Facility Operations - As of June 30, 2025, the company operates 316 facilities across 17 states, serving over 30,500 patients daily[190] - The number of facilities at period end rose to 287, representing a 34.1% increase from 214 in 2024[204] - The total number of post-acute care facilities increased from 220 to 316, marking a 43.6% growth[238] - The company added 119 skilled nursing beds and 175 assisted living beds during the six months ended June 30, 2025[197] - The company disposed of one facility with 120 skilled nursing beds during the six months ended June 30, 2025[197] Revenue and Financial Performance - Skilled nursing services revenue for the three months ended June 30, 2025, was $1,278,145, a 37.9% increase from $926,955 in the same period of 2024[201] - Skilled nursing services revenue for the six months ended June 30, 2025, increased to $2,532,220, a 37.7% increase from $1,839,529 in 2024[204] - Patient and resident service revenue increased by $373.6 million to $1.3 billion for the three months ended June 30, 2025, representing a 39.9% increase year-over-year[232] - Skilled nursing services revenue rose by $351.2 million to $1.3 billion, driven by a 28.3% increase in patient days[234] - Patient and resident service revenue increased by $731.2 million to $2.6 billion for the six months ended June 30, 2025, a 39.4% increase compared to the same period in 2024[245] - Skilled nursing services revenue rose by 37.7%, or $692.7 million, to $2.5 billion for the six months ended June 30, 2025, driven by an increase in patient days of 1,188,351 or 29.7%[246] Occupancy and Patient Metrics - The occupancy rate for skilled nursing services was 88.6% for the three months ended June 30, 2025, down from 91.0% in 2024[201] - Actual patient days for skilled nursing services increased to 5,182,818, a 29.7% increase from 3,994,467 in 2024[204] - Available patient days for skilled nursing services increased to 5,829,409, a 32.8% increase from 4,389,269 in 2024[204] - The occupancy rate for skilled nursing services decreased to 81.2%, down by 2.5% from 83.7% in 2024[205] Cost and Expenses - Cost of services increased by $258.7 million to $1.0 billion, primarily due to a $168.6 million rise in salaries and wages[238] - General and administrative expenses decreased by 26.6% to $100.3 million, reflecting operational efficiencies[232] - Total operating expenses increased by $630.3 million to $2.5 billion for the six months ended June 30, 2025, a 34.5% increase compared to the same period in 2024[244] - General and administrative expense increased by $15.5 million to $199.1 million for the six months ended June 30, 2025, driven by a 36.0% increase in salaries and wages[252] Income and Profitability - The net income for the three months ended June 30, 2025, was $50.97 million, a 259.9% increase compared to a loss of $31.88 million in the prior year[232] - Net income for the six months ended June 30, 2025, was $79.3 million, compared to $2.9 million for the same period in 2024, reflecting a significant increase[244] Cash Flow and Liquidity - Cash and cash equivalents were $294.2 million as of June 30, 2025, with total principal amount outstanding under the credit facility at $142.0 million[259] - Net cash provided by operating activities for the six months ended June 30, 2025, was $202.8 million, an increase of $109.3 million compared to the same period in 2024[266] - Cash, cash equivalents, and restricted cash at the end of the period on June 30, 2025, totaled $297.6 million, up from $77.9 million at the end of the same period in 2024[264] Debt and Interest Rates - The company had $142.0 million of variable rate debt as of June 30, 2025, with no interest rate hedge in place, exposing it to interest rate fluctuations[282] - A hypothetical 10% increase in interest rates would increase annual interest expense by approximately $0.9 million, while a 10% decrease would decrease it by the same amount[282] - The company had $256.2 million in outstanding indebtedness under mortgage loans and promissory notes, all at fixed interest rates as of June 30, 2025[284] Regulatory and Strategic Considerations - Approximately 72% of SNF revenue in 2022 was derived from government sources, with Medicaid representing 51% and Medicare 21%[195] - The company expects patient and resident service revenue to continue to grow as it executes its acquisition strategy[221] - The company is in a state of forbearance with lenders associated with the credit facility and is in discussions regarding terms for an amendment and waiver[260] - The company is in active discussions with Required Lenders regarding terms of an amendment and waiver to its Amended and Restated Credit Facility[276] - The company has a liquidity requirement to maintain unrestricted cash and certain permitted investments of at least $100 million until audited financial statements for the fiscal year ended December 31, 2024 are delivered[272]

Financial Performance - Full year revenue for fiscal 2025 was $835.6 million, representing a 14.0% increase year-over-year[5] - Full year net income reached $63.0 million, a significant increase of 50.0% compared to the previous year[5] - Adjusted EBITDA for the full year was $126.5 million, reflecting a 22.9% increase year-over-year[5] - Revenues for the three months ended September 30, 2025, were $222,442,000, representing an increase of 13.3% compared to $196,358,000 for the same period in 2024[28] - Net income for the twelve months ended September 30, 2025, was $63,018,000, up 50.0% from $42,001,000 in 2024[28] - The company reported a basic earnings per share of $1.16 for the twelve months ended September 30, 2025, compared to $0.77 in 2024, reflecting a growth of 50.6%[28] - UTI's revenue for Q3 2025 was $144,648, up from $130,545 in Q3 2024, representing an increase of 10.8%[34] - Net income for Q3 2025 was $18,756, compared to $18,840 in Q3 2024, reflecting a slight decrease of 0.4%[34] - Adjusted EBITDA for Q3 2025 was $36,779, compared to $37,309 in Q3 2024, indicating a decrease of 1.4%[37] - For the twelve months ended September 30, 2025, consolidated net income was $63,018 thousand, an increase from $42,001 thousand in the previous year[38][39] - Adjusted EBITDA for the twelve months ended September 30, 2025, was $126,455 thousand, compared to $102,855 thousand for the same period in 2024, reflecting a growth of approximately 23%[38][39] Student Enrollment and Growth - Average full-time active students increased by 10.5% to 24,618, with total new student starts of 29,793, up 10.8% from the prior year[5] - Total new student starts for Q3 2025 reached 12,109, a year-over-year increase of 5.4% compared to 11,492 in Q3 2024[33] - Total new student starts for the year ended September 30, 2025, were 29,793, a year-over-year increase of 10.8% from 26,885[33] - The end of period full-time active students for Q3 2025 was 27,679, an increase of 8.0% from 25,620 in Q3 2024[33] - Average full-time active students for the year ended September 30, 2025, was 24,618, a decline of 10.5% from 22,285 in the previous year[34] Future Projections - For fiscal 2026, the company expects revenue between $905 million and $915 million, indicating approximately 9% year-over-year growth at the midpoint[10] - Projected adjusted EBITDA for fiscal 2026 is expected to exceed $150 million, with reported adjusted EBITDA projected between $114 million and $119 million[10] - By fiscal 2029, the company anticipates surpassing $1.2 billion in annual revenue and approaching $220 million in adjusted EBITDA[10] - The company plans to launch new programs next year, aiming for double-digit growth regardless of economic conditions[23] Expenses and Liabilities - Total operating expenses for the twelve months ended September 30, 2025, were $752,147,000, an increase of 11.6% from $673,796,000 in 2024[28] - Total operating expenses for Q3 2025 were $197,456, an increase from $170,336 in Q3 2024, marking a rise of 15.9%[35] - The company incurred $42.0 million in cash capital expenditures for fiscal 2025, primarily for program expansions and upgrades[8] - The company’s total liabilities rose to $498,029,000 as of September 30, 2025, up from $484,344,000 in 2024, an increase of 2.8%[30] - Cash and cash equivalents decreased to $127,361,000 as of September 30, 2025, from $161,900,000 in 2024, a decline of 21.3%[30] - Total assets increased to $826,139,000 as of September 30, 2025, compared to $744,575,000 in 2024, marking an increase of 10.9%[30] Credit Losses and Costs - The provision for credit losses increased significantly to $22,144,000 in 2025 from $7,547,000 in 2024, indicating a rise of 194.5%[32] - The company incurred acquisition-related costs of $873 thousand in 2025, compared to no such costs in 2024[40] - Integration-related costs for completed acquisitions were $304 thousand in 2025, down from $6,196 thousand in 2024[40] - Stock-based compensation expense for the twelve months ended September 30, 2025, totaled $9,151 thousand, compared to $8,560 thousand in 2024[38][39]

Operations and Facilities - As of March 31, 2025, the company operates 315 facilities across 17 states, serving over 30,400 patients daily[186] - The company added one skilled nursing facility during the three months ended March 31, 2025, increasing total skilled nursing beds by 119[193] - Subsequent to March 31, 2025, the company expanded operations by adding six facilities, contributing 376 skilled nursing beds and 271 assisted living beds[194] - The number of facilities at the end of Q1 2025 increased to 139 from 65 in Q1 2024, a growth of 113.8%[200] Revenue and Financial Performance - Skilled nursing services revenue for the three months ended March 31, 2025, was $1,254,075, reflecting a 37.4% increase from $912,575 in the same period of 2024[198] - Skilled nursing services revenue for mature facilities increased to $692,159,000 in Q1 2025 from $282,038,000 in Q1 2024, a growth of 145.4%[200] - Patient and resident service revenue increased by $357.6 million to $1.3 billion for the three months ended March 31, 2025, a 38.9% increase compared to the same period in 2024[226] - Skilled nursing services revenue rose by 37.4%, or $341.5 million, to $1.3 billion, driven by an increase in patient days of 615,117, or 31.2%[227] Occupancy and Quality Metrics - The occupancy rate for skilled nursing services was 89.2% for the three months ended March 31, 2025, down from 91.1% in 2024[198] - The average Quality Measure (QM) Star rating for Mature facilities was 4.1 with an occupancy rate of 96% as of March 31, 2025[187] - The occupancy rate for mature facilities improved to 95.5% in Q1 2025 from 94.6% in Q1 2024, an increase of 0.9%[200] Cost and Expenses - Cost of services increased by $287.8 million to $1.0 billion, a 39.1% increase, primarily due to a $170.9 million rise in salaries and wages[230] - General and administrative expense increased by $51.8 million to $98.7 million, primarily due to a $22.8 million rise in legal fees and $12.2 million in stock compensation expense[232] - Rent - cost of services increased to $93.8 million, compared to $63.5 million, driven by new facilities and annual rent escalators[231] Income and Taxation - Net income for the three months ended March 31, 2025, was $28.4 million, a decrease of 18.5% compared to $34.8 million in the same period in 2024[225] - The effective tax rate decreased to 33.6% for the three months ended March 31, 2025, compared to 39.7% for the same period in 2024[235] Cash Flow and Liquidity - Net cash provided by operating activities for Q1 2025 was $150.2 million, an increase of $91.5 million compared to Q1 2024, driven by a $100.4 million increase in cash flows from changes in operating assets and liabilities[245] - Cash used in investing activities for Q1 2025 was $16.4 million, a decrease of $102.3 million compared to Q1 2024, primarily due to no cash used for investments in partnerships or acquisitions[247] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 totaled $290.6 million, up from $93.3 million at the end of Q1 2024[243] Debt and Interest Rate Exposure - The company had $142.0 million of variable rate debt as of March 31, 2025, with no interest rate hedge in place, exposing it to interest rate fluctuations[261] - A hypothetical 10% increase in interest rates would increase annual interest expense by approximately $0.9 million, while a 10% decrease would decrease it by the same amount[261] - The company had $259.5 million in outstanding indebtedness under mortgage loans and promissory notes, all at fixed interest rates as of March 31, 2025[263] Regulatory and Compliance - The company is required to maintain a minimum liquidity of $100 million during the forbearance period, which is set to run until October 31, 2025[254] - The company has entered into multiple forbearance agreements with lenders regarding technical events of default under its credit facility[251] - The company has historically derived a substantial portion of its revenue from Medicare and Medicaid programs, which are subject to inflation adjustments[256]

Financial Performance - Total revenues for the three months ended September 30, 2025, were $936,344, an increase from $745,880 in the same period of 2024, representing a growth of approximately 25.5%[16] - Gross profit for the six months ended September 30, 2025, was $471,043, compared to $349,869 for the same period in 2024, reflecting a year-over-year increase of about 34.7%[16] - The Company reported a gross profit margin of approximately 29.3% for the three months ended September 30, 2025, compared to 13.0% for the same period in 2024[16] - The Company incurred total operating expenses of $1,032,301 for the three months ended September 30, 2025, compared to $712,646 for the same period in 2024, an increase of approximately 45%[16] - The Company recognized a net cash used in operating activities of $(392,547) for the six months ended September 30, 2025, compared to a net cash provided of $192,349 for the same period in 2024[19] - The Company reported a net loss of approximately $1.0 million for the six months ended[32] - The Company recognized a net loss of $723,730 for the three months ended September 30, 2025, compared to a net loss of $238,739 for the same period in 2024, reflecting a significant increase in losses of approximately 203.5%[176] Assets and Liabilities - Total current assets decreased to $2,109,714 as of September 30, 2025, from $2,238,762 as of March 31, 2025, a decline of about 5.8%[14] - Total liabilities as of September 30, 2025, were $4,771,498, down from $5,218,172 as of March 31, 2025, representing a decrease of approximately 8.5%[14] - The total assets decreased to $4,682,368 as of September 30, 2025, from $5,800,792 as of March 31, 2025, reflecting a decline of about 19.3%[15] - The total equity as of September 30, 2025, was $(132,073), a decline from $2,952,520 as of September 30, 2024, reflecting a significant decrease in equity[17] - The company had cash and cash equivalents of $676,980 as of September 30, 2025, down from $833,577 as of March 31, 2025, a decrease of approximately 18.8%[14] Credit Losses and Deficits - The company had a total accumulated deficit of $(45,922,713) as of September 30, 2025, compared to $(42,769,137) as of September 30, 2024, indicating an increase in the accumulated deficit of approximately 5.03%[17] - The allowance for credit losses due from Jinkailong was $5,391,992 as of September 30, 2025[30] - The allowance for credit losses remained unchanged at $17,063,000 as of September 30, 2025, compared to March 31, 2025, after a write-off of $17,210,000 during the six months ended September 30, 2025[105] Revenue Streams - Operating lease revenues from automobile rentals for the six months ended September 30, 2025, were $1,442,918, up 7.6% from $1,340,733 in 2024[75] - Service fees from NEVs leasing increased significantly to $194,559 for the six months ended September 30, 2025, compared to $73,788 in 2024, representing a growth of 163.5%[75] - The company reported revenues of $936,344 from automobile transaction and related services for the three months ended September 30, 2025, compared to $745,880 for the same period in 2024, marking an increase of approximately 25.5%[176] Market and Operational Insights - The online ride-hailing industry in China is projected to grow from RMB354.7 billion in 2024 to RMB751.3 billion by 2028, driven by rising consumer demand for economical mobility options[199] - The total volume of online ride-hailing orders in China decreased by approximately 26% to 758 million in September 2025 compared to the same month in 2024, indicating increased competition and market saturation[200] - Approximately 40% of ride-hailing drivers using the company's services had not obtained the required driver's license as of September 30, 2025, which may impact operations[204] - The company plans to enhance its marketing efforts and strengthen collaborations with automobile dealers to maintain and grow its customer base[189] Future Outlook and Concerns - The company has substantial doubt about its ability to continue as a going concern due to insufficient funds to meet working capital requirements[34] - The company is currently evaluating the impact of new accounting standards effective after December 15, 2026, which may affect its financial statements and disclosures[99] - The company plans to continue focusing on its automobile rental business, expecting it to account for a majority of revenues moving forward[208]

Financial Performance - For the year ended December 31, 2024, the company generated total revenue of $4.1 billion, representing a CAGR of 29.9% over the last three years[51] - For the year ended December 31, 2024, total operating expenses were $4.0 billion, with net income of $55.3 million and Adjusted EBITDA of $279.5 million[53] - As of December 31, 2024, the company had total long-term liabilities of $3.5 billion[54] - The company had outstanding indebtedness under mortgage loans insured with HUD and two promissory notes to third parties totaling $262.6 million, all at fixed interest rates[550] - As of December 31, 2024, the company had approximately $142.0 million of variable rate debt, with a hypothetical 10% increase in interest rates potentially increasing annual interest expense by approximately $1.0 million[548] Facility Operations - The company operated 138 Mature facilities, 50 Ramping facilities, and 126 New facilities as of December 31, 2024[68] - The average occupancy rate for Mature facilities was 94% as of December 31, 2024, significantly higher than the industry average of 77%[49] - The average occupancy rate for New facilities was 83% as of December 31, 2024[69] - The skilled mix by revenue for Mature facilities was 54% as of December 31, 2024[69] - The company has successfully acquired and integrated over 300 facilities to date, establishing a reputation as an acquiror-of-choice in the industry[92] Revenue Sources - Medicare and Medicaid accounted for 33.8% and 40.4% of routine revenue for the year ended December 31, 2024, respectively[51] - Approximately 72% of SNF revenue in 2022 came from government sources, with Medicaid representing 51% and Medicare 21%[105] - Medicare and Medicaid accounted for 33.8% and 40.4% of the company's routine revenue for the year ended December 31, 2024[124] Industry Trends - The SNF industry in the U.S. comprises around 15,000 facilities serving approximately 1.3 million patients annually, with the top 10 operators representing about 11% of total SNFs [102]. - The number of SNFs has declined from approximately 15,650 in 2017 to about 14,800 in 2024, attributed to compliance challenges and barriers to entry for new operators [104]. - The U.S. population aged 65 and older is projected to nearly double from 2020 to 2060, reaching 95 million, which will increase demand for SNF services [103]. - Total industry expenditures for SNFs are expected to grow from $193.6 billion in 2022 to $283.3 billion in 2031, reflecting a CAGR of 4.3% [108]. Regulatory Environment - The company is subject to inquiries and audits by federal and state agencies, which may impose penalties for regulatory deficiencies[122] - The company received Civil Investigative Demands from the U.S. Department of Justice regarding potential violations of the Federal False Claims Act[123] - The OIG identified over $563 million in overpayments to hospitals for non-compliance with Medicare's post-acute care transfer policy[173] - CMS has increased scrutiny on facilities with high reimbursements for ultra-high therapy, indicating a focus on billing practices[177] - The company must comply with various anti-kickback and self-referral laws, with violations potentially leading to significant penalties[171] Strategic Plans - The company plans to explore additional purchases of real estate assets and new market entries in the future[50] - The company plans to expand its presence through acquisitions and new facility builds, historically completing about 25 acquisitions and one new facility per year [109] - The company aims to enhance its service offerings by exploring ancillary opportunities such as pharmacy and laboratory services, which could provide additional revenue streams [112] Quality of Care - The average QM Star rating for Mature facilities as of December 31, 2024, was 4.3, compared to the industry average of 3.4[49] - The company’s facilities have above-industry average QM Star ratings, reflecting excellence in clinical quality and patient experience[85] - The company has promoted 11 administrators from within its organization in the year ended December 31, 2024, demonstrating a commitment to internal career development[89] - The company maintains a culture of compliance and innovation, focusing on billing integrity and regular facility audits to build trust with payors[84] - The company’s investments in capital improvements and ongoing maintenance aim to enhance the quality of care and patient experience across all facilities[93] Payment Models - The Patient-Driven Payment Model (PDPM) classifies patients into payment groups based on their condition and care needs, impacting Medicare reimbursement levels[128] - The Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program withholds 2% of SNFs' Medicare payments, redistributing 50-70% based on performance metrics[129] - The Balanced Budget Act of 1997 requires a per diem PPS for SNFs, covering all costs related to services for Medicare Part A beneficiaries[127] - The Medicare payment rates for skilled nursing facilities (SNFs) under the SNF prospective payment system (PPS) increased by 4.2% for Fiscal Year 2025[127] - The final rule for FY 2026 updates SNF PPS rates by 3.2%, reflecting a 3.3% market basket increase and a negative 0.7% productivity adjustment[127] Legislative Changes - The Inflation Reduction Act of 2022 extended premium subsidies for private health insurance until the end of 2025, aiding older patients with limited savings[138] - The One Big Beautiful Bill Act, enacted in July 2025, imposes significant reductions in Medicaid funding and requires states to conduct more frequent eligibility redeterminations[139] - The OBBBA limits Medicaid provider payments to 100% of the Medicare rate for expansion states and 110% for non-expansion states, potentially impacting reimbursement rates[139] - The OBBBA establishes a $1.0 million limit for home equity exempted from Medicaid eligibility calculations for long-term care starting January 1, 2028[144] - Proposed legislation continues to emerge at both federal and state levels aimed at improving quality of care and oversight in nursing homes[151] Staffing and Employment - As of December 31, 2024, the company employed 45,680 individuals across 314 facilities, including 26,788 clinicians[114] - The company has a decentralized market-driven operating model that emphasizes local operational autonomy, which enhances responsiveness to patient needs[86] - Federal and state agencies conduct regular surveys to ensure compliance with regulatory standards, with unannounced inspections occurring at least annually[162] - CMS's final rule on minimum staffing standards for skilled nursing facilities will be implemented over three years, facing significant opposition and potential delays[155]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-42650 RENATUS TACTICAL ACQUISITION CORP I (Exact Name of Registrant as Specified in Its Charter) Cayman Islands N/A (State or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-42650 RENATUS TACTICAL ACQUISITION CORP I (Exact Name of Registrant as Specified in Its Charter) Cayman Islands N/A (State or ...

Operations and Facilities - As of September 30, 2024, the company operates 276 facilities across 15 states, serving over 26,400 patients daily[240] - The company added 46 stand-alone skilled nursing operations and 22 assisted living facilities during the nine months ended September 30, 2024, increasing capacity by 4,390 skilled nursing beds and 1,508 assisted living beds[248] - Subsequent to September 30, 2024, the company expanded operations by adding 45 facilities, contributing 5,030 skilled nursing beds and 271 assisted living beds[249] - The number of facilities at period end rose to 249, representing a 26.4% increase from 197 in the previous year[255] - The company acquired 75 facilities since September 30, 2023, contributing to improved operational performance[314] Financial Performance - Skilled nursing services revenue for the three months ended September 30, 2024, was $1,010,277, reflecting a 28.9% increase from $783,834 in the same period of 2023[252] - Skilled nursing services revenue for the nine months ended September 30, 2024, increased to $2,849,806, a 26.9% increase from $2,245,707 in 2023[255] - Total revenue for the three months ended September 30, 2024, was $1.026 billion, a 30.0% increase from $789.2 million in the same period of 2023[279] - Patient and resident service revenue increased by $235.3 million to $1.0 billion for the three months ended September 30, 2024, a 29.8% increase compared to the same period in 2023[280] - Patient and resident service revenue increased by $621.8 million to $2.9 billion for the nine months ended September 30, 2024, a 27.5% increase compared to the same period in 2023[291] - Total revenue for the nine months ended September 30, 2024, was $2.88 billion, a 27.6% increase from $2.26 billion in the same period of 2023[291] Occupancy and Patient Metrics - The occupancy rate for skilled nursing services was 90.5% for the three months ended September 30, 2024, compared to 90.4% in the prior year[252] - Occupancy rate for skilled nursing services decreased slightly to 90.8% from 91.2% year-over-year[255] - Actual patient days for skilled nursing services increased to 6,165,899, a 26.5% rise from 4,873,494 in the previous year[255] - Available patient days for the total facilities increased by 1,442,887 to 6,788,832, a 27.0% increase[255] Revenue Sources and Mix - Approximately 72% of SNF revenue in 2022 was derived from government sources, with Medicaid accounting for 51% and Medicare for 21%[245] - The skilled mix by revenue increased to 50.5% for the three months ended September 30, 2024, up from 49.4% in the same period of 2023[252] - For the three months ended September 30, 2024, Medicare revenue as a percentage of total skilled mix increased to 33.3% from 31.8% in 2023[256] - The skilled mix by revenue for new facilities was 39.3% in 2024, down from 54.6% in 2023[256] Cost and Expenses - Cost of services increased by $211.1 million to $849.6 million, a 33.1% rise compared to the same period in 2023, primarily due to increased salaries and wages[285] - General and administrative expenses rose by $21.0 million to $70.6 million for the three months ended September 30, 2024, with stock compensation expense accounting for $12.3 million of the increase[287] - Rent - cost of services increased to $72.6 million for the three months ended September 30, 2024, compared to $58.4 million in the same period of 2023, driven by new facility additions[286] - Operating expenses increased by $717.7 million to $2.83 billion for the nine months ended September 30, 2024, representing a 34.0% increase compared to the prior year[291] Profitability and Income - Net income decreased by 75.7% to $19.2 million for the nine months ended September 30, 2024, down from $78.7 million in the same period of 2023[291] - The effective tax rate increased to 52.5% for the nine months ended September 30, 2024, compared to 27.1% for the same period in 2023[303] Cash Flow and Financing - Cash and cash equivalents were $49.5 million as of September 30, 2024, compared to $355.7 million as of September 30, 2025[307] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $302.8 million, an increase of $229.4 million compared to the same period in 2023[314] - Net cash used in investing activities for the nine months ended September 30, 2024, was $338.3 million, an increase of $225.5 million compared to the same period in 2023, driven by $140.3 million for real estate acquisitions[316] - The company is in discussions with lenders regarding amendments to its credit facility, with potential borrowing capacity of up to $586.7 million[308] - The total long-term debt additions during the nine months ended September 30, 2024, amounted to $70.1 million, with favorable terms compared to existing debt[319] Market Trends and Industry Insights - The skilled nursing facility industry in the U.S. has seen a decline in the number of facilities from approximately 15,650 in 2017 to about 14,800 in 2024, indicating a growing demand for skilled nursing services[244] - The company’s operational model focuses on acquiring underperforming facilities and converting them into higher-value transitional care facilities, enhancing clinical quality and operational metrics[241]

Revenue and Profitability - For the three months ended September 30, 2025, revenues amounted to $6.1 million, a 48.8% increase from $4.1 million in the same period of 2024[270]. - Gross profit for the same period was $1.1 million, compared to $0.5 million in 2024, reflecting a significant improvement in profitability[270]. - Total revenue increased by $2.0 million, or 49.5%, from $4.1 million in Q3 2024 to $6.1 million in Q3 2025[294]. - Revenue from cross-border freight solutions rose by $0.7 million, or 16.7%, from $4.1 million in Q3 2024 to $4.8 million in Q3 2025, driven mainly by cross-border airfreight solutions[297]. - Revenue from cross-border ocean freight solutions decreased by $0.4 million, or 21.9%, from $1.8 million in Q3 2024 to $1.4 million in Q3 2025, due to a drop in processed volume from 1,430 TEU to 1,331 TEU[298]. - Revenue from cross-border airfreight solutions increased by $1.1 million, or 48.2%, from $2.2 million in Q3 2024 to $3.3 million in Q3 2025, despite a decrease in volume from approximately 7,273 tons to 5,776 tons[299]. - Revenue from Asia-based customers for cross-border freight solutions increased by $1.2 million, or 43.0%, from $2.8 million in Q3 2024 to $4.0 million in Q3 2025[301]. - Revenue from U.S.-based customers for cross-border freight solutions decreased by $0.5 million, or 41.4%, from $1.2 million in Q3 2024 to $0.7 million in Q3 2025[303]. - Total gross profit increased by $586.2 million, or 112.2%, from $522.5 million in Q3 2024 to $1.1 million in Q3 2025[296]. Operating Expenses and Losses - Total operating expenses rose by $530.3 million, or 28.7%, from $1.9 million in Q3 2024 to $2.4 million in Q3 2025[294]. - Net loss for Q3 2025 was $1.4 million, compared to a net loss of $1.3 million in Q3 2024, reflecting a slight increase in loss by $21,809[294]. - Selling expenses amounted to $0.2 million for the three months ended September 30, 2025, driven by salaries, software, and advertising expenses related to the new pharmaceutical distribution service[309]. - General and administrative expenses increased by $0.3 million, or 14.7%, from $1.8 million for the three months ended September 30, 2024, to $2.1 million for the same period in 2025[310]. - Interest expenses increased by $168,331, or 598.8%, from $28,110 for the three months ended September 30, 2024, to $196,441 for the same period in 2025[313]. Cash Flow and Financial Position - Net cash used in operating activities was $4,016,518 for the three months ended September 30, 2025, compared to $1,402,784 in the same period of 2024[322]. - Cash balance as of September 30, 2025, was $4.5 million, with current assets of $15.0 million and current liabilities of $9.8 million, resulting in a current ratio of 1.5[319]. - Net cash used in investing activities was $108,800 for the three months ended September 30, 2025, primarily due to an additional loan to a third party[326]. - Net cash provided by financing activities decreased to $3,672,316 for the three months ended September 30, 2025, from $4,044,402 in the same period of the prior year, primarily due to a smaller scale of financing activities[327]. - Capital expenditures were nil for the three months ended September 30, 2025, compared to $38,279 for the same period in 2024[328]. - The company expects capital expenditures to increase in the future as the business develops and plans to fund these expenditures with existing cash, loan proceeds, and private placements[329]. Business Operations and Market Environment - As of September 30, 2025, the company had fulfilled over 58,500 cross-border supply chain solution orders with an aggregate assessed value of $1.0 billion[269]. - The company has established collaborations with almost all major global ocean and air carriers, forwarding 37,300 TEU of container loads and 75,100 tons of air cargo as of September 30, 2025[267]. - The introduction of a new revenue stream from the distribution of pharmaceutical and medical products began in fiscal year 2025, creating opportunities but also exposing the company to additional risks[272]. - The U.S. has permanently eliminated the $800 de minimis threshold for duty-free shipments, increasing customs processing complexity and potentially reducing low-value parcel volumes[284]. - Recent U.S. tariff policies have created a challenging trade environment, significantly disrupting U.S.-China commerce and increasing operational complexities[282]. - The company aims to expand its customer base and improve service quality to achieve sustainable business growth, having served over 400 customers as of September 30, 2025[271]. - The company plans to continue monitoring the impact of COVID-19 and adapt its business operations as necessary to maintain service levels and profitability[281]. Accounting and Financial Reporting - The company prepares its financial statements in conformity with U.S. GAAP, which requires significant judgments and estimates that could materially affect reported amounts[330]. - Critical accounting estimates may have a material impact on the presentation of financial condition and results of operations, particularly those requiring subjective judgments[331]. - Common stock warrants are classified as either equity or liability instruments based on specific terms and assessments, with equity-classified warrants estimated using the Black-Scholes option-pricing model[332]. - The fair value of equity-classified warrants is determined at issuance, reflecting assumptions about market conditions and the company's stock[332]. - The company periodically reviews new accounting standards and their applicability to its financial statements[334].

Revenue Performance - For the nine months ended September 30, 2025, total revenue was $1,801,769, a decrease from $1,944,333 for the same period in 2024, primarily due to minimal contributions from the Vermont Renewable Gas project [307]. - Revenue from the Heat Recovery Solutions (HRS) segment was $805,975 for the nine months ended September 30, 2025, compared to $158,829 for the same period in 2024, reflecting higher product sales [317]. - Revenue from the CETY Renewables segment was $409,699 for the nine months ended September 30, 2025, down from $590,985 for the same period in 2024, expected to stabilize until construction activities commence [319]. - Revenue from the natural gas business was $586,095 for the nine months ended September 30, 2025, a decrease from $1,185,178 for the same period in 2024, due to macroeconomic factors and a strategic focus shift [321]. - CETY anticipates stronger revenue contributions from its Waste-to-Energy, Heat Recovery, and EPC segments in the latter half of the year, expected to deliver higher gross margins [311]. Profitability and Loss - Gross profit for the nine months ended September 30, 2025, was $1,135,315, an increase from $641,575 for the same period in 2024, driven by higher-margin refurbished systems sales [308]. - The net loss for the nine months ended September 30, 2025, was $3,522,342, slightly improved from a net loss of $3,550,669 for the same period in 2024 [310]. - The net loss for the nine months ended September 30, 2025, was $3,522,342, a slight improvement from a net loss of $3,550,669 in 2024 [335]. Operating Expenses - Operating expenses for the nine months ended September 30, 2025, were $3,301,052, compared to $3,193,447 for the same period in 2024, with increases attributed to consulting costs related to a potential acquisition [309]. - Selling, General and Administrative (SG&A) expenses for the nine months ended September 30, 2025, totaled $3,301,052, an increase of 3.4% from $3,193,447 in 2024 [327]. - Salary expenses decreased by 10.2% to $1,329,800 for the nine months ended September 30, 2025, compared to $1,481,316 in 2024 [328]. - Professional fees rose significantly to $1,073,709 for the nine months ended September 30, 2025, compared to $484,990 in 2024, primarily due to consulting costs related to a potential acquisition [330]. - Interest and finance fees increased to $2,399,193 for the nine months ended September 30, 2025, from $902,002 in 2024, attributed to larger interim financings [334]. Cash Flow and Financial Position - Net cash used in operating activities was $(6,218,085) for the nine months ended September 30, 2025, compared to $(2,788,608) in 2024, indicating increased cash outflow [337]. - The company recorded derivative liabilities of $924,588 for the nine months ended September 30, 2025, compared to $0 in 2024, due to new convertible instruments [333]. - As of September 30, 2025, the company had outstanding customer deposits of $197,220, up from $30,061 in 2024, reflecting increased customer commitments [365]. - The company expects to recognize $33,000 of deferred revenue in the fourth quarter of 2025, consistent with contract terms [364]. Strategic Initiatives - The company has an estimated backlog of $10 million associated with the Vermont Renewable Gas project, currently under review for a Certificate of Public Good [307]. - CETY's four-segment strategy is believed to create operational synergies and cross-selling opportunities, contributing to growth in non-China operations [314]. - The company plans to continue funding operations through equity sales, which may result in dilution for existing shareholders [379]. Accounting and Compliance - The company is engaged in the Engineering, Procurement, and Construction (EPC) of biomass power facilities, recognizing revenue according to ASC 606 standards [352]. - There are no significant off-balance sheet arrangements that could materially affect the company's financial condition or results of operations [380]. - The company believes that the impact of recently issued accounting standards will not materially affect its consolidated financial position or results of operations upon adoption [381]. Investment and Consolidation - JHJ made an investment of RMB 3.91 million ($0.55 million) into Shuya during the year ended December 31, 2022, with Shuya reporting a net loss of approximately $10,750, of which about $5,000 was allocated to JHJ [369]. - Effective January 1, 2023, JHJ, SSET, and Xiangyueheng entered a Consistent Action Agreement to consolidate their voting rights in Shuya, allowing JHJ to consolidate Shuya as a variable interest entity (VIE) [370][371]. - The acquisition of Shuya was accounted for using the acquisition method, with the fair value of non-controlling interests recorded at $650,951 and the fair value of previously held equity investment at $556,096, totaling $1,207,047 [375]. - The total identifiable net assets recognized at the acquisition date were valued at $1,207,047, with no goodwill recognized [375]. - On January 1, 2024, the Termination Agreement was executed, resulting in JHJ holding less than 50% of the voting rights in Shuya, leading to the decision not to consolidate Shuya in future financial statements [377].