Revenue and Financial Performance - In the first quarter of fiscal 2026, the company reported revenue of $1.3 million from buy-sell purchase orders, with a cost of revenue of $1.2 million[112]. - Revenues increased by 104% from $1.3 million for the three months ended November 30, 2024, to $2.6 million for the same period in 2025, driven primarily by a $1.3 million increase in other revenues from buy-sell purchase orders of equipment[129]. - The cost of revenues surged by 155% from $1.0 million in Q4 2024 to $2.5 million in Q4 2025, attributed to the costs associated with buy-sell purchase orders of equipment[135]. - Gross profit margin decreased to 1% for the three months ended November 30, 2025, down from 21% in the same period of 2024, primarily due to lower margins on buy-sell purchase orders[136]. - The company incurred a net loss attributable to stockholders of $742 thousand for the three months ended November 30, 2025, compared to a net loss of $547 thousand for the same period in 2024[166]. Product Development and Strategy - The company has developed advanced capabilities in LED manufacturing, including optimizing epitaxial growth processes and employing copper alloy base technology to improve chip performance[114]. - The company is focusing on expanding its product offerings in high-margin areas, such as LED modules and UV LED products, to improve gross margins and operating results[116]. - The company is adjusting its product mix by emphasizing sales of LED components over LED chips to respond to market trends and improve profitability[116]. - The company plans to enhance its product innovation strategy by focusing on technologically advanced and lower-cost products, particularly in the LED components market[120]. Market and Operational Challenges - The average selling price of the company's products is expected to decline due to competitive pressures, impacting revenues and gross margins[116]. - The company faces risks related to its reliance on chip suppliers, which could affect delivery schedules, quality assurance, and production costs[116]. - Inventory write-downs were recorded at $152 thousand for Q4 2025, compared to $96 thousand for Q4 2024, indicating increased challenges in inventory management[125]. Financial Position and Cash Flow - Cash and cash equivalents rose to $2.9 million as of November 30, 2025, up from $1.2 million as of November 30, 2024, indicating improved liquidity[120]. - Net cash provided by operating activities for the three months ended November 30, 2025, was $361 thousand, compared to net cash used in operating activities of $158 thousand for the same period in 2024[170]. - The company expects cash requirements to service debt and contractual obligations in fiscal 2026 to be approximately $1.9 million, which is anticipated to be funded through the issuance of additional equity[167]. - Net cash used in financing activities for the three months ended November 30, 2025, was $116 thousand, a decrease from $244 thousand for the same period in 2024[172]. Customer and Market Diversification - Sales to the three largest customers accounted for 69% of total revenues in Q4 2025, down from 78% in Q4 2024, highlighting a diversification in the customer base[120]. - The company is exploring opportunities in the China and India markets as part of its new strategy to drive growth[106]. Cost Management and Expenditures - The company is committed to reducing production costs to offset lower average selling prices, although current cost savings have limited impact on gross profit due to underutilization of manufacturing capacity[117]. - Selling, general and administrative expenses increased from $696 thousand for the three months ended November 30, 2024, to $703 thousand for the three months ended November 30, 2025, primarily due to a $28 thousand increase in shipping expense and a $22 thousand increase in cleaning expense[139]. - Capital expenditures for the three months ended November 30, 2025, were $30 thousand, a decrease from $118 thousand in the same period of 2024[173]. - The company plans to continue investing in capital expenditures to expand business operations and production capacity based on market conditions and customer demand[173]. Compliance and Risk Management - The company is focused on maintaining compliance with Nasdaq listing requirements to avoid potential delisting risks[116]. - Management is focused on controlling capital costs and maintaining financial flexibility, which may lead to a decrease in activity levels and capital expenditures as appropriate[173].

Financial Performance - Revenue for Q1 FY 2026 was $2.6 million, a decrease of 80.4% from $13.2 million in Q4 FY 2025[5] - GAAP net loss for Q1 FY 2026 was $742 thousand, or $(0.09) per diluted share, compared to a net loss of $1.2 million, or $(0.15) per diluted share in Q4 FY 2025[5] - GAAP gross margin decreased to 1% in Q1 FY 2026 from 2% in Q4 FY 2025[6] - Operating margin for Q1 FY 2026 was negative 39%, worsening from negative 7% in Q4 FY 2025[6] Cash and Assets - Cash and cash equivalents increased to $2.9 million as of November 30, 2025, up from $2.6 million at the end of Q4 FY 2025[6] - Total current assets decreased to $10.2 million from $11.3 million at the end of Q4 FY 2025[12] - Total liabilities decreased to $12.2 million from $12.8 million at the end of Q4 FY 2025[12] Expenses - Research and development expenses for Q1 FY 2026 were $356 thousand, slightly down from $362 thousand in Q4 FY 2025[14] - Selling, general and administrative expenses decreased to $703 thousand from $853 thousand in Q4 FY 2025[14] Foreign Currency Transactions - The company reported a foreign currency transaction gain of $21 thousand in Q1 FY 2026, compared to a gain of $453 thousand in Q4 FY 2025[14]

Financial Performance - Basic loss per share improved from $(0.11) for Q3 2024 to $(0.02) for Q3 2025, indicating a positive trend in financial performance [124]. - Basic loss per share improved from $(0.47) for the nine months ended November 30, 2024 to $(0.15) for the nine months ended November 30, 2025, indicating overall financial improvement [137]. - The company reported a consolidated net loss of $1.1 million for the nine months ended November 30, 2025, an improvement from a net loss of $3.2 million in the same period of 2024 [156]. Revenue and Sales - Revenues decreased by 4.4% from $7.9 million in Q3 2024 to $7.5 million in Q3 2025, primarily due to the non-renewal of an unprofitable contract [125][126]. - Total revenues for the nine months ended November 30, 2025, were $20.739 million, a slight increase of 0.3% compared to $20.680 million in the same period of 2024 [138]. - Durango product and retail sales decreased by 4.0%, or $0.7 million, for the nine months ended November 30, 2025, primarily due to the non-renewal of an unprofitable contract [139]. - Franchise fees increased by 17.3% to $95 thousand in Q3 2025 compared to $81 thousand in Q3 2024, reflecting improved franchise performance [127]. - Royalty and marketing fees increased by $0.8 million, or 21.5%, during the nine months ended November 30, 2025, compared to the same period in 2024 [140]. Cost and Expenses - Total cost of sales decreased by 17.6% from $6.0 million in Q3 2024 to $5.0 million in Q3 2025, contributing to improved profitability [128]. - Total cost of sales decreased by 8.7%, or $1.393 million, to $14.587 million for the nine months ended November 30, 2025 [141]. - Retail operating expenses increased by 122.2% due to the acquisition of a third retail store in August 2025 [134]. - General and administrative expenses decreased to 15.1% of total revenues for the nine months ended November 30, 2025, down from 20.7% in the same period of 2024 [147]. Gross Margin - Total gross margin increased to 21.4% in Q3 2025 from 10.0% in Q3 2024, driven by sales price increases [129][130]. - Total gross margin increased by 75.8% to $1.646 million, with a gross margin percentage of 10.1% for the nine months ended November 30, 2025, compared to 5.5% in 2024 [142][143]. Cash Flow and Working Capital - Cash flows used in investing activities were $0.5 million during the nine months ended November 30, 2025, primarily due to the acquisition of a retail store for $0.2 million [157]. - As of November 30, 2025, working capital increased to $3.6 million from $2.4 million as of February 28, 2025, mainly due to $1.8 million in proceeds from notes payable [154]. Debt and Credit Agreements - The company entered into a new credit agreement on August 28, 2025, with an outstanding balance of $6.6 million as of November 30, 2025 [161]. - The Company entered into a credit agreement with RMCF2 for a principal amount of $1.2 million, maturing on September 30, 2027, with a 12% annual interest rate [164]. - As of November 30, 2025, the Company repaid $0.6 million of the outstanding principal [164]. - The RMCF2 Credit Agreement limits capital expenditures to $3.5 million per year and includes financial covenants measured quarterly [165]. - The Company was not in compliance with the liabilities to tangible net worth covenant of 2.0:1.0 as of November 30, 2025, but complied with all other covenants [166]. Future Plans and Obligations - The company signed four area development agreements to add 34 new franchise stores over the next three to five years, supporting future growth [121]. - The Company has purchase obligations of approximately $4.2 million as of November 30, 2025, primarily for future purchases of commodities [170]. - The Company plans to issue 1,500,000 shares of common stock at $1.80 per share, generating total proceeds of approximately $2.7 million [168]. Economic Factors - The company experienced higher raw material, labor, and freight costs due to macroeconomic inflationary trends, although these trends have moderated [119]. - Inflationary factors, including increased costs of ingredients and labor, directly affect the Company's operations and may impact future lease costs [171]. - The Company experiences seasonal fluctuations in sales, with stronger sales during key holidays and the summer vacation season [173].

Financial Performance - Total revenue for the three months ended November 30, 2025, was $2,293, an increase of 91% compared to $1,201 for the same period in 2024[88]. - The net loss for the three months ended November 30, 2025, was $5,204,095, compared to a loss of $974 in the same period in 2024[88]. - For the three months ended November 30, 2025, the company reported a net loss of $5,204,095 compared to a net loss of $974 in the same period of 2024[98]. - Adjusted EBITDA for the three months ended November 30, 2025, was $(21,715), a significant decline from $(501) in 2024[98]. Revenue Sources - Revenue from staking was $980 for the three months ended November 30, 2025, compared to $0 in the same period in 2024, marking the initiation of staking as a primary yield generation strategy[92]. - The company expects annual fees of $40,000 to $50,000 for managing its multi-billion dollar ETH portfolio, which it anticipates will be offset by projected staking fees[122]. - Revenue from consulting/advisory services and equipment leasing is recognized over time or at the point of transfer of control, with estimates including variable consideration and collectability[129]. Expenses and Losses - General and administrative expenses rose to $223,436 for the three months ended November 30, 2025, from $959 in the same period in 2024, primarily due to one-time capital raising and consulting fees[91]. - The company recorded an unrealized loss of $5,247,925 related to digital asset holdings for the three months ended November 30, 2025, compared to a gain of $85 in the same period in 2024[93]. - Net cash used in operating activities was $228,356 for the three months ended November 30, 2025, compared to $96 in the same period of 2024[117]. - Net cash used in investing activities was $7,422,439 for the three months ended November 30, 2025, primarily due to the purchase of ETH amounting to $7,527,221[118]. Asset Management - As of November 30, 2025, the total fair value of ETH and BTC holdings amounted to $10,544,339 and $17,450, respectively[93]. - The company recognized an unrealized gain from trading securities of $15,890 for the three months ended November 30, 2025, reflecting the change in fair value of its investment in Eightco[99]. - The change in fair value of warrant liability resulted in a gain of $158,212 for the three months ended November 30, 2025[99]. Liquidity and Financing - The company strengthened its liquidity through a public offering and private placements, with $4,617,859 still available from its at-the-market program as of November 30, 2025[77]. - Net cash provided by financing activities was $8,026,474 for the three months ended November 30, 2025, driven by proceeds from the company's ATM Offering[119]. - The company had $887,678 in cash on hand and working capital of $751,900 as of November 30, 2025[113]. Strategic Focus - The company expects to maintain a flexible cost structure aligned with service activity and treasury scale, with modest capital expenditures relative to a mining-centric model[81]. - The company has pivoted to a services-led model, reducing proprietary mining exposure and focusing on advisory and leasing services[107]. - The company anticipates that staking yields will evolve with validator participation rates and market conditions, focusing on security and liquidity[80]. - The company is monitoring key trends such as Ethereum protocol upgrades and institutional adoption trends that may impact future results[82]. Accounting and Reporting - In fiscal year 2025, the company will account for eligible digital assets at fair value, with changes recognized in net income, potentially increasing volatility in reported results[127]. - The company recognizes digital assets received from operations under ASC 606 and monitors for impairment indicators, with estimates based on market price volatility and timing of transactions[128]. - The company depreciates miners and related equipment over useful lives of 2–10 years and evaluates long-lived assets for impairment when indicators arise[130]. - Stock-based compensation is measured at grant-date fair value using observable market prices and option-pricing models, with key inputs including volatility and risk-free rates[131]. - Certain financing arrangements contain embedded features accounted for as derivatives, with fair value estimated using market-based models[132]. - The company assesses collectability of receivables based on customer creditworthiness and establishes allowances for expected credit losses based on historical experience[133]. Internal Controls - Management has identified material weaknesses in internal control over financial reporting as of November 30, 2025, and is implementing measures to improve these controls[135][136]. - There were no changes in internal control over financial reporting during the quarter ended November 30, 2025, that materially affected the controls[138].

Financial Position - As of December 31, 2025, AirJoule Technologies Corporation had approximately $21.8 million in cash, cash equivalents, and restricted cash[10] - On January 5, 2026, the company contributed an additional $5.0 million in capital to its joint venture with GE Vernova[9] Partnerships and Collaborations - In December 2025, the company announced a partnership with Red Dot Ranch to deploy an AirJoule system for evaluating off-grid water solutions in coastal California[8] - The partnership with Red Dot Ranch aims to expand the deployment of AirJoule systems pending successful evaluation and testing beginning in early 2026[8] Capital Raising - The company intends to conduct an underwritten public offering of shares of its Class A common stock, subject to market conditions[5]

Financial Position - As of December 31, 2025, AirJoule Technologies Corporation had approximately $21.8 million in cash, cash equivalents, and restricted cash[10] - On January 5, 2026, the company contributed an additional $5.0 million in capital to its joint venture with GE Vernova[9] Partnerships and Collaborations - In December 2025, the company announced a partnership with Red Dot Ranch to deploy an AirJoule system for evaluating off-grid water solutions in coastal California[8] - The partnership with Red Dot Ranch aims to expand the deployment of AirJoule systems pending successful evaluation and testing beginning in early 2026[8] Capital Raising - The company intends to conduct an underwritten public offering of shares of its Class A common stock, subject to market conditions[5]

Revenue Performance - Total revenue for the twelve months ended October 31, 2025, was $392.9 million, a decrease of 7.7% from $425.9 million in 2024[152]. - Revenue from the U.S. Concrete Pumping segment decreased by 10.5%, or $30.6 million, from $291.0 million in 2024 to $260.5 million in 2025, primarily due to a slowdown in construction demand and disruptive weather events[153]. - Revenue for the U.S. Concrete Waste Management Services segment increased by 6.4%, or $4.5 million, from $70.9 million in 2024 to $75.4 million in 2025, driven by organic volume growth and pricing improvements[154]. - Revenue for the U.K. Operations segment decreased by 10.9%, or $7.0 million, from $64.0 million in 2024 to $57.0 million in 2025, with a 13.2% decline when excluding foreign currency translation impacts[155]. Profitability and Expenses - Gross profit for the year ended October 31, 2025, was $151.1 million, down 8.9% from $165.8 million in 2024, with a gross margin of 38.5% compared to 38.9% in the previous year[157]. - General and administrative expenses decreased by $6.9 million to $109.6 million in 2025, representing 27.9% of revenue, up from 27.4% in 2024[158]. - Interest expense for the year ended October 31, 2025, was $31.6 million, an increase of $5.7 million from $25.9 million in 2024, primarily due to refinancing of Senior Notes[160]. - The effective tax rate increased to 36.6% in 2025 from 33.3% in 2024, attributed to the impact of permanent differences on lower pretax income[162]. Segment Performance - U.S. Concrete Pumping segment reported a net loss of $1.9 million for the twelve months ended October 31, 2025, compared to a net income of $6.5 million for the same period in 2024, representing a decrease of $8.4 million[164]. - Adjusted EBITDA for U.S. Concrete Pumping decreased by 20.5% to $54.9 million in 2025 from $69.1 million in 2024, primarily due to revenue decline and increased interest expenses[164]. - U.S. Concrete Waste Management Services segment achieved a net income of $5.9 million in 2025, up 7.2% from $5.5 million in 2024, driven by improved revenue and disciplined cost control[165]. - U.K. Operations segment reported a net income of $2.4 million in 2025, down 41.0% from $4.2 million in 2024, with adjusted EBITDA decreasing by 16.7% to $14.0 million[166]. Cash Flow and Liquidity - Total liquidity as of October 31, 2025, was $359.5 million, consisting of $44.4 million in cash and cash equivalents and $315.1 million in available borrowing capacity under the ABL Facility[167]. - Net cash provided by operating activities was $64.3 million for the twelve months ended October 31, 2025, down from $86.9 million in 2024[182]. - Net cash used in investing activities was $37.3 million for the twelve months ended October 31, 2025, with $46.8 million spent on property, plant, and equipment, partially offset by $9.5 million from sales[184]. - Net cash used in financing activities was $25.8 million for the twelve months ended October 31, 2025, including $375.0 million for extinguishing the 2026 Notes and $53.1 million in dividends paid, offset by $425.0 million from issuing the 2032 Notes[186]. Capital Expenditures and Debt - Future capital expenditures for the company are estimated at $35.5 million for property and equipment purchases over the next twelve months[175]. - The company had gross capital expenditures of approximately $46.8 million in 2025, compared to $43.8 million in 2024[171]. - As of October 31, 2025, the company had total debt of $425.0 million related to senior notes due in 2032, with no outstanding balance under the ABL Facility[176]. - The company closed a private offering of $425.0 million in senior secured second lien notes due 2032 on January 31, 2025, to refinance existing debt[161]. Net Income and Adjusted Metrics - EBITDA for the twelve months ended October 31, 2025, was $94.0 million, down from $107.0 million in 2024, while Adjusted EBITDA decreased to $97.0 million from $112.1 million[192]. - The Company reported a net income of $6.4 million for the twelve months ended October 31, 2025, compared to $16.2 million in 2024, indicating a significant decline[192]. - The U.S. Concrete Pumping segment reported a net loss of $1.9 million for the twelve months ended October 31, 2025, compared to a net income of $6.5 million in 2024[192]. - The U.S. Concrete Waste Management Services segment achieved a net income of $5.9 million for the twelve months ended October 31, 2025, slightly up from $5.5 million in 2024[192]. - The U.K. Operations segment reported a net income of $2.4 million for the twelve months ended October 31, 2025, down from $4.2 million in 2024[192]. Goodwill and Impairment Analysis - The Company updated its methodology for allocating corporate costs to better align with resource allocation and performance measurement, resulting in reclassification of prior period segment results[189]. - The Company evaluates goodwill for impairment annually, with the last assessment conducted on August 31, indicating no impairment for the current period[196][203]. - The Company performed a step 1 impairment analysis as of August 31, 2025, for its U.S. Concrete Pumping, U.S. Concrete Waste Management Services, and U.K. Operations reporting units[204]. - The fair values of the U.S. Concrete Waste Management Services and U.K. Operations reporting units exceeded their carrying values by 155% and 31%, respectively[205]. - For the U.S. Concrete Pumping reporting unit, with goodwill of $147.5 million, the fair value was approximately 3% greater than its carrying value[206]. - A 50 basis point increase in the discount rate could have resulted in the U.S. Concrete Pumping reporting unit's carrying value exceeding its fair value[206]. - The most sensitive assumption affecting cash flows is the discount rate, which ranges from 9.0% to 12.5%[204]. - Terminal growth rates used in the projections were set at 3.0%[204]. Regulatory and Accounting Standards - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[208]. - Recent accounting standards and their impacts are detailed in Note 2 of the Company's audited financial statements[207].

Commercial Execution and Market Potential - Palsonify demonstrated strong commercial execution with robust metrics, indicating a successful launch strategy[5] - The estimated acromegaly patient population includes 36,000 undiagnosed patients and 19,000 patients with no active treatment, highlighting significant market potential[8] - Preliminary net product revenue for Q2 2025 is expected to reflect strong adoption rates among patients and prescribers[9] - 81% of prior authorizations for Palsonify have a minimum duration of 300 days, indicating strong patient retention and commitment[9] - The company is actively pursuing market expansion strategies, including partnerships with specialty pharmacies and treatment centers[10] - Palsonify's phased launch aims to address a broader acromegaly patient population, with a focus on newly diagnosed and treatment-naïve patients[8] Atumelnant Clinical Development - Atumelnant shows a promising profile for treating Congenital Adrenal Hyperplasia (CAH), with over 750 weeks of cumulative patient exposure in clinical trials[14] - The company has engaged over 200 participants in the Atumelnant clinical development program, demonstrating significant interest and potential for future growth[14] - Atumelnant is currently in Phase 3 studies for the treatment of Congenital Adrenal Hyperplasia (CAH) and has demonstrated a rapid and sustained reduction of Androstenedione (A4) levels to normal[18] - The Phase 2 cohorts demonstrated normalization of A4 levels and improvement in clinical symptoms associated with CAH[18] - The company is conducting an open-label extension study to reflect real-life clinical management of CAH patients, allowing for flexibility in adjusting doses as necessary[23] - The company is focused on minimizing adverse effects related to glucocorticoid treatment, such as diabetes and weight gain, through the use of Atumelnant[18] Efficacy and Safety of Atumelnant - Phase 3 study design for Atumelnant is well-powered to achieve both glucocorticoid dose reduction and correction of hyperandrogenemia, enhancing confidence in its efficacy[14] - In Phase 2 studies, Atumelnant achieved a 67% reduction in A4 levels while maintaining glucocorticoid (GC) doses at physiologic levels, with 7 out of 8 patients reaching these levels by the end of treatment[22] - The investigational drug showed significant decreases in A4 levels across all dose cohorts, with reductions of 58% to 70% compared to baseline[20] - Atumelnant's dosing regimen includes a morning dose that has been shown to maintain robust A4 reduction while tapering GC doses[21] - The treatment aims to address hyperandrogenism symptoms, including infertility and excessive hair growth, while minimizing GC-related adverse effects[18] - Atumelnant continues to be well tolerated with no serious adverse events reported in Phase 2 studies, with a total of 38 participants enrolled[27] - In the OLE study, 7 participants treated for over 20 weeks showed no treatment-related severe adverse events, and 1 participant was treated for almost 6.5 years[27] - No hepatic transaminase adverse events were reported in Cohort 4 or the OLE study, reinforcing the safety profile of Atumelnant[30] Future Outlook and Catalysts - The company is poised to deliver multiple commercial and clinical catalysts in the next 24+ months, including FDA approvals and Phase 3 readouts[31] - The company aims to replicate the reduction of A4 levels while reducing glucocorticoid doses to physiological levels[30] - The Phase 2 data drives confidence in the Phase 3 study design and goals for Atumelnant[30] - The company plans to evaluate differences in A4 reduction between morning and evening dosing, with no observed differences to date[30] - The total patient exposure in the OLE study includes 25 participants, with varying doses of Atumelnant (8 at 40 mg, 14 at 80 mg, 3 at 120 mg)[27] - The company is actively enrolling subjects in the OLE study, with a total of 27 participants currently[27]

Revenue Performance - Product revenues for the three months ended November 30, 2025, decreased by $3.9 million, or 36.9%, to $6.7 million compared to $10.6 million for the same period in 2024[86]. - PaperPie net revenues decreased by $8.1 million, or 33.6%, to $16.0 million for the nine-month period ended November 30, 2025, compared to $24.1 million in the same period last year[102]. - Publishing division's net revenues decreased by $0.7 million, or 20.6%, to $2.7 million during the nine-month period ended November 30, 2025, from $3.4 million in the same period last year[112]. Active Brand Partners - The average number of active brand partners decreased by 7,300, or 58.9%, to 5,100 in Q3 fiscal 2026 from 12,400 in Q3 fiscal 2025[96]. - The average number of active brand partners decreased by 7,100, or 53.4%, to 6,200 during the nine-month period ended November 30, 2025, from 13,300 in the same period a year ago[102]. - Approximately 20.0% of active Brand Partners maintained consignment inventory at the end of the third quarter of fiscal year 2026[138]. Gross Margin - Gross margin for the three months ended November 30, 2025, decreased by $2.3 million, or 37.1%, to $3.9 million, with gross margin as a percentage of net revenues at 62.1% compared to 62.9% in the prior year[98]. - Gross margin decreased by $5.4 million, or 36.0%, to $9.6 million for the nine-month period ended November 30, 2025, with gross margin as a percentage of net revenues decreasing to 60.1% from 62.1%[104]. - Gross margin for the Publishing division decreased by $0.5 million, or 25.0%, to $1.5 million during the nine-month period ended November 30, 2025, with gross margin as a percentage of net revenues at 55.7%[113]. Operating Income and Expenses - Total operating expenses for the PaperPie segment decreased by $1.7 million, or 33.3%, to $3.4 million during the three-month period ended November 30, 2025[99]. - Total operating expenses decreased by $4.9 million, or 36.0%, to $8.7 million during the nine-month period ended November 30, 2025, from $13.6 million in the same period last year[105]. - Operating income for the PaperPie segment decreased by $0.5 million, or 50%, to $0.5 million during the three months ended November 30, 2025[100]. - Operating income for the PaperPie segment decreased by $0.3 million, or 23.1%, to $1.0 million during the nine-month period ended November 30, 2025, with operating income as a percentage of net revenues at 6.0%[106]. Other Income and Expenses - Other income increased by $11.8 million to $12.5 million for the three months ended November 30, 2025, primarily due to a gain of $12.2 million from the sale of the Hilti Complex[89]. - Interest expense decreased by $0.2 million, or 33.3%, to $0.4 million for the three months ended November 30, 2025, due to the sale of the Hilti Complex and the payoff of outstanding indebtedness[88]. - Income tax expense increased by $3.1 million to $2.8 million for the three months ended November 30, 2025, with an effective tax rate of 26.7% compared to 24.8% in the prior year[90]. Cash Flow and Inventory Management - Cash inflows from operations totaled $4,004,600 during the first nine months of fiscal year 2026, resulting from net earnings of $5,432,200[117]. - Cash used in financing activities was $31,031,200, primarily for paying down existing term debt and line of credit[122]. - The Company expects to reduce excess inventory levels to generate cash flow and support ongoing operations[123]. - Noncurrent inventory balances prior to valuation allowances were $17.5 million and $16.3 million at November 30, 2025, and February 28, 2025, respectively[136]. - Noncurrent inventory valuation allowances were $0.8 million at November 30, 2025, and $0.7 million at February 28, 2025[136]. - Management has estimated a valuation allowance for both current and noncurrent inventory, including the reserve for consigned inventory, of $1.3 million and $1.2 million at November 30, 2025, and February 28, 2025, respectively[139].

Market Overview - Guardian operates in the Assisted Living Facilities (ALF) market, which is valued at approximately $7 billion, focusing on medication management for residents who typically require 12-14 prescriptions daily[7]. - The ALF market is characterized by a highly fragmented landscape with over 1,200 independent pharmacies, presenting significant opportunities for market share expansion[7][10]. Business Model and Strategy - Guardian's business model emphasizes local service combined with centralized support, resulting in improved accuracy and adherence in medication management[5][9]. - The company has a multi-pronged growth strategy that includes organic growth, expansion into new facilities, and disciplined mergers and acquisitions[5][12]. - Guardian's management team is co-founder-led, with a strong focus on capital allocation and operational excellence, contributing to consistent growth and profitability[5]. - The company has established a defensible competitive moat through its service-led, tech-enabled model, which enhances medication care coordination[5]. Financial Performance - Guardian's financial performance is supported by durable margins and a healthy balance sheet, indicating resilience in its business operations[5]. - Projected revenue for 2025 is estimated to be between $1.40 billion and $1.42 billion, with adjusted EBITDA guidance of $104 million to $106 million for 2026[30]. - The company has demonstrated a consistent track record of growth, with an estimated revenue CAGR of approximately 16% from 2012 to 2025[23]. - The company reported a cash conversion rate of approximately 60% for the year-to-date as of September 30, 2025, indicating strong cash flow management[26]. - The adjusted EBITDA margin is projected to exceed 8% for 2025, reflecting ongoing profitability improvements[30]. Growth Initiatives - The company aims to increase its market presence by adding new facilities and launching greenfield startups to drive organic growth[13]. - The company is expanding into new underserved markets with 20 greenfield start-ups planned from 2022 to 2025, including locations in Florida, Ohio, and Oklahoma[14]. - The target pool for M&A acquisitions includes approximately 100 potential targets, with typical target sizes ranging from $10 million to $30 million in revenue and 2,000 to 3,500 residents[15]. - The company aims for high single-digit organic growth at targeted operating margins in regions like Eastern Michigan and Northern Virginia[17]. Operational Metrics - As of September 30, 2025, Guardian processed approximately 28 million prescriptions, showcasing its scale and operational efficiency[9]. - As of September 30, 2025, the resident count is projected to reach 204,000, with prescription growth expected to increase to 28 million[24]. Regulatory Impact - The Inflation Reduction Act (IRA) will impact key branded drugs, with negotiated lower prices expected to affect revenue streams starting in 2026[28]. - The company is implementing efficiency improvements and purchasing optimization initiatives to mitigate the impact of the IRA on its business[29].