[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 ...

Table of Contents 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 No. 001-40625 RELATIVITY ACQUISITION CORP. (Exact name of registrant as specified in its charter) Delaware 86-3244927 (State ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Madison Square Garden Entertainment Corp. is a leading live entertainment company operating iconic venues and producing marquee content like the Christmas Spectacular, primarily concentrated in the New York City market - The company operates as a leader in live entertainment experiences, managing a portfolio of iconic venues such as Madison Square Garden, Radio City Music Hall, and The Chicago Theatre[14](index=14&type=chunk)[15](index=15&type=chunk) - Key business strategies include enhancing the live entertainment experience, increasing venue utilization with unique events and residencies, delivering marketing exposure for partners, offering premium hospitality, and utilizing customer data to drive revenue[17](index=17&type=chunk)[19](index=19&type=chunk) - In Fiscal Year 2025, the company hosted nearly **6 million** guests at more than **975 events** across its venues[22](index=22&type=chunk) - The company has long-term Arena License Agreements with MSG Sports, requiring the New York Knicks (NBA) and New York Rangers (NHL) to play their home games at The Garden[27](index=27&type=chunk) - The Christmas Spectacular production is a core property, selling approximately **1.1 million tickets** across **200 performances** in Fiscal Year 2025[35](index=35&type=chunk)[36](index=36&type=chunk) - As of June 30, 2025, the company had approximately **1,200 full-time** and **5,400 part-time employees**, with about **71%** of the total workforce represented by unions[70](index=70&type=chunk)[73](index=73&type=chunk) [Item 1A. Risk Factors](index=12&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant risks including intense competition, heavy reliance on the Christmas Spectacular, economic sensitivity, geographic concentration in New York City, regulatory challenges, substantial indebtedness, cybersecurity threats, and Dolan Family control - The company's business is highly competitive, facing challenges from other leisure activities, entertainment venues, and changing consumer tastes[75](index=75&type=chunk)[76](index=76&type=chunk) - Financial results are significantly dependent on the Christmas Spectacular production, which accounted for **18% of total revenues** in Fiscal Year 2025[79](index=79&type=chunk) - The Madison Square Garden Complex benefits from a New York City real estate tax exemption, which amounted to **$43.0 million** for Fiscal Year 2025, with potential material impact if repealed or amended[86](index=86&type=chunk) - The business is geographically concentrated in New York City, making it vulnerable to adverse local events, economic conditions, and regulatory changes, such as the renewal of The Garden's zoning special permit[93](index=93&type=chunk)[99](index=99&type=chunk) - As of June 30, 2025, the company is highly leveraged with total indebtedness of **$609 million**[111](index=111&type=chunk) - The company faces evolving cybersecurity risks, having previously addressed a payment card issue in November 2016 at several of its venues[125](index=125&type=chunk) - The Dolan Family Group controls the company with approximately **64.0% of the total voting power**, enabling them to prevent changes in control and influence corporate actions[137](index=137&type=chunk)[140](index=140&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[153](index=153&type=chunk) [Item 1C. Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cyber risk management program overseen by the Audit Committee and a cybersecurity leadership team, including regular testing, incident response, and employee training, acknowledging past incidents and evolving threats - The company's cyber risk management program is overseen by the Audit Committee of the Board of Directors and senior management[153](index=153&type=chunk)[159](index=159&type=chunk) - A cybersecurity leadership response team, including the Chief Security Officer (CSO), CFO, and General Counsel, is in place to manage threats and incidents[156](index=156&type=chunk)[157](index=157&type=chunk) - The program includes regular system security testing, an incident response policy, security awareness training, and vulnerability analysis systems[154](index=154&type=chunk) - A payment card issue affecting merchandise and food/beverage locations at several venues was identified and addressed in November 2016[160](index=160&type=chunk) [Item 2. Properties](index=25&type=section&id=Item%202.%20Properties) The company owns the Madison Square Garden Complex and The Chicago Theatre, and operates Radio City Music Hall and the Beacon Theatre under long-term lease agreements, in addition to leasing administrative and executive office space Property Portfolio | Property | Location | Ownership | Seating Capacity | | :--- | :--- | :--- | :--- | | Madison Square Garden Complex | New York, NY | Owned | ~21,000 (The Garden) | | The Theater at MSG | New York, NY | Owned | ~5,600 | | The Chicago Theatre | Chicago, IL | Owned | ~3,600 | | Radio City Music Hall | New York, NY | Leased | ~6,000 | | Beacon Theatre | New York, NY | Leased | ~2,800 | [Item 3. Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is a defendant in various lawsuits, but management does not believe their resolution will have a material adverse effect on the company - The company is involved in various lawsuits, but management does not expect the outcomes to materially and adversely affect the business[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[165](index=165&type=chunk) PART II [Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A Common Stock trades on the NYSE under "MSGE," with no current plans for cash dividends, and a stock repurchase program authorized for up to $250 million, of which $40 million was repurchased in FY2025 - The company's Class A Common Stock trades on the New York Stock Exchange (NYSE) under the symbol "MSGE"[167](index=167&type=chunk) - The company does not currently have plans to pay a cash dividend on its common stock for the foreseeable future[171](index=171&type=chunk) - Under its $250 million stock repurchase program, the company repurchased **1,117,601 shares** for approximately **$40 million** in Fiscal Year 2025, with approximately **$70 million** remaining available for future repurchases as of June 30, 2025[172](index=172&type=chunk) [Item 6. [Reserved]](index=28&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In Fiscal Year 2025, revenues decreased by 2% to $942.7 million, primarily due to lower event-related revenues, while operating income rose 9% to $122.1 million due to reduced expenses, though net income significantly decreased by 74% to $37.4 million due to a prior-year tax benefit, with Adjusted Operating Income (AOI) increasing 5% to $222.5 million, and the company maintaining sufficient liquidity with $43.0 million in cash and $134.0 million available under its revolving credit facility [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For Fiscal Year 2025 compared to 2024, total revenues decreased by $16.5 million (2%) to $942.7 million, driven by declines in entertainment offerings and food/beverage, partially offset by increased arena license fees, leading to a 9% increase in operating income to $122.1 million due to reduced expenses, despite a sharp 74% drop in net income to $37.4 million primarily from a prior-year tax benefit, while Adjusted Operating Income (AOI) rose 5% to $222.5 million Consolidated Results of Operations (Fiscal Year 2025 vs. 2024) | Financial Metric | FY 2025 ($M) | FY 2024 ($M) | Change ($M) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 942.7 | 959.3 | (16.5) | (2)% | | Total Direct Operating Expenses | (535.6) | (568.8) | 33.2 | 6% | | Operating Income | 122.1 | 111.9 | 10.2 | 9% | | Net Income | 37.4 | 144.3 | (106.9) | (74)% | - The decrease in revenues from entertainment offerings was primarily due to lower event-related revenues of **$49.2 million**, partially offset by a **$20.2 million** increase in revenues from the Christmas Spectacular production[218](index=218&type=chunk) - The Christmas Spectacular's revenue growth was driven by higher per-show revenue and an increase in performances to **200** in FY2025 from **193** in FY2024, with ticket sales rising to approximately **1.1 million** from over **1.0 million**[221](index=221&type=chunk) - The increase in operating income was primarily due to decreased direct operating expenses and lower restructuring charges, which offset the decline in revenues and an **$11.2 million** impairment charge on long-lived assets[239](index=239&type=chunk) Reconciliation of Operating Income to Adjusted Operating Income (AOI) | Metric | FY 2025 ($M) | FY 2024 ($M) | Change ($M) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Income | 122.1 | 111.9 | 10.2 | 9% | | Depreciation & Amortization | 57.8 | 53.9 | 3.9 | 7% | | Impairment of long-lived assets | 11.2 | 0.0 | 11.2 | NM | | Share-based compensation | 27.7 | 24.5 | 3.2 | 13% | | Restructuring charges | 1.1 | 17.6 | (16.6) | (94)% | | **Adjusted Operating Income** | **222.5** | **211.5** | **11.0** | **5%** | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash on hand, operating cash flow, and its revolving credit facility, with $43.0 million in unrestricted cash and $134.0 million available under its refinanced $150 million revolving credit facility as of June 30, 2025, alongside a new $609.4 million term loan, both maturing in June 2030, which management believes provides sufficient liquidity for the foreseeable future Liquidity Position as of June 30, 2025 | Item | Amount ($M) | | :--- | :--- | | Unrestricted Cash & Cash Equivalents | 43.0 | | Total Debt Outstanding | 609.4 | | Available Revolver Capacity | 134.0 | - On June 27, 2025, the company refinanced its credit facilities, establishing a new five-year **$609.4 million** term loan and a **$150 million** revolving credit facility, both maturing on June 27, 2030[256](index=256&type=chunk)[259](index=259&type=chunk) Cash Flow Summary (Fiscal Years 2025 vs. 2024) | Cash Flow Activity | FY 2025 ($M) | FY 2024 ($M) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 115.3 | 111.3 | | Net Cash used in Investing Activities | (23.7) | (62.4) | | Net Cash used in Financing Activities | (81.6) | (99.7) | Future Contractual Obligations as of June 30, 2025 | Obligation | Total ($M) | Year 1 ($M) | Years 2-3 ($M) | Years 4-5 ($M) | More Than 5 Years ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | | Leases | 1,109.6 | 30.8 | 125.8 | 115.4 | 837.6 | | Debt Repayments | 609.4 | 30.5 | 60.9 | 518.0 | 0.0 | | **Total** | **1,719.0** | **61.2** | **186.8** | **633.4** | **837.6** | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risk from changes in interest rates on its variable-rate debt and from market performance affecting its defined benefit pension plans, with a hypothetical 200 basis point interest rate increase raising annual interest expense by $12.2 million, and pension obligations sensitive to discount rates and asset returns - The company is subject to interest rate risk on its variable-rate credit facilities; a hypothetical **200 basis point** increase in floating rates would increase annual interest expense by **$12.2 million**[283](index=283&type=chunk) - The company's defined benefit pension plans are subject to market risk; a **25 basis point** decrease in the assumed discount rate would increase the projected benefit obligation by approximately **$2.9 million**[286](index=286&type=chunk) - A **25 basis point** decrease in the long-term return on pension plan assets assumption would increase the net periodic pension benefit cost by **$280 thousand** for Fiscal Year 2025[289](index=289&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's audited consolidated and combined financial statements and supplementary data, which begin on page F-1 of the report - This item refers to the full financial statements and supplementary data which are included starting on page F-1 of the Annual Report[290](index=290&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=45&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[291](index=291&type=chunk) [Item 9A. Controls and Procedures](index=45&type=section&id=Item%209A.%20Controls%20and%20Procedures) Based on management's evaluation, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of June 30, 2025, and internal control over financial reporting was also concluded to be effective, as audited by their independent registered public accounting firm - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[292](index=292&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of June 30, 2025, based on the COSO framework; this assessment was audited by Deloitte & Touche LLP[295](index=295&type=chunk) [Item 9B. Other Information](index=45&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[297](index=297&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=45&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[298](index=298&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=46&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the forthcoming 2025 proxy statement[300](index=300&type=chunk) [Item 11. Executive Compensation](index=46&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding executive compensation is incorporated by reference from the forthcoming 2025 proxy statement[301](index=301&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=46&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding security ownership is incorporated by reference from the forthcoming 2025 proxy statement[302](index=302&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=46&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding related party transactions and director independence is incorporated by reference from the forthcoming 2025 proxy statement[303](index=303&type=chunk) [Item 14. Principal Accountant Fees and Services](index=46&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding principal accountant fees and services is incorporated by reference from the forthcoming 2025 proxy statement[304](index=304&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=47&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and all exhibits filed as part of the Form 10-K report, including key corporate agreements such as the Distribution Agreement with Sphere Entertainment, Articles of Incorporation, credit agreements, and various employment and lease agreements - This item lists all documents filed as part of the report, including financial statements and exhibits such as material contracts and governance documents[307](index=307&type=chunk) [Item 16. Form 10-K Summary](index=52&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has elected not to provide a summary for the Form 10-K - The Company has elected not to provide summary information[315](index=315&type=chunk) Financial Statements and Notes to Financial Statements This section presents the company's audited consolidated and combined financial statements for the fiscal years ended June 30, 2025, 2024, and 2023, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Comprehensive Income, Cash Flows, and Deficit, with accompanying notes detailing accounting policies, revenue recognition, leases, debt, pension plans, and extensive related party transactions with Dolan Family-controlled entities [Consolidated Balance Sheets](index=58&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, the company reported total assets of $1.67 billion, an increase from $1.55 billion in the prior year, with total liabilities also increasing to $1.68 billion from $1.58 billion, and the total deficit improving to $13.3 million from $23.2 million, primarily due to net income and changes in additional paid-in capital Consolidated Balance Sheet Highlights (as of June 30) | Account | 2025 ($M) | 2024 ($M) | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | 43.5 | 33.6 | | Total Current Assets | 237.1 | 219.1 | | Property and equipment, net | 621.1 | 633.5 | | Total Assets | **1,669.8** | **1,552.7** | | Total Current Liabilities | 502.4 | 505.8 | | Long-term debt, net | 568.8 | 599.2 | | Total Liabilities | **1,683.1** | **1,575.9** | | Total Deficit | **(13.3)** | **(23.2)** | [Consolidated and Combined Statements of Operations](index=59&type=section&id=Consolidated%20and%20Combined%20Statements%20of%20Operations) For the fiscal year ended June 30, 2025, the company generated $942.7 million in total revenues, a slight decrease from $959.3 million in 2024, while operating income increased to $122.1 million from $111.9 million, and net income attributable to stockholders was $37.4 million, or $0.78 per basic share, a significant decrease from $144.3 million, or $2.99 per basic share, in 2024, which was impacted by a large tax benefit Statements of Operations Highlights (Years Ended June 30) | Account | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | :--- | | Total Revenues | **942.7** | **959.3** | 851.5 | | Total Direct Operating Expenses | (535.6) | (568.8) | (499.9) | | Operating Income | **122.1** | **111.9** | 105.0 | | Net Income Attributable to Stockholders | **37.4** | **144.3** | 76.6 | | Basic EPS | **$0.78** | **$2.99** | $1.48 | | Diluted EPS | **$0.77** | **$2.97** | $1.47 | [Note 4. Revenue Recognition](index=73&type=section&id=Note%204.%20Revenue%20Recognition) The company disaggregates its revenue into several categories, with ticketing and venue license fees being the largest contributor, totaling $862.8 million from contracts with customers in FY2025, and has significant remaining performance obligations, with an estimated $558.2 million of revenue expected to be recognized in future periods as of June 30, 2025 Disaggregation of Revenue (Years Ended June 30) | Revenue Category | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | :--- | | Ticketing and venue license fee revenues | 453.2 | 463.3 | 396.4 | | Sponsorship, signage, suite license, and advertising commission | 252.7 | 254.1 | 243.1 | | Food, beverage, and merchandise revenues | 150.5 | 162.1 | 135.9 | | **Total revenues from contracts with customers** | **862.8** | **886.0** | **779.8** | | Arena license fees and other leasing revenue | 79.9 | 73.3 | 71.7 | | **Total Revenues** | **942.7** | **959.3** | **851.5** | - As of June 30, 2025, the company had **$558.2 million** in estimated future revenue related to remaining performance obligations, with **$189.0 million** expected to be recognized in Fiscal Year 2026[465](index=465&type=chunk) [Note 12. Credit Facilities](index=81&type=section&id=Note%2012.%20Credit%20Facilities) In June 2025, the company refinanced its debt, establishing a new credit agreement with a $609.4 million term loan facility and a $150 million revolving credit facility, both maturing in June 2030, with the total principal balance outstanding at $609.4 million as of June 30, 2025, and the facilities subject to floating interest rates and financial covenants with which the company was in compliance - The company refinanced its debt on June 27, 2025, entering into a new agreement for a **$609.4 million** term loan and a **$150 million** revolver, both maturing in 2030[500](index=500&type=chunk) Debt Maturities as of June 30, 2025 | Fiscal Year Ending June 30 | Principal Amount ($M) | | :--- | :--- | | 2026 | 30.5 | | 2027 | 30.5 | | 2028 | 30.5 | | 2029 | 30.5 | | 2030 | 487.5 | | **Total** | **609.4** | [Note 16. Related Party Transactions](index=93&type=section&id=Note%2016.%20Related%20Party%20Transactions) The company engages in extensive related party transactions with other entities controlled by the Dolan Family, primarily MSG Sports and Sphere Entertainment, including Arena License Agreements with MSG Sports which generated $68.1 million in revenue in FY2025, and various services agreements, resulting in $109.8 million in revenues from related parties and $122.8 million in net operating credits in FY2025 - The Dolan Family Group controls MSG Entertainment, Sphere Entertainment, MSG Sports, and AMC Networks, leading to numerous related party transactions[574](index=574&type=chunk) - Key agreements exist with MSG Sports for arena licensing, sponsorship sales, and services, and with Sphere Entertainment for corporate services and marketing partnerships[575](index=575&type=chunk)[577](index=577&type=chunk) Summary of Related Party Transactions (Years Ended June 30) | Transaction Type | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | :--- | | **Revenues** | **109.8** | **101.8** | **105.9** | | **Operating Credits (Expenses), Net** | | | | | Revenue sharing expenses | (21.3) | (21.6) | (19.1) | | Reimbursement under Arena License Agreements | 29.6 | 25.1 | 22.3 | | Cost reimbursement from MSG Sports | 37.2 | 37.4 | 38.5 | | Corporate reimbursement/allocations (Sphere) | 78.5 | 108.8 | 151.2 | | Other operating (expenses) credits, net | (1.2) | 0.8 | (3.9) | | **Total operating credits, net** | **122.8** | **150.5** | **189.0** |

For the quarterly period ended June 30, 2025 OR o 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 001-41944 _________________________ Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q _________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Alto Neuroscience, Inc. (Exact name of registrant a ...

Exhibit 99.1 Opus Genetics Announces Financial Results for Second Quarter 2025 and Provides Corporate Update - Positive 12-month Phase 1/2 clinical data in adult cohort and early pediatric clinical data support potential for meaningful vision restoration with OPGx-LCA5 - - FDA grants Regenerative Medicine Advanced Therapy (RMAT) designation for OPGx-LCA5 - - Positive topline results reported from VEGA-3 and LYNX-2 Phase 3 trials with Phentolamine Ophthalmic Solution 0.75% - - OPGx-BEST1 on track to enter Ph ...