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: 001-42207 EQV Ventures Acquisition Corp. (Exact Name of Registrant as Specified in Its Charter) Cayman Islands 98-1786998 (State or other jurisd ...

[Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income (Loss)](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20INTERIM%20STATEMENTS%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) The company reported a net loss for the three months ended June 30, 2025, but a substantial improvement in net loss for the six-month period, primarily due to positive foreign currency translation gains [Profit or Loss and Other Comprehensive Income (Loss) Summary](index=3&type=section&id=Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20(Loss)%20Summary) For the three months ended June 30, 2025, the Company reported a net loss of $1.11 million, a significant decline from a profit of $12.43 million in the prior year period. For the six months ended June 30, 2025, the Company also reported a net loss of $0.05 million, a substantial improvement from a loss of $34.03 million in the same period of 2024. Total comprehensive income for the six months ended June 30, 2025, was $7.98 million, compared to a loss of $41.72 million in 2024, primarily driven by a positive foreign currency translation gain Key Profit or Loss and Comprehensive Income Data | Metric | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenues | $11,692,692 | $10,986,936 | $23,532,483 | $21,470,398 | | Investment property operating expense | $(2,007,135) | $(1,708,096) | $(4,344,837) | $(3,239,890) | | General and administrative | $(4,579,830) | $(4,556,683) | $(8,172,171) | $(6,250,780) | | Investment property valuation (loss) gain | $(257,400) | $4,550,714 | $1,658,081 | $9,749,988 | | Financing costs | $(4,933,560) | $(5,808,977) | $(10,182,645) | $(11,371,356) | | Profit (loss) before taxes | $191,864 | $12,970,820 | $3,237,048 | $(30,181,608) | | INCOME TAX EXPENSE | $(1,306,837) | $(539,160) | $(3,291,315) | $(3,846,518) | | PROFIT (LOSS) FOR THE PERIOD | $(1,114,973) | $12,431,660 | $(54,267) | $(34,028,126) | | Translation gain (loss) from functional currency to reporting currency | $3,089,457 | $(7,125,921) | $8,034,046 | $(7,695,204) | | TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD | $1,974,484 | $5,305,739 | $7,979,779 | $(41,723,330) | | Earnings (loss) per share attributable to owners of the Company - basic ($) | $(0.04) | $0.31 | $(0.06) | $(1.26) | [Condensed Consolidated Interim Statements of Financial Position](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20INTERIM%20STATEMENTS%20OF%20FINANCIAL%20POSITION) Total assets increased to $628.61 million, primarily due to investment properties, with corresponding increases in total liabilities and equity [Financial Position Summary](index=5&type=section&id=Financial%20Position%20Summary) As of June 30, 2025, Logistic Properties of the Americas reported total assets of $628.61 million, an increase from $607.02 million at December 31, 2024. This growth was primarily driven by an increase in investment properties. Total liabilities also increased to $350.55 million from $336.22 million, while total equity grew to $278.06 million from $270.80 million over the same period Key Financial Position Data | Metric | As of June 30, 2025 ($) | As of December 31, 2024 ($) | | :---------------------------------- | :-------------------- | :----------------------- | | Cash and cash equivalents | $25,572,768 | $28,827,347 | | Total current assets | $38,004,891 | $40,001,754 | | Investment properties | $579,044,985 | $554,518,864 | | Total non-current assets | $590,606,438 | $567,017,824 | | TOTAL ASSETS | $628,611,329 | $607,019,578 | | Total current liabilities | $26,131,939 | $26,524,836 | | Long term debt | $266,650,524 | $253,248,978 | | Total non-current liabilities | $324,419,443 | $309,693,324 | | TOTAL LIABILITIES | $350,551,382 | $336,218,160 | | Equity attributable to owners of the Company | $234,130,877 | $228,964,876 | | Non-controlling interests | $43,929,070 | $41,836,542 | | Total equity | $278,059,947 | $270,801,418 | | TOTAL LIABILITIES AND EQUITY | $628,611,329 | $607,019,578 | [Condensed Consolidated Interim Statements of Changes in Equity](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20INTERIM%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) Total equity increased by $7.26 million, primarily from comprehensive income and share-based payments, partially offset by treasury share repurchases [Changes in Equity Summary](index=7&type=section&id=Changes%20in%20Equity%20Summary) For the six months ended June 30, 2025, total equity increased by $7.26 million to $278.06 million, primarily driven by total comprehensive income of $7.98 million and share-based payments of $1.10 million, partially offset by treasury share repurchases of $2.03 million. In the prior year period (six months ended June 30, 2024), total equity saw a slight increase despite a significant total comprehensive loss, due to substantial capital contributions from the Business Combination and PIPE Investor, and listing expense recognition Key Changes in Equity Data | Metric | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :---------------------------------- | :--------------------------- | :--------------------------- | | Balance as of December 31 | $270,801,418 | $260,942,917 | | Profit (loss) for the period | $(54,267) | $(34,028,126) | | Other comprehensive income (loss) | $8,034,046 | $(7,695,204) | | Total comprehensive income (loss) for the period | $7,979,779 | $(41,723,330) | | Share-based payments (net of tax) | $1,103,170 | $1,140,218 | | Repurchase of Treasury shares | $(2,030,381) | — | | Capital contributions from non-controlling interests | $1,462,334 | $2,403,450 | | Distributions to non-controlling interests | $(1,256,373) | $(500,000) | | Issuance of shares to PIPE Investor (2024 only) | — | $15,000,000 | | Listing expense (2024 only) | — | $44,469,613 | | Balance as of June 30 | $278,059,947 | $269,213,176 | [Condensed Consolidated Interim Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20INTERIM%20STATEMENTS%20OF%20CASH%20FLOWS) Operating cash flow increased, investing activities used less cash, and financing activities shifted to a net outflow, leading to an overall decrease in cash and cash equivalents [Cash Flows Summary](index=9&type=section&id=Cash%20Flows%20Summary) For the six months ended June 30, 2025, the Company generated $8.91 million in net cash from operating activities, an increase from $7.21 million in the prior year. Investing activities used $6.72 million, a significant reduction from $11.00 million used in 2024, primarily due to lower capital expenditures and higher proceeds from investment property sales. Financing activities resulted in a net cash outflow of $5.70 million, a reversal from a $16.84 million inflow in 2024, mainly due to treasury share repurchases and lower net debt borrowings. Overall, cash and cash equivalents decreased by $3.25 million, ending the period at $25.57 million Key Cash Flow Data | Metric | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :---------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $8,908,665 | $7,208,539 | | Net cash used in investing activities | $(6,723,993) | $(11,001,373) | | Net cash (used in) provided by financing activities | $(5,699,847) | $16,837,790 | | Effects of exchange rate fluctuations on cash held | $260,596 | $(113,577) | | Net (decrease) increase in cash and cash equivalents | $(3,254,579) | $12,931,379 | | Cash and cash equivalents at the beginning of period | $28,827,347 | $35,242,363 | | Cash and cash equivalents at the end of period | $25,572,768 | $48,173,742 | | Supplemental disclosure: Increase in accrued payables for investment properties | $2,368,306 | — | | Supplemental disclosure: Forgiveness of loan receivable from LLI | — | $(9,765,972) | | Supplemental disclosure: Assumption of net liabilities from TWOA | — | $3,874,870 | [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=12&type=section&id=NOTES%20TO%20THE%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) This section provides detailed information on the company's business, accounting policies, reverse capitalization, revenue, expenses, segment performance, and financial risk management [1. Nature of Business](index=12&type=section&id=1.%20NATURE%20OF%20BUSINESS) Logistic Properties of the Americas (LPA) is a real estate company focused on developing, owning, and managing warehouse logistics assets in Central and South America. The Company completed a Business Combination on March 27, 2024, which resulted in LPA ordinary shares being listed on the NYSE. For accounting purposes, this transaction was treated as a reverse capitalization, with LatAm Logistic Properties, S.A. (LLP) considered the accounting acquirer - LPA is a fully integrated, internally managed real estate company that develops, owns, and manages a diversified portfolio of warehouse logistics assets in Central and South America[14](index=14&type=chunk) - On **March 27, 2024**, LPA consummated a Business Combination, leading to LPA ordinary shares being listed on the New York Stock Exchange (NYSE) under the symbol 'LPA'[15](index=15&type=chunk)[16](index=16&type=chunk) - The Business Combination was accounted for as a reverse capitalization in accordance with IFRS, with LatAm Logistic Properties, S.A. (LLP) treated as the accounting acquirer and TWOA as the acquired company[17](index=17&type=chunk) [2. Material Accounting Policy Information](index=13&type=section&id=2.%20MATERIAL%20ACCOUNTING%20POLICY%20INFORMATION) The condensed consolidated interim financial statements are prepared in accordance with IAS 34, using a historical cost basis with certain investment properties measured at fair value. The functional currency is USD for most entities, except for Colombian subsidiaries which use COP. The Company's consolidation policy is based on control, defined by power, exposure to variable returns, and the ability to affect returns. Recent IFRS amendments, including IAS 21, have been early adopted, while the impact of IFRS 18, IFRS 19, and other amendments issued but not yet effective are currently being evaluated [a. Basis of Accounting](index=13&type=section&id=a.%20Basis%20of%20Accounting) Financial statements are prepared under IAS 34, primarily using a historical cost basis, with certain investment properties measured at fair value - The financial statements are prepared in accordance with International Accounting Standard (IAS) 34 - Interim Financial Reporting[21](index=21&type=chunk) - The historical cost basis is used, except for certain investment properties measured at fair value[22](index=22&type=chunk) [b. Foreign Currency](index=13&type=section&id=b.%20Foreign%20Currency) The functional currency is USD for most entities, with Colombian subsidiaries using COP, and translation differences recognized in other comprehensive income - The functional and presentation currency is U.S. dollars (USD), except for Colombian subsidiaries where the functional currency is the Colombian Peso (COP)[24](index=24&type=chunk) Exchange Rates (USD 1.00) | Currency | As of June 30, 2025 | As of December 31, 2024 | | :------- | :------------------ | :---------------------- | | CRC | CRC 508 | CRC 513 | | COP | COP 4,070 | COP 4,409 | | PEN | PEN 3.552 | PEN 3.770 | | Currency | Average for 3 Months Ended Jun 30, 2025 | Average for 3 Months Ended Jun 30, 2024 | | :------- | :-------------------------------------- | :-------------------------------------- | | CRC | CRC 509 | CRC 516 | | COP | COP 4,199 | COP 3,926 | | PEN | PEN 3.662 | PEN 3.746 | | Currency | Average for 6 Months Ended Jun 30, 2025 | Average for 6 Months Ended Jun 30, 2024 | | :------- | :-------------------------------------- | :-------------------------------------- | | CRC | CRC 508 | CRC 517 | | COP | COP 4,195 | COP 3,920 | | PEN | PEN 3.684 | PEN 3.754 | - Foreign currency differences from foreign operations are recognized in other comprehensive income (loss) and accumulated in a separate reserve[27](index=27&type=chunk) [c. Basis of Consolidation](index=14&type=section&id=c.%20Basis%20of%20Consolidation) Consolidation is based on control, which requires power over the investee, exposure to variable returns, and the ability to affect those returns - Control is achieved when the Company has power over the investee, is exposed to variable returns, and has the ability to use its power to affect returns[28](index=28&type=chunk)[30](index=30&type=chunk) - Consolidation begins when control is obtained and ceases when control is lost[29](index=29&type=chunk) Selected Subsidiary Ownership Interests | Entity | Country | Ownership Interest (Jun 30, 2025) (%) | Ownership Interest (Dec 31, 2024) (%) | | :-------------------------------------- | :-------- | :-------------------------------- | :-------------------------------- | | Latam Logistic Properties S.A. | Panamá | 100% | 100% | | Latam Logistic Pan Holdco El Coyol II S de R.L. | Panamá | 50% | 50% | | Latam Logistic Pan Holdco Verbena I S de R.L. | Panamá | 48% | 48% | | Parque Logístico Callao, S.R.L. | Perú | 40% | 40% | | 3101784433, S.R.L. | Costa Rica | 24% | 24% | [d. New and amended IFRS accounting standards that are effective for the current year](index=17&type=section&id=d.%20New%20and%20amended%20IFRS%20accounting%20standards%20that%20are%20effective%20for%20the%20current%20year) Amendments to IAS 21, clarifying currency exchangeability and exchange rate determination, were early adopted as of January 1, 2025 - Amendments to IAS 21 (Effects of Changes in Foreign Exchange Rates) were **early adopted as of January 1, 2025**, clarifying the assessment of currency exchangeability and exchange rate determination[38](index=38&type=chunk) [e. New and amended IFRS Accounting Standards issued but not yet effective](index=17&type=section&id=e.%20New%20and%20amended%20IFRS%20Accounting%20Standards%20issued%20but%20not%20yet%20effective) The company is evaluating the impact of IFRS 18 and other amendments, with IFRS 19 not expected to have a material impact - The Company is evaluating the impact of IFRS 18 (Presentation and Disclosure in Financial Statements) and amendments to IFRS 9 and IFRS 7 (Financial Instruments) for future adoption[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - IFRS 19 (Subsidiaries without Public Accountability) is not expected to have a material impact[40](index=40&type=chunk) [3. Reverse Capitalization](index=18&type=section&id=3.%20REVERSE%20CAPITALIZATION) The Business Combination, consummated on March 27, 2024, involved SPAC Merger Sub merging with TWOA and Company Merger Sub merging with LLP, resulting in TWOA and LLP becoming wholly-owned subsidiaries of LPA, and LPA shares listing on the NYSE. This transaction was accounted for as a reverse capitalization, with LLP as the accounting acquirer. A significant share listing expense of $44.47 million was recognized under IFRS 2, reflecting the excess fair value of equity interests issued to TWOA over its net assets. The Company also incurred other transaction-related costs and granted cash bonuses and RSUs to management. A loan receivable from LLI was settled through the foreclosure of collateralized LLP shares - The Business Combination was consummated on **March 27, 2024**, leading to LPA Ordinary Shares commencing trading on the NYSE[46](index=46&type=chunk) LPA Ownership Structure Post-Business Combination (March 27, 2024) | Shareholder Type | Number of Ordinary Shares | % of Ownership | | :--------------------------------------- | :------------------------ | :------------- | | LPA Ordinary Shares issued to TWOA shareholders | 3,897,747 | 12.3% | | LPA Ordinary Shares converted from legacy LLP equity holders | 26,312,000 | 83.0% | | LPA Ordinary Shares issued to PIPE Investor | 1,500,000 | 4.7% | | Total | 31,709,747 | 100.0% | - A share listing expense of **$44,469,613** was recognized in the six months ended June 30, 2024, representing the excess fair value of equity interests issued to TWOA over its identifiable net liabilities[51](index=51&type=chunk)[52](index=52&type=chunk) - The loan receivable from Latam Logistics Investments, LLC (LLI) of **$9,765,972** was settled upon Closing through the foreclosure of collateralized LLP Shares held by LLI[58](index=58&type=chunk)[150](index=150&type=chunk) [4. Revenue](index=20&type=section&id=4.%20REVENUE) The Company's total revenues for the three months ended June 30, 2025, increased to $11.69 million from $10.99 million in the prior year, and for the six months, increased to $23.53 million from $21.47 million. Rental income, recognized under IFRS 16, constitutes the majority of revenue, supplemented by non-lease components and other revenue under IFRS 15. The weighted average lease term remaining on current leases is approximately 5.0 years Revenue Breakdown | Revenue Type | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :---------------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Rental income in accordance with IFRS 16 | $10,189,252 | $9,730,653 | $20,568,296 | $19,043,548 | | Non-lease components of rental arrangements | $1,400,733 | $1,216,441 | $2,786,464 | $2,329,795 | | Other | $102,707 | $39,842 | $177,723 | $97,055 | | Revenue from contracts with customers in accordance with IFRS 15 | $1,503,440 | $1,256,283 | $2,964,187 | $2,426,850 | | Total revenues | $11,692,692 | $10,986,936 | $23,532,483 | $21,470,398 | - The weighted average lease term remaining on current leases was **5.0 years** as of June 30, 2025, and 5.1 years as of June 30, 2024[60](index=60&type=chunk) [5. Investment Property Operating Expenses](index=21&type=section&id=5.%20INVESTMENT%20PROPERTY%20OPERATING%20EXPENSES) Investment property operating expenses increased to $2.01 million for the three months ended June 30, 2025, from $1.71 million in the prior year, and to $4.34 million for the six months, from $3.24 million. Key drivers of this increase include higher repair and maintenance, utilities, and a significant rise in expected credit loss adjustments Investment Property Operating Expenses Breakdown | Expense Category | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Repair and maintenance | $790,096 | $759,555 | $1,715,002 | $1,446,463 | | Utilities | $181,864 | $98,550 | $359,319 | $281,403 | | Insurance | $134,634 | $118,265 | $255,590 | $222,475 | | Property management | $109,187 | $71,881 | $231,215 | $134,067 | | Real estate taxes | $270,355 | $237,500 | $736,623 | $390,834 | | Expected credit loss adjustments | $188,947 | $13,112 | $250,541 | $24,081 | | Tenant-billable operating expenses | $301,855 | $304,589 | $603,278 | $556,679 | | Interest expenses on property related lease liabilities | $71,828 | $62,595 | $142,801 | $124,291 | | Other property related expenses | $(41,631) | $42,049 | $50,468 | $59,597 | | Total | $2,007,135 | $1,708,096 | $4,344,837 | $3,239,890 | [6. Other Income and Other Expenses](index=21&type=section&id=6.%20OTHER%20INCOME%20AND%20OTHER%20EXPENSES) Other income for the three months ended June 30, 2025, was $0.21 million, significantly lower than $10.84 million in the prior year, primarily due to the absence of income from Lock-up Release (LR) Agreements in 2025. Similarly, other expenses were negligible in 2025 compared to $1.17 million in 2024, which included fees related to LR Agreements and Business Combination transaction costs. For the six months ended June 30, 2024, income from LR Agreements contributed $9.84 million to other income, while related fees amounted to $1.15 million in other expenses Other Income Breakdown | Income Category | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest income | $95,533 | $369,956 | $367,335 | $680,446 | | Income in connection to the LR Agreements | — | $9,844,894 | — | $9,844,894 | | Other | $117,034 | $622,879 | $117,034 | $622,919 | | Total Other Income | $212,567 | $10,837,729 | $484,369 | $11,148,259 | Other Expenses Breakdown | Expense Category | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Transaction-related costs in connection with the Business Combination | — | $6,804 | — | $6,179,179 | | Fees in connection to the LR Agreements | — | $1,148,922 | — | $1,148,922 | | Other | — | $16,716 | $2,749 | $16,716 | | Total Other Expenses | — | $1,172,442 | $2,749 | $7,344,817 | - In June 2024, the Company recorded **$9,844,894** in income from Lock-up Release (LR) Agreements and incurred **$1,148,922** in related transaction costs[65](index=65&type=chunk) [7. Segment Reporting](index=22&type=section&id=7.%20SEGMENT%20REPORTING) The Company operates in three geographic segments: Costa Rica, Colombia, and Peru, with performance evaluated based on net operating income (NOI). For the six months ended June 30, 2025, total NOI increased to $19.01 million from $18.13 million in 2024, with Peru showing the highest growth. Segment investment properties totaled $579.04 million as of June 30, 2025, with Costa Rica holding the largest share. Segment debt amounted to $276.13 million - The Company has three operating segments based on geographic regions: Costa Rica, Colombia, and Peru, with performance evaluated by net operating income (NOI)[66](index=66&type=chunk)[69](index=69&type=chunk) Segment Revenue and Net Operating Income | Segment | 6 Months Ended Jun 30, 2025 Revenue ($) | 6 Months Ended Jun 30, 2024 Revenue ($) | 6 Months Ended Jun 30, 2025 NOI ($) | 6 Months Ended Jun 30, 2024 NOI ($) | | :-------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Costa Rica | $11,940,549 | $11,648,737 | $10,132,536 | $9,940,378 | | Colombia | $4,802,547 | $4,358,549 | $3,945,888 | $3,824,784 | | Peru | $6,611,664 | $5,366,057 | $4,931,499 | $4,368,291 | | Total | $23,532,483 | $21,470,398 | $19,009,923 | $18,133,453 | Segment Assets and Liabilities | Metric | As of June 30, 2025 ($) | As of December 31, 2024 ($) | | :-------------------------- | :-------------------- | :----------------------- | | Segment investment properties | $579,044,985 | $554,518,864 | | Costa Rica | $260,443,404 | $260,094,960 | | Colombia | $145,744,237 | $132,917,203 | | Peru | $172,857,344 | $161,506,701 | | Segment debt | $276,131,150 | $265,885,799 | | Costa Rica | $168,843,409 | $171,041,464 | | Colombia | $36,811,964 | $38,430,114 | | Peru | $70,475,777 | $56,414,221 | [8. Lease and Other Receivables, Net](index=26&type=section&id=8.%20LEASE%20AND%20OTHER%20RECEIVABLES%2C%20NET) As of June 30, 2025, total lease and other receivables, net, amounted to $4.64 million, an increase from $4.39 million at December 31, 2024. This includes lease receivables, short-term and long-term tenant notes receivable, and other receivables. The expected credit loss allowance provision increased to $1.12 million as of June 30, 2025, from $0.87 million at the beginning of the period Lease and Other Receivables, Net | Receivable Type | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------------- | :------------ | :---------------- | | Lease receivables, net | $2,155,375 | $1,990,246 | | Tenant notes receivable - short term, net | $438,439 | $509,543 | | Others | $488,297 | $141,983 | | Sub-total (current) | $3,082,111 | $2,641,772 | | Tenant notes receivable - long term, net | $1,553,335 | $1,748,616 | | Total Lease and other receivables, net | $4,635,446 | $4,390,388 | Expected Credit Loss Allowance Reconciliation | Metric | June 30, 2025 Total ($) | June 30, 2024 Total ($) | | :---------------------------------------------------------- | :------------------ | :------------------ | | Beginning balance | $871,314 | $946,006 | | Adjustments in expected credit loss allowance recognized in profit or loss during the period | $250,541 | $24,081 | | Ending balance | $1,121,855 | $970,087 | [9. Other Current Assets and Liabilities](index=26&type=section&id=9.%20OTHER%20CURRENT%20ASSETS%20AND%20LIABILITIES) Other current assets significantly increased to $6.00 million as of June 30, 2025, from $2.77 million at December 31, 2024, primarily due to a rise in value-added tax receivable. Conversely, other current liabilities decreased to $0.16 million from $0.64 million, mainly due to the absence of distributions payable to non-controlling interests Other Current Assets | Asset Category | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------- | :------------ | :---------------- | | Value added tax receivable | $4,307,128 | $1,722,404 | | Prepaid insurance | $757,346 | $533,915 | | Other | $937,427 | $512,790 | | Total | $6,001,901 | $2,769,109 | Other Current Liabilities | Liability Category | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------------------------- | :------------ | :---------------- | | Distributions payable to non-controlling interests | — | $380,950 | | Deferred revenue | $122,715 | $259,983 | | Other | $41,635 | — | | Total | $164,350 | $640,933 | [10. Investment Properties](index=27&type=section&id=10.%20INVESTMENT%20PROPERTIES) Investment properties increased to $579.04 million as of June 30, 2025, from $554.52 million at December 31, 2024, primarily due to additions and foreign currency translation effects. The fair value of these properties is determined by independent appraisers using Level 3 inputs, including discounted cash flows, direct capitalization, and cost approaches. A valuation gain of $1.66 million was recognized for the six months ended June 30, 2025. The Company completed the disposition of Latam Parque Logistico Calle 80 Building 500A, with the final installment payment received in February 2025 - Investment properties are measured at fair value, categorized into Level 1, 2, or 3 based on observability of inputs, with all owned investment properties guaranteeing the Company's debt[79](index=79&type=chunk)[80](index=80&type=chunk) Investment Properties Fair Market Value | Property Type | June 30, 2025 FMV ($) | December 31, 2024 FMV ($) | | :------------------------------------ | :------------------ | :-------------------- | | Total land bank | $37,939,099 | $40,542,349 | | Total properties under development | $24,481,904 | $21,798,170 | | Total operating properties | $516,623,982 | $492,178,345 | | Total Investment Properties | $579,044,985 | $554,518,864 | - Valuation techniques for operating properties include discounted cash flows, direct capitalization, and the cost approach, while land bank valuation uses a combination of income, sales comparison, cost, residual land value, and discounted cash flow methods[87](index=87&type=chunk) Reconciliation of Investment Properties | Metric | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Beginning balance | $554,518,864 | $514,172,281 | | Additions | $11,748,568 | $12,661,512 | | Gain on valuation of investment properties | $1,658,081 | $9,749,988 | | Foreign currency translation effect | $11,119,472 | $(10,721,259) | | Ending balance | $579,044,985 | $525,862,522 | - The Company received the final installment payment for the sale of Latam Parque Logistico Calle 80 Building 500A in February 2025, with total receivables from the sale of investment properties decreasing to **$0** as of June 30, 2025[92](index=92&type=chunk)[93](index=93&type=chunk) [11. Leases](index=31&type=section&id=11.%20LEASES) The Company acts as both a lessor, generating rental income from operating properties, and a lessee for land and office spaces. As a lessee, the Company has a 30-year land lease for investment property development, with the Right-of-Use (ROU) asset recognized at fair value under IAS 40. Office leases have a weighted average remaining term of 1.3 years. Total lease liability, including land and office leases, was $13.79 million as of June 30, 2025 - The Company generates rental income as a lessor of operating properties through lease arrangements with tenants[94](index=94&type=chunk) - As a lessee, the Company has a **30-year land lease agreement** for investment property development, with the ROU asset recognized as investment property under IAS 40 and measured at fair value[95](index=95&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - The Company leases office spaces with a weighted average remaining lease term of **1.3 years** as of June 30, 2025[100](index=100&type=chunk)[105](index=105&type=chunk) Lease Commitment for Land and Office Leases (Undiscounted) | Maturity Period | As of June 30, 2025 ($) | | :---------------- | :------------------ | | Remainder of 2025 | $284,656 | | 2026 | $815,660 | | 2027 | $1,059,609 | | 2028 | $1,329,874 | | 2029 | $1,343,173 | | 2030 | $1,042,989 | | Thereafter | $30,762,060 | | Total undiscounted rental payments | $36,638,021 | | Less: imputed interest | $(22,845,692) | | Total lease liability | $13,792,329 | [12. Debt](index=35&type=section&id=12.%20DEBT) The Company's total debt increased to $276.13 million as of June 30, 2025, from $265.89 million at December 31, 2024. This includes mortgage loans in Costa Rica, Colombia, and Peru, with a new $25 million mortgage loan secured with BBVA Peru in March 2025 for construction. The Company actively refinances and restructures loans, such as with BAC Credomatic and BTG, and received waivers for Bancolombia financial covenants, which it was compliant with as of June 30, 2025. Scheduled principal and interest payments extend through 2039 and beyond Debt Outstanding by Region | Region | Amount Outstanding at June 30, 2025 ($) | Amount Outstanding at December 31, 2024 ($) | | :--------- | :---------------------------------- | :---------------------------------- | | Costa Rica | $168,843,409 | $171,041,461 | | Colombia | $37,433,722 | $39,127,587 | | Peru | $71,463,678 | $57,047,644 | | Total Debt | $277,740,809 | $267,216,692 | | Less: Accrued financing costs and debt issuance costs, net | $(1,609,659) | $(1,330,893) | | Total Debt (net) | $276,131,150 | $265,885,799 | | Less: Current portion of long-term debt | $(9,480,626) | $(12,636,821) | | Total Long-term debt | $266,650,524 | $253,248,978 | - A new **$25,000,000** mortgage loan with BBVA Peru was entered into on March 6, 2025, for building construction, with **$16,000,000** outstanding as of June 30, 2025[112](index=112&type=chunk) Financing Costs | Metric | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Gross interest expense | $10,306,597 | $11,755,397 | | Amortization of debt issuance cost | $178,881 | $83,122 | | Debt modification gain | — | $(208,799) | | Debt extinguishment loss | — | $38,219 | | Capitalized amounts into investment properties | $(302,833) | $(330,123) | | Net financing cost | $10,182,645 | $11,371,356 | - The Company received waivers for Bancolombia financial covenants effective through December 31, 2024, and was in compliance with all debt covenants as of June 30, 2025[124](index=124&type=chunk)[125](index=125&type=chunk) [13. Equity](index=39&type=section&id=13.%20EQUITY) The Company is authorized to issue 450 million Ordinary Shares and 50 million Preference Shares. As of June 30, 2025, 31.90 million Ordinary Shares were issued. In November 2024, the board approved a share repurchase program of up to $10.0 million, under which 249,194 shares were repurchased for $2.03 million during the six months ended June 30, 2025. Retained earnings include legal reserves mandated by local legislation - The Company is authorized to issue **450,000,000 Ordinary Shares** and **50,000,000 Preference Shares**, with **31,897,657 Ordinary Shares** issued as of June 30, 2025[126](index=126&type=chunk) - A share repurchase program of up to **$10.0 million** was approved in November 2024. For the six months ended June 30, 2025, **249,194 shares** were repurchased at an average price of **$8.15 per share**, totaling **$2,030,381**[127](index=127&type=chunk)[128](index=128&type=chunk) - Retained earnings include legal reserves, which are a portion of net earnings appropriated annually by subsidiaries as required by local legislation[129](index=129&type=chunk) [14. Earnings Per Share](index=40&type=section&id=14.%20EARNINGS%20PER%20SHARE) For the three months ended June 30, 2025, basic and diluted earnings per share (EPS) were $(0.04), a decrease from $0.31 in the prior year. For the six months, EPS was $(0.06), an improvement from $(1.26) in 2024. The calculation retroactively recasts prior period EPS due to the Business Combination and excludes anti-dilutive Restricted Stock Units (RSUs) Earnings (Loss) Per Share | Metric | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :---------------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Earnings (loss) per share – basic | $(0.04) | $0.31 | $(0.06) | $(1.26) | | Earnings (loss) per share – diluted | $(0.04) | $0.31 | $(0.06) | $(1.26) | | Earnings (loss) attributed to owner(s) of the Company ($) | $(1,208,387) | $9,907,633 | $(1,940,834) | $(38,123,976) | | Weighted average number of Ordinary Shares – basic | 31,584,816 | 31,709,747 | 31,606,150 | 30,223,220 | | Weighted average number of Ordinary Shares – diluted | 31,584,816 | 31,863,168 | 31,606,150 | 30,223,220 | - **492,167 RSUs** for the six months ended June 30, 2025, and **416,500 RSUs** for the six months ended June 30, 2024, were excluded from diluted EPS calculation as their inclusion would be anti-dilutive[130](index=130&type=chunk) - Basic and diluted EPS related to LLP prior to the Business Combination have been retroactively recast[131](index=131&type=chunk) [15. Income Tax](index=40&type=section&id=15.%20INCOME%20TAX) LPA, as a Cayman Islands entity, is not subject to U.S. income tax, but its operating subsidiaries in Costa Rica, Colombia, and Peru are subject to local income tax rates of 30.0%, 35.0%, and 29.5%, respectively. The Company's effective tax rates were significantly high for the three and six months ended June 30, 2025 (681.1% and 101.7% respectively), primarily due to low consolidated pre-tax income relative to tax expense drivers like deferred tax movements, foreign tax rate differentials, and alternative minimum tax in Colombia - LPA is a Cayman Islands exempted company and is not subject to income tax in the United States[133](index=133&type=chunk) - Income tax rates in operating countries are: Costa Rica **30.0%**, Colombia **35.0%**, and Peru **29.5%**[133](index=133&type=chunk) Effective Tax Rates | Period | Effective Tax Rate (%) | | :-------------------------- | :----------------- | | 3 Months Ended Jun 30, 2025 | 681.1% | | 3 Months Ended Jun 30, 2024 | 4.2% | | 6 Months Ended Jun 30, 2025 | 101.7% | | 6 Months Ended Jun 30, 2024 | 12.7% | - High effective tax rates for 2025 are attributed to low consolidated pre-tax income compared with tax expense drivers such as deferred tax assets/liabilities related to currency translation, unrecognized deferred tax assets, foreign tax rate differentials, and alternative minimum tax in Colombia[134](index=134&type=chunk) [16. Employee Benefits](index=41&type=section&id=16.%20EMPLOYEE%20BENEFITS) Total employee benefits recognized in general and administrative expense for the six months ended June 30, 2025, increased to $3.73 million from $3.53 million in the prior year. This increase was primarily driven by share-based payment expenses, which were $1.24 million in 2025 compared to none in 2024 Employee Benefits Expense | Benefit Category | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Short-term employee benefits | $1,265,017 | $2,438,663 | $2,494,094 | $3,530,427 | | Share-based payment expense | $879,147 | — | $1,236,333 | — | | Total | $2,144,164 | $2,438,663 | $3,730,427 | $3,530,427 | [17. Share-Based Payments](index=41&type=section&id=17.%20SHARE-BASED%20PAYMENTS) The Company established the 2024 Equity Incentive Plan in March 2024, granting Restricted Stock Units (RSUs) to executives and directors. These RSUs, which vest over service periods or immediately upon grant, are equity-settled and measured at grant date fair value. For the six months ended June 30, 2025, share-based payment expense related to RSUs was $1.24 million. Additionally, 90,000 ordinary shares were granted to a non-employee service provider in August 2024 to settle a Business Combination liability, valued at $1.14 million - The Logistic Properties of the Americas 2024 Equity Incentive Plan was established in March 2024 to grant equity-based awards, including Restricted Stock Units (RSUs)[136](index=136&type=chunk)[137](index=137&type=chunk) - RSUs were granted to senior executives and board directors, with vesting periods ranging from three years to immediate vesting upon grant[139](index=139&type=chunk)[140](index=140&type=chunk) - For the six months ended June 30, 2025, the Company recognized **$1,236,333** in share-based payment expense related to RSUs[141](index=141&type=chunk) RSUs Outstanding | Metric | Number of RSUs | Weighted Average Grant Date Fair Value per RSU ($) | | :------------------------ | :------------- | :--------------------------------------------- | | Non-vested at December 31, 2024 | 319,000 | $9.70 | | Granted | 173,500 | $8.86 | | Vested | (92,833) | $9.22 | | Non-vested at June 30, 2025 | 399,667 | $9.45 | - On August 14, 2024, **90,000 Ordinary Shares** were granted to a non-employee service provider to share-settle a Business Combination liability, with a fair value of **$1,141,200**[143](index=143&type=chunk) [18. Related Party Transactions](index=42&type=section&id=18.%20RELATED%20PARTY%20TRANSACTIONS) Related party transactions are conducted on arm's length terms. Key management personnel compensation for the six months ended June 30, 2025, totaled $2.85 million, an increase from $2.61 million in 2024, primarily due to higher salaries and share-based payment expenses. The loan receivable from Latam Logistics Investments, LLC (LLI) was settled in 2024 through the foreclosure of collateralized LLP shares - Transactions between the Company and its related parties are made on terms equivalent to those that prevail in arm's length transactions[144](index=144&type=chunk) Key Management Personnel Compensation | Compensation Category | 3 Months Ended Jun 30, 2025 ($) | 3 Months Ended Jun 30, 2024 ($) | 6 Months Ended Jun 30, 2025 ($) | 6 Months Ended Jun 30, 2024 ($) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Salaries | $405,079 | $391,165 | $798,235 | $590,486 | | Cash performance bonus | $252,557 | $248,076 | $480,303 | $374,445 | | One-time cash bonus related to the Business Combination | — | — | — | $226,000 | | Share-based payment expense | $879,147 | $1,140,218 | $1,236,333 | $1,140,218 | | Total | $1,707,059 | $1,980,495 | $2,850,176 | $2,606,567 | - The loan receivable from LLI, which was in default, was settled upon the Business Combination closing through the foreclosure of collateralized LLP Shares[150](index=150&type=chunk) [19. Financial Risk Management](index=43&type=section&id=19.%20FINANCIAL%20RISK%20MANAGEMENT) The Company is exposed to interest rate risk due to its long-term debt obligations with floating interest rates, and liquidity risk in meeting financial liabilities. To manage liquidity, the Company aims to maintain sufficient cash and utilize bank deposits and loans. The fair value of the Company's debt was estimated at $260.27 million as of June 30, 2025, and $255.59 million as of December 31, 2024, using discounted cash flows - The Company's exposure to interest rate risk primarily relates to its long-term debt obligations with floating interest rates[152](index=152&type=chunk) - Liquidity risk is managed by ensuring sufficient liquidity to meet liabilities when due, balancing funding continuity and flexibility through bank deposits and loans[153](index=153&type=chunk) Contractual Maturities of Financial Liabilities (Gross and Undiscounted) as of June 30, 2025 | Liability | Less than 3 months ($) | 3 to 12 months ($) | 1 to 5 years ($) | Thereafter ($) | Total ($) | | :-------------------------------- | :----------------- | :------------- | :----------- | :--------- | :---------- | | Accounts payable and accrued expenses | $132,965 | $6,735,395 | — | — | $10,979,450 | | Lease liability | $121,831 | $534,824 | $4,854,621 | $31,126,745 | $36,638,021 | | Long and short-term debt | $2,217,139 | $7,263,487 | $63,336,173 | $204,924,010 | $277,740,809 | | Total | $2,797,810 | $19,028,758 | $70,815,040 | $236,050,755 | $332,895,542 | - The fair value of the Company's debt was estimated at **$260,273,902** as of June 30, 2025, and **$255,591,886** as of December 31, 2024, using discounted cash flows[156](index=156&type=chunk) [20. Commitments and Contingencies](index=44&type=section&id=20.%20COMMITMENTS%20AND%20CONTINGENCIES) As of June 30, 2025, the Company had future capital expenditure commitments of $14.35 million related to construction contracts. In terms of legal proceedings, a lawsuit filed by a construction company was settled for $237,226 in February 2024. An ongoing lawsuit by a former employee is being vigorously defended, with no material adverse effect expected on the financial statements - As of June 30, 2025, the Company had agreed upon construction contracts with third parties, committing to future capital expenditures of **$14,348,564**[158](index=158&type=chunk) - A lawsuit filed by a construction company was settled for **$237,226** on February 29, 2024[159](index=159&type=chunk) - The Company is vigorously defending an ongoing lawsuit by a former employee and believes the claims are without merit, with no material adverse effect expected[160](index=160&type=chunk)[161](index=161&type=chunk) [21. Subsequent Events](index=45&type=section&id=21.%20SUBSEQUENT%20EVENTS) The Company has evaluated subsequent events through August 13, 2025, the date the financial statements were issued, and found no events requiring disclosure or recognition - No subsequent events occurred through August 13, 2025, that would require disclosure or recognition in the condensed consolidated interim financial statements[162](index=162&type=chunk) [22. Approval of the Condensed Consolidated Interim Financial Statements](index=45&type=section&id=22.%20APPROVAL%20OF%20THE%20CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) The condensed consolidated interim financial statements were authorized for issue by the Company's board of directors on August 13, 2025 - The condensed consolidated interim financial statements were authorized for issue by the Company's board of directors on August 13, 2025[163](index=163&type=chunk)

Exhibit 99.1 FIEE Announces Fiscal 2025 First Half Unaudited Financial Results First Half Revenue of $45,118 Prepaid subscription fees received from customers for our SaaS service were $1.5 Million. Hong Kong, 13 August 2025 -- FiEE, Inc. (NASDAQ:FIEE ("FiEE" or the "Company"), a technology company integrating IoT, connectivity and AI to redefine brand management solutions in the digital era, today announced its unaudited financial results for the three and six months ended June 30, 2025. Operational and Fi ...

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 001-37568 PDS Biotechnology Corporation (Exact name of registrant as specified in its charter) (State or othe ...

[PART I-FINANCIAL INFORMATION](index=7&type=section&id=PART%20I-FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for WEBTOON Entertainment Inc. [Item 1. Unaudited Financial Statements](index=7&type=section&id=Item%201.%20Unaudited%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements for WEBTOON Entertainment Inc. as of June 30, 2025, including balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows. [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$2.01 billion**, total liabilities grew to **$411.8 million**, and total equity rose to **$1.56 billion**. Condensed Consolidated Balance Sheet Highlights (As of June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | **Total Assets** | **$2,009,759** | **$1,935,334** | | Total current assets | $862,018 | $836,372 | | Goodwill, net | $685,690 | $665,275 | | **Total Liabilities** | **$411,802** | **$378,873** | | Total current liabilities | $339,848 | $313,224 | | **Total Equity** | **$1,560,280** | **$1,519,881** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q2 2025, revenue grew to **$348.3 million**, and net loss significantly reduced to **$3.9 million** from **$76.6 million** in Q2 2024, primarily due to decreased general and administrative expenses. Statement of Operations Summary (Three Months Ended June 30) | Metric | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Revenue | $348,271 | $320,972 | | Cost of revenue | $(260,992) | $(237,915) | | General and administrative expenses | $(64,972) | $(138,705) | | Operating income (loss) | $(8,763) | $(79,096) | | **Net income (loss)** | **$(3,883)** | **$(76,568)** | | Basic & Diluted EPS | $(0.03) | $(0.70) | Statement of Operations Summary (Six Months Ended June 30) | Metric | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Revenue | $673,978 | $647,716 | | Cost of revenue | $(515,088) | $(482,300) | | General and administrative expenses | $(131,674) | $(187,398) | | Operating income (loss) | $(35,397) | $(64,908) | | **Net income (loss)** | **$(25,852)** | **$(70,335)** | | Basic & Diluted EPS | $(0.21) | $(0.64) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased from **$1.52 billion** at the start of 2025 to **$1.56 billion** by June 30, driven by foreign currency adjustments and equity-based compensation. - Total equity attributable to WEBTOON Entertainment Inc. increased from **$1.47 billion** on January 1, 2025, to **$1.51 billion** on June 30, 2025[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **$13.0 million**, with cash and cash equivalents increasing by **$9.1 million** to **$581.5 million**. Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(12,951) | $22,394 | | Net cash provided by (used in) investing activities | $5,711 | $(7,306) | | Net cash provided by (used in) financing activities | $229 | $336,053 | | **Net increase (decrease) in cash** | **$9,144** | **$340,560** | | **Cash and cash equivalents at end of period** | **$581,546** | **$572,305** | [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover revenue disaggregation, geographical markets, legal proceedings, and stock-based compensation, with Paid Content and Japan as key revenue drivers. Revenue by Stream (Three Months Ended June 30) | Revenue Stream | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Paid Content | $274,913 | $260,709 | | Advertising | $45,220 | $40,419 | | IP Adaptations | $28,138 | $19,844 | | **Total** | **$348,271** | **$320,972** | Revenue by Geography (Three Months Ended June 30) | Geography | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Korea | $125,746 | $118,067 | | Japan | $177,881 | $156,221 | | Rest of World | $44,644 | $46,684 | | **Total** | **$348,271** | **$320,972** | - The company is facing a putative class action lawsuit filed on September 5, 2024, alleging that the IPO Registration Statement was materially false and misleading, and the company intends to defend the case vigorously[63](index=63&type=chunk) - Total stock-based compensation expense was **$25.5 million** for the six months ended June 30, 2025, a significant decrease from **$57.7 million** in the same period of 2024[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses key business metrics, financial results, and liquidity, highlighting a decrease in global MAU but growth in ARPPU and significant reduction in net loss for Q2 2025. [Key Business Metrics](index=28&type=section&id=Key%20Business%20Metrics) Global MAU decreased by **7.6%** to **156.1 million** in Q2 2025, while Global MPU remained stable, and Paid Content ARPPU grew **11.1%** to **$12.4**. Key Operating Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Global MAU | 156.1 million | ~168.9 million | -7.6% | | - Korea MAU | 23.0 million | 25.8 million | -10.9% | | - Japan MAU | 22.6 million | 22.0 million | +2.7% | | - ROW MAU | 110.5 million | 121.1 million | -8.8% | | Global MPU | 7.4 million | ~7.7 million | -3.9% | | Paying Ratio | 4.7% | 4.6% | +0.1 ppt | | Global ARPPU | $12.4 | ~$11.16 | +11.1% | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q2 2025 revenue increased **8.5%** to **$348.3 million**, and operating loss significantly narrowed to **$8.8 million** due to a **53.2%** decrease in G&A expenses. Comparison of Operations (Three Months Ended June 30) | Metric (in thousands USD) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $348,271 | $320,972 | 8.5% | | Operating income (loss) | $(8,763) | $(79,096) | (88.9%) | | Net income (loss) | $(3,883) | $(76,568) | (94.9%) | - The decrease in G&A expenses for Q2 2025 was largely driven by a **$43.2 million** decrease in stock compensation expense and the non-recurrence of a **$30.0 million** one-time CEO bonus related to the successful IPO in 2024[154](index=154&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for Q2 2025 was **$9.7 million**, with a **2.8%** margin, while constant currency revenue grew **5.5%** year-over-year. Reconciliation of Net Loss to Adjusted EBITDA (Three Months Ended June 30) | Metric (in thousands USD) | 2025 | 2024 | | :--- | :--- | :--- | | Net income (loss) | $(3,883) | $(76,568) | | EBITDA | $(1,216) | $(67,778) | | **Adjusted EBITDA** | **$9,662** | **$20,351** | | Adjusted EBITDA Margin | 2.8% | 6.3% | - On a constant currency basis, total revenue for the three months ended June 30, 2025, was **$338.7 million**, representing a **5.5%** increase over the prior year period[184](index=184&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$581.5 million** in cash and cash equivalents as of June 30, 2025, supported by IPO proceeds, and believes it has sufficient liquidity for the next 12 months. - The company completed its IPO on June 28, 2024, receiving net proceeds of approximately **$281.7 million**, and an additional **$50 million** from a concurrent private placement[185](index=185&type=chunk)[186](index=186&type=chunk) - As of June 30, 2025, the company had **$581.5 million** in cash and cash equivalents[188](index=188&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Activity (in thousands USD) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(12,951) | $22,394 | | Net cash provided by (used in) investing activities | $5,711 | $(7,306) | | Net cash provided by (used in) financing activities | $229 | $336,053 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section refers to the company's Annual Report for a detailed discussion of its market risks, indicating no material changes since that filing. - The company's disclosures about market risk are referenced from its Annual Report on Form 10-K[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls were ineffective as of June 30, 2025, due to material weaknesses in accounting resources and period-end financial reporting processes, with remediation ongoing. - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting[197](index=197&type=chunk) - Identified material weaknesses include: * Lacking a sufficient complement of resources with appropriate accounting knowledge and experience[198](index=198&type=chunk) * Ineffective design and maintenance of controls related to the period-end financial reporting and disclosure process[199](index=199&type=chunk) - Remediation efforts are ongoing, including onboarding U.S. GAAP and SEC reporting specialists and strengthening financial closing and reporting controls[201](index=201&type=chunk) [PART II-OTHER INFORMATION](index=42&type=section&id=PART%20II-OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits. [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in class action and shareholder derivative lawsuits alleging misleading IPO statements, which it intends to vigorously defend. - A putative class action lawsuit was filed on September 5, 2024, against the company, its directors, and IPO underwriters, alleging violations of the Securities Act of 1933 related to the IPO Registration Statement[206](index=206&type=chunk) - A shareholder derivative lawsuit was filed on November 15, 2024, against the company's directors based on similar allegations as the class action, which has been stayed pending the motion to dismiss in the class action case[207](index=207&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the company's risk factors since the filing of its Annual Report on Form 10-K. - No material changes to the risk factors previously disclosed in the Annual Report have occurred[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) There were no unregistered sales of equity securities during the period. - None[209](index=209&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) There were no defaults upon senior securities during the period. - None[209](index=209&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company. - Not Applicable[209](index=209&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information.) There is no other information to report for the period. - None[210](index=210&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications. - Exhibits filed include: * Amended and Restated Certificate of Incorporation and By-Laws[211](index=211&type=chunk) * Certifications by the Principal Executive Officer and Principal Financial Officer[211](index=211&type=chunk) * Interactive Data Files (Inline XBRL)[211](index=211&type=chunk)

[PART I - Financial Information](index=4&type=section&id=PART%20I%20-%20Financial%20Information) This part provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Air T, Inc. and its subsidiaries [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Air T, Inc. and its subsidiaries, including statements of income, comprehensive income, balance sheets, cash flows, equity, and detailed notes, for the periods ended June 30, 2025, and March 31, 2025 [Condensed Consolidated Statements of Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) This statement details the company's operating revenues, expenses, and net loss for the three months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Operating Revenues | $70,870 | $66,411 | | Operating Expenses | $70,424 | $66,988 | | Operating Income (Loss) | $446 | $(577) | | Non-operating (Expense) Income | $(1,253) | $680 | | (Loss) Income before income taxes | $(807) | $103 | | Income Tax (Benefit) Expense | $(136) | $71 | | Net (Loss) Income | $(671) | $32 | | Net Loss Attributable to Air T, Inc. Stockholders | $(1,636) | $(335) | | Basic Loss per share | $(0.61) | $(0.12) | | Diluted Loss per share | $(0.61) | $(0.12) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents the net loss and other comprehensive income components, including foreign currency translation and reclassification of interest rate swaps Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net (Loss) Income | $(671) | $32 | | Foreign currency translation gain (loss) | $413 | $(50) | | Reclassification of interest rate swaps into earnings | $12 | $(203) | | Redemption of non-controlling interest | — | $146 | | Other | $(243) | $1 | | Total Other Comprehensive Gain (Loss) | $182 | $(106) | | Total Comprehensive Loss | $(489) | $(74) | | Comprehensive Income Attributable to Non-controlling Interests | $(965) | $(367) | | Comprehensive Loss Attributable to Air T, Inc. Stockholders | $(1,454) | $(441) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' deficit as of June 30, 2025, and March 31, 2025 Condensed Consolidated Balance Sheets (in thousands) | Category | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :-------------- | :------------- | | **ASSETS** | | | | Cash and cash equivalents | $14,460 | $5,932 | | Total Current Assets | $92,933 | $78,507 | | Total Assets | $190,037 | $173,778 | | **LIABILITIES AND STOCKHOLDERS' DEFICIT** | | | | Total Current Liabilities | $49,051 | $47,661 | | Long-term debt | $117,762 | $101,226 | | Total Liabilities | $184,745 | $168,242 | | Redeemable non-controlling interests | $8,210 | $7,054 | | Total Air T, Inc. Stockholders' Deficit | $(4,630) | $(3,216) | | Total Deficit | $(2,918) | $(1,518) | | Total Liabilities and Deficit | $190,037 | $173,778 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the cash flows from operating, investing, and financing activities for the three months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(1,095) | $113 | | Net cash (used in) provided by investing activities | $(2,724) | $2,008 | | Net cash provided by (used in) financing activities | $12,577 | $(1,291) | | Effect of foreign currency exchange rates on cash and cash equivalents | $(292) | $32 | | Net Increase in Cash and Cash Equivalents and Restricted Cash | $8,466 | $862 | | Cash and Cash Equivalents and Restricted Cash at End of Period | $15,223 | $8,705 | [Condensed Consolidated Statements of Equity](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This statement details changes in equity components, including common stock, retained earnings, and non-controlling interests, for the period ended June 30, 2025 Condensed Consolidated Statements of Equity (in thousands) | Equity Component | Balance, March 31, 2025 | Net Income (Loss) | Distributions to NCI | Stock Compensation Expense | Foreign Currency Translation Gain | Reclassification of Interest Rate Swaps | Allocation of Comprehensive Income | Allocation of Comprehensive Income to Redeemable NCI | Balance, June 30, 2025 | | :------------------------------------ | :---------------------- | :------------------ | :------------------- | :------------------------- | :------------------------------ | :------------------------------------- | :------------------------------------------------ | :------------------------------------------------------- | :--------------------- | | Common Stock (Amount) | $758 | — | — | — | — | — | — | — | $758 | | Treasury Stock (Amount) | $(6,404) | — | — | — | — | — | — | — | $(6,404) | | Additional Paid-In Capital | $947 | — | — | $40 | — | — | — | — | $987 | | Retained Earnings | $2,130 | $(1,636) | — | — | — | — | — | — | $494 | | Accumulated Other Comprehensive Income (Loss) | $(647) | — | — | — | $413 | $12 | $5 | $(248) | $(465) | | Non-controlling Interests | $1,698 | $52 | $(38) | — | — | — | — | — | $1,712 | | **Total Equity (Deficit)** | **$(1,518)** | **$(1,584)** | **$(38)** | **$40** | **$413** | **$12** | **$5** | **$(248)** | **$(2,918)** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanatory notes supporting the unaudited condensed consolidated financial statements, covering accounting policies, acquisitions, and other financial disclosures [1. Financial Statement Presentation](index=14&type=section&id=1.%20Financial%20Statement%20Presentation) This note clarifies the basis of presentation for the unaudited condensed consolidated financial statements and discusses the impact of new accounting standards - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP, with certain information condensed or omitted per SEC rules, and are not necessarily indicative of full-year results[23](index=23&type=chunk)[24](index=24&type=chunk) - The Company is evaluating the impact of new FASB ASUs 2023-09 (Income Taxes) and 2024-03 (Expense Disaggregation) on its consolidated financial statements and disclosures, effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[26](index=26&type=chunk)[27](index=27&type=chunk) [2. Acquisitions](index=15&type=section&id=2.%20Acquisitions) This note details the acquisition of Royal Aircraft Services, LLC by Mountain Air Cargo, Inc. on May 15, 2025 - On May 15, 2025, Mountain Air Cargo, Inc. (a wholly-owned subsidiary) acquired Royal Aircraft Services, LLC, an aircraft maintenance and repair company, for **$1.2 million**, net of cash acquired, integrating it into the Overnight Air Cargo segment[28](index=28&type=chunk) [3. Revenue Recognition](index=16&type=section&id=3.%20Revenue%20Recognition) This note describes the company's revenue recognition policies across various streams and provides disaggregated revenue data - The Company generates revenue from product sales (point-in-time), support services (over time, based on input/output methods), software services (ratably over subscription terms), and leasing revenue[31](index=31&type=chunk)[32](index=32&type=chunk) Disaggregated Revenues by Type (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Product Sales | $44,710 | $40,515 | | Support Services | $20,649 | $23,037 | | Leasing Revenue | $2,210 | $518 | | Software Services | $2,096 | $1,678 | | Other | $1,155 | $633 | | **Total** | **$70,870** | **$66,411** | Outstanding Contract Liabilities (in thousands) | Contract Liabilities | As of June 30, 2025 | As of April 1, 2025 | Recognized as Revenue (3 months ended June 30, 2025) | | :----------------------- | :------------------ | :------------------ | :--------------------------------------------------- | | Outstanding | $7,781 | $4,199 | $(1,577) | [4. Accrued Expenses and Other](index=19&type=section&id=4.%20Accrued%20Expenses%20and%20Other) This note provides a breakdown of accrued expenses and other current liabilities as of June 30, 2025, and March 31, 2025 Accrued Expenses and Other (in thousands) | Category | June 30, 2025 | March 31, 2025 | | :---------------------- | :-------------- | :------------- | | Salaries, wages and related | $6,477 | $6,235 | | Profit sharing and bonus | $827 | $2,980 | | Other Deposits | $2,965 | $513 | | Deferred Income | $4,816 | $3,686 | | Accrued insurance payable | $2,949 | $1,336 | | Other | $2,589 | $1,941 | | **Total** | **$20,623** | **$16,691** | [5. Income Taxes](index=19&type=section&id=5.%20Income%20Taxes) This note discusses the income tax benefit and expense, effective tax rates, and the impact of recent tax legislation for the periods presented - For the three months ended June 30, 2025, the Company recorded a **$0.1 million income tax benefit** at an effective tax rate (ETR) of **16.9%**, primarily due to valuation allowances, foreign rate differentials, and the Foreign-Derived Intangible Income (FDII) deduction[35](index=35&type=chunk) - For the three months ended June 30, 2024, the Company recorded income tax expense of **$71.0 thousand** at an ETR of **68.9%**, influenced by valuation allowances and foreign rate differentials[37](index=37&type=chunk) - The 'One Big Beautiful Bill Act,' signed July 4, 2025, is being evaluated for its full effects but is not expected to materially impact the financial statements for the period ended June 30, 2025, as it was enacted after the quarter-end[36](index=36&type=chunk) [6. Net Loss Per Share](index=19&type=section&id=6.%20Net%20Loss%20Per%20Share) This note presents the basic and diluted net loss per share attributable to Air T, Inc. stockholders for the three months ended June 30, 2025 and 2024 Net Loss Per Share (in thousands, except per share figures) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net Loss Attributable to Air T, Inc. Stockholders | $(1,636) | $(335) | | Basic Loss per share | $(0.61) | $(0.12) | | Diluted Loss per share | $(0.61) | $(0.12) | | Weighted Average Shares Outstanding (Basic) | 2,703 | 2,761 | | Weighted Average Shares Outstanding (Diluted) | 2,703 | 2,761 | [7. Intangible Assets and Goodwill](index=20&type=section&id=7.%20Intangible%20Assets%20and%20Goodwill) This note provides details on the net book value of intangible assets and changes in goodwill by segment Intangible Assets, Net Book Value (in thousands) | Intangible Asset Category | June 30, 2025 | March 31, 2025 | | :-------------------------- | :-------------- | :------------- | | Purchased software | $298 | $316 | | Internally developed software | $2,601 | $2,547 | | In-place lease and other | $609 | $634 | | Customer relationships | $6,305 | $6,005 | | Patents | $24 | $25 | | Other | $431 | $423 | | In-process software | $170 | $70 | | **Total Intangible Assets** | **$10,438** | **$10,020** | - Goodwill increased from **$10.5 million** at March 31, 2025, to **$11.9 million** at June 30, 2025, primarily due to the Royal acquisition (**$1.0 million**) and foreign currency translation adjustments at Shanwick (**$0.3 million**)[42](index=42&type=chunk) Goodwill by Segment (at cost, in thousands) | Goodwill by Segment | June 30, 2025 | March 31, 2025 | | :-------------------------------- | :-------------- | :------------- | | Overnight air cargo | $1,121 | $76 | | Commercial aircraft, engines and parts | $4,227 | $4,227 | | Digital solutions | $6,555 | $6,239 | | **Total reportable segment goodwill** | **$11,903** | **$10,542** | [8. Investments in Securities and Derivative Instruments](index=21&type=section&id=8.%20Investments%20in%20Securities%20and%20Derivative%20Instruments) This note describes the company's use of interest rate swaps and the fair value measurement of marketable equity securities - The Company uses interest rate swaps for risk management, but as of June 30, 2025, all previously designated cash flow hedging instruments are no longer effective hedges[44](index=44&type=chunk) - A new floating-to-fixed interest rate swap for a **$2.3 million** loan was entered into on February 28, 2025, with fair value changes recognized directly into earnings, as hedge accounting was not applied[45](index=45&type=chunk) - Marketable equity securities are carried at fair value (Level 1), with immaterial gross unrealized gains and losses for the three months ended June 30, 2025 and 2024[48](index=48&type=chunk)[49](index=49&type=chunk) [9. Equity Method Investments](index=22&type=section&id=9.%20Equity%20Method%20Investments) This note details the company's significant equity method investments and their contribution to net income or loss - The Company holds significant equity method investments in Lendway, Inc. (**27.5% ownership**), Cadillac Casting, Inc. (**20.1% ownership**), and Crestone Asset Management, LLC (**90% economic common interests**)[50](index=50&type=chunk)[52](index=52&type=chunk)[56](index=56&type=chunk) Equity Method Investment Balances (in thousands) | Investment | June 30, 2025 | March 31, 2025 | | :-------------------------- | :-------------- | :------------- | | Lendway | $858 | $729 | | CCI | $3,860 | $3,889 | | CAM | $13,385 | $12,428 | | Other equity method investments | $1,797 | $1,957 | | **Total** | **$19,900** | **$19,003** | Net (Loss) Income Attributable to Air T, Inc. Stockholders from Equity Method Investees (in thousands) | Investment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Lendway | $123 | $(290) | | CCI | $(29) | $674 | | CAM | $(251) | $1,495 | | Other equity method investments | $138 | $44 | | **Total** | **$(19)** | **$1,923** | [10. Inventories](index=24&type=section&id=10.%20Inventories) This note provides a breakdown of inventories, net of reserves, by category as of June 30, 2025, and March 31, 2025 Inventories, Net of Reserves (in thousands) | Inventory Category | June 30, 2025 | March 31, 2025 | | :----------------- | :-------------- | :------------- | | Raw Materials | $7,275 | $6,928 | | Work in process | $3,078 | $2,342 | | Finished Goods | $4,084 | $5,358 | | Aircraft parts | $30,440 | $28,794 | | Reserves | $(4,991) | $(4,906) | | **Total Inventories, net** | **$39,886** | **$38,516** | [11. Lessor Arrangements](index=24&type=section&id=11.%20Lessor%20Arrangements) This note outlines the company's leasing activities as a lessor, including depreciation expense and future minimum rental payments - The Company leases equipment (aircraft and engines) and offices to third parties[65](index=65&type=chunk) - Depreciation expense for equipment leases was **$0.6 million** in Q1 2026 (vs. **$0.1 million** in Q1 2025), and for office leases was **$0.1 million** in both periods[69](index=69&type=chunk) - Earned contingent rent on equipment leases totaled approximately **$0.5 million** for the three months ended June 30, 2025, with no contingent rent in the prior year period[66](index=66&type=chunk) Future Minimum Rental Payments to be Received (in thousands) | Year Ended March 31, | Equipment Leases | Office Leases | | :------------------------------------ | :--------------- | :------------ | | 2026 (excluding Q1 2026) | $2,192 | $765 | | 2027 | $3,361 | $990 | | 2028 | $2,843 | $849 | | 2029 | — | $774 | | 2030 | — | $743 | | Thereafter | — | $1,824 | | **Total** | **$8,396** | **$5,945** | [12. Lessee Arrangements](index=25&type=section&id=12.%20Lessee%20Arrangements) This note details the company's lease costs, operating lease balances, and maturities of lease liabilities as a lessee Components of Lease Cost (in thousands) | Lease Cost Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | | Operating lease cost | $841 | $668 | | Short-term lease cost | $279 | $294 | | Variable lease cost | $246 | $226 | | **Total lease cost** | **$1,366** | **$1,188** | Operating Lease Balances (in thousands, except terms/rates) | Metric | June 30, 2025 | March 31, 2025 | | :-------------------------- | :-------------- | :-------------- | | Operating lease ROU assets | $12,898 | $13,274 | | Operating lease liabilities | $13,848 | $14,220 | | Weighted-average remaining lease term | 10 years, 2 months | 10 years, 3 months | | Weighted-average discount rate | 5.68% | 5.67% | Maturities of Lease Liabilities (in thousands) | Operating Leases | Amount | | :------------------------------------ | :----- | | 2026 (excluding Q1 2026) | $2,450 | | 2027 | $3,065 | | 2028 | $2,358 | | 2029 | $1,750 | | 2030 | $977 | | Thereafter | $7,669 | | Total undiscounted lease payments | $18,269 | | Interest | $(4,421) | | **Total lease liabilities** | **$13,848** | [13. Financing Arrangements](index=26&type=section&id=13.%20Financing%20Arrangements) This note describes new and existing debt facilities, including term loans, note purchase agreements, and their respective terms - On May 15, 2025, the Alerus Loan Parties secured a **$1.1 million Term Loan C** to finance the Royal acquisition, maturing May 15, 2030, with interest at the greater of **5.00%** or 1-month SOFR + **2.25%**[79](index=79&type=chunk) - On May 30, 2025, AAM 24-1 entered into a Third Note Purchase Agreement for a Multiple Advance Senior Secured Note up to **$100.0 million**, with **$40.0 million** advanced to date and an additional **$60.0 million** committed in **$10.0 million** increments through May 2027, bearing **8.5%** annual interest[80](index=80&type=chunk)[81](index=81&type=chunk) Summary of Borrowings (in thousands) | Debt Type | June 30, 2025 | March 31, 2025 | Maturity Date | Interest Rate | | :-------------------------------- | :-------------- | :------------- | :------------ | :-------------------------------- | | Trust Preferred Securities | $35,450 | $35,342 | 6/7/2049 | 8.00% | | Alerus Loan Parties (Total) | $23,406 | $15,877 | Various | Various | | Contrail Debt (Total) | $8,143 | $11,877 | Various | Various | | Wolfe Lake Debt | $8,989 | $9,059 | 12/2/2031 | 3.65% | | Air T Acquisition 22.1 (Total) | $5,903 | $5,880 | Various | Various | | WASI Debt | $280 | $398 | 1/1/2026 | 6.00% | | AAM 24-1 Debt | $40,000 | $30,000 | 5/31/2035 | 8.50% | | MAC Debt | $2,242 | $2,271 | 2/21/2030 | 1-month SOFR + 0.11% + 1.75% | | **Total Debt, net** | **$123,842** | **$110,325** | | | [14. Shares Repurchased](index=30&type=section&id=14.%20Shares%20Repurchased) This note provides information on the company's common stock repurchase program and activity during the quarter - The Company has an authorized program to repurchase up to **1,125,000 shares** of its common stock, with **752,228 shares** remaining available as of June 30, 2025[179](index=179&type=chunk) - No shares were repurchased by the Company during the three months ended June 30, 2025[89](index=89&type=chunk)[180](index=180&type=chunk) [15. Geographical Information](index=30&type=section&id=15.%20Geographical%20Information) This note presents the company's total tangible long-lived assets and operating revenues disaggregated by geographical region Total Tangible Long-Lived Assets, Net (in thousands) | Location | June 30, 2025 | March 31, 2025 | | :------------- | :-------------- | :------------- | | United States | $20,025 | $20,422 | | Foreign | $14,164 | $14,525 | | **Total** | **$34,189** | **$34,947** | Total Operating Revenues by Region (in thousands) | Location | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | | United States | $58,977 | $54,829 | | Foreign | $11,803 | $11,487 | | **Total Revenue** | **$70,870** | **$66,411** | [16. Segment Information](index=31&type=section&id=16.%20Segment%20Information) This note outlines the company's four reportable segments, their revenue from external customers, and segment profit or loss - The Company operates in four reportable segments: Overnight Air Cargo, Commercial Aircraft, Engines and Parts, Ground Support Equipment, and Digital Solutions[97](index=97&type=chunk) - Effective Q4 FY2025, the Company renamed two segments and separately disclosed Digital Solutions to better align with business activities and anticipated long-term growth[95](index=95&type=chunk)[96](index=96&type=chunk) Revenue from External Customers by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Overnight Air Cargo | $30,589 | $30,383 | | Commercial Aircraft, Engines and Parts | $21,960 | $26,250 | | Ground Support Equipment | $15,070 | $7,354 | | Digital Solutions | $2,096 | $1,678 | | **Total Segment Revenue** | **$69,715** | **$65,665** | Segment Profit (Loss) (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Overnight Air Cargo | $1,466 | $1,831 | | Commercial Aircraft, Engines and Parts | $456 | $1,082 | | Ground Support Equipment | $1,338 | $(775) | | Digital Solutions | $(250) | $(464) | | **Total Segment Profit (Loss)** | **$3,010** | **$1,674** | [17. Commitments and Contingencies](index=35&type=section&id=17.%20Commitments%20and%20Contingencies) This note details the company's redeemable non-controlling interests, earnout liabilities, and stock incentive plan - Contrail has a redeemable non-controlling interest (RNCI) with an earnout liability valued at **$1.1 million** as of June 30, 2025, and a put/call option for the remaining **5% interest** commencing April 1, 2026[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - Shanwick also has a redeemable non-controlling interest (RNCI) with put/call options exercisable from the fifth anniversary of the shareholder agreement (February 2022), measured at the higher of carrying or redemption value[108](index=108&type=chunk)[109](index=109&type=chunk) - The 2020 Omnibus Stock and Incentive Plan authorized **420,000 shares**, with **199,000 granted options** outstanding as of June 30, 2025; however, no options were exercisable due to unmet market conditions[114](index=114&type=chunk) [18. Guarantees](index=39&type=section&id=18.%20Guarantees) This note describes the company's nonfinancial guarantees for lease agreements and their associated carrying values - The Company may issue nonfinancial guarantees for lease agreements of aircraft assets, with maximum potential payments of **$4.4 million** at June 30, 2025 and March 31, 2025[115](index=115&type=chunk)[117](index=117&type=chunk) - The carrying value of recorded liabilities related to these nonfinancial guarantees was **$0** at both June 30, 2025 and March 31, 2025[117](index=117&type=chunk) [19. Subsequent Events](index=39&type=section&id=19.%20Subsequent%20Events) This note reports on significant events occurring after the balance sheet date, including the sale of aircraft assets - On July 15, 2025, CASP, a **95%-owned subsidiary** of Contrail, completed the sale of two Airbus aircraft and associated engines for over **$18.0 million**, transferring lessor rights and obligations to the purchaser[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, and liquidity for the three months ended June 30, 2025, compared to the prior year, along with an overview of business segments and forward-looking statements [Forward-Looking Statements](index=40&type=section&id=Forward-Looking%20Statements) This section highlights the inherent uncertainties and risks associated with forward-looking statements in the report - The report contains forward-looking statements that reflect current views on future events and financial performance, subject to uncertainties and factors that could cause actual results to differ materially, including financing, economic conditions, contract risks, and market acceptance[120](index=120&type=chunk)[121](index=121&type=chunk)[124](index=124&type=chunk) [Overview](index=40&type=section&id=Overview) This section provides a high-level introduction to Air T, Inc.'s business model, strategic focus, and core operating segments - Air T, Inc. is a holding company focused on prudently and strategically diversifying its earnings power and compounding the growth in free cash flow per share over time[123](index=123&type=chunk) - The Company operates in four core industry segments: Overnight Air Cargo, Ground Support Equipment, Commercial Aircraft, Engines and Parts, and Digital Solutions[124](index=124&type=chunk)[131](index=131&type=chunk) - Effective as of the fourth quarter of fiscal year 2025, the Company renamed two segments and separately disclosed the Digital Solutions segment to better align with its activities and anticipated long-term growth[126](index=126&type=chunk)[127](index=127&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, expenses, and non-operating items, for the current and prior fiscal quarters [Operating Revenue](index=41&type=section&id=Operating%20Revenue) This section details the consolidated and segment-specific operating revenue changes for the three months ended June 30, 2025 - Consolidated segment revenue for the three-month period ended June 30, 2025, increased by **$4.1 million** (**6.2%**) compared to the same quarter in the prior fiscal year[129](index=129&type=chunk) Revenue by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change (%) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | :--------- | | Overnight Air Cargo | $30,589 | $30,383 | $206 | 1% | | Ground Support Equipment | $15,070 | $7,354 | $7,716 | 105% | | Commercial Aircraft, Engines and Parts | $21,960 | $26,250 | $(4,290) | (16)% | | Digital Solutions | $2,096 | $1,678 | $418 | 25% | | **Segments total** | **$69,715** | **$65,665** | **$4,050** | **6%** | - Ground Support Equipment revenue increased **105%** due to higher deicing truck sales, while Commercial Aircraft, Engines and Parts revenue decreased **16%** due to lower component sales, partially offset by increased lease income[130](index=130&type=chunk)[132](index=132&type=chunk) - Digital Solutions revenue grew **25%** from new software subscriptions[133](index=133&type=chunk) [Operating Expenses](index=42&type=section&id=Operating%20Expenses) This section analyzes the consolidated and segment-specific operating expense changes for the three months ended June 30, 2025 - Consolidated segment operating expenses for the three-month period ended June 30, 2025, increased by **$2.4 million** (**4.6%**) compared to the same quarter in the prior fiscal year[134](index=134&type=chunk) Operating Expenses by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | | Overnight Air Cargo | $25,899 | $25,709 | $190 | | Ground Support Equipment | $12,303 | $6,533 | $5,770 | | Commercial Aircraft, Engines and Parts | $14,656 | $18,533 | $(3,877) | | Digital Solutions | $836 | $556 | $280 | | **Segments total** | **$53,694** | **$51,331** | **$2,363** | - Ground Support Equipment operating expenses increased **88.3%** due to higher sales, but the percentage increase was less than revenue due to higher margins[135](index=135&type=chunk) - Commercial Aircraft, Engines and Parts operating expenses decreased **20.9%** due to lower component sales and profit margins[136](index=136&type=chunk) - Digital Solutions operating expenses increased **50.4%** due to headcount-related expenses[137](index=137&type=chunk) [General and administrative](index=43&type=section&id=General%20and%20administrative) This section reviews the general and administrative expenses and their proportion of total net sales General and Administrative Expenses (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------------- | :------------------------------- | :------------------------------- | :----- | | General and administrative | $15,031 | $14,612 | $419 | | Percentage of total net sales | 21% | 22% | | - General and administrative expenses remained relatively flat year-over-year[138](index=138&type=chunk) [Non-operating income (expense)](index=43&type=section&id=Non-operating%20income%20(expense)) This section explains the changes in non-operating income and expense, primarily driven by interest and equity method investments - The Company reported a net non-operating loss of **$1.3 million** during the quarter ended June 30, 2025, compared to net non-operating income of **$0.7 million** in the prior year quarter[139](index=139&type=chunk) - This shift was driven by a **$0.4 million increase** in interest expense and a net loss of **$0.3 million** from equity method investments in the current quarter, compared to a **$1.9 million net income** from equity method investments in the prior year[139](index=139&type=chunk) [Provision for Income Taxes](index=43&type=section&id=Provision%20for%20Income%20Taxes) This section discusses the income tax benefit or expense and effective tax rates for the current and prior fiscal quarters - The Company recorded a **$0.1 million income tax benefit** in Q1 2026 (ETR **16.9%**) versus a **$0.1 million expense** in Q1 2025 (ETR **68.9%**), primarily due to valuation allowances, foreign rate differentials, and the FDII deduction[140](index=140&type=chunk)[142](index=142&type=chunk) [Critical Accounting Policies and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that no significant changes were made to the company's critical accounting policies and estimates during the quarter - No significant changes were made to the Company's critical accounting policies and estimates during the three months ended June 30, 2025[144](index=144&type=chunk) [Seasonality](index=44&type=section&id=Seasonality) This section addresses the historical seasonal patterns affecting the ground support equipment segment's revenues and operating income - The ground support equipment segment business has historically been seasonal, with revenues and operating income typically lower in the first and fourth fiscal quarters as commercial deicers are usually delivered prior to the winter season[145](index=145&type=chunk) [Systems and Network Security](index=44&type=section&id=Systems%20and%20Network%20Security) This section acknowledges the potential legal, financial, and reputational risks associated with cybersecurity breaches - The Company acknowledges cybersecurity risks, noting that breaches could lead to significant legal and financial liability, reputational harm, and revenue loss, despite employed security measures[146](index=146&type=chunk) [Inflation](index=44&type=section&id=Inflation) This section highlights the material uncertainties and risks posed by future economic developments, including inflation and increased interest rates - Future economic developments, including inflation and increased interest rates, present material uncertainty and risk to the Company's financial condition and results of operations, with issues expected to continue beyond the current fiscal year[147](index=147&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, available credit, working capital changes, and new financing arrangements - As of June 30, 2025, the Company held **$15.0 million** in cash and cash equivalents and restricted cash, with an aggregate of approximately **$29.1 million** in available funds under its lines of credit[148](index=148&type=chunk) - Working capital increased by **$13.0 million** to **$43.9 million** at June 30, 2025, primarily driven by an **$8.5 million increase** in cash, a **$1.4 million increase** in inventory, and a **$3.0 million decrease** in short-term debt[149](index=149&type=chunk) - New financing includes a **$1.1 million Term Loan C** for the Royal acquisition and a Third Note Purchase Agreement for a Multiple Advance Senior Secured Note up to **$100.0 million**, with **$40.0 million** advanced to date and an additional **$60.0 million** committed in increments through May 2027[150](index=150&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) - Management believes it has sufficient cash on hand and available liquidity to meet its obligations for at least 12 months following the financial statements' issuance date[157](index=157&type=chunk) [Cash Flows](index=46&type=section&id=Cash%20Flows) This section analyzes the changes in cash flows from operating, investing, and financing activities for the three months ended June 30, 2025 Changes in Cash Flow (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----- | | Net cash (used in) provided by operating activities | $(1,095) | $113 | $(1,208) | | Net cash (used in) provided by investing activities | $(2,724) | $2,008 | $(4,732) | | Net cash provided by (used in) financing activities | $12,577 | $(1,291) | $13,868 | | **Net Increase in Cash and Cash Equivalents and Restricted Cash** | **$8,466** | **$862** | **$7,604** | - The **$1.2 million decrease** in operating cash flow was primarily due to an unfavorable change in inventory (**$3.8 million**), partially offset by a **$1.6 million increase** in net income after adjustments and **$1.3 million higher** customer deposits[158](index=158&type=chunk) - Net cash used in investing activities increased by **$4.7 million**, driven by **$2.0 million** in investments in unconsolidated entities, the **$1.2 million Royal acquisition**, and **$1.5 million lower** distributions from unconsolidated entities[159](index=159&type=chunk) - Net cash provided by financing activities increased by **$13.9 million**, primarily due to **$16.1 million more** proceeds from term loans and revolving lines of credit, partially offset by **$3.1 million more** payments on revolving lines of credit[160](index=160&type=chunk) [Non-GAAP Financial Measures (Adjusted EBITDA)](index=47&type=section&id=Non-GAAP%20Financial%20Measures%20(Adjusted%20EBITDA)) This section defines Adjusted EBITDA as a non-GAAP measure and provides its reconciliation to operating income and segment-wise breakdown - Adjusted EBITDA, a non-GAAP financial measure, is used to evaluate the Company's financial performance by removing the impact of specific items and adding back interest expense and depreciation/amortization (excluding certain leased assets)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) Reconciliation of Operating Income (Loss) to Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Operating income (loss) | $446 | $(577) | | Depreciation and amortization (excluding certain leased assets depreciation) | $702 | $760 | | Asset impairment, restructuring or impairment charges | $40 | $378 | | Gain on sale of property and equipment | $(1) | — | | Securities issuance expenses | $30 | $101 | | Share-based compensation | $39 | $16 | | Severance expenses | — | $179 | | Deal-sourcing expenses | $210 | — | | **Adjusted EBITDA** | **$1,466** | **$857** | Adjusted EBITDA by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Overnight Air Cargo | $1,613 | $1,947 | | Ground Support Equipment | $1,374 | $(511) | | Commercial Aircraft, Engines and Parts | $754 | $1,665 | | Digital Solutions | $(86) | $(312) | | Corporate and Other | $(2,189) | $(1,932) | | **Adjusted EBITDA** | **$1,466** | **$857** | [Issuer and guarantor subsidiary summarized information](index=48&type=section&id=Issuer%20and%20guarantor%20subsidiary%20summarized%20information) This section provides details on Air T Funding's Trust Preferred Securities and Air T, Inc.'s guarantee obligations - Air T Funding, a statutory business trust, issues Alpha Income Trust Preferred Securities (**8.0% Cumulative Securities**) which are fully and unconditionally guaranteed by Air T, Inc. on a senior unsecured basis[166](index=166&type=chunk)[167](index=167&type=chunk) - As of June 30, 2025, **$48.5 million** in Trust Preferred Securities are outstanding, with **$13.0 million** held by wholly-owned subsidiaries of the Company[173](index=173&type=chunk) - Air T has the right to defer interest payments on the Junior Subordinated Debentures (which back the Trust Preferred Securities) for up to **20 consecutive quarters**, with restrictions on other payments during such deferral periods[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the Company's Annual Report on Form 10-K for detailed market risk disclosures, stating that there have been no material changes in market risk exposures since March 31, 2025 - The Company's exposures to market risk have not changed materially since March 31, 2025[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025, and there were no material changes to internal control over financial reporting during the quarter - The Certifying Officers concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[176](index=176&type=chunk) - There has been no material change in the Company's internal control over financial reporting during the quarter ended June 30, 2025[177](index=177&type=chunk) [PART II -- OTHER INFORMATION](index=50&type=section&id=PART%20II%20--%20OTHER%20INFORMATION) This part includes disclosures on unregistered sales of equity securities, other information, and a list of exhibits [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's authorized common stock repurchase program, noting that no shares were repurchased during the quarter ended June 30, 2025 - The Company has an authorized program to repurchase up to **1,125,000 shares** of its common stock, with **752,228 shares** remaining available as of June 30, 2025[179](index=179&type=chunk) - No shares were repurchased by the Company during the quarter ended June 30, 2025[180](index=180&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section states that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by the Company's directors or officers during the quarter ended June 30, 2025 - None of the Company's directors or officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or a 'non-Rule 10b5-1 trading arrangement' during the quarter ended June 30, 2025[181](index=181&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section provides a comprehensive list of all exhibits filed as part of this Quarterly Report on Form 10-Q, including corporate governance documents, financing agreements, and certifications - The report includes a detailed list of exhibits, such as the Restated Certificate of Incorporation, Trust Agreements, Bills of Sale for aircraft, and Section 302/1350 Certifications[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) [Signatures](index=53&type=section&id=Signatures) This section confirms the official signing and submission of the Quarterly Report on Form 10-Q by the registrant, Air T, Inc., through its Chief Financial Officer - The report was duly signed on August 13, 2025, by Tracy Kennedy, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) of Air T, Inc[188](index=188&type=chunk)

PART I [Key Information](index=8&type=section&id=ITEM%203.%20Key%20Information) This section details the company's corporate structure, cash transfer policies, regulatory implications, and key risk factors, primarily focusing on its Cayman Islands holding company and Hong Kong operations [Corporate Structure and Cash Transfers](index=8&type=section&id=Corporate%20Structure%20and%20Cash%20Transfers) This section describes TFGL's corporate structure as a Cayman Islands holding company, detailing cash transfer mechanisms, dividend policies, and intercompany loans with its Hong Kong-based operating subsidiaries - TFGL is a Cayman Islands holding company, and all operations are conducted by its subsidiaries, primarily in Hong Kong Investors hold equity in the Cayman entity, not the operating subsidiaries[19](index=19&type=chunk)[48](index=48&type=chunk) - The company's ability to pay dividends depends on distributions from its operating subsidiaries Dividend distributions from BVI subsidiaries are permissible if assets exceed liabilities post-distribution, while Hong Kong subsidiaries can only distribute from available profits[49](index=49&type=chunk)[52](index=52&type=chunk) Cash Transfers from TFGL to Subsidiaries (FY2023 - FY2025) | Transfer To | Amount (US$) | Purpose | | :--- | :--- | :--- | | WIN100 WEALTH | $13,000,000 | Intra-company loans | | ZYSL | $3,000,000 | Capital injection | | WINRICH | $8,530,772 | Intra-company loans | [Regulatory Environment and Compliance](index=14&type=section&id=Regulatory%20Environment%20and%20Compliance) This section addresses legal and regulatory compliance, including the enforceability of U.S. judgments, HFCA Act implications, HKSFC licensing, and the company's assessment of PRC cybersecurity and CSRC filing requirements - The company's auditor, YCM CPA Inc., is a U.S.-based firm subject to PCAOB inspection, which currently mitigates the risk of delisting under the HFCA Act However, future regulatory changes could alter this situation[76](index=76&type=chunk)[131](index=131&type=chunk) - The company's key Hong Kong subsidiaries, ZYSL and ZYCL, hold the necessary Type 1, 2, 4, 5, and 9 licenses from the HKSFC Its subsidiary Winrich holds a money lender's license[77](index=77&type=chunk)[78](index=78&type=chunk) - The company believes it is not currently subject to PRC cybersecurity reviews or CSRC filing requirements because its operations are in Hong Kong and it has no mainland China presence However, it acknowledges significant uncertainty regarding potential future PRC government oversight, which could materially impact operations and share value[86](index=86&type=chunk)[87](index=87&type=chunk)[89](index=89&type=chunk) [Risk Factors](index=18&type=section&id=3.D.%20Risk%20Factors) This section outlines comprehensive risks related to the company's corporate structure, Hong Kong operations, ordinary shares, and business environment, including regulatory and competitive challenges - A key structural risk is the holding company's reliance on dividends from its operating subsidiaries to fund its cash requirements, which could be restricted by subsidiary-level debt or local regulations[93](index=93&type=chunk)[99](index=99&type=chunk) - The company faces significant risk from potential PRC government oversight and intervention in its Hong Kong operations, which could materially change its business, restrict cash transfers, and cause its share value to decline[98](index=98&type=chunk)[103](index=103&type=chunk) - The Class A Ordinary Shares are subject to significant risks, including potential trading prohibition under the HFCA Act, extreme price volatility as seen in April-May 2023, and the possibility of the company being classified as a Passive Foreign Investment Company (PFIC) for U.S. tax purposes[98](index=98&type=chunk)[149](index=149&type=chunk) - Business and industry risks include intense competition, significant revenue concentration from its top five customers (49% in FY2025), extensive and evolving regulatory requirements in Hong Kong, and vulnerability to cybersecurity threats and IT system failures[101](index=101&type=chunk)[164](index=164&type=chunk)[176](index=176&type=chunk) [Information on the Company](index=55&type=section&id=ITEM%204.%20Information%20on%20the%20Company) This section provides a detailed overview of the company's corporate history, business operations as an online brokerage, service offerings, revenue model, and the competitive and regulatory landscape in Hong Kong [History and Development of the Company](index=55&type=section&id=4.A.%20History%20and%20Development%20of%20the%20Company) This section details the company's corporate history, including its 2022 NASDAQ IPO, subsequent acquisitions, and the 2025 adoption of a dual-class share structure granting significant voting control to Ms. Junli Yang - The company completed its IPO on NASDAQ on June 3, 2022, issuing 5,000,000 Class A Ordinary Shares at $5.00 per share, raising gross proceeds of **$25 million**[266](index=266&type=chunk) - In July 2025, the company adopted a dual-class share structure Chairwoman Ms. Junli Yang converted 10,000,000 Class A shares into Class B shares, each with 50 votes, giving her control of **94.86% of the total voting power**[172](index=172&type=chunk)[272](index=272&type=chunk) - The company has been expanding its geographic footprint and service offerings through acquisitions, including TOP 500 in Australia (April 2023) and ZYFS in Hong Kong (July 2025), and establishing subsidiaries in Singapore[259](index=259&type=chunk)[270](index=270&type=chunk) [Business Overview](index=65&type=section&id=4.B.%20Business%20Overview) This section describes the company's online brokerage operations in Hong Kong, detailing its service offerings, declining trading volumes, revenue diversification efforts, reliance on third-party platforms, and competitive and regulatory landscape - The company's trading volume for futures contracts has declined, from **2.97 million trades in FY2023** to **2.27 million in FY2024**, and further to **1.12 million in FY2025**[295](index=295&type=chunk) Revenue Breakdown by Service (FY2023-FY2025) | Service | FY2025 % of Total Revenue | FY2024 % of Total Revenue | FY2023 % of Total Revenue | | :--- | :--- | :--- | :--- | | Futures Brokerage Commission | 55.0% | 42.1% | 44.6% | | Trading Solution Services | 24.2% | 34.0% | 45.3% | | Interest Income from Loan Business | 25.0% | 2.9% | 0% | | OTC Derivative Trading | 4.4% | 1.5% | 0% | | Margin Financing | 4.7% | 3.3% | 0% | | Other Services | 6.9% | 3.5% | 3.0% | - The company relies on licensed third-party trading platforms, primarily Esunny for futures and Longbridge for stocks, for its core brokerage operations[296](index=296&type=chunk)[353](index=353&type=chunk) - There is a significant concentration of revenue, with the top five customers accounting for **49%**, **36%**, and **43%** of total revenues for the fiscal years 2025, 2024, and 2023, respectively[341](index=341&type=chunk) [Organizational Structure](index=95&type=section&id=4.C.%20Organizational%20Structure) This section outlines the company's organizational structure, listing its subsidiaries and illustrating the parent-subsidiary relationships across Cayman Islands, BVI, Hong Kong, Australia, and Singapore - The company's structure consists of the parent company in the Cayman Islands, multiple holding subsidiaries in the British Virgin Islands, and operating subsidiaries located in Hong Kong, Australia, Singapore, and the Cayman Islands[451](index=451&type=chunk)[453](index=453&type=chunk)[454](index=454&type=chunk) [Property, Plant and Equipment](index=98&type=section&id=4.D.%20Property%2C%20Plant%20and%20Equipment) This section details the company's principal executive office as a leased space in Singapore and notes its single registered trademark in Hong Kong - The company's main office is a leased space in Singapore It does not own significant physical property[457](index=457&type=chunk) - The company has one registered trademark in Hong Kong[458](index=458&type=chunk) [Operating and Financial Review and Prospects](index=98&type=section&id=ITEM%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section provides management's discussion and analysis of financial performance, detailing revenue decline, net loss in FY2025, expense increases, balance sheet changes, liquidity, and critical accounting policies [Operating Results](index=100&type=section&id=5.A.%20Operating%20Results) This section details the company's operating results, highlighting a significant revenue decline and shift to a net loss in FY2025 due to market slowdown, trading losses, and increased credit loss allowances Consolidated Results of Operations (FY2023-FY2025) | Metric (US$) | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,329,256 | $8,037,105 | $9,695,402 | | **Total Expenses** | $9,152,500 | $7,049,258 | $6,266,139 | | **Net Income (Loss)** | **($5,969,348)** | **$1,051,539** | **$3,397,743** | - Total revenues decreased by **58.6% in FY2025** compared to FY2024, primarily due to declines in futures brokerage commissions and trading solution services, alongside a significant trading loss[517](index=517&type=chunk) - Expenses increased significantly in FY2025, driven by a **$2.7 million allowance for expected credit loss**, a **$1.5 million compensation payment** to OTC derivatives customers upon business termination, and increased compensation costs from new offices[525](index=525&type=chunk)[527](index=527&type=chunk)[529](index=529&type=chunk) - The company's balance sheet shows a decrease in total assets from **$57.6 million in FY2024** to **$46.8 million in FY2025**, mainly due to a reduction in cash and cash equivalents Loans receivable, net, increased significantly from **$4.7 million to $12.3 million**[549](index=549&type=chunk)[763](index=763&type=chunk) [Liquidity and Capital Resources](index=115&type=section&id=5.B.%20Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, detailing a significant decrease in cash reserves due to operating and investing outflows, while confirming compliance with regulatory capital requirements and noting past financing proceeds - The company's total cash, cash equivalents, and restricted cash decreased from **$38.7 million as of March 31, 2024**, to **$15.2 million as of March 31, 2025**[551](index=551&type=chunk)[562](index=562&type=chunk) Net Cash Flow Summary (FY2023-FY2025) | Cash Flow Activity (US$) | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($14,471,221) | $17,758,444 | ($6,031,451) | | Net cash used in investing activities | ($9,361,665) | ($1,280,187) | ($6,542,863) | | Net cash provided by financing activities | $0 | $4,389,992 | $22,500,871 | - The company's Hong Kong subsidiaries, ZYSL and ZYCL, were in compliance with their respective regulatory capital requirements as of March 31, 2025[565](index=565&type=chunk)[920](index=920&type=chunk) [Critical Accounting Estimates](index=118&type=section&id=5.E.%20Critical%20Accounting%20Estimates) This section outlines critical accounting policies requiring significant management judgment, including revenue recognition, trading gains, income tax expenses, and share-based compensation - Revenue from futures brokerage commissions is recognized at a point in time (the trade date), and the company acts as the primary obligor, recognizing revenue on a gross basis[582](index=582&type=chunk) - Trading solution services fees, which include an initial installation fee and monthly service fees, are recognized over the contract period as a single performance obligation[583](index=583&type=chunk) - The company accounts for income taxes using the asset and liability method, recognizing deferred tax assets and liabilities for future tax consequences of temporary differences[587](index=587&type=chunk) [Directors, Senior Management and Employees](index=121&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section introduces the company's directors and senior management, detailing compensation, board practices, employee count, and Chairwoman Junli Yang's substantial voting control Compensation of Directors and Executive Officers | Fiscal Year Ended | Aggregate Compensation (US$) | MPF Contributions (US$) | | :--- | :--- | :--- | | March 31, 2025 | $510,938 | $6,489 | | March 31, 2024 | $510,938 | $6,489 | | March 31, 2023 | $339,253 | $6,399 | - As of March 31, 2025, the company had **18 employees**[619](index=619&type=chunk) - Chairwoman Junli Yang beneficially owns shares representing **98.7% of the total voting power**, giving her substantial control over the company[625](index=625&type=chunk)[627](index=627&type=chunk) [Major Shareholders and Related Party Transactions](index=127&type=section&id=ITEM%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section details significant related party transactions, including interest income from a family member of the Chairwoman and acquisitions from entities affiliated with company officers - The company generated interest income from margin financing, brokerage, and handling services provided to Mr. Huaixi Yang, an immediate family member of Chairwoman Ms. Junli Yang, amounting to **$169,549 in FY2025**, **$179,217 in FY2024**, and **$96,801 in FY2023**[630](index=630&type=chunk) - The company has engaged in multiple acquisition transactions with entities controlled by or related to Chairwoman Ms. Junli Yang and other officers, including the acquisitions of WIN100 WEALTH, TOP 500, and Zhong Yang Financial Services Limited[632](index=632&type=chunk)[633](index=633&type=chunk)[634](index=634&type=chunk) [Financial Information](index=128&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms no material legal proceedings and outlines the company's dividend policy, indicating no expected future dividends as earnings will be retained for business growth - The company is not currently a party to any material legal or administrative proceedings[637](index=637&type=chunk) - The company does not plan to pay dividends in the foreseeable future, intending to retain earnings for business operations and expansion[640](index=640&type=chunk) - The company and its subsidiaries made several cash dividend distributions in fiscal years 2020 and 2021, prior to its IPO[641](index=641&type=chunk)[642](index=642&type=chunk)[643](index=643&type=chunk) [The Offer and Listing](index=130&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section confirms the company's Class A Ordinary Shares are listed and traded on the Nasdaq Capital Market under the ticker symbol "TOP" - The company's Class A Ordinary Shares are listed on the Nasdaq Capital Market with the ticker symbol "**TOP**"[649](index=649&type=chunk) [Additional Information](index=130&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary information on corporate governance, legal framework, and taxation, including Cayman Islands tax benefits, Hong Kong tax implications, and the potential PFIC status for U.S. investors - The company is an exempted company with limited liability under the laws of the Cayman Islands, which provides certain benefits such as no annual return of shareholders and the ability to obtain an undertaking against future taxation[668](index=668&type=chunk)[674](index=674&type=chunk) - The Cayman Islands does not levy taxes on profits, income, or capital gains Hong Kong profits tax is applicable to the company's Hong Kong subsidiaries, but capital gains from the sale of shares are not taxed[672](index=672&type=chunk)[675](index=675&type=chunk) - For U.S. federal income tax purposes, the company does not expect to be classified as a Passive Foreign Investment Company (PFIC), but notes that this is a factual determination made annually and is subject to risks, including fluctuations in its share price and the composition of its income and assets[685](index=685&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=139&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section identifies primary market risks including foreign exchange, interest rate, credit, and price risks, noting the company does not use derivative financial instruments for hedging - The company is exposed to foreign exchange risk as its revenues and expenses are denominated in USD, HKD, and EUR, but it does not currently use hedging instruments[704](index=704&type=chunk) - Credit risk is primarily related to bank deposits and receivables from brokers and customers The company mitigates this by dealing with reputable financial institutions and continuous monitoring[707](index=707&type=chunk)[709](index=709&type=chunk) - Price risk exposure is limited to the carrying amount of financial instruments held for proprietary trading, which consists of equity securities[710](index=710&type=chunk) PART II [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=141&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section details the allocation of net proceeds from the June 2022 IPO and the February 2024 registered direct offering across various business development and investment initiatives - The company received net proceeds of approximately **$22.8 million** from its June 2022 IPO[719](index=719&type=chunk) - The company received net proceeds of approximately **$4.39 million** from its February 2024 registered direct offering[722](index=722&type=chunk) Use of IPO Proceeds as of Report Date | Use Category | Amount (US$) | | :--- | :--- | | Management/Employee Incentives & General Corporate | $128,000 | | Investment in Financial Products | $6,000,000 | | Development of OTC Derivatives Business | $1,900,000 | | Facilitate Loan Business | $5,500,000 | | Capital Injection to Brokerage Business | $4,400,000 | | Company Acquisition | $770,000 | | Professional Fee | $2,200,000 | | Development of Asset Management Business | $700,000 | [Controls and Procedures](index=142&type=section&id=ITEM%2015.%20Controls%20and%20Procedures) This section reports management's conclusion that disclosure controls were ineffective as of March 31, 2025, citing material weaknesses in accounting personnel expertise and CECL process policies - Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025[725](index=725&type=chunk) - A material weakness was identified due to a lack of sufficient financial reporting and accounting personnel with adequate U.S. GAAP and SEC reporting expertise[725](index=725&type=chunk) - A second material weakness was identified related to the lack of formal policies and procedures for the CECL (Current Expected Credit Losses) process[725](index=725&type=chunk) [Corporate Governance and Other Matters](index=143&type=section&id=ITEM%2016.%20Corporate%20Governance%20and%20Other%20Matters) This section covers corporate governance, including the audit committee financial expert, Code of Conduct, principal accountant fees, change in certifying accountant, and cybersecurity risk management processes - The Board has identified Mr. Anthony S. Chan as the "audit committee financial expert"[730](index=730&type=chunk) Principal Accountant Fees (YCM CPA Inc.) | Fiscal Year Ended March 31, | Audit Fees (US$) | | :--- | :--- | | 2025 | $189,000 | | 2024 | $189,000 | | 2023 | $189,000 | - On June 26, 2022, the company dismissed Friedman LLP and appointed YCM CPA Inc. as its new independent registered public accounting firm[737](index=737&type=chunk) - The company has a process for assessing and managing cybersecurity risks, overseen by the Board of Directors and managed by an IT Committee composed of the CEO and CFO[745](index=745&type=chunk) PART III [Financial Statements](index=150&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's audited consolidated financial statements for FY2023-FY2025, including balance sheets, income statements, cash flow statements, and detailed notes, prepared under U.S. GAAP [Consolidated Balance Sheets](index=152&type=section&id=Consolidated%20Balance%20Sheets) This section presents the consolidated balance sheets, showing a decrease in total assets and liabilities, and a corresponding reduction in shareholders' equity from FY2024 to FY2025 Selected Balance Sheet Data (As of March 31) | Item (US$) | 2025 | 2024 | | :--- | :--- | :--- | | **Total Assets** | **$46,799,758** | **$57,642,843** | | Cash and cash equivalents | $12,227,380 | $25,919,945 | | Restricted cash | $2,947,556 | $12,777,148 | | Loans receivable, net | $12,306,331 | $4,654,635 | | **Total Liabilities** | **$11,914,454** | **$17,111,938** | | Payable to customers | $10,977,549 | $10,256,270 | | Payable to holders of structured notes | $0 | $6,139,179 | | **Total Shareholders' Equity** | **$34,885,304** | **$40,530,905** | [Consolidated Statements of Operations and Comprehensive (Loss) Income](index=153&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20%28Loss%29%20Income) This section presents the consolidated statements of operations, highlighting a shift from net income to a significant net loss in FY2025 due to declining revenues and increased expenses Key Income Statement Data (For the Year Ended March 31) | Item (US$) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Total Revenues | $3,329,256 | $8,037,105 | $9,695,402 | | Total Expenses | $9,152,500 | $7,049,258 | $6,266,139 | | **Net Income (Loss)** | **($5,969,348)** | **$1,051,539** | **$3,397,743** | | Basic and Diluted EPS | ($0.16) | $0.03 | $0.10 | [Consolidated Statements of Cash Flows](index=155&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the consolidated statements of cash flows, showing a significant net cash outflow in FY2025 driven by operating and investing activities Summary of Cash Flows (For the Year Ended March 31) | Item (US$) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | ($14,471,221) | $17,758,444 | ($6,031,451) | | Net cash from investing activities | ($9,361,665) | ($1,280,187) | ($6,542,863) | | Net cash from financing activities | $0 | $4,389,992 | $22,500,871 | | **Net change in cash** | **($23,832,886)** | **$20,868,249** | **$9,926,557** | [Notes to Consolidated Financial Statements](index=157&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the financial statements, explaining accounting policies, breakdowns of key line items, and disclosures on equity structure, taxes, and related party transactions - The company operates as a single reportable segment, with the CEO identified as the Chief Operating Decision Maker (CODM)[857](index=857&type=chunk) - Significant revenue concentration exists, with two customers accounting for **20% and 12% of total revenue in FY2025** Similarly, two brokers accounted for **75% and 18% of total commission expenses**[858](index=858&type=chunk)[859](index=859&type=chunk) - In FY2025, the company recorded a **$2.84 million allowance for expected credit losses** and a **$0.26 million impairment on a long-term investment**, significantly impacting its net loss[765](index=765&type=chunk)[807](index=807&type=chunk)

Aardvark Therapeutics Reports Second Quarter 2025 Financial Results and Provides Pipeline and Business Updates SAN DIEGO, CA, August 13, 2025 (GLOBE NEWSWIRE) -- Aardvark Therapeutics, Inc. (Aardvark) (Nasdaq: AARD), a clinical-stage biopharmaceutical company focused on developing novel, small- molecule therapeutics to activate innate homeostatic pathways for the treatment of metabolic diseases, today reported financial results for the second quarter ended June 30, 2025, and provided pipeline and business u ...

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 001-41092 Firefly Neuroscience, Inc. (Exact name of registrant as specified in its charter) (State or othe ...

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 001-41092 Firefly Neuroscience, Inc. (Exact name of registrant as specified in its charter) (State or othe ...