Employee Growth - As of September 30, 2025, the total number of employees increased to 46, up from 30 in fiscal 2024, representing a growth of 53.33%[552] Shareholder Information - The company had 1,993,625 outstanding Common Shares as of December 29, 2025, with a total of 1,861,147 shares beneficially owned by directors and executive officers[554] - David Luxton holds 9,064 Common Shares, representing 0.24% of the outstanding shares, while Sean Homuth holds 308 shares, representing 0.01%[556] Compensation Policies - The company adopted an Incentive Compensation Recovery Policy effective November 23, 2023, in compliance with Nasdaq listing rules, with no outstanding balance of erroneously awarded compensation as of September 30, 2025[558] Audit Committee - The Audit Committee consists of independent members, including James Yersh and Paul Mangano, who qualify as financial experts[548] - The Audit Committee meets regularly at least quarterly, ensuring oversight of financial matters and external auditor recommendations[550] Financial Risks - The company is exposed to various financial risks, including interest rate risk, foreign currency risk, credit risk, and liquidity risk[684] Legal and Regulatory Matters - Jennifer Welsh, former CFO of Indiva Limited, was involved in a bankruptcy filing on June 13, 2024, due to financial underperformance and industry fragmentation[541] - The company has not faced any penalties or sanctions related to securities legislation in the past ten years, except for a settlement involving EOTECH, which paid USD $25.6 million[543][544] Stock Options - The company has not granted any further options to directors and executive officers since the stock splits completed in fiscal 2025[557]

Financial Performance - Fiscal Year 2025 total consolidated revenue reached $87.7 million, a 25% increase from $69.9 million in Fiscal Year 2024[1] - Journal Technologies generated $69.9 million in revenue, marking a 32% increase from $53.1 million in Fiscal Year 2024, driven by a 51% rise in consulting fees and a 59% increase in other public service fees[3] - Operating income for Fiscal Year 2025 was $9.5 million, representing 10.9% of revenue, compared to $4.1 million or 5.8% of revenue in Fiscal Year 2024[3] - Net income for Fiscal Year 2025 was $112.1 million, or $81.41 per diluted share, an increase of 44% from $78.1 million or $56.73 per diluted share in Fiscal Year 2024[3] - The company generated $13.3 million in operating cash flow during Fiscal Year 2025[3] Market Position and Strategy - As of September 30, 2025, the fair market value of marketable securities was $493.0 million, including pretax unrealized gains of approximately $134.3 million for the twelve months ended September 30, 2025[3] - Traditional Business reported advertising and circulation revenues of $17.8 million, reflecting a 6% increase over $16.8 million in Fiscal Year 2024[3] - Journal Technologies secured 17 multi-year contracts with courts and government agencies, expanding its client base[3] - The company is focused on expanding recurring revenue, maintaining low churn, and building long-term client relationships in the courts and justice agency sector[2] - Daily Journal Corporation continues to optimize its digital publishing operations and expand online content offerings in response to market demands[3]

Revenue and Financial Performance - Journal Technologies constituted approximately 80% of the Company's total revenues in fiscal year 2025, up from 76% in fiscal year 2024[38]. - Revenues from Journal Technologies' foreign customers were approximately $11.9 million in fiscal year 2025, compared to $6.2 million in fiscal year 2024[42]. - Consolidated revenues increased by $17.8 million (25%) to $87.7 million in fiscal year 2025 from $69.9 million in fiscal year 2024, driven by Journal Technologies' consulting fees, public service fees, and licensing fees[127]. - Total revenues increased to $87.7 million in September 30, 2025, up 25.4% from $69.9 million in September 30, 2024[180]. - Net income rose to $112.1 million for the year ended September 30, 2025, compared to $78.1 million for the same period in 2024, reflecting a 43.5% increase[180]. - Journal Technologies' pretax income increased by $10.2 million (408%) to $12.7 million, driven by a revenue increase of $16.8 million (32%)[136]. - Traditional Business revenues increased to $17.8 million from $16.8 million, with advertising revenues rising by $0.8 million (8%) to $10.1 million[141]. Operating Expenses and Cash Flow - Consolidated operating expenses rose by $12.3 million (19%) to $78.1 million in fiscal year 2025, primarily due to increased personnel costs and outside services[129]. - In fiscal year 2025, net cash provided by operating activities was $112.1 million, with non-cash items totaling $99.2 million and cash used for working capital of $0.4 million[150]. - The company reported a net cash provided by operating activities of $13.3 million for the year ended September 30, 2025, compared to a net cash used of $89,000 in 2024[185]. - In fiscal year 2025, net cash used in financing activities totaled $5.7 million, mainly due to a $5.5 million repayment on the investment margin loan[153]. Market and Competitive Landscape - The Company faces significant competition in the case management software market, with many competitors having greater scale and longer operating histories[54]. - The Company anticipates challenges in maintaining commercial advertising and circulation revenues due to competition from online platforms[82]. - The Traditional Business is expected to continue facing significant secular decline, impacting future revenues[86]. Technology and Development - The Company has begun developing next-generation development patterns and practices to address technical debts within current generation offerings[52]. - The Company has introduced AI features in some of its products and plans to further invest in cutting-edge technologies to maintain a competitive edge[53]. - The Company is investing in the development of new technologies and improving existing products to enhance profitability[87]. - Research and development expenses related to software development were $2.5 million for fiscal year 2025, up from $1.4 million in fiscal year 2024[201]. Internal Controls and Compliance - The Company has identified a material weakness in its internal control over financial reporting, primarily related to segregation of duties and access controls, which has not been fully remediated as of September 30, 2025[102]. - The Company has made significant improvements in internal controls during fiscal year 2025, including increased finance personnel and enhanced review procedures[104]. - The Company is currently evaluating the impact of new accounting standards issued by FASB, including ASU 2023-09 and ASU 2024-01, which will affect future financial disclosures[214][215]. Assets and Securities - The Company held marketable securities worth approximately $493.0 million as of September 30, 2025, with a cumulative unrealized gain of $353.9 million[94]. - The Company's marketable securities portfolio is concentrated in six companies, increasing the risk of significant declines affecting net income and shareholders' equity[95]. - The passing of Charles T. Munger in November 2023 is expected to affect the future financial performance of the marketable securities portfolio[96]. Employee and Corporate Governance - As of September 30, 2025, the Company had approximately 415 full-time employees and contractors, with a good employee relations status[60]. - The Company did not declare or pay any dividends during fiscal years 2025 or 2024, and does not expect to do so in the foreseeable future[121]. - The Company has a stock repurchase program in place since 1987 but did not repurchase any shares during fiscal years 2025 and 2024[123]. Subscription and Revenue Recognition - The Company recognizes revenues in accordance with ASC Topic 606, with deferred revenue recorded for subscription sales and recognized as earned when services are provided[156]. - Revenue from subscription-type services is recognized on a pro-rata basis over the subscription term, with proceeds deferred at the time of sale[211]. - The Journal Technologies segment generates revenues from contracts including subscription software licenses, maintenance, support, and consulting services, with revenue recognized when performance obligations are satisfied[172].

Stock Splits and Compliance - The Company completed a 60:1 reverse stock split on October 2, 2024, followed by a 35:1 reverse stock split on November 26, 2024, and a 15:1 reverse stock split on September 29, 2025, with all share data retroactively adjusted [15]. - The Company regained compliance with Nasdaq's Minimum Bid Price Requirement on December 11, 2024, after previously receiving a notification for non-compliance due to a closing bid price below $1.00 for 30 consecutive trading days [16]. - As of January 2, 2025, the Company reported stockholders' equity of $4,710,677, which brought it back into compliance with Nasdaq's Minimum Stockholder's Equity Requirement of $2,500,000 [20]. - The Company received a deficiency letter from Nasdaq due to its Common Stock closing bid price being below $1.00 for 30 consecutive trading days, risking delisting if compliance is not regained by December 11, 2024 [178]. - The Company was notified that its stockholder's equity fell below the required $2,500,000 for continued listing on Nasdaq, necessitating compliance by February 17, 2025 [179]. - The Company may face delisting from Nasdaq if it fails to meet ongoing financial and liquidity standards, which could adversely affect stock trading and capital raising efforts [184]. Financial Performance and Capital Raising - The Company raised gross proceeds of $10,035,293 from a public offering on May 3, 2024, selling 11,764,705 Units and 11,210,000 Pre-Funded Units, with underwriting discounts and expenses totaling $995,333 [25]. - The Company raised $2,000,000 in a registered direct offering on December 11, 2025, selling 310,000 shares at $3.00 per share and pre-funded warrants at $2.999 per warrant [35]. - The Company issued 330,000 shares of common stock at $2.50 per share and pre-funded warrants for 470,000 shares at $2.499 per warrant, raising gross proceeds of $2,000,000 [36]. - The company raised approximately $12.5 million in net proceeds through equity financing in May 2024 and anticipates an additional $2.4 million from the exercise of Series B warrants [70]. - The Company anticipates needing significant additional capital for operations and research, which may lead to dilution of existing stockholders' ownership [176]. Debt and Liabilities - The Company issued a Promissory Note for $7,025,000 on November 7, 2025, with an interest rate of 8% per annum starting January 1, 2026, intended for potential acquisitions [30]. - As of September 30, 2025, the company has approximately $5.0 million in cash and total indebtedness of about $16.8 million, which includes notes payable of $8.5 million and a revolving line of credit of $3.2 million [70][77]. - Approximately $12.1 million of the company's total debt is classified as current, which may impact its ability to meet obligations [77]. - As of September 30, 2025, the company reported total consolidated liabilities of approximately $39.1 million [167]. Operational Challenges and Market Conditions - The Company reported substantial losses of $28.3 million and $7.6 million for fiscal years 2025 and 2024, respectively, raising doubts about its ability to continue as a going concern [69]. - The company incurred net losses of $28.1 million in 2025, with an accumulated deficit of $99.4 million as of September 30, 2025, indicating ongoing financial challenges [74]. - The company operates in a cyclical business, leading to significant fluctuations in demand for its products, which can adversely affect profitability [97]. - Sales and gross margins are highly dependent on market demand, with potential declines in demand resulting in significant losses [98]. - Factors affecting the company's operations include economic conditions, legislative policies, and the success of strategic growth initiatives [99]. - The company may need to adjust staffing and manage expenses closely to meet anticipated customer demand, which could lead to higher inventory levels and increased financing needs [100]. - Intense competition and rapid technological changes pose risks to the company's sales revenues and gross margins, potentially leading to protracted losses [101]. - The company may need to reduce prices in response to competitive pressures, which could negatively impact profit margins and overall financial performance [102]. Strategic Growth and Acquisitions - The Company aims to grow in high-growth markets with significant long-term opportunities, focusing on attractive returns on shareholder equity [37]. - The Company is focused on strategic acquisitions and expanding its products and services to enhance income sources and competitive advantage [39]. - The Company entered into a Share Purchase Agreement to acquire Invocon, Inc. for $7,060,000, expected to close around January 1, 2026, establishing a new reporting segment in Aerospace & Defense [31]. - The Company intends to use net proceeds from its recent offering for working capital and potential future acquisitions [36]. - The company is continuously looking to fund acquisitions, but failure to raise funds may slow down growth [139]. Technology and Intellectual Property - The Company has developed proprietary technologies and holds multiple patents, continuing to invest in research and development [44]. - The company holds only six issued patents, with two in the United States and four in Canada, and may face challenges in obtaining additional patents [126]. - The company may not have sufficient financial resources to defend its intellectual property rights, which could adversely affect its business [131]. Employee and Operational Structure - The Company employs around 240 full-time employees, with 34 in engineering, 128 in manufacturing and field service, and 82 in administrative, sales, and marketing functions [52]. - The Company has generally maintained sufficient availability of raw materials, but logistic delays and labor shortages have extended lead times beyond normal [119]. Cybersecurity and Compliance Risks - The company faces significant cybersecurity risks, including potential data breaches that could harm its reputation and financial results [109]. - Compliance with evolving data security regulations may incur additional costs and impact the company's operations [117]. - The Company has not identified any material cybersecurity threats that could impact its business or financial statements as of September 30, 2025 [191]. - The company has ongoing requirements to comply with the SEC Order, and any future violations could result in harsher sanctions [122]. Shareholder and Market Dynamics - The Company has approximately 90% of its outstanding voting shares controlled by Saagar Govil, which limits public stockholders' influence over corporate affairs [144]. - The public trading market for the common stock may be limited, affecting liquidity and resale value [169]. - The Company may face a decline in stock price and trading volume if securities or industry analysts do not publish research or provide unfavorable reports about its business [172]. - If the Company's Common Stock price falls below $5.00, it may be classified as a penny stock, leading to increased trading difficulties and regulatory requirements [173]. - The SEC's Regulation Best Interest may limit broker-dealers' ability to recommend the Company's securities, potentially reducing trading activity [174]. Inventory and Cost Management - The Company classifies inventory markdowns as a component of cost of goods sold, which are estimates that could vary significantly [211]. - The Company values inventory at the lower of cost or net realizable value, using the average cost method [210].

Financial Performance - Fiscal 2025 net revenues decreased by $750,000 (0.5%) to $141,630,000 from $142,380,000 in fiscal 2024[17] - Same store sales decreased by 2.1% at Bad Daddy's brand and by 5.0% at Good Times brand during fiscal 2025[17] - Total interest expense on notes payable was $191,000 for fiscal 2025, compared to $108,000 for fiscal 2024[26] - Good Times experienced a same store sales decrease of 5.0% in fiscal 2025, following a 2.9% increase in fiscal 2024, with a compound annual growth rate of 3.5% from fiscal 2015 to 2025[36] Cash and Debt Management - As of September 30, 2025, the company ended with $2.6 million in cash and $2.3 million in long-term debt[17] - The Cadence Credit Facility allows for loans up to $8,000,000, with an interest rate of 7.27% as of September 30, 2025[22] - The Cadence Credit Facility allows for loans up to $8,000,000, with a maturity date of April 20, 2028, and an interest rate of 7.27% as of September 30, 2025[20][22] Share Repurchase and Stock Performance - The company has repurchased a total of 1,822,246 shares at an aggregate cost of approximately $5,019,000 under its share repurchase program[19] Sales and Revenue Streams - Off-premises sales accounted for approximately 27% of all system-wide sales in fiscal 2025[30] - Bad Daddy's restaurants averaged $2.6 million in sales for fiscal 2025, a decline from fiscal 2024, but income from operations increased year over year[45] - Total alcoholic beverages account for approximately 12% of all sales and 16% of on-premises sales in Bad Daddy's restaurants[37] - Bad Daddy's average sales per transaction are approximately $38, with lunch representing 33% and dinner/happy hour 67% of sales[30] Operational Strategy - The company emphasizes operational excellence and financial discipline, aiming for growth while maintaining a low debt load[39] - The company aims to enhance operational capabilities while managing expenses, particularly in cost of sales and labor[47] - The company has implemented a cloud-based point-of-sale system across all company-owned Good Times restaurants, with plans to complete implementation at Bad Daddy's locations within 18 months[78] Brand Development and Growth Plans - Bad Daddy's brand is focused on disciplined unit growth, primarily financed from operating cash flow, with significant expansion potential due to small market penetration[40] - The company anticipates that most of its unit growth will come from the development of additional Bad Daddy's Burger Bar locations[98] - Good Times does not have explicit plans for additional restaurant development but may consider opportunistic growth in Colorado and surrounding states[49] Employee and Operational Structure - As of September 30, 2025, the company employed approximately 2,078 active employees, with 1,839 being hourly team members and 239 salaried managers or professional staff[82] - Bad Daddy's Burger Bar utilizes a team of three to four managers per restaurant, with a bonus pool based on sales and operational objectives to incentivize performance[68] Marketing and Customer Engagement - The marketing strategy for Bad Daddy's Burger Bar focuses on local store marketing and community events, supplemented by targeted social and digital media investments[63] - Good Times aims to drive same-store sales by attracting new customers and increasing visit frequency, while also highlighting product differentiation[64] Competitive Landscape - The restaurant industry is highly competitive, with Bad Daddy's Burger Bar facing competition from both local and national gourmet burger concepts[83] - Good Times competes with several hamburger-oriented quick-service restaurants, including those with greater financial resources and market presence[84] - Good Times may have a competitive advantage in product quality compared to traditional quick-service burger chains, but faces challenges from established competitors with greater financial resources[86] Regulatory and Compliance Issues - The company is subject to various health, safety, and labor regulations, which could impact restaurant operations and development[88] - Each restaurant is subject to various health and safety regulations, which could delay new openings if licenses are not obtained[88] Franchise Operations - The company operates two reportable business segments: Good Times Burgers and Frozen Custard, and Bad Daddy's Burger Bar[91] - The company actively monitors franchisee performance and provides support in areas such as menu management and marketing to ensure compliance with operational standards[77] - The company is subject to federal and state laws regulating franchise operations, which may impose restrictions on franchise agreements[89] Future Outlook - Forward-looking statements indicate expectations for unit growth primarily through the development of additional Bad Daddy's Burger Bar locations[98] - Management believes it will have adequate cash from operations and credit facility borrowings to meet future capital expenditure and working capital requirements in fiscal 2026[98]

Company Formation and Purpose - The company was formed as a blank check company with the purpose of effecting a merger or similar business combination, targeting companies with an enterprise value of at least $500 million[15]. - The company intends to focus on high-growth sectors including fintech, healthcare, sports and entertainment, and consumer goods for its initial business combination[21]. - The company has not yet selected any specific business combination target and has not engaged in substantive discussions regarding potential targets[25]. - The company will not effectuate its initial business combination with another blank check company or a similar company with nominal operations[91]. Management and Experience - The management team has significant experience in private investing and corporate finance, providing competitive advantages for sourcing and evaluating potential business combinations[17]. - The management team and directors may have conflicts of interest due to their obligations to other entities, which could affect the selection of business combination opportunities[20]. - The company may seek to recruit additional managers post-business combination, but there is no assurance that it will be able to do so successfully[43]. - Conflicts of interest may arise as executive officers and directors are involved in multiple business activities[173]. - The company has not adopted a policy to prevent conflicts of interest among its executive officers and directors[176]. Acquisition Strategy - The acquisition strategy includes targeting companies with strong fundamentals, leading market positions, and favorable growth outlooks, with a preference for those generating positive EBITDA and strong free cash flow[28]. - The acquisition process will involve thorough due diligence, including meetings with management and reviews of financial information[29]. - The company anticipates structuring the initial business combination to ensure that the post-transaction entity owns or acquires at least 50% of the voting securities of the target[35]. - The company may only complete one business combination with the proceeds from its initial public offering, leading to dependency on a single business[99]. Financial Resources and Risks - The company has approximately $115.6 million available for a business combination, assuming no redemptions occur[37]. - Stockholders holding 10,009,120 shares redeemed their shares for cash at approximately $10.60 per share, resulting in $106.1 million being removed from the Trust Account, leaving about $15.8 million remaining[38]. - The company has not secured third-party financing for the business combination, and there is no assurance that such financing will be available[37]. - The company may incur substantial debt to complete a business combination, which could adversely affect leverage and financial condition[162]. - The company may face challenges in obtaining additional financing for business combinations, which could compel restructuring or abandonment of proposed transactions[152]. Stockholder Rights and Redemption - Stockholder approval may be required for certain types of transactions, such as mergers where the company does not survive[45]. - The company plans to conduct redemptions either through a stockholder meeting or a tender offer, depending on various factors[54]. - If stockholder approval is required, the company will distribute proxy materials and provide redemption rights upon completion of the initial business combination[58]. - The anticipated per-share amount for public stockholders exercising redemption rights is approximately $10.05[53]. - If the initial business combination is not completed, the company will cease operations and redeem public shares at a price based on the trust account balance, which could be approximately $10.05 per share[70][74]. Regulatory and Compliance Issues - Regulatory approvals may be required for certain business combinations, and failure to obtain these could prevent the company from completing a transaction[105]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[94]. - The company intends to evaluate its internal control procedures for the fiscal year ending September 30, 2026, as required by the Sarbanes-Oxley Act[93]. - The company may be subject to a second level of U.S. federal income tax if classified as a personal holding company, which could impose a 20% tax on undistributed income[111]. Market Conditions and Competition - The company may face intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[87]. - The increasing number of special purpose acquisition companies (SPACs) may make attractive target businesses scarcer, increasing competition and costs for initial business combinations[100]. - The company may face significant risks and costs if attempting to complete multiple business combinations simultaneously, which could negatively impact operations and profitability[146]. Legal and Litigation Risks - There is currently no material litigation or governmental proceedings pending against the company or its management team[97]. - The company has provisions in its articles of incorporation that may discourage lawsuits against its directors and officers, potentially affecting shareholder rights[209]. - The exclusive forum provision in the company's articles of incorporation may limit the jurisdiction for certain lawsuits to the State of Nevada, which could impact legal recourse for shareholders[211]. Financial Projections and Shareholder Impact - The initial implied value per public share is $10.05, but this may decrease to an implied value of $2.05 per share upon consummation of the initial business combination, representing a 79.5% decrease[202]. - The nominal purchase price for founder shares was $3,000, approximately $0.0009 per share, which may lead to significant dilution of public shares upon the initial business combination[199]. - The company may issue shares to investors at a price of $10.05 per share during the initial business combination, which may be less than the prevailing market price[116]. - The company has the potential to issue a substantial number of additional shares, which could dilute the equity interest of investors from the initial public offering[196]. Miscellaneous Risks - The company may incur a 3.5% M&A fee on gross proceeds from the initial public offering and a 1.0% finder's fee for targets introduced by I-Bankers, increasing cash requirements for the business combination[153]. - The company may be adversely affected by changes in international trade policies and tariffs, impacting the search for business combination targets and post-combination operations[158]. - Cyber incidents could result in information theft and financial loss, impacting business operations[167]. - Key personnel's departure could negatively impact operations and profitability post-combination[171].

Financial Restructuring - The company entered into a Restructuring Support Agreement (RSA) with creditors to implement a financial restructuring, reducing total funded debt by approximately $1.1 billion[166]. - A Superpriority Secured Debtor In Possession Credit Agreement was established, providing up to $100 million in debtor-in-possession financing to fund the Chapter 11 Cases[167]. - The restructuring plan includes converting approximately $871 million in principal claims into $200 million of exit debt and 98% of the reorganized company's pro forma equity[168]. - The restructuring plan includes a potential equity rights offering of up to $200 million for certain holders of unsecured claims[168]. - The enterprise value range accepted by the Bankruptcy Court for the Chapter 11 restructuring is between $750.0 million and $925.0 million[182]. - Reorganization items, net for Q3 2025 amounted to $53.5 million due to the Chapter 11 restructuring[194]. - The company filed for reorganization under Chapter 11 on August 20, 2025, raising substantial doubt about its ability to meet obligations over the next twelve months[246]. - The company has classified the outstanding principal balance of the Incremental Term Loan and Term Loan Facility as liabilities subject to compromise due to Chapter 11 proceedings[270]. - Management has substantial doubt about the company's ability to continue as a going concern without successful restructuring[282]. Operational Performance - Consolidated service revenue, net for Q3 2025 decreased by $22.3 million, or 3.2%, compared to Q3 2024, with declines in all segments: NEMT down $0.6 million, PCS down $19.8 million, and Monitoring down $2.4 million[200]. - Total operating expenses for Q3 2025 were $691.8 million, slightly decreasing from $696.8 million in Q3 2024, with service expense accounting for 85.9% of revenue[200]. - Operating loss for Q3 2025 was $12.1 million, compared to an operating income of $5.3 million in Q3 2024, reflecting a significant decline in profitability[200]. - General and administrative expenses increased by $13.4 million, or 19.0%, in Q3 2025 compared to Q3 2024, rising to 12.4% of service revenue, net[202][203]. - Interest expense, net for Q3 2025 decreased by $14.0 million, or 49.2%, compared to Q3 2024, primarily due to the Chapter 11 filing which affected pre-petition debt[204]. - Consolidated service revenue, net for YTD 2025 decreased by $94.9 million, or 4.6%, compared to YTD 2024, driven by declines in the NEMT, PCS, and Monitoring segments[209]. - Total operating expenses for YTD 2025 increased to $2,274.9 million, or 114.3% of service revenue, compared to $2,181.8 million, or 104.7% of service revenue for YTD 2024[209]. - The company reported a net loss of $427.2 million for YTD 2025, compared to a net loss of $177.8 million for YTD 2024[209]. Segment Performance - The NEMT segment reported service revenue of $1,414.0 million for YTD 2025, a decrease from $1,462.2 million for YTD 2024[219]. - Average monthly members in the NEMT segment decreased to 23,628 in YTD 2025 from 30,023 in YTD 2024[219]. - Service revenue, net for the PCS segment decreased by $19.8 million, or 10.5%, in Q3 2025 compared to Q3 2024, primarily due to a 13.3% decrease in hours worked by personal care providers[228]. - Total service expense for the PCS segment decreased by $17.5 million, or 11.5%, in Q3 2025 compared to Q3 2024, mainly due to a decrease in payroll and related costs[229]. - Average monthly membership decreased by 21.3% in Q3 2025 and 20.0% YTD 2025, while revenue per member per month increased by 26.9% and 20.9% respectively, partially offsetting revenue declines[221]. Goodwill and Impairment - Goodwill impairment was recognized for the PCS and Monitoring reporting units during Q2 2025, attributed to a decline in market price and lower operating results[192]. - Impairment of goodwill for YTD 2025 was $263.4 million, significantly higher than $105.3 million for YTD 2024, due to charges recorded at both PCS and Monitoring units[213]. - An impairment of goodwill charge of $211.8 million was recorded during YTD 2025 for the PCS reporting unit, while no impairment charge was recorded in YTD 2024[233]. - Impairment of goodwill for YTD 2025 was $51.6 million, compared to $105.3 million for YTD 2024, indicating a significant reduction in impairment charges[241]. Cash Flow and Liquidity - Cash used in operating activities was $154.8 million for YTD 2025, an increase of $118.3 million compared to $36.5 million for YTD 2024, primarily due to lower service revenue and higher interest expense[249]. - The balance of cash and cash equivalents was $78.2 million as of September 30, 2025, down from $112.6 million at December 31, 2024[247]. - The company has a total cash requirement of $357.7 million over the next 12 months, which includes the DIP Facility and other current liabilities[277]. - The company expects to continue generating negative cash flows from operations in the near term, impacted by increased costs and membership declines[278]. - A one-percentage point increase in interest rates on the DIP Facility would have an approximate $0.6 million negative impact on pre-tax earnings[285]. Debt and Financing - The company entered into a DIP Credit Agreement for a senior secured superpriority term loan facility of up to $100.0 million, with an initial draw of $62.5 million[271]. - The DIP Facility has an interest rate of either SOFR plus 7.00% or Alternate Base Rate plus 6.00% per annum[272]. - The company issued $500.0 million in 5.000% senior unsecured notes due October 1, 2029 (2029 Notes) on August 24, 2021[252]. - The Fifth Amendment to the Credit Agreement allowed for the exchange of up to $251.0 million in principal of the 2029 Notes for Second Lien Notes[254]. - The Second Lien Notes will accrue interest at 5.000% per annum if paid in cash, or 10.000% if paid-in-kind, maturing on October 1, 2029[256].

Restructuring and Bankruptcy - The company entered into a Restructuring Support Agreement (RSA) with creditors to restructure approximately $1.1 billion in total funded debt[155]. - A Superpriority Secured Debtor In Possession Credit Agreement was established, providing a term loan credit facility of up to $100 million[156]. - The restructuring plan includes converting approximately $871 million in principal claims into $200 million of exit debt and 98% of the reorganized company's pro forma equity[157]. - The company is facing delisting from Nasdaq due to the commencement of Chapter 11 cases and failure to file required reports[160][161]. - The company is subject to risks associated with the Chapter 11 cases, which may affect its ability to continue as a going concern[165]. - The enterprise value range accepted by the Bankruptcy Court for the Chapter 11 restructuring is between $750.0 million and $925.0 million[170]. - The company filed for Chapter 11 reorganization on August 20, 2025, due to substantial doubt about its ability to meet obligations over the next twelve months[237]. - The company filed for Chapter 11 bankruptcy on August 20, 2025, to restructure its debt and improve liquidity[275]. - Management has substantial doubt about the company's ability to continue as a going concern without successful restructuring[271]. Financial Performance - Consolidated service revenue, net for Q2 2025 decreased by $38.7 million, or 5.5%, compared to Q2 2024, with declines in all segments: NEMT down $17.3 million, PCS down $19.7 million, and Monitoring down $1.5 million[188]. - Total operating expenses for Q2 2025 were $928.0 million, representing 140.7% of service revenue, net, compared to $797.2 million or 114.2% in Q2 2024[188]. - Impairment of goodwill for Q2 2025 was $263.4 million, significantly higher than $105.3 million in Q2 2024, driven by impairment charges in both PCS and Monitoring reporting units[192]. - Interest expense, net for Q2 2025 increased by $17.2 million, or 86.0%, totaling $37.1 million compared to $20.0 million in Q2 2024, due to new debt facilities and higher interest rates[193]. - Consolidated service revenue, net for YTD 2025 decreased by $72.5 million, or 5.2%, compared to YTD 2024, driven by declines in the NEMT segment ($47.6 million), PCS segment ($21.5 million), and Monitoring segment ($3.5 million)[197]. - Total operating expenses for YTD 2025 increased to $1,583.1 million, representing 120.8% of service revenue, net, compared to $1,485.1 million or 107.4% in YTD 2024[197]. - Impairment of goodwill for YTD 2025 was $263.4 million, significantly higher than $105.3 million in YTD 2024, due to charges recorded at both PCS and Monitoring reporting units[201]. - Interest expense, net for YTD 2025 increased by $37.3 million, or 96.6%, totaling $75.9 million compared to $38.6 million in YTD 2024, attributed to new debt facilities and higher interest rates[202]. Membership and Revenue Trends - Average monthly members decreased by 19.7% in Q2 2025 and 19.3% in YTD 2025 compared to the same periods in 2024, impacting revenue generation[207]. - Revenue per member per month increased by 20.1% in Q2 2025 and 18.0% in YTD 2025, partially offsetting the decline in total revenue due to decreased membership[207]. - Total paid trips increased by 0.1% in Q2 2025 but decreased by 1.9% in YTD 2025 compared to the same periods in 2024[207]. Cost Management - Service expense for Q2 2025 decreased by $17.5 million, or 3.0%, totaling $570.6 million, with notable decreases in the PCS segment by $16.3 million[189]. - General and administrative expense for Q2 2025 decreased by $5.5 million, or 7.2%, totaling $70.6 million, with a slight increase in the Corporate and Other segment[190]. - Depreciation and amortization expense decreased by $4.3 million, or 15.6%, in Q2 2025, primarily due to certain intangible assets being fully amortized[191]. - Service expense for YTD 2025 decreased by $48.0 million, or 4.1%, compared to YTD 2024, with notable reductions in the NEMT and PCS segments[198]. - General and administrative expenses for YTD 2025 decreased by $4.1 million, or 2.7%, but increased as a percentage of service revenue, net to 11.4% from 11.1% in YTD 2024[199]. Debt and Financing - The principal balance of the 2029 Notes was reduced to $228.8 million as of June 30, 2025, down from $500.0 million as of December 31, 2024[249]. - The principal balance of the Second Lien Notes as of June 30, 2025, was $316.2 million, which includes $15.1 million of PIK interest[249]. - The Revolving Credit Facility has an aggregate principal amount of $325.0 million, with sublimits for swingline loans, letters of credit, and alternative currency loans[251]. - The Term Loan Facility was established with an aggregate principal amount of $525.0 million, maturing on July 1, 2031, or July 2, 2029, if any of the 2029 Notes remain outstanding[255][256]. - The Incremental Term Loan was established with an aggregate principal amount of $75.0 million, priced at a SOFR-based benchmark plus 7.50%, maturing on January 10, 2026[258]. - The DIP Facility has an aggregate principal amount of up to $100.0 million, with an initial draw of up to $62.5 million and a subsequent draw of up to $37.5 million[260]. - The DIP Loans will accrue an interest rate of either SOFR plus 7.00% per annum or Alternate Base Rate plus 6.00% per annum[261]. - The Term Loan Facility requires annual prepayments of a percentage of Excess Cash Flow, starting with 75.0% if the Total Net Leverage Ratio exceeds 4.40:1.00[256]. - The company incurred approximately $26.9 million of deferred financing costs related to the Term Loan Facility[255]. Cash Flow and Liquidity - Cash used in operating activities was $104.3 million for YTD 2025, an increase of $58.6 million compared to $45.7 million for YTD 2024, primarily due to higher interest expense and changes in operating assets and liabilities[241]. - Net cash provided by financing activities was $91.7 million for YTD 2025, an increase of $23.1 million compared to $68.6 million for YTD 2024, driven by the issuance of the Incremental Term Loan[243]. - Net cash used in investing activities was $10.7 million for YTD 2025, a decrease of $3.8 million compared to YTD 2024, related to less cash used for property and equipment purchases[242]. - As of June 30, 2025, the company had liquid assets of $76.4 million and accounts receivable totaling $392.6 million[265]. - Cash requirements over the next 12 months totaled $935.9 million, including $130.7 million in guarantees and letters of credit not expected to be settled in cash[265]. - The company has a short-term balance of outstanding contract receivables of $115.6 million as of June 30, 2025[266]. - Total cash requirements as of June 30, 2025, amounted to $2.29 billion, with $935.9 million due in one year or less[273]. Operational Challenges - The company is experiencing rising labor costs and trip costs in its non-emergency medical transportation (NEMT) segment, impacting profit margins[169]. - The company is monitoring legislative impacts of the OBBBA, which could affect membership and the fair value of intangible assets[170]. - A one-percentage point increase in interest rates would negatively impact pre-tax earnings by approximately $8.7 million[277]. - The company has a history of operating losses and anticipates continued negative cash flows from operations in the near term[266]. - The company is authorized to operate as a debtor-in-possession but cannot engage in transactions outside the ordinary course without Bankruptcy Court approval[269].

Financial Viability and Risks - The company faces substantial doubt about its ability to continue as a going concern, as indicated in its financial statements for the year ended June 30, 2025[111]. - The company has a history of losses and may not achieve or maintain profitability, which increases investment risk[111]. - The company may require additional financing to achieve its goals, and failure to secure necessary capital could delay or limit operations[111]. - As of June 30, 2025, the company reported a working capital deficit of $204.9 million, raising substantial doubt about its ability to continue as a going concern[122]. - The net losses for the year ended June 30, 2025, were $154.6 million, with an accumulated deficit of $57.3 million[123]. - The company had $248.0 million in total indebtedness as of June 30, 2025, with 92% classified as current[134]. - Bioceres S.A. defaulted on a portion of its financial debt amounting to $36.4 million in June 2025, initiating a debt restructuring process[141]. - Bioceres LLC received a notice of default on its financial debt of $69.5 million, leading to the auction of pledged BIOX shares[141]. - The company may need to secure additional capital to fund its longer-term capital and liquidity needs, as it does not expect to rely solely on cash balances and operating cash flow[123]. Competitive Landscape - The company operates in a highly competitive environment, with many competitors having greater financial and technical resources[113]. - The competitive landscape includes companies with greater financial and technical resources, which may hinder the Company's ability to keep pace in product development and market presence[165]. - The company competes against larger, well-capitalized food and ingredients companies, limiting its success in brand awareness[196]. Product Development and Market Challenges - The company’s future revenue depends on the success of its technologies and product developments, including extrusion, fermentation, and molecular farming[111]. - The introduction and improvement of new products from the Company's development pipeline are critical for generating revenue and achieving market acceptance[169]. - Significant risks in product development include delays in market acceptance, regulatory approvals, and competition from superior products[172]. - The company faces challenges in scaling agricultural production due to climatic variability, cost overruns, and low farmer adoption of target crops[173]. - The potential size of target markets for products is significant, but estimates are based on unverified assumptions that may not prove accurate[175]. - Negative public perception of GMOs and molecular farming could adversely affect commercialization efforts and regulatory environments[177][180]. - Consumer preferences for plant-based proteins are difficult to predict, and shifts away from the company's products could harm sales and market share[181][183]. Regulatory and Compliance Issues - The company’s operations are subject to various risks, including regulatory changes and compliance with environmental laws[115]. - The company is subject to numerous laws and regulations, including data protection and anti-corruption laws, which could result in liability if not complied with[200][201]. - Regulatory changes in the U.S. and abroad could increase the time and costs associated with launching new products, adversely affecting operating results[254]. - The regulatory environment outside the U.S. is highly uncertain, which may limit the company's ability to expand into global markets[255]. - Compliance with environmental, health, and safety regulations could be costly and time-consuming, potentially impairing research and development efforts[260]. Intellectual Property and Legal Risks - The company relies on a combination of intellectual property protections, but these may not be sufficient to prevent disclosure or infringement[234]. - License agreements with third parties limit the company's rights to use certain important technologies, and termination of these agreements could adversely affect operations[238]. - The company faces significant risks related to its patent positions, which may adversely affect its competitive position due to the complexity and uncertainty of biotechnology patents[240]. - The company may not be able to adequately enforce its intellectual property rights in jurisdictions where it has sought protection, potentially limiting its commercial success[241]. - Changes in patent laws could allow others to use the company's discoveries without compensation, impacting its ability to secure patent protection[243]. - The company may incur substantial costs in enforcing its patent rights, which could divert resources from other business areas and affect its operations[244]. Market and Economic Conditions - Economic instability in Argentina, including high inflation and currency fluctuations, poses material risks to the company's financial condition[208]. - The recent presidential elections in Argentina resulted in a new government that may introduce significant economic changes affecting the company[210]. - The ambitious deregulation plan under Decree 70/2023 and the Bases Law could significantly affect the company's business and financial condition[217]. - The agricultural industry is susceptible to commodity price changes, which may negatively impact the company's ability to commercialize products[226]. - The company's operations may be adversely affected by climate change and adverse weather conditions, which can reduce crop size and quality[229]. - The company's sales and operating results are highly seasonal, influenced by planting and harvest seasons, leading to substantial fluctuations[230]. Corporate Governance and Compliance with Nasdaq - The company is currently listed on the Nasdaq Capital Market and faces substantial doubt about its ability to comply with continued listing standards, which require a minimum of $500,000 in net income from continuing operations or at least $2.5 million in stockholders' equity[277]. - The company's ordinary shares have been trading below the minimum requirement of $1.00 per share for 30 consecutive business days, which could lead to automatic delisting from Nasdaq[280]. - On November 14, 2025, the company received a determination letter from Nasdaq regarding its non-compliance with the minimum bid price requirement[281]. - The company has submitted an appeal to request a 180-day period to submit a compliance plan, which may include a reverse stock split[282]. - A reverse stock split with a ratio of fifteen-to-one has been approved by the board, expected to be effective around January 5, 2026, to increase the ordinary share price[284]. - The company has not filed its Annual Report on Form 20-F for the year ended June 30, 2025, leading to a compliance issue with Nasdaq Listing Rule 5250(c)(1)[287]. - The complexities arising from the business combination in mid-June 2025 have delayed the filing of the Form 20-F[288]. - The company is committed to monitoring the closing bid price of its ordinary shares and evaluating actions to regain compliance with Nasdaq listing rules[285]. - If the ordinary shares are delisted, they may trade in the over-the-counter market, which could significantly affect liquidity and market perception[290]. Operational and Management Challenges - The company faces difficulties in integrating acquired businesses and realizing anticipated cost savings and synergies[118]. - The reliance on third-party growers for seed production poses risks to the Company's supply chain and operational stability[163]. - Attracting and retaining qualified employees is critical for the company's growth and operational success[188]. - The company faces potential substantial damages from defective product lawsuits, which may not be covered by insurance[193]. - Limited brand awareness could hinder the company's ability to sell products effectively[194]. - Significant resources will be required for a marketing campaign to improve brand awareness and market position[195]. - Failure to develop technology and brand could adversely affect future growth and customer loyalty[197]. - The company is increasingly reliant on third-party information technology systems, exposing it to operational risks and potential cyber-attacks[198]. - The resignation of Nomura as the exclusive financial advisor may indicate reluctance to be associated with the company's disclosures and business analysis[274]. - The trading volume and price of Ordinary Shares could decline if analysts cease coverage or change their recommendations adversely[299].

Financial Performance - Net revenues for Q2 2025 reached $478.69 million, a 12.2% increase from $426.71 million in Q2 2024[24] - Gross profit for the six months ended June 30, 2025, was $404.57 million, compared to $363.14 million for the same period in 2024, reflecting an increase of 11.5%[24] - Operating loss for Q2 2025 was $27.24 million, compared to an operating income of $7.48 million in Q2 2024[24] - Net loss attributable to Holdings for Q2 2025 was $51.22 million, a decrease from $73.05 million in Q2 2024[24] - Basic loss per common share attributable to Holdings for Q2 2025 was $(0.88), compared to $(1.12) in Q2 2024[24] - Total comprehensive loss attributable to Holdings for the six months ended June 30, 2025, was $78.55 million, compared to $133.75 million for the same period in 2024[27] - Net loss for the six months ended June 30, 2025, was $127,682 thousand, compared to a net loss of $188,358 thousand for the same period in 2024, representing a 32.2% improvement[33] - Net loss from continuing operations attributable to common shares for Q2 2025 was $68,884,000, compared to a loss of $83,251,000 in Q2 2024, representing a 17.5% improvement year-over-year[144] - The company reported a net loss from continuing operations for the six months ended June 30, 2025, of $107,355,000, compared to $198,412,000 for the same period in 2024, a 45.9% reduction[146] Assets and Liabilities - Total assets as of June 30, 2025, were $3.27 billion, slightly down from $3.30 billion as of December 31, 2024[21] - Current liabilities increased to $2.54 billion as of June 30, 2025, compared to $2.43 billion at the end of 2024, marking a rise of 4.3%[21] - Total stockholders' equity attributable to Holdings decreased to $601.88 million from $678.62 million at the end of 2024, a decline of 11.3%[21] - The balance of accumulated deficit increased to $(1,141,951) as of June 30, 2025[30] - Total debt as of June 30, 2025, amounted to $1,857.036 million, with a significant portion classified as current due to forbearance agreements[118] Cash Flow and Financing - Cash and cash equivalents increased to $73.76 million from $59.66 million at the end of 2024, representing a growth of 23.6%[21] - Cash used in operating activities for continuing operations was $64,508 thousand for the six months ended June 30, 2025, compared to $93,591 thousand in 2024, indicating a reduction of 30.1%[33] - Cash flows from financing activities generated net cash of $98,378 thousand in the first half of 2025, compared to $41,611 thousand in the same period of 2024, reflecting an increase of 136.1%[35] - Proceeds from the issuance of Trust preferred shares amounted to $58,998 thousand in 2025, significantly higher than $9,803 thousand in 2024[35] - The company entered into a First Amendment to its Credit Agreement, providing for an additional term loan of $200 million and delayed draw commitments of $100 million for acquisitions and working capital[97] Acquisitions and Dispositions - The acquisition of The Honey Pot Co. was completed on January 31, 2024, through a merger and stock purchase agreement, making it a wholly-owned subsidiary[57] - The fair value of identifiable assets acquired from The Honey Pot Co. was $313.2 million, with total liabilities assumed at $42.96 million, resulting in net identifiable assets of $270.29 million[61] - The company completed the sale of Ergobaby, which is reported as discontinued operations for the three and six months ended June 30, 2024[48] - The sale of Crosman Corporation resulted in a loss of $24.6 million, with net proceeds of approximately $61.9 million used to repay intercompany credit[71] Legal and Compliance Issues - The Company reported that it was not in compliance with certain financial covenants under its 2022 Credit Facility, but entered into a Fifth Amendment on December 19, 2025, waiving existing defaults and resetting financial covenants[40][41] - The company has ongoing investigations by the SEC and DOJ related to its financial statements and the conduct at its Lugano subsidiary[179] - The company is currently involved in multiple legal actions, including securities class actions and derivative actions, but cannot estimate the potential loss[172][177] Impairments and Expenses - The company incurred an impairment expense of $31,515 thousand in 2025, compared to $8,182 thousand in 2024, indicating a significant increase in impairment losses[33] - The company recognized an impairment loss of $29.5 million related to property, plant, and equipment and $1.9 million related to right-of-use assets due to the Lugano Investigation[88] - The company experienced a goodwill impairment expense of $8.2 million for Velocity Outdoor in the previous fiscal year, impacting overall financial performance[208] Management and Operational Changes - The company plans to continue its strategy of issuing shares to manage equity and support growth initiatives[30] - The management fees incurred for the quarter ended June 30, 2025, totaled $19.0 million, with an adjusted amount of $14.0 million calculated post-restatement[189] - The company estimates approximately $43.1 million in overpaid management fees as of March 31, 2025, which will reduce future payments on a dollar-for-dollar basis[188] Revenue Recognition and Segment Performance - The company recognizes revenue when control of goods or services is obtained by the customer, excluding sales incentives and taxes[72] - Total revenue for the three months ended June 30, 2025, was $478.69 million, a 12.2% increase from $426.71 million in the same period of 2024[74] - The Honey Pot Co. generated $32.8 million in revenue for the three months ended June 30, 2025, compared to $24.18 million in the same period of 2024, reflecting a 35.7% increase[74] - Total consolidated operating loss for the company was $27.2 million for the three months ended June 30, 2025, compared to an operating income of $7.5 million for the same period in 2024[205][206] Shareholder Distributions - The Company suspended its quarterly cash distribution to common shareholders on May 27, 2025, due to the Lugano Investigation, to preserve cash[131][132] - Total cash distributions for Trust common shares in Q1 2025 amounted to $18,809,000, maintaining a cash distribution per share of $0.25[147] - The Company declared cash distributions for Series A Preferred Shares of $2,120,000 for the period ending April 29, 2025[147] Future Projections and Concerns - The Company continues to evaluate its ability to comply with amended financial covenants, raising substantial doubt about its ability to continue as a going concern[43] - The company expects to contribute approximately $0.2 million to the defined benefit plan for the remainder of 2025[160] - The company intends to adjust future profit allocation payments to reflect the impact of the restatement of its financial statements[193]