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 June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 001-37649 FIEE, INC. (Exact Name of Registrant as Specified in its Charter) | Delaware | 04-2621506 | | --- | --- | | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of August 2025 Commission File Number: 001-33283 EUROSEAS LTD. (Translation of registrant's name into English) 4 Messogiou & Evropis Street 151 24 Maroussi, Greece (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or ...

WASHINGTON, DC 20549 ______________________________________________________________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): August 13, 2025 ______________________________________________________________________________ AIR T, INC. (Exact Name of Registrant as Specified in Charter) ______________________________________________________________________________ UNITED STATES SECURITIES AND E ...

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 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: 001-34499 GULF RESOURCES, INC. (Exact name of registrant as specified in its charter) Nevada 13-3637458 (State or other jur ...

FORM 10-Q Filing Information [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides Luminar's basic identification, securities registration, filing status, and outstanding share details - Luminar Technologies, Inc. is incorporated in Delaware and its Class A common stock (LAZR) is listed on The Nasdaq Stock Market LLC[3](index=3&type=chunk) - The registrant is classified as a **non-accelerated filer** and a **smaller reporting company**[4](index=4&type=chunk) **Shares Outstanding** | Class of Stock | Shares Outstanding (as of Aug 8, 2025) | | :--------------- | :------------------------------------- | | Class A Common | 63,891,880 | | Class B Common | 4,872,578 | Table of Contents Cautionary Note Regarding Forward-Looking Statements [Forward-Looking Statements Disclosure](index=3&type=section&id=Forward-Looking%20Statements%20Disclosure) The company outlines forward-looking statements and cautions investors about risks that could cause actual results to differ - Forward-looking statements cover topics such as **restructuring plans (2024 and 2025)**, product plans, future growth, sales estimates, market opportunities, and liquidity[8](index=8&type=chunk) - Key risk factors include a history of losses, significant R&D costs, challenges in LiDAR product adoption by OEMs, lengthy implementation periods for commercial wins, and the inability to control input costs or reduce manufacturing expenses[9](index=9&type=chunk) - Other risks include general economic conditions (inflation, recession), market competition, ability to manage growth, supply chain disruptions, cybersecurity risks, and the **large amount of outstanding indebtedness**[9](index=9&type=chunk)[10](index=10&type=chunk) Website and Social Media Disclosure [Company Communication Channels](index=4&type=section&id=Company%20Communication%20Channels) Luminar uses its website and social media channels for material information disclosure, which investors should monitor - Luminar uses its website (luminartech.com) and social media (X, YouTube, LinkedIn) for disclosing company and product information[13](index=13&type=chunk) - Information posted on these channels may be considered **material**, and investors should monitor them alongside SEC filings[13](index=13&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements.](index=5&type=section&id=Item%201.%20Financial%20Statements.) The company presents its unaudited condensed consolidated financial statements, reflecting a reduced net loss, lower operating expenses, and changes in liquidity and debt structure [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) The company's balance sheet shows decreased total assets and liabilities, driven by lower cash and debt, while the stockholders' deficit increased **Condensed Consolidated Balance Sheets (Unaudited)** | Metric (in thousands) | Dec 31, 2024 | Jun 30, 2025 | Change | | :-------------------- | :----------- | :----------- | :----- | | **Assets** | | | | | Cash & Cash Equivalents | $82,840 | $48,166 | $(34,674) | | Marketable Securities | $99,827 | $59,465 | $(40,362) | | Total Current Assets | $245,227 | $167,328 | $(77,899) | | Total Assets | $365,213 | $265,487 | $(99,726) | | **Liabilities** | | | | | Total Current Liabilities | $60,588 | $69,187 | $8,599 | | Debt | $500,516 | $429,679 | $(70,837) | | Total Liabilities | $586,002 | $513,456 | $(72,546) | | **Equity** | | | | | Total Stockholders' Deficit | $(220,789) | $(272,179) | $(51,390) | [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) The company reports a significantly improved net loss for the six months ended June 30, 2025, driven by a substantial reduction in operating expenses **Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)** | Metric (in thousands, except per share) | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | $15,634 | $16,451 | $34,520 | $37,419 | | Total Cost of Sales | $28,061 | $30,131 | $55,047 | $61,554 | | Gross Loss | $(12,427) | $(13,680) | $(20,527) | $(24,135) | | Research and Development | $39,328 | $65,850 | $77,616 | $133,600 | | Sales and Marketing | $5,297 | $12,140 | $10,201 | $26,655 | | General and Administrative | $(18,753) | $29,790 | $2,163 | $62,839 | | Total Operating Expenses | $27,052 | $114,042 | $91,224 | $229,356 | | Loss from Operations | $(39,479) | $(127,722) | $(111,751) | $(253,491) | | Total Other Income (Expense), net | $16,730 | $(3,451) | $8,458 | $(2,809) | | Net Loss | $(22,899) | $(130,607) | $(103,590) | $(256,321) | | Net Loss per Share (Basic & Diluted) | $(0.62) | $(4.32) | $(2.44) | $(8.76) | [Condensed Consolidated Statements of Preferred Stock and Stockholders' Deficit (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Preferred%20Stock%20and%20Stockholders'%20Deficit%20(Unaudited)) The company's stockholders' deficit increased, influenced by the net loss and a deemed dividend on new Series A preferred stock **Changes in Stockholders' Deficit (in thousands)** | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :-------------------------------------- | :----------- | :----------- | :----- | | Series A Preferred Stock | $0 | $24,210 | $24,210 | | Additional Paid-in Capital | $2,204,814 | $2,257,171 | $52,357 | | Accumulated Deficit | $(2,112,835) | $(2,216,425) | $(103,590) | | Total Stockholders' Deficit | $(220,789) | $(272,179) | $(51,390) | - Issuance of Series A preferred stock, net of costs and discount, contributed **$29.4 million**[22](index=22&type=chunk)[25](index=25&type=chunk) - Deemed dividend on Series A preferred stock was **$7.6 million** for the six months ended June 30, 2025, impacting the calculation of net loss attributable to common stockholders[22](index=22&type=chunk)[25](index=25&type=chunk)[159](index=159&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash used in operations decreased significantly, while financing activities included proceeds from preferred stock and equity offerings offset by debt repurchases **Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands)** | Cash Flow Activity | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Net Cash Used in Operating Activities | $(97,954) | $(158,936) | $60,982 | | Net Cash Provided by Investing Activities | $41,417 | $35,511 | $5,906 | | Net Cash Provided by Financing Activities | $22,721 | $36,894 | $(14,173) | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(33,816) | $(86,531) | $52,715 | | Ending Cash, Cash Equivalents and Restricted Cash | $50,906 | $54,093 | $(3,187) | - Cash used in operations decreased due to a lower net loss and non-cash adjustments including a **$22.1 million gain on extinguishment of debt** and a **$5.3 million change in fair value of derivatives**[28](index=28&type=chunk)[309](index=309&type=chunk) - Financing activities included **$31.4 million** from Series A Preferred Stock issuance and **$21.5 million** from the Equity Financing Program, partially offset by **$30.3 million** for 2026 Convertible Senior Notes repurchase[28](index=28&type=chunk)[311](index=311&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes provide detailed disclosures on accounting policies, financial statement components, debt, equity, and other material items providing context to the financial statements [Note 1. Organization and Description of Business](index=10&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) Luminar specializes in LiDAR hardware and software for autonomous vehicles and retroactively adjusted share data for a 1-for-15 reverse stock split - Luminar specializes in advanced Light Detection and Ranging (LiDAR) hardware and software solutions for the world's safest and smartest vehicles[30](index=30&type=chunk) - A **1-for-15 reverse stock split** was effected in November 2024, with all prior share and per share data retroactively adjusted[31](index=31&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) The company continues to incur operating losses and relies on financing programs, which are expected to provide sufficient liquidity for at least 12 months - The company has an accumulated deficit of **$2.2 billion** as of June 30, 2025, and expects to continue incurring operating losses due to investments in product and software development, customer relations, and manufacturing capabilities[34](index=34&type=chunk) **Liquidity Position (in thousands)** | Metric | Jun 30, 2025 | Dec 31, 2024 | | :---------------------- | :----------- | :----------- | | Cash and Cash Equivalents | $48,166 | $82,840 | | Marketable Securities | $59,465 | $99,827 | | Total Liquidity | $107,631 | $182,667 | - The company early adopted ASU 2024-04 as of January 1, 2025, recognizing a **$21.5 million gain on extinguishment of debt** related to the 2026 Convertible Senior Notes[46](index=46&type=chunk) - The company's business is organized into two operating segments: **Autonomy Solutions** (LiDAR sensors, NRE services, software) and **Advanced Technologies and Services (ATS)** (photonic components, sub-systems, ASICs, pixel-based sensors)[39](index=39&type=chunk)[40](index=40&type=chunk) [Note 3. Business Combinations and Acquisitions](index=12&type=section&id=Note%203.%20Business%20Combinations%20and%20Acquisitions) The acquisition of EM4 in March 2024 resulted in a gain due to the purchase price being lower than the fair value of net assets acquired - Acquired EM4, a designer and manufacturer of packaged photonic components, on March 18, 2024, for approximately **$4.2 million in cash** and up to **$6.75 million in contingent future payments**[50](index=50&type=chunk)[51](index=51&type=chunk) - Recognized a **$1.5 million gain** from the acquisition of EM4, as the consideration paid was lower than the estimated fair value of net assets acquired due to EM4's historical losses and program cancellations[52](index=52&type=chunk) [Note 4. Revenue](index=14&type=section&id=Note%204.%20Revenue) Total revenue decreased for the three and six-month periods, with varied performance between the Autonomy Solutions and ATS segments **Revenue Disaggregation (in thousands)** | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | $15,634 | $16,451 | $34,520 | $37,419 | | Autonomy Solutions Revenue | $10,305 | $9,981 | $24,062 | $26,301 | | ATS Revenue | $5,329 | $6,470 | $10,458 | $11,118 | | North America Revenue | $13,612 (87%) | $15,764 (96%) | $28,604 (83%) | $36,101 (97%) | | Recognized at a point in time | $11,967 (77%) | $15,808 (96%) | $24,939 (72%) | $31,112 (83%) | - For the three months ended June 30, 2025, Autonomy Solutions revenue increased by **$0.3 million (3%)** due to a $4.2 million increase in service revenue, offset by a $3.9 million decrease in product revenue[273](index=273&type=chunk) - Three customers (customer C, customer B, and customer A) accounted for **34%**, **22%**, and **10%** of the Company's accounts receivable as of June 30, 2025, respectively[42](index=42&type=chunk) [Note 5. Restructuring](index=15&type=section&id=Note%205.%20Restructuring) The company initiated a new restructuring plan in May 2025, resulting in further workforce reductions and severance costs - The 2025 Restructuring Plan, initiated in May 2025, resulted in the termination of **257 employees** by June 30, 2025[62](index=62&type=chunk) **Restructuring Charges (in thousands)** | Metric | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | | :-------------------------------------- | :-------------------------- | :-------------------------- | | Restructuring Costs (P&L) | $1,180 | $1,244 | | Severance Expense (Balance as of Dec 31, 2024) | N/A | $772 | | Restructuring Charges (Balance Sheet) | N/A | $1,244 | | Cash Payments | N/A | $(1,715) | | Balance Payable and Accrued Liabilities (Jun 30, 2025) | N/A | $258 | [Note 6. Investments](index=16&type=section&id=Note%206.%20Investments) The company's debt securities portfolio decreased significantly, while an impairment charge on an equity investment was followed by a gain on its repurchase **Debt Securities (in thousands)** | Type | Dec 31, 2024 Fair Value | Jun 30, 2025 Fair Value | Change | | :---------------- | :---------------------- | :---------------------- | :----- | | U.S. Treasury Securities | $10,955 | $15,363 | $4,408 | | Commercial Paper | $19,074 | $9,899 | $(9,175) | | Corporate Bonds | $81,357 | $37,431 | $(43,926) | | Total Debt Securities | $112,947 | $62,693 | $(50,254) | **Equity Investments (in thousands)** | Type | Dec 31, 2024 | Jun 30, 2025 | | :---------------------------- | :----------- | :----------- | | Money Market Funds | $17,730 | $18,451 | | Marketable Equity Investments | $3,165 | $3,075 | | Investment in Non-Marketable Securities (Forterra) | $10,000 | $10,000 | | Total Equity Investments | $30,895 | $31,526 | - An additional impairment charge of **$4.0 million** was recorded on the investment in Forterra in Q2 2024, and a **$2.9 million gain** was recognized from the repurchase of these units in May 2025[70](index=70&type=chunk)[72](index=72&type=chunk) [Note 7. Financial Statement Components](index=17&type=section&id=Note%207.%20Financial%20Statement%20Components) This note details changes in key balance sheet accounts, including a decrease in cash and equipment, an increase in inventory, and accelerated depreciation charges **Key Financial Components (in thousands)** | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :------------------------------ | :----------- | :----------- | :----- | | Cash and Cash Equivalents | $82,840 | $48,166 | $(34,674) | | Inventory, net | $14,908 | $18,047 | $3,139 | | Property and Equipment, net | $52,281 | $46,643 | $(5,638) | | Intangible Assets, net | $15,556 | $13,493 | $(2,063) | | Accrued and Other Current Liabilities | $31,567 | $31,901 | $334 | - Inventory write-downs were **$3.4 million** for the six months ended June 30, 2025, primarily due to obsolescence from product design changes and lower of cost or market assessments[74](index=74&type=chunk) - Accelerated depreciation charges of **$0.3 million** for the six months ended June 30, 2025, resulted from a change in sourcing strategy for certain sub-assemblies and components[79](index=79&type=chunk) [Note 8. Debt](index=20&type=section&id=Note%208.%20Debt) Total debt decreased following exchange and repurchase transactions of convertible notes, resulting in a significant gain on debt extinguishment **Debt Carrying Amounts (in thousands)** | Debt Type | Dec 31, 2024 Net Carrying Amount | Jun 30, 2025 Net Carrying Amount | Change | | :------------------------ | :------------------------------- | :------------------------------- | :----- | | 2026 Convertible Senior Notes | $201,015 | $133,857 | $(67,158) | | Senior Notes | $95,499 | $95,946 | $447 | | 2030 Convertible Notes (Series 1) | $41,445 | $42,369 | $924 | | 2030 Convertible Notes (Series 2) | $153,147 | $153,486 | $339 | | Total Debt | $491,106 | $425,658 | $(65,448) | - For the six months ended June 30, 2025, the company recognized a **$21.5 million gain on debt extinguishment** from March and May 2025 exchange and repurchase transactions of 2026 Convertible Senior Notes[102](index=102&type=chunk) - The 2030 Convertible Notes have conversion options accounted for as bifurcated derivative liabilities, with a fair value of **$4.0 million** at June 30, 2025, and a **$5.3 million decrease in fair value** for the six months ended June 30, 2025[120](index=120&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - The company has a **$50.0 million non-recourse Credit Facility**, which was undrawn as of June 30, 2025[133](index=133&type=chunk)[135](index=135&type=chunk) [Note 9. Fair Value Measurements](index=26&type=section&id=Note%209.%20Fair%20Value%20Measurements) The company details the fair value hierarchy for its financial instruments, with derivative liabilities classified as Level 3 and certain notes as Level 2 or 3 **Fair Value Measurements (in thousands)** | Asset/Liability (Jun 30, 2025) | Level 1 | Level 2 | Level 3 | Total Fair Value | | :----------------------------- | :------ | :------ | :------ | :--------------- | | Cash Equivalents | $19,750 | $5,004 | $0 | $24,754 | | Marketable Investments | $17,139 | $42,326 | $0 | $59,465 | | Derivative Liability | $0 | $0 | $(4,021) | $(4,021) | - The estimated fair value of the 2026 Convertible Senior Notes was **$85.1 million (Level 2)** at June 30, 2025[146](index=146&type=chunk) - The estimated fair value of the Senior Notes was **$98.9 million (Level 3)** and the 2030 Convertible Notes (excluding bifurcated derivative liabilities) was **$106.1 million (Level 3)** at June 30, 2025[147](index=147&type=chunk) [Note 10. Earnings (Loss) Per Share](index=28&type=section&id=Note%2010.%20Earnings%20(Loss)%20Per%20Share) Net loss per share improved significantly compared to the prior year, with the calculation including a deemed dividend on Series A preferred stock **Net Loss Per Share Attributable to Common Stockholders** | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Loss Attributable to Common Stockholders (in thousands) | $(30,501) | $(130,607) | $(111,192) | $(256,321) | | Weighted Average Shares Outstanding (Basic & Diluted) | 49,087,995 | 30,242,540 | 45,608,362 | 29,274,792 | | Net Loss Per Share (Basic & Diluted) | $(0.62) | $(4.32) | $(2.44) | $(8.76) | - A deemed dividend of **$7.6 million** on Series A preferred stock reduced earnings available to common stockholders for the six months ended June 30, 2025[150](index=150&type=chunk) - As of June 30, 2025, **26.9 million potential common shares** were excluded from diluted EPS calculation as their effect would have been antidilutive due to the net loss[152](index=152&type=chunk) [Note 11. Preferred Stock](index=29&type=section&id=Note%2011.%20Preferred%20Stock) The company issued Series A Preferred Stock in May 2025, raising capital and resulting in a deemed dividend due to its variable conversion feature - Issued 35,000 shares of newly designated Series A Convertible Preferred Stock in May 2025 for net proceeds of **$33.6 million**[153](index=153&type=chunk) - The Series A Preferred Stock is convertible into Class A common stock at a conversion price equal to the lesser of a fixed price of **$4.752** and **95% of the lowest VWAP** over five trading days, subject to a floor price of **$0.792**[159](index=159&type=chunk) - Holders converted 12,000 shares of Series A Preferred Stock into **4,087,889 shares of Class A common stock** by June 30, 2025[154](index=154&type=chunk) [Note 12. Stockholders' Equity](index=31&type=section&id=Note%2012.%20Stockholders'%20Equity) The company utilized its Equity Financing Program and a Stock-in-lieu of Cash Program to issue additional Class A common shares **Common Stock Outstanding (as of June 30, 2025)** | Class | Shares Issued | Shares Outstanding | | :---------- | :------------ | :----------------- | | Class A | 54,830,075 | 53,372,512 | | Class B | 4,872,578 | 4,872,578 | - The Equity Financing Program was expanded by an additional **$75.0 million** in March 2025, with **$187.4 million** available for sale as of June 30, 2025[179](index=179&type=chunk)[180](index=180&type=chunk) - Issued **6,247,076 shares** of Class A common stock under the Equity Financing Program for net proceeds of **$21.5 million** during the six months ended June 30, 2025[180](index=180&type=chunk) - Issued **1,000,000 shares** of Class A common stock to TPK Holding Co, Ltd under the Stock-in-lieu of Cash Program during the six months ended June 30, 2025[184](index=184&type=chunk) [Note 13. Stock-based Compensation](index=33&type=section&id=Note%2013.%20Stock-based%20Compensation) Stock-based compensation expense reversed significantly due to the forfeiture of awards related to the termination of the former CEO **Stock-based Compensation Expense (in thousands)** | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Stock-based Compensation Expense | $(20,657) | $38,491 | $(1,277) | $82,956 | | G&A Stock-based Compensation | $(28,908) | $16,846 | $(18,274) | $38,209 | - A **$34.7 million reversal** of share-based compensation expense was recorded in general and administrative expenses due to the termination of the former CEO during the six months ended June 30, 2025[197](index=197&type=chunk) - **1,922,492 time-based RSUs** were granted during the six months ended June 30, 2025[193](index=193&type=chunk) [Note 14. Income Taxes](index=35&type=section&id=Note%2014.%20Income%20Taxes) The company's effective tax rate differs from the statutory rate primarily due to its valuation allowance and taxes on foreign earnings **Income Tax Provision (in thousands)** | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Provision for (benefit from) Income Taxes | $150 | $(566) | $297 | $21 | | Effective Tax Rate | (0.7)% | 0.4% | (0.3)% | —% | - The effective tax rate differs significantly from the statutory tax rate of 21% primarily due to the company's **valuation allowance movement** and taxes on foreign earnings[199](index=199&type=chunk) [Note 15. Leases](index=36&type=section&id=Note%2015.%20Leases) Operating lease assets and liabilities decreased, with a significant loss recorded from the termination of a lease in Sunnyvale, California **Lease Information (in thousands)** | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :-------------------------------------- | :----------- | :----------- | :----- | | Operating Lease Right-of-Use Assets | $31,479 | $20,127 | $(11,352) | | Operating Lease Liabilities, Current | $10,049 | $7,572 | $(2,477) | | Operating Lease Liabilities, Non-Current | $24,083 | $14,406 | $(9,677) | | Total Operating Lease Liabilities | $34,132 | $21,978 | $(12,154) | - Termination of a non-cancellable operating lease in Sunnyvale, California, in April 2025 resulted in an **$8.3 million loss on lease termination**[202](index=202&type=chunk) - Weighted average remaining lease term is **3.88 years** as of June 30, 2025, with a weighted average discount rate of **6.66%**[203](index=203&type=chunk)[204](index=204&type=chunk) [Note 16. Commitments and Contingencies](index=37&type=section&id=Note%2016.%20Commitments%20and%20Contingencies) The company has significant purchase obligations and is involved in several legal proceedings, which it intends to vigorously defend - Purchase obligations totaled **$93.7 million** as of June 30, 2025, primarily for inventory, R&D, and general and administrative activities[205](index=205&type=chunk) - The company is defending against multiple class action and shareholder derivative lawsuits, including **Johnson v. Luminar Technologies, Inc., et al.** and **Yskollari v. Luminar Technologies, Inc., et al.**, but does not expect a material adverse impact on financial results[207](index=207&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) [Note 17. Segment and Customer Concentration Information](index=38&type=section&id=Note%2017.%20Segment%20and%20Customer%20Concentration%20Information) Operating losses for both the Autonomy Solutions and ATS segments decreased, while revenue concentration with key customers remains high **Segment Operating Loss (in thousands)** | Segment | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Autonomy Solutions | $(35,150) | $(118,949) | $(102,630) | $(243,967) | | ATS | $(4,329) | $(8,773) | $(9,121) | $(9,524) | - Autonomy Solutions operating loss decreased significantly due to reductions in personnel-related costs, stock-based compensation expense, purchased materials, and supplies expenses[288](index=288&type=chunk) - Two customers, customer A and customer B of the Autonomy Solutions segment, accounted for **38%** and **21%**, respectively, of the Company's revenue for the six months ended June 30, 2025[229](index=229&type=chunk) [Note 18. Subsequent Events](index=42&type=section&id=Note%2018.%20Subsequent%20Events) Subsequent to the quarter end, the company saw further preferred stock conversions and common stock issuances under its financing programs - In July 2025, holders of Series A Preferred Stock converted an additional 16,000 shares into **6,104,645 shares of Class A common stock**[233](index=233&type=chunk) - In July 2025, the company issued **2,345,520 shares of Class A common stock** under the Equity Financing Program for net proceeds of **$6.9 million**[234](index=234&type=chunk) - In July 2025, **1,600,000 shares of Class A common stock** were issued to TPK Holding Co, Ltd for services[235](index=235&type=chunk) - Preliminary analysis suggests the One, Big, Beautiful, Bill (OBBB) Act's impact on deferred taxes will not be significant due to the company's **valuation allowance**[230](index=230&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses financial results, strategic updates, liquidity management, and efforts to reduce operating losses while managing debt and securing capital [Overview](index=44&type=section&id=Overview) Luminar is a technology company developing advanced LiDAR hardware and software to enable vehicle safety and autonomy - Luminar specializes in advanced LiDAR hardware and software solutions to enable next-generation safety and autonomous capabilities for passenger and commercial vehicles[237](index=237&type=chunk) - The product portfolio includes proprietary LiDAR hardware, core semiconductor components, and in-development software capabilities such as perception and high-definition '3D' mapping[238](index=238&type=chunk) [Industrialization Update](index=44&type=section&id=Industrialization%20Update) The company is executing its industrialization plan, achieving Start of Production for Volvo and optimizing its manufacturing and supply chain processes - Achieved **Start of Production (SOP)** for Volvo Cars at the manufacturing facility in Mexico in 2024 and began shipping production LiDAR sensors for the Volvo EX90[240](index=240&type=chunk) - The transition to new suppliers for certain sub-assemblies and components has essentially been completed, as part of ongoing manufacturing and product design optimization[241](index=241&type=chunk) [Business Updates](index=44&type=section&id=Business%20Updates) The company is winding down non-core businesses, expanding OEM partnerships, and executing restructuring and financing activities to manage liquidity - Initiated the wind-down of data and insurance businesses, expecting a **$16.0 million reduction in total revenue** and a **$23.0 million reduction in operating expenses** on a full-year run-rate basis[242](index=242&type=chunk)[243](index=243&type=chunk) - LiDAR technology will be equipped in the new **Volvo ES90**, marking the second Volvo model to feature Luminar's technology, and a collaboration with **Caterpillar Inc.** for autonomous solutions was announced[244](index=244&type=chunk)[245](index=245&type=chunk) - Incurred **$11.0 million in total charges** associated with employee severance and related costs from the 2024 and 2025 restructuring plans[248](index=248&type=chunk) - Completed March and May 2025 exchange transactions and a repurchase transaction for 2026 Convertible Senior Notes, issuing Class A common stock and repurchasing notes for cash[249](index=249&type=chunk)[250](index=250&type=chunk) - Closed an initial offering for 35,000 shares of Series A Preferred Stock for **$33.6 million net proceeds** in May 2025[251](index=251&type=chunk) [Basis of Presentation](index=45&type=section&id=Basis%20of%20Presentation) The condensed consolidated financial statements include Luminar and its wholly-owned subsidiaries, with intercompany transactions eliminated - The condensed consolidated financial statements include the accounts of Luminar and its wholly-owned subsidiaries, with intercompany accounts and transactions eliminated[254](index=254&type=chunk) [Components of Results of Operations](index=46&type=section&id=Components%20of%20Results%20of%20Operations) The company's operations are divided into Autonomy Solutions and ATS segments, with significant ongoing investment in R&D for product and software development - The **Autonomy Solutions** segment designs, manufactures, and sells LiDAR sensors and provides non-recurring engineering (NRE) services and data licensing[256](index=256&type=chunk) - The **ATS** segment provides advanced semiconductors, components, and design/testing services to both Autonomy Solutions and third-party customers, including government agencies[257](index=257&type=chunk) - R&D costs are expensed as incurred and are expected to remain elevated due to continued investment in product roadmap and integrated software solutions[263](index=263&type=chunk)[265](index=265&type=chunk) - Gross loss is expected to temporarily increase as the company transitions from prototype to series production, with lower average selling prices, until cost reduction and efficiency measures are realized[262](index=262&type=chunk) [Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024](index=48&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The company's loss from operations improved significantly, driven by a 60% reduction in operating expenses due to lower R&D, S&M, and G&A costs **Key Financial Performance (in thousands)** | Metric | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Total Revenue | $34,520 | $37,419 | $(2,899) | (8)% | | Gross Loss | $(20,527) | $(24,135) | $3,608 | (15)% | | Research and Development | $77,616 | $133,600 | $(55,984) | (42)% | | Sales and Marketing | $10,201 | $26,655 | $(16,454) | (62)% | | General and Administrative | $2,163 | $62,839 | $(60,676) | (97)% | | Total Operating Expenses | $91,224 | $229,356 | $(138,132) | (60)% | | Loss from Operations | $(111,751) | $(253,491) | $141,740 | (56)% | | Net Loss | $(103,590) | $(256,321) | $152,731 | (60)% | - Autonomy Solutions revenue decreased by **$2.2 million (9%)** for the six months ended June 30, 2025, primarily due to an $8.2 million decrease in product revenue, partially offset by a $6.0 million increase in service revenue[274](index=274&type=chunk) - Cost of sales decreased by **$6.5 million (11%)** for the six months ended June 30, 2025, due to cost reduction initiatives and decreased costs associated with a terminated Iris+ development contract[276](index=276&type=chunk) - General and administrative expenses decreased by **$60.7 million (97%)** for the six months ended June 30, 2025, largely due to a **$34.7 million stock-based compensation expense reversal** from the former CEO's termination and headcount reduction[283](index=283&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company relies on debt and equity financing to fund its operations and believes existing liquidity sources are sufficient for at least the next 12 months **Liquidity Position (in thousands)** | Metric | Jun 30, 2025 | | :---------------------- | :----------- | | Cash and Cash Equivalents | $48,166 | | Marketable Securities | $59,465 | | Total Liquidity | $107,631 | - Net cash used in operating activities was **$98.0 million** for the six months ended June 30, 2025[305](index=305&type=chunk) - The company relies on proceeds from debt and equity issuances, including the Equity Financing Program (with **$187.4 million available** as of June 30, 2025) and Series A Preferred Stock Financing, to fund operations and strategic initiatives[295](index=295&type=chunk)[297](index=297&type=chunk)[306](index=306&type=chunk) - Management believes existing liquidity sources will be sufficient for at least 12 months, contingent on continued access to the Equity Financing Program and Series A Preferred Stock Financing Program[306](index=306&type=chunk) [Cash Flow Summary](index=53&type=section&id=Cash%20Flow%20Summary) Cash used in operations decreased due to a lower net loss, while investing activities provided cash from marketable securities and financing activities provided cash from equity issuances **Cash Flow Summary (in thousands)** | Cash Flow Activity | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :-------------------------- | :-------------------------- | :-------------------------- | | Operating Activities | $(97,954) | $(158,936) | | Investing Activities | $41,417 | $35,511 | | Financing Activities | $22,721 | $36,894 | - Net cash used in operating activities decreased by **$60.9 million**, primarily due to a lower net loss and non-cash adjustments like debt extinguishment gains and derivative fair value changes[309](index=309&type=chunk) - Investing activities were primarily driven by **$80.8 million** of proceeds from maturities of marketable securities and **$14.5 million** from sales and redemptions of marketable securities[310](index=310&type=chunk) - Financing activities included **$31.4 million** from Series A Preferred Stock issuance and **$21.5 million** from the Equity Financing Program, partially offset by **$30.3 million** paid for the repurchase of 2026 Convertible Senior Notes[311](index=311&type=chunk) [Critical Accounting Policies and Estimates](index=53&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies and estimates remained unchanged during the period - No significant changes to critical accounting policies and estimates occurred during the three and six months ended June 30, 2025[314](index=314&type=chunk) [Smaller Reporting Company Status](index=53&type=section&id=Smaller%20Reporting%20Company%20Status) Luminar qualifies as a smaller reporting company and utilizes reduced disclosure requirements - Luminar is a smaller reporting company and takes advantage of certain reduced disclosure requirements[315](index=315&type=chunk) [Recent Accounting Pronouncements](index=53&type=section&id=Recent%20Accounting%20Pronouncements) Details on recent accounting pronouncements are available in Note 2 of the financial statements - Information on recent accounting pronouncements is provided in Note 2 of the notes to condensed consolidated financial statements[316](index=316&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, Luminar is not required to provide these disclosures - As a smaller reporting company, Luminar is not required to provide quantitative and qualitative disclosures about market risk[317](index=317&type=chunk) [Item 4. Controls and Procedures.](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management evaluated and concluded that the company's disclosure controls and procedures were effective as of the end of the quarter - The effectiveness of disclosure controls and procedures was evaluated and concluded to be **effective** as of June 30, 2025[319](index=319&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter ended June 30, 2025[320](index=320&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings.](index=55&type=section&id=Item%201.%20Legal%20Proceedings.) Information regarding legal proceedings is provided in Note 16 of the financial statements - Information regarding legal proceedings is incorporated by reference from Note 16 to the condensed consolidated financial statements[323](index=323&type=chunk) [Item 1A. Risk Factors.](index=55&type=section&id=Item%201A.%20Risk%20Factors.) The company updates its risk factors, emphasizing dependence on external capital, potential for stockholder dilution, and the influence of its largest stockholder [Risk Factor Summary](index=55&type=section&id=Risk%20Factor%20Summary) The company's ability to access capital is a key risk, as unfavorable terms or substantial dilution to stockholders could result - A key risk factor is the company's ability to access sources of capital to pay indebtedness and finance operations and growth, which may not be available on favorable terms or without **substantial dilution** to stockholders[325](index=325&type=chunk) [Risks Related to Ownership of Our Class A Shares](index=55&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Shares) Luminar's dependency on financing, potential for dilution from future issuances, and the significant voting power of its largest stockholder pose risks to shareholders - The company is dependent on proceeds from its Equity Financing Program, Series A Preferred Stock Financing, and debt financing to meet financial obligations and fund operations[326](index=326&type=chunk) - Any future equity securities or convertible/exchangeable securities issued may have rights, preferences, and privileges more favorable than Class A common stock and would **further dilute existing stockholders**[328](index=328&type=chunk) - Austin Russell, through his ownership of Class B common stock, controls approximately **47.7% of the voting power**, giving him significant influence over corporate actions[329](index=329&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued Class A common stock in exchange for convertible notes in an unregistered transaction - On May 22, 2025, the company issued **3,050,750 shares of Class A common stock** in exchange for **$6.2 million** aggregate principal amount of 2026 Convertible Senior Notes[330](index=330&type=chunk) - These exchange transactions were conducted pursuant to an exemption from registration under **Section 4(a)(2) of the Securities Act**[331](index=331&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) No defaults upon senior securities occurred during the reported period - There were no defaults upon senior securities[332](index=332&type=chunk) [Item 4. Mine Safety Disclosures.](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Mine Safety Disclosures are not applicable[333](index=333&type=chunk) [Item 5. Other Information.](index=56&type=section&id=Item%205.%20Other%20Information.) No officers or directors adopted or terminated Rule 10b5-1 trading arrangements during the quarter - None of the company's Section 16 officers or directors adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the fiscal quarter ended June 30, 2025[334](index=334&type=chunk) [Item 6. Exhibits.](index=57&type=section&id=Item%206.%20Exhibits.) This section lists the various exhibits filed with the Form 10-Q, including corporate governance documents and key agreements - The section lists various exhibits filed, including corporate governance documents (e.g., Certificate of Designations of Series A Preferred Stock), key agreements (e.g., Securities Purchase Agreement), and certifications[335](index=335&type=chunk)[337](index=337&type=chunk) Signatures [Report Signatures](index=58&type=section&id=Report%20Signatures) The report was duly signed by the Chief Executive Officer and Chief Financial Officer on behalf of the company - The report was signed on August 13, 2025, by **Paul Ricci, Chief Executive Officer**, and **Thomas J. Fennimore, Chief Financial Officer**[340](index=340&type=chunk)

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 quarter ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-42617 CRANE HARBOR ACQUISITION CORP. (Exact Name of Registrant as Specified in Its Charter) Cayman Islands 98-1830736 (State or other jurisd ...

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 quarter ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-42617 CRANE HARBOR ACQUISITION CORP. (Exact Name of Registrant as Specified in Its Charter) Cayman Islands 98-1830736 (State or other jurisd ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) Global Water Resources reported **5.4% revenue growth** to **$14.2 million** in Q2 2025, with net income at **$1.6 million**, alongside operational expansion, strategic investments, and regulatory successes [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Global Water Resources reported a 5.4% increase in total revenue to $14.2 million for Q2 2025, driven by organic connection growth, increased consumption, and higher rates, though net income decreased to $1.6 million ($0.06 per share) due to increased depreciation expense, while Adjusted EBITDA saw a modest increase of 2.1% to $6.9 million Q2 2025 Financial Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :------------------- | :------------------ | :------------------ | :--------- | | Total Revenue | $14.2 | $13.5 | 5.4% | | Net Income | $1.6 | $1.7 | -5.9% | | EPS | $0.06 | $0.07 | -14.3% | | Adjusted EBITDA | $6.9 | $6.8 | 2.1% | - The decline in **net income** was primarily due to **increased depreciation expense** resulting from the company's **capital improvement plan**[5](index=5&type=chunk) [Q2 2025 Operational Highlights](index=1&type=section&id=Q2%202025%20Operational%20Highlights) The company experienced significant operational growth in Q2 2025, with active service connections increasing by 3.8% and water consumption rising by 8.2%, alongside substantial investments in infrastructure projects to support existing utilities and future growth Q2 2025 Operational Metrics | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--------------------------- | :----------- | :----------- | :--------- | | Total Active Service Connections | 65,639 | 63,256 | 3.8% | | Water Consumption | 1.2 billion gallons | 1.1 billion gallons | 8.2% | - Invested **$20.2 million** in infrastructure projects to support existing utilities and continued growth[5](index=5&type=chunk) [Other Key Highlights](index=1&type=section&id=Other%20Highlights) Global Water Resources extended its revolving credit facility to May 2027 and increased its borrowing capacity to $20 million, declared monthly cash dividends of $0.02533 per share, secured key regulatory approvals for GW-Farmers expected to generate an additional $1.1 million in annual revenue, and completed a significant acquisition of seven water systems from Tucson Water projected to add $1.5 million in annual revenue - Extended maturity date of revolving credit facility to **May 18, 2027**, and increased principal amount available for borrowing from **$15 million to $20 million**[5](index=5&type=chunk) - Declared three monthly cash dividends of **$0.02533 per common share**, totaling **$0.30396 per common share** on an annualized basis[5](index=5&type=chunk) - The Arizona Corporation Commission (ACC) issued Decision No. 80695 for GW-Farmers, with new rates expected to generate approximately **$1.1 million in increased annual revenue**, phased in starting **May 1, 2025**[5](index=5&type=chunk) - Completed the acquisition of seven water systems from Tucson Water in July, valued at approximately **$7.7 million**, expected to generate approximately **$1.5 million in annual revenue**[5](index=5&type=chunk) - The City of Maricopa was estimated by the U.S. Census Bureau to be the **6th fastest growing large city** in the country, with a **7.4% population increase in 2024**[5](index=5&type=chunk) [Management Commentary & Strategic Outlook](index=2&type=section&id=Management%20Commentary) Management attributes Q2 growth to organic connections and rate cases, details strategic initiatives and regulatory progress, and underscores Arizona's robust economic outlook as a key growth driver [Q2 Performance Drivers](index=2&type=section&id=Q2%20Performance%20Drivers) Global Water Resources' Q2 top-line growth was primarily fueled by organic connection growth, increased water consumption, and a successful rate case strategy, including the approval of the GW-Farmers general rate case - Top-line growth in Q2 was primarily driven by **organic connection growth**, **increased consumption**, and **successful rate case strategy**[6](index=6&type=chunk) - Received approval for the GW-Farmers general rate case, with **50% of the approved rate increase effective May 1, 2025**, supporting improvements for customers and the Sahuarita community[6](index=6&type=chunk) [Strategic Initiatives & Regulatory Updates](index=2&type=section&id=Strategic%20Initiatives%20%26%20Regulatory%20Updates) The company anticipates significant regional growth catalysts, including the Arizona Department of Transportation's plan for State Route 347 improvements and the new 'ag-to-urban' bill (Senate Bill 1611), which is expected to support water management and development, while the general rate case for GW-Santa Cruz and GW-Palo Verde is progressing, aiming for approximately $6.5 million in additional net annual revenue to maintain high-quality services - Arizona Department of Transportation's inclusion of State Route 347 improvements in its **$11.6 billion five-year plan** is seen as a major milestone and catalyst for sustainable growth, potentially driving increased demand for water services[7](index=7&type=chunk) - Arizona's Senate Bill 1611, the new 'ag-to-urban' bill, effective **September 26, 2025**, is expected to support water management, economic development, and housing accessibility, with up to **384,000 acres eligible for conversion**[8](index=8&type=chunk) - The general rate case for GW-Santa Cruz and GW-Palo Verde is proceeding, with testimony and a hearing expected in **Q4 2025**, seeking approximately **$6.5 million in additional net annual revenue**[9](index=9&type=chunk) - The company expects appropriate rates to capture **2025 capital investments** upon the anticipated completion of the Pinal County utilities' rate case around **mid-2026**[10](index=10&type=chunk) [Arizona Growth & Economic Outlook](index=2&type=section&id=Arizona%20Growth%20%26%20Economic%20Outlook) Arizona's robust economic outlook, characterized by strong job growth and unprecedented investment commitments from major industry leaders, is expected to drive organic connection growth for Global Water Resources, particularly in the Metro Phoenix area - Arizona's strong economic outlook, with employment expected to rise by **478,000 jobs through 2032** (**1.4% annual growth**), is anticipated to support organic connection growth[11](index=11&type=chunk) - The state received **$50 billion in investment commitments last year**, including TSMC's **$165 billion planned investment** in Metro Phoenix and Apple's multi-billion dollar plans, significantly reshaping the region[11](index=11&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Summary) This section details a **5.4% revenue increase** to **$14.2 million**, an **8.5% rise** in operating expenses, and a **6.8% decrease** in net income to **$1.6 million**, while Adjusted EBITDA grew by **2.1%** [Revenue Analysis](index=2&type=section&id=Revenue) Total regulated revenue increased by 5.4% to $14.2 million in Q2 2025, primarily driven by organic growth in active water and wastewater connections, increased consumption, and higher rates from recent general rate cases for GW-Saguaro and GW-Farmers Three Months Ended June 30, Revenue (in thousands) | Service Type | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------- | :------ | :------ | :--------- | :--------- | | Water service | $7,368 | $6,668 | $700 | 10.5% | | Wastewater and recycled water service | $6,873 | $6,842 | $31 | 0.5% | | Total regulated revenue | $14,241 | $13,510 | $731 | 5.4% | | Total revenue | $14,241 | $13,510 | $731 | 5.4% | - Revenue increase was primarily attributable to **organic growth in active water and wastewater connections**, **increased water and recycled water consumption**, and **higher rates** for GW-Saguaro (effective July 2024 and January 2025) and GW-Farmers (effective May 1, 2025)[12](index=12&type=chunk)[13](index=13&type=chunk) [Operating Expenses Analysis](index=3&type=section&id=Operating%20Expenses) Total operating expenses increased by 8.5% to $11.6 million in Q2 2025, mainly due to higher personnel costs, increased IT service provider contracts, one-time wastewater disposal costs, and higher depreciation and amortization Three Months Ended June 30, Operating Expenses (in thousands) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------- | :------ | :------ | :--------- | :--------- | | Personnel costs - operations and maintenance | $1,356 | $1,184 | ($172) | (14.5)% | | Utilities, chemicals and repairs | $1,183 | $1,084 | ($99) | (9.1)% | | Other operations and maintenance expenses | $1,378 | $1,217 | ($161) | (13.2)% | | Total operations and maintenance expense | $3,917 | $3,485 | ($432) | (12.4)% | | Personnel costs - general and administrative | $2,236 | $2,185 | ($51) | (2.3)% | | Professional fees | $441 | $482 | $41 | 8.5% | | Other general and administrative expenses | $1,710 | $1,565 | ($145) | (9.3)% | | Total general and administrative expense | $4,387 | $4,232 | ($155) | (3.7)% | | Depreciation and amortization | $3,317 | $2,996 | ($321) | (10.7)% | | Total operating expenses | $11,621 | $10,713 | ($908) | (8.5)% | [Operations and Maintenance](index=3&type=section&id=Operations%20and%20Maintenance) Higher operations and maintenance costs were primarily due to increased salaries and wages from filling vacant positions, higher medical costs, additional IT service provider contracts, and one-time wastewater disposal costs - Higher personnel costs were attributable to **increased salaries and wages** from filling vacant positions and **increased medical costs**[15](index=15&type=chunk) - Other operations and maintenance expenses increased due to **additional contracts with IT service providers** and **one-time wastewater disposal costs**[15](index=15&type=chunk) [General and Administrative](index=3&type=section&id=General%20and%20Administrative) The increase in general and administrative expenses was mainly driven by higher costs associated with various service providers - Increase in other general and administrative expenses was primarily due to **higher costs associated with various service providers**[16](index=16&type=chunk) [Depreciation and Amortization](index=3&type=section&id=Depreciation%20and%20Amortization) Depreciation and amortization expenses rose due to an increase in depreciable fixed assets and additional amortization from a new office lease in Pima County - Increase in depreciation and amortization was substantially attributable to an **increase in depreciable fixed assets** and **additional amortization from a new office lease** in Pima County in December 2024[17](index=17&type=chunk) [Other Income (Expense)](index=3&type=section&id=Other%20Expense) Other expense decreased to $0.4 million in Q2 2025 from $0.5 million in the prior year, primarily due to higher income from Buckeye growth premiums resulting from an increase in new meter connections - Other expense decreased by **$0.1 million**, primarily due to **higher income associated with Buckeye growth premiums** from increased new meter connections[18](index=18&type=chunk) [Net Income & Adjusted EBITDA](index=3&type=section&id=Net%20Income) Net income for Q2 2025 decreased by 6.8% to $1.6 million, or $0.06 per share, compared to $1.7 million, or $0.07 per share, in Q2 2024, while Adjusted EBITDA, however, increased by 2.1% to $6.9 million Q2 2025 Net Income and Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------- | :------ | :------ | :--------- | :--------- | | Net Income | $1,612 | $1,730 | ($118) | -6.8% | | EPS | $0.06 | $0.07 | ($0.01) | -14.3% | | Adjusted EBITDA | $6,935 | $6,793 | $142 | 2.1% | [Business Operations & Strategy](index=4&type=section&id=Business%20Strategy) The company's strategy focuses on increasing service connections, improving efficiencies, and securing rate increases, supported by a consistent dividend policy and favorable regional growth trends [Dividend Policy](index=4&type=section&id=Dividend%20Policy) Global Water Resources recently declared a monthly cash dividend of $0.02533 per common share, which translates to an annualized dividend of $0.30396 per share - Declared a monthly cash dividend of **$0.02533 per common share**, payable on **August 29, 2025**, to holders of record on **August 15, 2025**, equivalent to **$0.30396 per share** on an annualized basis[21](index=21&type=chunk) [Business Strategy](index=4&type=section&id=Business%20Strategy) The company's near-term growth strategy focuses on increasing service connections, improving operating efficiencies, and securing utility rate increases, while long-term, Global Water plans to continue aggregating water and wastewater utilities through strategic acquisitions and consolidation to realize benefits of regionalization and environmental stewardship - Near-term growth strategy involves **increasing service connections**, **improving operating efficiencies**, and **increasing utility rates** as approved by the ACC[22](index=22&type=chunk) - Plans to continue **aggregating water and wastewater utilities** through strategic acquisitions and entity consolidation to achieve benefits of consolidation, regionalization, and environmental stewardship[22](index=22&type=chunk) [Connection Rates & Growth Trends](index=4&type=section&id=Connection%20Rates) Active service connections increased by 3.8% year-over-year, primarily driven by organic growth in the company's service areas, supported by the Phoenix metropolitan area's significant population increase and lower housing costs in areas like the City of Maricopa, despite a recent decrease in housing permits Active Service Connections | Date | Active Service Connections | | :----------- | :------------------------- | | June 30, 2025 | 65,639 | | June 30, 2024 | 63,256 | | Change | +2,383 (3.8%) | - The Phoenix MSA is the **10th largest MSA in the U.S.** with an estimated population of **5.2 million in 2024**, a **7.0% increase since 2020**, and is projected to reach **5.8 million by 2030** and **6.5 million by 2040**[24](index=24&type=chunk) - Organic growth is heavily influenced by the nearly **30% lower median home sales price** in the City of Maricopa compared to the City of Phoenix as of June 2025[25](index=25&type=chunk) - Despite a decrease in single-family and multi-family permits in **H1 2025** due to macroeconomic challenges, management believes the company is well-positioned for long-term growth in the Phoenix MSA due to available lots and existing infrastructure[26](index=26&type=chunk) [Company Information & Financial Statements](index=4&type=section&id=Company%20Information%20%26%20Financial%20Statements) This section provides an overview of Global Water Resources' operations and Total Water Management approach, defines non-GAAP measures, includes cautionary notes on forward-looking statements, and presents condensed consolidated financial statements [About Global Water Resources](index=5&type=section&id=About%20Global%20Water%20Resources) Global Water Resources is a leading water resource management company operating 39 systems providing water, wastewater, and recycled water services primarily in growth corridors around metropolitan Phoenix and Tucson, recognized for its Total Water Management (TWM) approach which integrates the entire water cycle to maximize beneficial use of recycled water and promote conservation - Global Water Resources owns and operates **39 systems** providing water, wastewater, and recycled water service, primarily in growth corridors around metropolitan Phoenix and Tucson[29](index=29&type=chunk) - The company implements **Total Water Management (TWM)**, an integrated approach to managing the entire water cycle, maximizing recycled water use, and enabling smart water management programs for conservation[30](index=30&type=chunk) - Received national recognition as a **'Utility of the Future Today'** for superior water reuse practices and Cityworks' Excellence in Departmental Practice Award for public asset management[31](index=31&type=chunk) [Use of Non-GAAP Measures](index=5&type=section&id=Use%20of%20Non-GAAP%20Measures) This section defines non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and Adjusted Net Income, which management uses as supplemental indicators of operating performance and overall corporate performance, while cautioning investors that these should not replace GAAP measures - **EBITDA** is defined as net income before interest, income taxes, depreciation, and amortization[33](index=33&type=chunk) - **Adjusted EBITDA** excludes gains/losses related to nonrecurring events, restricted stock expense, and disposal of assets[33](index=33&type=chunk) - **Adjusted Net Income** reflects net income excluding amortization related to ICFA intangible assets and their tax effect[33](index=33&type=chunk) - Management believes these non-GAAP measures provide useful supplemental information for investors but should not be construed as alternatives to GAAP measures[34](index=34&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=6&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, highlighting that they involve assumptions, risks, and uncertainties that could cause actual results to differ materially from expectations, and investors are cautioned not to place undue reliance on these statements, which are subject to various political, economic, business, market, and regulatory factors - Forward-looking statements reflect the company's expectations regarding future events and involve assumptions, risks, uncertainties, and other factors that could cause actual results to differ materially[35](index=35&type=chunk) - These statements are based on current beliefs and are subject to political, economic, business, market, regulatory, and other factors, as detailed in SEC filings[35](index=35&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets to $449.4 million as of June 30, 2025, from $405.1 million at December 31, 2024, primarily driven by an increase in net utility plant, with total shareholders' equity also increasing significantly to $76.7 million Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :---------------- | | Net utility plant | $401,749 | $359,379 | | Total Assets | $449,382 | $405,137 | | Total shareholders' equity | $76,740 | $47,604 | | Long-term debt, net | $116,803 | $118,518 | | Total Capitalization | $193,543 | $166,122 | | Total current liabilities | $20,006 | $22,258 | | Total other liabilities | $235,833 | $216,757 | | Total Capitalization and Liabilities | $449,382 | $405,137 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, total revenue increased to $14.2 million, while operating income slightly decreased to $2.6 million, with net income at $1.6 million, resulting in basic and diluted EPS of $0.06 Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | | Total revenue | $14,241 | $13,510 | | Total operating expenses | $11,621 | $10,713 | | Operating Income | $2,620 | $2,797 | | Income Before Income Taxes | $2,229 | $2,328 | | Net Income | $1,612 | $1,730 | | Basic earnings per common share | $0.06 | $0.07 | | Diluted earnings per common share | $0.06 | $0.07 | | Dividends declared per common share | $0.08 | $0.08 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $8.8 million, a decrease from $13.6 million in the prior year, while net cash used in investing activities significantly increased to $35.4 million due to higher capital expenditures, and net cash provided by financing activities was $27.8 million, largely due to the issuance of common stock Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $8,827 | $13,571 | | Net cash used in investing activities | ($35,395) | ($12,211) | | Net cash provided by financing activities | $27,788 | $13,573 | | Increase in cash, cash equivalents, and restricted cash | $1,220 | $14,933 | | Cash, cash equivalents, and restricted cash — End of period | $12,376 | $19,696 | [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The reconciliation shows that Adjusted EBITDA increased to $6.9 million in Q2 2025 from $6.8 million in Q2 2024, and Adjusted Net Income remained consistent with Net Income in Q2 2025, as there were no ICFA intangible amortization expenses or related tax effects Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | | Net Income | $1,612 | $1,730 | | Income tax expense | $617 | $598 | | Interest income | ($216) | ($266) | | Interest expense | $1,496 | $1,507 | | Depreciation and amortization | $3,317 | $2,996 | | EBITDA | $6,826 | $6,565 | | EBITDA adjustments | $109 | $228 | | Adjusted EBITDA | $6,935 | $6,793 | Reconciliation of Net Income to Adjusted Net Income (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | | Net Income | $1,612 | $1,730 | | ICFA intangible amortization expense | — | $81 | | Income tax effect of items above | — | ($20) | | Adjusted Net Income | $1,612 | $1,791 | [Conference Call & Contact Information](index=4&type=section&id=Conference%20Call) Global Water Resources will host a conference call on August 14, 2025, to discuss its Q2 2025 results, with details provided for dial-in and webcast access, and contact information for the company's CFO and Investor Relations is also included - Conference call to discuss Q2 2025 results scheduled for **Thursday, August 14, 2025, at 1:00 p.m. Eastern time**[27](index=27&type=chunk) - Dial-in numbers: Toll-free **1-833-816-1435**, International **1-412-317-0527**, Conference ID: **10201420**, Webcast available via **www.gwresources.com**[27](index=27&type=chunk) - Company Contact: Michael J. Liebman, CFO and SVP, Tel **(480) 999-5104**, Investor Relations: Ron Both or Grant Stude, Encore Investor Relations, Tel **(949) 432-7450**[36](index=36&type=chunk)

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 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: 001-41964 Pelthos Therapeutics Inc. (Exact name of registrant as specified in its charter) (State or ...

[Membership Interest Purchase Agreement Overview](index=1&type=section&id=Membership%20Interest%20Purchase%20Agreement) This agreement outlines the sale of PEAK EXPLORATION & PRODUCTION, LLC's membership interests to EPSILON ENERGY USA, INC. [Parties to the Agreement](index=1&type=section&id=Parties%20to%20the%20Agreement) This section identifies the key parties to the agreement, including Sellers, Purchaser, and their respective parent entities - The agreement details the sale of **all issued and outstanding interests** of PEAK EXPLORATION & PRODUCTION, LLC[14](index=14&type=chunk) Key Parties in the Transaction | Role | Entity Name | | :--- | :--- | | **Sellers** | Various entities and individuals listed in Annex I | | **Company Being Sold** | PEAK EXPLORATION & PRODUCTION, LLC | | **Purchaser** | EPSILON ENERGY USA, INC. | | **Purchaser Parent** | EPSILON ENERGY LTD. | | **Sellers' Representative** | YORKTOWN ENERGY PARTNERS XI, L.P. | [ARTICLE 1: DEFINITIONS AND INTERPRETATION](index=8&type=section&id=ARTICLE%201%20DEFINITIONS%20AND%20INTERPRETATION) This article establishes the definitions for capitalized terms and provides rules for agreement interpretation [Section 1.1: Defined Terms](index=8&type=section&id=Section%201.1%20Defined%20Terms) This section specifies that capitalized terms are **primarily defined in Appendix A** and apply consistently throughout the document - Capitalized terms used in the agreement are **primarily defined in Appendix A**[17](index=17&type=chunk) [Section 1.2: References and Rules of Construction](index=8&type=section&id=Section%201.2%20References%20and%20Rules%20of%20Construction) This section provides guidelines for interpreting the agreement, covering references, common terms, and accounting principles - All references to Exhibits, Annexes, Schedules, and Appendices are incorporated into the agreement[19](index=19&type=chunk) - The term "made available to Purchaser" means documents were posted to the Data Room **at least two business days before the Execution Date**[19](index=19&type=chunk) [ARTICLE 2: PURCHASE AND SALE](index=9&type=section&id=ARTICLE%202%20PURCHASE%20AND%20SALE) This article details the core transaction of selling Company Interests and establishes the financial effective time [Section 2.1: Purchase and Sale](index=9&type=section&id=Section%202.1%20Purchase%20and%20Sale) This section outlines the core transaction where Sellers transfer Company Interests to Purchaser **free and clear of encumbrances** - Sellers agree to sell the Company Interests to the Purchaser, and the Purchaser agrees to buy them at Closing[21](index=21&type=chunk) [Section 2.2: Effective Time](index=9&type=section&id=Section%202.2%20Effective%20Time) This section establishes the financial effective time for asset transfer as **12:01 a.m., Mountain Time, on January 1, 2025** - The financial effective time of the transaction is set for **12:01 a.m., Mountain Time, on January 1, 2025**[22](index=22&type=chunk) [ARTICLE 3: PURCHASE PRICE](index=9&type=section&id=ARTICLE%203%20PURCHASE%20PRICE) This article defines the purchase price, its allocation for tax purposes, and various adjustments [Section 3.1: Purchase Price](index=9&type=section&id=Section%203.1%20Purchase%20Price) The purchase price is **5,800,000 common shares** of Purchaser Parent, subject to **proportionate adjustment** Unadjusted Purchase Price | Consideration Type | Amount | | :--- | :--- | | Purchaser Parent Common Stock | 5,800,000 shares | - The number of shares is subject to **proportionate adjustment** for events like stock splits, dividends, or mergers involving Purchaser Parent stock before closing[24](index=24&type=chunk)[25](index=25&type=chunk) [Section 3.2: Allocation of Purchase Price](index=10&type=section&id=Section%203.2%20Allocation%20of%20Purchase%20Price) This section details the purchase price allocation for tax purposes, based on the **60-day volume-weighted average price (VWAP)** of Purchaser Parent stock - The purchase price will be allocated among the assets according to the methodologies in Schedule 3.2 and **IRS Code Section 1060**[26](index=26&type=chunk) - For tax purposes, the Purchaser Parent Common Stock will be valued using the **60-day volume-weighted average price (VWAP)** prior to the Closing Date[26](index=26&type=chunk) [Section 3.3: Adjustments to Purchase Price](index=10&type=section&id=Section%203.3%20Adjustments%20to%20Purchase%20Price) This section outlines upward and downward adjustments to the purchase price, converted into Purchaser Parent shares - The Unadjusted Purchase Price will be adjusted upward for the **appraised value of the Durango Building**[29](index=29&type=chunk) - Downward adjustments include reductions for title/environmental defects, suspense funds, leakage, company transaction expenses exceeding the Fee Cap, and the value of Purchaser's non-oil and gas real estate in Pennsylvania[29](index=29&type=chunk) - All dollar-based adjustments will be converted to an equivalent number of Purchaser Parent shares using the **60-day VWAP** prior to closing[28](index=28&type=chunk) [Section 3.4: Allocated Values](index=11&type=section&id=Section%203.4%20Allocated%20Values) This section specifies "Allocated Values" for assets, used for defect thresholds but not for purchase price adjustments - Allocated Values for assets are listed in Schedule 3.4 and are used to determine if the **Individual Defect Threshold** and **Aggregate Defect Deductible** are met[30](index=30&type=chunk)[31](index=31&type=chunk) - Sellers do not represent or warrant the accuracy of the Allocated Values[31](index=31&type=chunk) [ARTICLE 4: TITLE AND ENVIRONMENTAL MATTERS](index=12&type=section&id=ARTICLE%204%20TITLE%20AND%20ENVIRONMENTAL%20MATTERS) This article outlines the processes for identifying, notifying, and adjusting for title and environmental defects [Section 4.1: Sellers' and the Company Group's Title](index=12&type=section&id=Section%204.1%20Sellers'%20and%20the%20Company%20Group's%20Title) This section disclaims Sellers' title warranties, limiting Purchaser's **sole remedy** to the adjustment process or special warranty - Sellers expressly disclaim any representation or warranty regarding title to the assets, except for the special warranty in Section 6.25[32](index=32&type=chunk) - Purchaser's **sole remedy** for title defects is the adjustment process defined in this Article 4 before the Claim Date, and the special warranty thereafter[32](index=32&type=chunk) [Section 4.2: Notice of Title Defects; Title Defect Adjustments](index=13&type=section&id=Section%204.2%20Notice%20of%20Title%20Defects%3B%20Title%20Defect%20Adjustments) This section details the procedure for Purchaser to claim Title Defects, including notice, cure rights, and adjustment - Purchaser must deliver a Title Defect Notice to Sellers' Representative no later than **5:00 p.m. Mountain Time, 45 days after the Execution Date (the "Claim Date")**[35](index=35&type=chunk) - Sellers have a "**Cure Period**" ending **two business days before the Closing Date** to attempt to cure any asserted Title Defects at their own expense[36](index=36&type=chunk) - The "**Title Defect Amount**" is calculated based on specific methodologies, such as the cost to remove a lien or a formula based on the reduction in Net Revenue Interest or Net Mineral Acres[42](index=42&type=chunk)[43](index=43&type=chunk) [Section 4.3: Title Benefits](index=15&type=section&id=Section%204.3%20Title%20Benefits) This section allows Sellers to assert Title Benefits, which offset downward purchase price adjustments from Title Defects - Sellers can assert **Title Benefits** by delivering a **Title Benefit Notice** on or before the Claim Date[44](index=44&type=chunk) - Title Benefit Amounts are used only as an **offset against Title Defect Amounts** and do not result in an upward adjustment to the Unadjusted Purchase Price[46](index=46&type=chunk) [Section 4.4: Notice of Environmental Defects; Environmental Defect Adjustments](index=17&type=section&id=Section%204.4%20Notice%20of%20Environmental%20Defects%3B%20Environmental%20Defect%20Adjustments) This section outlines the process for addressing Environmental Defects, including notice, cure rights, and Purchaser's disclaimers - Purchaser must deliver an **Environmental Defect Notice** by the Claim Date, detailing the alleged defect, affected assets, and a calculation of the **Remediation Amount**[50](index=50&type=chunk) - The remedy for an uncured Environmental Defect is a reduction in the Unadjusted Purchase Price by the **Remediation Amount**, subject to applicable thresholds[56](index=56&type=chunk) - Purchaser acknowledges the assets have been used for **oil and gas operations** and may contain hazardous substances like **NORM and asbestos**, waiving claims except as provided in this article[59](index=59&type=chunk) [Section 4.5: Limitations on Applicability](index=20&type=section&id=Section%204.5%20Limitations%20on%20Applicability) This section establishes financial thresholds for Title and Environmental Defect claims, including **individual and aggregate deductibles** Defect Claim Thresholds | Threshold Type | Amount | Description | | :--- | :--- | :--- | | **Individual Defect Threshold** | **$75,000** | No adjustment for any single Title or Environmental Defect below this amount | | **Aggregate Defect Deductible** | **$1,000,000** | No adjustments unless the total of all qualifying defects exceeds this amount. Purchaser is then entitled to adjustments only for the amount in excess of the deductible | [Section 4.6: Title and Environmental Disputes](index=20&type=section&id=Section%204.6%20Title%20and%20Environmental%20Disputes) This section provides an **exclusive dispute resolution mechanism** for title and environmental disagreements via a **neutral Consultant** - Disputes over title or environmental matters that cannot be resolved by the parties before Closing will be submitted to a **neutral Consultant** for a final and binding resolution[64](index=64&type=chunk) - The Consultant will be an experienced attorney for title disputes or an environmental attorney for environmental disputes[66](index=66&type=chunk) - The dispute resolution process is **not intended to delay the Closing**; adjustments for disputed matters will be made post-Closing based on the Consultant's decision[72](index=72&type=chunk) [Section 4.7: Casualty or Condemnation Loss](index=22&type=section&id=Section%204.7%20Casualty%20or%20Condemnation%20Loss) This section addresses **Casualty Losses**, requiring Purchaser to close without price reduction and receive related **insurance proceeds and condemnation awards** - If a **Casualty Loss** occurs before Closing, the Purchaser must still close the transaction with **no reduction to the purchase price**[73](index=73&type=chunk) - Upon Closing, Purchaser becomes entitled to all **insurance proceeds and condemnation awards** related to the **Casualty Loss**[73](index=73&type=chunk) [ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF SELLERS](index=22&type=section&id=ARTICLE%205%20REPRESENTATIONS%20AND%20WARRANTIES%20OF%20SELLERS) This article contains the Sellers' fundamental representations and warranties regarding their legal standing and the transaction [Sections 5.2-5.5: Existence, Power, Authorization, and Conflicts](index=23&type=section&id=Section%205.2%20-%205.5) These sections contain Sellers' representations that they are **duly formed and validly existing entities**, authorized, and the transaction has no conflicts - Each Seller warrants it is a **duly formed and validly existing entity**[76](index=76&type=chunk) - Sellers confirm they have the necessary power and authority to execute the agreement and that it is a **legally enforceable obligation**[77](index=77&type=chunk)[78](index=78&type=chunk) - The execution of the agreement will not conflict with Sellers' organizational documents, material contracts, or laws, except as disclosed in Schedule 5.5[79](index=79&type=chunk) [Section 5.6: Capitalization](index=24&type=section&id=Section%205.6%20Capitalization) Each Seller represents ownership of Company Interests **free of encumbrances**, transferring **good and valid title** to Purchaser at Closing - Each Seller warrants ownership of the Company Interests as detailed in Schedule 5.6, **free of encumbrances**[80](index=80&type=chunk) - At Closing, Purchaser will receive **good and valid title** to the Company Interests[81](index=81&type=chunk) [Sections 5.7-5.10: Brokers' Fees, Litigation, Bankruptcy, and Credit Support](index=24&type=section&id=Section%205.7%20-%205.10) These sections provide Sellers' warranties regarding brokerage fees, absence of litigation or bankruptcy, and credit support - Sellers are **responsible for their own brokerage or finder's fees**[82](index=82&type=chunk) - There are **no pending or threatened bankruptcy proceedings** against any Seller[83](index=83&type=chunk) - Schedule 5.10 provides a **complete list of all credit support** (bonds, letters of credit, etc.) posted by Sellers or their Affiliates for the Company Group[84](index=84&type=chunk) [ARTICLE 6: REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY GROUP AND THE ASSETS](index=24&type=section&id=ARTICLE%206%20REPRESENTATIONS%20AND%20WARRANTIES%20REGARDING%20THE%20COMPANY%20GROUP%20AND%20THE%20ASSETS) This article details the Company Group's representations and warranties concerning its operations, assets, and financial condition [Sections 6.2-6.5: Company Existence, Power, Authorization, and Conflicts](index=25&type=section&id=Section%206.2%20-%206.5) The Company represents its **validly existing LLC in good standing under Delaware law**, power, proper authorization, and absence of conflicts with its obligations - The Company is a **validly existing LLC in good standing under Delaware law**[86](index=86&type=chunk) - The agreement is a **valid and binding obligation of the Company**, duly authorized by all necessary company action[88](index=88&type=chunk) [Section 6.6: Capitalization](index=26&type=section&id=Section%206.6%20Capitalization) This section details the Company's capital structure, confirming **Sellers own all issued and outstanding Interests of the Company** Company Interests as of Execution Date | Interest Type | Amount | | :--- | :--- | | Common Units | **2,325,510** | | Preferred Units | **958,864** | | Tier I Profits Units | **0 outstanding** | | Tier II Profits Units | **0 outstanding** | - **Sellers own all issued and outstanding Interests of the Company**[91](index=91&type=chunk) - Except as listed in Schedule 6.6(c), there are **no outstanding options, warrants, or other rights** to acquire Company Interests[92](index=92&type=chunk) [Section 6.9: Taxes and Assessments](index=27&type=section&id=Section%206.9%20Taxes%20and%20Assessments) The Company represents **all material Tax Returns** are filed and paid, with **no pending or threatened tax audits or deficiencies** - **All material Tax Returns** for the Company Group have been **timely filed and are accurate, and all material Taxes have been paid**[98](index=98&type=chunk) - There are **no pending or threatened tax audits or deficiencies** against the Company Group, except as disclosed in Schedule 6.9[101](index=101&type=chunk)[102](index=102&type=chunk) - The Company has always been **classified as a partnership for federal income tax purposes**, and its **subsidiaries as disregarded entities**[106](index=106&type=chunk) [Section 6.12: Material Contracts](index=29&type=section&id=Section%206.12%20Material%20Contracts) This section defines and lists the Company's **Material Contracts**, warranting their validity and absence of default - Schedule 6.12 lists all **Material Contracts**, which include those with payments or revenues over **$100,000/year**, hydrocarbon sales agreements, and joint operating agreements[117](index=117&type=chunk)[118](index=118&type=chunk) - The Company warrants that there are **no material defaults under any Material Contract** by the Company Group or, to its knowledge, any other party[120](index=120&type=chunk) [Section 6.17: Environmental Matters](index=32&type=section&id=Section%206.17%20Environmental%20Matters) The Company represents **material compliance with Environmental Laws** and absence of **material Environmental Claims** - The Company Group and its assets are in **compliance with Environmental Laws in all material respects**[125](index=125&type=chunk) - There are **no pending or, to the Company's knowledge, threatened material Environmental Claims** against the Company Group or its assets[125](index=125&type=chunk) [Section 6.28: Employment Matters](index=35&type=section&id=Section%206.28%20Employment%20Matters) This section provides representations regarding Company employees, labor law compliance, and absence of labor agreements - Schedule 6.28(a)(i) **lists all Employees**, and Schedule 6.28(a)(ii) **lists all Contingent Workers**[138](index=138&type=chunk) - **No Employees are represented by a labor union**, and there are **no labor agreements in place**[139](index=139&type=chunk)[140](index=140&type=chunk) - The Company Group is in **material compliance with all applicable labor and employment laws**[141](index=141&type=chunk) [Section 6.39: Financial Statements](index=41&type=section&id=Section%206.39%20Financial%20Statements) The Company represents its financial statements are true, complete, **prepared in accordance with GAAP and fairly present the Company Group's financial condition** - Schedule 6.39 contains the Company Group's **audited annual financial statements for 2022, 2023, and 2024**, and **unaudited interim statements as of June 30, 2025**[169](index=169&type=chunk) - The financial statements were **prepared in accordance with GAAP and fairly present the Company Group's financial condition**[169](index=169&type=chunk) [ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF PURCHASER](index=41&type=section&id=ARTICLE%207%20REPRESENTATIONS%20AND%20WARRANTIES%20OF%20PURCHASER) This article outlines the Purchaser's representations and warranties regarding its legal standing, financial capacity, and independent evaluation [Sections 7.2-7.5: Existence, Power, Authorization, and Conflicts](index=41&type=section&id=Section%207.2%20-%207.5) Purchaser and Purchaser Parent represent they are **validly existing corporations in good standing**, power, authorization, and absence of conflicts - Purchaser and Purchaser Parent are **validly existing corporations in good standing**[172](index=172&type=chunk)[173](index=173&type=chunk) - The agreement has been duly authorized and is a **valid and binding obligation of the Purchaser and Purchaser Parent**[175](index=175&type=chunk) [Section 7.8: Independent Evaluation](index=43&type=section&id=Section%207.8%20Independent%20Evaluation) Purchaser acknowledges **independent due diligence** and relies **solely on express representations** in Articles 5 and 6 - Purchaser acknowledges it is a **sophisticated party capable of evaluating the assets** and has **relied solely on its own independent due diligence**[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - Purchaser **explicitly disclaims reliance on any representation or statement other than those expressly contained in Articles 5 and 6** of the agreement[182](index=182&type=chunk) [Section 7.12: Capitalization](index=44&type=section&id=Section%207.12%20Capitalization) Purchaser Parent represents its capital structure and warrants that shares issued as purchase price will be **validly issued, fully paid, and nonassessable** Purchaser Parent Capitalization | Security Type | Amount Issued & Outstanding | | :--- | :--- | | Common Shares | **22,058,574** | | Preferred Shares | **0** | - The shares issued to Sellers as part of the purchase price will be **validly issued, fully paid, and nonassessable**[191](index=191&type=chunk) [Section 7.14: SEC Documents; Financial Statements; No Liabilities](index=46&type=section&id=Section%207.14%20SEC%20Documents%3B%20Financial%20Statements%3B%20No%20Liabilities) Purchaser Parent warrants **timely filed all required SEC documents since December 31, 2024**, compliance, and **GAAP-compliant financial statements fairly presenting its financial condition** - Purchaser Parent has **timely filed all required SEC documents since December 31, 2024**, which **complied with applicable regulations**[200](index=200&type=chunk) - The Purchaser Parent's financial statements were **prepared according to GAAP and fairly present its financial condition**[200](index=200&type=chunk) [ARTICLE 8: COVENANTS OF THE PARTIES](index=47&type=section&id=ARTICLE%208%20COVENANTS%20OF%20THE%20PARTIES) This article details the ongoing obligations and restrictions on the parties between signing and closing [Section 8.1: Access](index=47&type=section&id=Section%208.1%20Access) This section grants Purchaser **reasonable access to assets and records for due diligence**, prohibits **invasive environmental testing** without consent, and requires **Purchaser indemnification** - Sellers will provide Purchaser with **reasonable access to assets and records for due diligence** before closing[206](index=206&type=chunk) - **Invasive environmental testing (e.g., soil or water sampling) is not permitted without Sellers' consent**[207](index=207&type=chunk) - Purchaser must **indemnify and hold harmless the Sellers Group from any damages arising from its due diligence activities**[216](index=216&type=chunk) [Section 8.2: Operation of Business](index=49&type=section&id=Section%208.2%20Operation%20of%20Business) This section requires the Company Group to operate in the **Ordinary Course of Business** and restricts certain actions without consent - From signing to closing, the Company must conduct its business in the **Ordinary Course of Business**[217](index=217&type=chunk) - The Company is restricted from taking certain actions without Purchaser's consent, including: **proposing new capital expenditures over $50,000**, **entering into new material contracts**, **selling assets, or issuing any new interests**[218](index=218&type=chunk)[219](index=219&type=chunk) [Section 8.6: R&W Insurance Policy](index=53&type=section&id=Section%208.6%20R%26W%20Insurance%20Policy) This section confirms Purchaser's **R&W Insurance Policy**, requiring a **waiver of subrogation** and prohibiting **materially adverse amendments** - Purchaser has **procured a conditional binder for an R&W Insurance Policy**, attached as Exhibit E[227](index=227&type=chunk) - The **R&W Insurance Policy** must contain a **waiver of subrogation** against the Sellers Group, except in cases of **Fraud**[228](index=228&type=chunk) - Purchaser covenants **not to amend, modify, or terminate the policy in a manner that is materially adverse to the Sellers Group**[228](index=228&type=chunk)[229](index=229&type=chunk) [Section 8.7: Directors and Officers](index=54&type=section&id=Section%208.7%20Directors%20and%20Officers) This section ensures **All existing rights to indemnification and exculpation** for D&O for **at least six years** post-closing and requires a **six-year "D&O Tail Policy"** - **All existing rights to indemnification and exculpation** for the Company Group's directors and officers will **survive the Closing for at least six years**[231](index=231&type=chunk) - Prior to Closing, the Company Group must obtain and pay for a **six-year "D&O Tail Policy"** to cover claims arising from pre-closing events[235](index=235&type=chunk) [Section 8.13: Board Representation at Purchaser Parent](index=58&type=section&id=Section%208.13%20Board%20Representation%20at%20Purchaser%20Parent) This section grants Sellers the right to **appoint two designees to the Purchaser Parent's Board of Directors** at Closing - At Closing, Sellers will **appoint two designees to the Purchaser Parent's Board of Directors**[249](index=249&type=chunk) - These designees will be **nominated for re-election at the 2026 annual stockholders' meeting**[250](index=250&type=chunk) [ARTICLE 9: CONDITIONS TO CLOSING](index=60&type=section&id=ARTICLE%209%20CONDITIONS%20TO%20CLOSING) This article specifies the conditions that must be satisfied or waived by each party for the transaction to close [Section 9.1: Sellers' Conditions to Closing](index=60&type=section&id=Section%209.1%20Sellers'%20Conditions%20to%20Closing) This section lists Sellers' closing conditions, including **Purchaser's representations and warranties must be true and correct**, covenants, and **20% of the Unadjusted Purchase Price** impairment thresholds - **Purchaser's representations and warranties must be true and correct**[260](index=260&type=chunk) - **Purchaser must have performed its covenants in all material respects**[260](index=260&type=chunk) - The **total value of impairments (Title/Environmental Defects and Casualty Losses) must not exceed 20% of the Unadjusted Purchase Price**[261](index=261&type=chunk) - **Purchaser Parent must have received shareholder consent for the transaction**[261](index=261&type=chunk) [Section 9.2: Purchaser's Conditions to Closing](index=62&type=section&id=Section%209.2%20Purchaser's%20Conditions%20to%20Closing) This section lists Purchaser's closing conditions, mirroring Sellers' regarding **Sellers' and Company's representations and warranties must be true and correct**, covenants, and **20% of the Unadjusted Purchase Price** impairment thresholds - **Sellers' and Company's representations and warranties must be true and correct**[263](index=263&type=chunk) - **Sellers must have performed their covenants in all material respects**[263](index=263&type=chunk) - The **total value of impairments (Title/Environmental Defects and Casualty Losses) must not exceed 20% of the Unadjusted Purchase Price**[263](index=263&type=chunk) [ARTICLE 10: CLOSING](index=63&type=section&id=ARTICLE%2010%20CLOSING) This article outlines the procedures, deliverables, and settlement process for the transaction's closing [Section 10.1: Time and Place of Closing](index=63&type=section&id=Section%2010.1%20Time%20and%20Place%20of%20Closing) This section sets the time and place for the electronic closing of the transaction, contingent on condition fulfillment - The Closing will take place on the **later of October 27, 2025, or two business days after all conditions in Article 9 are satisfied or waived**[267](index=267&type=chunk) [Section 10.2: Obligations of Sellers' Representative at Closing](index=63&type=section&id=Section%2010.2%20Obligations%20of%20Sellers'%20Representative%20at%20Closing) This section lists the documents and actions Sellers' Representative must deliver at Closing, including agreements and certificates - **Deliver executed Assignment Agreements and Registration Rights Agreement**[267](index=267&type=chunk)[268](index=268&type=chunk) - **Provide a certificate confirming that Sellers' representations are true and covenants have been performed**[267](index=267&type=chunk) - **Deliver written resignations of officers and directors listed in Schedule 10.2(e)**[267](index=267&type=chunk) [Section 10.3: Obligations of Purchaser at Closing](index=64&type=section&id=Section%2010.3%20Obligations%20of%20Purchaser%20at%20Closing) This section lists Purchaser's obligations at Closing, primarily **Deliver the Adjusted Purchase Price via issuance of the Purchaser Parent Common Stock to Sellers** and confirming conditions - **Deliver the Adjusted Purchase Price via issuance of the Purchaser Parent Common Stock to Sellers**[269](index=269&type=chunk) - **Provide evidence that the Company's Existing Secured Credit Facility has been paid off**[269](index=269&type=chunk) - **Deliver a certificate confirming that Purchaser's representations are true and covenants have been performed**[269](index=269&type=chunk) [Section 10.4: Settlement Statement](index=65&type=section&id=Section%2010.4%20Settlement%20Statement) This section describes the process for finalizing purchase price adjustments via a Settlement Statement and dispute resolution - **Sellers' Representative will prepare a draft Settlement Statement calculating the Adjusted Purchase Price five business days before Closing**[272](index=272&type=chunk) - **If there are disputes over the adjustments, they will be submitted to an Independent Accountant for a binding resolution**[273](index=273&type=chunk) [ARTICLE 11: TERMINATION](index=66&type=section&id=ARTICLE%2011%20TERMINATION) This article defines the conditions under which the agreement can be terminated and the consequences of such termination [Section 11.1: Termination](index=66&type=section&id=Section%2011.1%20Termination) This section outlines conditions for agreement termination, including **mutual written consent of the parties**, legal prohibition, **material, uncured breach by the other party**, or **Outside Date** - The agreement can be terminated by **mutual written consent of the parties**[278](index=278&type=chunk) - Either party can terminate if there is a **material, uncured breach by the other party**[278](index=278&type=chunk) - Any party can terminate if the Closing does not occur by the **Outside Date, which is 180 days after the Execution Date**[278](index=278&type=chunk) [Section 11.2: Effect of Termination](index=67&type=section&id=Section%2011.2%20Effect%20of%20Termination) This section details termination consequences, specifying **exclusive remedies** for breach and a **Termination Fee of $750,000** for lack of consent - Upon termination, the **agreement becomes void, except for certain specified surviving sections**[280](index=280&type=chunk) - In the event of a failure to close due to a breach, the **non-breaching party's exclusive remedies are to either seek specific performance or terminate the agreement**[281](index=281&type=chunk)[282](index=282&type=chunk) - If Sellers' Representative terminates because Purchaser Parent fails to get shareholder approval, **Sellers' sole remedy is to receive a Termination Fee of $750,000**[283](index=283&type=chunk)[491](index=491&type=chunk) [ARTICLE 12: INDEMNIFICATION](index=68&type=section&id=ARTICLE%2012%20INDEMNIFICATION) This article establishes the post-closing indemnification obligations and procedures for claims between the parties [Section 12.1: Indemnification](index=68&type=section&id=Section%2012.1%20Indemnification) This section establishes post-closing indemnification, with the **R&W Insurance Policy** as the primary remedy, except for **Fraud** - **Purchaser indemnifies Sellers for breaches of Purchaser's covenants and warranties**[287](index=287&type=chunk) - **Sellers indemnify Purchaser for breaches of Sellers' covenants**[288](index=288&type=chunk) - This article provides the **sole and exclusive remedy for the parties post-closing, except for claims of Fraud and rights under the R&W Insurance Policy**[288](index=288&type=chunk) [Section 12.2: Indemnification Actions](index=69&type=section&id=Section%2012.2%20Indemnification%20Actions) This section sets forth procedures for making and resolving indemnification claims, including **Claim Notice** and defense control - An indemnification claim is initiated by the Indemnified Person sending a **Claim Notice** to the Indemnifying Person[292](index=292&type=chunk) - For third-party claims, the **Indemnifying Person has the right to control the defense if it admits its obligation to indemnify**[294](index=294&type=chunk) [Section 12.3: Limitations on Actions](index=71&type=section&id=Section%2012.3%20Limitations%20on%20Actions) This section establishes survival periods for representations and covenants, limiting Purchaser's recourse post-closing - **Sellers' and Company's representations and warranties terminate at the Closing Date**; **Purchaser's recourse is through the R&W Insurance Policy**[299](index=299&type=chunk) - **Purchaser's representations and warranties survive for twelve months following the Closing Date**[299](index=299&type=chunk) - **Purchaser explicitly waives all rights and claims against Sellers relating to the subject matter of the agreement, except for Fraud and indemnification for covenant breaches**[301](index=301&type=chunk) [ARTICLE 13: TAX MATTERS](index=74&type=section&id=ARTICLE%2013%20TAX%20MATTERS) This article addresses tax filing responsibilities and the agreed-upon tax treatment of the transaction [Section 13.1: Tax Filings](index=74&type=section&id=Section%2013.1%20Tax%20Filings) This section designates **Sellers' Representative will prepare all Pass-Through Tax Returns for pre-closing periods that are filed after Closing** and allocates **Deal-Generated Deductions** - **Sellers' Representative will prepare all Pass-Through Tax Returns for pre-closing periods that are filed after Closing**[313](index=313&type=chunk) - **Deal-Generated Deductions are to be allocated to the Pre-Closing Tax Period to the extent permitted by law**[313](index=313&type=chunk) [Section 13.5: Tax Treatment](index=75&type=section&id=Section%2013.5%20Tax%20Treatment) The parties agree on the U.S. federal income tax treatment, consistent with **IRS Revenue Ruling 99-6, Situation 2** - The transaction will be treated in a manner consistent with **IRS Revenue Ruling 99-6, Situation 2**[317](index=317&type=chunk) - For Sellers, the **transaction is a taxable sale of their Company Interests**[317](index=317&type=chunk) - For Purchaser, the **transaction is a purchase of all of the Company's Assets**[317](index=317&type=chunk) [ARTICLE 14: MISCELLANEOUS](index=76&type=section&id=ARTICLE%2014%20MISCELLANEOUS) This article covers general legal provisions, including governing law, dispute resolution, and limitations on damages [Section 14.4: Governing Law; Jurisdiction](index=77&type=section&id=Section%2014.4%20Governing%20Law%3B%20Jurisdiction) This section establishes **Texas law**, grants exclusive jurisdiction to **Harris County, Texas** courts, and includes a **trial by jury** waiver - The agreement is governed by the laws of the **State of Texas**[325](index=325&type=chunk) - Exclusive jurisdiction for disputes is granted to the federal or state courts in **Harris County, Texas**[326](index=326&type=chunk) - All parties waive their right to a **trial by jury** for any disputes related to the agreement[328](index=328&type=chunk) [Section 14.11: Limitation on Damages](index=79&type=section&id=Section%2014.11%20Limitation%20on%20Damages) This section limits damages, excluding **consequential, special, indirect, punitive, or exemplary damages**, with waivers - **Parties are not entitled to consequential, special, indirect, punitive, or exemplary damages from each other in connection with this agreement**[336](index=336&type=chunk) [Section 14.16: Specific Performance](index=80&type=section&id=Section%2014.16%20Specific%20Performance) This section grants **specific performance** rights, but **Sellers explicitly waive any right to specific performance to compel the Purchaser to close the transaction** - Parties are entitled to seek **specific performance** and injunctive relief for breaches of the agreement, as **monetary damages are considered inadequate**[341](index=341&type=chunk) - **Sellers explicitly waive any right to specific performance to compel the Purchaser to close the transaction**[341](index=341&type=chunk) [Section 14.20: Sellers' Representative](index=82&type=section&id=Section%2014.20%20Sellers'%20Representative) This section appoints **Yorktown Energy Partners XI, L.P.** as Sellers' Representative with **full authority to act on behalf of all Sellers**, which is **irrevocable** - **Yorktown Energy Partners XI, L.P.** is appointed as the Sellers' Representative with **full authority to act on behalf of all Sellers**[347](index=347&type=chunk)[348](index=348&type=chunk) - The **Representative's authority is irrevocable** and includes negotiating claims, executing amendments, and giving/receiving notices[348](index=348&type=chunk)[351](index=351&type=chunk) - **Purchaser is entitled to rely on all actions taken by the Sellers' Representative as binding on all Sellers**[350](index=350&type=chunk) [Appendices, Annexes, Exhibits, and Schedules](index=6&type=section&id=Appendices%2C%20Annexes%2C%20Exhibits%2C%20and%20Schedules) This section describes the supplementary documents providing detailed information and forms for the agreement [Ancillary Documents](index=6&type=section&id=Ancillary%20Documents) The agreement is supplemented by appendices, annexes, exhibits, and schedules providing detailed information and forms - **Appendix A contains the definitions** for capitalized terms used throughout the agreement[7](index=7&type=chunk) - **Annex I provides a complete schedule of all entities and individuals defined as "Sellers"**[7](index=7&type=chunk) - **Exhibits provide forms for critical legal documents**, including the Assignment Agreement (Exhibit B), Lock-Up Agreement (Exhibit C), and Registration Rights Agreement (Exhibit D)[9](index=9&type=chunk) - **Numerous Schedules provide detailed disclosures qualifying the representations and warranties** made in Articles 5, 6, and 7[9](index=9&type=chunk)[10](index=10&type=chunk)