PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents SoundThinking, Inc.'s unaudited condensed consolidated financial statements for the period ended June 30, 2025, covering balance sheets, operations, comprehensive loss, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The Condensed Consolidated Balance Sheets show a slight decrease in total assets and liabilities from December 31, 2024, to June 30, 2025, while total stockholders' equity increased | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------------------- | :-------------------------- | :------------------ | | Total assets | $134,776 (in thousands) | $136,793 (in thousands) | | Total liabilities | $60,255 (in thousands) | $64,394 (in thousands) | | Total stockholders' equity | $74,521 (in thousands) | $72,399 (in thousands) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The Condensed Consolidated Statements of Operations show decreased revenues and increased net loss for Q2 2025, while H1 2025 saw increased revenues but a wider net loss | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $25,889 (in thousands) | $26,960 (in thousands) | $54,238 (in thousands) | $52,370 (in thousands) | | Gross profit | $13,795 (in thousands) | $16,073 (in thousands) | $30,389 (in thousands) | $30,960 (in thousands) | | Operating loss | $(2,943) (in thousands) | $(43) (in thousands) | $(4,147) (in thousands) | $(2,658) (in thousands) | | Net loss | $(3,120) (in thousands) | $(752) (in thousands) | $(4,604) (in thousands) | $(3,661) (in thousands) | | Net loss per share, basic and diluted | $(0.24) | $(0.06) | $(0.36) | $(0.29) | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The Condensed Consolidated Statements of Comprehensive Loss reflect the net loss adjusted for other comprehensive income/loss, primarily foreign currency translation adjustments | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(3,120) (in thousands) | $(752) (in thousands) | $(4,604) (in thousands) | $(3,661) (in thousands) | | Other comprehensive loss | $2 (in thousands) | $12 (in thousands) | $28 (in thousands) | $(4) (in thousands) | | Comprehensive loss | $(3,118) (in thousands) | $(740) (in thousands) | $(4,576) (in thousands) | $(3,665) (in thousands) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' Equity increased from December 2024 to June 2025, driven by stock-based compensation despite net losses, detailing changes in common stock, paid-in capital, and accumulated deficit | Metric | Balance at January 1, 2025 | Balance at June 30, 2025 | | :-------------------------- | :------------------------- | :----------------------- | | Common Stock Shares | 12,634,485 | 12,788,631 | | Par Value | $64 (in thousands) | $64 (in thousands) | | Additional Paid-in Capital | $177,021 (in thousands) | $183,719 (in thousands) | | Accumulated Deficit | $(104,298) (in thousands) | $(108,902) (in thousands) | | Total Stockholders' Equity | $72,399 (in thousands) | $74,521 (in thousands) | - Stock-based compensation contributed **$3,404 thousand** (Q1 2025) and **$3,841 thousand** (Q2 2025) to additional paid-in capital[19](index=19&type=chunk) - Repurchases of common stock amounted to **$504 thousand** (Q1 2025) and **$470 thousand** (Q2 2025)[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows shifted from operating cash provided in 2024 to used in 2025, mainly due to decreased deferred revenue and accruals, while investing and financing activities continued to use cash | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $(1,424) | $9,391 | | Net cash used in investing activities | $(2,290) | $(3,748) | | Net cash used in financing activities | $(547) | $(1,550) | | Net change in cash and cash equivalents | $(4,261) | $4,093 | | Cash and cash equivalents at end of period | $8,950 (in thousands) | $9,790 (in thousands) | - The decrease in net cash from operating activities by **$10.8 million** was primarily due to an **$8.1 million** decrease in deferred revenue and a **$2.2 million** decrease in personnel-related accruals[164](index=164&type=chunk) - Investing activities used **$2.3 million** for property and equipment in H1 2025[166](index=166&type=chunk) - Financing activities used **$0.6 million**, reflecting **$1.0 million** in stock repurchases offset by **$0.4 million** from the employee stock purchase plan[168](index=168&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes explain the company's business, accounting policies, revenue recognition, fair value, intangible assets, and other financial items, including new pronouncements and equity plans [Note 1. Organization and Description of Business](index=9&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) SoundThinking, Inc. provides precision-policing and security solutions via its SafetySmart™ platform to approximately 335 customers and 2,100 agencies, primarily on a SaaS subscription model - As of June 30, 2025, the Company had approximately **335 customers** and worked with approximately **2,100 agencies**[25](index=25&type=chunk) - The SafetySmart™ platform includes six data-driven tools: ShotSpotter®, CrimeTracer™, CaseBuilder™, ResourceRouter™, PlateRanger™ (introduced July 2024), and SafePointe™[26](index=26&type=chunk) - Solutions are offered on a software-as-a-service subscription model[26](index=26&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements adhere to U.S. GAAP and SEC rules, relying on estimates, with credit and revenue concentrations noted, and new accounting pronouncements under assessment - One customer accounted for **32%** of total accounts receivable and contract assets, net, as of June 30, 2025[35](index=35&type=chunk) - One customer accounted for **31%** of total revenues for the six months ended June 30, 2025[36](index=36&type=chunk) - New accounting pronouncements, ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures), are effective for fiscal years beginning after December 15, 2024, and January 1, 2027, respectively, with no material impact expected from ASU 2023-09[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [Note 3. Revenue Related Disclosures](index=11&type=section&id=Note%203.%20Revenue%20Related%20Disclosures) Deferred revenue slightly decreased in H1 2025, with **$4.3 million** catch-up revenue from NYPD renewals, and most revenue from US monthly subscription services | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Deferred Revenue, Beginning balance | $44,233 (in thousands) | $42,077 (in thousands) | | New billings | $50,362 (in thousands) | $57,924 (in thousands) | | Revenue recognized from beginning balance | $(23,484) (in thousands) | $(29,051) (in thousands) | | Revenue recognized from new billings | $(27,581) (in thousands) | $(21,519) (in thousands) | | Deferred Revenue, Ending balance | $43,530 (in thousands) | $49,431 (in thousands) | - Remaining performance obligations for contractually committed revenues as of June 30, 2025, totaled **$99.9 million**[41](index=41&type=chunk) - The Company recognized approximately **$4.3 million** of catch-up revenue during the six months ended June 30, 2025, including **$3.5 million** from NYPD contract renewals[47](index=47&type=chunk) | Revenue Source | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Monthly subscription, maintenance and support services | $53,600 (in thousands) | $50,600 (in thousands) | | Professional software development services | $700 (in thousands) | $1,800 (in thousands) | [Note 4. Fair Value Measurements](index=12&type=section&id=Note%204.%20Fair%20Value%20Measurements) Contingent consideration for the SafePointe acquisition was nil as of June 30, 2025 and 2024, as the earnout was not probable, with a **$0.6 million** change recognized in 2024 - The fair value of contingent consideration liabilities for the SafePointe acquisition was nil as of June 30, 2025 and 2024, as the earnout was not probable of being earned[49](index=49&type=chunk) - A change in fair value of contingent consideration of **$0.6 million** was recognized during the three and six months ended June 30, 2024[49](index=49&type=chunk) [Note 5. Intangible Assets, Net](index=12&type=section&id=Note%205.%20Intangible%20Assets,%20Net) Net intangible assets decreased from **$33.2 million** at December 31, 2024, to **$31.3 million** at June 30, 2025, primarily due to amortization, with customer relationships and acquired software technology as largest components | Intangible Asset Category | June 30, 2025 (Net) | December 31, 2024 (Net) | | :-------------------------- | :------------------ | :---------------------- | | Customer relationships | $18,244 (in thousands) | $19,163 (in thousands) | | Acquired software technology | $11,574 (in thousands) | $12,429 (in thousands) | | Patents and intellectual property | $576 (in thousands) | $657 (in thousands) | | Tradename | $872 (in thousands) | $933 (in thousands) | | Total intangible assets, net | $31,266 (in thousands) | $33,182 (in thousands) | - Intangible amortization expense was approximately **$0.9 million** for the three months ended June 30, 2025, and **$1.9 million** for the six months ended June 30, 2025[53](index=53&type=chunk) [Note 6. Details of Certain Condensed Consolidated Balance Sheet Accounts](index=13&type=section&id=Note%206.%20Details%20of%20Certain%20Condensed%20Consolidated%20Balance%20Sheet%20Accounts) This note details key balance sheet accounts, showing increased accounts receivable, decreased contract assets, and lower accrued expenses primarily due to personnel-related accruals | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Accounts receivable | $27,714 | $19,635 | | Contract assets | $3,573 | $6,104 | | Allowance for credit losses | $(544) | $(275) | | **Total Accounts receivable and contract assets, net** | **$30,743** | **$25,464** | | Prepaid software and licenses | $2,356 | $1,306 | | Prepaid insurance | $154 | $1,069 | | Deferred commissions (long-term) | $2,742 | $3,152 | | Personnel-related accruals | $5,410 | $8,252 | | Total accrued expenses and other current liabilities | $7,153 | $10,216 | [Note 7. Related Party Transactions](index=15&type=section&id=Note%207.%20Related%20Party%20Transactions) Revenues from SoundThinking Labs projects with charitable organizations, linked to a former director and a significant stockholder, decreased significantly in 2025 compared to 2024 | Period | Revenues from SoundThinking Labs projects (in thousands) | | :-------------------------- | :----------------------------------------------------- | | Three Months Ended June 30, 2025 | $7 | | Three Months Ended June 30, 2024 | $47 | | Six Months Ended June 30, 2025 | $18 | | Six Months Ended June 30, 2024 | $80 | [Note 8. Restructuring](index=15&type=section&id=Note%208.%20Restructuring) In Q2 2024, the Company restructured, reducing its workforce by **3%** and terminating a building lease, incurring **$0.4 million** in expenses, with no restructuring activity in H1 2025 - In Q2 2024, the Company restructured, eliminating **3%** of its workforce and terminating a building lease[58](index=58&type=chunk) - Restructuring expenses in Q2 2024 totaled **$0.4 million** (**$0.3 million** for workforce, **$0.1 million** for lease termination)[59](index=59&type=chunk) - No restructuring activity occurred during the six months ended June 30, 2025[60](index=60&type=chunk) [Note 9. Stock Repurchase Program](index=15&type=section&id=Note%209.%20Stock%20Repurchase%20Program) The Company repurchased **$1.0 million** of common stock (**65,063 shares**) in H1 2025, a decrease from **$2.0 million** (**134,150 shares**) in H1 2024 | Period | Shares Repurchased | Total Cost (in thousands) | Average Price per Share | | :-------------------------- | :----------------- | :------------------------ | :---------------------- | | Six Months Ended June 30, 2025 | 65,063 | $1,000 | $14.92 | | Six Months Ended June 30, 2024 | 134,150 | $2,000 | $14.86 | [Note 10. Net Income (Loss) per Share](index=15&type=section&id=Note%2010.%20Net%20Income%20(Loss)%20per%20Share) Net loss per share, basic and diluted, increased significantly for both Q2 and H1 2025 due to higher net losses, with potentially dilutive shares excluded as anti-dilutive | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(3,120) (in thousands) | $(752) (in thousands) | $(4,604) (in thousands) | $(3,661) (in thousands) | | Weighted-average shares outstanding | 12,712,191 | 12,792,952 | 12,680,456 | 12,781,910 | | Net loss per share, basic and diluted | $(0.24) | $(0.06) | $(0.36) | $(0.29) | - Potentially dilutive shares totaling **4,385,471** (2025) and **2,878,929** (2024) were excluded from diluted EPS calculation as they were anti-dilutive[64](index=64&type=chunk) [Note 11. Equity Incentive Plans](index=16&type=section&id=Note%2011.%20Equity%20Incentive%20Plans) Equity incentive plans include stock options, RSUs, and PSUs, with **631,724** more shares reserved for the 2017 Plan in January 2025, and total stock-based compensation expense reaching **$7.2 million** for H1 2025 - The number of shares reserved for issuance under the 2017 Equity Incentive Plan increased by **631,724 shares** on January 1, 2025[65](index=65&type=chunk)[66](index=66&type=chunk) | Metric | Six Months Ended June 30, 2025 | | :------------------------------------ | :----------------------------- | | Stock Options Outstanding (Dec 31, 2024) | 1,774,388 | | Stock Options Granted | 95,275 | | Stock Options Outstanding (June 30, 2025) | 1,772,338 | | Unvested RSUs (Dec 31, 2024) | 966,131 | | RSUs Granted | 1,852,388 | | Unvested RSUs (June 30, 2025) | 2,592,981 | | Expense Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cost of revenues | $620 | $399 | $1,268 | $839 | | Sales and marketing | $574 | $584 | $1,165 | $1,185 | | Research and development | $444 | $303 | $837 | $605 | | General and administrative | $2,203 | $1,860 | $3,975 | $3,444 | | **Total Stock-based compensation** | **$3,841** | **$3,146** | **$7,245** | **$6,073** | [Note 12. Financing Arrangements](index=18&type=section&id=Note%2012.%20Financing%20Arrangements) The Company has a **$25.0 million** revolving loan facility with Umpqua Bank, with **$4.0 million** outstanding and **$21.0 million** available as of June 30, 2025, and was in compliance with all covenants - Revolving credit commitment of **$25.0 million** with Umpqua Bank, maturing October 15, 2025[75](index=75&type=chunk) - As of June 30, 2025, **$4.0 million** was outstanding on the line of credit, with **$21.0 million** available[76](index=76&type=chunk) - The Company was in compliance with all covenants of the Umpqua Credit Agreement as of June 30, 2025[76](index=76&type=chunk) [Note 13. Commitments and Contingencies](index=18&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) The Company may face legal proceedings and claims, making provisions for probable and estimable liabilities, as unfavorable outcomes could materially affect its business, operating results, financial condition, and cash flows - The Company may become subject to legal proceedings, demands, and claims in the normal course of business[77](index=77&type=chunk) - Provisions for legal liabilities are made when probable and reasonably estimable[77](index=77&type=chunk) - An unfavorable outcome in litigation could result in substantial damages or prevent the sale of certain products, materially affecting the business[78](index=78&type=chunk) [Note 14. Segment Reporting](index=19&type=section&id=Note%2014.%20Segment%20Reporting) The Company operates as a single operating segment, with the President and CEO reviewing financial information on a consolidated basis - The Company operates as a single operating segment[79](index=79&type=chunk) - The President and CEO reviews financial information on a consolidated basis[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses SoundThinking's financial condition and operational results for H1 2025 and 2024, covering revenues, costs, expenses, liquidity, and capital [Overview](index=20&type=section&id=Overview) SoundThinking, Inc. offers public safety technology via its SafetySmart™ platform, including ShotSpotter® and SafePointe™, operating on a SaaS model with ShotSpotter as the primary revenue driver - SoundThinking, Inc. (formerly ShotSpotter, Inc.) provides public safety technology, including ShotSpotter®, CrimeTracer™, CaseBuilder™, ResourceRouter™, PlateRanger™, and SafePointe™[82](index=82&type=chunk) - Solutions are offered on a software-as-a-service subscription model, with ShotSpotter comprising approximately **68% of total revenues** for the three months ended June 30, 2025[85](index=85&type=chunk)[90](index=90&type=chunk) - As of June 30, 2025, ShotSpotter coverage areas under contract exceeded **1,086 square miles** across **179 cities** and **22 campuses/sites**, and SafePointe had **264 lanes** under contract[85](index=85&type=chunk) - Net new 'go-live' cities and universities were **5** for the three months and **9** for the six months ended June 30, 2025[98](index=98&type=chunk) [Components of Results of Operations](index=23&type=section&id=Components%20of%20Results%20of%20Operations) This section details SoundThinking's financial results, including revenue, cost of revenues, and operating expenses, highlighting contract terms, invoicing, and AI investments, with anticipated rising costs due to inflation and growth [Revenues](index=23&type=section&id=Revenues) Revenues primarily derive from subscription services for ShotSpotter and other solutions, recognized ratably over contract terms, with upfront invoicing leading to deferred revenue and catch-up revenue upon renewal - Revenues are primarily from subscription services, recognized ratably over **1-3 year** contract terms[100](index=100&type=chunk)[101](index=101&type=chunk) - Set-up fees, if material, are recognized ratably over **three to five years**[101](index=101&type=chunk) - Invoicing for ShotSpotter is generally **50%** upon contract execution and **50%** upon 'go-live' date, with all advance billings recorded as deferred revenue[103](index=103&type=chunk) - Catch-up revenue is recognized when renewal processes are completed after contract expiration[106](index=106&type=chunk) [Costs](index=24&type=section&id=Costs) Cost of revenues includes sensor network depreciation, operations, support, personnel, and stock-based compensation, with impairment from lost customers, and expected increases due to growth, AI investments, and tariffs - Cost of revenues includes depreciation of acoustic sensor networks, communication, hosting, IRC operations, customer support, training, personnel, stock-based compensation, and allocated overheads[111](index=111&type=chunk) - Impairment of property and equipment is primarily from write-offs of sensor networks for lost customers[112](index=112&type=chunk) - Cost of revenues is expected to increase due to installed base growth, AI investments, and tariffs on components from Greater China[113](index=113&type=chunk) [Operating Expenses](index=25&type=section&id=Operating%20Expenses) Operating expenses (sales, marketing, R&D, G&A) are expected to increase in absolute dollars due to growth and AI investments, but decrease as a percentage of revenues, with R&D focusing on new hardware and AI, and G&A rising for internal control compliance - Total operating expenses are expected to increase in absolute dollars due to growth and investments in AI, but decrease as a percentage of revenues over time[117](index=117&type=chunk) - Research and development efforts focus on new lower-cost sensor hardware, new features, improved functionality, and AI/ML integration for solutions like ResourceRouter, CrimeTracer, CaseBuilder, PlateRanger, and SafePointe[120](index=120&type=chunk)[121](index=121&type=chunk)[124](index=124&type=chunk) - General and administrative expenses are expected to increase due to growth and compliance with the requirement for an auditor attestation report on internal control over financial reporting for fiscal year 2025[125](index=125&type=chunk)[126](index=126&type=chunk) [Other Income (Expense), Net](index=27&type=section&id=Other%20Income%20(Expense),%20Net) Other income (expense), net, primarily includes interest income, interest expense, and local/franchise tax expenses - Other income (expense), net, primarily consists of interest income, interest expense, and local and franchise tax expenses[128](index=128&type=chunk) [Income Taxes](index=27&type=section&id=Income%20Taxes) Income taxes are based on taxable income and enacted tax rates, adjusted for credits and deductions, with a valuation allowance maintained against deferred tax assets, and new tax laws being evaluated for potential impact - Income taxes are based on taxable income, enacted federal, state, and foreign tax rates, adjusted for credits and deductions[129](index=129&type=chunk) - A valuation allowance is maintained against deferred tax assets, with realizability assessed based on future taxable income[131](index=131&type=chunk) - The Company is evaluating the impact of the One Big Beautiful Bill Act of 2025, enacted July 4, 2025, on its consolidated financial statements[132](index=132&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) SoundThinking's results show a **4%** revenue decrease and **315%** net loss increase for Q2 2025 due to Chicago contract non-renewal and higher costs, while H1 2025 revenues rose **4%** but net loss widened **26%** [Comparison of Three Months Ended June 30, 2025 and 2024](index=28&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) Q2 2025 revenues decreased **4%** to **$25.9 million** due to Chicago contract non-renewal, while costs and R&D rose, sales/marketing fell, and G&A increased, resulting in a **315%** wider net loss of **$3.1 million** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :------------------ | :------------------ | :--------- | :--------- | | Revenues | $25,889 | $26,960 | $(1,071) | -4% | | Cost of revenues | $12,058 | $10,781 | $1,277 | 12% | | Gross profit | $13,795 | $16,073 | $(2,278) | -14% | | Sales and marketing | $6,525 | $7,322 | $(797) | -11% | | Research and development | $3,746 | $3,468 | $278 | 8% | | General and administrative | $6,467 | $5,880 | $587 | 10% | | Operating loss | $(2,943) | $(43) | $(2,900) | 6744% | | Net loss | $(3,120) | $(752) | $(2,368) | 315% | - Revenue decrease of **$1.1 million** was primarily due to a **$2.8 million** reduction from the non-renewal of the City of Chicago contract, partially offset by **$1.9 million** in new bookings and expansions[134](index=134&type=chunk) - Cost of revenues increased by **$1.3 million** due to headcount, maintenance, reimbursable product costs, and AI capability investments[135](index=135&type=chunk) - General and administrative expense increased by **$0.6 million** due to **$0.3 million** in equity expense and **$0.5 million** in accounting fees for internal control compliance[138](index=138&type=chunk)[139](index=139&type=chunk) [Comparison of Six Months Ended June 30, 2025 and 2024](index=29&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) H1 2025 revenues increased **4%** to **$54.2 million** from new bookings and NYPD renewals, offset by Chicago non-renewal, while costs, R&D, and G&A rose, sales/marketing fell, leading to a **26%** wider net loss of **$4.6 million** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :------------------ | :------------------ | :--------- | :--------- | | Revenues | $54,238 | $52,370 | $1,868 | 4% | | Cost of revenues | $23,776 | $21,052 | $2,724 | 13% | | Gross profit | $30,389 | $30,960 | $(571) | -2% | | Sales and marketing | $13,784 | $14,434 | $(650) | -5% | | Research and development | $7,811 | $7,028 | $783 | 11% | | General and administrative | $12,941 | $12,710 | $231 | 2% | | Operating loss | $(4,147) | $(2,658) | $(1,489) | 56% | | Net loss | $(4,604) | $(3,661) | $(943) | 26% | - Revenue increase of **$1.9 million** was due to **$4.1 million** in new bookings/expansions and **$2.8 million** catch-up revenue from NYPD renewals, offset by a **$5.2 million** reduction from the Chicago contract non-renewal[144](index=144&type=chunk) - Cost of revenues increased by **$2.7 million** due to IT costs (**$1.0M**), maintenance (**$0.8M**), reimbursable product costs (**$0.4M**), and headcount/other expenses (**$0.4M**) related to AI investments[145](index=145&type=chunk) - Research and development expense increased by **$0.8 million**, primarily due to **$0.5 million** in consulting for SafePointe and **$0.4 million** in IT expense for AI capabilities[148](index=148&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) SoundThinking's liquidity relies on **$9.0 million** cash, **$30.7 million** accounts receivable, and a **$21.0 million** credit facility, deemed sufficient for **12 months**, with **$1.0 million** common stock repurchased in H1 2025 - Principal liquidity sources: **$9.0 million** in cash and cash equivalents and **$30.7 million** in accounts receivable as of June 30, 2025[153](index=153&type=chunk) - Available credit facility of approximately **$21.0 million** as of June 30, 2025, with **$4.0 million** outstanding[153](index=153&type=chunk) - The Company believes existing cash, credit facility, and operating cash flow will meet requirements for at least the next **12 months**[154](index=154&type=chunk) - Repurchased **$1.0 million** of common stock (**65,063 shares**) in H1 2025; **$12.5 million** remains available under the 2022 Repurchase Program[160](index=160&type=chunk) [Cash Flows](index=32&type=section&id=Cash%20Flows) Net cash used in operating activities was **$1.4 million** for H1 2025, a significant shift from **$9.4 million** provided in H1 2024, mainly due to reduced deferred revenue and accruals, with investing and financing activities also using cash | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $(1,424) | $9,391 | | Net cash used in investing activities | $(2,290) | $(3,748) | | Net cash used in financing activities | $(547) | $(1,550) | | Net change in cash and cash equivalents | $(4,261) | $4,093 | - Operating cash flow decreased by **$10.8 million**, primarily due to an **$8.1 million** decrease in deferred revenue and a **$2.2 million** decrease in personnel-related accruals[164](index=164&type=chunk) - Investing activities used **$2.3 million** for property and equipment in H1 2025[166](index=166&type=chunk) - Financing activities used **$0.6 million**, reflecting **$1.0 million** in stock repurchases offset by **$0.4 million** from the employee stock purchase plan[168](index=168&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates for accounts receivable, assets, contingent consideration, stock-based compensation, and income taxes remain consistent with the 2024 Form 10-K, with no material changes as of June 30, 2025 - Critical accounting estimates include valuation of accounts receivable, tangible and intangible assets, contingent consideration, stock-based compensation, and income taxes[32](index=32&type=chunk)[169](index=169&type=chunk) - No material changes to critical accounting policies and estimates from the 2024 Annual Report on Form 10-K as of June 30, 2025[170](index=170&type=chunk) [Recently Issued Accounting Pronouncements](index=33&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Refer to Note 2, Summary of Significant Accounting Policies, for information on recently issued accounting pronouncements - Refer to Note 2 for details on recently issued accounting pronouncements[171](index=171&type=chunk) [Item 3. Qualitative and Quantitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Qualitative%20and%20Quantitative%20Disclosures%20About%20Market%20Risk) The Company's market risk exposure primarily stems from fluctuations in interest rates, foreign exchange rates, and inflation, with no material changes during H1 2025 compared to the 2024 Annual Report on Form 10-K - Market risk exposure is primarily due to fluctuations in interest rates, foreign exchange rates, and inflation[173](index=173&type=chunk) - No material changes in market risk during the six months ended June 30, 2025, compared to the 2024 Annual Report on Form 10-K[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of June 30, 2025, due to an unremediated material weakness in data completeness and accuracy, though financial statements are fairly presented, with ongoing remediation [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and CFO concluded disclosure controls were ineffective as of June 30, 2025, due to an unremediated material weakness in internal control, though management believes financial statements are fairly presented - Disclosure controls and procedures were not effective as of June 30, 2025, due to an unremediated material weakness[175](index=175&type=chunk) - Management believes the material weakness did not adversely affect reported operating results or financial condition, and financial statements are fairly presented[176](index=176&type=chunk) [Changes in Internal Control over Financial Reporting](index=34&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There were no material changes in the Company's internal control over financial reporting during Q2 2025, while remediation efforts for the identified material weakness continue - No material changes in internal control over financial reporting during the quarter ended June 30, 2025[177](index=177&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=34&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) Management acknowledges that control systems provide only reasonable, not absolute, assurance against all errors and fraud, and may become inadequate over time due to changing conditions or deteriorating compliance - Control systems provide only reasonable, not absolute, assurance that objectives are met[178](index=178&type=chunk) - Inherent limitations mean misstatements due to error or fraud may occur and not be detected[178](index=178&type=chunk) [Material Weakness in Internal Control Over Financial Reporting](index=34&type=section&id=Material%20Weakness%20in%20Internal%20Control%20Over%20Financial%20Reporting) A material weakness was identified in the design of controls for verifying the completeness and accuracy of data supporting consolidated financial statements as of June 30, 2025, creating a reasonable possibility of material misstatement - A material weakness was identified in the design of controls for verifying completeness and accuracy of data used in financial statements[180](index=180&type=chunk) - This weakness creates a reasonable possibility of material misstatement not being prevented or detected on a timely basis[179](index=179&type=chunk) [Remediation Plan](index=35&type=section&id=Remediation%20Plan) The Company initiated measures to remediate the material weakness, including documenting processes, training personnel, and monitoring controls for data verification, but there is no assurance of full remediation or prevention of recurrence - Remediation measures include fully documenting processes, training personnel, and monitoring controls for data verification[182](index=182&type=chunk) - There is no assurance that the material weakness will be fully remediated or prevented from re-occurring[182](index=182&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 13, Commitments and Contingencies, in the condensed consolidated financial statements - Legal proceedings information is incorporated by reference from Note 13, Commitments and Contingencies[183](index=183&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks for SoundThinking, covering growth, public safety business, strategic, operational, legal, regulatory, and stock ownership aspects, including managing growth, third-party reliance, and market penetration [Summary of Risk Factors](index=36&type=section&id=Summary%20of%20Risk%20Factors) Investing in SoundThinking's common stock involves high risks, including challenges in business growth, service interruptions, market entry, customer funding, fluctuating results, unprofitability, and complexities of government contracts - Key risks include failure to grow, service interruptions, inability to sell into new markets, dependence on customer funding, and significant quarterly result fluctuations[185](index=185&type=chunk) - Additional risks cover unprofitability, need for capital, complexities of government contracts, lengthy sales cycles, and changes in federal funding[185](index=185&type=chunk) - Risks also include false positive alerts, negative publicity, economic downturns, liability risks, data privacy concerns, intellectual property protection, and cybersecurity threats[187](index=187&type=chunk) [Risks Related to Our Growth](index=37&type=section&id=Risks%20Related%20to%20Our%20Growth) SoundThinking's growth depends on expanding its customer base, coverage, and markets, while managing macroeconomic pressures and AI investments, with unpredictable quarterly results and growth management failures posing significant risks - Growth depends on acquiring new customers, expanding coverage, international footprint, and new vertical markets (e.g., healthcare, casino gaming)[187](index=187&type=chunk) - Failure to manage growth effectively, including investments in sales, marketing, R&D, and AI, could impair solution performance and reduce customer satisfaction[189](index=189&type=chunk)[190](index=190&type=chunk) - Quarterly results are highly unpredictable due to factors like customer base expansion/contraction, contract renewals (e.g., Chicago non-renewal), sales timing, customer budgets, and macroeconomic conditions[191](index=191&type=chunk) - Revenue recognition is ratable over subscription terms (**1-3 years**), meaning sales fluctuations are not immediately reflected, and new sales revenue is recognized slowly[195](index=195&type=chunk) [Risks Related to Our Public Safety Business](index=40&type=section&id=Risks%20Related%20to%20Our%20Public%20Safety%20Business) Success relies on sales to government entities, susceptible to funding, political changes, and public perception, with complex contracting, lengthy sales cycles, and federal funding changes posing risks, while false positives, negative publicity, and privacy concerns can damage reputation - Success depends on sales to government agencies and universities, which are affected by funding availability, political changes, and public perception[202](index=202&type=chunk) - Contracting with government entities is complex, expensive, and time-consuming, with potential for delays, non-renewals, and compliance challenges[204](index=204&type=chunk)[205](index=205&type=chunk) - False positive gunshot alerts or missed weapon detections, or negative publicity (e.g., VICE Media lawsuit, NYC Comptroller report), can harm reputation and growth[214](index=214&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) - Economic uncertainties, political changes, and concerns over privacy/surveillance (e.g., City of Toronto decision) can limit customer funding and market adoption[219](index=219&type=chunk)[224](index=224&type=chunk) [Strategic and Operational Risks](index=44&type=section&id=Strategic%20and%20Operational%20Risks) Strategic and operational risks include new market expansion challenges, solution failures, service interruptions, debt covenants, acquisition risks, dependence on key personnel, limited supplier reliance, AI usage challenges, and international expansion risks - Inability to sell solutions into new markets (e.g., healthcare, casino gaming) or cross-sell to existing customers could hinder revenue growth[226](index=226&type=chunk) - Failures of solutions (e.g., missed threat detection) could result in injury, loss of life, reputational harm, and litigation[230](index=230&type=chunk) - Service interruptions from technology issues, third-party hosting, IRC operations, or wireless carrier reliance could negatively impact business and customer satisfaction[231](index=231&type=chunk)[232](index=232&type=chunk)[236](index=236&type=chunk) - The revolving credit facility subjects the company to restrictive and financial covenants, and an event of default could have a material adverse effect[244](index=244&type=chunk)[245](index=245&type=chunk) - Acquisition strategy (e.g., SafePointe) carries risks of integration failure, higher costs, diversion of management attention, and unforeseen liabilities[252](index=252&type=chunk)[253](index=253&type=chunk) - Reliance on a single manufacturer for proprietary ShotSpotter sensors and a limited number of suppliers creates supply chain risks[279](index=279&type=chunk) - Use of generative AI tools introduces operational challenges, legal liability (e.g., copyright, privacy), reputational concerns, and competitive risks due to evolving technology and regulatory uncertainty[285](index=285&type=chunk)[286](index=286&type=chunk)[288](index=288&type=chunk) - International expansion exposes the company to currency fluctuations, data residency requirements, compliance with local laws, and geopolitical risks[292](index=292&type=chunk) [Legal and Regulatory Risks](index=56&type=section&id=Legal%20and%20Regulatory%20Risks) SoundThinking is subject to stringent data privacy and security laws, contractual obligations, and industry standards, with non-compliance leading to regulatory actions, litigation, and reputational harm, while reliance on third-party data, tax law changes, NOL limitations, IP protection failures, and AI usage pose significant legal risks - Subject to stringent and evolving U.S. and foreign data privacy and security laws (e.g., GDPR, CCPA, PIPL), contractual obligations, and industry standards[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk)[310](index=310&type=chunk) - Non-compliance or perceived failures can lead to regulatory investigations, litigation, fines, reputational harm, and restrictions on data processing[305](index=305&type=chunk)[317](index=317&type=chunk) - Reliance on third-party data suppliers and registration as a data broker increase compliance risks, especially with laws like California's Delete Act[312](index=312&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk) - Changes in tax laws (e.g., One Big Beautiful Bill Act) or adverse interpretations could impact business and financial performance[318](index=318&type=chunk) - Ability to use net operating losses (NOLs) is subject to limitations (e.g., Section 382 of the Code, state-level suspensions)[320](index=320&type=chunk) - Failure to protect intellectual property (patents, trade secrets) or claims of infringement by third parties could be costly, divert resources, and limit technology use[321](index=321&type=chunk)[322](index=322&type=chunk)[329](index=329&type=chunk)[331](index=331&type=chunk) - Use of generative AI tools poses risks to proprietary software (e.g., copyright ownership, confidential information disclosure, third-party IP infringement claims)[332](index=332&type=chunk)[333](index=333&type=chunk) [Risks Related to the Ownership of Our Common Stock](index=61&type=section&id=Risks%20Related%20to%20the%20Ownership%20of%20Our%20Common%20Stock) An unremediated material weakness in internal control could affect investor confidence and financial reporting, while stock price volatility, repurchases, increased costs from accelerated filer status, and anti-takeover provisions pose risks to common stock ownership - An unremediated material weakness in internal control over financial reporting as of June 30, 2025, could adversely affect investor confidence and financial reporting accuracy[336](index=336&type=chunk)[337](index=337&type=chunk) - The market price of common stock is volatile, influenced by operating results, analyst estimates, federal funding changes, and macroeconomic conditions[340](index=340&type=chunk)[341](index=341&type=chunk)[343](index=343&type=chunk) - Stock repurchases could increase stock price volatility and diminish cash reserves, with no guarantee of enhancing long-term stockholder value[342](index=342&type=chunk) - Becoming an accelerated filer effective December 31, 2025, will increase costs and demands on management for compliance with Section 404(b) of Sarbanes-Oxley Act[344](index=344&type=chunk)[345](index=345&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make company acquisition more difficult and limit stockholders' ability to replace management[346](index=346&type=chunk)[347](index=347&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or specific use of proceeds are reported, but the Company repurchased **31,570 shares** for **$0.5 million** in Q2 2025 under its stock repurchase program, with **$12.45 million** remaining - No unregistered sales of equity securities or specific use of proceeds reported[353](index=353&type=chunk)[354](index=354&type=chunk) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) | | :-------------------------- | :------------------------------- | :--------------------------- | :---------------------------------------------------------------- | | April 1, 2025 - April 30, 2025 | — | — | $12,919 | | May 1, 2025 - May 31, 2025 | 20,193 | $14.78 | $12,620 | | June 1, 2025 - June 30, 2025 | 11,377 | $14.94 | $12,450 | | **Total (Q2 2025)** | **31,570** | **$14.84** | | - The stock repurchase program, approved in November 2022 for up to **$25 million**, has no expiration date[355](index=355&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including organizational documents, certifications of principal executive and financial officers, and XBRL-related documents - Exhibits include Amended and Restated Certificate of Incorporation, Certificate of Change of Registered Agent, Amended and Restated Bylaws[358](index=358&type=chunk) - Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 are included[358](index=358&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, and Cover Page are also filed[358](index=358&type=chunk) [Signatures](index=67&type=section&id=Signatures) The report was duly signed on August 13, 2025, by Ralph A. Clark, President and Chief Executive Officer, and Alan R. Stewart, Chief Financial Officer, pursuant to the requirements of the Securities Exchange Act of 1934 - The report was signed on August 13, 2025[362](index=362&type=chunk)[363](index=363&type=chunk) - Signed by Ralph A. Clark, President and Chief Executive Officer, and Alan R. Stewart, Chief Financial Officer[363](index=363&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 0-33203 LANDMARK BANCORP, INC. (Exact name of registrant as specified in its charter) Delaware 43-1930755 (State or other juri ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2025 Commission file number: 001-15985 UNION BANKSHARES, INC. VT 03-0283552 20 LOWER MAIN STREET, P.O. BOX 667 MORRISVILLE, VT 05661 Registrant's telephone number: 802-888-6600 Former name, former address ...

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 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 Commission File Number 001-40143 Better Home & Finance Holding Company (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...

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 For the quarterly period ended June 30, 2025 OR New York, NY 10007 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-40143 Better Home & Finance Holding Company (Exact name of registrant as specified in its charter) (State or other jurisdictio ...

PART I. Financial Information [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited statements show significant revenue growth, a return to net income driven by non-recurring items, and a persistent working capital deficit [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased, resulting in a working capital deficit of $0.3 million and total stockholders' equity of $12.3 million as of June 30, 2025 Key Balance Sheet Items (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $1,130 | $1,389 | | Accounts receivable, net | $1,488 | $799 | | Total current assets | $4,053 | $3,451 | | Total assets | $18,816 | $16,996 | | Total current liabilities | $4,353 | $4,271 | | Total liabilities | $6,528 | $4,902 | | Total stockholders' equity | $12,288 | $12,094 | - The company reported a **working capital deficit of $0.3 million** as of June 30, 2025, and an **accumulated deficit of $103.3 million**[25](index=25&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved net income in Q2 2025, a significant turnaround from the prior year's loss, primarily due to a 27% sales increase and substantial other income Q2 & H1 2025 vs 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $5,654 | $4,441 | $10,583 | $7,873 | | Gross profit | $2,429 | $1,716 | $4,569 | $2,636 | | Operating loss | $(824) | $(1,209) | $(1,683) | $(3,283) | | Net income (loss) | $74 | $(1,220) | $(810) | $(3,299) | | Basic EPS | $0.05 | $(0.83) | $(0.54) | $(2.28) | - The company's Q2 2025 profitability was significantly impacted by non-operating items, including a **$789 thousand Employee Retention Credit** and a **$143 thousand gain on settlement of a liability**[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first half of 2025, net cash from operations was positive, though the overall cash position decreased by $0.26 million to $1.13 million Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $309 | $(167) | | Net cash used in investing activities | $(197) | $(70) | | Net cash (used in) provided by financing activities | $(371) | $14 | | Net change in cash | $(259) | $(223) | | Cash at end of period | $1,130 | $1,279 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes highlight a "going concern" uncertainty, detail revenue sources, and disclose significant events including an ERC receipt and a post-quarter warrant exercise - The company has **substantial doubt about its ability to continue as a going concern** for the next twelve months, citing historical operating losses and a working capital deficit[25](index=25&type=chunk)[26](index=26&type=chunk) - In Q2 2025, the company received and recognized as other income approximately **$0.8 million from an Employee Retention Credit (ERC)** claim originally filed in November 2022[120](index=120&type=chunk) - Subsequent to the quarter end, in July 2025, the company received approximately **$1.3 million in net cash proceeds** from the exercise of 100,000 warrants[123](index=123&type=chunk) Service Revenue by Payer (Six Months Ended June 30, in thousands) | Payer | 2025 | 2024 | | :--- | :--- | :--- | | Medicare | $4,189 | $2,616 | | Third party payers | $5,009 | $4,053 | | Medicaid | $13 | $25 | | Self-pay | $10 | $32 | | Contract diagnostics and other | $41 | $4 | | **Total Service Revenue, net** | **$9,262** | **$6,730** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q2 revenue growth to increased case volume, which improved gross margins, while noting that net income was driven by non-recurring items [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Q2 2025 net sales rose 27% year-over-year, driven by a 19% increase in cases processed, which expanded gross margin from 39% to 43% Q2 2025 vs Q2 2024 Performance Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $5,654 | $4,441 | $1,213 | 27% | | Gross Profit | $2,426 | $1,716 | $710 | 41% | - The increase in Q2 2025 net sales was primarily driven by processing **3,692 cases compared to 3,099 cases** in Q2 2024, a 19% increase in volume[150](index=150&type=chunk) - **Gross margin improved to 43% from 39%** year-over-year, which management attributes to economies of scale and leveraging fixed expenses in its CLIA certified laboratory[152](index=152&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains a key focus with a working capital deficit, though a post-quarter warrant exercise provided a crucial $1.3 million cash infusion Working Capital Position (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current assets | $4,053 | $3,451 | | Current liabilities | $4,353 | $4,271 | | Working capital | $(300) | $(820) | - A warrant exercise in July 2025 provided **net cash proceeds of approximately $1.3 million**, which is a critical event for the company's liquidity subsequent to the reporting period[163](index=163&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide information for this item - Precipio is exempt from providing quantitative and qualitative disclosures about market risk because it **qualifies as a smaller reporting company**[174](index=174&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls during the quarter - Management concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[175](index=175&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the second quarter of 2025[176](index=176&type=chunk) PART II. Other Information [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal matters that are not expected to have a material adverse effect on the business - The company is currently defending against a legal proceeding from a former employee in San Antonio, Texas, alleging unfair dismissal, which management **does not expect to have a material impact** on its financial results[182](index=182&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor has been introduced concerning potential adverse effects from the recently enacted "One Big Beautiful Bill Act" (OBBBA) tax law changes - A new risk factor has been introduced related to changes in tax law, specifically highlighting the **"One Big Beautiful Bill Act" (OBBBA)** signed into law on July 4, 2025, which could adversely affect the company's business and financial condition[186](index=186&type=chunk) [Other Part II Items](index=56&type=section&id=Other%20Part%20II%20Items) This section confirms no unregistered equity sales, no defaults on senior securities, and no adoption or termination of Rule 10b5-1 trading plans by insiders - The company did not have any **sales of unregistered securities** during the three months ended June 30, 2025[187](index=187&type=chunk) - No directors or officers adopted or terminated a **Rule 10b5-1 trading plan** or a non-Rule 10b5-1 trading arrangement during the fiscal quarter[190](index=190&type=chunk)

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) Dolphin reported strong Q2 2025 financial results, with revenue growth, improved profitability, and strategic investments highlighted by the CEO [CEO Commentary & Strategic Focus](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Focus) Dolphin's CEO highlighted strong Q2 performance, strategic investments in future growth, and anticipated profit margin expansion - Dolphin's Q2 revenue grew by **23% year-over-year**, reaching **$14.1 million**, exceeding expectations and demonstrating strong financial performance[2](index=2&type=chunk)[3](index=3&type=chunk) - The company strategically invested in future growth engines like women's sports and affiliate marketing, anticipating long-term returns after initial investment phases[3](index=3&type=chunk) - CEO Bill O'Dowd purchased approximately **1% of outstanding shares** since April 2025, demonstrating confidence in the company's value[2](index=2&type=chunk)[5](index=5&type=chunk) - Adjusted operating margins are expected to grow as Always Alpha and affiliate marketing investments decrease, real estate commitments expire, and bank loans are repaid[4](index=4&type=chunk) [Q2 2025 Financial Performance Overview](index=2&type=section&id=Q2%202025%20Financial%20Performance%20Overview) Dolphin's Q2 2025 saw revenue grow 23%, operating loss significantly narrow, and adjusted operating income turn profitable Q2 2025 Key Financial Metrics (Compared to Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------- | :--------------- | :--------------- | :--------------------- | | Total Revenue | $14.1 million | $11.4 million | +23% | | Operating Loss | $(57,000) | $(1.1) million | Significantly narrowed | | Adjusted Operating Income (Loss) | $0.6 million | $(0.1) million | Shifted to profit | | Net Loss | $(1.4) million | $(1.6) million | Reduced | | Net Loss Per Share (Basic) | $(0.13) | $(0.17) | Improved | | Net Loss Per Share (Diluted) | $(0.13) | $(0.17) | Improved | - Q2 2025 operating expenses were **$14.1 million**, including **$0.6 million** in depreciation and amortization and approximately **$0.1 million** in non-recurring or non-cash expenses, an increase from **$12.6 million** in Q2 2024[7](index=7&type=chunk) [Operational Highlights & Business Updates](index=3&type=section&id=Operational%20Highlights%20%26%20Business%20Updates) Dolphin's subsidiaries achieved significant Q2 2025 milestones, including new partnerships, industry awards, platform launches, and expanded marketing [Subsidiary & Division Achievements](index=3&type=section&id=Subsidiary%20%26%20Division%20Achievements) Dolphin's subsidiaries achieved Q2 2025 milestones, including new partnerships, Emmy nominations, platform launches, and diverse marketing support - Dolphin established a company-wide partnership with The Lumistella Company, leveraging its agency alliance for integrated marketing, media, and brand strategy for Elf on the Shelf® Santaverse™ and new IP extensions[13](index=13&type=chunk) - Dolphin demonstrated leadership in fan public relations at San Diego Comic-Con 2025, executing campaigns for top talent and brands like Amazon Studios, Funko, and Crunchyroll[13](index=13&type=chunk) - Dolphin's clients received **15 nominations** for the 77th Primetime Emmy Awards[13](index=13&type=chunk) - The Door and The Digital Dept. jointly launched Dolphin Tastemakers, combining talent management and media outreach to build impactful multi-dimensional brands for top talent like Rachael Ray, Josh Scherer, and Jeanine Donofrio[13](index=13&type=chunk) [42West](index=3&type=section&id=42West) 42West clients garnered significant industry recognition, including multiple Emmy nominations and high-profile fashion collaborations - 42West clients received **15 nominations** for the 77th Primetime Emmy Awards[13](index=13&type=chunk) - At the Met Gala, 42West client Christian Siriano designed custom looks for Lizzo, Bebe Rexha, and Alex Newell[13](index=13&type=chunk) [The Door / The Digital Dept. / DISRPT Agency](index=3&type=section&id=The%20Door%20%2F%20The%20Digital%20Dept.%20%2F%20DISRPT%20Agency) These agencies launched Dolphin Tastemakers, secured major client partnerships, and expanded influencer marketing, solidifying cultural influence - The Door and The Digital Dept. jointly launched Dolphin Tastemakers, empowering top talent and digital-native creators by combining talent management and media outreach[13](index=13&type=chunk)[17](index=17&type=chunk) - DISRPT Agency announced its 2025 client roster, including CultureCon and Edison Chen x Bad Bunny for adidas Originals, reinforcing its leadership in cultural influence[13](index=13&type=chunk) - The Digital Dept. debuted the BRANDEdit experience at CMA Fest 2025 and hosted its highest-grossing BRANDEdit influencer experience in Los Angeles to date[17](index=17&type=chunk) [Shore Fire Media](index=5&type=section&id=Shore%20Fire%20Media) Shore Fire Media secured PR for the Miles Davis Estate and supported high-profile music festivals and artists - Shore Fire Media was appointed as the public relations agency for the Miles Davis Estate ahead of its 2026 centennial celebration[17](index=17&type=chunk) - Shore Fire Media was selected to support several high-profile music festivals and concert series, including Summerfest and Montreux Jazz Festival Miami[17](index=17&type=chunk) - Long-term client Cyndi Lauper was inducted into the Rock & Roll Hall of Fame[17](index=17&type=chunk) [Special Projects](index=6&type=section&id=Special%20Projects) Special Projects curated star-studded lineups for major events like the Academy Museum Gala and Peabody Awards ceremony - Special Projects secured a star-studded lineup for the 2025 Academy Museum Gala, featuring Bruce Springsteen, Penélope Cruz, Walter Salles, and Bowen Yang[21](index=21&type=chunk) - Special Projects managed bookings for the 2025 Peabody Awards ceremony, successfully securing host Roy Wood, Jr. and several notable presenters and performers[21](index=21&type=chunk) [Always Alpha](index=6&type=section&id=Always%20Alpha) Always Alpha strengthened its women's sports management team with key hires and elevated women's sports profile at Cannes Lions - Malea Hotson and Tracy Hughes joined Always Alpha, bringing decades of expertise to the women's sports management team to drive innovation and growth in the sector[21](index=21&type=chunk) - Always Alpha elevated the profile of women's sports at the 2025 Cannes Lions International Festival of Creativity through high-profile events and panel discussions[21](index=21&type=chunk) [Youngblood (Film Adaptation)](index=6&type=section&id=Youngblood%20%28Film%20Adaptation%29) Dolphin's film adaptation, *Youngblood*, is set to premiere at the 2025 Toronto International Film Festival - Dolphin announced its film adaptation, *Youngblood*, has been selected to premiere at the 2025 Toronto International Film Festival[20](index=20&type=chunk) [Company Information](index=7&type=section&id=Company%20Information) Dolphin (NASDAQ:DLPN) provided a business overview, announced Q2 earnings call details, and included standard forward-looking statements [About Dolphin & Business Divisions](index=7&type=section&id=About%20Dolphin%20%26%20Business%20Divisions) Founded in 1996, Dolphin (NASDAQ:DLPN) evolved into three dynamic divisions, with Dolphin Marketing recognized as a top agency - Dolphin, founded by Bill O'Dowd in 1996, began as an Emmy-nominated television, digital, and film content production company[23](index=23&type=chunk) - The company now comprises three core divisions: Dolphin Entertainment (content production), Dolphin Marketing (PR, influencer marketing, brand strategy), and Dolphin Ventures (accelerating innovative ideas and products)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The Dolphin Marketing division was named a Top Agency of 2025 by Observer[25](index=25&type=chunk) [Conference Call & Investor Relations](index=7&type=section&id=Conference%20Call%20%26%20Investor%20Relations) Dolphin scheduled an August 13, 2025 webcast and conference call to discuss Q2 2025 results, with participation and replay details provided - The company will host a Q2 2025 earnings conference call and webcast on Wednesday, August 13, 2025, at **4:30 PM ET**[22](index=22&type=chunk) - Toll-free, international dial-in numbers, participant access codes, webcast links, and replay information are provided[22](index=22&type=chunk) [Forward-Looking Statements & Disclaimer](index=7&type=section&id=Forward-Looking%20Statements%20%26%20Disclaimer) This press release contains forward-looking statements on Dolphin's stock offerings and financial results, subject to risks and no update obligation - This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act, concerning stock offerings and anticipated financial and operational results[27](index=27&type=chunk) - Forward-looking statements involve unpredictable risks and uncertainties, where actual results may differ materially from those discussed[27](index=27&type=chunk)[28](index=28&type=chunk) - Dolphin Entertainment assumes no obligation to update any forward-looking statements unless required by applicable law[28](index=28&type=chunk) [Financial Statements](index=9&type=section&id=Financial%20Statements) Dolphin's Q2 2025 financial statements show revenue growth, narrowed operating losses, and a GAAP to non-GAAP adjusted operating income reconciliation [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Dolphin's total assets slightly increased to **$58.61 million**, with growing current assets but decreasing shareholder equity Condensed Consolidated Balance Sheets Key Data | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------------- | :--------------- | :--------------- | | Cash and Cash Equivalents | 8,697,360 | 8,203,842 | | Total Current Assets | 22,156,949 | 20,067,099 | | Total Assets | 58,611,434 | 58,437,279 | | Total Current Liabilities | 29,131,730 | 26,514,137 | | Total Liabilities | 50,709,023 | 46,791,888 | | Total Stockholders' Equity | 7,902,411 | 11,645,391 | [Condensed Consolidated Statements of Operations](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Dolphin's Q2 2025 revenue grew **23%** to **$14.09 million**, with narrowed operating and net losses, despite increased year-to-date losses Condensed Consolidated Statements of Operations Key Data | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Revenue | 14,087,529 | 11,449,089 | 26,257,240 | 26,684,981 | | Total Expenses | 14,144,583 | 12,568,554 | 28,087,820 | 27,639,907 | | Operating Loss | (57,054) | (1,119,465) | (1,830,580) | (954,926) | | Net Loss | (1,413,918) | (1,624,458) | (3,742,980) | (1,951,226) | | Basic Loss Per Share | (0.13) | (0.17) | (0.33) | (0.20) | | Diluted Loss Per Share | (0.13) | (0.17) | (0.34) | (0.20) | [Reconciliation of Non-GAAP Measures](index=12&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Dolphin's Q2 2025 GAAP operating loss of **$57,000** adjusted to non-GAAP operating income of **$627,905**, reflecting core business profitability Reconciliation of GAAP Operating Loss to Non-GAAP Adjusted Operating Income (Loss) | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Operating Loss (GAAP) | (57,054) | (1,119,465) | (1,830,580) | (954,926) | | **Adjustments:** | | | | | | Depreciation and Amortization | 591,552 | 555,694 | 1,183,104 | 1,108,797 | | Bad Debt Expense | 93,407 | 82,959 | 149,161 | 286,980 | | Acquisition Costs | — | — | 416,171 | — | | Goodwill Impairment | — | 190,565 | — | 190,565 | | Stock-Based Compensation | — | 153,291 | — | 259,052 | | **Adjusted Operating Income (Loss) (Non-GAAP)** | 627,905 | (136,956) | (82,144) | 890,468 |

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________ FORM 10-Q _________________________________________________ | | For the quarterly period ended June 30, 2025 | | --- | --- | | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or | o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to Commissio ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's unaudited condensed financial statements and management's discussion [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Columbus Circle Capital Corp I's unaudited condensed financial statements and notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity Total Assets | Date | Amount ($) | | :--- | :--- | | June 30, 2025 | $252,552,771 | | December 31, 2024 | $43,900 | - Marketable securities held in Trust Account increased from $0 at December 31, 2024, to **$251,199,623** at June 30, 2025[11](index=11&type=chunk) - Class A ordinary shares subject to possible redemption totaled **$251,199,623** as of June 30, 2025[11](index=11&type=chunk) [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) This section details the company's financial performance, including revenues, expenses, and net loss Net Loss | Period | Amount ($) | | :--- | :--- | | Three Months Ended June 30, 2025 | $(87,410) | | Six Months Ended June 30, 2025 | $(114,382) | | Period from Inception (June 25, 2024) through June 30, 2024 | $0 | - Interest earned on marketable securities held in Trust Account was **$1,199,623** for both the three and six months ended June 30, 2025[13](index=13&type=chunk) - Basic and diluted net loss per ordinary share (redeemable) was **$(0.00)** for the three months and **$(0.01)** for the six months ended June 30, 2025[13](index=13&type=chunk) [Condensed Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) This section outlines changes in the company's equity, reflecting transactions with owners Total Shareholders' Equity | Date | Amount ($) | | :--- | :--- | | June 30, 2025 | $676,434 | | January 1, 2025 | $1,456 | - The sale of **705,000** Private Placement Units contributed **$7,050,000** to equity[17](index=17&type=chunk) - Fair Value of Public Warrants at issuance added **$3,125,000** to equity[17](index=17&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section reports cash generated and used across operating, investing, and financing activities - Net cash provided by financing activities was **$251,569,555** for the six months ended June 30, 2025[20](index=20&type=chunk) - Net cash used in investing activities was **$(250,000,000)** for the six months ended June 30, 2025, primarily for investment into the Trust Account[20](index=20&type=chunk) - Net Change in Cash was **$1,003,946** for the six months ended June 30, 2025[20](index=20&type=chunk) [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) This section provides detailed explanations and additional information for the financial statements [NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS](index=8&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20ORGANIZATION%20AND%20BUSINESS%20OPERATIONS) This note describes the company's formation, IPO, and recent business combination activities - Columbus Circle Capital Corp I is a blank check company incorporated on **June 25, 2024**, for the purpose of effecting a business combination[22](index=22&type=chunk) - The company consummated its Initial Public Offering (IPO) on **May 19, 2025**, raising gross proceeds of **$250,000,000** from **25,000,000 units**[25](index=25&type=chunk) - A definitive business combination agreement was entered into on **June 23, 2025**, with ProCap BTC, LLC and ProCap Financial, Inc., involving a SPAC merger, company merger, preferred equity investment (**$516.5 million**), and convertible note financing (**$235 million**) for acquiring bitcoin[35](index=35&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Management has determined that the company's liquidity condition raises **substantial doubt** about its ability to continue as a **going concern** through twelve months from the date these condensed financial statements are issued, with plans to address this uncertainty through a business combination[49](index=49&type=chunk) [NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing financial statements - The unaudited condensed financial statements are prepared in accordance with **GAAP** for interim financial information and **SEC rules**[50](index=50&type=chunk) - The company is an '**emerging growth company**' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[52](index=52&type=chunk)[54](index=54&type=chunk) - Marketable securities held in the Trust Account are classified as **trading securities** and presented at **fair value**[57](index=57&type=chunk) - Class A ordinary shares subject to possible redemption are presented at **redemption value** as **temporary equity**, outside of the shareholders' equity section[68](index=68&type=chunk) [Note 3 — Initial Public Offering](index=22&type=section&id=Note%203%20%E2%80%94%20Initial%20Public%20Offering) This note details the terms and proceeds of the company's Initial Public Offering - The Initial Public Offering closed on **May 19, 2025**, with the company selling **25,000,000 Units** at **$10.00 per Unit**[79](index=79&type=chunk) - Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant, with each whole warrant exercisable at **$11.50 per share**[79](index=79&type=chunk) [Note 4 — Private Placement](index=22&type=section&id=Note%204%20%E2%80%94%20Private%20Placement) This note describes the private placement of units to the Sponsor and Representatives - Simultaneously with the IPO, **705,000 Private Placement Units** were sold at **$10.00 per unit** to the Sponsor and Representatives[80](index=80&type=chunk) - Private Placement Warrants are subject to transfer restrictions and will fund public share redemption if a business combination is not completed within **24 months**[81](index=81&type=chunk) [Note 5 — Related Party Transactions](index=22&type=section&id=Note%205%20%E2%80%94%20Related%20Party%20Transactions) This note details transactions with related parties, including founder shares and administrative fees - The Sponsor initially received **5,750,000** Class B ordinary shares (Founder Shares), which increased to **8,433,333**, with **100,000** shares later forfeited[82](index=82&type=chunk) - A share-based compensation expense of **$395,400** was recorded due to the sale of **200,000** Class B ordinary shares to independent directors[84](index=84&type=chunk) - The company had a non-interest bearing promissory note of up to **$300,000** from the Sponsor, which was fully repaid as of **June 30, 2025**[88](index=88&type=chunk) - An administrative services agreement with an affiliate of the Sponsor requires a payment of **$10,000 per month** for office space and support[89](index=89&type=chunk) [Note 6 — Commitments and Contingencies](index=25&type=section&id=Note%206%20%E2%80%94%20Commitments%20and%20Contingencies) This note outlines the company's contractual obligations, potential liabilities, and geopolitical risks - The company faces risks from global **geopolitical instability** (Russia-Ukraine, Israel-Hamas conflicts) that could adversely affect its search for a business combination[92](index=92&type=chunk)[93](index=93&type=chunk) - A Business Combination Marketing Agreement with CCM and Clear Street entails a cash fee of up to **$10,600,000** upon the consummation of the initial Business Combination[99](index=99&type=chunk) - The underwriters received a cash underwriting discount of **$4,400,000** upon the closing of the Initial Public Offering[96](index=96&type=chunk) [Note 7 — Shareholders' Equity](index=27&type=section&id=Note%207%20%E2%80%94%20Shareholders%27%20Equity) This note details the authorized and issued share capital, including preference, Class A, and Class B shares - The company is authorized to issue **5,000,000 preference shares** (none issued), **500,000,000 Class A ordinary shares** (**705,000 issued**, excluding **25,000,000 subject to redemption**), and **50,000,000 Class B ordinary shares** (**8,333,333 issued**)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Class B ordinary shares **automatically convert** into Class A ordinary shares upon consummation of the initial Business Combination, subject to adjustment[103](index=103&type=chunk) - Prior to the initial Business Combination, only holders of **Class B ordinary shares** have the right to vote on the appointment and removal of directors and on continuing the company in a jurisdiction outside the Cayman Islands[104](index=104&type=chunk) [Note 8 — Fair Value Measurements](index=31&type=section&id=Note%208%20%E2%80%94%20Fair%20Value%20Measurements) This note explains methodologies and inputs for fair value measurements of financial instruments - The fair value of Public Warrants is **$3,125,000**, or **$0.25 per public warrant**, determined using the **binomial lattice model**[116](index=116&type=chunk) Public Warrants Valuation Inputs (May 19, 2025) | Metric | Value | | :--- | :--- | | Volatility | 10.0% | | Risk free rate | 4.1% | | Dividend yield | 0.0% | | Asset price | $9.99 | | Exercise price | $11.50 | | Term | 5.5 | | Probability of business combination | 20.0% | [Note 9 — Segment Information](index=31&type=section&id=Note%209%20%E2%80%94%20Segment%20Information) This note clarifies the company operates as a single reportable segment - The company operates as a **single reportable segment**, with the **Chief Financial Officer** identified as the chief operating decision maker (CODM)[119](index=119&type=chunk) - The CODM reviews key metrics such as **cash** and **marketable securities** held in the **Trust Account**, **cash**, **general and administrative expenses**, and **interest earned** on Trust Account securities[121](index=121&type=chunk) [NOTE 10. SUBSEQUENT EVENTS](index=33&type=section&id=NOTE%2010.%20SUBSEQUENT%20EVENTS) This note confirms no subsequent events requiring adjustment or disclosure were identified - The company evaluated subsequent events up to the issuance date of the financial statements and identified **no events** requiring adjustment or disclosure[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operational results, and accounting estimates [Overview](index=34&type=section&id=Overview) This section introduces the company's purpose as a blank check company and operational expectations - Columbus Circle Capital Corp I is a **blank check company** formed on **June 25, 2024**, to effect a business combination[127](index=127&type=chunk) - The company expects to incur **significant costs** in pursuit of its acquisition plans[128](index=128&type=chunk) - New **2024 SEC SPAC Rules** may materially affect the company's ability and costs to complete its initial Business Combination[129](index=129&type=chunk) [Recent Developments](index=34&type=section&id=Recent%20Developments) This section highlights key recent events, including the business combination agreement and financing - On **June 23, 2025**, the company entered into a **definitive business combination agreement** with ProCap BTC, LLC and ProCap Financial, Inc[130](index=130&type=chunk) - The proposed transaction involves the company re-registering as a **Delaware corporation** and merging with ProCap BTC, with both becoming wholly-owned subsidiaries of **Pubco**, which will become a publicly traded company[131](index=131&type=chunk)[132](index=132&type=chunk) - The deal includes a **$516.5 million Preferred Equity Investment** and a **$235 million Convertible Note Financing**, with proceeds from the latter expected to be used for acquiring additional bitcoin[133](index=133&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, focusing on net losses and influencing factors - The company has **not engaged in any operations** or generated **no operating revenues** to date[139](index=139&type=chunk) Net Loss | Period | Amount ($) | | :--- | :--- | | Three Months Ended June 30, 2025 | $(87,410) | | Six Months Ended June 30, 2025 | $(114,382) | - Net losses were primarily due to **operating costs** and **share-based compensation**, partially offset by **interest income** from marketable securities in the Trust Account[140](index=140&type=chunk)[141](index=141&type=chunk) [Factors That May Adversely Affect our Results of Operations](index=38&type=section&id=Factors%20That%20May%20Adversely%20Affect%20our%20Results%20of%20Operations) This section discusses external factors like economic uncertainty and geopolitical instability - The company's results and ability to complete a business combination may be adversely affected by **economic uncertainty**, **financial market volatility**, and **geopolitical instability** (e.g., conflicts in Ukraine and the Middle East)[143](index=143&type=chunk) [Liquidity and Going Concern](index=38&type=section&id=Liquidity%20and%20Going%20Concern) This section addresses the company's cash position, obligations, and going concern assessment - As of **June 30, 2025**, the company had **$251,199,623** in marketable securities held in the Trust Account and **$1,003,946** in cash outside the Trust Account[148](index=148&type=chunk)[149](index=149&type=chunk) - Management has identified **substantial doubt** about the company's ability to continue as a **going concern** due to its liquidity condition, with plans to address this through a business combination[151](index=151&type=chunk) - Cash used in operating activities for the six months ended June 30, 2025, was **$565,609**[146](index=146&type=chunk) [Off-Balance Sheet Arrangements](index=40&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms that the company has no off-balance sheet arrangements as of the reporting date - As of June 30, 2025, the company had **no obligations, assets, or liabilities** considered off-balance sheet arrangements[153](index=153&type=chunk) [Contractual obligations](index=40&type=section&id=Contractual%20obligations) This section details the company's contractual commitments, including administrative and marketing fees - The company has **no long-term debt**, **no capital lease obligations**, **no operating lease obligations**, or **no long-term liabilities**[154](index=154&type=chunk) - Contractual obligations include an administrative services agreement for **$10,000 per month** and a business combination marketing agreement for a **$9,800,000 cash fee** upon consummation of the initial Business Combination[155](index=155&type=chunk)[157](index=157&type=chunk) [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) This section discusses significant judgments and assumptions in preparing financial statements - The preparation of financial statements requires management to make **significant estimates and assumptions**, with actual results potentially differing materially[158](index=158&type=chunk) - Class A ordinary shares subject to possible redemption are classified as **temporary equity** and measured at **redemption value**[159](index=159&type=chunk) - Warrants are **excluded from diluted net loss per share** as their exercise is contingent and currently anti-dilutive[160](index=160&type=chunk) [Recent Accounting Standards](index=41&type=section&id=Recent%20Accounting%20Standards) This section outlines recently issued accounting standards and their potential impact - The FASB issued **ASU 2024-03** in **November 2024**, requiring additional expense disaggregation disclosures, effective for fiscal years beginning after **December 15, 2026**[161](index=161&type=chunk) - Management does not believe any other recently issued, but not yet effective, accounting standards would have **no material effect** on the condensed financial statements[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20Regarding%20Market%20Risk) As a smaller reporting company, Columbus Circle Capital Corp I is exempt from market risk disclosures - The company is a **smaller reporting company** and is **not required** to provide quantitative and qualitative disclosures about market risk[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures, concluding effectiveness [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures as of June 30, 2025 - Management concluded that the company's disclosure controls and procedures were **effective** as of **June 30, 2025**[165](index=165&type=chunk) - Disclosure controls and procedures provide only **reasonable, not absolute, assurance** due to inherent limitations and resource constraints[166](index=166&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section states no changes in internal control over financial reporting occurred - **No changes** in internal control over financial reporting were applicable for the period[167](index=167&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, and other relevant disclosures [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) No material litigation is currently pending or contemplated against the company or its officers and directors - **No material litigation** is currently pending or contemplated against the company or its officers and directors[169](index=169&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Columbus Circle Capital Corp I is not required to include risk factors - As a **smaller reporting company**, the company is **not required** to include risk factors in this report[170](index=170&type=chunk) - Additional risks relating to operations are detailed in the company's **final prospectus** dated **May 19, 2025**[170](index=170&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) This section details unregistered equity sales and the use of IPO and private placement proceeds [Unregistered Sales of Equity Securities](index=42&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) This section describes the private sale of Private Placement Units and Class B share forfeiture - The company privately sold **705,000 Private Placement Units** at **$10.00 per unit**, exempt from registration under **Section 4(a)(2) of the Securities Act**[171](index=171&type=chunk) - Underwriters exercised their over-allotment option for **3,000,000 Units**, leading to the forfeiture of **100,000 Class B ordinary shares** by the Sponsor[172](index=172&type=chunk) [Use of Proceeds](index=42&type=section&id=Use%20of%20Proceeds) This section details gross proceeds from the IPO and private placement, and their Trust Account allocation - The IPO generated **$25,000,000** gross proceeds from **25,000,000 Units**, and the private placement generated **$7,050,000** from **705,000 Private Placement Units**[174](index=174&type=chunk) - **$250,000,000** from the proceeds was deposited into a **Trust Account** and invested in U.S. government treasury obligations or money market funds[175](index=175&type=chunk) - There has been **no material change** in the planned use of proceeds from the IPO and Private Placement[176](index=176&type=chunk) [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=43&type=section&id=Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) This section confirms no equity security purchases by the issuer or affiliated purchasers - There were **no purchases** of equity securities by the issuer or affiliated purchasers during the quarterly period[177](index=177&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reported period - **No defaults** upon senior securities occurred[178](index=178&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable to the company - **No mine safety disclosures** are applicable[179](index=179&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated - **None** of the company's directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[180](index=180&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference into the Quarterly Report - The exhibits include the **Underwriting Agreement**, **Business Combination Marketing Agreement**, **Warrant Agreement**, **Registration Rights Agreement**, and **certifications**[182](index=182&type=chunk) [PART III. SIGNATURES](index=45&type=section&id=Part%20III.%20Signatures) This section provides the official signatures of the Chief Executive Officer and Chief Financial Officer - The report was signed on **August 13, 2025**, by **Gary Quin** (Chief Executive Officer) and **Joseph W. Pooler, Jr.** (Chief Financial Officer)[187](index=187&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-42653 COLUMBUS CIRCLE CAPITAL CORP I (Exact name of registrant as specified in its charter) Cayman Islands 99-3947168 (State or ...