[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited condensed consolidated financial statements, management's analysis of financial condition, market risk disclosures, and internal controls [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Spirit Aviation Holdings, Inc. for the periods ended June 30, 2025. It includes the Statements of Operations, Comprehensive Income (Loss), Balance Sheets, Cash Flows, and Shareholders' Equity. A key feature is the separation of financial data into "Predecessor" and "Successor" periods, reflecting the company's emergence from Chapter 11 bankruptcy on March 12, 2025, and the application of fresh start accounting, which makes periods non-comparable. The notes also highlight a "Going Concern" uncertainty due to challenging market conditions and liquidity covenant compliance risks * The company emerged from **Chapter 11 bankruptcy on March 12, 2025**, leading to the application of **fresh start accounting**. Financial statements are presented for "**Predecessor**" (before emergence) and "**Successor**" (after emergence) periods, which are **not comparable**[25](index=25&type=chunk)[26](index=26&type=chunk) * Management has concluded there is **substantial doubt** about the company's ability to continue as a **going concern** within the **next 12 months** due to challenges in complying with **minimum liquidity covenants** in its **debt and credit card processing agreements** amid adverse market conditions[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) Q2 2025 vs Q2 2024 Statement of Operations Highlights (in thousands) | Metric | Q2 2025 (Successor) | Q2 2024 (Predecessor) | Change | | :--- | :--- | :--- | :--- | | **Total operating revenues** | **$1,019,833** | **$1,280,889** | **-20.4%** | | Total operating expenses | $1,203,956 | $1,433,401 | -16.0% | | **Operating income (loss)** | **($184,123)** | **($152,512)** | **-20.7%** | | **Net income (loss)** | **($245,831)** | **($192,927)** | **-27.4%** | | Diluted earnings (loss) per share | ($7.24) | ($1.76) | -311.4% | Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (Successor) | December 31, 2024 (Predecessor) | | :--- | :--- | :--- | | Cash and cash equivalents | $407,511 | $902,057 | | Total current assets | $1,481,219 | $2,109,122 | | Total assets | $8,576,287 | $9,595,178 | | Total current liabilities | $1,453,528 | $1,769,365 | | Long-term debt, net | $2,242,448 | $1,761,215 | | Total liabilities | $8,096,842 | $9,675,312 | | Total shareholders' equity (deficit) | $479,445 | ($80,134) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting the significant impact of its emergence from Chapter 11 bankruptcy and the adoption of fresh start accounting. The analysis covers key trends, including efforts to drive higher unit revenues, reduce network capacity, and maintain low unit costs amidst challenges like the Pratt & Whitney GTF engine issues. The company reported a wider operating loss in Q2 2025 compared to Q2 2024, driven by a 20.4% decrease in operating revenues due to reduced capacity. The discussion reiterates the substantial doubt about the company's ability to continue as a going concern and outlines its liquidity enhancement strategies * The company is implementing **strategic changes** to drive **higher unit revenues**, including enhancing its **Premium Economy travel option** and realigning its network to focus on markets with **strong leisure demand**[235](index=235&type=chunk)[258](index=258&type=chunk) * Ongoing issues with **Pratt & Whitney GTF engines** are expected to require **engine removals and inspections through at least 2026**, **negatively impacting capacity and financial results**, although a **compensation agreement** with the manufacturer provides some offsetting credits[238](index=238&type=chunk)[239](index=239&type=chunk) Q2 2025 vs Q2 2024 Key Operating Statistics | Operating Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Available seat miles (ASMs) (thousands) | 10,761,858 | 14,146,192 | (23.9)% | | Load factor (%) | 79.4% | 83.2% | (3.8) pts | | TRASM (cents) | 9.48 | 9.05 | 4.8% | | CASM (cents) | 11.19 | 10.13 | 10.5% | | Adjusted CASM ex-fuel (cents) | 8.77 | 7.36 | 19.2% | | Average economic fuel cost per gallon ($) | 2.37 | 2.78 | (14.7)% | * The company's **liquidity as of June 30, 2025**, was **$682.5 million**, comprising **unrestricted cash** and available funds under its **Exit Revolving Credit Facility**. Management is pursuing **additional liquidity measures**, including **asset sales**, to address **going concern issues**[312](index=312&type=chunk)[320](index=320&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies its primary market risks as commodity prices (specifically aircraft fuel) and interest rates. Aircraft fuel represented 21.6% of operating expenses for the first six months of 2025, and price volatility remains a significant risk. The company also has exposure through its fixed-rate debt instruments * The company's **main market risks** are **aircraft fuel prices** and **interest rates**. It does not hold any **derivative financial instruments for trading purposes**[380](index=380&type=chunk) * A hypothetical **10% increase** in the average price of aircraft fuel would have increased annual into-plane fuel expense by approximately **$121 million**, based on consumption over the **last 12 months**. As of **June 30, 2025**, the company had **no outstanding jet fuel derivatives**[381](index=381&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective at a reasonable assurance level. There were no material changes in internal control over financial reporting during the quarter * Based on an evaluation as of **June 30, 2025**, the **CEO and CFO** concluded that the company's **disclosure controls and procedures were effective**[386](index=386&type=chunk) * **No changes occurred** in the company's **internal control over financial reporting** during the quarter ended **June 30, 2025**, that have **materially affected**, or are **reasonably likely to materially affect**, these controls[387](index=387&type=chunk) [Part II. Other Information](index=67&type=section&id=Part%20II.%20Other%20Information) This section details legal proceedings, updated risk factors, equity security sales, and a list of filed exhibits [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various commercial litigation and regulatory proceedings, which it does not expect to have a material adverse effect on its financial condition. A specific matter disclosed is an ongoing challenge to a $27.5 million IRS assessment related to federal excise taxes on optional seat selection charges * The company is challenging a **$27.5 million assessment from the IRS** related to the collection of **federal excise taxes** on **optional passenger seat selection charges** for the period of **Q2 2018 through Q4 2020**. The company believes a **loss is not probable** and has **not recorded a loss contingency**[389](index=389&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) This section highlights material risks to the company, focusing on its high dependency on cash balances and operating cash flows to fund operations and meet obligations. It also emphasizes the risk associated with reliance on third-party service providers, particularly the upcoming expiration of its primary credit card processing agreement on December 31, 2025, which may require additional collateral for renewal * The company is **highly dependent on its cash balances and operating cash flows**. **Inadequate liquidity** could impact compliance with **debt covenants** and adversely affect its ability to raise capital or continue as a **going concern**[392](index=392&type=chunk)[394](index=394&type=chunk) * A **significant risk** is the **reliance on third-party service providers**. The **primary credit card processing agreement expires on December 31, 2025**, and the processor has requested **additional collateral to renew**, which could **materially reduce unrestricted cash**[395](index=395&type=chunk)[396](index=396&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of its securities and no repurchases of its common stock during the quarter ended June 30, 2025 * There were **no unregistered sales of equity securities** during the quarter ended **June 30, 2025**[398](index=398&type=chunk) * There were **no repurchases of the company's common stock** during the quarter ended **June 30, 2025**[399](index=399&type=chunk) [Item 3. Defaults Upon Senior Securities](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable [Item 4. Mine Safety Disclosures](index=70&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements such as employment and separation agreements, the 2025 Incentive Award Plan, and required CEO/CFO certifications

[PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) [Item 1: Financial Statements (Unaudited)](index=5&type=section&id=Item%201%3A%20Financial%20Statements%20(Unaudited)) The unaudited financial statements show decreased assets, increased liabilities, declining revenue, and a wider net loss for the period ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Balance Sheet Items | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Assets** | **$1,501.5** | **$1,512.5** | | Total Current Assets | $109.4 | $111.8 | | Property, plant and equipment, net | $823.9 | $831.2 | | **Total Liabilities** | **$1,320.6** | **$1,303.7** | | Long-term debt and finance lease obligations | $1,032.7 | $997.4 | | **Total Stockholders' Equity** | **$180.9** | **$208.8** | - Total assets slightly decreased to **$1,501.5 million** from $1,512.5 million at year-end 2024, while long-term debt increased to **$1,032.7 million** from $997.4 million[12](index=12&type=chunk) - Stockholders' equity declined from **$208.8 million** to **$180.9 million**, driven by the net loss[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Six Months 2025 (in millions) | Six Months 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$144.2** | **$158.8** | **$294.2** | **$320.3** | | Income from operations | $2.4 | $3.7 | $11.1 | $8.9 | | Interest expense | ($25.6) | ($17.8) | ($53.1) | ($38.8) | | **Net loss** | **($17.8)** | **($10.8)** | **($31.7)** | **($25.8)** | | **Diluted loss per share** | **($0.22)** | **($0.13)** | **($0.38)** | **($0.32)** | - Revenue for Q2 2025 decreased by **9.2%** year-over-year to **$144.2 million**[13](index=13&type=chunk) - Net loss widened to **$17.8 million** in Q2 2025 from $10.8 million in Q2 2024, primarily due to lower revenue and a significant increase in interest expense[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (Six Months Ended June 30) | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $52.8 | $86.6 | | Net cash used in investing activities | ($85.5) | ($123.5) | | Net cash provided by financing activities | $25.7 | $34.2 | | **Decrease in cash and cash equivalents** | **($7.0)** | **($2.7)** | - Net cash from operating activities decreased by **39%** to **$52.8 million** for the first six months of 2025 compared to the same period in 2024[20](index=20&type=chunk) - Capital expenditures were reduced to **$86.8 million** from $123.6 million year-over-year[20](index=20&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Revenue by Service Offering (Six Months Ended June 30) | Service | 2025 (in millions) | 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Residential HSD | $170.5 | $172.6 | -1.2% | | Residential Video | $37.0 | $57.6 | -35.8% | | Residential Telephony | $8.2 | $9.3 | -11.8% | | **Total residential subscription** | **$215.7** | **$239.5** | **-9.9%** | | Total business subscription | $55.7 | $56.0 | -0.5% | - On August 11, 2025, the company entered into a Merger Agreement with Bandit Parent LP to be acquired for **$5.20 per share** in cash[85](index=85&type=chunk) - The company's long-term debt outstanding balance increased to **$1,042.2 million** as of June 30, 2025, from $1,008.7 million at the end of 2024[41](index=41&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202%3A%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses an 8% revenue decline from subscriber loss, its 'broadband first' strategy, and the pending acquisition by DigitalBridge and Crestview Partners [Overview and Recent Developments](index=31&type=section&id=Overview%20and%20Recent%20Developments) - The company's core strategy is to provide outstanding service at affordable prices, with a primary focus on its high-speed data (HSD) service under a **'broadband first' approach**[94](index=94&type=chunk)[95](index=95&type=chunk) - WOW is pursuing a **greenfield expansion strategy**, building out its all-IP fiber network in new markets in Florida, Alabama, and South Carolina[97](index=97&type=chunk) - On August 11, 2025, WOW entered into a definitive agreement to be acquired by affiliates of DigitalBridge and Crestview Partners for **$5.20 per share**[98](index=98&type=chunk)[100](index=100&type=chunk) [Homes Passed and Subscribers](index=33&type=section&id=Homes%20Passed%20and%20Subscribers) Subscriber Trends | Metric | Jun. 30, 2024 | Dec. 31, 2024 | Jun. 30, 2025 | | :--- | :--- | :--- | :--- | | Homes passed | 1,956,700 | 1,962,100 | 1,997,100 | | Total subscribers | 495,200 | 478,700 | 469,600 | | HSD RGUs | 485,000 | 470,400 | 462,000 | | Video RGUs | 71,600 | 60,600 | 42,500 | | Telephony RGUs | 75,700 | 71,600 | 67,000 | - While total subscribers have declined from 495,200 to **469,600** over the past year, market expansion activities have contributed a growing base, reaching **46,300 total subscribers** as of June 30, 2025[104](index=104&type=chunk)[106](index=106&type=chunk) [Results of Operations Analysis](index=37&type=section&id=Results%20of%20Operations%20Analysis) - Total revenue for the six months ended June 30, 2025, **decreased by $26.1 million (8%)** compared to the prior year, driven by a $24.1 million drop in subscription revenue[117](index=117&type=chunk)[118](index=118&type=chunk) - Operating expenses for the first six months of 2025 **decreased by $17.9 million (14%)** year-over-year, mainly due to a $17.2 million reduction in programming expenses[121](index=121&type=chunk) - Interest expense for the first six months of 2025 **increased by $14.3 million (37%)** year-over-year, attributed to higher overall debt balances and derivative instruments[125](index=125&type=chunk) [Liquidity, Capital Resources, and Cash Flow](index=42&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Cash%20Flow) - As of June 30, 2025, the company had **$31.8 million in cash** and **$110.4 million available** under its Revolving Credit Facility[132](index=132&type=chunk)[133](index=133&type=chunk) - Net cash from operating activities for the first six months of 2025 was **$52.8 million**, a significant decrease from $86.6 million in the same period of 2024[137](index=137&type=chunk) Capital Expenditures (Six Months Ended June 30) | Category | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Customer premise equipment | $35.8 | $34.4 | | Scalable infrastructure | $23.8 | $50.4 | | Support capital and other | $14.2 | $19.5 | | Line extensions | $13.0 | $19.3 | | **Total** | **$86.8** | **$123.6** | [Item 3: Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate fluctuation on its variable-rate debt, with a 1% rate increase projected to raise annual interest expense by $5.5 million - The company's main market risk is from interest rate fluctuations on its variable rate debt; after accounting for swaps, **51% of this debt remains at a variable rate**[143](index=143&type=chunk) - A hypothetical **100 basis point (1%) increase** in the SOFR rate would change annual interest expense by approximately **$5.5 million**[143](index=143&type=chunk) [Item 4: Controls and Procedures](index=46&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management concluded that disclosure controls were not effective as of June 30, 2025, due to a material weakness in internal control over financial reporting - Management concluded that **disclosure controls and procedures were not effective** as of June 30, 2025[145](index=145&type=chunk) - The ineffectiveness is due to a **material weakness** in internal control over financial reporting related to insufficient documentation for annual impairment testing[148](index=148&type=chunk)[149](index=149&type=chunk) - A remediation plan is being designed, but the material weakness continued to exist at June 30, 2025[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) [PART II. Other Information](index=49&type=section&id=PART%20II.%20Other%20Information) [Item 1: Legal Proceedings](index=49&type=section&id=Item%201%3A%20Legal%20Proceedings) The company is party to various legal proceedings arising from normal business operations, with no expected material adverse effect from their resolution - For a discussion of legal proceedings, the report refers to **Note 13 – Commitments and Contingencies** in the financial statements[156](index=156&type=chunk) [Item 1A: Risk Factors](index=49&type=section&id=Item%201A%3A%20Risk%20Factors) The company identifies new material risks related to its proposed merger, including potential closing failures, business disruptions, and significant costs - Completion of the proposed merger is subject to several closing conditions, including **stockholder and regulatory approvals**, which may not be satisfied or could be delayed[158](index=158&type=chunk) - The pending merger creates uncertainty that may **disrupt business relationships** with customers, partners, and employees, and diverts management attention[162](index=162&type=chunk) - If the merger is completed, stockholders will receive a **fixed cash price** and will not benefit from any potential future appreciation in the company's value[164](index=164&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company purchased 11,672 shares of its equity securities in Q2 2025 to cover employee tax obligations upon the vesting of restricted stock awards Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 3,001 | $4.38 | | May 2025 | 3,336 | $4.21 | | June 2025 | 5,335 | $4.14 | | **Total** | **11,672** | **N/A** | - The shares purchased represent shares withheld from employees for the payment of taxes upon the vesting of restricted stock awards[167](index=167&type=chunk)

Company Information [FORM 10-Q Filing Details](index=1&type=section&id=FORM%2010-Q%20Filing%20Details) This section details the filing information for Turning Point Brands, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2025, including registrant name, jurisdiction, address, telephone number, and stock exchange listing (NYSE: TPB). The company is classified as an accelerated filer with **18,024,761** shares of common stock outstanding as of July 28, **2025** - Filing is a Quarterly Report on Form 10-Q for the period ended June 30, **2025**[2](index=2&type=chunk) - Registrant: TURNING POINT BRANDS, INC., incorporated in Delaware[2](index=2&type=chunk) | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- | --- | --- | | Common Stock, $0.01 par value | TPB | New York Stock Exchange | | Large accelerated filer | ☐ | Accelerated filer | ☑ | | --- | --- | --- | --- | | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | | Emerging growth company ☐ | | | | - As of July 28, **2025**, there were **18,024,761** shares outstanding of the registrant's voting common stock[4](index=4&type=chunk) Cautionary Note Regarding Forward-Looking Statements [Forward-Looking Statements and Risk Factors](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section highlights that the Quarterly Report contains forward-looking statements subject to risks and uncertainties, which could cause actual events to differ materially from expectations. TPB has no obligation to update these statements, except as required by law. Key risk factors include declining tobacco sales, dependence on suppliers, brand recognition, intense competition, regulatory changes (FDA, taxes), product liability litigation, indebtedness, internal control weaknesses, and external factors like epidemics or climate change. - Forward-looking statements are identified by words like "anticipate," "believe," "expect," "intend," "plan," and "will"[7](index=7&type=chunk) - TPB has no obligation to update forward-looking statements, except as required by federal securities laws[7](index=7&type=chunk) - Factors that could cause differences include declining tobacco sales, dependence on third-party suppliers, potential termination of licenses, failure to maintain consumer loyalty, intense competition, and substantial and increasing regulation (e.g., FDA enforcement priorities, taxes)[7](index=7&type=chunk) - Other risks include complications with ERP system implementation, product recalls, nicotine addiction concerns, significant product liability litigation, indebtedness, internal control weaknesses, and external events like epidemics or natural disasters[8](index=8&type=chunk) PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements of Turning Point Brands, Inc. for the periods ended June 30, **2025**, and December 31, **2024** (Balance Sheets), and for the three and six months ended June 30, **2025** and **2024** (Income, Comprehensive Income, Cash Flows, and Stockholders' Equity). Key financial highlights include a significant increase in cash and total assets, alongside growth in net sales and net income, primarily driven by the Stoker's products segment. The company also details its accounting policies, discontinued operations, and various financial instrument valuations. [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) **Consolidated Balance Sheets (dollars in thousands):** | ASSETS | June 30, 2025 | December 31, 2024 | |---|---|---| | Cash | $109,925 | $46,158 | | Accounts receivable, net | $30,056 | $9,624 | | Inventories, net | $105,009 | $96,253 | | Total current assets | $285,217 | $198,205 | | Total assets | $595,788 | $493,353 | | LIABILITIES AND STOCKHOLDERS' EQUITY | June 30, 2025 | December 31, 2024 | |---|---|---| | Accounts payable | $26,169 | $11,675 | | Accrued liabilities | $41,340 | $31,096 | | Total current liabilities | $67,509 | $44,820 | | Notes payable and long-term debt | $293,138 | $248,604 | | Total liabilities | $370,965 | $302,973 | | Total stockholders' equity | $224,823 | $190,380 | | Total liabilities and stockholders' equity | $595,788 | $493,353 | - Cash increased significantly from **$46.16 million** at December 31, **2024**, to **$109.93 million** at June 30, **2025**[10](index=10&type=chunk) - Total assets grew by approximately **20.8%** from **$493.35 million** to **$595.79 million**[10](index=10&type=chunk) [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) **Consolidated Statements of Income (dollars in thousands, except share and per share data):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Net sales | $116,634 | $93,225 | $223,070 | $176,289 | | Gross profit | $66,623 | $50,398 | $126,233 | $98,752 | | Operating income | $26,327 | $22,872 | $49,516 | $42,142 | | Income from continuing operations before income taxes | $21,204 | $17,391 | $39,035 | $33,301 | | Consolidated net income | $16,960 | $12,920 | $32,751 | $25,099 | | Net income attributable to Turning Point Brands, Inc. | $14,480 | $13,007 | $28,875 | $25,017 | | Basic earnings per share | $0.81 | $0.74 | $1.62 | $1.42 | | Diluted earnings per share | $0.79 | $0.68 | $1.58 | $1.31 | - Net sales increased by **25.1%** for the three months ended June 30, **2025**, and **26.5%** for the six months ended June 30, **2025**, compared to the prior year periods[11](index=11&type=chunk) - Diluted EPS from continuing operations increased from **$0.68** to **$0.79** for the three months, and from **$1.31** to **$1.58** for the six months ended June 30, **2025**, year-over-year[11](index=11&type=chunk) [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) **Consolidated Statements of Comprehensive Income (dollars in thousands):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Consolidated net income | $16,960 | $12,920 | $32,751 | $25,099 | | Other comprehensive income (loss), net of tax | $373 | $(33) | $865 | $(441) | | Consolidated comprehensive income | $17,333 | $12,887 | $33,616 | $24,658 | | Comprehensive income attributable to Turning Point Brands, Inc. | $14,853 | $12,974 | $29,740 | $24,576 | - Other comprehensive income (loss) significantly improved, moving from a loss of **$(33) thousand** to a gain of **$373 thousand** for the three months ended June 30, **2025**, and from a loss of **$(441) thousand** to a gain of **$865 thousand** for the six months ended June 30, **2025**[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) **Consolidated Statements of Cash Flows (dollars in thousands):** | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---| | Net cash provided by operating activities | $29,230 | $36,077 | | Net cash used in investing activities | $(8,626) | $(7,972) | | Net cash provided by (used in) financing activities | $40,312 | $(6,747) | | Net increase in cash | $60,916 | $21,358 | | Total cash at end of period | $111,838 | $144,097 | - Net cash provided by financing activities saw a substantial increase, moving from a use of **$(6.75) million** in **2024** to a provision of **$40.31 million** in **2025**, primarily due to the issuance of **2032

EXHIBIT 99.1 QUIPT HOME MEDICAL REPORTS IMPROVED FISCAL THIRD QUARTER 2025 RESULTS Posts Positive Organic Growth and Adjusted EBITDA1 of 23.5% of Revenue Cincinnati, Ohio – August 11, 2025 – Quipt Home Medical Corp. ("Quipt" or the "Company") (NASDAQ: QIPT; TSX: QIPT), a U.S. based home medical equipment provider, focused on end-to-end respiratory care, today announced its fiscal third quarter 2025 financial results and operational highlights. These results pertain to the three and nine months ended June 30 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (I.R.S. Employer Identification No.) Commission File Number 001-40503 NET Power Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization ...

Exhibit 99.1 WOW! REPORTS SECOND QUARTER 2025 RESULTS Greenfield markets now pass 91.1 thousand homes with a penetration rate at 16.0% ENGLEWOOD, Colo. (August 11, 2025) – WideOpenWest, Inc. ("WOW!" or the "Company") (NYSE: WOW), one of the nation's leading broadband providers, with an efficient, high-performing network that passes nearly 2.0 million residential, business and wholesale consumers, today announced financial and operating results for the second quarter ended June 30, 2025. Second Quarter 2025 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-51173 Gyre Therapeutics, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 56-2020050 (State or Other Jurisdi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 (Address of Principal Executive Offices) (Zip Code) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-51173 Gyre Therapeutics, Inc. (Exact Name of Registrant as Specified in its ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Table of Contents (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40413 Quipt Home Medical Corp. (Exact name of registrant as specified in its charter) British Columbia, Canada ...

[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary note regarding statements that involve risks and uncertainties about future events and financial performance [Part I — Financial Information](index=5&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Nauticus Robotics, Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, changes in stockholders' equity (deficit), and cash flows. It also includes detailed notes explaining the company's business, significant accounting policies, revenue recognition, debt, equity, and recent business combination [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and stockholders' equity (deficit) at specific points in time | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :------------------ | | **Assets** | | | | Total Current Assets | $7,966,766 | $4,320,782 | | Property and equipment, net | $22,238,369 | $17,115,246 | | Goodwill | $10,652,389 | $- | | **Total Assets** | **$41,881,281** | **$22,685,087** | | **Liabilities** | | | | Total Current Liabilities | $18,310,374 | $12,301,000 | | Total Liabilities | **$47,556,621** | **$43,082,500** | | **Stockholders' Deficit** | | | | Total Stockholders' Equity (Deficit) | **$(5,675,340)** | **$(20,397,413)** | - Total assets increased significantly from **$22.68 million** at December 31, 2024, to **$41.88 million** at June 30, 2025, primarily due to the acquisition of SeaTrepid International LLC, which introduced **$10.65 million** in goodwill and increased property and equipment[15](index=15&type=chunk)[16](index=16&type=chunk)[150](index=150&type=chunk) - The company's stockholders' deficit improved from **$(20.40) million** at December 31, 2024, to **$(5.68) million** at June 30, 2025, indicating a reduction in the negative equity position[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income or loss over specific 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 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $2,075,566 | $501,708 | $2,240,822 | $966,062 | | Total costs and expenses | $8,446,793 | $6,514,268 | $14,475,812 | $12,527,952 | | Operating loss | $(6,371,227) | $(6,012,560) | $(12,234,990) | $(11,561,890) | | Total other (income) expense, net | $1,082,949 | $(10,553,535) | $2,786,373 | $56,736,071 | | Net Income (loss) | $(7,454,176) | $4,540,975 | $(15,021,363) | $(68,297,961) | | Basic income (loss) per share | $(0.26) | $2.33 | $(0.53) | $(40.97) | | Diluted loss per share | $(0.26) | $(1.12) | $(0.53) | $(40.97) | - Revenue for the three months ended June 30, 2025, increased by **314%** to **$2,075,566** compared to **$501,708** in the same period of 2024, primarily driven by the SeaTrepid acquisition[18](index=18&type=chunk)[248](index=248&type=chunk) - The company reported a net loss of **$(7,454,176)** for the three months ended June 30, 2025, a significant decrease from the net income of **$4,540,975** in the prior year, largely influenced by changes in fair value of warrant liabilities and convertible debentures[18](index=18&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) [Condensed Consolidated Statements of Changes of Stockholders' Equity (Deficit)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20of%20Stockholders'%20Equity%20(Deficit)) This section outlines the changes in the company's equity or deficit over specific reporting periods, reflecting transactions with owners and net income/loss - Total Stockholders' Equity (Deficit) improved from **$(20,397,413)** at December 31, 2024, to **$(5,675,340)** at June 30, 2025[10](index=10&type=chunk) - Additional paid-in capital increased by approximately **$29.7 million** during the six months ended June 30, 2025, primarily due to ATM share offerings and conversion of notes payable to Common Stock[10](index=10&type=chunk)[167](index=167&type=chunk)[170](index=170&type=chunk) - The accumulated deficit increased by approximately **$15 million** during the six months ended June 30, 2025, reflecting the net loss for the period[10](index=10&type=chunk)[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the cash inflows and outflows from operating, investing, and financing activities for specific periods | Cash Flow Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(14,006,452) | $(15,051,198) | | Net cash (used in) provided by investing activities | $(3,919,731) | $74,580 | | Net cash provided by financing activities | $19,403,540 | $22,346,163 | | Net change in cash and cash equivalents | $1,477,357 | $7,369,545 | | Cash and cash equivalents, end of period | $2,663,404 | $8,122,943 | - Net cash used in operating activities decreased to **$(14.01) million** for the six months ended June 30, 2025, from **$(15.05) million** in the prior year, indicating a slight improvement in operational cash burn[22](index=22&type=chunk) - Investing activities shifted from providing **$74,580** in cash in 2024 to using **$(3.92) million** in 2025, primarily due to the acquisition of SeaTrepid and capital expenditures[22](index=22&type=chunk)[262](index=262&type=chunk) - Cash provided by financing activities decreased to **$19.40 million** in 2025 from **$22.35 million** in 2024, mainly from ATM share offerings[22](index=22&type=chunk)[261](index=261&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. Description of the Business](index=14&type=section&id=1.%20Description%20of%20the%20Business) This note describes Nauticus Robotics, Inc.'s core business, products, strategic acquisitions, and financial viability - Nauticus Robotics, Inc. develops ocean robots, cloud software, and services for the ocean industry, focusing on offshore energy and national security[26](index=26&type=chunk) - Key products include autonomous underwater vehicles (AUVs) like Aquanaut®, remotely operated vehicles (ROVs), robotic manipulators (Olympic Arm™), and the open robotic operating system Nauticus ToolKITT™[26](index=26&type=chunk)[27](index=27&type=chunk) - The strategic acquisition of SeaTrepid International LLC on March 20, 2025, aims to integrate Nauticus' AI-driven autonomy software into SeaTrepid's ROV fleet, enhancing operational performance and unlocking new service opportunities[28](index=28&type=chunk) - The company currently does not generate sufficient revenue to cover operating expenses and requires additional liquidity, which a current investor has committed to provide, supporting its going concern for at least one year[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies](index=14&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles, estimates, and assumptions used in preparing the financial statements - The financial statements are unaudited and prepared in accordance with SEC rules and GAAP, with interim results not necessarily indicative of full-year performance[30](index=30&type=chunk) - Significant estimates and assumptions are made for future costs on customer contracts, deferred income tax assets, stock-based compensation, and fair value of conversion options, warrants, earnouts, and the SeaTrepid acquisition[32](index=32&type=chunk)[34](index=34&type=chunk) - The functional currency for the foreign subsidiary changed from Brazilian Real to U.S. dollars effective January 1, 2025, due to changes in operational and economic circumstances[56](index=56&type=chunk) - Common stock warrants are classified as liabilities and revalued at each reporting date, with changes in fair value reported in the condensed consolidated statements of operations[58](index=58&type=chunk)[59](index=59&type=chunk) - The company elected the fair value option for New Convertible Debentures and November 2024 Debentures to provide greater transparency, with changes in fair value recognized in earnings[63](index=63&type=chunk)[64](index=64&type=chunk) [3. Revenue](index=19&type=section&id=3.%20Revenue) This note provides a breakdown of revenue by type and details related accounts receivable and unfulfilled performance obligations | Revenue Type | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost plus fixed fee | $2,075,566 | $- | $2,240,822 | $214,414 | | Firm fixed-price | $- | $501,708 | $- | $751,648 | | **Total Revenue** | **$2,075,566** | **$501,708** | **$2,240,822** | **$966,062** | - Total revenue for the three months ended June 30, 2025, increased by **314%** to **$2,075,566**, primarily from cost plus fixed fee services, compared to **$501,708** from firm fixed-price contracts in the prior year[77](index=77&type=chunk)[248](index=248&type=chunk) - Accounts receivable, net, significantly increased to **$2,283,131** as of June 30, 2025, from **$238,531** at December 31, 2024[78](index=78&type=chunk) - The company expects to recognize approximately **$180,000** of revenue in future periods from unfulfilled performance obligations as of June 30, 2025[82](index=82&type=chunk) [4. Prepaid Expenses and Other Current Assets](index=20&type=section&id=4.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note details the composition of prepaid expenses and other current assets | Category | June 30, 2025 | December 31, 2024 | | :---------------------- | :-------------- | :------------------ | | Prepaid material purchases | $395,554 | $394,950 | | Prepaid insurance | $798,317 | $817,717 | | Other prepayments | $252,505 | $176,767 | | **Total prepaid expenses** | **$1,446,376** | **$1,389,434** | | Other current assets | $607,491 | $573,275 | | **Total other current assets** | **$607,491** | **$573,275** | - Total prepaid expenses increased slightly to **$1,446,376** at June 30, 2025, from **$1,389,434** at December 31, 2024[84](index=84&type=chunk) [5. Property and Equipment](index=20&type=section&id=5.%20Property%20and%20Equipment) This note provides a breakdown of property and equipment, net of accumulated depreciation | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :------------------ | | Land | $444,435 | $- | | Leasehold improvements | $1,804,884 | $833,920 | | Property & equipment | $11,863,554 | $7,528,597 | | Technology hardware equipment | $1,969,841 | $1,966,841 | | Total | $16,082,714 | $10,329,358 | | Less accumulated depreciation | $(5,011,362) | $(3,958,780) | | Construction in progress | $11,167,017 | $10,744,668 | | **Total property and equipment, net** | **$22,238,369** | **$17,115,246** | - Net property and equipment increased by approximately **$5.1 million** to **$22,238,369** at June 30, 2025, primarily due to the acquisition of SeaTrepid, which added land, buildings, and machinery and equipment[85](index=85&type=chunk)[144](index=144&type=chunk)[250](index=250&type=chunk) [6. Accrued Liabilities](index=21&type=section&id=6.%20Accrued%20Liabilities) This note details the various accrued liabilities of the company | Category | June 30, 2025 | December 31, 2024 | | :---------------------- | :-------------- | :------------------ | | Accrued compensation | $450,847 | $956,399 | | Accrued severance | $336,538 | $1,031,731 | | Accrued professional fees | $150,000 | $2,350 | | Accrued insurance | $249,858 | $440,562 | | Accrued sales and property taxes | $400,630 | $428,801 | | Accrued royalties | $475,000 | $400,000 | | Accrued interest | $3,432,419 | $2,302,878 | | Accrued purchase liability | $3,537,963 | $- | | Other accrued expenses | $355,833 | $40,000 | | **Total accrued expenses** | **$9,389,088** | **$5,602,721** | - Total accrued liabilities increased by approximately **$3.79 million** to **$9,389,088** at June 30, 2025, primarily due to a **$3,537,963** accrued purchase liability related to the SeaTrepid acquisition[87](index=87&type=chunk) [7. Notes Payable](index=21&type=section&id=7.%20Notes%20Payable) This note provides details on the company's various notes payable, including fair value adjustments and conversions | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------- | :-------------- | :------------------ | | November 2024 debentures - fair value | $3,119,892 | $2,583,832 | | Convertible senior secured term loan | $25,287,311 | $27,500,383 | | SBA loan | $485,300 | $- | | Ameristate loan | $1,917,863 | $- | | **Total notes payable – long-term** | **$27,677,366** | **$28,935,530** | - Total notes payable (long-term) decreased slightly to **$27,677,366** at June 30, 2025, from **$28,935,530** at December 31, 2024[88](index=88&type=chunk) - The fair value of November 2024 Debentures increased to **$3,119,892** at June 30, 2025, from **$2,583,832** at December 31, 2024, with a reported loss on change in fair value of **$536,060** for the six months ended June 30, 2025[94](index=94&type=chunk) - During the six months ended June 30, 2025, ATW I and ATW II converted **$2,551,855** in principal and **$318,718** in interest from 2024 Term Loan notes into **1,805,392** shares of Common Stock[123](index=123&type=chunk)[214](index=214&type=chunk) - SBA and Ameristate loans, totaling **$485,300** and **$1,917,863** respectively, were assumed with the SeaTrepid acquisition and are classified as current liabilities due to the company's intent to repay them by December 31, 2025[124](index=124&type=chunk)[125](index=125&type=chunk) [8. Leases](index=27&type=section&id=8.%20Leases) This note provides information on the company's lease arrangements, including expenses and right-of-use assets | Lease Cost Category | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fixed lease expense | $122,318 | $122,798 | $244,636 | $259,443 | | Variable lease expense | $54,081 | $89,910 | $126,275 | $214,271 | | Short-term lease expense | $39,379 | $6,915 | $47,236 | $27,428 | | **Total lease expense** | **$215,778** | **$219,623** | **$418,147** | **$501,142** | - Total lease expense for the six months ended June 30, 2025, decreased to **$418,147** from **$501,142** in the prior year[133](index=133&type=chunk) - Operating lease right-of-use assets, net, decreased to **$900,292** at June 30, 2025, from **$1,094,743** at December 31, 2024[136](index=136&type=chunk) - The weighted average remaining lease term was **2.7 years** as of June 30, 2025, with a weighted average discount rate of **10.3%**[136](index=136&type=chunk) [9. Commitments and Contingencies](index=29&type=section&id=9.%20Commitments%20and%20Contingencies) This note addresses potential future obligations and legal matters that could impact the company's financial position - The company is not currently a party to any material legal proceedings, and no amounts have been accrued in the financial statements for such matters[138](index=138&type=chunk) [10. Business Combination](index=29&type=section&id=10.%20Business%20Combination) This note details the acquisition of SeaTrepid International LLC, including consideration and allocation of the purchase price - On March 20, 2025, Nauticus Robotics acquired SeaTrepid International LLC for a total consideration of **$14.4 million**, expanding its subsea robotic services[139](index=139&type=chunk) | Consideration/Allocation | Amount | | :-------------------------- | :------------- | | Cash consideration | $8,000,000 | | Earnout shares (fair value) | $6,864,729 | | Purchase price adjustment | $(512,037) | | **Total purchase price** | **$14,352,692** | | Goodwill | $10,652,389 | | Property and equipment acquired | $6,169,303 | | Notes payable assumed | $(2,437,743) | - The acquisition included a contingent consideration arrangement of **6,043,896** earnout shares, valued at approximately **$6.9 million**, subject to achieving **$4 million** in business revenue for the year ended December 31, 2025[141](index=141&type=chunk) - SeaTrepid contributed approximately **$2.21 million** in revenue and **$54,800** in net income to the company's consolidated financial statements for the six months ended June 30, 2025[145](index=145&type=chunk) [11. Goodwill](index=31&type=section&id=11.%20Goodwill) This note explains the goodwill recognized from the SeaTrepid acquisition and its tax implications - Goodwill of **$10,652,389** was recognized as a result of the SeaTrepid acquisition on March 20, 2025, representing expected synergies and assembled workforce[150](index=150&type=chunk) - The goodwill is not deductible for tax purposes, and no impairment indicators were identified through the second quarter of 2025[150](index=150&type=chunk)[151](index=151&type=chunk) [12. Income Taxes](index=31&type=section&id=12.%20Income%20Taxes) This note discusses the company's income tax expense and valuation allowance against deferred tax assets - No income tax expense was recognized for the three and six months ended June 30, 2025, or 2024[152](index=152&type=chunk) - The company maintains a full valuation allowance against its net deferred tax assets as of June 30, 2025, and December 31, 2024[152](index=152&type=chunk) [13. Equity](index=31&type=section&id=13.%20Equity) This note provides details on changes in the company's equity, including preferred and common stock, ATM offerings, and stock splits - Outstanding Series A Convertible Preferred Stock decreased from **35,034** shares at December 31, 2024, to **18,296** shares at June 30, 2025, due to conversions into Common Stock[153](index=153&type=chunk)[169](index=169&type=chunk) - Common Stock outstanding significantly increased to **37,404,948** shares at June 30, 2025, from **9,761,895** shares at December 31, 2024[166](index=166&type=chunk) - During the first quarter of 2025, the company issued **7,488,822** shares through ATM offerings, generating net proceeds of **$19,438,121**[167](index=167&type=chunk) - A **1-for-36** reverse stock split was effected on July 22, 2024, to meet NASDAQ bid price requirements, retroactively adjusting all share and per-share data[161](index=161&type=chunk)[165](index=165&type=chunk) - Earnout Shares related to the 2022 Merger, totaling **208,333** post-reverse split, remain in escrow as the stock price targets have not been achieved as of June 30, 2025[173](index=173&type=chunk)[174](index=174&type=chunk) [14. Warrants](index=33&type=section&id=14.%20Warrants) This note details the accounting treatment and fair value measurements of various types of warrants - Public Warrants, Private Warrants, and SPA Warrants are accounted for as liabilities and revalued at each reporting date[179](index=179&type=chunk)[181](index=181&type=chunk)[199](index=199&type=chunk) | Warrant Type | Fair Value as of June 30, 2025 | Fair Value as of December 31, 2024 | | :------------- | :----------------------------- | :--------------------------------- | | Public Warrants | $31,778 | $9,080 | | Private Warrants | $11,682 | $7,884 | | SPA Warrants | $96,322 | $164,949 | | **Total Warrant Liability** | **$139,782** | **$181,913** | - The company reported a loss in fair value of Public Warrants of **$11,465** for the three months ended June 30, 2025, and a gain of **$22,698** for the six months ended June 30, 2025[179](index=179&type=chunk) - The fair value of Private Warrants was estimated using a Black-Scholes model, resulting in a gain of **$1,179** for the three months ended June 30, 2025, and a loss of **$3,798** for the six months ended June 30, 2025[181](index=181&type=chunk) - The fair value of SPA Warrants was estimated using a Black-Scholes model, showing a gain of **$1,499** for the three months ended June 30, 2025, and a gain of **$68,627** for the six months ended June 30, 2025[199](index=199&type=chunk) [15. Stock-Based Compensation](index=36&type=section&id=15.%20Stock-Based%20Compensation) This note provides details on the stock-based compensation expense recognized by the company | Period | Stock-Based Compensation Expense | | :------------------------------- | :------------------------------- | | Three months ended June 30, 2025 | $257,334 | | Six months ended June 30, 2025 | $570,015 | | Three months ended June 30, 2024 | $809,310 | | Six months ended June 30, 2024 | $1,339,965 | - Total stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to the prior year, reflecting changes in equity incentive awards[201](index=201&type=chunk) [16. Employee Benefit Plan](index=36&type=section&id=16.%20Employee%20Benefit%20Plan) This note outlines the costs associated with the company's 401(k) employee benefit plan | Period | 401(k) Plan Cost | | :------------------------------- | :----------------- | | Three months ended June 30, 2025 | $61,231 | | Six months ended June 30, 2025 | $95,692 | | Three months ended June 30, 2024 | $48,261 | | Six months ended June 30, 2024 | $103,265 | - The company's cost for the 401(k) plan increased for the three months ended June 30, 2025, but slightly decreased for the six months ended June 30, 2025, compared to the same periods in 2024[202](index=202&type=chunk) [17. Related Party Transactions](index=37&type=section&id=17.%20Related%20Party%20Transactions) This note discloses transactions and relationships with related parties, including significant investors and management - ATW I, ATW II, ATW III, MIF, and SLS are considered related parties due to their significant influence and consent requirements on material transactions[204](index=204&type=chunk) - Related parties hold SPA Warrants, November 2024 Debentures, and are lenders in Convertible Senior Secured Term Loans[204](index=204&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - During the six months ended June 30, 2025, ATW I and SLS converted Series A Preferred Shares into Common Stock, and ATW I and ATW II converted 2024 Term Loan notes into Common Stock[209](index=209&type=chunk)[214](index=214&type=chunk) | Related Party | Principal Amount Outstanding (June 30, 2025) | | :-------------- | :------------------------------------------- | | ATW I | $1,643,933 | | ATW II | $4,404,211 | | ATW III | $1,155,306 | | MIF | $4,309,674 | - Flexible Consulting, LLC, co-owned by the Interim CFO, provided **$319,726** in services for the six months ended June 30, 2025, with **$45,000** due at period-end[216](index=216&type=chunk) [18. Loss Per Share](index=39&type=section&id=18.%20Loss%20Per%20Share) This note presents the calculation of basic and diluted loss per share, including anti-dilutive securities | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) for basic EPS | $(7,454,176) | $4,540,975 | $(15,021,363) | $(68,297,961) | | Basic weighted average shares outstanding | 29,007,029 | 1,950,563 | 28,231,536 | 1,667,187 | | Diluted weighted average shares outstanding | 29,007,029 | 5,364,395 | 28,231,536 | 1,667,187 | | Basic loss per share | $(0.26) | $2.33 | $(0.53) | $(40.97) | | Diluted loss per share | $(0.26) | $(1.12) | $(0.53) | $(40.97) | - Basic and diluted loss per share for the three months ended June 30, 2025, was **$(0.26)**, compared to basic income per share of **$2.33** and diluted loss per share of **$(1.12)** in the prior year[220](index=220&type=chunk) - Weighted average shares outstanding for basic EPS increased significantly to **29,007,029** for the three months ended June 30, 2025, from **1,950,563** in the prior year, reflecting equity issuances and conversions[220](index=220&type=chunk) - Anti-dilutive securities excluded from shares outstanding as of June 30, 2025, totaled **32,768,470**, including warrants, earnout shares, convertible debt, and Series A Convertible Preferred Stock[220](index=220&type=chunk) [19. Fair Value Measurements](index=40&type=section&id=19.%20Fair%20Value%20Measurements) This note describes the company's fair value measurements for financial and non-financial assets and liabilities, categorized by input levels - The company measures certain financial and non-financial assets and liabilities at fair value, categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[222](index=222&type=chunk)[227](index=227&type=chunk) - November 2024 Debentures, Private Warrants, and SPA Warrants are classified as Level 3 measurements due to the use of significant unobservable inputs in their valuation models (e.g., Monte Carlo simulation, Black-Scholes)[223](index=223&type=chunk)[224](index=224&type=chunk) | Financial Liability | Fair Value (Level 3) as of June 30, 2025 | Fair Value (Level 3) as of December 31, 2024 | | :-------------------------- | :--------------------------------------- | :----------------------------------------- | | November 2024 Debentures | $3,119,892 | $2,583,832 | | Private Warrants | $11,682 | $7,884 | | SPA Warrants | $96,322 | $164,949 | | **Total Level 3 Liabilities** | **$3,227,896** | **$2,756,665** | - Fair value of earnout shares related to the SeaTrepid acquisition was measured at **$6,864,729** using a Monte Carlo simulation model with Level 3 inputs[225](index=225&type=chunk)[229](index=229&type=chunk) [20. Subsequent Events](index=41&type=section&id=20.%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period but before the financial statements were issued - As of the filing date, the company issued and sold **2,008,713** shares through an ATM offering, generating net proceeds of **$1,941,956**[230](index=230&type=chunk)[232](index=232&type=chunk) - On August 8, 2025, the company closed a Securities Purchase Agreement with a related party institutional investor, issuing **3,000** shares of Series B Convertible Preferred Stock for **$2,940,000**[232](index=232&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Nauticus Robotics, Inc.'s financial condition and results of operations for the three and six months ended June 30, 2025, compared to the same periods in 2024. It covers an overview of the business, recent developments, market environment, operational performance, and a detailed analysis of revenue, costs, and liquidity [Overview](index=43&type=section&id=Overview) This section provides a high-level summary of Nauticus Robotics' business, core products, and strategic initiatives - Nauticus Robotics develops ocean robots, cloud software, and intelligent services for offshore energy, environmental monitoring, and defense, with a portfolio including AUVs (AQUANAUT®), ROVs, robotic manipulators (Olympic Arm™), and the Nauticus ToolKITT™ software platform[234](index=234&type=chunk)[235](index=235&type=chunk) - The acquisition of SeaTrepid on March 20, 2025, is intended to expand the operational fleet, enhance service capacity, and enable cross-selling by integrating Nauticus ToolKITT™ into SeaTrepid's ROV operations[236](index=236&type=chunk) [Recent Developments](index=43&type=section&id=Recent%20Developments) This section highlights key operational and strategic achievements and milestones during the reporting period - Successfully launched the 2025 offshore season with multiple ROV deployments, including a long-term drill support contract and environmental operations - AQUANAUT® is now integrated into commercial operations, marking a critical milestone for scaled revenue - Technology received significant visibility at industry conferences, highlighting growing influence in subsea autonomy - SeaTrepid integration is delivering tangible results, expanding customer base and increasing utilization - Announced collaboration with Open Ocean Robotics to pair AQUANAUT® with solar-powered uncrewed surface vessels for cost-efficient, lower-carbon solutions - Signed a multi-year master services agreement with Advanced Ocean Systems (AOS) to test integrated subsea and surface autonomy solutions[240](index=240&type=chunk) [Market Environment and Outlook](index=43&type=section&id=Market%20Environment%20and%20Outlook) This section discusses the current market conditions and future prospects relevant to the company's operations and growth - The offshore energy market remains robust, with high vessel and subsea asset utilization in the Gulf of Mexico[237](index=237&type=chunk) - Adoption of autonomous subsea robotics is accelerating, driven by customer priorities for safety, efficiency, and data quality, creating tailwinds for AQUANAUT® and Nauticus ToolKITT™[238](index=238&type=chunk) - Defense sector engagement is gaining momentum through partnerships, positioning the company for future contracts[239](index=239&type=chunk) - The near-term pipeline is strong, supported by active contracts, prospective projects in multiple basins, and international interest[241](index=241&type=chunk) [Operational Performance and Product Advancement](index=44&type=section&id=Operational%20Performance%20and%20Product%20Advancement) This section reviews the company's operational achievements and progress in product development and commercialization - Service revenue was primarily driven by SeaTrepid's ROV operations, with cross-selling of AQUANAUT®, Olympic Arm™, and Nauticus ToolKITT™ beginning to take hold among SeaTrepid's customers[242](index=242&type=chunk) - AQUANAUT® is integrated into commercial environmental contracts, with hardware refinements expected to improve reliability and performance[243](index=243&type=chunk) - Nauticus ToolKITT™ is nearing full commercial deployment, with external testing underway and discussions with customers to integrate it into their ROV fleets[243](index=243&type=chunk) - Market demand for the compact, fully electric Olympic Arm™ manipulator remains strong as its development matures[244](index=244&type=chunk) [Conclusion](index=44&type=section&id=Conclusion) This section summarizes the key achievements and strategic positioning of the company during the reporting period - The first half of 2025 saw decisive execution, including SeaTrepid integration, fleet expansion, advancement of core products (AQUANAUT®, Nauticus ToolKITT™, Olympic Arm™) towards commercialization, and strategic alliances[245](index=245&type=chunk) - Nauticus is well-positioned for growth with a strong ROV services pipeline, increasing adoption of autonomous solutions, and anticipated scaling of AQUANAUT® revenue in the second half of the year[246](index=246&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, including revenue, cost of revenue, and operating expenses | Metric | 3M Ended Jun 30, 2025 | 3M Ended Jun 30, 2024 | Change ($) | Change (%) | 6M Ended Jun 30, 2025 | 6M Ended Jun 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :-------------------- | :-------------------- | :--------- | :--------- | :-------------------- | :-------------------- | :--------- | :--------- | | Revenue | $2,075,566 | $501,708 | $1,573,858 | 314% | $2,240,822 | $966,062 | $1,274,760 | 132% | | Cost of revenue | $3,504,043 | $2,875,394 | $628,649 | 22% | $4,743,000 | $4,969,349 | $(226,349) | -5% | | Depreciation | $574,563 | $411,586 | $162,977 | 40% | $1,054,939 | $837,771 | $217,168 | 26% | | R&D | $- | $- | $- | 0% | $- | $63,534 | $(63,534) | -100% | | G&A | $4,368,187 | $3,227,288 | $1,140,899 | 35% | $8,677,873 | $6,657,298 | $2,020,575 | 30% | | Operating loss | $(6,371,227) | $(6,012,560) | $358,667 | 6% | $(12,234,990) | $(11,561,890) | $673,100 | 6% | | Net income (loss) | $(7,454,176) | $4,540,975 | $11,995,151 | -264% | $(15,021,363) | $(68,297,961) | $(53,276,598) | -78% | - Revenue increased significantly by **314%** for the three months and **132%** for the six months ended June 30, 2025, primarily due to the SeaTrepid acquisition[248](index=248&type=chunk) - Research and development costs decreased by **100%** for the six months ended June 30, 2025, as the company achieved technological feasibility and focused on product commercialization[251](index=251&type=chunk) - General and administrative costs increased by **35%** and **30%** for the three and six months, respectively, due to SeaTrepid acquisition-related costs and integration[252](index=252&type=chunk) - Net loss for the six months ended June 30, 2025, improved to **$(15,021,363)** from **$(68,297,961)** in the prior year, largely due to the absence of a large loss on extinguishment of debt seen in 2024[248](index=248&type=chunk)[255](index=255&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its short-term and long-term financial obligations and its sources of funding - The company does not generate sufficient revenue to cover operating expenses and requires additional liquidity, which a current investor has committed to provide, ensuring sufficient resources for at least one year[259](index=259&type=chunk) - Cash and cash equivalents stood at **$2,663,404** as of June 30, 2025[260](index=260&type=chunk) - Sources of cash: **$19,403,540** net proceeds from ATM share offering - Uses of cash: **$14,006,452** in operating activities (including **$2,067,289** for working capital increase), and **$3,919,731** in investing activities (primarily SeaTrepid acquisition and capital expenditures)[261](index=261&type=chunk)[262](index=262&type=chunk) [Critical Accounting Policies and Estimates](index=47&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the accounting policies that require significant management judgment and are crucial to the financial statements - The company's critical accounting estimates involve significant management judgments and assumptions, which are susceptible to material changes based on evolving facts and circumstances[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not required for smaller reporting companies - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[264](index=264&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures, identifying material weaknesses in internal control over financial reporting, and outlining the remediation plan [Evaluation of disclosure controls and procedures](index=47&type=section&id=Evaluation%20of%20disclosure%20controls%20and%20procedures) This section assesses the effectiveness of the company's controls designed to ensure timely and accurate financial reporting - As of June 30, 2025, the company's disclosure controls and procedures were deemed not effective due to previously disclosed material weaknesses[266](index=266&type=chunk) - Despite the material weakness, management performed additional analyses and procedures to conclude that the unaudited condensed consolidated financial statements fairly present the financial position, results of operations, and cash flows in conformity with GAAP[266](index=266&type=chunk) [Previously identified material weakness](index=47&type=section&id=Previously%20identified%20material%20weakness) This section describes the significant deficiencies in internal control over financial reporting identified in prior periods - In 2021, a material weakness was identified due to a lack of qualified accounting and financial reporting personnel and inadequate procedures for the accounting close process - In 2024, additional material weaknesses were identified related to ineffective design and operation of controls over significant complex transactions (leading to restatements) and failure to remediate user access controls[268](index=268&type=chunk)[270](index=270&type=chunk) [Remediation Plan](index=48&type=section&id=Remediation%20Plan) This section outlines the steps the company is taking to address and correct the identified material weaknesses in internal control - The company is implementing a formal Significant and Complex Transaction review process, involving third-party experts, to ensure proper accounting treatment - User access controls and segregation of duties for critical accounting systems are being designed and implemented, supported by formal policies and IT personnel training, with full implementation expected by the end of 2025[271](index=271&type=chunk) [Changes in internal control over financial reporting](index=48&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting) This section reports on any changes in internal control over financial reporting that occurred during the reporting period - During the fiscal quarter ended June 30, 2025, no other material changes in internal control over financial reporting were identified, apart from the ongoing remediation efforts[271](index=271&type=chunk) [Inherent limitation on the effectiveness of internal control](index=48&type=section&id=Inherent%20limitation%20on%20the%20effectiveness%20of%20internal%20control) This section acknowledges that even effective internal control systems have inherent limitations that can prevent them from detecting all misstatements - The effectiveness of any internal control system is subject to inherent limitations, including judgment in design and operation, resource constraints, and the inability to eliminate misconduct completely[272](index=272&type=chunk) [Part II — Other Information](index=49&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is not currently involved in any material legal proceedings - The company is not a party to any material legal proceedings in the normal course of business, and no amounts have been accrued in the financial statements for such matters[275](index=275&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes occurred in the 'Risk Factors' during the three months ended June 30, 2025, as set forth in the Annual Report on Form 10-K for the year ended December 31, 2024[276](index=276&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on unregistered sales of equity securities during the second quarter of 2025 - In the second quarter of 2025, the company issued **1,781,983** shares to ATW and **363,167** shares to SLS upon their conversions of Series A Preference Stock[277](index=277&type=chunk) [Item 3. Defaults upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section states that there were no defaults upon senior securities - There were no defaults upon senior securities during the reporting period[278](index=278&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to Nauticus Robotics, Inc[279](index=279&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) This section provides information on trading plans of directors and Section 16 officers - No director or Section 16 officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[280](index=280&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including certificates of incorporation, bylaws, certifications, and XBRL documents - The exhibits include the Second Amended and Restated Certificate of Incorporation, Certificate of Amendment, Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock, Amended and Restated Bylaws, and certifications from the CEO and CFO[282](index=282&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) This section contains the required signatures of the company's authorized officers, certifying the accuracy of the report