Royalty Income - Royalty income for Q3 2025 was $128,993, compared to $63,966 in Q3 2024, representing a 101.5% increase[11] - The Trust's royalty income for the three months ended September 30, 2025, was $67,122, while for the same period in 2024, it was $43,029, representing a year-over-year increase of approximately 56.1%[66] - Royalty income for the quarter ended September 30, 2025, was $128,993, a significant increase from $63,966 in the same quarter of 2024, reflecting a growth of approximately 101%[70] - Royalty income from San Juan Basin – New Mexico Properties increased to $128,993 in Q3 2025 from $63,966 in Q3 2024, representing an increase of approximately 101.5%[90] - Royalty income for the nine months ended September 30, 2025, was $460,810, down from $552,994 in the same period of 2024, a decrease of approximately 16.6%[94] - Royalty income attributable to Hugoton Royalty Properties was $0 for both the nine months ended September 30, 2025 and 2024, primarily due to expenses exceeding revenues[104] - Royalty income from the San Juan Basin – New Mexico Properties decreased to $460,810 for the nine months ended September 30, 2025, down approximately 17% from $552,994 in the same period of 2024[108] Distributable Income - Distributable income for the nine months ended September 30, 2025, was $365,709, down from $400,622 in the same period of 2024, a decrease of 8.7%[11] - Distributable income per unit increased to $0.0477 in Q3 2025 from $0.0295 in Q3 2024, a growth of 61.5%[11] - The Trust's distributable income available for distribution for the three months ended September 30, 2025, was $72,000, compared to $10,314 for the same period in 2024, representing a significant increase of 600%[51] - Distributable income available for distribution for the quarter ended September 30, 2025, was $72,000, representing $0.0386 per unit, compared to $10,314 or $0.0055 per unit in the same quarter of 2024, indicating a substantial increase in per unit distribution[77] Financial Position - Total assets as of September 30, 2025, were $3,222,233, up from $3,187,975 at the end of 2024, an increase of 1.1%[12] - Cash and short-term investments increased to $1,999,792 as of September 30, 2025, compared to $1,930,126 at the end of 2024, a rise of 3.6%[12] - The Trust's total liabilities and corpus remained stable at $3,222,233 as of September 30, 2025, consistent with the previous year[12] - The Trust's corpus at the end of Q3 2025 was $3,150,233, slightly up from $3,146,692 at the end of Q3 2024[15] Operating Costs - As of September 30, 2025, excess production costs totaled $929,446, up from $793,838 as of December 31, 2024, indicating an increase of approximately 17.1%[48] - The Trust's operating costs for the three months ended September 30, 2025, were $(409,297), compared to $(362,332) in 2024, indicating an increase of approximately 12.9%[66] - Operating costs for Hugoton Royalty Properties were $1,300,986 for the nine months ended September 30, 2025, slightly down from $1,302,531 in 2024[104] - Operating costs attributable to the San Juan Basin – New Mexico Properties were $725,934 for the nine months ended September 30, 2025, compared to $741,048 in 2024[108] Sales Prices - Average sales price for natural gas in the nine months ended September 30, 2025, was $2.03 per Mcf, compared to $1.90 per Mcf in 2024, reflecting an increase of approximately 6.8%[68] - The average sales price for natural gas was $3.59 per Mcf for the quarter ended September 30, 2025, compared to $2.84 per Mcf in the same quarter of 2024, representing an increase of approximately 27%[84] - The average sales price for natural gas in Hugoton Royalty Properties was $3.95 per Mcf in 2025, compared to $3.05 per Mcf in 2024, an increase of 29.5%[105] - Average sales price for oil and natural gas liquids was $18.66 per Bbl in 2025, down from $21.92 per Bbl in 2024[109] Production Volumes - The Trust's net production volumes attributable to the Royalty for the three months ended September 30, 2025, were 38,877 Mcf, compared to 24,249 Mcf in 2024, representing an increase of about 60.5%[66] - Actual production volumes attributable to the Royalty paid for San Juan Basin – New Mexico Properties were 369,108 Mcf of natural gas and 25,845 Bbls of oil and condensate in 2025[109] Legal and Regulatory Matters - There are no pending legal proceedings against the Trust, although the Working Interest Owners may face litigation that could impact future royalty income[43] - The Trust may be subject to litigation that could materially affect future royalty income, although no current material adverse effects are anticipated[124] Economic Factors - Ongoing global economic uncertainties, including high inflation and geopolitical risks, are expected to adversely impact royalty income and distributions in 2025[79] - The Trust's royalty income is heavily influenced by commodity prices, which can fluctuate widely due to supply and demand changes, market uncertainty, and other factors beyond the Trustee's control[49] Trustee and Governance - The Trustee's fees for Q3 2025 amounted to $108,288, with $95,897 reimbursed by the Working Interest Owners, unchanged from Q3 2024[32] - The Trustee intends to increase the Contingent Reserve to a total of $2.0 million, which will reduce net proceeds available to the Trust and distributions to unitholders[111] - The Trustee maintains effective disclosure controls and procedures to ensure timely reporting of required information[118] Contingent Reserve - The Contingent Reserve balance was $1,927,792 as of September 30, 2025, compared to $1,867,792 as of September 30, 2024, showing an increase of 3.2%[50] - The Contingent Reserve increased to $1,927,792 as of September 30, 2025, up from $1,867,792 as of September 30, 2024[101] - Substantial accumulated excess production costs have decreased Trust income and distributions, with some months resulting in no distributions[113] - Future distributions to unitholders may be impacted if royalty income is insufficient to fund the increase in the Contingent Reserve[114]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2025 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-40916 MultiSensor AI Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware (Stat ...

Financial Performance - Total revenue for Q3 2025 was $1,574,000, a decrease of 1.75% from $1,602,000 in Q3 2024[18]. - Net loss for Q3 2025 was $1,677,000, compared to a net loss of $8,195,000 in Q3 2024, representing an improvement of 79.5%[18]. - Operating loss for Q3 2025 was $1,694,000, compared to an operating loss of $8,675,000 in Q3 2024, an improvement of 80.5%[18]. - Basic net loss per share for Q3 2025 was $(0.05), compared to $(0.34) for Q3 2024, an improvement of 85.3%[18]. - For the nine months ended September 30, 2025, the company reported a net loss of $9,435,000, an improvement from a net loss of $18,510,000 for the same period in 2024[23]. - Total revenue for the nine months ended September 30, 2025, was $4,163,000, down 30.7% from $6,002,000 in the same period of 2024[38]. - Hardware revenue for the nine months ended September 30, 2025, was $2,480,000, a decrease of 48.6% compared to $4,822,000 in 2024[38]. - For the three months ended September 30, 2025, net revenue was $1.574 million, a decrease of 2% from $1.602 million in the same period in 2024, primarily due to reduced hardware sales offset by a 114% increase in software revenue[100]. - The net loss for the nine months ended September 30, 2025, was $9,435 million, a reduction of 49% from $18,510 million in 2024[107]. Assets and Liabilities - Total current assets decreased to $6,809,000 as of September 30, 2025, down from $10,516,000 as of December 31, 2024, a decline of 35.7%[17]. - Total assets decreased to $11,871,000 as of September 30, 2025, down from $15,478,000 as of December 31, 2024, a decline of 23.5%[17]. - Shareholders' equity decreased to $8,279,000 as of September 30, 2025, down from $12,288,000 as of December 31, 2024, a decline of 32.5%[17]. - The company had contract liabilities of $1,675,000 as of September 30, 2025, compared to $483,000 as of December 31, 2024[39]. - Cash and cash equivalents decreased to $1,064,000 as of September 30, 2025, down from $4,358,000 as of December 31, 2024, a decline of 75.6%[17]. - Cash, cash equivalents, and restricted cash equivalents at the end of the period were $1,164,000, down from $8,633,000 at the end of the previous year[23]. Operating Expenses - Total operating expenses for Q3 2025 were $2,702,000, down from $7,706,000 in Q3 2024, a decrease of 64.9%[18]. - Selling, general and administrative expenses decreased by 65% to $2.164 million for the three months ended September 30, 2025, down from $6.098 million in 2024, mainly due to a reduction in professional fees and payroll expenses[102]. - Total operating expenses for the nine months ended September 30, 2025, were $11.666 million, a decrease of 34% from $17.577 million in 2024[107]. Cash Flow - The company’s total cash used in operating activities for the nine months ended September 30, 2025, was $(5,783,000), an improvement from $(12,510,000) in 2024[23]. - Net cash used in operating activities decreased to $(5,783) thousand for the nine months ended September 30, 2025, from $(12,510) thousand in the same period of 2024, reflecting strategic cost optimization initiatives[134]. - Net cash provided by financing activities was $3,683 thousand for the nine months ended September 30, 2025, a decrease of $17,905 thousand compared to $21,588 thousand in the same period of 2024[136]. - The company reported a net cash decrease of $(3,344) thousand for the nine months ended September 30, 2025, compared to an increase of $7,478 thousand in the same period of 2024[133]. Financing Activities - The company completed a private placement and registered direct offering of common stock to raise an aggregate gross amount of $28,400,000 after September 30, 2025[31]. - The company raised approximately $13.6 million in net proceeds from a registered direct offering that closed on November 5, 2025[131]. - The company entered into a common stock purchase agreement allowing it to sell up to $25 million worth of common stock, but did not utilize this agreement during the three months ended September 30, 2025[123]. - The company utilized its equity line of credit to sell 1,791,732 shares for cash proceeds of $4,657 during the nine months ended September 30, 2025, compared to only 23,999 shares for $58 in the same period of 2024[63]. Business Operations - The company is focused on enhancing its predictive maintenance solutions in the distribution and logistics market to minimize unplanned downtime and reduce costs[94]. - The company is engaged in pilot programs with two major automakers for lithium-ion battery pack monitoring, indicating ongoing collaboration in the manufacturing sector[94]. - Discussions have begun to pilot MSAI Connect solutions with several large data center owners and operators, indicating expansion into the data center market[95]. - As of September 30, 2025, the Company had approximately 665 active sensors connected to its cloud-based software platform, representing a 9.2% increase quarter over quarter and a 167% increase year over year[93]. Risk Factors and Concerns - The company expects to continue incurring losses or limited income in the future, raising substantial doubt about its ability to continue as a going concern[30]. - The company has substantial doubt about its ability to continue as a going concern for the next twelve months due to recurring losses and uncertainty in obtaining shareholder approval for financing[122]. - The company has not experienced any material changes in its risk factors since the 2024 Annual Report[152]. Corporate Governance - The company is classified as an "emerging growth company" and has opted out of extended exemptions, committing to comply with new accounting standards as required for non-emerging growth companies[142]. - The company is also a "smaller reporting company," allowing it to provide only two years of audited financial statements as long as its non-affiliate common stock is below $250 million[143]. - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2025[147]. - There are no ongoing legal proceedings that would materially affect the company's business or financial condition[151]. - The company has not defaulted on any senior securities[154]. - The company has filed multiple certifications and agreements related to its financial reporting and governance[159].

Financial Performance - Revenues for the three months ended September 30, 2025, were $266,000, compared to $0 for the same period in 2024, indicating a significant increase [22]. - Gross profit for the nine months ended September 30, 2025, was $586,000, compared to $0 for the same period in 2024, reflecting successful revenue generation [22]. - The net loss for the three months ended September 30, 2025, was $2,912,000, compared to a net loss of $2,471,000 for the same period in 2024, indicating a 17.8% increase in losses [22]. - For the nine months ended September 30, 2025, the company reported a net loss of $8.2 million, compared to a net loss of $5.9 million for the same period in 2024 [29]. - The company reported a net loss of $8,227,000 for the nine months ended September 30, 2025, compared to a net loss of $5,936,000 for the same period in 2024, representing a 38.6% increase in net loss [89]. - The company anticipates continued operating losses until significant revenue is generated from the commercialization of the RenovoCath device [166]. Assets and Liabilities - Total assets increased to $11,206,000 as of September 30, 2025, up from $8,118,000 on December 31, 2024, representing a 37.5% growth [17]. - Cash and cash equivalents increased to $10,044,000 as of September 30, 2025, up from $7,154,000 on December 31, 2024, a growth of 40.5% [17]. - Total liabilities decreased to $3,128,000 as of September 30, 2025, down from $3,640,000 on December 31, 2024, a reduction of 14.0% [18]. - The accumulated deficit as of September 30, 2025, was $(58,446,000), compared to $(50,219,000) as of December 31, 2024, indicating an increase in the deficit of 16.4% [19]. Expenses - Operating expenses for the three months ended September 30, 2025, totaled $3,413,000, an increase from $2,828,000 in the same period of 2024, marking a 20.6% rise [22]. - Research and development expenses for the nine months ended September 30, 2025, were $4,768,000, compared to $4,449,000 for the same period in 2024, a 7.2% increase [22]. - Selling, general and administrative expenses increased by 47% to approximately $1.7 million for the three months ended September 30, 2025, compared to $1.2 million for the same period in 2024 [154]. - Selling, general and administrative expenses for the nine months ended September 30, 2025, were approximately $4.8 million, a 24% increase from $3.9 million in the same period in 2024 [156]. Financing Activities - The company raised an aggregate of $71.4 million since its inception, with net proceeds of $64.3 million after deducting offering expenses [35]. - The company completed a registered direct offering in April 2023, raising gross proceeds of $5.0 million [40]. - The February 2025 public offering generated approximately $12.1 million in gross proceeds, with net proceeds of $10.8 million after deducting underwriting fees and expenses [43]. - The company anticipates needing additional funding to support operations if commercial sales of RenovoCath do not significantly increase during 2026 [45]. Commercialization and Market Potential - The company expanded its commercial efforts for the RenovoCath device, achieving its first commercial sales revenue in Q4 2024 and increasing the number of approved centers from 5 to 14 by early 2025 [105]. - The initial peak U.S. market opportunity for RenovoCath is estimated at approximately $400 million annually, with potential for several billion dollars as the company expands into other tumor types [111]. - As of September 30, 2025, RenovoCath sales totaled approximately $900,000, with expectations for revenue growth over time [106]. Clinical Trials and Research - The ongoing Phase III TIGeR-PaC clinical trial for IAG is expected to complete enrollment in early 2026, with final data anticipated in 2027 [114]. - The company launched the RR5 Post-Marketing Registry Study in July 2025 to evaluate the safety and effectiveness of RenovoCath across a range of solid tumors [121]. - The independent Data Monitoring Committee recommended continuing the TIGeR-PaC trial after their second interim analysis in August 2025 [117]. Internal Controls and Governance - The company has identified material weaknesses in its accounting policies and controls, primarily due to insufficient staffing and lack of GAAP expertise [189]. - The remediation plan includes hiring additional accounting personnel with GAAP and SEC reporting experience and developing an accounting policy manual [190]. - The company plans to enhance internal control procedures and monitoring for complex transactions to ensure financial statement accuracy [191]. - There have been no changes in internal control over financial reporting that materially affect the company since the filing of the 2024 Annual Report [193]. Stock and Shareholder Information - The company reported a weighted-average share count of 36,646,278 for the three months ended September 30, 2025, compared to 24,940,746 for the same period in 2024, reflecting a 46.0% increase in shares outstanding [22]. - The common stock warrant liability was valued at $1.1 million as of September 30, 2025, compared to $1.5 million as of December 31, 2024 [59]. - The market price of the company's common stock may be volatile, and failure to comply with Nasdaq requirements could lead to delisting [202].

Financial Performance - SeaStar Medical reported net revenue of approximately $0.2 million for Q3 2025, up from $0.1 million in Q3 2024, reflecting sales of the QUELIMMUNE pediatric SCD therapy[6]. - Net revenue for the three months ended September 30, 2025, was $183,000, a significant increase from $68,000 in the same period of 2024, representing a growth of 169%[28]. - Gross profit for the nine months ended September 30, 2025, reached $773,000, compared to $68,000 for the same period in 2024, indicating a substantial increase[28]. - The net loss for the nine months ended September 30, 2025, was $9,246,000, an improvement compared to a net loss of $20,411,000 for the same period in 2024, showing a reduction of 54%[30]. - Total operating expenses for the three months ended September 30, 2025, were $3,748,000, down from $4,524,000 in the same period of 2024, reflecting a decrease of 17%[28]. - Research and development expenses for the nine months ended September 30, 2025, were $5,318,000, down from $6,367,000 in the same period of 2024, indicating a reduction of 17%[28]. Cash and Financing - The company raised $12.4 million in Q3 2025 through equity offerings and warrant exercises, strengthening its balance sheet[5]. - Cash at September 30, 2025, was $13.8 million, a significant increase from $1.8 million at December 31, 2024[11]. - Cash at the end of the period on September 30, 2025, was $13,763,000, a significant increase from $2,082,000 at the end of the same period in 2024[30]. - The net cash provided by financing activities for the nine months ended September 30, 2025, was $21,449,000, compared to $13,220,000 for the same period in 2024, showing an increase of 62%[30]. Clinical Trials and Research - The NEUTRALIZE-AKI pivotal clinical trial has adjusted total enrollment from 200 to approximately 339 patients, with 146 patients enrolled to date[4][5]. - SeaStar Medical initiated its first clinical site for the NEUTRALIZE-CRS trial, targeting 20 patients with acute chronic systolic heart failure[5]. - The company anticipates completing enrollment for the NEUTRALIZE-AKI trial by the end of 2026 based on current enrollment rates[4]. - QUELIMMUNE therapy demonstrated a 76% survival rate at 60 days and 71% at 90 days for 21 pediatric patients, indicating a potential 50% reduction in loss of life compared to historical data[4]. Operational Metrics - General and administrative expenses decreased to approximately $1.9 million in Q3 2025 from $2.2 million in Q3 2024, attributed to lower franchise tax and legal fees[9]. - The company added three top-ranked children's hospitals to its customer base for QUELIMMUNE therapy, with fourth quarter orders already exceeding those of Q3 2025[3][4]. - Total assets as of September 30, 2025, amounted to $15,530,000, compared to $4,658,000 as of December 31, 2024, indicating a growth of 233%[26]. - Total liabilities remained stable at $4,066,000 as of September 30, 2025, compared to $6,841,000 as of December 31, 2024, reflecting a decrease of 40%[26]. - Research and development expenses decreased to $1.9 million in Q3 2025 from $2.3 million in Q3 2024, primarily due to lower consulting and personnel costs[8]. - The company reported a weighted-average of 26,393,400 shares outstanding for the three months ended September 30, 2025, compared to 4,086,871 shares for the same period in 2024[28].

Drug Development - Kodiak Sciences is developing tarcocimab, an investigational anti-VEGF therapy, which has shown a 29-fold increased response rate in treating diabetic retinopathy (DR) compared to the sham group, with 41.1% of patients achieving at least a 2-step improvement on the Diabetic Retinopathy Severity Scale (DRSS) in the GLOW1 study[93]. - The GLOW2 study has completed enrollment with over 250 patients, and Kodiak anticipates announcing topline data in Q1 2026[95]. - Tarcocimab is designed to provide a flexible treatment regimen with a potential label for dosing every 1 to 6 months for patients with retinal vascular diseases[89]. - KSI-501, a bispecific therapy targeting IL-6 and VEGF, is currently in the Phase 3 DAYBREAK study, which has also completed enrollment, with topline data expected in Q3 2026[103]. - KSI-101 has shown meaningful vision gains in the Phase 1b APEX study, with over 50% of patients achieving a 3-line improvement on the eye chart[84]. - The PEAK and PINNACLE Phase 3 studies for KSI-101 are actively enrolling patients, targeting different severities of macular edema[108]. - Kodiak's ABC® Platform is central to its drug development, merging protein-based and chemistry-based therapies for retinal diseases[81]. Financial Performance - Research and development expenses for Q3 2025 were $50.5 million, an increase of $18.6 million (37%) compared to $31.9 million in Q3 2024[123]. - General and administrative expenses decreased by $2.9 million (24%) in Q3 2025 to $11.9 million from $14.8 million in Q3 2024[130]. - The net loss for Q3 2025 was $61.5 million, an increase of $17.5 million (40%) compared to a net loss of $43.9 million in Q3 2024[123]. - As of September 30, 2025, the company had cash and cash equivalents of $72.0 million, expected to support operations into 2026[131]. - The accumulated deficit as of September 30, 2025, was $1,502 million, indicating ongoing financial challenges[132]. - Tarcocimab program expenses increased by $6.2 million (66%) in Q3 2025 compared to Q3 2024, driven by the DAYBREAK pivotal phase 3 clinical trial[125]. - KSI-501 and KSI-101 program expenses rose by $6.7 million (293%) in Q3 2025 compared to Q3 2024, due to expanding clinical activities[126]. - ABC Platform and other program expenses increased by $4.4 million (143%) in Q3 2025 compared to Q3 2024, primarily due to increased biopolymer manufacturing activities[127]. - The company plans to raise additional capital to maintain operations and continue research and development activities, indicating potential dilution for existing shareholders[133]. - The company has not generated any product revenue to date and does not expect to until regulatory approval and commercialization of product candidates[136]. - Net cash used in operating activities was $96.6 million for the nine months ended September 30, 2025, with operational spend of $105.9 million[142]. - The net decrease in cash, cash equivalents, and restricted cash was $96.0 million for the nine months ended September 30, 2025, compared to a decrease of $87.8 million in the same period of 2024[141]. - Cash flows from investing activities showed a net outflow of $463,000 for the nine months ended September 30, 2025, compared to $631,000 in 2024[141]. - Cash flows from financing activities provided $1.1 million in 2025, a significant increase from $97,000 in 2024[141]. - The company is unable to estimate the exact amount of its working capital requirements due to uncertainties in research, development, and commercialization of product candidates[139]. - The company has not reported any material changes in its contractual obligations and commitments since December 31, 2024[143]. - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions that may affect reported amounts[144]. - There were no material changes to critical accounting policies during the nine months ended September 30, 2025[145]. - The company is classified as a "smaller reporting company" and is not required to provide quantitative and qualitative disclosures about market risk[147]. - Future funding requirements could increase significantly due to various factors, including the scope and costs of clinical programs and regulatory reviews[140]. Manufacturing and Technology - Kodiak has a dedicated commercial-scale drug substance manufacturing facility, positioning the company well for market share capture if tarcocimab and KSI-501 are approved[87]. - Kodiak's VETi™ program has made significant advancements in AI and machine-learning technologies, enhancing its commercial retina franchise[86].

Financial Performance - The company reported a net loss of $4.2 million, or $4.64 per share, for Q3 2025, compared to a net loss of $5.1 million, or $1,092 per share, in Q3 2024, indicating a reduction in net loss attributed to prior year revaluation expenses[9]. - The net loss for the nine-month period ended September 30, 2025, was $15,760,000, up from $12,503,000 in 2024, indicating a 26% increase in losses[23]. - Basic and diluted net loss per share for the nine-month period ended September 30, 2025, was $30.09, compared to $2.868 in 2024[23]. - Comprehensive loss for the nine-month period ended September 30, 2025, was $15,687,000, compared to $12,514,000 in 2024, representing a 25% increase[23]. Research and Development - Research and development expenses for Q3 2025 were $3.2 million, up from $2.1 million in Q3 2024, reflecting increased product and manufacturing development costs for the Glucotrack CBGM product[7]. - For the nine months ended September 30, 2025, research and development expenses totaled $8.2 million, compared to $7.8 million for the same period in 2024, driven by increased development costs for the CBGM product[10]. - Research and development expenses rose to $8,186,000 for the nine-month period ended September 30, 2025, compared to $7,800,000 in 2024, reflecting a 5% increase[23]. Cash and Equity - Cash and cash equivalents as of September 30, 2025, were $7.9 million, an increase from $5.6 million as of December 31, 2024, due to $13.7 million in net proceeds from financing activities[13]. - The company has established an equity line of credit (ELOC) allowing it to sell up to $20 million of common stock to Sixth Borough Capital Fund, LP, with proceeds directed towards repaying a convertible promissory note[3]. - The total stockholders' equity as of September 30, 2025, was $2.75 million, compared to a deficit of $13 million as of December 31, 2024[22]. Operating Expenses - Total operating expenses for the nine-month period ended September 30, 2025, were $12,603,000, an increase of 18% from $10,693,000 in the same period of 2024[23]. - Marketing and general and administrative expenses for the nine months ended September 30, 2025, were $4.4 million, up from $2.9 million in the same period in 2024, primarily due to increased legal and professional fees[11]. - Total operating expenses for the three-month period ended September 30, 2025, were $4,309,000, an increase of 32% from $3,251,000 in the same period of 2024[23]. - The operating loss for the three-month period ended September 30, 2025, was $4,309,000, compared to $3,251,000 in 2024, reflecting a 32% increase[23]. Clinical Studies and Market Interest - The company anticipates submitting its Investigational Device Exemption (IDE) to the FDA in Spring 2026 to initiate a long-term clinical study of the CBGM product[3]. - The company initiated a long-term multicenter feasibility study in Australia to evaluate the CBGM product's performance and safety over an initial period of one year[5]. - The company presented strong interest from endocrinologists in the CBGM product, with 73% of surveyed endocrinologists expressing willingness to prescribe it due to its extended sensor life and potential for greater accuracy[5]. Other Financial Metrics - The change in fair value of derivative liabilities for the nine-month period ended September 30, 2025, was $3,269,000, while there was no change in 2024[23]. - Finance income, net, for the nine-month period ended September 30, 2025, was $(68,000), a significant decrease from $1,822,000 in 2024[23]. - Weighted-average shares used to compute basic and diluted net loss per share increased to 523,833 for the nine-month period ended September 30, 2025, from 4,464 in 2024[23].

Clinical Trials and Biomarker Development - The PreTRM test is the only broadly validated, commercially available blood-based biomarker test to predict the risk of preterm birth, providing accurate predictions during weeks 18 through 20 of gestation [88]. - The AVERT PRETERM TRIAL showed an 18% reduction in severe neonatal morbidity and mortality, and a 7-day reduction in mean neonatal hospital length of stay for at-risk neonates [89]. - The PRIME study indicated a 25% reduction in neonatal morbidity and mortality and an 18% reduction in neonatal hospital length of stay for approximately 10% of babies who stay beyond standard delivery days [91]. - The company is actively developing additional biomarker tests, including one for more accurate delivery date predictions, currently in early market testing [101]. Financial Performance - The company reported net losses of $7.8 million and $7.9 million for the three months ended September 30, 2025 and 2024, respectively, and $24.0 million and $24.3 million for the nine months ended September 30, 2025 and 2024, respectively [104]. - Revenue for the three months ended September 30, 2025, was $16,000, a decrease of $13,000 (44.83%) compared to $29,000 in 2024 [116]. - For the nine months ended September 30, 2025, revenue increased by $18,000 (33.96%) to $71,000 from $53,000 in 2024 [122]. - Total operating expenses for the same period were $8,996,000, an increase of $105,000 (1.18%) from $8,891,000 in 2024 [116]. - Total operating expenses for the nine months ended September 30, 2025, were $27,621,000, an increase of $356,000 (1.31%) from $27,265,000 in 2024 [122]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $19,503,000, compared to $7,929,000 in 2024 [132]. - As of September 30, 2025, the company had cash, cash equivalents, and available-for-sale securities totaling $102.4 million, with an accumulated deficit of $303.8 million [127]. Operational Strategy and Future Outlook - The company completed a public offering in February 2025, resulting in approximately $53.6 million in net proceeds after deducting underwriting discounts and commissions [103]. - The company plans to expand its commercial team, having recently hired a Chief Commercial Officer and field sales representatives in strategic geographies [100]. - The company believes its cash runway is sufficient to operate through 2028 based on existing plans, while continuing to monitor operating expenses [105]. - The company aims to secure contracts with private and governmental payers using positive data from clinical studies to generate material revenues [106]. - The company expects research and development expenses to decrease in 2026 compared to 2025 as it shifts capital allocation toward revenue-generating activities [109]. - Selling and marketing expenses are anticipated to increase in Q4 2025 and further in 2026 due to investments in commercialization activities for the PreTRM test [110]. - The company expects significant additional operating losses and negative cash flows due to commercialization activities for the PreTRM test and other pipeline products [136]. - The company currently has no credit facility or committed sources of capital, and future funding requirements will depend on various factors including sales from the PreTRM test [137]. - Existing cash and cash equivalents are expected to fund operating expenses and capital expenditures for at least the next 12 months [138]. Market and Economic Factors - A hypothetical 100 basis point increase in interest rates would have resulted in a decrease of $0.8 million in the market value of available-for-sale debt securities as of September 30, 2025 [148]. - The company does not regularly incur expenses in foreign currencies, and exchange rate fluctuations have not materially affected results to date [149]. - Inflation has not had a material effect on results, but ongoing inflation could increase costs of labor and supplies, adversely affecting business operations [150].

Revenue Performance - Consolidated revenue for the three months ended September 30, 2025, was $9,086,000, an increase of $140, or 2%, compared to the same period in 2024[116] - Ranor's revenue decreased by $417, or 9%, to $4,373,000, primarily due to a shift in customer project mix[117] - Stadco's revenue increased by $596, or 14%, to $4,819,000, driven by higher contract values and gross margins[118] - Consolidated revenue for the six months ended September 30, 2025, was $16,465, a decrease of $467, or 3%, compared to the same period last year[135] - Ranor's revenue for the six months ended September 30, 2025, was $8,670, a decrease of $502, or 5%, compared to the same period last year[136] - Stadco's revenue for the six months ended September 30, 2025, was $8,151, an increase of $324, or 4%, compared to the same period last year[138] Cost and Profitability - Consolidated cost of revenue for the three months ended September 30, 2025, was $6,628,000, a decrease of 16% compared to the same period in 2024[119] - Gross profit increased by $1,444, or 143%, to $2,458,000, with a gross margin of 27% compared to 11% in the same period last year[119] - Ranor's cost of revenue was $2,271,000, a decrease of 31% from $3,272,000 in the prior year[115] - Stadco's cost of revenue was $4,463,000, a decrease of 6% from $4,727,000 in the prior year[115] - Ranor's gross profit increased by $623, or 39%, compared to the same period last year, while cost of revenue decreased by $1,001, or 31%[120] - Stadco's gross profit was $250 for the three months ended September 30, 2025, an increase of $821 compared to the same period last year, with cost of revenue decreasing by $264, or 6%[121] - Consolidated gross profit increased by $2,235, or 179%, for the six months ended September 30, 2025, with a gross margin of 21.0% compared to 7.0% in the same period last year[140] Operating Performance - Consolidated SG&A expenses for the six months ended September 30, 2025, decreased by $73, or 2%[144] - Operating income for the six months ended September 30, 2025, was $479, compared to an operating loss of $1,829 for the same period last year, reflecting improved performance at both Ranor and Stadco[146] - EBITDA for the six months ended September 30, 2025 was $1,885, compared to a negative EBITDA of $425 for the same period in 2024[175] Net Income and Liquidity - Net income for the three months ended September 30, 2025, was $825, or $0.08 per share, compared to a net loss of $601, or $0.06 per share for the same period last year[133] - For the six months ended September 30, 2025, the company recorded net income of $228, or $0.02 per share, compared to a net loss of $2,061, or $0.22 per share for the same period in 2024[153] - As of September 30, 2025, total available liquidity was $1,400, consisting of $1,180 in undrawn capacity under the Revolver Loan and $220 in cash and cash equivalents, compared to $1,451 in total available liquidity as of March 31, 2025[154] Debt and Financing - The company had total debt obligations of $7,235 as of September 30, 2025, classified as current due to debt covenant violations[176] - The company plans to renew its Revolver Loan or seek alternative financing by January 16, 2026, to continue operations beyond the next twelve months[170] - The company drew down $8,940 under the Revolver Loan during the six months ended September 30, 2025, and repaid $8,770 during the same period[159] - Interest expense increased by $11 compared to the same period last year, primarily due to higher levels of borrowings under the amended loan agreement[129] Investments and Obligations - The company invested $2,245 in new factory machinery and equipment for the six months ended September 30, 2025, up from $1,622 in the same period in 2024[158] - The company has $10,896 in purchase obligations outstanding for machinery and equipment, with reimbursement from a customer for all purchases[176] - The valuation allowance on deferred tax assets was approximately $5,700 as of September 30, 2025, indicating a likelihood that certain state NOL carryforwards will not be realized[152] Market Focus - Over 95% of revenue for both Ranor and Stadco is derived from the defense sector, highlighting the company's market focus[96][99] - The project mix for Stadco included products with higher contract values and gross margins, contributing to revenue growth[118] - The company relies on individual purchase orders rather than long-term contracts, which may impact revenue stability[93]

Operations and Locations - As of September 30, 2025, EZCORP operated a total of 1,360 locations, including 545 in the U.S., 622 in Mexico, and 193 in Guatemala, El Salvador, and Honduras[16] - The company opened 40 new pawn locations in fiscal 2025, contributing to a total of 1,360 locations[18] - In fiscal 2025, the company opened 40 de novo stores and acquired 52 stores, bringing the total to 1,360 stores, with 60% in Latin America and 40% in the U.S.[57] - The company has 1,360 stores as of September 30, 2025, with 545 located in the U.S. and 622 in Mexico[146] Financial Performance - The company reported a net income of $109.6 million for fiscal 2025, representing a 32% increase compared to $83.1 million in fiscal 2024[171] - Total revenues increased by $112.7 million (10%) in fiscal 2025, driven by higher pawn service charges and merchandise sales[172] - Pawn service charges rose by $37.7 million (9%) due to an increase in average pawn loan amounts[173] - Gross profit for fiscal 2025 was $195.4 million, an increase of 8% from $181.0 million in fiscal 2024, with a 17% increase on a constant currency basis[182] - Cash flows from operating activities increased by 31% to $149.0 million, driven by higher net income and favorable changes in working capital[197] Revenue Sources - In fiscal 2025, pawn service charges (PSC) accounted for approximately 37% of total revenues and 64% of gross profit, with a closing pawn loan outstanding (PLO) balance of $307.5 million[21] - EZCORP's gross profit sources for fiscal 2025 included PSC, merchandise sales gross profit, and jewelry scrap gross profit, with a focus on optimizing the balance of PLO to increase PSC[14] - Merchandise sales rose 10% to $225.7 million, with a 20% increase on a constant currency basis, while same-store merchandise sales increased by 8% (18% on a constant currency basis)[187] - Jewelry scrap sales surged by 62%, with gross margin increasing by 1,160 basis points to 26.6% due to rising gold prices[173] Employee Engagement and Development - The company achieved an 89% participation rate in its annual Global Employee Engagement Survey, with an overall engagement score of 85, which is eleven points higher than the global benchmark[29] - Approximately 82% of managerial positions were filled via internal promotion, reflecting the company's commitment to talent management and development[36] Sustainability and Compliance - The company prioritizes sustainability and has developed foundational elements of a comprehensive sustainability program[12] - The company has installed energy-efficient LED lighting in 85% of U.S. stores and 60% of Latin America stores to reduce energy consumption[58] - The company’s corporate office in Austin, Texas, has achieved LEED Certified Silver status, reflecting its commitment to sustainability[58] - The company maintains a strong compliance culture, monitored by the Board of Directors, to adhere to regulatory standards across all jurisdictions[49] Market Presence and Competition - EZCORP holds a 43.7% equity interest in Cash Converters International Limited, which operates 659 stores across 15 countries, enhancing its market presence[16] - The pawn industry in the U.S. is large and highly fragmented, with the company being the second largest operator[62] - Significant competition exists from pawn stores, consumer lending companies, and online retailers, which could adversely affect operations[103] Risks and Challenges - A significant portion of collateral for pawn loans is gold jewelry, and fluctuations in gold values could materially impact earnings and financial position[93] - The company is exposed to risks associated with firearms transactions, including potential regulatory fines and liabilities[100] - The company faces risks related to natural disasters, particularly in regions susceptible to hurricanes and earthquakes, which could impact operations and financial performance[111] - Foreign operations in Latin America expose the company to risks related to political instability and economic volatility, potentially impacting growth plans[123] Debt and Financial Obligations - The company issued $300 million of 7.375% senior notes due 2032, which could restrict funds available for growth and other corporate purposes[121] - Debt obligations total $530,000,000, with $230,000,000 due in 3-5 years and $300,000,000 due in more than 5 years[210] - Total cash needs to meet future aggregate contractual obligations as of September 30, 2025, amount to $1,035,045,000[210] Stock Performance - The Class A Common Stock closing price was $19.04 per share as of September 30, 2025[150] - The company’s stock performance increased from $100 in 2020 to $378.42 in 2025, representing a 278.42% increase[154]