Financial Performance - Total income for the three months ended September 30, 2025, was $385, a significant decrease from $18,463 in the same period of 2024, indicating a decline of 97.9%[11] - Distributable income for the nine months ended September 30, 2025, showed a loss of $274,135 compared to a distributable income of $5,158,229 in 2024, reflecting a decrease of 105.3%[11] - Royalty Income for the three months ended September 30, 2025, was $0, compared to $6,945,974 for the nine months ended September 30, 2024, reflecting a significant decrease due to higher capital project spending[79] - Distributable Income for the three months ended September 30, 2025, was a loss of $111,352, with no Royalty Income distributed during this period[91] - Interest income decreased for the three and nine months ended September 30, 2025, primarily due to the decrease in Royalty Income and cash reserves[92] Cash and Investments - As of September 30, 2025, cash and short-term investments decreased to $29,160 from $760,920 as of December 31, 2024, representing a decline of approximately 96.2%[8] - Total cash reserves were $29,160 as of September 30, 2025, with plans to increase reserves to $2,000,000[94] - The Trust did not receive any Royalty Income from May 2024 through September 2025, relying on cash reserves and a Line of Credit to cover administrative expenses[96] Expenses and Costs - General and administrative expenses for the nine months ended September 30, 2025, totaled $1,017,505, a decrease from $2,161,377 in 2024, representing a reduction of about 53.0%[11] - General and administrative expenses decreased by $270,968 (70.1%) for the three months ended September 30, 2025, and by $1,143,872 (52.9%) for the nine months ended September 30, 2025[93] - Severance taxes increased approximately $0.5 million, or 48%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to higher Gross Proceeds[85] Production and Revenue - Natural gas production increased from 5,691,025 Mcf for the three months ended September 30, 2024, to 6,918,497 Mcf for the same period in 2025, and from 16,743,796 Mcf to 21,624,972 Mcf for the nine months ended September 30, 2024, to 2025[81] - Natural gas production volumes increased by 1,227,472 Mcf (21.6%) for the three months ended September 30, 2025, compared to the same period in 2024[105] - Oil production volumes decreased by 3,336 Bbls (30.0%) for the three months ended September 30, 2025, compared to the same period in 2024[106] Capital Expenditures - Hilcorp's 2025 capital expenditures for the Subject Interests are estimated to be approximately $9.0 million, with $4.0 million allocated to new vertical drill projects[47] - Hilcorp's capital expenditures for the Subject Interests are estimated at approximately $9.0 million for 2025, with $7.70 million already spent as of September 30, 2025[69] - Hilcorp's capital expenditures for the three months ended September 30, 2025, were $3,941,821, reflecting a decrease of $6,947,777 compared to the same period in 2024[74] - Capital expenditures decreased by $6,947,777 for the three months ended September 30, 2025, but increased by $7,788,545 for the nine months ended September 30, 2025, primarily due to drilling two new horizontal wells in 2024[83] Trust Structure and Governance - The Trust's financial statements raise substantial doubt about its ability to continue as a going concern within one year after the issuance date[29] - The Trust's distribution of income to Unit Holders is funded by Royalty Income after payment of Trust expenses, with no obligation to return overpayments[95] - The Trust does not have any directors or officers, resulting in no adoption of insider trading policies[127] Debt and Credit - The Trust established a Line of Credit of $2,000,000 with Texas Bank on May 21, 2025, bearing an interest rate of 8.5% as of June 30, 2025, maturing on May 21, 2027[29] - The outstanding balance on the Line of Credit was $274,135 as of September 30, 2025[98] - The Trust entered into a line of credit of $2,000,000 on May 21, 2025, to cover operating expenses, with an outstanding balance of $274,135 as of September 30, 2025[88][90] Market Conditions - The Trust's income is heavily influenced by natural gas and oil prices, which can fluctuate widely due to supply and demand changes[76] - The average realized natural gas price per Mcf increased to $2.11 for the three months ended September 30, 2025, compared to $1.49 in 2024[107] - The average realized oil price per Bbl decreased to $54.66 for the three months ended September 30, 2025, compared to $70.63 in 2024[108] Regulatory and Compliance - The Trust's financial statements are prepared on a modified cash basis, which differs from GAAP, affecting revenue recognition and expense recording[23] - Hilcorp's ongoing accounting and reporting to the Trust is subject to third-party compliance audits to ensure accuracy[72] - The Trust's production and sale of natural gas from coal seam wells does not qualify for tax credit under Section 45K of the Code, with no current legislation reinstating such credits[36]

Financial Position - Total assets decreased by $2.4 million, or 0.27%, to $909.4 million at September 30, 2025, from $911.8 million at December 31, 2024[176]. - Total liabilities increased by $2.8 million, or 0.4%, to $719.2 million at September 30, 2025, primarily due to an increase in deposits[180]. - The total assets as of September 30, 2025, were $909,794,000, up from $890,091,000 in 2024[190]. - The total liabilities as of September 30, 2025, were $714,410,000, with equity amounting to $195,384,000[190]. Loans and Credit - Loans receivable increased by $8.3 million, or 1.1%, to $746.1 million at September 30, 2025, driven by increases in owner-occupied 1-4 loans, commercial loans, and construction loans[178]. - The allowance for credit losses decreased by $325,000 to $8.2 million at September 30, 2025, with the ratio to total loans at 1.10%[179]. - The ratio of allowance for credit losses to non-performing loans was 233.5% at September 30, 2025, compared to 212.5% at December 31, 2024[179]. - The allowance for credit losses was $8.2 million at September 30, 2025, representing 1.10% of total loans, compared to 1.15% at December 31, 2024[206][211]. - The average outstanding balance of loans for the nine months ended September 30, 2025, was $745,001,000, with interest income from loans amounting to $33,594,000[190]. - The average balance of loans increased by $52.9 million, or 7.7%, to $743.1 million for the three months ended September 30, 2025[196]. Deposits - Total deposits increased by $12.3 million, or 1.9%, to $663.8 million at September 30, 2025, with interest-bearing deposits rising by $7.3 million, or 1.4%[181]. - At September 30, 2025, the Company had $50.3 million in brokered deposits, an increase from $10.0 million at September 30, 2024[214]. - The total interest-bearing deposits increased to $523,149,000, with an average yield of 2.03% for the nine months ended September 30, 2025[190]. Income and Expenses - Net income for the three months ended September 30, 2025, was $3.7 million or $0.41 per diluted share, a decrease from $3.8 million or $0.35 per diluted share for the same period in 2024[195]. - Interest income increased by $377,000, or 3.10%, to $12.5 million for the three months ended September 30, 2025, primarily due to a $1.0 million increase in interest income on loans[196]. - Non-interest income totaled approximately $684,000 for the three months ended September 30, 2025, a slight decrease from $696,000 for the same period in 2024[207]. - Non-interest expense increased to $5.9 million for the three months ended September 30, 2025, primarily due to a $570,000 increase in compensation and benefits[208]. - The effective tax rate for the nine months ended September 30, 2025, was 26.4%, down from 27.9% for the same period in 2024[210]. Interest and Yield - For the three months ended September 30, 2025, total interest-earning assets increased to $842,475,000, generating net interest income of $9,350,000, compared to $9,303,000 in the same period of 2024[185]. - The average yield on loans for the three months ended September 30, 2025, was 6.15%, up from 6.05% in 2024, with total loans amounting to $743,119,000[185]. - Total interest-bearing liabilities increased to $560,994,000, with a net interest rate spread of 3.65% for the three months ended September 30, 2025, compared to 3.71% in 2024[185]. - For the nine months ended September 30, 2025, net interest income was $27,149,000, an increase from $26,176,000 in 2024[190]. - The average yield on interest-earning assets for the nine months ended September 30, 2025, was 5.80%, compared to 5.64% in 2024[190]. - The change in net interest income for the three months ended September 30, 2025, was $47,000, reflecting a volume increase of $289,000 and a rate decrease of $242,000[189]. - Net interest income was $9.4 million for the three months ended September 30, 2025, compared to $9.3 million for the same period in 2024, with a net interest margin of 4.40%[204]. - Interest expense increased by $330,000, or 11.6%, to $3.2 million for the three months ended September 30, 2025, driven by a 13 basis point increase in the average rate on interest-bearing deposits[198][199].

Financial Performance - Total interest income for the three months ended September 30, 2025, was $19,010,000, an increase of 1.9% from $18,651,000 in the same period of 2024[12] - Net income for the three months ended September 30, 2025, was $4,420,000, representing a 65% increase compared to $2,677,000 in the prior year[12] - Noninterest income for the three months ended September 30, 2025, was $2,537,000, an increase of 10.9% from $2,288,000 in the same period of 2024[12] - Basic net income per common share for the three months ended September 30, 2025, was $0.70, up from $0.42 in the same period of 2024[12] - Total comprehensive income for the three months ended September 30, 2025, was $10,435,000, down from $18,792,000 in the prior year[14] - Net income for the nine months ended September 30, 2025, was $9,945,000, a significant increase from $4,544,000 in the same period of 2024, representing a growth of 119%[26] - Cash dividends paid for the nine months ended September 30, 2025, totaled $4,645,000, compared to $4,303,000 in 2024, reflecting an increase of 8%[26] - The company reported a net cash provided by operating activities of $10,748,000 for the nine months ended September 30, 2025, compared to $4,020,000 in 2024, indicating a growth of 167%[26] Assets and Loans - Total assets as of September 30, 2025, were $1,802,407,000, a slight decrease from $1,811,636,000 as of December 31, 2024[10] - Total loans increased to $1,016,945,000 as of September 30, 2025, up from $988,613,000 at the end of 2024, marking a growth of 2.9%[10] - Total loans reached $1,016,945 million as of September 30, 2025, with a significant increase from $1,005,541 million in the prior period[58] - The gross loans portfolio as of September 30, 2025, was $1,016,945 million, up from $988,613 million at the end of 2024[43] - As of September 30, 2025, the total loans, net of deferred fees and costs, were $1,005,823 million, an increase from $977,688 million as of December 31, 2024[43] - The consumer real estate loans increased to $324.597 billion as of September 30, 2025, from $307.855 billion as of December 31, 2024[43] Credit Losses and Provisions - The provision for credit losses for the three months ended September 30, 2025, was $306,000, compared to a recovery of $5,000 in the same period of 2024[12] - The provision for credit losses was $618,000 for the nine months ended September 30, 2025, down from $1,287,000 in 2024, showing a decrease of 52%[26] - The provision for credit losses for the nine months ended September 30, 2025, was $581 million, compared to a recovery of $3 million in the same period of the previous year[47] - The allowance for credit losses on loans increased to $10,579 million as of September 30, 2025, compared to $10,262 million as of December 31, 2024[43] - The total provision for credit losses for the nine months ended September 30, 2025, was $37 million, reflecting ongoing risk management efforts[65] Acquisition and Market Expansion - The acquisition of Frontier Community Bank contributed $14,299,000 to additional paid-in capital as of December 31, 2023[23] - The acquisition of Frontier Community Bank expanded the company's operations into the Waynesboro, Staunton, and Lynchburg, Virginia markets, enhancing its market presence[37] - The total purchase price consideration for the acquisition of FCB was $16,349 million, consisting of $14,299 million in stock consideration and $2,050 million in cash consideration[41] - The fair value of identifiable assets acquired was $148,513 million, while the total identifiable liabilities assumed amounted to $137,038 million, resulting in a fair value of net assets acquired of $11,475 million[41] - Goodwill recorded from the acquisition was $4,874 million, reflecting expected management and operational synergies[41] Securities and Investments - As of September 30, 2025, the total amortized cost of securities available for sale was $687,097 million, with a fair value of $630,483 million, resulting in gross unrealized losses of $56,646 million[66] - The fair value of securities available for sale as of September 30, 2025, was $630.483 million, categorized under Level 2[90] - The company had 534 securities with a fair value of $603,882 million in an unrealized loss position, attributed to noncredit-related factors such as changes in interest rates[67] - The deferred tax asset for the net unrealized loss on securities available for sale was $11,889 million as of September 30, 2025, down from $16,506 million as of December 31, 2024[71] - The fair value of mortgage-backed securities was $177,663 million as of September 30, 2025, with an amortized cost of $181,664 million[66] Deposits and Equity - Total deposits decreased to $1,561,904,000 as of September 30, 2025, from $1,644,752,000 at the end of 2024, a decline of 5%[10] - The total carrying amount of deposits as of September 30, 2025, was $1.561 billion, with an estimated fair value of $1.561 billion[90] - The total stockholders' equity increased to $179,220 thousand as of September 30, 2025, up from $156,409 thousand as of December 31, 2024, representing an increase of 14.5%[10] Miscellaneous - The company recognized stock-based compensation expenses of $143,000 for the nine months ended September 30, 2025, up from $93,000 in 2024, representing a rise of 54%[26] - The company borrowed $40 million from the Federal Home Loan Bank of Atlanta and $10 million from the Federal Reserve Discount Window during Q3 2025, with a weighted average interest rate of 3.99%[113] - The company plans to keep the measurement of goodwill open until December 31, 2024, to reflect any adjustments to the fair value of assets acquired and liabilities assumed[41]

Financial Performance - For the nine months ended September 30, 2025, net income was $1.6 million, compared to a net loss of $3.7 million for the same period in 2024[113]. - For the three months ended September 30, 2025, the company reported net income of $489,000, an increase from $447,000 in the same period of 2024[146]. - Non-interest income for the nine months ended September 30, 2025, totaled $1.2 million, an increase of $5.4 million compared to the same period in 2024[169]. - Non-interest income totaled $315,000 for the three months ended September 30, 2025, down $305,000 compared to the same period in 2024[155]. - Income tax expense was reported at $357,000 for the nine months ended September 30, 2025, compared to an income tax benefit of $1.0 million for the same period in 2024[177]. Asset and Liability Management - Total assets increased by $7.1 million, or 2.6%, to $283.8 million at September 30, 2025, from $276.7 million at December 31, 2024[113]. - Loans decreased by $2.3 million, or 1.4%, to $164.8 million at September 30, 2025, compared to $167.1 million at December 31, 2024[113]. - Total deposits increased to $186,372 thousand as of September 30, 2025, reflecting a 0.4% increase from $185,674 thousand at December 31, 2024[132]. - The ratio of total loans to total deposits was 88.4% as of September 30, 2025, compared to 90.0% at December 31, 2024[132]. - Total term debt at September 30, 2025, was $74.072 million, with expectations of retaining a majority of maturing certificates of deposit[187]. Investment and Securities - Investment securities rose by $17.6 million, or 41.8%, to $59.8 million at September 30, 2025, compared to December 31, 2024[113]. - Total investment securities increased to $59.8 million, a rise of 41.8% from $42.2 million at the end of 2024[126]. - The weighted average yield of newly purchased securities was 5.12% as of September 30, 2025[126]. - Net unrealized losses on available-for-sale securities decreased to $3.4 million from $4.5 million at the end of 2024[127]. Non-Performing Assets - Non-performing assets increased by $74,000, or 4.1%, to $1.9 million at September 30, 2025, from December 31, 2024[113]. - Total non-performing loans rose to $1.823 million, up from $1.631 million at the end of 2024[125]. - The allowance for credit losses on loans was $2.4 million, or 1.45% of total loans, down from 1.51% at the end of 2024[121]. - Net loan charge-offs for the nine months ended September 30, 2025, totaled $83,000, primarily related to residential mortgages and overdrawn deposit accounts[121]. Revenue and Expenses - For the three months ended September 30, 2025, net interest income was $2.5 million, down $82,000, or 3.2%[113]. - Total interest income decreased by $158,000, or 4.3%, to $3.5 million for the three months ended September 30, 2025, compared to the same period in 2024[147]. - Total interest income for the nine months ended September 30, 2025, was $10.3 million, down from $10.4 million in 2024[162]. - Non-interest expense for the nine months ended September 30, 2025, decreased by $541,000, or 7.6%, to $6.6 million compared to the same period in 2024[113]. - Total interest expense decreased by $76,000, or 6.7%, to $1.1 million for the three months ended September 30, 2025[152]. Strategic Initiatives - The company has shifted its business strategy to a relationship-based community bank model targeting small- to mid-sized businesses while continuing to serve its traditional customer base[111]. - Total commercial real estate revenue increased to $33.679 million in Q3 2025, up 52.3% from $22.108 million in Q4 2024[120]. - Health service facilities revenue surged by 746.1%, reaching $3.325 million compared to $393,000 in the previous period[120]. - Total construction and land revenue decreased by 42.8%, falling to $18.850 million from $32.941 million[120]. Shareholder Information - Shareholders' equity increased to $81.6 million, or 28.7% of total assets, up 1.7% from $80.2 million at December 31, 2024[137]. - The company repurchased 148,546 shares at an average cost of $11.98 per share during the nine months ended September 30, 2025[138]. Liquidity and Commitments - Total unused and available liquidity as of September 30, 2025, was $95.663 million[181]. - Commitments to originate loans totaled $120,000 as of September 30, 2025[186].

Debt and Interest Management - As of September 30, 2025, borrowings under the Term Loan totaled $1,940 million, with an applicable margin of 1.25% for adjusted base rate loans and 2.25% for Term SOFR loans[195] - An assumed 10% increase/decrease in the current interest rate would increase/decrease annual interest expense by $4.9 million on the non-hedged portion of the borrowing[195] - The Company entered into a $600 million interest rate swap agreement effective September 3, 2024, paying a fixed rate of 3.61%[197] - The Company also entered into a $150 million interest rate swap agreement effective April 1, 2025, paying a fixed rate of 3.36%[198] - The Company finalized an amendment to its Credit Agreement on August 21, 2025, reducing the applicable margin on the Term Loan and RCF[196] Commodity and Currency Exposure - The Company has manufacturing and distribution facilities in multiple countries, including the Czech Republic, China, and Thailand, exposing it to foreign currency risks[199] - The Company is exposed to fluctuations in raw material costs, including nickel, zinc, aluminum, and copper, which can affect its operating results[202] - At September 30, 2025, the Company was managing $0.8 million notional value of nickel forward contracts and $0.1 million notional value of copper forward contracts[203] - The Company does not designate its derivative contracts as hedge transactions, recording mark-to-market impacts to current earnings[203] Operational Reliance - The Company has significant reliance on the performance of distributors, suppliers, and retailers, which could impact its operational performance[13]

Financial Performance - Pure Cycle reported a net income of $13.1 million for the year ended August 31, 2025, representing a 13% increase from 2024[1]. - Earnings per fully diluted common share increased to $0.54, up 12.5% from $0.48 in 2024[1]. - Total revenue for the year was $26.1 million, a 9% decrease from $28.7 million in 2024, while pre-tax income rose 12% to $17.5 million[3]. - Net income increased to $13,110,000 for 2025, compared to $11,613,000 in 2024, representing a growth of 12.9%[19]. - Basic and diluted earnings per share rose to $0.54 in 2025, up from $0.48 in 2024, reflecting an increase of 12.5%[19]. - The company reported an increase in interest income to $3,272,000 in 2025, compared to $2,837,000 in 2024, marking a growth of 15.4%[19]. Revenue Sources - Oil and gas royalty income surged by 738% to $6.7 million, compared to $0.8 million in 2024[3]. - Water and wastewater tap sales increased to 182 taps sold for $7.3 million, up from 73 taps for $3.4 million in 2024[8]. - Lot sales revenue decreased to $13.7 million in 2025 from $16.0 million in 2024 due to delays in Phase 2D[15]. - The land development segment generated $15,257,000 in revenues for 2025, down 13.3% from $17,599,000 in 2024[19]. Assets and Liabilities - Total assets as of August 31, 2025, were $162,279,000, an increase of 10.1% from $147,354,000 in 2024[21]. - Cash and cash equivalents totaled $21.9 million as of August 31, 2025[3]. - Cash and cash equivalents decreased slightly to $21,931,000 in 2025 from $22,113,000 in 2024[21]. - Total liabilities increased to $19,541,000 in 2025 from $17,652,000 in 2024, an increase of 10.7%[21]. - Working capital was reported at $20 million as of August 31, 2025[13]. Future Plans and Growth - The company expects to complete Phase 2D by the end of fiscal 2026 and Phase 2E by the end of fiscal 2027[9]. - Pure Cycle plans to ramp up its single-family rental segment, with 40 additional homes under contract for delivery in fiscal 2026[12]. - Future growth is anticipated through the development of rental units and expansion of land development operations at Sky Ranch[25]. - The company continues to expand its operations in the water and wastewater service sector, which remains a core business segment[23].

Revenue and Loss - Total revenue for the three months ended September 30, 2025, was $0, unchanged from the same period in 2024[147] - Net loss for the three months ended September 30, 2025, was $2.3 million, a decrease of $1.4 million, or 38%, from a net loss of $3.8 million in 2024[147] - Net loss for the nine months ended September 30, 2025, was $9.1 million, an increase of $1.6 million, or 21%, from a net loss of $7.5 million in 2024[151] - The company incurred a net loss of $9.1 million with no revenues generated during the nine months ended September 30, 2025, and had working capital of approximately $1.3 million[158] Expenses - Research and development (R&D) expenses decreased by $0.5 million, or 33%, to $0.9 million for the three months ended September 30, 2025, compared to $1.4 million in 2024[147] - General and administrative expenses increased by $0.6 million, or 169%, to $0.9 million for the three months ended September 30, 2025, primarily due to investor relations advertising costs[148] - Legal and professional expenses decreased by $0.9 million, or 67%, to $0.4 million for the three months ended September 30, 2025, due to lower accounting expenses compared to 2024[149] - Total operating expenses decreased by $0.8 million, or 26%, to $2.3 million for the three months ended September 30, 2025[147] - R&D expenses for the nine months ended September 30, 2025, increased by $0.9 million, or 35%, to $3.5 million compared to $2.6 million in 2024[151] - General and administrative expenses for the nine months ended September 30, 2025, increased by $2.9 million, or 297%, to $3.8 million compared to $0.96 million in 2024[151] - Total operating expenses for the nine months ended September 30, 2025, increased by $3.2 million, or 54%, to $9.1 million compared to $5.9 million in 2024[151] - R&D compensation related expenses were $1.0 million for the nine months ended September 30, 2025, a 11% increase from $0.9 million in the same period of 2024, with a decrease in percentage of total R&D expenses from 36% to 29%[152] - General and Administrative expenses increased by $2.9 million, or 297%, from $1.0 million in the nine months ended September 30, 2024, to $3.8 million in the same period of 2025[153] - Legal and professional expenses decreased by $0.6 million, or 24%, during the nine months ended September 30, 2025, compared to the same period in 2024[154] - Cash used in operating activities was $8.5 million for the nine months ended September 30, 2025, an increase of 83% from $4.6 million in the same period of 2024[172] Assets and Capital - Total current assets increased by 48% to $3.3 million as of September 30, 2025, compared to $2.2 million as of December 31, 2024[170] - As of September 30, 2025, the company had cash and cash equivalents of $2.1 million, a 1237% increase from $156,656 as of September 30, 2024[172] - The company raised approximately $5.0 million in net proceeds from a public offering in March 2025 and $3.9 million from a private placement in June 2025[166][168] Financial Instruments and Valuation - The fair value of the October 2024 Convertible Bridge Notes is calculated based on mandatory conversion scenarios and the fair value per share at the balance sheet date[183] - The company uses Monte Carlo simulation models to estimate the fair value of financial instruments, which require subjective assumptions and can lead to significant variations in measurements[190] - Changes in the fair value of derivative financial instruments are recognized in the unaudited condensed consolidated statements of operations[191] - The company evaluates all warrants issued to determine their classification and fair value, with liability-classified warrants revalued at each reporting date[188] - The fair value of warrants is estimated at issuance and recorded to additional paid-in capital for equity-classified warrants[188] - The company does not provide quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[194] Other Considerations - The company is evaluating options regarding the potential termination of the Theradex Master Agreement, which could materially affect its clinical trials and financial position[157] - The company has no off-balance sheet arrangements that materially affect its financial condition or results of operations[178] - Research and development expenses are charged as incurred, including product development and personnel costs, with significant involvement from former executives[180]

Financial Performance - Total income for the three months ended September 30, 2025, was $223,402, a decrease of 26.1% from $302,192 in the same period of 2024[13] - Distributable income for the three months ended September 30, 2025, was $130,813, down 44.0% from $233,552 in 2024[13] - Distributable income per unit decreased to $0.07 in Q3 2025 from $0.12 in Q3 2024, reflecting a 41.7% decline[13] - The Trust distributed $136,194 to unitholders in Q3 2025, compared to $189,772 in Q3 2024, indicating a reduction of 28.1%[14] - Distributable income per unit for the three months ended September 30, 2025 was $0.07, down from $0.12 for the same period in 2024, with distributions also decreasing to $0.07 per unit from $0.09[46] Trust Assets and Expenses - Trust corpus at the end of Q3 2025 was $916,146, a decrease of 0.4% from $921,527 at the end of Q2 2025[9][14] - General and administrative expenses increased to $92,589 in Q3 2025 from $68,640 in Q3 2024, representing a rise of 34.9%[13] - General and administrative expenses increased to $92,589 for the three months ended September 30, 2025, from $68,640 in the comparable period of 2024, primarily due to the timing of professional fee payments[54] Production and Revenue - For the three months ended September 30, 2025, royalty income from oil and natural gas decreased to $218,526 from $286,498 in the comparable period in 2024, primarily due to lower prices and production levels[48] - Oil production decreased to 3,226 barrels for the three months ended September 30, 2025, compared to 3,265 barrels in the same period in 2024, while natural gas volumes sold decreased to 3,567 thousand cubic feet from 5,095 thousand cubic feet[47] - Income from natural gas royalties decreased to $11,194 for the three months ended September 30, 2025, from $15,362 in the same period in 2024, with natural gas sold volumes also declining[51] Commodity Prices and Market Conditions - The average price realized for oil decreased to $63.52 per barrel in the three months ended September 30, 2025, down from $81.11 per barrel in the comparable period in 2024[47] - The average price realized for natural gas liquids decreased to $0.38 per thousand cubic feet for the three months ended September 30, 2025, down from $0.75 in the same period in 2024[53] - The Trust's income is significantly influenced by commodity prices, which may fluctuate widely due to various factors beyond the Trustee's control[31] - Marine's royalty income is heavily dependent on the operations of third parties, with fluctuations based on the number of productive wells and market prices[42] Future Outlook - The estimated reserve for future expenses deducted from distributable income for Q3 2025 was $84,500[18] - The company anticipates future production declines due to normal well depletion and does not receive information on future drilling or re-working operations from operators[44] Compliance and Controls - Marine's disclosure controls and procedures were evaluated as effective as of September 30, 2025, ensuring compliance with SEC requirements[58]

Financial Performance - Consolidated revenue for Q3 2025 was approximately $13.8 million, a decrease from approximately $15.4 million in Q3 2024, primarily due to a decline in Healthcare Operations revenue[6] - Gross profit margin for Q3 2025 declined to approximately 19.9% from 23.2% in the prior year, with Healthcare segment margin decreasing to 18.4% from 21.5%[6] - Operating expenses decreased to approximately $4.7 million in Q3 2025 from approximately $7.8 million in Q3 2024, excluding non-recurring expenses[6] - Net loss attributable to common shareholders decreased approximately 48% to approximately $2.2 million, or ($0.08) per diluted share, compared to a net loss of approximately $4.2 million, or ($0.22) per diluted share in Q3 2024[6] Cash and Assets - The company ended Q3 2025 with approximately $13.9 million in cash[6] - Total assets decreased from $36,478 million as of December 31, 2024, to $30,013 million as of September 30, 2025, representing a decline of approximately 17.6%[17] - Current assets decreased from $31,480 million to $26,209 million, a reduction of about 16.8%[17] - Cash reserves decreased from $19,960 million to $13,926 million, a decline of approximately 30.3%[17] - Total equity decreased from $26,798 million to $21,546 million, a decline of about 19.5%[17] Liabilities - Total liabilities decreased from $9,680 million to $8,467 million, a reduction of about 12.5%[17] - Current liabilities decreased from $8,210 million to $7,363 million, a decline of approximately 10.4%[17] Operational Improvements - The company has identified annualized overhead expense reductions exceeding $2.0 million through staff reductions and operational improvements[6] - Prescription volumes in the Healthcare segment are expected to increase sequentially starting in Q4 2025 due to improved customer engagement[6] - The company is optimizing inventory levels in its PharmcoRx pharmacies, which is expected to generate significant one-time cash savings[7] Inventory and Capital - Inventory increased from $4,881 million to $5,616 million, an increase of about 15.1%[17] - Additional paid-in capital increased slightly from $75,697 million to $75,913 million, an increase of approximately 0.3%[17] - The company reported a treasury stock of $100 million as of September 30, 2025, compared to no shares as of December 31, 2024[17] Product Development and Sales - The e-Commerce segment saw robust sales for satellite-based connectivity and IoT products, with high-margin recurring revenue at record levels[7] - NextPlat launched Florida Sunshine products in the UK and EU and is preparing an AI-driven marketing campaign for these products[7]

IPO and Financial Transactions - The company completed its Initial Public Offering on December 14, 2021, raising gross proceeds of $200 million from the sale of 20 million units at $10.00 per unit[130]. - An additional $15,624,010 was generated from the partial exercise of the over-allotment option, with total transaction costs amounting to $12,926,100[130][132]. - Following the IPO, $219,936,490 was placed in a trust account, invested in U.S. government securities, with a per unit value of $10.20[133]. - The underwriters were paid a cash underwriting discount of $0.20 per Unit, totaling $4,312,480, with an additional deferred fee of $7,546,840 payable upon completion of a business combination[167]. Business Combination and Deadlines - On June 12, 2023, the company extended the deadline for completing a business combination to June 14, 2024, with a monthly extension fee of $50,000[134]. - The Company has until October 14, 2025, to consummate a business combination, after which mandatory liquidation will occur if not completed[158]. - The Company entered into a Business Combination Agreement with Leading Partners Limited, exchanging 11,124,960 private placement warrants for 500,000 Holdco Class A Ordinary Shares and 43,000,000 Holdco Class A Ordinary Shares for LEADING equity holders[150]. Shareholder Redemptions - A total of 19,824,274 shares were redeemed by public shareholders for $10.54 per share, resulting in $208,992,255 being removed from the trust account[136]. - Approximately $12,302,385 was removed from the trust account for the redemption of 1,146,276 shares at $10.73 per share[139]. - Following the extraordinary meeting on April 30, 2025, approximately $2,948,990 was removed from the Trust Account due to the redemption of 246,676 shares[154]. - Public shareholders have the right to redeem their shares for a pro rata portion of the trust account, initially anticipated to be $10.20 per share[141]. - If the company fails to complete a business combination by December 14, 2024, it will redeem public shares at a price equal to the amount in the trust account, estimated to be $10.20 per share[145]. Financial Position and Performance - As of June 30, 2025, the Company had a working capital deficit of approximately $2,503,403 and only $212 in its operating bank account[155]. - The Trust Account balance decreased significantly from $225,411,726 as of March 31, 2023 to $1,865,847 as of June 30, 2025 due to redemptions totaling $221,294,640[161]. - For the three months ended June 30, 2025, the Company reported a net loss of $542,059, with interest income of $25,966 offset by operating costs and changes in fair value of warrant liability[162]. - The Company anticipates that cash held outside the Trust Account may not be sufficient for operations for at least the next 12 months if a business combination is not completed[157]. Accounting Policies and Reporting - The Company has identified critical accounting policies that may significantly affect reported amounts, including the accounting for Class A ordinary shares subject to possible redemption[172]. - The company accounts for warrants issued in connection with its initial public offering as liabilities, measured at fair value at inception and each reporting date[174]. - As of June 30, 2025, the company did not have any dilutive securities, resulting in diluted loss per ordinary share being the same as basic loss per ordinary share[176]. - The company adopted ASU 2016-13 on January 1, 2023, which did not have a material impact on its financial statements[178]. - The company does not have any off-balance sheet arrangements as of June 30, 2025[180]. - The company is classified as an "emerging growth company" and is exempt from certain reporting requirements[182]. - The company has elected not to opt out of the extended transition period for new or revised financial accounting standards[183]. - The company is classified as a smaller reporting company and is not required to provide certain disclosures[185]. Economic Impact - Inflation did not have a material impact on the company's business, revenues, or operating results during the period presented[181].