Financial Performance - The company reported a net loss of $105.3 million for the three months ended September 30, 2025, primarily due to stock compensation charges and asset impairments [205]. - Selling, General and Administrative expenses surged to $110,719,156, a 5,822% increase from $1,869,598 in the same quarter of 2024, largely due to stock compensation expenses [243]. - For the three months ended September 30, 2025, the Company recognized product revenue of $83,622, primarily from Sologard syringes sold under a supply agreement [238]. - The Company reported net staking revenue of $2,205,423 for the same period, resulting from its digital treasury platform [240]. - For the nine months ended September 30, 2025, the company reported net revenue of $306,344, primarily from the sale of Securegard and Sologard syringes under a supply agreement with Stericare [250]. - The company recognized net staking revenue of $2,205,423 during the same period, resulting from its digital treasury platform [252]. - Selling, General and Administrative expenses surged to $114,571,809, a 2,079% increase from $5,257,015 in the prior year, largely due to realized and unrealized gains on digital assets amounting to $15,499,742 [255]. Cash Flow and Liquidity - As of September 30, 2025, the company used $11.7 million in cash for operations and had current cash of $10.5 million and USDC of $14.7 million, indicating sufficient liquidity for planned operations over the next twelve months [206]. - Cash used in operating activities was $11,743,528 for the nine months ended September 30, 2025, compared to $5,172,135 in the prior year, primarily due to increased transaction fees and higher G&A expenses [264]. - Cash used in investing activities increased significantly to $189,506,025, mainly due to the purchase of digital assets of $186,104,214 following the August 2025 offering [265]. - Cash provided by financing activities reached $210,726,915, a substantial increase from $5,707,946 in the previous year, driven by net proceeds from offerings [267]. - The company had a working capital of $29,045,025 as of September 30, 2025, a significant improvement from a working capital deficiency of $2,011,679 at the end of 2024 [260]. Strategic Direction - The company will no longer engage in research and development activities following the Settlement Agreement, focusing instead on marketing and distribution of syringe products [210]. - The company has begun exploring strategic acquisitions and investments globally, hiring a Head of Innovation to analyze opportunities [212]. - The company intends to explore plans to expand its distribution platform by representing established third-party manufacturers of complementary medical products [233]. Asset Management - The company adopted a treasury policy allocating principal holdings to digital assets, specifically Solana (SOL), with over 2.0 million SOL held as of October 31, 2025 [211]. - The Company adopted a digital asset treasury strategy focused on accumulating SOL, the native digital asset of the Solana blockchain [234]. - The company stakes a portion of its SOL holdings to earn staking rewards, with an expected un-staking period of approximately 48 hours under normal conditions [281]. - The Company recorded a realized and unrealized gain of $15,499,742 on digital assets during the quarter [244]. - The company recorded a foreign currency gain of $371,741, reflecting a 1,278% increase compared to a loss of $31,566 in the previous year [259]. - An impairment of long-lived fixed assets was recorded at $7,497,669, reflecting the fair market value of assets related to the pending sale of the Safegard subsidiary [245]. - The company recorded a net asset impairment of $7,497,669 related to the fair market value of fixed assets due to the pending sale of the Safegard subsidiary [256]. Research and Development - The company recognized research and development expenses primarily related to syringe products, which will cease due to the new strategic direction [210]. - Research and Development expenses decreased to $295,579, down 44% from $523,347 in the prior year, due to a shift towards increased manufacturing [254]. Risks and Considerations - Digital assets held through custodians do not generally enjoy the same regulatory protections as cash or securities deposited with FDIC or SIPC [280]. - Use of derivatives such as call and put options may require margin posting, potentially reducing available liquidity and introducing additional volatility [282]. - Exposure to SOL introduces various risks including market risk, liquidity risk, operational risk, regulatory risk, accounting risk, and concentration risk [283].

Financial Performance - Total revenue for Q3 2025 was $6,392,000, a 14.15% increase from $5,599,000 in Q3 2024[15] - Printed products revenue increased to $4,994,000 in Q3 2025, up from $4,828,000 in Q3 2024, representing a growth of 3.44%[15] - Net loss for Q3 2025 was $2,299,000, compared to a net loss of $5,283,000 in Q3 2024, indicating a 56.45% improvement[15] - Operating loss for Q3 2025 was $3,234,000, an improvement from an operating loss of $4,671,000 in Q3 2024, reflecting a 30.83% reduction in losses[15] - The company reported a total cost of revenue of $6,068,000 for Q3 2025, a decrease from $6,603,000 in Q3 2024, representing an 8.09% reduction[15] - Net loss for Q3 2025 was $10,087,000, a decrease from a net loss of $15,762,000 in Q3 2024, representing a 36% improvement[17] - Gross profit for the three months ended September 30, 2025, was $324,000, compared to a loss of $1,004,000 in the same period of 2024, indicating a significant improvement[129] - Operating income for the nine months ended September 30, 2025, was a loss of $10,384,000, compared to a loss of $14,287,000 for the same period in 2024, reflecting a reduction in losses by approximately 27.5%[130] - The net loss from operations for the nine months ended September 30, 2025, was $10,154,000, an improvement from a loss of $15,925,000 in the same period of 2024, reflecting a reduction in losses by approximately 36.5%[130] Assets and Liabilities - Total assets decreased to $92,123,000 as of September 30, 2025, down from $106,453,000 at the end of 2024, a decline of 13.39%[10][13] - Current liabilities decreased to $54,194,000 as of September 30, 2025, down from $65,028,000 at the end of 2024, a reduction of 16.36%[11] - Cash and cash equivalents decreased to $7,019,000 as of September 30, 2025, compared to $11,431,000 at the end of 2024, a decline of 38.36%[10] - Total stockholders' equity decreased to $26,108,000 as of September 30, 2025, down from $32,716,000 at the end of 2024, a decrease of 20.19%[13] - Cash and cash equivalents at the end of Q3 2025 were $7,119,000, down from $11,631,000 at the end of Q3 2024, reflecting a 39% decrease[18] - The Company established a reserve for credit losses of approximately $1,014,000, down from $1,613,000 as of December 31, 2024[31] - The Company established a reserve for credit losses of approximately $7,478,000 as of September 30, 2025, down from $9,406,000 as of December 31, 2024[36] - The Company has a reserve of $5,544,000 against the principal and interest outstanding on a convertible promissory note with Puradigm, which is currently in default[67] - The Company has fully reserved for various promissory notes totaling approximately $2,000,000 as of September 30, 2025, indicating significant credit risk[67][70][71][72][74] Cash Flow - Cash flows from operating activities showed a net cash used of $7,576,000 in Q3 2025, compared to $5,889,000 in Q3 2024, indicating a 29% increase in cash outflow[17] - The company recorded a loan loss reserve of approximately $908,000 for the nine months ended September 30, 2025, compared to $9,406,000 for the year ended December 31, 2024[83] - Cash paid for interest increased to $1,502,000 in the nine months ended September 30, 2025, compared to $631,000 in the same period of 2024[127] Investments and Acquisitions - The biotechnology division is focused on acquiring companies in the BioHealth and BioMedical fields, targeting urgent medical needs and developing initiatives against airborne infectious diseases[22] - The company is actively pursuing a merger with Impact BioMedical Inc., with the closing date pending regulatory approval[24] - The fair value of the investment in Alset International Limited was approximately $2,467,000 as of September 30, 2025, with an unrealized loss of approximately $51,000 recorded during the nine months ended September 30, 2025[88] - The company owns 81,836,908 shares of True Partners Capital Holding Limited, with a fair value of approximately $5,679,000 as of September 30, 2025, reflecting an unrealized gain of approximately $864,000 during the nine months ended September 30, 2025[89] - Impact BioMedical entered into a Royalty Agreement with Chemia Corporation, covering costs for patent applications and intellectual property related to 3F technology, with a 50% revenue share from sales and licensing[109] Revenue Recognition and Segments - The Company recognizes revenue based on when the title passes to the customer or when the service is completed, excluding sales and other taxes billed[60] - The Company operates five segments, including Biotechnology, which focuses on drug discovery and treatment of diseases, and Commercial Banking, aimed at providing integrated financial services[128] Stock and Equity - The number of shares used in computing loss per common share increased to 9,092,518 in Q3 2025, compared to 7,066,772 in Q3 2024, an increase of 28.63%[15] - DSS, Inc. executed a reverse stock split of 1 for 20, reducing outstanding shares from 140,264,240 to 7,066,772 as of December 31, 2023[110] - DSS completed a private placement selling 820,597 shares for approximately $803,000 to Alset Inc. on December 10, 2024[111] - IBO's initial public offering on September 16, 2024, raised approximately $3,726,000 in net proceeds from selling 1,500,000 shares at $3.00 each[122] - IBO issued 880,000 option grants with a purchase price of $3.00 per share on October 1, 2024, with potential proceeds of $2,640,000[126] - IBO's Articles of Incorporation were amended to increase the total number of shares of Common Stock to 4,000,000,000, with a forward split resulting in 3,877,282,251 shares[120] Operational Challenges - The Company incurred operating losses and negative cash flows from operating and investing activities over the past two years, raising substantial doubt about its ability to continue as a going concern[52] - The Company has assessed its operating segments and realigned its segment reporting to reflect management's evaluation of performance, with no change to the segment structure[56]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . SOTHERLY HOTELS INC. (Exact name of registrant as specified in its charter) MARYLAND 001-32379 20-1531029 (State or Other Jurisdiction of Incorporation or Organ ...

Financial Performance - Total revenue for the six months ended September 30, 2025, was $7,759,788, representing a 20% increase from $6,468,589 in the same period of 2024[10]. - Gross profit for the three months ended September 30, 2025, was $3,181,498, up 29% from $2,459,174 in the same quarter of 2024[10]. - The net loss attributable to common stockholders for the six months ended September 30, 2025, was $1,526,616, compared to a loss of $8,601,321 in the same period of 2024[10]. - The company experienced a comprehensive loss of $1,553,499 for the six months ended September 30, 2025, compared to $8,707,114 in the same period of 2024[10]. - The net loss before dividends for the period of $690,913 for the three months ended September 30, 2025, compared to a net loss of $1,362,890 for the same period in 2024, indicating a year-over-year improvement[11]. - For the six months ended September 30, 2025, Biotricity reported a net loss of $1,362,890, a significant improvement compared to a net loss of $5,256,288 for the same period in 2024, representing a reduction of approximately 74%[14]. Revenue Breakdown - Technology fees for the six months ended September 30, 2025, amounted to $6,882,846, up from $6,081,064 in 2024, reflecting a growth of 13%[28]. - Device sales increased significantly to $876,942 for the six months ended September 30, 2025, compared to $387,525 in 2024, marking a growth of 126%[28]. Assets and Liabilities - Total current assets increased to $5,536,234 as of September 30, 2025, from $4,639,292 as of March 31, 2025[8]. - Total liabilities rose to $37,984,860 as of September 30, 2025, compared to $35,655,054 as of March 31, 2025[8]. - Cash decreased to $308,460 as of September 30, 2025, from $365,145 as of March 31, 2025[8]. - The company reported a working capital deficiency of $18,077,790 as of September 30, 2025, compared to $15,996,856 as of March 31, 2025, highlighting liquidity concerns[21]. Equity and Stockholder Information - The number of common shares outstanding increased to 26,791,608 as of September 30, 2025, from 26,081,295 as of March 31, 2025[8]. - The total common shares issued increased to 26,952,280 as of September 30, 2025, up from 26,728,441 as of June 30, 2025, representing a growth of approximately 0.84%[11]. - The total stockholders' deficiency increased from $32,798,917 to $33,412,378, indicating a decline in overall equity position[11]. - The company’s accumulated deficit reached $140,968,401 as of September 30, 2025, reflecting ongoing financial challenges[11]. Cash Flow and Financing - Cash generated from operating activities was $42,241 for the six months ended September 30, 2025, a turnaround from cash used of $1,891,299 in the same period of 2024[14]. - Cash paid for interest during the six months ended September 30, 2025, was $1,683,697, compared to $1,235,256 in the same period of 2024, indicating increased financing costs[14]. - The Company issued $11,275,500 in Series A Convertible Promissory Notes, which accrue interest at 12% per annum, with a maturity date of one year from the final closing date[75]. - The Company issued Series C Notes totaling $1,812,700 with net proceeds of $1,100,430 after financing fees[104]. Stock-Based Compensation - The company recorded stock-based compensation of $6,001 for the ESOP during the period, contributing to the overall equity adjustments[11]. - Stock-based compensation under the ESOP was recorded at $115,863, reflecting the company's commitment to employee incentives[13]. - The Company recognized stock-based compensation of $6,001 and $11,936 for the three and six months ended September 30, 2025, respectively[202]. Employee Stock Purchase Plan (ESPP) - The Company adopted the Employee Stock Purchase Plan (ESPP) allowing eligible employees to purchase shares at a discount[206]. - The purchase price under the ESPP cannot be less than 85% of the fair market value on the commencement or purchase date[206]. - Employees can withdraw from the ESPP due to financial hardship with a request made at least 20 business days before the end of the offering period[206]. - The ESPP aims to incentivize employee ownership and engagement within the Company[206].

Financial Performance - Total Revenues for Q3 2025 were $52.2 million, a decrease of 13% from $60.1 million in Q3 2024[5] - Positive EBITDA of $3.6 million improved by 26% compared to $2.8 million in Q3 2024, marking the fifth consecutive quarter of positive EBITDA[5] - Basic Loss per Share improved by 42% to $0.18 from $0.31 in Q3 2024, representing the best third quarter result since Q3 2019[5] - Total Revenues for the first nine months of 2025 increased slightly by 1% to $152.7 million compared to $152.0 million for the same period in 2024[5] - Operating Loss for the first nine months of 2025 improved by 72% to $4.3 million from $15.6 million in the same period of 2024[5] - Operating loss for Q3 2025 was $329,000, compared to a loss of $343,000 in Q3 2024[22] - Net loss attributable to Reading International, Inc. was $4,157,000 in Q3 2025, compared to a net loss of $7,028,000 in Q3 2024[26] - Total segment operating income for Q3 2025 was $3,143,000, a decrease of 12.9% from $3,609,000 in Q3 2024[27] - For the nine months ended September 30, 2025, total segment operating income was $7,193,000, compared to a loss of $3,329,000 in the same period of 2024[27] - The company reported a loss before income taxes of $3,986,000 in Q3 2025, an improvement from a loss of $6,439,000 in Q3 2024[27] Revenue Breakdown - Cinema revenue for Q3 2025 decreased by 14% to $48.6 million due to a less appealing movie slate compared to Q3 2024[7] - U.S. Real Estate Revenues increased by 35% to $2.0 million in Q3 2025, driven by improved performance of Live Theatre assets[10] - Total revenue for Q3 2025 was $52,170,000, a decrease of 13% compared to $60,090,000 in Q3 2024[22] - Cinema revenue decreased by 14% to $48,555,000 in Q3 2025 from $56,357,000 in Q3 2024, while real estate revenue decreased by 7% to $4,567,000[24] Debt and Assets - Total gross debt decreased by 14.8% to $172.6 million from December 31, 2024, primarily funded by proceeds from property sales[9] - Total assets decreased to $435,186,000 as of September 30, 2025, from $471,011,000 as of December 31, 2024[23] - Total liabilities decreased to $448,198,000 as of September 30, 2025, from $475,801,000 as of December 31, 2024[23] - The company’s cash and cash equivalents decreased to $8,090,000 as of September 30, 2025, from $12,347,000 as of December 31, 2024[23] Operational Insights - The company reported a significant improvement in operating income for the cinema segment in the United States, with a loss of $72,000 in Q3 2025 compared to a loss of $957,000 in Q3 2024, representing a 92% improvement[24] - Unallocated corporate expenses included a depreciation and amortization expense of $75,000 in Q3 2025, down from $106,000 in Q3 2024[27] - Interest expense, net for Q3 2025 was $4,174,000, a decrease of 20.4% from $5,245,000 in Q3 2024[27] - Equity earnings from unconsolidated joint ventures increased to $121,000 in Q3 2025, compared to $71,000 in Q3 2024[27] Future Outlook - The company expects a strong rebound in Q4 2025, supported by high presales for upcoming films and a promising holiday movie lineup[6] EBITDA and Adjustments - Adjusted EBITDA for Q3 2025 was $3,572,000, compared to $2,843,000 in Q3 2024[26] - Adjusted EBITDA is used to evaluate the company's performance, excluding certain non-recurring items[34] - The company emphasizes that EBITDA is a widely accepted measure in the cinema exhibition and real estate industries[31] - Legal expenses related to extraordinary litigation are adjusted out of the EBITDA calculation[34] - The company aims to provide insights into operational performance separate from non-operational factors affecting net income[30]

Financial Performance - Total Revenues for Q3 2025 were $52.2 million, a decrease of 13% from $60.1 million in Q3 2024[5] - Positive EBITDA of $3.6 million improved by 26% compared to $2.8 million in Q3 2024, marking the fifth consecutive quarter of positive EBITDA[5] - Basic Loss per Share improved by 42% to $0.18 from $0.31 in Q3 2024, representing the best third quarter result since Q3 2019[5] - Total Revenues for the first nine months of 2025 increased slightly by 1% to $152.7 million compared to $152.0 million for the same period in 2024[5] - Operating Loss for the first nine months of 2025 improved by 72% to $4.3 million from $15.6 million in the same period of 2024[5] - Operating loss for Q3 2025 was $329,000, compared to a loss of $343,000 in Q3 2024[22] - Net loss attributable to Reading International, Inc. for Q3 2025 was $4,157,000, compared to a net loss of $7,028,000 in Q3 2024[26] - Adjusted EBITDA for Q3 2025 was $3,572,000, an increase from $2,843,000 in Q3 2024[26] - The company reported a loss before income taxes of $3,986,000 in Q3 2025, an improvement from a loss of $6,439,000 in Q3 2024[27] Revenue Breakdown - The cinema revenue for Q3 2025 was $48.6 million, a decrease of 14% compared to Q3 2024, attributed to a less appealing movie slate and a 7.3% reduction in U.S. cinema screen count[7] - U.S. Real Estate Revenues increased by 35% to $2.0 million in Q3 2025, driven by improved performance of Live Theatre assets in NYC[10] - Cinema revenue decreased by 14% to $48,555,000 in Q3 2025 from $56,357,000 in Q3 2024, while real estate revenue decreased by 7% to $4,567,000[24] - The company reported a 35% increase in real estate revenue in the U.S. for Q3 2025 compared to Q3 2024[24] Debt and Assets - Total gross debt decreased by 14.8% to $172.6 million, a reduction of $30.1 million from December 31, 2024[9] - Total current assets decreased to $18,808,000 as of September 30, 2025, down from $57,042,000 at December 31, 2024[23] - Total liabilities decreased to $448,198,000 as of September 30, 2025, compared to $475,801,000 at December 31, 2024[23] Segment Performance - The total segment operating income for Q3 2025 was $3,143,000, a decrease of 13% from $3,609,000 in Q3 2024[24] - Total segment operating income for Q3 2025 was $3,143,000, a decrease of 12.9% from $3,609,000 in Q3 2024[27] - For the nine months ended September 30, 2025, total segment operating income was $7,193,000, compared to a loss of $3,329,000 in the same period of 2024[27] Corporate Expenses and Earnings - Unallocated corporate expenses included a depreciation and amortization expense of $75,000 in Q3 2025, down from $106,000 in Q3 2024[27] - Interest expense, net for Q3 2025 was $4,174,000, a decrease of 20.4% from $5,245,000 in Q3 2024[27] - Equity earnings from unconsolidated joint ventures increased to $121,000 in Q3 2025, compared to $71,000 in Q3 2024[27] Future Outlook - The company expects a strong rebound in Q4 2025, supported by high presales for upcoming films and a promising holiday movie lineup[6] EBITDA Insights - Adjusted EBITDA is used to evaluate the company's performance, excluding certain non-recurring items[34] - The company emphasizes that EBITDA is a widely accepted measure in the cinema exhibition and real estate industries, aiding in performance comparison[31] - Legal expenses related to extraordinary litigation are adjusted in the calculation of Adjusted EBITDA[34] - The company aims to provide insights into operational performance separate from non-operational factors affecting net income[30]

Financial Performance - Total revenue for Q3 2025 was $52.17 million, a decrease of 13.5% compared to $60.09 million in Q3 2024[10] - Cinema revenue decreased to $48.56 million in Q3 2025 from $56.36 million in Q3 2024, representing a decline of 13.5%[10] - Net loss for Q3 2025 was $4.31 million, an improvement from a net loss of $7.14 million in Q3 2024[10] - The company reported a comprehensive loss of $4.92 million for Q3 2025, compared to a comprehensive loss of $5.64 million in Q3 2024[12] - Basic earnings per share for Q3 2025 were $(0.18), an improvement from $(0.31) in Q3 2024[10] - The company reported a net loss attributable to Reading International, Inc. of $4,157,000 for the quarter ended September 30, 2025, compared to a net loss of $7,028,000 for the same quarter in 2024[46] - Net loss attributable to Reading International, Inc. for the nine months improved by 65%, from a loss of $33.1 million to a loss of $11.6 million[186] Assets and Liabilities - Total assets decreased to $435.19 million as of September 30, 2025, down from $471.01 million at the end of 2024, a reduction of 7.6%[9] - Current liabilities decreased to $111.49 million from $161.63 million, a decline of 30.9%[9] - Total liabilities decreased to $448.20 million as of September 30, 2025, down from $475.80 million at the end of 2024, a reduction of 5.8%[9] - Cash and cash equivalents at the end of Q3 2025 were $8.09 million, down from $12.35 million at the end of 2024, a decrease of 34.5%[9] - The company has $16.5 million of debt due in twelve months, cash of $10.5 million, and negative working capital of $92.7 million[17] - Total borrowings decreased to $171.61 million as of September 30, 2025, down from $201.83 million as of December 31, 2024, representing a reduction of approximately 15%[77] Revenue Segments - The cinema exhibition segment's revenue is generated from ticket sales, food and beverage, and other ancillary sales, while expenses include film rent and wages[32] - The real estate segment earns revenue through leasing space to third-party tenants, with expenses incurred from property maintenance and utilities[34] - Total segment revenue for the quarter ended September 30, 2025, was $53,122,000, a decrease of 11.5% from $61,255,000 in the same quarter of 2024[37] - Total revenue for the nine months ended September 30, 2025, was $155,805,000, an increase of 0.3% from $155,414,000 in the same period of 2024[37] - The company reported a total of $141,740,000 in revenue for the nine months ended September 30, 2025, compared to $140,570,000 in the same period of 2024, indicating a slight growth[37] Operating Income and Expenses - Operating income for the nine months ended September 30, 2025, was a loss of $4.33 million, compared to a loss of $15.56 million for the same period in 2024[10] - Operating income for the cinema segment was $1,756,000 for the quarter ended September 30, 2025, compared to $2,213,000 in the same quarter of 2024, reflecting a decline of 20.6%[39] - Total operating expenses for the quarter ended September 30, 2025, were $49,979,000, a decrease of 13.1% from $57,646,000 in the same quarter of 2024[37] - Operating income for the nine months ended September 30, 2025, was $7,193,000, compared to a loss of $3,329,000 in the same period of 2024[37] - The cinema segment's total operating expenses for the nine months ended September 30, 2025, were $148,612,000, a decrease of 6.4% from $158,743,000 in the same period of 2024[37] Debt and Financing - The company has extended the maturity dates of several loans, including a $20.4 million Valley National debt extended to October 1, 2026[19] - The company has extended the maturity of its loan facility with Emerald Creek Capital to May 6, 2025, with provisions for principal payments of $500,000[83] - The company entered into an Interest Rate Hedging Agreement on AU$50.0 million of the Corporate Loan Facility, with a floor of 4.18% and a cap of 4.78%[86] - The Bank of America Credit Facility was amended to extend the maturity date to May 18, 2026, with a current balance of $6.70 million[79] Real Estate Operations - The company has developed a plan to address going concern uncertainty, informed by current liquidity positions and marketability of real estate properties[17] - The company has classified the Newberry Yard property as held for sale, continuing sales efforts as of September 30, 2025[58] - The company sold its Wellington properties, including the Courtenay Central building, for $21.5 million (NZ$38.0 million) and has an agreement to lease the cinema component post-redevelopment[174] - The company sold its Cannon Park ETC in Townsville, Queensland, for $20.7 million (AU$32.0 million) and retained a long-term lease for the cinema component[173] Market Conditions and Future Outlook - The company believes that the recovery of the global cinema industry will improve patronage and operating revenue levels, although attendance levels remain uncertain[18] - The cinema segment experienced a decline in box office performance in Q3 2025 compared to Q3 2024, attributed to a weaker film slate and broader industry challenges[128] - The company anticipates a strong fourth quarter with major releases such as The Running Man and Zootopia 2, which are expected to drive significant box office results[134] - Year-to-date attendance for the first nine months of 2025 was down compared to the same period in 2024, indicating ongoing challenges in cinema attendance levels[131] Operational Efficiency - The company is focusing on operational efficiency and strategic initiatives to improve performance, with ongoing efforts to enhance the guest experience through expanded food and beverage programs[130] - The company has successfully negotiated rent abatements and revised rental terms to mitigate rising fixed costs associated with cinema leases[132] - Operating expenses for the nine months ended September 30, 2025, totaled $129.3 million, a decrease of $7.1 million due to operational efficiency and cinema closures[196] Stock and Compensation - The total stockholders' equity at September 30, 2025, was $159,087,000, with a retained earnings deficit of $126,370,000[105] - The company recorded a compensation expense of $197,000 for the quarter ended September 30, 2025, a decrease from $302,000 in the same quarter of 2024, representing a reduction of approximately 34.8%[110] - The number of outstanding stock options increased to 3,795,297 as of September 30, 2025, from 1,707,412 at the end of 2024, reflecting a growth of approximately 121.5%[111]

Financial Performance - Total revenue for Q3 2025 was $52.17 million, a decrease of 13.5% compared to $60.09 million in Q3 2024[10] - Cinema revenue decreased to $48.56 million in Q3 2025 from $56.36 million in Q3 2024, representing a decline of 13.1%[10] - Net loss for Q3 2025 was $4.31 million, an improvement from a net loss of $7.14 million in Q3 2024[10] - The company reported a comprehensive loss of $4.92 million for Q3 2025, compared to a comprehensive loss of $5.64 million in Q3 2024[12] - Basic earnings per share for Q3 2025 were $(0.18), compared to $(0.31) for Q3 2024[10] - The company reported a net loss attributable to Reading International, Inc. of $4,157,000 for the quarter ended September 30, 2025, compared to a net loss of $7,028,000 for the same quarter in 2024[46] - Net income attributable to noncontrolling interests was a loss of $148,000 for the quarter ended September 30, 2025, compared to a loss of $111,000 for the same quarter in 2024[103] Assets and Liabilities - Total assets decreased to $435.19 million as of September 30, 2025, down from $471.01 million at the end of 2024[9] - Current liabilities decreased to $111.49 million from $161.63 million at the end of 2024, a reduction of 30.9%[9] - Total liabilities decreased to $448.20 million as of September 30, 2025, from $475.80 million at the end of 2024[9] - Cash and cash equivalents at the end of Q3 2025 were $8.09 million, down from $12.35 million at the end of 2024[9] - The company has $16.5 million of debt due in twelve months, cash of $10.5 million, and negative working capital of $92.7 million[17] - Total borrowings decreased to $171.61 million as of September 30, 2025, down from $201.83 million as of December 31, 2024, representing a reduction of about 15%[77] Revenue Segments - The cinema exhibition segment generates revenue through various channels, including ticket sales, food and beverage, and online ticket sales[32] - Total segment revenue for the quarter ended September 30, 2025, was $53,122,000, a decrease of 14.5% from $61,255,000 in the same quarter of 2024[37] - Admissions revenue in the United States decreased to $13,784,000 for the quarter ended September 30, 2025, down 10.7% from $15,445,000 in the same quarter of 2024[39] - Concessions revenue in the United States was $9,276,000 for the quarter ended September 30, 2025, down 5.6% from $9,824,000 in the same quarter of 2024[39] - The total revenue for the nine months ended September 30, 2025, was $155,805,000, an increase of 0.3% from $155,414,000 in the same period of 2024[37] - The cinema segment's operating loss for the nine months ended September 30, 2025, was $(6,563,000), compared to an operating income of $3,234,000 in the same period of 2024[39] Operating Expenses - Total operating expenses for the quarter ended September 30, 2025, were $49,979,000, a decrease of 13.1% from $57,646,000 in the same quarter of 2024[37] - Operating expenses for the quarter ended September 30, 2025, decreased by $6.9 million to $43.7 million, mainly due to lower attendance leading to reduced variable costs[195] - Operating expenses for the nine months ended September 30, 2025, totaled $129.3 million, a decrease of $7.1 million compared to the prior year, driven by operational efficiency and cinema closures[196] Debt and Financing - The company plans to raise liquidity through refinancing and real estate asset monetization, having sold nine property assets for a total of $201.5 million since 2021[20] - The company repaid $10.7 million of its Westpac loan and $6.1 million of its Bank of America facility, reducing the balance to $8.7 million[19] - The company extended the maturity date of several loans, including a $20.4 million Valley National debt to October 1, 2026[19] - The effective interest rate on the Bank of America Credit Facility is 11.25%, with a maturity date extended to May 18, 2026[79] Real Estate Performance - The real estate segment in Australia reported steady performance, but revenues were impacted by unfavorable exchange rates and the monetization of the Cannon Park entertainment center[135] - Real estate rent revenue for Q3 2025 decreased by $0.3 million to $4.6 million compared to Q3 2024, primarily due to the sale of Wellington and Cannon Park assets[199] - For the nine months ended September 30, 2025, real estate rent revenue decreased by $0.8 million to $14.1 million, attributed to lower rental income from property sales, partially offset by increased Live Theatre rental and ancillary income in the U.S.[200] - The company sold its Wellington properties for $21.5 million (NZ$38.0 million) and Cannon Park properties for $20.7 million (AU$32.0 million) in 2025, using proceeds to pay down approximately $32.1 million in debt[137] Future Outlook - The company expects a strong fourth quarter with major releases like The Running Man and Zootopia 2, which are anticipated to drive significant box office results[134] - The company plans to launch new free to join and paid membership programs in the U.S. in the fourth quarter of 2025 to drive audience engagement[132] - The cinema segment experienced a decline in box office performance in Q3 2025 compared to Q3 2024, attributed to a weaker film slate and broader industry challenges[128] Operational Challenges - The company has faced significant operational challenges due to the COVID-19 pandemic, Hollywood strikes, and economic factors, necessitating a reevaluation of its real estate business plan[166] - The company is considering reducing, delaying, or eliminating planned capital expenditures if cash flow is insufficient[208] - Additional asset monetization and restructuring of debt or lease obligations are potential alternatives for liquidity[208]

Credit and Loan Commitments - As of September 30, 2025, the Bank's commitments to extend credit increased to $201,227,000 from $182,522,000 as of December 31, 2024, representing a growth of approximately 10.3%[145] - The total off-balance sheet commitments, including letters of credit, amounted to $203,685,000 as of September 30, 2025, compared to $186,029,000 at the end of 2024, indicating an increase of about 9.5%[145] - Total loans, excluding loans held for sale, increased by 2.37% to $659,586,000, with growth primarily in commercial and commercial real estate portfolios[153] - Nonperforming loans totaled approximately $1,895,000 at September 30, 2025, representing 0.29% of total loans, up from 0.25% at year-end 2024[218] Financial Performance - For the three months ended September 30, 2025, the company reported net income of $2,752,000, an increase of 38.3% compared to $1,990,000 for the same period in 2024[182] - Basic and diluted earnings per common share were $0.61 for the three months ended September 30, 2025, compared to $0.44 for the same period in 2024[183] - Interest income increased to $11,771,000 for the three months ended September 30, 2025, up from $11,563,000 in 2024, driven by higher average loan balances and improved yields[187] - Net interest income rose to $8,300,000 for the three months ended September 30, 2025, representing a 10.5% increase from $7,509,000 in 2024[191] - Noninterest income totaled $4,169,000 for the three months ended September 30, 2025, a 9.1% increase from $3,823,000 in 2024[195] Asset and Liability Management - Total assets increased by 4.18% to $1,020,125,000 as of September 30, 2025, compared to $979,244,000 at December 31, 2024[151] - Total deposits rose by 4.24% to $919,796,000, driven by inflows into money market and time deposit products[152] - Total uninsured deposits were approximately $276,000,000, or 30% of total deposits, as of September 30, 2025[174] - The Bank had no borrowings from correspondent relationships or the FHLBA as of September 30, 2025, indicating adequate liquidity[172] Capital and Equity - Stockholders' equity rose by 18.66% to $76,972,000, primarily due to retained earnings growth[177] - The Bank's Tier 1 risk-based capital ratio was 11.41%, exceeding the well-capitalized institution requirements[175] Credit Losses and Allowance - The allowance for credit losses is based on management's estimates of expected credit losses, which may differ from actual losses due to various factors[128] - The allowance for credit losses was $6,298,000 as of September 30, 2025, representing 0.95% of total loans, down from 1.09% at year-end 2024[215] - The provision for credit losses recorded was $91,000 for Q3 2025, compared to $92,000 for the same period in 2024, while a recovery of $300,000 was noted for the nine months ended September 30, 2025[214] Branch Expansion and Strategy - The Bank opened a new full-service branch in Nellysford, Virginia, in September 2025, while continuously evaluating potential new branch locations for future expansion[140] - Management expects that each new branch will become profitable within 12 to 18 months of operation, although the financial impact of each new branch cannot be predicted with certainty[141] - The Bank's expansion plans are subject to regulatory approval, and it may open additional branches in the next two fiscal years[141] Operational Efficiency - Noninterest expense for Q3 2025 increased to $9,160,000, a 4.4% rise from Q3 2024, and year-to-date expenses reached $28,441,000, up 11.1% from the previous year[205] - Total personnel expenses for Q3 2025 were $5,516,000, reflecting a 12.1% increase from $4,920,000 in Q3 2024, driven by merit increases and staffing additions[206] - The company anticipates monthly cost savings of over $40,000 from the amended core-service provider contract initiated in April 2025[211] Market Conditions and Economic Factors - The Bank's financial condition is influenced by regional economic conditions, interest rate fluctuations, and changes in real estate values in its market area[127] - The company anticipates that elevated interest rates may continue to limit refinancing activity in the near term[201] Interest Income and Margin - The net interest margin was 3.44% for the quarter ended September 30, 2025, compared to 3.16% for the same period in 2024[192] - The average interest rate on loans, including fees, rose to 5.65% in 2025 from 5.45% in 2024, showing an increase of 20 basis points[226] - The interest spread improved to 3.07% in 2025 from 2.73% in 2024, indicating enhanced profitability on interest-earning assets[228]

Financial Performance - For the three months ended September 30, 2025, net income was $0.6 million, or $0.02 per diluted share, compared to a net loss of $2.0 million, or $(0.10) per diluted share, for the same period in 2024[95]. - For the nine months ended September 30, 2025, net income was $4.7 million, or $0.22 per diluted share, compared to a net loss of $4.7 million, or $(0.24) per diluted share, for the same period in 2024[95]. - Operating income increased by $2.3 million for the three months ended September 30, 2025, compared to the same period in 2024[97]. Revenue Growth - Premium revenue increased by $8.2 million, or 18.7%, to $52.0 million for the three months ended September 30, 2025, compared to $43.8 million in the same period in 2024[96]. - The increase in premium revenue was primarily driven by the automobile liability, inland marine, and automobile physical damage lines of business[96]. - Gross earned premiums increased by $4.7 million, or 11.6%, to $45.6 million for the three months ended September 30, 2025, and by $10.8 million, or 8.9%, to $132.0 million for the nine months ended September 30, 2025, compared to the same periods in 2024[106]. - Net earned premiums increased by $6.3 million, or 38.8%, during the three months ended September 30, 2025, compared to the same period in 2024[102]. - Net earned premiums rose by $1.9 million, or 6.9%, to $29.5 million for the three months ended September 30, 2025, and by $5.4 million, or 6.6%, to $87.1 million for the nine months ended September 30, 2025, over the comparable periods in 2024[108]. Loss and Expense Management - Insurance benefits and losses incurred at American Southern increased by $4.0 million, or 28.4%, for the three months ended September 30, 2025, compared to the same period in 2024[104]. - The loss ratio for American Southern decreased to 79.8% for the three months ended September 30, 2025, from 86.2% in the same period in 2024[104]. - The loss ratio improved to 59.4% for the three months ended September 30, 2025, down from 60.9% in the same period of 2024, and decreased to 60.3% from 65.5% for the nine months ended September 30, 2025[109]. - Commissions and underwriting expenses increased by $0.8 million, or 8.5%, to $10.8 million for the three months ended September 30, 2025, and by $0.4 million, or 1.3%, to $31.2 million for the nine months ended September 30, 2025, compared to the same periods in 2024[110]. Combined Ratio - The combined ratio for American Southern improved to 97.9% for the three months ended September 30, 2025, from 109.8% in the same period in 2024[99]. - The combined ratio remained stable at 96.1% for the three months ended September 30, 2025, compared to the same period in 2024, and improved from 103.1% to 97.1% for the nine months ended September 30, 2025[106]. Investment and Financing - Investment income increased by $0.2 million, or 6.3%, during the three months ended September 30, 2025, while remaining constant for the nine months ended September 30, 2025, compared to the same periods in 2024[112]. - The Company recognized net unrealized losses on equity securities of $0.8 million during the three months ended September 30, 2025, and net unrealized gains of $2.5 million during the nine months ended September 30, 2025[114]. - Interest expense decreased by $0.1 million, or 10.4%, during the three months ended September 30, 2025, and by $0.3 million, or 10.2%, during the nine months ended September 30, 2025, compared to the same periods in 2024[115]. Capital and Liquidity - As of September 30, 2025, the Company had 55,000 shares of Series D Preferred Stock outstanding, with a stated value of $100 per share and annual dividends accruing at a rate of $7.25 per share[124]. - The Company had accrued but unpaid dividends on the Series D Preferred Stock totaling $0.3 million as of September 30, 2025[124]. - Bankers Fidelity Life Insurance Company has access to credit availability of approximately $9.0 million from the Federal Home Loan Bank of Atlanta as of September 30, 2025[125]. - The Company entered into a Revolving Credit Agreement providing for an unsecured $10.0 million revolving credit facility, which was amended to extend the maturity date to March 22, 2027[126]. - The Credit Agreement requires the Company to maintain a consolidated net worth of not less than $64.2 million[126]. - As of September 30, 2025, the Company had outstanding borrowings of $4.0 million under the Credit Agreement, including accrued interest[127]. - Cash and cash equivalents decreased from $35.6 million at December 31, 2024, to $34.4 million at September 30, 2025, primarily due to net cash used in investing activities of $15.9 million[128]. - Net cash provided by operating activities was $15.2 million during the nine-month period ended September 30, 2025[128]. - The Company believes existing cash balances and expected dividends will enable it to meet liquidity requirements for the foreseeable future[129].