ESTRELLA IMMUNOPHARMA, INC. (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ 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 001-40608 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) (State or other jur ...

[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section provides a standard disclaimer for forward-looking statements, highlighting inherent uncertainties and the company's non-obligation to update them - Forward-looking statements are identified by words like 'plan,' 'believe,' 'expect,' and are based on current management expectations, subject to inherent uncertainties and changes in circumstances[9](index=9&type=chunk)[10](index=10&type=chunk) - These statements involve risks and uncertainties, including those described in 'Risk Factors' (Part II, Item 1A) and the Annual Report on Form 10-KT[10](index=10&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Estrella Immunopharma's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in equity, and cash flows, with detailed notes [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the unaudited condensed consolidated balance sheets, detailing assets, liabilities, and equity as of specific dates Condensed Consolidated Balance Sheet Highlights | Metric | As of June 30, 2025 (Unaudited) | As of December 31, 2024 | | :-------------------------------- | :------------------------------- | :---------------------- | | Cash and cash equivalent | $1,316,594 | $916,916 | | Total current assets | $1,480,527 | $1,640,777 | | Total Assets | $2,980,527 | $3,140,777 | | Total current liabilities | $9,075,195 | $2,997,046 | | Total Liabilities | $9,075,195 | $2,997,046 | | Accumulated deficit | $(31,576,492) | $(23,927,303) | | Total Stockholders' (Deficit) Equity | $(6,094,668) | $143,731 | - Total current liabilities significantly increased by **$6.1 million**, primarily due to a substantial rise in accrued liability - related party and the recognition of derivative liabilities[17](index=17&type=chunk) - Total Stockholders' (Deficit) Equity shifted from a positive balance of **$0.14 million** to a deficit of **$(6.1 million)**, reflecting increased losses[17](index=17&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited condensed consolidated statements of operations, outlining revenues, expenses, and net loss for the reported periods Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development | $4,660,301 | $3,525,000 | $6,070,489 | $3,550,000 | | General and administrative | $883,727 | $424,447 | $1,577,837 | $868,977 | | Total operating expenses | $5,544,028 | $3,949,447 | $7,648,326 | $4,418,977 | | Net loss | $(5,544,878) | $(3,951,072) | $(7,649,189) | $(4,420,602) | | Net loss per share, basic and diluted | $(0.15) | $(0.11) | $(0.21) | $(0.12) | - Net loss increased for both the three-month period (from **$(3.95) million** to **$(5.54) million**) and the six-month period (from **$(4.42) million** to **$(7.65) million**) year-over-year[18](index=18&type=chunk) - Research and development expenses rose significantly, by **$1.14 million (32.2%)** for the three months and **$2.52 million (71.0%)** for the six months, reflecting increased clinical trial activities[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Preferred Stock and Stockholders' (Deficit) Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Preferred%20Stock%20and%20Stockholders'%20(Deficit)%20Equity) This section details changes in preferred stock and stockholders' (deficit) equity, reflecting capital transactions and net loss over the period Changes in Stockholders' (Deficit) Equity | Metric | Balance, December 31, 2024 | Stock-based compensation | Issuance of common stock for PIPE investment | Net loss | Balance, June 30, 2025 | | :----------------------------------- | :------------------------- | :----------------------- | :------------------------------------------- | :------------------------- | :------------------------- | | Common Stock Shares | 36,680,870 | - | 900,000 | - | 37,580,870 | | Common Stock Amount | $3,668 | - | $90 | - | $3,758 | | Treasury Stock | $(568,917) | - | - | - | $(598,379) | | Additional Paid-in Capital | $24,636,283 | $318,193 | $1,121,969 | - | $26,076,445 | | Accumulated Deficit | $(23,927,303) | - | - | $(7,649,189) | $(31,576,492) | | Total Stockholders' (Deficit) Equity | $143,731 | $318,193 | $1,122,059 | $(7,649,189) | $(6,094,668) | - Total Stockholders' (Deficit) Equity decreased from a positive **$0.14 million** at December 31, 2024, to a deficit of **$(6.1 million)** at June 30, 2025, primarily due to the net loss incurred[19](index=19&type=chunk) - The issuance of common stock for PIPE investment contributed **$1.12 million** to additional paid-in capital during the period[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(7,649,189) | $(4,420,602) | | Net cash used in operating activities | $(880,860) | $(4,526,147) | | Net cash provided by (used in) financing activities | $1,280,538 | $(354,440) | | Net Change in Cash | $399,678 | $(4,880,587) | | Cash at end of the period | $1,316,594 | $4,165,428 | - Net cash used in operating activities significantly decreased from **$(4.53) million** in 2024 to **$(0.88) million** in 2025, primarily due to an increase in accrued liability - related party[21](index=21&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - Net cash provided by financing activities was **$1.28 million** in 2025, a substantial increase from net cash used of **$(0.35) million** in 2024, driven by proceeds from the PIPE investment[21](index=21&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering organization, accounting policies, commitments, related party transactions, and equity [Note 1 — Organization and Business Operation](index=9&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20Business%20Operation) This note describes the company's formation, business as a clinical-stage biopharmaceutical entity, and current financial position regarding liquidity - Estrella Immunopharma, Inc. is a clinical-stage biopharmaceutical company developing T-cell therapies for blood cancers and solid tumors, formed through a separation from Eureka Therapeutics, Inc[24](index=24&type=chunk)[26](index=26&type=chunk) - The FDA cleared the IND application for EB103, allowing the Phase I/II STARLIGHT-1 Clinical Trial to proceed, with patient enrollment ongoing as of June 30, 2025[28](index=28&type=chunk) - The company completed a business combination with TradeUP Acquisition Corp. (UPTD) on September 29, 2023, and established a wholly-owned subsidiary in Hong Kong in November 2024[29](index=29&type=chunk)[31](index=31&type=chunk) - As of June 30, 2025, the company had **$1.3 million** in cash and an accumulated deficit of **$31.6 million**, but management believes it has sufficient funds for the next 12 months through an Equity Line with White Lion[33](index=33&type=chunk)[39](index=39&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 significant accounting policies and estimates used in preparing the financial statements, including U.S. GAAP compliance and derivative liabilities - The financial statements are prepared in accordance with U.S. GAAP for interim reporting, with certain information condensed or omitted per SEC rules[40](index=40&type=chunk) - The company is an 'emerging growth company' and has elected the extended transition period for complying with new or revised accounting standards[43](index=43&type=chunk)[44](index=44&type=chunk) - Significant estimates include stock-based compensation, derivative liability, and deferred income tax asset valuation[47](index=47&type=chunk) - Derivative liabilities, specifically 'True Up Shares' from the Securities Purchase Agreement, are bifurcated and classified as a liability, measured at fair value with subsequent changes recognized in the consolidated statements of operations[64](index=64&type=chunk)[65](index=65&type=chunk) [Note 3 — Other payables and accrued liabilities](index=17&type=section&id=Note%203%20%E2%80%94%20Other%20payables%20and%20accrued%20liabilities) This note details the composition and changes in other payables and accrued liabilities, including professional fees and payroll taxes Other Payables and Accrued Liabilities | Category | As of June 30, 2025 (Unaudited) | As of December 31, 2024 | | :-------------------------------- | :------------------------------- | :---------------------- | | Accrued professional fees | $98,660 | $177,029 | | Salary and payroll taxes payable | $12,107 | $14,100 | | Others | $- | $10,631 | | Total other payables and accrued liabilities | $110,767 | $201,760 | - Total other payables and accrued liabilities decreased by **$90,993** from December 31, 2024, to June 30, 2025, primarily due to a reduction in accrued professional fees[84](index=84&type=chunk) [Note 4 — Commitments and contingencies](index=17&type=section&id=Note%204%20%E2%80%94%20Commitments%20and%20contingencies) This note describes the company's contractual commitments and potential liabilities, including agreements for clinical trials and equity financing - Eureka is solely responsible for the manufacture and supply of clinical quantities of licensed products under the License Agreement[85](index=85&type=chunk) - The Equity Line Agreement with White Lion allows the company to sell up to **$50 million** in common stock, with **70,000 shares** issued for **$0.08 million** as of June 30, 2025, subject to certain limitations and stockholder approval[86](index=86&type=chunk)[195](index=195&type=chunk) - An amendment to the Common Stock Purchase Agreement extends its term to December 30, 2025, and introduces a 'Rapid Purchase' mechanism for expedited share settlements[87](index=87&type=chunk)[88](index=88&type=chunk) - The Collaboration Agreement with Imugene for solid tumor treatments was completed as of August 30, 2023, with no associated R&D expenses in the current periods[95](index=95&type=chunk) [Note 5 — Related Party Transactions](index=19&type=section&id=Note%205%20%E2%80%94%20Related%20Party%20Transactions) This note details transactions with related parties, including license agreements, clinical trial services, consulting, and office subleases - Under the License Agreement with Eureka, Estrella has an exclusive license for T-cell therapies, with upfront payments fully made and two development milestones achieved and paid as of June 30, 2025[97](index=97&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[205](index=205&type=chunk) - The Statement of Work (SOW) with Eureka for the STARLIGHT-1 clinical trial has total fees of **$33.0 million**; as of June 30, 2025, **$3.5 million** has been paid, **$1.5 million** deposited, and **$8.8 million** accrued for six patient dosings and a site activation[105](index=105&type=chunk)[108](index=108&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[210](index=210&type=chunk) - A consulting agreement with CoFame Investment Holding LLC, a related party, resulted in **$0.11 million** in consulting expenses for the six months ended June 30, 2025[114](index=114&type=chunk)[115](index=115&type=chunk) - Office sublease agreements with Eureka incurred **$0.012 million** in rent expense for the six months ended June 30, 2025[118](index=118&type=chunk)[120](index=120&type=chunk) [Note 6 — Preferred Stock](index=23&type=section&id=Note%206%20%E2%80%94%20Preferred%20Stock) This note describes the issuance and conversion of preferred stock, including Series AA and Series A, prior to the business combination - Estrella issued **105,000,000 shares** of Series AA Preferred Stock to Eureka in exchange for T-cell therapy assets[121](index=121&type=chunk) - Series A Preferred Stock was issued to third-party investors for gross proceeds, with significant terms including dividend rights (**8% non-cumulative**), liquidation preferences, and voting rights[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[128](index=128&type=chunk) - All Series A and Series AA Preferred Stock automatically converted into Estrella Common Stock immediately prior to the business combination on September 29, 2023[130](index=130&type=chunk)[134](index=134&type=chunk) [Note 7 — Stockholders' Equity (Deficit)](index=26&type=section&id=Note%207%20%E2%80%94%20Stockholders'%20Equity%20(Deficit)) This note details the components of stockholders' equity (deficit), including common stock, additional paid-in capital, and derivative liabilities - As of June 30, 2025, the company had **37,580,870 shares** of Common Stock issued and **37,065,589 shares** outstanding[135](index=135&type=chunk) - The company issued **900,000 shares** of Common Stock for **$1.35 million** in gross proceeds as part of a private placement offering as of June 30, 2025, which includes a 'True-Up Shares' contingent value protection feature[140](index=140&type=chunk)[196](index=196&type=chunk) - The 'True-Up Shares' feature is classified as a derivative liability, valued at **$0.19 million** as of June 30, 2025, using a Monte Carlo Simulation model[141](index=141&type=chunk)[142](index=142&type=chunk) - The company has **2,214,993 public warrants** outstanding, exercisable at **$11.50 per share**, which are accounted for as equity instruments[143](index=143&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) - A stock repurchase program authorized up to **$1.0 million**, with approximately **$0.4 million** remaining available as of June 30, 2025[148](index=148&type=chunk) [Note 8 — Stock Based Compensation](index=28&type=section&id=Note%208%20%E2%80%94%20Stock%20Based%20Compensation) This note outlines the company's stock-based compensation plan, granted options, and associated expenses recognized during the periods - The 2023 Omnibus Incentive Plan authorized **3,520,123 shares**, with **3,600,000 options** granted in October 2024 to employees, directors, and consultants[150](index=150&type=chunk) Stock-Based Compensation Expense | Expense Category | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Research and development | $10,301 | $20,489 | | General and administrative | $148,797 | $297,704 | | Total stock-based compensation | $159,098 | $318,193 | - As of June 30, 2025, there were **$1.6 million** in unvested compensation costs, expected to be recognized over a weighted average remaining service period of **2.78 years**[151](index=151&type=chunk) [Note 9 — Leases](index=29&type=section&id=Note%209%20%E2%80%94%20Leases) This note describes the company's short-term operating lease agreements for office space and the associated rent expenses - The company entered into short-term office sublease agreements with Eureka, classified as operating leases, with a monthly sublease fee of **$2,000**[117](index=117&type=chunk)[118](index=118&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - The company elected not to apply ROU asset and lease liability recognition requirements for these short-term leases, recognizing monthly payments in profit or loss on a straight-line basis[154](index=154&type=chunk) - Rent expense for both the three and six months ended June 30, 2025, was **$0.006 million** and **$0.012 million**, respectively[155](index=155&type=chunk) [Note 10 — Segment Information](index=30&type=section&id=Note%2010%20%E2%80%94%20Segment%20Information) This note states that the company operates as a single segment and provides a breakdown of operating expenses by category - The company operates as a single operating and reportable segment, with the Chief Executive Officer serving as the chief operating decision-maker[156](index=156&type=chunk) Operating Expenses by Category | Operating Expenses | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Clinical trial related service fee | $4,625,000 | $3,500,000 | $6,000,000 | $3,500,000 | | Consulting fee | $25,000 | $25,000 | $50,000 | $50,000 | | Stock-based compensation | $159,098 | $- | $318,193 | $- | | Salary expense | $131,096 | $131,063 | $260,807 | $251,549 | | Professional fee | $475,437 | $152,148 | $760,527 | $351,304 | | Insurance expense | $83,636 | $87,494 | $164,693 | $174,987 | | Other general and administrative fee | $44,761 | $53,742 | $94,106 | $91,137 | | Loss before income tax | $5,544,028 | $3,949,447 | $7,648,326 | $4,418,977 | | Net loss | $5,544,878 | $3,951,072 | $7,649,189 | $4,420,602 | [Note 11 — Subsequent Events](index=30&type=section&id=Note%2011%20%E2%80%94%20Subsequent%20Events) This note confirms that no material subsequent events occurred after the balance sheet date requiring disclosure - No material subsequent events requiring recognition or disclosure were identified after the balance sheet date through the issuance date of the financial statements[158](index=158&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) This section provides management's analysis of financial condition and operations, covering strategic developments, performance, liquidity, and Nasdaq compliance [Overview](index=31&type=section&id=Overview) Estrella Immunopharma is a clinical-stage biopharmaceutical company focused on T-cell therapies, advancing clinical trials with no product revenue and an accumulated deficit - The company is a clinical-stage biopharmaceutical company developing T-cell therapies for blood cancers and solid tumors, utilizing Eureka's ARTEMIS platform[160](index=160&type=chunk)[162](index=162&type=chunk) - The FDA cleared the IND application for EB103, allowing the Phase I/II STARLIGHT-1 Clinical Trial to proceed, with six patients dosed as of June 30, 2025[163](index=163&type=chunk)[164](index=164&type=chunk) - Estrella has funded operations primarily from Series A Preferred Stock issuance (**$5.0 million**) and net proceeds from the Business Combination (**$20.1 million**)[165](index=165&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of approximately **$31.6 million** and expects significant increases in expenses for ongoing R&D, clinical development, and regulatory activities[166](index=166&type=chunk)[167](index=167&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) This section details the business combination, corporate changes, and Nasdaq non-compliance notices regarding minimum bid price and market value of listed securities - The Business Combination with UPTD on September 29, 2023, was accounted for as a 'reverse recapitalization,' with Estrella as the accounting acquirer, leading to increased public company expenses[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - The company merged with its wholly-owned subsidiary, Estrella BioPharma Inc., on June 30, 2024, and changed its fiscal year end from June 30 to December 31 on November 25, 2024[174](index=174&type=chunk)[175](index=175&type=chunk) - Estrella received Nasdaq notices for non-compliance with the minimum closing bid price (**$1.00**) and minimum Market Value of Listed Securities (**$35 million**) rules, with compliance periods until October 27, 2025, and January 28, 2026, respectively[177](index=177&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) The company has not generated revenue, focusing on product development, and reported increased net losses and operating expenses due to higher clinical trial costs [Results of Operations for the three months ended June 30, 2025 and 2024 (unaudited)](index=34&type=section&id=Results%20of%20Operations%20for%20the%20three%20months%20ended%20June%2030,%202025%20and%202024%20(unaudited)) This section analyzes the company's financial performance for the three months ended June 30, 2025 and 2024, highlighting key expense changes and net loss Three Months Ended June 30 - Key Financials | Expense Category | 2025 (Unaudited) | 2024 (Unaudited) | Change | | :----------------------------------- | :----------------- | :----------------- | :------- | | Research and Development Expenses | $4,660,301 | $3,525,000 | +$1,135,301 | | General and Administrative Expenses | $883,727 | $424,447 | +$459,280 | | Net Loss | $(5,544,878) | $(3,951,072) | $(1,593,806) | - Research and development expenses increased by **$1.1 million (32.2%)** due to higher clinical phase service fees and three patient dosings under the SOW[179](index=179&type=chunk) - General and administrative expenses increased by **$0.46 million (108.2%)** primarily due to professional fees and stock-based compensation[181](index=181&type=chunk) [Results of Operations for the six months ended June 30, 2025 and 2024 (unaudited)](index=35&type=section&id=Results%20of%20Operations%20for%20the%20six%20months%20ended%20June%2030,%202025%20and%202024%20(unaudited)) This section analyzes the company's financial performance for the six months ended June 30, 2025 and 2024, detailing expense increases and net loss Six Months Ended June 30 - Key Financials | Expense Category | 2025 (Unaudited) | 2024 (Unaudited) | Change | | :----------------------------------- | :----------------- | :----------------- | :------- | | Research and Development Expenses | $6,070,489 | $3,550,000 | +$2,520,489 | | General and Administrative Expenses | $1,577,837 | $868,977 | +$708,860 | | Net Loss | $(7,649,189) | $(4,420,602) | $(3,228,587) | - Research and development expenses increased by **$2.5 million (71.0%)** due to higher clinical phase service fees and four patient dosings and one site activation under the SOW[183](index=183&type=chunk) - General and administrative expenses increased by **$0.71 million (81.6%)** mainly due to professional fees and stock-based compensation[185](index=185&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity challenges with a working capital deficit, relying on future financing as it generates no revenue and expects continued losses - As of June 30, 2025, the company had approximately **$1.3 million** in cash and a working capital deficit of approximately **$7.6 million**[187](index=187&type=chunk) - The company has not generated any revenue to date and expects continued losses, making future operations highly dependent on additional financing[188](index=188&type=chunk)[193](index=193&type=chunk) - The exercise of outstanding tradeable warrants is unlikely to provide significant liquidity, as the current stock price (**$0.84**) is substantially lower than the exercise price (**$11.50**)[194](index=194&type=chunk) - The Equity Line Agreement with White Lion allows for up to **$50.0 million** in common stock purchases, but issuances exceeding **20%** of outstanding stock require stockholder approval, which has not been obtained[195](index=195&type=chunk) - Net cash used in operating activities improved significantly to **$(0.9) million** for the six months ended June 30, 2025, from **$(4.5) million** in the prior year, while net cash provided by financing activities was **$1.3 million**, primarily from a private placement[198](index=198&type=chunk)[200](index=200&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) The company reported no off-balance sheet arrangements as of the specified reporting dates - As of June 30, 2025, and December 31, 2024, the company did not have any off-balance sheet arrangements[202](index=202&type=chunk) [Commitments & Contingencies](index=38&type=section&id=Commitments%20%26%20Contingencies) This section details the company's contractual obligations and potential liabilities, including license agreements, clinical trial commitments, and equity line agreements - Under the License Agreement, the **$1.0 million** upfront fee has been fully paid, and two development milestones (**$0.05 million** each) related to IND submission and first patient dosing have been achieved and paid[204](index=204&type=chunk)[205](index=205&type=chunk) - The Statement of Work for the STARLIGHT-1 clinical trial involves total fees of **$33.0 million**; as of June 30, 2025, **$3.5 million** has been paid, **$1.5 million** deposited for patient treatment, and **$8.8 million** accrued for six patient dosings and a site activation[209](index=209&type=chunk)[210](index=210&type=chunk) - The Equity Line Agreement with White Lion provides a commitment for up to **$50.0 million** in common stock purchases, with **70,000 shares** issued for **$0.08 million** as of June 30, 2025[211](index=211&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies derivative liabilities and stock-based compensation as critical accounting policies and estimates due to the significant judgment and assumptions required for their valuation - Derivative liabilities, specifically the 'True Up Shares' from the Securities Purchase Agreement, are measured at fair value using a Monte Carlo Simulation model, with a fair value of **$0.19 million** as of June 30, 2025[213](index=213&type=chunk)[214](index=214&type=chunk) - Stock-based compensation costs are recognized as an expense over the service period, with fair value estimated using the Black-Scholes-Merton option-pricing model, which relies on significant assumptions[215](index=215&type=chunk)[216](index=216&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Estrella Immunopharma, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[220](index=220&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to a material weakness related to insufficient qualified personnel for complex accounting and financial statement preparation [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details management's conclusion regarding the effectiveness of the company's disclosure controls and procedures - Management concluded that the company's disclosure controls and procedures were not effective at a reasonable assurance level as of June 30, 2025[222](index=222&type=chunk) [Material Weaknesses](index=41&type=section&id=Material%20Weaknesses) This section identifies a material weakness related to the lack of qualified personnel for complex accounting and financial statement preparation - A material weakness was identified due to the lack of qualified full-time personnel with appropriate accounting knowledge and experience to address complex U.S. GAAP issues and prepare/review financial statements[223](index=223&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section outlines remediation efforts for internal control weaknesses, noting that effectiveness has not yet been achieved - Remediation efforts implemented in 2024 include adding qualified personnel, implementing processes for non-routine transactions, and establishing narratives and policies for business processes[224](index=224&type=chunk)[226](index=226&type=chunk) - Despite remediation efforts, disclosure controls and procedures were still not effective as of June 30, 2025[224](index=224&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=41&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section acknowledges the inherent limitations of controls and procedures, which can only provide reasonable assurance - Management acknowledges that controls and procedures, regardless of design, can only provide reasonable assurance due to inherent limitations and resource constraints[225](index=225&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings during the quarter ended June 30, 2025 - No material legal proceedings were reported for the quarter ended June 30, 2025[228](index=228&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors from the Annual Report on Form 10-KT, highlighting Nasdaq non-compliance and potential delisting risks - The company refers to the risk factors detailed in its Annual Report on Form 10-KT filed on March 25, 2025[229](index=229&type=chunk) - The company is currently not in compliance with Nasdaq's minimum bid price (**$1.00**) and minimum Market Value of Listed Securities (**$35 million**) requirements, facing potential delisting[230](index=230&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk) - Non-compliance could adversely affect the market liquidity and price of common stock, and the company's ability to raise capital[236](index=236&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%20from%20Registered%20Securities) The company reported no unregistered sales of equity securities or use of proceeds from registered securities during the quarter - No unregistered sales of equity securities or use of proceeds from registered securities were reported[237](index=237&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the quarter - No defaults upon senior securities were reported[238](index=238&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[239](index=239&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[240](index=240&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q - Exhibits include certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.CAL, 101.SCH, 101.DEF, 101.LAB, 101.PRE, 104)[242](index=242&type=chunk) [SIGNATURES](index=44&type=section&id=SIGNATURES) This section contains the signatures of the principal executive officer, principal financial officer, and directors, certifying the report filing - The report was signed by the Principal Executive Officer (Cheng Liu), Principal Financial Officer (Peter Xu), and Directors on August 11, 2025[247](index=247&type=chunk)[248](index=248&type=chunk)

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) For the six months ending June 30, 2025, Anteris Technologies reported a 16% decrease in revenue to $1.17 million compared to the same period in 2024, with the loss from ordinary activities after tax increasing by 23% to $43.0 million and the net loss attributable to members growing by 22% to $42.7 million Financial Performance Overview | | Six months to June 30, | | | | |---|---|---|---|---| | | 2025 (US$'000) | 2024 (US$'000) | Change (US$'000) | Change (%) | | Revenues from ordinary activities | 1,174 | 1,398 | (224) | (16%) | | Loss from ordinary activities after tax | (42,993) | (34,972) | (8,021) | 23% | | Loss for the period attributable to members | (42,698) | (35,057) | (7,641) | 22% | - No dividend has been proposed or declared for the reporting period[3](index=3&type=chunk) [Capital Management and Use of Funds](index=1&type=section&id=Capital%20Management%20and%20Use%20of%20Funds) The company raised net proceeds of $80.0 million from its initial public offering in December 2024, primarily allocating these funds to the development of the DurAVR® THV and its pivotal trial ($37.6 million), with the remainder used for working capital and general corporate purposes, including debt repayment, while payments to related parties totaled $640,000 in Q2 2025 - The company completed an initial public offering on December 12, 2024, issuing 14,878,481 shares at $6.00 per share, raising net proceeds of **$80.0 million** after expenses[5](index=5&type=chunk)[6](index=6&type=chunk) - As of June 30, 2025, the use of IPO proceeds included: - **$37.6 million** for the ongoing development and pivotal trial of DurAVR® THV - **$14.1 million** for net working capital, v2vmedtech expenditure, and other corporate purposes, which included a **$6.4 million** debt repayment[9](index=9&type=chunk) - During Q2 2025, aggregate payments to related parties and their associates, including executive remuneration and director fees, amounted to **$640,000**[6](index=6&type=chunk) [Company and Product Overview](index=2&type=section&id=Company%20and%20Product%20Overview) Anteris is a global structural heart company focused on developing medical devices, with its lead product, the DurAVR® Transcatheter Heart Valve (THV), a biomimetic valve designed to treat aortic stenosis using patented ADAPT® tissue, which has been clinically used in over 55,000 patients worldwide - Anteris is a global structural heart company focused on designing, developing, and commercializing medical devices to restore healthy heart function[10](index=10&type=chunk) - The company's lead product is the DurAVR® Transcatheter Heart Valve (THV), a balloon-expandable, biomimetic valve designed to treat aortic stenosis by mimicking a healthy human aortic valve[11](index=11&type=chunk) - DurAVR® THV utilizes ADAPT® tissue, Anteris's patented, FDA-cleared anti-calcification technology, which has been clinically used for over 10 years in more than **55,000 patients**[11](index=11&type=chunk)

Exhibit 99.1 Condensed Interim Consolidated Financial Statements Three and six months ended June 30, 2025 and 2024 Presented in United States dollars Condensed Interim Consolidated Balance Sheets (Unaudited - thousands of United States dollars) | | | | June 30, | | December 31, | | --- | --- | --- | --- | --- | --- | | | | | 2025 | | 2024 | | ASSETS | | | | | | | Current assets | | | | | | | Cash | | $ | 215,448 | $ | 160,849 | | Trade and other receivables | | | 12,904 | | 229 | | Derivative assets (note 1 ...

PART I FINANCIAL INFORMATION Presents the unaudited condensed consolidated financial statements and detailed notes for the reporting periods [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of specific dates | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $29,811,667 | $25,051,355 | | Total current assets | $63,752,556 | $74,577,448 | | Total assets | $73,183,401 | $83,154,408 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $35,510,684 | $49,042,087 | | Total liabilities | $49,921,658 | $62,476,289 | | Total equity | $23,261,743 | $20,678,119 | [Condensed Consolidated Income Statements](index=8&type=section&id=Condensed%20Consolidated%20Income%20Statements) Details the company's revenues, costs, and net income or loss for the specified reporting periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $13,270,270 | $12,610,036 | $26,347,860 | $24,794,752 | | Total cost of revenues | $2,772,607 | $2,812,389 | $5,744,733 | $5,516,901 | | Loss from operations | $(1,138,167) | $(1,779,325) | $(1,816,701) | $(2,205,921) | | Net loss from continuing operations | $(989,635) | $(1,710,023) | $(1,495,656) | $(2,108,942) | | Net income (loss) from discontinued operations | $1,082,998 | $(1,886,375) | $2,556,815 | $(540,477) | | Net income (loss) | $93,363 | $(3,596,398) | $1,061,159 | $(2,649,419) | | Basic EPS (Net income (loss)) | $0.01 | $(0.24) | $0.07 | $(0.18) | | Diluted EPS (Net income (loss)) | $0.01 | $(0.24) | $0.07 | $(0.18) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines changes in equity over the period, driven by net income and stock-based activities - Total The Joint Corp. stockholders' equity increased from **$20,653,119** at December 31, 2024, to **$23,236,743** at June 30, 2025. This increase was primarily driven by net income of **$967,796** for the period ending March 31, 2025, and **$93,363** for the period ending June 30, 2025, along with stock-based compensation expense and proceeds from stock option exercises[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the reporting periods | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(2,832,005) | $1,836,874 | | Net cash provided by (used in) investing activities | $6,941,742 | $(433,350) | | Net cash provided by (used in) financing activities | $893,182 | $(1,970,095) | | Increase (decrease) in cash, cash equivalents and restricted cash | $5,002,919 | $(566,571) | | Cash, cash equivalents and restricted cash, end of period | $30,999,355 | $18,647,721 | - Net cash used in operating activities decreased by **$4.7 million** to **$2.8 million** for the six months ended June 30, 2025, compared to net cash provided by operating activities of **$1.8 million** for the prior year period. This was mainly due to changes in accrued expenses, accounts receivable, prepaid expenses, and payroll liabilities[164](index=164&type=chunk) - Net cash provided by investing activities significantly increased to **$6.9 million** for the six months ended June 30, 2025, primarily driven by **$7.8 million** in proceeds from clinic sales, partially offset by **$0.8 million** in property and equipment purchases[165](index=165&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1: Nature of Operations and Summary of Significant Accounting Policies](index=12&type=section&id=Note%201:%20Nature%20of%20Operations%20and%20Summary%20of%20Significant%20Accounting%20Policies) Describes the company's business, operational structure, and key accounting principles - The Company's unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain disclosures condensed or omitted. The results of operations for the periods ended June 30, 2025 and 2024, are not necessarily indicative of expected operating results for the full year[23](index=23&type=chunk) - The corporate clinic segment's results are reported as discontinued operations, and related assets and liabilities are classified as such in the balance sheets. Cash flows related to discontinued operations are included in the consolidated statement of cash flows[25](index=25&type=chunk) | Clinic Type | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Franchised clinics in operation | 885 | 829 | | Company-owned or managed clinics in operation | 82 | 131 | | Total clinics in operation | 967 | 960 | | Clinic licenses sold but not yet developed | 92 | 113 | | Future clinic licenses subject to executed letters of intent | 60 | 45 | - The Company consolidates Variable Interest Entities (VIEs), primarily professional corporations (PCs) in states prohibiting corporate practice of chiropractic, where it acts as the primary beneficiary by directing activities and absorbing significant losses or benefits[30](index=30&type=chunk) - Restricted cash includes funds contributed by franchisees to the National Marketing Fund and regional Co-Op Marketing Funds, which are classified as restricted cash despite not being legally segregated[34](index=34&type=chunk) - The Company adopted ASU 2023-07 (Segment Reporting) on January 1, 2024, with no material effect. It plans to adopt ASU 2023-09 (Income Taxes) for the year ending December 31, 2025, and is evaluating the impact of ASU 2024-03 (Expense Disaggregation Disclosures) for the annual period ending December 31, 2027[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) [Note 2: Revenue Disclosures](index=21&type=section&id=Note%202:%20Revenue%20Disclosures) Details the company's revenue sources, recognition policies, and contract liabilities - The Company's primary revenue sources are royalties, franchise fees, advertising fund contributions, and software fees from its **885** franchised clinics. Initial franchise fees are recognized ratably over the 10-year franchise agreement term, while royalties and advertising fees are recognized as franchisee sales occur[69](index=69&type=chunk)[75](index=75&type=chunk) | Revenue Recognition Timing | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue recognized at a point in time | $11,020,509 | $10,475,897 | $21,807,613 | $20,617,963 | | Revenue recognized over time | $2,249,761 | $2,134,139 | $4,540,247 | $4,176,789 | | Total revenue | $13,270,270 | $12,610,036 | $26,347,860 | $24,794,752 | | Contract Liabilities (Deferred Franchise Fees) | Amount | | :--------------------------------------------- | :------------- | | Balance at December 31, 2024 | $14,997,105 | | Revenue recognized from beginning of year liability | $(1,662,396) | | Net increase during six months ended June 30, 2025 | $1,181,468 | | Balance at June 30, 2025 | $14,516,177 | [Note 3: Divestitures](index=23&type=section&id=Note%203:%20Divestitures) Explains the refranchising strategy for corporate clinics and the financial impact of these divestitures - The Company initiated a plan in 2023 to refranchise its corporate-owned or managed clinics, expanding in Q3 2024 to include the full portfolio. This refranchising plan is considered a strategic shift, leading to the corporate clinic segment being reported as discontinued operations[80](index=80&type=chunk)[81](index=81&type=chunk) | Metric (Discontinued Operations) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues from company-owned or managed clinics | $16,642,013 | $17,650,525 | $33,548,363 | $35,187,976 | | Net income (loss) from discontinued operations | $1,082,998 | $(1,886,375) | $2,556,815 | $(540,477) | | Net loss on disposition or impairment | $1,752,494 | $1,434,658 | $2,885,852 | $1,796,486 | - As of June 30, 2025, the estimated fair value of the corporate clinic portfolio expected to be sold within one year was **$6.4 million**. The Company recorded an estimated loss on disposal of **$1.4 million** for the six months ended June 30, 2025, and maintains a valuation allowance of **$5.7 million**[83](index=83&type=chunk)[84](index=84&type=chunk) - During the six months ended June 30, 2025, the Company sold **$16.1 million** in assets held for sale (net of a **$1.0 million** valuation allowance) and **$7.2 million** in liabilities to be disposed of, generating **$7.8 million** in sales proceeds. This resulted in a **$0.6 million** loss on sale[86](index=86&type=chunk) [Note 4: Property and Equipment](index=25&type=section&id=Note%204:%20Property%20and%20Equipment) Provides a breakdown of property and equipment, along with related depreciation and amortization | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Office and computer equipment | $976,441 | $937,551 | | Leasehold improvements | $1,588,391 | $1,585,609 | | Software developed | $6,702,368 | $5,914,254 | | Accumulated depreciation and amortization | $(6,660,324) | $(5,982,533) | | Construction in progress | $568,554 | $751,873 | | Property and equipment, net | $3,175,430 | $3,206,754 | - Depreciation expense increased to **$0.8 million** for the six months ended June 30, 2025, from **$0.7 million** in the prior year, primarily due to internal use software enhancements and developments, including a new mobile app[88](index=88&type=chunk)[147](index=147&type=chunk) [Note 5: Fair Value Measurements](index=26&type=section&id=Note%205:%20Fair%20Value%20Measurements) Discusses fair value hierarchy and measurement of financial and non-financial assets and liabilities - The Company's financial instruments, excluding debt under the Credit Agreement, approximate fair value due to short maturities. Debt under the Credit Agreement approximates fair value and is considered a Level 2 fair value measurement[90](index=90&type=chunk) - Non-financial assets, including goodwill, intangible assets, property, plant and equipment, and operating lease ROU assets, are assessed for impairment periodically. Impairment charges are recorded to write down assets to fair value, which is considered Level 3 within the fair value hierarchy[92](index=92&type=chunk) - Assets held for sale are reported at the lower of carrying value or fair value less estimated cost to sell. As of June 30, 2025, the fair value measurement of assets held for sale was **$0.1 million** based on Level 2 inputs and **$6.3 million** based on Level 3 inputs, with a **$5.7 million** valuation allowance[93](index=93&type=chunk)[94](index=94&type=chunk) [Note 6: Debt](index=27&type=section&id=Note%206:%20Debt) Outlines the company's credit facility, borrowing terms, and compliance with covenants - The Company's 2022 Credit Facility provides a **$20 million** Revolver for working capital, general corporate purposes, acquisitions, development, and capital improvements. Borrowings bear interest at adjusted SOFR plus 0.10% plus 1.75%, or ABR plus 1.00%[98](index=98&type=chunk) - The 2022 Credit Facility terminates on February 28, 2027. As of June 30, 2025, the Company was in compliance with all covenants, and there was no outstanding balance on the debt, following a **$2 million** paydown on January 17, 2024[98](index=98&type=chunk)[99](index=99&type=chunk) [Note 7: Stock-Based Compensation](index=28&type=section&id=Note%207:%20Stock-Based%20Compensation) Details stock-based award plans, activity, and related compensation expense - The Company grants stock-based awards under its 2024 Incentive Stock Plan, including non-qualified stock options, incentive stock options, and restricted stock. Compensation expense is recognized ratably over the service period[100](index=100&type=chunk) | Stock Option Activity | Number of Shares | Weighted Average Exercise Price | | :-------------------------- | :--------------- | :------------------------------ | | Outstanding at Dec 31, 2024 | 281,977 | $11.80 | | Exercised | (3,000) | $3.07 | | Forfeited | (432) | $45.39 | | Expired | (71,023) | $17.78 | | Outstanding at June 30, 2025 | 207,522 | $9.80 | | Exercisable at June 30, 2025 | 169,293 | $9.57 | | Restricted Stock Awards | Shares | Weighted Average Grant-Date Fair Value per Award | | :-------------------------- | :----- | :----------------------------------------------- | | Non-vested at Dec 31, 2024 | 305,982 | $11.97 | | Granted | 263,798 | $10.80 | | Vested | (91,347) | $12.90 | | Forfeited | (95,169) | $11.55 | | Non-vested at June 30, 2025 | 383,264 | $11.04 | - Stock-based compensation expense for restricted stock awards decreased to **$586,248** for the six months ended June 30, 2025, from **$943,685** in the prior year period[106](index=106&type=chunk) [Note 8: Income Taxes](index=29&type=section&id=Note%208:%20Income%20Taxes) Presents income tax expense and factors influencing the effective tax rate | Income Tax Expense | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | From continuing operations | $11,390 | $11,169 | $24,794 | $19,751 | | From discontinued operations | $100,201 | $167,153 | $203,613 | $337,498 | - The Company's effective tax rate differs from the federal statutory rate primarily due to changes in valuation allowance and state taxes. Income tax expense increased for both three and six months ended June 30, 2025, mainly due to higher estimated state income taxes[107](index=107&type=chunk)[152](index=152&type=chunk) [Note 9: Commitments and Contingencies](index=29&type=section&id=Note%209:%20Commitments%20and%20Contingencies) Discloses operating lease commitments, guarantees, and legal claims | Operating Lease Costs | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative expenses | $91,577 | $64,289 | $172,758 | $128,577 | - The Company has guaranteed **29** future operating lease commitments assumed by buyers in connection with clinic sales, totaling **$4.3 million** in undiscounted maximum remaining lease payments as of June 30, 2025. No liability has been recorded as payment under these guarantees is not probable[110](index=110&type=chunk) - During Q1 2025, the Company settled a medical injury claim for **$3.4 million**, accrued in discontinued operations current liabilities. This was offset by a **$1.9 million** receivable from the Company's insurance[113](index=113&type=chunk) [Note 10: Segment Reporting](index=31&type=section&id=Note%2010:%20Segment%20Reporting) Describes operating segments and financial performance, focusing on Franchise Operations - Historically, the Company had two operating segments: Corporate Clinics and Franchise Operations. Following the refranchising strategy, the Corporate Clinic segment is now reported as discontinued operations, leaving Franchise Operations as the sole reportable segment since December 31, 2024[115](index=115&type=chunk) - The Franchise Operations segment, comprising **885** clinics as of June 30, 2025, derives revenue from franchise licenses, royalties, and software fees. The CEO uses Net Income, Gross Profit, Operating Income, and Adjusted EBITDA to assess performance and allocate resources[116](index=116&type=chunk) | Segment Financials | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $13,270,270 | $12,610,036 | $26,347,860 | $24,794,752 | | Franchise and regional developer cost of revenues | $2,350,613 | $2,458,186 | $4,901,848 | $4,799,951 | | Selling and marketing expenses | $3,483,844 | $3,440,391 | $6,988,994 | $5,677,974 | | Segment loss | $(989,635) | $(1,710,023) | $(1,495,656) | $(2,108,942) | [Note 11: Related Party Transactions](index=32&type=section&id=Note%2011:%20Related%20Party%20Transactions) Identifies transactions with related parties, including a board director's family member - Jefferson Gramm, a beneficial holder of over **5%** of common stock and a Board Director, has a family member (Marshall Gramm) who owns four franchise licenses. These transactions were on terms no less favorable than those with unaffiliated parties[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) [Note 12: Subsequent Events](index=32&type=section&id=Note%2012:%20Subsequent%20Events) Reports significant events occurring after the reporting period, such as new legislation - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted, allowing more favorable deductibility of certain business expenses (e.g., R&D, bonus depreciation) starting in 2025. The Company is evaluating the financial impact, which was not reflected in the Q2 2025 income tax provision[123](index=123&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operations, key performance indicators, and liquidity [Overview](index=33&type=section&id=Overview) Introduces The Joint Corp.'s business model and key performance indicators - The Joint Corp. is a rapidly growing franchisor using a private pay, non-insurance, cash-based model, aiming to be the leading provider of chiropractic care in North America and potentially abroad[125](index=125&type=chunk) - Key performance indicators include gross sales, comparable same-store sales growth (Comp Sales), new patients, conversion percentage, membership attrition, system-wide sales, clinic openings, clinic license sales, and Adjusted EBITDA[126](index=126&type=chunk) [Key Clinic Development Trends](index=33&type=section&id=Key%20Clinic%20Development%20Trends) Details clinic growth strategy, refranchising efforts, and franchise sales - As of June 30, 2025, the Company and its franchisees operated **967** clinics (**885** franchised, **82** company-owned/managed). Seven franchised clinics opened in Q2 2025, down from nine in Q2 2024[127](index=127&type=chunk) - The Company's strategy is to grow through franchise sales and development, including refranchising its entire portfolio of company-owned/managed clinics. In Q2 2025, **37** clinics were refranchised, with significant interest from multi-unit operators and private equity firms[128](index=128&type=chunk) - On June 30, 2025, **31** corporate clinics in Arizona and New Mexico were sold to an existing franchisee for **$8.3 million** cash, including regional developer territory rights. Another five clinics in Kansas City were sold on June 23, 2025[129](index=129&type=chunk) - The Company sold **13** franchise licenses in Q2 2025, compared to **7** in Q2 2024, and plans to continue leveraging its regional developer program to accelerate clinic sales and openings[131](index=131&type=chunk) [Recent Events](index=34&type=section&id=Recent%20Events) Discusses the impact of global economic conditions, inflation, and labor costs - Unfavorable global economic or political conditions, labor shortages, inflation, and other cost increases are expected to impact the business, with 2025 anticipated to be a volatile macroeconomic environment[133](index=133&type=chunk) - Labor costs are the primary inflationary factor, leading to increased general and administrative expenses in 2024 due to shortages and wage increases. Increased interest rates may also reduce patient discretionary spending[134](index=134&type=chunk)[135](index=135&type=chunk) [Other Significant Events and/or Recent Developments](index=34&type=section&id=Other%20Significant%20Events%20and/or%20Recent%20Developments) Highlights recent operational performance metrics, including comparable same-store and system-wide sales - For the three months ended June 30, 2025, comparable same-store sales (clinics open 13+ months) increased by **1.4%**, while comp sales for mature clinics (48+ months) decreased by **2.0%**. System-wide sales grew **2.6%** to **$129.6 million**[139](index=139&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Analyzes changes in revenues and expenses for current and prior reporting periods [Total Revenues - Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024](index=35&type=section&id=Total%20Revenues%20-%20Three%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Three%20Months%20Ended%20June%2030,%202024) Compares total revenues and their components for the three months ended June 30, 2025 and 2024 | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | Percent Change | | :--------------------------------- | :--------------------------- | :--------------------------- | :----- | :------------- | | Royalty fees | $8,133,122 | $7,846,328 | $286,794 | 3.7% | | Franchise fees | $768,100 | $719,103 | $48,997 | 6.8% | | Advertising fund revenue | $2,332,695 | $2,240,839 | $91,856 | 4.1% | | IT-related income and software fees | $1,481,661 | $1,415,036 | $66,625 | 4.7% | | Other revenues | $554,692 | $388,730 | $165,962 | 42.7% | | Total revenues | $13,270,270 | $12,610,036 | $660,234 | 5.2% | - Total revenues increased by **$0.7 million (5.2%)** for the three months ended June 30, 2025, primarily due to the expansion and revenue growth of the franchise base, including increased royalty fees, advertising fund revenue, and software fees from a larger franchised clinic base (**885** clinics in 2025 vs. **829** in 2024). Other revenues saw a significant **42.7%** increase mainly from **$150,000** in sponsorship payments for the annual conference[140](index=140&type=chunk)[142](index=142&type=chunk) [Total Revenues - Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024](index=35&type=section&id=Total%20Revenues%20-%20Six%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Six%20Months%20Ended%20June%2030,%202024) Compares total revenues and their components for the six months ended June 30, 2025 and 2024 | Revenue Type | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | Percent Change | | :--------------------------------- | :--------------------------- | :--------------------------- | :----- | :------------- | | Royalty fees | $16,204,107 | $15,433,874 | $770,233 | 5.0% | | Franchise fees | $1,596,619 | $1,374,977 | $221,642 | 16.1% | | Advertising fund revenue | $4,640,197 | $4,407,311 | $232,886 | 5.3% | | IT-related income and software fees | $2,943,628 | $2,801,812 | $141,816 | 5.1% | | Other revenues | $963,309 | $776,778 | $186,531 | 24.0% | | Total revenues | $26,347,860 | $24,794,752 | $1,553,108 | 6.3% | - Total revenues increased by **$1.6 million (6.3%)** for the six months ended June 30, 2025, driven by continued expansion and sales growth in the franchise base. Royalty fees, advertising fund revenue, and software fees all increased due to a larger franchised clinic base. Other revenues increased by **$150,000** from annual conference sponsorship payments[141](index=141&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [Cost of Revenues](index=36&type=section&id=Cost%20of%20Revenues) Analyzes changes in the cost of revenues for the three and six months ended June 30, 2025 and 2024 | Cost of Revenues | 2025 | 2024 | Change | Percent Change | | :----------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $2,772,607 | $2,812,389 | $(39,782) | (1.4)% | | Six Months Ended June 30, | $5,744,733 | $5,516,901 | $227,832 | 4.1% | - Cost of revenues decreased by **1.4%** for the three months ended June 30, 2025, primarily due to a reduction in regional developer sales commissions. For the six months, it increased by **4.1%** due to more franchised clinics and sales growth in regional developer regions, partially offset by the commission reduction[145](index=145&type=chunk) [Selling and Marketing Expenses](index=36&type=section&id=Selling%20and%20Marketing%20Expenses) Examines the trends and drivers behind selling and marketing expenses for the specified periods | Selling and Marketing Expenses | 2025 | 2024 | Change | Percent Change | | :------------------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $3,483,844 | $3,440,391 | $43,453 | 1.3% | | Six Months Ended June 30, | $6,988,994 | $5,677,974 | $1,311,020 | 23.1% | - Selling and marketing expenses increased by **1.3%** for the three months and **23.1%** for the six months ended June 30, 2025, primarily due to increased expenses associated with digital marketing transformation efforts incurred in Q1 2025[146](index=146&type=chunk) [Depreciation and Amortization Expenses](index=36&type=section&id=Depreciation%20and%20Amortization%20Expenses) Reviews changes in depreciation and amortization expenses, primarily due to software development | Depreciation and Amortization Expenses | 2025 | 2024 | Change | Percent Change | | :--------------------------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $402,295 | $342,454 | $59,841 | 17.5% | | Six Months Ended June 30, | $764,225 | $672,088 | $92,137 | 13.7% | - Depreciation and amortization expenses increased by **17.5%** for the three months and **13.7%** for the six months ended June 30, 2025, mainly due to depreciation related to internal use software enhancements and the launch of a new mobile app[147](index=147&type=chunk) [General and Administrative Expenses](index=36&type=section&id=General%20and%20Administrative%20Expenses) Discusses fluctuations in general and administrative expenses, including payroll and employee compensation | General and Administrative Expenses | 2025 | 2024 | Change | Percent Change | | :------------------------------------ | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $7,745,251 | $7,793,465 | $(48,214) | (0.6)% | | Six Months Ended June 30, | $14,660,196 | $15,132,773 | $(472,577) | (3.1)% | - General and administrative expenses decreased by **0.6%** for the three months and **3.1%** for the six months ended June 30, 2025, primarily due to a decrease in payroll and other employee compensation expenses, reflecting fewer employees and the departure of long-tenure employees with stock-based compensation[148](index=148&type=chunk) - As a percentage of revenue, general and administrative expenses decreased from **62%** to **58%** for the three months, and from **61%** to **56%** for the six months ended June 30, 2025[149](index=149&type=chunk) [Loss from Operations](index=37&type=section&id=Loss%20from%20Operations) Analyzes the company's operating loss and factors contributing to its change over the periods | Loss from Operations | 2025 | 2024 | Change | Percent Change | | :----------------------- | :------------- | :------------- | :------- | :------------- | | Three Months Ended June 30, | $(1,138,167) | $(1,779,325) | $641,158 | 36.0% | | Six Months Ended June 30, | $(1,816,701) | $(2,205,921) | $389,220 | 17.6% | - Loss from operations decreased by **$0.6 million (36.0%)** for the three months and **$0.4 million (17.6%)** for the six months ended June 30, 2025, driven by increased total revenues, a slight decrease in total cost of revenues, and reduced general and administrative expenses, partially offset by higher selling and marketing expenses[150](index=150&type=chunk)[154](index=154&type=chunk) [Other Income (Expense), Net](index=37&type=section&id=Other%20Income%20(Expense),%20Net) Details components of other income and expense, primarily interest income | Other Income (Expense), Net | 2025 | 2024 | Change | Percent Change | | :---------------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $159,922 | $80,471 | $79,451 | (98.7)% | | Six Months Ended June 30, | $345,839 | $116,730 | $229,109 | (196.3)% | - Other income (expense), net increased significantly for both three and six months ended June 30, 2025, primarily due to higher interest income from deploying additional cash and cash equivalents into higher interest rate savings products[151](index=151&type=chunk) [Income Tax Expense](index=37&type=section&id=Income%20Tax%20Expense) Explains income tax expense and reasons for its changes | Income Tax Expense | 2025 | 2024 | Change | Percent Change | | :------------------- | :----------- | :----------- | :----- | :------------- | | Three Months Ended June 30, | $11,390 | $11,169 | $221 | 2.0% | | Six Months Ended June 30, | $24,794 | $19,751 | $5,043 | 25.5% | - Income tax expense increased for both three and six months ended June 30, 2025, primarily due to an increase in estimated state income taxes[152](index=152&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) Presents and reconciles non-GAAP financial measures like EBITDA and Adjusted EBITDA for performance evaluation | Non-GAAP Financial Data | 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) income | $93,363 | $(3,596,398) | $1,061,159 | $(2,649,419) | | EBITDA | $464,447 | $(1,974,173) | $1,751,695 | $520,008 | | Adjusted EBITDA | $3,239,193 | $2,126,162 | $6,094,181 | $5,632,876 | - Adjusted EBITDA from continuing operations increased to **$88,049** for the three months and **$134,443** for the six months ended June 30, 2025, compared to **$(380,434)** and **$44,274** respectively in the prior year, used to evaluate ongoing operating results and trends, excluding items like interest, taxes, depreciation, amortization, and certain non-recurring expenses[156](index=156&type=chunk)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses cash position, cash flow activities, and ability to meet financial obligations - As of June 30, 2025, the Company had **$29.8 million** in unrestricted cash and short-term bank deposits, with management believing existing cash, anticipated cash flows from operations, and available credit will be sufficient for the next 12 months, despite potential liquidity risks from global economic conditions[160](index=160&type=chunk)[161](index=161&type=chunk) - Net cash used in operating activities for both continuing and discontinued operations decreased by **$4.7 million** to **$2.8 million** for the six months ended June 30, 2025, compared to net cash provided by operating activities of **$1.8 million** for the prior year period[164](index=164&type=chunk) - Net cash provided by investing activities was **$6.9 million** for the six months ended June 30, 2025, primarily from **$7.8 million** in clinic sales proceeds. Net cash provided by financing activities was **$0.9 million**, mainly from stock option exercises[165](index=165&type=chunk)[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures since the December 31, 2024 Annual Report on Form 10-K/A - No material changes to quantitative and qualitative disclosures about market risk as of June 30, 2025, compared to the December 31, 2024 Annual Report on Form 10-K/A[168](index=168&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in complex transaction accounting - The CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness[170](index=170&type=chunk) - The material weakness identified as of December 31, 2024, and continuing as of June 30, 2025, is the inadequate design, implementation, and maintenance of effective controls to analyze and account for non-routine, unusual, or complex transactions, particularly impairment of assets held for sale[171](index=171&type=chunk)[172](index=172&type=chunk) - The remediation plan includes designing, implementing, and maintaining enhanced internal controls for timely analysis and accounting of complex transactions and reviewing valuation methodologies for impairment charges[173](index=173&type=chunk)[179](index=179&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control during the quarter ended June 30, 2025, other than the ongoing material weakness[174](index=174&type=chunk) PART II OTHER INFORMATION Contains disclosures on legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is detailed in Note 9, Commitments and Contingencies - Legal proceedings information is detailed in Note 9, Commitments and Contingencies[175](index=175&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors since the December 31, 2024 Annual Report on Form 10-K/A - No material changes to risk factors since the filing of the amended and restated Annual Report on Form 10-K/A for the year ended December 31, 2024[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported - No unregistered sales of equity securities or use of proceeds were reported[177](index=177&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[178](index=178&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits include Employment Agreement (10.1), Asset Purchase Agreement (10.2), Certifications of Principal Executive Officer (31.1) and Principal Financial Officer (31.2), Certifications pursuant to 18 U.S.C. Section 1350 (32), and XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[181](index=181&type=chunk) SIGNATURES Confirms the official signing of the Quarterly Report on Form 10-Q by the principal executive and financial officers - The Quarterly Report on Form 10-Q was signed on August 11, 2025, by Sanjiv Razdan, Chief Executive Officer and President, and Scott J. Bowman, Chief Financial Officer[185](index=185&type=chunk)

Exhibit 99.1 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three and Six Months Ended June 30, 2025 (Unaudited and Expressed in US Dollars) POET TECHNOLOGIES INC. The accompanying notes are an integral part of these condensed interim consolidated financial statements. Page 1 POET TECHNOLOGIES INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in US Dollars) (Unaudited) | | | June 30, | | December 31, | | --- | --- | --- | --- | --- | | | | 2025 | | 2024 | | Assets ...

[Filing Details](index=1&type=section&id=Filing%20Details) Provides essential identification and registration information for Tandy Leather Factory, Inc.'s Form 8-K filing [Registrant and Filing Information](index=1&type=section&id=Registrant%20and%20Filing%20Information) Details the registrant's identity, incorporation, principal offices, and filing date for this Form 8-K Registrant and Filing Information | Detail | Value | | :--- | :--- | | **Registrant Name** | Tandy Leather Factory, Inc. | | **Date of Report** | August 11, 2025 | | **State of Incorporation** | Delaware | | **Principal Executive Offices** | 1900 Southeast Loop 820, Fort Worth, Texas 76140 | | **Telephone Number** | (817) 872-3200 | [Securities Registration and Status](index=1&type=section&id=Securities%20Registration%20and%20Status) Outlines the company's registered securities and its classification regarding emerging growth company status Securities Registration | Class of Security | Trading Symbol | Exchange Registered | | :--- | :--- | :--- | | Common Stock, par value $0.0024 | TLF | Nasdaq | - The registrant is not an emerging growth company[4](index=4&type=chunk) [Current Report on Form 8-K](index=2&type=section&id=Current%20Report%20on%20Form%208-K) Covers the announcement of financial results and the nature of information furnished in this Form 8-K [Item 2.02. Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition) Announces Tandy Leather Factory, Inc.'s Q2 FY2025 financial results and clarifies the furnished nature of this information - On August 11, 2025, Tandy Leather Factory, Inc. issued a press release and filed its Quarterly Report on Form 10-Q, announcing financial results for the second quarter of fiscal year 2025[5](index=5&type=chunk) - The information furnished under Item 2.02 is not deemed 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934, limiting associated liabilities[6](index=6&type=chunk) [Item 9.01 Financial Statements and Exhibits.](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits.) Lists the specific exhibits accompanying the Form 8-K filing, including the press release and interactive data Financial Statements and Exhibits | No. | Exhibit | | :--- | :--- | | 99.1 | Press Release dated August 11, 2025 | | 104 | Cover page interactive data file (embedded within the Inline XBRL document) | [Legal and Concluding Information](index=2&type=section&id=Legal%20and%20Concluding%20Information) Contains disclaimers regarding forward-looking statements and the official signing of the Form 8-K report [Forward Looking Statements](index=2&type=section&id=Forward%20Looking%20Statements) Clarifies the nature of forward-looking statements, associated risks, and the company's update obligations - The report contains forward-looking statements, identifiable by terms such as 'may,' 'will,' 'expect,' and 'plan,' which are subject to risks and uncertainties[8](index=8&type=chunk) - Readers are directed to the Company's Annual Report on Form 10-K for FY2024 for more information on factors that could negatively impact the Company[8](index=8&type=chunk) - The Company assumes no obligation to update or revise its forward-looking statements, except as required by law[8](index=8&type=chunk) [Signatures](index=3&type=section&id=SIGNATURES) Formally concludes the Form 8-K filing with the authorized signature of the Chief Executive Officer - The report was signed on August 11, 2025, by Johan Hedberg, Chief Executive Officer of Tandy Leather Factory, Inc.[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk)

[Financial Performance Highlights](index=1&type=section&id=Financial%20Performance%20Highlights) The company reported strong financial improvements in Q2 and year-to-date 2025, marked by significant revenue growth, gross margin expansion, and a shift to positive adjusted EBITDA [Second Quarter 2025 (Q2 2025) Performance](index=1&type=section&id=Second%20Quarter%202025%20%28Q2%202025%29%20Performance) Microvast reported record revenue of $91.3 million for Q2 2025, a 9.2% year-over-year increase. Gross margin expanded to 34.7% from 32.5% in Q2 2024. While the company recorded a GAAP net loss of $106.1 million, it achieved a significant turnaround with a positive non-GAAP adjusted EBITDA of $25.9 million, compared to a negative $78.4 million in the prior-year quarter Q2 2025 vs. Q2 2024 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $91.3 million | $83.7 million | +9.2% YoY | | **Gross Margin** | 34.7% | 32.5% | +2.2 p.p. YoY | | **Operating Expenses** | $16.5 million | $126.7 million | -87.0% YoY | | **Net Loss (GAAP)** | ($106.1 million) | ($101.6 million) | Increased Loss | | **Net Loss per Share (GAAP)** | ($0.33) | ($0.32) | Increased Loss | | **Adjusted EBITDA (Non-GAAP)** | $25.9 million | ($78.4 million) | Significant Improvement | | **Adjusted Net Profit/(Loss) (Non-GAAP)** | $16.3 million | ($87.9 million) | Significant Improvement | - Cash, cash equivalents, and restricted cash increased to **$138.8 million** as of June 30, 2025, up from **$104.5 million** as of June 30, 2024, and **$109.6 million** as of December 31, 2024[6](index=6&type=chunk) [Year-to-Date 2025 (YTD 2025) Performance](index=1&type=section&id=Year-to-Date%202025%20%28YTD%202025%29%20Performance) For the first six months of 2025, revenue grew 25.9% year-over-year to $207.8 million. Gross margin saw a substantial increase to 36.0% from 26.9% in the same period last year. The company significantly reduced its GAAP net loss to $44.3 million from $126.4 million and achieved a positive adjusted EBITDA of $54.4 million, reversing a loss of $82.1 million in YTD 2024 YTD 2025 vs. YTD 2024 Financial Highlights | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $207.8 million | $165.0 million | +25.9% YoY | | **Gross Margin** | 36.0% | 26.9% | +9.1 p.p. YoY | | **Operating Expenses** | $42.0 million | $167.5 million | -74.9% YoY | | **Net Loss (GAAP)** | ($44.3 million) | ($126.4 million) | Reduced Loss | | **Net Loss per Share (GAAP)** | ($0.14) | ($0.40) | Reduced Loss | | **Adjusted EBITDA (Non-GAAP)** | $54.4 million | ($82.1 million) | Significant Improvement | | **Adjusted Net Profit/(Loss) (Non-GAAP)** | $35.6 million | ($100.9 million) | Significant Improvement | [Business Outlook and Corporate Information](index=2&type=section&id=Business%20Outlook%20and%20Corporate%20Information) The company maintains its 2025 revenue guidance and raises gross margin targets, while also providing corporate information and strategic priorities [2025 Full-Year Outlook](index=2&type=section&id=2025%20Full-Year%20Outlook) Microvast maintains its 2025 revenue guidance of $450 million to $475 million, representing 18% to 25% year-over-year growth. The company has raised its full-year gross margin target to a range of 30% to 32%. Key operational goals include completing the Huzhou Phase 3.2 capacity expansion by year-end and focusing on new customer acquisition Full Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | **Revenue Growth** | 18% to 25% YoY | | **Revenue** | $450 million to $475 million | | **Gross Margin** | Updated to 30% to 32% | - Strategic priorities for 2025 include: - Completing the installation and commissioning of production equipment for the Huzhou Phase 3.2 expansion to meet strong customer demand[11](index=11&type=chunk) - Focusing on securing new customer wins to expand market presence in new and electrifying segments[11](index=11&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) Microvast will host a conference call and webcast on August 11, 2025, to discuss its financial results. The company positions itself as a global leader in battery technologies for electric vehicles and energy storage, with a history of over 18 years and more than 810 patents and patent applications - A conference call and webcast to discuss financial results is scheduled for August 11, 2025, at 4:00 p.m. Central Time[9](index=9&type=chunk) - Microvast, founded in 2006, is a global provider of battery technologies for EVs and energy storage solutions, holding over **810 patents** and patent applications[10](index=10&type=chunk)[12](index=12&type=chunk) [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) Unaudited consolidated financial statements detail the company's balance sheet, income, and cash flow positions for the periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Microvast's total assets stood at **$1,004,692 thousand**, with total liabilities at **$648,562 thousand**. The company's cash position, including cash, cash equivalents, and restricted cash, improved to **$138,820 thousand** from **$109,601 thousand** at the end of 2024. Total equity decreased to **$356,130 thousand** from **$387,895 thousand** over the same period Key Balance Sheet Items (in thousands of U.S. dollars) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash, cash equivalents & restricted cash** | $138,820 | $109,601 | | **Total Current Assets** | $434,591 | $428,026 | | **Total Assets** | $1,004,692 | $951,867 | | **Total Current Liabilities** | $524,663 | $330,153 | | **Total Liabilities** | $648,562 | $563,972 | | **Total Equity** | $356,130 | $387,895 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported revenues of **$91,339 thousand** and a gross profit of **$31,723 thousand**. A significant change in the fair value of warrant liability and convertible loan of **$121,500 thousand** contributed heavily to the net loss of **$106,058 thousand**. For the six-month period, revenues were **$207,830 thousand** with a net loss of **$44,268 thousand**, a substantial improvement from the **$126,381 thousand** loss in the prior year period Key Income Statement Items - Q2 (in thousands of U.S. dollars) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenues** | $91,339 | $83,675 | | **Gross Profit** | $31,723 | $27,195 | | **Total operating expenses** | ($16,504) | ($126,671) | | **Profit/(loss) from operations** | $16,214 | ($98,741) | | **Net loss** | ($106,058) | ($101,556) | Key Income Statement Items - YTD (in thousands of U.S. dollars) | Account | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | **Revenues** | $207,830 | $165,026 | | **Gross Profit** | $74,739 | $44,420 | | **Total operating expenses** | ($42,004) | ($167,548) | | **Profit/(loss) from operations** | $35,146 | ($121,859) | | **Net loss** | ($44,268) | ($126,381) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash generated from operating activities was **$44,323 thousand**, a significant improvement from **$2,142 thousand** in the same period of 2024. Net cash used in investing activities was **$5,078 thousand**, while financing activities used **$6,799 thousand**. The company's total cash, cash equivalents, and restricted cash increased by **$29,219 thousand** during the period, ending at **$138,820 thousand** Cash Flow Summary - Six Months Ended June 30 (in thousands of U.S. dollars) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | $44,323 | $2,142 | | **Net cash used in investing activities** | ($5,078) | ($7,442) | | **Net cash (used in)/from financing activities** | ($6,799) | $28,488 | | **Increase in cash, cash equivalents and restricted cash** | $29,219 | $16,295 | | **Cash, cash equivalents and restricted cash at end of period** | $138,820 | $104,484 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides reconciliations of GAAP to non-GAAP financial measures, including gross profit, operating expenses, net profit, and EBITDA, to offer a clearer view of underlying performance [Gross Profit and Gross Margin Reconciliation](index=10&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20Reconciliation) After adjusting for non-cash share-based compensation, the non-GAAP adjusted gross profit for Q2 2025 was **$31,785 thousand** (34.8% margin), compared to **$28,676 thousand** (34.3% margin) in Q2 2024. For the six-month period, non-GAAP adjusted gross profit was **$74,863 thousand** (36.0% margin), up from **$47,039 thousand** (28.5% margin) in the prior year Non-GAAP Gross Profit Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Gross Profit (GAAP)** | $31,723 | $27,195 | $74,739 | $44,420 | | **Adjusted Gross Profit (Non-GAAP)** | $31,785 | $28,676 | $74,863 | $47,039 | | **Adjusted Gross Margin (Non-GAAP)** | 34.8% | 34.3% | 36.0% | 28.5% | [Operating Expenses Reconciliation](index=11&type=section&id=Operating%20Expenses%20Reconciliation) GAAP operating expenses for Q2 2025 were **$16,504 thousand**, a sharp decrease from **$126,671 thousand** in Q2 2024, primarily due to a large impairment loss in the prior year. After excluding non-cash share-based compensation, non-GAAP adjusted operating expenses were **$15,720 thousand** for the quarter Non-GAAP Operating Expenses Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Operating Expenses (GAAP)** | ($16,504) | ($126,671) | ($42,004) | ($167,548) | | **Adjusted Operating Expenses (Non-GAAP)** | ($15,720) | ($116,022) | ($40,579) | ($146,170) | [Net Loss to Adjusted Net Profit/(Loss) Reconciliation](index=12&type=section&id=Net%20Loss%20to%20Adjusted%20Net%20Profit%2F%28Loss%29%20Reconciliation) The company reconciled its Q2 2025 GAAP net loss of **$106,058 thousand** to a non-GAAP adjusted net profit of **$16,309 thousand**. This adjustment primarily accounts for a **$121,500 thousand** change in the fair value of warrant liability and convertible loan. This represents a significant turnaround from a non-GAAP adjusted net loss of **$87,858 thousand** in Q2 2024 Non-GAAP Net Profit/(Loss) Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Loss (GAAP)** | ($106,058) | ($101,556) | ($44,268) | ($126,381) | | **Adjusted Net Profit/(Loss) (Non-GAAP)** | $16,309 | ($87,858) | $35,642 | ($100,858) | | **Adjusted Net Profit/(Loss) per Share** | $0.05 | ($0.28) | $0.11 | ($0.32) | [Net Loss to EBITDA and Adjusted EBITDA Reconciliation](index=13&type=section&id=Net%20Loss%20to%20EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) Microvast's non-GAAP adjusted EBITDA for Q2 2025 was a positive **$25,881 thousand**, a substantial improvement from a negative **$78,375 thousand** in Q2 2024. For the first six months of 2025, adjusted EBITDA was **$54,402 thousand**, compared to a loss of **$82,098 thousand** in the prior-year period. The reconciliation from GAAP net loss includes adjustments for interest, taxes, depreciation, amortization, changes in fair value of warrants/loans, and share-based compensation Non-GAAP Adjusted EBITDA Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Loss (GAAP)** | ($106,058) | ($101,556) | ($44,268) | ($126,381) | | **EBITDA (Non-GAAP)** | ($96,486) | ($92,073) | ($25,508) | ($107,621) | | **Adjusted EBITDA (Non-GAAP)** | $25,881 | ($78,375) | $54,402 | ($82,098) | [Important Disclosures](index=3&type=section&id=Important%20Disclosures) Important disclosures include cautionary statements regarding forward-looking information and explanations of the company's use of non-GAAP financial measures [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding future operations, financial position, growth, and business strategy. These statements are subject to significant business, economic, and competitive uncertainties. The company lists numerous risk factors that could cause actual results to differ materially, including the ability to remain a going concern, achieve profitability, manage manufacturing capacity, and navigate market competition and geopolitical events - Forward-looking statements cover future results, operational performance, growth strategy, and demand for products, but are subject to significant risks and uncertainties[13](index=13&type=chunk) - Key risks include the ability to remain a going concern, achieve profitability, manage manufacturing, competition, raw material prices, and geopolitical events[14](index=14&type=chunk)[15](index=15&type=chunk) [Non-GAAP Financial Measures Explanation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) Microvast uses non-GAAP financial measures such as adjusted gross profit, adjusted EBITDA, and adjusted net profit to provide supplemental information on its financial performance. Management believes these measures help illustrate underlying business trends by excluding certain items, like non-cash stock-based compensation and changes in warrant valuation, that may not be indicative of recurring core operations. The company acknowledges the limitations of these measures and provides reconciliations to the most comparable GAAP figures - The company discloses non-GAAP measures to supplement GAAP results and provide additional information on financial performance[19](index=19&type=chunk) - Management uses these non-GAAP metrics for financial and operational decision-making, to evaluate period-to-period comparisons, and to assess underlying business trends[22](index=22&type=chunk) - Key adjustments to derive non-GAAP figures include excluding non-cash stock-based compensation, depreciation, amortization, and changes in the fair value of warrants and convertible loans[21](index=21&type=chunk)

(Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 ☐ 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: 001-40775 ALPHA MODUS HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other j ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ALPHA MODUS HOLDINGS, INC. (Exact name of registrant as specified in its charter) 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 ☐ 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: 001-40775 (State or other j ...