Financial Performance - Net income for the three months ended September 30, 2025, was $4,481,000, a 54.7% increase compared to $2,901,000 for the same period in 2024[9]. - Earnings per common share attributable to First Capital, Inc. increased to $1.34 for the three months ended September 30, 2025, compared to $0.87 in 2024, reflecting a growth of 54.0%[9]. - Comprehensive income attributable to First Capital, Inc. for the nine months ended September 30, 2025, was $20,809,000, up from $14,210,000 in 2024, reflecting a 46.5% increase[12]. - For the nine months ended September 30, 2025, net income attributable to First Capital, Inc. was $11,488,000, compared to $8,678,000 in 2024, indicating a 32.5% increase[84]. - Net income attributable to the Company was $4.5 million ($1.34 per diluted share) for the three months ended September 30, 2025, compared to $2.9 million ($0.87 per diluted share) for the same period in 2024[127]. Asset and Liability Management - Total assets increased to $1,235,477,000 as of September 30, 2025, up from $1,187,523,000 at the end of 2024, representing a growth of 4.0%[7]. - Total liabilities increased to $1,102,928,000 as of September 30, 2025, compared to $1,072,812,000 at the end of 2024, representing a growth of 2.8%[7]. - Total deposits reached $1,094,733,000 as of September 30, 2025, an increase of 2.5% from $1,066,439,000 at the end of 2024[7]. - Cash and cash equivalents increased from $105.9 million at December 31, 2024, to $112.2 million at September 30, 2025, primarily due to net deposit inflows[121]. Income and Expense Analysis - Total interest income rose to $14,658,000 for the three months ended September 30, 2025, up 10.9% from $13,224,000 in the prior year[9]. - Noninterest income increased to $2,306,000 for the three months ended September 30, 2025, compared to $1,800,000 in 2024, marking a growth of 28.1%[9]. - Noninterest expenses increased by $540,000 for the quarter ended September 30, 2025, primarily due to increases in occupancy and equipment and compensation and benefits expenses[133]. - Cash payments for interest for the nine months ended September 30, 2025, totaled $10,899,000, an increase from $9,604,000 in 2024, representing a 13.4% increase[93]. Credit Quality and Loan Performance - The provision for credit losses was $150,000 for the three months ended September 30, 2025, down from $463,000 in the same period of 2024, indicating improved credit quality[9]. - The allowance for credit losses increased to $9,861,000 from $9,281,000, indicating a rise of 6.24%[40]. - Nonperforming loans totaled $3,866 million as of September 30, 2025, consisting of $2,006 million in nonaccrual loans and $1,860 million in loans 90 days or more past due[60]. - The total for Special Mention loans across all categories is $667,000, indicating potential risk[67]. - The company continues to assess risks associated with various loan segments, including economic conditions and property values, which may impact repayment[40][41][42][43][44][45][46][47][48]. Securities and Investments - Total securities available for sale amounted to $439.2 million, with a fair value of $421.6 million, reflecting a gross unrealized loss of $19.8 million[24]. - The company’s investment in equity securities had a fair value of $1.0 million as of September 30, 2025, up from $887,000 at December 31, 2024[38]. - Securities available for sale increased by $32.4 million from $389.2 million at December 31, 2024, to $421.6 million at September 30, 2025[122]. Capital Management - The Bank's CBLR was 10.82% as of September 30, 2025, indicating compliance with capital adequacy requirements[152]. - The Company has a borrowing capacity limit of $50.2 million with the FHLB based on pledged collateral as of September 30, 2025[79]. - The Company purchased a total of 1,443 shares at an average price of $43.55 during the reporting period, with a remaining repurchase authorization of 113,236 shares[176]. Risk Management - The Company aims for long-term profitability while managing interest rate exposure through strategies like shortening asset maturities and relying on retail deposits[158]. - Management monitors the differences between estimated and actual incurred loan losses to evaluate the effectiveness of the estimation process[57]. - The Company has not engaged in trading accounts or high-risk derivatives, thus avoiding foreign currency exchange rate risk and commodity price risk[159]. Corporate Governance - The report is signed by Michael C. Frederick, President and CEO, and Joshua P. Stevens, Executive Vice President, CFO and Treasurer[184]. - Management has effective disclosure controls and procedures in place, ensuring timely and accurate reporting[170].

Product and Customer Metrics - As of September 27, 2025, Sonos had nearly 53.4 million products registered across approximately 17.1 million households globally, with 61% of these households owning more than one product [18]. - In fiscal 2025, existing customers accounted for approximately 45% of new product registrations, indicating strong customer retention and engagement [18]. - The average Sonos household owned 3.13 products, while multi-product households averaged 4.49 products, highlighting significant growth potential in expanding product ownership [27]. - Sonos introduced several new products in fiscal 2025, including Arc Ultra, Sub (Gen 4), and Era 100 Pro, aimed at enhancing its product portfolio and customer experience [29]. - Sonos experienced the highest revenue levels in the first fiscal quarter, coinciding with the holiday shopping season [57]. - The company generates a substantial majority of its revenue from smart speakers, particularly wireless speakers and home theater soundbars, making market demand critical for its success [81]. - Sonos speakers accounted for 77.7% of total revenue in fiscal 2025, decreasing by 4.1% from fiscal 2024, driven by declines in Arc and Sonos One [194]. Financial Performance - Sonos reported net losses of $10.3 million, $38.1 million, and $61.1 million for fiscal years 2023, 2024, and 2025, respectively, with an accumulated deficit of $112.1 million as of September 27, 2025 [75]. - Total revenue for fiscal year 2025 was $1,443,276, a decrease of 4.9% from $1,518,056 in fiscal year 2024 [181]. - Net loss for fiscal year 2025 was $61,144, compared to a net loss of $38,146 in fiscal year 2024, indicating a worsening financial performance [181]. - Adjusted EBITDA for fiscal year 2025 was $132,291, with an Adjusted EBITDA margin of 7.1%, down from $107,862 and 9.3% in fiscal year 2024 [181]. - Gross profit for fiscal 2025 was $630.5 million, down $58.8 million or 8.5% from fiscal 2024, resulting in a gross margin of 43.7% [198]. - Operating expenses for fiscal 2025 totaled $681.0 million, down $56.4 million, or 7.7%, from fiscal 2024, with net operating expenses after restructuring charges at $650.9 million [201]. Cost Management and Operational Efficiency - Sonos initiated a cost transformation initiative in fiscal 2024, resulting in workforce reductions of approximately 6% in August 2024 and 12% in February 2025 to enhance operational efficiency [20]. - The company has implemented a comprehensive cybersecurity program to manage risks and protect confidential information [157]. - The company has a credit agreement allowing it to borrow up to $80.0 million, maturing in October 2030, indicating potential future capital needs [151]. - The company has authorized a common stock repurchase program of up to $200 million as of November 15, 2023 [172]. Supply Chain and Manufacturing - As of September 27, 2025, Sonos had open purchase orders to contract manufacturers for finished goods amounting to approximately $173 million, with expected commitments to suppliers for components ranging from $131 million to $149 million [47]. - Sonos is exiting a partnership with one of its contract manufacturers to consolidate and improve supply chain efficiency, expected to be completed with minimal disruption by the second quarter of fiscal 2026 [20]. - Sonos maintains a diversified contract manufacturing strategy, with production primarily in Malaysia and Vietnam, to optimize its supply chain [46]. - The company is dependent on a limited number of contract manufacturers, which poses risks to production capacity and could lead to increased costs and delays [107]. Market and Competitive Landscape - The company faces global macroeconomic challenges, including inflation and geopolitical conflicts, which may impact demand for its products and operational costs [21]. - The company faces intense competition from established brands like Bose, Samsung, Sony, and new entrants, which may impact its market share and pricing strategies [82][83]. - The company competes favorably based on brand awareness, product quality, and customer support, distinguishing itself with its proprietary Sonos App and open platform [55]. - The company faces competition from content partners that may limit the availability of streaming services on its products, potentially lowering demand [106]. Research and Development - As of the end of calendar year 2024, Sonos had obtained 1,779 issued patents in the United States, with 228 patents obtained in 2024 alone, and is on pace to obtain more than 200 patents in 2025 [56]. - The company has invested heavily in research and development to enhance its product offerings, but these investments may not yield expected results in a timely manner [88]. - Sonos aims to enhance its global brand awareness and expand its customer base through ongoing investments in research and development and marketing efforts [76]. Risks and Compliance - The company is subject to risks associated with intellectual property rights claims, which could lead to significant legal expenses and impact its operations [96][97]. - The use of AI technologies presents challenges, including reputational harm and legal liability, which could adversely affect operational results [121]. - The company must comply with extensive regulatory requirements, which may increase operational costs and create procurement challenges [137]. - Changes in international trade policies and tariffs could adversely affect the company's business and financial results [135]. Employee and Organizational Structure - The company has approximately 1,404 full-time employees, with 931 in the United States and 473 internationally [59]. - Sonos' compensation program includes base salary, cash incentive bonuses, and long-term equity awards, aimed at aligning employee and stockholder interests [61]. - The Board of Directors oversees the management of cybersecurity risks, with regular updates provided by the information security team [163].

Financial Performance - The company reported a net loss of $25.76 million for the three months ended September 30, 2025, compared to a net loss of $3.56 million for the same period in 2024, indicating an increase in losses of about 620%[19] - For the nine months ended September 30, 2025, net loss was $40.0 million compared to $10.2 million in the same period of 2024, driven by a $24.7 million increase in exploration expenses[129] - Net loss for Q3 2025 was $25.8 million, up from a net loss of $3.6 million in Q3 2024, primarily due to a $17.6 million increase in exploration expenses[128] Assets and Liabilities - Total assets increased significantly to $544.89 million as of September 30, 2025, compared to $117.61 million at December 31, 2024, representing a growth of approximately 363%[18] - Total liabilities stood at $12.89 million as of September 30, 2025, compared to $8.75 million at December 31, 2024, reflecting an increase of approximately 47%[18] - Shareholders' equity increased to $531.99 million as of September 30, 2025, from $108.86 million at December 31, 2024, representing a growth of about 388%[21] Cash Flow and Financing - Cash and cash equivalents rose to $445.83 million at the end of September 2025, a substantial increase from $44.10 million at the beginning of the period, marking an increase of about 910%[23] - The company raised $473.76 million from the sale of common shares during the nine months ended September 30, 2025, compared to $11.01 million in the same period of 2024, indicating a significant increase in financing activities[23] - The company raised $807 million in aggregate gross proceeds from several equity offerings from June 2025 through October 2025[111] Exploration and Development Costs - Exploration expenses surged to $32.13 million for the three months ended September 30, 2025, up from $14.51 million in the same period of 2024, reflecting a year-over-year increase of approximately 121%[19] - Total exploration expenses for the nine months ended September 30, 2025, were $56.2 million, compared to $31.5 million in the same period of 2024[132] - Engineering costs for the nine months ended September 30, 2025, reached $32,486,009, more than double the $16,778,292 reported in 2024[94] Grants and Funding - The Company has been awarded government grants by the U.S. Department of War to fund research and development related to the Stibnite Gold Project[89] - For the three months ended September 30, 2025, the total grant income was $3,332,365, a decrease from $12,920,417 in the same period of 2024[90] - The DPA grant received cash of $592,242 during the three months ended September 30, 2025, compared to $11,667,011 in 2024, indicating a significant decline[90] Project Financing and Development - The Company received a preliminary financing term sheet from U.S. EXIM for $2 billion in debt financing for the Stibnite Gold Project, with due diligence expected to be completed by spring 2026[29] - The Company has a long-term plan to develop the Stibnite Gold Project, which will require additional financing expected to be secured in 2026[28] - The estimated total initial capital cost for the Stibnite Gold Project is approximately $2,215 million, excluding debt service and other financing costs[174] Legal and Regulatory Matters - The Company is involved in ongoing legal proceedings related to environmental claims, with a settlement agreement requiring total payments of $5.0 million over four years[79] - The Idaho Board of Environmental Quality upheld the air permit for the Project, but challenges to this permit are ongoing[169] - The Company believes the USFS ROD and other federal approvals were conducted thoroughly, but outcomes of ongoing lawsuits remain uncertain[167] Environmental and Community Engagement - The Company contributed $450,000 in cash to the Stibnite Foundation during the nine months ended September 30, 2025, totaling $750,000 since its establishment[74] - Future cash payments to the Stibnite Foundation include $500,000 upon commercial production and annual payments of at least $500,000 during commercial production[74] Management and Personnel - The company appointed Mark Murchison as Chief Financial Officer effective October 1, 2025[108] - The company is dependent on a small number of key personnel for critical management decisions, and the loss of any key personnel could adversely affect its operations[202] Risks and Challenges - The successful development of the Project requires obtaining committed financing and completing a multi-year construction process, with significant risks associated with establishing new mining operations[189] - Legal challenges may impact the company's mining, exploration, and development operations, potentially resulting in increased defense costs and delays in project approvals[196] - A prolonged U.S. federal government shutdown could materially affect the company's operations and financial condition, delaying regulatory approvals and impacting construction activities[204]

Financial Performance - The Company reported a net loss per common share for the three months ended September 30, 2025, with basic and diluted calculations reflecting the potential dilution from outstanding shares[38]. - The Company raised approximately $1,245,000 in net proceeds from the sale of 824,535 shares of common stock at an average price of $1.45 per share from July 1, 2025, to September 30, 2025[58]. - The Company sold 440,453 shares of common stock at an average price of approximately $1.55 per share from October 1, 2025, to November 4, 2025, generating net proceeds of approximately $663,000[73]. - On November 10, 2025, the Company entered into a securities purchase agreement to sell 1,970,000 shares of common stock at an offering price of $1.68 per share, with gross proceeds of approximately $6 million[74]. Research and Development - For the three months ended September 30, 2025, research and development costs related to TheraCour amounted to $539,522, a decrease from $644,527 in the same period of 2024, indicating a reduction of approximately 16.3%[47]. - The Company is dependent on its license agreements with TheraCour, which are critical for the development of its drug candidates[68]. - The Company has entered into multiple license agreements, including a COVID-19 License Agreement with TheraCour, which allows the Company to use proprietary technology for drug development[69]. - The Company will pay KMPL a royalty of 70% of the final invoiced sales of any resulting approved drugs from its clinical test drug candidates for COVID-19 in India[70]. Assets and Liabilities - The total property and equipment as of September 30, 2025, was $15,107,567, an increase from $15,023,250 as of June 30, 2025, reflecting a growth of approximately 0.56%[52]. - The Company’s intangible assets, net, as of September 30, 2025, totaled $314,971, a slight decrease from $317,039 as of June 30, 2025[53]. - The Company’s accumulated depreciation for property and equipment increased to $8,320,111 as of September 30, 2025, from $8,189,359 as of June 30, 2025, indicating an increase of approximately 1.6%[52]. - The Company’s accounts payable to TheraCour as of September 30, 2025, was $663,776, an increase from $584,089 as of June 30, 2025[46]. - As of September 30, 2025, accrued expenses totaled $26,300, an increase from $25,969 as of June 30, 2025[57]. Stock and Equity - The Company has 916,308 shares of Series A preferred stock outstanding, which can convert to 3,207,078 common shares only upon a change of control[39]. - The Company granted Dr. Anil Diwan 10,204 shares of Series A preferred stock, with a non-cash compensation expense of $10,013 recognized for the three months ended September 30, 2025[59]. - The Company issued 117,208 fully vested shares of common stock for consulting and legal services, recording an expense of $173,850 for the three months ended September 30, 2025[62]. - The Company has 5,434 outstanding and exercisable common stock warrants as of September 30, 2025, with a weighted average exercise price of $2.36[64]. Regulatory and Reporting - The Company adopted ASU 2023-07 for segment reporting, effective January 1, 2024, which requires additional disclosures regarding significant segment expenses[42]. - The private placement of Warrants and shares was conducted under an exemption from registration, indicating a strategic move to raise capital without extensive regulatory requirements[75]. - The company qualifies as a smaller reporting company and is not obligated to disclose certain market risk information, reflecting its operational scale[323].

Revenue Performance - For the three months ended September 30, 2025, the Precision Logistics segment generated revenue of $4,973,000, a decrease of 6.2% compared to $5,303,000 for the same period in 2024[55]. - The Premium services within the Precision Logistics segment saw revenue decline from $886,000 in Q3 2024 to $809,000 in Q3 2025, representing a decrease of 8.7%[55]. - For the nine months ended September 30, 2025, total revenue was $14,008,000, down from $16,546,000 in the same period of 2024, indicating a decline of 15.4%[55]. - The Proactive services revenue for the nine months ended September 30, 2025, was $11,687,000, compared to $12,587,000 in 2024, reflecting a decrease of 7.1%[55]. - The Authentication segment contributed $113,000 in revenue for the nine months ended September 30, 2025, down from $385,000 in the same period of 2024[55]. - For the three months ended September 30, 2025, the consolidated net revenue was $5,435,000, a decrease of 10.5% compared to $5,303,000 for the same period in 2024[142]. - For the nine months ended September 30, 2025, the consolidated net revenue was $16,546,000, a decrease of 6.5% from $17,688,000 in the same period of 2024[144]. Expenses and Losses - The net loss for the three months ended September 30, 2025, was $2,424,000, compared to a net loss of $3,356,000 for the same period in 2024, representing a 27.7% improvement[142]. - The net loss for the nine months ended September 30, 2025, was $3,323,000, compared to a net loss of $4,218,000 for the same period in 2024, indicating a 21.2% improvement[144]. - Total segment expenses for the three months ended September 30, 2025, were $3,987,000, compared to $4,836,000 in the same period of 2024, indicating a reduction of 17.5%[142]. - The total segment expenses for the nine months ended September 30, 2025, were $7,518,000, compared to $7,260,000 in the same period of 2024, reflecting an increase of 3.6%[144]. Impairments and Amortization - The company recorded a goodwill impairment charge of $1,062 thousand for the Precision Logistics segment during the three and nine months ended September 30, 2025, reducing the net book value to $2,926 thousand[66]. - An intangible asset impairment charge of $2,788 thousand was recorded during the three and nine months ended September 30, 2025, indicating that the carrying value of long-lived assets exceeded their estimated fair values[73]. - Amortization expense for intangible assets was $271 thousand for the three months ended September 30, 2025, and $819 thousand for the nine months ended September 30, 2025[77]. - The company expects to record amortization expense of $137 thousand in the remaining three months of 2025 and a total of $2,317 thousand over the next five years[78]. Share-Based Compensation - The total unrecognized share-based compensation cost related to unvested performance-based restricted stock units was $199 thousand, expected to be recognized over a weighted-average period of less than a year[106]. - The Company granted 110,773 restricted stock units with a grant date fair value of $1.52, while 155,038 units vested and 20,334 units were forfeited as of September 30, 2025[103]. - The Company had a total of 209,137 unvested restricted stock units with an average grant date fair value of $1.39 as of September 30, 2025[103]. - The Company issued 60,000 shares of restricted common stock valued at $41 thousand for consulting services on March 31, 2025, and an additional 60,000 shares valued at $45 thousand on September 30, 2025[83]. - The company expensed $92 thousand related to restricted stock units for the three months ended September 30, 2025[80]. Financial Position and Debt - As of September 30, 2025, the contract asset balance was $381 thousand, down from $786 thousand in 2024, with additions of $4,967 thousand and reclassifications to accounts receivable of $(5,319) thousand during the period[60]. - As of September 30, 2025, the Company had $0 outstanding on the revolving line of credit (RLOC) of $1 million[120]. - The Company entered into a Convertible Note Purchase Agreement for $1.1 million, with $400 thousand held by related parties as of September 30, 2025[122]. - For the nine months ended September 30, 2025, interest expense related to the convertible debt was $46 thousand, down from $66 thousand for the same period in 2024[122]. - The Company has a Master Loan Agreement with ZenCredit Ventures for up to $2 million at an annual interest rate of 16%, with $2 million loaned as of August 11, 2025[123]. - The PNC Facility includes a financial covenant to maintain a fixed charge coverage ratio of at least 1.10 to 1.00 at the end of each fiscal year[117]. - The Company had no taxes payable as of September 30, 2025, or December 31, 2024[124]. Operational Insights - The Company operates two reportable segments: Precision Logistics and Authentication, with the former accounting for nearly all of the revenue[28]. - The Company utilizes a proprietary software platform for predictive analytics in its Precision Logistics segment, enhancing service delivery and customer experience[28]. - One customer represented 12% of revenues for the nine months ended September 30, 2025, compared to 19% for the same period in 2024[134]. - One vendor accounted for 99% of transportation costs in the Precision Logistics segment during the three and nine months ended September 30, 2025[135]. - The company recognized a loss of $0.1 million on the sale of Trust Codes Global, which was sold for $1 NZD[61]. Stock and Shareholder Actions - As of September 30, 2025, the Company had 481,448 shares held in treasury valued at approximately $502 thousand, compared to 290,467 shares valued at $480 thousand as of December 31, 2024[88]. - The Company repurchased 272,177 shares for $221 thousand during the nine months ended September 30, 2025, under a share repurchase program approved in December 2023[89]. - As of September 30, 2025, there were no outstanding stock options, with a balance of 221,000 options as of December 31, 2024, all of which were forfeited or cancelled[97][99]. - The Company had 1,555,207 warrants outstanding as of September 30, 2025, with an average exercise price of $3.95, following the exercise of 1,461,896 warrants at an exercise price of $3.22[107]. - The Company has not sold any shares of common stock through the At-the-Market Sales Agreement, which has an aggregate offering price of $15.8 million[113][115]. Other Notable Events - The Company is currently evaluating the potential effects of new accounting standards on its financial statement disclosures, including ASU 2023-09 and ASU 2024-03[33][35]. - The company issued 70,000 restricted stock awards on October 9, 2025, vesting on October 9, 2026, to two members of the Board of Directors[146]. - After the third quarter ended September 30, 2025, the company discontinued one foreign patent application and abandoned one US and one European patent due to lack of planned use[146].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2025 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36366 FG Nexus Inc. (Exact name of registrant as specified in its charter) Nevada 46-1119100 (State or other jurisdiction of incorporation or organization) Washington, D.C. 20549 ( ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2025 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36366 FG Nexus Inc. (Exact name of registrant as specified in its charter) Nevada 46-1119100 (State or other jurisdiction of incorporation or organization) ( ...

Financial Performance - Revenues for the three months ended September 30, 2025, were $5,300,527, a decrease of $755,519 or 12.48% compared to $6,056,046 for the same period in 2024[228] - Cost of revenues increased to $5,496,377 for the three months ended September 30, 2025, compared to $4,451,185 in 2024, reflecting a rise of $1,045,192 or 23.49%[229] - Gross profit for the quarter ended September 30, 2025, was a loss of $195,850, down from a profit of $1,604,861 in the prior year, a decline of $1,800,711[230] - Selling, general and administrative expenses rose to $6,002,208 for the three months ended September 30, 2025, an increase of $2,637,415 or 78.40% compared to $3,364,793 in 2024[232] - Net loss from continuing operations was $25,844,216 for the three months ended September 30, 2025, compared to a loss of $3,177,373 for the same period in 2024, reflecting an increase in losses of $22,666,843[239] - Revenues for the nine months ended September 30, 2025, were $22,793,160, an increase of $3,494,824 or 18.11% compared to the same period in 2024[243] - Cost of revenues increased to $20,930,455, reflecting a rise of $5,949,773 or 39.71% from $14,980,682 in 2024[244] - Gross profit decreased to $1,862,705, a decline of $2,454,949 or 56.85% compared to $4,317,654 in 2024[245] - Operating expenses were $10,683,465, an increase of $1,068,781 or 11.11% from $9,614,684 in 2024[248] - Net loss was $(29,562,461) for the nine months ended September 30, 2025, compared to net income of $3,212,482 in 2024[257] Digital Assets - The Company recognized a loss of $18,639,017 related to changes in the fair value of digital assets during the three months ended September 30, 2025, with no digital assets held in the comparable 2024 period[235] - The Company recorded a loss of $(18,639,017) related to the change in fair value of its digital asset holdings for the nine months ended September 30, 2025[252] - The Company acquired digital assets with an aggregate fair value of approximately $287 million as of September 30, 2025[208] Financing Activities - The PIPE financing generated $270 million in gross proceeds, representing a significant source of liquidity during the period[261] - Net cash provided by financing activities was $329,618,207, largely attributable to PIPE and ATM transactions[276] - As of September 30, 2025, the Company had approximately $10.1 million outstanding under its secured inventory financing facilities[263] Market and Regulatory Environment - The company faces digital asset market volatility, including price, volume, and spreads for WLD/WCWLD and other tokens[279] - Regulatory developments are impacting custody, stablecoins, and exchange operations, affecting access, withdrawals, and pricing[279] - There are concerns regarding custodian concentration and counterparty risk, including operational incidents and cybersecurity[279] - Capital market conditions are influencing the company's ability to raise additional equity through PIPE or ATM transactions[279] - Interest rate levels are affecting borrowing costs under the Forever 8 Facilities and customer demand for inventory financing[279] - Macro factors such as consumer demand, e-commerce trends, geopolitics, inflation, and credit availability are significant[279] Accounting and Estimates - The company bases its financial estimates on historical experience and reasonable assumptions, which may differ from actual results[280] - Significant accounting policies are detailed in Note 2 of the Quarterly Report[282]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 001-41033 EIGHTCO HOLDINGS INC. (Exact Name of Registrant as Specified in its Charter) Delaware 87-2755739 (State or Oth ...

Business Operations - The Company sold its entire jade mats inventory for $2.00 million in liquidation sales in June 2023, exiting the jade mats business [232]. - The Company has limited experience with operations in Southeast Asia, requiring considerable management attention and resources [232]. - The Company has a global network of retailers and e-commerce platforms, focusing on middle to high-end private label home furnishings [227]. - The Company is actively seeking to integrate new sources of distribution and manufacturing aligned with its growth strategy [227]. - The Company has shifted some manufacturing from China to countries like Vietnam and India to mitigate tariff impacts, although most production remains in China due to quality concerns [245]. - The Company is focusing on AI-driven smart living solutions, integrating technologies like VR, AR, and AI to enhance its furniture business [245]. - The Company has identified a generational shift in consumer preferences towards high-quality, stylish furniture, which is expected to help maintain gross profit margins [245]. - The Company anticipates long-term growth opportunities through refined product development and marketing strategies targeting high-end customers [245]. Financial Performance - Net sales for the three months ended September 30, 2025, were $9.76 million, an increase of 273% from $2.62 million for the same period in 2024 [299]. - Cost of sales increased by 511% to $8.78 million for the three months ended September 30, 2025, compared to $1.44 million for the same period in 2024, with cost of sales as a percentage of sales rising to 90% [301]. - Gross profit was $0.98 million for the three months ended September 30, 2025, compared to $1.18 million for the same period in 2024, representing a gross profit margin decrease from 45% to 10% [302]. - Operating expenses decreased by 59% to $1.47 million for the three months ended September 30, 2025, from $3.59 million for the same period in 2024 [303]. - Net loss for the three months ended September 30, 2025, was $1.13 million, compared to a net loss of $2.47 million for the same period in 2024 [306]. - Net sales for the nine months ended September 30, 2025, were $14.95 million, an increase of 95% from $7.68 million for the same period in 2024 [309]. - Cost of sales for the nine months ended September 30, 2025, increased by 168% to $11.48 million, with cost of sales as a percentage of sales rising to 77% [311]. - Gross profit for the nine months ended September 30, 2025, was $3.47 million, with a gross profit margin of 23%, compared to 44% for the same period in 2024 [312]. - Operating expenses for the nine months ended September 30, 2025, were $4.35 million, a decrease of 44% from $7.78 million for the same period in 2024 [313]. - Net loss for the nine months ended September 30, 2025, was $1.76 million, compared to a net loss of $4.49 million for the same period in 2024 [316]. Compliance and Regulatory Matters - The Company regained compliance with the $1.00 minimum closing bid price requirement for continued listing on NASDAQ as of May 27, 2025 [236]. - The Company submitted a plan to regain compliance with NASDAQ listing rules by June 6, 2024, after being notified of non-compliance [234]. - The company adopted ASU 2023-07 on segment reporting in 2024, which did not have a material impact on financial statements [286]. - ASU 2023-09, effective for annual periods beginning after December 15, 2024, modifies income tax disclosure rules, which the company adopted in 2025 without material impact [287]. - The company is evaluating the impact of ASU 2023-01 on its consolidated financial statements, effective for fiscal years beginning after December 15, 2023 [289]. - The company is currently assessing the implications of ASU 2024-03 on expense disclosures, effective for annual reporting periods beginning after December 15, 2026 [291]. Capital and Financing - The Company received loan proceeds of approximately $139,802 under the Paycheck Protection Program and $176,294 from Cathay Bank, along with a $150,000 SBA loan [233]. - The Company completed three private placements for gross proceeds of $500,000 during the first six months of 2025 [233]. - The Company has increased its authorized shares from 250 million to 5 billion shares, effective immediately upon filing on November 3, 2025 [243]. - The Company has changed its name from "Nova LifeStyle, Inc." to "XMax Inc." as of November 3, 2025 [244]. - Net cash provided by financing activities was $8.63 million for the nine months ended September 30, 2025, compared to $0.96 million for the same period in 2024 [323]. Assets and Liabilities - As of September 30, 2025, the company had working capital of $7,855,912, an increase of $5,729,385 from $2,106,164 at December 31, 2024 [319]. - Net cash used in operating activities was $2.14 million for the nine months ended September 30, 2025, an increase of $1.00 million from $1.13 million for the same period in 2024 [320]. - The company incurred cash outflow of $5.00 million for investing activities, a significant increase from $0 million in the same period of 2024, primarily for investment in SpaceX [322]. - As of September 30, 2025, gross accounts receivable amounted to $16,440, with $2,709 not yet past due and $2,419 more than 90 days past due [324]. - Advances to suppliers increased to $8,025,174 as of September 30, 2025, up from $4,689,148 at December 31, 2024 [325]. - The company has no off-balance sheet arrangements that could materially affect its financial condition [330]. - There are no financial guarantees or derivative contracts that are not reflected in the consolidated financial statements [331].