Company Separation and Structure - Starz Entertainment Corp. completed the separation from Old Lionsgate on May 6, 2025, resulting in two publicly traded companies: Starz Entertainment Corp. and Lionsgate Studios Holding Corp.[162] - The Starz Business primarily consists of Starz Networks, which distributes premium subscription video services in the U.S. and Canada, and international OTT services outside these regions[161]. Financial Performance - Total revenue for the three months ended September 30, 2025, decreased by $26.0 million, or 7.5%, to $320.9 million compared to $346.9 million in the same period of 2024[205]. - OTT revenue declined by $9.4 million, or 4.0%, from $232.2 million in 2024 to $222.8 million in 2025, while linear and other revenue decreased by $16.6 million, or 14.5%[205]. - Total revenue for the six months ended September 30, 2025, decreased by $53.9 million (7.8%) to $640.6 million, down from $694.5 million in 2024[238]. - OTT revenue declined by $22.7 million (4.9%) to $443.9 million for the six months ended September 30, 2025, compared to $466.6 million in 2024[238]. - Starz Networks Adjusted OIBDA decreased by $5.1 million to $21.8 million for the three months ended September 30, 2025, primarily due to lower revenue from fewer subscribers[236]. Subscriber Metrics - The number of total subscribers in the United States decreased from 17.83 million in September 2024 to 17.46 million in September 2025, a decline of 2.1%[209]. - Total Starz subscribers decreased from 23.20 million in September 2024 to 19.20 million in September 2025, reflecting a decline of 17.2%[209]. Expenses and Losses - Operating loss for the three months ended September 30, 2025, was $34.8 million, compared to an operating loss of $17.0 million in the same period of 2024, representing an increase in loss of 104.7%[205]. - Net loss from continuing operations increased by $22.0 million, or 72.8%, from $30.2 million in 2024 to $52.2 million in 2025[205]. - General and administrative expenses increased by $2.5 million, or 9.5%, from $26.3 million in 2024 to $28.8 million in 2025[205]. - General and administrative expenses rose by $3.0 million (13.2%) to $25.8 million for the three months ended September 30, 2025, from $22.8 million in 2024[220]. - Interest expense increased by $3.5 million to $15.8 million for the three months ended September 30, 2025, compared to the same period in 2024[223]. - Net loss from continuing operations for the three months ended September 30, 2025, was $52.6 million, up from a net loss of $30.6 million in the same period of 2024[225]. - Net loss from continuing operations for the six months ended September 30, 2025, was $95.1 million, compared to a net loss of $29.5 million in 2024[253]. Cash Flow and Debt Management - Cash and cash equivalents as of September 30, 2025, were $37.0 million, up from $17.8 million in 2024[258]. - Cash flow from operations, cash on hand, and availability under the $150 million senior secured revolving credit facility are expected to meet operational cash and debt service requirements for the next twelve months[270]. - Total future repayment of debt and other commitments under contractual obligations is projected to be $1,629.7 million, with $591.4 million due in the next 12 months[275]. - Net cash flows provided by operating activities for the six months ended September 30, 2025, were $39.3 million, an increase of $57.1 million compared to the same period in 2024[281]. - Cash provided by investing activities for the six months ended September 30, 2025, was $70.7 million, reflecting a net change of $160.7 million compared to 2024[282]. - Cash used in financing activities for the six months ended September 30, 2025, was $(90.8) million, a decrease of $184.2 million compared to the same period in 2024[283]. Restructuring and Strategic Review - During the six months ended September 30, 2024, Old Lionsgate executed a restructuring plan, exiting all international territories except Canada, India, and Southeast Asia, which was completed in May 2024[167]. - Starz continues to strategically review its content and performance as a standalone company following the separation[165]. Programming and Content Expenses - Programming amortization expenses decreased by $25.3 million, or 13.9%, from $182.1 million in 2024 to $156.8 million in 2025[205]. - The company premiered fewer original series in the three months ended September 30, 2025, contributing to decreased programming amortization[210]. - For the six months ended September 30, 2025, programming amortization decreased to $319.3 million from $330.0 million in 2024, a decline of $10.7 million or 3.2%[241]. Interest Rate Management - The company has entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk, converting floating-rate borrowings to fixed-rate[289]. - The variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 8.8%[290]. - The average interest rate for Term Loan A is 7.2%[291]. - The fair value of Programming notes is $88.2 million with an average interest rate of 8.8%[291]. - The Production Loan has a fair value of $16.2 million and an average interest rate of 6.5%[291]. - The 5.5% Senior Notes have a fair value of $325.1 million, with a fixed interest rate of 5.5%[291].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File No. 1-14880 Starz Entertainment Corp. (Exact name of registrant as specified in its charter) British Columbia, Canada N/A ...

Company Separation and Structure - Starz Entertainment Corp. completed the separation from Old Lionsgate on May 6, 2025, resulting in two publicly traded companies: Starz Entertainment Corp. and Lionsgate Studios Corp.[162] - The Starz Business primarily consists of Starz Networks, which distributes premium subscription video services in the U.S. and Canada, and international OTT distribution outside these regions[161]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $320.9 million, a decrease of $26.0 million or 7.5% compared to $346.9 million in the same period of 2024[206]. - OTT revenue decreased by $9.4 million (4.0%) to $222.8 million, while linear and other revenue fell by $16.6 million (14.5%) to $98.1 million[206]. - Total revenue for the six months ended September 30, 2025, decreased by $53.9 million (7.8%) to $640.6 million, down from $694.5 million in 2024[238]. - OTT revenue declined by $22.7 million (4.9%) to $443.9 million for the six months ended September 30, 2025, compared to $466.6 million in 2024[238]. Subscriber Metrics - The number of total subscribers in the United States decreased to 17.46 million from 17.83 million, with OTT subscribers increasing to 12.29 million but linear subscribers declining to 5.17 million[209]. - The number of total Starz subscribers decreased to 19.20 million from 23.20 million, with OTT subscribers dropping to 12.97 million from 15.45 million[209]. Expenses and Losses - Operating loss for the three months ended September 30, 2025, was $34.8 million, an increase in loss of $17.8 million (104.7%) from $17.0 million in 2024[206]. - Net loss from continuing operations was $52.6 million, an increase of $22.0 million (71.9%) compared to $30.6 million in the same period of 2024[206]. - General and administrative expenses increased by $2.5 million (9.5%) to $28.8 million compared to $26.3 million in the prior year[206]. - General and administrative expenses rose by $3.0 million (13.2%) to $25.8 million for the three months ended September 30, 2025, from $22.8 million in 2024[220]. - Interest expense increased by $3.5 million (28.5%) to $15.8 million compared to $12.3 million in the prior year[206]. - Advertising and marketing expenses increased by $3.2 million (4.3%) to $78.4 million for the three months ended September 30, 2025, compared to $75.2 million in the same period of 2024[216]. - Net loss from continuing operations for the six months ended September 30, 2025, was $95.1 million, compared to a loss of $29.5 million in 2024[253]. Debt and Financial Obligations - Total aggregate debt outstanding, including $300.0 million outstanding per Term Loan A, was $625.1 million following the Exchange Transaction[179]. - As of September 30, 2025, the company had $300.0 million outstanding under its new Term Loan A and $325.1 million under 5.5% Senior Notes due 2029[259]. - Total future repayment of debt and other commitments under contractual obligations is $1,629.7 million, with $591.4 million due in the next 12 months[275]. - The company has entered into $150.0 million worth of pay-fixed interest rate swaps to manage interest rate risk[289]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2025, were $37.0 million, an increase from $17.8 million in 2024[258]. - Net cash flows provided by operating activities for the six months ended September 30, 2025, were $39.3 million, an increase of $57.1 million compared to the same period in 2024[281]. - Cash provided by investing activities for the six months ended September 30, 2025, was $70.7 million, reflecting a net change of $160.7 million compared to 2024[282]. - Cash used in financing activities for the six months ended September 30, 2025, was $(90.8) million, a decrease of $184.2 million compared to the same period in 2024[283]. Programming and Content Costs - Programming amortization for the three months ended September 30, 2025, was $156.8 million, down $25.3 million (13.9%) from $182.1 million in 2024[206]. - Programming related obligations included $88.2 million of programming notes and $16.2 million of a production loan as of September 30, 2025[261]. - Programming amortization for the six months ended September 30, 2025, decreased by $10.7 million (3.2%) to $319.3 million from $330.0 million in 2024[238]. Strategic Initiatives - Starz continues to strategically review its content and performance as a standalone company following the separation[165]. - Management's estimates for financial statements include significant assumptions regarding customer relationships and future revenue, which could differ from actual results[187]. - The company plans to change its fiscal year end from March 31 to December 31, with the next fiscal year end set for December 31, 2025[186].

AI and Technology Solutions - Rekor has positioned itself to participate in the modernization of the U.S. transportation infrastructure, focusing on AI solutions through collaborations with public and private sectors [148]. - The Rekor One® roadway intelligence engine aggregates trillions of data points from IoT devices, roadway sensors, and cameras, delivering real-time and predictive solutions [154]. - AI monitoring systems enhance roadway safety by detecting hazards and reducing incident response times, contributing to fewer injuries and fatalities [150]. - Rekor's AI-powered platforms support various use cases, including traffic analysis, operations management, and high-definition video monitoring [155]. - The company aims to optimize resource allocation through AI assistance, streamlining operations for better efficiency [157]. - Automated enforcement systems are designed to reduce uninsured drivers, thereby improving public safety [158]. - Rekor's solutions provide enhanced data accuracy, supporting better decision-making and strategic planning [159]. - The company is committed to creating a connected, data-driven infrastructure ecosystem to improve urban mobility and transportation management [144]. - Rekor's traffic analytics and monitoring capabilities assist law enforcement and support intelligence-based policing [156]. - The ongoing modernization efforts present significant opportunities for Rekor to address challenges such as traffic congestion and roadway safety [147]. - The company anticipates significant growth in the Smart City market, driven by advancements in big data and AI, addressing urban challenges as two-thirds of the global population is expected to live in urban areas by 2050 [160]. - The company expects to benefit from the Infrastructure Investment and Jobs Act, which allocates over $150 billion for roadway infrastructure, including intelligent transportation systems, and aims to capture federal funding opportunities [161]. - The company is investing in advanced vehicle recognition systems to enhance accuracy and affordability, targeting smaller municipalities and organizations that previously could not afford conventional systems [160]. - The company is focused on expanding automated enforcement of motor vehicle laws, anticipating increased legislative support for automated compliance programs [160]. - The company is leveraging improvements in GPU technology to enhance image processing capabilities, which is expected to drive growth in the GPU market due to IoT adoption [161]. Financial Performance - Revenue for the three months ended September 30, 2025, was $14,194,000, representing a 35% increase from $10,546,000 in 2024 [178]. - Revenue for the nine months ended September 30, 2025, was $35,751,000, a 9% increase from $32,751,000 in 2024 [178]. - Cost of revenue, excluding depreciation and amortization, decreased by 12% to $5,195,000 for the three months ended September 30, 2025, compared to $5,903,000 in 2024 [179]. - Total operating expenses for the three months ended September 30, 2025, were $12,969,000, a 26% decrease from $17,497,000 in 2024 [180]. - General and administrative expenses decreased by 27% to $6,299,000 for the three months ended September 30, 2025, from $8,637,000 in 2024 [181]. - Net loss for the three months ended September 30, 2025, was $4,149,000, compared to a net loss of $12,646,000 in 2024 [189]. - Interest expense, net, increased by 15% to $568,000 for the three months ended September 30, 2025, from $496,000 in 2024 [186]. - EBITDA for the three months ended September 30, 2025, was $(2,036,000), an improvement from $(9,751,000) in 2024 [189]. - The company recorded a loss on extinguishment of debt of $4,693,000 in 2024, which did not recur in 2025 [187]. - Research and development expenses decreased by 23% to $3,660,000 for the three months ended September 30, 2025, from $4,740,000 in 2024 [183]. - Adjusted Gross Profit for the three months ended September 30, 2025, was $8,999,000, compared to $4,643,000 for the same period in 2024, representing an increase of 94.5% [192]. - Adjusted Gross Margin improved to 63.4% for the three months ended September 30, 2025, up from 44.0% in 2024, indicating a significant enhancement in profitability [192]. - Recurring revenue for the three months ended September 30, 2025, was $5,511,000, an 18% decrease from $6,520,000 in 2024 [194]. - Net cash used in operating activities decreased by $6,970,000, from $27,552,000 in the nine months ended September 30, 2024, to $20,582,000 in 2025, a 25% improvement [197]. - Net cash provided by financing activities decreased by $10,722,000, from $31,367,000 in the nine months ended September 30, 2024, to $20,645,000 in 2025, a 34% decline [199]. - As of September 30, 2025, the company had cash and cash equivalents of $3,411,000, compared to $5,329,000 as of December 31, 2024 [200]. - The company reported a net loss of $23,681,000 for the nine months ended September 30, 2025, reflecting ongoing challenges in achieving profitability [203]. - Performance obligations as of September 30, 2025, included approximately $13,157,000 in contracts expected to be recognized over the next twelve months [195]. - The company issued 18,888,832 shares of common stock at a weighted average selling price of $1.23 per share, generating net cash of $22,350,000 after issuance costs [207]. - The company anticipates that existing cash is insufficient to fund operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern [208]. Operational Challenges - The company is facing challenges in achieving profitability, with increasing operating expenses and capital expenditures, and has not yet reached sustainable profitability [162]. - The company is committed to significant investments in sales and marketing to increase market awareness and adoption of its products and services [168]. - The company has identified risks associated with executing its corporate strategy, particularly in acquiring and integrating established technology companies [162]. - The company is experiencing high general and administrative expenses due to growth-related costs, but expects these expenses to decrease as a percentage of revenue over the long term [167]. - The company relies on information technology for operations, facing potential cybersecurity risks that could disrupt services and impact financial condition [162].

Investment Activities - The company acquired or originated investments totaling $73,008,612 during the three months ended September 30, 2025, with various property types including multifamily and life science [225]. - The company’s investment objective is to generate attractive, risk-adjusted returns for stockholders over the long term [218]. - The company focuses on investments in real estate sectors where its senior management has expertise, particularly in the top 50 MSAs [217]. - The company is actively managing a diverse range of investments including preferred equity and common stock investments [272]. - The company has a 280-unit multifamily property that was 94.6% occupied with an effective rent of $1,617 per month as of September 30, 2025 [275]. - The company committed to fund $24.0 million of preferred equity for a single-family property in Phoenix, Arizona, with $3.1 million unfunded as of September 30, 2025, offering a floating annual return of at least 11.25% [304]. - A total of $30.3 million of preferred units was fully funded for a multifamily property development in Richmond, Virginia, with an additional $4.3 million of common equity, of which $0.3 million was unfunded as of September 30, 2025 [305]. Financial Performance - Net income attributable to common stockholders for Q3 2025 was approximately $35.0 million, a significant increase of 117.4% from $16.1 million in Q3 2024 [241][256]. - Net income attributable to common stockholders for the nine months ended September 30, 2025, was $63.8 million, a remarkable increase of 585.1% from $9.3 million in 2024 [248][256]. - Other income for the nine months ended September 30, 2025, reached $88.9 million, up 111.6% from $42.0 million in 2024 [248][250]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $27.5 million, an increase from $24.9 million for the same period in 2024 [294]. - Net cash provided by investing activities decreased to $279.7 million for the nine months ended September 30, 2025, compared to $735.9 million for the same period in 2024 [295]. - Net cash used in financing activities was $292.6 million for the nine months ended September 30, 2025, down from $738.8 million for the same period in 2024 [296]. Operating Expenses - Operating expenses increased by 6.5% to $8.4 million in Q3 2025 compared to $7.8 million in Q3 2024 [241]. - G&A expenses for Q3 2025 were $3.4 million, up from $2.2 million in Q3 2024, reflecting a 54.5% increase [244]. - Management fees increased to $1.8 million in Q3 2025 from $1.0 million in Q3 2024, a rise of 80.0% [246]. - Total operating expenses for the nine months ended September 30, 2025, decreased by 6.4% to $25.9 million compared to $27.7 million in 2024 [248]. Equity and Book Value - Book value per share of common stock as of September 30, 2025, was $18.87, an increase from $16.93 as of December 31, 2024 [270]. - Total equity as of September 30, 2025, was $428,488,000, compared to $381,788,000 as of December 31, 2024 [271]. - Combined book value per share/unit as of September 30, 2025, was $18.83, up from $16.97 as of December 31, 2024 [271]. Debt and Liquidity - The outstanding balance on the Freddie Mac Credit Facility was $108.8 million as of September 30, 2025 [282]. - The company expects to meet its long-term liquidity requirements through various sources, including future debt or equity issuances and net cash from operations [278]. - As of September 30, 2025, the company has borrowed approximately $257.6 million under repurchase agreements, with collateral valued at approximately $740.6 million [285]. - The company has an aggregate principal amount of $180.0 million of its 5.75% Notes outstanding as of September 30, 2025 [291]. - The OP had an aggregate principal amount of $36.5 million of its 7.50% OP Notes outstanding as of September 30, 2025, and subsequently issued $45.0 million of 2026 OP Notes [292]. Legal and Regulatory Matters - The company has engaged in various legal proceedings, including the Bankruptcy Trust Lawsuit and the UBS Lawsuit, but does not expect these to materially affect its business [223]. - The company intends to maintain its REIT status for U.S. federal income tax purposes, which commenced with the taxable year ended December 31, 2020 [220]. - The company elected to be treated as a REIT for U.S. federal income tax purposes, requiring it to distribute at least 90% of its REIT taxable income to stockholders [333]. Risk Management - The company is actively managing financial risks associated with tariffs imposed by the U.S. government, which could impact operational costs [221]. - The macroeconomic environment remains challenging due to high interest rates and limited credit availability, impacting capital markets and financing [332]. - The company has implemented loan loss forecasting models for estimating expected lifetime credit losses at the individual loan level [325]. - Significant judgment is required in determining impairment and estimating the resulting loss allowance, with actual losses potentially differing from estimates [326]. Investment Portfolio - The company's portfolio has a combined unpaid principal balance of $1.5 billion as of September 30, 2025 [272]. - The total principal amount for Senior Loans is $119,243,000 with a current yield of 5.32% [272]. - CMBS B-Pieces total principal amount is $322,733,000 with a current yield of 5.08% [272]. - The highest yielding CMBS B-Piece has a coupon of 13.47% [272]. - The total net equity for CMBS B-Pieces is $69,251,000 [272]. - The average term remaining for Senior Loans is 2.05 years [272]. - The average current yield for CMBS I/O Strips is 2.02% [272]. - The total principal amount for CMBS I/O Strips is $213,680,000 [272]. - The total number of mezzanine loans issued was 18, reflecting a diverse investment strategy in multifamily properties [10].

Financial Performance - For the three months ended September 30, 2025, GRAIL incurred a net loss of $89.0 million, compared to a net loss of $125.7 million for the same period in 2024[136]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $(248.8) million, an improvement from $(399.5) million for the same period in 2024[136]. - Total revenue for the three months ended September 30, 2025, was $36.2 million, a 26% increase from $28.7 million in the same period of 2024[193]. - Total revenue for the nine months ended September 30, 2025, was $103.6 million, reflecting a $16.2 million, or 19%, increase compared to the same period in 2024[207]. - The company reported a benefit from income taxes of $108.8 million for the nine months ended September 30, 2025, an increase of $3.4 million, or 3%, compared to the prior year[223]. - The company incurred net losses of $10.1 billion since the acquisition of GRAIL by Illumina, including significant impairment charges[238]. Product Development and Clinical Trials - The Galleri test demonstrated a positive predictive value (PPV) of 61.6%, specificity of 99.6%, and cancer signal of origin (CSO) accuracy of 92% in the PATHFINDER 2 study[133]. - The NHS-Galleri Trial involves over 140,000 participants aged 50 to 77 to evaluate Galleri's effectiveness alongside existing NHS screenings[147]. - Data from the NHS-Galleri Trial's prevalent screening round showed a PPV of 43%, CSO accuracy of 88%, and specificity of 99.5%[146]. - The PATHFINDER 2 study enrolled 35,878 adults aged 50 and older, with positive top-line performance results announced for the first 25,578 participants in June 2025[150]. - The Galleri test's cancer signal detection and origin prediction results were compared with standard care pathways, demonstrating the test's performance in symptomatic patients[155]. - The company has invested heavily in clinical studies, including the NHS-Galleri Trial, which is expected to provide results in mid-2026 and could facilitate adoption in other single-payor systems[175]. Strategic Collaborations and Investments - GRAIL announced a strategic collaboration with Samsung C&T to commercialize Galleri in Korea, with potential expansion to Japan and Singapore[137]. - The Samsung collaboration includes a $110 million equity investment at a price of $70.05 per share[138]. - GRAIL received a cash contribution of $932.3 million from Illumina in connection with the Spin-Off, incurring $22.2 million in legal and professional fees related to the transaction[160]. - The company plans to use net proceeds from the Samsung Investment, expected to be approximately $110.0 million, for commercial activities and working capital[235]. Operational Changes and Restructuring - The restructuring plan approved in August 2024 aimed to reduce overall spend by approximately 30% of the workforce, including 350 full-time employees[164]. - The restructuring plan was substantially completed in Q4 2024, incurring total charges of $18.3 million primarily for employee severance and associated costs[165]. - The company expects research and development expenses to decrease over the next three years as it reduces investment in product programs beyond Galleri[177]. - Sales and marketing expenses decreased by $10.1 million to $25.5 million, mainly due to a reduction in compensation expenses related to workforce restructuring[201]. Market and Revenue Insights - Screening revenue increased by $19.2 million, or 25%, to $96.3 million for the nine months ended September 30, 2025, primarily due to a 33% increase in Galleri sales volume[207][208]. - Screening revenue increased by $7.4 million to $32.8 million, driven by a 39% increase in Galleri sales volume, despite a 7% decrease in average selling price (ASP)[194]. - Revenue from Galleri is recognized at the point of time when the test result report is delivered, with pricing generally based on list price and subject to discounts and rebates[178]. Future Outlook and Financing - The company anticipates needing to raise additional financing in the future to support operations and product development[238]. - The company expects to meet its working capital and capital expenditure needs into 2030 with existing cash and securities[238]. - The company plans to submit data from the PATHFINDER 2 study and the NHS-Galleri Trial for premarket approval to the FDA in Q1 2026[153]. - The company plans to complete a PMA submission with the FDA in Q1 2026, which is subject to various risks and may take several years to obtain approval[173]. Cash and Securities Position - As of September 30, 2025, the company had cash and cash equivalents of $126.9 million and short-term marketable securities of $413.2 million, primarily in U.S. government treasury bills[254]. - As of September 30, 2025, the company's cash and cash equivalents totaled $126.9 million, with short-term marketable securities amounting to $413.2 million[234]. Risks and Challenges - The company is exposed to interest rate risk, but a hypothetical 10% change in interest rates would not have a material impact on its financial statements[255]. - The majority of transactions are conducted in U.S. dollars, but the company is subject to foreign exchange risk due to transactions in other currencies, primarily the British pound[256]. - The company does not currently engage in hedging activities to mitigate currency fluctuations but may consider it in the future[256].

Financial Performance - Total revenue for the three-month period ended September 30, 2025, was $4,172,716, representing a 42% increase from $2,943,188 in the same period of 2024[18] - Net income for the nine-month period ended September 30, 2025, reached $1,976,873, up 39% from $1,419,472 in the prior year[18] - Earnings per share (basic) for the three-month period ended September 30, 2025, was $0.1617, compared to $0.1153 for the same period in 2024, reflecting a 40% increase[18] - The company reported a total comprehensive income for the nine-month period ended September 30, 2025, of $2,808,208, compared to $1,013,767 in the prior year, representing a 176% increase[20] - The company reported a net increase in loss allowance across all stages, with Stage 1, Stage 2, and Stage 3 contributing $23,840, $602,315, and $1,228,580 respectively for the current period[104] Assets and Liabilities - Total assets increased to $68,362,816 as of September 30, 2025, compared to $49,931,214 at the end of 2024, marking a 37% growth[22] - Total liabilities increased to $57,809,276 as of September 30, 2025, up from $42,284,138 at the end of 2024, representing a 36.6% increase[23] - Total equity attributable to shareholders of the parent company rose to $10,551,991 as of September 30, 2025, compared to $7,646,289 at the end of 2024, marking a 38.9% increase[23] - Total financial liabilities at amortized cost increased to $38,775,929 as of September 30, 2025, compared to $28,855,065 as of December 31, 2024, representing a growth of about 34%[156] - The Group's total assets as of September 30, 2025, were valued at US$55,150,087 million, compared to US$40,227,546 million on December 31, 2024, indicating an increase of 37.2%[186] Cash and Cash Equivalents - Cash and cash equivalents as of September 30, 2025, totaled $12,895,785, an increase from $9,185,742 at the end of 2024[22] - Cash flows generated from operating activities for the nine-month period ended September 30, 2025, amounted to $2,669,433, compared to $1,028,947 in 2024, reflecting a significant increase[28] - Cash and cash equivalents at the end of the period reached $12,895,785, up from $7,645,754 at the end of September 2024, representing a 68.5% increase[29] Credit Loss and Allowances - Credit loss allowance expenses for the nine-month period ended September 30, 2025, were $2,963,219, compared to $2,364,628 in the same period of 2024, reflecting a 25% increase[18] - The company reported a credit loss allowance expense of $3,304,609 for the nine-month period ended September 30, 2025, up from $2,569,667 in 2024, indicating a 28.6% increase[28] - The total credit loss allowance increased to $1,380,214 as of September 30, 2025, compared to $752,611 in the previous year, reflecting a net increase of $627,603[120] Operating Expenses - The company’s total operating expenses for the nine-month period ended September 30, 2025, were $1,887,914, slightly up from $1,861,827 in the prior year[18] - Total transactional expenses for the three-month period ended September 30, 2025, increased to $104,990 million, up 76.4% from $59,454 million in the same period of 2024[69] - Customer support and operations expenses for the three-month period ended September 30, 2025, totaled $(174,843) million, a decrease from $(349,262) million in the same period of 2024[73] Interest Income and Expenses - Interest income and gains net of losses on financial instruments for the nine-month period ended September 30, 2025, were $9,438,357, up from $7,137,362 in the same period of 2024, a 32% increase[18] - Interest expense on deposits for the nine-month period ended September 30, 2025, was US$2,770,941, an increase of 64.4% from US$1,687,921 in 2024[68] - Total interest income and gains net of losses on financial instruments for the three-month period ended September 30, 2025, reached US$3,577,478, a 44.7% increase from US$2,473,807 in the same period of 2024[65] Future Plans and Expectations - The company plans to expand its portfolio of credit and other financial products in Mexico following the regulatory approval to convert Nu Mexico Financiera into a bank[32] - The company plans to continue expanding its operations in Brazil, Mexico, and Colombia through existing product lines and new product introductions[34] - The company expects seasonality effects to become more pronounced in future periods, particularly benefiting from higher purchase volumes in the fourth quarter due to the holiday season[36] Taxation - The company’s Brazilian operations are subject to a statutory corporate income tax rate of 40%, which exceeds the new QDMTT standards of 15%[44] - The income tax expense for the nine-month period ended September 30, 2025, was $813,851 million, compared to $608,276 million for the same period in 2024, indicating a year-over-year increase of approximately 33.8%[200] Derivatives and Financial Instruments - The Group's total notional amount of derivative financial instruments increased significantly from $2,167,022 million to $5,439,601 million, indicating a growth of approximately 150.5%[140] - The fair value of total assets related to derivatives rose from $75,464 million to $287,731 million, marking an increase of approximately 280.5%[145] - The total fair value of derivative financial instruments was US$293,347 million as of September 30, 2025, compared to US$75,464 million at the end of 2024, reflecting a significant increase of 287.5%[190]

Financial Performance - Total revenue for the three months ended September 30, 2025, was $266.1 million, a decrease of $10.5 million (3.8%) compared to $276.6 million in the same period of 2024 [261]. - Total hotel expenses for the three months ended September 30, 2025, were $193.3 million, a slight decrease of $1.6 million (0.8%) from $194.8 million in 2024 [261]. - Net loss attributable to the Company for the three months ended September 30, 2025, was $60.1 million, compared to a net loss of $57.9 million in the same period of 2024, reflecting a change of $2.2 million [265]. - For the nine months ended September 30, 2025, total revenue was $845.4 million, a decrease of $51.6 million (5.8%) from $896.9 million in 2024 [261]. - The Company reported an operating income of $12.2 million for the three months ended September 30, 2025, down from $20.2 million in 2024, a decrease of $7.9 million [261]. - EBITDA for the nine months ended September 30, 2025, was $221.7 million, a decrease from $428.4 million in the same period of 2024 [359]. - Adjusted EBITDAre for the nine months ended September 30, 2025, was $180.9 million, compared to $190.9 million for the same period in 2024 [359]. - Net income for the three months ended September 30, 2025, was $(62,725) thousand, compared to $(59,128) thousand for the same period in 2024, indicating a year-over-year decline of approximately 4.4% [362]. - Funds from Operations (FFO) available to common stockholders and OP unitholders for the nine months ended September 30, 2025, was $(98,464) thousand, compared to $(86,022) thousand for the same period in 2024, reflecting a decrease of about 14.4% [362]. - Adjusted FFO available to common stockholders and OP unitholders for the three months ended September 30, 2025, was $(17,617) thousand, compared to $(8,793) thousand for the same period in 2024, representing a decline of approximately 100% [362]. Revenue Breakdown - Rooms revenue from hotel properties decreased by $11.0 million, or 5.2%, to $201.9 million in the 2025 quarter compared to the 2024 quarter, primarily due to a decrease from hotel dispositions and comparable hotel properties [266]. - Food and beverage revenue decreased by $462,000, or 1.0%, to $45.9 million in the 2025 quarter, mainly due to a decrease in sales from hotel dispositions [267]. - Other hotel revenue increased by $1.2 million, or 7.0%, to $17.8 million in the 2025 quarter, driven by increases from comparable hotel properties and the Le Méridien Opening [268]. - Rooms revenue decreased by $50.4 million, or 7.3%, to $635.4 million in the 2025 period compared to the 2024 period, primarily due to decreases from hotel dispositions and properties in receivership [292]. - Food and beverage revenue decreased by $3.2 million, or 2.0%, to $155.8 million in the 2025 period, mainly due to decreases from hotel dispositions [293]. Operational Metrics - RevPAR for the three months ended September 30, 2025, was $127.75, down from $132.05 in 2024, indicating a decrease of 2.0% [262]. - Occupancy rate for the three months ended September 30, 2025, was 70.93%, slightly up from 70.82% in 2024 [262]. - ADR for the three months ended September 30, 2025, was $180.10, down from $186.44 in 2024, reflecting a decrease of 3.6% [262]. - The company is focusing on owning predominantly full-service hotels in the upper upscale segment in domestic markets with RevPAR generally less than twice the national average [236]. Asset Management - As of September 30, 2025, the company's portfolio consisted of 69 consolidated operating hotel properties, totaling 16,821 rooms, plus one additional property with 188 rooms through a 29.3% investment [235]. - The company sold the 150-room Residence Inn San Diego Sorrento Mesa for $42.0 million [253]. - The company entered into an agreement to sell two Embassy Suites properties for a combined purchase price of $27.0 million, with a nonrefundable deposit of $1.0 million paid on November 11, 2025 [256]. - The company recognized a gain of $133.9 million from the derecognition of hotel properties associated with the KEYS Pool A and KEYS Pool B loans [328]. - The company owns a total of 2,800 rooms across various Embassy Suites and Hilton Garden Inn properties, all of which are 100% owned [363]. - The company has a total of 13 hotel properties listed, all categorized under full-service and select-service types [363]. Debt and Financing - The company has a total indebtedness of $2.7 billion, with $2.5 billion being variable-rate debt [368]. - The company refinanced the mortgage loan for the Renaissance Hotel in Nashville, Tennessee, with a new balance of $218.1 million and a floating interest rate of SOFR + 2.26% [252]. - The company executed an Amended and Restated Master Line of Credit Promissory Note allowing it to draw up to $40 million in cash through November 15, 2026, at an annual interest rate of 10.0% [254]. - The company closed on a $580 million refinancing secured by 16 hotels, with a two-year term and a floating interest rate of SOFR + 4.37% [330][331]. - The company extended its Morgan Stanley Pool mortgage loan secured by 17 hotels, with a current balance of $409.8 million and a maturity date extended to March 2026 [334]. - Interest expense and amortization of discounts and loan costs decreased by $8.8 million, or 4.2%, to $200.4 million in 2025, mainly due to lower cash interest expense [306]. Impairment and Charges - Impairment charges were $18.4 million in the 2025 quarter, related to the New Orleans Le Pavillon Hotel due to reduced estimated future cash flows [273]. - The company reported impairment charges on real estate amounting to $19.8 million for the nine months ended September 30, 2025 [359]. - The company reported impairment charges on real estate of $18,374 thousand for the three months ended September 30, 2025 [362]. Advisory and Management - The company is advised by Ashford LLC, which manages all hotel properties in its portfolio [237]. - The company aims to preserve capital and maintain significant cash liquidity while pursuing acquisitions that are expected to be accretive to its portfolio [239]. - The company has a stock repurchase program approved for up to $200 million, with no shares repurchased to date [340]. Cash Flow and Liquidity - As of September 30, 2025, the company held cash and cash equivalents of $81.9 million and restricted cash of $166.9 million [316]. - For the nine months ended September 30, 2025, net cash flows used in operating activities were $3.2 million, a decrease from $37.7 million used in the same period in 2024 [345]. - Net cash flows provided by investing activities for the nine months ended September 30, 2025, were $133.1 million, primarily from $159.2 million in net proceeds from asset dispositions [346]. - For the nine months ended September 30, 2025, net cash flows used in financing activities were $101.6 million, primarily due to $635.0 million in debt repayments [349]. Future Outlook - The company continues to focus on full-service offerings, which represent a majority of the hotel types listed [364]. - Future growth may be supported by ongoing market expansion and potential acquisitions in high-demand areas [364]. - The company’s operational strategy emphasizes maintaining high occupancy rates across its owned properties [364].

FDA Clearance and Product Development - HeartBeam's HeartBeam System received FDA clearance on December 13, 2024, marking it as the first cable-free, ambulatory ECG device that captures heart signals in three dimensions [63]. - The VALID-ECG pivotal study showed a 93.4% overall diagnostic agreement between HeartBeam's synthesized 12L ECG and standard 12L ECGs, based on data from 198 patients across five clinical sites [65]. - The company initiated an Early Access Program for the HeartBeam System to gather user feedback ahead of commercialization [66]. - HeartBeam announced a strategic collaboration with AccurKardia to integrate their FDA-cleared automated ECG interpretation platform, enhancing the product's diagnostic capabilities [68]. - R&D expenses increased by approximately $0.4 million or 13% for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to product development costs related to the HeartBeam System [83]. Financial Performance - General and administrative expenses decreased by approximately $0.2 million or 8% for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to lower consultant costs [81]. - Research and development expenses increased by 13% to $2.9 million for the three months ended September 30, 2025, compared to the same period in 2024 [81]. - Interest income decreased by 63% to $96,000 for the three months ended September 30, 2025, compared to the same period in 2024 [81]. - Net loss for the three months ended September 30, 2025, was $5.3 million, reflecting an increase of 6% compared to the same period in 2024 [81]. - For the nine months ended September 30, 2025, R&D expenses rose by approximately $1.9 million or 24% compared to the same period in 2024, driven by product development and headcount-related costs [84]. - As of September 30, 2025, the company has cash of approximately $1.9 million, which is insufficient to fund operations for the next twelve months based on current business plan assumptions [87]. - Net cash used in operating activities was $11.1 million for the nine months ended September 30, 2025, primarily due to a net loss of $15.7 million [90]. - Net cash provided by financing activities was $10.7 million for the nine months ended September 30, 2025, primarily from the sale of common stock [93]. - The company has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception [87]. - The company expects no material commercial revenue in 2025 and cannot assure that financing or strategic relationships will be available on acceptable terms [88]. - R&D expenses for the nine months ended September 30, 2025, included a net increase in headcount-related costs of $1.2 million and non-cash stock-based compensation of $1.2 million [84]. - Net cash used in investing activities was $0.2 million for both the nine months ended September 30, 2025, and 2024, related to the purchase of property and equipment [92]. Intellectual Property - As of September 30, 2025, HeartBeam holds a total of 24 issued patents worldwide, including 16 issued U.S. patents, strengthening its intellectual property position [76]. Research and Development Focus - The company continues to devote significant capital resources to R&D and go-to-market strategies [86]. - The company has acquired over six million standard 12L ECGs to support its AI program, which aims to enhance diagnostic capabilities [69].

Financial Performance - The company experienced an operating loss of $55.4 million and a net loss of $184.5 million, or $0.46 per share, for Q3 2025, compared to a net loss of $20.5 million, or $0.06 per share, for the same quarter in 2024 [6][15]. - For the three months ended September 30, 2025, the operating loss was $55,359,000, compared to $19,962,000 for the same period in 2024, representing an increase of 177% [26]. - The net loss and comprehensive loss for the period after tax was $184,517,000 for Q3 2025, significantly higher than $20,520,000 in Q3 2024, indicating an increase of 800% [26]. - The basic and diluted net loss per share for Q3 2025 was $0.46, compared to $0.06 in Q3 2024, reflecting a 667% increase [26]. - For the nine months ended September 2025, TMC reported a loss of $279,446 thousand, compared to a loss of $65,882 thousand in the same period of 2024, indicating a significant increase in losses [31]. Cash and Liquidity - As of September 30, 2025, TMC reported total cash of approximately $115.6 million and total liquidity of $165 million, including undrawn credit facilities [3][14]. - Cash at the end of the period increased to $115,648 thousand, up from $360 thousand at the end of September 2024, showing a substantial improvement in liquidity [31]. - Net cash used in operating activities for the nine months ended September 2025 was $31,496 thousand, slightly higher than $29,750 thousand in the prior year [31]. - Cash provided by financing activities increased to $143,475 thousand in 2025, compared to $23,386 thousand in 2024, reflecting strong capital raising efforts [31]. - The company raised $85,165 thousand from a private placement with Korea Zinc and $42,000 thousand from registered direct offerings during the nine months ended September 2025 [31]. Expenses - Exploration and evaluation expenses decreased to $9.6 million in Q3 2025 from $11.8 million in Q3 2024, attributed to reduced environmental studies and mining costs [16]. - General and administrative expenses rose to $45.7 million in Q3 2025, up from $8.1 million in Q3 2024, primarily due to higher share-based compensation and consulting fees [17]. - General and administrative expenses for the three months ended September 30, 2025, were $45,726,000, compared to $8,149,000 in Q3 2024, reflecting a substantial increase of 461% [26]. - Share-based compensation and expenses settled with equity rose to $62,265 thousand from $19,129 thousand, indicating increased equity compensation [31]. - The company incurred $38,056 thousand in Nauru and Tonga warrant costs, a new expense category for the current reporting period [31]. Royalty and Economic Studies - TMC's royalty liability increased by $131 million to $145 million following the release of the two economic studies [18]. - TMC's two economic studies revealed a combined Net Present Value (NPV) of $23.6 billion, with a world-first Pre-Feasibility Study showing an NPV of $5.5 billion and 51 million tonnes of probable mineral reserves [8]. - The change in fair value of royalty liability was reported at $131,000,000 for both the three and nine months ended September 30, 2025, with no comparable figure in 2024 [26]. Production and Regulatory Compliance - The company expects to commence commercial production in Q4 2027, pending the acquisition of necessary permits [8]. - NOAA confirmed full compliance of TMC USA's exploration license applications, marking a significant step in the regulatory process [10]. - TMC successfully produced battery-grade manganese sulfate from nodule-derived manganese silicate during bench-scale trials, indicating progress in developing domestic manganese sources [9]. - All four metals contained in TMC's nodules are now recognized on the U.S. Critical Minerals List, with copper contributing 17% of expected life-of-mine revenue [13]. Shareholder Information - The company issued 19,623,376 shares and warrants to Korea Zinc, netting $71,686,000 in the nine months ended September 30, 2025 [30]. - The total number of common shares outstanding increased to 408,855,173 as of September 30, 2025, up from 324,131,896 shares a year earlier, representing a growth of 26% [30].