[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited statements show asset growth to $842.5 million and a net income increase to $7.3 million for the six months ended June 30, 2025 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew 13.0% to $842.5 million, driven by loan portfolio expansion and funded by a 16.6% increase in deposits - Total assets increased by **13.0%** to **$842.5 million** as of June 30, 2025, from $746.0 million at December 31, 2024, primarily driven by a **60.8% increase in Strategic Program loans held-for-sale** and a **13.1% increase in loans held-for-investment**[16](index=16&type=chunk) - Total deposits grew by **16.6%** to **$635.2 million**, funded mainly by an increase in interest-bearing deposits, while total shareholders' equity rose to **$182.0 million** from $173.7 million[16](index=16&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$842,488** | **$745,976** | | Total cash and cash equivalents | $90,100 | $109,162 | | Strategic Program loans held-for-sale | $147,282 | $91,588 | | Loans held-for-investment, net | $506,503 | $447,812 | | **Total Liabilities** | **$660,529** | **$572,256** | | Total deposits | $635,174 | $544,952 | | **Total Shareholders' Equity** | **$181,959** | **$173,720** | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Net income rose 12.2% year-over-year to $7.3 million, propelled by a 67.6% surge in non-interest income - **Net income** for the six months ended June 30, 2025, increased by **12.2%** year-over-year to **$7.3 million**, driven by a **67.6% surge in non-interest income** that offset higher credit loss provisions and non-interest expenses[18](index=18&type=chunk) - For Q2 2025, **non-interest income more than doubled to $10.3 million** from $5.2 million in Q2 2024, primarily due to a significant increase in credit enhancement income and gain on sale of loans[18](index=18&type=chunk) Key Income Statement Data (in thousands, except EPS) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Interest Income | $29,008 | $28,621 | | Provision for credit losses | $8,062 | $5,539 | | Total Non-interest Income | $18,147 | $10,828 | | Total Non-interest Expense | $29,230 | $25,223 | | **Net Income** | **$7,286** | **$6,495** | | **Diluted EPS** | **$0.52** | **$0.49** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail business operations through subsidiaries, a stock repurchase program, and a post-quarter data breach with related litigation - The company operates through its subsidiaries, FinWise Bank and FinWise Investment, LLC, with the Bank providing solutions to fintech brands and originating loans through third-party Strategic Programs[33](index=33&type=chunk) - A stock repurchase program was authorized on March 6, 2024, to purchase up to 641,832 shares; as of June 30, 2025, **44,608 shares have been repurchased for $0.5 million**, with no repurchases in Q2 2025[38](index=38&type=chunk) - Subsequent to the quarter end, the company notified approximately **600,000 individuals of a data breach** and is now facing class action lawsuits, though management believes any related losses will not be material[147](index=147&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Asset and net income growth were driven by Strategic Program loans, though net interest margin compressed and credit loss provisions increased [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Net income grew 12.2% despite a compressed net interest margin, driven by a 67.6% increase in non-interest income - **Net interest margin (NIM) decreased to 8.03%** for the six months ended June 30, 2025, from 10.19% in the prior-year period, due to loan repricing and a strategic shift to higher quality, lower-yielding loans[160](index=160&type=chunk)[161](index=161&type=chunk) - **Non-interest income** for the first six months of 2025 **grew by 67.6% YoY**, primarily due to higher Strategic Program fees, a significant increase in credit enhancement income, and higher gains on the sale of SBA loans[169](index=169&type=chunk) - **Non-interest expense rose 15.9% YoY** for the first six months of 2025, mainly due to a **25.6% increase in salaries and employee benefits** from increased headcount and compensation adjustments[171](index=171&type=chunk) Net Income Components Comparison (in thousands) | Component | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | $29,008 | $28,621 | 1.4% | | Provision for credit losses | ($8,062) | ($5,539) | 45.5% | | Non-interest income | $18,147 | $10,828 | 67.6% | | Non-interest expense | ($29,230) | ($25,223) | 15.9% | | **Net income** | **$7,286** | **$6,495** | **12.2%** | [Financial Condition](index=47&type=section&id=Financial%20Condition) Total assets grew 12.9% to $842.5 million, led by increases in Strategic Program and held-for-investment loans - **Total assets grew by $96.5 million (12.9%) to $842.5 million** at June 30, 2025, from year-end 2024, led by a **$55.7 million increase in Strategic Program loans held-for-sale** and a **$58.7 million increase in loans held-for-investment**[174](index=174&type=chunk) - **Nonperforming assets increased to $39.7 million** as of June 30, 2025, from $36.5 million at year-end 2024; however, **$21.2 million of these are SBA 7(a) loan balances guaranteed by the SBA**[198](index=198&type=chunk) - The **Allowance for Credit Losses (ACL) increased to $16.2 million (3.1% of total loans)** from $13.2 million (2.8% of total loans) at year-end, driven by growth in credit-enhanced Strategic Program loans[216](index=216&type=chunk)[217](index=217&type=chunk) Loan Portfolio Composition (Gross, in thousands) | Loan Category | June 30, 2025 | % of Total | Dec 31, 2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | SBA | $246,903 | 46.6% | $255,056 | 54.8% | | Commercial leases | $88,957 | 16.8% | $70,153 | 15.1% | | Commercial real estate (Owner occupied) | $77,871 | 14.7% | $41,046 | 8.8% | | Residential real estate | $54,132 | 10.2% | $51,574 | 11.1% | | Strategic Program loans | $30,699 | 5.8% | $20,122 | 4.3% | | Other | $33,482 | 6.3% | $27,281 | 5.9% | | **Total Loans Held-for-Investment** | **$530,044** | **100.0%** | **$465,233** | **100.0%** | [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and a 'well-capitalized' status, with a leverage ratio of 18.0% - The primary source of funding is deposits, which **increased by $90.2 million** since year-end 2024, mainly through brokered time deposits to fund loan growth[222](index=222&type=chunk)[223](index=223&type=chunk) - The company maintains significant liquidity sources, including **$90.1 million in cash**, a **$257.6 million line with the Federal Reserve Bank**, and a **$24.9 million line with the FHLB**, with no outstanding balances[230](index=230&type=chunk)[231](index=231&type=chunk) - The Bank remains **'well-capitalized'** under the Community Bank Leverage Ratio (CBLR) framework, with a **leverage ratio of 18.0%** as of June 30, 2025, well above the 9.0% requirement[91](index=91&type=chunk)[236](index=236&type=chunk) Key Performance Ratios | Ratio | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Return on Average Equity | 9.2% | 7.9% | | Return on Average Assets | 2.0% | 2.1% | | Total Equity to Total Assets | 21.6% | 23.3% (as of 12/31/24) | [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is asset-sensitive, with a +100 basis point rate shock projected to increase net interest income by 2.7% - The company's Asset/Liability Management Committee (ALCO) manages interest rate risk by structuring the balance sheet and **does not use leveraged derivatives, options, or futures contracts** for this purpose[254](index=254&type=chunk)[255](index=255&type=chunk) Earnings at Risk (EAR) Analysis as of June 30, 2025 | Interest Rate Shock | Impact on Net Interest Income | | :--- | :--- | | +300 bps | +8.7% | | +200 bps | +5.8% | | +100 bps | +2.7% | | -100 bps | (2.0)% | | -200 bps | (4.5)% | [Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that **disclosure controls and procedures were effective** as of the end of the period covered by the report[257](index=257&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[258](index=258&type=chunk) [PART II. OTHER INFORMATION](index=68&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any material legal proceedings outside the ordinary course of business - The company is not subject to any material legal proceedings, only claims and litigation from the ordinary course of business[260](index=260&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor regarding counterparty default in credit enhancement arrangements for Strategic Program loans has been identified - A new risk factor highlights the **counterparty risk from credit enhancement agreements** with Strategic Program service providers; if a provider defaults on its obligation to reimburse for credit or fraud losses, the Bank would assume that risk[263](index=263&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased in the quarter, with 597,224 shares remaining available under the current program - **No shares of common stock were repurchased** during the three months ended June 30, 2025; there are **597,224 shares remaining for repurchase** under the current program[264](index=264&type=chunk) [Other Information](index=68&type=section&id=Item%205.%20Other%20Information) No directors or officers engaged in changes to Rule 10b5-1(c) trading arrangements during the quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1(c) trading arrangement during the quarter[267](index=267&type=chunk) [Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including bylaws, stock plans, and officer certifications - Exhibits filed include Amended and Restated Bylaws, the 2019 and 2016 Stock Plans, and certifications from the Principal Executive Officer and Principal Financial Officer[270](index=270&type=chunk)

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, revealing a **$32.2 million** net loss for Q2 2025, primarily due to a **$34.0 million** impairment charge, and a shift to a **$4.7 million** stockholders' deficit Condensed Consolidated Balance Sheet Highlights | Account | June 30, 2025 ($M) | December 31, 2024 ($M) | | :--- | :--- | :--- | | **Total Assets** | **$712.3** | **$755.2** | | Cash | $44.7 | $85.3 | | Inventory, net | $274.9 | $240.6 | | Franchise rights and other intangible assets | $127.8 | $161.9 | | **Total Liabilities** | **$717.0** | **$718.5** | | Vehicle floor plan notes payable | $240.2 | $209.9 | | Long-term debt, net of current maturities | $218.0 | $212.0 | | **Total Stockholders' Equity (Deficit)** | **($4.7)** | **$36.7** | Condensed Consolidated Statement of Operations Highlights (Q2) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | | :--- | :--- | :--- | | Total Revenue | $299.9 | $336.8 | | Gross Profit | $83.9 | $89.9 | | Impairment of franchise rights | $34.0 | $0.0 | | Operating Income (Loss) | ($18.8) | $15.4 | | Net Loss | ($32.2) | ($0.7) | | Net Loss Per Share | ($0.85) | ($0.02) | Condensed Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 ($M) | 2024 ($M) | | :--- | :--- | :--- | | Net cash provided by operating activities | $4.0 | $29.2 | | Net cash used in investing activities | ($2.9) | ($1.4) | | Net cash used in financing activities | ($38.0) | ($33.7) | | **Net Change in Cash and Restricted Cash** | **($36.9)** | **($5.9)** | - The company operates through powersports dealership and vehicle transportation services segments, and will change its name to **RideNow Group, Inc.** (ticker **RDNW**) effective August 13, 2025[17](index=17&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - A **$34.0 million** impairment charge on franchise rights was recorded in Q2 2025, driven by economic uncertainty and depressed stock price, significantly contributing to the quarterly operating loss[33](index=33&type=chunk)[34](index=34&type=chunk) - Post-quarter, on August 10, 2025, the Term Loan Credit Agreement was amended, extending maturity to September 2027, and **$10.0 million** in subordinated loans were secured from related parties to prepay senior debt[40](index=40&type=chunk)[59](index=59&type=chunk)[77](index=77&type=chunk) - The company is subject to an SEC investigation initiated in June 2024 concerning former CEO's resource use and related-party transactions, and is defending a lawsuit from the former CEO seeking over **$57.5 million** in damages[71](index=71&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q2 and H1 2025 financial performance, noting an **11.0%** revenue decline, a **$32.2 million** net loss driven by impairment, and recent debt restructuring for flexibility Overall Results of Operations (Q2) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $299.9 | $336.8 | (11.0)% | | Total Gross Profit | $83.9 | $89.9 | (6.7)% | | SG&A Expenses | $66.7 | $71.4 | (6.6)% | | Impairment of franchise rights | $34.0 | $0.0 | NM | | Operating Income (Loss) | ($18.8) | $15.4 | (222.1)% | | Net Loss | ($32.2) | ($0.7) | NM | - The Vehicle Transportation Services segment's revenue plummeted **91.4%** year-over-year in Q2 2025, primarily due to the departure of key employees, including most brokers, early in the year[99](index=99&type=chunk) - Powersports segment revenue decreased by **$23.0 million** in Q2 2025, driven by lower new retail unit sales volume, partially offset by increased pre-owned retail vehicle volume[96](index=96&type=chunk) - In August 2025, the company extended its term loan maturity to September 2027 and secured **$10.0 million** in new subordinated loans to prepay **$20.0 million** of senior debt, projected to reduce annual cash interest payments by **$3.4 million**[83](index=83&type=chunk)[84](index=84&type=chunk)[112](index=112&type=chunk) Liquidity Resources | Resource | June 30, 2025 ($M) | Dec 31, 2024 ($M) | | :--- | :--- | :--- | | Cash | $44.7 | $85.3 | | Restricted cash | $15.1 | $11.4 | | Availability under powersports inventory financing | $125.9 | $146.2 | | **Committed liquidity resources available** | **$185.7** | **$242.9** | [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company qualifies as a smaller reporting company - As a smaller reporting company, RumbleOn, Inc. is not required to provide disclosures under this item[121](index=121&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of June 30, 2025, due to a material weakness in IT system user access and segregation of duties, with remediation underway - The CEO and Interim CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025[123](index=123&type=chunk) - Ineffectiveness stems from a material weakness in user access and segregation of duties within IT systems supporting financial reporting processes[123](index=123&type=chunk)[124](index=124&type=chunk) - Management's remediation plan includes enhancing system access review processes and improving governance and reporting over these controls[126](index=126&type=chunk)[129](index=129&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company faces an SEC investigation regarding former CEO's resource use and related-party transactions, alongside a **$57.5 million** lawsuit from the former CEO for wrongful termination - On June 28, 2024, the company received an SEC subpoena for an investigation covering January 1, 2021, onwards, related to the former CEO, related-party transactions, and disclosures[132](index=132&type=chunk) - The former CEO, Marshall Chesrown, is suing the company in Delaware Superior Court, seeking **$7.5 million** in termination compensation and **$50.0 million** in general and reputational damages[134](index=134&type=chunk) - The company cannot predict the outcome or timing of the SEC investigation or the litigation with its former CEO, but intends to vigorously defend the claims[133](index=133&type=chunk)[135](index=135&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - No material changes to the risk factors previously disclosed in the company's 2024 10-K have occurred[136](index=136&type=chunk) [Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[137](index=137&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including name change, executive agreements, stock plan amendments, and debt restructuring documents - Key exhibits filed include: - Certificate of Amendment for the name change to **RideNow Group, Inc.** - Amendment No. 10 to the Term Loan Credit Agreement - Form of Commitment Letter for the subordinated loans - Certifications by the Principal Executive Officer and Principal Financial Officer[138](index=138&type=chunk)

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) Spruce Power reported strong Q2 2025 results, with **revenue up 48% to $33.2 million** and **Operating EBITDA up 71% to $24.6 million**, reflecting strategic progress | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenues | $33.2 million | +48% | | Operating EBITDA | $24.6 million | +71% | | O&M Expense | $2.1 million | -52% | | Net Loss Attributable to Stockholders | $3.0 million | Improved from $8.6M loss | | Total Cash Balance (as of June 30, 2025) | $90.5 million | - | | Adjusted Cash Flow generated in Operations | $9.5 million | +245% | - The company's primary strategic initiatives are scaling its portfolio of solar installations and prudently containing costs, with a key objective of generating **positive free cash flow**[3](index=3&type=chunk) - Spruce's business model as a third-party owner of existing residential solar systems generates **stable, high-margin recurring revenue** and is expected to have **minimal impact** from the H.R. 1 tax reconciliation bill[3](index=3&type=chunk)[5](index=5&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) Q2 2025 revenue increased to **$33.2 million** from **$22.5 million** YoY, driven by portfolio acquisition and SREC revenue, narrowing net loss to **$3.0 million** | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $33.2 million | $22.5 million | | Total Operating Expenses | $24.3 million | $25.8 million | | Net Loss Attributable to Stockholders | $3.0 million | $8.6 million | - The year-over-year revenue increase was primarily due to the **acquisition of a residential solar portfolio** from NJR Clean Energy Ventures and **improved solar renewable energy credits (SRECs) revenue**[6](index=6&type=chunk) - The decrease in operating expenses was mainly driven by **lower O&M costs**, which fell from **$4.5 million to $2.1 million** YoY, due to **operational efficiencies** and the near completion of **meter upgrade efforts**[8](index=8&type=chunk) [Financial Position and Capital Management](index=3&type=section&id=Financial%20Position%20and%20Capital%20Management) As of June 30, 2025, Spruce Power maintained a solid financial position with **$90.5 million in cash** and **$717.1 million in non-recourse project finance debt**, repurchasing **$1.0 million** in common stock | Metric | As of June 30, 2025 | | :--- | :--- | | Total Cash | $90.5 million | | - Cash and cash equivalents | $53.5 million | | - Restricted cash | $36.9 million | | Total Principal Debt | $717.1 million | | Blended Interest Rate | 6.1% | - All company debt consists of project finance loans that are **non-recourse** to the Company itself, meaning they are incurred at the project level[10](index=10&type=chunk) - In Q2 2025, the company **repurchased 479,667 shares for $1.0 million**, with **$42.0 million remaining** under the authorized $50.0 million share repurchase program[13](index=13&type=chunk) [Key Operating Metrics](index=4&type=section&id=Key%20Operating%20Metrics) As of Q2 2025, Spruce Power owns cash flows from approximately **85,000 home solar assets** with an **11-year average contract life**, generating **187 thousand MWh** and a Gross Portfolio Value (PV6) of **$887.0 million** | Operating Metric | Value (as of June 30, 2025) | | :--- | :--- | | Owned Home Solar Assets & Contracts | ~85,000 | | Serviced 3rd Party Systems | ~60,000 | | Average Remaining Contract Life | ~11 years | | Q2 2025 Portfolio Generation | ~187 thousand MWh | | Gross Portfolio Value (PV6) | $887.0 million | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) This section defines key non-GAAP financial measures, including **Operating EBITDA** and **Adjusted Cash Flow from Operations**, and explains Portfolio Value Metrics like **Contracted Portfolio Value** and **Renewal Portfolio Value** based on a **6% discount rate** - **Operating EBITDA:** Defined as Adjusted EBITDA plus net proceeds from master lease agreements, proceeds from contract buyouts/prepayments, and interest earned on cash investments[23](index=23&type=chunk) - **Adjusted Cash Flow from Operations:** Defined as cash from operations adjusted for recurring proceeds from the SEMTH master lease and sales of solar energy systems, as well as non-recurring legal settlements[24](index=24&type=chunk) | Portfolio Value Metric | Value (as of June 30, 2025) | | :--- | :--- | | Contracted Portfolio Value | $745 million | | Renewal Portfolio Value | $91 million | | Uncontracted Renewable Energy Credits | $51 million | | **Gross Portfolio Value** | **$887 million** | [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q2 2025, including the **Statement of Operations** and **Balance Sheet**, and reconciliations for key non-GAAP measures [Condensed Consolidated Statements of Operations](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenues reached **$33.2 million**, with net loss attributable to stockholders at **$3.0 million**, or **($0.17) per share**, significantly improving from Q2 2024 | (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenues | $33,239 | $22,481 | | Total operating expenses | $24,337 | $25,841 | | Income (loss) from operations | $8,902 | $(3,360) | | Net loss | $(2,867) | $(8,573) | | Net loss attributable to stockholders | $(2,966) | $(8,578) | | Net loss per share, basic and diluted | $(0.17) | $(0.45) | [Condensed Consolidated Balance Sheets](index=16&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Spruce Power reported total assets of **$862.6 million**, total liabilities of **$735.2 million**, and total stockholders' equity of **$125.0 million**, including **$53.5 million** in cash | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $53,511 | $72,802 | | Total current assets | $119,300 | $136,430 | | Total assets | $862,631 | $898,479 | | **Liabilities & Equity** | | | | Total current liabilities | $239,485 | $59,569 | | Total liabilities | $735,221 | $752,327 | | Total stockholders' equity | $124,987 | $143,714 | | Total liabilities & equity | $862,631 | $898,479 | [Reconciliation of Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, highlighting Q2 2025 **Operating EBITDA of $24.6 million**, **Adjusted Cash Flow from Operations of $9.5 million**, and **Core Operating Expenses of $17.2 million** Reconciliation of Net Loss to Operating EBITDA (Q2) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss attributable to stockholders | $(2,966) | $(8,578) | | EBITDA | $11,322 | $(1,261) | | Adjusted EBITDA | $17,430 | $5,402 | | **Operating EBITDA** | **$24,641** | **$14,443** | Reconciliation of Adjusted Cash Flow from Operations (Q2) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,343) | $(5,115) | | **Adjusted Cash Flow from Operations** | **$9,547** | **$2,764** | Calculation of Core Operating Expenses (Q2) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | O&M Expense | $2,137 | $4,474 | | SG&A Expense | $15,099 | $16,701 | | **Core operating expenses** | **$17,236** | **$21,175** | [Supplemental Information](index=4&type=section&id=Supplemental%20Information) This section provides details on the investor conference call, an overview of Spruce Power's business as a leading distributed solar energy asset owner, and cautionary notes on forward-looking statements and risks - A conference call for analysts and investors was scheduled for **August 11, 2025**, at 2:30 p.m. Mountain Time to discuss the financial results[15](index=15&type=chunk) - Spruce Power is a **leading owner and operator of distributed solar energy assets**, providing subscription-based services for rooftop solar and battery storage[17](index=17&type=chunk) - The report includes a detailed **cautionary note on forward-looking statements**, outlining **numerous risks and uncertainties** that could cause actual results to differ from expectations[18](index=18&type=chunk)[19](index=19&type=chunk)

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 No.: 1-12504 THE MACERICH COMPANY (Exact name of registrant as specified in its charter) Maryland 95-4448705 (State or other juris ...

[PART I – FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=7&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Webster Financial Corporation reported total consolidated assets of approximately $82 billion as of June 30, 2025, with net income increasing to $258.8 million in Q2 2025, driven by higher net interest income and a positive swing in non-interest income. - Webster Financial Corporation is a bank holding company with approximately **$82 billion in total consolidated assets** as of June 30, 2025, operating through Commercial Banking, Healthcare Financial Services, and Consumer Banking[17](index=17&type=chunk) - Management believes the company's diverse business, strong capital, and risk management framework position it to operate effectively despite economic uncertainty from potential changes in U.S. trade policies and tariffs[19](index=19&type=chunk) [Results of Operations](index=8&type=section&id=Results%20of%20Operations) In Q2 2025, net income rose to $258.8 million, a 42.5% increase YoY, with diluted EPS at $1.52, driven by an 8.5% quarterly increase in net interest income and a 123.8% surge in non-interest income. Selected Financial Highlights (Q2 & YTD 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (in thousands)** | $258,848 | $181,633 | $485,765 | $397,956 | | **Diluted EPS** | $1.52 | $1.03 | $2.81 | $2.26 | | **Return on Average Assets (annualized)** | 1.29% | 0.96% | 1.22% | 1.05% | | **Return on Avg. Tangible Common Equity (non-GAAP, annualized)** | 17.96% | 14.17% | 16.95% | 15.25% | | **Net Interest Margin** | 3.44% | 3.39% | 3.46% | 3.40% | | **Efficiency Ratio (non-GAAP)** | 45.40% | 46.22% | 45.59% | 45.74% | [Segment Reporting](index=18&type=section&id=Segment%20Reporting) For Q2 2025, Commercial Banking's pre-tax, pre-provision net revenue (PPNR) decreased 10.0% YoY to $240.8 million, while Healthcare Financial Services' PPNR grew 4.4% to $70.9 million, and Consumer Banking's PPNR increased 2.7% to $114.2 million. Segment Pre-Tax, Pre-Provision Net Revenue (PPNR) (in thousands) | Segment | Q2 2025 | Q2 2024 | Change | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Commercial Banking** | $240,774 | $267,510 | (10.0%) | $482,273 | $537,507 | (10.3%) | | **Healthcare Financial Services** | $70,859 | $67,862 | 4.4% | $140,890 | $132,934 | 6.0% | | **Consumer Banking** | $114,219 | $111,166 | 2.7% | $219,831 | $230,800 | (4.8%) | - Commercial Banking loans and leases grew by **$581.5 million (1.4%)** since year-end 2024, driven by commercial non-mortgage lending[71](index=71&type=chunk) - Healthcare Financial Services deposits increased by **$214.4 million (2.2%)** since year-end 2024, due to growth in HSA Bank and Ametros account holders[76](index=76&type=chunk) - Consumer Banking loans increased by **$585.6 million (4.9%)** since year-end 2024, primarily from growth in residential mortgages and other consumer loans[82](index=82&type=chunk) [Financial Condition](index=21&type=section&id=Financial%20Condition) As of June 30, 2025, total assets increased by $2.9 billion (3.7%) to $81.9 billion from year-end 2024, driven by a $1.2 billion rise in loans and leases and a $0.9 billion increase in cash equivalents. Balance Sheet Changes (June 30, 2025 vs. Dec 31, 2024) | Item | Change (in billions) | Key Drivers | | :--- | :--- | :--- | | **Total Assets** | +$2.9 | +$1.2B in Loans & Leases, +$0.9B in Cash & Equivalents | | **Total Liabilities** | +$2.7 | +$1.5B in Deposits, +$1.2B in FHLB Advances | | **Total Stockholders' Equity** | +$0.2 | +$485.8M Net Income, offset by -$261.9M Stock Repurchases & Dividends | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity and capital position, with the Holding Company's primary liquidity source being dividends from the Bank, and all regulatory capital ratios significantly exceeding 'well-capitalized' thresholds. - The Board of Directors increased the common stock repurchase program authority by **$700.0 million** on April 30, 2025, with the company repurchasing **5.1 million shares for $259.6 million** in the first six months of 2025[130](index=130&type=chunk) Regulatory Capital Ratios as of June 30, 2025 | Ratio | Webster Financial Corp. | Webster Bank | Well Capitalized Minimum | | :--- | :--- | :--- | :--- | | **CET1 Risk-Based Capital** | 11.35% | 12.55% | 6.5% | | **Tier 1 Risk-Based Capital** | 11.86% | 12.55% | 8.0% | | **Total Risk-Based Capital** | 14.05% | 13.80% | 10.0% | | **Tier 1 Leverage Capital** | 8.57% | 9.08% | 5.0% | - Total uninsured deposits, after excluding affiliate and collateralized deposits, were **$14.0 billion**, representing **21.1% of total deposits**[142](index=142&type=chunk) - The company reports immediately available liquidity of **$26.2 billion**, covering these adjusted uninsured deposits by **187.0%**[143](index=143&type=chunk) [Financial Statements](index=39&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show total assets of $81.9 billion, up from $79.0 billion at year-end 2024, with net income for the six months at $485.8 million. [Condensed Consolidated Financial Statements](index=39&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements present the company's financial position as of June 30, 2025, with total assets of $81.9 billion, total liabilities of $72.6 billion, and total stockholders' equity of $9.3 billion. Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $81,914,270 | $79,025,073 | | Loans and leases, net | $52,949,913 | $51,815,602 | | Total Deposits | $66,314,425 | $64,753,080 | | **Total Liabilities** | $72,576,653 | $69,891,859 | | **Total Stockholders' Equity** | $9,337,617 | $9,133,214 | Condensed Consolidated Income Statement Highlights (Six Months Ended June 30) | Account (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | $1,233,374 | $1,140,036 | | Provision for credit losses | $124,000 | $104,500 | | Total Non-interest Income | $187,263 | $141,651 | | Total Non-interest Expense | $689,358 | $661,944 | | **Net Income** | **$485,765** | **$397,956** | [Notes to Condensed Consolidated Financial Statements](index=46&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures, including the January 2024 acquisition of Ametros for $378.4 million, the February 2024 sale of mortgage servicing rights for an $11.7 million net gain, and the July 2024 formation of a private credit joint venture. - On January 24, 2024, the Bank acquired Ametros for a total purchase price of **$378.4 million**, resulting in **$228.2 million of goodwill** and **$188.9 million in other intangible assets**[204](index=204&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) - In February 2024, the company sold the majority of its mortgage servicing portfolio for net cash proceeds of **$18.4 million**, recognizing an **$11.7 million net gain** on the sale[211](index=211&type=chunk) - In July 2024, the company formed a private credit joint venture with Marathon Asset Management, seeding it with **$242.2 million of commercial non-mortgage loans** reclassified to 'Loans held for sale' in June 2025[212](index=212&type=chunk)[213](index=213&type=chunk) - The Allowance for Credit Losses (ACL) on loans and leases increased to **$722.0 million** at June 30, 2025, from **$689.6 million** at year-end 2024, primarily due to macroeconomic uncertainty and organic loan growth[233](index=233&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=95&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the detailed market risk disclosures provided in Note 13 of the Financial Statements and the 'Asset/Liability Management and Market Risk' section of the MD&A. - The company's disclosures about market risk are incorporated by reference from Note 13 (Derivative Financial Instruments) and the 'Asset/Liability Management and Market Risk' section within the MD&A[381](index=381&type=chunk) [Controls and Procedures](index=95&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[382](index=382&type=chunk) - A new cloud-based general ledger system was implemented during the quarter, leading to modifications and additions to internal controls over financial reporting[383](index=383&type=chunk) [PART II – OTHER INFORMATION](index=96&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=96&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business, with management believing that the outcomes will not have a material impact on the company's financial position. - Information regarding legal proceedings is incorporated by reference from Note 17: Commitments and Contingencies[387](index=387&type=chunk) [Risk Factors](index=96&type=section&id=Item%201A.%20Risk%20Factors) 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 to risk factors were reported since the last Annual Report on Form 10-K[388](index=388&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company repurchased a total of 1,528,615 shares of its common stock at an average price of $51.70 per share, with the Board increasing repurchase authority by $700.0 million. Issuer Purchases of Equity Securities (Q2 2025) | Period (2025) | Total Shares Purchased | Avg. Price Paid Per Share | Shares Purchased Under Program | Remaining Authority (in millions) | | :--- | :--- | :--- | :--- | :--- | | April | 368,600 | $51.08 | 366,318 | $728.2 | | May | 598,919 | $52.05 | 598,257 | $697.1 | | June | 561,096 | $51.72 | 555,939 | $668.4 | | **Total** | **1,528,615** | **$51.70** | **1,520,514** | **$668.4** | - On April 30, 2025, the Board of Directors increased the authority for the common stock repurchase program by **$700.0 million**[391](index=391&type=chunk) [Other Information](index=97&type=section&id=Item%205.%20Other%20Information) John Ciulla, the Chairman and Chief Executive Officer, entered into a Rule 10b5-1 trading agreement on April 30, 2025, covering the potential sale of up to 32,000 shares of Webster common stock. - Chairman and CEO John Ciulla entered into a Rule 10b5-1 trading plan on April 30, 2025, for the sale of up to **32,000 shares of common stock**[394](index=394&type=chunk) [Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, indentures, new employment-related agreements, and certifications required by the Sarbanes-Oxley Act.

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited condensed consolidated financial statements and comprehensive notes for Natural Gas Services Group, Inc [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the Company's financial position, detailing assets, liabilities, and stockholders' equity | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $325 | $2,142 | | Trade accounts receivable, net | $13,742 | $15,626 | | Inventory, net | $18,334 | $18,051 | | Total current assets | $48,882 | $48,176 | | Rental equipment, net | $446,952 | $415,021 | | Total assets | $525,526 | $492,528 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total current liabilities | $24,788 | $17,358 | | Long-term debt | $182,000 | $170,000 | | Total liabilities | $259,312 | $237,471 | | Total stockholders' equity | $266,214 | $255,057 | | Total liabilities and stockholders' equity | $525,526 | $492,528 | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This statement reports the Company's revenues, expenses, and net income over specific periods | Metric (in thousands, except EPS) | 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 revenue | $41,382 | $38,491 | $82,765 | $75,398 | | Total operating costs and expenses | $31,458 | $29,985 | $63,334 | $57,573 | | Operating income | $9,924 | $8,506 | $19,431 | $17,825 | | Net income | $5,188 | $4,250 | $10,042 | $9,348 | | Basic EPS | $0.42 | $0.34 | $0.81 | $0.75 | | Diluted EPS | $0.41 | $0.34 | $0.80 | $0.75 | - Net income increased by **22.1%** for the three months ended June 30, 2025, and by **7.4%** for the six months ended June 30, 2025, compared to the prior year periods[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This statement details changes in the Company's equity accounts, including net income and stock-based compensation | Stockholders' Equity (in thousands) | January 1, 2025 | June 30, 2025 | | :---------------------------------- | :-------------- | :------------ | | Total Stockholders' Equity | $255,057 | $266,214 | | Change in Stockholders' Equity | | +$11,157 | - Total stockholders' equity increased by **$11.157 million** from January 1, 2025, to June 30, 2025, primarily due to net income and stock-based compensation[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $32,263 | $31,119 | | Net cash used in investing activities | $(44,962) | $(27,881) | | Net cash provided by (used in) financing activities | $10,882 | $(2,368) | | Net change in cash and cash equivalents | $(1,817) | $870 | | Cash and cash equivalents at end of period | $325 | $3,616 | - Operating cash flows increased by **$1.1 million**, while investing activities saw a significant increase in cash used, primarily for rental equipment purchases[18](index=18&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Financing activities shifted from net cash used to net cash provided, mainly due to increased credit facility borrowings[18](index=18&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [1. Description of Business](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A1.%20Description%20of%20Business) This note outlines Natural Gas Services Group, Inc.'s core business as a provider of compression equipment and services - Natural Gas Services Group, Inc. (NGS) is a leading provider of natural gas and electric compression equipment, technology, and services to the energy industry, headquartered in Midland, Texas, with operations across major U.S. oil and gas basins[19](index=19&type=chunk) [2. Summary of Significant Accounting Policies](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details the key accounting principles and policies used in preparing the financial statements - The financial statements are prepared in accordance with GAAP, include the Company and its subsidiary, and all significant intercompany transactions are eliminated[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The Company operates in one business segment, as resource allocation and performance assessment are based on the entire entity[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - ASU 2024-03, effective January 1, 2027, for annual periods, will expand disclosures for certain income statement expenses but is not expected to materially impact financial statements[25](index=25&type=chunk) [3. Trade Accounts Receivable](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A3.%20Trade%20Accounts%20Receivable) This note provides a breakdown of trade accounts receivable and the provision for credit losses | Trade Accounts Receivable (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :------------ | :---------------- | | Rentals | $12,525 | $14,218 | | Sales and aftermarket services | $1,735 | $2,657 | | Less: Provision for credit losses | $(518) | $(1,249) | | Total trade accounts receivable, net | $13,742 | $15,626 | - Occidental Permian, LTD. (Oxy) accounted for **47%** and **51%** of revenue for the six months ended June 30, 2025 and 2024, respectively, and **50%** and **52%** of accounts receivable as of June 30, 2025 and December 31, 2024, respectively, indicating significant customer concentration[27](index=27&type=chunk) | Provision for Credit Losses (in thousands) | Six months ended June 30, 2025 | Year ended December 31, 2024 | | :--------------------------------------- | :----------------------------- | :--------------------------- | | Beginning balance | $1,249 | $823 | | Provision for credit losses | $208 | $433 | | Write-offs | $(939) | $(7) | | Ending balance | $518 | $1,249 | - A substantial write-off of **$939 thousand** in credit loss provision occurred during the six months ended June 30, 2025, reflecting certain aged receivables no longer deemed collectible[28](index=28&type=chunk) [4. Inventory](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A4.%20Inventory) This note details the composition of inventory and the allowance for obsolescence | Inventory (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials, net | $17,576 | $17,706 | | Work-in-process | $758 | $345 | | Inventory - current | $18,334 | $18,051 | | Total inventory | $18,334 | $18,051 | | Allowance for Obsolescence (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Beginning balance | $5,867 | $4,004 | | Allowance for obsolescence | $61 | $1,863 | | Write-offs | $(3,409) | $0 | | Ending balance | $2,519 | $5,867 | - A significant write-off of **$3.409 million** in the allowance for obsolescence during the six months ended June 30, 2025, was due to the disposal of inventory items from the former Midland, Texas fabrication facility[30](index=30&type=chunk) [5. Assets Held for Sale](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A5.%20Assets%20Held%20for%20Sale) This note describes assets reclassified for sale, including the Midland facility, and related impacts - The Company reclassified its Midland, Texas fabrication, repair, and overhaul facility (industrial building and land) with a net carrying value of **$2.2 million** to assets held for sale as of June 30, 2025, following the termination of operations and disposal of inventory[31](index=31&type=chunk)[32](index=32&type=chunk) - The closure of the Midland Facility resulted in the termination of eight employees and **$0.1 million** in severance and termination benefits paid in April 2025[33](index=33&type=chunk) [6. Rental Equipment](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A6.%20Rental%20Equipment) This note provides details on the Company's rental equipment, including its net value and depreciation | Rental Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Compressor units | $627,823 | $579,373 | | Work-in-progress | $41,207 | $51,662 | | Accumulated depreciation | $(222,078) | $(216,014) | | Rental equipment, net | $446,952 | $415,021 | - Depreciation expense for rental equipment was **$8.0 million** and **$6.9 million** for the three months ended June 30, 2025 and 2024, respectively, and **$15.7 million** and **$13.4 million** for the six months ended June 30, 2025 and 2024, respectively[34](index=34&type=chunk) [7. Property and Equipment](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A7.%20Property%20and%20Equipment) This note outlines the Company's property and equipment, including land and buildings, net of depreciation | Property and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Land | $1,562 | $1,680 | | Building | $16,135 | $19,140 | | Total, net of accumulated depreciation | $22,664 | $22,989 | - During Q2 2025, **$2.2 million** of property and equipment from the former Midland Facility was reclassified to assets held for sale[36](index=36&type=chunk) [8. Supplemental Balance Sheet Disclosures](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A8.%20Supplemental%20Balance%20Sheet%20Disclosures) This note provides additional details on accrued liabilities and other balance sheet items | Accrued Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Accrued purchases | $3,529 | $2,085 | | Compensation | $3,395 | $3,483 | | Other | $2,752 | $1,343 | | Total | $10,297 | $7,688 | [9. Long-Term Debt](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A9.%20Long-Term%20Debt) This note details the Company's long-term debt, including credit facility terms and outstanding balances | Long-Term Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Credit facility | $182,000 | $170,000 | - On April 18, 2025, the Company amended its Credit Facility, increasing the total commitment to **$400.0 million** (from $300.0 million) with an expanded accordion feature of **$100.0 million**, reducing interest rates by **50-75 basis points**, and providing more flexible leverage covenants from June 30, 2026[38](index=38&type=chunk)[39](index=39&type=chunk) - As of June 30, 2025, **$182.0 million** was outstanding under the Credit Facility with a weighted average interest rate of **7.23%**, and **$172.3 million** was available for borrowing[40](index=40&type=chunk)[121](index=121&type=chunk) - The Company was in compliance with all financial covenants[40](index=40&type=chunk)[121](index=121&type=chunk) [10. Income Taxes](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A10.%20Income%20Taxes) This note discusses the Company's income tax position, including a federal income tax refund claim - The Company has an outstanding federal income tax refund claim of approximately **$11.4 million** related to 2019 NOL carrybacks under the CARES Act[45](index=45&type=chunk)[46](index=46&type=chunk) - The refund request was formally submitted to the Joint Committee on Taxation (JCT) for review in Q2 2025[45](index=45&type=chunk)[46](index=46&type=chunk) [11. Commitments and Contingencies](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A11.%20Commitments%20and%20Contingencies) This note addresses potential future obligations and legal matters that could impact the Company - The Company is not currently a party to any material legal proceedings and believes that any potential claims will not have a material adverse effect on its financial condition, results of operations, or cash flows[47](index=47&type=chunk) [12. Revenues from Customers](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A12.%20Revenues%20from%20Customers) This note disaggregates revenue by source, including rental, sales, and aftermarket services | Revenue Disaggregation (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental | $39,580 | $34,926 | $78,490 | $68,660 | | Sales | $750 | $2,270 | $2,677 | $4,773 | | Aftermarket services | $1,052 | $1,295 | $1,598 | $1,965 | | Total revenue | $41,382 | $38,491 | $82,765 | $75,398 | - Rental revenue increased by **13.3%** and **14.3%** for the three and six months ended June 30, 2025, respectively, compared to the prior year, while sales and aftermarket services revenue declined[48](index=48&type=chunk) [13. Stock-Based and Other Long-Term Incentive Compensation](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A13.%20Stock-Based%20and%20Other%20Long-Term%20Incentive%20Compensation) This note details the Company's stock-based compensation plans and related expenses | Stock-Based Compensation Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equity-classified | $579 | $242 | $938 | $516 | | Liability-classified | $137 | $16 | $137 | $16 | | Total | $716 | $258 | $1,075 | $532 | - Stock-based compensation expense significantly increased in 2025, primarily due to a higher mix of performance-based share unit (PSU) awards for executive officers, which generally have a higher grant-date fair value[52](index=52&type=chunk)[95](index=95&type=chunk) - As of June 30, 2025, unrecognized compensation cost for unvested options was approximately **$0.6 million** (expected over 2.33 years), for RSUs was **$2.1 million** (expected over 2.12 years), and for PSUs was **$1.8 million** (expected over 2.13 years)[54](index=54&type=chunk)[56](index=56&type=chunk)[61](index=61&type=chunk) - Stockholders approved an amendment to the 2019 Equity Incentive Plan on June 5, 2025, increasing available shares by **500,000** to **1,650,000** and extending the term to June 20, 2034[55](index=55&type=chunk) [14. Earnings per Share](index=15&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A14.%20Earnings%20per%20Share) This note presents the basic and diluted earnings per share calculations for the Company | Earnings per Common Share | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic | $0.42 | $0.34 | $0.81 | $0.75 | | Diluted | $0.41 | $0.34 | $0.80 | $0.75 | | Anti-Dilutive Awards Excluded (shares) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | 94,000 | 92,417 | 94,000 | 92,417 | | Restricted stock and RSUs | 20,963 | 5,750 | 7,595 | 18,635 | | PSUs | 47,029 | — | 47,029 | — | | Total | 161,992 | 98,167 | 148,624 | 111,052 | [15. Subsequent Events](index=16&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements%3A15.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period but before financial statement issuance - On July 30, 2025, the Board declared a cash dividend of **$0.10 per share**, payable August 22, 2025[64](index=64&type=chunk) - On August 5, 2025, Brian Tucker, President and COO, announced his transition out of the role by October 31, 2025, due to an unexpected family loss[65](index=65&type=chunk) - On August 8, 2025, the Board approved a **$6 million** share repurchase program, expiring August 6, 2027[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of financial performance, liquidity, capital resources, and critical accounting estimates [Overview](index=18&type=section&id=Overview) This section provides a general description of the Company's business model and operational focus - The Company's primary focus is on the rental of natural gas and electric compressors, with contracts typically ranging from 12 to 60 months[74](index=74&type=chunk) - Substantially all compressor assembly is outsourced, with limited in-house work at the Tulsa facility[74](index=74&type=chunk) - **77%** of rental revenue is generated from the Permian Basin, and approximately **75%** supports oil production, primarily gas lift operations[75](index=75&type=chunk) - The Company operates in one reporting segment across five states[75](index=75&type=chunk) [Operating Highlights](index=18&type=section&id=Operating%20Highlights) This section presents key operational metrics and their year-over-year performance trends | Operating Metric | June 30, 2025 | June 30, 2024 | | :----------------- | :------------ | :------------ | | Rented horsepower (at period end) | 498,651 | 454,568 | | Horsepower utilization (at period end) | 83.6 % | 82.3 % | | Rental revenues | $39,580 | $34,926 | | Total revenues | $41,382 | $38,491 | | Rental revenues as a percent of total revenues | 95.6 % | 90.7 % | - Rented horsepower increased by **9.7%** year-over-year, and horsepower utilization improved to **83.6%**[76](index=76&type=chunk) - Rental revenues now constitute **95.6%** of total revenues, up from **90.7%** in the prior year[76](index=76&type=chunk) [Our Performance Trends and Outlook](index=19&type=section&id=Our%20Performance%20Trends%20and%20Outlook) This section discusses current performance trends and the Company's future market expectations - Demand for the existing compressor fleet is expected to remain positive, assuming crude oil prices stay within reasonable bands[78](index=78&type=chunk) - The market outlook for U.S. natural gas production remains steady, with opportunities for increased utilization of small and medium horsepower units in the Permian basin and Marcellus Shale[79](index=79&type=chunk) [Non-GAAP Financial Measures](index=19&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures used by management to assess performance - The Company uses Adjusted Gross Margin (total revenue less cost of revenues excluding depreciation and amortization) and Adjusted EBITDA (net income before interest, taxes, depreciation, amortization, inventory allowance, impairments, retirement of rental equipment, non-recurring restructuring charges, and non-cash equity-classified stock-based compensation) as non-GAAP financial measures to analyze performance[81](index=81&type=chunk)[85](index=85&type=chunk) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted gross margin | $24,223 | $21,002 | $48,479 | $42,115 | | Adjusted EBITDA | $19,665 | $16,456 | $38,955 | $33,334 | - Adjusted Gross Margin increased by **15.3%** for the three months and **15.1%** for the six months ended June 30, 2025, year-over-year[84](index=84&type=chunk)[87](index=87&type=chunk) - Adjusted EBITDA increased by **19.5%** for the three months and **16.9%** for the six months ended June 30, 2025, year-over-year[84](index=84&type=chunk)[87](index=87&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the Company's revenues, costs, and expenses by segment [Rentals](index=22&type=section&id=Rentals) This section analyzes revenue and costs associated with the Company's compressor rental business | Rental Performance (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental revenue | $39,580 | $34,926 | $78,490 | $68,660 | | Cost of rentals (excluding D&A) | $15,528 | $14,228 | $30,368 | $27,342 | | Rental adjusted gross margin | $24,052 | $20,698 | $48,122 | $41,318 | | Rental adjusted gross margin percentage | 60.8 % | 59.3 % | 61.3 % | 60.2 % | | Rented horsepower (period end) | 498,651 | 454,568 | 498,651 | 454,568 | | Horsepower utilization (period end) | 83.6 % | 82.3 % | 83.6 % | 82.3 % | - Rental revenue increased by **13.3%** (QoQ) and **14.3%** (YoY) due to higher rented horsepower, particularly larger units, despite a decrease in the number of units and customers[89](index=89&type=chunk)[90](index=90&type=chunk) - The adjusted gross margin percentage improved due to efficient maintenance activities supported by SMART and telemetry software[89](index=89&type=chunk)[90](index=90&type=chunk) [Sales](index=23&type=section&id=Sales) This section examines the performance of the Company's compressor sales activities | Sales Performance (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales revenue | $750 | $2,270 | $2,677 | $4,773 | | Cost of sales (excluding D&A) | $911 | $2,249 | $2,927 | $4,429 | | Sales adjusted gross margin | $(161) | $21 | $(250) | $344 | | Sales adjusted gross margin percentage | (21.5)% | 0.9 % | (9.3)% | 7.2 % | - Sales revenue declined significantly by **67.0%** (QoQ) and **43.9%** (YoY)[92](index=92&type=chunk) - Sales adjusted gross margin turned negative due to lower business volume and fixed overhead costs, including severance from the Midland facility closure, as the Company shifts focus from new compressor sales to rentals[92](index=92&type=chunk) [Aftermarket Service](index=23&type=section&id=Aftermarket%20Service) This section reviews the revenue and profitability of aftermarket services provided by the Company | Aftermarket Services Performance (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Aftermarket services revenue | $1,052 | $1,295 | $1,598 | $1,965 | | Cost of aftermarket services (excluding D&A) | $720 | $1,012 | $991 | $1,512 | | Aftermarket services adjusted gross margin | $332 | $283 | $607 | $453 | | Aftermarket services adjusted gross margin percentage | 31.6 % | 21.9 % | 38.0 % | 23.1 % | - Aftermarket services revenue declined by **18.8%** (QoQ) and **18.7%** (YoY) due to lower unit commissioning work and freight costs[93](index=93&type=chunk) - Adjusted gross margins and percentages improved significantly, reflecting better cost management[93](index=93&type=chunk) [Selling, General and Administrative Expenses](index=24&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) This section details the trends and components of the Company's SG&A expenses | SG&A Expenses (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Primary SG&A expenses | $4,875 | $4,778 | $9,894 | $9,206 | | Stock-based compensation | $579 | $242 | $938 | $516 | | Total SG&A expenses | $5,454 | $5,020 | $10,832 | $9,722 | | SG&A as % of total revenues | 13.2 % | 13.0 % | 13.1 % | 12.9 % | - Total SG&A expenses increased by **8.6%** (QoQ) and **11.4%** (YoY), driven by higher information technology support costs, public company costs, occupancy, and office costs, partially offset by lower credit loss expenses and professional fees[95](index=95&type=chunk) - Equity-classified stock-based compensation saw a significant increase due to a higher mix of performance-based share unit awards[95](index=95&type=chunk) [Depreciation and Amortization](index=24&type=section&id=Depreciation%20and%20Amortization) This section analyzes the Company's depreciation and amortization expenses and their drivers | Depreciation and Amortization (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Allocable to cost of revenues | $8,873 | $7,572 | $17,412 | $14,508 | | Corporate depreciation | $96 | $98 | $193 | $218 | | Intangible asset amortization | $0 | $35 | $0 | $66 | | Total | $8,969 | $7,705 | $17,605 | $14,792 | | As a percent of total revenues | 21.7 % | 20.0 % | 21.3 % | 19.6 % | - Depreciation and amortization expense increased by **16.4%** (QoQ) and **19.0%** (YoY), primarily due to the depreciation of high horsepower units placed in service since the second half of 2024, aligning with the Company's strategy to focus on higher-margin applications[98](index=98&type=chunk) [Inventory Allowance](index=25&type=section&id=Inventory%20Allowance) This section discusses changes in the allowance for inventory obsolescence and related write-offs | Inventory Allowance (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Inventory allowance | $0 | $0 | $61 | $0 | - A nominal increase in inventory allowance was recorded in Q1 2025 due to inventory transfers from the closed Midland facility[99](index=99&type=chunk) - The inventory obsolescence balance decreased from **$5.9 million** at December 31, 2024, to **$2.5 million** at June 30, 2025, following write-offs[99](index=99&type=chunk) [Retirement of Rental Equipment](index=25&type=section&id=Retirement%20of%20Rental%20Equipment) This section reports on the gains or losses from the disposal of rental equipment | Retirement of Rental Equipment (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Retirement of rental equipment | $0 | $0 | $728 | $5 | - The Company retired certain small and medium horsepower compressor units during the six months ended June 30, 2025, resulting in a charge of **$728 thousand**, significantly higher than the minimal retirements in the comparable 2024 period[100](index=100&type=chunk) [Gain on the Sale of Assets](index=25&type=section&id=Gain%20on%20the%20Sale%20of%20Assets) This section details the net gains or losses recognized from the sale of various assets | Gain on Disposition of Assets, net (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gain on the disposition of assets, net | $124 | $229 | $178 | $229 | - Gains on asset disposition primarily resulted from the sale of trucks after their useful lives, with lower gains recognized in 2025 compared to 2024[101](index=101&type=chunk) [Interest Expense](index=25&type=section&id=Interest%20Expense) This section analyzes the Company's interest expenses, including borrowings and capitalized interest | Interest Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest on borrowings, finance leases and related fees | $3,464 | $4,037 | $6,996 | $7,980 | | Amortization of debt issue costs | $294 | $165 | $506 | $315 | | Capitalized interest | $(515) | $(1,270) | $(1,089) | $(2,428) | | Total | $3,243 | $2,932 | $6,413 | $5,867 | | Weighted-average interest rates on borrowings | 7.46 % | 8.92 % | 7.68 % | 9.00 % | - Interest expense increased by **10.6%** (QoQ) and **9.3%** (YoY), primarily due to lower capitalized interest and increased amortization of debt issue costs from Credit Facility amendments[104](index=104&type=chunk) - This occurred despite lower weighted-average interest rates on borrowings[104](index=104&type=chunk) [Other Income (Expense), net](index=26&type=section&id=Other%20Income%20%28Expense%29%2C%20net) This section reports on non-operating income and expenses, including unrealized gains or losses | Other Income (Expense), net (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Other income (expense), net | $104 | $(30) | $103 | $163 | - Other income (expense), net improved for the three months ended June 30, 2025, due to non-operating credits and unrealized gains from corporate-owned life insurance (COLI) policies[105](index=105&type=chunk) - However, it declined for the six-month period compared to 2024 due to higher unrealized COLI gains in the prior year[105](index=105&type=chunk) [Provision for Income Taxes](index=26&type=section&id=Provision%20for%20Income%20Taxes) This section details the Company's income tax expense and effective tax rates | Income Tax Provision (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $1,597 | $1,294 | $3,079 | $2,773 | | Effective income tax rate | 23.5 % | 23.3 % | 23.5 % | 22.9 % | - Income tax expense increased by **23%** (QoQ) and **11%** (YoY), with effective tax rates of **23.5%** for both periods in 2025[106](index=106&type=chunk) - This differs from the U.S. federal statutory rate due to certain non-deductible expenses[106](index=106&type=chunk) [Financial Condition](index=27&type=section&id=Financial%20Condition) This section assesses the Company's overall financial health, including liquidity and capital structure [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's ability to meet short-term and long-term financial obligations - Primary liquidity sources are operating activities and the Credit Facility, which has a **$400.0 million** commitment and an additional **$100.0 million** accordion feature[107](index=107&type=chunk) - As of June 30, 2025, **$172.3 million** was available under the Credit Facility[107](index=107&type=chunk) - The Company believes current cash, operating cash flows, and Credit Facility borrowings will be sufficient to meet capital, dividend, and liquidity requirements for at least the next twelve months[110](index=110&type=chunk) [Cash flows](index=28&type=section&id=Cash%20flows) This section details cash generated and used across operating, investing, and financing activities | Cash Flows (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $32,263 | $31,119 | | Net cash used in investing activities | $(44,962) | $(27,881) | | Net cash (used in) provided by financing activities | $10,882 | $(2,368) | | Net increase in cash and cash equivalents | $(1,817) | $870 | - Operating cash flows increased by **$1.1 million** due to growth in accounts payable, improved billing/collection processes, and higher margins from high horsepower unit rentals[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Investing activities used **$45.1 million**, primarily for rental equipment[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Financing activities provided **$10.9 million**, mainly from net borrowings under the Credit Facility[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Capitalization](index=28&type=section&id=Capitalization) This section outlines the Company's capital structure, including debt and equity components | Capitalization (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Credit facility borrowings | $182,000 | $170,000 | | Total stockholders' equity | $266,214 | $255,057 | | Total capitalization | $448,214 | $425,057 | | Debt as a percent of total capitalization | 40.6 % | 40.0 % | - Total capitalization increased to **$448.2 million** as of June 30, 2025, with debt representing **40.6%** of total capitalization[119](index=119&type=chunk) - The Credit Facility has a **$400.0 million** commitment and a maturity date of February 28, 2028[119](index=119&type=chunk)[120](index=120&type=chunk) [Critical Accounting Estimates](index=29&type=section&id=Critical%20Accounting%20Estimates) This section highlights critical accounting estimates that require significant judgment and could materially impact results - There have been no changes to the critical accounting estimates disclosed in the Company's Form 10-K for the year ended December 31, 2024[124](index=124&type=chunk) [Recently Issued Accounting Pronouncements](index=29&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section discusses new accounting standards and their potential impact on the Company's financials - Refer to Note 2, 'Summary of Significant Accounting Policies,' for a discussion of recently issued accounting pronouncements[125](index=125&type=chunk) [Off-Balance Sheet Arrangements](index=29&type=section&id=Off-Balance%20Sheet%20Arrangements) This section describes contractual obligations not on the balance sheet that could affect financial condition - The Company has entered into off-balance sheet purchase agreements for compressor unit components, consistent with capital expenditure plans, which are not expected to materially affect liquidity or capital resources[126](index=126&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section confirms no material changes to market risks previously disclosed in the Company's 2024 Form 10-K - There have been no changes in the market risks disclosed in the Company's Form 10-K for the year ended December 31, 2024[127](index=127&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management's evaluation of disclosure controls and internal control over financial reporting, concluding effectiveness - Management concluded that the Company's internal control over financial reporting was effective as of June 30, 2025, based on the COSO framework[130](index=130&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[131](index=131&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not involved in material legal proceedings or aware of threatened litigation impacting its financials - The Company is not currently a party to any material legal proceedings and is not aware of any threatened material litigation[133](index=133&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) Readers are referred to the Company's 2024 Form 10-K for a comprehensive discussion of risk factors - Readers are referred to Item 1A, Risk Factors, in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for a discussion of risks[134](index=134&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&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 during the period - There were no unregistered sales of equity securities or use of proceeds to report[135](index=135&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company has not defaulted on any senior securities during the reporting period - There were no defaults upon senior securities[136](index=136&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures required for the Company - There are no mine safety disclosures[137](index=137&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) A Rule 10b5-1 trading agreement for common stock sales was adopted by a Board member, effective August 2025 - On May 16, 2025, Stephen C. Taylor, a Board member, adopted a Rule 10b5-1 trading agreement for the sale of up to **100,000 shares** of common stock, effective August 15, 2025, and terminating September 30, 2026[138](index=138&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including key amendments and certifications - Key exhibits include the Fourth Amendment to the Amended and Restated Credit Agreement (April 18, 2025) and the Natural Gas Services Group, Inc. 2019 Equity Incentive Plan, as amended[141](index=141&type=chunk) [Signatures](index=33&type=section&id=Signatures) Signatures of the CEO and CFO certify the report on behalf of Natural Gas Services Group, Inc - The report is signed by Justin C. Jacobs, Chief Executive Officer and Director, and Ian M. Eckert, Chief Financial Officer, on August 11, 2025[143](index=143&type=chunk)

PART I - FINANCIAL INFORMATION This section presents fuboTV Inc.'s unaudited condensed consolidated financial statements and management's analysis of financial condition and operations [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents fuboTV Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income (loss), statements of changes in shareholders' equity, and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, and specific financial line items for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | **ASSETS** | | | | | Cash and cash equivalents | $283,580 | $161,435 | +$122,145 | | Total current assets | $386,644 | $274,033 | +$112,611 | | Total assets | $1,192,386 | $1,077,428 | +$114,958 | | **LIABILITIES & EQUITY** | | | | | Total current liabilities | $558,992 | $515,322 | +$43,670 | | Convertible notes, net (non-current) | $187,525 | $332,383 | -$144,858 | | Total liabilities | $792,027 | $896,646 | -$104,619 | | Total shareholders' equity | $400,359 | $180,782 | +$219,577 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) This section details the company's revenues, expenses, and net income or loss over specific reporting periods Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands) | Metric (in thousands) | 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 | $379,968 | $390,965 | $796,254 | $793,312 | | Total operating expenses | $385,967 | $426,640 | $827,674 | $892,300 | | Operating loss | $(5,999) | $(35,675) | $(31,420) | $(98,988) | | Total other income (expense) | $(1,875) | $9,941 | $216,682 | $17,038 | | Net income (loss) from continuing operations | $(8,026) | $(25,833) | $180,462 | $(82,162) | | Net income (loss) attributable to common shareholders | $(8,030) | $(25,272) | $180,463 | $(81,282) | | Basic EPS (Continuing Operations) | $(0.02) | $(0.08) | $0.53 | $(0.27) | | Diluted EPS (Continuing Operations) | $(0.02) | $(0.08) | $0.46 | $(0.27) | - The significant increase in total other income (expense) for the six months ended June 30, 2025, was primarily due to a **$219.5 million gain on settlement of antitrust litigation**[48](index=48&type=chunk)[227](index=227&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) This section outlines the changes in the company's equity components, including net income and stock-based compensation Condensed Consolidated Statements of Changes in Shareholders' Equity (in thousands) | Metric (in thousands) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :------------------------------------ | :--------------------------- | :----------------------- | | Total Shareholders' Equity | $180,782 | $400,359 | | Net income attributable to common shareholders | N/A | $180,463 | | Stock-based compensation | N/A | $20,103 | | Foreign currency translation adjustment | N/A | $16,312 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $126,785 | $(99,549) | | Net cash used in investing activities | $(6,977) | $(7,686) | | Net cash provided by financing activities | $2,348 | $17,143 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $122,156 | $(90,092) | | Cash, cash equivalents and restricted cash at end of period | $289,728 | $161,328 | - The significant increase in net cash provided by operating activities for the six months ended June 30, 2025, was primarily due to **$220.0 million received from the Antitrust Settlement**[247](index=247&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and specific financial statement line items [Note 1 - Organization and Nature of Business](index=14&type=section&id=Note%201%20-%20Organization%20and%20Nature%20of%20Business) This note describes FuboTV Inc.'s primary business, its recent business combination, and antitrust settlement - FuboTV Inc. is primarily focused on offering a live TV streaming platform for sports, news, and entertainment, with revenues almost entirely derived from subscription services and advertisements in the United States, Canada, Spain, and France[40](index=40&type=chunk) - On January 6, 2025, the Company entered into a Business Combination Agreement with The Walt Disney Company and Hulu, LLC, which involves Hulu contributing certain assets to a newly formed entity (Newco) where Hulu will hold a **70% economic and voting interest**, and Fubo will hold a **30% economic interest**[42](index=42&type=chunk) - Concurrently with the Business Combination Agreement, Fubo settled its antitrust litigation against Disney, Fox, and Warner Bros. Discovery, Inc., receiving a cash payment of **$220.0 million**[48](index=48&type=chunk) - The Company revised its diluted earnings per share calculation for the three months ended March 31, 2025, to properly include potential common stock equivalents, resulting in a revised diluted EPS of **$0.47 from $0.55**[49](index=49&type=chunk)[51](index=51&type=chunk) [Note 2 - Liquidity, Going Concern and Management Plans](index=16&type=section&id=Note%202%20-%20Liquidity%2C%20Going%20Concern%20and%20Management%20Plans) This note assesses the company's short-term financial health and its plans to maintain sufficient liquidity Liquidity Metrics (in thousands) | Metric (in thousands) | June 30, 2025 | | :-------------------- | :------------ | | Cash and cash equivalents and restricted cash | $289,728 | | Working capital deficit | $(172,300) | | Accumulated deficit | $(1,837,300) | | Net income from continuing operations (YTD) | $180,500 | | Gain on settlement of litigation (YTD) | $219,500 | - The Company believes its current cash and cash equivalents provide sufficient liquidity for at least one year and has a commitment letter for up to **$145.0 million in senior unsecured term loan** available on January 5, 2026[54](index=54&type=chunk) [Note 3 - Summary of Significant Accounting Policies](index=17&type=section&id=Note%203%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - The Company consolidates wholly-owned subsidiaries, non-wholly owned subsidiaries with controlling interest, and certain variable interest entities (VIEs)[57](index=57&type=chunk) - The Company operates as a single operating segment, the streaming business, as of June 30, 2025[62](index=62&type=chunk) Cash & Restricted Cash (in thousands) | Cash & Restricted Cash (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $283,580 | $161,435 | | Restricted cash | $6,148 | $6,137 | | Total cash, cash equivalents and restricted cash | $289,728 | $167,572 | - The Company relies on Google Cloud Platform and Amazon Web Services for critical operations, and any disruption could adversely impact the business[67](index=67&type=chunk) - New accounting standards issued include ASU 2023-09 (Improvements to Income Tax Disclosures), ASU 2024-03/2025-01 (Expense Disaggregation Disclosures), and ASU 2024-04 (Induced Conversions of Convertible Debt Instruments), which the Company is currently evaluating for impact[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) [Note 4 – Discontinued Operations](index=20&type=section&id=Note%204%20%E2%80%93%20Discontinued%20Operations) This note reports on the financial impact of business segments that have been discontinued - The Company dissolved its wholly-owned subsidiary Fubo Gaming and ceased operation of Fubo Sportsbook on October 17, 2022[78](index=78&type=chunk) Net Income (Loss) from Discontinued Operations (in thousands) | Metric (in thousands) | 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) from discontinued operations | $0 | $106 | $0 | $(149) | [Note 5 - Revenue from Contracts with Customers](index=21&type=section&id=Note%205%20-%20Revenue%20from%20Contracts%20with%20Customers) This note details the company's revenue recognition policies and disaggregates revenue by type and geography Revenue by Type (in thousands) | Revenue Type (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Subscription (North America) | $344,356 | $354,887 | $727,792 | $720,457 | | Subscription (Rest of world) | $8,317 | $8,049 | $16,313 | $16,193 | | Total subscription revenues | $352,673 | $362,936 | $744,105 | $736,650 | | Advertising (North America) | $25,474 | $26,028 | $48,001 | $53,253 | | Advertising (Rest of world) | $377 | $257 | $731 | $501 | | Total advertising revenues | $25,851 | $26,285 | $48,732 | $53,754 | - Contract liabilities (deferred revenue) totaled approximately **$80.5 million** as of June 30, 2025, down from **$98.4 million** at December 31, 2024, with the majority expected to be recognized within the next month[84](index=84&type=chunk) [Note 6 – Property and equipment, net](index=22&type=section&id=Note%206%20%E2%80%93%20Property%20and%20equipment%2C%20net) This note provides a breakdown of the company's property and equipment, along with depreciation expenses Property and Equipment, Net (in thousands) | Property and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Furniture and fixtures | $919 | $693 | | Computer equipment | $7,000 | $6,431 | | Leasehold improvements | $5,346 | $5,304 | | Less: Accumulated depreciation | $(7,147) | $(6,348) | | Total property and equipment, net | $6,118 | $6,080 | Depreciation Expense (in thousands) | Depreciation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $400 | $300 | $700 | $700 | [Note 7 – Intangible Assets and Goodwill](index=22&type=section&id=Note%207%20%E2%80%93%20Intangible%20Assets%20and%20Goodwill) This note details the company's intangible assets, goodwill, and related amortization and impairment information Intangible Assets, Net (in thousands) | Intangible Assets (in thousands) | June 30, 2025 (Net Balance) | December 31, 2024 (Net Balance) | | :------------------------------- | :-------------------------- | :------------------------------ | | Trade names | $15,915 | $18,038 | | Capitalized internal use software | $21,573 | $21,151 | | Software and technology | $83,523 | $94,514 | | Total intangible assets, net | $121,011 | $133,703 | Amortization Expense (in thousands) | Amortization Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization expense | $9,800 | $9,200 | $19,300 | $18,100 | Goodwill (in thousands) | Goodwill (in thousands) | Balance at December 31, 2024 | Foreign currency translation adjustment | Balance at June 30, 2025 | | :---------------------- | :--------------------------- | :-------------------------------------- | :----------------------- | | Goodwill | $615,399 | $15,617 | $631,016 | - Goodwill includes a cumulative impairment charge of **$148.1 million** as of June 30, 2025, related to the historical FaceBank reporting unit[93](index=93&type=chunk) [Note 8 – Accounts Payable, Accrued Expenses, and Other Long-term Liabilities](index=23&type=section&id=Note%208%20%E2%80%93%20Accounts%20Payable%2C%20Accrued%20Expenses%2C%20and%20Other%20Long-term%20Liabilities) This note provides a breakdown of the company's various current and long-term liabilities Liability Category (in thousands) | Liability Category (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Affiliate fees | $233,857 | $283,953 | | Selling and marketing | $7,743 | $22,580 | | Income tax payable | $4,866 | $315 | | Sales tax | $28,929 | $33,752 | | Total | $336,230 | $419,801 | [Note 9 – Income Taxes](index=24&type=section&id=Note%209%20%E2%80%93%20Income%20Taxes) This note details the company's income tax provision, effective tax rate, and deferred tax assets Income Tax Metric (in thousands) | Income Tax Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax provision | $(152) | $(99) | $(4,800) | $(212) | | Effective tax rate | 1.93% | 0.38% | 2.59% | 0.26% | - The income tax provision for the six months ended June 30, 2025, included a discrete tax expense of **$5.3 million** related to the Antitrust Settlement and stock-based compensation expense[96](index=96&type=chunk) - The Company maintains a full valuation allowance on all its U.S., French, and Spanish deferred tax assets, concluding they are not realizable on a more-likely-than-not basis[98](index=98&type=chunk) [Note 10 – Notes Payable, Long-Term Borrowing, and Convertible Notes](index=24&type=section&id=Note%2010%20%E2%80%93%20Notes%20Payable%2C%20Long-Term%20Borrowing%2C%20and%20Convertible%20Notes) This note provides detailed information on the company's various debt instruments, including convertible notes Debt Instrument Details (in thousands) | Debt Instrument (in thousands) | Stated Interest Rate | Principal Balance (June 30, 2025) | Net Balance (June 30, 2025) | | :----------------------------- | :------------------- | :-------------------------------- | :-------------------------- | | 2026 Convertible Notes | 3.25% | $144,765 | $144,130 | | 2029 Convertible Notes | 7.5% (cash) / 10.0% (PIK) | $177,506 | $187,525 | | Note payable (CAM Digital Note) | 10.0% | $2,700 | $7,361 | | Bpifrance | 2.25% | $821 | $821 | | Other | 4.0% | $30 | $40 | | Total | | $325,822 | $339,877 | - The 2026 Convertible Notes mature on **February 15, 2026**, with an initial conversion price of **$57.78 per share**[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - The 2029 Convertible Notes, issued January 2, 2024, have an initial conversion rate of **260.6474 shares per $1,000 principal amount** (approx. **$3.84/share**) and mature on **February 15, 2029**[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) Fair Value of Convertible Notes (in thousands) | Fair Value (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | 2026 Convertible Notes | $141,200 | $111,800 | | 2029 Convertible Notes | $224,200 | $161,700 | [Note 11 – Segments and Geographic Information](index=28&type=section&id=Note%2011%20%E2%80%93%20Segments%20and%20Geographic%20Information) This note outlines the company's operating segments and provides revenue breakdown by geographic region - The Company operates as a single operating segment, the streaming business, with substantially all tangible long-lived assets located in the United States[127](index=127&type=chunk) Revenue by Region (in thousands) | Revenue by Region (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $363,751 | $376,010 | $763,017 | $762,793 | | Rest of world | $16,217 | $14,955 | $33,237 | $30,519 | | Total revenue | $379,968 | $390,965 | $796,254 | $793,312 | Profitability Metric (in thousands) | Profitability Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross profit | $77,689 | $49,293 | $146,920 | $76,970 | | Net income (loss) from continuing operations | $(8,026) | $(25,833) | $180,462 | $(82,162) | [Note 12 – Fair Value Measurements](index=29&type=section&id=Note%2012%20%E2%80%93%20Fair%20Value%20Measurements) This note details the fair value hierarchy and measurements for the company's financial assets Financial Assets at Fair Value (in thousands) | Financial Assets at Fair Value (in thousands) | June 30, 2025 (Level 1) | December 31, 2024 (Level 1) | | :------------------------------------------ | :---------------------- | :-------------------------- | | Money market securities and time deposits | $233,120 | $111,130 | | Total financial assets at fair value | $233,120 | $111,130 | [Note 13 – Shareholders' Equity](index=29&type=section&id=Note%2013%20%E2%80%93%20Shareholders%27%20Equity) This note provides details on the company's capital stock, stock-based compensation, and equity plans - Under the At-the-Market (ATM) sales agreement, the Company sold **28,791,969 shares** for net proceeds of approximately **$36.9 million** during the six months ended June 30, 2024[133](index=133&type=chunk)[134](index=134&type=chunk) - As of June 30, 2025, **$112.0 million** remained available for sale under the ATM program[134](index=134&type=chunk) Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | 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 stock-based compensation expense | $8,256 | $10,308 | $11,720 | $23,285 | - The 2020 Equity Incentive Plan was amended on June 17, 2025, increasing available shares by **20,000,000**, with **27,565,801 shares** available for future issuance as of June 30, 2025[137](index=137&type=chunk) - As of June 30, 2025, unrecognized stock-based compensation related to time-based restricted stock units totaled **$48.1 million**, with a weighted average remaining contractual term of **2.5 years**[148](index=148&type=chunk) - During the six months ended June 30, 2025, the Company reversed **$8.4 million** of stock-based compensation expense and shares settled liability due to the forfeiture of the third tranche of MEP Project restricted stock awards[159](index=159&type=chunk) [Note 14 – Commitments and Contingencies](index=34&type=section&id=Note%2014%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's contractual obligations, legal proceedings, and potential liabilities Future Minimum Payments for Commitments (in thousands) | Commitment (in thousands) | Total Future Minimum Payments | | :------------------------ | :---------------------------- | | Operating lease liabilities | $35,375 | | Annual Sponsorship Agreements | $24,650 | | Sports Rights Agreements | $77,529 | - The Company is involved in patent infringement litigation with DISH Technologies, LLC, which is currently stayed pending inter partes review (IPR) proceedings at the PTAB[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - The antitrust lawsuit against Disney, Fox, and WBD was settled on January 6, 2025, with the Company receiving a **$220.0 million cash payment**[179](index=179&type=chunk) - The Company reached a class action settlement for **$3.4 million** related to Video Privacy Protection Act (VPPA) claims, which received preliminary court approval on May 29, 2025[180](index=180&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on fuboTV Inc.'s financial condition and operational results, highlighting key business strategies, recent developments, factors impacting performance, and a detailed analysis of revenues, expenses, and cash flows for the three and six months ended June 30, 2025, compared to the prior year [Overview](index=38&type=section&id=Overview) This section introduces Fubo's business model, core strategies, and recent significant corporate developments - Fubo is a sports-first, cable TV replacement platform offering live TV streaming for sports, news, and entertainment, monetizing its subscriber base through subscriptions and advertising[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - The Company's core strategies include growing its paid subscriber base, optimizing content portfolio, engagement, and retention, and increasing monetization through subscription and advertising[188](index=188&type=chunk) - A business combination agreement was entered into with The Walt Disney Company and Hulu, LLC on January 6, 2025, which will result in Hulu holding a **70% economic and voting interest** in a new jointly owned entity (Newco)[189](index=189&type=chunk) - The operations of the former wagering reportable segment (Fubo Sportsbook) are presented as discontinued operations for all periods[191](index=191&type=chunk) [Key Factors and Trends Impacting Performance](index=40&type=section&id=Key%20Factors%20and%20Trends%20Impacting%20Performance) This section identifies the primary internal and external factors influencing the company's financial and operational results - Key factors include brand awareness, subscriber acquisition/retention, acceleration/deceleration of cord-cutting, shift of advertising spend to Connected TV (CTV), content acquisition and renewal costs, seasonality (especially Q3/Q4 for sports), and macroeconomic factors like inflation[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Components of Results of Operations](index=41&type=section&id=Components%20of%20Results%20of%20Operations) This section breaks down the various revenue streams and operating expense categories contributing to the company's financial performance - Revenue streams include Subscription (basic plans and add-ons), Advertising (impressions within streamed content), and Other (distribution fees, commissions, carriage fees)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Operating expenses consist of Subscriber related expenses (affiliate distribution rights), Broadcasting and transmission (signal acquisition, transcoding, retransmission), Sales and marketing, Technology and development, General and administrative, and Depreciation and amortization[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Other income (expense) includes gains/losses on debt extinguishment, interest income/expense, litigation settlement gains, and amortization of debt premium/discount[208](index=208&type=chunk) [Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024](index=43&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section provides a detailed comparative analysis of the company's financial performance for the specified periods Results of Operations (in thousands) | Metric (in thousands) | 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 | $379,968 | $390,965 | $796,254 | $793,312 | | Subscription revenue | $352,673 | $362,936 | $744,105 | $736,650 | | Advertising revenue | $25,851 | $26,285 | $48,732 | $53,754 | | Subscriber related expenses | $291,402 | $326,499 | $625,962 | $686,669 | | Broadcasting and transmission expenses | $10,877 | $15,173 | $23,372 | $29,673 | | Sales and marketing expenses | $29,957 | $35,883 | $66,760 | $79,063 | | General and administrative expenses | $24,334 | $20,217 | $52,130 | $38,726 | | Operating loss | $(5,999) | $(35,675) | $(31,420) | $(98,988) | | Net income (loss) from continuing operations | $(8,026) | $(25,833) | $180,462 | $(82,162) | - Total revenues decreased by **$11.0 million** (QoQ) primarily due to a **$10.3 million decrease in subscription revenue**, driven by a decrease in the subscriber base, partially offset by price increases[212](index=212&type=chunk)[213](index=213&type=chunk) - For the six months, total revenues increased by **$2.9 million** due to subscription price increases offsetting subscriber base decreases[213](index=213&type=chunk) - Subscriber related expenses decreased by **$35.1 million** (QoQ) and **$60.7 million** (YTD) primarily due to a decrease in subscribers and the expiration of certain content agreements[214](index=214&type=chunk)[215](index=215&type=chunk) - Broadcasting and transmission expenses decreased by **$4.3 million** (QoQ) and **$6.3 million** (YTD) due to initiatives to optimize cloud infrastructure[216](index=216&type=chunk)[217](index=217&type=chunk) - General and administrative expenses increased by **$4.1 million** (QoQ) and **$13.4 million** (YTD) primarily due to increased legal and professional fees associated with the Business Combination[222](index=222&type=chunk)[223](index=223&type=chunk) - Other income (expense) for the six months ended June 30, 2025, saw a **$199.6 million increase**, primarily driven by a **$220.0 million gain on settlement of antitrust litigation**[227](index=227&type=chunk) [Key Performance Metrics](index=46&type=section&id=Key%20Performance%20Metrics) This section presents crucial operational and financial indicators used to evaluate the company's business health and growth Paid Subscribers | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Paid Subscribers (North America) | 1.4 million | 1.5 million | | Paid Subscribers (Rest of World) | 0.4 million | 0.4 million | Gross Profit and Margin (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross Profit | $77,700 | $49,300 | $146,900 | $77,000 | | Gross Margin | 20.4% | 12.6% | 18.5% | 9.7% | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet short-term obligations and its sources and uses of capital - Primary cash sources are subscription and advertising revenue, supplemented by equity and debt financings[238](index=238&type=chunk) - Primary uses are content/programming license fees and operating expenses[238](index=238&type=chunk) - As of June 30, 2025, the Company had **$289.7 million** in cash, cash equivalents, and restricted cash[242](index=242&type=chunk) - The Company received **$220.0 million cash** from the antitrust litigation settlement in January 2025[240](index=240&type=chunk) - A commitment letter provides access to up to **$145.0 million in senior unsecured term loan** on January 5, 2026, for general corporate purposes[240](index=240&type=chunk) - As of June 30, 2025, **$112.0 million** remained available for sale under the At-the-Market (ATM) Program[241](index=241&type=chunk) Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $126,785 | $(98,920) | | Net cash used in investing activities | $(6,977) | $(7,686) | | Net cash provided by financing activities | $2,348 | $17,143 | [Critical Accounting Policies and Estimates](index=50&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights accounting policies requiring significant judgment and their potential impact on financial results - Critical accounting policies and estimates include business combinations (fair value allocation, useful lives), goodwill impairment testing (annual qualitative/quantitative assessment), intangible asset amortization and impairment, and stock-based compensation (fair value using Black-Scholes model)[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk) - The Company performed a qualitative assessment of goodwill impairment during Q2 2025 and concluded that fair value was not more-likely-than-not less than carrying value[257](index=257&type=chunk) [Recently Issued Accounting Pronouncements](index=51&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section outlines new accounting standards and their potential effects on the company's financial reporting - Refer to Note 3 for details on recently issued accounting pronouncements, including ASU 2023-09, ASU 2024-03/2025-01, and ASU 2024-04, which the Company is currently evaluating[264](index=264&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, specifically interest rate risk and foreign currency risk, and their potential impact on financial statements - As of June 30, 2025, the Company had **$289.7 million** in cash, cash equivalents, and restricted cash, primarily invested in money market funds, and **$330.5 million** in outstanding fixed-rate indebtedness[267](index=267&type=chunk) - A hypothetical **10% change in interest rates** would not have a material impact on the consolidated financial statements[267](index=267&type=chunk) - Revenues denominated in foreign currencies (primarily Euro and Canadian dollar) accounted for approximately **2.3%** and **2.1%** of consolidated revenue for the three and six months ended June 30, 2025, respectively[268](index=268&type=chunk) - A hypothetical **10% weakening of the euro** relative to the U.S. dollar would not have a material impact on the consolidated financial statements[268](index=268&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter ended June 30, 2025 - As of June 30, 2025, the Company's disclosure controls and procedures were effective at the reasonable assurance level[270](index=270&type=chunk) - There have been no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[271](index=271&type=chunk) PART II - OTHER INFORMATION This section provides additional information, including legal proceedings, risk factors, and other disclosures [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section provides updates on fuboTV Inc.'s ongoing legal proceedings, including patent infringement claims, a recently settled antitrust lawsuit, and class action complaints related to video privacy - The Company is a defendant in a patent infringement lawsuit filed by DISH Technologies, LLC, which is currently stayed pending inter partes review (IPR) proceedings at the PTAB[274](index=274&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) - The antitrust lawsuit against The Walt Disney Company, Fox Corporation, and Warner Bros. Discovery, Inc. was settled on January 6, 2025, leading to the dismissal of the lawsuit with prejudice[279](index=279&type=chunk) - The Company reached a class action settlement for **$3.4 million** to resolve Video Privacy Protection Act (VPPA) claims, with preliminary court approval granted on May 29, 2025[280](index=280&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks and uncertainties that could materially affect fuboTV Inc.'s business, financial condition, results of operations, and prospects, categorized by financial position, business combination, relationships with third parties, financial reporting, products/technology, regulation, operations, privacy/cybersecurity, intellectual property, and specific debt instruments [Risks Related to Our Financial Position and Capital Needs](index=55&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) This section details risks associated with the company's profitability, capital requirements, seasonality, tax assets, and debt obligations - The Company has incurred operating losses since inception and expects future losses, with no assurance of achieving or maintaining profitability[284](index=284&type=chunk) - Additional capital may be required for business growth, which might not be available on acceptable terms or could dilute existing shareholders[285](index=285&type=chunk)[286](index=286&type=chunk) - Revenue is subject to seasonality, particularly driven by sports leagues in Q3 and Q4, making results difficult to predict and potentially harming the business if expectations are not met[288](index=288&type=chunk)[289](index=289&type=chunk) - The Company may not be able to utilize a significant portion of its **$1,458.4 million federal net operating loss carryforwards** due to past or future ownership changes (e.g., Business Combination) and Section 382 limitations[290](index=290&type=chunk)[291](index=291&type=chunk) - Servicing **$330.5 million in outstanding indebtedness** requires significant cash flow, and the Company's ability to refinance or make payments depends on future performance and financing availability[292](index=292&type=chunk)[296](index=296&type=chunk) [Risks Relating to the Business Combination](index=59&type=section&id=Risks%20Relating%20to%20the%20Business%20Combination) This section outlines risks concerning the completion, integration, and financial implications of the proposed business combination - The Business Combination with Disney and Hulu is subject to various closing conditions, including shareholder and regulatory approvals, and may not be completed on contemplated terms or timeline, or at all[302](index=302&type=chunk)[304](index=304&type=chunk) - Failure to complete the Business Combination could result in Fubo not realizing anticipated benefits, being required to pay a **$50 million termination fee**, and increased stock price volatility[305](index=305&type=chunk)[308](index=308&type=chunk) - Uncertainty during the Business Combination's pendency could adversely affect employee retention, business partner relationships, and management's focus on existing operations[306](index=306&type=chunk)[307](index=307&type=chunk)[309](index=309&type=chunk) - Fubo will incur significant direct and indirect costs related to the Business Combination, many of which are payable even if the transaction is not completed[312](index=312&type=chunk) - Post-Business Combination, Fubo will be a holding company dependent on distributions from Newco to pay taxes and expenses, including substantial payments under the Tax Receivables Agreement, which may be subject to limitations[314](index=314&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk)[319](index=319&type=chunk) [Risks Related to Our Relationships with Content Providers, Customers and Other Third Parties](index=64&type=section&id=Risks%20Related%20to%20Our%20Relationships%20with%20Content%20Providers%2C%20Customers%20and%20Other%20Third%20Parties) This section addresses risks arising from content contracts, subscriber acquisition, distribution partnerships, and reliance on third-party service providers - Long-term content commitments may limit operating flexibility and adversely affect liquidity and results if subscriber acquisition and retention do not meet expectations[324](index=324&type=chunk)[326](index=326&type=chunk) - Failure to renew long-term content contracts on favorable terms, or an increase in content costs, could adversely affect results and the ability to grow the business[327](index=327&type=chunk) - Inability to attract and retain subscribers due to competitive offerings, perceived reduction in platform value, or content changes could harm the business[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk) - Agreements with distribution partners may contain parity obligations, limiting Fubo's ability to pursue unique partnerships or offer differentiated features[334](index=334&type=chunk) - Reliance on Google Cloud Platform (GCP) and Amazon Web Services (AWS) means any disruption or interference with these services could adversely impact operations[351](index=351&type=chunk) [Risks Related to Our Financial Reporting and Disclosure](index=69&type=section&id=Risks%20Related%20to%20Our%20Financial%20Reporting%20and%20Disclosure) This section covers risks associated with internal controls, key performance metrics, financial estimates, and asset impairment - Failure to maintain an effective system of internal controls or identification of material weaknesses could lead to loss of investor confidence and adverse impact on stock price[352](index=352&type=chunk)[353](index=353&type=chunk) - Key performance metrics and other estimates are subject to inherent measurement challenges, and inaccuracies could harm reputation and business[354](index=354&type=chunk)[355](index=355&type=chunk)[356](index=356&type=chunk) - Preparing and forecasting financial results requires judgments and estimates that may differ materially from actual results, potentially causing stock price decline if guidance is not met[357](index=357&type=chunk)[358](index=358&type=chunk) - Impairment in the carrying value of goodwill or long-lived assets could negatively affect operating results, as the Company has recorded material non-cash impairment charges in prior periods[359](index=359&type=chunk)[360](index=360&type=chunk) [Risks Related to Our Products and Technologies and Competition](index=71&type=section&id=Risks%20Related%20to%20Our%20Products%20and%20Technologies%20and%20Competition) This section discusses competitive pressures, advertising market trends, content expansion challenges, technology failures, and AI-related risks - The TV streaming industry is highly competitive, with large technology and entertainment companies, TV brands, and service operators, making it difficult to attract or retain subscribers if Fubo fails to differentiate itself[361](index=361&type=chunk)[362](index=362&type=chunk)[364](index=364&type=chunk) - Future growth depends on the acceptance and growth of OTT advertising, and if advertisers do not perceive meaningful benefits, market development may be slower than expected[366](index=366&type=chunk)[367](index=367&type=chunk)[370](index=370&type=chunk) - The Company may not successfully expand content beyond its current offering or overcome its reputation as primarily a live sports streaming service[368](index=368&type=chunk) - Failure or unavailability of proprietary or third-party technology used in operations, including CDNs and data analytics systems, could adversely impact business and results[375](index=375&type=chunk)[376](index=376&type=chunk) - Risks associated with the use of artificial intelligence and machine learning models include inadequate design, biased data, evolving regulatory landscape (e.g., EU AI Act), and increased litigation[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[382](index=382&type=chunk) [Risks Related to Regulation](index=76&type=section&id=Risks%20Related%20to%20Regulation) This section addresses risks from regulatory investigations, changes in internet/privacy laws, payment processing, and tax liabilities - The Company expects to be subject to regulatory investigations, which could incur substantial costs or require adverse changes to business practices[383](index=383&type=chunk) - Changes in government regulations related to the Internet, user privacy, data protection, consumer protection, and broadcasting (e.g., potential FCC regulation of vMVPDs) could increase operating expenses or alter the business model[384](index=384&type=chunk)[385](index=385&type=chunk) - The Company is subject to payment processing risks, including increased fees, changes in the payment ecosystem, or disruptions in processing systems, which could adversely impact revenue and operating expenses[388](index=388&type=chunk) - The Company could be required to collect additional sales and other similar taxes, or be subject to other tax liabilities in multiple jurisdictions, increasing costs for customers and adversely affecting operating results[390](index=390&type=chunk)[391](index=391&type=chunk)[392](index=392&type=chunk) [Risks Related to Our Operations](index=79&type=section&id=Risks%20Related%20to%20Our%20Operations) This section covers operational risks including legal proceedings, customer support, international expansion, key personnel, economic conditions, and strategic transactions - Legal proceedings, including past securities class actions, derivative lawsuits, and current patent infringement claims, could cause unforeseen expenses and divert management's time[394](index=394&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk) - Failure to provide adequate customer support, especially when relying on BPO providers, could lead to subscriber loss and harm the business[397](index=397&type=chunk) - Unsuccessful international expansion plans, particularly in Canada, Spain, and France, could subject the Company to economic, political, and regulatory risks, and differing legal systems[398](index=398&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk) - Dependence on highly skilled key personnel, including executive leadership, means inability to attract, retain, and motivate qualified employees could harm business development and growth[403](index=403&type=chunk) - Worldwide economic conditions, including inflation, can adversely affect advertising spending and consumer discretionary spending, impacting revenue and subscriber levels[405](index=405&type=chunk)[406](index=406&type=chunk) - Strategic transactions, including acquisitions and investments (e.g., Edisn Inc. and Molotov), involve risks such as integration difficulties, unforeseen costs, and failure to realize anticipated benefits[410](index=410&type=chunk) [Risks Related to Privacy, Consumer Protection and Cybersecurity](index=83&type=section&id=Risks%20Related%20to%20Privacy%2C%20Consumer%20Protection%20and%20Cybersecurity) This section details risks associated with data privacy laws, cybersecurity threats, and potential system interruptions or data breaches - The Company is subject to evolving international, federal, and state privacy and data protection laws (e.g., CCPA, GDPR, UK GDPR, VPPA, COPPA), and any failure to comply could adversely affect reputation, business, and financial results[411](index=411&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk)[418](index=418&type=chunk)[419](index=419&type=chunk) - Significant interruptions, delays, or unauthorized access to information technology systems, including those of third-party cloud providers (GCP, AWS) or due to cyber-attacks, could result in service degradation, data disclosure, or intellectual property theft[421](index=421&type=chunk)[422](index=422&type=chunk)[424](index=424&type=chunk) - Cybersecurity threats, including ransomware, phishing, and human error, are ongoing risks, and past incidents (e.g., December 2022 cyber-attack) highlight the potential for business disruption and financial costs[422](index=422&type=chunk) [Risks Related to Our Intellectual Property](index=88&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section outlines risks concerning intellectual property infringement, content licensing, protection of proprietary rights, and open-source software use - The Company could face costly litigation regarding intellectual property rights infringement, misappropriation, or violation, potentially leading to damages, content restrictions, or the need for expensive licenses[427](index=427&type=chunk)[428](index=428&type=chunk) - Inability to obtain necessary or desirable licenses for streaming content from suppliers or other rights holders could harm the business, especially with evolving rights and royalty rates[429](index=429&type=chunk)[430](index=430&type=chunk)[431](index=431&type=chunk)[432](index=432&type=chunk) - Failure to adequately protect technology, trademarks, and other proprietary rights could diminish brand value and intangible assets, as competitors may independently develop similar technologies or infringe existing IP[433](index=433&type=chunk)[434](index=434&type=chunk) - Use of open-source software could impose limitations on commercializing the platform, potentially requiring public release of proprietary source code or licensing under unfavorable terms[435](index=435&type=chunk)[436](index=436&type=chunk) [Risks Related to the 2026 Convertible Notes](index=90&type=section&id=Risks%20Related%20to%20the%202026%20Convertible%20Notes) This section details risks associated with the 2026 Convertible Notes, including cash settlement, liquidity, EPS impact, and business combination deterrence - The Company may lack sufficient funds to settle conversions of the 2026 Convertible Notes in cash or repurchase them upon a fundamental change, potentially leading to default[438](index=438&type=chunk)[439](index=439&type=chunk) - The conditional conversion feature, if triggered, could adversely affect liquidity by requiring cash payments[440](index=440&type=chunk) - The accounting method for convertible debt (ASU 2020-06) requires the 'if-converted' method, which could adversely affect diluted earnings per share[441](index=441&type=chunk) - Provisions in the indenture for the 2026 Convertible Notes, such as repurchase rights upon fundamental change, may deter or prevent a business combination favorable to shareholders[442](index=442&type=chunk) [Risks Related to the 2029 Convertible Notes](index=91&type=section&id=Risks%20Related%20to%20the%202029%20Convertible%20Notes) This section outlines risks related to the 2029 Convertible Notes, including cash settlement, liquidity, business combination deterrence, and operational restrictions - The Company may not have the ability to raise funds necessary to settle conversions of the 2029 Convertible Notes in cash or repurchase them upon a fundamental change, potentially leading to default[443](index=443&type=chunk)[444](index=444&type=chunk) - The conditional conversion feature, if triggered, could adversely affect liquidity by requiring cash payments or reclassifying principal as a current liability[445](index=445&type=chunk) - Provisions in the indenture for the 2029 Convertible Notes may deter or prevent a business combination favorable to shareholders[446](index=446&type=chunk) - The terms of the 2029 notes indenture and Exchange Agreement place restrictions on operating and financial flexibility, including limitations on incurring additional secured indebtedness and certain business transactions[447](index=447&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk)[450](index=450&type=chunk) [Risks Related to Ownership of our Common Stock](index=93&type=section&id=Risks%20Related%20to%20Ownership%20of%20our%20Common%20Stock) This section addresses risks concerning common stock price volatility, potential dilution from future sales, and the absence of cash dividends - The market price of the Company's common stock is subject to wide fluctuations due to macroeconomic conditions, operating results, competitive factors, and technical trading factors[451](index=451&type=chunk)[452](index=452&type=chunk) - Future sales of a substantial number of shares by existing shareholders, including those from expired lock-up agreements or equity compensation plans, could depress the market price[453](index=453&type=chunk)[454](index=454&type=chunk)[455](index=455&type=chunk) - The Company does not anticipate declaring cash dividends in the foreseeable future, requiring investors to rely on stock price appreciation for gains[456](index=456&type=chunk) - Future sales and issuances of capital stock, including through shelf registration statements, could dilute existing shareholders' ownership[457](index=457&type=chunk) [General Risk Factors](index=94&type=section&id=General%20Risk%20Factors) This section highlights general risks, including the adequacy of insurance coverage against potential claims or losses - The Company's insurance coverage may not provide adequate levels of coverage against all potential claims or losses, which could adversely affect business prospects[459](index=459&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds during the reporting period [Item 3. Defaults Upon Senior Securities](index=95&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period [Item 4. Mine Safety Disclosures](index=95&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company [Item 5. Other Information](index=95&type=section&id=Item%205.%20Other%20Information) This section details the adoption of the 2025 Employment Inducement Equity Incentive Plan by the Board of Directors - On August 8, 2025, the Board approved the 2025 Employment Inducement Equity Incentive Plan, reserving an initial total of **3,000,000 shares** for issuance to new employees as an inducement for employment[464](index=464&type=chunk) [Item 6. Exhibits](index=95&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including the Business Combination Agreement, various articles of incorporation, indentures for convertible notes, and equity incentive plans - Key exhibits include the Business Combination Agreement (Exhibit 2.1), various amendments to Articles of Incorporation (Exhibit 3.1 series), Indentures for 2026 and 2029 Convertible Notes (Exhibits 4.2, 4.4), and the fuboTV Inc. 2025 Employment Inducement Equity Incentive Plan (Exhibit 10.1)[466](index=466&type=chunk)[467](index=467&type=chunk)[468](index=468&type=chunk)

Table of Contents 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 0-11204 AmeriServ Financial, Inc. (Exact name of registrant as specified in its charter) | Pennsylvania ...

[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) The unaudited condensed consolidated financial statements for June 30, 2025, reflect increased revenue, a shift to net income, asset growth driven by property investments, and a decrease in cash due to substantial capital expenditures and new long-term debt [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to $447.3 million, primarily from property and equipment, while cash decreased and liabilities rose due to new long-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $16,701 | $59,273 | | Total current assets | $79,629 | $111,252 | | Property, Equipment and Facilities, net | $149,142 | $103,533 | | Total Assets | $447,321 | $436,556 | | **Liabilities & Equity** | | | | Total current liabilities | $88,252 | $90,212 | | Long-term debt | $13,000 | $0 | | Total liabilities | $266,643 | $258,292 | | Total stockholders' equity | $180,678 | $178,264 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 saw a turnaround to $1.6 million net income on 13.2% revenue growth, with H1 2025 net income reaching $3.5 million on 13.4% revenue growth Q2 2025 vs Q2 2024 Performance (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $116,474 | $102,914 | | Operating Income (Loss) | $2,878 | $(1,116) | | Net Income (Loss) | $1,554 | $(682) | | Diluted EPS | $0.05 | $(0.02) | H1 2025 vs H1 2024 Performance (in thousands, except per share) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | $233,980 | $206,281 | | Operating Income (Loss) | $6,292 | $(1,575) | | Net Income (Loss) | $3,499 | $(896) | | Diluted EPS | $0.11 | $(0.03) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw $8.1 million cash used in operations, $45.8 million in investing activities driven by capital expenditures, and $11.3 million from financing, resulting in a $42.6 million net cash decrease Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,079) | $(6,599) | | Net cash used in investing activities | $(45,772) | $(3,007) | | Net cash provided by (used in) financing activities | $11,279 | $(3,676) | | **Net Decrease in Cash** | **$(42,572)** | **$(13,282)** | - Capital expenditures significantly increased to **$46.3 million** in H1 2025 from $12.7 million in H1 2024, reflecting investments in campus growth initiatives[23](index=23&type=chunk)[159](index=159&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business segments, accounting policies, and financial components, including a new credit facility, share repurchase program, and the absence of active transitional campuses - The company operates **21 campuses** in **12 states** and is expanding with two new campuses planned for Houston, TX (H2 2025) and Hicksville, NY (end of 2026)[26](index=26&type=chunk) - The business is organized into two segments: Campus Operations (continuing campuses) and Transitional (closed/sold campuses); as of June 30, 2025, no campuses were in the Transitional segment following the sale of the Summerlin campus on January 1, 2025[29](index=29&type=chunk)[84](index=84&type=chunk) - On March 11, 2025, the company amended its credit facility, increasing the principal amount from **$40.0 million to $60.0 million** and extending the maturity to March 7, 2028; as of June 30, 2025, **$13.0 million** was outstanding[65](index=65&type=chunk)[67](index=67&type=chunk) - The company's share repurchase program was extended through May 24, 2026, with approximately **$29.7 million** remaining for repurchases; no shares were repurchased in H1 2025[78](index=78&type=chunk)[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Strong H1 2025 performance, driven by student growth and operational efficiency, is supported by a growth strategy involving new campuses and program expansion, though liquidity is impacted by capital expenditures and new regulatory changes [Business Strategy](index=26&type=section&id=Business%20Strategy) The business strategy focuses on geographic expansion, program replication, operational efficiency, facility utilization, and enhancing the hybrid teaching platform Planned Campus Openings and Relocations | Campus Location | Type | Status | Opening Date | | :--- | :--- | :--- | :--- | | East Point, GA | New Campus | Opened | March 2024 | | Nashville, TN | Campus Relocation | Opened | March 2025 | | Levittown, PA | Campus Relocation | Opened | August 2025 | | Houston, TX | New Campus | In Progress | Second half of 2025 | | Hicksville, NY | New Campus | In Progress | By the end of 2026 | - Strategic priorities include expanding the program portfolio with in-demand offerings, improving margins by centralizing operations, and completing the implementation of the Lincoln 10.0 hybrid teaching platform by year-end[116](index=116&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) H1 2025 revenue grew 13.4% to $234.0 million, driven by a 14.5% student population increase, leading to a significant operating income improvement to $6.3 million due to better margins Six Months Ended June 30, 2025 vs 2024 Key Metrics | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue (millions) | $234.0 | $206.3 | 13.4% | | Average student population | 15,742 | 13,745 | 14.5% | | Total new student starts | 10,531 | 8,920 | 18.1% | | Operating Income (Loss) (millions) | $6.3 | $(1.6) | 499.5% | - The Campus Operations segment saw an **80.1% increase in operating income to $41.0 million** for H1 2025, driven by a **15.5% revenue increase** from a **17.4% rise in average student population**[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Marketing efficiency improved, with cost per start declining **17.3%** in H1 2025 compared to the prior-year period[143](index=143&type=chunk) - Corporate expenses increased by **$11.2 million to $34.7 million** in H1 2025, driven by workforce expansion, higher medical claims, and increased performance-based incentive compensation[152](index=152&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity, primarily from Title IV aid, decreased due to $45.8 million in capital expenditures for campus expansion, necessitating a $13.0 million draw on the expanded credit facility - Cash and cash equivalents decreased to **$16.7 million** as of June 30, 2025, from $67.0 million as of June 30, 2024, mainly due to increased capital expenditures[153](index=153&type=chunk) - Capital expenditures for H1 2025 were **$46.3 million**, a substantial increase from $12.7 million in H1 2024, funding the relocation of two campuses and the buildout of two new campuses[159](index=159&type=chunk) - The company's credit facility was increased to **$60.0 million** and extended to 2028, providing financial flexibility for growth; **$13.0 million** was outstanding as of June 30, 2025[166](index=166&type=chunk)[168](index=168&type=chunk) [Regulatory Updates](index=35&type=section&id=Regulatory%20Updates) New DOE rulemaking and the OBBB Act, effective July 1, 2026, introduce changes to Title IV loan limits and accountability metrics, requiring company evaluation of potential impacts - The DOE is conducting negotiated rulemaking sessions which may lead to new regulations for Title IV programs[171](index=171&type=chunk)[172](index=172&type=chunk) - The OBBB Act, effective July 1, 2026, will introduce new Title IV loan limits and accountability metrics that could impact student enrollment and program eligibility[174](index=174&type=chunk)[179](index=179&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposure were identified for the three months ended June 30, 2025 - No material changes in market risk exposure were identified for the quarter ended June 30, 2025[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures are effective as of June 30, 2025[180](index=180&type=chunk) - No material changes to internal control over financial reporting occurred during the most recently completed fiscal quarter[181](index=181&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) No material developments occurred in previously disclosed legal proceedings, and other routine legal matters are not expected to have a material adverse effect - No material developments have occurred in previously disclosed legal proceedings[183](index=183&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No new or additional material risk factors were identified for the quarter ended June 30, 2025, beyond those previously disclosed - No new or additional risk factors were identified for the quarter ended June 30, 2025[185](index=185&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The share repurchase program was extended to May 24, 2026, with $29.7 million remaining, and no shares were repurchased in Q2 2025 - The company did not repurchase any shares in Q2 2025; the share repurchase program was extended to May 24, 2026, with **$29.7 million** remaining authorized for repurchases[190](index=190&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, CEO/CFO certifications, and iXBRL financial statements

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Compass Minerals International, Inc. for the three and nine months ended June 30, 2025, and June 30, 2024, covering balance sheets, operations, cash flows, and related notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$1,537.4 million** as of June 30, 2025, from **$1,640.1 million** as of September 30, 2024, primarily due to reduced inventories and intangible assets, while total stockholders' equity declined to **$249.8 million** Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $79.4 | $20.2 | | Inventories | $264.7 | $414.1 | | Total current assets | $570.6 | $587.3 | | Property, plant and equipment, net | $773.8 | $806.5 | | **Total assets** | **$1,537.4** | **$1,640.1** | | **Liabilities & Equity** | | | | Total current liabilities | $265.1 | $217.0 | | Long-term debt, net | $825.3 | $910.0 | | **Total stockholders' equity** | **$249.8** | **$316.6** | | **Total liabilities and stockholders' equity** | **$1,537.4** | **$1,640.1** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Sales for the three months ended June 30, 2025, increased to **$214.6 million**, with net loss narrowing to **$(17.0) million**, while nine-month sales grew to **$1,016.4 million**, and net loss significantly decreased to **$(72.6) million** due to lower impairment charges Consolidated Statements of Operations Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales | $214.6 | $202.9 | $1,016.4 | $908.6 | | Gross profit | $41.2 | $32.6 | $152.3 | $175.5 | | Operating income (loss) | $15.9 | $5.9 | $13.3 | $(87.0) | | Net loss | $(17.0) | $(43.6) | $(72.6) | $(157.8) | | Diluted net loss per common share | $(0.41) | $(1.05) | $(1.74) | $(3.83) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for the nine months ended June 30, 2025, significantly improved to **$204.6 million** from **$27.1 million** in the prior year, while financing activities used **$111.5 million** primarily for debt restructuring Consolidated Cash Flow Summary (in millions) | Cash Flow Activity | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $204.6 | $27.1 | | Net cash used in investing activities | $(34.7) | $(95.0) | | Net cash (used in) provided by financing activities | $(111.5) | $42.2 | | Net change in cash and cash equivalents | $59.2 | $(25.9) | | Cash and cash equivalents, end of period | $79.4 | $12.8 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment information, debt, and legal contingencies, highlighting the strategic exit from the Fortress business, significant debt refinancing in June 2025, and a securities class action settlement covered by insurance - The company is exiting the Fortress fire retardant business, which resulted in impairment charges of **$53.7 million** for the nine months ended June 30, 2025. Substantially all Fortress assets were subsequently sold for **$20.0 million** in cash[26](index=26&type=chunk)[27](index=27&type=chunk)[32](index=32&type=chunk) - In June 2025, the company issued **$650.0 million** of **8.00%** Senior Notes due 2030. Proceeds were used to repay the term loan, redeem **$350.0 million** of its **6.75%** Senior Notes due 2027, and for general corporate purposes[55](index=55&type=chunk)[56](index=56&type=chunk) - The company reached an agreement to settle a securities class action lawsuit for **$48.0 million**. The company's insurers have consented to and committed to pay the settlement amount[67](index=67&type=chunk)[68](index=68&type=chunk) - A valuation allowance of **$29.0 million** was recorded against U.S. deferred tax assets during the nine months ended June 30, 2025, due to a cumulative loss position in the U.S. over the last three years[47](index=47&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and nine-month fiscal 2025 financial results, highlighting improved operating income from higher sales and lower impairment charges, segment performance, the Fortress business exit, significant debt refinancing, and the full fiscal year 2025 outlook [Consolidated Results of Operations](index=29&type=section&id=Consolidated%20Results%20of%20Operations) Q3 fiscal 2025 total sales increased **6%** to **$214.6 million**, with operating income rising to **$15.9 million**, while nine-month sales grew **12%** to **$1,016.4 million**, achieving **$13.3 million** operating income, a significant turnaround from a prior-year loss due to lower impairment charges Q3 Financial Performance Comparison (in millions) | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $214.6 | $202.9 | +$11.7M (+6%) | | Operating Income | $15.9 | $5.9 | +$10.0M | | Net Loss | $(17.0) | $(43.6) | +$26.6M | | Diluted EPS | $(0.41) | $(1.05) | +$0.64 | Nine-Month Financial Performance Comparison (in millions) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $1,016.4 | $908.6 | +$107.8M (+12%) | | Operating Income (Loss) | $13.3 | $(87.0) | +$100.3M | | Net Loss | $(72.6) | $(157.8) | +$85.2M | | Diluted EPS | $(1.74) | $(3.83) | +$2.09 | - The significant improvement in nine-month operating income was primarily due to lower impairment charges. The current period included a **$53.7 million** impairment for the Fortress business exit, whereas the prior year had **$173.4 million** in impairments related to lithium, Fortress, and Plant Nutrition goodwill[10](index=10&type=chunk)[135](index=135&type=chunk)[153](index=153&type=chunk) [Operating Segment Performance](index=34&type=section&id=Operating%20Segment%20Performance) The Salt segment's Q3 sales increased **3%** to **$166.0 million** with operating earnings of **$28.1 million**, while nine-month operating earnings fell to **$124.4 million**; Plant Nutrition's Q3 sales rose **15%** to **$44.8 million**, achieving a **$5.2 million** profit, and nine-month operating results improved to **$0.3 million** earnings Salt Segment Performance | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales (in millions) | $166.0 | $160.6 | $840.9 | $745.3 | | Operating Earnings (in millions) | $28.1 | $25.9 | $124.4 | $142.6 | | Total Tons Sold (thousands) | 1,544 | 1,483 | 9,142 | 7,804 | Plant Nutrition Segment Performance | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales (in millions) | $44.8 | $38.8 | $164.5 | $138.6 | | Operating Earnings (Loss) (in millions) | $5.2 | $(1.4) | $0.3 | $(56.7) | | Sales Volumes (thousands of tons) | 68 | 56 | 263 | 205 | [Outlook](index=36&type=section&id=Outlook) For fiscal year 2025, the company projects Salt segment sales volumes of **10.7M-11.0M tons** and adjusted EBITDA of **$220M-$229M**, Plant Nutrition sales volumes of **320K-325K tons** and adjusted EBITDA of **$24M-$27M**, with capital expenditures of **$75M-$85M** - Fiscal Year 2025 Guidance: - **Salt Segment:** Sales volumes of **10.7M to 11.0M tons**; Adjusted EBITDA of **$220M to $229M** - **Plant Nutrition Segment:** Sales volumes of **320,000 to 325,000 tons**; Adjusted EBITDA of **$24M to $27M** - **Capital Expenditures:** Expected to be **$75M to $85M**[174](index=174&type=chunk) - Based on bidding for the upcoming winter season, the company expects its average North American highway deicing contract selling price to be **2% to 4%** higher than in fiscal 2025, with committed bid volumes up **3% to 5%**[174](index=174&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, total liquidity was **$388.7 million**, with nine-month net cash from operations significantly increasing to **$204.6 million**; the company completed a major debt refinancing by issuing **$650 million** in new **8.00%** Senior Notes and suspended dividends to prioritize debt reduction - Total liquidity as of June 30, 2025, was **$388.7 million**, comprising **$79.4 million** of cash and **$309.3 million** of availability under its revolving credit facility[178](index=178&type=chunk) - The company issued **$650.0 million** of **8.00%** Senior Notes due 2030 and used proceeds to repay its term loan and redeem **$350.0 million** of its **6.75%** Senior Notes due 2027, resulting in a **$7.6 million** loss on debt extinguishment[187](index=187&type=chunk)[188](index=188&type=chunk)[142](index=142&type=chunk) - The credit agreement was amended to fix revolving commitments at **$325.0 million** and modify financial covenants, replacing the total net leverage ratio with a first lien net leverage ratio and lowering the interest coverage ratio requirement[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate fluctuations, foreign currency (CAD, GBP), and commodity pricing (natural gas), using derivatives to mitigate some exposures, with no material change in risk since the last fiscal year-end - The company's primary market risks are interest rate risk, foreign currency exchange rate risk, and commodity pricing risk. It uses derivatives to hedge commodity and foreign currency risks and does not engage in speculative trading[207](index=207&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management deemed disclosure controls and procedures ineffective as of September 30, 2024, due to material weaknesses in risk assessment and information/communication processes, with active remediation efforts underway including enhanced risk assessment and new accounting personnel - The CEO and CFO concluded that disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting[208](index=208&type=chunk) - The material weaknesses stem from an ineffective risk assessment process and an ineffective information and communication process, which led to deficiencies in process-level controls throughout financial reporting[214](index=214&type=chunk) - Remediation efforts are in progress, including enhancing the risk assessment process, hiring additional accounting professionals with technical expertise, and redesigning controls over manual journal entries and balance sheet reconciliations[216](index=216&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to detailed disclosures on legal proceedings in Note 6 (Income Taxes) and Note 8 (Commitments and Contingencies) of the financial statements, with no material developments since September 30, 2024, beyond those notes - The company is involved in various legal proceedings, with detailed information provided in Note 6 (Income Taxes) and Note 8 (Commitments and Contingencies) of the financial statements[217](index=217&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, for a comprehensive discussion of applicable business risk factors - For a discussion of applicable risk factors, the report refers to Part I, Item 1A of the company's Annual Report on Form 10-K for the year ended September 30, 2024[218](index=218&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that information on mine safety violations and related regulatory matters, as required by the Dodd-Frank Act, is included in Exhibit 95 of this Quarterly Report - Information regarding mine safety violations as required by Section 1503(a) of the Dodd-Frank Act is included in Exhibit 95 to this Form 10-Q[220](index=220&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the indenture for the new **8.000%** Senior Notes, the fifth amendment to the credit agreement, and CEO/CFO certifications - Key exhibits filed include the Indenture for the **8.000%** Senior Notes due 2030 (Exhibit 4.1) and Amendment No. 5 to the Credit Agreement (Exhibit 10.1)[223](index=223&type=chunk)