[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part provides the unaudited consolidated financial statements and management's discussion and analysis for First National Corporation [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of First National Corporation, including balance sheets, income statements, comprehensive income statements, cash flow statements, and statements of changes in shareholders' equity, along with detailed notes providing context and breakdowns of key financial items - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC guidance, and should be read in conjunction with the annual report on Form 10-K[18](index=18&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) This section presents the consolidated balance sheets, detailing assets, liabilities, and shareholders' equity at specific reporting dates | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs. Dec 31, 2024) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------------------- | | Total Assets | $2,041,441 | $2,010,281 | +$31,160 | | Cash and cash equivalents | $194,315 | $162,874 | +$31,441 | | Loans, net | $1,427,836 | $1,450,195 | -$22,359 | | Total Liabilities | $1,867,909 | $1,843,750 | +$24,159 | | Total Deposits | $1,803,166 | $1,803,778 | -$612 | | Total Shareholders' Equity | $173,532 | $166,531 | +$7,001 | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section presents the consolidated statements of income, showing revenues, expenses, and net income for the reported periods | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Total interest and dividend income | $25,165 | $17,055 | +$8,110 | $49,186 | $33,389 | +$15,797 | | Total interest expense | $6,617 | $5,561 | +$1,056 | $13,187 | $11,045 | +$2,142 | | Net interest income | $18,548 | $11,494 | +$7,054 | $35,999 | $22,344 | +$13,655 | | Provision for credit losses | $911 | $400 | +$511 | $1,743 | $1,400 | +$343 | | Total noninterest income | $3,889 | $2,686 | +$1,203 | $7,500 | $6,733 | +$767 | | Total noninterest expense | $15,191 | $10,659 | +$4,532 | $33,526 | $20,546 | +$12,980 | | Net income | $5,051 | $2,442 | +$2,609 | $6,649 | $5,651 | +$998 | | Basic EPS | $0.56 | $0.39 | +$0.17 | $0.74 | $0.90 | -$0.16 | | Diluted EPS | $0.56 | $0.39 | +$0.17 | $0.74 | $0.90 | -$0.16 | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section presents the consolidated statements of comprehensive income, including net income and other comprehensive income components | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net income | $5,051 | $2,442 | +$2,609 | $6,649 | $5,651 | +$998 | | Total other comprehensive income (loss) | $971 | $475 | +$496 | $2,600 | -$336 | +$2,936 | | Total comprehensive income | $6,022 | $2,917 | +$3,105 | $9,249 | $5,315 | +$3,934 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section presents the consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net cash provided by operating activities | $8,228 | $8,336 | -$108 | | Net cash provided by investing activities | $1,332 | $9,932 | -$8,600 | | Net cash provided by financing activities | $21,881 | $30,205 | -$8,324 | | Increase in cash and cash equivalents | $31,441 | $48,473 | -$17,032 | | Cash and Cash Equivalents, Ending | $194,315 | $135,634 | +$58,681 | [Consolidated Statements of Changes in Shareholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This section presents the consolidated statements of changes in shareholders' equity, detailing movements in common stock, surplus, retained earnings, and other comprehensive loss | Metric (in thousands) | Balance, June 30, 2025 | Balance, June 30, 2024 | Change | | :-------------------------------- | :--------------------- | :--------------------- | :----- | | Common Stock | $11,236 | $7,851 | +$3,385 | | Surplus | $77,578 | $33,116 | +$44,462 | | Retained Earnings | $100,810 | $97,966 | +$2,844 | | Accumulated Other Comprehensive (Loss) | -$16,092 | -$19,042 | +$2,950 | | Total Shareholders' Equity | $173,532 | $119,891 | +$53,641 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(unaudited)) The notes provide critical context for the financial statements, detailing the impact of the Touchstone Bankshares acquisition on various financial line items and the application of accounting standards [Note 1. General](index=12&type=section&id=Note%201.%20General) This note outlines the basis of financial statement preparation, significant events, and the expected impact of recent accounting pronouncements - The financial statements are prepared in accordance with GAAP for interim information and SEC guidance, not including all annual year-end footnotes[18](index=18&type=chunk) - The Company completed the acquisition of Touchstone Bankshares, Inc. on October 1, 2024, issuing **2,673,640 shares of common stock** and incurring **$2.0 million in merger costs** during the six months ended June 30, 2025[21](index=21&type=chunk) - Recent accounting pronouncements (ASU 2024-03 and ASU 2023-09) are not expected to have a material impact on the Company's consolidated financial statements[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) [Note 2. Securities](index=14&type=section&id=Note%202.%20Securities) This note details the Company's investment securities portfolio, including available-for-sale and held-to-maturity categories, and associated unrealized gains and losses | Security Type (in thousands) | June 30, 2025 Amortized Cost | June 30, 2025 Fair Value | Dec 31, 2024 Amortized Cost | Dec 31, 2024 Fair Value | | :-------------------------------- | :----------------------------- | :----------------------- | :-------------------------- | :-------------------------- | | Securities available for sale | $206,510 | $187,579 | $185,917 | $163,847 | | Securities held to maturity | $106,527 | $97,728 | $109,835 | $98,874 | | Total Securities | $313,037 | $285,307 | $295,752 | $262,721 | - At June 30, 2025, the Company had gross unrealized losses of **$19.094 million** on available-for-sale securities and **$8.801 million** on held-to-maturity securities, primarily due to current interest rates being above purchase rates[27](index=27&type=chunk)[30](index=30&type=chunk) - **100% of the Company's investment portfolio** was considered investment grade at June 30, 2025, with a weighted-average re-pricing term of **4.9 years**[30](index=30&type=chunk) [Note 3. Loans](index=19&type=section&id=Note%203.%20Loans) This note provides a breakdown of the loan portfolio by category, changes in loan balances, and aging of past due loans | Loan Category (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Real estate loans: Construction and land development | $78,169 | $84,480 | -$6,311 | | Real estate loans: Secured by 1-4 family residential | $544,162 | $547,167 | -$3,005 | | Real estate loans: Other real estate loans | $680,063 | $672,162 | +$7,901 | | Commercial and industrial loans | $120,700 | $141,333 | -$20,633 | | Consumer and other loans | $19,928 | $21,453 | -$1,525 | | Total loans | $1,443,022 | $1,466,595 | -$23,573 | | Allowance for credit losses | -$15,186 | -$16,400 | +$1,214 | | Loans, net | $1,427,836 | $1,450,195 | -$22,359 | - Total loans decreased by **$23.573 million** from December 31, 2024, to June 30, 2025, with significant decreases in commercial and industrial loans and construction and land development loans[42](index=42&type=chunk) | Loan Aging (in thousands) | June 30, 2025 Total Past Due | December 31, 2024 Total Past Due | | :-------------------------------- | :----------------------------- | :------------------------------- | | 30-59 Days Past Due | $3,520 | $2,436 | | 60-89 Days Past Due | $1,022 | $650 | | 90 Days or More Past Due | $3,332 | $365 | | Total Past Due | $7,874 | $3,451 | [Note 4. Allowance for Credit Losses](index=28&type=section&id=Note%204.%20Allowance%20for%20Credit%20Losses) This note details the activity in the allowance for credit losses, including charge-offs, recoveries, and provisions, and information on nonaccrual loans | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Beginning Balance, Dec 31, 2024 (2023) | $16,400 | $11,974 | | Charge-offs | -$3,025 | -$934 | | Recoveries | $176 | $89 | | Provision for (recovery of) credit losses on loans | $1,635 | $1,424 | | Ending Balance, June 30, 2025 (2024) | $15,186 | $12,553 | - Nonaccrual loans totaled **$6.796 million** at June 30, 2025, an increase from **$6.971 million** at December 31, 2024[58](index=58&type=chunk) - No loans were modified due to borrowers experiencing financial difficulty during the six months ended June 30, 2025 and 2024[66](index=66&type=chunk) [Note 5. Earnings per Common Share](index=32&type=section&id=Note%205.%20Earnings%20per%20Common%20Share) This note presents the calculation of basic and diluted earnings per common share for the reported periods | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net income (in thousands) | $5,051 | $2,442 | $6,649 | $5,651 | | Weighted average shares outstanding – basic | 8,987,179 | 6,278,113 | 8,983,374 | 6,273,952 | | Basic EPS | $0.56 | $0.39 | $0.74 | $0.90 | | Diluted EPS | $0.56 | $0.39 | $0.74 | $0.90 | [Note 6. Fair Value Measurements](index=32&type=section&id=Note%206.%20Fair%20Value%20Measurements) This note describes the Company's fair value measurements for assets and liabilities, categorized by input levels - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[74](index=74&type=chunk)[75](index=75&type=chunk) | Asset/Liability (in thousands) | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :-------------------------------- | :----------------------- | :--------------------------- | | Securities available for sale | $187,579 | $163,847 | | Derivatives - cash flow hedges | $2,363 | $2,690 | | Total assets measured at fair value (recurring) | $189,942 | $166,537 | - Loans, net, had a carrying amount of **$1,427.8 million** and a fair value of **$1,397.2 million** at June 30, 2025, with fair value determined using Level 3 unobservable inputs[87](index=87&type=chunk) [Note 7. Stock Compensation Plans](index=38&type=section&id=Note%207.%20Stock%20Compensation%20Plans) This note provides details on the Company's stock incentive plan, restricted stock unit grants, and associated compensation expense - The Company's 2023 Stock Incentive Plan makes up to **325,000 shares of common stock** available for awards[89](index=89&type=chunk) - During Q1 2025, **18,455 restricted stock units** were granted to employees, with **15,061 units vested** and **5,000 forfeited**[93](index=93&type=chunk)[94](index=94&type=chunk) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total unrecognized pre-tax compensation expense (unvested RSUs) | $1,400 | $404 | | Compensation expense recognized (RSUs) | $445 | $202 | [Note 8. Accumulated Other Comprehensive (Loss)](index=39&type=section&id=Note%208.%20Accumulated%20Other%20Comprehensive%20(Loss)) This note details the components of accumulated other comprehensive loss, including unrealized gains/losses on securities and cash flow hedges | Metric (in thousands) | Balance at June 30, 2025 | Balance at June 30, 2024 | | :-------------------------------- | :----------------------- | :----------------------- | | Net Unrealized Gains (Losses) on Securities | -$17,958 | -$21,163 | | Change in Fair Value of Cash Flow Hedges | $1,866 | $2,121 | | Total Accumulated Other Comprehensive (Loss) | -$16,092 | -$19,042 | - The accumulated other comprehensive loss decreased by **$2.95 million** from June 30, 2024, to June 30, 2025, primarily due to unrealized holding gains on available-for-sale securities[95](index=95&type=chunk) [Note 9. Revenue Recognition](index=40&type=section&id=Note%209.%20Revenue%20Recognition) This note explains the Company's revenue recognition policies, distinguishing between in-scope and out-of-scope revenues under ASC Topic 606 - Most revenue from financial instruments (interest income, loan fees, etc.) is outside the scope of ASC Topic 606[96](index=96&type=chunk) | Noninterest Income (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Service charges on deposit accounts | $1,020 | $612 | $2,033 | $1,266 | | ATM and check card fees | $1,128 | $809 | $2,124 | $1,579 | | Wealth management fees | $867 | $879 | $1,765 | $1,762 | | Brokered mortgage fees | $183 | $32 | $293 | $70 | | Fees for other customer services | $230 | $178 | $488 | $373 | | Total in-scope of Topic 606 | $3,428 | $2,510 | $6,703 | $5,050 | | Total out-of-scope of Topic 606 | $461 | $176 | $797 | $1,683 | | Total noninterest income | $3,889 | $2,686 | $7,500 | $6,733 | [Note 10. Derivative Financial Instruments](index=42&type=section&id=Note%2010.%20Derivative%20Financial%20Instruments) This note describes the Company's use of interest rate swap agreements as cash flow hedges and their notional amounts - The Company uses interest rate swap agreements to convert variable rate junior subordinated debt into fixed rate debt, designated as cash flow hedges[105](index=105&type=chunk) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Notional Amount (Interest rate swap contracts) | $9,000 | $9,000 | | Assets (Interest rate swap contracts) | $2,363 | $2,690 | [Note 11. Acquisition](index=42&type=section&id=Note%2011.%20Acquisition) This note provides details on the acquisition of Touchstone Bankshares, Inc., including purchase price, assets acquired, liabilities assumed, and merger costs - The Company acquired Touchstone Bankshares, Inc. on October 1, 2024, issuing **2.7 million shares of common stock** for an aggregate consideration of **$46.8 million**[110](index=110&type=chunk) - The acquisition resulted in a preliminary bargain purchase gain of **$2.9 million**[110](index=110&type=chunk)[113](index=113&type=chunk) | Acquisition Financials (in thousands) | Amount | | :-------------------------------- | :----- | | Total purchase price | $46,799 | | Fair value of total assets acquired | $664,326 | | Fair value of total liabilities assumed | $614,607 | | Fair value of net assets acquired | $49,719 | | Preliminary bargain purchase gain | $2,920 | - Merger costs totaled **$2.0 million** for the six months ended June 30, 2025[111](index=111&type=chunk) [Note 12. Segment Reporting](index=48&type=section&id=Note%2012.%20Segment%20Reporting) This note presents financial information for the Company's operating segments: Community Banking and Wealth Management Services - The Company operates in two segments: Community Banking (loans, deposits, fees) and Wealth Management Services (trustee, estate administration, investment management)[133](index=133&type=chunk) | Segment Net Income (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Community Banking | $6,056 | $5,084 | $4,751 | $2,173 | | Wealth Management | $593 | $567 | $300 | $269 | | Total Net Income | $6,649 | $5,651 | $5,051 | $2,442 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, and liquidity, highlighting key performance drivers, the impact of the Touchstone acquisition, and future outlook - The discussion emphasizes the significant impact of the Touchstone acquisition on financial performance, including increased assets, liabilities, and operating expenses[137](index=137&type=chunk)[145](index=145&type=chunk)[149](index=149&type=chunk)[155](index=155&type=chunk) - Forward-looking statements are subject to various risks and uncertainties, including general business and economic conditions, competition, and regulatory changes[137](index=137&type=chunk)[139](index=139&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=53&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section highlights that forward-looking statements are subject to significant uncertainties, including merger benefits, economic conditions, and regulatory changes - Forward-looking statements are identified by words like "believes," "expects," "may," "will," and are subject to significant uncertainties including the realization of merger benefits, economic conditions, and regulatory changes[137](index=137&type=chunk)[139](index=139&type=chunk) [Executive Overview](index=54&type=section&id=Executive%20Overview) This section provides a high-level summary of First National Corporation's business, primary revenue sources, and the impact of the recent Touchstone acquisition - First National Corporation is the bank holding company for First Bank, offering loan, deposit, and wealth management products through **33 branch offices** and **three loan production offices** in Virginia and North Carolina[142](index=142&type=chunk)[146](index=146&type=chunk) - The primary revenue source is **net interest income (70-90% of total revenue)**, supplemented by noninterest income from service charges, wealth management, and ATM/check card fees[143](index=143&type=chunk) - The acquisition of Touchstone Bankshares, Inc. on October 1, 2024, expanded the Company's presence and resulted in **$2.0 million in merger costs** for the six months ended June 30, 2025[145](index=145&type=chunk)[147](index=147&type=chunk) [Overview of Quarterly Financial Performance](index=55&type=section&id=Overview%20of%20Quarterly%20Financial%20Performance) This section summarizes key financial performance metrics for the quarter and six-month periods, including net income, EPS, and returns on assets and equity | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net income | $5.1 million | $2.4 million | +$2.7 million | | Diluted EPS | $0.56 | $0.39 | +$0.17 | | Return on average assets | 1.00% | 0.68% | +0.32% | | Return on average equity | 11.85% | 8.31% | +3.54% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net income | $6.6 million | $5.7 million | +$0.9 million | | Diluted EPS | $0.74 | $0.90 | -$0.16 | | Return on average assets | 0.66% | 0.79% | -0.13% | | Return on average equity | 7.90% | 9.68% | -1.78% | - The increase in net income for both periods was primarily driven by higher net interest income after provision, partially offset by increased noninterest expenses due to the Touchstone merger[149](index=149&type=chunk)[155](index=155&type=chunk) [Non-GAAP Financial Measures](index=56&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and presents non-GAAP financial measures such as the efficiency ratio and net interest margin, used to assess operational performance - The efficiency ratio is a non-GAAP measure used to assess operational efficiency, calculated by dividing adjusted noninterest expense by tax-equivalent net interest income plus noninterest income[160](index=160&type=chunk) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Efficiency ratio | 65.03% | 70.64% | 70.07% | 68.09% | | Net Interest Margin | 3.95% | 3.40% | 3.86% | 3.31% | - Net interest margin is calculated by dividing tax-equivalent net interest income by total average earning assets, with a **21% tax rate** used for tax-equivalent adjustments[163](index=163&type=chunk) [Critical Accounting Policies](index=58&type=section&id=Critical%20Accounting%20Policies) This section identifies critical accounting policies involving significant management judgments and estimates, particularly for credit losses and acquired loans - Critical accounting policies involve significant management judgments and estimates, especially for the allowance for credit losses on loans, loans acquired in business combinations, and goodwill[19](index=19&type=chunk) [Lending Policies](index=58&type=section&id=Lending%20Policies) This section confirms that no material changes have occurred in the Company's lending policies since the last annual report - No material changes to the Company's lending policies have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[167](index=167&type=chunk) [Results of Operations](index=58&type=section&id=Results%20of%20Operations) This section analyzes the Company's financial performance, focusing on net income, net interest income, provision for credit losses, noninterest income, and expenses - Net interest income is the primary source of earnings, influenced by changes in volume and mix of interest-earning assets and interest-bearing liabilities, and their respective yields and rates[168](index=168&type=chunk)[169](index=169&type=chunk) - The Touchstone merger significantly impacted all aspects of the results of operations, leading to increased assets, liabilities, and associated income and expenses[175](index=175&type=chunk)[176](index=176&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk) [Net Income](index=60&type=section&id=Net%20Income) This section details the Company's net income, diluted EPS, and returns on average assets and equity for the reported periods | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net income | $5.1 million | $2.4 million | +$2.7 million | | Diluted EPS | $0.56 | $0.39 | +$0.17 | | Return on average assets | 1.00% | 0.68% | +0.32% | | Return on average equity | 11.85% | 8.31% | +3.54% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net income | $6.6 million | $5.7 million | +$0.9 million | | Diluted EPS | $0.74 | $0.90 | -$0.16 | | Return on average assets | 0.66% | 0.79% | -0.13% | | Return on average equity | 7.90% | 9.68% | -1.78% | [Net Interest Income](index=60&type=section&id=Net%20Interest%20Income) This section analyzes the components of net interest income, including total interest income, interest expense, and net interest margin | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net interest income | $18,548 | $11,494 | +$7,054 (61.4%) | | Total interest income | $25,165 | $17,055 | +$8,110 | | Total interest expense | $6,617 | $5,561 | +$1,056 | | Net interest margin | 3.95% | 3.40% | +0.55% | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Net interest income | $36,000 | $22,344 | +$13,656 (61.1%) | | Total interest income | $49,186 | $33,389 | +$15,797 | | Total interest expense | $13,187 | $11,045 | +$2,142 | | Net interest margin | 3.86% | 3.31% | +0.55% | - The increase in interest income on loans was due to a **25-basis point increase in yield** and a **47.2% increase in average balances** for the three-month period, and a **21-basis point increase in yield** and a **48.8% increase in average balances** for the six-month period, primarily from the Touchstone merger[175](index=175&type=chunk)[179](index=179&type=chunk) [Provision for Credit Losses](index=64&type=section&id=Provision%20for%20Credit%20Losses) This section discusses the provision for credit losses and its drivers, including the impact of acquired loan balances and net charge-offs | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Provision for credit losses | $911 | $400 | +$511 | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Provision for credit losses | $1,700 | $1,400 | +$300 | | Net charge-offs | $2,800 | $844 | +$1,956 | - The increase in provision for credit losses reflects the impact of higher pool loan balances acquired in the Touchstone merger and an increase in net charge-offs[187](index=187&type=chunk)[188](index=188&type=chunk) [Noninterest Income](index=64&type=section&id=Noninterest%20Income) This section analyzes the various components of noninterest income, highlighting changes in service charges, fees, and other operating income | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Noninterest income | $3,900 | $2,700 | +$1,200 (44.8%) | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Noninterest income | $7,500 | $6,700 | +$800 (11.4%) | - Increases were seen in service charges, ATM and check card fees, and brokered mortgage fees, partially offset by a decrease in other operating income for the six-month period due to a loan recovery in 2024[189](index=189&type=chunk)[190](index=190&type=chunk) [Noninterest Expense](index=64&type=section&id=Noninterest%20Expense) This section details the components of noninterest expense, explaining increases primarily due to the recent acquisition | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Noninterest expenses | $15,200 | $10,700 | +$4,500 (42.5%) | | Salaries and employee benefits | +$2,200 (37.6%) | | | | Other operating expense | +$1,200 (223.0%) | | | | Occupancy expense | +$396 (72.3%) | | | | Data processing expense | +$341 (209.2%) | | | | Amortization expense | +$436 | | | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Noninterest expenses | $33,500 | $20,500 | +$13,000 (63.2%) | | Salaries and employee benefits | +$5,000 (42.8%) | | | | Other operating expense | +$2,200 (143.8%) | | | | Merger expenses | +$1,600 | | | | Occupancy expense | +$930 (85.9%) | | | | Amortization expense | +$874 | | | | Data processing expense | +$857 (209.5%) | | | | Equipment expense | +$800 (62.4%) | | | - Increases were primarily due to the Touchstone merger, leading to more employees, additional branches, increased customer transactions, duplicative system expenses, and core deposit intangible amortization[191](index=191&type=chunk)[193](index=193&type=chunk) [Income Taxes](index=65&type=section&id=Income%20Taxes) This section discusses income tax expense and the effective tax rate, explaining differences from the federal statutory rate | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Income tax expense | $1,300 | $605 | +$695 | | Effective tax rate | 20.3% | 21.8% | -1.5% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | | Income tax expense | $1,600 | $1,500 | +$100 | | Effective tax rate | 19.2% | 20.8% | -1.6% | - Differences from the U.S. federal income tax rate are primarily due to net permanent tax deductions, including tax-exempt interest income, income from bank-owned life insurance, and nondeductible merger expenses[194](index=194&type=chunk)[196](index=196&type=chunk) [Financial Condition](index=66&type=section&id=Financial%20Condition) This section provides an overview of the Company's financial position, including assets, liabilities, equity, and key balance sheet components - Total assets increased by **$31.2 million (3.1% annualized)** to **$2.041 billion** at June 30, 2025, from December 31, 2024[197](index=197&type=chunk) - Total shareholders' equity increased by **$7.0 million**, primarily due to a **$3.9 million increase in retained earnings** and a **$2.6 million reduction in accumulated other comprehensive loss**[199](index=199&type=chunk) [General (Financial Condition Overview)](index=66&type=section&id=General%20(Financial%20Condition%20Overview)) This section provides a high-level overview of the Company's total assets, liabilities, and shareholders' equity at the reporting dates | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total Assets | $2,041 | $2,010 | +$31 | | Total Liabilities | $1,868 | $1,844 | +$24 | | Total Shareholders' Equity | $174 | $167 | +$7 | [Loans](index=66&type=section&id=Loans) This section details the total loan portfolio, its composition, and changes in balances over the reported periods | Metric (in millions) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :---------------- | :------------ | | Total Loans | $1,428 | $1,450 | $977 | | YoY Change (vs. June 30, 2024) | +$451 (46.1%) | | | | QoQ Change (vs. Dec 31, 2024) | -$22.4 (3.1% annualized) | | | - The loan portfolio is primarily comprised of loans secured by **one-to-four family residential real estate (38%)**, **commercial real estate (47%)**, and **commercial and industrial loans (8%)** at June 30, 2025[200](index=200&type=chunk) [Asset Quality](index=66&type=section&id=Asset%20Quality) This section assesses the quality of the Company's assets, including non-performing assets, nonaccrual loans, and management's reserve adequacy | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Non-performing assets | $6.8 | $7.0 | | Nonaccrual loans | $6.8 | $7.1 | | OREO | $0 | $0.053 | | Other potential problem loans | $6.6 | $9.1 | - Non-performing assets represented **0.33% of total assets** at June 30, 2025, a slight decrease from **0.35%** at December 31, 2024[203](index=203&type=chunk) - Management believes the Bank has sufficient reserves to cover expected losses, with the provision for credit losses based on economic conditions, historical losses, and loan quality reports[208](index=208&type=chunk) [Securities](index=68&type=section&id=Securities) This section provides an overview of the Company's securities portfolio, including total balances and unrealized gains and losses | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total Securities | $299.6 | $277.3 | +$22.3 (8%) | | Gross unrealized gains (AFS) | $0.163 | $0.062 | +$0.101 | | Gross unrealized losses (AFS) | -$19.1 | -$22.1 | +$3.0 | | Gross unrealized gains (HTM) | $0.002 | $0.008 | -$0.006 | | Gross unrealized losses (HTM) | -$8.8 | -$11.0 | +$2.2 | - The change in unrealized gains and losses was related to changes in market interest rates, not credit concerns[210](index=210&type=chunk) [Deposits](index=68&type=section&id=Deposits) This section details the Company's total deposits, their composition, and changes in balances over the reported periods | Metric (in millions) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :---------------- | :------------ | | Total Deposits | $1,803 | $1,804 | $1,266 | | QoQ Change (vs. Dec 31, 2024) | -$0.612 (0.03%) | | | | YoY Change (vs. June 30, 2024) | +$537.4 (42.5%) | | | - Deposit composition at June 30, 2025: **noninterest-bearing (30%)**, **savings and interest-bearing (50%)**, and **time deposits (20%)**[211](index=211&type=chunk) [Subordinated Debt](index=68&type=section&id=Subordinated%20Debt) This section describes the Company's subordinated debt issuances, including those assumed from the Touchstone acquisition and any redemptions - The Company assumed two subordinated debt issuances from the Touchstone acquisition: an **$8.0 million fixed-to-floating rate note due 2030** and a **$10.0 million fixed-to-floating rate note due 2032**[212](index=212&type=chunk) - A **$500 thousand tranche** of the **$10.0 million issuance** was paid off for **$420 thousand**, resulting in an **$80 thousand gain on redemption** during Q2 2025[212](index=212&type=chunk) [Liquidity](index=68&type=section&id=Liquidity) This section outlines the Company's liquidity sources and estimated uninsured customer deposits | Metric (in millions) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :---------------- | :------------ | | Total liquidity sources | $800.2 | $758.0 | $553.3 | | Estimated uninsured customer deposits | $545.7 | $537.0 | $419.4 | | Estimated uninsured customer deposits (excl. municipal) | $451.9 | $445.5 | $324.5 | [Capital Resources](index=70&type=section&id=Capital%20Resources) This section details the Company's capital adequacy ratios and its status as "well capitalized" under regulatory frameworks - The Bank meets all capital adequacy requirements, including the capital conservation buffer, with a **Common Equity Tier 1 capital ratio of 11.81%** (minimum 7.0%)[217](index=217&type=chunk)[218](index=218&type=chunk) - The Bank qualifies as "well capitalized" under the prompt corrective action framework, exceeding the minimum requirements for Common Equity Tier 1, Tier 1, Total Capital, and Tier 1 Leverage ratios[219](index=219&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not required for this filing - This section is not required for the current filing[227](index=227&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and states that there were no material changes to internal control over financial reporting during the last fiscal quarter - The Company's disclosure controls and procedures were effective as of June 30, 2025[228](index=228&type=chunk) - No material changes to internal control over financial reporting were identified during the last fiscal quarter[229](index=229&type=chunk)[230](index=230&type=chunk) [PART II – OTHER INFORMATION](index=73&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part includes information on legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, and exhibits [Item 1. Legal Proceedings](index=73&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no material pending legal proceedings, other than ordinary routine litigation incidental to the Company's business - No material pending legal proceedings exist, other than routine litigation[232](index=232&type=chunk) [Item 1A. Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there were no material changes to the Company's risk factors as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the Company's risk factors were disclosed since the Annual Report on Form 10-K for the year ended December 31, 2024[233](index=233&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=74&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds to report[234](index=234&type=chunk) [Item 3. Defaults Upon Senior Securities](index=74&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report - No defaults upon senior securities to report[234](index=234&type=chunk) [Item 4. Mine Safety Disclosures](index=74&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there were no mine safety disclosures to report - No mine safety disclosures to report[234](index=234&type=chunk) [Item 5. Other Information](index=74&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[234](index=234&type=chunk) [Item 6. Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL-formatted financial statements - Exhibits include CEO and CFO certifications (Sections 302 and 1350) and XBRL-formatted financial statements[235](index=235&type=chunk)

Exhibit 99.1 FOR IMMEDIATE RELEASE (301) 429-4638 August 13, 2025 Contact: Peter D. Thompson, EVP and CFO URBAN ONE, INC. REPORTS SECOND QUARTER 2025 RESULTS NEWS RELEASE Silver Spring, MD: - Urban One, Inc. (NASDAQ: UONEK and UONE) today reported its results for the three months ended June 30, 2025. For the three months ended June 30, 2025, net revenue was approximately $91.6 million, a decrease of 22.2% from the same period in 2024. The Company reported operating loss of approximately $120.7 million for t ...

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) Urban One, Inc. reported a significant decline in Q2 2025 financial performance, with net revenue decreasing by 22.2% year-over-year to $91.6 million, alongside increased losses and reduced Adjusted EBITDA [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Urban One, Inc. experienced a significant Q2 2025 financial downturn, with net revenue falling **22.2%** to **$91.6 million**, alongside increased operating and net losses, and a **51.6%** drop in Adjusted EBITDA Q2 2025 Key Financial Highlights | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :----------------------- | :------------------ | :------------------ | :--------- | | Net Revenue | $91,600 | $117,700 | (22.2)% | | Operating Loss | $(120,700) | $(60,400) | 99.8% | | Net Loss | $(77,900) | $(45,400) | 71.6% | | Net Loss Per Share (Basic) | $(1.74) | $(0.94) | 85.1% | | Adjusted EBITDA | $14,000 | $28,900 | (51.6)% | [CEO Commentary and Business Outlook](index=1&type=section&id=CEO%20Commentary%20and%20Business%20Outlook) CEO Alfred C. Liggins, III, attributed weak Q2 results to underperforming Reach Media and Digital segments, reduced advertising demand, and subscriber churn, leading to a revised full-year Adjusted EBITDA guidance of **$60.0 million** and strategic debt repurchases - Second quarter results were impacted by weaker than expected performance in Reach Media and Digital segments, partly due to the timing of the annual Tom Joyner Fantastic Voyage (Q2 2024 revenue of **$9.6 million**, Q4 2025 event)[1](index=1&type=chunk) - Reach Media segment was **loss-making** for the quarter due to client attrition and lower CPMs[1](index=1&type=chunk) - Digital business experienced lower advertising demand and reduced streaming CPMs compared to Q2 2024[1](index=1&type=chunk) - Core radio advertising finished **down 11.8%** excluding digital, with national radio advertising demand experiencing double-digit declines; local radio pacing was flat year-over-year, showing some sequential improvement[1](index=1&type=chunk) - Cable TV advertising was **down 4.2%** and affiliate revenue was **down 11.7%** due to continuing subscriber churn[1](index=1&type=chunk) - Full-year Adjusted EBITDA guidance was reduced to **$60.0 million** due to broad economic headwinds[1](index=1&type=chunk) - The company repurchased **$64.0 million** of its 2028 Notes at an average price of approximately **51.8% of par**, reducing outstanding debt balance to **$492.3 million**[1](index=1&type=chunk) [Consolidated Statements of Operations](index=2&type=section&id=Consolidated%20Statements%20of%20Operations) The company's consolidated statements of operations reveal significant year-over-year declines in net revenue and substantial increases in operating and net losses for both the three and six months ended June 30, 2025 [Three Months Ended June 30, 2025 vs 2024](index=2&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For Q2 2025, Urban One reported net revenue of **$91.6 million**, a **22.2%** decrease, with operating loss widening to **$120.7 million** and net loss to **$77.9 million**, primarily due to increased impairment charges Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :------------------ | :------------------ | :--------- | :--------- | | Net Revenue | $91,631 | $117,744 | $(26,113) | (22.2)% | | Total Operating Expenses | $212,315 | $178,165 | $34,150 | 19.2% | | Operating Loss | $(120,684) | $(60,421) | $(60,263) | 99.7% | | Impairment of goodwill and intangible assets | $130,078 | $80,758 | $49,320 | 61.1% | | Net Loss Attributable to Common Stockholders | $(77,902) | $(45,431) | $(32,471) | 71.5% | - The significant increase in operating loss was largely driven by a **61.1%** increase in impairment of goodwill and intangible assets[3](index=3&type=chunk) [Six Months Ended June 30, 2025 vs 2024](index=2&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For the first six months of 2025, net revenue decreased **17.2%** to **$183.9 million**, with operating loss substantially higher at **$118.6 million** and net loss widening to **$89.6 million**, primarily due to increased impairment charges Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :------------------ | :------------------ | :--------- | :--------- | | Net Revenue | $183,866 | $222,154 | $(38,288) | (17.2)% | | Total Operating Expenses | $302,452 | $269,687 | $32,765 | 12.2% | | Operating Loss | $(118,586) | $(47,533) | $(71,053) | 149.5% | | Impairment of goodwill and intangible assets | $136,521 | $80,758 | $55,763 | 69.1% | | Net Loss Attributable to Common Stockholders | $(89,644) | $(37,938) | $(51,706) | 136.3% | - The increase in operating loss was primarily due to a **69.1%** increase in impairment of goodwill and intangible assets[3](index=3&type=chunk) [Segment Reporting](index=3&type=section&id=Segment%20Reporting) This section details Urban One's segment performance, including reclassifications, net revenue, operating expenses, and Adjusted EBITDA, highlighting declines across most segments and the impact of impairment charges [Segment Reclassification and Presentation Changes](index=3&type=section&id=Segment%20Reclassification%20and%20Presentation%20Changes) Effective January 1, 2025, Urban One reclassified its CTV offering to the Cable Television segment and recast prior period segment expenses to align with the Chief Operating Decision Maker's (CODM) performance evaluation presentation - Effective January 1, 2025, the CTV offering was transferred from the Digital segment to the Cable Television segment to align with operations[4](index=4&type=chunk) - Prior period segment information for Sales and marketing and General and administrative expenses was reclassified to conform to the current presentation used by the CODM[4](index=4&type=chunk) [Net Revenue by Segment](index=3&type=section&id=Net%20Revenue%20by%20Segment) All segments experienced revenue declines in both the three and six months ended June 30, 2025, with Reach Media showing the most significant percentage decrease due to the timing of the Fantastic Voyage cruise [Three Months Ended June 30, 2025 vs 2024](index=3&type=section&id=Net%20Revenue%20by%20Segment%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For Q2 2025, all segments reported decreased net revenue, with Reach Media experiencing the largest decline of **71.9%** due to the Fantastic Voyage cruise timing - For Q2 2025, all segments reported decreased net revenue, with Reach Media experiencing the largest decline of **71.9%** due to the Fantastic Voyage cruise timing[5](index=5&type=chunk)[12](index=12&type=chunk) Net Revenue by Segment (Three Months Ended June 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------- | :------------------ | :------------------ | :--------- | :--------- | | Radio Broadcasting | $36,693 | $41,999 | $(5,306) | (12.6)% | | Reach Media | $5,315 | $18,929 | $(13,614) | (71.9)% | | Digital | $10,254 | $14,072 | $(3,818) | (27.1)% | | Cable Television | $40,070 | $43,312 | $(3,242) | (7.5)% | - Radio Broadcasting revenue decreased primarily due to weaker overall market demand from national advertisers and lower event revenues[12](index=12&type=chunk) - Digital revenue decreased primarily due to lower national digital sales and direct revenue streams[12](index=12&type=chunk) - Cable Television revenue decreased primarily due to subscriber churn[12](index=12&type=chunk) [Six Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Net%20Revenue%20by%20Segment%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For the first half of 2025, all segments continued to show revenue declines, with Reach Media again having the largest percentage drop of **59.2%**, influenced by the Fantastic Voyage timing - For the first half of 2025, all segments continued to show revenue declines, with Reach Media again having the largest percentage drop of **59.2%**, influenced by the Fantastic Voyage timing[6](index=6&type=chunk)[12](index=12&type=chunk) Net Revenue by Segment (Six Months Ended June 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------- | :------------------ | :------------------ | :--------- | :--------- | | Radio Broadcasting | $69,303 | $78,350 | $(9,047) | (11.5)% | | Reach Media | $11,168 | $27,401 | $(16,233) | (59.2)% | | Digital | $20,466 | $26,260 | $(5,794) | (22.1)% | | Cable Television | $84,263 | $91,317 | $(7,054) | (7.7)% | [Operating Expenses by Segment](index=3&type=section&id=Operating%20Expenses%20by%20Segment) Total consolidated operating expenses increased in both periods, primarily driven by higher impairment charges, though most segments saw decreased programming, technical, selling, general, and administrative expenses when excluding impairment [Three Months Ended June 30, 2025 vs 2024](index=3&type=section&id=Operating%20Expenses%20by%20Segment%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Consolidated total operating expenses increased by **19.2%** to **$212.3 million**, largely due to a significant rise in impairment of goodwill and intangible assets - Consolidated total operating expenses increased by **19.2%** to **$212.3 million**, largely due to a significant rise in impairment of goodwill and intangible assets[3](index=3&type=chunk)[5](index=5&type=chunk) Consolidated Total Operating Expenses (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :------------------ | :------------------ | :--------- | :--------- | | Consolidated Total Operating Expenses | $212,315 | $178,165 | $34,150 | 19.2% | | Impairment of goodwill and intangible assets | $130,078 | $80,758 | $49,320 | 61.1% | - Operating expenses, excluding depreciation and amortization, stock-based compensation, and impairment, decreased by approximately **$15.2 million (16.3%)** due to lower expenses across most segments and reduced third-party professional fees[14](index=14&type=chunk) [Six Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Operating%20Expenses%20by%20Segment%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Consolidated total operating expenses for the first six months increased by **12.2%** to **$302.5 million**, primarily due to a **69.1%** increase in impairment charges - Consolidated total operating expenses for the first six months increased by **12.2%** to **$302.5 million**, primarily due to a **69.1%** increase in impairment charges[3](index=3&type=chunk)[6](index=6&type=chunk) Consolidated Total Operating Expenses (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :------------------ | :------------------ | :--------- | :--------- | | Consolidated Total Operating Expenses | $302,452 | $269,687 | $32,765 | 12.2% | | Impairment of goodwill and intangible assets | $136,521 | $80,758 | $55,763 | 69.1% | [Adjusted EBITDA by Segment](index=3&type=section&id=Adjusted%20EBITDA%20by%20Segment) Consolidated Adjusted EBITDA significantly decreased in both periods, with Reach Media and Digital segments reporting negative Adjusted EBITDA in 2025, highlighting their underperformance, while Cable Television remained the largest contributor despite a decline [Three Months Ended June 30, 2025 vs 2024](index=3&type=section&id=Adjusted%20EBITDA%20by%20Segment%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Consolidated Adjusted EBITDA decreased by **51.7%** to **$14.0 million** in Q2 2025, with Reach Media and Digital segments reporting negative Adjusted EBITDA - Consolidated Adjusted EBITDA decreased by **51.7%** to **$14.0 million**; Reach Media and Digital segments reported negative Adjusted EBITDA[5](index=5&type=chunk)[23](index=23&type=chunk) Adjusted EBITDA by Segment (Three Months Ended June 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------- | :------------------ | :------------------ | :--------- | :--------- | | Consolidated | $13,960 | $28,922 | $(14,962) | (51.7)% | | Radio Broadcasting | $6,938 | $9,495 | $(2,557) | (26.9)% | | Reach Media | $(1,651) | $3,457 | $(5,108) | (147.7)% | | Digital | $(146) | $2,714 | $(2,860) | (105.4)% | | Cable Television | $18,056 | $16,022 | $2,034 | 12.7% | - Cable Television was the only segment to show an increase in Adjusted EBITDA[5](index=5&type=chunk) [Six Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Adjusted%20EBITDA%20by%20Segment%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) Consolidated Adjusted EBITDA for the first half of 2025 decreased by **47.6%** to **$26.8 million**, with Reach Media and Digital segments remaining negative - Consolidated Adjusted EBITDA for the first half of 2025 decreased by **47.6%** to **$26.8 million**; Reach Media and Digital segments remained negative[6](index=6&type=chunk)[25](index=25&type=chunk) Adjusted EBITDA by Segment (Six Months Ended June 30) | Segment | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------- | :------------------ | :------------------ | :--------- | :--------- | | Consolidated | $26,817 | $51,179 | $(24,362) | (47.6)% | | Radio Broadcasting | $9,786 | $15,129 | $(5,343) | (35.3)% | | Reach Media | $(2,202) | $5,287 | $(7,489) | (141.6)% | | Digital | $(88) | $5,061 | $(5,149) | (101.7)% | | Cable Television | $36,648 | $35,323 | $1,325 | 3.7% | [Detailed Financial Performance Analysis](index=9&type=section&id=Detailed%20Financial%20Performance%20Analysis) This section provides a detailed analysis of Urban One's financial performance, examining net revenue by source, operating expenses, impairment charges, and other key financial metrics [Net Revenue by Source](index=9&type=section&id=Net%20Revenue%20by%20Source) All revenue sources experienced declines in both the three and six months ended June 30, 2025, with Event revenues & other showing the most significant percentage drop due to the Fantastic Voyage cruise timing, alongside a sharp decrease in political advertising [Three Months Ended June 30, 2025 vs 2024](index=9&type=section&id=Net%20Revenue%20by%20Source%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For Q2 2025, Event revenues & other plummeted by **81.2%**, and Political advertising decreased by **88.2%**, with all other revenue streams also experiencing declines - For Q2 2025, Event revenues & other plummeted by **81.2%**, and Political advertising decreased by **88.2%**; all other revenue streams also saw declines[13](index=13&type=chunk) Net Revenue by Source (Three Months Ended June 30) | Revenue Source | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Radio advertising | $38,627 | $45,421 | $(6,794) | (15.0)% | | Political advertising | $254 | $2,152 | $(1,898) | (88.2)% | | Digital advertising | $10,241 | $13,714 | $(3,473) | (25.3)% | | Cable Television advertising | $22,977 | $23,985 | $(1,008) | (4.2)% | | Cable Television affiliate fees | $17,061 | $19,315 | $(2,254) | (11.7)% | | Event revenues & other | $2,471 | $13,157 | $(10,686) | (81.2)% | | **Total Net Revenue** | **$91,631** | **$117,744** | **$(26,113)** | **(22.2)%** | [Six Months Ended June 30, 2025 vs 2024](index=9&type=section&id=Net%20Revenue%20by%20Source%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For the first half of 2025, Event revenues & other decreased by **73.2%**, and Political advertising by **88.1%**, contributing to an overall **17.2%** decrease in net revenue - For the first half of 2025, Event revenues & other decreased by **73.2%**, and Political advertising by **88.1%**; all other revenue streams also experienced declines, contributing to the overall **17.2%** decrease in net revenue[13](index=13&type=chunk) Net Revenue by Source (Six Months Ended June 30) | Revenue Source | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Radio advertising | $74,844 | $86,761 | $(11,917) | (13.7)% | | Political advertising | $404 | $3,388 | $(2,984) | (88.1)% | | Digital advertising | $20,452 | $25,881 | $(5,429) | (21.0)% | | Cable Television advertising | $48,402 | $51,129 | $(2,727) | (5.3)% | | Cable Television affiliate fees | $35,778 | $40,103 | $(4,325) | (10.8)% | | Event revenues & other | $3,986 | $14,892 | $(10,906) | (73.2)% | | **Total Net Revenue** | **$183,866** | **$222,154** | **$(38,288)** | **(17.2)%** | [Operating Expenses (Excluding Non-Cash Items)](index=10&type=section&id=Operating%20Expenses%20(Excluding%20Non-Cash%20Items)) Operating expenses, excluding depreciation, amortization, stock-based compensation, and impairment, decreased by approximately **$15.2 million (16.3%)** for Q2 2025, primarily due to lower expenses across most segments and reduced third-party professional fees Operating Expenses (Excluding Non-Cash Items) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------------------------------------------------------------------ | :------------------- | :------------------- | :--------- | :--------- | | Operating expenses (excluding D&A, stock-based comp, and impairment) | $78,100 | $93,300 | $(15,200) | (16.3)% | - The decrease was primarily due to lower expenses across most segments and lower third-party professional fees[14](index=14&type=chunk) [Impairment of Goodwill and Intangible Assets](index=10&type=section&id=Impairment%20of%20Goodwill%20and%20Intangible%20Assets) Impairment losses significantly increased to **$130.1 million** in Q2 2025, primarily driven by a **$121.3 million** impairment of radio broadcasting licenses within the Radio Broadcasting segment due to declining market revenues and operating profit margins, leading to a change in their useful life to finite-lived assets Impairment of Goodwill and Intangible Assets | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :------------------- | :------------------- | :--------- | :--------- | | Impairment of goodwill and intangible assets | $130,078 | $80,758 | $49,320 | 61.1% | - The Q2 2025 impairment loss was driven by approximately **$121.3 million** of impairment of radio broadcasting licenses within the Radio Broadcasting segment, **$4.9 million** within the Digital reporting unit, and **$3.9 million** in the Radio Broadcasting reporting units[15](index=15&type=chunk) - Primary factors leading to impairment were a continued decline of projected gross market revenues and a decline in operating profit margin, along with ongoing declines in national and local radio listenership[15](index=15&type=chunk) - Effective June 1, 2025, the Company prospectively changed the useful life of radio broadcasting licenses from indefinite-lived to finite-lived intangible assets, recording amortization expense of **$1.3 million** for Q2 2025[15](index=15&type=chunk) [Depreciation and Amortization](index=10&type=section&id=Depreciation%20and%20Amortization) Depreciation and amortization expense increased by **$0.5 million (17.7%)** to **$3.5 million** in Q2 2025, primarily due to TV One Trade Name amortization and new radio broadcasting license amortization, partially offset by lower depreciation on leasehold improvements Depreciation and Amortization Expense | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------- | :------------------- | :--------- | :--------- | | Depreciation and amortization | $3,523 | $2,993 | $530 | 17.7% | - The increase was due to TV One Trade Name amortization and radio broadcasting license amortization, offset by additional depreciation on leasehold improvements during Q2 2024[16](index=16&type=chunk) [Interest and Investment Income](index=10&type=section&id=Interest%20and%20Investment%20Income) Interest and investment income decreased by **$1.2 million (65.3%)** to **$0.6 million** in Q2 2025, driven by lower cash and cash equivalents balances compared to the prior year Interest and Investment Income | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------- | :------------------- | :--------- | :--------- | | Interest and investment income | $616 | $1,777 | $(1,161) | (65.3)% | - The decrease was driven by lower cash and cash equivalents balances during Q2 2025[17](index=17&type=chunk) [Interest Expense and Debt Retirement](index=10&type=section&id=Interest%20Expense%20and%20Debt%20Retirement) Interest expense decreased by **$2.7 million (21.8%)** to **$9.7 million** in Q2 2025, as the company repurchased **$64.0 million** of its 2028 Notes at approximately **51.8% of par**, resulting in a significant net gain on retirement of debt of **$30.3 million** Interest Expense and Gain on Retirement of Debt | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------- | :------------------- | :--------- | :--------- | | Interest expense | $9,704 | $12,404 | $(2,700) | (21.8)% | | Gain on retirement of debt | $30,297 | $7,425 | $22,872 | 308.0% | - During Q2 2025, the Company repurchased approximately **$64.0 million** of its 2028 Notes at a weighted average price of approximately **51.8% of par**[18](index=18&type=chunk) [Benefit from Income Taxes](index=10&type=section&id=Benefit%20from%20Income%20Taxes) For Q2 2025, the company recorded a benefit from income taxes of **$21.4 million** on a pre-tax loss of **$99.4 million**, resulting in an effective tax rate of **21.5%**, which included **$6.4 million** of discrete tax expense related to the change in accounting estimate for radio broadcasting licenses Benefit from Income Taxes | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :-------------------------- | :------------------- | :------------------- | | Benefit from income taxes | $21,382 | $18,512 | | Pre-tax loss | $(99,351) | $(63,609) | | Annual effective tax rate | 21.5% | 29.1% | - The Q2 2025 effective tax rate includes **$6.4 million** of discrete tax expense related to the change of accounting estimate for radio broadcasting licenses[19](index=19&type=chunk) [Capital Expenditures](index=10&type=section&id=Capital%20Expenditures) Capital expenditures for Q2 2025 were **$1.2 million**, representing a decrease of **$1.0 million (45.5%)** from **$2.2 million** in Q2 2024 Capital Expenditures | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------- | :------------------- | :--------- | :--------- | | Capital expenditures | $1,200 | $2,200 | $(1,000) | (45.5)% | [Share Repurchases](index=10&type=section&id=Share%20Repurchases) In Q2 2025, Urban One repurchased **226,041 shares** of Class A Common Stock for **$0.4 million** and **200,549 shares** of Class D Common Stock for **$0.1 million**, indicating decreased repurchase activity compared to Q2 2024 Share Repurchases (Three Months Ended June 30) | Share Class | Q2 2025 Shares | Q2 2025 Amount (in thousands) | Q2 2025 Avg Price | Q2 2024 Shares | Q2 2024 Amount (in thousands) | Q2 2024 Avg Price | | :---------------- | :------------- | :---------------------------- | :---------------- | :------------- | :---------------------------- | :---------------- | | Class A Common Stock | 226,041 | $400 | $1.63 | 449,277 | $900 | $2.06 | | Class D Common Stock | 200,549 | $100 | $0.59 | 113,283 | $200 | $1.57 | [Per Share Data and Non-GAAP Reconciliations](index=6&type=section&id=Per%20Share%20Data%20and%20Non-GAAP%20Reconciliations) This section presents per share data and reconciliations of non-GAAP financial measures, including Broadcast and Digital Operating Income and Adjusted EBITDA, highlighting significant declines in profitability metrics [Per Share Data (Basic and Diluted)](index=6&type=section&id=Per%20Share%20Data%20(Basic%20and%20Diluted)) Net loss attributable to common stockholders per share (basic and diluted) increased significantly to **$(1.74)** for Q2 2025 and to **$(2.00)** for the six months ended June 30, 2025, reflecting a substantial widening of losses Net Loss Attributable to Common Stockholders Per Share (Basic and Diluted) | Period | 2025 | 2024 | Change | | :-------------------------- | :----- | :----- | :----- | | Three Months Ended June 30 | $(1.74) | $(0.94) | $(0.80) | | Six Months Ended June 30 | $(2.00) | $(0.78) | $(1.22) | - Weighted-average shares outstanding (basic) decreased from **48,483,639** in Q2 2024 to **44,738,306** in Q2 2025[7](index=7&type=chunk) [Broadcast and Digital Operating Income Reconciliation](index=6&type=section&id=Broadcast%20and%20Digital%20Operating%20Income%20Reconciliation) Broadcast and digital operating income decreased by **25.0%** to **$25.7 million** in Q2 2025 and by **26.5%** to **$48.7 million** for the six months ended June 30, 2025, primarily due to overall net revenue decline and increased impairment charges Broadcast and Digital Operating Income | Period | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Three Months Ended June 30 | $25,664 | $34,196 | $(8,532) | (25.0)% | | Six Months Ended June 30 | $48,680 | $66,210 | $(17,530) | (26.5)% | - Broadcast and digital operating income is a non-GAAP measure used by management to evaluate the operating performance of core operating segments, excluding expenses associated with fixed assets, goodwill and intangible assets, income taxes, investments, impairment charges, debt financings and retirements, corporate overhead, and stock-based compensation[30](index=30&type=chunk) [Adjusted EBITDA Reconciliation](index=6&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA decreased by **51.7%** to **$14.0 million** in Q2 2025 and by **47.6%** to **$26.8 million** for the six months ended June 30, 2025, reflecting challenging market conditions and revenue declines across most segments Adjusted EBITDA | Period | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Three Months Ended June 30 | $13,960 | $28,922 | $(14,962) | (51.7)% | | Six Months Ended June 30 | $26,817 | $51,179 | $(24,362) | (47.6)% | - Adjusted EBITDA is a non-GAAP measure used by management to evaluate operating performance, excluding items such as depreciation and amortization, income taxes, interest expense, and impairment of intangible assets[30](index=30&type=chunk) - In 2024, an immaterial change was made to the definition of Adjusted EBITDA by adding back the loss from ceased non-core operations, with all historical periods recast to reflect this change[9](index=9&type=chunk) [Balance Sheet and Leverage](index=8&type=section&id=Balance%20Sheet%20and%20Leverage) This section provides an overview of Urban One's balance sheet and leverage position, highlighting decreases in cash, total assets, and equity, alongside a reduction in total debt [Selected Consolidated Balance Sheet Data](index=8&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Data) As of June 30, 2025, cash and cash equivalents decreased by **37.3%**, total assets declined by **22.8%** primarily due to reduced intangible assets, and total stockholders' equity saw a substantial **51.9%** reduction, alongside decreases in total debt and liabilities Selected Consolidated Balance Sheet Data (as of June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | :--------- | | Cash and cash equivalents and restricted cash | $86,217 | $137,574 | $(51,357) | (37.3)% | | Intangible assets, net | $345,524 | $490,024 | $(144,500) | (29.5)% | | Total assets | $729,227 | $944,790 | $(215,563) | (22.8)% | | Total debt | $488,396 | $579,069 | $(90,673) | (15.7)% | | Total liabilities | $644,468 | $765,857 | $(121,389) | (15.9)% | | Total stockholders' equity | $82,182 | $170,945 | $(88,763) | (51.9)% | - Intangible assets, net, include Goodwill, Radio Broadcasting Licenses, net, Other Intangible Assets, net, and Launch Assets[10](index=10&type=chunk) [Selected Leverage Data](index=8&type=section&id=Selected%20Leverage%20Data) As of June 30, 2025, the company's total debt primarily consisted of **$488.4 million** in **7.375%** senior secured notes due February 2028 Selected Leverage Data (as of June 30, 2025) | Debt Instrument | Amount (in thousands) | Applicable Interest Rate | | :------------------------------------------------------------------------------------------------ | :-------------------- | :----------------------- | | 7.375% senior secured notes due February 2028, net of issuance costs of approximately $3.9 million | $488,396 | 7.375% | [Corporate Information and Disclosures](index=8&type=section&id=Corporate%20Information%20and%20Disclosures) This section provides essential corporate information, including cautionary notes on forward-looking statements, a company overview, definitions of non-GAAP financial measures, and conference call details [Cautionary Note Regarding Forward-Looking Statements](index=8&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section advises that the press release contains forward-looking statements based on management's current expectations, which involve known and unknown risks and uncertainties that could cause actual results to differ materially, and refers readers to Urban One's SEC filings for important factors - The press release includes forward-looking statements based on management's current expectations[11](index=11&type=chunk) - These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[11](index=11&type=chunk) - Readers are referred to Urban One's reports on Forms 10-K, 10-Q, 8-K and other SEC filings for important factors[11](index=11&type=chunk) - Urban One does not undertake any duty to update any forward-looking statements[11](index=11&type=chunk) [Company Overview](index=15&type=section&id=Company%20Overview) Urban One, Inc. is the largest diversified media company primarily targeting Black Americans and urban consumers in the U.S., with assets including TV One, **74 broadcast stations**, syndicated programming via Reach Media, and digital platforms like iOne Digital - Urban One, Inc. is the largest diversified media company primarily targeting Black Americans and urban consumers in the United States[29](index=29&type=chunk) - The Company owns TV One, LLC, a television network serving over **35 million households**[29](index=29&type=chunk) - As of June 30, 2025, the Company owned and/or operated **74 independently formatted, revenue producing broadcast stations** in **13 of the most populous African-American markets**[29](index=29&type=chunk) - Through its controlling interest in Reach Media, Inc., the Company operates syndicated programming including the Rickey Smiley Morning Show and the DL Hughley Show[29](index=29&type=chunk) - Urban One owns iOne Digital, a wholly owned digital platform serving the African American community through social content, news, information, and entertainment websites, including Cassius, Bossip, HipHopWired, and MadameNoire[29](index=29&type=chunk) [Non-GAAP Financial Measures Definitions](index=15&type=section&id=Non-GAAP%20Financial%20Measures%20Definitions) This section defines and explains the non-GAAP financial measures "Broadcast and digital operating income" and "Adjusted EBITDA," clarifying their use by management to evaluate core operating performance while excluding certain non-operating, non-cash, or corporate overhead items - Broadcast and digital operating income is a non-GAAP measure used by management to evaluate the operating performance of core operating segments, excluding items such as depreciation and amortization, income taxes, interest expense, and impairment of intangible assets[30](index=30&type=chunk) - Adjusted EBITDA is a non-GAAP measure that consists of net (loss) income plus depreciation and amortization, income taxes, interest expense, impairment of intangible assets, stock-based compensation, gain/loss on retirement of debt, corporate development costs, severance-related costs, investment income, loss from unconsolidated joint venture, loss from ceased non-core business initiatives, less other income, net and interest and investment income[30](index=30&type=chunk) - Both Broadcast and digital operating income and Adjusted EBITDA do not represent operating income or cash flow from operating activities as defined under GAAP and should not be considered as alternatives to those measurements[30](index=30&type=chunk) [Conference Call Information](index=15&type=section&id=Conference%20Call%20Information) Urban One, Inc. scheduled a conference call for August 13, 2025, at 10:00 a.m. EDT to discuss its Q2 2025 results, with replay information and web access details provided - A conference call to discuss Q2 2025 results was scheduled for Wednesday, August 13, 2025, at **10:00 a.m. EDT**[27](index=27&type=chunk) - U.S. callers could dial toll-free **(+1) 888-596-4144**; international callers could dial direct **(+1) 646-968-2525**, with Access Code **3660282**[27](index=27&type=chunk) - A replay of the conference call was available from August 13, 2025, until August 20, 2025, via phone and on Urban One's corporate website at **www.urban1.com**[28](index=28&type=chunk)

[Financial Statements](index=3&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Stratasys' total assets grew to $1.14 billion by June 30, 2025, with equity increasing to $902.4 million from a PIPE transaction Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $614,846 | $512,961 | | **Total Assets** | $1,138,987 | $1,029,746 | | **Total Current Liabilities** | $166,049 | $167,214 | | **Total Liabilities** | $236,606 | $236,755 | | **Total Equity** | $902,381 | $792,991 | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 revenues were flat at $138.1 million, with operating loss narrowing to $16.6 million and net loss per share improving to $(0.20) Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total Revenues** | $138,086 | $138,041 | | **Gross Profit** | $59,494 | $60,500 | | **Operating Loss** | $(16,620) | $(26,043) | | **Net Loss** | $(16,745) | $(25,743) | | **Net Loss Per Share** | $(0.20) | $(0.36) | H1 2025 vs H1 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $274,132 | $282,091 | | **Gross Profit** | $119,733 | $124,397 | | **Operating Loss** | $(29,024) | $(50,496) | | **Net Loss** | $(29,799) | $(51,726) | | **Net Loss Per Share** | $(0.38) | $(0.74) | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to $902.4 million by June 30, 2025, primarily due to $119.3 million net proceeds from a PIPE transaction - A Private Investment in Public Equity (PIPE) transaction resulted in the issuance of 11.65 million new ordinary shares, providing net proceeds of **$119.3 million**, which was the main contributor to the increase in total equity[7](index=7&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $3.4 million for H1 2025, with significant investing outflows offset by $118.3 million from financing activities Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $3,431 | $4,901 | | **Net cash used in investing activities** | $(123,943) | $(14,941) | | **Net cash provided by (used in) financing activities** | $118,284 | $(701) | | **Net change in cash, cash equivalents and restricted cash** | $841 | $(11,728) | [Notes to Condensed Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 1. Business Description and Basis of Presentation](index=11&type=section&id=Note%201.%20Business%20Description%20and%20Basis%20of%20Presentation) Stratasys, a global leader in polymer-based 3D printing, prepares financial statements under U.S. GAAP, noting limited impact from the Israel conflict - Stratasys is a global leader in connected, polymer-based 3D printing solutions, focusing on the manufacturing sector[11](index=11&type=chunk) - The military conflict in Israel has had a **limited impact** on the company's operations and financial condition for the first half of 2025[14](index=14&type=chunk) [Note 2. New Accounting Pronouncements](index=11&type=section&id=Note%202.%20New%20Accounting%20Pronouncements) The company is evaluating new accounting standards for income tax disclosures, expense disaggregation, and business combinations, effective in future periods - The company is assessing new accounting standards that will enhance disclosures for income taxes (ASU 2023-09), expense disaggregation (ASU 2024-03), and business combinations (ASU 2025-03), which are effective in future periods[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) [Note 3. Certain Transactions](index=13&type=section&id=Note%203.%20Certain%20Transactions) The company's equity investment in Ultimaker was **$35.1 million**, with a **$4.0 million** share of losses, and completed minor acquisitions including Forward AM - The company's equity investment in Ultimaker amounted to **$35.1 million** as of June 30, 2025. The share in Ultimaker's losses for the first six months of 2025 was approximately **$4.0 million**[23](index=23&type=chunk) - During the first half of 2025, the company completed several small acquisitions, including Forward AM and certain assets from Nexa3D Inc[24](index=24&type=chunk) [Note 4. Revenues](index=14&type=section&id=Note%204.%20Revenues) H1 2025 revenue slightly decreased to $274.1 million, with Americas as the largest market and remaining performance obligations at **$95.1 million** Revenue by Geographical Region - Six Months Ended June 30 (in thousands) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Americas | $165,095 | $170,296 | | EMEA | $74,001 | $75,526 | | Asia Pacific | $35,036 | $36,269 | | **Total Revenues** | **$274,132** | **$282,091** | - As of June 30, 2025, the company had **$95.1 million** in Remaining Performance Obligations (RPO), with **$63.7 million** expected to be recognized as revenue within the next 12 months[31](index=31&type=chunk) [Note 5. Inventories](index=17&type=section&id=Note%205.%20Inventories) Total inventories decreased to **$164.6 million** by June 30, 2025, from **$179.8 million** at year-end 2024, reflecting improved management Inventory Breakdown (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finished goods | $83,589 | $90,702 | | Work-in-process | $7,856 | $7,491 | | Raw materials | $73,140 | $81,616 | | **Total** | **$164,585** | **$179,809** | [Note 6. Goodwill and Other Intangible Assets](index=17&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill increased to **$101.6 million** due to acquisitions and currency adjustments, with other intangible assets stable at **$106.0 million** - Goodwill increased by **$2.5 million** in the first half of 2025, primarily from acquisitions (**$0.7 million**) and currency translation adjustments (**$1.8 million**)[34](index=34&type=chunk) - The net book value of other intangible assets was **$106.0 million** as of June 30, 2025, with developed technology (**$78.9 million**) being the largest component[35](index=35&type=chunk) [Note 7. Net Loss Per Share](index=18&type=section&id=Note%207.%20Net%20Loss%20Per%20Share) Net loss per share significantly improved to **$(0.20)** for Q2 2025 and **$(0.38)** for H1 2025, with no dilutive shares included Net Loss Per Share (Basic and Diluted) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $(0.20) | $(0.36) | | **Six Months Ended June 30** | $(0.38) | $(0.74) | [Note 8. Income Taxes](index=18&type=section&id=Note%208.%20Income%20Taxes) Income tax expense for H1 2025 was **$1.5 million**, consistent with the prior year, influenced by geographic earnings distribution - The company recorded income tax expenses of **$1.5 million** for the six-month period ended June 30, 2025, consistent with the same period in 2024[39](index=39&type=chunk) [Note 9. Fair Value Measurements](index=19&type=section&id=Note%209.%20Fair%20Value%20Measurements) Significant Level 3 fair value measurements include **$11.8 million** in convertible notes assets and **$13.0 million** in contingent consideration liabilities - The company's most significant Level 3 fair value measurements are convertible notes assets of **$11.8 million** and contingent consideration liabilities of **$13.0 million**[40](index=40&type=chunk) [Note 10. Derivative instruments and hedging activities](index=20&type=section&id=Note%2010.%20Derivative%20instruments%20and%20hedging%20activities) The company uses foreign currency forward contracts to hedge exchange rate volatility, with a total notional amount of **$213.4 million** as of June 30, 2025 - The company uses derivative financial instruments to manage its net exposure to foreign currency exchange rates, primarily the NIS, Euro, British Pound, and several Asian currencies[43](index=43&type=chunk)[44](index=44&type=chunk) - As of June 30, 2025, the company had foreign exchange forward contracts designated as cash flow hedges for the conversion of **$30.2 million** into NIS and **€68.4 million** into dollars[47](index=47&type=chunk)[49](index=49&type=chunk) [Note 11. Equity](index=21&type=section&id=Note%2011.%20Equity) Equity changes include a **$120 million** PIPE transaction, no share repurchases, and **$12.4 million** in share-based compensation for H1 2025 - On April 8, 2025, the company completed a **$120 million** private investment in public equity (PIPE) transaction, issuing **11.65 million** new shares at **$10.30** per share[53](index=53&type=chunk) - The company has a **$50 million** share repurchase program authorized in September 2024, but no shares were repurchased during the first six months of 2025[51](index=51&type=chunk)[52](index=52&type=chunk) Share-Based Compensation Expenses (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $6,138 | $7,346 | | **Six Months Ended June 30** | $12,351 | $15,995 | [Note 12. Contingencies](index=24&type=section&id=Note%2012.%20Contingencies) The company is involved in ordinary course legal proceedings, which management expects will not significantly impact its financial position or results - The company is a party to various ordinary course legal proceedings, which management does not expect to have a **significant effect** on its financial position, profitability, or cash flows[58](index=58&type=chunk) [Note 13. Segment](index=25&type=section&id=Note%2013.%20Segment) Stratasys operates as a **single operating and reportable segment**, focusing on 3D printing systems, services, and consumables - The company's business is managed as a **single operating and reportable segment**, generating revenues from 3D printing systems, related services, consumables, and additive manufacturing solutions[59](index=59&type=chunk) [Note 14. Restructuring costs](index=25&type=section&id=Note%2014.%20Restructuring%20costs) The 2024 Restructuring Plan was substantially completed by year-end 2024, with a remaining liability of **$3.6 million** as of June 30, 2025 - The 2024 Restructuring Plan, aimed at achieving **$40 million** in annualized cost savings, was substantially completed by the end of 2024[60](index=60&type=chunk) - As of June 30, 2025, the accrued liability for the 2024 Restructuring Plan was **$3.6 million**[61](index=61&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: 001-36616 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2801 Diode Lane Louisv ...

[Financial Highlights and Management Commentary](index=1&type=section&id=Financial%20Highlights%20and%20Management%20Commentary) This section covers key financial performance and management's strategic outlook [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) American Shared Hospital Services reported a **16% sequential revenue increase** in Q2 2025, driven by strong Gamma Knife and LINAC performance, despite flat year-over-year total revenue Q2 2025 Revenue Performance vs. Prior Periods | Revenue Category | Sequential Change (vs Q1 2025) | Year-over-Year Change (vs Q2 2024) | | :--- | :--- | :--- | | **Total Revenue** | ▲ 16% | ▲ 0.2% | | **Gamma Knife Revenue** | ▲ 25% | ▼ 5% | | **LINAC Revenue** | ▲ 7% | ▲ 34% | | **Proton Beam Radiation Therapy Revenue** | ▲ 17% | ▼ 21% | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed optimism for growth, focusing on direct patient services, operational efficiencies, and strategic acquisitions, highlighting diversification success - The CEO highlighted a focus on expanding the business model and operational enhancements, with expected growth from a new Esprit system in Guadalajara, Mexico, and expansion in Rhode Island[2](index=2&type=chunk) - The CFO emphasized the positive momentum from the growth strategy, which focuses on shifting from a traditional leasing model to being a direct provider of radiation therapy services[2](index=2&type=chunk) - The Executive Chairman noted four years of consecutive revenue growth and three years of sustained profitability, underscoring the success of recent acquisitions and the ongoing pursuit of additional strategic tuck-in acquisitions[4](index=4&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) This section details the company's financial performance for Q2 and year-to-date 2025, including revenue, gross margin, and net income [Second Quarter 2025 Performance (Three Months Ended June 30, 2025)](index=2&type=section&id=Second%20Quarter%202025%20Performance%20(Three%20Months%20Ended%20June%2030%2C%202025)) Q2 2025 revenue was **$7.1 million**, up **0.2%** year-over-year, but the company reported a **net loss of $280,000** due to lower volumes and the absence of a prior-year bargain purchase gain Q2 2025 vs. Q2 2024 Financial Summary (in US Dollars) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $7,071,000 | $7,056,000 | ▲ 0.2% | | Gross Margin | $1,630,000 | $2,468,000 | ▼ 34.0% | | Net (Loss)/Income | $(280,000) | $3,602,000 | - | | Diluted EPS | $(0.04) | $0.55 | - | | Adjusted EBITDA | $1,701,000 | $2,010,000 | ▼ 15.4% | - Revenue from the direct patient services segment grew **11% to $3.5 million**, primarily due to the Rhode Island centers and the new facility in Puebla, Mexico[6](index=6&type=chunk) - Revenue from the medical equipment leasing segment fell **8% to $3.6 million** due to lower Gamma Knife volumes from expired contracts and decreased PBRT volumes[7](index=7&type=chunk) - The net loss in Q2 2025 contrasts with a large net income in Q2 2024, which included a **$3,679,000 net bargain purchase gain** from the RI Acquisition[9](index=9&type=chunk) [Year-to-Date 2025 Performance (Six Months Ended June 30, 2025)](index=3&type=section&id=Year-to-Date%202025%20Performance%20(Six%20Months%20Ended%20June%2030%2C%202025)) H1 2025 revenue increased **7% to $13.2 million**, driven by direct patient services, but resulted in a **net loss of $905,000** compared to prior year's profit H1 2025 vs. H1 2024 Financial Summary (in US Dollars) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $13,183,000 | $12,272,000 | ▲ 7.4% | | Gross Margin | $2,572,000 | $4,611,000 | ▼ 44.2% | | Net (Loss)/Income | $(905,000) | $3,721,000 | - | | Diluted EPS | $(0.14) | $0.57 | - | | Adjusted EBITDA | $2,650,000 | $3,754,000 | ▼ 29.4% | - Direct patient services revenue grew **61% to $6.6 million**, while leasing segment revenue decreased to **$6.6 million** due to expired contracts, equipment downtime, and lower PBRT volumes[11](index=11&type=chunk)[12](index=12&type=chunk) - The net loss for the first half of 2025 is compared against a net income in H1 2024 that included a **$3,679,000 net bargain purchase gain**[14](index=14&type=chunk) [Balance Sheet Highlights](index=3&type=section&id=Balance%20Sheet%20Highlights) This section provides a snapshot of the company's financial position, including cash, total assets, and shareholders' equity [Balance Sheet Summary](index=3&type=section&id=Balance%20Sheet%20Summary) As of June 30, 2025, cash and equivalents remained stable at **$11.3 million**, total assets increased to **$63.5 million**, and shareholders' equity was **$24.5 million** Balance Sheet Data (Unaudited, in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | $11,331,000 | $11,275,000 | | Total assets | $63,494,000 | $60,197,000 | | Shareholders' equity (excluding NCI) | $24,481,000 | $25,183,000 | | Equity per outstanding share | $3.78 | $3.92 | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) This section provides details on the upcoming conference call, non-GAAP financial measures, and condensed consolidated financial statements [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) The company scheduled a conference call for August 13, 2025, at 1:00 PM ET to discuss Q2 2025 financial results, with replay options available - A conference call to discuss Q2 2025 results was scheduled for 1:00 pm ET on the day of the earnings release[16](index=16&type=chunk) - Details for participation, including phone numbers and a webcast link, were provided, and a replay will be available through August 20, 2025[17](index=17&type=chunk)[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA is used as a non-GAAP measure to assess core operational performance, excluding non-recurring items, with a detailed reconciliation provided - Adjusted EBITDA is defined as net income (loss) adjusted for interest, taxes, depreciation, amortization, stock-based compensation, bargain purchase gains, and asset write-down costs[22](index=22&type=chunk) - Management uses this non-GAAP measure for period-to-period comparisons, believing it provides supplemental information on the performance of the recurring core business[23](index=23&type=chunk) Reconciliation of GAAP Net (Loss) Income to Non-GAAP Adjusted EBITDA (in US Dollars) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Net (loss) income** | **$(280,000)** | **$3,602,000** | **$(905,000)** | **$3,721,000** | | Adjustments | $1,981,000 | $(1,592,000) | $3,555,000 | $(133,000) | | **Adjusted EBITDA** | **$1,701,000** | **$2,010,000** | **$2,650,000** | **$3,754,000** | [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated statements of operations and balance sheet data for the reported periods Condensed Consolidated Statements of Operations (Unaudited, in US Dollars) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Revenues** | $7,071,000 | $7,056,000 | $13,183,000 | $12,272,000 | | **Gross margin** | $1,630,000 | $2,468,000 | $2,572,000 | $4,611,000 | | **Operating (loss)** | $(544,000) | $(1,000) | $(1,843,000) | $(86,000) | | **Net (loss) income attributable to AMS** | $(280,000) | $3,602,000 | $(905,000) | $3,721,000 |

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents BV Financial, Inc.'s unaudited consolidated financial statements for Q2 2025, covering balance sheets, income, comprehensive income, equity, and cash flows, with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$908.3 million** at June 30, 2025, driven by cash reduction for FHLB repayment, while net loans and deposits increased Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $56,323 | $70,500 | -20.1% | | Net loans | $742,414 | $729,238 | +1.8% | | **Total assets** | **$908,327** | **$911,821** | **-0.4%** | | Total deposits | $658,891 | $651,491 | +1.1% | | FHLB borrowings | $0 | $15,000 | -100.0% | | **Total liabilities** | **$710,336** | **$716,322** | **-0.8%** | | **Total stockholders' equity** | **$197,991** | **$195,499** | **+1.3%** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income decreased for both Q2 and six-month periods of 2025, primarily due to increased compensation expenses and a shift to credit loss provisions Income Statement Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $9,156 | $8,909 | $17,799 | $16,872 | | Provision (Recovery) for credit losses | $178 | ($111) | $475 | ($92) | | Total noninterest income | $714 | $596 | $1,243 | $1,174 | | Total noninterest expense | $5,755 | $4,897 | $11,932 | $9,820 | | **Net income** | **$2,861** | **$3,399** | **$4,960** | **$5,973** | | **Diluted earnings per share** | **$0.29** | **$0.32** | **$0.50** | **$0.52** | - Compensation and related benefits expense increased significantly to **$4.0 million** in Q2 2025 from **$3.1 million** in Q2 2024, and to **$8.5 million** for the six months of 2025 from **$6.2 million** in the prior year period[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income was **$2.9 million** for Q2 2025 and **$5.2 million** for the six months, including net income and unrealized gains on securities Comprehensive Income (in thousands) | Component | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $2,861 | $3,399 | $4,960 | $5,973 | | Other comprehensive income | $75 | $119 | $269 | $121 | | **Total comprehensive income** | **$2,936** | **$3,518** | **$5,229** | **$6,094** | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased to **$198.0 million** at June 30, 2025, driven by net income, partially offset by **$5.3 million** in stock repurchases - For the six months ended June 30, 2025, the company repurchased shares for a total cost of **$5.265 million**[17](index=17&type=chunk) - Net income of **$4.960 million** and other comprehensive income of **$269,000** contributed positively to equity, while stock repurchases were the primary offsetting factor[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents decreased by **$14.2 million** for the six months ended June 30, 2025, due to investing and financing activities, despite operating cash flow Net Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,148 | $6,068 | | Net cash (used in) provided by investing activities | ($10,520) | $5,353 | | Net cash (used in) provided by financing activities | ($10,805) | $5,476 | | **Net (decrease) and increase in cash** | **($14,177)** | **$16,897** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial items, including loan and securities portfolios, credit loss allowances, deposit structure, and regulatory capital - The company's primary business is attracting public deposits to fund various loans, including one-to-four-family real estate, commercial real estate, and construction loans, mainly in the Baltimore metropolitan area and the Eastern Shore of Maryland[24](index=24&type=chunk)[28](index=28&type=chunk) - The Allowance for Credit Losses (ACL) on loans was **$9.2 million** as of June 30, 2025, up from **$8.5 million** at year-end 2024, with the methodology using historical loss rates adjusted for a 12-month GDP forecast[79](index=79&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) - Total loans increased to **$751.6 million**, with commercial investor real estate loans comprising the largest segment at **43.67%** of the portfolio[79](index=79&type=chunk) - As of June 30, 2025, the Bank exceeded all regulatory capital requirements to be considered 'well capitalized', with a Tier 1 leverage ratio of **19.75%** and a Total Capital ratio of **25.70%**[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operating results, covering balance sheet changes, net interest income, credit losses, noninterest items, and asset quality [Comparison of Financial Condition at June 30, 2025 (unaudited) and December 31, 2024](index=40&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) Total assets decreased to **$908.3 million** due to cash reduction for FHLB repayment, partially offset by increased loans, deposits, and stockholders' equity - Total assets decreased by **0.4%** to **$908.3 million** at June 30, 2025[176](index=176&type=chunk) - Loans receivable increased by **1.9%** to **$751.6 million**, while cash and cash equivalents decreased by **20.1%** to **$56.3 million**[177](index=177&type=chunk)[178](index=178&type=chunk) - Total liabilities decreased by **0.8%** to **$710.3 million**, primarily due to the repayment of FHLB borrowings, while total deposits increased by **1.1%**[180](index=180&type=chunk)[181](index=181&type=chunk) - Stockholders' equity increased by **1.3%** to **$198.0 million**, reflecting net income partially offset by **$4.3 million** in stock repurchases[182](index=182&type=chunk) [Comparison of Operating Results for the Three and Six Months Ended June 30, 2025 and 2024](index=41&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net income decreased for both Q2 and six-month periods of 2025, primarily due to increased credit loss provisions and higher non-interest expenses, despite net interest income growth Net Income and EPS Comparison | Period | Net Income (2025) | Net Income (2024) | Diluted EPS (2025) | Diluted EPS (2024) | | :--- | :--- | :--- | :--- | :--- | | **Three Months** | $2.9M | $3.4M | $0.29 | $0.32 | | **Six Months** | $5.0M | $6.0M | $0.50 | $0.52 | - Net interest income for Q2 2025 increased to **$9.2 million** from **$8.9 million** in Q2 2024, with the net interest margin rising slightly to **4.36%** from **4.33%**[204](index=204&type=chunk) - A provision for credit losses of **$178,000** was recorded in Q2 2025, compared to a recovery of **$111,000** in Q2 2024[206](index=206&type=chunk) - Non-interest expense for Q2 2025 rose to **$5.8 million** from **$4.9 million** in Q2 2024, primarily due to a **$927,000** increase in compensation and benefits, which included **$1.1 million** in costs for the 2024 Equity Incentive Plan[208](index=208&type=chunk) [Asset Quality](index=46&type=section&id=Asset%20Quality) Asset quality slightly deteriorated, with non-performing assets increasing to **$4.5 million**, and the allowance for credit losses rising to **$9.2 million** Asset Quality Metrics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-performing assets | $4.5 million | $4.2 million | | Non-performing loans | $4.4 million | $4.0 million | | Allowance for credit losses (ACL) | $9.2 million | $8.5 million | | ACL to total loans | 1.22% | 1.15% | | ACL to non-performing loans | 208.6% | 212.5% | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, with primary sources including deposits and FHLB borrowing capacity, exceeding all regulatory capital requirements - Primary sources of funds are deposits, loan and security payments, and FHLB borrowings[213](index=213&type=chunk) - At June 30, 2025, the company had a **$165.5 million** line of credit with the FHLB and a **$20.0 million** short-term unsecured facility from a correspondent bank[213](index=213&type=chunk) - Uninsured deposits were **$171.5 million** (**24.9%** of total deposits), of which **$53.2 million** were secured by collateral or FHLB letters of credit[215](index=215&type=chunk) - The Bank was categorized as **'well capitalized'** at June 30, 2025, exceeding all regulatory capital requirements[216](index=216&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the Company qualifies as a smaller reporting company - The company, as a smaller reporting company, is not required to provide these disclosures[217](index=217&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[218](index=218&type=chunk) - No material changes were identified in the company's internal controls over financial reporting during the quarter ended June 30, 2025[219](index=219&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal actions, with management expecting no material adverse effect on financial condition or results - The company is subject to routine legal actions but does not expect them to have a material financial impact[222](index=222&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - Risk factors remain consistent with those disclosed in the 2024 Annual Report on Form 10-K[223](index=223&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity) The company actively repurchases stock, completing one program in January 2025 and announcing a new 10% repurchase program in April 2025 - On April 4, 2025, the Company announced a new stock repurchase program for up to **10%** of its outstanding common stock (approximately **1,059,404 shares**)[224](index=224&type=chunk) Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 40,700 | $15.33 | | May 2025 | 116,300 | $15.85 | | June 2025 | 120,080 | $14.73 | | **Total** | **277,080** | **$15.29** | [Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - There were no defaults upon senior securities[227](index=227&type=chunk) [Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - This item is not applicable to the company[228](index=228&type=chunk) [Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q2 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[229](index=229&type=chunk) [Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - Exhibits include CEO and CFO certifications (302 and 906) and Inline XBRL financial data[231](index=231&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Bogota Financial Corp.'s unaudited consolidated financial statements, offering a quantitative overview of its performance and financial position for the periods ended June 30, 2025 [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets decreased to **$921.8 million** at June 30, 2025, primarily due to reduced cash and net loans, while liabilities also fell and equity slightly increased Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $20,334 | $52,232 | (61.1)% | | Loans, net | $693,211 | $711,716 | (2.6)% | | Securities available for sale | $144,602 | $140,307 | 3.1% | | **Total Assets** | **$921,835** | **$971,490** | **(5.1)%** | | Total deposits | $628,230 | $642,188 | (2.2)% | | FHLB advances (short & long term) | $135,944 | $172,173 | (21.0)% | | **Total Liabilities** | **$783,395** | **$834,201** | **(6.1)%** | | **Total Stockholders' Equity** | **$138,440** | **$137,289** | **0.8%** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company achieved net income of **$224 thousand** in Q2 2025 and **$955 thousand** for the six months, a significant turnaround from prior year losses, driven by higher net interest income Key Income Statement Data (in thousands) | 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 Interest Income | $3,695 | $2,744 | $7,288 | $5,395 | | Provision (Recovery) for Credit Losses | $0 | $35 | ($80) | $70 | | Non-interest Income | $332 | $303 | $1,221 | $602 | | Non-interest Expense | $3,855 | $3,726 | $7,714 | $7,369 | | **Net Income (Loss)** | **$224** | **($432)** | **$955** | **($873)** | | **EPS - diluted** | **$0.02** | **($0.03)** | **$0.08** | **($0.07)** | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) The company reported a comprehensive loss of **$81 thousand** in Q2 2025, but a comprehensive income of **$1.0 million** for the six-month period, a significant improvement year-over-year Comprehensive Income (Loss) Summary (in thousands) | Period | Net Income (Loss) | Other Comprehensive (Loss) Income | Comprehensive (Loss) Income | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | $224 | ($306) | ($81) | | **Three Months Ended June 30, 2024** | ($432) | $784 | $351 | | **Six Months Ended June 30, 2025** | $955 | $55 | $1,010 | | **Six Months Ended June 30, 2024** | ($873) | $483 | ($391) | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased to **$138.4 million** at June 30, 2025, driven by net income, partially offset by stock repurchases and comprehensive loss - Stockholders' equity increased to **$138.4 million** at June 30, 2025, from **$137.3 million** at January 1, 2025[18](index=18&type=chunk) - Key activities affecting equity in the first six months of 2025 included net income of **$955,342**, stock-based compensation of **$446,615**, and stock repurchases of **$402,792**[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was **$1.9 million** for the six months ended June 30, 2025, with investing activities providing **$16.4 million** and financing activities using **$50.2 million**, resulting in a **$31.9 million** net decrease in cash Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $1,904 | ($1,230) | | Net cash from investing activities | $16,372 | ($41,156) | | Net cash from financing activities | ($50,174) | $35,048 | | **Net decrease in cash** | **($31,899)** | **($7,338)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the composition of the securities and loan portfolios, including a decrease in total loans, and information on derivative instruments used for interest rate risk hedging - The available-for-sale securities portfolio increased to **$144.6 million** at June 30, 2025, from **$140.3 million** at Dec 31, 2024. The portfolio consists mainly of mortgage-backed securities and corporate bonds[37](index=37&type=chunk) - Total loans decreased to **$695.8 million** at June 30, 2025, from **$714.3 million** at Dec 31, 2024, with residential first mortgages being the largest category at **$458.2 million**[42](index=42&type=chunk) - Non-performing loans were **$13.9 million** at June 30, 2025, slightly down from **$14.0 million** at year-end 2024. The allowance for credit losses was **$2.59 million**[49](index=49&type=chunk)[42](index=42&type=chunk) - The company uses interest rate swaps with notional amounts of **$65.0 million** (cash flow hedges) and **$60.0 million** (fair value hedges) to manage interest rate risk on FHLB advances, deposits, and loans[67](index=67&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results, highlighting decreased assets and liabilities, significant net income improvement driven by higher net interest income, and stable asset quality - Total assets decreased by **$49.7 million (5.1%)** to **$921.8 million** at June 30, 2025, from year-end 2024, mainly from a **$31.9 million** drop in cash and an **$18.5 million** decrease in net loans[88](index=88&type=chunk) - Total liabilities fell by **$50.8 million (6.1%)** to **$783.4 million**, driven by a **$36.2 million** decrease in borrowings and a **$14.0 million** decrease in deposits[93](index=93&type=chunk) - For Q2 2025, net income was **$224 thousand**, a significant turnaround from a net loss of **$432 thousand** in Q2 2024, driven by a **$951 thousand** increase in net interest income. The net interest margin improved to **1.74%** from **1.21%** YoY[107](index=107&type=chunk)[115](index=115&type=chunk) - For the six months ended June 30, 2025, net income was **$955 thousand**, compared to a net loss of **$873 thousand** in the prior year period. The result was boosted by a **$1.9 million** increase in net interest income and a one-time BOLI death benefit of approximately **$543 thousand**[121](index=121&type=chunk) - Asset quality remained stable, with non-performing assets at **$13.9 million (1.5% of total assets)** at June 30, 2025. The allowance for credit losses was **0.37%** of total loans[91](index=91&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk using NPV and NII analyses, with a **+200 bp** shock scenario showing a **17.83%** NPV decrease and **3.47%** NII decrease, both within policy limits Net Portfolio Value (NPV) Sensitivity Analysis (June 30, 2025) | Basis Point Change | NPV (in thousands) | Percent Change | | :--- | :--- | :--- | | +400 bp | $82,457 | (34.92)% | | +200 bp | $104,106 | (17.83)% | | 0 | $126,693 | 0.00% | | -200 bp | $148,859 | 17.50% | Net Interest Income (NII) Sensitivity Analysis (Year One) | Basis Point Change | Change in NII (%) | | :--- | :--- | | +400 bp | (6.97)% | | +200 bp | (3.47)% | | 0 | 0.00% | | -200 bp | 2.87% | [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[150](index=150&type=chunk) - There were no changes in the company's internal control over financial reporting during the second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, these controls[151](index=151&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2025, the company was not involved in any material legal proceedings beyond routine business matters - The company reports no pending legal proceedings, other than routine proceedings in the ordinary course of business, that would be material to its financial condition or results of operations[153](index=153&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, have been reported - No material changes in the risk factors from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, have been reported[154](index=154&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities for the period - The company reported "None" for this item[155](index=155&type=chunk) [Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - The company reported "None" for this item[156](index=156&type=chunk) [Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is reported as "Not applicable"[157](index=157&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or any "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025[158](index=158&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate documents, CEO/CFO certifications, and iXBRL data files - The filing includes CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as financial statements formatted in iXBRL[160](index=160&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 001-41835 AGAPE ATP CORPORATION (Exact name of registrant issuer as specified in its charter) (State or other ju ...

Part I: Financial Information [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Dogwood Therapeutics' unaudited condensed consolidated financial statements for the periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$96.7 million**, liabilities decreased to **$14.2 million**, and stockholders' equity turned positive to **$6.9 million** as of June 30, 2025 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$96,692,527** | **$94,308,246** | | Cash | $13,402,809 | $14,847,949 | | Goodwill | $12,458,383 | $11,812,476 | | Intangible assets | $69,303,582 | $65,710,527 | | **Total Liabilities** | **$14,151,904** | **$30,027,223** | | Debt with related party | $0 | $15,381,077 | | **Total stockholders' equity (deficit)** | **$6,878,599** | **($10,124,339)** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported no revenue, with net loss increasing to **$14.7 million** for the six months ended June 30, 2025, driven by a **$6.1 million** debt conversion loss and higher R&D expenses Statement of Operations Highlights (Unaudited, Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $0 | $0 | | Research and development expenses | $5,006,941 | $679,801 | | General and administrative expenses | $3,346,100 | $1,704,124 | | Loss from operations | ($8,353,041) | ($2,383,925) | | Loss on debt conversion with related party | ($6,134,120) | $0 | | **Net loss** | **($14,732,305)** | **($2,341,168)** | | Net loss per common share, basic and diluted | ($9.51) | ($2.78) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$8.7 million**, while financing activities provided **$7.3 million**, resulting in a **$1.5 million** net decrease in cash for the six months ended June 30, 2025 Cash Flow Summary (Unaudited, Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($8,708,672) | ($1,749,160) | | Net cash provided by financing activities | $7,252,245 | $1,452,397 | | **Net decrease in cash** | **($1,456,427)** | **($296,763)** | | Cash, beginning of period | $14,847,949 | $3,316,946 | | Cash, end of period | $13,402,809 | $3,020,183 | - Non-cash financing activities for the six months ended June 30, 2025, included the conversion of **$19.5 million** in related-party debt and **$0.4 million** in accrued interest into Series A-1 Non-Voting Convertible Preferred Stock[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business focus, going concern issues, the Pharmagesic acquisition, debt conversion, and recent equity financing activities - The company is a pre-revenue, development-stage biopharmaceutical firm focused on two main areas: Nav 1.7 modulation for pain (lead candidate Halneuron®) and antiviral therapies for fatigue-related illnesses (IMC-1, IMC-2)[18](index=18&type=chunk) - Management has concluded there is substantial doubt about the Company's ability to operate as a going concern within one year, as current cash is insufficient to fund operations beyond the first quarter of 2026. Additional financing is required[23](index=23&type=chunk) - On October 7, 2024, the company acquired Pharmagesic (Holdings) Inc. in a business combination, which was accounted for using the acquisition method. This transaction brought in the Halneuron® program[17](index=17&type=chunk)[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operations, and liquidity, highlighting increased expenses from clinical trials and the need for additional financing due to going concern issues [Overview](index=27&type=section&id=Overview) The company focuses on developing pain and fatigue medicines, with lead candidate Halneuron® in a Phase 2b trial and antiviral programs seeking partnerships - The lead product candidate, Halneuron®, is in a Phase 2b clinical trial (HALT-CINP-203) for chemotherapy-induced neuropathic pain (CINP)[125](index=125&type=chunk) - An interim analysis of the HALT-CINP-203 trial is expected in the fourth quarter of 2025, with top-line data anticipated in the second half of 2026[126](index=126&type=chunk) - The antiviral programs for IMC-1 (fibromyalgia) and IMC-2 (Long-COVID) are secondary priorities, and the company is seeking partnerships to advance them[127](index=127&type=chunk)[130](index=130&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Operating expenses significantly increased for the six months ended June 30, 2025, driven by a **$4.3 million** rise in R&D and a **$1.6 million** increase in G&A expenses Comparison of Operating Expenses (Six Months Ended June 30) | Expense Category | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $5,006,941 | $679,801 | +$4,327,140 | | General and administrative | $3,346,100 | $1,704,124 | +$1,641,976 | | **Total operating expenses** | **$8,353,041** | **$2,383,925** | **+$5,969,116** | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) With **$13.4 million** cash as of June 30, 2025, the company's liquidity is limited to Q1 2026, necessitating additional financing due to going concern issues - The company's cash on hand of approximately **$13.4 million** as of June 30, 2025, is expected to fund operations only through the first quarter of 2026[138](index=138&type=chunk)[143](index=143&type=chunk) - A registered direct offering in March 2025 raised net proceeds of approximately **$4.25 million**[141](index=141&type=chunk) - Substantial doubt exists regarding the company's ability to continue as a going concern, and it will need to raise additional funds through equity, debt, or partnerships to continue its strategy[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Dogwood Therapeutics is not required to provide market risk disclosures - This item is not required for smaller reporting companies[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=32&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 in internal control over financial reporting - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[156](index=156&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[157](index=157&type=chunk) Part II: Other Information [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material pending or ongoing litigation - The company does not currently have any pending or ongoing material litigation[160](index=160&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes from previously disclosed risk factors in the 2024 Annual Report on Form 10-K are reported - No material changes from risk factors previously disclosed in the 2024 Annual Report on Form 10-K are reported[161](index=161&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[162](index=162&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 trading arrangements during the six months ended June 30, 2025 - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the six months ended June 30, 2025[165](index=165&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section refers to the Exhibit Index, listing all exhibits filed with or incorporated by reference into this Quarterly Report on Form 10-Q