[Recent Business Highlights and 2Q 2025 Results](index=1&type=section&id=Recent%20Business%20Highlights%20and%202Q%202025%20Results) This section covers the company's overview, key business achievements including clinical trial progress and financial position, and the CEO's strategic commentary [Company Overview](index=1&type=section&id=Company%20Overview) Perspective Therapeutics is a radiopharmaceutical company focused on pioneering advanced treatments for cancers throughout the body, utilizing proprietary technology - Perspective Therapeutics, Inc. is a radiopharmaceutical company that is pioneering advanced treatments for cancers throughout the body[2](index=2&type=chunk) [Key Business Highlights](index=1&type=section&id=Key%20Business%20Highlights) The company reported positive interim results from its Phase 1/2a [212Pb]VMT-α-NET study in neuroendocrine tumors, including objective responses and a favorable safety profile. FDA alignment was reached for Cohort 3, and two patients have been dosed. Upcoming data presentations are planned, and current cash is expected to fund operations into late 2026 - [212Pb]VMT-α-NET study showed objective responses in **4 of 7 patients** in Cohort 2, with **3 confirmed** and remaining in response. Favorable safety profile with no dose-limiting toxicities or discontinuations due to adverse events observed among **42 patients**[3](index=3&type=chunk) - FDA alignment reached in June to open Cohort 3 (**6.0 mCi**) of the [212Pb]VMT-α-NET study; **two patients** dosed as of July 31, 2025[3](index=3&type=chunk) - Cash, cash equivalents and short-term investments of approximately **$192 million** as of June 30, 2025, are expected to fund current planned clinical milestones and operational investments into **late 2026**[3](index=3&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Thijs Spoor highlighted the company's commitment to cancer patients, attributing recent and upcoming scientific data presentations to strong clinical trial participation and stable supply of proprietary radiopharmaceutical medicines. The company plans further updates through mid-2026 and beyond - CEO emphasizes company-wide commitment to helping cancer patients with limited treatment options, supported by strong clinical trial participation and stable supply of three clinical-stage, proprietary new medicines[4](index=4&type=chunk) [Clinical Program Updates](index=2&type=section&id=Clinical%20Program%20Updates) This section details the progress of the company's key clinical programs, including VMT-α-NET for neuroendocrine tumors, VMT01 for melanoma, and PSV359 for solid tumors, highlighting study designs, enrollment, dosing, and upcoming data presentations [VMT-α-NET (Neuroendocrine Tumors)](index=2&type=section&id=VMT-%CE%B1-NET%20(Neuroendocrine%20Tumors)) VMT-α-NET targets SSTR2-expressing tumors. The Phase 1/2a study has progressed, with Cohort 2 enrollment closed and Cohort 3 (6.0 mCi) opened in June 2025 following FDA alignment. Two patients have been dosed in Cohort 3. Data from the study were presented at ASCO and SNMMI 2025, and an update is accepted for ESMO Congress 2025 [Program Description and Study Design](index=2&type=section&id=VMT-%CE%B1-NET_Program%20Description%20and%20Study%20Design) VMT-α-NET is designed to target and deliver 212Pb to SSTR2-expressing tumor sites. It is being evaluated in a multi-center, open-label, dose-finding, dose-expansion Phase 1/2a study (NCT05636618) for unresectable or metastatic SSTR2-positive neuroendocrine tumors in patients without prior radiopharmaceutical therapies - VMT-α-NET targets SSTR2-expressing tumor sites with **212Pb** for patients with unresectable or metastatic SSTR2-positive neuroendocrine tumors[5](index=5&type=chunk) - Study is a multi-center, open-label, dose finding, dose expansion Phase 1/2a (NCT05636618) for patients without prior radiopharmaceutical therapies[5](index=5&type=chunk) [Enrollment and Dosing Progress](index=2&type=section&id=VMT-%CE%B1-NET_Enrollment%20and%20Dosing%20Progress) Cohort 2 enrollment closed in 2Q 2025 with 46 patients treated. Cohort 3 (6.0 mCi) opened in June 2025 after FDA alignment, with two patients dosed by July 31, 2025. The study has progressed through dose escalations from 2.5 mCi (Cohort 1) to 5.0 mCi (Cohort 2) based on Safety Monitoring Committee recommendations - Cohort 2 enrollment closed in 2Q 2025 with an additional 39 patients, totaling **46 patients**[6](index=6&type=chunk) - Cohort 3 (**6.0 mCi**) opened in June 2025 after FDA alignment; **two patients** dosed as of July 31, 2025[7](index=7&type=chunk)[9](index=9&type=chunk) - Dose escalation progressed from Cohort 1 (**2.5 mCi**) to Cohort 2 (**5.0 mCi**) based on Safety Monitoring Committee recommendations after DLT review[8](index=8&type=chunk) [Key Data and Upcoming Presentations](index=1&type=section&id=VMT-%CE%B1-NET_Key%20Data%20and%20Upcoming%20Presentations) Updated interim results from the Phase 1/2a study were presented at the 2025 ASCO Annual Meeting, showing objective responses in Cohort 2 and a favorable safety profile. An update has been accepted for a Mini Oral presentation at the ESMO Congress 2025 in October. Further updates on dosed patients are planned for scientific congresses in the next twelve months - Updated interim results from Phase 1/2a study presented at 2025 ASCO Annual Meeting, showing objective responses and favorable safety profile[3](index=3&type=chunk) - Data on [212Pb]VMT-α-NET accepted for Mini Oral presentation at ESMO Congress 2025 on October 20, 2025[3](index=3&type=chunk)[11](index=11&type=chunk) - Plans to submit relevant updates on dosed patients to scientific congresses for presentation in the next twelve months[12](index=12&type=chunk) [VMT01 (Melanoma)](index=3&type=section&id=VMT01%20(Melanoma)) VMT01 is an MC1R-targeted RPT for melanoma, radiolabeled with 203Pb for imaging or 212Pb for therapy. The Phase 1/2a study has progressed through dose escalations, and the Safety Monitoring Committee recommended exploring a lower dose (1.5 mCi) both as monotherapy and in combination with nivolumab, with initial patients treated in March and April 2025 [Program Description and Study Design](index=3&type=section&id=VMT01_Program%20Description%20and%20Study%20Design) VMT01 is an MC1R-targeted radiopharmaceutical therapy (RPT) that can be radiolabeled with 203Pb for patient selection/dosimetry or 212Pb for alpha particle therapy. It is being studied in a multi-center, open-label, dose-finding, dose-expansion study (NCT05655312) for previously treated patients with histologically confirmed melanoma and MC1R-positive imaging scans - VMT01 is an MC1R-targeted RPT, using **203Pb** for imaging/dosimetry and **212Pb** for alpha particle therapy[13](index=13&type=chunk) - Study (NCT05655312) is a multi-center, open-label, dose finding, dose expansion for previously treated melanoma patients with MC1R-positive imaging[13](index=13&type=chunk) [Dosing and Cohort Updates](index=3&type=section&id=VMT01_Dosing%20and%20Cohort%20Updates) The study initially dosed patients in Cohort 1 (3.0 mCi) and Cohort 2 (5.0 mCi). The Safety Monitoring Committee later recommended exploring a lower dose of 1.5 mCi, both as monotherapy and in combination with nivolumab, allowing concurrent progression. As of July 31, 2025, five patients received monotherapy and two received combination treatment - SMC recommended exploring a lower dose level of **1.5 mCi** for VMT01, both as monotherapy and in combination with anti-PD-1 antibody nivolumab[13](index=13&type=chunk) - As of July 31, 2025, **five patients** received initial monotherapy treatments of VMT01 at **1.5 mCi**, and **two patients** received treatment in the VMT01 **1.5 mCi** plus nivolumab cohort[14](index=14&type=chunk) [PSV359 (Solid Tumors)](index=4&type=section&id=PSV359%20(Solid%20Tumors)) PSV359 is designed to deliver 212Pb to FAP-α expressing tumor sites in multiple solid tumors. Its targeting ligand shows improved target engagement and reduced retention in healthy tissues in preclinical and human imaging. As of July 31, 2025, two patients have been treated, and additional site activations are in progress [Program Description and Status](index=4&type=section&id=PSV359_Program%20Description%20and%20Status) PSV359 targets fibroblast activation protein-α (FAP-α) in solid tumors with 212Pb. The targeting moiety can also be radiolabeled with 203Pb or 68Ga (PSV377) for FAP-α detection. Preclinical and human imaging suggest improved target engagement and reduced healthy tissue retention. Two patients treated as of July 31, 2025, with additional site activations underway - PSV359 targets FAP-α expressing tumor sites with **212Pb** for multiple highly prevalent solid tumors; can also use **203Pb** or **68Ga (PSV377)** for detection[16](index=16&type=chunk) - Proprietary targeting ligand shows improved levels of target engagement and uptake in tumors, as well as reduced retention in healthy tissues[16](index=16&type=chunk) - **Two patients** treated with [212Pb]PSV359 as of July 31, 2025; additional site activation activities are underway[17](index=17&type=chunk) [Second Quarter 2025 Financial Summary](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Summary) This section provides a detailed overview of the company's financial performance and position for the second quarter of 2025, including cash flow, operating expenses, net loss, and balance sheet highlights [Financial Position and Outlook](index=4&type=section&id=Financial%20Position%20and%20Outlook) Cash, cash equivalents, and short-term investments decreased to $192 million as of June 30, 2025, from $227 million at December 31, 2024. This funding is projected to be sufficient into late 2026, supporting clinical programs, pre-IND assets, and manufacturing site development. The company had 74.3 million common shares and 10.6 million warrants/options outstanding, with all pre-funded warrants exercised in 2Q 2025 Cash, Cash Equivalents, and Short-Term Investments (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash, cash equivalents, and short-term investments | $192 million | $227 million | - Current funding expected to be sufficient into **late 2026**, supporting clinical programs, pre-IND assets, and regional manufacturing sites[18](index=18&type=chunk) - As of June 30, 2025, approximately **74.3 million shares** of common stock and **10.6 million warrants/options** outstanding. All outstanding pre-funded warrants exercised in 2Q 2025[19](index=19&type=chunk) [Segment Reporting Changes](index=4&type=section&id=Segment%20Reporting%20Changes) Following the divestiture of the brachytherapy segment in April 2024, its operations are now classified as discontinued operations in the financial statements. Financial discussions primarily pertain to continuing operations - Brachytherapy segment divested in **April 2024**; operations classified as discontinued in financial statements[20](index=20&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss of $21.5 million for 2Q 2025, up from $11.7 million in 2Q 2024, driven by significant increases in R&D and G&A expenses. Grant revenue decreased, while interest income provided a net benefit [Grant Revenue](index=5&type=section&id=Grant%20Revenue) Grant revenue decreased to $0.3 million for 2Q 2025 from $0.5 million in 2Q 2024, and to $0.6 million for the six months ended June 30, 2025, from $0.9 million in the prior year, primarily from NIH work Grant Revenue (in millions) | Period | 2Q 2025 | 2Q 2024 | YoY Change | 6M 2025 | 6M 2024 | YoY Change | | :---------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Grant Revenue | $0.3 | $0.5 | -40% | $0.6 | $0.9 | -33.3% | [Operating Expenses](index=5&type=section&id=Operating%20Expenses) Total operating expenses increased by 65% to $24.3 million for 2Q 2025 and $46.5 million for the six months ended June 30, 2025. This was primarily due to a 79% increase in R&D expenses (to $16.6 million) and a 40% increase in G&A expenses (to $7.7 million) for 2Q 2025, driven by increased clinical activities, drug product costs, and higher personnel costs Operating Expenses (in millions) | Expense Category | 2Q 2025 | 2Q 2024 | YoY Change | 6M 2025 | 6M 2024 | YoY Change | | :----------------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Research and development | $16.6 | $9.3 | +79% | $31.0 | $16.7 | +85% | | General and administrative | $7.7 | $5.5 | +40% | $15.6 | $11.4 | +37% | | Total operating expenses | $24.3 | $14.8 | +65% | $46.5 | $28.1 | +65% | - Increase in R&D expenses primarily related to increased clinical site activities, drug product costs, delivery costs, and higher personnel costs (including share-based compensation)[22](index=22&type=chunk) - Increase in G&A expenses primarily due to increased personnel costs, including share-based compensation[23](index=23&type=chunk) [Net Loss and EPS](index=5&type=section&id=Net%20Loss%20and%20EPS) Net loss for 2Q 2025 was $21.5 million ($0.29 per share), compared to $11.7 million ($0.18 per share) in 2Q 2024. For the six months, net loss was $39.7 million ($0.54 per share) versus $24.0 million ($0.41 per share) in the prior year. Net interest income and other expense provided a benefit of $2.0 million and $4.3 million for the three and six months ended 2025, respectively Net Loss and EPS (in millions, except per share) | Metric | 2Q 2025 | 2Q 2024 | YoY Change | 6M 2025 | 6M 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Net loss | $(21.5) | $(11.7) | +83.8% | $(39.7) | $(24.0) | +65.4% | | Basic and diluted loss per share | $(0.29) | $(0.18) | +61.1% | $(0.54) | $(0.41) | +31.7% | | Net benefit from interest income and other expense | $2.0 | $3.0 | -33.3% | $5.7 | $4.2 | +35.7% | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $310.7 million as of June 30, 2025, from $341.1 million at December 31, 2024. This was primarily driven by a decrease in cash and cash equivalents. Total liabilities also decreased to $45.0 million from $50.4 million, while total stockholders' equity decreased to $265.7 million from $290.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :-------------- | :---------------- | :----- | | Total assets | $310,725 | $341,101 | $(30,376) | | Cash and cash equivalents | $28,849 | $61,580 | $(32,731) | | Short-term investments | $162,729 | $165,336 | $(2,607) | | Total current assets | $195,958 | $231,160 | $(35,202) | | Total liabilities | $45,033 | $50,433 | $(5,400) | | Total stockholders' equity | $265,692 | $290,668 | $(24,976) | [About Perspective Therapeutics, Inc.](index=5&type=section&id=About%20Perspective%20Therapeutics%2C%20Inc.) This section outlines Perspective Therapeutics' mission to develop advanced cancer treatments using alpha-emitting isotopes and a theranostic approach, detailing its clinical programs and manufacturing strategy [Company Mission and Technology](index=5&type=section&id=Company%20Mission%20and%20Technology) Perspective Therapeutics is a radiopharmaceutical company developing advanced cancer treatments using the alpha-emitting isotope 212Pb with specialized targeting moieties. They employ a 'theranostic' approach, combining imaging diagnostics (using the same targeting moieties) with therapy to personalize treatment and optimize outcomes. Their clinical programs include VMT-α-NET (neuroendocrine tumors), VMT01 (melanoma), and PSV359 (solid tumors), all in Phase 1/2a trials. The company is also expanding its regional manufacturing network for product candidates - Perspective Therapeutics pioneers advanced cancer treatments using the alpha-emitting isotope **212Pb** delivered via specialized targeting moieties[26](index=26&type=chunk) - Employs a 'theranostic' approach, combining complementary imaging diagnostics with therapy to personalize treatment and optimize patient outcomes[26](index=26&type=chunk) - Clinical programs in Phase 1/2a trials include VMT-α-NET (neuroendocrine tumors), VMT01 (melanoma), and PSV359 (solid tumors)[27](index=27&type=chunk) [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) This section outlines the company's forward-looking statements, highlighting potential risks and uncertainties that could cause actual results to differ materially, and disclaims any obligation to update these statements [Forward-Looking Statements and Risks](index=6&type=section&id=Forward-Looking%20Statements%20and%20Risks) This section contains forward-looking statements regarding the company's expected cash runway, clinical development plans, timing of data release, market opportunities, product candidate capabilities, and future strategies. It cautions that actual results may differ materially due to various risks and uncertainties, including clinical trial delays, regulatory approvals, manufacturing issues, funding sufficiency, intellectual property, and changes in laws. The company disclaims any obligation to update these statements - Press release contains forward-looking statements regarding cash runway, clinical development plans, data timing, market opportunities, and product capabilities[28](index=28&type=chunk) - Actual results may differ materially due to risks and uncertainties, including clinical trial delays, regulatory issues, manufacturing, funding, intellectual property, and legal changes[29](index=29&type=chunk) - Company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[30](index=30&type=chunk) [Media and Investor Relations Contacts](index=7&type=section&id=Media%20and%20Investor%20Relations%20Contacts) This section provides essential contact information for media and investor relations inquiries [Contact Information](index=7&type=section&id=Contact%20Information) Provides contact information for media and investor relations inquiries, including email addresses for Perspective Therapeutics IR and Russo Partners, LLC - Contact information provided for Media and Investor Relations: Annie J. Cheng, CFA (ir@perspectivetherapeutics.com) and Nic Johnson of Russo Partners, LLC (PerspectiveIR@russopr.com)[31](index=31&type=chunk)

i-80 Gold Reports Second Quarter 2025 Results and Project Development Highlights RENO, NEVADA, August 13, 2025 – i-80 GOLD CORP. (TSX:IAU) (NYSE American:IAUX) ("i-80 Gold", or the "Company") reports its operating and financial results for the three and six months ended June 30, 2025, highlighting key developments across its asset portfolio. Unless otherwise stated, all amounts referred to herein are in U.S. dollars. "The second quarter marked a major turning point at i-80 Gold," stated Richard Young, Presi ...

[FORWARD-LOOKING INFORMATION](index=6&type=section&id=FORWARD-LOOKING%20INFORMATION) This section outlines forward-looking statements, their inherent risks, and the company's disclaimer regarding updates - Forward-looking statements cover future plans, operations, project merits, development timing, and financial outlook, including **gold output**, **growth expenditures**, and **permitting**[9](index=9&type=chunk) - Actual results may differ materially due to numerous risks and uncertainties, such as general economic conditions, commodity price volatility, title risks, capital access, currency fluctuations, and operational risks[9](index=9&type=chunk) - Readers are advised not to place undue reliance on forward-looking statements, and the Company disclaims any obligation to update them, except as required by law[9](index=9&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements and Supplementary Data](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20and%20Supplementary%20Data) This item provides the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and changes in equity, along with detailed notes explaining significant accounting policies, inventory, debt, equity, revenue, expenses, and financial instruments [Condensed Consolidated Balance Sheets (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) This section presents the company's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Highlights (USD thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :----- | | **ASSETS** | | | | | Cash and cash equivalents | $133,691 | $19,001 | +$114,690 | | Total current assets | $166,579 | $42,304 | +$124,275 | | Total non-current assets | $616,302 | $613,325 | +$2,977 | | **Total assets** | **$782,881** | **$655,629** | **+$127,252** | | **LIABILITIES** | | | | | Total current liabilities | $120,531 | $74,050 | +$46,481 | | Total non-current liabilities | $198,810 | $240,915 | -$42,105 | | **Total liabilities** | **$319,341** | **$314,965** | **+$4,376** | | **EQUITY** | | | | | Common shares | $790,183 | $606,505 | +$183,678 | | Accumulated deficit | $(356,238) | $(284,818) | -$71,420 | | **Total equity** | **$463,540** | **$340,664** | **+$122,876** | [Condensed Consolidated Statements of Operations (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations Highlights (USD thousands, except per share) | 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 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $27,836 | $7,184 | $41,884 | $15,597 | | Cost of sales | $(26,491) | $(19,422) | $(37,257) | $(27,753) | | Gross profit (loss) | $798 | $(12,312) | $3,704 | $(12,607) | | Loss from operations | $(18,751) | $(31,262) | $(34,527) | $(47,378) | | Net loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Basic and diluted loss per share | $(0.05) | $(0.11) | $(0.14) | $(0.18) | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) This section presents the unaudited condensed consolidated statements of cash flows for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows Highlights (USD thousands) | 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 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cash used in operating activities | $(11,335) | $(24,559) | $(34,036) | $(49,782) | | Cash used in investing activities | $(1,094) | $(96) | $(1,450) | $(798) | | Cash provided by financing activities | $132,695 | $59,379 | $151,011 | $76,696 | | Change in cash, cash equivalents and restricted cash | $120,266 | $34,724 | $115,525 | $26,116 | | Cash, cash equivalents and restricted cash, end of period | $175,003 | $87,263 | $175,003 | $87,263 | [Condensed Consolidated Statements of Changes in Equity (unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(unaudited)) This section presents the unaudited condensed consolidated statements of changes in equity for the six months ended June 30, 2025 Condensed Consolidated Statements of Changes in Equity Highlights (USD thousands, except share count) | Metric | December 31, 2024 | June 30, 2025 | Change | | :--------------------------------- | :---------------- | :-------------- | :----- | | Number of shares issued and outstanding | 409,786,957 | 814,697,291 | +404,910,334 | | Common shares | $606,505 | $790,183 | +$183,678 | | Additional paid-in capital | $18,977 | $29,595 | +$10,618 | | Accumulated deficit | $(284,818) | $(356,238) | -$71,420 | | **Total equity** | **$340,664** | **$463,540** | **+$122,876** | [Notes to Condensed Consolidated Financial Statements (unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining significant accounting policies and financial instrument details [NATURE OF OPERATIONS](index=11&type=section&id=NATURE%20OF%20OPERATIONS) This note describes I-80 Gold Corp.'s business as a Nevada-focused gold and silver mining company and its principal assets - I-80 Gold Corp. is a Nevada-focused, growth-oriented **gold and silver mining company**[18](index=18&type=chunk) - Principal assets include **Granite Creek, Ruby Hill, Cove, and Lone Tree properties**, all wholly-owned[18](index=18&type=chunk) - The Company's shares and warrants are listed on NYSE American (IAUX, IAUX WS) and TSX (IAU, IAU.WT.U)[19](index=19&type=chunk) [SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies, including revenue recognition, going concern assumptions, and future accounting standard adoptions - The Company's revenue and profitability are substantially dependent on **volatile gold and silver prices**, which could lead to material adverse effects or impairment charges[20](index=20&type=chunk) - Financial statements are prepared on a going concern basis, but material uncertainties exist regarding the Company's ability to obtain additional financing, which could impact asset valuations[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The Company plans to adopt ASU 2023-09 "Income Taxes (Topic 720): Improvements to Income Tax Disclosures" for its Annual Report for the fiscal year ended **December 31, 2025**[26](index=26&type=chunk) [INVENTORY](index=12&type=section&id=INVENTORY) This note details the composition of inventory, including mineralized material, work-in-process, and materials, along with related cost of sales and write-downs Inventory Breakdown (USD thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Mineralized material in stockpiles and on leach pads | $16,432 | $9,634 | | Work-in-process | $3,549 | $2,133 | | Finished goods | $0 | $195 | | Materials and supplies | $1,830 | $3,369 | | **Total inventory** | **$21,811** | **$15,331** | - Inventory recognized in cost of sales was **$26.5 million for Q2 2025** and **$37.3 million for H1 2025**, compared to $19.4 million and $27.8 million in the respective 2024 periods[27](index=27&type=chunk) - Inventory write-downs were **$3.1 million for Q2 2025** and **$4.0 million for H1 2025**, primarily due to Granite Creek mineralized material stockpile, a decrease from $8.8 million in both 2024 periods[27](index=27&type=chunk) [PROPERTY, PLANT AND EQUIPMENT, NET](index=12&type=section&id=PROPERTY%2C%20PLANT%20AND%20EQUIPMENT%2C%20NET) This note provides a breakdown of property, plant, and equipment, net of accumulated depreciation, and details depreciation, depletion, and amortization expenses Property, Plant and Equipment, Net (USD thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Pre-development and exploration properties | $363,894 | $363,228 | | Buildings, plant and equipment | $204,278 | $203,137 | | Construction-in-progress | $25,671 | $24,448 | | Total | $593,843 | $590,813 | | Accumulated depreciation | $(19,965) | $(18,371) | | **Net carrying amounts** | **$573,878** | **$572,442** | Total Depreciation, Depletion and Amortization (USD thousands) | Period | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | Three months ended June 30, | $951 | $693 | | Six months ended June 30, | $1,694 | $1,450 | [LONG-TERM DEBT](index=12&type=section&id=LONG-TERM%20DEBT) This note details the company's long-term debt, including convertible loans, debentures, and prepay agreements, along with key terms and deliveries Long-Term Debt Breakdown (USD thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Orion Convertible Loan | $60,521 | $57,121 | | Sprott Convertible Loan | $5,909 | $5,459 | | Convertible Debentures | $76,643 | $73,450 | | Gold Prepay Agreement | $15,496 | $31,718 | | Silver Purchase Agreement | $16,904 | $23,574 | | Other | $339 | $75 | | **Total** | **$175,812** | **$191,397** | | Less current portion | $(77,594) | $(37,842) | | **Long-term portion** | **$98,218** | **$153,555** | - The Orion Convertible Loan maturity date was extended from December 13, 2025, to **June 30, 2026**, with additional security provided[32](index=32&type=chunk) - During Q2 2025, the Company delivered **9,630 ounces of gold** and **322,458 ounces of silver** to Orion under the respective prepay agreements[41](index=41&type=chunk)[44](index=44&type=chunk) [OTHER LIABILITIES](index=15&type=section&id=OTHER%20LIABILITIES) This note outlines other liabilities, including warrant and share-based payment liabilities, embedded derivatives, and deferred revenue, explaining changes and fair value gains Other Liabilities Breakdown (USD thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Warrant liability | $5,884 | $4,623 | | Share-based payment liability | $2,910 | $790 | | Orion - Conversion and change of controls rights | $1,032 | $336 | | Sprott - Conversion and change of controls rights | $10 | $33 | | Gold Prepay Agreement embedded derivative | $9,682 | $9,665 | | Silver Purchase Agreement embedded derivative | $15,245 | $7,999 | | Deferred revenue | $7,102 | $0 | | Lease liability | $1,128 | $685 | | **Total other liabilities** | **$42,993** | **$24,131** | - The increase in other liabilities is mainly due to the **Silver Purchase Agreement embedded derivative**, **warrant liability**, and **deferred revenue** from a new gold prepayment[49](index=49&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk) - The Company recorded a fair value gain of **$0.7 million on warrant liability** and **$8.2 million on Gold Prepay Agreement embedded derivative** for Q2 2025[51](index=51&type=chunk)[57](index=57&type=chunk) [COMMON SHARES](index=18&type=section&id=COMMON%20SHARES) This note details common shares issued and outstanding, including changes from public offerings, private placements, and the ATM Program Common Shares Issued and Outstanding (USD thousands, except share count) | Metric | December 31, 2024 | June 30, 2025 | Change | | :--------------------------------- | :---------------- | :-------------- | :----- | | Number of shares issued and outstanding | 409,786,957 | 814,697,291 | +404,910,334 | | Amount | $606,505 | $790,183 | +$183,678 | - A bought deal public offering on May 16, 2025, issued **345.8 million units for $172.9 million gross proceeds**, and a concurrent private placement issued **25.2 million units for $12.6 million gross proceeds**[62](index=62&type=chunk) - The ATM Program expired on March 31, 2025, having issued **4.3 million common shares for $2.5 million gross proceeds** in Q1 2025[61](index=61&type=chunk) [BASIC AND DILUTED LOSS PER SHARE](index=19&type=section&id=BASIC%20AND%20DILUTED%20LOSS%20PER%20SHARE) This note presents the calculation of basic and diluted loss per share, including net loss and weighted average shares outstanding Basic and Diluted Loss Per Share (USD thousands, except per share) | 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 loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Basic and diluted weighted average shares outstanding | 608,167,841 | 361,145,495 | 520,243,077 | 333,234,688 | | **Basic and diluted loss per share** | **$(0.05)** | **$(0.11)** | **$(0.14)** | **$(0.18)** | - Convertible Debentures, Convertible Loans, stock options, PSUs, and warrants were excluded from diluted EPS calculation as their effect would be anti-dilutive[67](index=67&type=chunk) [SUPPLEMENTAL CASH FLOW INFORMATION](index=19&type=section&id=SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) This note provides supplemental cash flow information, detailing net changes in operating assets and liabilities and non-cash items affecting other expense/income Net Change in Operating Assets and Liabilities (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Receivables | $(2,313) | $(1,638) | $(1,369) | $602 | | Prepaids and deposits | $(1,341) | $(1,069) | $(1,707) | $(242) | | Inventory | $2,152 | $4,645 | $(6,412) | $(1,820) | | Accounts payable and accrued liabilities | $(1,627) | $2,466 | $(3,472) | $(5,714) | | Deferred revenue | $7,103 | $0 | $7,103 | $0 | | **Net change in operating assets and liabilities** | **$3,974** | **$4,404** | **$(5,857)** | **$(7,174)** | Non-Cash Items in Other (Expense) Income (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gain on fair value measurement of warrant liability | $709 | $1,645 | $275 | $4,275 | | Gain (loss) on fair value measurement of Convertible Loans | $765 | $3,030 | $(673) | $9,145 | | Loss on Gold Prepay Agreement | $(2,412) | $(2,478) | $(10,674) | $(5,976) | | Loss on Silver Purchase Agreement | $(1,986) | $(4,445) | $(9,461) | $(5,302) | | Other | $(794) | $79 | $(749) | $94 | | **Total non-cash items included in other (expense) income** | **$(3,718)** | **$(2,169)** | **$(21,282)** | **$2,236** | [REVENUE](index=21&type=section&id=REVENUE) This note breaks down revenue by product, including gold, silver, and mineralized material, and identifies major customer concentrations Revenue by Product (USD thousands) | Product | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gold and silver | $18,071 | $3,896 | $25,931 | $9,111 | | Mineralized material | $9,765 | $3,288 | $15,953 | $6,486 | | **Total** | **$27,836** | **$7,184** | **$41,884** | **$15,597** | - In Q2 2025, one customer accounted for **98% of trade receivables**, and all revenues were generated in the United States[72](index=72&type=chunk) Sales to Major Customers (USD thousands) | Customer | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Customer 1 | $15,783 | $2,706 | $22,301 | $7,000 | | Customer 2 | $9,765 | $3,473 | $15,952 | $6,746 | | Customer 3 | $0 | $1,149 | $0 | $1,969 | [OTHER EXPENSE AND OTHER INCOME](index=22&type=section&id=OTHER%20EXPENSE%20AND%20OTHER%20INCOME) This note details other expenses and income, including losses/gains on prepay agreements, convertible loans, warrant liabilities, and foreign exchange Other Expense (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Loss on Gold Prepay Agreement | $(2,412) | $(2,478) | $(10,674) | $(5,976) | | Loss on Silver Purchase Agreement | $(1,986) | $(4,445) | $(9,461) | $(5,302) | | Loss on fair value measurement of Convertible Loans | $0 | $0 | $(673) | $0 | | Other | $(486) | $0 | $(316) | $0 | | **Total other expense** | **$(4,884)** | **$(6,923)** | **$(21,124)** | **$(11,278)** | Other Income (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gain on fair value measurement of warrant liability | $709 | $1,645 | $275 | $4,275 | | Gain on fair value measurement of Convertible Loans | $765 | $3,030 | $0 | $9,145 | | Gain on foreign exchange | $295 | $449 | $168 | $380 | | Interest income on restricted cash | $346 | $429 | $686 | $915 | | Other | $0 | $770 | $0 | $802 | | **Total other income** | **$2,115** | **$6,323** | **$1,129** | **$15,517** | [INTEREST EXPENSE](index=22&type=section&id=INTEREST%20EXPENSE) This note provides a breakdown of interest expense, including accretion on convertible loans, prepay agreements, debentures, and other finance costs Interest Expense Breakdown (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest accretion on Convertible Loans | $2,705 | $2,722 | $5,344 | $5,324 | | Interest accretion on Gold Prepay Agreement | $1,639 | $3,026 | $4,109 | $5,842 | | Interest accretion on Silver Purchase Agreement | $864 | $792 | $2,109 | $1,703 | | Interest accretion on Convertible Debentures | $1,564 | $1,415 | $3,068 | $2,802 | | Interest accretion on long-term debt | $727 | $0 | $727 | $0 | | Amortization of finance costs | $344 | $357 | $691 | $671 | | Finance expense | $521 | $0 | $521 | $0 | | Other interest expense | $331 | $445 | $329 | $451 | | **Total interest expense** | **$8,695** | **$8,757** | **$16,898** | **$16,793** | [SEGMENTED INFORMATION](index=22&type=section&id=SEGMENTED%20INFORMATION) This note presents financial information by operating segment, detailing revenue and adjusted loss from operations for each principal asset - The Company's four principal assets (**Granite Creek, Ruby Hill, Lone Tree, Cove**) are operating segments, all located in Nevada, US[76](index=76&type=chunk)[18](index=18&type=chunk) - The Chief Operating Decision Maker (CODM) uses **adjusted loss from operations** to evaluate each operation's financial performance[76](index=76&type=chunk) Segmented Revenue and Adjusted Loss from Operations (Six Months Ended June 30, 2025, USD thousands) | Segment | Revenue | Adjusted Loss from Operations | | :--------------------------------- | :-------------- | :---------------------------- | | Granite Creek | $28,422 | $(11,959) | | Ruby Hill | $3,678 | $(5,575) | | Lone Tree | $9,784 | $2,527 | | Cove | $0 | $(4,128) | | Corporate and other | $0 | $(384) | | **Total** | **$41,884** | **$(19,519)** | [INCOME TAXES](index=26&type=section&id=INCOME%20TAXES) This note details income tax expense and loss before income taxes by jurisdiction, noting the impact of new tax legislation Income Tax Expense (USD thousands) | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Deferred tax expense (United States) | $0 | $(386) | $0 | $(773) | | **Total income tax expense** | **$0** | **$(386)** | **$0** | **$(773)** | Loss Before Income Taxes by Jurisdiction (USD thousands) | Jurisdiction | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $(13,941) | $(26,859) | $(25,937) | $(39,261) | | Canada | $(16,274) | $(13,760) | $(45,483) | $(20,671) | | **Loss before income taxes** | **$(30,215)** | **$(40,619)** | **$(71,420)** | **$(59,932)** | - The One Big Beautiful Bill Act (OBBBA) signed into U.S. law on **July 4, 2025**, is not expected to materially impact the Company's financial statements[80](index=80&type=chunk) [RELATED PARTY TRANSACTIONS](index=26&type=section&id=RELATED%20PARTY%20TRANSACTIONS) This note describes transactions with related parties, including convertible loans, prepay agreements, and warrants with Orion Mine Finance and Sprott Asset Management - The Company has Convertible Loans with **Orion Mine Finance** and **Sprott Asset Management USA, Inc.**[85](index=85&type=chunk) - The Company has Gold Prepay Agreement and Silver Purchase Agreement with Orion[85](index=85&type=chunk) - Warrants and an offtake agreement have been issued/entered into with Orion[82](index=82&type=chunk) [COMMITMENTS AND CONTINGENCIES](index=26&type=section&id=COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's commitments and contingencies, including surety bonds, royalties, contingent consideration, and an offtake agreement - Outstanding surety bonds for environmental reclamation and exploration permits totaled **$137.7 million as of June 30, 2025**, secured by restricted cash[83](index=83&type=chunk) - Royalties include **1-5% NSR on Granite Creek**, **3% NSR on Ruby Hill**, and a **10% NPI on Granite Creek**, totaling $1.8 million in cost of gold sold for H1 2025[84](index=84&type=chunk) - Contingent consideration of **$13.8 million (C$20 million)** is payable to Victoria Gold Corporation for Cove Deposit production milestones[87](index=87&type=chunk) - An Offtake Agreement with Orion for **20% of refined gold and silver** from Granite Creek and Ruby Hill projects will begin in December 2028 and end December 2034[88](index=88&type=chunk) [FINANCIAL INSTRUMENTS](index=28&type=section&id=FINANCIAL%20INSTRUMENTS) This note categorizes financial instruments by fair value hierarchy and details changes in Level 3 instruments, highlighting management judgment on input variables - Financial instruments are categorized into a fair value hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than quoted prices), and **Level 3** (unobservable inputs)[90](index=90&type=chunk) Financial Instruments Measured at Fair Value (USD thousands) | Instrument | Level | June 30, 2025 Carrying Amount | December 31, 2024 Carrying Amount | | :--------------------------------- | :---- | :------------------------------ | :-------------------------------- | | Warrant liability (brokered placement) | 1 | $3,576 | $3,875 | | Warrant liability (other) | 2 | $2,308 | $748 | | Share-based payments | 2 | $2,910 | $790 | Changes in Level 3 Financial Instruments (USD thousands) | Instrument | December 31, 2024 Balance | June 30, 2025 Balance | | :--------------------------------- | :------------------------ | :-------------------- | | Orion conversion and change of control rights | $(336) | $(1,032) | | Sprott conversion and change of control rights | $(33) | $(10) | | Silver Purchase Agreement - silver price derivative | $(7,999) | $(15,245) | | Gold Prepay - gold price derivative | $(9,665) | $(9,682) | - Level 3 instruments (Convertible Loans, Gold Prepay, Silver Purchase embedded derivatives) require management judgment on input variables like **probability of change of control**, **metal prices**, **volatility**, and **risk-free rates**[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) [ITEM 2. Management's Discussion of Analysis of Financial Condition and Results of Operations](index=31&type=section&id=ITEM%202.%20Management's%20Discussion%20of%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive discussion of I-80 Gold Corp.'s operational and financial performance for the three and six months ended June 30, 2025. It covers the Company's strategic development plan, recapitalization efforts, detailed operational results for its key properties, financial results, balance sheet review, liquidity, capital resources, and non-GAAP financial measures [Overview](index=31&type=section&id=Overview) This section provides an overview of the company's business, operational and financial highlights, strategic direction, recapitalization plan, and future outlook [Company Overview](index=31&type=section&id=Company%20Overview) This section introduces I-80 Gold Corp. as a Nevada-focused gold and silver mining company with key assets and stock exchange listings - I-80 Gold Corp. is a Nevada-focused, growth-oriented gold and silver mining company, ranking as the **fourth largest gold mineral resource holder** in the state[99](index=99&type=chunk) - The Company's principal assets include **Granite Creek, Ruby Hill, Lone Tree (with processing facility), Cove, and FAD properties**, all at various stages of permitting, construction, and technical studies[99](index=99&type=chunk) - The Company's common shares and warrants are listed on NYSE American (IAUX, IAUX.WS) and TSX (IAU, IAU.WT, IAU.WT.U)[100](index=100&type=chunk) [Operational and Financial Highlights](index=31&type=section&id=Operational%20and%20Financial%20Highlights) This section summarizes key operational and financial metrics, including revenue, net loss, cash flow, gold sales, and drilling activities Operational and Financial Highlights (USD thousands, except per share/ounce) | 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 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $27,836 | $7,184 | $41,884 | $15,597 | | Net loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Loss per share | $(0.05) | $(0.11) | $(0.14) | $(0.18) | | Cash flow used in operating activities | $(11,335) | $(24,559) | $(34,036) | $(49,782) | | Gold ounces sold | 8,400 | 3,445 | 13,352 | 7,506 | | Average realized gold price ($/oz) | $3,301 | $2,337 | $3,124 | $2,188 | - Cash balance increased to **$133.7 million as of June 30, 2025**, primarily due to net proceeds from equity offerings[105](index=105&type=chunk) - Completed **8,717 feet of drilling in Q2 2025** and **23,479 feet in H1 2025** at Mineral Point and Granite Creek to enhance resource definition[105](index=105&type=chunk)[111](index=111&type=chunk) - Filed Preliminary Economic Assessments (PEAs) for all five gold projects, outlining a combined net present value of approximately **$1.6 billion** based on a $2,175/oz gold price[111](index=111&type=chunk) [Strategy Overview](index=33&type=section&id=Strategy%20Overview) This section outlines the company's long-term strategy to become a mid-tier gold producer in Nevada through phased development of its core projects - The Company aims to become a mid-tier gold producer in Nevada, targeting over **600,000 ounces of annual gold production by the early 2030s**[107](index=107&type=chunk)[108](index=108&type=chunk) - Phase one involves ramping up Granite Creek, commencing extraction at Archimedes, and refurbishing the Lone Tree autoclave for owner-operated processing by 2028, targeting **150,000-200,000 ounces annually**[108](index=108&type=chunk) - Phase two includes bringing Cove and Granite Creek open pit into operation, aiming for **300,000-400,000 ounces annually by 2031**. Phase three targets Mineral Point open pit to exceed **600,000 ounces**[108](index=108&type=chunk) - PEAs for all five gold core projects were released in Q1 2025, outlining a clear and phased path to production and cash flow growth[107](index=107&type=chunk) [Recapitalization Plan](index=33&type=section&id=Recapitalization%20Plan) This section details the company's recapitalization efforts, including equity offerings, potential warrant proceeds, and planned allocation of funds for project development - A bought deal public offering and concurrent private placement in May 2025 raised **$172.9 million (gross)** and **$12.6 million (gross)**, respectively, issuing 345.8 million and 25.2 million units[109](index=109&type=chunk) - Warrants issued in these offerings could provide up to approximately **$130 million in additional proceeds** if fully exercised[109](index=109&type=chunk) - Approximately **$92 million** is expected to be allocated to fund construction, drilling, permitting, and technical studies across all five core projects, including the Lone Tree autoclave, through mid-2026[112](index=112&type=chunk) - The Company is seeking additional financing (debt, royalty sale, FAD property sale) to complete its recapitalization plan by mid-2026, aligning with the Orion Convertible Loan maturity[113](index=113&type=chunk) [Outlook](index=34&type=section&id=Outlook) This section provides the company's outlook for 2025, including expected gold extraction, contributions from key properties, and planned growth expenditures - Expected gold extraction for 2025 is **30,000 to 40,000 ounces**[114](index=114&type=chunk) - Granite Creek underground is projected to contribute **20,000-30,000 ounces**, and residual heap leach operations approximately **10,000 ounces in 2025**[114](index=114&type=chunk) - Growth expenditures for 2025 are expected to total **$40 million to $50 million**, focusing on permitting, feasibility studies, and Archimedes underground development[114](index=114&type=chunk) [Financing Overview](index=34&type=section&id=Financing%20Overview) This section summarizes recent financing activities, including a working capital facility, equity offerings, and the extension of the Orion Convertible Loan - Finalized a working capital facility with Auramet International, Inc. on April 29, 2025, receiving a **$12.0 million prepayment for 3,600 ounces of gold**[116](index=116&type=chunk) - A bought deal public offering and private placement on May 16, 2025, raised **$172.9 million** and **$12.6 million in gross proceeds**, respectively[117](index=117&type=chunk) - The New Gold Prepay and Silver Purchase Agreement with National Bank, used to satisfy prior Orion deliveries, was fully repaid in May 2025[118](index=118&type=chunk)[126](index=126&type=chunk) - The Orion Convertible Loan maturity was extended to **June 30, 2026**, and 5 million common share purchase warrants were issued to Orion[123](index=123&type=chunk) - The ATM Program expired on March 31, 2025, having issued **4.3 million common shares for $2.5 million gross proceeds** in Q1 2025[125](index=125&type=chunk) [Discussion of Operational Results](index=37&type=section&id=Discussion%20of%20Operational%20Results) This section discusses the operational performance and development activities for the company's key properties, including Granite Creek, Ruby Hill, Cove, and Lone Tree [Granite Creek Property](index=37&type=section&id=Granite%20Creek%20Property) This section details operational progress at Granite Creek, including mining activities, gold ounces sold, exploration expenses, and future development plans - Granite Creek underground is ramping up towards steady-state gold output, with mining activities exceeding prior-year levels in Q2 2025[131](index=131&type=chunk)[135](index=135&type=chunk) Granite Creek Operational Statistics | 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 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total oxide and sulfide mineralized material mined (tonnes) | 35,275 | 19,510 | 65,241 | 32,212 | | Gold ounces sold (oz) | 5,981 | 1,809 | 9,086 | 3,384 | | Pre-development, evaluation and exploration expenses ($000s) | $5,949 | $7,634 | $9,719 | $12,115 | - Infill drilling in the South Pacific Zone began in June 2025, with a feasibility study targeted for completion in **Q1 2026**[139](index=139&type=chunk) - As of June 30, 2025, approximately **28,000 tonnes of sulfide mineralized material** are awaiting processing under a new toll milling agreement[137](index=137&type=chunk) [Ruby Hill Property](index=40&type=section&id=Ruby%20Hill%20Property) This section describes the Ruby Hill property, its mineralization, and development plans for the Archimedes underground and Mineral Point open pit projects - Ruby Hill property contains gold, silver, and base metal mineralization within the **Archimedes underground project** and **Mineral Point open pit project**[141](index=141&type=chunk) - Initial development of the Archimedes underground exploration drift is anticipated to commence in **Q3 2025**, with permitting for mining above the 5100-foot level nearing completion[142](index=142&type=chunk)[143](index=143&type=chunk) Ruby Hill Operational Statistics | 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 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gold ounces sold (oz) | 665 | 510 | 1,117 | 954 | | Drilling (ft) | 5,739 | 0 | 5,739 | 4,032 | | Pre-development, evaluation and exploration expenses ($000s) | $1,898 | $296 | $5,089 | $713 | - A drill program for the Mineral Point open pit project commenced in June 2025, completing approximately **5,800 feet of surface core drilling** to support geotechnical, metallurgical, and hydrogeology studies[145](index=145&type=chunk) [Cove Project](index=40&type=section&id=Cove%20Project) This section outlines the Cove project as a high-grade underground development, detailing permitting activities, drilling programs, and future resource estimates - Cove is a high-grade underground development project, expected to be the Company's third underground mine, contributing to production by **mid-2029**[148](index=148&type=chunk)[149](index=149&type=chunk) - NEPA permitting activities are underway with the BLM for regulatory approvals aligned with development timelines[149](index=149&type=chunk) Cove Project Operational Statistics | 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 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Drilling (ft) | 0 | 14,382 | 14,762 | 17,976 | | Pre-development, evaluation and exploration expenses ($000s) | $1,174 | $2,343 | $3,721 | $4,615 | - An infill drill program was completed in Q1 2025, with an updated mineral resource estimate expected in **Q3 2025** and a feasibility study targeted for **Q1 2026**[150](index=150&type=chunk) [Lone Tree Processing Facility](index=42&type=section&id=Lone%20Tree%20Processing%20Facility) This section highlights the Lone Tree Processing Facility as a strategic asset for refractory material, detailing refurbishment studies and planned processing timelines - Lone Tree Processing Facility, with one of Nevada's three autoclaves, is a strategic asset for processing high-grade underground refractory material[151](index=151&type=chunk) - A refurbishment feasibility-level Class 3 engineering study is underway with Hatch Ltd., targeted for completion in **Q4 2025**[152](index=152&type=chunk)[153](index=153&type=chunk) - The autoclave is envisioned to process refractory material from Granite Creek, Archimedes, and Cove by **December 31, 2027**[152](index=152&type=chunk)[128](index=128&type=chunk) Lone Tree Operational Statistics | 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 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gold ounces sold (oz) | 1,754 | 1,126 | 3,149 | 3,168 | | Capital expenditure ($000s) | $597 | $93 | $661 | $507 | [Discussion of Financial Results](index=43&type=section&id=Discussion%20of%20Financial%20Results) This section analyzes the company's financial performance for the three and six months ended June 30, 2025, focusing on revenue, gross profit, and key expenses [Financial results for the three months ended June 30, 2025](index=43&type=section&id=Financial%20results%20for%20the%20three%20months%20ended%20June%2030%2C%202025) This section reviews key financial results for Q2 2025, including revenue, gold sales, gross profit, and changes in cost of sales and depreciation Key Financial Results (Three Months Ended June 30, USD thousands, except per ounce) | Metric | 2025 | 2024 | % Change | | :--------------------------------- | :----- | :----- | :------- | | Revenue | $27,836 | $7,184 | +287.5% | | Gold ounces sold | 8,400 | 3,445 | +143.9% | | Average realized gold price ($/oz) | $3,301 | $2,337 | +41.2% | | Gross profit (loss) | $798 | $(12,312) | N/A | | Pre-development, evaluation and exploration expenses | $9,045 | $10,436 | -13.4% | | Other income and expenses, net | $(2,769) | $(600) | +361.5% | | Interest expense | $8,695 | $8,757 | -0.7% | - Cost of sales increased to **$26.5 million** (from $19.4 million) due to higher gold ounces sold, partially offset by lower inventory write-downs (**$3.1 million vs. $8.8 million**)[158](index=158&type=chunk) - Depreciation, depletion, and amortization expense increased to **$0.5 million** (from $0.1 million) due to leach pad depreciation associated with Granite Creek material[159](index=159&type=chunk) [Financial results for the six months ended June 30, 2025](index=45&type=section&id=Financial%20results%20for%20the%20six%20months%20ended%20June%2030%2C%202025) This section reviews key financial results for H1 2025, including revenue, gold sales, gross profit, and the impact of other expenses on net income Key Financial Results (Six Months Ended June 30, USD thousands, except per ounce) | Metric | 2025 | 2024 | % Change | | :--------------------------------- | :----- | :----- | :------- | | Revenue | $41,884 | $15,597 | +168.5% | | Gold ounces sold | 13,352 | 7,506 | +77.9% | | Average realized gold price ($/oz) | $3,124 | $2,188 | +42.8% | | Gross profit (loss) | $3,704 | $(12,607) | N/A | | Pre-development, evaluation and exploration expenses | $18,590 | $17,710 | +4.9% | | Other income and expenses, net | $(19,995) | $4,239 | N/A | | Interest expense | $16,898 | $16,793 | +0.6% | - Cost of sales increased to **$37.3 million** (from $27.8 million) due to higher gold ounces sold, partially offset by lower inventory write-downs (**$4.0 million vs. $8.8 million**)[165](index=165&type=chunk) - The significant increase in other expenses, net, was driven by losses on Gold Prepay Agreement and Silver Purchase Agreement due to increasing metal forward prices, and a loss on fair value measurement of Convertible Loans[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) [Discussion of Financial Position](index=47&type=section&id=Discussion%20of%20Financial%20Position) This section discusses the company's financial position, including changes in cash, inventory, and total liabilities as of June 30, 2025 [Balance Sheet Review](index=47&type=section&id=Balance%20Sheet%20Review) This section reviews key balance sheet changes, including increases in cash and inventory, and the slight increase in total liabilities - Cash and cash equivalents increased by **$114.7 million to $133.7 million** as of June 30, 2025, from $19.0 million at December 31, 2024[172](index=172&type=chunk) - Inventory increased to **$21.8 million from $15.3 million**, primarily due to the buildup of stockpiled sulfide material for toll mill processing[172](index=172&type=chunk) - Total liabilities increased slightly to **$319.3 million from $315.0 million**, driven by increases in other liabilities (Silver Purchase Agreement derivative) partially offset by a decrease in long-term debt[173](index=173&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's liquidity position and capital resources, including working capital, debt, equity, and cash flow activities [Liquidity Outlook](index=47&type=section&id=Liquidity%20Outlook) This section provides the liquidity outlook, highlighting the short-term position, need for additional long-term capital, and risks related to debt servicing Working Capital (USD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $133,691 | $19,001 | | Working capital | $46,048 | $(31,746) | - The Company is in a solid short-term liquidity position but needs to raise additional capital for long-term requirements to execute its development plan[175](index=175&type=chunk) - Ability to service or refinance debt depends on future performance, capital markets, and compliance with covenants, with risks of default if unable to generate sufficient cash flow or secure financing[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) [Debt](index=49&type=section&id=Debt) This section details the company's debt structure, including convertible debentures, loans, and prepay agreements, along with key terms and repayment status Debt Breakdown (USD thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Convertible Debentures | $76,643 | $73,450 | | Orion Convertible Loan | $60,521 | $57,121 | | Sprott Convertible Loan | $5,909 | $5,459 | | Gold Prepay Agreement | $15,496 | $31,718 | | Silver Purchase Agreement | $16,904 | $23,574 | | Other | $339 | $75 | | **Total** | **$175,812** | **$191,397** | - The Orion Convertible Loan maturity date was extended from December 13, 2025, to **June 30, 2026**, with additional security provided[183](index=183&type=chunk)[185](index=185&type=chunk) - The Gold Prepay Agreement liability was **$15.5 million with 8,760 ounces of gold** remaining to be delivered, and the Silver Purchase Agreement liability was **$16.9 million with 96,299 ounces of silver** remaining[189](index=189&type=chunk)[191](index=191&type=chunk) - The New Gold Prepay and Silver Purchase Agreement with National Bank, used to satisfy prior Orion deliveries, was fully repaid in May 2025[193](index=193&type=chunk) [Equity](index=52&type=section&id=Equity) This section provides an overview of the company's equity, including common shares, warrants, stock options, and other share-based instruments Outstanding Share Data (As of August 12, 2025) | Instrument | Count | | :--------------------------------- | :-------------- | | Common Shares | 816,047,291 | | Warrants | 233,749,025 | | Stock Options | 9,179,066 | | Restricted Share Units ("RSU") | 14,533,867 | | Performance Share Units ("PSU") | 3,339,000 | | Deferred Share Units ("DSU") | 2,005,172 | Shares Issued in H1 2025 (USD thousands, except share count) | Issuance Type | Number of Shares Issued | Amounts | | :--------------------------------- | :---------------------- | :-------- | | Shares issued in brokered placement | 345,760 | $153,158 | | Shares issued in private placement | 25,240 | $11,790 | | Shares issued in private placement (Jan 2025) | 29,210 | $16,015 | | ATM Program | 4,341 | $2,426 | | Exercise of stock options | 20 | $52 | | Shares issued from settlement of DSUs | 338 | $237 | | **Total** | **404,909** | **$183,678** | - Warrant liability was **$5.9 million as of June 30, 2025**, including 5 million warrants issued to Orion in January 2025[204](index=204&type=chunk) [Cash Flows](index=53&type=section&id=Cash%20Flows) This section summarizes cash flow activities from operations, investing, and financing, explaining the drivers of changes in cash and cash equivalents Cash Flow Summary (USD thousands) | Activity | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cash used in operating activities | $(11,335) | $(24,559) | $(34,036) | $(49,782) | | Cash used in investing activities | $(1,094) | $(96) | $(1,450) | $(798) | | Cash provided by financing activities | $132,695 | $59,379 | $151,011 | $76,696 | | Change in cash, cash equivalents and restricted cash | $120,266 | $34,724 | $115,525 | $26,116 | - The increase in cash provided by financing activities was primarily due to higher proceeds from share issuances in brokered placements and equity offerings[208](index=208&type=chunk)[211](index=211&type=chunk) - Investing activities primarily involved capital expenditures for autoclave studies at Lone Tree and construction for an access portal at Ruby Hill[207](index=207&type=chunk)[210](index=210&type=chunk) [Non-GAAP Financial Performance Measures](index=54&type=section&id=Non-GAAP%20Financial%20Performance%20Measures) This section defines and reconciles non-GAAP financial measures, including average realized gold price and adjusted loss, used to assess performance - Non-GAAP measures include "**Average realized gold price**" and "**Adjusted loss**" (and "adjusted loss per share"), which are not defined under US GAAP[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) - "**Average realized gold price**" is used to improve the understanding of revenue[216](index=216&type=chunk) - "**Adjusted loss**" excludes temporary or non-recurring items such as gains/losses on warrants, Convertible Loans, and fair value measurements of Gold Prepay and Silver Purchase Agreements[217](index=217&type=chunk) Adjusted Loss and Adjusted Loss Per Share (USD thousands, except per share) | 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 loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Total adjustments | $9,949 | $(1,187) | $(7,660) | $3,203 | | **Adjusted loss** | **$(40,164)** | **$(39,818)** | **$(63,760)** | **$(63,908)** | | Weighted average shares | 608,167,841 | 361,145,495 | 520,243,077 | 333,234,688 | | **Adjusted loss per share** | **$(0.07)** | **$(0.11)** | **$(0.12)** | **$(0.19)** | [ITEM 3. Quantitative and Qualitative Disclosure about Market Risk](index=57&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company - No quantitative and qualitative disclosures about market risk are applicable[219](index=219&type=chunk) [ITEM 4. Controls and Procedures](index=57&type=section&id=ITEM%204.%20Controls%20and%20Procedures) The CEO and CFO have concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025. There have been no material changes in internal control over financial reporting during the three months ended June 30, 2025 - The CEO and CFO concluded that disclosure controls and procedures were **effective as of June 30, 2025**[220](index=220&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[221](index=221&type=chunk) [PART II - OTHER INFORMATION](index=4&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part contains other information not included in the financial statements, such as legal proceedings, risk factors, equity sales, and corporate governance updates [ITEM 1. Legal Proceedings](index=58&type=section&id=ITEM%201.%20Legal%20Proceedings) There are no legal proceedings material to the Company or its subsidiaries, nor are any contemplated, as of the date of this report - No material legal proceedings are ongoing or contemplated for the Company or its subsidiaries[222](index=222&type=chunk) [ITEM 1A. Risk Factors](index=58&type=section&id=ITEM%201A.%20Risk%20Factors) The Company's business, operations, and financial condition are subject to various risks and uncertainties inherent in the mining industry and exploration stage. There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - The Company's business is subject to various risks and uncertainties inherent in the mining industry and exploration stage[223](index=223&type=chunk) - No material changes to the risk factors from the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, have occurred[223](index=223&type=chunk) [ITEM 2. Unregistered Sales Of Equity Securities And Use Of Proceeds](index=58&type=section&id=ITEM%202.%20Unregistered%20Sales%20Of%20Equity%20Securities%20And%20Use%20Of%20Proceeds) On June 17, 2025, the Company closed a private placement of 3,000,000 units for $1.5 million gross proceeds, with each unit comprising one common share and one-half warrant. The proceeds are intended for general working capital and corporate purposes. This private placement was exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D - On June 17, 2025, the Company closed a private placement of **3,000,000 units at $0.50 per unit**, raising **$1.5 million in gross proceeds**[224](index=224&type=chunk) - Each unit consisted of one common share and one-half common share purchase warrant, exercisable at **$0.70 per share**[224](index=224&type=chunk) - The private placement was exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D, with proceeds intended for general working capital and corporate purposes[224](index=224&type=chunk)[225](index=225&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=58&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities - There were no defaults upon senior securities[226](index=226&type=chunk) [ITEM 4. Mine Safety Disclosures](index=58&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Information regarding mine safety matters is reported in Exhibit 95.1, in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act - Mine safety disclosures are provided in Exhibit 95.1, as required by Section 1503(a) of the Dodd-Frank Act[227](index=227&type=chunk) [ITEM 5. Other Information](index=59&type=section&id=ITEM%205.%20Other%20Information) On June 17, 2025, shareholders approved changes to the director-nomination process by adopting an advance notice policy. This policy sets deadlines and requirements for shareholders to submit director nominations for annual or special meetings - Shareholders approved changes to the director-nomination process on **June 17, 2025**, by adopting an advance notice policy[228](index=228&type=chunk) - The policy sets deadlines for shareholders to submit director nominations, typically **30 days before an annual meeting** or **15 days after public announcement of a special meeting**[230](index=230&type=chunk) - The Chair of the meeting has the authority to determine if nominations comply with the policy and to declare non-compliant nominations ineligible[229](index=229&type=chunk) [ITEM 6. Exhibits](index=60&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Underwriting Agreement, Form of Warrant Indenture, Employment Agreement, various certifications (CEO, CFO), Mine Safety Disclosure, and Inline XBRL documents - Exhibits include the Underwriting Agreement, Form of Warrant Indenture, Employment Agreement, CEO/CFO certifications (Sarbanes-Oxley Act), Mine Safety Disclosure, and Inline XBRL documents[231](index=231&type=chunk) [Signatures](index=62&type=section&id=Signatures) The report is duly signed on August 12, 2025, by Richard Young, President and Chief Executive Officer, and Ryan Snow, Chief Financial Officer, certifying its submission pursuant to the Securities Exchange Act of 1934 - The report was signed on **August 12, 2025**, by Richard Young (President and CEO) and Ryan Snow (CFO)[234](index=234&type=chunk)

Second Quarter Fiscal 2025 versus 2024 Plano, TX, August 13, 2025- Today, European Wax Center, Inc. (NASDAQ: EWCZ), the leading franchisor and operator of out-of- home waxing services in the United States, reports financial results for the 13 and 26 weeks ended July 5, 2025. Chris Morris, Chairman and CEO of European Wax Center, Inc., stated: "In the second quarter, we began to see encouraging early signs that our strategies are taking hold, reinforcing the stability of our core business and the resilience ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) China Automotive Systems reported significant year-over-year growth for the second quarter of 2025, with an 11.1% increase in net sales and a 20.2% rise in income from operations, maintaining a strong financial position with $135.3 million in cash, cash equivalents, and short-term investments [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) In Q2 2025, the company achieved double-digit growth in net sales and operating income, primarily driven by a 49.4% surge in sales from Brazil and a 31.1% increase in Electric Power Steering (EPS) product sales Q2 2025 vs Q2 2024 Key Financial Metrics | Metric | Q2 2025 (USD) | Q2 2024 (USD) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $176.2 million | $158.6 million | +11.1% | | Gross Profit | $30.5 million | $29.3 million | +4.2% | | Income from Operations | $13.0 million | $10.8 million | +20.2% | | Net Income (to shareholders) | $7.6 million | $7.1 million | +6.8% | | Diluted EPS | $0.25 | $0.24 | +4.2% | - Sales in Brazil grew by **49.4%** year-over-year, accounting for **10.1%** of total net sales in Q2 2025[4](index=4&type=chunk)[6](index=6&type=chunk) [First Six Months of 2025 Highlights](index=1&type=section&id=First%20Six%20Months%20of%202025%20Highlights) For the first half of 2025, net sales grew robustly by 15.2% and gross profit increased by 10.8%, though net income attributable to shareholders slightly decreased to $14.7 million from $15.4 million in the prior year period H1 2025 vs H1 2024 Key Financial Metrics | Metric | H1 2025 (USD) | H1 2024 (USD) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $343.3 million | $298.0 million | +15.2% | | Gross Profit | $59.1 million | $53.4 million | +10.8% | | Income from Operations | $21.6 million | $20.5 million | +5.7% | | Net Income (to shareholders) | $14.7 million | $15.4 million | -4.5% | | Diluted EPS | $0.49 | $0.51 | -3.9% | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management highlighted the successful transition towards advanced technology products, with Electric Power Steering (EPS) sales growing 31.1% YoY in Q2 and now representing 41.4% of product sales, while maintaining a strong balance sheet - Sales of Electric Power Steering (EPS) products grew by **31.1%** year-over-year in Q2 2025, now accounting for **41.4%** of total product sales[5](index=5&type=chunk) - The company is advancing its technology with the second-generation iRCB (intelligent electro-hydraulic circulating ball power steering), which is compatible with L2+ assisted driving[5](index=5&type=chunk) - A new R-EPS product order was secured from a major European automaker, with expected annual sales exceeding **$100 million** and mass production starting by 2027[5](index=5&type=chunk) - The company maintains a strong financial position with cash, cash equivalents, and short-term investments of **$135.3 million** and net cash from operations of **$49.1 million** in H1 2025[5](index=5&type=chunk) [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) This section provides a detailed breakdown of the company's financial performance for the second quarter and first half of 2025, including analysis of revenue by product and region, profitability, operating expenses, and balance sheet condition [Second Quarter of 2025 Performance](index=2&type=section&id=Second%20Quarter%20of%202025%20Performance) Q2 2025 net sales rose 11.1% to $176.2 million, driven by a 31.1% increase in EPS product sales and strong international demand, particularly a 49.4% rise in Brazil, despite a gross margin decline due to tariffs and product mix Q2 2025 Revenue Breakdown | Category | Q2 2025 Value (USD) | YoY Change | Note | | :--- | :--- | :--- | :--- | | Total Net Sales | $176.2 million | +11.1% | Strong overall growth | | EPS Product Sales | $72.9 million | +31.1% | Represents 41.4% of total sales | | North American Sales | $30.0 million | +11.8% | Improved demand from one customer | | Brazil Sales | $17.9 million | +49.4% | Significant international growth driver | - Gross profit margin decreased to **17.3%** from **18.5%** in Q2 2024, mainly due to increased tariffs and a change in product mix towards lower-margin products[8](index=8&type=chunk) - General and administrative (G&A) expenses decreased to **$5.4 million** from **$7.4 million**, primarily due to lower business taxes and surcharges[10](index=10&type=chunk) [First Six Months of 2025 Performance](index=4&type=section&id=First%20Six%20Months%20of%202025%20Performance) For the first half of 2025, net sales increased 15.2% to $343.3 million, and operating income grew 5.7% to $21.6 million, though net income attributable to shareholders decreased to $14.7 million from $15.4 million H1 2025 vs H1 2024 Performance | Metric | H1 2025 (USD) | H1 2024 (USD) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $343.3 million | $298.0 million | +15.2% | | Gross Profit | $59.1 million | $53.4 million | +10.8% | | Gross Margin | 17.2% | 17.9% | -0.7 p.p. | | Income from Operations | $21.6 million | $20.5 million | +5.7% | | Net Income (to shareholders) | $14.7 million | $15.4 million | -4.5% | [Balance Sheet Highlights](index=4&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, the company maintained a healthy balance sheet with $135.3 million in cash, cash equivalents, and short-term investments, and total parent company stockholders' equity increased to $366.4 million Key Balance Sheet Items (as of June 30, 2025) | Item | Value (USD) | Comparison (vs Dec 31, 2024) | | :--- | :--- | :--- | | Cash, cash equivalents & short-term investments | $135.3 million | N/A (Combined figure) | | Net working capital | $170.9 million | N/A | | Total accounts receivable | $294.2 million | $343.5 million | | Total accounts payable | $269.6 million | $292.8 million | | Total parent company stockholders' equity | $366.4 million | $349.6 million | [Business Outlook](index=5&type=section&id=Business%20Outlook) Reflecting confidence in its current operating and market conditions, the company's management has increased its full-year revenue guidance for fiscal year 2025 - Management has raised its revenue guidance for the full fiscal year 2025 to **$720.0 million**[21](index=21&type=chunk) [Company and Event Information](index=5&type=section&id=Company%20and%20Event%20Information) This section provides details about the upcoming conference call to discuss the financial results and general information about China Automotive Systems, Inc., its business, and key customers [Conference Call](index=5&type=section&id=Conference%20Call) Management will host a conference call on August 13, 2025, at 8:00 A.M. EDT to discuss the financial results, with details for participation and replay provided - A conference call is scheduled for August 13, 2025, at 8:00 A.M. EDT to discuss the results[22](index=22&type=chunk) [About China Automotive Systems, Inc.](index=5&type=section&id=About%20China%20Automotive%20Systems%20Inc.) China Automotive Systems, Inc., based in Hubei, China, is a leading supplier of power steering components and systems, serving major Chinese auto manufacturers and international clients - The company is a leading supplier of power steering systems in China, with an annual production capacity of over **8 million** sets[23](index=23&type=chunk) - Key customers include China FAW Group, Dongfeng Auto Group, BYD, Stellantis N.V., and Ford Motor Company[23](index=23&type=chunk) [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) This section contains the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, including the statements of operations, balance sheets, and cash flows [Consolidated Statements of Operations (Q2 2025)](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20%28Q2%202025%29) The statement of operations for the second quarter of 2025 shows an 11.1% increase in net sales and a 6.8% increase in net income attributable to parent company's common shareholders compared to the same period in 2024 Q2 2025 Statement of Operations Summary (in thousands USD) | Line Item | Q2 2025 (USD thousands) | Q2 2024 (USD thousands) | | :--- | :--- | :--- | | Net product sales | $176,245 | $158,608 | | Gross profit | $30,547 | $29,302 | | Income from operations | $12,984 | $10,806 | | Net income | $10,372 | $8,755 | | Net income attributable to parent company's common shareholders | $7,625 | $7,140 | [Consolidated Statements of Operations (H1 2025)](index=8&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20%28H1%202025%29) For the six months ended June 30, 2025, net sales increased by 15.2%, but net income attributable to shareholders decreased by 4.5% compared to the first half of 2024, primarily due to higher operating expenses and income taxes H1 2025 Statement of Operations Summary (in thousands USD) | Line Item | H1 2025 (USD thousands) | H1 2024 (USD thousands) | | :--- | :--- | :--- | | Net product sales | $343,339 | $298,002 | | Gross profit | $59,132 | $53,371 | | Income from operations | $21,624 | $20,457 | | Net income | $18,827 | $18,019 | | Net income attributable to parent company's common shareholders | $14,747 | $15,407 | [Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows total assets of $843.7 million and total liabilities of $432.8 million, with total parent company stockholders' equity standing at $366.4 million Balance Sheet Summary (in thousands USD) | Line Item | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $102,194 | $56,961 | | Total current assets | $599,965 | $602,638 | | Total assets | $843,716 | $850,579 | | Total current liabilities | $429,029 | $456,482 | | Total liabilities | $432,838 | $460,790 | | Total parent company stockholders' equity | $366,375 | $349,569 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, the company generated $49.1 million in net cash from operating activities, a significant improvement from $9.1 million in the same period of 2024, with net cash used in investing of $10.3 million and in financing of $2.8 million Cash Flow Summary for H1 2025 (in thousands USD) | Line Item | H1 2025 (USD thousands) | H1 2024 (USD thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $49,082 | $9,131 | | Net cash used in investing activities | ($10,299) | ($28,232) | | Net cash (used in)/provided by financing activities | ($2,834) | $14,174 | | Net increase/(decrease) in cash | $37,144 | ($6,809) | | Cash, cash equivalents and pledged cash at end of period | $138,968 | $148,385 |

Part I [Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements.) The company reported increased net product sales and improved operating cash flow for H1 2025, with slight shifts in net income and total assets [Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For Q2 2025, net product sales increased 11.1% to $176.2 million, and net income rose to $7.6 million, while H1 2025 net sales grew 15.2% to $343.3 million, with net income slightly decreasing to $14.7 million Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Financial Metric | 2025 (in thousands USD) | 2024 (in thousands USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net product sales | $176,245 | $158,608 | 11.1% | | Gross profit | $30,547 | $29,302 | 4.3% | | Income from operations | $12,984 | $10,806 | 20.2% | | Net income attributable to parent company's common shareholders | $7,625 | $7,140 | 6.8% | | Diluted EPS | $0.25 | $0.24 | 4.2% | Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Financial Metric | 2025 (in thousands USD) | 2024 (in thousands USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net product sales | $343,339 | $298,002 | 15.2% | | Gross profit | $59,132 | $53,371 | 10.8% | | Income from operations | $21,624 | $20,457 | 5.7% | | Net income attributable to parent company's common shareholders | $14,747 | $15,407 | -4.3% | | Diluted EPS | $0.49 | $0.51 | -3.9% | [Condensed Unaudited Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets slightly decreased to $843.7 million, while cash and cash equivalents significantly increased to $102.2 million, and total stockholders' equity grew to $410.9 million Consolidated Balance Sheet Highlights | Balance Sheet Item | June 30, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $102,194 | $56,961 | | Total current assets | $599,965 | $602,638 | | Total assets | $843,716 | $850,579 | | **Liabilities & Equity** | | | | Total current liabilities | $429,029 | $456,482 | | Total liabilities | $432,838 | $460,790 | | Total parent company stockholders' equity | $366,375 | $349,569 | | Total stockholders' equity | $410,878 | $389,789 | [Condensed Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, net cash provided by operating activities substantially increased to $49.1 million, while net cash used in investing activities decreased, and financing activities shifted to a net cash outflow Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $49,082 | $9,131 | | Net cash used in investing activities | ($10,299) | ($28,232) | | Net cash (used in)/provided by financing activities | ($2,834) | $14,174 | | Net increase/(decrease) in cash, cash equivalents and pledged cash | $37,144 | ($6,809) | [Notes to Condensed Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail the company's planned redomicile merger, significant customer concentration, PRC operational risks, and segment revenue contributions - The company plans a redomicile merger with its subsidiary **CAAS Cayman**, which will survive and be renamed **China Automotive Systems Inc**. The merger is subject to shareholder approval[24](index=24&type=chunk) - For the six months ended June 30, 2025, the company's five largest customers accounted for **57.4%** of its consolidated net product sales, with two customers representing **21.9%** and **16.3%** respectively[36](index=36&type=chunk) - The company's operations in the **PRC** are subject to local regulations that restrict the ability of its China-based subsidiaries to transfer a portion of their net assets to the parent company[69](index=69&type=chunk) Segment Net Sales (Six Months Ended June 30, 2025) | Segment | Net Sales (in thousands USD) | | :--- | :--- | | Henglong | $164,161 | | Henglong KYB | $102,248 | | Other Entities | $70,061 | | Hubei Henglong | $57,236 | | Jiulong | $43,171 | | Brazil Henglong | $34,415 | | Wuhu | $16,147 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses revenue growth driven by EPS sales, slight gross margin decline, controlled operating expenses, and strengthened liquidity [Results of Operations - Three Months Ended June 30, 2025 and 2024](index=35&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) Net product sales for Q2 2025 increased 11.1% to $176.2 million, driven by a 31.1% surge in EPS sales, while gross margin declined to 17.3% and G&A expenses decreased 27.0% - Net product sales increased by **$17.6 million** (**11.1%**) in Q2 2025, primarily due to increased sales of electric power steering (EPS)[96](index=96&type=chunk) - Sales of EPS systems and parts grew **31.1%** to **$72.9 million** in Q2 2025, accounting for **41.4%** of total net sales, up from 35.1% in Q2 2024[97](index=97&type=chunk) - Gross margin for Q2 2025 was **17.3%**, down from **18.5%** in Q2 2024, mainly due to increased tariffs and a product mix change towards lower-margin products[102](index=102&type=chunk) - General and administrative expenses decreased by **27.0%** to **$5.4 million** in Q2 2025, mainly due to lower business taxes and surcharges[104](index=104&type=chunk) [Results of Operations - Six Months Ended June 30, 2025 and 2024](index=40&type=section&id=Results%20of%20Operations%20-%20Six%20months%20Ended%20June%2030,%202025%20and%202024) For H1 2025, net product sales rose 15.2% to $343.3 million, led by a 41.7% increase in EPS sales, while R&D expenses increased 25.4% and net income slightly decreased - Net product sales for H1 2025 increased by **$45.3 million** (**15.2%**), driven by strong sales of EPS systems[113](index=113&type=chunk) - Sales of EPS systems and parts grew **41.7%** to **$145.9 million** in H1 2025, making up **42.5%** of total net sales, compared to 34.6% in H1 2024[114](index=114&type=chunk) - R&D expenses increased by **25.4%** to **$16.8 million** in H1 2025, attributed to increased salary expenses and a higher headcount in R&D departments[121](index=121&type=chunk) - Net income attributable to parent company's common shareholders was **$14.7 million** for H1 2025, a decrease of **$0.7 million** from H1 2024[127](index=127&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity strengthened with working capital increasing by 16.9% to $170.9 million, driven by a significant increase in cash from operations to $49.1 million in H1 2025 - Working capital increased by **$24.7 million** (**16.9%**) to **$170.9 million** as of June 30, 2025[129](index=129&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (in thousands USD) | 2024 (in thousands USD) | | :--- | :--- | :--- | | Net cash from Operating Activities | $49,082 | $9,131 | | Net cash from Investing Activities | ($10,299) | ($28,232) | | Net cash from Financing Activities | ($2,834) | $14,174 | - As of June 30, 2025, the company had total credit facilities of **$135.8 million**, with **$51.0 million** utilized[136](index=136&type=chunk) - As of June 30, 2025, the company had outstanding short-term loans of **$71.9 million** and notes payable of **$90.0 million**[134](index=134&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company states that there were no material changes to the market risk disclosures made in its Annual Report on Form 10-K for the year ended December 31, 2024 - There were **no material changes** to the disclosure regarding market risk from the company's 2024 Annual Report on Form 10-K[156](index=156&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures.) The company's management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2025[157](index=157&type=chunk) - **No changes** in internal control over financial reporting occurred during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control[159](index=159&type=chunk) Part II [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings.) The company reports that it is not a party to any pending or threatened legal proceedings, nor are any related parties involved in adverse litigation - The Company is **not a party** to any pending or threatened legal proceedings[161](index=161&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors.) The company faces significant risks from international trade policies, particularly potential U.S. tariffs up to 72.5% on Chinese-made steering gears - The company faces **significant risk** from changes in international trade policies, especially **tariffs and sanctions** between the U.S. and China[163](index=163&type=chunk) - As of the report date, the total potential tariff rate for the company's Chinese-made steering gears exported to the U.S. could be **72.5%**[165](index=165&type=chunk) Composition of Potential U.S. Tariffs on Company Products | Tariff Type | Rate (%) | Description | | :--- | :--- | :--- | | MFN Tariff | 2.5% | Standard tariff for modern vehicles | | Section 301 Tariff | 25% | On automobiles and certain parts from China | | Fentanyl-related Tariff | 20% | On all imports from China | | Section 232 Tariff | 25% | On automobiles and parts from all countries for national security reasons | - The company has contractual agreements with customers to recover some tariff costs and is evaluating its production footprint and supply chain, but **cannot guarantee** these measures will be successful[167](index=167&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company reported no unregistered sales of equity securities or use of proceeds during the period - **None reported**[170](index=170&type=chunk) [Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The company reported no defaults upon senior securities - **None reported**[171](index=171&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information.) The company reported no other information required to be disclosed under this item - **None reported**[173](index=173&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes **CEO and CFO certifications** under Rule 13a-14(a) and Section 1350, as well as **XBRL interactive data files**[174](index=174&type=chunk)

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed financial statements and related disclosures for Hennessy Capital Investment Corp. VII [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed financial statements for Hennessy Capital Investment Corp. VII (HVII) as of June 30, 2025, and for the periods ended June 30, 2025, including detailed notes on organization, accounting policies, IPO, private placement, related party transactions, commitments, contingencies, and fair value measurements [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) This section provides a snapshot of HVII's financial position, detailing assets, liabilities, and shareholders' deficit at specific dates Condensed Balance Sheet Data | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :------------------ | | Cash and cash equivalents | $1,861,192 | $20,005 | | Total current assets | $1,982,233 | $40,834 | | Marketable securities held in Trust Account | $193,308,208 | — | | Total Assets | $195,290,441 | $993,266 | | Total current liabilities | $156,654 | $566,218 | | Total Liabilities | $8,531,654 | $1,016,218 | | Class A ordinary shares subject to possible redemption | $193,308,208 | — | | Total Shareholders' Deficit | $(6,549,421) | $(22,952) | - Significant increase in total assets from **$993,266** at December 31, 2024, to **$195,290,441** at June 30, 2025, primarily due to marketable securities held in the Trust Account following the IPO[10](index=10&type=chunk) - Class A ordinary shares subject to possible redemption increased from **$0** to **$193,308,208**, reflecting the IPO proceeds placed in the Trust Account[10](index=10&type=chunk) [Condensed Statement of Operations](index=5&type=section&id=Condensed%20Statement%20of%20Operations) This section outlines HVII's financial performance, reporting revenues, expenses, and net income over specific periods Condensed Statement of Operations Data | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------------ | :------------------------------- | :----------------------------- | | General and administrative costs | $448,910 | $937,945 | | Loss from operations | $(448,910) | $(937,945) | | Interest earned on cash equivalents | $15,444 | $27,997 | | Interest earned on marketable securities held in Trust Account | $1,953,980 | $3,448,469 | | Total other income | $1,969,424 | $3,476,466 | | Net income | $1,520,515 | $2,538,521 | | Basic and diluted net income per ordinary share, Class A ordinary shares | $0.06 | $0.11 | - The company reported net income of **$1,520,515** for the three months and **$2,538,521** for the six months ended June 30, 2025, primarily driven by interest earned on marketable securities in the Trust Account[14](index=14&type=chunk) [Condensed Statement of Changes in Shareholders' Deficit](index=6&type=section&id=Condensed%20Statement%20of%20Changes%20in%20Shareholders%27%20Deficit) This section details the changes in HVII's shareholders' deficit, including net income and share-related transactions Condensed Statement of Changes in Shareholders' Deficit Data | Metric | January 1, 2025 | June 30, 2025 | | :------------------------------------------------ | :-------------- | :------------ | | Total Shareholders' Deficit | $(22,952) | $(6,549,421) | | Sale of Private Placement Units (Class A ordinary shares) | — | $69 | | Fair value of public Share Rights at issuance | — | $1,577,000 | | Accretion for Class A ordinary shares to redemption amount | — | $(15,504,819) | | Net income (six months) | — | $2,538,522 | - Shareholders' Deficit increased significantly from **$(22,952)** at January 1, 2025, to **$(6,549,421)** at June 30, 2025, largely due to the accretion for Class A ordinary shares to redemption amount[16](index=16&type=chunk) - The company recorded **$6,900,000** from the sale of Private Placement Units and recognized **$1,577,000** for the fair value of public Share Rights at issuance[16](index=16&type=chunk) [Condensed Statement of Cash Flows](index=7&type=section&id=Condensed%20Statement%20of%20Cash%20Flows) This section presents HVII's cash inflows and outflows from operating, investing, and financing activities Condensed Statement of Cash Flows Data | Cash Flow Activity | Six Months Ended June 30, 2025 | | :------------------------------------ | :----------------------------- | | Net cash used in operating activities | $(811,872) | | Net cash used in investing activities | $(189,859,739) | | Net cash provided by financing activities | $192,512,798 | | Net change in cash and cash equivalents | $1,841,187 | | Cash and cash equivalents, end of the period | $1,861,192 | - Operating activities used **$811,872** in cash, primarily due to adjustments reconciling net income to cash flow, including interest earned on marketable securities held in the Trust Account[18](index=18&type=chunk) - Investing activities resulted in a net cash outflow of **$189,859,739**, mainly from the investment of cash into the Trust Account[18](index=18&type=chunk) - Financing activities provided **$192,512,798**, driven by proceeds from the sale of Units and Private Placement Units, net of underwriting discounts[18](index=18&type=chunk) [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed financial statements [NOTE 1 — ORGANIZATION AND BUSINESS OPERATIONS](index=8&type=section&id=NOTE%201%20%E2%80%94%20ORGANIZATION%20AND%20BUSINESS%20OPERATIONS) This note describes HVII's formation, IPO, private placement, and business combination objectives - Hennessy Capital Investment Corp. VII (HVII) is a blank check company incorporated on September 27, 2024, for the purpose of effecting a business combination[20](index=20&type=chunk) - On January 21, 2025, HVII consummated its Initial Public Offering (IPO) of **19,000,000 units** at **$10.00 per unit**, generating gross proceeds of **$190,000,000**[22](index=22&type=chunk) - Simultaneously with the IPO, HVII sold **690,000 private placement units** at **$10.00 per unit**, generating **$6,900,000**, with the Sponsor and Underwriters as purchasers[23](index=23&type=chunk) - Transaction costs for the IPO amounted to **$12,656,782**, including cash underwriting fees, deferred underwriting fees, and other offering costs[24](index=24&type=chunk) - Substantially all net proceeds are intended for a Business Combination, which must have a fair market value of at least **80%** of the Trust Account's net balance[25](index=25&type=chunk)[26](index=26&type=chunk) - As of June 30, 2025, HVII had cash and cash equivalents of **$1,861,192** and working capital of **$1,825,579**, with sufficient funds for working capital needs for at least one year[34](index=34&type=chunk) [NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202%20%E2%80%94%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing HVII's financial statements - The unaudited condensed financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, with certain disclosures condensed or omitted[36](index=36&type=chunk) - HVII is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[38](index=38&type=chunk)[39](index=39&type=chunk) - Marketable securities held in the Trust Account are classified as held-to-maturity and recorded at amortized cost, or as trading securities when comprised of money market securities[44](index=44&type=chunk) - Offering costs allocated to Class A ordinary shares subject to possible redemption were charged to temporary equity, while those allocated to Share Rights were charged to shareholders' deficit[46](index=46&type=chunk) - HVII is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States, resulting in a zero tax provision[52](index=52&type=chunk) - Class A ordinary shares subject to possible redemption are classified as temporary equity at redemption value, with changes recognized immediately[54](index=54&type=chunk) [NOTE 3 — INITIAL PUBLIC OFFERING](index=16&type=section&id=NOTE%203%20%E2%80%94%20INITIAL%20PUBLIC%20OFFERING) This note details the terms and proceeds of HVII's Initial Public Offering, including unit structure - On January 21, 2025, HVII sold **19,000,000 Units** in its IPO, including a partial exercise of the over-allotment option, at **$10.00 per Unit**[61](index=61&type=chunk) - Each Unit consists of one Class A ordinary share and one Share Right, entitling the holder to receive one-twelfth (1/12) of one Class A ordinary share upon Business Combination[61](index=61&type=chunk) [NOTE 4 — PRIVATE PLACEMENT](index=16&type=section&id=NOTE%204%20%E2%80%94%20PRIVATE%20PLACEMENT) This note describes the private placement of units to the Sponsor and Underwriters, including transfer restrictions - Simultaneously with the IPO, the Sponsor and Underwriters purchased **690,000 Private Placement Units** at **$10.00 each**, totaling **$6,900,000**[62](index=62&type=chunk) - Private Placement Units are subject to transfer restrictions until **30 days** after a Business Combination and grant certain registration rights[63](index=63&type=chunk) - The Sponsor, officers, and directors waived redemption rights for their founder shares, private placement shares, and public shares in connection with a Business Combination[65](index=65&type=chunk) [NOTE 5 — RELATED PARTY TRANSACTIONS](index=17&type=section&id=NOTE%205%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions and arrangements between HVII and its related parties, including the Sponsor - The Sponsor initially received **5,750,000 founder shares** for **$25,000** and an additional **958,333 founder shares** for no consideration, subject to forfeiture[66](index=66&type=chunk) - After partial exercise of the over-allotment option and forfeiture, the Sponsor holds **5,203,333 founder shares**[66](index=66&type=chunk) - Founder shares were transferred to the CFO, COO, and independent directors for **$0.004 per share**, with a fair value of **$0.99 per share**, recognized as compensation expense upon probable occurrence of a Business Combination[67](index=67&type=chunk) - The Sponsor loaned the Company up to **$250,000** via a non-interest bearing Promissory Note, which was fully repaid on January 21, 2025[71](index=71&type=chunk) - HVII pays **$15,000 per month** to the Sponsor for administrative services and **$10,000 per month** to the CFO for services[73](index=73&type=chunk)[74](index=74&type=chunk) [NOTE 6 — COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=NOTE%206%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines HVII's contractual obligations, potential liabilities, and geopolitical risks - Geopolitical instability (Russia-Ukraine, Israel-Hamas, Israel-Iran conflicts) and U.S. tariff policies pose risks to HVII's search for a Business Combination and potential target businesses[76](index=76&type=chunk)[77](index=77&type=chunk) - Holders of founder shares, Private Placement Units, and Working Capital Loans have registration rights for their securities[78](index=78&type=chunk) - Underwriters received a **$3,800,000** cash underwriting discount and are entitled to a deferred underwriting discount of up to **$7,600,000**, payable upon completion of a Business Combination[80](index=80&type=chunk) - Deferred legal fees totaled **$775,000** as of June 30, 2025, payable upon consummation of a Business Combination and classified as a non-current liability[82](index=82&type=chunk) [NOTE 7 — SHAREHOLDERS' DEFICIT](index=20&type=section&id=NOTE%207%20%E2%80%94%20SHAREHOLDERS%27%20DEFICIT) This note details HVII's authorized and outstanding share capital, including Class A and Class B ordinary shares - HVII is authorized to issue **1,000,000 preference shares**, **200,000,000 Class A ordinary shares**, and **20,000,000 Class B ordinary shares**[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - As of June 30, 2025, there were **690,000 Class A ordinary shares** and **6,333,333 Class B ordinary shares** issued and outstanding (excluding redeemable Class A shares)[84](index=84&type=chunk)[85](index=85&type=chunk) - Founder shares (Class B ordinary shares) automatically convert to Class A ordinary shares on a one-for-one basis upon Business Combination, subject to certain adjustments[86](index=86&type=chunk) - Holders of Class B ordinary shares have exclusive voting rights on director appointments/removals and continuation in a different jurisdiction prior to a Business Combination[89](index=89&type=chunk) - Each Share Right entitles the holder to receive one-twelfth (1/12) of one Class A ordinary share upon consummation of a Business Combination, but will expire worthless if HVII fails to complete a Business Combination[90](index=90&type=chunk) [NOTE 8 — FAIR VALUE MEASUREMENTS](index=21&type=section&id=NOTE%208%20%E2%80%94%20FAIR%20VALUE%20MEASUREMENTS) This note explains HVII's fair value hierarchy and the valuation of assets and liabilities, particularly Trust Account securities - HVII uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on observable and unobservable inputs[91](index=91&type=chunk)[92](index=92&type=chunk) - As of June 30, 2025, assets in the Trust Account were **$193,308,208**, held in a money market account (Level 1 fair value)[94](index=94&type=chunk)[95](index=95&type=chunk) - The fair value of Share Rights issued in the IPO was **$1,577,000**, or **$0.083 per Share Right**, classified within shareholders' deficit and not subject to remeasurement[95](index=95&type=chunk) [NOTE 9 — SEGMENT REPORTING](index=22&type=section&id=NOTE%209%20%E2%80%94%20SEGMENT%20REPORTING) This note clarifies that HVII operates as a single reportable segment, with the CFO as the primary decision-maker - HVII operates as a single reportable segment, with the Chief Financial Officer (CODM) reviewing overall assets, operating results, and financial metrics[97](index=97&type=chunk) - The CODM monitors interest earned on the Trust Account and general and administrative costs to manage shareholder value, investment strategy, and capital availability for a Business Combination[100](index=100&type=chunk) [NOTE 10 — SUBSEQUENT EVENTS](index=23&type=section&id=NOTE%2010%20%E2%80%94%20SUBSEQUENT%20EVENTS) This note confirms no material events occurred after the balance sheet date requiring disclosure - No subsequent events requiring adjustment or disclosure were identified after the balance sheet date up to the issuance of the unaudited condensed financial statements[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on HVII's financial condition and results of operations, including forward-looking statements, an overview of its SPAC nature, factors affecting its performance, detailed results of operations, liquidity and capital resources, and contractual obligations, highlighting the company's focus on completing a business combination and related financial activities [Special Note Regarding Forward Looking Statements](index=24&type=section&id=Special%20Note%20Regarding%20Forward%20Looking%20Statements) This section highlights that the report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially - The report contains forward-looking statements regarding HVII's future expectations, hopes, beliefs, intentions, or strategies, which are not guarantees of future performance[105](index=105&type=chunk)[106](index=106&type=chunk) - Actual results may differ materially due to various risks and uncertainties, including HVII's ability to select a target, complete a business combination, and retain key personnel[106](index=106&type=chunk)[107](index=107&type=chunk) [Overview](index=25&type=section&id=Overview) This section provides an overview of HVII as a SPAC, its formation, and its objective to effect a business combination - HVII is a SPAC formed on September 27, 2024, to effect a business combination using proceeds from its IPO, private placement units, and potentially additional securities or debt[109](index=109&type=chunk) - Issuance of additional ordinary shares or incurring significant indebtedness in a business combination could dilute public shareholders, subordinate rights, cause a change of control, or adversely affect market prices[110](index=110&type=chunk)[112](index=112&type=chunk) [Factors That May Adversely Affect HVII's Results of Operations](index=26&type=section&id=Factors%20That%20May%20Adversely%20Affect%20HVII%27s%20Results%20of%20Operations) This section discusses economic uncertainty and geopolitical instability as key factors that may negatively impact HVII's operations and ability to complete a business combination - HVII's operations and ability to complete a business combination are susceptible to economic uncertainty and volatility, including geopolitical instability (Ukraine, Middle East conflicts) and changes in financial markets[114](index=114&type=chunk) - These factors could negatively impact HVII's search for a target business and the consummation of a business combination[114](index=114&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section details HVII's financial performance, primarily driven by interest income from the Trust Account offset by administrative costs - HVII has not generated operating revenues to date, with activities focused on organizational efforts and the IPO[115](index=115&type=chunk) Results of Operations Summary | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------------ | :------------------------------- | :----------------------------- | | Net income | $1,520,515 | $2,538,521 | | Interest earned on marketable securities held in Trust Account | $1,953,980 | $3,448,469 | | General and administrative costs | $448,910 | $937,945 | - Net income is primarily derived from interest earned on marketable securities held in the Trust Account, offset by general and administrative costs[116](index=116&type=chunk)[117](index=117&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses HVII's sources and uses of cash, including IPO proceeds, Trust Account investments, and funding for operational expenses and potential business combinations - HVII's liquidity prior to the IPO was limited to initial Class B share purchases and sponsor loans, which were repaid[119](index=119&type=chunk) - Following the IPO and private placement, **$190,000,000** was placed in the Trust Account, and HVII incurred **$12,656,782** in transaction costs[120](index=120&type=chunk)[121](index=121&type=chunk) - Funds in the Trust Account are primarily for the business combination, while funds outside are for identifying targets, due diligence, and operational expenses[122](index=122&type=chunk)[123](index=123&type=chunk) - The Sponsor or affiliates may provide Working Capital Loans, convertible into Private Placement Units, to finance transaction costs[124](index=124&type=chunk) - HVII may need additional financing for a business combination if current funds are insufficient or if a significant number of public shares are redeemed[126](index=126&type=chunk) [Off-Balance Sheet Financing Arrangements](index=28&type=section&id=Off-Balance%20Sheet%20Financing%20Arrangements) This section confirms that HVII has no off-balance sheet arrangements as of the reporting date - As of June 30, 2025, HVII has no obligations, assets, or liabilities considered off-balance sheet arrangements[127](index=127&type=chunk) [Contractual Obligations](index=28&type=section&id=Contractual%20Obligations) This section outlines HVII's contractual commitments, including administrative fees and deferred underwriting discounts - HVII has no long-term debt, capital lease, or operating lease obligations, other than monthly administrative fees of **$15,000** to the Sponsor and **$10,000** to the CFO[128](index=128&type=chunk) - A deferred underwriting discount of up to **$7,600,000** is payable to underwriters upon completion of a business combination[129](index=129&type=chunk) [Critical Accounting Estimates](index=28&type=section&id=Critical%20Accounting%20Estimates) This section states that HVII has not identified any critical accounting estimates requiring significant judgment - HVII has not identified any critical accounting estimates that require significant judgment and could materially differ from actual results[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, HVII is exempt from providing quantitative and qualitative disclosures about market risk - HVII is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[131](index=131&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of HVII's disclosure controls and procedures and reports on any changes in internal control over financial reporting, concluding that disclosure controls were effective as of June 30, 2025, and no material changes to internal controls occurred during the quarter [Evaluation of Disclosure Controls and Procedures](index=29&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of HVII's disclosure controls and procedures as evaluated by certifying officers - HVII's Certifying Officers evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective[132](index=132&type=chunk) - Disclosure controls provide reasonable, not absolute, assurance that objectives are met, acknowledging inherent limitations and resource constraints[133](index=133&type=chunk) [Changes in Internal Control over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on the absence of material changes to HVII's internal control over financial reporting during the most recent fiscal quarter - There were no changes in HVII's internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[134](index=134&type=chunk) [PART II - OTHER INFORMATION](index=30&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information beyond financial statements, covering legal, risk, and other disclosures [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) HVII's management reports no pending litigation against the company, its officers, or directors as of the date of this Quarterly Report - To the knowledge of HVII's management, there is no litigation currently pending against HVII, its officers, or directors[136](index=136&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors previously disclosed, emphasizing the potential adverse effects of changes in international trade policies, tariffs, and treaties on HVII's search for a business combination target or the performance of a post-business combination company - No material changes to risk factors were disclosed since the Annual Report on Form 10-K, except for the detailed discussion on international trade policies and tariffs[137](index=137&type=chunk) - Changes in international trade policies, tariffs, and treaties could materially affect HVII's ability to find a suitable business combination target or the performance of a post-business combination company[138](index=138&type=chunk)[140](index=140&type=chunk) - Uncertainty regarding future trade policies and tariffs may reduce the pool of potential target companies and adversely affect the market value of the post-business combination company's securities[139](index=139&type=chunk)[141](index=141&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered equity sales or use of proceeds during the reporting period - No unregistered sales of equity securities or use of proceeds occurred[142](index=142&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults on senior securities occurred during the reporting period - No defaults upon senior securities occurred[143](index=143&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to HVII's operations - Mine safety disclosures are not applicable to HVII[144](index=144&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section reports on director and officer trading arrangements during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[145](index=145&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q - Exhibits include the Amended and Restated Memorandum and Articles of Association, CEO and CFO certifications (31.1*, 31.2*, 32.1**, 32.2**), and Inline XBRL documents (101.INS*, 101.SCH*, 101.CAL*, 101.LAB*, 101.PRE*, 101.DEF*, 104*)[146](index=146&type=chunk) [Signatures](index=33&type=section&id=Signatures) This section provides the official signatures of HVII's authorized officers, certifying the report's accuracy - The report is duly signed on behalf of Hennessy Capital Investment Corp. VII by Daniel J. Hennessy, Chairman of the Board of Directors and Chief Executive Officer, and Nicholas Geeza, Executive Vice President, Chief Financial Officer and Secretary, on August 13, 2025[149](index=149&type=chunk)[150](index=150&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: 001-42479 HENNESSY CAPITAL INVESTMENT CORP. VII (Exact Name of Registrant as Specified in Its Charter) | Cayma ...

[Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements based on current expectations that are inherently subject to risks and uncertainties - The report contains forward-looking statements regarding financial performance, business strategy, product timing, costs, market trends, liquidity, and capital requirements[8](index=8&type=chunk) - Actual future results may differ materially due to risks such as economic conditions, competitive product prices, disease outbreaks (e.g., COVID-19), political unrest, data security breaches, government actions, and changes in the medical aesthetics, cosmetics, and biotechnology market[9](index=9&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the Company does not undertake to update them except as required by law[10](index=10&type=chunk) [PART I – FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position, performance, and cash flows for the periods ended June 30, 2025, and 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show the company's financial position as of June 30, 2025, and December 31, 2024, reflecting a significant increase in cash and total equity Balance Sheet Summary | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :--------------------------------- | :-------------- | :---------------- | :----- | :--------- | | Cash | 5,682,628 | 3,984,453 | 1,698,175 | 42.62% | | Total Current Assets | 7,302,844 | 6,051,001 | 1,251,843 | 20.69% | | Total Assets | 9,375,476 | 8,993,165 | 382,311 | 4.25% | | Total Current Liabilities | 326,301 | 1,799,134 | (1,472,833) | -81.86% | | Total Liabilities | 326,301 | 2,333,601 | (2,007,300) | -86.02% | | Total Equity | 9,049,175 | 6,659,564 | 2,389,611 | 35.88% | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statements of operations detail financial performance for the three and six months ended June 30, 2025, and 2024, showing a reduced total net loss year-over-year Statement of Operations Summary | Metric | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total operating expenses | 1,013,518 | 556,242 | 2,215,242 | 1,356,216 | | Net loss from continuing operations | (579,490) | (552,911) | (2,160,301) | (1,097,032) | | Loss from discontinued operations | 17,135 | (859,580) | (10,509) | (1,712,709) | | Total net loss | (562,355) | (1,412,491) | (2,170,810) | (2,809,741) | | Basic and diluted loss per share (Continuing operations) | (0.466) | (42.303) | (2.411) | (86.215) | | Weighted average shares outstanding | 1,243,720 | 13,070 | 896,149 | 12,724 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) These statements illustrate changes in stockholders' equity, highlighting increases in common stock, Series B preferred stock, and additional paid-in capital Stockholders' Equity Summary | Metric | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :-------------- | :-------------- | | Common Stock (shares) | 1,477,575 | 13,501 | | Common Stock (amount in $) | 148 | 2 | | Series B Preferred Stock (shares) | 6,372,874 | - | | Series B Preferred Stock (amount in $) | 637 | - | | Additional paid-in capital ($) | 24,490,049 | 12,472,023 | | Accumulated deficit ($) | (15,440,437) | (9,833,631) | | Total Equity ($) | 9,049,175 | 2,639,636 | - **Significant increases** in common stock and additional paid-in capital were driven by issuance of shares for acquisition, exercise of warrants, and ATM program sales[16](index=16&type=chunk)[17](index=17&type=chunk) - Series B preferred stock was issued to settle accrued bonus liability in 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The statements of cash flows show cash generation and usage, indicating a substantial increase in cash from financing activities in 2025 Cash Flow Summary | Metric | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | | Cash flows used in operating activities | (2,693,714) | (3,104,757) | | Cash flows used in investing activities | (18,479) | (121,480) | | Cash flows provided by financing activities | 4,410,768 | - | | Increase (decrease) in cash | 1,698,175 | (3,226,817) | | Cash, ending of period | 5,682,628 | 100,034 | - Non-cash investing and financing transactions in 2025 included common stock issued for intangible assets (**$43,535**), shares received for the sale of Skincare (**$728,550**), Series B preferred shares issued to settle bonus liability (**$150,000**), and consideration payable settled through agreement termination (**$894,151**)[19](index=19&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations for the financial statements, covering organization, accounting policies, discontinued operations, and specific accounts [Note 1. Organization and nature of operations](index=13&type=section&id=Note%201.%20Organization%20and%20nature%20of%20operations) PMGC transitioned into a diversified holding company managing subsidiaries in biopharmaceuticals, research, and investments after selling its skincare business - PMGC Holdings Inc. (formerly Elevai Labs Inc.) completed a reorganization in 2024, including a name change and redomiciling from Delaware to Nevada[21](index=21&type=chunk) - The Company completed two reverse stock splits: **1-for-200** on November 27, 2024, and **1-for-7** on March 10, 2025, resulting in a combined **1-for-1,400** reverse split[22](index=22&type=chunk) - On January 16, 2025, PMGC sold its skincare business, leading to a change in its principal business from skincare development to a diversified holding company[23](index=23&type=chunk)[24](index=24&type=chunk) - PMGC now manages three wholly-owned subsidiaries: Northstrive BioSciences Inc, PMGC Research Inc, and PMGC Capital LLC[25](index=25&type=chunk) [Note 2. Going Concern](index=14&type=section&id=Note%202.%20Going%20Concern) The company's ability to continue as a going concern is in substantial doubt due to significant accumulated deficit and net losses - As of June 30, 2025, the Company had an **accumulated deficit of $15,440,437** and used **$2,693,714 in cash for operating activities**, raising substantial doubt about its ability to continue as a going concern[27](index=27&type=chunk) - Management's plans to address going concern issues include raising additional debt or equity financing and acquiring cash flow generating assets or businesses[29](index=29&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=14&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines significant accounting policies for financial statement preparation, including basis of presentation, consolidation, and use of estimates [Basis of Presentation](index=14&type=section&id=Basis%20of%20Presentation) The financial statements are prepared in accordance with SEC rules and U.S. GAAP for interim financial information and are expressed in U.S. dollars - Unaudited condensed consolidated financial statements are prepared in accordance with SEC rules and U.S. GAAP for interim financial information, expressed in United States dollars[30](index=30&type=chunk) [Principles of Consolidation](index=14&type=section&id=Principles%20of%20Consolidation) The consolidated financial statements include PMGC and its 100% owned subsidiaries, with all intercompany accounts and transactions eliminated - The consolidated financial statements include PMGC and its 100% owned subsidiaries (PMGC Research, Skincare, BioSciences, and PMGC Capital), with all intercompany accounts and transactions eliminated[31](index=31&type=chunk) [Use of Estimates](index=15&type=section&id=Use%20of%20Estimates) Financial statement preparation requires management to make estimates and assumptions that are regularly evaluated, though actual results may differ - Management makes estimates and assumptions affecting reported amounts of assets, liabilities, revenues, and expenses, including revenue recognition, collectability of receivables, valuation of investments, and useful lives of assets[32](index=32&type=chunk) [Foreign Currency Translation](index=15&type=section&id=Foreign%20Currency%20Translation) The company's functional currency is the U.S. dollar, while its Canadian subsidiary uses the Canadian dollar, with transactions translated at prevailing rates - The Company's functional and reporting currency is the U.S. dollar; PMGC Research's functional currency is the Canadian dollar[33](index=33&type=chunk) - Assets and liabilities of PMGC Research are translated at period-end exchange rates, while revenues and expenses are translated at average rates, with exchange gains/losses included in accumulated other comprehensive income (loss)[34](index=34&type=chunk) [Investments in securities](index=15&type=section&id=Investments%20in%20securities) Investments in securities are classified as trading securities and reported at fair value, with realized and unrealized gains/losses recognized in earnings - Investments in securities, including publicly traded equity securities and a convertible debenture, are classified as trading securities and reported at fair value[35](index=35&type=chunk) - Both realized and unrealized gains and losses on these investments are recognized in earnings[35](index=35&type=chunk) [New Accounting Standards](index=15&type=section&id=New%20Accounting%20Standards) The company adopted ASU 2022-03 and ASU 2023-07, neither of which had a significant or material impact on its financial statements - The Company adopted ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions) for fiscal years beginning after December 15, 2023, with no significant impact[37](index=37&type=chunk)[39](index=39&type=chunk) - ASU 2023-07 (Segment Reporting) was adopted for fiscal years beginning after December 15, 2023, and interim periods beginning January 1, 2025, with no material impact[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 4. Assets and liabilities held for sale and discontinued operations](index=16&type=section&id=Note%204.%20Assets%20and%20liabilities%20held%20for%20sale%20and%20discontinued%20operations) This note details the sale of the skincare business in January 2025, with its financial results presented as discontinued operations - The Company sold its skincare business on January 16, 2025, for **1,267,040 shares of buyer common stock ($728,550 market value)**, assumption of certain liabilities, and **$56,525 cash**[42](index=42&type=chunk) - Additional earn-out consideration includes **5% of sales** from existing products for five years and a one-time payment of **$500,000** if specific revenue targets are met for hair and scalp products[43](index=43&type=chunk) - The Company recorded a **loss on sale of discontinued operations of $39,676**, with proceeds of $728,550 against net assets of $768,226[45](index=45&type=chunk) Discontinued Operations Financial Summary | Metric | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | - | 605,530 | 152,381 | 1,220,093 | | Gross profit | - | 439,256 | 121,851 | 884,908 | | Total expenses | 7,661 | 1,291,627 | 142,298 | 2,620,766 | | Net income (loss) from discontinued operations | 17,135 | (859,580) | (10,509) | (1,712,709) | Discontinued Operations Cash Flow | Cash Flows (Discontinued Operations) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | | Cash flows used in operating activities | (174,767) | (1,912,907) | | Cash flows used in investing activities | - | (9,160) | [Note 5. Short Term Loan Receivable](index=18&type=section&id=Note%205.%20Short%20Term%20Loan%20Receivable) The company held a short-term loan receivable of $128,111 as of June 30, 2025, which was subsequently settled in July 2025 Loan Receivable Summary | Receivable Type | June 30, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :-------------- | :---------------- | | Promissory note receivable | 127,300 | - | | Interest receivable | 811 | - | | Total | 128,111 | - | - The promissory note bears interest at the U.S. prime rate (**7.5%**) and was due by September 30, 2025[47](index=47&type=chunk) - Subsequent to June 30, 2025, the note was fully settled through the transfer of a **10% equity interest** in Pacific Sun Packaging Inc. as part of an acquisition[49](index=49&type=chunk) [Note 6. Prepaids and Deposits](index=18&type=section&id=Note%206.%20Prepaids%20and%20Deposits) Prepaid expenses and deposits totaled $791,055 as of June 30, 2025, a decrease from $868,464 at year-end 2024 Prepaids and Deposits Summary | Item | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------- | :-------------- | :---------------- | | Prepaid expenses | 753,735 | 867,420 | | Deposits | 37,320 | 1,044 | | Total | 791,055 | 868,464 | [Note 7. Investment in securities](index=19&type=section&id=Note%207.%20Investment%20in%20securities) The company's investments, classified as trading securities, totaled $624,838 as of June 30, 2025, resulting in a net loss for the period - Investments include publicly traded equity securities and a convertible debenture, classified as trading securities and measured at fair value[51](index=51&type=chunk) - Fair value measurement as of June 30, 2025: Equity securities (**$312,624**) are Level 1, and the convertible debenture (**$312,214**) is Level 2[54](index=54&type=chunk) Investment Securities Activity | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :-------------------------- | :---------------- | :-------------- | | Balance, Investments | 139,084 | 624,838 | | Purchases (6 months 2025) | - | 995,100 | | Acquired in Skincare sale | - | 728,550 | | Proceeds on sale | - | (1,109,921) | | Realized loss (6 months 2025) | - | (371,494) | | Unrealized gain (6 months 2025) | - | 238,899 | [Note 8. Equipment](index=20&type=section&id=Note%208.%20Equipment) The net book value of equipment decreased to $0 as of June 30, 2025, from $1,087 at year-end 2024 due to depreciation Equipment Summary | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :-------------------- | :---------------- | :-------------- | | Cost | 2,601 | 2,604 | | Accumulated depreciation | 1,514 | 2,604 | | Net book value | 1,087 | - | [Note 9. Intangible assets and consideration payable](index=20&type=section&id=Note%209.%20Intangible%20assets%20and%20consideration%20payable) The company terminated License 1, recognizing a gain, and increased the value of License 2 (an IPR&D asset) by expanding its rights Intangible Assets Summary | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :--------------------------------- | :---------------- | :-------------- | | Intangibles, net | 2,801,993 | 2,072,632 | | License 1 Cost | 861,452 | - | | License 2 Cost (IPR&D asset) | 2,023,097 | 2,072,632 | | Accumulated amortization | 82,556 | - | | Consideration payable | 884,467 | - | - License 1 was mutually terminated on February 27, 2025, releasing the Company from a **$950,000 obligation** and resulting in a **gain of $129,613**[56](index=56&type=chunk)[58](index=58&type=chunk) - License 2, an IPR&D asset, was acquired on April 30, 2024, for **$2,023,097**, including cash and common stock, with fair value adjustments for trading restrictions[59](index=59&type=chunk)[60](index=60&type=chunk)[63](index=63&type=chunk) - On March 21, 2025, License 2 was amended to expand into animal health, costing **$6,000 cash and 12,000 shares of common stock**, with a fair value discount adjustment of $15,624[64](index=64&type=chunk)[65](index=65&type=chunk) - A second amendment to License 2 on May 12, 2025, clarified scope and terms for animal health, with no associated cost[69](index=69&type=chunk) [Note 10. Derivative liabilities](index=23&type=section&id=Note%2010.%20Derivative%20liabilities) Derivative liabilities from warrants were measured at fair value, which was deemed $nil as of June 30, 2025, due to the exercise price - Common stock purchase warrants and IPO warrants are classified as financial liabilities and accounted for as derivative liabilities, measured at fair value[71](index=71&type=chunk) - As of June 30, 2025, **221 derivative liability warrants** were outstanding with a weighted average exercise price of **$3,497** and a weighted average life of **2.21 years**[73](index=73&type=chunk) Derivative Liabilities Summary | Metric | December 31, 2023 ($) | December 31, 2024 ($) | June 30, 2025 ($) | | :--------------------------------- | :---------------- | :---------------- | :-------------- | | Outstanding, Derivative liabilities | 369,158 | - | - | | Change in fair value of derivative liabilities | (369,158) | - | - | [Note 11. Equity](index=24&type=section&id=Note%2011.%20Equity) This note details the company's equity structure, highlighting significant increases in common and preferred stock outstanding in 2025 [Common Stock](index=24&type=section&id=Common%20Stock) The number of common shares outstanding increased significantly to 1,477,575 at June 30, 2025, driven by warrant exercises and equity offerings - As of June 30, 2025, **1,477,575 shares of common stock** were issued and outstanding, compared to 438,987 shares at December 31, 2024[75](index=75&type=chunk) - In January 2025, the Company issued **138,485 common shares** from Series A warrant exercises, generating **$1,938,772 gross proceeds**[76](index=76&type=chunk) - In March 2025, a registered direct offering resulted in the sale of **129,145 common shares** and **165,305 prefunded warrants** for **$1,484,028 gross proceeds**[79](index=79&type=chunk) - During the six months ended June 30, 2025, **593,194 common shares** were sold under an ATM program, generating **$1,519,437 gross proceeds**[80](index=80&type=chunk) [Preferred Stock](index=25&type=section&id=Preferred%20Stock) As of June 30, 2025, the company had 6,372,874 shares of Series B Preferred Stock outstanding, primarily for settling accrued bonus liabilities - As of June 30, 2025, **6,372,874 shares of Series B Preferred Stock** were issued and outstanding, compared to nil at December 31, 2024[84](index=84&type=chunk) - These shares were issued in March 2025 to GB Capital Ltd and Northstrive Companies Inc. as signing bonuses, totaling **$150,000**, to settle accrued bonus liabilities[85](index=85&type=chunk) [Equity Warrants](index=25&type=section&id=Equity%20Warrants) Equity warrants outstanding as of June 30, 2025, totaled 829,136, with a weighted average exercise price of $4.88 - In January 2025, **138,485 replacement warrants** were issued with an initial exercise price of $19.25, later reset to **$3.22 per share**, resulting in 827,900 replacement warrants outstanding[86](index=86&type=chunk) - In March 2025, **165,305 pre-funded warrants** were issued in a registered direct offering, immediately exercisable at **$0.0001 per share**, and fully exercised by April 14, 2025[88](index=88&type=chunk)[89](index=89&type=chunk) Outstanding Warrants Summary | Outstanding Warrants | Number | Weighted Average Exercise Price ($) | | :------------------- | :----- | :-------------------------------- | | August 28, 2026 | 179 | 4,200.00 | | March 12, 2027 | 36 | 4,200.00 | | March 24, 2028 | 1,021 | 470.40 | | January 28, 2030 | 827,900 | 3.22 | | Total | 829,136 | 4.88 | [Stock Options](index=26&type=section&id=Stock%20Options) As of June 30, 2025, 524 stock options were outstanding, with no new options granted and 223 options forfeited or cancelled during the period - No stock option activity (grants or exercises) occurred during the six months ended June 30, 2025[93](index=93&type=chunk)[96](index=96&type=chunk) - **180 vested stock options** with a weighted average exercise price of $1,696 were cancelled on April 16, 2025, following the sale of the skincare business[97](index=97&type=chunk) - Share-based compensation expense for the six months ended June 30, 2025, was **$(42,996)**, compared to $10,484 in 2024[98](index=98&type=chunk) Stock Option Summary | Metric | December 31, 2024 | June 30, 2025 | | :--------------------------------- | :---------------- | :-------------- | | Outstanding stock options | 747 | 524 | | Weighted average exercise price ($) | 2,347.25 | 2,268.18 | | Weighted average life (years) | 6.88 | 6.41 | [Note 12. Related Party Transactions](index=28&type=section&id=Note%2012.%20Related%20Party%20Transactions) Related party transactions primarily involve fees and compensation paid to key management personnel and their controlled entities - Consulting fees to GB Capital Ltd (controlled by CEO/CFO Graydon Bensler) were **$281,000** in 2025 (vs. $100,833 in 2024)[107](index=107&type=chunk) - Consulting fees to Northstrive Companies Inc. (controlled by Chairman Braeden Lichti) were **$314,400** in 2025 (vs. $60,000 in 2024)[107](index=107&type=chunk) - As of June 30, 2025, **$53,355** was due to companies controlled by Braeden Lichti, and **$127** was due to Graydon Bensler[108](index=108&type=chunk)[109](index=109&type=chunk) Key Management Remuneration | Remuneration Type | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------- | :--------------------------- | :--------------------------- | | Consulting fees | 595,400 | 160,833 | | Director fees | 83,290 | - | | Salaries | 26,228 | 377,656 | | Share-based compensation | 36,616 | (32,583) | | Total | 741,534 | 505,906 | [Note 13. Commitments and Contingencies](index=30&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) As of June 30, 2025, there were no new commitments, and a prior ongoing dispute was settled and paid in full - No new commitments as of June 30, 2025, or during the periods then ended[110](index=110&type=chunk) - An ongoing dispute as of December 31, 2024, was settled in February 2025, with all associated payments made by June 30, 2025[111](index=111&type=chunk) [Note 14. Subsequent Events](index=30&type=section&id=Note%2014.%20Subsequent%20Events) Subsequent to June 30, 2025, the company completed two acquisitions in July 2025 for a total of $1,798,000 in cash - On July 7, 2025, the Company acquired **100% of Pacific Sun Packaging Inc.** for **$1,148,000 cash** and a potential earnout of up to $250,000[113](index=113&type=chunk) - The acquisition of Pacific Sun Packaging Inc. included settling a **$127,300 secured promissory note** for a 10% minority interest[113](index=113&type=chunk) - On July 18, 2025, the Company acquired all membership interests of **AGA Precision Systems LLC for $650,000 cash**, enhancing precision manufacturing capabilities[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides its perspective on the company's financial condition, results of operations, new business strategy, and future outlook [Organization and Overview of Operations](index=31&type=section&id=Organization%20and%20Overview%20of%20Operations) Following the sale of its skincare business, PMGC transformed into a diversified holding company with three wholly-owned subsidiaries - After selling its skincare business on January 16, 2025, PMGC Holdings Inc. became a diversified holding company[116](index=116&type=chunk)[117](index=117&type=chunk) - The Company operates three wholly-owned subsidiaries: NorthStrive BioSciences Inc, PMGC Research Inc, and PMGC Capital LLC[117](index=117&type=chunk) [Outlook (Management's Plans)](index=32&type=section&id=Outlook) Management plans to increase revenue through investments, establish new subsidiaries, advance clinical development, and pursue acquisitions of profitable B2B companies - Management intends to increase revenue through PMGC Capital LLC by acquiring and managing undervalued assets, public and private investments, and structured financing[119](index=119&type=chunk) - Plans include establishing new wholly-owned subsidiaries for acquired/licensed assets, utilizing clinical validation studies, and advancing NorthStrive BioSciences' clinical assets towards IND applications[119](index=119&type=chunk) - The Company will pursue additional acquisitions of operating business-to-business companies with **positive EBITDA** and evaluate potential out-licensing, spin-offs, and creation of new publicly traded companies[119](index=119&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This analysis of financial performance, excluding discontinued operations, highlights significant increases in consulting, professional, and administrative expenses [Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024](index=32&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%20to%20the%20six%20months%20ended%20June%2030%2C%202024) For the six months ended June 30, 2025, total operating expenses increased by $859,026, and net loss from continuing operations increased by $1,063,269 Operating Expenses (Six Months) | Expense Category | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :----------------------- | :--------------------------- | :--------------------------- | :----- | :--------- | | Marketing and Promotion | 117,923 | 265,113 | (147,190) | -55.52% | | Consulting Fees | 745,902 | 558,316 | 187,586 | 33.60% | | Office and Administration | 528,870 | 280,800 | 248,070 | 88.35% | | Professional Fees | 550,643 | 91,996 | 458,647 | 498.55% | | Investor Relations | 116,777 | 97,565 | 19,212 | 19.69% | | Research and Development | 99,108 | 55,553 | 43,555 | 78.40% | | Total operating expenses | 2,215,242 | 1,356,216 | 859,026 | 63.34% | | Net loss from continuing operation | (2,160,301) | (1,097,032) | (1,063,269) | 96.92% | - Research and development expenses increased by **$43,555**, driven by work on EL-22 and pre-IND meeting costs[120](index=120&type=chunk) - Consulting fees increased by **$187,586**, primarily due to **$300,000** in bonus-related consulting expenses[123](index=123&type=chunk) - Professional fees increased by **$458,647** due to corporate restructuring, business acquisition due diligence, and financing efforts[124](index=124&type=chunk) - Other income (expense) had an unfavorable variance of **$204,243**, mainly due to a **$371,494 realized loss on investments** and the absence of a prior-period gain, partially offset by a **$129,613 gain on intangible asset termination** and **$238,899 unrealized gain on investments**[126](index=126&type=chunk) [Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024](index=34&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%20to%20the%20three%20months%20ended%20June%2030%2C%202024) For the three months ended June 30, 2025, total operating expenses increased by $457,276, while net loss from continuing operations increased slightly Operating Expenses (Three Months) | Expense Category | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :----------------------- | :--------------------------- | :--------------------------- | :----- | :--------- | | Marketing and Promotion | 82,329 | 133,597 | (51,268) | -38.38% | | Consulting Fees | 198,345 | 179,843 | 18,502 | 10.29% | | Office and Administration | 319,839 | 148,341 | 171,498 | 115.61% | | Professional Fees | 284,175 | 48,706 | 235,469 | 483.46% | | Investor Relations | 46,827 | 5,987 | 40,840 | 682.16% | | Research and Development | 66,675 | 34,824 | 31,851 | 91.46% | | Total operating expenses | 1,013,518 | 556,242 | 457,276 | 82.21% | | Net loss from continuing operation | (579,490) | (552,911) | (26,579) | 4.81% | - Other income (expense) showed a **favorable variance of $430,697**, primarily due to a **$95,184 realized gain on investments**, a **$299,303 unrealized gain on investments**, and **$36,527 interest income** in 2025[134](index=134&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved due to financing activities, but an accumulated deficit and operating cash usage still raise substantial doubt about its going concern ability - Cash increased to **$5,682,628** at June 30, 2025, from $3,984,453 at December 31, 2024, driven by financing activities[136](index=136&type=chunk) - Net working capital increased to **$6,976,543** at June 30, 2025, from $4,251,867 at December 31, 2024[136](index=136&type=chunk) - The Company incurred a **net loss of $2,170,810** and used **$2,693,714 in cash for operating activities** for the six months ended June 30, 2025, raising substantial doubt about its going concern ability[136](index=136&type=chunk) - Financing activities in 2025 included **$1,245,306** from common stock/warrants, **$1,698,058** from Series A warrant exercises, and **$1,467,583** from ATM program sales[143](index=143&type=chunk) Cash Flow Activity (Continuing Operations) | Cash Flow Activity (Continuing Operations) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | Change ($) | | :--------------------------------------- | :--------------------------- | :--------------------------- | :----- | | Cash used in operating activities | (2,518,947) | (1,191,850) | (1,327,097) | | Cash used in investing activities | (18,479) | (112,320) | 93,841 | | Cash provided by financing activities | 4,410,768 | - | 4,410,768 | [Critical Accounting Policies and Significant Judgments and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section reiterates the importance of management's estimates and assumptions in financial reporting, particularly for asset valuation and going concern assessment - Preparation of financial statements requires management to make estimates and assumptions, which are regularly evaluated, but actual results may differ materially[145](index=145&type=chunk) - Key estimates relate to revenue recognition, collectability of receivables, valuation of inventory and investments, derivative liabilities, stock options, useful lives and recoverability of long-lived assets, and deferred income tax valuation allowances[145](index=145&type=chunk) - The Company's policy for intangible assets requires judgment in determining if future economic benefits exceed capitalized costs and continuous monitoring for impairment indicators[146](index=146&type=chunk) - The assessment of going concern requires management to consider all available information for at least 12 months from the financial statement issuance date[147](index=147&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not have any off-balance sheet arrangements that are material to its financial condition or results of operations - The Company does not have any material off-balance sheet arrangements[155](index=155&type=chunk) [JOBS Act](index=38&type=section&id=JOBS%20Act) As an 'emerging growth company,' PMGC has elected to delay adopting new accounting standards, which may affect financial statement comparability - As an 'emerging growth company' under the JOBS Act, PMGC has elected to delay the adoption of new or revised accounting standards[156](index=156&type=chunk) - This election may result in financial statements that are not comparable to companies complying with new standards as of public company effective dates[156](index=156&type=chunk) [Future Related Party Transactions](index=38&type=section&id=Future%20Related%20Party%20Transactions) All future related party transactions will be approved by the Corporate Governance Committee and conducted on arm's-length terms - All related party transactions require approval from the Corporate Governance Committee of the Board of Directors[157](index=157&type=chunk) - Transactions must be on terms no less favorable than those from unaffiliated third parties[157](index=157&type=chunk) [Impact of Inflation / Inflation Risk](index=38&type=section&id=Impact%20of%20Inflation%20%2F%20Inflation%20Risk) The company does not believe inflation has had a material impact to date but acknowledges future high inflation could adversely affect results - The Company does not believe inflation has had a material impact on its financial position or results of operations to date[158](index=158&type=chunk)[159](index=159&type=chunk) - Future high inflation, particularly in labor costs, could adversely affect gross margin and operating expenses[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) As a smaller reporting company, PMGC is not required to provide detailed disclosures about market risk - As a 'smaller reporting company,' PMGC is not required to provide detailed market risk disclosures[161](index=161&type=chunk) - The Company's market risk exposure is generally limited to normal business operations, as it does not engage in speculative transactions or use derivative instruments for trading[160](index=160&type=chunk) [Item 4. Controls and Procedures](index=39&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 in internal control [Evaluation of Disclosure Controls and Procedures](index=39&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective** as of June 30, 2025[162](index=162&type=chunk)[163](index=163&type=chunk) - These controls provide reasonable assurance that required information is recorded, processed, summarized, and reported within SEC specified time periods[163](index=163&type=chunk) [Changes in Internal Control over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No changes in internal control over financial reporting occurred during the period that materially affected, or are likely to affect, such controls - No material changes in internal control over financial reporting occurred during the period[165](index=165&type=chunk) [PART II – OTHER INFORMATION](index=40&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any pending legal proceedings expected to have a material adverse effect on its business - The Company is not currently a party to any pending legal proceedings expected to have a material adverse effect on its business or financial conditions[167](index=167&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, PMGC is not required to make disclosures under this item - As a smaller reporting company, PMGC is not required to make disclosures under Item 1A. Risk Factors[168](index=168&type=chunk) [Item 2. Recent Sales of Unregistered Securities; Use of Proceeds and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%202.%20Recent%20Sales%20of%20Unregistered%20Securities%3B%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No issuer purchases of common stock were made during the quarter, and any unregistered sales were deemed exempt from registration - No issuer purchases of common stock were made during the quarter ended June 30, 2025[173](index=173&type=chunk) - Any unregistered sales of equity securities not previously disclosed were exempt from registration under Section 4(a)(2) of the Securities Act of 1933[170](index=170&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[174](index=174&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[175](index=175&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) This section discloses several equity issuances in February and March 2025 to a consultant and entities owned by executive management - In February 2025, **438 common shares** were issued to a consultant for License 2 acquisition[177](index=177&type=chunk) - In March 2025, **12,000 common shares** were issued to a consultant for expanding rights under License 2[177](index=177&type=chunk) - In March 2025, **3,036,437 Series B Preferred Stock shares** were issued to an entity owned by the CEO/CFO/Director, and **3,336,437 Series B Preferred Stock shares** were issued to an entity owned by the Chairman of the Board[177](index=177&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report, including various agreements and required certifications - Exhibits include amendments to consulting agreements, an At-the-Market Issuance Sales Agreement, a Secondment Agreement, and a Second Amendment to License Agreement[183](index=183&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002 are also filed[183](index=183&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) The report is duly signed on behalf of the company by its Chief Executive Officer and Chief Financial Officer on August 13, 2025 - The report was signed by Graydon Bensler, Chief Executive Officer and Chief Financial Officer, on August 13, 2025[189](index=189&type=chunk)

Report Overview [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) The company reported a Q2 2025 net loss of $(14.3) million and Core FFO of $(7.2) million while executing key leasing and financing activities Q2 2025 Key Financial Metrics | Metric | Value | Per Diluted Share | | :--- | :--- | :--- | | Net Loss Attributable to Common Stockholders | $(14.3) million | $(18.94) | | Funds from Operations (FFO) | $(7.9) million | $(10.42) | | Core FFO | $(7.2) million | $(9.53) | - The company's same-store office portfolio was **70.1% leased**, with **47,859 square feet** of new leases executed with terms longer than 12 months[7](index=7&type=chunk) - In April 2025, the company closed a **$35.5 million mortgage**, using proceeds to repay all outstanding obligations under its 2022 Credit Facility[7](index=7&type=chunk) - In June 2025, a subsidiary secured a **$20.0 million revolving credit facility** backed by its SBA 7(a) loans receivable portfolio[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted progress in its strategic plan, focusing on multifamily assets, balance sheet strength, and increased office leasing activity - The company is accelerating its focus towards **premier multifamily assets**, strengthening its balance sheet, and improving liquidity[4](index=4&type=chunk) - Since September 2024, the company has completed **four refinancings**, extended debt maturities on two multifamily assets, and fully repaid its recourse credit facility[5](index=5&type=chunk) - Office leasing activity has increased, with **78,192 square feet leased** in the first half of 2025 and an additional **61,747 square feet** in July[6](index=6&type=chunk) - Hotel segment NOI increased approximately **5.5%** in the first half of 2025 following the renovation of all 505 hotel rooms[6](index=6&type=chunk) Financial and Operating Performance [Overall Financial Results (Q2 2025)](index=2&type=section&id=Overall%20Financial%20Results%20(Q2%202025)) The company's Q2 2025 net loss widened to $(14.3) million, driven by lower segment NOI and higher interest expense Q2 Financial Results Comparison (2025 vs. 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss Attributable to Common Stockholders | $(14.3) million | $(9.7) million | | Net Loss per Diluted Share | $(18.94) | $(98.64) | | FFO Attributable to Common Stockholders | $(7.9) million | $(3.3) million | | FFO per Diluted Share | $(10.42) | $(33.46) | | Core FFO Attributable to Common Stockholders | $(7.2) million | $(2.1) million | | Core FFO per Diluted Share | $(9.53) | $(21.93) | - The increase in net loss was primarily caused by a **$6.4 million decrease in segment net operating income** and a **$1.3 million rise in interest expense**, partially offset by a $2.6 million decrease in redeemable preferred stock dividends[9](index=9&type=chunk) [Real Estate Portfolio Overview](index=2&type=section&id=Real%20Estate%20Portfolio%20Overview) As of June 30, 2025, the company's portfolio comprised 27 assets across office, multifamily, hotel, and development sites - The portfolio comprises **12 office properties** (~1.3 million rentable sq. ft.), **four multifamily properties (696 units)**, nine development sites, and one 505-room hotel[8](index=8&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) Total segment NOI decreased to $9.8 million in Q2 2025 from $16.2 million in Q2 2024, with declines across most segments Total Segment NOI (Q2 2025 vs. Q2 2024) | Period | Total Segment NOI | | :--- | :--- | | Q2 2025 | $9.8 million | | Q2 2024 | $16.2 million | [Office Segment](index=2&type=section&id=Office%20Segment) Office segment same-store NOI decreased to $5.5 million from $8.9 million year-over-year due to reduced rental revenue and lower occupancy Office Segment Same-Store Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Segment NOI | $5.5 million | $8.9 million | | Cash NOI | $5.8 million | $9.9 million | | Occupancy | 68.1% | 83.5% (-1,540 bps) | | Leased Percentage | 70.3% | 82.5% (-1,220 bps) | | Annualized Rent per Occupied Sq. Ft. | $60.96 | $58.85 | [Hotel Segment](index=3&type=section&id=Hotel%20Segment) Hotel Segment NOI was $4.2 million, a slight decrease from $4.3 million in Q2 2024, with minor declines in occupancy and RevPAR Hotel Operating Metrics (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Occupancy | 78.4% | 79.9% | | Average Daily Rate (ADR) | $212.92 | $210.54 | | Revenue per Available Room (RevPAR) | $166.83 | $168.30 | [Multifamily Segment](index=3&type=section&id=Multifamily%20Segment) The Multifamily segment's NOI fell sharply to $189,000 from $2.3 million, impacted by an investment loss and lower property revenues - The decrease in multifamily segment NOI was driven by an **unrealized loss on investment** in real estate at an unconsolidated joint venture and a decrease in revenues at multifamily properties in Oakland, California[15](index=15&type=chunk) Multifamily Operating Metrics (as of June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Occupancy | 83.4% | 92.5% | | Monthly Rent per Occupied Unit | $2,458 | $2,647 | | Net Monthly Rent per Occupied Unit | $2,284 | $2,469 | [Lending Segment](index=3&type=section&id=Lending%20Segment) The Lending segment reported an NOI loss of $47,000 for Q2 2025, compared to an income of $743,000 in Q2 2024 - The decrease in Lending segment NOI was primarily due to a decrease in interest income from loan payoffs and lower interest rates, as well as an increase in current expected credit losses[16](index=16&type=chunk) [Debt and Equity](index=3&type=section&id=Debt%20and%20Equity) The company executed a 1-for-25 reverse stock split and strengthened its financial position through new financing and debt repayment - A **1-for-25 reverse stock split** of the company's Common Stock became effective on April 15, 2025[17](index=17&type=chunk) - In April 2025, the company closed a **$35.5 million mortgage** and used the proceeds to repay and terminate the 2022 Credit Facility[18](index=18&type=chunk) - In June 2025, a subsidiary closed on a new **$20.0 million revolving credit facility**, which had an outstanding balance of $8.3 million as of June 30, 2025[19](index=19&type=chunk) [Dividends](index=4&type=section&id=Dividends) The company declared quarterly cash dividends for its Series A, Series A1, and Series D Preferred Stock for the second quarter of 2025 Q2 2025 Preferred Stock Dividends | Preferred Stock Series | Quarterly Dividend Amount per Share | | :--- | :--- | | Series A | $0.34375 | | Series A1 | $0.426875 | | Series D | $0.353125 | Financial Statements [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets stood at $885.0 million, while total liabilities increased, leading to lower total equity Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $885,024 | $889,555 | | Debt, net | $535,605 | $505,732 | | Total Liabilities | $584,250 | $562,492 | | Total Equity | $288,270 | $306,264 | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenues declined to $29.7 million while expenses rose, resulting in a net loss attributable to the company of $(9.0) million Selected Income Statement Data (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $29,689 | $34,439 | | Total Expenses | $38,245 | $36,126 | | Net Loss | $(9,151) | $(852) | | Net Loss Attributable to Common Stockholders | $(14,279) | $(9,667) | Non-GAAP Financial Measures & Reconciliations [Funds from Operations (FFO)](index=10&type=section&id=Funds%20from%20Operations%20(FFO)) FFO attributable to common stockholders for Q2 2025 was $(7.9) million, a decline from $(3.3) million in Q2 2024 FFO Reconciliation Summary (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss attributable to common stockholders | $(14,279) | $(9,667) | | Adjustments (Depreciation, Impairment, etc.) | $6,426 | $6,388 | | **FFO attributable to common stockholders** | **$(7,853)** | **$(3,279)** | [Core Funds from Operations (Core FFO)](index=11&type=section&id=Core%20Funds%20from%20Operations%20(Core%20FFO)) Core FFO for Q2 2025 was $(7.2) million, compared to $(2.1) million in the prior-year quarter Core FFO Reconciliation Summary (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | FFO attributable to common stockholders | $(7,853) | $(3,279) | | Adjustments (Debt Extinguishment, Transaction Costs, etc.) | $670 | $1,130 | | **Core FFO attributable to common stockholders** | **$(7,183)** | **$(2,149)** | [Net Operating Income (NOI)](index=12&type=section&id=Net%20Operating%20Income%20(NOI)) Total Segment NOI for Q2 2025 was $9.8 million, a decrease from $16.2 million in Q2 2024 Segment NOI Breakdown (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Office | $5,519 | $8,908 | | Hotel | $4,158 | $4,320 | | Multifamily | $189 | $2,252 | | Lending | $(47) | $743 | | **Total Segment NOI** | **$9,819** | **$16,223** |