[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This section details the Form 8-K filing, covering company specifics, forward-looking statements, dividend declaration, and accompanying exhibits [Company and Filing Details](index=1&type=section&id=Company%20and%20Filing%20Details) This section outlines NewtekOne, Inc.'s identification, jurisdiction, and registered securities on the Nasdaq Global Market LLC - The filing is a Current Report on Form 8-K, dated **September 29, 2025**, for NewtekOne, Inc., a Maryland corporation[1](index=1&type=chunk)[2](index=2&type=chunk) Registered Securities on Nasdaq Global Market LLC | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :--------------------------------------------------------------------------------------------------------------------------------------------- | :---------------- | :---------------------------------------- | | Common Stock, par value $0.02 per share | NEWT | Nasdaq Global Market LLC | | 5.50% Notes due 2026 | NEWTZ | Nasdaq Global Market LLC | | 8.00% Notes due 2028 | NEWTI | Nasdaq Global Market LLC | | 8.50% Notes due 2029 | NEWTG | Nasdaq Global Market LLC | | 8.625% Notes due 2029 | NEWTH | Nasdaq Global Market LLC | | Depositary Shares, each representing a 1/40th interest in a share of 8.500% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B | NEWTP | Nasdaq Global Market LLC | [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section disclaims forward-looking statements, noting their inherent risks and the company's non-obligation to update them - Statements in the Form 8-K and its Exhibit contain forward-looking statements subject to significant risks and uncertainties, with actual results potentially differing materially from expectations[6](index=6&type=chunk) - NewtekOne does not undertake to update forward-looking statements to reflect the impact of circumstances or events arising after their initial making[6](index=6&type=chunk) [Item 2.02. Results of Operations and Financial Condition](index=4&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition) This section details NewtekOne, Inc.'s declaration of a dividend on Series B Preferred Shares via a press release, furnished as Exhibit 99.1 - On **September 29, 2025**, NewtekOne, Inc. issued a press release titled 'NewtekOne, Inc. Declares Dividend on Series B Preferred Shares'[7](index=7&type=chunk) - The Press Release is furnished as **Exhibit 99.1** to this Current Report on Form 8-K[7](index=7&type=chunk) - The information in this report and Exhibit 99.1 is not deemed 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934, nor is it incorporated by reference into any registration statement unless expressly set forth[7](index=7&type=chunk) [Item 9.01 Financial Statement and Exhibits](index=4&type=section&id=Item%209.01%20Financial%20Statement%20and%20Exhibits) This section enumerates the exhibits accompanying the Form 8-K filing, including the dividend press release and interactive data file Form 8-K Exhibits | Exhibit Number | Description | | :------------- | :-------------------------------------------- | | 99.1 | NewtekOne, Inc. Press Release dated September 29, 2025 | | 104 | Cover Page Interactive Data File | [Signatures](index=5&type=section&id=SIGNATURES) This section confirms the official signing of the report by NewtekOne, Inc.'s Chief Executive Officer, President, and Chairman of the Board - The report was signed on **September 29, 2025**, by Barry Sloane, Chief Executive Officer, President, and Chairman of the Board of NEWTEKONE, INC[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)

[Executive Summary & Outlook Reaffirmation](index=1&type=section&id=Lamb%20Weston%20Reports%20First%20Quarter%20Fiscal%202026%20Results%3B%20Reaffirms%20Fiscal%20Year%202026%20Outlook) [First Quarter Fiscal 2026 Highlights](index=1&type=section&id=Summary%20of%20First%20Quarter%20FY%202026%20Results) Lamb Weston reported a strong start to fiscal year 2026 with solid volume growth and positive customer momentum, driven by its 'Focus to Win' strategy, with adjusted income from operations and adjusted EBITDA showing modest growth despite declines in GAAP net income and EPS Q1 2026 Key Financial Highlights (YoY) | Metric | Q1 2026 ($ millions) | Year-Over-Year Growth | | :----------------------------- | :------------------- | :-------------------- | | Net sales | 1,659.3 | — % | | Income from operations | 156.5 | (26)% | | Net income | 64.3 | (50)% | | Diluted EPS | 0.46 | (48)% | | Adjusted Income from Operations | 206.5 | 5 % | | Adjusted Net Income | 103.0 | (9)% | | Adjusted Diluted EPS | 0.74 | (5)% | | Adjusted EBITDA | 302.2 | 1 % | | Capital returned to shareholders | 62.1 | | - CEO Mike Smith noted a strong start to the fiscal year with **solid volume growth** and **positive customer momentum**, attributing it to the 'Focus to Win' strategy[3](index=3&type=chunk) [Fiscal Year 2026 Outlook Reaffirmation](index=1&type=section&id=Reaffirms%20Fiscal%20Year%202026%20Outlook) Lamb Weston reaffirmed its full-year financial targets for fiscal 2026, indicating confidence in its strategic direction and operational execution - Lamb Weston reaffirmed its full year financial targets for fiscal 2026[1](index=1&type=chunk) [First Quarter Fiscal 2026 Financial Performance](index=1&type=section&id=Q1%202026%20Commentary) [Consolidated Results of Operations](index=1&type=section&id=Q1%20Results%20of%20Operations) Consolidated net sales saw a slight year-over-year increase, primarily due to favorable foreign currency, though constant currency sales declined, while profitability metrics experienced declines largely influenced by unfavorable price/mix and a higher effective tax rate, partially offset by cost savings and higher volumes Q1 2026 Consolidated Financial Performance (YoY) | Metric | Q1 2026 ($ millions) | YoY Change ($ millions) | YoY % Change | | :----------------------------- | :------------------- | :---------------------- | :----------- | | Net sales | 1,659.3 | +5.2 | — % | | Net sales (constant currency) | 1,635.6 | -1% | -1% | | Gross profit | 342.4 | (13.6) | -3.8% | | Adjusted Gross Profit | 338.9 | (14.2) | -4.0% | | SG&A | 153.6 | +9.7 | +6.7% | | Adjusted SG&A | 132.4 | (24.0) | -15.3% | | Net income | 64.3 | (63.1) | (50)% | | Diluted EPS | 0.46 | (0.42) | (48)% | | Adjusted Net Income | 103.0 | (9.7) | (9)% | | Adjusted Diluted EPS | 0.74 | (0.04) | (5)% | | Adjusted EBITDA | 302.2 | +2.8 | 1 % | - Volume growth of **6%** was driven by customer wins and retention, particularly in North America and Asia, and lapping an approximately **$15 million** charge in the prior year quarter related to a voluntary product withdrawal[4](index=4&type=chunk) - Price/mix declined **7%**, reflecting the carryover impact of fiscal 2025 price and trade investments, ongoing price and trade support, and unfavorable channel product mix[4](index=4&type=chunk) [Net Sales Analysis](index=1&type=section&id=Net%20sales) Net sales increased slightly by $5.2 million to $1,659.3 million, primarily due to a favorable foreign currency impact of $23.7 million, while at constant currency, net sales declined 1% as a 6% volume increase was more than offset by a 7% price/mix decline - Net sales increased **$5.2 million** to **$1,659.3 million**, including a favorable foreign currency impact of **$23.7 million**[4](index=4&type=chunk) - Net sales at constant currency declined **1%**, as a **6%** increase in volume was more than offset by a **7%** decline in price/mix[4](index=4&type=chunk) [Profitability Metrics (Gross Profit, SG&A, Net Income, EPS, EBITDA)](index=2&type=section&id=Gross%20profit%20declined) Gross profit and adjusted gross profit declined due to unfavorable price/mix, partially mitigated by higher sales volumes and lower manufacturing costs, while SG&A increased but adjusted SG&A decreased due to cost savings and miscellaneous income, and net income and diluted EPS saw significant declines, while Adjusted EBITDA increased slightly due to lower Adjusted SG&A - Gross profit declined **$13.6 million** to **$342.4 million**, and Adjusted Gross Profit declined **$14.2 million** to **$338.9 million**, primarily due to unfavorable price/mix, partially offset by higher sales volumes and lower manufacturing costs[5](index=5&type=chunk) - SG&A increased **$9.7 million** to **$153.6 million**, but Adjusted SG&A declined **$24.0 million** to **$132.4 million**, reflecting cost savings initiatives and **$7.3 million** of miscellaneous income[5](index=5&type=chunk) - Net income declined **$63.1 million** to **$64.3 million**, and Diluted EPS declined **$0.42** to **$0.46**, while Adjusted Net Income declined **$9.7 million** to **$103.0 million**, and Adjusted Diluted EPS declined **$0.04** to **$0.74**[5](index=5&type=chunk) [Effective Tax Rate](index=2&type=section&id=effective%20tax%20rate) The effective tax rate for Q1 2026 was 42.7%, significantly higher than 28.5% in Q1 2025, primarily due to a $10.2 million discrete tax expense related to a non-cash full valuation allowance against certain international deferred tax assets, with the rate being 30.2% versus 30.8% in the prior year when excluding these items - The effective tax rate in Q1 2026 was **42.7%**, compared to **28.5%** in Q1 2025, including **$10.2 million** of discrete tax expense primarily for a valuation allowance against international deferred tax assets[5](index=5&type=chunk) - Excluding these items, the effective tax rate was **30.2%** in Q1 2026, versus **30.8%** in the prior year quarter[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Q1%202026%20Segment%20Highlights) The North America segment experienced a decline in net sales and Adjusted EBITDA due to price/mix pressures despite volume growth, while the International segment saw an increase in net sales driven by foreign currency and an improvement in Adjusted EBITDA, benefiting from higher volumes and lower costs even with new facility start-up expenses Q1 2026 Segment Performance (YoY) | Segment | Net Sales Q1 2026 ($ millions) | Net Sales YoY % Change | Net Sales Constant Currency YoY % Change | Volume YoY % Change | Price/Mix YoY % Change | Adjusted EBITDA Q1 2026 ($ millions) | Adjusted EBITDA YoY % Change | | :-------------- | :----------------------------- | :--------------------- | :--------------------------------------- | :------------------ | :--------------------- | :----------------------------------- | :--------------------------- | | North America | 1,084.6 | (2%) | (2%) | 5% | (7%) | 260.0 | (6%) | | International | 574.7 | 4% | —% | 6% | (6%) | 57.2 | 11% | [North America Segment](index=2&type=section&id=North%20America%20Summary) North America net sales declined 2% to $1,084.6 million, as a 7% price/mix decline more than offset a 5% volume increase, while Adjusted EBITDA decreased 6% to $260.0 million, primarily reflecting price and trade support partially offset by higher volumes and cost savings - North America net sales declined **2%** to **$1,084.6 million**, with volume increasing **5%** and price/mix declining **7%**[6](index=6&type=chunk) - Volume growth was supported by recent customer contract wins and growth across channels, while price/mix declined due to fiscal 2025 price investments, ongoing customer support, and unfavorable channel mix[6](index=6&type=chunk) - North America Segment Adjusted EBITDA decreased **$18.0 million** to **$260.0 million**, primarily reflecting price and trade in support of customers, partially offset by higher sales volumes, lower manufacturing costs, and cost savings initiatives[7](index=7&type=chunk) [International Segment](index=2&type=section&id=International%20Summary) International net sales increased 4% to $574.7 million, including a $24.5 million favorable foreign currency impact, resulting in flat net sales at constant currency, with volume increasing 6% and price/mix declining 6%, while Adjusted EBITDA increased 11% to $57.2 million, driven by higher volumes, lower potato prices, and cost savings despite $3.5 million in start-up costs for a new Argentina facility - International net sales increased **4%** to **$574.7 million**, including a favorable **$24.5 million** from foreign currency translation, with net sales at constant currency being flat[8](index=8&type=chunk) - Volume increased **6%**, led primarily by growth in Asia and with multinational chain customers, while price/mix at constant currency declined **6%**[8](index=8&type=chunk) - International Segment Adjusted EBITDA increased **$5.8 million** to **$57.2 million**, reflecting higher sales volumes and lower manufacturing costs per pound, partially offset by **$3.5 million** in start-up costs for the new Argentina facility[8](index=8&type=chunk) [Equity Method Investment Earnings (Loss)](index=3&type=section&id=Equity%20Method%20Investment%20Earnings%20(Loss)) Equity method investment earnings shifted from a gain of $11.3 million in Q1 2025 to a loss of $0.6 million in Q1 2026, primarily due to lower net sales and an unfavorable mix of sales from the Lamb Weston/RDO Frozen joint venture Equity Method Investment Earnings (Loss) | Period | Earnings (Loss) ($ millions) | | :------------------- | :--------------------------- | | Q1 Fiscal 2026 | (0.6) | | Q1 Fiscal 2025 | 11.3 | - The decline in earnings was primarily the result of lower net sales and an unfavorable mix of sales from the unconsolidated joint venture, Lamb Weston/RDO Frozen[9](index=9&type=chunk) [Financial Position and Cash Flows](index=3&type=section&id=Cash%20Flows%2C%20Capital%20Expenditures%20and%20Liquidity) [Cash Flows from Operating Activities](index=3&type=section&id=Net%20cash%20provided%20by%20operating%20activities) Net cash provided by operating activities increased by $21.8 million to $352.0 million, primarily reflecting favorable working capital, led by lower finished goods inventories in North America - Net cash provided by operating activities increased **$21.8 million** to **$352.0 million**, primarily reflecting favorable working capital, led by lower finished goods inventories in North America[10](index=10&type=chunk) [Capital Expenditures and Liquidity](index=3&type=section&id=Capital%20expenditures%2C%20net%20of%20proceeds) Capital expenditures significantly decreased by $256.4 million to $79.2 million, reflecting the completion of growth-based investments in Argentina, the Netherlands, and the U.S., while the company maintained strong liquidity with $98.6 million in cash and $1,318.4 million available under its revolving credit facility - Capital expenditures, net of proceeds from blue chip swap transactions, were **$79.2 million**, down **$256.4 million** from the prior year, reflecting the completion of growth-based investments[11](index=11&type=chunk) Liquidity as of August 24, 2025 | Metric | Amount ($ millions) | | :-------------------------- | :------------------ | | Cash and cash equivalents | 98.6 | | Available revolving credit | 1,318.4 | [Capital Returned to Shareholders](index=3&type=section&id=Capital%20Returned%20to%20Shareholders) In the first quarter of fiscal 2026, Lamb Weston returned $62.1 million to shareholders, comprising $51.7 million in cash dividends and $10.4 million in share repurchases (187,259 shares at an average price of $55.34), while the Board also declared a quarterly dividend of $0.37 per share payable in November 2025, and approximately $348 million remains authorized for share repurchases - The Company returned **$62.1 million** to shareholders in Q1 FY26, including **$51.7 million** through cash dividends and **$10.4 million** through share repurchases (**187,259 shares** at an average price of **$55.34**)[2](index=2&type=chunk)[12](index=12&type=chunk) - The Board of Directors declared a quarterly dividend of **$0.37 per share**, payable on November 28, 2025, with approximately **$348 million** remaining authorized and available for repurchase under the share repurchase program[12](index=12&type=chunk)[13](index=13&type=chunk) [Strategic Initiatives and Fiscal 2026 Outlook](index=3&type=section&id=Fiscal%202026%20Outlook) [Focus to Win Strategy](index=3&type=section&id=Focus%20to%20Win) The 'Focus to Win' strategy, announced in Q4 fiscal 2025, aims to improve execution and drive profitable growth through four guiding principles: focusing investments on priority global markets, strengthening customer partnerships, achieving executional excellence, and setting the pace for innovation, including a Cost Savings Program targeting at least $250 million in annualized run rate savings by end of FY28, with $100 million expected by end of FY26, plus $60 million in working capital improvements, and total pre-tax charges of $70-100 million are expected, with $32 million recorded in Q1 FY26 - The 'Focus to Win' strategic plan aligns the organization around four guiding principles: focusing investments on priority global markets and segments; strengthening customer partnerships; achieving executional excellence; and setting the pace for innovation[14](index=14&type=chunk) - The Cost Savings Program is expected to deliver at least **$250 million** of annualized run rate savings by the end of fiscal year 2028, with at least **$100 million** of expected savings and an additional **$60 million** of working capital improvements by the end of fiscal year 2026[14](index=14&type=chunk) - In connection with these strategic initiatives, the Company expects to recognize total pre-tax charges of **$70 million** to **$100 million**, including approximately **$32 million** recorded in the first fiscal quarter[14](index=14&type=chunk) [Fiscal 2026 Financial Targets](index=3&type=section&id=Fiscal%202026%20Outlook%20Targets) Lamb Weston reaffirmed its fiscal 2026 financial targets, including net sales at constant currency in the range of $6.35 billion to $6.55 billion, Adjusted EBITDA between $1.00 billion and $1.20 billion, and capital expenditures of approximately $500 million, with the guidance incorporating enacted tariffs but excluding potential effects of evolving trade policies Fiscal 2026 Financial Targets | Metric | Target Range | | :-------------------------------- | :-------------------------------- | | Net sales at constant currency | $6.35 billion to $6.55 billion | | Adjusted EBITDA | $1.00 billion to $1.20 billion | | Cash used for capital expenditures | Approximately $500 million | - The Company's guidance includes its current view of the anticipated impact of enacted tariffs but does not include potential effects of evolving trade policies[15](index=15&type=chunk) [Additional Information](index=4&type=section&id=End%20Notes) [Webcast and Conference Call Information](index=4&type=section&id=Webcast%20and%20Conference%20Call%20Information) Lamb Weston hosted a conference call on September 30, 2025, to discuss its first quarter fiscal 2026 results, with details provided for live access and a rebroadcast - Lamb Weston hosted a conference call to review its first quarter fiscal 2026 results at **10:00 a.m. ET** on **September 30, 2025**, with a rebroadcast available online[17](index=17&type=chunk)[18](index=18&type=chunk) [About Lamb Weston](index=4&type=section&id=About%20Lamb%20Weston) Lamb Weston is a leading global supplier of frozen potato products to restaurants and retailers, known for 75 years of innovation in simplifying back-of-house management and enhancing customer experience - Lamb Weston is a leading supplier of frozen potato products to restaurants and retailers around the world, with **75 years** of industry leadership in innovation[19](index=19&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes various non-GAAP financial measures (e.g., Adjusted Gross Profit, Adjusted EBITDA, constant currency metrics) to supplement GAAP information, providing useful insights into core operating performance for investors and management decision-making by excluding certain non-recurring or non-operational impacts, with reconciliations to comparable GAAP measures provided and limitations of non-GAAP measures acknowledged - Lamb Weston presents non-GAAP financial measures such as Adjusted Gross Profit, Adjusted SG&A, Adjusted Income from Operations, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, and constant currency metrics to supplement GAAP financial information[20](index=20&type=chunk) - Management uses these non-GAAP measures to analyze core operating performance, providing investors with useful supplemental information by excluding impacts of foreign currency exchange translation, unrealized derivative activities, and other items affecting comparability[21](index=21&type=chunk) - Prospective quantification of certain unpredictable items for forward-looking non-GAAP measures is not feasible without unreasonable efforts, thus a reconciliation to GAAP has not been provided for guidance[24](index=24&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding the company's outlook, strategies, capital expenditures, and industry conditions, which are subject to uncertainties and risks, with readers cautioned not to place undue reliance on these statements, and the company undertakes no obligation to update them, except as required by law, with key risks including consumer preferences, raw material availability, operational challenges, successful implementation of strategic plans, competitive environment, and global economic conditions - The press release contains forward-looking statements regarding the Company's business and financial outlook, plans and strategies (including Focus to Win and the Cost Savings Program), capital expenditures, and anticipated industry conditions[25](index=25&type=chunk) - These statements are based on management's current expectations and are subject to uncertainties and changes in circumstances, with many factors potentially causing actual results to vary materially[25](index=25&type=chunk) - Readers are cautioned not to place undue reliance on any forward-looking statements, and the Company undertakes no responsibility for updating these statements, except as required by law[25](index=25&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Earnings](index=6&type=section&id=Consolidated%20Statements%20of%20Earnings) The consolidated statements of earnings provide a detailed breakdown of revenues, costs, and profits for the thirteen weeks ended August 24, 2025, and August 25, 2024, highlighting significant year-over-year declines in net income and diluted EPS, influenced by restructuring expenses and a higher tax rate in the current period Consolidated Statements of Earnings (Thirteen Weeks Ended) | Metric | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net sales | 1,659.3 | 1,654.1 | | Cost of sales | 1,316.9 | 1,298.1 | | Gross profit | 342.4 | 356.0 | | Selling, general and administrative expenses | 153.6 | 143.9 | | Restructuring expense | 32.3 | — | | Income from operations | 156.5 | 212.1 | | Interest expense, net | 43.7 | 45.2 | | Income before income taxes and equity method earnings | 112.8 | 166.9 | | Income tax expense | 47.9 | 50.8 | | Equity method investment earnings (loss) | (0.6) | 11.3 | | Net income | 64.3 | 127.4 | | Diluted EPS | 0.46 | 0.88 | | Dividends declared per common share | 0.37 | 0.36 | - Net income for the thirteen weeks ended August 24, 2025, reflects total pre-tax cash charges totaling **$31.9 million** (**$24.2 million** after-tax, or **$0.18 per share**) primarily related to the Cost Savings Program[27](index=27&type=chunk) - The thirteen weeks ended August 25, 2024, included an approximately **$39 million** charge (**$30 million** after-tax, or **$0.21 per share**) related to a voluntary product withdrawal, impacting net sales and cost of sales[29](index=29&type=chunk) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present the company's financial position as of August 24, 2025, and May 25, 2025, with key changes including a decrease in total current assets, primarily driven by lower inventories, and a slight increase in total stockholders' equity Consolidated Balance Sheets (as of) | Metric | August 24, 2025 ($ millions) | May 25, 2025 ($ millions) | | :------------------------------------------ | :--------------------------- | :-------------------------- | | **ASSETS:** | | | | Cash and cash equivalents | 98.6 | 70.7 | | Receivables, net | 772.7 | 781.6 | | Inventories | 906.8 | 1,035.4 | | Total current assets | 1,873.3 | 2,032.7 | | Property, plant and equipment, net | 3,686.7 | 3,687.9 | | Total assets | 7,236.7 | 7,392.6 | | **LIABILITIES & STOCKHOLDERS' EQUITY:** | | | | Short-term borrowings | 215.4 | 370.8 | | Accounts payable | 544.9 | 616.4 | | Total current liabilities | 1,258.0 | 1,476.0 | | Long-term debt and financing obligations | 3,670.9 | 3,682.8 | | Total liabilities | 5,446.9 | 5,654.9 | | Total stockholders' equity | 1,789.8 | 1,737.7 | | Total liabilities and stockholders' equity | 7,236.7 | 7,392.6 | - Inventories decreased from **$1,035.4 million** as of May 25, 2025, to **$906.8 million** as of August 24, 2025[31](index=31&type=chunk) - Total stockholders' equity increased from **$1,737.7 million** to **$1,789.8 million**[31](index=31&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows detail the cash movements for the thirteen weeks ended August 24, 2025, and August 25, 2024, with operating activities generating more cash, while investing activities used significantly less cash due to completed capital projects, and financing activities shifted from providing cash to using cash, primarily due to higher net repayments of short-term borrowings Consolidated Statements of Cash Flows (Thirteen Weeks Ended) | Cash Flow Activity | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | 352.0 | 330.2 | | Net cash used for investing activities | (76.3) | (335.6) | | Net cash (used for) provided by financing activities | (248.5) | 52.2 | | Net increase in cash and cash equivalents | 27.9 | 49.4 | | Cash and cash equivalents, end of period | 98.6 | 120.8 | - Net cash provided by operating activities increased by **$21.8 million**, primarily reflecting favorable working capital, led by lower finished goods inventories[10](index=10&type=chunk)[33](index=33&type=chunk) - Net cash used for investing activities decreased substantially from **$335.6 million** in Q1 FY25 to **$76.3 million** in Q1 FY26, reflecting the completion of growth-based investments[11](index=11&type=chunk)[33](index=33&type=chunk) - Net cash from financing activities shifted from a **$52.2 million** inflow in Q1 FY25 to a **$248.5 million** outflow in Q1 FY26, primarily due to higher net repayments of short-term borrowings[33](index=33&type=chunk) [Segment Information and Non-GAAP Reconciliations](index=10&type=section&id=Segment%20Information%20and%20Reconciliation%20of%20Net%20Sales%20at%20Constant%20Currency) [Segment Net Sales and Adjusted EBITDA](index=10&type=section&id=Segment%20net%20sales) This section provides a detailed breakdown of net sales and Adjusted EBITDA by segment (North America and International) for Q1 fiscal 2026 and 2025, including constant currency adjustments, highlighting the differing drivers of performance in each segment, with North America experiencing price/mix pressure and International benefiting from volume growth and foreign currency Segment Net Sales and Adjusted EBITDA (Thirteen Weeks Ended) | Metric | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | % Increase (Decrease) | % Increase (Decrease) at Constant Currency | Price/Mix | Volume | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :----------------------------------------- | :-------- | :------- | | **Segment net sales:** | | | | | | | | North America | 1,084.6 | 1,103.7 | (2%) | (2%) | (7%) | 5% | | International | 574.7 | 550.4 | 4% | —% | (6%) | 6% | | **Total Net Sales** | 1,659.3 | 1,654.1 | —% | (1%) | (7%) | 6% | | **Segment Adjusted EBITDA:** | | | | | | | | North America | 260.0 | 278.0 | (6%) | (6%) | | | | International | 57.2 | 51.4 | 11% | 4% | | | | **Total Adjusted EBITDA** | 317.2 | 329.4 | | | | | - Foreign currency translation had a minimal impact on overall Segment Adjusted EBITDA, with a favorable impact of approximately **$4 million** to the International segment[36](index=36&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of various GAAP financial measures to their non-GAAP counterparts, including Adjusted Gross Profit, SG&A, Income from Operations, Net Income, Diluted EPS, and Adjusted EBITDA, itemizing adjustments for unrealized derivative gains/losses, foreign currency, stock-based compensation, and specific items impacting comparability like the Cost Savings Program and pension settlement - Reconciliations are provided for Adjusted Gross Profit, Adjusted SG&A, Adjusted Income from Operations, Adjusted Net Income, and Adjusted Diluted EPS, detailing adjustments for unrealized derivative gains, foreign currency exchange, stock-based compensation, and specific comparability items[39](index=39&type=chunk) - Adjusted EBITDA is reconciled from Net Income by adding back interest expense, income tax expense, depreciation and amortization, and adjusting for unrealized derivative gains/losses, foreign currency exchange, blue chip swap transactions, stock-based compensation, and other comparability items[44](index=44&type=chunk)[45](index=45&type=chunk) [Adjusted Gross Profit, SG&A, Income from Operations, Net Income, EPS Reconciliation](index=11&type=section&id=As%20reported) This sub-section details the adjustments made to GAAP figures to arrive at adjusted non-GAAP measures for gross profit, SG&A, income from operations, net income, and diluted EPS for both Q1 FY26 and Q1 FY25, with key adjustments in Q1 FY26 including restructuring expense, shareholder activism expense, and pension settlement charges Reconciliation of GAAP to Adjusted Financial Measures (Q1 FY26) | Metric | As Reported ($ millions) | Total Adjustments ($ millions) | Adjusted ($ millions) | | :----------------------------- | :----------------------- | :----------------------------- | :-------------------- | | Gross Profit | 342.4 | (3.5) | 338.9 | | SG&A | 153.6 | (21.2) | 132.4 | | Restructuring Expense | 32.3 | (32.3) | — | | Income From Operations | 156.5 | 50.0 | 206.5 | | Net Income | 64.3 | 38.7 | 103.0 | | Diluted EPS | 0.46 | 0.28 | 0.74 | - Adjustments for Q1 FY26 include **$32.3 million** for restructuring expense, **$4.0 million** for shareholder activism expense, and **$13.1 million** for pension settlement, which significantly impact reported GAAP figures[39](index=39&type=chunk) [Adjusted EBITDA Reconciliation](index=12&type=section&id=Adjusted%20EBITDA) This sub-section provides the reconciliation of net income to Adjusted EBITDA, a key non-GAAP measure, for Q1 FY26 and Q1 FY25, detailing the add-backs for interest, taxes, depreciation, amortization, and other non-operating or non-recurring items to arrive at the adjusted profitability metric Reconciliation of Net Income to Adjusted EBITDA | Metric | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net income | 64.3 | 127.4 | | Interest expense, net | 43.7 | 45.2 | | Income tax expense | 47.9 | 50.8 | | Depreciation and amortization | 96.3 | 91.4 | | Unrealized derivative gains | (4.9) | (8.9) | | Foreign currency exchange (gains) losses | (4.7) | 0.6 | | Blue chip swap transaction gains | — | (16.6) | | Stock-based compensation | 10.6 | 9.5 | | Cost Savings Program, Restructuring Plan, and other expenses | 31.9 | — | | Shareholder activism expense | 4.0 | — | | Pension settlement | 13.1 | — | | **Adjusted EBITDA** | **302.2** | **299.4** | - Adjusted EBITDA increased from **$299.4 million** in Q1 FY25 to **$302.2 million** in Q1 FY26, after accounting for various non-GAAP adjustments[45](index=45&type=chunk) - Unallocated corporate costs, which are excluded from Segment Adjusted EBITDA, were **($15.0) million** in Q1 FY26, compared to **($30.0) million** in Q1 FY25[45](index=45&type=chunk)

[Fiscal Year 2025 Financial Results Overview](index=1&type=section&id=FY25%20Financial%20Results%20Overview) [FY25 Financial and Operational Highlights](index=1&type=section&id=Financial%20Summary) The Glimpse Group reported significant revenue growth in FY25 and Q4 FY25, achieved near cash breakeven, and maintained strong gross margins, driven by SpatialCore revenues and strategic reorganization efforts Revenue Growth | Metric | FY25 | FY24 | Change (YoY) | | :------------------- | :----------- | :----------- | :------------- | | Total Revenue | $10.5 million | $8.8 million | +20% | | Q4 FY25 Revenue | $3.5 million | $1.7 million | +105% | | Q4 FY25 vs Q3 FY25 | $3.5 million | $1.4 million | +150% | - Gross Margin for FY25 was approximately **67.5%**, on par with **67%** for FY24, and is expected to remain in the **65-75%** range due to increased SpatialCore and software license sales[5](index=5&type=chunk) Cash Flow & Position (as of June 30, 2025) | Metric | Amount | | :-------------------------- | :----------- | | Net Operating Cash loss (FY25) | ~-$0.27 million | | Net Operating Cash loss (FY24) | ~-$5.2 million | | Cash and equivalents | ~$6.85 million | | Accounts receivable | ~$0.85 million | - The company achieved essentially **cash breakeven** for FY25, marking an extraordinary turnaround, and maintains a clean capital structure with **no debt, convertible debt, or preferred equity**[5](index=5&type=chunk) - FY26 revenue is expected to exceed FY25, but quarterly revenue will be 'choppy' with Q1 FY26 significantly lower than Q4 FY25, followed by sequential growth, due to the nature of Brightline's DoW contracts and potential U.S. Government budget delays[5](index=5&type=chunk) - Key FY25 achievements include a return to revenue growth, first-time annual cash flow neutrality, significant Tier-1 customer wins, divestiture of non-core assets, key technology developments integrating AI into Immersive products, and filing of **7 new patents** focused on AI with immersive technologies[5](index=5&type=chunk) [Strategic Business Developments and Outlook](index=1&type=section&id=Strategic%20Review%20and%20Update) The Glimpse Group's growth is primarily driven by Brightline Interactive (BLI) and its SpatialCore product, which secured significant Department of War (DoW) contracts and achieved key technological milestones in AI-driven spatial computing, leading to a strategic decision to spin out BLI - Brightline Interactive (BLI), through its SpatialCore product, provides advanced Spatial Computing, AI-driven, operational simulation middleware software and solutions to the Department of War (DoW) and Big Data driven enterprises[6](index=6&type=chunk) - SpatialCore is positioned at the intersection of Spatial Computing, Immersive technologies, AI, Cloud, and Geospatial Data, functioning as an operating system for 3D information processing on the cloud[6](index=6&type=chunk) - BLI achieved several critical milestones in FY25, including a **$4+ million** initial contract for a unified synthetic training ecosystem for a major DoW entity, a **$2+ million** SpatialCore contract with another DoW entity, delivery of an immersive simulator to the U.S. Navy, and a Cooperative Research And Development Agreement (CRADA) with the U.S. Army DEVCOM C5ISR Center for AI/ML algorithm training[6](index=6&type=chunk) - These initial contracts have the potential to expand into multi-million and multi-year follow-on contracts, potentially leading to inclusion in exceptionally large, long-term DoW Programs of Record, with a robust pipeline of new potential customers in both DoW and enterprise Big Data segments[6](index=6&type=chunk) [BLI Spin-out Strategy](index=3&type=section&id=BLI%20Spin-out%20Strategy) Glimpse Group's Board of Directors has approved a strategy to spin out Brightline Interactive (BLI) into an independent, publicly traded company to unlock its intrinsic value, which is currently not reflected in Glimpse's valuation - BLI's intrinsic value is believed to be significantly undervalued within Glimpse's current valuation, with public company comparables in the Defense Tech/AI segment trading at substantially higher multiples of trailing annual revenue[10](index=10&type=chunk) - The Board of Directors concluded that spinning out BLI is the best way to maximize shareholder value for Glimpse shareholders and increase BLI's chances of success, as its true value and potential are currently 'hidden' and 'encumbered' within the Glimpse umbrella[10](index=10&type=chunk) - If successful, BLI will become an independent, publicly traded 'PURE PLAY' company focused on Spatial Computing, AI-Driven, Cloud Operational Simulation Middleware for DoW and Big Data enterprises[10](index=10&type=chunk) - As part of the process, Glimpse shareholders are planned to be issued shares in the spun-out BLI public entity as a distribution, while retaining their holdings in Glimpse, which is expected to pursue attractive alternatives as a clean, healthy, Nasdaq-listed technology company[10](index=10&type=chunk) [Company Information and Investor Resources](index=3&type=section&id=Company%20Information%20%26%20Investor%20Resources) [Conference Call and Webcast Information](index=3&type=section&id=Fiscal%20Year%202025%20Conference%20Call%20and%20Webcast) The Glimpse Group held a conference call and webcast on September 30, 2025, to discuss its fiscal year 2025 financial results, with replay options available for a limited time - A conference call and webcast for Fiscal Year 2025 results was held on September 30, 2025, at 8:30 a.m. Eastern time[7](index=7&type=chunk) - Replay of the webcast will be available through Wednesday, September 2026, and a teleconference replay through Tuesday, October 15, 2025[8](index=8&type=chunk) [About The Glimpse Group, Inc.](index=4&type=section&id=About%20The%20Glimpse%20Group%2C%20Inc.) The Glimpse Group is a diversified Immersive Technology platform company providing enterprise-focused Immersive Technology, Spatial Computing, and AI-driven software and services, aiming to offer investors a diversified entry into this emerging industry - The Glimpse Group (NASDAQ: VRAR) is a diversified Immersive Technology platform company[12](index=12&type=chunk) - It provides enterprise-focused Immersive Technology, Spatial Computing, and AI-driven software & services[12](index=12&type=chunk) - The company's business model aims to build scale and a robust ecosystem, while offering investors an opportunity to invest directly into the emerging industry via a diversified platform[12](index=12&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) This press release contains forward-looking statements based on current expectations, which are subject to risks and uncertainties, and the company assumes no obligation to update this information - The press release may contain forward-looking statements based on current expectations, forecasts, and assumptions that involve risks and uncertainties[13](index=13&type=chunk) - Actual results may differ materially from those stated or implied due to business risks and uncertainties[13](index=13&type=chunk) - The company assumes no obligation to update the information included in the press release, whether as a result of new information, future events, or otherwise[13](index=13&type=chunk) [Company Contact Information](index=4&type=section&id=Company%20Contact) Contact information for The Glimpse Group's CFO & COO, Maydan Rothblum, is provided for inquiries - Company Contact: Maydan Rothblum, CFO & COO[14](index=14&type=chunk) - Contact details: (917) 292-2685, maydan@theglimpsegroup.com[14](index=14&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=5&type=section&id=THE%20GLIMPSE%20GROUP%2C%20INC.%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, The Glimpse Group significantly increased its cash and cash equivalents, leading to a substantial rise in total assets, while total liabilities decreased, strengthening its stockholders' equity Assets (as of June 30) | Asset Category | 2025 | 2024 | Change | | :-------------------------------- | :------------ | :------------ | :------- | | Cash and cash equivalents | $6,832,725 | $1,848,295 | +270% | | Accounts receivable | $840,551 | $723,032 | +16.26% | | Total current assets | $8,172,657 | $3,520,289 | +132.16% | | Total assets | $19,279,066 | $15,558,603 | +23.91% | Liabilities & Stockholders' Equity (as of June 30) | Liability/Equity Category | 2025 | 2024 | Change | | :-------------------------------- | :------------ | :------------ | :------- | | Total current liabilities | $2,338,472 | $2,427,598 | -3.67% | | Total liabilities | $2,343,176 | $4,020,118 | -41.73% | | Total stockholders' equity | $16,935,890 | $11,538,485 | +46.79% | [Consolidated Statements of Operations](index=6&type=section&id=THE%20GLIMPSE%20GROUP%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For FY25, The Glimpse Group reported a 19.58% increase in total revenue, primarily from software services, and significantly reduced its net loss by 60.08% compared to FY24, driven by lower operating expenses Revenue (For the Years Ended June 30) | Revenue Category | 2025 | 2024 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :------------- | | Software services | $9,996,491 | $8,130,515 | +23% | | Software license/software as a service | $503,734 | $673,684 | -25.23% | | Royalty income | $27,700 | - | N/A | | **Total Revenue** | **$10,527,925** | **$8,804,199** | **+19.58%** | Profitability (For the Years Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----------- | :----------- | :------------- | | Gross profit | $7,119,979 | $5,862,739 | +21.45% | | Total operating expenses | $9,862,313 | $12,478,798 | -20.97% | | Loss from operations before other income | $(2,742,334) | $(6,616,059) | -58.55% | | **Net loss** | **$(2,552,651)** | **$(6,394,295)** | **-60.08%** | Per Share Data (For the Years Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :------------- | | Basic and diluted net loss per share | $(0.13) | $(0.38) | -65.79% | | Weighted-average common shares outstanding | 19,633,374 | 16,681,234 | +17.69% | [Consolidated Statements of Cash Flows](index=7&type=section&id=THE%20GLIMPSE%20GROUP%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The Glimpse Group significantly improved its cash flow from operating activities in FY25, moving from a substantial net cash outflow to near breakeven, primarily due to reduced net loss and various non-cash adjustments, while financing activities provided substantial cash Cash Flows from Operating Activities (For the Year Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :------------- | | Net loss | $(2,552,651) | $(6,394,295) | -60.08% | | Net cash used in operating activities | $(273,774) | $(5,209,847) | -94.74% | Cash Flows from Investing Activities (For the Year Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :------------- | | Cash used in investing activities | $(1,542,508) | $(1,529,442) | +0.85% | Cash Flows from Financing Activities (For the Year Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :------------- | | Net cash provided by financing activities | $6,800,712 | $2,968,501 | +129.03% | Cash and Cash Equivalents (For the Year Ended June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :------------- | | Net change in cash and cash equivalents | $4,984,430 | $(3,770,788) | N/A (turnaround) | | Cash and cash equivalents, end of year | $6,832,725 | $1,848,295 | +270% | [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Note on Non-GAAP Financial Measures](index=4&type=section&id=Note%20about%20Non-GAAP%20Financial%20Measures) Non-GAAP financial measures are presented to provide additional insights into performance but are not a substitute for GAAP measures and may not be comparable to those of other companies - Non-GAAP financial measures are numerical measures of performance, financial position, or cash flows that either exclude or include amounts not normally excluded or included in GAAP[9](index=9&type=chunk) - These measures are not in accordance with, nor a substitute for, GAAP measures and may not be comparable to similarly titled measures presented by other companies[9](index=9&type=chunk)[11](index=11&type=chunk) - The company believes adjusted EBITDA provides useful information to investors by offering a more focused measure of operating results and is an integral part of internal reporting to evaluate operations and management performance[11](index=11&type=chunk) [Adjusted EBITDA Reconciliation](index=8&type=section&id=Adjusted%20EBITDA%20Reconciliation) The Glimpse Group reported a significant reduction in Adjusted EBITDA loss for FY25, improving from $(4.63) million in FY24 to $(0.87) million, reflecting operational improvements and reduced non-cash expenses Adjusted EBITDA Loss (For the Years Ended June 30, in millions) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------- | :----- | :----- | :------------- | | Net loss | $(2.55) | $(6.39) | -60.09% | | EBITDA loss | $(2.04) | $(5.03) | -59.44% | | **Adjusted EBITDA loss** | **$(0.87)** | **$(4.63)** | **-81.21%** | - Key adjustments to reconcile net loss to Adjusted EBITDA loss include depreciation and amortization, stock-based compensation expenses, loss on subsidiary divestiture, gain on lease termination, change in fair value of acquisition contingent consideration, and intangible asset impairment[21](index=21&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Fourth Quarter and Full Fiscal Year 2025 Performance Overview](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Performance) UNFI demonstrated solid performance in the fourth quarter of fiscal year 2025, successfully navigating a cybersecurity incident, achieving above-industry-average sales growth for the full fiscal year, while improving free cash flow and strengthening its financial position Key Financial Data for Fourth Quarter and Full Fiscal Year 2025 | Metric | FY2025 Q4 (13 Weeks) | FY2024 Q4 (14 Weeks) | Percentage Change | FY2025 Full Year (52 Weeks) | FY2024 Full Year (53 Weeks) | Percentage Change | | :------------------------------------- | :----------------------- | :----------------------- | :----------- | :-------------------- | :-------------------- | :----------- | | Net Sales (million USD) | $7,696 | $8,155 | (5.6)% | $31,784 | $30,980 | 2.6 % | | Natural Product Sales (million USD) | $3,998 | $3,943 | 1.4 % | $16,017 | $14,948 | 7.2 % | | Conventional Product Sales (million USD) | $3,414 | $3,917 | (12.8)% | $14,667 | $14,946 | (1.9)% | | Retail Sales (million USD) | $573 | $628 | (8.8)% | $2,342 | $2,436 | (3.9)% | | Net Loss (million USD) | $(87) | $(37) | N/M | $(118) | $(112) | N/M | | Adjusted EBITDA (million USD) | $116 | $143 | (18.9)% | $552 | $518 | 6.6 % | | Diluted Loss Per Share (EPS) | $(1.43) | $(0.63) | N/M | $(1.95) | $(1.89) | N/M | | Adjusted Loss Per Share (Adjusted EPS) | $(0.11) | $0.01 | N/M | $0.71 | $0.14 | 407.1 % | | Net Cash Provided by Operating Activities (million USD) | $160 | $191 | (16.2)% | $470 | $253 | 85.8 % | | Capital Expenditures (million USD) | $(74) | $(120) | (38.3)% | $(231) | $(345) | (33.0)% | | Free Cash Flow (million USD) | $86 | $71 | 21.1 % | $239 | $(92) | N/M | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Sandy Douglas noted the company's solid performance in the fourth quarter of fiscal year 2025, successfully managing a cybersecurity incident and achieving above-industry-average sales growth, with a focus on accelerating momentum in fiscal year 2026 by delivering innovative products, services, and supply chain solutions to drive profitable growth and shareholder value for customers and suppliers - UNFI demonstrated solid performance in the fourth quarter of fiscal year 2025, effectively managing a cybersecurity incident and collaborating with customers and suppliers[3](index=3&type=chunk) - For fiscal year 2025, the company continuously enhanced its value proposition, achieved above-industry-average sales growth, improved efficiency, drove increased free cash flow, and strengthened its financial position[3](index=3&type=chunk) - In fiscal year 2026, the company will focus on accelerating momentum by providing innovative products, programs, services, and comprehensive supply chain solutions to help customers and suppliers achieve profitable growth and shareholder value[4](index=4&type=chunk) [Recent Financial and Operational Summary](index=1&type=section&id=Recent%20Financial%20and%20Operational%20Summary) The company achieved **$7.7 billion** in net sales for the fourth quarter of fiscal year 2025, with comparable 13-week growth of **1.6%**, significantly improved full-year free cash flow, reduced net debt to its lowest level since 2018, and lowered net leverage to **3.3x**, while deploying lean daily management in 28 distribution centers and projecting approximately **20% growth** in median Adjusted EBITDA for fiscal year 2026 - Net sales reached **$7.7 billion**, with comparable 13-week growth of **1.6%**[7](index=7&type=chunk) - Free cash flow for fiscal year 2025 significantly improved, increasing by **$331 million** year-over-year[7](index=7&type=chunk) - Net debt decreased to **$1.83 billion**, the lowest level since 2018, with the net leverage ratio falling **0.7x** from **4.0x** at the end of the prior fiscal year to **3.3x**[7](index=7&type=chunk) - Lean daily management was deployed in **28 distribution centers** in fiscal year 2025, enhancing customer and supplier experience, and improving safety, quality, delivery, and cost efficiency[7](index=7&type=chunk) - The fiscal year 2026 outlook reflects potential business momentum and continued strategic execution, with median Adjusted EBITDA projected to grow approximately **20%** over fiscal year 2025, and nearly **15%** average annual growth over fiscal year 2024 (comparable 52 weeks)[7](index=7&type=chunk) [Fourth Quarter Fiscal Year 2025 Detailed Financial Summary](index=2&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Summary) [Net Sales](index=2&type=section&id=Net%20sales) Net sales for the fourth quarter of fiscal year 2025 were **$7.7 billion**, down from **$8.2 billion** in the fourth quarter of fiscal year 2024, primarily due to an extra week in the prior year, with comparable sales increasing **1.6%** excluding the impact of the additional week - Net sales for the fourth quarter of fiscal year 2025 were **$7.7 billion**, compared to **$8.2 billion** in the fourth quarter of fiscal year 2024[8](index=8&type=chunk) - The fourth quarter of fiscal year 2024 included approximately **$582 million** in sales from an extra week[8](index=8&type=chunk) - Excluding the extra week, sales increased by **1.6%** (comparable 13-week basis)[8](index=8&type=chunk) [Gross Profit](index=2&type=section&id=Gross%20profit) Gross profit for the fourth quarter of fiscal year 2025 was **$1.03 billion**, down from **$1.116 billion** in the fourth quarter of fiscal year 2024, including **$15 million** in cybersecurity incident-related costs and **$7 million** in LIFO income, with gross margin remaining **13.5%** in both quarters after adjusting for these items and the extra week in fiscal year 2024 - Gross profit for the fourth quarter of fiscal year 2025 was **$1.03 billion**, compared to **$1.116 billion** in the fourth quarter of fiscal year 2024[9](index=9&type=chunk) - Gross profit in the fourth quarter of fiscal year 2025 included **$15 million** in cybersecurity incident-related costs and **$7 million** in LIFO income[9](index=9&type=chunk) - Excluding cybersecurity incident costs and LIFO income, gross profit for the fourth quarter of fiscal year 2025 was **$1.038 billion**, representing **13.5%** of net sales, consistent with **$1.022 billion** (representing **13.5%** of net sales) in the fourth quarter of fiscal year 2024 (excluding LIFO income and the extra week)[9](index=9&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20expenses) Operating expenses for the fourth quarter of fiscal year 2025 were **$1.046 billion**, or **13.6%** of net sales, higher than **$1.075 billion** (or **13.2%** of net sales) in the fourth quarter of fiscal year 2024, primarily due to the deleveraging impact of lost sales from the cybersecurity incident on fixed costs and investments in customer service - Operating expenses for the fourth quarter of fiscal year 2025 were **$1.046 billion**, or **13.6%** of net sales[10](index=10&type=chunk) - Operating expenses for the fourth quarter of fiscal year 2024 were **$1.075 billion**, or **13.2%** of net sales[10](index=10&type=chunk) - The increase in operating expenses as a percentage of net sales was due to the deleveraging impact of lost sales from the cybersecurity incident on fixed costs and investments made in customer service during the period[10](index=10&type=chunk) [Interest Expense, Net](index=2&type=section&id=Interest%20expense%2C%20net) Net interest expense for the fourth quarter of fiscal year 2025 was **$36 million**, down from **$50 million** in the fourth quarter of fiscal year 2024, primarily due to a reduction in the average outstanding debt balance and the extra week in the prior year, excluding prepayment and refinancing costs - Net interest expense for the fourth quarter of fiscal year 2025 was **$36 million**, including **$4 million** in costs and fees related to the prepayment of secured term loans[11](index=11&type=chunk) - Net interest expense for the fourth quarter of fiscal year 2024 was **$50 million**, including **$10 million** in costs and fees related to the refinancing of secured term loans[11](index=11&type=chunk) - Excluding prepayment and refinancing costs, the decrease in interest expense was primarily due to a reduction in the average outstanding debt balance and the extra week in the prior year period[11](index=11&type=chunk) [Effective Tax Rate](index=2&type=section&id=Effective%20tax%20rate) The effective tax rate for the fourth quarter of fiscal year 2025 was a **21.1%** benefit on pre-tax loss, compared to a **15.9%** benefit on pre-tax loss in the fourth quarter of fiscal year 2024, with both periods including expenses related to the deductibility of charitable contributions due to tax law changes, and the prior year also including equity compensation - The effective tax rate for the fourth quarter of fiscal year 2025 was a **21.1%** benefit on pre-tax loss[12](index=12&type=chunk) - The effective tax rate for the fourth quarter of fiscal year 2024 was a **15.9%** benefit on pre-tax loss[12](index=12&type=chunk) - The effective tax rate for the fourth quarter of fiscal year 2025 included expenses related to the deductibility of charitable contributions due to tax law changes, while the fourth quarter of fiscal year 2024 included expenses related to equity compensation and charitable contribution deductibility[12](index=12&type=chunk) [Net Loss and EPS](index=2&type=section&id=Net%20loss%20and%20EPS) Net loss for the fourth quarter of fiscal year 2025 worsened to **$87 million**, with diluted loss per share of **$1.43**, compared to a net loss of **$37 million** and diluted loss per share of **$0.63** in the fourth quarter of fiscal year 2024, and adjusted loss per share also declined from **$0.01** to **$0.11** - Net loss for the fourth quarter of fiscal year 2025 was **$87 million**, compared to **$37 million** in the fourth quarter of fiscal year 2024[13](index=13&type=chunk) - Diluted loss per share for the fourth quarter of fiscal year 2025 was **$1.43**, compared to **$0.63** in the fourth quarter of fiscal year 2024[13](index=13&type=chunk) - Adjusted loss per share for the fourth quarter of fiscal year 2025 was **$0.11**, compared to **$0.01** in the fourth quarter of fiscal year 2024[13](index=13&type=chunk) [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for the fourth quarter of fiscal year 2025 was **$116 million**, a decrease from **$143 million** in the fourth quarter of fiscal year 2024 - Adjusted EBITDA for the fourth quarter of fiscal year 2025 was **$116 million**, compared to **$143 million** in the fourth quarter of fiscal year 2024[14](index=14&type=chunk) [Capital Structure and Financing Overview](index=2&type=section&id=Capital%20Structure%20and%20Financing%20Overview) [Free Cash Flow](index=2&type=section&id=Free%20Cash%20Flow) Free cash flow for the fourth quarter of fiscal year 2025 was **$86 million**, an increase from **$71 million** in the fourth quarter of fiscal year 2024, driven by **$160 million** in cash flow from operating activities less **$74 million** in capital expenditures - Free cash flow for the fourth quarter of fiscal year 2025 was **$86 million**, compared to **$71 million** in the fourth quarter of fiscal year 2024[17](index=17&type=chunk) - Free cash flow for the fourth quarter of fiscal year 2025 reflected **$160 million** in cash provided by operating activities less **$74 million** in capital expenditures[17](index=17&type=chunk) [Net Leverage](index=2&type=section&id=Net%20Leverage) As of August 2, 2025, the company's total outstanding debt (net of cash) was **$1.83 billion**, reduced by **$230 million** in fiscal year 2025, with the net debt to Adjusted EBITDA leverage ratio decreasing to **3.3x** from **4.0x** at the end of the prior fiscal year - As of August 2, 2025, total outstanding debt (net of cash) was **$1.83 billion**, reduced by **$230 million** during fiscal year 2025[17](index=17&type=chunk) - As of August 2, 2025, the net debt to Adjusted EBITDA leverage ratio was **3.3x**[17](index=17&type=chunk)[39](index=39&type=chunk) [Liquidity](index=2&type=section&id=Liquidity) As of August 2, 2025, the company's total liquidity was approximately **$1.5 billion**, comprising **$44 million** in cash and approximately **$1.45 billion** in unused availability under its asset-backed lending facility - As of August 2, 2025, total liquidity was approximately **$1.5 billion**[17](index=17&type=chunk) - Liquidity consisted of **$44 million** in cash and approximately **$1.45 billion** in unused availability under the company's asset-backed lending facility[17](index=17&type=chunk) [Fiscal Year 2026 Outlook](index=3&type=section&id=Fiscal%202026%20Outlook) UNFI provided its fiscal year 2026 (52-week) outlook, projecting net sales between **$31.6 billion** and **$32.0 billion**, net income between **$0** and **$50 million**, Adjusted EBITDA between **$630 million** and **$700 million**, adjusted EPS between **$1.50** and **$2.30**, and free cash flow of approximately **$300 million** Fiscal Year 2026 Outlook (as of August 1, 2026, 52 Weeks) | Metric | Range | | :------------------------------------- | :---------------- | | Net Sales (billion USD) | $31.6 - $32.0 | | Net Income (million USD) | $0 - $50 | | EPS | $0.00 - $0.80 | | Adjusted EPS | $1.50 - $2.30 | | Adjusted EBITDA (million USD) | $630 - $700 | | Capital and Cloud Implementation Expenditures (million USD) | ~ $250 | | Free Cash Flow (million USD) | ~ $300 | - The midpoint of the fiscal year 2026 Adjusted EBITDA range reflects approximately **20% growth** over fiscal year 2025 and nearly **15%** average annual growth over fiscal year 2024 (comparable 52 weeks)[7](index=7&type=chunk) [Company Information & Contacts](index=3&type=section&id=Company%20Information%20%26%20Contacts) [Conference Call and Webcast](index=3&type=section&id=Conference%20Call%20and%20Webcast) The company held its fiscal year 2025 fourth quarter and full-year earnings conference call and audio webcast on Tuesday, September 30, 2025, at 8:30 AM ET, accessible to the public via the company's investor relations website or by phone - The company's fiscal year 2025 fourth quarter and full-year earnings conference call and audio webcast was held on Tuesday, September 30, 2025, at 8:30 AM ET[21](index=21&type=chunk) - The webcast (and supplemental materials) is available to the public on a listen-only basis via the investor relations section of the company's website at www.unfi.com, and the conference call can also be accessed by dialing **(800) 715-9871** (conference ID **5462932**)[21](index=21&type=chunk) [About United Natural Foods](index=3&type=section&id=About%20United%20Natural%20Foods) UNFI is North America's leading food wholesaler, supplying a wide range of fresh, branded, and private label products to over 30,000 locations, including natural product supermarkets, independent retailers, conventional supermarket chains, e-commerce platforms, and foodservice customers, while also offering extensive value-added services and specialized marketing to build a better food system for all - UNFI is North America's leading food wholesaler, providing the widest variety of fresh, branded, and private label products to over **30,000 locations** across North America[22](index=22&type=chunk) - Customers served include natural product supermarkets, independent retailers, conventional supermarket chains, e-commerce platforms, and foodservice customers[22](index=22&type=chunk) - The company offers value-added services and specialized marketing, including proprietary technology, data, market insights, and shelf management, to help customers and suppliers grow their businesses and brands[22](index=22&type=chunk) [Investor Contacts](index=3&type=section&id=INVESTOR%20CONTACTS) Contact information for Steve Bloomquist, Vice President of Investor Relations, and Kristyn Farahmand, Chief Strategy Officer, is provided - Vice President, Investor Relations: Steve Bloomquist, Phone: **952-828-4144**, Email: sbloomquist@unfi.com[23](index=23&type=chunk) - Chief Strategy Officer: Kristyn Farahmand, Phone: **612-439-6625**, Email: kristyn.farahmand@unfi.com[23](index=23&type=chunk) [Legal Disclosures](index=4&type=section&id=Legal%20Disclosures) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) Non-historical statements in this press release are 'forward-looking statements' involving risks and uncertainties, where actual results may differ materially, with detailed risks described in the company's SEC filings, including the 'Risk Factors' section of its fiscal year 2024 Form 10-K, and the company undertakes no obligation to update any information - Non-historical statements in this press release regarding the company's business are 'forward-looking statements' involving risks and uncertainties, based on current expectations and management estimates; actual results may differ materially[24](index=24&type=chunk) - Risks and uncertainties that could affect these statements are described in the company's filings with the U.S. Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, including the 'Risk Factors' section of the company's Annual Report on Form 10-K for the fiscal year ended August 3, 2024[24](index=24&type=chunk) - The company undertakes no obligation to update any information in the foregoing reports until the effective date of its future reports as required by applicable law[24](index=24&type=chunk) [Explanation of Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and explains the non-GAAP financial measures used by the company, including Adjusted EBITDA, Adjusted EPS, Adjusted Effective Tax Rate, Free Cash Flow, Net Debt to Adjusted EBITDA Leverage Ratio, and Capital and Cloud Implementation Expenditures, which are intended to supplement GAAP financial information for better period-over-period comparisons and understanding of core business trends, though a full reconciliation for outlook cannot be provided without unreasonable effort - The company included non-GAAP financial measures such as Adjusted EBITDA, Adjusted EPS, Adjusted Effective Tax Rate, Free Cash Flow, Net Debt to Adjusted EBITDA Leverage Ratio, and Capital and Cloud Implementation Expenditures in the press release[25](index=25&type=chunk) - Non-GAAP financial measures are provided to aid in period-over-period comparisons, evaluate the company's business performance, and understand underlying operating performance and core business trends by excluding certain adjustments not expected to recur in the normal course of business or not indicative of actual and estimated operating performance[26](index=26&type=chunk) - The company is unable to provide a full reconciliation of the non-GAAP outlook to the most comparable GAAP measures without unreasonable effort, as the amount of certain adjusting items is difficult to predict[23](index=23&type=chunk) [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) [Consolidated Statements of Operations](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section presents the unaudited consolidated statements of operations for the fourth quarter and full fiscal years ended August 2, 2025, and August 3, 2024, detailing key financial data such as net sales, cost of sales, gross profit, operating expenses, and net loss Consolidated Statements of Operations (million USD, except per share data) | Metric | FY2025 Q4 (13 Weeks) | FY2024 Q4 (14 Weeks) | FY2025 Full Year (52 Weeks) | FY2024 Full Year (53 Weeks) | | :------------------------------------- | :----------------------- | :----------------------- | :-------------------- | :-------------------- | | Net Sales | $7,696 | $8,155 | $31,784 | $30,980 | | Cost of Sales | $6,666 | $7,039 | $27,562 | $26,779 | | Gross Profit | $1,030 | $1,116 | $4,222 | $4,201 | | Operating Expenses | $1,046 | $1,075 | $4,117 | $4,100 | | Operating (Loss) Income | $(78) | $2 | $(31) | $8 | | Loss Before Income Taxes | $(109) | $(44) | $(154) | $(137) | | Net Loss Attributable to United Natural Foods, Inc. | $(87) | $(37) | $(118) | $(112) | | Diluted Loss Per Share | $(1.43) | $(0.63) | $(1.95) | $(1.89) | [Consolidated Balance Sheets](index=7&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) This section provides the unaudited consolidated balance sheets as of August 2, 2025, and August 3, 2024, detailing the composition of assets, liabilities, and stockholders' equity Consolidated Balance Sheets (million USD, except par value) | Metric | August 2, 2025 | August 3, 2024 | | :------------------------------------- | :------------- | :------------- | | **Assets** | | | | Cash and Cash Equivalents | $44 | $40 | | Accounts Receivable, Net | $1,093 | $953 | | Inventories, Net | $2,095 | $2,179 | | Prepaid Expenses and Other Current Assets | $191 | $230 | | Total Current Assets | $3,423 | $3,402 | | Property and Equipment, Net | $1,749 | $1,820 | | Operating Lease Assets | $1,474 | $1,370 | | Goodwill | $19 | $19 | | Intangible Assets, Net | $576 | $649 | | Deferred Income Taxes | $162 | $87 | | Other Long-Term Assets | $192 | $181 | | **Total Assets** | **$7,595** | **$7,528** | | **Liabilities and Stockholders' Equity** | | | | Accounts Payable | $1,875 | $1,688 | | Accrued Expenses and Other Current Liabilities | $319 | $288 | | Accrued Compensation and Benefits | $227 | $197 | | Current Portion of Operating Lease Liabilities | $173 | $181 | | Current Portion of Long-Term Debt and Finance Lease Liabilities | $8 | $11 | | Total Current Liabilities | $2,602 | $2,365 | | Long-Term Debt | $1,859 | $2,081 | | Long-Term Operating Lease Liabilities | $1,400 | $1,263 | | Long-Term Finance Lease Liabilities | $11 | $12 | | Pension and Other Postretirement Benefit Obligations | $14 | $15 | | Other Long-Term Liabilities | $155 | $151 | | **Total Liabilities** | **$6,041** | **$5,887** | | Total Stockholders' Equity Attributable to United Natural Foods, Inc. | $1,551 | $1,641 | | Noncontrolling Interests | $3 | $0 | | **Total Stockholders' Equity** | **$1,554** | **$1,641** | | **Total Liabilities and Stockholders' Equity** | **$7,595** | **$7,528** | [Consolidated Statements of Cash Flows](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section provides the unaudited consolidated statements of cash flows for the full fiscal years ended August 2, 2025, and August 3, 2024, detailing cash flows from operating, investing, and financing activities Consolidated Statements of Cash Flows (million USD) | Metric | FY2025 Full Year (52 Weeks) | FY2024 Full Year (53 Weeks) | | :------------------------------------- | :-------------------- | :-------------------- | | Net Cash Provided by Operating Activities | $470 | $253 | | Net Cash Used in Investing Activities | $(218) | $(342) | | Net Cash (Used in) Provided by Financing Activities | $(248) | $92 | | Net Increase in Cash and Cash Equivalents | $4 | $3 | | Cash and Cash Equivalents at End of Period | $44 | $40 | [Supplemental Non-GAAP Financial Information](index=9&type=section&id=SUPPLEMENTAL%20NON-GAAP%20FINANCIAL%20INFORMATION) [Reconciliation of Net Loss (including noncontrolling interests) to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20loss%20including%20noncontrolling%20interests%20to%20Adjusted%20EBITDA) This section details the reconciliation from GAAP net loss (including noncontrolling interests) to Adjusted EBITDA for the fourth quarter and full fiscal years 2025 and 2024, covering adjustments such as interest expense, taxes, depreciation, amortization, equity compensation, LIFO adjustments, restructuring charges, asset disposal losses, business transformation costs, and cybersecurity incident-related expenses Reconciliation of Net Loss (including noncontrolling interests) to Adjusted EBITDA (million USD) | Metric | FY2025 Q4 (13 Weeks) | FY2024 Q4 (14 Weeks) | FY2025 Full Year (52 Weeks) | FY2024 Full Year (53 Weeks) | | :------------------------------------- | :----------------------- | :----------------------- | :-------------------- | :-------------------- | | Net Loss (including noncontrolling interests) | $(86) | $(37) | $(115) | $(110) | | Less: Net income attributable to noncontrolling interests | $(1) | $0 | $(3) | $(2) | | Interest expense, net | $36 | $50 | $146 | $162 | | Income tax benefit | $(23) | $(7) | $(39) | $(27) | | Depreciation and amortization | $79 | $91 | $321 | $319 | | Share-based compensation | $15 | $11 | $43 | $37 | | LIFO (income) expense | $(7) | $(12) | $(2) | $7 | | Restructuring, acquisition, and integration related expenses | $59 | $19 | $94 | $36 | | Loss on asset disposals and other asset charges | $3 | $20 | $42 | $57 | | Business transformation costs | $7 | $12 | $47 | $52 | | Cybersecurity incident | $26 | $0 | $26 | $0 | | Other adjustments | $13 | $0 | $15 | $4 | | **Adjusted EBITDA** | **$116** | **$143** | **$552** | **$518** | - Fiscal year 2025 restructuring expenses primarily included **$53 million** related to the termination of a supply agreement with an eastern region customer, and costs associated with certain employee severance and outsourcing of certain corporate functions[36](index=36&type=chunk) - Cybersecurity incident-related costs and expenses primarily included mitigation and remediation costs associated with third-party cybersecurity, legal, and governance experts, with **$15 million** recorded in gross profit and **$11 million** in operating expenses[36](index=36&type=chunk) [Reconciliation of Net Loss Attributable to United Natural Foods, Inc. to Adjusted Net (Loss) Income and Adjusted EPS](index=10&type=section&id=Reconciliation%20of%20Net%20loss%20attributable%20to%20United%20Natural%20Foods%2C%20Inc.%20to%20Adjusted%20net%20(loss)%20income%20and%20Adjusted%20EPS) This section provides a reconciliation from GAAP net loss attributable to United Natural Foods, Inc. to adjusted net (loss) income and adjusted EPS for the fourth quarter and full fiscal years 2025 and 2024, calculated by adding specific non-GAAP adjustments and applying the adjusted effective tax rate Reconciliation of Net Loss Attributable to United Natural Foods, Inc. to Adjusted Net (Loss) Income and Adjusted EPS (million USD, except per share amounts) | Metric | FY2025 Q4 (13 Weeks) | FY2024 Q4 (14 Weeks) | FY2025 Full Year (52 Weeks) | FY2024 Full Year (53 Weeks) | | :------------------------------------- | :----------------------- | :----------------------- | :-------------------- | :-------------------- | | Net Loss Attributable to United Natural Foods, Inc. | $(87) | $(37) | $(118) | $(112) | | Restructuring, acquisition, and integration related expenses | $59 | $19 | $94 | $36 | | Loss (gain) on asset disposals and other asset charges (excluding loss on sale of accounts receivable) | $(2) | $15 | $23 | $36 | | LIFO (income) expense | $(7) | $(12) | $(2) | $7 | | Depreciation and interest expense on residual properties | $1 | $2 | $2 | $5 | | Loss on extinguishment of debt | $4 | $10 | $4 | $10 | | Business transformation costs | $7 | $12 | $47 | $52 | | Cybersecurity incident | $26 | $0 | $26 | $0 | | Other adjustments | $13 | $0 | $15 | $4 | | Tax impact of adjustments and adjusted effective tax rate | $(20) | $(8) | $(47) | $(29) | | **Adjusted Net (Loss) Income** | **$(6)** | **$1** | **$44** | **$9** | | Diluted weighted-average shares outstanding | 60.6 | 60.0 | 61.8 | 60.4 | | **Adjusted EPS** | **$(0.11)** | **$0.01** | **$0.71** | **$0.14** | [Calculation of Net Debt to Adjusted EBITDA Leverage Ratio](index=11&type=section&id=Calculation%20of%20net%20debt%20to%20Adjusted%20EBITDA%20leverage%20ratio) This section details the calculation of the net debt to Adjusted EBITDA leverage ratio for fiscal years 2025 and 2024, demonstrating a significant improvement in the leverage ratio Calculation of Net Debt to Adjusted EBITDA Leverage Ratio (million USD, except ratio) | Metric | FY2025 (August 2, 2025) | FY2024 (August 3, 2024) | | :------------------------------------- | :----------------------- | :----------------------- | | Current portion of long-term debt and finance lease liabilities | $8 | $11 | | Long-term debt | $1,859 | $2,081 | | Long-term finance lease liabilities | $11 | $12 | | Less: Cash and cash equivalents | $(44) | $(40) | | Net carrying value of debt and finance lease liabilities | $1,834 | $2,064 | | Adjusted EBITDA | $552 | $518 | | **Adjusted EBITDA Leverage Ratio** | **3.3x** | **4.0x** | [Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow](index=11&type=section&id=Reconciliation%20of%20Net%20cash%20provided%20by%20operating%20activities%20to%20Free%20cash%20flow) This section reconciles net cash provided by operating activities to free cash flow for the fourth quarter and full fiscal years 2025 and 2024, by subtracting capital expenditures from net cash provided by operating activities Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (million USD) | Metric | FY2025 Q4 (13 Weeks) | FY2024 Q4 (14 Weeks) | FY2025 Full Year (52 Weeks) | FY2024 Full Year (53 Weeks) | | :------------------------------------- | :----------------------- | :----------------------- | :-------------------- | :-------------------- | | Net cash provided by operating activities | $160 | $191 | $470 | $253 | | Capital expenditures | $(74) | $(120) | $(231) | $(345) | | **Free Cash Flow** | **$86** | **$71** | **$239** | **$(92)** | [Reconciliation of Capital Expenditures to Capital and Cloud Implementation Expenditures](index=11&type=section&id=Reconciliation%20of%20Payments%20for%20capital%20expenditures%20to%20Capital%20and%20cloud%20implementation%20expenditures) This section reconciles capital expenditures to total capital and cloud implementation expenditures for the fourth quarter and full fiscal years 2025 and 2024, by adding cloud technology implementation expenditures to capital expenditures Reconciliation of Capital Expenditures to Capital and Cloud Implementation Expenditures (million USD) | Metric | FY2025 Q4 (13 Weeks) | FY2024 Q4 (14 Weeks) | FY2025 Full Year (52 Weeks) | FY2024 Full Year (53 Weeks) | | :------------------------------------- | :----------------------- | :----------------------- | :-------------------- | :-------------------- | | Capital expenditures | $74 | $120 | $231 | $345 | | Cloud technology implementation expenditures | $1 | $5 | $7 | $25 | | **Capital and Cloud Implementation Expenditures** | **$75** | **$125** | **$238** | **$370** | [Fiscal Year 2025 Comparable Growth Rates](index=11&type=section&id=Fiscal%202025%20Comparable%20Growth%20Rates) This section provides comparable growth rates for the fourth quarter and full fiscal year 2025, adjusted to exclude the impact of the 53rd week in fiscal year 2024, covering metrics such as net sales and Adjusted EBITDA Fiscal Year 2025 Comparable Growth Rates (million USD) | Metric | FY2025 Q4 (13 Weeks) | FY2024 Q4 (13 Weeks, Comparable) | Comparable 13-Week Percentage Change | FY2025 Full Year (52 Weeks) | FY2024 Full Year (52 Weeks, Comparable) | Comparable 52-Week Percentage Change | | :------------------------------------- | :----------------------- | :----------------------------- | :------------------- | :-------------------- | :----------------------------- | :------------------- | | Net Sales | $7,696 | $7,573 | 1.6 % | $31,784 | $30,398 | 4.6 % | | Natural Products | $3,998 | $3,663 | 9.1 % | $16,017 | $14,668 | 9.2 % | | Conventional Products | $3,414 | $3,637 | (6.1)% | $14,667 | $14,666 | — % | | Retail | $573 | $583 | (1.7)% | $2,342 | $2,391 | (2.0)% | | Eliminations | $(289) | $(310) | (6.8)% | $(1,242) | $(1,327) | (6.4)% | | Adjusted EBITDA | $116 | $133 | (12.8)% | $552 | $508 | 8.7 % | - Comparable 13-week and 52-week percentage changes exclude the estimated contribution from the extra week in fiscal year 2024[45](index=45&type=chunk) [Reconciliation of Actual Fiscal Year 2025 and 2024 U.S. GAAP Effective Tax Rate to Adjusted Effective Tax Rate](index=12&type=section&id=Reconciliation%20of%20actual%202025%20and%202024%20U.S.%20GAAP%20effective%20tax%20rate%20to%20adjusted%20effective%20tax%20rate) This section reconciles the actual U.S. GAAP effective tax rate to the adjusted effective tax rate for fiscal years 2025 and 2024, calculated by adjusting for discrete GAAP items, tax impact of other expenses and adjustments, and changes in valuation allowance Reconciliation of Actual Fiscal Year 2025 and 2024 U.S. GAAP Effective Tax Rate to Adjusted Effective Tax Rate | Metric | FY2025 Actual | FY2024 Actual | | :------------------------------------- | :------------- | :------------- | | U.S. GAAP Effective Tax Rate | 25 % | 20 % | | Quarterly discrete recognition of GAAP items | (1)% | 20 % | | Tax impact of other expenses and adjustments | (13)% | (24)% | | Change in valuation allowance | 5 % | 5 % | | **Adjusted Effective Tax Rate** | **16 %** | **21 %** |

Exhibit 99.1 CYTOMED THERAPEUTICS LIMITED AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INDEX | Page | | | --- | --- | | Unaudited Interim Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Loss for the Six months | | | ended June 30, 2024 and 2025 | 1 | | Unaudited Interim Condensed Consolidated Statements of Financial Positions as of December 31, 2024 and June 30, 2025 | 2 | | Unaudited Interim Condensed Consolidated Statements of Cash Flows for th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to_________ Commission File Number 1-10324 THE INTERGROUP CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 13-3293645 (State or Other Jurisdict ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report_________________ For the transition period from__________to_____ ...

[Special Note Regarding Forward-Looking Statements and Other Information Contained in This Report](index=5&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS%20AND%20OTHER%20INFORMATION%20CONTAINED%20IN%20THIS%20REPORT) This section highlights forward-looking statements, subject to inherent risks and uncertainties, which the company will not update - The report contains forward-looking statements, identifiable by specific terminology such as 'may,' 'will,' 'expects,' 'plans,' 'intends,' 'anticipates,' 'believes,' 'estimates,' 'predicts,' 'potential,' or 'continue'[20](index=20&type=chunk)[22](index=22&type=chunk) - These forward-looking statements are inherently subject to risks and uncertainties, including potential volatility in common share prices, inability to implement business plans, achieve sales and production capacity at scale, or sustain profitability, and challenges in raising additional capital[20](index=20&type=chunk)[24](index=24&type=chunk) - The company does not intend to update or revise these forward-looking statements, whether due to new information, future events, or otherwise[23](index=23&type=chunk) [PART I](index=7&type=section&id=PART%20I) This part covers the company's business, risk factors, properties, legal proceedings, and cybersecurity disclosures [ITEM 1: Business](index=7&type=section&id=ITEM%201%3A%20Business) Damon Inc. develops smart electric motorcycles and personal mobility products with AI, distributes data analytics software, and pursues strategic growth - Damon Inc. was spun off by its former parent company, XTI Aerospace Inc., on **December 27, 2023**, and subsequently completed a business combination with Damon Motors Inc. on **November 13, 2024**, changing its corporate name from Grafiti Holding Inc. to Damon Inc.[12](index=12&type=chunk)[13](index=13&type=chunk) - The company's material business operates through Damon Motors, aiming to commercialize smart, technologically advanced electric motorcycles and other personal mobility products with zero emissions, incorporating connectivity and artificial intelligence[28](index=28&type=chunk)[29](index=29&type=chunk) - Damon Motors' electric motorcycles are currently in the prototype phase of product validation, with core technology advancements in its HyperDrive platform drive unit and HyperSport motorcycle[30](index=30&type=chunk) - Through its wholly-owned subsidiary, Grafiti Limited, Damon distributes data analytics and visualization software products (SAVES) primarily for scientists and engineers in the United Kingdom and certain other European countries[31](index=31&type=chunk) - The corporate strategy focuses on building end-to-end solutions for personal mobility, evaluating strategic opportunities including partnerships with OEMs, providers of complementary technologies and intellectual property, and accretive acquisitions[33](index=33&type=chunk) - The global two-wheel industry is valued at **$127 billion**, with the medium and heavy motorcycle segments, where Damon's core capabilities lie, totaling **$11.2 billion** and growing at a **CAGR of 7.2%** in North America and Europe[36](index=36&type=chunk)[38](index=38&type=chunk) - Damon's competitive strengths include a highly qualified management team, best-in-class strategic partners and suppliers (e.g., Continental, Brembo), a significant head start in applying multiple new technologies, a patent portfolio of **33 national and international patents**, and a planned direct-to-customer distribution model[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - Damon's electric vehicles are built on the proprietary HyperDrive™ platform (**150 kW**, monocoque battery-chassis) for high-performance models (**$20,000-$80,000**) and the smaller, lower-cost HyperLite platform (early design phase) for mass markets[57](index=57&type=chunk)[58](index=58&type=chunk) - Key patented technologies include CoPilot™ (rider assistance and warning system), Shift™ (mechatronically adjustable handlebars and foot pegs), and an AI-enabled cloud platform for collision warning improvements and over-the-air software updates[59](index=59&type=chunk) - Commercial production of Damon's motorcycles is expected to commence after passing various internal and external tests and undergoing a self-certification process for US-bound vehicle homologation, with HyperSport pre-production anticipated by **Q4 FY2026** and HyperFighter concept stage by **Q3-Q4 FY2026**[60](index=60&type=chunk)[61](index=61&type=chunk) - Damon I/O is a Software-as-a-Solution (SaaS) platform designed for motorcycle and personal mobility OEMs and fleet operators, offering real-time diagnostics, over-the-air software updates, predictive maintenance alerts, and branded mobile apps[74](index=74&type=chunk)[75](index=75&type=chunk) - The SAVES business offers a comprehensive suite of data analytics and statistical visualization software, including SigmaPlot, SYSTAT, and the next-generation, platform-independent Sigmaplot NG, with a cloud version anticipated for release later this year[76](index=76&type=chunk) - Damon has partnerships with Auteco Mobility for HyperLite assembly, distribution, and sales in Latin America, and with PT Ilectra Motor Group and PT Solusi Mobilitas Indonesia for similar activities in Indonesia and Southeast Asia[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - The company holds **33 utility patents** (**19 in the United States** and **14 foreign counterparts**) expiring between **2037 and 2043**, and registered trademarks including 'DAMON,' 'HYPERSPORT,' and 'HYPERFIGHTER'[94](index=94&type=chunk) - As of the date of the report, the company has a total of **13 employees and contractors**, with **11 dedicated to the motorcycle business** and **2 supporting the SAVES business**[99](index=99&type=chunk) - Damon's electric vehicles are subject to numerous regulatory requirements, including NHTSA safety standards and EPA emissions standards in the United States, and Type Approval in Europe, with battery packs tested against industry safety standards[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - The company is subject to stringent environmental, health, and safety laws and regulations, particularly concerning hazardous substances like lithium-ion batteries, in the US and EU[110](index=110&type=chunk)[113](index=113&type=chunk)[116](index=116&type=chunk) - Damon's planned direct-to-consumer distribution model faces challenges from state laws regulating vehicle sales and service, potentially limiting its ability to sell directly in certain jurisdictions and exposing it to franchise dealer litigation risks[118](index=118&type=chunk)[119](index=119&type=chunk) - The company collects, uses, and stores customer data, making it subject to various data privacy and cybersecurity laws globally (e.g., CCPA, CPRA, GDPR) and has implemented a cybersecurity program based on the NIST Cybersecurity Framework[121](index=121&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [ITEM 1A: Risk Factors](index=27&type=section&id=ITEM%201A%3A%20Risk%20Factors) This section details significant risks, including early stage, losses, capital needs, production scaling, competition, and internal control weaknesses - The company is an early-stage company with a history of operating losses and an accumulated deficit of **$145,958,256** as of **June 30, 2025**, raising substantial doubt about its ability to continue as a going concern[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - The company's success depends on its ability to economically produce vehicles at scale, create additional revenue from SaaS solutions (Damon I/O), and manage significant capital requirements and operating costs, which remain unproven[159](index=159&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - The company faces risks of significant delays in the design, manufacture, regulatory approval, launch, transportation, and delivery of its motorcycles, and will initially depend on revenue generated from a single model (HyperSport)[157](index=157&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - The motorcycle and personal mobility market is highly competitive, with established internal combustion engine (ICE) manufacturers and new electric vehicle (EV) entrants, many of whom have significantly greater financial and technical resources than Damon[182](index=182&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) - Demand in the motorcycle and personal mobility industry is highly volatile and depends on consumer willingness to adopt electric vehicles, perceptions of quality and safety, availability of charging infrastructure, and government incentives[188](index=188&type=chunk)[189](index=189&type=chunk) - The company is dependent on third-party suppliers, some of which are single or limited sources, and disruptions in supply or cost increases for raw materials (e.g., lithium, nickel, cobalt for batteries) could materially adversely affect its business[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - The company's success depends on its ability to retain and attract qualified management, technical, vehicle engineering, and sales personnel, including key individuals like the CEO and CFO[210](index=210&type=chunk) - Manufacturing in collaboration with partners (e.g., Auteco Mobility, Indika Energy) is subject to risks such as delays, capacity constraints, potential disputes, and maintaining quality standards outside of direct control[222](index=222&type=chunk)[223](index=223&type=chunk) - The company's motorcycles rely on highly technical software and hardware systems that may contain errors, bugs, or vulnerabilities, potentially leading to performance issues, recalls, or reputational damage[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - The electric vehicle industry and its technology are rapidly evolving, and the company may be unable to keep up with changes in electric vehicle technology or compete effectively with alternative fuel technologies or improvements in internal combustion engines[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - The company's vehicles use lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame, posing risks of bodily injury, death, lawsuits, product recalls, and negative public perception[266](index=266&type=chunk) - The assisted driving technology (CoPilot ADAS) in Damon's vehicles is subject to risks, including accidents and fatalities, which could lead to liability, negative publicity, government scrutiny, and further regulation[268](index=268&type=chunk) - The company's patent applications may not result in issued patents, and it may need to defend itself against costly patent or trademark infringement claims from competitors or non-practicing entities, potentially leading to substantial costs or operational disruptions[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) - The SAVES distribution business is dependent on a single licensor (Grafiti LLC), and rapid, significant, or adverse changes in sales terms and conditions could negatively impact the company's financial condition and results of operations[230](index=230&type=chunk)[231](index=231&type=chunk) - The company is subject to numerous environmental, health, safety, anti-corruption (e.g., FCPA, UK Bribery Act), and data privacy laws and regulations (e.g., GDPR) in various jurisdictions, with non-compliance potentially leading to administrative, civil, and criminal penalties, and reputational harm[274](index=274&type=chunk)[276](index=276&type=chunk)[286](index=286&type=chunk)[289](index=289&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) - Ongoing legal proceedings, including civil claims from former CEO Jay Giraud and Andy DeFrancesco, could result in adverse judgments, substantial costs, and diversion of management's time and attention[301](index=301&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk) - The company's common shares were recently delisted from Nasdaq and are currently traded on the OTCID Basic Market, which may adversely affect the market price and liquidity of its shares and limit its ability to raise additional capital[311](index=311&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[334](index=334&type=chunk) - The company has identified material weaknesses in its internal control over financial reporting, which could impair its ability to produce timely and accurate financial statements, adversely affect operating results, share price, and access to capital markets[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) [ITEM 1B: Unresolved Staff Comments](index=71&type=section&id=ITEM%201B%3A%20Unresolved%20Staff%20Comments) As a smaller reporting company, Damon Inc. is not required to provide information on unresolved staff comments - The company is a smaller reporting company and is not required to provide information on unresolved staff comments[342](index=342&type=chunk) [ITEM 1C: Cybersecurity](index=71&type=section&id=ITEM%201C%3A%20Cybersecurity) Damon maintains a NIST CSF and GDPR-based cybersecurity program with Board oversight, acknowledging potential future material incidents - Damon maintains a cybersecurity risk management program integrated into its overall enterprise risk management framework, based on recognized standards and best practices including the NIST Cybersecurity Framework (CSF) and GDPR requirements[343](index=343&type=chunk)[344](index=344&type=chunk) - The program includes annual third-party assessments to identify and prioritize risks, internal policies for information security and incident response, external partnerships for vulnerability testing and data protection, and a structured third-party risk management program[345](index=345&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk) - Oversight of the cybersecurity program rests with the Vice President of IT Operations, supported by third-party specialists, and the Audit Committee of the Board of Directors, with regular briefings and at least annual reviews by the full Board[348](index=348&type=chunk)[349](index=349&type=chunk) - While past cybersecurity incidents have not had a material adverse effect, the company acknowledges that future incidents could have a material impact despite existing safeguards and is committed to continuous enhancement of cybersecurity controls and monitoring capabilities[350](index=350&type=chunk)[351](index=351&type=chunk) - Increasing regulatory requirements regarding cybersecurity, including mandatory incident reporting and disclosure obligations, may subject the company to additional costs, liabilities, or reputational impact[352](index=352&type=chunk) [ITEM 2: Properties](index=72&type=section&id=ITEM%202%3A%20Properties) Damon Motors' principal executive offices are located in Burnaby, British Columbia, Canada, under a 3-year lease - Damon Motors' principal executive offices are located at 4601 Canada Way, Suite 402, Burnaby, British Columbia, Canada[353](index=353&type=chunk) - The company operates its principal executive offices under a **3-year lease** that commenced in **May 2025**[353](index=353&type=chunk) [ITEM 3: Legal Proceedings](index=72&type=section&id=ITEM%203%3A%20Legal%20Proceedings) Damon Inc. is involved in several legal proceedings, including claims from former executives and a landlord, which the company denies - A civil claim was filed on **March 7, 2025**, by former director and CEO Damon Jay Mercredi Giraud, alleging the company failed to honor agreed-upon settlement terms for a listing bonus and backpay following his resignation[355](index=355&type=chunk) - Andy DeFrancesco filed a civil claim on **April 11, 2025**, alleging a verbal agreement for the issuance of **$3.2 million** worth of common shares in exchange for past and future services, which the company has refused to issue[356](index=356&type=chunk) - Moz Holdings Canada Inc. served a notice of civil claim on **September 9, 2025**, alleging Damon Motors Inc. has unpaid rent of **$376,527** for a previously occupied manufacturing facility[357](index=357&type=chunk) - The company denies the allegations of wrongdoing in these legal proceedings and has filed or will file responses to the notices of civil claim[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk) [ITEM 4: Mine Safety Disclosures](index=72&type=section&id=ITEM%204%3A%20Mine%20Safety%20Disclosures) This item is not applicable to Damon Inc. - The company is not required to provide mine safety disclosures[358](index=358&type=chunk) [PART II](index=73&type=section&id=PART%20II) This part details market information, financial condition, management's discussion, and controls and procedures [ITEM 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=73&type=section&id=ITEM%205%3A%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Damon Inc.'s common shares trade on the OTCID Basic Market, with no cash dividends paid or share repurchases in FY2025 - The company's common shares are currently quoted on the OTCID Basic Market under the symbol **'DMNIF'** following its delisting from Nasdaq[360](index=360&type=chunk) - As of the date of this report, there were approximately **442 holders of record** of the company's common shares[360](index=360&type=chunk) - The company has not declared or paid any cash dividends on its common shares and intends to retain future earnings, if any, to finance the expansion of its business[361](index=361&type=chunk)[326](index=326&type=chunk) - During the period covered by this Annual Report on Form 10-K, no equity securities were sold that were not registered under the Securities Act and not previously reported[363](index=363&type=chunk) - The company had no share repurchase activity for the year ended **June 30, 2025**[364](index=364&type=chunk) [ITEM 6: [Reserved]](index=73&type=section&id=ITEM%206%3A%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved and contains no information[365](index=365&type=chunk) [ITEM 7: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=ITEM%207%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Damon Inc. reported FY2025 revenue of $222,736, a net loss of $5.35 million, and a working capital deficiency, raising going concern doubts - Damon Inc. (formerly Grafiti Holding Inc.) completed a business combination with Damon Motors Inc. in **November 2024**, with Damon Motors treated as the accounting acquirer for financial reporting purposes[367](index=367&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - The company's core business involves developing electric motorcycles (HyperDrive and HyperLite platforms) and a Software-as-a-Solution (SaaS) platform called Damon I/O, alongside distributing SAVES software products[368](index=368&type=chunk)[371](index=371&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) Revenue and Gross Profit (FY2025 vs. FY2024) | Metric | FY2025 | FY2024 | | :---------------- | :------- | :------- | | Revenue | $222,736 | $0 | | Cost of Revenue | $107,394 | $0 | | Gross Profit | $115,342 | $0 | | Gross Profit Margin | 52% | N/A | Operating Expenses (FY2025 vs. FY2024) | Expense Category | FY2025 | FY2024 | | :-------------------------- | :--------- | :--------- | | Research and development, net | $3,045,949 | $4,550,229 | | General and administrative | $8,551,784 | $4,296,231 | | Sales and marketing | $667,300 | $986,137 | | Transaction costs | $4,945,436 | $1,626,519 | | Depreciation | $217,443 | $303,424 | | Impairment | $14,119,955 | $0 | - The net loss for the year ended **June 30, 2025**, was **$5,350,662**, a significant decrease from **$33,968,248** in the prior year, primarily due to a **$34,333,573** income from changes in fair value of financial liabilities[394](index=394&type=chunk)[404](index=404&type=chunk)[405](index=405&type=chunk)[407](index=407&type=chunk) Liquidity and Cash Flows (FY2025 vs. FY2024) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Cash | $2,479,283 | $395,580 | | Working Capital Deficiency | $(10,400,000) | N/A | | Cash flows used in operating activities | $(19,634,512) | $(12,869,374) | | Cash flows provided by investing activities | $77,270 | $0 | | Cash flows provided by financing activities | $21,692,469 | $11,195,898 | - The company's expected future losses and a working capital deficiency of approximately **$10.4 million** as of **June 30, 2025**, cast substantial doubt upon its ability to continue as a going concern[408](index=408&type=chunk)[409](index=409&type=chunk) - A non-recurring impairment of goodwill in the amount of **$14,045,955** and an impairment of intangible assets in the amount of **$74,000** were recorded for the year ended **June 30, 2025**, reducing their carrying value to **$nil**[403](index=403&type=chunk)[391](index=391&type=chunk) [ITEM 7A: Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=ITEM%207A%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Damon Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[417](index=417&type=chunk) [ITEM 8: Financial Statements and Supplementary Data](index=82&type=section&id=ITEM%208%3A%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the financial statements and supplementary data included elsewhere in the annual report - The financial statements and supplementary data are presented following Item 15 of this annual report and are included herein by reference[418](index=418&type=chunk) [ITEM 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=83&type=section&id=ITEM%209%3A%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) Marcum LLP resigned as auditor, replaced by CBIZ CPAs P.C., with no disagreements on accounting principles but noted material weaknesses - Marcum LLP resigned as the independent registered public accounting firm on **June 17, 2025**, as a result of CBIZ CPAs P.C. acquiring its attest business[420](index=420&type=chunk) - CBIZ CPAs P.C. was engaged as the company's new independent registered public accounting firm on the same date, **June 17, 2025**[420](index=420&type=chunk) - Marcum LLP's audit report for the fiscal year ended **June 30, 2024**, did not contain an adverse opinion or disclaimer, and was not qualified or modified, except for an explanatory paragraph regarding the company's ability to continue as a going concern[421](index=421&type=chunk) - During Marcum's engagement, there were no disagreements on accounting principles or practices, financial statement disclosure, or auditing scope or procedures[422](index=422&type=chunk) - Material weaknesses in the company's internal control over financial reporting were previously disclosed, relating to ineffective controls over period-end financial disclosure and reporting processes, and a lack of sufficient personnel with requisite U.S. GAAP financial reporting skills[422](index=422&type=chunk) [ITEM 9A: Controls and Procedures](index=83&type=section&id=ITEM%209A%3A%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were ineffective due to identified material weaknesses - As of **June 30, 2025**, the chief executive officer and chief financial officer concluded that the company's disclosure controls and procedures were not effective[425](index=425&type=chunk) - Management concluded that the company's internal control over financial reporting was not effective as of **June 30, 2025**, due to identified material weaknesses[426](index=426&type=chunk) - Material weaknesses identified include a lack of adequate controls for identifying and accounting for material contracts/agreements, and information technology deficiencies in the design, implementation, and operation of controls over program change management and vendor management[430](index=430&type=chunk) - Remediation plans include educating control owners, developing documentation, enhancing controls related to financial reporting systems, performing in-depth access analysis, and implementing additional levels of internal review of financial statements[427](index=427&type=chunk) - The material weaknesses will not be considered remediated until the remediation efforts are fully concluded and the controls are operating effectively, with no assurance that all errors or fraud will be prevented or detected[427](index=427&type=chunk)[428](index=428&type=chunk) [ITEM 9B: Other Information](index=85&type=section&id=ITEM%209B%3A%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q4 FY2025 - None of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended **June 30, 2025**[432](index=432&type=chunk) [ITEM 9C: Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=85&type=section&id=ITEM%209C%3A%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to Damon Inc. - This item is not applicable to the company[433](index=433&type=chunk) [PART III](index=86&type=section&id=PART%20III) This part covers directors, executive compensation, security ownership, related party transactions, and accounting fees [ITEM 10: Directors, Executive Officers and Corporate Governance](index=86&type=section&id=ITEM%2010%3A%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The Board consists of five members, including independent directors, with established committees and a Code of Business Conduct and Ethics Directors and Executive Officers | Name | Age | Position | | :-------------------- | :-- | :--------------------------------- | | Dominique Kwong | 50 | Chief Executive Officer and Director | | Baljinder Kaur Bhullar | 56 | Chief Financial Officer and Director | | Karan Sodhi | 33 | Director | | Shashi Tripathi | 48 | Chairman of the Board | | Melanie Figueroa | 43 | Director | - Karan Sodhi and Shashi Tripathi are determined to be independent directors in accordance with Nasdaq listing requirements[446](index=446&type=chunk) - The Board has established an Audit Committee (chaired by Karan Sodhi, an 'audit committee financial expert'), a Compensation Committee (chaired by Shashi Tripathi), and a Nominating and Corporate Governance Committee (chaired by Shashi Tripathi)[448](index=448&type=chunk)[449](index=449&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk) - The Board is responsible for the oversight of the company's risk management processes, with committees regularly discussing major risk exposures and mitigation strategies with management[458](index=458&type=chunk)[459](index=459&type=chunk) - The company adopted a written Code of Business Conduct and Ethics that applies to its directors, officers, and employees, and an Insider Trading Policy prohibiting hedging activities and holding securities in margin accounts[463](index=463&type=chunk)[467](index=467&type=chunk) - The company qualifies as a 'foreign private issuer' and, while voluntarily filing U.S. domestic issuer forms, avails itself of exemptions from certain Exchange Act provisions, including proxy rules, Regulation FD, and Section 16 reporting and short-swing profit recovery[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk) [ITEM 11: Executive Compensation](index=92&type=section&id=ITEM%2011%3A%20Executive%20Compensation) This section details compensation for NEOs and directors, new executive employment agreements, and the Stock Incentive Plan Summary Compensation Table (FY2025 vs. FY2024) | Name and Principal Position | Year | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) | | :-------------------------- | :--- | :--------- | :-------- | :------------------------- | :-------- | | Dominique Kwong, CEO | 2025 | 107,159 | - | - | 107,159 | | | 2024 | - | - | - | - | | Baljinder Bhullar, CFO | 2025 | 312,948 | 1,000,000 | - | 1,312,948 | | | 2024 | 121,473 | - | - | 121,473 | | Nadir Ali, Former CEO | 2025 | 325,000 | - | 400,000 | 725,000 | | | 2024 | - | - | 45,000 | 264,627 | | Damon Jay Giraud, Former CEO | 2025 | 140,739 | - | 137,454 | 278,193 | | | 2024 | 270,188 | - | 7 | 270,195 | | Derek Dorresteyn, Former CTO | 2025 | 162,500 | - | 144,231 | 306,731 | | | 2024 | 234,163 | - | 7 | 234,170 | - New executive employment agreements for CEO Dominique Kwong and CFO Baljinder Bhullar, effective **July 16, 2025**, include monthly salaries (**CAD$39,947** for Kwong, **CAD$37,035.75** for Bhullar), potential yearly cash bonuses up to **100% of salary**, short-term incentive payments, and equity awards (stock options and RSUs)[474](index=474&type=chunk)[476](index=476&type=chunk)[481](index=481&type=chunk)[483](index=483&type=chunk) - Termination provisions in the Kwong and Bhullar agreements include severance payments (up to **18 months of salary**), benefits extension, and options extension, depending on the reason for termination[477](index=477&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk)[480](index=480&type=chunk)[484](index=484&type=chunk)[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk) - Nadir Ali's consulting agreement includes a **$325,000 fee** upon Business Combination closing and a monthly fee of **$54,167** for **six months**, with payment continuing if terminated without cause during this period[488](index=488&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk)[491](index=491&type=chunk) - Melanie Figueroa's consulting agreement includes a **$175,000 fee** upon Business Combination closing and a monthly fee of **$29,167** for **six months**, with similar termination provisions[551](index=551&type=chunk)[552](index=552&type=chunk) - The Stock Incentive Plan, adopted **June 11, 2024**, provides flexibility to grant equity-based incentive awards (Options, RSUs, Restricted Shares, PSUs, DSUs) to attract, retain, and motivate qualified directors, employees, and consultants[511](index=511&type=chunk)[512](index=512&type=chunk)[520](index=520&type=chunk) Securities Authorized for Issuance under Equity Compensation Plans (as of June 30, 2025) | Plan Category | Number of securities to be issued upon exercise of outstanding options (a) | Weighted average exercise price of outstanding options (b) | Number of securities remaining available for future issuance (c) | | :------------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------------- | | Equity compensation plans approved by security holders | 5,781 | $186.74 | 13,282,097 | | Equity compensation plans not approved by security holders | - | - | - | | Total | 5,781 | $186.74 | 13,282,097 | - The maximum aggregate number of common shares that may be issued pursuant to awards granted under the Stock Incentive Plan is initially **10,000,000**, with automatic annual increases, but not exceeding **40,000,000 shares** over the term[514](index=514&type=chunk) - The Plan Administrator (Compensation Committee) determines eligibility, grant timing, conditions, number of shares, exercise price, and restrictions for awards, and has the authority to interpret the plan and adopt related rules[516](index=516&type=chunk)[517](index=517&type=chunk) - The company has an anti-hedging policy that restricts participants from purchasing financial instruments designed to hedge or offset a decrease in the market value of awards granted to them[543](index=543&type=chunk) Director Compensation (FY2025) | Name | Fees Earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Non-equity Incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | :---------------------- | :------------------------------ | :--------------- | :---------------- | :----------------------------------------- | :-------------------------------------------- | :------------------------- | :-------- | | Karan Sodhi | 39,796 | - | - | - | - | - | 39,796 | | Shashi Tripathi | 52,500 | - | - | - | - | - | 52,500 | | Melanie Figueroa | 227,500 | - | - | 175,000 | - | - | 402,500 | [ITEM 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=ITEM%2012%3A%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides beneficial ownership information for executives, directors, and major shareholders as of September 29, 2025 Beneficial Ownership of Common Shares (as of September 29, 2025) | Name of Beneficial Owner | Amount and nature of beneficial ownership | Percent of Class | | :------------------------------------------ | :---------------------------------------- | :--------------- | | Dominique Kwong | 5,991 | * | | Baljinder Bhullar | - | - | | Karan Sodhi | - | - | | Shashi Tripathi | 529 | * | | Melanie Figueroa | 2,538 | * | | All current executive officers and directors as a group (5 persons) | 9,058 | * | | Nadir Ali - former chief executive officer | 1,138 | * | | Jay Giraud - former chief executive officer | 11,129 | * | | Derek Dorresteyn – former chief technology officer | - | - | | Streeterville Capital LLC | 1,958,421 | 9.99% | | Maxim Partners LLC | 985,876 | 5.03% | - As of **September 29, 2025**, there were **19,603,815 shares** of the registrant's common shares outstanding[6](index=6&type=chunk)[557](index=557&type=chunk) - Streeterville Capital LLC's current ownership is capped at **9.99%** under various agreements, despite having rights to convert a promissory note into up to approximately **52,615,320 common shares**[557](index=557&type=chunk)[558](index=558&type=chunk)[336](index=336&type=chunk) [ITEM 13: Certain Relationships and Related Transactions, and Director Independence](index=111&type=section&id=ITEM%2013%3A%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section outlines related party transactions, including agreements with Grafiti LLC, spin-off related agreements, and former executive arrangements - Grafiti Limited, a wholly-owned subsidiary, has a Distributor Agreement and an Administrative Support Service Agreement with Grafiti LLC, an entity controlled by Nadir Ali, the company's former Chief Executive Officer[560](index=560&type=chunk)[561](index=561&type=chunk) - The company entered into a Separation and Distribution Agreement and a Liquidating Trust Agreement in connection with its spin-off from XTI Aerospace Inc. and the subsequent distribution of shares to participating Parent securityholders[562](index=562&type=chunk)[564](index=564&type=chunk) - Consulting agreements were in place with Melanie Figueroa (director) and Wendy Loundermon (who owned more than **5%** of outstanding common shares prior to the Business Combination) for advisory services, with specified monthly fees and payments upon the Business Combination closing[565](index=565&type=chunk)[566](index=566&type=chunk)[567](index=567&type=chunk) - Former CEO Jay Giraud was issued **1,391,181 multiple voting shares** at the Business Combination closing, subject to a Coattail Agreement and Founder Agreement, which were converted to common shares upon his resignation on **December 4, 2024**[568](index=568&type=chunk)[569](index=569&type=chunk)[574](index=574&type=chunk)[575](index=575&type=chunk) - The company's Articles contain provisions limiting the liability of directors and provide for indemnification of directors and officers to the fullest extent permitted by British Columbia law, supplemented by individual indemnification agreements[578](index=578&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) [ITEM 14: Principal Accounting Fees and Services](index=114&type=section&id=ITEM%2014%3A%20Principal%20Accounting%20Fees%20and%20Services) This section details audit fees paid to CBIZ CPAs P.C. and Marcum LLP for FY2025 and FY2024, with Audit Committee pre-approval Principal Accountant Fees and Services (FY2025 vs. FY2024) | Fee Type | 2025 | 2024 | | :--------------- | :------- | :------- | | Audit Fees | $691,798 | $297,670 | | Audit Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | - Audit fees increased from **$297,670** in fiscal year **2024** to **$691,798** in fiscal year **2025**, covering professional services for annual audits and quarterly reviews[580](index=580&type=chunk) - The Audit Committee is responsible for reviewing and approving in advance the retention of independent auditors for all audit and lawfully permitted non-audit services and their associated fees[582](index=582&type=chunk) [PART IV](index=115&type=section&id=PART%20IV) This part lists exhibits and financial statement schedules, and addresses the Form 10-K Summary [ITEM 15: Exhibits, Financial Statement Schedules](index=115&type=section&id=ITEM%2015%3A%20Exhibits%2C%20Financial%20Statement%20Schedules) This item lists financial statements and provides an index of exhibits, omitting schedules not applicable or included elsewhere - The financial statements filed as part of this report are listed and indexed in the table of contents[584](index=584&type=chunk) - Financial statement schedules have been omitted because they are not applicable or the required information has been included elsewhere in this report[585](index=585&type=chunk) - An Exhibit Index is provided, listing exhibits including management contracts and compensation plans, as required by Item 15(a)(3) of Form 10-K[586](index=586&type=chunk)[590](index=590&type=chunk) [ITEM 16: Form 10-K Summary](index=115&type=section&id=ITEM%2016%3A%20Form%2010-K%20Summary) This item is not applicable to Damon Inc. - This item is not applicable to the company[587](index=587&type=chunk) [SIGNATURE](index=121&type=section&id=SIGNATURE) The report is signed by the CEO, CFO, and directors, who also appoint attorneys-in-fact for amendments - The report is signed on **September 29, 2025**, by Dominique Kwong (Chief Executive Officer and Director), Baljinder Bhullar (Chief Financial Officer), Karan Sodhi (Director), Shashi Tripathi (Chairman of the Board), and Melanie Figueroa (Director)[600](index=600&type=chunk)[601](index=601&type=chunk) - Each signatory appoints Dominique Kwong and Baljinder Bhullar as true and lawful attorneys-in-fact and agents for signing and filing any amendments to this Annual Report on Form 10-K and related documents with the Securities and Exchange Commission[600](index=600&type=chunk)

[PART I](index=4&type=section&id=PART%20I) [Item 1. Business](index=5&type=section&id=Item%201.%20Business) The Glimpse Group, Inc. is an immersive technology company specializing in enterprise-focused VR, AR, and Spatial Computing software and services. In fiscal year 2024, the company strategically shifted its focus to Spatial Computing, Cloud, and AI-driven solutions, particularly with its 'Spatial Core' product. The company operates an ecosystem of entities targeting diverse industry verticals, aiming for competitive advantages through collaboration and shared infrastructure. Key developments in FY2025 included the divestiture of QReal, a registered direct offering raising $6.79 million, and a new $2+ million SpatialCore contract - The Glimpse Group, Inc. is an Immersive technology company providing enterprise-focused Virtual Reality (VR), Augmented Reality (AR), and Spatial Computing software and services[13](index=13&type=chunk) - In fiscal year 2024, the company shifted its business focus (Strategic Shift) to immersive technology solutions primarily driven by Spatial Computing, Cloud, and Artificial Intelligence (AI), including its 'Spatial Core' product[16](index=16&type=chunk) - The company's ecosystem comprises several entities targeting different industry segments in a non-competitive, collaborative manner, sharing operational, financial, and intellectual property infrastructure[17](index=17&type=chunk)[18](index=18&type=chunk) - Key business developments in FY2025 included the divestiture of QReal, a registered direct offering that realized net proceeds of **$6.79 million**, and a new **$2+ million SpatialCore contract**[23](index=23&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) Customer Revenue Concentration (FY2025 vs. FY2024) | Fiscal Year | Top 2 Customers Revenue Share | Top 5 Customers Revenue Share | | :---------- | :----------------------------- | :---------------------------- | | 2025 | 61% (40%, 21%) | 76% | | 2024 | 38% (23%, 15%) | 53% | [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) Investing in The Glimpse Group involves significant risks due to its early-stage nature in an emerging industry. Key risks include a history of net losses and potential future losses, the need for additional capital, intense and dynamic market competition, customer concentration, and the ability to attract and retain customers. The company also faces challenges in ongoing R&D, anticipating technological changes, and managing its decentralized entity structure. Intellectual property protection, cybersecurity threats, and stock price volatility are also material risks. As an 'emerging growth company' and 'smaller reporting company,' it benefits from reduced reporting requirements, but this may affect investor attractiveness - The company is an early-stage technology development company operating in an emerging industry, subject to associated risks[59](index=59&type=chunk) - The company has incurred significant net losses since inception (**$2.6 million in FY2025**, **$6.4 million in FY2024**) and may continue to do so, with an accumulated deficit of approximately **$65.6 million** as of June 30, 2025[60](index=60&type=chunk) - Future growth depends on the ability to attract and retain customers in a competitive and dynamic market, requiring ongoing R&D and adaptation to rapid technological changes[68](index=68&type=chunk)[69](index=69&type=chunk)[71](index=71&type=chunk) - Significant customer concentration exists, with the top five customers accounting for **76% of revenues in FY2025**, posing a risk if these relationships decline[67](index=67&type=chunk) - The company faces risks related to its acquisition strategy, intellectual property protection, potential stock price volatility, and the significant costs and management time associated with operating as a public company[97](index=97&type=chunk)[103](index=103&type=chunk)[118](index=118&type=chunk)[124](index=124&type=chunk) [Item 1B. Unresolved Staff Comments](index=27&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments applicable to the company - Not applicable[133](index=133&type=chunk) [Item 1C. Cybersecurity](index=27&type=section&id=Item%201C.%20Cybersecurity) The company has a cybersecurity risk management program led by its Director of Information Technology, guided by the NIST Cybersecurity Framework. The program includes risk assessments, security controls, external service providers, employee training, and an incident response plan. The board of directors oversees cybersecurity risks, receiving reports from the Director of Information Technology. As of the report date, no cybersecurity threats are believed to have materially affected the company, though future incidents remain a risk - The company's cybersecurity risk management program is led by the Director of Information Technology and is based on industry frameworks like the NIST Cybersecurity Framework[134](index=134&type=chunk)[135](index=135&type=chunk) - The program includes risk assessments, security controls, external service provider engagement, employee training, and an incident response plan[136](index=136&type=chunk) - The board of directors has primary responsibility for cybersecurity oversight, receiving reports from the Director of Information Technology, with the Audit Committee annually reviewing security policies and internal controls[140](index=140&type=chunk)[141](index=141&type=chunk) - As of the report date, the company does not believe any cybersecurity threats have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[138](index=138&type=chunk) [Item 2. Properties](index=28&type=section&id=Item%202.%20Properties) The Glimpse Group maintains leased offices in New York, New York (lease expiring December 31, 2025), Ashburn, Virginia (for BLI operations, expiring April 2026, expected to renew), and Richardson, Texas (nominal lease expiring November 2026). Current facilities are deemed adequate for ongoing needs, with potential for additional facilities if expansion occurs - The company's headquarters in New York, NY, has a lease expiring December 31, 2025, with renewal status undetermined[143](index=143&type=chunk) - Other leased properties include an office in Ashburn, VA, for Brightline Interactive, LLC (BLI) operations, expiring April 2026 (expected to renew), and a nominal lease in Richardson, TX, expiring November 2026[144](index=144&type=chunk) - Current leased facilities are considered adequate for present and future needs, with potential for additional facilities if geographical expansion requires it[144](index=144&type=chunk) [Item 3. Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations. However, litigation, regardless of outcome, can negatively impact the company due to costs and diversion of management resources - The company is not currently a party to or aware of any legal proceedings that are believed to have a material adverse effect on its business, financial condition, or results of operations[145](index=145&type=chunk) - Litigation, regardless of outcome, can have an adverse impact due to defense and settlement costs, and diversion of management resources[145](index=145&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Not applicable[146](index=146&type=chunk) [PART II](index=29&type=section&id=PART%20II) [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the Nasdaq Capital Market under 'VRAR'. As of September 22, 2025, there were 100 holders of record. The company reported recent sales of unregistered securities for compensation and vendor expenses totaling $14,218 for 11,750 shares in Q4 FY2025. No equity securities were purchased by the issuer or affiliates. The company has never paid cash dividends and intends to retain earnings for business development, but has a discretionary policy to distribute a majority of net proceeds from significant entity sales (over $10 million) or 10% of consolidated net income, subject to board approval and certain conditions - The company's common stock is traded on the Nasdaq Capital Market under the symbol 'VRAR' since July 1, 2021[148](index=148&type=chunk) - As of September 22, 2025, there were **100 holders of record** for the common stock[149](index=149&type=chunk) Recent Sales of Unregistered Securities (Q4 FY2025) | Category | Number of Shares | Value of Shares ($) | | :----------------------- | :--------------- | :------------------ | | Compensation and vendor expense | 11,750 | 14,218 | | Total | 11,750 | 14,218 | - The company has never declared or paid cash dividends and intends to retain all available funds and future earnings for business development[153](index=153&type=chunk) - A discretionary dividend policy allows for distribution of no less than **85%** of after-tax net proceeds from the sale of an entity's business (if over **$10 million**) or **10%** of consolidated net income, subject to board approval and specific conditions[154](index=154&type=chunk)[155](index=155&type=chunk) [Item 6. [Reserved]](index=31&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the fiscal years ended June 30, 2025 and 2024. The Glimpse Group, an immersive technology company, strategically shifted its focus to Spatial Computing, Cloud, and AI-driven solutions in FY2024. The company reported a 20% increase in total revenue to $10.53 million in FY2025, primarily from new Spatial Core customers, and a significant improvement in net loss from $6.39 million in FY2024 to $2.55 million in FY2025. Operating expenses decreased by 21%, driven by the strategic shift and divestitures. Liquidity improved significantly, with cash and cash equivalents increasing to $6.83 million by June 30, 2025, supported by a $6.79 million net proceeds from a securities purchase agreement [Company Overview](index=31&type=section&id=Company%20Overview) The Glimpse Group is an immersive technology company focused on enterprise Virtual Reality (VR), Augmented Reality (AR), and Spatial Computing software and services. It operates an ecosystem of entities to simplify industry challenges, achieve scale, and provide diversified investment opportunities. In fiscal year 2024, the company underwent a strategic shift to focus on Spatial Computing, Cloud, and AI-driven solutions, particularly its 'Spatial Core' product, targeting B2B and B2B2C segments across various industry verticals - The Glimpse Group is an Immersive technology company providing enterprise-focused VR, AR, and Spatial Computing software and services[159](index=159&type=chunk) - The company's ecosystem model aims to simplify challenges in the emerging Immersive technology industry, create scale, build operational efficiencies, and enhance go-to-market synergies[160](index=160&type=chunk) - In fiscal year 2024, the company shifted its business focus to immersive technology solutions primarily driven by Spatial Computing, Cloud, and AI, including its 'Spatial Core' product[162](index=162&type=chunk) - The company targets a wide array of industry verticals and focuses primarily on B2B and B2B2C segments, remaining hardware agnostic[161](index=161&type=chunk) [Critical Accounting Policies and Estimates and Recent Accounting Pronouncements](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates%20and%20Recent%20Accounting%20Pronouncements) The company's financial statements are prepared under GAAP, requiring significant management estimates for areas like allowance for doubtful accounts, stock options, revenue recognition, business combinations, and impairment of assets. Key policies include consolidating wholly-owned entities, recording acquired assets and liabilities at fair value, amortizing intangible assets over their useful lives, and testing goodwill for impairment annually. Revenue is recognized when performance obligations are satisfied, disaggregated into Software Services, Software License/SaaS, and Royalty Income. Stock-based compensation is expensed based on grant date fair values, and R&D costs are expensed as incurred. The company is evaluating ASU 2023-09 for income tax disclosure improvements, effective July 1, 2025 - Consolidated financial statements are prepared in accordance with GAAP, requiring estimates for valuation of allowance for doubtful accounts, stock options, revenue recognition, business combinations, contingent consideration, fair value of intangible assets, and goodwill impairment[164](index=164&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - Goodwill is tested annually for impairment, and intangible assets are amortized using the straight-line method over their estimated useful lives[170](index=170&type=chunk)[171](index=171&type=chunk) - Revenue is disaggregated into Software Services, Software License/SaaS, and Royalty Income, recognized when performance obligations are satisfied and collection is reasonably assured[178](index=178&type=chunk)[179](index=179&type=chunk)[184](index=184&type=chunk) - Employee stock-based compensation is recognized based on grant date fair values using the Black-Scholes Merton method and amortized over the requisite period[189](index=189&type=chunk)[190](index=190&type=chunk) - Research and development expenses are expensed as incurred due to the emerging industry and uncertain market environment[191](index=191&type=chunk) - The company is evaluating ASU 2023-09, effective July 1, 2025, for improvements to income tax disclosures[193](index=193&type=chunk) [Highlights](index=36&type=section&id=Highlights) The Glimpse Group reported a 20% increase in total revenue to $10.53 million in FY2025, primarily driven by new Spatial Core customers, despite a decrease in Software License revenue due to the QReal divestiture. Gross profit margin improved to 68%. Total operating expenses decreased by 21% to $9.86 million, largely due to reductions in R&D, G&A, and S&M expenses following the strategic shift and divestitures, and a significant decrease in amortization and impairment charges. The net loss improved by 60% to $2.55 million in FY2025 Summary P&L (in millions) | Metric | FY2025 ($) | FY2024 ($) | Change ($) | Change (%) | | :------------------------- | :--------- | :--------- | :--------- | :--------- | | Revenue | 10.53 | 8.80 | 1.73 | 20% | | Cost of Goods Sold | 3.41 | 2.94 | 0.47 | 16% | | Gross Profit | 7.12 | 5.86 | 1.26 | 22% | | Total Operating Expenses | 9.86 | 12.47 | (2.61) | -21% | | Loss from Operations | (2.74) | (6.61) | 3.87 | 59% | | Other Income | 0.19 | 0.22 | (0.03) | -14% | | Net Loss | (2.55) | (6.39) | 3.84 | 60% | Revenue Breakdown (in millions) | Revenue Category | FY2025 ($) | FY2024 ($) | Change ($) | Change (%) | | :---------------------------- | :--------- | :--------- | :--------- | :--------- | | Software Services | 10.00 | 8.13 | 1.87 | 23% | | Software License/SaaS | 0.51 | 0.67 | (0.16) | -24% | | Royalty Income | 0.02 | - | 0.02 | 100% | | **Total Revenue** | **10.53** | **8.80** | **1.73** | **20%** | - Gross profit margin increased by **1% to 68%** in FY2025, reflecting increased margin on Spatial Core revenue due to less reliance on third-party vendors[199](index=199&type=chunk) Operating Expenses (in millions) | Expense Category | FY2025 ($) | FY2024 ($) | Change ($) | Change (%) | | :---------------------------------------- | :--------- | :--------- | :--------- | :--------- | | Research and development expenses | 3.49 | 5.45 | (1.96) | -36% | | General and administrative expenses | 3.64 | 4.29 | (0.65) | -15% | | Sales and marketing expenses | 2.20 | 2.82 | (0.62) | -22% | | Amortization of acquisition intangible assets | 0.43 | 1.24 | (0.81) | -65% | | Goodwill impairment | - | 0.38 | (0.38) | -100% | | Intangible asset impairment | - | 2.56 | (2.56) | -100% | | Change in fair value of acquisition contingent consideration | 0.10 | (4.27) | 4.37 | -102% | | **Total Operating Expenses** | **9.86** | **12.47** | **(2.61)** | **-21%** | - Net loss improved by approximately **$3.84 million (60%)** in FY2025, driven by increased revenue/gross profit and expense reductions from the Strategic Shift and divestitures[209](index=209&type=chunk) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures, specifically Adjusted EBITDA, to evaluate operating performance and facilitate period-to-period comparisons by excluding non-operational items. Adjusted EBITDA loss significantly improved to $0.87 million in FY2025 from $4.63 million in FY2024, reflecting increased revenue, gross profit, and expense reductions from the strategic shift and divestitures - Adjusted EBITDA is a non-GAAP financial measure used by management to evaluate core operating results by removing the impact of non-operational items[210](index=210&type=chunk)[212](index=212&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA Loss (in millions) | Metric | FY2025 ($) | FY2024 ($) | | :-------------------------------------------- | :--------- | :--------- | | Net loss | (2.55) | (6.39) | | Depreciation and amortization | 0.51 | 1.36 | | **EBITDA loss** | **(2.04)** | **(5.03)** | | Stock based compensation expenses | 0.99 | 2.28 | | Loss on subsidiary divestiture | 0.11 | - | | Gain on lease termination | (0.03) | - | | Change in fair value of acquisition contingent consideration | 0.10 | (4.27) | | Intangible asset impairment | - | 2.94 | | Change in fair value of accrued performance bonus | - | (0.55) | | **Adjusted EBITDA loss** | **(0.87)** | **(4.63)** | - Adjusted EBITDA loss improved from **$4.63 million in FY2024 to $0.87 million in FY2025**, driven by increased revenue/gross profit and expense reductions from the Strategic Shift and divestitures[215](index=215&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly improved in FY2025, with net cash used in operating activities decreasing by 95% to $0.27 million. Net cash provided by financing activities increased by 129% to $6.80 million, primarily from a securities purchase agreement. Cash and cash equivalents at year-end increased by 271% to $6.83 million. The company believes it is sufficiently funded for its operational plan beyond the next 12 months, with no outstanding debt or preferred stock as of June 30, 2025 Cash Flow Summary (in millions) | Cash Flow Category | FY2025 ($) | FY2024 ($) | Change ($) | Change (%) | | :-------------------------------------- | :--------- | :--------- | :--------- | :--------- | | Net cash used in operating activities | (0.27) | (5.21) | 4.94 | 95% | | Net cash used in investing activities | (1.54) | (1.53) | (0.01) | -1% | | Net cash provided by financing activities | 6.80 | 2.97 | 3.83 | 129% | | Net increase (decrease) in cash and cash equivalents | 4.99 | (3.77) | 8.76 | NA | | Cash and cash equivalents, end of year | 6.83 | 1.84 | 4.99 | 271% | - The significant improvement in net cash used in operating activities is driven by increased revenue/gross profit and expense reductions from the Strategic Shift and divestitures[217](index=217&type=chunk) - Financing activities in FY2025 were primarily boosted by **$6.80 million** in net proceeds from a securities purchase agreement[219](index=219&type=chunk) - As of June 30, 2025, the company had **$6.83 million** in cash and cash equivalents, no outstanding debt obligations, and no issued preferred stock[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - The company believes it is sufficiently funded to meet its operational plan and future obligations beyond the next 12 months[338](index=338&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=41&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) The Glimpse Group is classified as an 'emerging growth company' and a 'smaller reporting company,' allowing it to take advantage of reduced reporting and disclosure requirements. This includes exemptions from auditor attestation for internal controls, reduced executive compensation disclosures, and an extended transition period for new accounting standards. While these exemptions reduce compliance costs, they may make the common stock less attractive to some investors, potentially affecting trading market activity and stock price volatility - The company is an 'emerging growth company' and 'smaller reporting company,' benefiting from reduced reporting and disclosure requirements under the JOBS Act[223](index=223&type=chunk)[226](index=226&type=chunk) - Exemptions include auditor attestation for internal controls, reduced executive compensation disclosures, and an extended transition period for new accounting standards[223](index=223&type=chunk)[224](index=224&type=chunk) - The company has elected to use the extended transition period for complying with new or revised accounting standards, which may make its financial statements not comparable to other public companies[224](index=224&type=chunk) - Reliance on these exemptions could make the common stock less attractive to investors, potentially leading to a less active trading market and more volatile stock price[227](index=227&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the company - Not applicable[228](index=228&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=42&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item indicates that all required financial information is attached at the end of the report, starting on page F-1, and is incorporated by reference - All financial information required by this Item is attached at the end of this Report beginning on page F-1 and is incorporated herein by reference[229](index=229&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=42&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) Hoberman & Lesser, CPAs LLP resigned as the independent registered public accounting firm effective December 20, 2023. During the fiscal years ended June 30, 2023, and the subsequent interim period through December 20, 2023, there were no disagreements or reportable events between the company and Hoberman regarding accounting principles, financial disclosure, or auditing scope - Hoberman & Lesser, CPAs LLP resigned as the independent registered public accounting firm effective December 20, 2023[230](index=230&type=chunk) - There were no disagreements or reportable events with Hoberman regarding accounting principles, financial statement disclosure, or auditing scope during the specified periods[231](index=231&type=chunk) [Item 9A. Controls and Procedures](index=42&type=section&id=Item%209A.%20Controls%20and%20Procedures) The company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, concluding they were effective. They also assessed the effectiveness of internal control over financial reporting based on the COSO 2013 framework and concluded it was effective as of June 30, 2025. No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025 - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of June 30, 2025[233](index=233&type=chunk) - Management also concluded that internal control over financial reporting was effective as of June 30, 2025, based on the COSO 2013 framework[235](index=235&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[236](index=236&type=chunk) [Item 9B. Other Information](index=42&type=section&id=Item%209B.%20Other%20Information) This section states that there is no other information to report - None[237](index=237&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=43&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section states that disclosures regarding foreign jurisdictions that prevent inspections are not applicable to the company - Not applicable[238](index=238&type=chunk) [PART III](index=44&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=44&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section details the executive officers and directors of The Glimpse Group, including their ages and positions as of September 30, 2025. The board is divided into three classes with staggered three-year terms. Key executive officers include Lyron Bentovim (President, CEO, Chairman), Maydan Rothblum (CFO, COO), David J. Smith (Chief Creative Officer), and Tyler Gates (Chief Futurist Officer). The board has established four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Strategy, with specific independent directors serving on each. The company has a written code of ethics and business conduct and complies with Section 16(a) reporting requirements Executive Officers and Directors (as of September 30, 2025) | Name | Age | Position | | :----------------- | :-- | :-------------------------------------------------------------------- | | Lyron Bentovim | 56 | President, Chief Executive Officer, Director and Chairman of the Board | | Maydan Rothblum | 52 | Chief Financial Officer, Chief Operating Officer, Secretary and Director | | David J. Smith | 49 | Chief Creative Officer | | Tyler Gates | 39 | Chief Futurist Officer | | Ian Charles | 57 | Independent Director | | Jeff Enslin | 58 | Lead Independent Director | | Lemuel Amen | 59 | Independent Director | | Alexander Ruckdaeschel | 53 | Independent Director | | Tamar Elkeles | 56 | Independent Director | - The board of directors is divided into three classes, with each class elected to a three-year term[242](index=242&type=chunk) - The company has established four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Strategy[259](index=259&type=chunk) - The Audit Committee consists of Ian Charles (Chair), Lemuel Amen, and Jeff Enslin, all determined to be independent, with Ian Charles identified as an 'audit committee financial expert'[260](index=260&type=chunk) - The company has adopted a written code of ethics and business conduct applicable to its directors, officers, and employees[268](index=268&type=chunk) - All executive officers, directors, and greater than ten-percent beneficial owners complied with Section 16(a) reporting requirements for the year ended June 30, 2025[271](index=271&type=chunk) [Item 11. Executive Compensation](index=49&type=section&id=Item%2011.%20Executive%20Compensation) This section outlines the compensation for the named executive officers (Lyron Bentovim, Maydan Rothblum, and David J. Smith) for fiscal years 2025 and 2024, primarily consisting of base salaries and performance bonuses. Directors do not receive cash compensation but are reimbursed for expenses and receive equity-based compensation. The company's Equity Incentive Plan, administered by the compensation committee, allows for various equity awards, with approximately 7.40 million shares available for issuance as of June 30, 2025. Total stock option-based expense for employees and board members was $0.93 million in FY2025, down from $1.61 million in FY2024 Summary Compensation Table for Named Executive Officers | Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Award ($) | Total ($) | | :-------------------------------------- | :---------- | :--------- | :-------- | :--------------- | :--------------- | :-------- | | Lyron Bentovim, President and CEO | 2025 | 259,133 | 120,000 | - | - | 379,133 | | | 2024 | 265,000 | - | - | 69,638 | 334,638 | | Maydan Rothblum, CFO and COO | 2025 | 246,833 | 100,000 | - | - | 346,833 | | | 2024 | 235,000 | - | - | 357,746 | 592,746 | | David J Smith, Chief Creative Officer | 2025 | 210,000 | 10,000 | - | - | 220,000 | | | 2024 | 210,000 | - | - | 49,686 | 259,686 | - Executive employment agreements specify annual base cash salaries and eligibility for performance bonuses[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) - The Equity Incentive Plan, approved in October 2016, authorizes the grant of options and other equity awards to eligible persons, with approximately **13.17 million common shares reserved** and **7.40 million available for issuance** as of June 30, 2025[281](index=281&type=chunk)[282](index=282&type=chunk) Director Equity-Based Compensation (FY2025) | Name | Fiscal Year | Options ($) | Stock Awards ($) | Total ($) | | :------------------- | :---------- | :---------- | :--------------- | :-------- | | Jeffrey Enslin | 2025 | 81,788 | - | 81,788 | | Lemuel Amen | 2025 | 81,788 | - | 81,788 | | Alexander Ruckdaeschel | 2025 | 81,788 | - | 81,788 | | Ian Charles | 2025 | 81,788 | - | 81,788 | | Tamar Elkeles | 2025 | 81,788 | - | 81,788 | Stock Option-Based Expense | Expense Category | FY2025 ($) | FY2024 ($) | | :-------------------------------- | :--------- | :--------- | | Research and development expenses | 210,498 | 731,638 | | General and administrative expenses | 394,039 | 346,309 | | Sales and marketing expenses | 97,520 | 349,377 | | Board option expense | 229,389 | 179,950 | | **Total** | **931,446**| **1,607,274**| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](index=52&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) This section details the beneficial ownership of the company's common stock by directors, executive officers, and significant shareholders as of September 22, 2025. As of this date, 21,066,006 shares of common stock were outstanding. Lyron L. Bentovim is the largest individual beneficial owner among directors and officers with 5.43%, followed by D.J. Smith with 4.89%. All officers and directors as a group beneficially own 16.69% of the common stock - Beneficial ownership information is provided as of September 22, 2025, based on **21,066,006 shares of common stock outstanding**[293](index=293&type=chunk) Security Ownership of Certain Beneficial Owners and Management | Name of Beneficial Owner | Common Stock Beneficially Owned | Percentage of Common Stock Owned | | :-------------------------------------------------------- | :------------------------------ | :------------------------------- | | Lyron L. Bentovim (President, CEO, Chairman) | 1,149,102 | 5.43% | | Maydan Rothblum (COO, CFO, Secretary, Treasurer, Director) | 652,345 | 3.07% | | D.J. Smith (Chief Creative Officer and Director) | 1,030,708 | 4.89% | | Jeff Enslin (Director) | 369,780 | 1.75% | | Lemuel Amen (Director) | 182,497 | 0.86% | | Alexander Ruckdaeschel (Director) | 83,264 | 0.39% | | Ian Charles (Director and Chair of Audit Committee) | 78,850 | 0.37% | | Tamar Elkeles (Director) | 54,375 | 0.26% | | All officers and directors (8 persons) | 3,600,921 | 16.69% | - Beneficial ownership includes shares issuable upon exercise of options, warrants, or other rights exercisable within **60 days** of September 30, 2025[293](index=293&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=55&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) This section confirms that there were no related party transactions to disclose. The board of directors has affirmatively determined that five of its members (Ian Charles, Lemuel Amen, Alexander Ruckdaeschel, Tamar Elkeles, and Jeff Enslin) are independent according to Nasdaq Listing Rules. This determination ensures that a majority of the board and all members of the audit, nominating and corporate governance, and compensation committees meet independence criteria - There were no related party transactions to disclose[297](index=297&type=chunk) - The board of directors has determined that Ian Charles, Lemuel Amen, Alexander Ruckdaeschel, Tamar Elkeles, and Jeff Enslin are independent in accordance with Nasdaq Listing Rules[300](index=300&type=chunk) - All members of the audit committee, nominating and corporate governance committee, and compensation committee are independent directors[300](index=300&type=chunk) [Item 14. Principal Accountant Fees and Services](index=55&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section provides a summary of fees billed by the company's current auditors, Turner, Stone & Company, L.L.P., for professional services during fiscal years 2025 and 2024. Total fees increased from $141,000 in FY2024 to $158,000 in FY2025, primarily due to an increase in audit fees. The audit committee has a policy for pre-approving all audit and permissible non-audit services to ensure auditor independence Principal Accountant Fees and Services | Category | FY2025 ($) | FY2024 ($) | | :-------------------- | :--------- | :--------- | | Audit fees | 128,000 | 108,000 | | Audit fees - benefit plan | 16,000 | 20,000 | | Tax fees | 14,000 | 13,000 | | **Total Fees** | **158,000**| **141,000**| - Audit fees represent fees for respective fiscal year audits, including the review of quarterly financial statements[301](index=301&type=chunk) - The audit committee has a policy for pre-approving all audit and permissible non-audit services to ensure auditor independence[302](index=302&type=chunk) [PART IV](index=56&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=56&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the exhibits and financial statement schedules included as part of the report. Financial statements are referenced starting on page F-1, and all financial statement schedules have been omitted as the information is either not applicable, insufficient to require submission, or included within the consolidated financial statements and notes. A detailed index of exhibits, including articles of incorporation, bylaws, employment agreements, and other corporate documents, is provided - Financial statements are included starting on page F-1 of the report[305](index=305&type=chunk)[308](index=308&type=chunk) - Financial statement schedules are omitted because the required information was not applicable, insufficient, or already included in the consolidated financial statements or notes[305](index=305&type=chunk) - A list of exhibits is provided, including corporate governance documents, employment agreements, and other regulatory filings[306](index=306&type=chunk)[307](index=307&type=chunk)[311](index=311&type=chunk) [Item 16. Form 10-K Summary](index=57&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section indicates that there is no Form 10-K summary provided - None[310](index=310&type=chunk) [Financial Statements](index=59&type=section&id=Financial%20Statements) [Report of Independent Registered Public Accounting Firm](index=61&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Turner, Stone & Company, L.L.P., the independent registered public accounting firm since 2023, issued an unqualified opinion on The Glimpse Group, Inc.'s consolidated financial statements for the years ended June 30, 2025 and 2024. The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement and evaluating accounting principles and estimates. The firm did not audit internal control over financial reporting - Turner, Stone & Company, L.L.P. issued an unqualified opinion on the consolidated financial statements for the years ended June 30, 2025 and 2024[319](index=319&type=chunk) - The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement and evaluating accounting principles and estimates[321](index=321&type=chunk)[322](index=322&type=chunk) - The firm has served as the company's auditor since 2023 and was not engaged to perform an audit of internal control over financial reporting[321](index=321&type=chunk)[323](index=323&type=chunk) [Consolidated Balance Sheets](index=62&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show an increase in total assets from $15.56 million in FY2024 to $19.28 million in FY2025, primarily driven by a significant increase in cash and cash equivalents. Total liabilities decreased from $4.02 million to $2.34 million, mainly due to a reduction in long-term contingent consideration for acquisitions and lease liabilities. Stockholders' equity increased from $11.54 million to $16.94 million, reflecting additional paid-in capital from securities issuances despite an accumulated deficit of $65.59 million Consolidated Balance Sheets Summary (as of June 30, in $) | ASSETS | 2025 | 2024 | | :-------------------------------------- | :----------- | :----------- | | Cash and cash equivalents | 6,832,725 | 1,848,295 | | Accounts receivable | 840,551 | 723,032 | | Total current assets | 8,172,657 | 3,520,289 | | Equipment and leasehold improvements, net | 54,898 | 167,325 | | Right-of-use assets, net | 122,094 | 452,808 | | Intangible assets, net | 60,717 | 487,867 | | Goodwill | 10,857,600 | 10,857,600 | | **Total assets** | **19,279,066** | **15,558,603** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | 228,371 | 181,668 | | Accrued liabilities | 446,896 | 340,979 | | Total current liabilities | 2,338,472 | 2,427,598 | | Contingent consideration for acquisitions, net of current portion | - | 1,413,696 | | Lease liabilities, net of current portion | 4,704 | 178,824 | | **Total liabilities** | **2,343,176** | **4,020,118** | | Common Stock | 21,056 | 18,158 | | Additional paid-in capital | 82,506,758 | 74,559,600 | | Accumulated deficit | (65,591,924) | (63,039,273) | | **Total stockholders' equity** | **16,935,890** | **11,538,485** | | **Total liabilities and stockholders' equity** | **19,279,066** | **15,558,603** | - Cash and cash equivalents increased significantly from **$1.85 million in FY2024 to $6.83 million in FY2025**[325](index=325&type=chunk) - Total liabilities decreased by approximately **$1.68 million**, primarily due to the reduction in long-term contingent consideration for acquisitions and lease liabilities[325](index=325&type=chunk) - Stockholders' equity increased by approximately **$5.4 million**, driven by an increase in additional paid-in capital[325](index=325&type=chunk) [Consolidated Statements of Operations](index=63&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a 20% increase in total revenue to $10.53 million in FY2025, primarily from Software Services. Gross profit increased by 22% to $7.12 million. Total operating expenses decreased by 21% to $9.86 million, largely due to significant reductions in R&D, sales and marketing, and amortization/impairment expenses. The net loss improved by 60% from $6.39 million in FY2024 to $2.55 million in FY2025. Basic and diluted net loss per share improved from $(0.38) to $(0.13) Consolidated Statements of Operations Summary (for the years ended June 30, in $) | Metric | 2025 | 2024 | | :-------------------------------------------- | :----------- | :----------- | | Software services | 9,996,491 | 8,130,515 | | Software license/software as a service | 503,734 | 673,684 | | Royalty income | 27,700 | - | | **Total Revenue** | **10,527,925** | **8,804,199** | | Cost of goods sold | 3,407,946 | 2,941,460 | | **Gross profit** | **7,119,979** | **5,862,739** | | Research and development expenses | 3,494,731 | 5,455,612 | | General and administrative expenses | 3,636,266 | 4,292,001 | | Sales and marketing expenses | 2,201,754 | 2,819,668 | | Amortization of acquisition intangible assets | 427,150 | 1,241,228 | | Goodwill impairment | - | 379,038 | | Intangible asset impairment | - | 2,563,331 | | Change in fair value of acquisition contingent consideration | 102,412 | (4,272,080) | | **Total operating expenses** | **9,862,313** | **12,478,798** | | Loss from operations before other income | (2,742,334) | (6,616,059) | | Interest income | 189,683 | 221,764 | | **Net loss** | **(2,552,651)**| **(6,394,295)**| | Basic and diluted net loss per share | (0.13) | (0.38) | - Total revenue increased by **20%** year-over-year, primarily driven by a **23% increase in Software Services revenue**[328](index=328&type=chunk) - Net loss improved by **60%** in FY2025, reflecting increased gross profit and a **21% reduction in total operating expenses**[328](index=328&type=chunk) - Weighted-average common shares outstanding for basic and diluted net loss per share increased to **19,633,374 in FY2025** from **16,681,234 in FY2024**[328](index=328&type=chunk) [Consolidated Statements of Stockholders' Equity](index=64&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) The consolidated statements of stockholders' equity show an increase in total stockholders' equity from $11.54 million at June 30, 2024, to $16.94 million at June 30, 2025. This was primarily driven by $6.78 million in net proceeds from a securities purchase agreement and $0.18 million from the exercise of warrants, contributing to additional paid-in capital. The accumulated deficit increased from $63.04 million to $65.59 million due to the net loss incurred in FY2025 Consolidated Statements of Stockholders' Equity Summary (for the years ended June 30, in $) | Metric | Shares (2025) | Amount (2025) | Additional Paid-In Capital (2025) | Accumulated Deficit (2025) | Total (2025) | | :-------------------------------------- | :------------ | :------------ | :-------------------------------- | :------------------------- | :----------- | | Balance as of July 1, 2023 | 14,701,929 | 14,702 | 67,854,108 | (56,644,978) | 11,223,832 | | Common stock and stock option based compensation expense | 37,000 | 37 | 754,717 | - | 754,754 | | Common stock issued in Securities Purchase Agreement, net | 1,990,000 | 1,990 | 6,783,562 | - | 6,785,552 | | Common stock issued for exercise of warrants | 860,000 | 860 | 174,900 | - | 175,760 | | Net loss | - | - | - | (2,552,651) | (2,552,651) | | **Balance as of June 30, 2025** | **21,055,506**| **21,056** | **82,506,758** | **(65,591,924)** | **16,935,890** | - Total stockholders' equity increased from **$11.54 million in FY2024 to $16.94 million in FY2025**[331](index=331&type=chunk) - Additional paid-in capital increased significantly due to net proceeds from securities purchase agreements (**$6.78 million**) and warrant exercises (**$0.18 million**)[331](index=331&type=chunk) - The accumulated deficit grew from **$63.04 million to $65.59 million**, reflecting the net loss for the year[331](index=331&type=chunk) [Consolidated Statements of Cash Flows](index=65&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows show a substantial improvement in cash from operating activities, with net cash used decreasing by 95% to $0.27 million in FY2025. Net cash provided by financing activities increased by 129% to $6.80 million, primarily from proceeds of a securities purchase agreement and warrant exercises. Net cash used in investing activities remained stable at approximately $1.54 million, mainly for contingent consideration payments. Overall, cash and cash equivalents increased by $4.98 million, ending FY2025 at $6.83 million Consolidated Statements of Cash Flows Summary (for the year ended June 30, in $) | Cash Flow Category | 2025 | 2024 | | :-------------------------------------- | :----------- | :----------- | | Net cash used in operating activities | (273,774) | (5,209,847) | | Net cash used in investing activities | (1,542,508) | (1,529,442) | | Net cash provided by financing activities | 6,800,712 | 2,968,501 | | Net change in cash and cash equivalents | 4,984,430 | (3,770,788) | | Cash and cash equivalents, end of year | 6,832,725 | 1,848,295 | - Net cash used in operating activities significantly improved, decreasing by **95% from $5.21 million in FY2024 to $0.27 million in FY2025**[333](index=333&type=chunk) - Net cash provided by financing activities increased by **129%**, primarily due to **$6.79 million** in net proceeds from a securities purchase agreement and **$0.18 million** from warrant exercises[333](index=333&type=chunk) - Cash and cash equivalents at the end of the year increased by **$4.98 million**, reaching **$6.83 million**[333](index=333&type=chunk) [Notes to Consolidated Financial Statements](index=66&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies, financial instruments, and specific transactions. Key areas include the company's business description as an immersive technology provider, its improved liquidity position with $6.83 million in cash, and critical accounting estimates. Significant events include the divestiture of QReal and Glimpse Turkey, resulting in a non-cash gain offset by a loan loss reserve, and the impairment of goodwill and intangible assets related to PulpoAR and BLI's strategic shift. The notes also detail equity transactions, including securities purchase agreements and stock option activity, and provide information on earnings per share, income taxes, and lease commitments [NOTE 1. DESCRIPTION OF BUSINESS](index=66&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20BUSINESS) The Glimpse Group, Inc. is a Nevada-incorporated immersive technology company, founded in June 2016, providing VR, AR, and Spatial Computing software and services. Headquartered in the United States, its business model focuses on building scale and a robust ecosystem in this emerging industry. The company completed its IPO on the Nasdaq Capital Market in July 2021 - The Glimpse Group, Inc. is an immersive technology company providing Virtual Reality (VR), Augmented Reality (AR), and Spatial Computing software and services, incorporated in Nevada in June 2016[335](index=335&type=chunk) - The company's business model aims to build scale and a robust ecosystem in the emerging immersive technology industry[336](index=336&type=chunk) - The company completed its initial public offering (IPO) on the Nasdaq Capital Market in July 2021 under the ticker VRAR[336](index=336&type=chunk) [NOTE 2. LIQUIDITY AND CAPITAL RESOURCES](index=66&type=section&id=NOTE%202.%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity significantly improved with $6.79 million in net cash proceeds from a Securities Purchase Agreement in December 2024 and January 2025. As of June 30, 2025, cash and cash equivalents totaled $6.83 million, with working capital of $5.83 million. Net cash used in operating activities for FY2025 was $0.27 million, a substantial improvement. The company believes it is sufficiently funded to meet operational plans and future obligations beyond the next 12 months, operating on a going concern basis - The company completed a Securities Purchase Agreement in December 2024 and January 2025, generating **$6.79 million** in net cash proceeds[337](index=337&type=chunk) Liquidity and Capital Resources (as of June 30, 2025, in $) | Metric | Amount | | :----------------------------------- | :---------- | | Cash and cash equivalents | 6,832,725 | | Working capital | 5,830,000 | | Net cash used in operating activities (FY2025) | (273,774) | - The company believes it is sufficiently funded to meet its operational plan and future obligations beyond the 12-month period from the date of financial statement issuance[338](index=338&type=chunk) - The consolidated financial statements are prepared assuming the company will continue as a going concern[339](index=339&type=chunk) [NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=66&type=section&id=NOTE%203.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the company's significant accounting policies, including GAAP basis presentation, consolidation of wholly-owned entities, and the use of estimates for various valuations. It covers policies for cash and cash equivalents, accounts receivable (with customer concentration noted), business combinations (recording assets/liabilities at fair value), intangible assets (amortized straight-line), goodwill (tested annually for impairment), and long-lived assets (reviewed for impairment). Fair value measurements are categorized into a three-level hierarchy. Revenue recognition is based on satisfying performance obligations across Software Services, Software License/SaaS, and Royalty Income. Employee stock-based compensation is valued using Black-Scholes, and R&D costs are expensed as incurred. Income taxes are recorded using the asset and liability method with a valuation allowance. The company adopted ASU 2023-07 and is evaluating ASU 2023-09 - Financial statements are prepared in accordance with GAAP, consolidating wholly-owned entities, and relying on management estimates for various valuations[340](index=340&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk) - Customer concentration risk is noted, with two customers accounting for approximately **61% of total gross revenues in FY2025** and one customer for **46% of accounts receivable**[347](index=347&type=chunk)[348](index=348&type=chunk) - Intangible assets are amortized straight-line, goodwill is tested annually for impairment, and long-lived assets are reviewed for impairment when circumstances indicate[352](index=352&type=chunk)[354](index=354&type=chunk)[355](index=355&type=chunk) - Revenue is recognized across Software Services, Software License/SaaS, and Royalty Income, based on satisfying distinct performance obligations[366](index=366&type=chunk)[367](index=367&type=chunk) - Employee stock-based compensation is expensed based on Black-Scholes fair values, and R&D costs are expensed as incurred[390](index=390&type=chunk)[391](index=391&type=chunk) - The company adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) and is evaluating ASU 2023-09 (Improvements to Income Tax Disclosures), effective July 1, 2025[395](index=395&type=chunk)[396](index=396&type=chunk) [NOTE 4. SEGMENT AND RELATED INFORMATION](index=73&type=section&id=NOTE%204.%20SEGMENT%20AND%20RELATED%20INFORMATION) The Glimpse Group operates as a single reportable segment: immersive technology software development and commercialization. The Chief Executive Officer, as the chief operating decision maker (CDOM), reviews financial information on a consolidated basis to manage resources and evaluate performance. All business activities and revenue generation are primarily in the United States, and accounting policies are consistent with consolidated financial statements - The company has one reportable segment: Immersive technology software development and commercialization, managed on a consolidated basis[398](index=398&type=chunk) - The Chief Executive Officer acts as the chief operating decision maker (CDOM), reviewing consolidated financial information for resource allocation and performance evaluation[399](index=399&type=chunk) - Revenue is primarily derived from customers in the United States, and accounting policies are consistent across the single reportable segment and consolidated financial statements[398](index=398&type=chunk)[399](index=399&type=chunk) [NOTE 5. QREAL AND GLIMPSE TURKEY DIVESTITURE](index=73&type=section&id=NOTE%205.%20QREAL%20AND%20GLIMPSE%20TURKEY%20DIVESTITURE) Effective October 1, 2024, The Glimpse Group divested QReal, LLC and Glimpse Turkey in a management buyout as part of a strategic realignment around Spatial Core. The company retains full revenue from QReal's largest customer until $1.35 million net cash is collected, followed by an 18-month revenue share. The divestiture yielded a $1.56 million senior secured convertible note and a minority equity stake in the new entity, though a $1.50 million loan loss reserve was recorded due to collectability uncertainty. A non-cash gain of $1.40 million on divestiture was offset by this reserve. Revenue from the divested business not retained was $0.15 million in FY2025 and $0.67 million in FY2024 - Effective October 1, 2024, the company divested QReal, LLC and Glimpse Turkey in a management buyout, aligning with its Spatial Core strategy[400](index=400&type=chunk) - The company retains full revenue from QReal's largest customer until **$1.35 million** net cash is collected, followed by an 18-month revenue share[401](index=401&type=chunk) - The divestiture resulted in a **$1.56 million** senior secured convertible note and a **10% equity stake** in the new entity, but a **$1.50 million** loan loss reserve was recorded due to uncertain collectability[402](index=402&type=chunk)[403](index=403&type=chunk) - A non-cash gain on divestiture of approximately **$1.40 million** was recorded, fully offset by the loan loss reserve[403](index=403&type=chunk) - Revenue from the divested business not being retained was approximately **$0.15 million in FY2025** and **$0.67 million in FY2024**[404](index=404&type=chunk) [NOTE 6. IMPAIRMENT OF GOODWILL AND LONG-LIVED ASSETS](index=74&type=section&id=NOTE%206.%20IMPAIRMENT%20OF%20GOODWILL%20AND%20LONG-LIVED%20ASSETS) In December 2023, the company divested PulpoAR, LLC due to poor revenue performance and non-strategic alignment, resulting in a $0.90 million write-off of net assets (including $0.38 million goodwill and $0.52 million intangible assets). A non-cash gain of $1.0 million on divestiture was fully offset by a loan loss reserve for a $1.0 million note received. Additionally, as of June 30, 2024, Brightline Interactive, LLC's (BLI) intangible assets related to legacy customer relationships were fully impaired, leading to a $2.04 million non-cash expense, driven by a strategic shift to Spatial Computing and a significant turnover in its customer base - The divestiture of PulpoAR, LLC in December 2023 led to a **$0.90 million write-off of net assets**, including **$0.38 million in goodwill** and **$0.52 million in intangible assets**[409](index=409&type=chunk)[410](index=410&type=chunk) - A non-cash gain of **$1.0 million** on the PulpoAR divestiture was fully offset by a loan loss reserve for a **$1.0 million** note received, due to remote collectability[411](index=411&type=chunk) - As of June 30, 2024, BLI's intangible assets related to legacy customer relationships were fully impaired, resulting in a **$2.04 million non-cash expense**[412](index=412&type=chunk)[413](index=413&type=chunk) - This impairment was driven by BLI's strategic shift to Spatial Computing, Cloud, and AI, leading to a significant turnover in its customer base[412](index=412&type=chunk) [NOTE 7. GOODWILL AND INTANGIBLE ASSETS](index=75&type=section&id=NOTE%207.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill remained stable at $10.86 million from FY2024 to FY2025, with the 2024 balance reflecting the write-off of PulpoAR's goodwill. Intangible assets, net, decreased significantly from $0.49 million in FY2024 to $0.06 million in FY2025. This reduction is primarily due to the full impairment of BLI's customer relationships in FY2024 and ongoing amortization. The remaining intangible asset amortization expense for FY2026 is estimated at $60,717 Goodwill Composition (as of June 30, in $) | Entity | 2025 | 2024 | | :----- | :----------- | :----------- | | XRT | 300,000 | 300,000 | | BLI | 10,557,600 | 10,557,600 | | PulpoAR| - | - | | **Total**| **10,857,600** | **10,857,600** | Intangible Assets, Net (as of June 30, in $) | Intangible Assets | 2025 | 2024 | | :---------------- | :------- | :------- | | Technology | 60,717 | 487,867 | | **Total, net** | **60,717** | **487,867**| - Intangible asset amortization expense decreased from **$1.24 million in FY2024 to $0.43 million in FY2025**[417](index=417&type=chunk) - Estimated intangible asset amortization expense for FY2026 is **$60,717**[417](index=417&type=chunk) [NOTE 8. FINANCIAL INSTRUMENTS](index=76&type=section&id=NOTE%208.%20FINANCIAL%20INSTRUMENTS) This note details the fair value measurements of financial instruments. Cash equivalents, primarily money market funds, are classified as Level 1. Contingent consideration liabilities related to acquisitions are categorized as Level 3, valued using unobservable inputs like financial forecasts and discount rates. For FY2025, the change in fair value of contingent consideration for BLI was a $0.14 million non-cash expense, while for XR Terra (XRT) it was a $0.03 million non-cash gain. As of June 30, 2025, the remaining contingent consideration for BLI is $1.48 million, payable in cash, with no future contingent consideration for S5D or XRT Cash and Cash Equivalents (as of June 30, in $) | Category | 2025 | 2024 | | :---------------- | :---------- | :---------- | | Cash | 130,288 | 109,659 | | Money market funds | 6,702,437 | 1,738,636 | | **Total** | **6,832,725** | **1,848,295** | - Contingent consideration liabilities are categorized as Level 3, valued using unobservable inputs such as financial forecasts and discount rates[420](index=420&type=chunk) - For FY2025, the change in fair value of contingent consideration was a **$0.14 million non-cash expense for BLI** and a **$0.03 million non-cash gain for XRT**[424](index=424&type=chunk)[425](index=425&type=chunk) Contingent Consideration for Acquisitions (as of June 30, in $) | Entity | 2025 | 2024 | | :----- | :----------- | :----------- | | BLI | 1,483,583 | 2,845,457 | | XRT | - | 35,714 | | S5D | - | - | | **Total**| **1,483,583** | **2,881,171** | - As of June 30, 2025, the remaining contingent consideration for the BLI acquisition is **$1.5 million cash**, payable in calendar year 2025, representing the final payment[222](index=222&type=chunk)[423](index=423&type=chunk) [NOTE 9. DEFERRED COSTS AND DEFERRED REVENUE](index=78&type=section&id=NOTE%209.%20DEFERRED%20COSTS%20AND%20DEFERRED%20REVENUE) Deferred costs decreased from $170,781 in FY2024 to $48,971 in FY2025, while deferred revenue decreased from $72,788 to $52,576

Part I [Item 1. Business.](index=4&type=section&id=Item%201.%20Business.) IDT Corporation provides fintech and communications solutions to underserved consumer and B2B markets, leveraging core strategic assets for growth. - IDT Corporation is a provider of fintech and communications solutions, leveraging core strategic assets to serve under-served consumer and B2B markets[14](index=14&type=chunk) Fiscal Year 2025 Segment Revenue Contribution | Segment | Revenue (Millions USD) | % of Total Revenues | | :----------------------- | :--------------------- | :------------------ | | National Retail Solutions | $128.8 | 10.5% | | Fintech | $154.6 | 12.6% | | net2phone | $87.9 | 7.1% | | Traditional Communications | $860.2 | 69.8% | - The company's strategy emphasizes accelerating growth in high-margin businesses (NRS, BOSS Money, net2phone) through organic development and strategic acquisitions, financed by cash flows from mature offerings, avoiding debt and dilutive capital raises[40](index=40&type=chunk)[41](index=41&type=chunk) - Key strategic assets include popular consumer and B2B brands (BOSS Money, BOSS Revolution, NRS, net2phone), a nationwide network of over **32,000** independent retailers, a customer base of over seven million, global technology infrastructure, VoIP and cloud services expertise, and a diverse global staff[45](index=45&type=chunk) - IDT operates in a complex regulatory environment, subject to telecommunications, money transmitter, payment instrument, anti-money laundering, privacy, and data security laws at federal, state, and international levels[119](index=119&type=chunk)[120](index=120&type=chunk)[125](index=125&type=chunk) [Overview](index=4&type=section&id=OVERVIEW) IDT Corporation is a fintech and communications solutions provider targeting underserved consumer and B2B markets, leveraging a common core of strategic assets for growth and profitability. - IDT Corporation provides fintech and communications solutions, focusing on under-served consumer and B2B markets[14](index=14&type=chunk) - The company's offerings leverage a common core of strategic assets to maximize synergies for growth and profitability[14](index=14&type=chunk) [Segment Reporting](index=4&type=section&id=SEGMENT%20REPORTING) IDT operates four reportable business segments: National Retail Solutions (NRS), Fintech, net2phone, and Traditional Communications. Each segment contributed varying percentages to total revenues in fiscal years 2025 and 2024, with Traditional Communications being the largest. - IDT has four reportable business segments: National Retail Solutions (NRS), Fintech, net2phone, and Traditional Communications[16](index=16&type=chunk) Segment Revenue Contribution (FY2025 vs FY2024) | Segment | FY2025 Revenue (Millions USD) | FY2025 % of Total | FY2024 Revenue (Millions USD) | FY2024 % of Total | | :----------------------- | :---------------------------- | :---------------- | :---------------------------- | :---------------- | | National Retail Solutions | $128.8 | 10.5% | $103.1 | 8.6% | | Fintech | $154.6 | 12.6% | $120.7 | 10.0% | | net2phone | $87.9 | 7.1% | $82.3 | 6.8% | | Traditional Communications | $860.2 | 69.8% | $899.6 | 74.6% | [Key Events in Our History](index=5&type=section&id=KEY%20EVENTS%20IN%20OUR%20HISTORY) IDT's history spans from its founding in 1990 to recent strategic developments in 2025, including significant spin-offs, public listings, and the launch of key services like BOSS Revolution, BOSS Money, NRS, and AI-powered net2phone offerings. - Founded in **1990** as International Discount Telephone, the company completed its IPO in **1996** and listed on NYSE in **2001**[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Key business launches include BOSS Revolution (**2008**), BOSS Money (**2013**), net2phone UCaaS (**2015**), and NRS (**2016**)[26](index=26&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[32](index=32&type=chunk) - Recent developments in **2025** include net2phone launching AI Agent and Coach, NRS surpassing **37,000** active terminals, and BOSS Money handling **2.3 million** remittances in May[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - The company has executed several spin-offs, including CTM Media Holdings (**2009**), Genie Energy Ltd. (**2011**), Straight Path Communications (**2013**), and Zedge (**2016**), and Rafael Holdings (**2018**)[26](index=26&type=chunk)[27](index=27&type=chunk)[31](index=31&type=chunk)[34](index=34&type=chunk) [Our Strategy](index=6&type=section&id=OUR%20STRATEGY) IDT's strategy is to be a leading fintech and communications solutions provider by organically growing high-margin businesses like NRS, BOSS Money, and net2phone, funding these initiatives with cash flows from mature businesses, and avoiding debt or dilutive capital raises. The company aims to expand through new offerings, technologies, and market penetration, particularly in POS, fintech, and AI. - The core strategy is to grow high-margin businesses (NRS, BOSS Money, net2phone) organically, financed by cash flows from mature offerings[40](index=40&type=chunk) - This approach has enabled improved consolidated bottom-line performance, strengthened the balance sheet, and allowed for value return to stockholders through stock repurchases and dividends[40](index=40&type=chunk) - Future efforts focus on developing new offerings organically and through acquisitions, leveraging the balance sheet, and concentrating on POS, fintech, and AI businesses[41](index=41&type=chunk) [Business Description](index=6&type=section&id=BUSINESS%20DESCRIPTION) This section details the operations, revenue generation, and strategic focus of IDT's key business segments: National Retail Solutions (NRS), Fintech (BOSS Money), net2phone, and Traditional Communications (IDT Digital Payments, BOSS Revolution, IDT Global). Each segment has distinct offerings, target markets, competitive advantages, and growth strategies. [National Retail Solutions (NRS)](index=6&type=section&id=National%20Retail%20Solutions) NRS operates a POS terminal-based platform for independent retailers in the U.S., offering integrated hardware and software for efficient operations, payment processing, and digital advertising. NRS saw significant revenue and income growth in fiscal 2025, driven by expanding its POS network and merchant services. NRS Financial Performance (FY2025 vs FY2024) | Metric | FY2025 (Millions USD) | FY2024 (Millions USD) | Change ($) | Change (%) | | :--------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Revenues | $128.8 | $103.1 | $25.7 | 24.9% | | Income from Operations | $27.8 | $21.6 | $6.2 | 28.3% | NRS Key Metrics (July 31, 2025 vs 2024) | Metric | July 31, 2025 (Thousands) | July 31, 2024 (Thousands) | Change () | Change (%) | | :------------------------ | :------------------------ | :------------------------ | :--------- | :--------- | | Active POS terminals | 37.2 | 32.1 | 5.1 | 15.8% | | Payment processing accounts | 26.5 | 21.3 | 5.2 | 24.1% | - NRS generates revenue from terminal-based software services (SaaS), merchant services (NRS PAY), display advertising (NRS Digital Media), and data and analytics (NRS Insights)[50](index=50&type=chunk)[51](index=51&type=chunk) - Competitive advantages include purpose-built hardware/software, direct sales capabilities, customer-facing screens for advertising, unique reach into urban/multicultural markets, transparent payment processing pricing, and governmental EBT acceptance[53](index=53&type=chunk) - Growth strategy focuses on expanding the POS network into new retail verticals, subsidizing hardware for NRS Pay enrollment, converting existing terminal customers to NRS payment processing, integrating with new programmatic advertisers, developing home delivery partnerships, and building out digital wholesale supply channels[53](index=53&type=chunk) [Fintech](index=10&type=section&id=Fintech) The Fintech segment, primarily driven by BOSS Money, provides cross-border money transfer services. It experienced substantial revenue and income growth in fiscal 2025, largely due to increased transaction volume across both digital and retail channels. The segment leverages the BOSS brand and ecosystem for customer acquisition and competitive pricing. Fintech Financial Performance (FY2025 vs FY2024) | Metric | FY2025 (Millions USD) | FY2024 (Millions USD) | Change ($) | Change (%) | | :--------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Total Revenues | $154.6 | $120.7 | $33.9 | 28.1% | | BOSS Money Revenues | $139.8 | $108.3 | $31.5 | 29.1% | | Income from Operations | $15.4 | $(0.1) | $15.5 | nm | - BOSS Money offers international money transfers to **50** countries through approximately **1,800** disbursement partners and over **250,000** cash payout locations, with transactions initiated via digital channels (BOSS Money and BOSS Revolution apps) and retail agents[58](index=58&type=chunk)[59](index=59&type=chunk) -