 | Owned | $476 | 8,700 | | First Federal of Kentucky: 120 Skywatch Drive, Danville, Kentucky 40422 | 2012 | Owned | $627 | 2,300 | | First Federal of Kentucky: 208 Lexington Street, Lancaster, Kentucky 40444 | 2012 | Owned | $360 | 4,300 | - The net book value of the company's investment in premises and equipment was **$4.2 million** at June 30, 2025[182](index=182&type=chunk) [Item 3. Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any pending legal proceedings expected to have a material adverse effect on its financial condition or operations - The company is not a party to any pending legal proceedings that are believed to have a material adverse effect on its financial condition, results of operations, or cash flows[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable[184](index=184&type=chunk) [PART II](index=39&type=section&id=PART%20II) This part covers market information for common equity, financial statements, and internal controls [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company did not repurchase any equity securities in FY2024 or FY2025 and has no repurchase plan, with other information incorporated by reference - No stock was purchased in the fiscal years ended June 30, 2024 and 2025[187](index=187&type=chunk) - There is no stock repurchase plan in place as of June 30, 2025[187](index=187&type=chunk) - The company repurchased no equity securities registered under the Securities Exchange Act of 1934 during any quarter of the fiscal year ended June 30, 2025[189](index=189&type=chunk) [Item 6. [Reserved]](index=40&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Information for Management's Discussion and Analysis of Financial Condition and Results of Operations is incorporated by reference from the Annual Report to Stockholders - Information for Management's Discussion and Analysis of Financial Condition and Results of Operations is incorporated by reference from the Annual Report to Stockholders[190](index=190&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company as it qualifies as a smaller reporting company - This item is not applicable, as the Company is a smaller reporting company[191](index=191&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The Consolidated Financial Statements, Notes, Independent Auditor's Report, and Selected Financial Data are incorporated by reference from the Annual Report to Stockholders - The Consolidated Financial Statements, Notes to Consolidated Financial Statements, Report of Independent Registered Public Accounting Firm and Selected Financial Data are incorporated by reference from the Annual Report to Stockholders[192](index=192&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=40&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants regarding accounting and financial disclosure - There are no changes in and disagreements with accountants on accounting and financial disclosure[193](index=193&type=chunk) [Item 9A. Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2025, with no material changes during the quarter - The company's disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2025[194](index=194&type=chunk) - Management assessed the effectiveness of the company's internal control over financial reporting as of June 30, 2025, based on the COSO 2013 framework, and concluded it was effective[200](index=200&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[202](index=202&type=chunk) [Disclosure Controls and Procedures](index=40&type=section&id=Disclosure%20Controls%20and%20Procedures) The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[194](index=194&type=chunk) [Internal Control Over Financial Reporting](index=40&type=section&id=Internal%20Control%20Over%20Financial%20Reporting) Management affirmed the effectiveness of internal control over financial reporting as of June 30, 2025, based on the COSO 2013 framework, with no auditor attestation due to filer status - Management is responsible for establishing and maintaining adequate internal control over financial reporting[199](index=199&type=chunk) - Management assessed the effectiveness of internal control over financial reporting as of June 30, 2025, based on COSO 2013, and concluded it was effective[200](index=200&type=chunk) - The report does not include an attestation report from the public accounting firm due to the company's exemption as a non-accelerated filer[201](index=201&type=chunk) [Changes to Internal Control Over Financial Reporting](index=41&type=section&id=Changes%20to%20Internal%20Control%20Over%20Financial%20Reporting) There were no material changes to the company's internal control over financial reporting during the quarter ended June 30, 2025 - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[202](index=202&type=chunk) [Item 9B. Other Information](index=41&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b-5 trading arrangements during the three months ended June 30, 2025 - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b-5 trading arrangement during the three months ended June 30, 2025[203](index=203&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=41&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[204](index=204&type=chunk) [PART III](index=42&type=section&id=PART%20III) This part provides information on directors, executive compensation, security ownership, related transactions, and principal accountant fees [Item 10. Directors, Executive Officers and Corporate Governance](index=42&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, corporate governance, and ethics policies is incorporated by reference from the 2025 Annual Meeting of Stockholders Proxy Statement - Information on Directors, Executive Officers, and Corporate Governance is incorporated by reference from the 2025 Annual Meeting of Stockholders Proxy Statement[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - The company has adopted a Code of Ethics and Business Conduct applicable to all directors, officers, and employees[211](index=211&type=chunk) - Insider trading policies and procedures have been adopted to promote compliance with insider trading laws, rules, and regulations[212](index=212&type=chunk) [Item 11. Executive Compensation](index=42&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the definitive proxy statement - Information on Executive Compensation is incorporated by reference from the Proxy Statement[213](index=213&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=43&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and changes in control is incorporated by reference from the proxy statement, with no outstanding equity compensation options as of June 30, 2025 - Information on Security Ownership of Certain Beneficial Owners and Management is incorporated by reference to the 'Stock Ownership' section in the Proxy Statement[219](index=219&type=chunk) - Management knows of no arrangements that may result in a change in control of the company[219](index=219&type=chunk) Equity Compensation Plans (as of June 30, 2025) | Equity Compensation Plans (as of June 30, 2025) | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | :---------------------------------------------- | :------------------------------------------------------------------------ | :------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------------ | | Equity compensation plans approved by security holders | — | — | — | | Equity compensation plans not approved by security holders | — | — | — | | Total | — | — | — | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=43&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the proxy statement - Information on Certain Relationships and Related Transactions and Director Independence is incorporated by reference from the Proxy Statement[216](index=216&type=chunk)[217](index=217&type=chunk) [Item 14. Principal Accountant Fees and Services](index=43&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the proxy statement - Information on Principal Accountant Fees and Services is incorporated by reference from the 'Audit Related Matters' section in the Proxy Statement[218](index=218&type=chunk) [PART IV](index=44&type=section&id=PART%20IV) This part includes exhibits, financial statement schedules, and the Form 10-K summary [Item 15. Exhibits and Financial Statement Schedules](index=44&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists consolidated financial statements, financial statement schedules, and exhibits filed as part of the Annual Report on Form 10-K - The consolidated financial statements are incorporated by reference from Item 8[221](index=221&type=chunk) - All financial statement schedules are omitted because conditions for their requirement are absent or the information is included in the consolidated financial statements and related notes[221](index=221&type=chunk) - A list of exhibits filed as part of this Annual Report on Form 10-K is provided, including corporate documents, employment agreements, and regulatory filings[222](index=222&type=chunk)[223](index=223&type=chunk) [Item 16. Form 10-K Summary](index=45&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Form 10-K Summary is not applicable[224](index=224&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) This section contains the required signatures of the company's authorized officers

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________ FORM 6-K ________________________ REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 Date of report: September 30, 2025 Commission File Number: 001-39777 ________________________ NANOBIOTIX S.A. (Exact name of registrant as specified in its charter) _________________________ Nanobiotix S.A. 60 rue de Wattignies 75012 Paris, France (Address of principal ex ...

[1. Fiscal 2026 First Quarter Results Overview](index=1&type=section&id=1.%20Fiscal%202026%20First%20Quarter%20Results%20Overview) [1.1 Executive Summary of Financial Performance](index=1&type=section&id=1.1%20Executive%20Summary%20of%20Financial%20Performance) NIKE, Inc. reported fiscal 2026 first quarter revenues of **$11.7 billion**, a **1%** increase reported, with gross margin down **320 bps** and diluted EPS decreasing **30%** to **$0.49** Fiscal 2026 First Quarter Key Financial Highlights | Metric | Value (millions) | Reported % Change YoY | Currency-Neutral % Change YoY | | :--- | :--- | :--- | :--- | | Total Revenues | $11,700 | 1 % | -1 % | | NIKE Direct Revenues | $4,500 | -4 % | -5 % | | Wholesale Revenues | $6,800 | 7 % | 5 % | | Gross Margin | 42.2 % | -320 bps | | | Diluted EPS | $0.49 | -30 % | | [1.2 Management Commentary](index=1&type=section&id=1.2%20Management%20Commentary) Management noted progress in North America and Wholesale, expressing confidence in the 'Sport Offense' strategy despite non-linear recovery and external headwinds - NIKE drove progress through Win Now actions in priority areas of North America, Wholesale, and Running[3](index=3&type=chunk) - Confidence in the new alignment in the Sport Offense as key to maximizing NIKE, Inc.'s complete portfolio over the long-term[3](index=3&type=chunk) - Progress will not be linear as dimensions of the business recover on different timelines, navigating several external headwinds[3](index=3&type=chunk) [2. Consolidated Financial Statements](index=3&type=section&id=2.%20Consolidated%20Financial%20Statements) [2.1 Consolidated Statements of Income](index=3&type=section&id=2.1%20Consolidated%20Statements%20of%20Income) Revenues increased **1%** to **$11.72 billion**, but gross profit decreased **6%** due to a **320 bps** margin decline, leading to a **31%** net income drop to **$727 million** Consolidated Statements of Income (Three Months Ended August 31) | Metric (in millions, except per share data) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $11,720 | $11,589 | 1 % | | Cost of sales | $6,777 | $6,332 | 7 % | | Gross profit | $4,943 | $5,257 | -6 % | | Gross margin | 42.2 % | 45.4 % | | | Total selling and administrative expense | $4,016 | $4,048 | -1 % | | Income before income taxes | $922 | $1,307 | -29 % | | Income tax expense | $195 | $256 | -24 % | | Effective tax rate | 21.1 % | 19.6 % | | | NET INCOME | $727 | $1,051 | -31 % | | Diluted EPS | $0.49 | $0.70 | -30 % | [2.1.1 Revenue Breakdown](index=3&type=section&id=2.1.1%20Revenue%20Breakdown) This section details revenue and cost of sales performance, showing a slight revenue increase but a notable rise in cost of sales Revenue and Cost of Sales Performance | Metric (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $11,720 | $11,589 | 1 % | | Cost of sales | $6,777 | $6,332 | 7 % | | Gross profit | $4,943 | $5,257 | -6 % | [2.1.2 Gross Margin and Profitability](index=3&type=section&id=2.1.2%20Gross%20Margin%20and%20Profitability) Gross margin significantly declined by **320 basis points** to **42.2%**, primarily due to lower average selling prices and higher tariffs Gross Margin Performance | Metric | 8/31/2025 | 8/31/2024 | Change | | :--- | :--- | :--- | :--- | | Gross margin | 42.2 % | 45.4 % | -320 bps | - Gross margin decreased primarily due to lower average selling price, reflecting higher discounts and channel mix, as well as higher tariffs in North America[6](index=6&type=chunk) [2.1.3 Operating Expenses](index=3&type=section&id=2.1.3%20Operating%20Expenses) Total selling and administrative expense saw a slight decrease, driven by lower demand creation expense offset by flat operating overhead Selling and Administrative Expense (Three Months Ended August 31) | Expense Category (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Demand creation expense | $1,188 | $1,226 | -3 % | | Operating overhead expense | $2,828 | $2,822 | 0 % | | Total selling and administrative expense | $4,016 | $4,048 | -1 % | | % of revenues | 34.3 % | 34.9 % | | - Demand creation expense decreased primarily due to lower brand marketing expense reflecting higher investment in key sports events in the prior year, partially offset by higher sports marketing expense in the current year[6](index=6&type=chunk) - Operating overhead expense was flat, primarily due to higher wage-related expense, offset by lower other administrative costs[6](index=6&type=chunk) [2.1.4 Net Income and Earnings Per Share](index=3&type=section&id=2.1.4%20Net%20Income%20and%20Earnings%20Per%20Share) Net income decreased significantly by **31%** to **$727 million**, with diluted EPS falling **30%** to **$0.49**, impacted by a higher effective tax rate Net Income and EPS (Three Months Ended August 31) | Metric | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | NET INCOME | $727 million | $1,051 million | -31 % | | Basic EPS | $0.49 | $0.70 | -30 % | | Diluted EPS | $0.49 | $0.70 | -30 % | Effective Tax Rate | Metric | 8/31/2025 | 8/31/2024 | | :--- | :--- | :--- | | Effective tax rate | 21.1 % | 19.6 % | - The effective tax rate increased to **21.1%** from 19.6% primarily due to decreased benefits from stock-based compensation[6](index=6&type=chunk) [2.2 Consolidated Balance Sheets](index=4&type=section&id=2.2%20Consolidated%20Balance%20Sheets) Total assets decreased **1%** to **$37.33 billion**, driven by lower cash and investments, while current liabilities rose **3%** and shareholders' equity fell **3%** Consolidated Balance Sheet Summary (August 31) | Metric (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | TOTAL ASSETS | $37,334 | $37,867 | -1 % | | Total current liabilities | $10,911 | $10,628 | 3 % | | Shareholders' equity | $13,468 | $13,944 | -3 % | [2.2.1 Assets](index=4&type=section&id=2.2.1%20Assets) Total current assets decreased by **5%**, primarily due to significant reductions in cash and equivalents and short-term investments Current Assets (August 31) | Asset Category (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Cash and equivalents | $7,024 | $8,485 | -17 % | | Short-term investments | $1,551 | $1,809 | -14 % | | Accounts receivable, net | $4,962 | $4,764 | 4 % | | Inventories | $8,114 | $8,253 | -2 % | | Prepaid expenses and other current assets | $2,247 | $1,729 | 30 % | | Total current assets | $23,898 | $25,040 | -5 % | - Inventories were down **2%** compared to the prior year, reflecting a decrease in units, partially offset by increased product costs, primarily due to higher tariffs in North America[12](index=12&type=chunk) - Cash and equivalents and short-term investments were down approximately **$1.7 billion** from last year, as cash generated by operations was more than offset by cash dividends, share repurchases, bond repayment and capital expenditures[12](index=12&type=chunk) [2.2.2 Liabilities and Shareholders' Equity](index=4&type=section&id=2.2.2%20Liabilities%20and%20Shareholders'%20Equity) Total current liabilities increased by **3%**, driven by higher accounts payable and accrued liabilities, while shareholders' equity decreased by **3%** Current Liabilities and Shareholders' Equity (August 31) | Category (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Current portion of long-term debt | $0 | $1,000 | -100 % | | Accounts payable | $3,772 | $3,357 | 12 % | | Accrued liabilities | $5,923 | $5,075 | 17 % | | Total current liabilities | $10,911 | $10,628 | 3 % | | Shareholders' equity | $13,468 | $13,944 | -3 % | [3. Divisional and Brand Performance](index=5&type=section&id=3.%20Divisional%20and%20Brand%20Performance) [3.1 NIKE Brand Divisional Revenues](index=5&type=section&id=3.1%20NIKE%20Brand%20Divisional%20Revenues) NIKE Brand revenues grew **2%** reported to **$11.4 billion**, flat currency-neutral, with North America growing and Greater China declining significantly NIKE Brand Divisional Revenues (Reported % Change, Three Months Ended August 31) | Region | Footwear | Apparel | Equipment | Total | | :--- | :--- | :--- | :--- | :--- | | North America | 0 % | 11 % | 16 % | 4 % | | Europe, Middle East & Africa | 4 % | 11 % | 3 % | 6 % | | Greater China | -11 % | 1 % | -32 % | -9 % | | Asia Pacific & Latin America | 1 % | 7 % | -6 % | 2 % | | TOTAL NIKE BRAND | -1 % | 9 % | 4 % | 2 % | NIKE Brand Divisional Revenues (Currency-Neutral % Change, Three Months Ended August 31) | Region | Footwear | Apparel | Equipment | Total | | :--- | :--- | :--- | :--- | :--- | | North America | 0 % | 11 % | 16 % | 4 % | | Europe, Middle East & Africa | -2 % | 6 % | -2 % | 1 % | | Greater China | -12 % | 0 % | -33 % | -10 % | | Asia Pacific & Latin America | 0 % | 5 % | -7 % | 1 % | | TOTAL NIKE BRAND | -2 % | 7 % | 3 % | 0 % | - Currency-neutral growth in North America was offset by a decline in Greater China for the NIKE Brand[6](index=6&type=chunk) [3.2 Converse Brand Revenues](index=5&type=section&id=3.2%20Converse%20Brand%20Revenues) Converse revenues significantly declined by **27%** reported and **28%** currency-neutral, driven by declines across all territories Converse Revenues (Three Months Ended August 31) | Metric (in millions) | 8/31/2025 | 8/31/2024 | Reported % Change | Currency-Neutral % Change | | :--- | :--- | :--- | :--- | :--- | | Converse Revenues | $366 | $501 | -27 % | -28 % | - Converse revenues declined due to declines across all territories[6](index=6&type=chunk) [3.3 Earnings Before Interest and Taxes (EBIT) by Segment](index=6&type=section&id=3.3%20Earnings%20Before%20Interest%20and%20Taxes%20(EBIT)%20by%20Segment) Total NIKE, Inc. EBIT decreased **28%** to **$904 million**, with EBIT margin at **7.7%**, as all segments, especially Converse and Greater China, saw declines EBIT by Segment (Three Months Ended August 31) | Segment (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | North America | $1,134 | $1,216 | -7 % | | Europe, Middle East & Africa | $735 | $792 | -7 % | | Greater China | $377 | $502 | -25 % | | Asia Pacific & Latin America | $350 | $402 | -13 % | | TOTAL NIKE BRAND | $1,404 | $1,685 | -17 % | | Converse | $39 | $121 | -68 % | | TOTAL NIKE, INC. EBIT | $904 | $1,264 | -28 % | | EBIT margin | 7.7 % | 10.9 % | | [4. Shareholder Returns](index=2&type=section&id=4.%20Shareholder%20Returns) [4.1 Shareholder Returns Overview](index=2&type=section&id=4.1%20Shareholder%20Returns%20Overview) NIKE, Inc. returned approximately **$714 million** to shareholders in Q1 through dividends and share repurchases, maintaining **23 years** of dividend increases - The Company returned approximately **$714 million** to shareholders in the first quarter[8](index=8&type=chunk) Shareholder Returns Q1 Fiscal 2026 | Metric | Amount (millions) | % Change YoY | | :--- | :--- | :--- | | Dividends | $591 | 6 % | | Share repurchases | $123 | | - NIKE has a strong track record of returns to shareholders, including **23 consecutive years** of increasing dividend payouts[8](index=8&type=chunk) - **1.8 million shares** were retired as part of the Company's four-year, **$18 billion** share repurchase program approved in June 2022[12](index=12&type=chunk) [5. Company Information and Disclosures](index=2&type=section&id=5.%20Company%20Information%20and%20Disclosures) [5.1 About NIKE, Inc.](index=2&type=section&id=5.1%20About%20NIKE,%20Inc.) NIKE, Inc. is a global leader in athletic footwear, apparel, and equipment, with Converse as its athletic lifestyle subsidiary - NIKE, Inc. is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities[10](index=10&type=chunk) - Converse, a wholly-owned NIKE, Inc. subsidiary brand, designs, markets and distributes athletic lifestyle footwear, apparel and accessories[10](index=10&type=chunk) [5.2 Forward-Looking Statements](index=2&type=section&id=5.2%20Forward-Looking%20Statements) This section discloses forward-looking statements, which are subject to risks and uncertainties detailed in SEC filings, potentially causing actual results to differ - This press release contains forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially[11](index=11&type=chunk) - These risks and uncertainties are detailed from time to time in reports filed by NIKE with the U.S. Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q and 10-K[11](index=11&type=chunk) [5.3 Conference Call Information](index=2&type=section&id=5.3%20Conference%20Call%20Information) NIKE, Inc. management hosted a conference call on September 30, 2025, to discuss Q1 results, with a live broadcast and archived version available online - NIKE, Inc. management hosted a conference call on September 30, 2025, at approximately 2:00 p.m. PT to review fiscal first quarter results[9](index=9&type=chunk) - The conference call was broadcast live via the Internet and an archived version is available at https://investors.nike.com through approximately October 21, 2025[9](index=9&type=chunk)

[Company Overview and Strategic Direction](index=1&type=section&id=Company%20Overview%20and%20Strategic%20Direction) [Introduction and Key Updates](index=1&type=section&id=Introduction%20and%20Key%20Updates) Veradigm released Q2 2025 estimates, reaffirmed FY2025 outlook, and appointed Donald Trigg as CEO - Veradigm provided **Q2 2025 financial estimates**, details on **recent financing activities**, and **reaffirmed its FY2025 outlook**[1](index=1&type=chunk) - Donald Trigg joined Veradigm as **Chief Executive Officer and Board member** on **September 2, 2025**[2](index=2&type=chunk) [New Leadership and Strategic Vision](index=1&type=section&id=New%20Leadership%20and%20Strategic%20Vision) New CEO Donald Trigg outlined plans to boost profitability, revive growth, and ensure timely SEC filings - CEO Don Trigg outlined Veradigm's immediate path: **enhance profitability**, **revitalize growth**, and **timely complete SEC financial filings**[3](index=3&type=chunk) - The company possesses a **large national physician practice base** and **differentiated data assets** offering a 'mainstream health' perspective[3](index=3&type=chunk) [About Veradigm](index=2&type=section&id=About%20Veradigm) Veradigm is a healthcare technology company providing advanced insights and data-driven solutions - Veradigm is a healthcare technology company that creates value through its **unique combination of platform, data, expertise, connectivity, and scale**[9](index=9&type=chunk) - The Veradigm network provides **advanced insights, technology, and data-driven solutions** for healthcare providers, payers, and the biopharmaceutical market[9](index=9&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) [Preliminary Unaudited Financial Overview](index=1&type=section&id=Preliminary%20Unaudited%20Financial%20Overview) Veradigm reported preliminary Q2 2025 GAAP revenue of $145-$148 million, with $350M cash and $283M debt Financial Metrics Overview | Metric | Q2 2025 Estimate | YoY Change (Midpoint) | | :----- | :--------------- | :--------------------- | | Revenue (GAAP) | $145 million - $148 million | -2% | | Cash & Equivalents (as of Jun 30, 2025) | $350 million | Increase of ~$78M from Mar 31, 2025 | | Debt (as of Jun 30, 2025) | $283 million | | [Revenue Performance](index=4&type=section&id=Revenue%20Performance) Q2 2025 GAAP revenue projected at $145-$148 million, with provider revenue at $115-$117 million Revenue Breakdown | Revenue Segment | Q2 2025 (Estimate) | Q2 2024 | H1 2025 (Estimate) | H1 2024 | | :-------------- | :----------------- | :-------- | :----------------- | :-------- | | Provider Revenue (GAAP) | $115 million - $117 million | $119 million - $120 million | $228 million - $232 million | $234 million - $236 million | | Payer & Life Sciences Revenue (GAAP) | $30 million - $31 million | $29 million - $30 million | $61 million - $63 million | $58 million - $60 million | | **Total Veradigm Revenue (GAAP)** | **$145 million - $148 million** | **$148 million - $150 million** | **$289 million - $295 million** | **$292 million - $296 million** | [Cash and Debt Position](index=5&type=section&id=Cash%20and%20Debt%20Position) As of June 30, 2025, cash and equivalents totaled $350 million, up $78M from March 31, with total debt at $283M Cash and Debt Summary | Metric | Jun 30, 2025 | Dec 31, 2024 | | :----- | :------------ | :---------------- | | Cash & Cash Equivalents | $350 million | $294 million | | Debt | $283 million | $208 million | - Cash and equivalents increased by approximately **$78 million** from March 31, 2025, reflecting **$72 million in net debt financing inflows**, **$23 million in net portfolio activity inflows**, **$7 million in capital expenditure outflows**, and **$10 million in net operating activity outflows**[5](index=5&type=chunk) [Operational Highlights](index=2&type=section&id=Operational%20Highlights) Q2 2025 commercial team secured over $30 million in ACV, consistent with Q1, with stable revenue - The commercial team completed over **$30 million in annual contract value (ACV) transactions** in Q2 2025, consistent with Q1[7](index=7&type=chunk) - The interim CFO stated that **stable revenue performance** and a **robust capital base** are foundational pillars for the company's future success[7](index=7&type=chunk) [Financing Activities](index=1&type=section&id=Financing%20Activities) [Convertible Notes Repurchases](index=1&type=section&id=Convertible%20Notes%20Repurchases) Veradigm completed two convertible note repurchases totaling $230 million, reducing outstanding notes - On July 1, 2025, the company repurchased approximately **$180 million of convertible notes** using cash on hand, including **$164 million in principal** and **$16 million in contractual repurchase premium plus accrued interest**[5](index=5&type=chunk) - On September 29, 2025, the company repurchased approximately **$50 million of convertible notes** using cash on hand, including **$44 million in principal** and **$6 million in contractual repurchase premium plus accrued interest**[5](index=5&type=chunk) [Debt Structure Post-Repurchases](index=2&type=section&id=Debt%20Structure%20Post-Repurchases) Post-repurchases as of September 29, 2025, Veradigm's debt is primarily $75 million from a senior secured term loan - As of September 29, 2025, post-convertible note repurchases, the majority of the company's debt consists of **$75 million outstanding** under its senior secured term loan facility[6](index=6&type=chunk) - As of September 29, 2025, the company had **108.9 million common shares outstanding** and **10.6 million unvested restricted stock units**[6](index=6&type=chunk) [Fiscal Year 2025 Outlook](index=2&type=section&id=Fiscal%20Year%202025%20Outlook) [Reaffirmed Financial Expectations](index=2&type=section&id=Reaffirmed%20Financial%20Expectations) Veradigm reaffirmed FY2025 outlook, projecting GAAP revenue flat with FY2024 ($583-$588 million) and positive net cash FY 2025 Financial Outlook | Metric | FY 2025 Outlook | FY 2024 Estimate Range | | :----- | :------------------ | :---------------------- | | Revenue (GAAP) | Largely Flat | $583 million - $588 million | | Net Cash | Expected to Remain Positive | | [Investor Relations](index=2&type=section&id=Investor%20Relations) [Conference Call and Webcast Details](index=2&type=section&id=Conference%20Call%20and%20Webcast%20Details) Veradigm management will host an investor conference call and webcast on October 1, 2025, at 8:00 AM ET - Veradigm management plans to host an **investor conference call and webcast** on **October 1, 2025, at 8:00 AM ET**[7](index=7&type=chunk) - Participants can access the call via the **Veradigm Investor Relations website** or by dialing **877-405-1224** or **201-389-0848 (Access ID 13755960)**, with a replay available on the website for one year[8](index=8&type=chunk) [Legal and Forward-Looking Statements](index=3&type=section&id=Legal%20and%20Forward-Looking%20Statements) [Disclaimer on Preliminary Results](index=3&type=section&id=Disclaimer%20on%20Preliminary%20Results) Preliminary, unaudited financial estimates are subject to change upon completion of financial closing procedures - The financial performance estimates in this press release are **preliminary, unaudited results**, and final results may change upon completion of the company's financial closing procedures[12](index=12&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This release contains forward-looking statements based on management's beliefs, subject to risks like unlisted common stock, delayed reporting, internal control issues, SEC investigation, and litigation - This press release contains **forward-looking statements** based on management's current beliefs and expectations regarding future events, subject to **significant risks and uncertainties**[13](index=13&type=chunk) - Key factors that could cause actual results to differ materially from forward-looking statements include risks such as **common stock not trading on a national securities exchange**, **delayed financial reporting**, **internal control deficiencies**, **SEC investigation**, **litigation**, **leadership recruitment**, and **additional indebtedness**[14](index=14&type=chunk)

Filing Information This chapter presents the company's quarterly report filing information, including the reporting period, corporate details, and registrant status - The document is a Quarterly Report on Form 10-Q for the quarterly period ended **August 31, 2025**[1](index=1&type=chunk)[2](index=2&type=chunk) - **Paychex, Inc.** is a Delaware corporation, with its principal executive offices in Rochester, NY[2](index=2&type=chunk)[3](index=3&type=chunk) Registrant Status and Stock Information | Metric | Value | | :------------------------------------ | :-------------------- | | Filer Status | Large accelerated filer | | Common Stock Trading Symbol | PAYX | | Exchange Registered | Nasdaq Global Select Market | | Common Stock Outstanding (as of Aug 31, 2025) | 359,894,143 shares | PART I. FINANCIAL INFORMATION This part presents the unaudited consolidated financial statements and management's discussion and analysis of financial condition and operations [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Paychex, Inc.'s unaudited consolidated financial statements for the three months ended August 31, 2025, covering income, balance sheets, equity, and cash flows [Consolidated Statements of Income and Comprehensive Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Consolidated Statements of Income and Comprehensive Income (YoY Change) | Metric | For the three months ended August 31, 2025 (Millions) | For the three months ended August 31, 2024 (Millions) | Change (%) | | :---------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | :--------- | | **Revenue:** | | | | | Management Solutions | $1,163.3 | $961.7 | 21.0% | | PEO and Insurance Solutions | $329.1 | $319.3 | 3.1% | | Total service revenue | $1,492.4 | $1,281.0 | 16.5% | | Interest on funds held for clients | $47.6 | $37.5 | 26.9% | | Total revenue | $1,540.0 | $1,318.5 | 16.8% | | **Expenses:** | | | | | Cost of service revenue | $413.8 | $380.0 | 8.9% | | Selling, general and administrative expenses | $584.3 | $391.8 | 49.1% | | Total expenses | $998.1 | $771.8 | 29.3% | | Operating income | $541.9 | $546.7 | (0.9%) | | Interest expense | $(68.2) | $(9.6) | 610.4% | | Other income, net | $23.8 | $20.0 | 19.0% | | Income before income taxes | $497.5 | $557.1 | (10.7%) | | Income taxes | $113.7 | $129.7 | (12.4%) | | Net income | $383.8 | $427.4 | (10.2%) | | Other comprehensive income, net of tax | $28.7 | $64.8 | (55.7%) | | Comprehensive income | $412.5 | $492.2 | (16.2%) | | Basic earnings per share | $1.07 | $1.19 | (10.1%) | | Diluted earnings per share | $1.06 | $1.18 | (10.2%) | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (QoQ Change) | Metric | August 31, 2025 (Millions) | May 31, 2025 (Millions) | Change (%) | | :------------------------------------------ | :------------------------- | :------------------------ | :--------- | | **Assets:** | | | | | Cash and cash equivalents | $809.0 | $1,628.6 | (50.3%) | | Corporate investments | $861.9 | $34.5 | 2398.3% | | Funds held for clients | $4,927.4 | $4,813.3 | 2.4% | | Total current assets | $9,040.0 | $8,916.5 | 1.4% | | Total assets | $16,663.0 | $16,564.1 | 0.6% | | **Liabilities:** | | | | | Client fund obligations | $4,948.4 | $4,867.0 | 1.7% | | Total current liabilities | $7,128.7 | $6,956.3 | 2.5% | | Long-term borrowings, net of debt issuance costs | $4,550.3 | $4,548.4 | 0.0% | | Total liabilities | $12,692.4 | $12,436.1 | 2.1% | | **Stockholders' Equity:** | | | | | Total stockholders' equity | $3,970.6 | $4,128.0 | (3.8%) | [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated Statements of Stockholders' Equity (QoQ Change) | Metric | Balance as of May 31, 2025 (Millions) | For the three months ended August 31, 2025 (Millions) | Balance as of August 31, 2025 (Millions) | | :------------------------------------------ | :------------------------------------ | :---------------------------------------------------- | :----------------------------------- | | Total Stockholders' Equity | $4,128.0 | | $3,970.6 | | Net income | | $383.8 | | | Unrealized gains on securities, net of tax | | $24.3 | | | Cash dividends declared ($1.08 per share) | | $(389.0) | | | Repurchases of common shares | | $(160.1) | | | Stock-based compensation costs | | $26.8 | | | Foreign currency translation adjustment | | $4.4 | | | Activity related to equity-based plans | | $(47.6) | | - The company repurchased **1.1 million common shares** for **$160.1 million** during the three months ended August 31, 2025, at a weighted-average price of **$145.59 per share**[15](index=15&type=chunk) - Cash dividends declared were **$1.08 per share**, totaling **$389.0 million** for the three months ended August 31, 2025[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (YoY Change) | Activity | For the three months ended August 31, 2025 (Millions) | For the three months ended August 31, 2024 (Millions) | Change (Millions) | | :-------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | :---------------- | | Net cash provided by operating activities | $718.4 | $546.1 | $172.3 | | Net cash used in investing activities | $(1,302.7) | $(110.0) | $(1,192.7) | | Net cash used in financing activities | $(515.4) | $(485.0) | $(30.4) | | Net change in cash, restricted cash, and equivalents | $(1,099.7) | $(48.9) | $(1,050.8) | | Cash, restricted cash, and equivalents, end of period | $1,634.6 | $1,848.1 | $(213.5) | - Investing activities for the three months ended August 31, 2025, included **$3,731.9 million** in purchases of AFS securities and **$2,547.3 million** in proceeds from sales and maturities of AFS securities[17](index=17&type=chunk) - Financing activities for the three months ended August 31, 2025, included **$389.1 million** in dividends paid and **$160.1 million** in repurchases of common shares[17](index=17&type=chunk) [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note A: Description of Business, Basis of Presentation, and Significant Accounting Policies](index=7&type=section&id=Note%20A:%20Description%20of%20Business,%20Basis%20of%20Presentation,%20and%20Significant%20Accounting%20Policies) Paychex, Inc. is a human capital management (HCM) company offering HR, employee benefits, insurance, and payroll processing services across the U.S. and parts of Europe, operating as a single segment - Paychex is an industry-leading human capital management (HCM) company providing technology and advisory services in HR, employee benefit solutions, insurance, and payroll processing across the U.S. and parts of Europe, with operations also in India[19](index=19&type=chunk) - The company reports as **one segment**[19](index=19&type=chunk) Stock-Based Compensation Costs (YoY Change) | Metric | For the three months ended August 31, 2025 (Millions) | For the three months ended August 31, 2024 (Millions) | | :-------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | | Stock-based compensation costs | $26.8 | $16.5 | - Recently issued ASUs (2023-09, 2024-03, 202

Cover Page & Preliminary Information [General Information](index=1&type=section&id=General%20Information) The section identifies SRx Health Solutions Inc. as a non-accelerated, smaller reporting company filing its Q2 2025 Form 10-Q - Filing Type: **Quarterly Report on Form 10-Q** for the period ended **June 30, 2025**[2](index=2&type=chunk) - Registrant Name: **SRx Health Solutions Inc.** (formerly **Better Choice Company, Inc.**)[2](index=2&type=chunk) - Trading Symbol: **SRXH** on **NYSE American**[3](index=3&type=chunk) - Filer Status: **Non-accelerated filer** and **Smaller reporting company**[4](index=4&type=chunk) - Common Stock Outstanding (as of **Sep 29, 2025**): **24,853,633 shares**[5](index=5&type=chunk) [Explanatory Note](index=3&type=section&id=EXPLANATORY%20NOTE) This note clarifies the business combination (Merger) on April 24, 2025, where SRx Canada merged with Better Choice Company, Inc - Business Combination Date: **April 24, 2025**[6](index=6&type=chunk) - Accounting Acquirer: **SRx Health Solutions, Inc.** (formerly **SRx Canada**)[7](index=7&type=chunk) - Legal Acquirer: **Better Choice Company, Inc.**[6](index=6&type=chunk) - Post-Merger Name: **SRx Health Solutions, Inc.**[7](index=7&type=chunk) [Forward-Looking Statements](index=5&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections - Forward-looking statements discuss current expectations and projections relating to financial condition, results of operations, plans, objectives, future performance, and business[13](index=13&type=chunk) - Key risks include: ability to continue as a **going concern**, impact of **cyber-attacks**, business interruptions from geopolitical actions, ability to implement growth strategy, achieve/maintain profitability, loss of key management, ability to generate cash flow or raise capital, dependence on subsidiaries, product development, competition, customer retention, product allegations, supply chain management, regulatory compliance (**FDA**, **FTC**, **USDA**), product recalls, shifting customer demand, and inflationary pressures[14](index=14&type=chunk)[18](index=18&type=chunk) [Note Regarding Trademarks](index=6&type=section&id=NOTE%20REGARDING%20TRADEMARKS) This standard disclosure confirms the company's ownership or rights to use trademarks and trade names mentioned in the report - Company owns or has rights to use trademarks and trade names in its business operations[17](index=17&type=chunk) - References without ® or ™ symbols do not waive rights to these trademarks and trade names[17](index=17&type=chunk) Part I [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for SRx Health Solutions Inc., including the statements of operations, balance sheets, shareholders' equity, and cash flows, along with comprehensive notes detailing the company's financial position, performance, and significant accounting policies. The statements reflect the impact of the recent reverse merger and highlight the company's ongoing liquidity challenges and going concern uncertainty [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited condensed consolidated statements of operations, detailing the company's financial performance over specified periods | Metric (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net sales | 11,447 | 42,670 | (31,223) | (73.2%) | | Cost of goods sold | 8,028 | 33,254 | (25,226) | (75.9%) | | Gross margin | 3,419 | 9,416 | (5,997) | (63.7%) | | Operating loss | (17,422) | (1,322) | (16,100) | (1217.9%) | | Net loss after taxes | (15,133) | (3,115) | (12,018) | (385.8%) | | Net loss per share, basic | (0.74) | (0.14) | (0.60) | (428.6%) | | Metric (USD in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net sales | 41,082 | 117,122 | (76,040) | (65.0%) | | Cost of goods sold | 30,786 | 93,695 | (62,909) | (67.1%) | | Gross margin | 10,296 | 23,427 | (13,131) | (56.1%) | | Operating loss | (32,177) | (8,200) | (23,977) | (292.4%) | | Net loss after taxes | (29,745) | (11,077) | (18,668) | (168.5%) | | Net loss per share, basic | (1.54) | (0.50) | (1.04) | (208.0%) | [Unaudited Condensed Consolidated Balance Sheets](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section provides the unaudited condensed consolidated balance sheets, outlining the company's financial position at specific dates | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Total Assets | 33,985 | 33,764 | 221 | 0.7% | | Total Liabilities | 79,865 | 88,884 | (9,019) | (10.1%) | | Total Shareholders' Deficit | (45,880) | (55,119) | 9,239 | 16.8% | | Cash and cash equivalents | 912 | 106 | 806 | 760.4% | | Working Capital Deficiency | (49,581) | (67,667) | 18,086 | 26.7% | [Unaudited Condensed Consolidated Statements of Shareholders' Equity (Deficit)](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Deficit%29) This section details the unaudited condensed consolidated statements of shareholders' equity (deficit), showing changes in equity over time | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Common Stock Amount | 21 | 22 | (1) | (4.5%) | | Additional Paid-in Capital | 38,642 | 12,491 | 26,151 | 209.4% | | Accumulated Deficit | (98,424) | (70,031) | (28,393) | (40.5%) | | Accumulated Other Comprehensive Loss | 13,881 | 2,399 | 11,482 | 478.6% | | Total Shareholders' Deficit | (45,880) | (55,119) | 9,239 | 16.8% | - Shares redeemed in connection with business combinations: (**26,323,200 shares**), reducing common stock by **$26K** and additional paid-in capital by **$7,244K**[26](index=26&type=chunk) - Shares issued for private placement, post-merger: **1,280,000 shares**, increasing common stock by **$9K** and additional paid-in capital by **$8,791K**[26](index=26&type=chunk) - Fair value of shares issued to acquire Better Choice: **8,898,069 shares**, increasing common stock by **$9K** and additional paid-in capital by **$8,930K**[26](index=26&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statements of cash flows, summarizing cash inflows and outflows from operating, investing, and financing activities | Metric (USD in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Operating activities | (15,744) | 613 | (16,357) | (2668.3%) |\ | Investing activities | 13,280 | (4,490) | 17,770 | (395.8%) |\ | Financing activities | 3,154 | 3,841 | (687) | (17.9%) |\n| Net increase (decrease) in cash | 690 | (36) | 726 | (2016.7%) |\ | Cash and cash equivalents, end of period | 912 | 488 | 424 | 86.9% | - Cash used in operating activities increased significantly due to a higher net loss, partially offset by non-cash adjustments and working capital changes[300](index=300&type=chunk) - Cash provided by investing activities increased due to proceeds from asset sales and cash acquired in the merger, offsetting prior period acquisitions[301](index=301&type=chunk) - Cash provided by financing activities decreased slightly, with private placement proceeds offset by senior secured facility paydowns[302](index=302&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the financial statements, covering significant accounting policies, the reverse merger, specific asset and liability accounts, revenue recognition, segment performance, income taxes, related party transactions, share activity, financial instruments, asset disposals, commitments, and crucial subsequent events like the CCAA filing [Note 1 – Nature of business and summary of significant accounting policies](index=11&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20business%20and%20summary%20of%20significant%20accounting%20policies) This note outlines the company's business operations, the impact of the reverse merger, and key accounting policies - Company operates as a vertically integrated healthcare organization (Canadian pharmacy and healthcare services via **SRx Canada**) and a branded pet wellness company (premium pet health and nutrition products via **Halo**)[35](index=35&type=chunk) - Reverse Merger: **SRx Canada** (Accounting Acquirer) consummated a business combination with **Better Choice Company, Inc.** (Legal Acquirer) on **April 24, 2025**. **Better Choice** changed its name to **SRx Health Solutions, Inc.**[32](index=32&type=chunk)[33](index=33&type=chunk) - **Halo** Spin-Out Distribution: On **April 25, 2025**, **17%** of **Halo's** capital stock was distributed to **Better Choice** stockholders, treated as a common control equity reorganization with **Halo** remaining fully consolidated[36](index=36&type=chunk)[38](index=38&type=chunk) - **SRx Canada** filed for protection under the **Companies' Creditors Arrangement Act (Canada)** ('**CCAA**') on **August 12, 2025**[39](index=39&type=chunk) [Note 2 – Basis of Preparation](index=11&type=section&id=Note%202%20%E2%80%93%20Basis%20of%20Preparation) This note details the basis of financial statement preparation, identifies an immaterial error, and highlights going concern uncertainties - Financial statements prepared in accordance with **U.S. GAAP** and **SEC rules** for interim reports[40](index=40&type=chunk) - Immaterial error identified in **FY2024** revenue related to billed but undispensed prescriptions, resulting in a **$1.8 million** reduction to accumulated deficit as of **September 30, 2024**[43](index=43&type=chunk)[44](index=44&type=chunk) - Going Concern Uncertainty: Company has accumulated deficit (**$98.4M**), working capital deficiency (**$49.6M**), recurring net losses (**$15.1M** for **3 months**, **$29.7M** for **9 months ended June 30, 2025**), and non-compliance with **CWB** debt covenants[49](index=49&type=chunk)[50](index=50&type=chunk) - Management plans to address going concern include raising capital, debt restructuring, cost control, scaling high-margin services, and divesting non-core assets. However, there is no assurance of success[53](index=53&type=chunk)[59](index=59&type=chunk) - **CCAA** Filing: **SRx Canada** initiated **CCAA** proceedings in **August 2025**, leading to operational changes (divestiture, workforce reductions) to stabilize liquidity, but outcome remains uncertain[54](index=54&type=chunk) - U.S. pet food business (legacy Better Choice) faces significant liquidity constraints and operating losses, with management evaluating strategic alternatives[55](index=55&type=chunk) [Note 3 – Summary of significant accounting policies](index=14&type=section&id=Note%203%20%E2%80%93%20Summary%20of%20significant%20accounting%20policies) This note summarizes the company's significant accounting policies, including segment reporting, business combinations, revenue recognition, and asset impairment - Segment Information: Following the reverse merger, the Company reports two segments: **Health Solutions** (Canadian pharmacy/healthcare) and **Consumer Products** (legacy **Halo** pet food business, primarily U.S.)[62](index=62&type=chunk)[63](index=63&type=chunk) - Business Combinations: Accounted for using the acquisition method (**ASC 805**). Goodwill is measured as excess consideration over net identifiable assets. A bargain purchase gain is recognized if net assets acquired exceed consideration[64](index=64&type=chunk)[66](index=66&type=chunk)[70](index=70&type=chunk) - Revenue Recognition: For healthcare services, revenue is recognized when control of goods/services transfers (e.g., prescription dispensed, service completed). For **Halo** pet food, revenue is recognized upon product shipment[78](index=78&type=chunk)[80](index=80&type=chunk)[85](index=85&type=chunk) - Impairment of Non-Financial Assets: Long-lived assets (property, equipment, finite-lived intangibles, ROU assets) are reviewed for impairment when circumstances indicate carrying amount may not be recoverable (**ASC 360**). Goodwill is tested annually or more frequently (**ASC 350**)[105](index=105&type=chunk)[106](index=106&type=chunk) - Share Repurchases: Board authorized a stock repurchase plan for up to **$6.5 million**. **76,800 shares** repurchased between **April 24, 2025**, and **June 30, 2025**[75](index=75&type=chunk) [Note 4 – Business Combinations](index=24&type=section&id=Note%204%20%E2%80%93%20Business%20Combinations) This note details the reverse merger, the resulting bargain purchase gain, acquisition-related costs, and prior pharmacy acquisitions - Reverse Merger (**April 24, 2025**): **Better Choice** issued **8,898,069 shares** and **19,701,935 exchangeable shares**. Former **SRx Canada** shareholders hold **~88%** of combined voting power. Accounted for as a reverse acquisition with **SRx Canada** as accounting acquirer[142](index=142&type=chunk)[143](index=143&type=chunk) - Bargain Purchase Gain: Preliminary gain of **$1.69 million** recognized in **Q2 2025** due to total consideration transferred being less than the fair value of net assets acquired[144](index=144&type=chunk)[150](index=150&type=chunk) - Acquisition-Related Costs: Issued **1,599,231 common shares** for advisory and professional services, totaling **$3.3 million**, expensed in **Q2 2025**[146](index=146&type=chunk) - Private Placement: Completed on **April 24, 2025**, issuing **1,280,000 common shares** and **2,756,697 pre-funded warrants** for **$8.8 million** gross proceeds[147](index=147&type=chunk) - Prior Pharmacy Acquisitions (**9 months ended June 30, 2024**): Acquired Elora Apothecary Ltd., Trailside Pharmacy Ltd., 0864009 B.C. Ltd. (Mediglen), and Vaughan Endoscopy Clinic Inc., totaling **$4.019 million** in consideration and **$2.441 million** in goodwill[152](index=152&type=chunk) [Note 5 – Trade and other receivables](index=27&type=section&id=Note%205%20%E2%80%93%20Trade%20and%20other%20receivables) This note provides a breakdown of trade and other receivables, including the allowance for current expected credit losses | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Receivables from third-party customers | 5,519 | 4,223 | 1,296 | 30.7% | | Other receivables | 2,460 | 2,883 | (423) | (14.7%) | | Sales and income tax receivables | 247 | 2,371 | (2,124) | (89.6%) | | Less: Allowance for CECL | (88) | (202) | 114 | (56.4%) | | Total Accounts Receivable, net | 8,138 | 9,275 | (1,137) | (12.3%) | - Allowance for current expected credit losses (**CECL**) decreased from **$202K** to **$88K**[165](index=165&type=chunk) [Note 6 – Inventory](index=28&type=section&id=Note%206%20%E2%80%93%20Inventory) This note presents the composition of the company's inventory, including finished goods and packaging supplies | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Finished goods | 4,582 | 3,369 | 1,213 | 36.0% | | Inventory packaging and supplies | 550 | - | 550 | N/A | | Total Inventory, net | 5,132 | 3,369 | 1,763 | 52.3% | [Note 7 – Fixed assets](index=28&type=section&id=Note%207%20%E2%80%93%20Fixed%20assets) This note details the company's fixed assets, accumulated depreciation, and depreciation expense | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Total fixed assets | 7,698 | 11,207 | (3,509) | (31.3%) | | Accumulated depreciation | (4,628) | (5,176) | 548 | (10.6%) | | Fixed assets, net | 3,070 | 6,031 | (2,961) | (49.1%) | - Depreciation expense for the **nine months ended June 30, 2025**, was **$0.5 million**, compared to **$0.4 million** for the same period in **2024**[167](index=167&type=chunk) [Note 8 – Intangible assets](index=28&type=section&id=Note%208%20%E2%80%93%20Intangible%20assets) This note outlines the company's intangible assets, amortization expense, and impairment losses | Metric (USD in thousands) | June 30, 2025 (Net Carrying Amount) | September 30, 2024 (Net Carrying Amount) | Change ($) | Change (%) | | :------------------------ | :---------------------------------- | :--------------------------------------- | :--------- | :--------- | | Computer software | 30 | 50 | (20) | (40.0%) | | Domain/website | 1 | 1 | 0 | 0.0% | | Customer lists | 424 | 6,210 | (5,786) | (93.2%) | | Charter license | 669 | 740 | (71) | (9.6%) | | Total Intangible Assets | 1,124 | 7,001 | (5,877) | (83.9%) | - Amortization expense for the **nine months ended June 30, 2025**, was **$2.4 million**, compared to **$1.0 million** for the same period in **2024**, an increase of **140%**[169](index=169&type=chunk) - Impairment loss of **$2.7 million** recognized during the **nine months ended June 30, 2025**, related to customer list intangible assets, driven by a decline in estimated fair value[170](index=170&type=chunk) [Note 9 – Goodwill](index=29&type=section&id=Note%209%20%E2%80%93%20Goodwill) This note details the company's goodwill, including impairment charges and their underlying causes | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Beginning balance | - | 18,346 | (18,346) | (100.0%) | | Acquisitions | - | 2,438 | (2,438) | (100.0%) | | Impairment expense | - | (19,669) | 19,669 | (100.0%) | | Ending balance | - | - | 0 | N/A | - A goodwill impairment charge of **$19.7 million** was recognized for the **three and twelve months ended September 30, 2024**, for the Pharmacy and Prescription Drug Sales reporting unit[173](index=173&type=chunk) - Impairment was primarily due to the loss of a key contract, reduced projected revenue, increased pricing pressure, lower long-term growth expectations, and a higher discount rate[172](index=172&type=chunk) [Note 10 – Leases](index=30&type=section&id=Note%2010%20%E2%80%93%20Leases) This note provides information on the company's operating lease assets, liabilities, and associated costs | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Operating lease assets | 4,717 | 6,490 | (1,773) | (27.3%) | | Total Operating lease liabilities | 5,044 | 7,092 | (2,048) | (28.9%) | - Total lease cost for the **nine months ended June 30, 2025**, was **$1.707 million**, a decrease of **6%** from **$1.816 million** in **2024**[176](index=176&type=chunk) - Weighted average remaining lease term is **4.78 years**, with a weighted average discount rate of **7.74%**[176](index=176&type=chunk) [Note 11 – Debt](index=31&type=section&id=Note%2011%20%E2%80%93%20Debt) This note details the company's debt structure, including short-term borrowings, CWB facilities, and covenant non-compliance | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Short-term borrowings | 4,077 | 3,715 | 362 | 9.7% | | CWB Term Facilities | 23,054 | 30,603 | (7,549) | (24.7%) | | Other borrowings | 3,685 | 1,668 | 2,017 | 120.9% | | Total Debt | 30,816 | 35,986 | (5,170) | (14.4%) | | Current portion of long-term borrowings | 24,836 | 31,575 | (6,739) | (21.3%) | | Long-term portion of other borrowings | 1,903 | 696 | 1,207 | 173.4% | - Company was not in compliance with **CWB** loan covenants (**Senior Funded Debt to Adjusted EBITDA < 4.0x** and **Fixed Charge Coverage Ratio > 1.0x**) as of **June 30, 2025**, and **September 30, 2024**, leading to reclassification of the entire **CWB** loan as a current liability[183](index=183&type=chunk) - Revolving Loan with **Better Choice Company Inc. (BTTR)** was converted into common shares upon the reverse merger on **April 24, 2025**, and is no longer outstanding[181](index=181&type=chunk)[182](index=182&type=chunk) [Note 12 – Convertible debentures](index=32&type=section&id=Note%2012%20%E2%80%93%20Convertible%20debentures) This note describes the company's convertible debentures, including conversions and new issuances | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Convertible debentures | 1,145 | 2,230 | (1,085) | (48.7%) | - **Better Choice** Convertible Note (**$1.45 million** principal) converted into common shares upon the reverse merger on **April 24, 2025**, and is no longer outstanding[190](index=190&type=chunk)[191](index=191&type=chunk) - During the **nine months ended June 30, 2025**, an additional **$1.0 million** in convertible debentures were issued[189](index=189&type=chunk) [Note 13 – Revenue](index=33&type=section&id=Note%2013%20%E2%80%93%20Revenue) This note provides a detailed breakdown of the company's revenue by channel for various periods | Revenue Channel (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Retail pharmacy | 6,790 | 41,438 | (34,648) | (83.6%) | 33,598 | 113,921 | (80,323) | (70.5%) | | Infusion services | 207 | 428 | (221) | (51.6%) | 724 | 948 | (224) | (23.6%) | | Specialty clinics | 142 | 111 | 31 | 27.9% | 411 | 417 | (6) | (1.4%) | | Wholesale distribution | 1 | 245 | (244) | (99.6%) | 31 | 612 | (581) | (95.0%) | | Patient support program | 193 | 262 | (69) | (26.3%) | 731 | 744 | (13) | (1.7%) | | Clinical trial | 213 | 7 | 206 | 2942.9% | 792 | 8 | 784 | 9800.0% | | Consumer packaged goods | 2,673 | - | 2,673 | N/A | 2,673 | - | 2,673 | N/A | | Other service revenue | 1,228 | 179 | 1,049 | 586.0% | 2,122 | 472 | 1,650 | 349.6% | | Total revenue | 11,447 | 42,670 | (31,223) | (73.2%) | 41,082 | 117,122 | (76,040) | (65.0%) | [Note 14 – Segment information](index=33&type=section&id=Note%2014%20%E2%80%93%20Segment%20information) This note outlines the company's two reportable segments: Health Solutions and Consumer Products, and their respective financial contributions - Company operates two reportable segments: Health Solutions (Canadian pharmacies, core business) and Consumer Products (legacy Halo pet food, primarily U.S.)[195](index=195&type=chunk) - CODM (Board of Directors) evaluates segments based on revenues, gross margin, and Adjusted EBITDA, but not total assets[196](index=196&type=chunk)[197](index=197&type=chunk) | Segment (USD in thousands) | 3 Months Ended June 30, 2025 (Net Sales) | 3 Months Ended June 30, 2024 (Net Sales) | 9 Months Ended June 30, 2025 (Net Sales) | 9 Months Ended June 30, 2024 (Net Sales) | | :------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Health Solutions | 8,774 | 42,670 | 38,409 | 117,122 | | Consumer Products | 2,673 | - | 2,673 | - | | Total | 11,447 | 42,670 | 41,082 | 117,122 | - U.S. revenue (Consumer Products) for **9 months ended June 30, 2025**, was **$2.673 million** (N/A in 2024). Canadian revenue (Health Solutions) for **9 months ended June 30, 2025**, was **$38.409 million**, down from **$117.122 million** in **2024**[201](index=201&type=chunk) - Long-lived assets in the U.S. increased to **$4.090 million** as of **June 30, 2025** (from **$0** in **2024**), while Canadian long-lived assets decreased to **$0.104 million** (from **$13.032 million** in **2024**)[202](index=202&type=chunk) [Note 15 – Income taxes](index=36&type=section&id=Note%2015%20%E2%80%93%20Income%20taxes) This note details the company's income tax provision, deferred tax income, and effective tax rates | Metric (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income tax provision | 100 | 300 | 800 | 200 | | Deferred tax income (expense) | 1,700 | (400) | 1,500 | 600 | - U.S. operations have a federal statutory tax rate of **21%**, but the effective tax rate was **less than 1%** due to a full valuation allowance against deferred tax assets related to net operating losses[205](index=205&type=chunk) [Note 16 – Related party transactions](index=36&type=section&id=Note%2016%20%E2%80%93%20Related%20party%20transactions) This note describes transactions with related parties, including working capital advances and balances due to former executives - Historical non-interest-bearing working capital advances with largest shareholder and common control entities were forgiven, resulting in a capital contribution[206](index=206&type=chunk)[207](index=207&type=chunk) - As of **June 30, 2025**, net related party balances transitioned to a payable position of **$82K** (from a receivable of **$81K** in **Sep 2024**)[210](index=210&type=chunk) - A **$1.4 million** balance due to former CEO Adesh Vora was recorded as an increase to beginning accumulated deficit and a non-cash capital distribution[208](index=208&type=chunk) [Note 17 – Share issuances and warrants](index=37&type=section&id=Note%2017%20%E2%80%93%20Share%20issuances%20and%20warrants) This note details the company's share issuances, private placements, and warrant activity | Metric | June 30, 2025 | September 30, 2024 | Change | | :------------------------ | :------------ | :----------------- | :----- | | Warrants Outstanding () | 3,075,042 | 232,438 | 2,842,604 | | Weighted average price ($)| 14.94 | 2.02 | 12.92 | - On **April 24, 2025**, issued **1,280,000 common shares** and **2,756,697 pre-funded warrants** for **$8.8 million** in a private placement[212](index=212&type=chunk) - Issued **1,941,120 shares** for settlement of **$2.9 million** inventory-related accounts payable and **$3.1 million** professional fee-related accounts payable during the **nine months ended June 30, 2025**[213](index=213&type=chunk) [Note 18 – Loss per share](index=38&type=section&id=Note%2018%20%E2%80%93%20Loss%20per%20share) This note presents the company's net loss per share, including basic and diluted calculations | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | (15,133) | (3,115) | (29,745) | (11,077) | | Weighted average shares (basic & diluted) | 20,401,138 | 21,922,889 | 19,334,671 | 22,005,842 | | Net loss per share (basic & diluted) | (0.74) | (0.14) | (1.54) | (0.50) | - Basic and diluted net loss per share are the same as potentially dilutive securities were anti-dilutive due to net losses[215](index=215&type=chunk)[216](index=216&type=chunk) [Note 19 – Share-based compensation](index=38&type=section&id=Note%2019%20%E2%80%93%20Share-based%20compensation) This note outlines the company's share-based compensation expense, incentive plans, and restricted stock unit activity | Metric (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Share-based compensation expense | 2,900 | 800 | 4,500 | 2,600 | - Amended **2019 Incentive Award Plan** adopted post-Merger, authorizing **1,928,023 shares** for issuance[217](index=217&type=chunk)[222](index=222&type=chunk) - Granted **890,192 shares** of immediately vested restricted common stock in **April 2025** for performance bonus compensation (**$1.9 million** expense)[220](index=220&type=chunk) - **RSUs** outstanding decreased from **1,594,641** (**Sep 30, 2024**) to **0** (**June 30, 2025**) due to vesting and conversion in the Reverse Merger[222](index=222&type=chunk) [Note 20 – Financial instruments](index=39&type=section&id=Note%2020%20%E2%80%93%20Financial%20instruments) This note discusses the fair value of financial instruments, exposure to credit, liquidity, and market risks, and contractual maturities - Fair value of cash, receivables, and payables approximate carrying amounts due to short-term maturities[224](index=224&type=chunk) - Convertible debt classified as **Level 3** financial instrument due to unobservable inputs in valuation[225](index=225&type=chunk) - Company is exposed to credit risk, liquidity risk, and market risk (interest rate risk)[227](index=227&type=chunk) - Liquidity risk is monitored through cash flow forecasts and access to credit facilities[228](index=228&type=chunk) | Contractual Maturities (USD in thousands) | Year 1 (June 30, 2025) | Year 2 (June 30, 2025) | Total (June 30, 2025) | Year 1 (Sep 30, 2024) | Year 3 (Sep 30, 2024) | Total (Sep 30, 2024) | | :---------------------------------------- | :--------------------- | :--------------------- | :-------------------- | :-------------------- | :-------------------- | :------------------- | | Long-term borrowings | 24,836 | 1,903 | 26,739 | 31,575 | 696 | 32,271 | | Convertible debentures | 1,145 | - | 1,145 | 2,230 | - | 2,230 | | Due to related parties | 82 | - | 82 | 288 | - | 288 | | Short-term borrowings | 4,077 | - | 4,077 | 3,715 | - | 3,715 | | Trade and other payables | 41,638 | - | 41,638 | 41,697 | - | 41,697 | | Total | 71,778 | 1,903 | 73,681 | 79,505 | 696 | 80,201 | [Note 21 – Disposal of assets](index=40&type=section&id=Note%2021%20%E2%80%93%20Disposal%20of%20assets) This note details the gains recognized from the disposal of various assets during the period - Net total gain of **$4.3 million** from asset disposals for the **nine months ended June 30, 2025**[236](index=236&type=chunk) - Key asset sales include **Niagara Community Pharmacy Ltd.** (gain of **$1.3M**), **P.A. Pharmacy Limited** (gain of **$2.1M**), warehouse building (gain of **$0.4M**), **Clearbrook Pharmacy (1987)** (gain of **$0.4M**), and **Greg's Drug Ltd.** (gain of **$0.4M**)[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) [Note 22 – Commitments and contingencies](index=40&type=section&id=Note%2022%20%E2%80%93%20Commitments%20and%20contingencies) This note addresses the company's involvement in legal proceedings, claims, and regulatory inquiries, and related loss contingencies - Company is involved in legal proceedings, claims, and regulatory inquiries in the ordinary course of business[237](index=237&type=chunk) - Loss contingencies are accrued when probable and estimable; management is not aware of any claims that would have a material adverse effect[237](index=237&type=chunk)[238](index=238&type=chunk) [Note 23 – Subsequent events](index=41&type=section&id=Note%2023%20%E2%80%93%20Subsequent%20events) This note discloses significant events occurring after the reporting period, including asset sales, financing activities, share cancellations, and the CCAA filing - Asset Sale: On **July 11, 2025**, sold assets of **3788602 Manitoba Ltd.** for **$1.8 million**, resulting in a gain of **$1.066 million**[240](index=240&type=chunk) - Equity Line of Credit (**ELOC**): On **July 7, 2025**, entered agreement to sell up to **$50 million** of common shares (capped at **19.99%** unless stockholder approval). Issued **$1 million** in Commitment Shares[241](index=241&type=chunk) - Convertible Note and Warrant Financing: On **July 7, 2025**, issued **$7.65 million** senior secured convertible notes (**8% interest**, due **July 8, 2027**, convertible at **$0.6274/share**) and warrants for **21,338,062 shares** (exercisable at **$0.6274**)[242](index=242&type=chunk) - Share Cancellation: On **August 1, 2025**, **18,839,332 shares** (common and exchangeable) were forfeited and cancelled by original founders/officers, representing **~46%** of fully diluted capital stock prior to settlement[243](index=243&type=chunk) - **CCAA** Filing: On **August 11, 2025**, **SRx Canada** commenced proceedings under the **Companies' Creditors Arrangement Act (Canada)** due to liquidity constraints and inability to refinance maturing obligations[244](index=244&type=chunk) - Pro-forma financial information for U.S. operations (not subject to **CCAA**) shows net income of **$1.710 million** for **3 months ended June 30, 2025**, and net loss of **$(0.651) million** for **9 months ended June 30, 2025**[247](index=247&type=chunk)[248](index=248&type=chunk) - Issued **2,193,355 shares** in **July 2025** for professional advisory fees (**$0.61/share** weighted average price)[249](index=249&type=chunk) - Share Exchange Agreement: On **August 21, 2025**, acquired **17%** interest in **Halo** from **Halo Spin-Out SPV, Inc.** by issuing **4,950,000 common shares**, regaining **100% ownership** of **Halo**[250](index=250&type=chunk) - Issued **2,396,697 shares** of restricted common stock to directors/officers/employees as performance bonus compensation in **August 2025** (**$0.40/share** weighted average price)[251](index=251&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=43&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial performance and condition for the nine months ended June 30, 2025, compared to the prior year. It details the business overview, recent corporate developments including the reverse merger and CCAA filing, and a comprehensive analysis of revenue, gross profit, operating expenses, and liquidity, emphasizing the significant challenges faced due to liquidity constraints and covenant non-compliance [Overview and Outlook](index=43&type=section&id=Overview%20and%20Outlook) This section provides an overview of SRx's integrated Canadian healthcare services business and its strategic outlook - **SRx** is a fully integrated Canadian healthcare services provider, focusing on specialty healthcare at the intersection of pharmacy, clinical services, and pharmaceutical distribution[255](index=255&type=chunk) - The **SRx Network** includes **~30 specialty pharmacies**, **37 specialty health clinics**, **2 clinical trial sites**, a diagnostics lab, national Patient Support Programs (**PSPs**), and a wholesale/distribution facility, operating across **all ten Canadian provinces**[256](index=256&type=chunk) - Specialty drugs, high-cost and complex therapies, are the core focus, requiring advanced logistics and clinical oversight[257](index=257&type=chunk) - Outlook: Expects increasing demand for specialty medications and health system capacity challenges to drive growth, leveraging established footprint and partnerships[259](index=259&type=chunk) [Recent Corporate Developments](index=43&type=section&id=Recent%20Corporate%20Developments) This section summarizes key corporate events, including CWB loan covenant non-compliance, the reverse merger, and management changes - **2023** focused on strategic acquisitions; **2024** shifted to integration, operational optimization, and organic growth[260](index=260&type=chunk) - Non-compliance with **CWB** loan financial covenants as of **June 30, 2025**, led to debt being callable. Subsequent to **June 30, 2025**, the Company sought creditor protection under **CCAA**[261](index=261&type=chunk) - Reverse merger with **Better Choice Company, Inc.** completed on **April 24, 2025**; **Better Choice** changed name to **SRx Health Solutions Inc.** and began trading as '**SRXH**'[262](index=262&type=chunk)[263](index=263&type=chunk) - Multiple management and Board of Directors changes occurred between **April** and **August 2025**, including changes in **CEO** and **Chairman** roles, and the resignation of Adesh Vora[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - Cancellation of approximately **18.8 million shares** of fully diluted capital stock announced on **August 14, 2025**[266](index=266&type=chunk) [Arrangement Agreement](index=44&type=section&id=Arrangement%20Agreement) This section details the all-stock arrangement agreement with Better Choice Company Inc., which closed on April 24, 2025 - Arrangement Agreement with **Better Choice Company Inc.** (publicly listed) for **SRx's** acquisition through an all-stock transaction, closed on **April 24, 2025**[267](index=267&type=chunk)[270](index=270&type=chunk) - **SRx** common shares converted into **Better Choice** common stock or exchangeable shares (1:1 convertible). Former **SRx** shareholders hold **~88%** of combined voting power[143](index=143&type=chunk)[269](index=269&type=chunk) - Transaction reflects an assigned equity value of **SRx** of USD **$80 million**, assuming net debt of USD **$43 million**[269](index=269&type=chunk) - Combined Company aims to be a leading global health and wellness platform, continuing **Halo** pet product brands and **SRx** healthcare business[271](index=271&type=chunk)[272](index=272&type=chunk) [Results of Operations for the nine months ended June 30, 2025 and 2024](index=46&type=section&id=Results%20of%20Operations%20for%20the%20nine%20months%20ended%20June%2030%2C%202025%20and%202024) The company experienced a significant decline in net sales and gross profit for the nine months ended June 30, 2025, primarily due to operational disruptions and liquidity constraints. Operating expenses increased due to transaction-related professional fees and share-based compensation, while other income improved from asset sales. The net loss widened considerably [Net sales](index=46&type=section&id=Net%20sales) This section analyzes the significant decrease in net sales, primarily attributed to operational disruptions and liquidity constraints - Net sales decreased by **$76.0 million (65%)** to **$41.1 million** for the **nine months ended June 30, 2025**, from **$117.1 million** in **2024**[273](index=273&type=chunk)[276](index=276&type=chunk) - Primary drivers for decrease: significant operational disruptions due to liquidity constraints, limiting ability to purchase and dispense high-cost specialty medications, leading to reduced patient volumes and prescription fulfillment rates[276](index=276&type=chunk) - Retail pharmacy revenue, the core driver, decreased by **$80.3 million (70.5%)** for the **nine months ended June 30, 2025**[194](index=194&type=chunk) [Gross profit](index=47&type=section&id=Gross%20profit) This section examines the decline in gross profit, driven by reduced net sales and operational challenges - Gross profit decreased by **$13.1 million (56%)** to **$10.3 million** for the **nine months ended June 30, 2025**, from **$23.4 million** in **2024**[273](index=273&type=chunk)[279](index=279&type=chunk) - Decrease primarily driven by significant decline in net sales, operational and liquidity challenges, and under-absorption of fixed costs[279](index=279&type=chunk) - Company is collaborating with supply chain partners for cost-saving opportunities but expects ongoing margin variability due to macroeconomic factors (inflationary pressures)[280](index=280&type=chunk) [Operating expenses](index=47&type=section&id=Operating%20expenses) This section details the increase in total operating expenses, including SG&A, share-based compensation, and professional fees - Total operating expenses increased by **$10.8 million (34%)** to **$42.5 million** for the **nine months ended June 30, 2025**, from **$31.6 million** in **2024**[273](index=273&type=chunk) - Selling, general and administrative (**SG&A**) expenses increased by **$8.2 million (26%)** to **$39.8 million**[273](index=273&type=chunk) - Sales and marketing costs increased by **$0.3 million (389%)** due to **Better Choice** integration[281](index=281&type=chunk) - Employee compensation and benefits remained constant at **$16.8 million**, as headcount reductions were offset by **Better Choice** personnel costs[281](index=281&type=chunk) - Share-based compensation increased by **$1.8 million (71%)** to **$4.4 million**, primarily due to **Better Choice** consolidation[281](index=281&type=chunk) - Impairment of long-lived intangible assets resulted in a **$2.7 million charge** in **2025** (none in **2024**)[283](index=283&type=chunk) - Professional fees increased by **$3.9 million (285%)** to **$5.2 million**, driven by reverse merger transaction-related expenses[288](index=288&type=chunk) [Other income (expense), net](index=48&type=section&id=Other%20income%20%28expense%29%2C%20net) This section explains the improvement in other income, primarily due to gains from asset sales - Other income improved by **$3.5 million** to **$3.457 million** for the **nine months ended June 30, 2025**, from an expense of **$0.069 million** in **2024**[273](index=273&type=chunk)[284](index=284&type=chunk) - Improvement primarily driven by a gain on the sale of assets at the SRx level, as part of asset base optimization and liquidity strengthening[284](index=284&type=chunk) [Interest expense, net](index=48&type=section&id=Interest%20expense%2C%20net) This section discusses the company's interest expense, which remained relatively constant year-over-year - Interest expense remained constant at **$3.3 million** for the **nine months ended June 30, 2025**, compared to **$3.26 million** in **2024**[273](index=273&type=chunk)[285](index=285&type=chunk) - Comprised of interest on **CWB** term loan, CEBA loans, and other borrowings; not materially impacted by Better Choice consolidation[285](index=285&type=chunk) [Income taxes](index=48&type=section&id=Income%20taxes) This section analyzes the income tax recovery and the effective tax rate, influenced by valuation allowances against deferred tax assets - Income tax recovery of **$0.63 million** for the **nine months ended June 30, 2025**, compared to an expense of **$0.45 million** in **2024**[286](index=286&type=chunk) - Effective tax rate was **(2.46%)** in **2025** vs. **(3.92%)** in **2024**, differing from the **26.5%** Canadian statutory rate due to a significant increase in valuation allowances against deferred tax assets (primarily **NOLs**)[286](index=286&type=chunk) [Non-GAAP Measures](index=49&type=section&id=Non-GAAP%20Measures) This section defines and reconciles Adjusted EBITDA, a non-GAAP measure used by management for performance evaluation and strategic decisions - **Adjusted EBITDA** is a non-GAAP measure used by management to evaluate operating performance, generate future plans, and make strategic capital allocation decisions[290](index=290&type=chunk) - **Adjusted EBITDA** is calculated by adding interest expense, tax expense (benefit), depreciation and amortization, share-based compensation, gain on extinguishment of debt and accounts payable, loss on disposal of assets, transaction-related expenses, and other non-recurring expenses to net loss[289](index=289&type=chunk) | Metric (USD in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net loss | (29,745) | (11,077) | (18,668) | (168.5%) | | EBITDA | (24,104) | (4,947) | (19,157) | (387.3%) | | Adjusted EBITDA | (19,142) | (135) | (19,

Table of Contents For the quarterly period ended August 24, 2025 OR o 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: 1-37830 _________________________________________________________________ LAMB WESTON HOLDINGS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________________________________________________ FORM 10-Q ______________________________________________ ...