[Special Note About Forward-Looking Statements](index=5&type=section&id=SPECIAL%20NOTE%20ABOUT%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Disclaimer](index=5&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section highlights that certain statements in the report are forward-looking, reflecting current views on future events and financial performance based on assumptions, and cautions against undue reliance due to inherent risks and uncertainties - Forward-looking statements reflect current views about future events and financial performance based on certain assumptions, including opinions, forecasts, intentions, plans, goals, projections, guidance, expectations, and beliefs[11](index=11&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, as they are subject to future events, risks, and uncertainties outside the company's control, which could cause actual results to differ materially[12](index=12&type=chunk) - Key factors that could impact future results include the ability to develop market acceptance for new products, future financial and operating results, liquidity, facility adequacy, customer orders, pricing, patent/trademark licensing, operating efficiencies, raw material availability, intellectual property protection, economic/political conditions, currency exchange rates, litigation outcomes, and regulatory compliance[13](index=13&type=chunk) [PART I](index=6&type=section&id=PART%20I) [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Natural Alternatives International, Inc. (NAI) is a formulator, manufacturer, and marketer of nutritional supplements, primarily offering private-label contract manufacturing services and commercializing its patent estate related to beta-alanine, emphasizing quality, scientific research, and regulatory compliance across its U.S. and Swiss facilities - NAI's vision is to enrich the world through the best of nutrition, serving as a leading formulator, manufacturer, and marketer of nutritional supplements[14](index=14&type=chunk)[15](index=15&type=chunk) - The primary business activity is private-label contract manufacturing, alongside commercialization of its beta-alanine patent estate under CarnoSyn®, SR CarnoSyn®, and TriBsyn™ trademarks[16](index=16&type=chunk) - NAI operates manufacturing facilities in Vista and Carlsbad, California, and Manno, Switzerland, holding various certifications including TGA, NSF, Health Canada, Organic, SSCI, and Swissmedic pharmaceutical licenses[21](index=21&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) [General Business Overview](index=6&type=section&id=General%20Business%20Overview) - NAI provides comprehensive strategic partnerships, offering services like scientific research, clinical studies, proprietary ingredients, product formulation, testing, marketing support, packaging, regulatory review, and international product registration assistance[15](index=15&type=chunk) - The company commercializes its beta-alanine patent estate through direct raw material sales and supply agreements under CarnoSyn®, SR CarnoSyn®, and TriBsyn™ trademarks[16](index=16&type=chunk) [History and Facilities](index=6&type=section&id=History%20and%20Facilities) - Founded in 1980 and reorganized in 1989, NAI's principal executive offices are in Carlsbad, CA, with primary U.S. manufacturing in Vista, CA, and an additional facility in Carlsbad, CA[17](index=17&type=chunk) - NAIE, a wholly-owned Swiss subsidiary formed in 1999, operates a manufacturing facility in Manno, Switzerland, with capabilities in encapsulation, powders, tablets, packaging, quality control, and distribution[18](index=18&type=chunk) - NAI licensed beta-alanine patent rights in 1997, expanding to include sustained-release beta-alanine (SR CarnoSyn®) and a new form, TriBsyn™[19](index=19&type=chunk) - U.S. facilities are certified by TGA (Australia), NSF International (GMP and 'GMP for Sport'), Health Canada, and Natural Food Certifiers (Organic), with the Vista facility's TGA certification renewed through August 2025[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The Carlsbad, CA facility, acquired in August 2021 and fully operational in April 2023, is a dedicated high-volume powder blending and packaging facility, also certified Organic, NSF, NSF for Sport, and SSCI[28](index=28&type=chunk) - NAIE's Swiss facility holds pharmaceutical licenses from Swissmedic Authority (since 2004, with upgrades in 2007 and 2013) and FSSC 22000 certification (May 2024)[29](index=29&type=chunk) [Business Strategy](index=8&type=section&id=Business%20Strategy) - NAI's goals are long-term growth, profitability, and sales base diversification by leveraging certified facilities, expanding beta-alanine patent commercialization, and improving operational efficiencies[30](index=30&type=chunk)[33](index=33&type=chunk) - The company aims to enhance consumer confidence through education, utilizing its GMP and TGA certified operations, science-based formulations, clinical studies, and regulatory expertise as competitive advantages[30](index=30&type=chunk) - Significant opportunities exist in commercializing the beta-alanine patent estate, particularly for SR CarnoSyn® and the new TriBsyn™ product, targeting Wellness and Healthy Aging channels and new demographics like older adults, vegetarians, and vegans[32](index=32&type=chunk)[34](index=34&type=chunk) [Products, Principal Markets and Methods of Distribution](index=10&type=section&id=Products%2C%20Principal%20Markets%20and%20Methods%20of%20Distribution) - NAI's primary business is private-label contract manufacturing of nutritional supplements (vitamins, minerals, herbs) and other healthcare products for direct sales, e-commerce, and retail channels, in forms like capsules, tablets, chewable wafers, and powders[37](index=37&type=chunk) - Strategic partnering services include customized product formulation, clinical study support, manufacturing, marketing support, international regulatory compliance, product registration, and packaging/labeling design[38](index=38&type=chunk)[45](index=45&type=chunk) Net Sales Breakdown (in thousands) | Category | 2025 ($) | 2025 (%) | 2024 ($) | 2024 (%) | | :----------------------------- | :------- | :------- | :------- | :------- | | Private-label Contract Manufacturing | 121,779 | 94 | 105,358 | 93 | | Patent and Trademark Licensing | 8,081 | 6 | 8,438 | 7 | | **Total Net Sales** | **129,860** | **100** | **113,796** | **100** | [Research and Development](index=10&type=section&id=Research%20and%20Development) - NAI is committed to quality R&D, focusing on new science-based products and improving existing ones, including testing for stability, potency, efficacy, and safety, and participating in clinical research[40](index=40&type=chunk) Research and Development Expenses (in millions) | Fiscal Year | Expense ($) | | :------------ | :---------- | | 2025 | 1.8 | | 2024 | 1.9 | [Sources and Availability of Raw Materials](index=10&type=section&id=Sources%20and%20Availability%20of%20Raw%20Materials) - NAI uses various raw materials, including powders, excipients, capsules, and packaging components, with identity testing and quality evaluation protocols[43](index=43&type=chunk) - The company experienced supply chain challenges due to COVID-19, geopolitical issues (Ukraine-Russia, Israel-Hamas conflicts), and inflationary pressures, leading to increased costs for raw materials, packaging, labor, and transportation[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - The commercialization of beta-alanine patents depends on the availability of this raw material, which is purchased from a single manufacturer in Japan[43](index=43&type=chunk)[93](index=93&type=chunk) [Customers](index=11&type=section&id=Customers) - NAI has three private-label contract manufacturing customers, each representing over **10% of consolidated net sales**, posing a significant concentration risk[48](index=48&type=chunk) - The company is actively seeking new private-label customers to mitigate risks associated with a limited customer base[48](index=48&type=chunk) [Competition](index=12&type=section&id=Competition) - The nutritional supplement industry is highly fragmented and competitive, with competition based on customized services, product quality and safety, innovation, price, and customer service[50](index=50&type=chunk)[51](index=51&type=chunk) - NAI believes it competes favorably due to its comprehensive customer solutions, certified manufacturing operations, commitment to quality and safety, and R&D activities[51](index=51&type=chunk) - Future competitive position depends on product acceptance, intellectual property protection, product expansion, inventory levels, manufacturing quality/price, personnel, regulatory changes, and industry growth[52](index=52&type=chunk) [Government Regulation](index=12&type=section&id=Government%20Regulation) - NAI's business is subject to extensive regulation by U.S. authorities (FDA, FTC, CPSC, USDA, EPA) and various state/local agencies, covering product claims, labels, ingredients, manufacturing, packaging, distribution, import/export, and storage[53](index=53&type=chunk)[55](index=55&type=chunk) - The FDA regulates dietary supplements under GMPs, DSHEA (1994), and the 2006 Act, requiring compliance with manufacturing standards, labeling, claims, and adverse event reporting[54](index=54&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - International operations are subject to varying regulations, including EU rules and country-specific approvals, which may conflict with U.S. laws and require significant financial and operational resources for compliance[61](index=61&type=chunk) [Intellectual Property](index=14&type=section&id=Intellectual%20Property) - NAI owns **57 registered trademarks globally**, including **11 in the U.S.** (7 incontestable), and **46 foreign trademarks** covering 39 countries, including CarnoSyn®, SR CarnoSyn®, and TriBsyn™[62](index=62&type=chunk)[63](index=63&type=chunk) - The company holds **nine U.S. patents** and **eight corresponding non-U.S. patents** related to beta-alanine, with some extending through 2036, and pending applications for TriBsyn™[66](index=66&type=chunk) Intellectual Property Related Financials (in millions) | Item | Fiscal 2025 ($) | | :-------------------------------- | :-------------- | | Beta-alanine sales & licensing revenue | 8.1 | | IP litigation & patent compliance expenses | 0.4 | [Employees](index=15&type=section&id=Employees) - As of June 30, 2025, NAI employed **215 full-time U.S. employees** (3 executive officers, 45 R&D/QC, 13 sales/marketing, 154 manufacturing/admin) and **19 temporary personnel**[68](index=68&type=chunk) - NAIE employed an additional **78 full-time** and **21 temporary employees**, mostly in manufacturing and support[69](index=69&type=chunk) - Employees are not unionized, and the company reports a good relationship with its workforce[69](index=69&type=chunk) [Seasonality](index=16&type=section&id=Seasonality) - NAI is impacted by seasonal factors and trends, such as cultural events and vacation patterns, which vary by region[71](index=71&type=chunk) - While the impact on consolidated results is minimal, quarterly results may vary significantly due to the timing of private-label contract manufacturing and beta-alanine raw material orders[71](index=71&type=chunk) [Financial Information about Our Business Segments and Geographic Areas](index=16&type=section&id=Financial%20Information%20about%20Our%20Business%20Segments%20and%20Geographic%20Areas) - NAI operates in two reportable segments: Private-label contract manufacturing and Royalty, licensing, and raw material sales (primarily beta-alanine)[72](index=72&type=chunk)[75](index=75&type=chunk) - Private-label products are sold in the U.S. and international markets (Europe, Australia, Asia, Mexico, Canada), with Europe and Asia being primary international markets. Patent and trademark licensing activities are primarily U.S.-based[72](index=72&type=chunk) [Item 1A. Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks that could materially adversely affect NAI's business, financial condition, and results of operations, spanning economic downturns, global instability, intense competition, operational challenges, customer concentration, regulatory compliance, intellectual property protection, corporate governance, and potential acquisition failures - A significant or prolonged economic downturn could materially adversely affect NAI's results by lowering consumer demand for products manufactured for customers and those sold under licensed patent rights[78](index=78&type=chunk) - Global economic instability, including supply chain issues, inflation, fuel/energy costs, and geopolitical conflicts (Ukraine-Russia, Israel-Hamas), impact raw material availability and pricing, increasing operational costs[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - The nutritional supplement industry is highly competitive with low entry barriers; NAI faces risks from larger competitors, new product introductions, and potential price reductions if consumers do not value higher quality[83](index=83&type=chunk)[84](index=84&type=chunk) - Operational risks include dependence on uninterrupted facility operations, potential power failures, cybersecurity vulnerabilities, human error, natural disasters, and the ability to attract and retain qualified management and manufacturing personnel[88](index=88&type=chunk)[89](index=89&type=chunk) - Customer concentration is a significant risk, with sales to the three largest customers representing approximately **59% of consolidated net sales in fiscal 2025**; the loss of any major customer or a significant decline in their orders could materially affect financial results[99](index=99&type=chunk) - Extensive government regulation (FDA, FTC, international agencies) poses risks of non-compliance, product withdrawals, recalls, fines, and increased costs, while potential new tariffs on imported goods could adversely impact raw material costs and customer competitiveness[108](index=108&type=chunk)[109](index=109&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - NAI faces risks related to protecting its intellectual property (patents, trademarks, trade secrets), including litigation costs and potential infringement claims, and the ability to successfully commercialize new beta-alanine forms like SR CarnoSyn® and TriBsyn™[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[118](index=118&type=chunk) [Item 1C. Cybersecurity](index=29&type=section&id=Item%201C.%20Cybersecurity) NAI maintains various information security processes as part of its enterprise risk management to identify, assess, and manage cybersecurity threats, employing technological defenses, an Incident Response Plan, and a governance structure involving the Audit Committee and senior management to oversee cybersecurity risks, though it acknowledges the continuous and evolving nature of these threats - NAI has implemented information security processes to identify, assess, and manage cybersecurity risks to its critical computer networks, third-party hosted services, and data, aligning with business objectives and operational needs[138](index=138&type=chunk) - Technological defenses include gateway consoles, limited access to key Information Systems, and multi-factor authentication via a third-party mobile identity management tool[140](index=140&type=chunk) - An established Incident Response Plan formalizes stages for reporting, identification, scope, response, and recovery of cybersecurity incidents, supported by crisis management and business continuity measures[141](index=141&type=chunk) - The Audit Committee of the Board of Directors oversees risk management, including cybersecurity, with senior management responsible for day-to-day management and reporting material issues to the Board[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Item 2. Properties](index=31&type=section&id=Item%202.%20Properties) NAI's facilities as of June 30, 2025, include leased manufacturing and distribution sites in Vista, CA, and Manno, Switzerland, along with owned corporate headquarters and a powder filling/packaging facility in Carlsbad, CA, which the company believes are adequate for foreseeable operating requirements Summary of Facilities as of June 30, 2025 | Location | Nature of Use | Square Feet | How Held | Lease Expiration Date | | :------------------ | :------------------------------------------------ | :---------- | :------- | :-------------------- | | Vista, CA USA | Manufacturing, warehousing, packaging, distribution | 162,000 | Leased | August 2034 | | Manno, Switzerland | Manufacturing, warehousing, packaging, distribution | 85,070 | Leased | December 2032 | | Manno, Switzerland | Warehousing | 30,892 | Leased | December 2026 | | Carlsbad, CA USA | Corporate headquarters | 20,981 | Owned | N/A | | Carlsbad, CA USA | Powder filling, packaging, distribution, storage | 67,453 | Owned | N/A | - The Vista, CA facility lease was extended through August 31, 2034, and the Carlsbad, CA powder facility, operational since April 2023, was temporarily closed in October 2023 due to customer inventory issues but reopened in May 2024[152](index=152&type=chunk) [Item 3. Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) NAI is involved in various legal proceedings in the ordinary course of business, and as of June 30, 2025, the company accrued **$1.4 million** for a tentative settlement of two class action and PAGA lawsuits filed by former employees in December 2023, with court approval estimated to take about one year - NAI is routinely involved in investigations, claims, and legal proceedings related to intellectual property, product liability, employment, tax, regulation, and contracts[148](index=148&type=chunk) - In December 2023, NAI was sued by three former employees in two class action and PAGA lawsuits, leading to a tentative settlement agreement on July 3, 2025, for a maximum contribution of **$1.25 million**[149](index=149&type=chunk) - The company accrued **$1.4 million** in its fiscal 2025 results for the settlement and estimated legal fees, with court approval for the settlement process expected to take approximately one year[149](index=149&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Natural Alternatives International, Inc [PART II](index=33&type=section&id=PART%20II) [Item 5. Market for Our Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Our%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) NAI's common stock trades on the Nasdaq Global Market under 'NAII', with **169 stockholders of record** as of September 19, 2025; the company has never paid dividends and does not intend to in the foreseeable future, retaining earnings for growth, and stock repurchases were limited to shares acquired from employees for tax withholding upon restricted stock vesting - NAI's common stock trades on the Nasdaq Global Market under the symbol 'NAII'[155](index=155&type=chunk) Common Stock High and Low Sales Prices (Fiscal 2025 & 2024) | Quarter | Fiscal 2025 High ($) | Fiscal 2025 Low ($) | Fiscal 2024 High ($) | Fiscal 2024 Low ($) | | :-------------- | :------------------- | :------------------ | :------------------- | :------------------ | | First Quarter | 6.88 | 5.10 | 7.62 | 5.06 | | Second Quarter | 5.60 | 4.02 | 7.37 | 5.78 | | Third Quarter | 4.40 | 3.27 | 6.98 | 5.65 | | Fourth Quarter | 3.62 | 2.57 | 7.26 | 6.00 | - As of September 19, 2025, there were **169 stockholders of record**, and the closing sale price was **$3.12 per share**[156](index=156&type=chunk) - NAI has never paid dividends on its common stock and does not intend to in the foreseeable future, prioritizing retention of earnings for operations and future growth, also restricted by credit facility terms[157](index=157&type=chunk) - No unregistered securities were sold during fiscal year 2025[158](index=158&type=chunk) Common Stock Repurchases (Fiscal 2025) | Item | Shares Purchased | Average Cost ($) | Total Cost (in thousands) ($) | | :--------------------------------------- | :--------------- | :--------------- | :---------------------------- | | Shares purchased under Repurchase Plan | — | — | — | | Shares acquired for restricted stock vesting | 45,972 | 3.88 | 178 | | **Total** | **45,972** | | **178** | Equity Compensation Plan Information (as of June 30, 2025) | Plan Category | Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b) | Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Shares Reflected in Column (a)) (c) | | :---------------------------------------------- | :--------------------------------------------------------------------------------------- | :------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------------------------------------------------------- | | Equity compensation plans approved by stockholders | — | — | 158,877 | | Equity compensation plans not approved by stockholders | N/A | N/A | N/A | | **Total** | **—** | **—** | **158,877** | [Item 6. Selected Financial Data](index=33&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, Natural Alternatives International, Inc. is not required to provide Item 6 disclosure in this Annual Report [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of NAI's financial performance, highlighting a **14% increase in consolidated net sales in fiscal 2025**, primarily driven by private-label contract manufacturing, but reported a net loss due to factory underutilization, a valuation allowance against deferred tax assets, and a litigation settlement, anticipating a net loss in the first half of fiscal 2026 but expecting full-year net income while actively managing liquidity, capital resources, and inflationary pressures - Consolidated net sales increased by **14% in fiscal 2025** compared to fiscal 2024, primarily driven by a **16% increase in private-label contract manufacturing net sales**[167](index=167&type=chunk)[176](index=176&type=chunk) - Revenue concentration from the largest private-label contract manufacturing customer decreased from **42% in fiscal 2024 to 33% in fiscal 2025**[167](index=167&type=chunk)[176](index=176&type=chunk) - Patent and trademark licensing revenue decreased by **4% to $8.1 million in fiscal 2025**, primarily due to decreased material sales from existing customers, partially offset by lower volume rebates and increased royalty income[168](index=168&type=chunk)[177](index=177&type=chunk) - NAI incurred a net loss of **$13.6 million in fiscal 2025**, an **88% increase from $7.2 million in fiscal 2024**, primarily due to underutilization of factory capacities, a **$4.8 million valuation allowance** against domestic net deferred income tax assets, and a **$1.4 million litigation settlement accrual**[172](index=172&type=chunk)[176](index=176&type=chunk)[182](index=182&type=chunk) - The company anticipates a net loss in the first half of fiscal 2026 but expects to achieve net income in the second half and for the full fiscal year 2026[172](index=172&type=chunk) - Net cash provided by operating activities was **$5.9 million in fiscal 2025**, a significant improvement from net cash used of **$1.5 million in fiscal 2024**, driven by changes in accounts receivable and inventory[183](index=183&type=chunk)[213](index=213&type=chunk) - NAI's credit facility was amended on June 20, 2025, extending maturity to December 31, 2026, decreasing the maximum borrowing to **$10.0 million**, and waiving prior covenant defaults. The company expects non-compliance with modified covenants in H1 fiscal 2026 and is negotiating revisions[190](index=190&type=chunk) [Executive Overview](index=35&type=section&id=Executive%20Overview) - NAI's business strategy focuses on long-term growth, profitability, and sales diversification through new private-label customers and commercialization of its beta-alanine patent estate (CarnoSyn®, SR CarnoSyn®, TriBsyn™)[166](index=166&type=chunk) - The new TriBsyn™ product, a patent-pending carnosine booster, aims to penetrate the Wellness and Healthy Aging channel by increasing beta-alanine bioavailability and eliminating paresthesia, making it suitable for older adults, vegetarians, and vegans[169](index=169&type=chunk) - Litigation and patent compliance expenses for CarnoSyn® product offerings were **$0.4 million in fiscal 2025** and **$0.2 million in fiscal 2024**, primarily for patent and trademark estate maintenance and expansion[170](index=170&type=chunk) - Key strategic focuses for fiscal 2026 include leveraging certified facilities, expanding beta-alanine commercialization into Sports Nutrition, Wellness, Healthy Aging, and Medical foods, and improving operational efficiencies[173](index=173&type=chunk)[178](index=178&type=chunk) [Discussion of Critical Accounting Estimates](index=37&type=section&id=Discussion%20of%20Critical%20Accounting%20Estimates) - Revenue recognition involves significant judgment in estimating variable consideration, such as volume rebates, which can differ from actual sales due to changes in customer orders and raw material availability[174](index=174&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Consolidated Operating Results (in thousands, except percentages) | Item | Fiscal Year Ended June 30, 2025 ($) | Fiscal Year Ended June 30, 2025 (%) | Fiscal Year Ended June 30, 2024 ($) | Fiscal Year Ended June 30, 2024 (%) | Increase (Decrease) ($) | Increase (Decrease) (%) | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | :---------------------------------- | :---------------------------------- | :---------------------- | :---------------------- | | Private-label contract manufacturing | 121,779 | 94% | 105,358 | 93% | 16,421 | 16% | | Patent and trademark licensing | 8,081 | 6% | 8,438 | 7% | (357) | (4)% | | **Total net sales** | **129,860** | **100%** | **113,796** | **100%** | **16,064** | **14%** | | Cost of goods sold | 120,571 | 93% | 106,931 | 94% | 13,640 | 13% | | Gross profit | 9,289 | 7% | 6,865 | 6% | 2,424 | 35% | | Other selling, general & administrative expenses | 16,549 | 13% | 15,399 | 14% | 1,150 | 7% | | Settlement of legal proceeding and associated expense | 1,400 | 1% | — | 0% | 1,400 | 100% | | Loss from operations | (8,660) | (7)% | (8,534) | (7)% | (126) | 1% | | Other loss, net | (2,080) | (2)% | (930) | (1)% | (1,150) | 124% | | Loss before income taxes | (10,740) | (8)% | (9,464) | (8)% | (1,276) | 13% | | Provision (benefit) for income taxes | 2,835 | 2% | (2,247) | (2)% | 5,082 | (226)% | | **Net loss** | **(13,575)** | **(10)%** | **(7,217)** | **(6)%** | **(6,358)** | **88%** | - Gross profit margin increased by **1.2 percentage points in fiscal 2025**, primarily due to a favorable product sales mix in private-label contract manufacturing, despite a marginal increase in manufacturing overhead costs[178](index=178&type=chunk)[180](index=180&type=chunk) - Selling, general and administrative expenses increased by **$1.2 million (7%) in fiscal 2025**, driven by higher compensation, legal expenses for patent/trademark registrations, rent, and sales commissions, plus a **$1.4 million legal settlement accrual**[179](index=179&type=chunk) - Other expense, net, increased by **$1.2 million in fiscal 2025** due to unfavorable foreign currency exchange volatility and higher interest expense from increased rates and credit facility usage[181](index=181&type=chunk) - An income tax provision of **$2.8 million** was recorded in fiscal 2025, compared to a **$2.2 million tax benefit in fiscal 2024**, mainly due to a **$4.8 million valuation allowance** against domestic net deferred income tax assets[182](index=182&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash provided by operating activities was **$5.9 million in fiscal 2025**, a significant improvement from **$1.5 million used in fiscal 2024**, primarily due to timing of sales and collections for accounts receivable[183](index=183&type=chunk)[184](index=184&type=chunk) - Cash used in investing activities increased to **$3.6 million in fiscal 2025** (from **$3.0 million in fiscal 2024**) due to increased capital expenditures, including solar energy generation equipment[186](index=186&type=chunk) - Cash used in financing activities was **$2.0 million in fiscal 2025**, compared to **$2.9 million provided in fiscal 2024**, reflecting net payments on the line of credit[187](index=187&type=chunk) - As of June 30, 2025, NAI had **$12.3 million in cash and cash equivalents**, with **$9.9 million available borrowing capacity** on its credit facility and **$8.9 million outstanding** on a term loan[188](index=188&type=chunk)[190](index=190&type=chunk) - The company was not in compliance with credit agreement covenants for Q4 fiscal 2025, but received a prospective waiver. It anticipates non-compliance in H1 fiscal 2026 and is negotiating a revised credit facility[189](index=189&type=chunk)[190](index=190&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) - As of June 30, 2025, NAI did not have any significant off-balance sheet debt or arrangements with unconsolidated entities that would materially affect its financial condition or results of operations[191](index=191&type=chunk) [Inflation](index=40&type=section&id=Inflation) - NAI experienced continued price increases for raw materials and operational costs in fiscal 2025, expecting these inflationary pressures to persist through fiscal 2026 due to limited supplies, higher labor/transportation costs, interest rates, tariffs, and global fuel/energy costs[192](index=192&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) - A discussion of recent accounting pronouncements is included under Note A in the notes to the consolidated financial statements[193](index=193&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Natural Alternatives International, Inc. is not required to provide Item 7A disclosure in this Annual Report [PART III](index=42&type=section&id=PART%20III) [Item 8. Financial Statements and Supplementary Data](index=41&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Natural Alternatives International, Inc. for the fiscal years ended June 30, 2025, and 2024, including the balance sheets, statements of operations and comprehensive loss, stockholders' equity, and cash flows, with the independent registered public accounting firm issuing an unqualified opinion stating the financial statements are presented fairly in all material respects, and extensive notes detailing accounting policies, financial instrument fair values, inventory, property and equipment, leases, comprehensive income, debt, income taxes, employee benefits, stockholders' equity, commitments, economic dependency, derivatives, hedging, contingencies, and segment information - The independent registered public accounting firm, HASKELL & WHITE LLP, issued an unqualified opinion, stating that the consolidated financial statements present fairly, in all material respects, the company's financial position and results of operations in conformity with GAAP[197](index=197&type=chunk) - No critical audit matters were identified during the audit of the consolidated financial statements for the current period[201](index=201&type=chunk) [Report of Independent Registered Public Accounting Firm](index=41&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement and evaluating accounting principles and estimates[199](index=199&type=chunk)[200](index=200&type=chunk) - The company is not required to have, nor was the auditor engaged to perform, an audit of its internal control over financial reporting[199](index=199&type=chunk) [Consolidated Balance Sheets](index=42&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 ($) | June 30, 2024 ($) | | :-------------------------------------------- | :---------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | 12,325 | 11,981 | | Accounts receivable, net | 14,644 | 16,891 | | Inventories, net | 24,871 | 24,249 | | Total current assets | 59,276 | 61,610 | | Property and equipment, net | 50,890 | 52,211 | | Operating lease right-of-use assets | 41,054 | 43,537 | | Deferred tax asset, net – noncurrent | — | 3,170 | | **Total assets** | **151,939** | **162,342** | | **Liabilities and Stockholders' Equity** | | | | Accounts payable | 15,352 | 12,740 | | Accrued liabilities | 3,105 | 2,847 | | Line of credit – current | 1,900 | 3,400 | | Total current liabilities | 28,804 | 23,465 | | Long-term liability – operating leases | 45,970 | 46,468 | | Mortgage note payable, net of current portion | 8,628 | 8,933 | | **Total liabilities** | **83,513** | **79,747** | | Total stockholders' equity | 68,426 | 82,595 | | **Total liabilities and stockholders' equity** | **151,939** | **162,342** | [Consolidated Statements of Operations and Comprehensive Loss](index=43&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data) | Item | 2025 ($) | 2024 ($) | | :------------------------------------------ | :-------- | :-------- | | Net sales | 129,860 | 113,796 | | Cost of goods sold | 120,571 | 106,931 | | Gross profit | 9,289 | 6,865 | | Other selling, general and administrative expenses | 16,549 | 15,399 | | Settlement of legal proceeding and associated expense | 1,400 | — | | Loss from operations | (8,660) | (8,534) | | Total other expense | (2,080) | (930) | | Loss before income taxes | (10,740) | (9,464) | | Provision (benefit) for income taxes | 2,835 | (2,247) | | **Net loss** | **(13,575)** | **(7,217)** | | Comprehensive loss | (14,968) | (7,156) | | Net loss per common share: Basic | (2.28) | (1.23) | | Net loss per common share: Diluted | (2.28) | (1.23) | | Weighted average common shares outstanding: Basic | 5,946,520 | 5,870,974 | | Weighted average common shares outstanding: Diluted | 5,946,520 | 5,870,974 | [Consolidated Statements of Stockholders' Equity](index=44&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Consolidated Statements of Stockholders' Equity (in thousands) | Item | June 30, 2023 | June 30, 2024 | June 30, 2025 | | :------------------------------------------ | :------------ | :------------ | :------------ | | Common Stock (Shares) | 9,314,406 | 9,480,906 | 9,504,906 | | Common Stock (Amount) | 91 | 93 | 93 | | Additional Paid-in Capital | 31,436 | 32,634 | 33,611 | | Retained Earnings | 80,183 | 72,966 | 59,391 | | Treasury Stock (Shares) | 3,240,593 | 3,280,721 | 3,326,693 | | Treasury Stock (Amount) | (22,855) | (23,076) | (23,254) | | Accumulated Other Comprehensive Income (Loss) | (83) | (22) | (1,415) | | **Total Stockholders' Equity** | **88,772** | **82,595** | **68,426** | | Net Loss | (7,217) | (13,575) | | [Consolidated Statements of Cash Flows](index=45&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Item | 2025 ($) | 2024 ($) | | :------------------------------------------ | :------- | :------- | | **Cash flows from operating activities** | | | | Net loss | (13,575) | (7,217) | | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | Settlement of legal proceeding and associated expense | 1,400 | — | | Depreciation and amortization | 4,560 | 4,647 | | Deferred income taxes | 3,613 | (2,907) | | Non-cash lease expenses | 7,254 | 6,083 | | Non-cash compensation | 977 | 1,200 | | Changes in operating assets and liabilities: | | | | Accounts receivable | 2,247 | (9,869) | | Inventories | (622) | 5,445 | | Accounts payable and accrued liabilities | 2,858 | 5,387 | | **Net cash provided by (used in) operating activities** | **5,932** | **(1,497)** | | **Cash flows from investing activities** | | | | Purchases of property and equipment | (3,614) | (3,017) | | **Net cash used in investing activities** | **(3,614)** | **(3,017)** | | **Cash flows from financing activities** | | | | (Payments) Borrowings on line of credit | (1,500) | 3,400 | | Repurchase of common stock | (178) | (221) | | Payments on long-term debt | (296) | (288) | | **Net cash (used in) provided by financing activities** | **(1,974)** | **2,891** | | Net increase (decrease) in cash and cash equivalents | 344 | (1,623) | | Cash and cash equivalents at end of year | 12,325 | 11,981 | [A. Organization and Summary of Significant Accounting Policies](index=46&type=section&id=A.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) - NAI provides private-label contract manufacturing and commercializes its beta-alanine patent estate (CarnoSyn®, SR CarnoSyn®, TriBsyn™) through raw material and finished product sales, and licensing[216](index=216&type=chunk) - NAIE, a wholly-owned Swiss subsidiary, operates a manufacturing facility in Manno, Switzerland, with its functional currency being the U.S. Dollar[217](index=217&type=chunk)[218](index=218&type=chunk) - NAI adopted ASU 2023-07 (Segment Reporting) in fiscal 2025, which did not materially impact financial statements. It is evaluating ASU 2024-03 (Expense Disaggregation) and ASU 2023-09 (Income Tax Disclosures) for future adoption[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - Fair value measurements use a three-level hierarchy, with cash, cash equivalents, and marketable securities as Level 1, and derivative forward exchange contracts, line of credit, and term loan as Level 2[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) - Revenue is recognized when performance obligations are fulfilled and control of products is transferred, with estimates for variable consideration like early payment discounts and volume rebates[241](index=241&type=chunk)[242](index=242&type=chunk)[244](index=244&type=chunk) - NAI uses derivative financial instruments to manage foreign currency exchange risk for Euro and Swiss Franc sales and interest rate fluctuations on its term note, with some designated as cash flow hedges[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) - A valuation allowance of **$4.8 million** was recorded in fiscal 2025 against net domestic deferred income tax assets due to cumulative U.S.-based operational losses, resulting in a net deferred tax asset of **$0**[255](index=255&type=chunk)[256](index=256&type=chunk) - Basic and diluted net loss per common share were both **$(2.28) in fiscal 2025** and **$(1.23) in fiscal 2024**, with restricted stock excluded from diluted EPS calculation due to anti-dilutive effect[264](index=264&type=chunk) - Credit risk is concentrated with three largest customers, whose receivables represented **67.8% of gross accounts receivable** at June 30, 2025[265](index=265&type=chunk) [B. Inventories](index=54&type=section&id=B.%20Inventories) Inventories, net (in thousands) | Item | June 30, 2025 ($) | June 30, 2024 ($) | | :-------------- | :---------------- | :---------------- | | Raw materials | 17,632 | 18,489 | | Work in progress | 3,943 | 3,362 | | Finished goods | 4,054 | 3,038 | | Reserves | (758) | (640) | | **Total** | **24,871** | **24,249** | - Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, with reserves established for inventory not expected to be recovered, based on factors like quantity on hand, estimated sales time, shelf life, demand, and market conditions[231](index=231&type=chunk) [C. Property and Equipment](index=56&type=section&id=C.%20Property%20and%20Equipment) Property and Equipment (in thousands) | Item | Depreciable Life (Years) | 2025 ($) | 2024 ($) | | :---------------------------------- | :----------------------- | :-------- | :-------- | | Land | NA | 8,940 | 8,940 | | Building and building improvements | 7 – 39 | 24,650 | 24,723 | | Machinery and equipment | 3 – 12 | 41,311 | 43,631 | | Office equipment and furniture | 3 – 5 | 6,936 | 6,765 | | Vehicles | 3 | 237 | 237 | | Leasehold improvements | 1 – 20 | 24,788 | 23,223 | | Total property and equipment | | 106,862 | 107,519 | | Less: accumulated depreciation and amortization | | (55,972) | (55,308) | | **Property and equipment, net** | | **50,890** | **52,211** | - Depreciation and amortization expense was **$4.6 million** in both fiscal 2025 and fiscal 2024[270](index=270&type=chunk) - During fiscal 2025, NAI disposed of machinery and equipment with an original value of **$3.945 million**, resulting in a **$49,000 loss on disposal**[269](index=269&type=chunk) [D. Leases](index=56&type=section&id=D.%20Leases) - NAI leases manufacturing and support facilities in Vista, California, and Lugano, Switzerland, with no finance leases currently classified[271](index=271&type=chunk)[274](index=274&type=chunk) - The Vista, CA facility lease was extended by ten years and five months, effective April 1, 2024, increasing base rent and resulting in a **$25.9 million increase** in lease liability and right-of-use asset[272](index=272&type=chunk) - The weighted average remaining lease term for operating leases was **8.6 years in fiscal 2025** (**9.5 years in fiscal 2024**), with a weighted average discount rate of **5.94%** (**5.92% in fiscal 2024**)[274](index=274&type=chunk) Supplemental Cash Flows Information for Leases (in thousands) | Item | 2025 ($) | 2024 ($) | | :-------------------------------------------------------------------- | :------- | :------- | | Cash paid for amounts included in the measurement of operating lease liabilities | 4,302 | 2,966 | | Net increase in operating lease liabilities and right-of-use assets due to lease remeasurement | — | 25,692 | [E. Other Comprehensive (Loss) Income](index=58&type=section&id=E.%20Other%20Comprehensive%20(Loss)%20Income) Other Comprehensive (Loss) Income (in thousands) | Item | Year Ended June 30, 2025 ($) | Year Ended June 30, 2024 ($) | | :---------------------------------------------------------------- | :--------------------------- | :--------------------------- | | Balance as of June 30, 2024 | (22) | (83) | | OCI/OCL before reclassifications | (2,115) | 204 | | Amounts reclassified from OCI | 278 | (53) | | Tax effect of OCI activity | 444 | (90) | | Net current period OCI/OCL | (1,393) | 61 | | **Balance as of June 30, 2025** | **(1,415)** | **(22)** | [F. Debt](index=58&type=section&id=F.%20Debt) - NAI's credit facility with Wells Fargo was amended on June 20, 2025 (Sixth Amendment), extending maturity to December 31, 2026, decreasing maximum borrowing to **$10.0 million**, increasing interest rate to **3.25%**, and waiving prior covenant non-compliance[285](index=285&type=chunk) - The amended credit agreement includes new financial covenants, with NAI anticipating non-compliance in the first half of fiscal 2026 due to litigation expense and deferred tax asset valuation allowance, and is negotiating a revision[286](index=286&type=chunk)[290](index=290&type=chunk) - NAI has a **$10.0 million Term Note** with Wells Fargo, secured by its Carlsbad property, with payments amortized over 25 years and a final installment due September 1, 2028. The variable interest rate was fixed at **2.4%** for the first three years via an interest rate swap, which expired on September 3, 2024[289](index=289&type=chunk)[239](index=239&type=chunk) Future Debt Payments Under Term Note (in thousands) | Year | 2026 ($) | 2027 ($) | 2028 ($) | 2029 ($) | 2030 and Thereafter ($) | Total ($) | | :--------- | :------- | :------- | :------- | :------- | :---------------------- | :-------- | | Future Debt Payments | 305 | 315 | 325 | 7,988 | — | 8,933 | - As of June 30, 2025, NAI had **$1.9 million outstanding** on its credit facility and **$9.9 million available borrowing capacity**[291](index=291&type=chunk) [G. Income Taxes](index=60&type=section&id=G.%20Income%20Taxes) - In fiscal 2025, NAI recorded a U.S.-based domestic tax expense of **$2.7 million** and foreign tax expense of **$0.1 million**, compared to a U.S.-based domestic tax benefit of **$2.2 million in fiscal 2024**[292](index=292&type=chunk) - A **$4.8 million valuation allowance** was recognized in fiscal 2025 against net domestic deferred income tax assets, resulting in a net deferred tax asset of **$0**, due to cumulative U.S.-based operational losses[293](index=293&type=chunk) Geographical Breakdown of Loss Before Income Taxes (in thousands) | Region | 2025 ($) | 2024 ($) | | :------------ | :-------- | :-------- | | United States | (11,520) | (9,046) | | Foreign | 780 | (418) | | **Total** | **(10,740)** | **(9,464)** | Provision (Benefit) for Income Taxes (in thousands) | Item | 2025 ($) | 2024 ($) | | :---------------------------------- | :------- | :------- | | Current: Federal | (858) | (55) | | Current: State | (17) | 41 | | Current: Foreign | 161 | 66 | | Deferred: Federal | (1,198) | (2,007) | | Deferred: State | (68) | (223) | | Deferred: Foreign | — | (69) | | Valuation allowance | 4,815 | — | | **Total provision (benefit) for income taxes** | **2,835** | **(2,247)** | Net Deferred Tax Assets and Liabilities (in thousands) | Item | 2025 ($) | 2024 ($) | | :---------------------------------- | :------- | :------- | | Total gross deferred tax assets | 14,347 | 12,563 | | Deferred tax liabilities | (9,533) | (9,393) | | Valuation allowance | (4,814) | — | | **Net deferred tax assets** | **—** | **3,170** | - NAI has U.S. federal net operating loss carryforwards of **$8.0 million** (indefinite carryforward) and state NOLs of **$6.8 million** (expiring from fiscal 2032). Federal and state tax credits total **$0.8 million** (expiring from fiscal 2041)[296](index=296&type=chunk) Income Tax Provision (Benefit) Reconciliation (in thousands) | Item | 2025 ($) | 2024 ($) | | :------------------------------------------ | :------- | :------- | | Income taxes computed at statutory federal income tax rate | (2,256) | (2,033) | | State income taxes, net of federal income tax expense | (177) | (215) | | Permanent differences | 10 | (20) | | Foreign tax rate differential | (2) | 131 | | Tax credits | (61) | (170) | | Stock based compensation | 123 | 93 | | Global intangible low-taxed income (GILTI) | 233 | — | | Return to provision - differences | 150 | (33) | | Change in valuation allowance, net | 4,815 | — | | **Income tax provision (benefit) as reported** | **2,835** | **(2,247)** | | Effective tax rate | (26.4)% | (23.7)% | [H. Employee Benefit Plans](index=64&type=section&id=H.%20Employee%20Benefit%20Plans) - NAI has a 401(k) profit-sharing plan, matching **50% of the first 6% of participant contributions** since January 1, 2025, with total contributions of **$0.5 million in fiscal 2025** and **$0.6 million in fiscal 2024**[304](index=304&type=chunk) - A Non-Qualified Incentive Plan allows for deferred cash awards to directors, officers, employees, and consultants, with **$0.2 million granted in fiscal 2025** and **$0.9 million in fiscal 2024**[307](index=307&type=chunk)[309](index=309&type=chunk) Defined Benefit Pension Plan Funded Status (in thousands) | Item | 2025 ($) | 2024 ($) | | :------------------------------------------ | :------- | :------- | | Benefit obligation at end of year | 1,152 | 1,374 | | Fair value of plan assets at end of year | 1,042 | 1,232 | | Difference between benefit obligation and fair value of plan assets | (110) | (142) | | Unrecognized net actuarial loss in accumulated other comprehensive income | 217 | 282 | | **Net amount recognized** | **107** | **140** | Defined Benefit Pension Plan Net Periodic Benefit Cost (in thousands) | Item | 2025 ($) | 2024 ($) | | :------------------------ | :------- | :------- | | Interest cost | 46 | 49 | | Expected return on plan assets | (51) | (42) | | Recognized actuarial loss | 24 | 39 | | Settlement loss | 62 | — | | **Net periodic benefit expense** | **81** | **46** | Defined Benefit Pension Plan Asset Allocation (June 30) | Asset Category | 2025 (%) | 2024 (%) | Target Allocation (%) | | :---------------- | :------- | :------- | :-------------------- | | Equity securities | 60 | 72 | 53 | | Debt securities | 35 | 14 | 41 | | Cash alternatives | 4 | 14 | 2 | | Commodities | 1 | 0 | 4 | | **Total** | **100** | **100** | **100** | [I. Stockholders' Equity](index=68&type=section&id=I.%20Stockholders%27%20Equity) - The Board authorized a total of **$18.0 million** for the stock repurchase plan, but current credit agreement terms prohibit most stock repurchases[320](index=320&type=chunk) - Stock repurchases in fiscal 2025 were limited to **45,972 shares** acquired from employees for restricted stock vesting, totaling **$0.178 million**[322](index=322&type=chunk)[323](index=323&type=chunk) Restricted Stock Activity (2020 Plan) | Item | Number of Shares – 2020 Plan (2025) | Weighted Average Grant Date Fair Value (2025) ($) | Number of Shares – 2020 Plan (2024) | Weighted Average Grant Date Fair Value (2024) ($) | | :------------------------ | :---------------------------------- | :------------------------------------------------ | :---------------------------------- | :------------------------------------------------ | | Nonvested at June 30 | 173,985 | 6.38 | 283,107 | 7.50 | | Granted | 24,000 | 3.84 | 166,500 | 6.09 | | Vested | (133,122) | 8.31 | (104,075) | 11.39 | | Forfeited | — | — | (3,000) | 9.59 | | Available for grant at June 30 | 158,877 | | 182,877 | | - Total remaining unrecognized compensation cost for unvested restricted stock was **$0.9 million** at June 30, 2025, with a weighted average remaining service period of **1.6 years**[327](index=327&type=chunk) [J. Commitments](index=70&type=section&id=J.%20Commitments) - NAI leases **162,000 sq ft in Vista, CA**, under an operating lease extended through August 31, 2034, with an option to extend to August 31, 2039[328](index=328&type=chunk) - NAIE leases **116,000 sq ft in Manno, Switzerland**, for manufacturing and warehousing, with the main facility lease extended to December 31, 2032, and a warehouse lease automatically extended to December 31, 2026[329](index=329&type=chunk)[331](index=331&type=chunk) Minimum Rental Commitments (in thousands) | Year | 2026 ($) | 2027 ($) | 2028 ($) | 2029 ($) | 2030 ($) | Thereafter ($) | Total ($) | | :--------- | :------- | :------- | :------- | :------- | :------- | :------------- | :-------- | | Gross minimum rental commitments | 5,014 | 4,889 | 4,863 | 4,996 | 9,009 | 20,420 | 49,191 | - Rental expense totaled **$5.5 million for fiscal 2025** and **$5.4 million for fiscal 2024**[333](index=333&type=chunk) [K. Economic Dependency](index=72&type=section&id=K.%20Economic%20Dependency) - NAI has substantial economic dependency on a few key customers; sales to its three largest private-label contract manufacturing customers totaled **$77.16 million in fiscal 2025** and **$77.31 million in fiscal 2024**[334](index=334&type=chunk) Net Sales to Major Customers (in thousands) | Customer | Fiscal 2025 ($) | Fiscal 2024 ($) | | :--------- | :-------------- | :-------------- | | Customer 1 | 42,289 | 48,055 | | Customer 2 | 17,707 | 12,941 | | Customer 3 | 17,165 | 16,312 | | **Total** | **77,161** | **77,308** | - Accounts receivable from these major customers were **$9.9 million** at June 30, 2025, and **$12.3 million** at June 30, 2024[334](index=334&type=chunk) - NAI is dependent on a single supplier for beta-alanine and other raw materials, with Supplier 1 representing **18% of total raw material purchases in fiscal 2025** and **23% in fiscal 2024**[335](index=335&type=chunk) Raw Material Purchases from Major Supplier (in thousands) | Supplier | 2025 Raw Material Purchases ($) | 2025 % of Total Raw Material Purchases | 2024 Raw Material Purchases ($) | 2024 % of Total Raw Material Purchases | | :--------- | :------------------------------ | :------------------------------------- | :------------------------------ | :------------------------------------- | | Supplier 1 | 12,004 | 18% | 11,624 | 23% | | **Total** | **12,004** | **18%** | **11,624** | **23%** | [L. Derivatives and Hedging](index=72&type=section&id=L.%20Derivatives%20and%20Hedging) - NAI uses foreign exchange forward contracts to manage foreign currency exchange risk from forecasted Euro and Swiss Franc sales, with some designated as cash flow hedges[336](index=336&type=chunk)[337](index=337&type=chunk) - As of June 30, 2025, notional amounts for cash flow hedges were **$35.5 million (€31.2 million)** for Euro sales and **$6.8 million (CHF 5.4 million)** for Swiss Franc sales, expected to settle by June 2026[340](index=340&type=chunk) - A net loss of approximately **$1.6 million** (offset by **$0.4 million deferred taxes**) related to cash flow hedges was recorded in OCI as of June 30, 2025, with **$1.6 million** expected to be reclassified to earnings in the next 12 months[340](index=340&type=chunk) - NAI also uses foreign currency contracts not designated as cash flow hedges to hedge its Swiss Franc-denominated lease liability, with notional amounts of **$11.8 million (CHF 9.5 million)** as of June 30, 2025[343](index=343&type=chunk) - An interest rate swap fixed the variable interest rate on the **$10.0 million Term Note to 2.4%** for three years, expiring on September 3, 2024[344](index=344&type=chunk) [M. Contingencies](index=74&type=section&id=M.%20Contingencies) - NAI accrued **$1.4 million** for a tentative settlement of two class action and PAGA lawsuits filed by former employees in December 2023, including estimated legal fees, with court ap

[First Quarter Fiscal 2026 Results Overview](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Results%20Overview) MillerKnoll Inc. achieved strong Q1 FY2026 results, driven by robust execution, improving market conditions, and strategic growth initiatives [Executive Summary](index=1&type=section&id=Executive%20Summary) MillerKnoll Inc. reported strong Q1 FY2026 results, exceeding expectations through robust execution and strategic growth - MillerKnoll Inc. reported **strong Q1 FY2026 results**, exceeding expectations[1](index=1&type=chunk)[5](index=5&type=chunk) - Performance driven by strong execution, improving conditions in key markets, and strategic growth initiatives[5](index=5&type=chunk) - The business model delivered revenue and earnings growth while maintaining balance sheet strength[5](index=5&type=chunk) [Consolidated Financial Highlights](index=1&type=section&id=Consolidated%20Financial%20Highlights) MillerKnoll reported significant Q1 FY2026 increases in net sales and operating earnings, with adjusted diluted EPS growth despite a slight gross margin decrease Consolidated Financial Highlights (Dollars in millions, except per share data) | (Dollars in millions, except per share data) | August 30, 2025 | August 31, 2024 | % Chg. | | :------------------------------------------ | :-------------- | :-------------- | :----- | | Net sales | $955.7 | $861.5 | 10.9 % | | Gross margin % | 38.5 % | 39.0 % | (1.3)% | | Operating expenses | $314.6 | $321.1 | (2.0)% | | * Adjusted operating expenses | $308.0 | $286.9 | 7.4 % | | Operating earnings % | 5.6 % | 1.8 % | 211.1 %| | * Adjusted operating earnings % | 6.3 % | 5.8 % | 8.6 % | | (1) Earnings (loss) per share - diluted | $0.29 | $(0.02) | N/A | | *(1) Adjusted earnings per share - diluted | $0.45 | $0.36 | 25.0 % | - Net sales of **$955.7 million**, up **10.9%** as reported and **10.0% organically**, year-over-year[3](index=3&type=chunk) - Orders of **$885.4 million**, down **5.4%** as reported and **6.2% organically**, year-over-year, primarily due to order pull-forward in North America Contract segment in Q4 FY2025[3](index=3&type=chunk) - Gross margin decreased **50 basis points**, mainly from **$8.0 million** net tariff-related impact, partially offset by leverage on higher net sales[3](index=3&type=chunk) [Cash Flow, Debt, and Liquidity](index=2&type=section&id=Cash%20Flow%2C%20Debt%2C%20and%20Liquidity) MillerKnoll maintained strong liquidity, refinanced its Term Loan B to 2032, and reported $9.4 million in operating cash flow with a 2.92x net debt-to-EBITDA ratio - Liquidity as of August 30, 2025, was **$480.5 million**, including cash on hand and Revolving Credit Facility availability[8](index=8&type=chunk) - Issued **$550 million** Term Loan B, replacing existing debt and extending maturity to 2032[8](index=8&type=chunk) - Cash flow from operations was **$9.4 million**[8](index=8&type=chunk) - Net debt-to-EBITDA ratio was **2.92x**[8](index=8&type=chunk) Near Term Scheduled Debt Maturities (millions) | Fiscal Year | Amount (millions) | | :---------- | :---------------- | | 2026 | $12.4 | | 2027 | $23.3 | | 2028 | $25.8 | [Results by Segment](index=2&type=section&id=Results%20by%20Segment) All MillerKnoll segments reported Q1 FY2026 net sales growth, with varied order trends and operating margins influenced by market dynamics [North America Contract](index=2&type=section&id=North%20America%20Contract) North America Contract achieved significant net sales growth and increased operating margin, despite an order decline due to prior quarter pull-ahead - Q1 net sales of **$533.9 million**, up **12.1%** on both reported and organic basis, year-over-year[9](index=9&type=chunk) - Q1 orders of **$492.2 million**, down **8.2%** as reported and organically, year-over-year, primarily due to an estimated **$55 million to $60 million** order pull-ahead from Q4 FY2025 pricing actions[9](index=9&type=chunk) - Q1 operating margin of **10.7%** compared to **3.4%** in the prior year; adjusted operating margin of **11.4%**, up **200 basis points**, driven by fixed expense leverage on higher net sales, partially offset by higher net tariff-related impact[9](index=9&type=chunk) [International Contract](index=2&type=section&id=International%20Contract) International Contract saw strong net sales growth but declining orders, with improved operating margin and a slight adjusted margin decrease - Q1 net sales of **$167.5 million**, up **14.4%** as reported and **11.3% organically**, year-over-year[9](index=9&type=chunk) - Q1 orders of **$154.5 million**, down **6.5%** as reported and **9.2% organically**, year-over-year[9](index=9&type=chunk) - Q1 operating margin of **8.1%** compared to **6.5%** in the prior year; adjusted operating margin of **8.5%**, down **60 basis points** year-over-year, primarily from regional and product sales mix[9](index=9&type=chunk) [Global Retail](index=3&type=section&id=Global%20Retail) Global Retail reported net sales and order growth, but operating margin declined due to increased freight, tariffs, and new store opening costs - Q1 net sales of **$254.3 million**, up **6.4%** as reported and **4.9% organically**, year-over-year[13](index=13&type=chunk) - Q1 orders of **$238.7 million**, up **1.7%** as reported and **0.3% organically**, year-over-year, with North America region orders up **8%**[13](index=13&type=chunk) - Q1 operating margin of **0.6%** compared to **2.2%** in the prior year; adjusted operating margin of **1.2%**, down **190 basis points** year-over-year, primarily from increased freight costs, higher net tariff-related impact, and new retail store opening costs[13](index=13&type=chunk) - Opened two DWR stores (Sarasota, FL, and Las Vegas, NV) and two Herman Miller stores (Chicago, IL, and Philadelphia, PA) in Q1[13](index=13&type=chunk) [Second Quarter Fiscal 2026 Outlook](index=3&type=section&id=Second%20Quarter%20Fiscal%202026%20Outlook) MillerKnoll projects Q2 FY2026 net sales between $926 million and $966 million, with adjusted diluted EPS of $0.38 to $0.44, including tariff and new store costs Q2 FY2026 Financial Operating Results Expectations | Q2 FY2026 | Range | | :------------------------------ | :------------------------- | | Net sales | $926 million to $966 million | | Gross margin % | 37.6% to 38.6% | | Adjusted operating expenses* | $300 million to $310 million | | Interest and other expense, net | $16.2 million to $17.2 million | | Adjusted effective tax rate* | 22.0% to 24.0% | | Adjusted earnings per share - diluted* | $0.38 to $0.44 | - Guidance ranges include estimated incremental costs related to tariffs (net of expected mitigation efforts) between **$2 million to $4 million** before tax, and **$0.02 to $0.04** of net earnings per share[14](index=14&type=chunk) - Operating expense outlook reflects costs related to four new retail store openings in Q2 FY2026[14](index=14&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents MillerKnoll's unaudited condensed consolidated financial statements, including statements of operations, cash flows, and balance sheets [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) The statements of operations highlight MillerKnoll's Q1 FY2026 financial performance, showing significant increases in net sales and operating earnings Condensed Consolidated Statements of Operations (Three Months Ended) | (Unaudited) (Dollars in millions, except per share and common share data) | August 30, 2025 | % | August 31, 2024 | % | | :---------------------------------------------------------------------- | :-------------- | :----- | :-------------- | :----- | | Net sales | $955.7 | 100.0 %| $861.5 | 100.0 %| | Cost of sales | 587.6 | 61.5 % | 525.2 | 61.0 % | | Gross margin | 368.1 | 38.5 % | 336.3 | 39.0 % | | Operating expenses | 314.6 | 32.9 % | 321.1 | 37.3 % | | Operating earnings | 53.5 | 5.6 % | 15.2 | 1.8 % | | Other expenses, net | 24.8 | 2.6 % | 16.9 | 2.0 % | | Earnings (loss) before income taxes and equity income | 28.7 | 3.0 % | (1.7) | (0.2)% | | Income tax expense (benefit) | 7.6 | 0.8 % | (1.1) | (0.1)% | | Equity income (loss), net of tax | — | — % | 0.1 | — % | | Net earnings (loss) | 21.1 | 2.2 % | (0.5) | (0.1)% | | Net earnings attributable to redeemable noncontrolling interests | 0.9 | 0.1 % | 0.7 | 0.1 % | | Net earnings (loss) attributable to MillerKnoll, Inc. | $20.2 | 2.1 % | $(1.2) | (0.1)% | | Earnings (loss) per share - basic | $0.29 | | ($0.02) | |\ | Weighted average basic common shares | 68,519,141 | | 70,206,373 | | | Earnings (loss) per share - diluted | $0.29 | | ($0.02) | | | Weighted average diluted common shares | 69,194,506 | | 70,206,373 | | [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows) The statements of cash flows show decreased operating cash flow, increased investing cash use, and reduced financing cash use for Q1 FY2026 Condensed Consolidated Statements of Cash Flows (Three Months Ended, Dollars in millions) | (Unaudited) (Dollars in millions) | August 30, 2025 | August 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Cash provided by (used in): | | | | Operating activities | $9.4 | $21.1 | | Investing activities | (30.5) | (22.3) | | Financing activities | (9.2) | (20.3) | | Effect of exchange rate changes | 3.8 | 0.8 | | Net change in cash and cash equivalents | (26.5) | (20.7) | | Cash and cash equivalents, beginning of period | 193.7 | 230.4 | | Cash and cash equivalents, end of period | $167.2 | $209.7 | [Balance Sheets](index=7&type=section&id=Balance%20Sheets) The balance sheets indicate a slight decrease in total assets and liabilities, with decreased cash and increased inventories from May to August 2025 Condensed Consolidated Balance Sheets (Dollars in millions) | (Unaudited) (Dollars in millions) | August 30, 2025 | May 31, 2025 | | :-------------------------------- | :-------------- | :----------- | | **ASSETS** | | | | Current Assets: | | | | Cash and cash equivalents | $167.2 | $193.7 | | Accounts receivable, net | 332.1 | 350.2 | | Unbilled accounts receivable | 33.2 | 26.9 | | Inventories, net | 465.8 | 447.5 | | Prepaid expenses and other | 91.5 | 90.4 | | Total current assets | 1,089.8 | 1,108.7 | | Net property and equipment | 502.6 | 496.1 | | Right of use assets | 412.1 | 411.2 | | Other assets | 1,936.5 | 1,934.2 | | Total Assets | $3,941.0 | $3,950.2 | | **LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY** | | | | Current Liabilities: | | | | Accounts payable | $253.6 | $271.3 | | Short-term borrowings and current portion of long-term debt | 16.4 | 16.0 | | Short-term lease liability | 75.7 | 72.0 | | Accrued liabilities | 306.3 | 344.5 | | Total current liabilities | 652.0 | 703.8 | | Long-term debt | 1,327.5 | 1,310.6 | | Lease liabilities | 409.0 | 413.4 | | Other liabilities | 190.1 | 187.3 | | Total Liabilities | 2,578.6 | 2,615.1 | | Redeemable Noncontrolling Interests | 62.9 | 59.3 | | Stockholders' Equity | 1,299.5 | 1,275.8 | | Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity | $3,941.0 | $3,950.2 | [Non-GAAP Financial Measures and Other Supplemental Data](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Supplemental%20Data) This section provides definitions, adjustments, and reconciliations for non-GAAP financial measures, along with segment descriptions [Non-GAAP Definitions](index=8&type=section&id=Non-GAAP%20Definitions) This section defines key non-GAAP financial measures, presented to offer a comparative basis for investors alongside GAAP results - Non-GAAP measures are presented to provide financial information on a more comparative basis for investors, not as alternatives to GAAP[19](index=19&type=chunk) - Definitions provided for: Adjusted Effective Tax Rate, Adjusted Operating Earnings (Loss), Adjusted Operating Margin, Adjusted Earnings per Share, Adjusted Gross Margin, Adjusted Operating Expenses, Adjusted Bank Covenant EBITDA, and Organic Growth (Decline)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) [Non-GAAP Adjustments and Segment Descriptions](index=9&type=section&id=Non-GAAP%20Adjustments%20and%20Segment%20Descriptions) This section details specific adjustments for non-GAAP measures and describes MillerKnoll's reportable segments - Adjustments include Amortization of Knoll purchased intangibles, Integration charges, Restructuring charges, Knoll pension plan termination charges, Debt extinguishment charges, Impairment charges, and Tax related items[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - Segment descriptions: North America Contract (furniture for office, healthcare, education in US/Canada, plus specific brands), International Contract (furniture in Europe, MEA, APAC, LatAm), Global Retail (modern design furnishings to third-party retailers and D2C, plus Holly Hunt brand), and Corporate (unallocated general corporate expenses)[30](index=30&type=chunk) [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations from GAAP to non-GAAP financial measures for various metrics on a consolidated and segment basis [Operating Earnings to Adjusted Operating Earnings by Segment](index=10&type=section&id=Operating%20Earnings%20to%20Adjusted%20Operating%20Earnings%20by%20Segment) This reconciliation details adjustments from GAAP to adjusted operating earnings for each segment and consolidated MillerKnoll, highlighting specific charges Reconciliation of Operating Earnings (Loss) to Adjusted Operating Earnings (Loss) by Segment (millions) | Segment / Metric | August 30, 2025 (millions) | August 31, 2024 (millions) | | :-------------------------------- | :------------------------- | :------------------------- | | **North America Contract** | | | | Operating earnings | $56.9 | $16.1 | | Adjustments | 4.2 | 28.8 | | Adjusted operating earnings | $61.1 | $44.9 | | **International Contract** | | | | Operating earnings | $13.5 | $9.5 | | Adjustments | 0.8 | 3.8 | | Adjusted operating earnings | $14.3 | $13.3 | | **Global Retail** | | | | Operating earnings | $1.4 | $5.3 | | Adjustments | 1.6 | 2.1 | | Adjusted operating earnings | $3.0 | $7.4 | | **Corporate** | | | | Operating (loss) | $(18.3) | $(15.7) | | Adjusted operating (loss) | $(18.3) | $(15.7) | | **MillerKnoll, Inc. (Consolidated)** | | | | Operating earnings | $53.5 | $15.2 | | Adjustments | 6.6 | 34.7 | | Adjusted operating earnings | $60.1 | $49.9 | [Earnings per Share to Adjusted Earnings per Share](index=12&type=section&id=Earnings%20per%20Share%20to%20Adjusted%20Earnings%20per%20Share) This reconciliation details adjustments from diluted EPS to adjusted diluted EPS, including amortization, integration, restructuring, and debt extinguishment charges Reconciliation of Earnings (Loss) per Share to Adjusted Earnings per Share (Three Months Ended) | Metric | August 30, 2025 | August 31, 2024 | | :------------------------------------------ | :-------------- | :-------------- | | Earnings (loss) per share - diluted | $0.29 | $(0.02) | | Add: Amortization of Knoll purchased intangibles | 0.09 | 0.08 | | Add: Integration charges | — | 0.40 | | Add: Restructuring charges | 0.01 | — | | Add: Debt extinguishment charges | 0.11 | — | | Add: Knoll pension plan termination charges | — | 0.01 | | Tax impact on adjustments | (0.05) | (0.11) | | Adjusted earnings per share - diluted | $0.45 | $0.36 | | Weighted average shares outstanding (used for calculating adjusted earnings per share) – diluted | 69,194,506 | 70,206,373 | [Gross Margin to Adjusted Gross Margin](index=12&type=section&id=Gross%20Margin%20to%20Adjusted%20Gross%20Margin) This reconciliation illustrates the adjustment from GAAP gross margin to adjusted gross margin, accounting for integration charges Reconciliation of Gross Margin to Adjusted Gross Margin (Three Months Ended, Dollars in millions) | Metric | August 30, 2025 | % | August 31, 2024 | % | | :------------------ | :-------------- | :----- | :-------------- | :----- | | Gross margin | $368.1 | 38.5 % | $336.3 | 39.0 % | | Integration charges | — | — % | 0.5 | 0.1 % | | Adjusted gross margin | $368.1 | 38.5 % | $336.8 | 39.1 % | [Operating Expenses to Adjusted Operating Expenses & Adjusted Bank Covenant EBITDA](index=12&type=section&id=Operating%20Expenses%20to%20Adjusted%20Operating%20Expenses%20%26%20Adjusted%20Bank%20Covenant%20EBITDA) This section reconciles operating expenses to adjusted operating expenses and presents the calculation of Adjusted Bank Covenant EBITDA and its ratio Reconciliation of Operating Expenses to Adjusted Operating Expenses (Three Months Ended, Dollars in millions) | Metric | August 30, 2025 | % | August 31, 2024 | % | | :------------------------------------------ | :-------------- | :----- | :-------------- | :----- | | Operating expenses | $314.6 | 32.9 % | $321.1 | 37.3 % | | Restructuring charges | 0.5 | 0.1 % | — | — % | | Integration charges | — | — % | 27.8 | 3.2 % | | Amortization of Knoll purchased intangibles | 6.1 | 0.6 % | 5.9 | 0.7 % | | Knoll pension plan termination charges | — | — % | 0.5 | 0.1 % | | Adjusted operating expenses | $308.0 | 32.2 % | $286.9 | 33.3 % | Reconciliation of Net Loss to Adjusted Bank Covenant EBITDA and Adjusted Bank Covenant EBITDA Ratio (Trailing Twelve Month Basis, Dollars in millions) | Metric | August 30, 2025 | | :-------------------------------------- | :-------------- | | Net loss | $(15.6) | | Income tax expense | 20.3 | | Depreciation expense | 102.9 | | Amortization expense | 38.5 | | Interest expense | 75.2 | | (*) Other adjustments | 183.7 | | Adjusted bank covenant EBITDA | $405.0 | | Total debt, less cash, end of trailing period | $1,184.5 | | Net debt to adjusted bank covenant EBITDA ratio | 2.92 | [Organic Sales Growth by Segment](index=14&type=section&id=Organic%20Sales%20Growth%20by%20Segment) This table presents organic sales growth for each segment and consolidated MillerKnoll, adjusted for currency translation effects Organic Sales Growth by Segment (Three Months Ended August 30, 2025, Dollars in millions) | Metric | North America Contract | International Contract | Global Retail | Total | | :---------------------- | :--------------------- | :--------------------- | :------------ | :------ | | Net sales, as reported | $533.9 | $167.5 | $254.3 | $955.7 | | % change from PY | 12.1 % | 14.4 % | 6.4 % | 10.9 % | | Adjustments | | | | | | (1) Currency translation effects | (0.1) | (4.6) | (3.6) | (8.3) | | Net sales, organic | $533.8 | $162.9 | $250.7 | $947.4 | | % change from PY | 12.1 % | 11.3 % | 4.9 % | 10.0 % | [Organic Order Growth by Segment](index=14&type=section&id=Organic%20Order%20Growth%20by%20Segment) This table details organic order growth for each segment and consolidated MillerKnoll, adjusted for currency translation effects Organic Order Growth by Segment (Three Months Ended August 30, 2025, Dollars in millions) | Metric | North America Contract | International Contract | Global Retail | Total | | :---------------------- | :--------------------- | :--------------------- | :------------ | :------ | | Orders, as reported | $492.2 | $154.5 | $238.7 | $885.4 | | % change from PY | (8.2)% | (6.5)% | 1.7 % | (5.4)% | | Adjustments | | | | | | (1) Currency translation effects | (0.1) | (4.5) | (3.3) | (7.9) | | Orders, organic | $492.1 | $150.0 | $235.4 | $877.5 | | % change from PY | (8.2)% | (9.2)% | 0.3 % | (6.2)% | [Effective Tax Rate to Adjusted Effective Tax Rate](index=15&type=section&id=Effective%20Tax%20Rate%20to%20Adjusted%20Effective%20Tax%20Rate) This reconciliation shows adjustments from the GAAP effective tax rate to the adjusted effective tax rate, accounting for non-GAAP impacts Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate (Three Months Ended, Dollars in millions) | Metric | August 30, 2025 | August 31, 2024 | | :------------------------------------------ | :-------------- | :-------------- | | Income tax expense (benefit), as reported (GAAP) | $7.6 | $(1.1) |\ | Effective Tax Rate | 26.5 % | 66.2 % | | Adjustments | | | | Restructuring charges | $0.1 | — | | Integration charges | — | 6.7 | | Amortization of Knoll purchased intangibles | 1.5 | 1.4 | | Knoll pension plan termination charges | — | 0.1 | | Debt extinguishment charges | 2.0 | — | | Income tax expense (benefit), adjusted | $11.2 | $7.1 | | * Adjusted Effective Tax Rate | 26.0 % | 21.5 % | [Consolidated Backlog](index=15&type=section&id=Consolidated%20Backlog) MillerKnoll's consolidated backlog decreased to $690.9 million in Q1 FY2026 from $758.0 million in Q1 FY2025 Consolidated MillerKnoll Backlog (Dollars in millions) | Metric | Q1 FY2026 | Q1 FY2025 | | :---------------- | :-------- | :-------- | | MillerKnoll backlog | $690.9 | $758.0 | [Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of MillerKnoll, its brands, forward-looking statements, risk factors, and webcast information [About MillerKnoll](index=16&type=section&id=About%20MillerKnoll) MillerKnoll is a collective of dynamic brands focused on designing and building a sustainable, equitable, and beautiful future - MillerKnoll is a collective of dynamic brands, including Herman Miller, Knoll, Colebrook Bosson Saunders, DatesWeiser, Design Within Reach, Edelman, Geiger, HAY, Holly Hunt, Knoll Textiles, Maharam, Muuto, NaughtOne, and Spinneybeck|FilzFelt[43](index=43&type=chunk) - The company aims to redefine modern for the 21st century by building a more sustainable, equitable, and beautiful future[43](index=43&type=chunk) [Forward-Looking Statements and Risk Factors](index=16&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section outlines forward-looking statements and key risk factors, including trade policies, growth strategy, economic conditions, and cybersecurity threats - The communication includes forward-looking statements about future events, anticipated results, market conditions, business strategies, and risks[44](index=44&type=chunk) - Actual results could differ materially due to various risks and uncertainties, many beyond the company's control[44](index=44&type=chunk) - Key risk factors include changes to U.S. and international trade policies (tariffs), challenges in implementing growth strategy, consumer spending levels, global and national economic conditions (inflation, interest rates, geopolitical tensions), cybersecurity threats, public health crises, risks related to Knoll acquisition debt, availability and pricing of raw materials, financial strength of dealers/customers, pace of government procurement, and outcome of litigation/audits[46](index=46&type=chunk) [Webcast and Conference Call Information](index=3&type=section&id=Webcast%20and%20Conference%20Call%20Information) MillerKnoll hosted a conference call and webcast on September 23, 2025, to discuss Q1 FY2026 results, with an online archive available - Conference call and webcast held on Tuesday, September 23, 2025, at 5:00 PM ET to discuss Q1 FY2026 results[12](index=12&type=chunk) - Details and online archive available on the company's investor relations website: https://www.millerknoll.com/investor-relations/news-events/events-and-presentations[12](index=12&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-38247 AYTU BIOPHARMA, INC. (Exact name of registrant as specified in its charter) | Delaware | | 47-0883144 | | --- | --- | --- | | (State or other jurisdiction of incorporation or or ...

[Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) Aytu BioPharma reported fiscal 2025 results, detailed EXXUA launch plans, and discussed strategic direction [Full Year Fiscal 2025 Highlights](index=1&type=section&id=Full%20Year%20Fiscal%202025%20Highlights) FY2025 net revenue increased 2% to $66.4 million, with a net loss of $13.6 million and $9.2 million adjusted EBITDA Full Year Fiscal 2025 Key Financial Highlights | Metric | FY2025 | FY2024 | Change | | :----- | :----- | :----- | :----- | | Net Revenue | $66.4 million | $65.2 million | +2% | | ADHD Portfolio Net Revenue | $57.6 million | $57.8 million | -0.3% | | Pediatric Portfolio Net Revenue | $8.8 million | $7.3 million | +20.5% | | Net Loss | $(13.6) million | $(15.8) million | Improved | | Adjusted EBITDA | $9.2 million | $10.8 million | -14.8% | | Cash & Cash Equivalents (June 30, 2025) | $31.0 million | N/A | N/A | [Q4 Fiscal 2025 Highlights](index=1&type=section&id=Q4%20Fiscal%202025%20Highlights) Q4 FY2025 net revenue grew 4% to $15.1 million, with a net loss of $19.8 million and $2.0 million adjusted EBITDA Q4 Fiscal 2025 Key Financial Highlights | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :----- | :----- | :----- | :----- | | Net Revenue | $15.1 million | $14.6 million | +4% | | ADHD Portfolio Net Revenue | $13.1 million | $13.8 million | -5.1% | | Pediatric Portfolio Net Revenue | $2.0 million | $0.8 million | +150% | | Net Loss | $(19.8) million | $(4.6) million | Worsened | | Adjusted EBITDA | $2.0 million | $2.0 million | 0% | [EXXUA Commercial Launch Update](index=2&type=section&id=EXXUA%20Calendar%20Fourth%20Quarter%202025%20Commercial%20Launch%20Remains%20on%20Track) EXXUA launch is on track for Q4 calendar 2025, targeting the significant U.S. MDD market - EXXUA launch is on track for Q4 calendar 2025, expected to be a major growth catalyst in the over **$22 billion** U.S. MDD market[1](index=1&type=chunk)[5](index=5&type=chunk) - Key launch activities include finalizing product manufacturing, labeling, serialization, engaging key opinion leaders, refining sales territories and physician targeting, preparing promotional materials, and assessing commercial and government payors[6](index=6&type=chunk)[9](index=9&type=chunk) [Management Discussion](index=2&type=section&id=Management%20Discussion) CEO highlighted EXXUA's strategic fit, portfolio stability, and 9th consecutive quarter of positive adjusted EBITDA - EXXUA is a "perfect strategic fit" and will be a "centerpiece of Aytu's commercial efforts" due to its significant potential, uniqueness, sales force's CNS focus, and alignment with the Aytu RxConnect platform[7](index=7&type=chunk) - The company achieved its **9th consecutive quarter of positive adjusted EBITDA**, demonstrating stability in existing ADHD and Pediatric portfolios and focus on operational efficiencies[7](index=7&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) Detailed analysis of net revenue by product portfolio and comprehensive financial results for FY2025 and Q4 [Net Revenue by Product Portfolio](index=2&type=section&id=Net%20Revenue%20by%20Product%20Portfolio) Detailed breakdown of net revenue contributions from ADHD and Pediatric portfolios for Q4 and full fiscal year 2025 Net Revenue by Product Portfolio (in thousands) | Portfolio | Q4 FY2025 (in thousands) | Q4 FY2024 (in thousands) | FY2025 (in thousands) | FY2024 (in thousands) | | :---------------- | :----------------------- | :----------------------- | :-------------------- | :-------------------- | | ADHD Portfolio | $13,107 | $13,758 | $57,576 | $57,784 | | Pediatric Portfolio | $2,017 | $841 | $8,769 | $7,280 | | Other | $11 | $(6) | $37 | $119 | | **Total Net Revenue** | **$15,135** | **$14,593** | **$66,382** | **$65,183** | [Full Year Fiscal 2025 Financial Results](index=3&type=section&id=Full%20Year%20Fiscal%202025%20Financial%20Results) FY2025 net revenue increased 2% to $66.4 million, with gross profit decline and improved net loss despite impairments - Net revenue increased **2% to $66.4 million**, driven by Pediatric Portfolio growth (**49% increase in units sold**) offsetting a slight decrease in ADHD prescriptions[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) - Gross profit percentage decreased from **75% to 69%** due to increased cost of sales in ADHD inventory, attributed to overhead allocation from a closed manufacturing facility to reduced production, which is expected to normalize[13](index=13&type=chunk) - Operating expenses (excluding amortization, restructuring, impairment) decreased by **$5.2 million to $39.6 million**, reflecting continued cost reduction and operational efficiencies[14](index=14&type=chunk) Full Year Fiscal 2025 Key Financial Results | Metric | FY2025 | FY2024 | Change | | :----- | :----- | :----- | :----- | | Net Loss | $(13.6) million | $(15.8) million | Improved | | Net Loss per Share (Basic & Diluted) | $(2.16) | $(2.86) | Improved | | Adjusted EBITDA | $9.2 million | $10.8 million | -14.8% | | Cash and Cash Equivalents (June 30) | $31.0 million | $20.0 million | +55% | - Net loss was impacted by **$8.3 million impairment expense** on the Pediatric Portfolio due to shifted focus to psychiatric products and EXXUA launch, **$1.7 million derivative warrant liabilities loss**, and **$2.1 million restructuring costs** related to the Grand Prairie facility closure[16](index=16&type=chunk) [Q4 Fiscal 2025 Financial Results](index=4&type=section&id=Q4%20Fiscal%202025%20Financial%20Results) Q4 net revenue grew 4% to $15.1 million, with gross profit decline and widened net loss due to impairment and liabilities - Q4 net revenue increased **4% to $15.1 million**, driven by the Pediatric Portfolio's return-to-growth plan, while ADHD portfolio revenue decreased due to fewer prescriptions[18](index=18&type=chunk)[19](index=19&type=chunk) - Gross profit percentage decreased from **76% to 68%** in Q4[19](index=19&type=chunk) - Operating expenses (excluding amortization, restructuring, impairment) decreased by **$1.8 million to $8.7 million**, reflecting ongoing cost reduction and operational efficiencies[20](index=20&type=chunk) Q4 Fiscal 2025 Key Financial Results | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :----- | :----- | :----- | :----- | | Net Loss | $(19.8) million | $(4.6) million | Worsened | | Net Loss per Share (Basic & Diluted) | $(2.92) | $(0.82) | Worsened | | Adjusted EBITDA | $2.0 million | $2.0 million | 0% | - Q4 net loss was significantly impacted by **$8.3 million impairment expense** on the Pediatric Portfolio and **$9.9 million derivative warrant liabilities loss**, primarily due to an increase in the fair value of prefunded warrants and the company's stock price[22](index=22&type=chunk) [Corporate Information & Product Details](index=4&type=section&id=Corporate%20Information%20%26%20Product%20Details) Overview of Aytu BioPharma, EXXUA product details, and investor communication information [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) Details for the fiscal 2025 results conference call and webcast, including replay information - Conference call and webcast held on September 23, 2025, at 4:30 p.m. Eastern time, with replay available until October 7, 2025[24](index=24&type=chunk)[25](index=25&type=chunk) [About Aytu BioPharma](index=5&type=section&id=About%20Aytu%20BioPharma) Aytu BioPharma focuses on innovative CNS medicines, including EXXUA, ADHD, and pediatric products - Aytu BioPharma focuses on advancing innovative medicines for complex central nervous system diseases[1](index=1&type=chunk)[26](index=26&type=chunk) - Key prescription products include EXXUA (MDD), Adzenys XR-ODT and Cotempla XR-ODT (ADHD), and legacy pediatric products[26](index=26&type=chunk) [About EXXUA](index=5&type=section&id=About%20EXXUA) EXXUA is a novel oral selective serotonin 5HT1a receptor agonist for major depressive disorder (MDD) in adults - EXXUA is a novel oral selective serotonin 5HT1a receptor agonist indicated for the treatment of major depressive disorder (MDD) in adults[27](index=27&type=chunk)[28](index=28&type=chunk) [Indications and Important Safety Information for EXXUA](index=5&type=section&id=INDICATIONS%20and%20IMPORTANT%20SAFETY%20INFORMATION%20for%20EXXUA) EXXUA is indicated for MDD in adults, with warnings for suicidal thoughts and contraindications - EXXUA is indicated for MDD in adults, but not approved for pediatric patients[28](index=28&type=chunk)[29](index=29&type=chunk) - Boxed WARNING: Antidepressants, including EXXUA, increased the risk of suicidal thoughts and behaviors in pediatric and young adult patients in short-term studies, requiring close monitoring[29](index=29&type=chunk) - Contraindications include prolonged QTc interval, use with strong CYP3A4 inhibitors, severe liver problems, and concurrent use with MAOIs[29](index=29&type=chunk)[31](index=31&type=chunk) - Serious side effects may include QT prolongation (irregular heartbeats) and serotonin syndrome when taken with certain other medicines[29](index=29&type=chunk)[30](index=30&type=chunk) [Supplementary Information](index=6&type=section&id=Supplementary%20Information) Details on non-GAAP reconciliation, forward-looking statements, and investor contact information [Adjusted EBITDA Non-GAAP Reconciliation](index=6&type=section&id=Footnote%201) Adjusted EBITDA is a non-GAAP measure used for performance analysis, reconciled to GAAP net loss - Adjusted EBITDA is a non-GAAP financial indicator used to analyze and compare companies based on operating performance, with net loss being the most directly comparable GAAP measure[32](index=32&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) Press release contains forward-looking statements subject to risks and uncertainties detailed in SEC filings - The press release contains forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially[33](index=33&type=chunk) - Risks include overall financial and operational performance, changes in financial position, market acceptance of products, financing ability, regulatory challenges, and future collaborations[33](index=33&type=chunk) [Contacts for Investors](index=6&type=section&id=Contacts%20for%20Investors) Investor contacts provided for Aytu BioPharma's CFO and Lytham Partners for inquiries - Investor contacts are Ryan Selhorn (CFO, Aytu BioPharma) and Robert Blum (Lytham Partners)[34](index=34&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) Presentation of Aytu BioPharma's consolidated statements of operations, balance sheets, and EBITDA reconciliation [Consolidated Statements of Operations](index=7&type=section&id=Aytu%20BioPharma,%20Inc.%20Consolidated%20Statements%20of%20Operations) Presents revenues, costs, expenses, and net loss for Q4 and full fiscal year 2025 and 2024 Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------------------ | :-------- | :-------- | :------- | :------- | | Net revenue | $15,135 | $14,593 | $66,382 | $65,183 | | Cost of goods sold | $4,881 | $3,541 | $20,551 | $16,129 | | Gross profit | $10,254 | $11,052 | $45,831 | $49,054 | | Total operating expenses | $17,877 | $13,325 | $53,658 | $50,645 | | Net loss | $(19,818) | $(4,617) | $(13,562) | $(15,844) | | Basic and diluted - net loss per share | $(2.92) | $(0.82) | $(2.16) | $(2.86) | [Consolidated Balance Sheets](index=8&type=section&id=Aytu%20BioPharma,%20Inc.%20Consolidated%20Balance%20Sheets) Snapshot of assets, liabilities, and equity as of June 30, 2025 and 2024, showing increases in assets and liabilities Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | **ASSETS** | | | | Cash and cash equivalents | $30,952 | $20,006 | | Accounts receivable, net | $31,155 | $23,526 | | Inventories | $11,434 | $12,141 | | Total current assets | $79,179 | $61,891 | | Intangible assets, net | $42,201 | $52,453 | | Total assets | $124,177 | $118,095 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $63,064 | $62,228 | | Derivative warrant liabilities | $26,334 | $12,745 | | Total liabilities | $105,211 | $90,379 | | Total stockholders' equity | $18,966 | $27,716 | | Total liabilities and stockholders' equity | $124,177 | $118,095 | [Reconciliation of Net Loss to Adjusted EBITDA](index=9&type=section&id=Aytu%20BioPharma,%20Inc.%20Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) Reconciliation of GAAP net loss to non-GAAP Adjusted EBITDA for Q4 and full fiscal year 2025 and 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric (in thousands) | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :------------------------------------ | :-------- | :-------- | :------- | :------- | | Net loss - GAAP | $(19,818) | $(4,617) | $(13,562) | $(15,844) | | Interest expense | $730 | $1,253 | $3,703 | $5,059 | | Income tax expense | $437 | $841 | $437 | $2,142 | | Depreciation and amortization | $1,278 | $1,398 | $5,191 | $5,910 | | Stock-based compensation expense | $113 | $243 | $576 | $2,374 | | Derivative warrant liabilities loss (gain) | $9,860 | $(1,463) | $1,703 | $4,004 | | Impairment expense | $8,263 | $0 | $8,263 | $0 | | Net (income) loss from discontinued operations, net of tax | $(62) | $1,239 | $(620) | $3,324 | | **Adjusted EBITDA - non-GAAP** | **$2,039** | **$2,029** | **$9,186** | **$10,833** |

[Micron Technology, Inc. Reports Results for FQ4 and FY25](index=1&type=section&id=Micron%20Technology%2C%20Inc.%20Reports%20Results) Micron Technology, Inc. reports financial results for FQ4 and FY25, detailing performance and future outlook [Executive Summary and Highlights](index=1&type=section&id=Executive%20Summary%20and%20Highlights) Micron achieved record FQ4 and FY25 results, driven by AI data center growth, positioning it for future AI opportunities - Micron achieved **record fiscal Q4 and full-year revenue in 2025**, primarily driven by AI data center growth[1](index=1&type=chunk)[2](index=2&type=chunk) - The company reached **all-time highs across its data center business** and is entering fiscal 2026 with strong momentum and its most competitive portfolio to date[2](index=2&type=chunk) - Micron, as the **only U.S.-based memory manufacturer**, is **uniquely positioned** to capitalize on the AI opportunity ahead[2](index=2&type=chunk) [Summary Financial Performance](index=1&type=section&id=Summary%20Financial%20Performance) This section summarizes Micron's quarterly and annual financial performance, detailing key revenue, margin, and cash flow metrics [Quarterly Financial Results (FQ4 2025)](index=1&type=section&id=Quarterly%20Financial%20Results%20(FQ4%202025)) Micron reported robust FQ4 2025 financial performance, with significant revenue growth, improved margins, and strong net income and EPS | Metric | FQ4-25 (GAAP) | FQ3-25 (GAAP) | FQ4-24 (GAAP) | FQ4-25 (Non-GAAP) | FQ3-25 (Non-GAAP) | FQ4-24 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $11,315M | $9,301M | $7,750M | $11,315M | $9,301M | $7,750M | | Gross margin % | 44.7% | 37.7% | 35.3% | 45.7% | 39.0% | 36.5% | | Operating income | $3,654M | $2,169M | $1,522M | $3,955M | $2,490M | $1,745M | | Net income | $3,201M | $1,885M | $887M | $3,469M | $2,181M | $1,342M | | Diluted EPS | $2.83 | $1.68 | $0.79 | $3.03 | $1.91 | $1.18 | - Operating cash flow for FQ4 2025 was **$5.73 billion**, up from $4.61 billion for the prior quarter and $3.41 billion for the same period last year[4](index=4&type=chunk) [Annual Financial Results (FY 2025)](index=1&type=section&id=Annual%20Financial%20Results%20(FY%202025)) Micron achieved substantial FY25 revenue growth to **$37.38 billion**, with significant improvements in margins, net income, and strong cash flow | Metric | FY-25 (GAAP) | FY-24 (GAAP) | FY-25 (Non-GAAP) | FY-24 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $37,378M | $25,111M | $37,378M | $25,111M | | Gross margin % | 39.8% | 22.4% | 40.9% | 23.7% | | Operating income | $9,770M | $1,304M | $10,846M | $1,935M | | Net income | $8,539M | $778M | $9,470M | $1,472M | | Diluted EPS | $7.59 | $0.70 | $8.29 | $1.30 | - Operating cash flow for FY 2025 was **$17.53 billion**, a significant increase from **$8.51 billion** in the prior year[4](index=4&type=chunk) - Adjusted free cash flow for the full year of 2025 was **$3.72 billion**, compared to **$386 million** for the prior year[5](index=5&type=chunk)[22](index=22&type=chunk) - Micron ended the year with cash, marketable investments, and restricted cash of **$11.94 billion**[5](index=5&type=chunk) - A quarterly dividend of **$0.115 per share** was declared on September 23, 2025, payable on October 21, 2025[5](index=5&type=chunk) [Quarterly Business Unit Financial Results (FQ4 2025)](index=2&type=section&id=Quarterly%20Business%20Unit%20Financial%20Results%20(FQ4%202025)) Cloud Memory Business Unit led FQ4 2025 growth with substantial revenue and strong margins, with other units also showing sequential improvements | Business Unit | FQ4-25 Revenue | FQ3-25 Revenue | FQ4-24 Revenue | FQ4-25 Gross Margin | FQ4-25 Operating Margin | | :--- | :--- | :--- | :--- | :--- | :--- | | Cloud Memory | $4,543M | $3,386M | $1,449M | 59% | 48% | | Core Data Center | $1,577M | $1,530M | $2,048M | 41% | 25% | | Mobile and Client | $3,760M | $3,255M | $3,019M | 36% | 29% | | Automotive and Embedded | $1,434M | $1,127M | $1,230M | 31% | 20% | - Cloud Memory Business Unit revenue increased **34.2% QoQ** and **213.5% YoY**, with a **59% gross margin** and **48% operating margin** in FQ4 2025[6](index=6&type=chunk) - Mobile and Client Business Unit revenue grew **15.5% QoQ**, with gross margin improving from **24% to 36%** in FQ4 2025[6](index=6&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) This section outlines Micron's financial guidance for the upcoming fiscal quarter, including revenue and margin projections [FQ1 2026 Guidance](index=3&type=section&id=FQ1%202026%20Guidance) Micron projects strong FQ1 2026 performance, forecasting revenue of approximately **$12.50 billion** and gross margins exceeding **50%** | Metric | FQ1-26 (GAAP Outlook) | FQ1-26 (Non-GAAP Outlook) | | :--- | :--- | :--- | | Revenue | $12.50B ± $300M | $12.50B ± $300M | | Gross margin | 50.5% ± 1.0% | 51.5% ± 1.0% | | Operating expenses | $1.49B ± $20M | $1.34B ± $20M | | Diluted EPS | $3.56 ± $0.15 | $3.75 ± $0.15 | - Micron is forecasting **$1.2 billion** in sequential revenue growth for FQ1 2026, with gross margins exceeding **50%**[1](index=1&type=chunk)[7](index=7&type=chunk) [Company Information and Disclosures](index=3&type=section&id=Company%20Information%20and%20Disclosures) Micron provides FQ4 earnings webcast details, investor information, and an overview of its leadership in memory and storage for AI [Investor Relations and Company Profile](index=3&type=section&id=Investor%20Relations%20and%20Company%20Profile) Micron provides details for its FQ4 earnings webcast and general investor information, alongside a brief overview of its role as a leader in memory and storage solutions, emphasizing its contribution to AI and compute-intensive applications - Micron will host a conference call on Tuesday, **September 23, 2025**, at **2:30 p.m. Mountain Time** to discuss its fourth quarter financial results and provide forward-looking guidance for its first quarter, with a live webcast available at investors.micron.com[8](index=8&type=chunk) - Micron is an **industry leader** in **innovative memory and storage solutions**, delivering a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through its Micron® and Crucial® brands[10](index=10&type=chunk) - The company's innovations **fuel the data economy**, enabling advances in **artificial intelligence (AI)** and compute-intensive applications[10](index=10&type=chunk) [Forward-Looking Statements and Non-GAAP Definitions](index=3&type=section&id=Forward-Looking%20Statements%20and%20Non-GAAP%20Definitions) This section clarifies forward-looking statements, SEC filing risks, and defines GAAP and Non-GAAP financial measures and adjustments - This press release contains **forward-looking statements** regarding Micron's industry, strategic position, and financial and operating results, which are subject to **risks and uncertainties** detailed in SEC filings (Form 10-K and 10-Q)[12](index=12&type=chunk) - **Non-GAAP measures** represent GAAP excluding the impact of certain activities (e.g., **stock-based compensation**, **restructure and asset impairments**, **gains/losses from debt prepayments and settlements**, and **estimated tax effects**) which management excludes in analyzing operating results and understanding trends[12](index=12&type=chunk)[24](index=24&type=chunk) - Management uses Non-GAAP information for **evaluating performance** and **allocating resources**, believing it **increases transparency** and provides useful supplemental information for investors[22](index=22&type=chunk) [Consolidated Financial Statements (GAAP)](index=4&type=section&id=Consolidated%20Financial%20Statements%20(GAAP)) This section presents Micron's GAAP consolidated statements of operations, balance sheets, and cash flows [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The GAAP Consolidated Statements of Operations detail Micron's revenue, cost of goods sold, gross margin, operating expenses, and net income for FQ4 and FY25 | Metric | FQ4-25 | FQ3-25 | FQ4-24 | FY-25 | FY-24 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $11,315M | $9,301M | $7,750M | $37,378M | $25,111M | | Cost of goods sold | $6,261M | $5,793M | $5,013M | $22,505M | $19,498M | | Gross margin | $5,054M | $3,508M | $2,737M | $14,873M | $5,613M | | Operating income | $3,654M | $2,169M | $1,522M | $9,770M | $1,304M | | Net income | $3,201M | $1,885M | $887M | $8,539M | $778M | | Diluted EPS | $2.83 | $1.68 | $0.79 | $7.59 | $0.70 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The GAAP Consolidated Balance Sheets present Micron's financial position as of August 28, 2025, showing increased total assets and shareholders' equity | Metric | August 28, 2025 | May 29, 2025 | August 29, 2024 | | :--- | :--- | :--- | | Total current assets | $28,841M | $27,919M | $24,372M | | Property, plant, and equipment | $46,590M | $44,773M | $39,749M | | Total assets | $82,798M | $78,397M | $69,416M | | Total liabilities | $28,633M | $27,649M | $24,285M | | Total equity | $54,165M | $50,748M | $45,131M | - Total assets increased by **$13.38 billion** YoY to **$82.80 billion** as of August 28, 2025, while total equity increased by **$9.03 billion** YoY to **$54.17 billion**[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The GAAP Consolidated Statements of Cash Flows highlight a substantial increase in net cash from operating activities for FY25 | Metric | FY-25 | FY-24 | | :--- | :--- | | Net cash provided by operating activities | $17,525M | $8,507M | | Expenditures for property, plant, and equipment | $(15,857)M | $(8,386)M | | Net cash used for investing activities | $(14,087)M | $(8,309)M | | Net cash used for financing activities | $(850)M | $(1,842)M | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $2,594M | $(1,604)M | | Cash, cash equivalents, and restricted cash at end of period | $9,646M | $7,052M | - Net cash provided by operating activities for FY25 was **$17.53 billion**, more than double the **$8.51 billion** in FY24[18](index=18&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section details the reconciliation of GAAP to Non-GAAP financial measures for historical results and future outlook [Non-GAAP Financial Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Reconciliations) This section provides detailed reconciliations of GAAP to Non-GAAP financial metrics for quarterly and annual periods, illustrating specific adjustment impacts Adjustments to Net Income | Adjustment Type | FQ4-25 Impact | FY-25 Impact | | :--- | :--- | :--- | | Stock-based compensation | $262M | $975M | | Restructure and asset impairments | $38M | $39M | | Loss on debt prepayments | $9M | $59M | | Patent license charges | $0M | $57M | | Estimated tax effects | $(42)M | $(200)M | | **Total Adjustments to Net Income** | **$267M** | **$930M** | Adjusted Free Cash Flow | Metric | FQ4-25 | FQ3-25 | FQ4-24 | FY-25 | FY-24 | | :--- | :--- | :--- | :--- | :--- | :--- | | GAAP net cash provided by operating activities | $5,730M | $4,609M | $3,405M | $17,525M | $8,507M | | Investments in capital expenditures, net | $(4,927)M | $(2,660)M | $(3,082)M | $(13,804)M | $(8,121)M | | **Adjusted free cash flow** | **$803M** | **$1,949M** | **$323M** | **$3,721M** | **$386M** | - Non-GAAP adjustments are made to exclude items such as **stock-based compensation**, **gains and losses from settlements**, **gains and losses from debt prepayments**, **restructure and asset impairments**, and **estimated tax effects**, to provide a clearer understanding of operating results and earnings trends[24](index=24&type=chunk) [Non-GAAP Outlook Reconciliations](index=9&type=section&id=Non-GAAP%20Outlook%20Reconciliations) This section details specific adjustments applied to GAAP guidance to arrive at the Non-GAAP outlook for FQ1 2026 Non-GAAP Adjustments for FQ1 2026 Outlook | Adjustment Type | Impact (Millions) | | :--- | :--- | | Stock-based compensation – cost of goods sold | $111 | | Stock-based compensation – research and development | $98 | | Stock-based compensation – sales, general, and administrative | $50 | | Tax effects of the above items and other tax adjustments | $(39) | | **Total Non-GAAP Adjustments** | **$220** | - Non-GAAP diluted EPS outlook for FQ1 2026 is **$3.75 ± $0.15**, reflecting adjustments for stock-based compensation and tax effects from the GAAP outlook of **$3.56 ± $0.15**[26](index=26&type=chunk) - The guidance **does not incorporate** the impact of any potential business combinations, divestitures, additional restructuring activities, or other significant transactions[26](index=26&type=chunk)

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides the administrative and securities registration details for the Form 8-K filing [General Information](index=1&type=section&id=General%20Information) This section provides the administrative details of the Form 8-K filing for CEA Industries Inc., including its incorporation state, commission file number, and principal executive office address - Company Name: **CEA INDUSTRIES INC.**[1](index=1&type=chunk) - Jurisdiction of Incorporation: **Nevada**[1](index=1&type=chunk) - Principal Executive Office: **385 South Pierce Avenue, Suite C, Louisville, Colorado 80027**[1](index=1&type=chunk) [Securities and Filing Status](index=1&type=section&id=Securities%20and%20Filing%20Status) This part details the securities registered by CEA Industries Inc. on the Nasdaq Capital Market and confirms its status regarding emerging growth company provisions Registered Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock, par value $0.00001 | BNC | Nasdaq Capital Market | | Warrants to purchase Common Stock | BNCWW | Nasdaq Capital Market | - The registrant is an **Emerging Growth Company**[2](index=2&type=chunk) [Current Report on Form 8-K Items](index=2&type=section&id=Current%20Report%20on%20Form%208-K%20Items) This section outlines the specific items reported in the Form 8-K, including financial results and accompanying exhibits [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) CEA Industries Inc. filed this 8-K to announce its financial and operational results for the first quarter ended July 31, 2025, which were disclosed in a press release dated September 22, 2025 - CEA Industries Inc. issued a press release on **September 22, 2025**, announcing financial and operational results for the first quarter ended **July 31, 2025**[3](index=3&type=chunk) - The press release is furnished as **Exhibit 99.1** to this Current Report on Form 8-K[3](index=3&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K, primarily the press release detailing the financial results and the interactive data file Exhibits | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press Release, dated September 22, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [Signatures](index=3&type=section&id=SIGNATURES) This section provides the formal authorization and signing details for the Current Report on Form 8-K [Report Authorization](index=3&type=section&id=Report%20Authorization) This section formally authorizes the filing of the report on behalf of CEA Industries Inc., signed by its Chief Executive Officer - The report was signed on behalf of **CEA INDUSTRIES INC.** by **David Namdar, Chief Executive Officer**[8](index=8&type=chunk) - The report was dated **September 23, 2025**[8](index=8&type=chunk)

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) AutoZone's executive summary highlights sales growth, margin pressures from LIFO and investments, ongoing share repurchases, and increased inventory to support growth initiatives [Fourth Quarter & Annual Overview](index=1&type=section&id=Fourth%20Quarter%20%26%20Annual%20Overview) AutoZone reported sales growth for Q4 and full-year FY2025, with net sales reaching $6.2 billion and $18.9 billion respectively, despite declines in gross margin and operating profit due to LIFO and growth investments Key Financial Data for Q4 and Full-Year FY2025 | Metric | Fourth Quarter (16 weeks) | YoY Change | Full Year (52 weeks) | YoY Change | | :------------------- | :---------------- | :--------- | :---------------- | :--------- | | **Net Sales** | $6.2 billion | +0.6% (GAAP), +6.9% (Adjusted) | $18.9 billion | +2.4% | | **Gross Margin** | 51.5% | -98 bps | 52.6% | -50 bps | | **Operating Profit** | $1.2 billion | -7.8% | $3.6 billion | -4.7% | | **Net Income** | $837.0 million | -7.2% | $2.5 billion | -6.2% | | **Diluted EPS** | $48.71 | -5.6% | $144.87 | -3.1% | - Fourth quarter gross margin decreased by **98 basis points**, primarily due to a **128 basis point non-cash LIFO impact** ($80 million LIFO charge this quarter, none in the prior year period)[2](index=2&type=chunk) - Operating expenses as a percentage of sales increased from **31.6%** in the prior year period to **32.4%**, mainly due to investments supporting growth initiatives[2](index=2&type=chunk) [Share Repurchase Program](index=1&type=section&id=Share%20Repurchase%20Program) AutoZone consistently executed its share repurchase program in Q4 and full-year FY2025, returning value to shareholders Share Repurchase Activity | Period | Shares Repurchased (thousands) | Total Investment ($ millions) | Average Repurchase Price (per share) | | :--- | :-------------- | :------------------ | :------------------- | | Fourth Quarter | 117 | $446.7 | $3,821 | | Fiscal Year | 447 | $1.5 billion | $3,425 | | Remaining Authorization | - | $632.3 | - | - As of the fiscal year-end, the company had **$632.3 million** remaining under its existing share repurchase authorization[5](index=5&type=chunk) [Inventory Overview](index=1&type=section&id=Inventory%20Overview) Company inventory increased by 14.1% year-over-year, driven by growth initiatives, with net inventory per store improving to negative $131,000 - Company inventory increased by **14.1%** compared to the prior year, primarily driven by growth initiatives[6](index=6&type=chunk) - Net inventory per store (merchandise inventory less accounts payable) was **negative $131,000**, an improvement from negative $163,000 in the prior year and negative $142,000 last quarter[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) President and CEO Phil Daniele expressed satisfaction with strong Q4 sales growth, highlighting successful domestic and international DIY and commercial strategies, with plans for aggressive new store openings to expand market share and create shareholder value through disciplined profit and cash flow growth - The company is pleased with the results of its domestic and international DIY and commercial sales strategies, with domestic sales showing continuous improvement throughout the quarter[7](index=7&type=chunk) - International business continued its strong performance, with comparable store sales increasing by **7.2%** on a constant currency basis[7](index=7&type=chunk) - A total of **141 net new stores** were opened globally this quarter, with **304 net new stores** for the full year, and plans for aggressive store expansion in the new fiscal year[7](index=7&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) AutoZone is a leading retailer and distributor of automotive replacement parts and accessories in the Americas, offering a wide product range to DIY and commercial customers through physical stores and various online platforms, without providing automotive repair or installation services - AutoZone is the leading retailer and distributor of automotive replacement parts and accessories in the Americas[9](index=9&type=chunk) - The company offers a wide range of products, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products, serving repair garages, dealers, and other commercial customers through its commercial sales program[9](index=9&type=chunk) - Products and information are sold through online channels including www.autozone.com, www.autozonepro.com, www.alldata.com, and www.duralastparts.com[9](index=9&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) AutoZone will host a conference call on Tuesday, September 23, 2025, at 10:00 AM EDT to discuss Q4 results, accessible via the company's website or by phone - The conference call to discuss fourth quarter results will be held on **Tuesday, September 23, 2025, at 10:00 AM EDT**[10](index=10&type=chunk) - Investors can access the webcast and supporting slides through the "Investor Relations" section of AutoZone's website or by dialing **(888) 506-0062 (passcode 347798)**[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP financial measures like adjusted sales, ROIC, and adjusted debt ratios to provide clearer year-over-year operational performance insights and manage its investment-grade credit rating [Explanation of Non-GAAP Measures](index=2&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP financial measures such as adjusted sales, Return on Invested Capital (ROIC), adjusted debt, and adjusted debt to EBITDAR ratio to present clearer year-over-year operating performance and assist management in maintaining an investment-grade credit rating - Non-GAAP measures include adjustments to exclude the impact of an extra week in the prior year's fourth quarter and fiscal year, Return on Invested Capital, Adjusted Debt, and Adjusted Debt to EBITDAR ratio[11](index=11&type=chunk) - The company believes these non-GAAP measures are useful to investors for a clearer understanding of year-over-year operating performance but should not be considered substitutes for GAAP measures[11](index=11&type=chunk) - Management maintains an investment-grade credit rating through capital structure management, deeming it critical for debt levels and share repurchase management[11](index=11&type=chunk) [Adjusted Debt / EBITDAR](index=6&type=section&id=Adjusted%20Debt%20%2F%20EBITDAR) The company reported an Adjusted Debt to EBITDAR ratio of 2.5x for both FY2025 and FY2024, demonstrating stability in its debt management Adjusted Debt / EBITDAR (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :---------------- | :---------------- | | EBITDAR | $4,811,103 | $4,892,402 | | Adjusted Debt | $11,977,901 | $12,109,980 | | **Adjusted Debt/EBITDAR** | **2.5** | **2.5** | - Adjusted debt includes debt, financing lease liabilities, and six times rent[19](index=19&type=chunk) [Adjusted Return on Invested Capital (ROIC)](index=6&type=section&id=Adjusted%20Return%20on%20Invested%20Capital%20(ROIC)) Adjusted Return on Invested Capital (ROIC) for FY2025 was 41.3%, a decrease from 49.7% in FY2024, reflecting increased invested capital and reduced adjusted after-tax return Adjusted Return on Invested Capital (ROIC) (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :---------------- | :---------------- | | Adjusted After-Tax Return | $3,246,514 | $3,380,045 | | Invested Capital | $7,869,085 | $6,798,295 | | **Adjusted ROIC** | **41.3%** | **49.7%** | - Invested capital calculation includes average debt, average shareholder deficit, six times rent, and average financing lease liabilities[20](index=20&type=chunk)[21](index=21&type=chunk) [Rent Expense Reconciliation](index=7&type=section&id=Rent%20Expense%20Reconciliation) The company provided a rent expense reconciliation under ASC 842, showing the difference between total lease cost and rent expense, primarily due to financing lease interest and amortization, and variable operating lease components Rent Expense Reconciliation (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------------------------------------- | :---------------- | :---------------- | | Total Lease Cost under ASC 842 | $626,625 | $588,835 | | Less: Financing Lease Interest and Amortization | ($119,801) | ($103,670) | | Less: Variable Operating Lease Components related to Insurance and Common Area Maintenance | ($43,793) | ($37,472) | | **Rent Expense** | **$463,031** | **$447,693** | - The effective tax rates for FY2025 and FY2024 were **20.3%** and **20.2%**, respectively[22](index=22&type=chunk) [Forward-Looking Statements & Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This press release contains forward-looking statements protected by the Private Securities Litigation Reform Act of 1995, based on management's assumptions and assessments, subject to various risks and uncertainties including product demand, energy prices, competition, credit market conditions, inflation, and supply chain disruptions, where actual results may differ materially - Forward-looking statements are based on management's assumptions and assessments of experience, historical trends, current conditions, and anticipated future developments[12](index=12&type=chunk) - Risks and uncertainties include, but are not limited to, product demand, energy prices, weather, competition, credit market conditions, cash flow, financing, stock repurchases, recession impacts, consumer debt levels, legal and regulatory changes, war, public health issues, inflation, exchange rates, employee recruitment and retention, construction delays, IT system failures, cyberattacks, credit rating downgrades, reputational damage, international market challenges, supplier costs, inventory availability, supply chain disruptions, tariffs, and geopolitical factors[12](index=12&type=chunk) - Forward-looking statements are not guarantees of future performance, and actual results may differ materially from expectations[12](index=12&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) This section presents AutoZone's condensed consolidated statements of operations, selected balance sheet information, and other key financial data for the reported periods [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) [Fourth Quarter](index=3&type=section&id=Fourth%20Quarter) For Q4 FY2025 (16 weeks), net sales were $6.243 billion, gross profit was $3.216 billion, net income was $837.0 million, and diluted EPS was $48.71; adjusted Q4 FY2024 (16 weeks) net sales were $5.840 billion, net income was $841.5 million, and diluted EPS was $48.11 Condensed Consolidated Statements of Operations for Q4 FY2025 (GAAP) (in thousands of dollars) | Metric | Q4 FY2025 (16 weeks) | Q4 FY2024 (17 weeks) | | :------------------- | :------------------------ | :------------------------ | | Net Sales | $6,242,726 | $6,205,380 | | Cost of Sales | $3,026,233 | $2,947,517 | | Gross Profit | $3,216,493 | $3,257,863 | | Operating, Selling and Administrative Expenses | $2,020,428 | $1,961,183 | | Operating Profit (EBIT) | $1,196,065 | $1,296,680 | | Net Interest Expense | $148,087 | $153,151 | | Income Before Taxes | $1,047,978 | $1,143,529 | | Income Tax Expense | $211,027 | $241,321 | | Net Income | $836,951 | $902,208 | | Diluted EPS | $48.71 | $51.58 | | Diluted Weighted Average Shares (thousands) | 17,181 | 17,491 | Condensed Consolidated Statements of Operations for Q4 FY2025 (Adjusted) (in thousands of dollars) | Metric | Q4 FY2025 (16 weeks) | Q4 FY2024 (16 weeks) | | :------------------- | :------------------------ | :------------------------ | | Net Sales | $6,242,726 | $5,839,501 | | Cost of Sales | $3,026,233 | $2,770,662 | | Gross Profit | $3,216,493 | $3,068,839 | | Operating, Selling and Administrative Expenses | $2,020,428 | $1,858,905 | | Operating Profit (EBIT) | $1,196,065 | $1,209,934 | | Net Interest Expense | $148,087 | $144,142 | | Income Before Taxes | $1,047,978 | $1,065,792 | | Income Tax Expense | $211,027 | $224,297 | | Net Income | $836,951 | $841,495 | | Diluted EPS | $48.71 | $48.11 | | Diluted Weighted Average Shares (thousands) | 17,181 | 17,491 | [Fiscal Year](index=4&type=section&id=Fiscal%20Year) For FY2025 (52 weeks), net sales were $18.939 billion, gross profit was $9.966 billion, net income was $2.498 billion, and diluted EPS was $144.87; adjusted FY2024 (52 weeks) net sales were $18.124 billion, net income was $2.602 billion, and diluted EPS was $146.14 Condensed Consolidated Statements of Operations for FY2025 (GAAP) (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :---------------- | :---------------- | | Net Sales | $18,938,717 | $18,490,268 | | Cost of Sales | $8,972,243 | $8,673,216 | | Gross Profit | $9,966,474 | $9,817,052 | | Operating, Selling and Administrative Expenses | $6,356,318 | $6,028,344 | | Operating Profit (EBIT) | $3,610,156 | $3,788,708 | | Net Interest Expense | $475,824 | $451,578 | | Income Before Taxes | $3,134,332 | $3,337,130 | | Income Tax Expense | $636,085 | $674,703 | | Net Income | $2,498,247 | $2,662,427 | | Diluted EPS | $144.87 | $149.55 | | Diluted Weighted Average Shares (thousands) | 17,245 | 17,803 | Condensed Consolidated Statements of Operations for FY2025 (Adjusted) (in thousands of dollars) | Metric | FY2025 (52 weeks) | FY2024 (52 weeks) | | :------------------- | :---------------- | :---------------- | | Net Sales | $18,938,717 | $18,124,389 | | Cost of Sales | $8,972,243 | $8,496,361 | | Gross Profit | $9,966,474 | $9,628,028 | | Operating, Selling and Administrative Expenses | $6,356,318 | $5,926,066 | | Operating Profit (EBIT) | $3,610,156 | $3,701,962 | | Net Interest Expense | $475,824 | $442,569 | | Income Before Taxes | $3,134,332 | $3,259,393 | | Income Tax Expense | $636,085 | $657,679 | | Net Income | $2,498,247 | $2,601,714 | | Diluted EPS | $144.87 | $146.14 | | Diluted Weighted Average Shares (thousands) | 17,245 | 17,803 | [Selected Balance Sheet Information](index=5&type=section&id=Selected%20Balance%20Sheet%20Information) As of August 30, 2025, total assets were $19.355 billion, an increase from the prior year, primarily driven by higher merchandise inventory and net property and equipment, with an improved shareholder deficit and continued negative working capital Selected Balance Sheet Information (in thousands of dollars) | Metric | August 30, 2025 | August 31, 2024 | | :------------------- | :---------------- | :---------------- | | Cash and Cash Equivalents | $271,803 | $298,172 | | Merchandise Inventory | $7,025,688 | $6,155,218 | | Total Current Assets | $8,341,379 | $7,306,759 | | Net Property and Equipment | $7,062,509 | $6,183,539 | | Total Assets | $19,355,324 | $17,176,538 | | Accounts Payable | $8,025,590 | $7,355,701 | | Total Current Liabilities | $9,519,397 | $8,714,243 | | Total Debt | $8,799,775 | $9,024,381 | | Shareholder Deficit | ($3,414,313) | ($4,749,614) | | Working Capital | ($1,178,018) | ($1,407,484) | - Merchandise inventory increased by **14.1%** year-over-year, reaching **$7.026 billion**[17](index=17&type=chunk) - Shareholder deficit improved from **negative $4.750 billion** in FY2024 to **negative $3.414 billion** in FY2025[18](index=18&type=chunk) [Other Selected Financial Information](index=7&type=section&id=Other%20Selected%20Financial%20Information) The company disclosed cumulative share repurchases, remaining repurchase authorization, depreciation and amortization, operating cash flow, and capital expenditures, with cumulative share repurchases exceeding $38.5 billion and operating cash flow reaching $3.155 billion in FY2025 Other Selected Financial Information (in thousands of dollars) | Metric | August 30, 2025 | August 31, 2024 | | :------------------- | :---------------- | :---------------- | | Cumulative Share Repurchases ($) (since FY1998) | $38,517,689 | $36,986,031 | | Remaining Share Repurchase Authorization ($) | $632,311 | $2,163,969 | | Shares Outstanding at Quarter End (thousands) | 16,665 | 16,926 | | **Period Metrics** | **FY2025 (52 weeks)** | **FY2024 (53 weeks)** | | Depreciation and Amortization | $613,199 | $549,755 | | Cash Flow from Operating Activities | $3,155,401 | $3,004,116 | | Capital Expenditures | $1,365,321 | $1,072,696 | - Cash flow from operating activities for FY2025 was **$3.155 billion**, up from **$3.004 billion** in FY2024[23](index=23&type=chunk) - Capital expenditures for FY2025 increased to **$1.365 billion** from **$1.073 billion** in FY2024[23](index=23&type=chunk) [Operational Highlights](index=8&type=section&id=Operational%20Highlights) Operational highlights include continued store expansion, detailed sales and store statistics, same-store sales performance, and inventory management metrics [Store Expansion](index=8&type=section&id=Store%20Expansion) AutoZone continued to expand its store network in Q4 and full-year FY2025, opening 141 net new stores globally in Q4 and 304 for the full year, bringing the total store count to 7,657 Store Count and Regional Distribution | Region | August 30, 2025 (End of Period Store Count) | August 31, 2024 (End of Period Store Count) | | :--- | :-------------------------- | :-------------------------- | | United States | 6,627 | 6,432 | | Mexico | 883 | 794 | | Brazil | 147 | 127 | | **Total** | **7,657** | **7,353** | | **Net New Stores (Q4)** | **141** | **117** | | **Net New Stores (FY)** | **304** | **213** | - In Q4 FY2025, **91 new stores** opened in the US (1 closed), **45** in Mexico, and **6** in Brazil, totaling **141 net new stores**[8](index=8&type=chunk) [Store & Sales Statistics](index=8&type=section&id=Store%20%26%20Sales%20Statistics) In FY2025, AutoZone saw growth in average sales per store and per square foot, with domestic commercial sales continuing to increase and average sales per program per week significantly improving Store & Sales Statistics | Metric | Q4 FY2025 (16 weeks) | Q4 FY2024 (17 weeks) | FY2025 (52 weeks) | FY2024 (53 weeks) | | :------------------- | :------------------------ | :------------------------ | :---------------- | :---------------- | | Average Sales Per Store (thousands of dollars) | $823 | $835 | $2,523 | $2,505 | | Average Sales Per Square Foot ($) | $122 | $124 | $374 | $373 | | Total Domestic Commercial Sales (thousands of dollars) | $1,761,960 | $1,662,596 | $5,212,294 | $4,882,764 | | Domestic Commercial Sales YoY Growth | 6.0% | 10.9% | 6.7% | 6.2% | | Average Sales Per Program Per Week ($) | $18.2 | $16.7 | $16.7 | $15.9 | | Average Sales Per Program Per Week YoY Growth | 9.0% | 0.0% | 5.0% | -0.6% | - In FY2024, an extra week of sales contributed approximately **$359.1 million** to total sales, including **$95.7 million** in domestic commercial sales, benefiting average sales per store by **$49,000** and per square foot by **$7,000**[25](index=25&type=chunk) [Same Store Sales](index=9&type=section&id=Same%20Store%20Sales) In Q4 FY2025, total same store sales grew by 4.5%, or 5.1% on a constant currency basis, with domestic same store sales increasing by 4.8% and international same store sales by 7.2% at constant currency Same Store Sales Growth Rate | Category | Q4 FY2025 (16 weeks) | Q4 FY2024 (16 weeks) | FY2025 (52 weeks) | FY2024 (52 weeks) | | :------------------- | :------------------------ | :------------------------ | :---------------- | :---------------- | | Domestic | 4.8% | 0.2% | 3.2% | 0.4% | | International | 2.1% | 4.9% | -3.2% | 16.1% | | **Company Total** | **4.5%** | **0.7%** | **2.4%** | **2.1%** | | International (Constant Currency) | 7.2% | 9.9% | 9.3% | 10.2% | | Company Total (Constant Currency) | 5.1% | 1.3% | 3.9% | 1.4% | - Same store sales are calculated based on sales from stores open for at least one year, with constant currency same store sales excluding the impact of foreign exchange fluctuations[26](index=26&type=chunk) [Inventory Statistics](index=9&type=section&id=Inventory%20Statistics) As of August 30, 2025, total company inventory was $7.026 billion, with inventory per store at $918,000, an accounts payable to inventory ratio of 114.2%, net inventory (less accounts payable) of negative $999.9 million, and net inventory per store of negative $131,000 Inventory Statistics (in thousands of dollars) | Metric | August 30, 2025 | August 31, 2024 | | :------------------- | :---------------- | :---------------- | | Accounts Payable/Inventory | 114.2% | 119.5% | | Inventory | $7,025,688 | $6,155,218 | | Inventory Per Store | $918 | $837 | | Net Inventory (less Accounts Payable) | ($999,902) | ($1,200,483) | | Net Inventory Per Store | ($131) | ($163) | | **Inventory Turnover** | **1.4 x** | **1.5 x** | - Inventory turnover decreased from **1.5x** in FY2024 to **1.4x** in FY2025[27](index=27&type=chunk)

[PART I](index=4&type=section&id=Part%20I) This part covers the company's business, risk factors, and other foundational disclosures [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights that the Annual Report contains forward-looking statements subject to risks and uncertainties - The report contains forward-looking statements and information, which are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated[16](index=16&type=chunk) - Key risk factors include the company's ability to stem operating losses, obtain additional financing, effectively research and commercialize drug candidates, optimize manufacturing approaches, and successfully navigate regulatory processes[16](index=16&type=chunk)[17](index=17&type=chunk) - New risks regularly emerge, and management cannot predict all factors that could cause actual results to differ, emphasizing the need for readers not to place undue reliance on forward-looking statements[18](index=18&type=chunk) [ITEM 1. BUSINESS](index=6&type=section&id=Item%201.%20Business) InMed Pharmaceuticals develops small molecule drug candidates for unmet medical needs and commercializes rare cannabinoids via BayMedica - InMed Pharmaceuticals Inc. is a pharmaceutical company developing proprietary small molecule drug candidates targeting CB1 and CB2 receptors for diseases with high unmet medical needs[19](index=19&type=chunk) - Through its subsidiary BayMedica, the company also develops and sells bulk rare cannabinoids as ingredients for the health and wellness sector[19](index=19&type=chunk) - The current pharmaceutical pipeline includes INM-901 for Alzheimer's disease, INM-089 for dry Age-Related Macular Degeneration, and INM-755 for Epidermolysis Bullosa[20](index=20&type=chunk) [Overview](index=6&type=section&id=Overview) InMed is a pharmaceutical company developing small molecule drug candidates targeting CB1 and CB2 receptors - InMed is a pharmaceutical company developing small molecule drug candidates that are preferential signaling ligands of CB1 and CB2 receptors, targeting diseases with high unmet medical needs[19](index=19&type=chunk) - The company's pipeline includes INM-901 for Alzheimer's disease, INM-089 for dry Age-Related Macular Degeneration, and INM-755 for Epidermolysis Bullosa[20](index=20&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - BayMedica, a wholly-owned subsidiary, specializes in B2B commercialization of bulk rare, non-intoxicating cannabinoids for the Health and Wellness sector, utilizing chemical synthesis, biosynthesis, and the proprietary IntegraSyn approach[19](index=19&type=chunk)[25](index=25&type=chunk) [Corporate Information](index=8&type=section&id=Corporate%20Information) InMed Pharmaceuticals Inc. was incorporated in British Columbia, Canada, in 1981, with offices in Vancouver - InMed Pharmaceuticals Inc. was incorporated in British Columbia, Canada, on May 19, 1981, and changed its name to the current one on October 6, 2014[26](index=26&type=chunk) - The principal executive offices are located in Vancouver, BC, Canada[26](index=26&type=chunk) [Employees and Human Capital](index=8&type=section&id=Employees%20and%20Human%20Capital) The company's management team comprises experienced executives, with **13 full-time employees** as of September 2025 - The management team consists of highly experienced pharmaceutical and biotechnology executives with **20-30+ years** of industry experience[27](index=27&type=chunk) - As of September 12, 2025, the company had **13 full-time employees** and utilized several consultants[27](index=27&type=chunk) - Compensation programs include competitive salaries, stock options, and annual bonuses to attract and retain talented employees in a competitive industry[28](index=28&type=chunk) [Our Business Strategy](index=9&type=section&id=Our%20Business%20Strategy) The company aims to develop a pipeline of prescription drug candidates and expand its health and wellness product portfolio - The company's goal is to develop a pipeline of prescription-based Product Candidates for diseases with high unmet medical needs[30](index=30&type=chunk) - The strategy includes advancing drug candidates through preclinical and clinical development, expanding the portfolio of health and wellness products, and developing cost-effective manufacturing processes[32](index=32&type=chunk)[33](index=33&type=chunk) - Commercialization strategies for Product Candidates may involve 'go-it-alone' efforts, out-licensing, or co-promotion agreements, with INM-755's advancement contingent on partnerships[31](index=31&type=chunk) [Our Strengths](index=10&type=section&id=Our%20Strengths) Key strengths include an experienced team, a robust pharmaceutical pipeline, diverse manufacturing, and early-mover status - Key strengths include an experienced executive team and board, a robust pharmaceutical pipeline (INM-901 for Alzheimer's, INM-088/089 for ocular diseases, INM-755 for dermatology), and multiple manufacturing approaches (chemical synthesis, biosynthesis, IntegraSyn)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - The company holds an early-mover status as a B2B supplier of non-intoxicating rare cannabinoids to the health and wellness sector[37](index=37&type=chunk) - A diverse portfolio of patent applications covers a spectrum of commercial opportunities, bolstered by the acquisition of BayMedica[38](index=38&type=chunk) [Research and Development Pipeline of Therapeutic Drug Candidates](index=10&type=section&id=Research%20and%20Development%20Pipeline%20of%20Therapeutic%20Drug%20Candidates) This section details the company's therapeutic drug candidate pipeline, including INM-901, INM-089, and INM-755 [INM-901 for the Treatment of Alzheimer's Disease ("AD")](index=10&type=section&id=INM-901%20for%20the%20Treatment%20of%20Alzheimer%27s%20Disease%20(%22AD%22)) INM-901 is a small molecule drug candidate for Alzheimer's, showing neuroprotective effects in preclinical studies - INM-901 is a proprietary small molecule drug candidate for Alzheimer's disease, demonstrating neuroprotective effects, reduced neuroinflammation, enhanced neuronal function, and improved cognitive function and memory in preclinical studies[40](index=40&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - It acts as a preferential signaling agonist for CB1 and CB2 receptors and impacts the PPAR signaling pathway, offering a multi-factorial approach to AD treatment[22](index=22&type=chunk)[71](index=71&type=chunk) - As a small molecule, INM-901 can safely cross the blood-brain barrier and may offer advantages like oral administration, good bioavailability, and low-cost manufacturing compared to antibody therapies[41](index=41&type=chunk)[42](index=42&type=chunk)[58](index=58&type=chunk)[73](index=73&type=chunk) [INM-089 for the Treatment of Age-related Macular Degeneration ("AMD")](index=19&type=section&id=INM-089%20for%20the%20Treatment%20of%20Age-related%20Macular%20Degeneration%20(%22AMD%22)) INM-089 is a small molecule dual CB1/CB2 agonist for dry AMD, showing neuroprotection in preclinical studies - INM-089 is a proprietary small molecule dual CB1/CB2 agonist for dry AMD, demonstrating neuroprotection of photoreceptors, improved retinal pigment epithelium integrity, and reduced extracellular autofluorescent deposits in preclinical studies[87](index=87&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk)[108](index=108&type=chunk) - The company has selected an intravitreal (IVT) formulation for INM-089, successfully delivered in preclinical studies, as it is the established method for effective drug delivery to the back of the eye[115](index=115&type=chunk)[116](index=116&type=chunk) - Dry AMD is the most common form of AMD, affecting **80-90%** of cases, and current FDA-approved complement inhibitors for advanced stages only slow progression and do not improve eyesight, highlighting a significant unmet medical need[84](index=84&type=chunk)[90](index=90&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk)[98](index=98&type=chunk) [INM-755 for the Treatment of Epidermolysis Bullosa ('EB')](index=27&type=section&id=INM-755%20for%20the%20Treatment%20of%20Epidermolysis%20Bullosa%20('EB')) INM-755 cream for Epidermolysis Bullosa demonstrated safety in Phase 1 and anti-itch activity in Phase 2 - INM-755 (cannabinol) cream is a proprietary topical product candidate for Epidermolysis Bullosa (EB), an orphan disease with no definitive cure, targeting wound healing, infection, pain, inflammation, and itch[118](index=118&type=chunk) - Phase 1 clinical trials (755-101-HV and 755-102-HV) demonstrated INM-755 cream was safe and well-tolerated on both intact and induced epidermal wounds[120](index=120&type=chunk)[129](index=129&type=chunk)[132](index=132&type=chunk) - Phase 2 clinical trial (755-201-EB) results showed a positive indication of enhanced anti-itch activity, with **66.7%** of assessed patients experiencing clinically meaningful improvement in chronic non-wound itch[125](index=125&type=chunk) - Continued development of INM-755 is contingent on R&D and commercial partnerships, with potential expansion beyond EB to broader chronic itch indications[126

[Announcement and Business Context](index=1&type=section&id=Announcement%20and%20Business%20Context) [Fiscal Year 2025 Financial Results Announcement](index=1&type=section&id=Fiscal%20Year%202025%20Financial%20Results%20Announcement) Netcapital Inc. announced full fiscal year 2025 financial results for the period ended April 30, 2025, on August 12, 2025 - Netcapital Inc. announced full fiscal year 2025 financial results on August 12, 2025[1](index=1&type=chunk) - The fiscal year ended April 30, 2025[1](index=1&type=chunk) [Management Commentary and Strategic Direction](index=1&type=section&id=Management%20Commentary%20and%20Strategic%20Direction) CEO Martin Kay highlighted a strategic shift in 2025 to build a stronger, scalable foundation, emphasizing the secured broker-dealer license to broaden service and a commitment to disciplined execution and long-term value creation - In 2025, Netcapital Inc. made an important shift in strategy to focus on building a stronger, more scalable foundation for the future[2](index=2&type=chunk) - The secured broker-dealer license positions the company to serve a broader base of issuers and investors and deepen its impact on democratizing access to private markets[2](index=2&type=chunk) - Management remains committed to disciplined execution, product innovation, and long-term value creation[2](index=2&type=chunk) [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) The company will host an investor conference call on August 13, 2025, at 9 a.m. ET, providing participant access details and a conference entry code - An investor conference call is scheduled for August 13, 2025, at 9 a.m. ET[3](index=3&type=chunk) - Participant access: **844-985-2012** or **973-528-0138**, Conference entry code: **310637**[3](index=3&type=chunk) [About Netcapital Inc.](index=1&type=section&id=About%20Netcapital%20Inc.) Netcapital Inc. is a fintech company providing a scalable platform for private capital raising and investment, operating Netcapital Advisors and two SEC/FINRA registered entities - Netcapital Inc. is a fintech company providing a scalable technology platform for private capital raising and private equity investment opportunities[4](index=4&type=chunk) - The company's consulting group, Netcapital Advisors, offers marketing and strategic advice and takes equity positions[4](index=4&type=chunk) - Netcapital Funding Portal Inc. and Netcapital Securities Inc. (broker-dealer) are registered with the U.S. SEC and are members of FINRA[4](index=4&type=chunk) [Forward Looking Statements](index=1&type=section&id=Forward%20Looking%20Statements) The report contains forward-looking statements subject to known and unknown risks and uncertainties, with no obligation for public updates or revisions - The information includes forward-looking statements related to future events or financial performance[5](index=5&type=chunk) - These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different[5](index=5&type=chunk) - The company assumes no obligation to publicly update or revise these forward-looking statements[5](index=5&type=chunk) [Fiscal Year 2025 Financial Performance](index=1&type=section&id=Fiscal%20Year%202025%20Financial%20Performance) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) For fiscal year 2025, Netcapital Inc. reported significantly decreased revenues, a larger operating loss, substantial impairment, and a reduced net loss per share Key Financial Highlights Table | Metric | FY2025 | FY2024 | Change (YoY) (%) | | :----------------------- | :------------- | :------------- | :---------------- | | Revenues ($) | $869,460 | $4,951,435 | -82.4 | | Operating loss ($) | ($8,321,317) | ($3,442,388) | -141.7 | | Impairment loss ($) | $19,900,000 | N/A | N/A | | Net loss per share ($) | ($20.39) | ($28.83) | +29.3 (less negative) | - Revenues decreased primarily due to a reduction in consulting services[6](index=6&type=chunk) [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) As of April 30, 2025, total assets significantly decreased to **$20.9 million** from **$41.6 million**, driven by reduced equity securities, while liabilities increased and equity decreased Consolidated Balance Sheets Table | Balance Sheet Item | April 30, 2025 ($) | April 30, 2024 ($) | Change (YoY) (%) | | :-------------------------- | :------------- | :------------- | :---------------- | | Cash and cash equivalents | $289,428 | $863,182 | -66.5 | | Total current assets | $399,612 | $1,042,535 | -61.7 | | Equity securities | $5,748,050 | $25,333,386 | -77.3 | | Total assets | $20,901,491 | $41,557,306 | -49.7 | | Total current liabilities | $5,495,767 | $3,116,698 | +76.3 | | Total liabilities | $5,995,767 | $3,616,698 | +65.8 | | Total stockholders' equity | $14,905,724 | $37,940,608 | -60.7 | - The significant decrease in total assets was largely due to a reduction in equity securities from **$25.3 million** to **$5.7 million**[8](index=8&type=chunk) - Retained earnings shifted from positive **$479,563** in FY2024 to a deficit of **($27,821,762)** in FY2025[8](index=8&type=chunk) [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) For FY2025, Netcapital Inc. experienced substantial declines in revenues and gross profit, leading to increased operating and net losses, exacerbated by impairment expense and negative unrealized gain/loss Consolidated Statements of Operations Table | Income Statement Item | FY2025 ($) | FY2024 ($) | Change (YoY) (%) | | :-------------------------------- | :------------- | :------------- | :---------------- | | Revenues | $869,460 | $4,951,435 | -82.4 | | Gross profit | $829,116 | $4,843,375 | -82.8 | | Total costs and expenses | $9,150,433 | $8,285,763 | +10.4 | | Operating loss | ($8,321,317) | ($3,442,388) | -141.7 | | Impairment expense | ($19,915,556) | ($1,048,430) | -1799.5 | | Unrealized gain (loss) on equity securities | $18,050 | ($2,696,135) | +100.7 (less negative) | | Net loss | ($28,301,325) | ($4,986,317) | -467.6 | | Basic loss per share | ($20.39) | ($28.83) | +29.3 (less negative) | - The significant increase in net loss was primarily driven by a substantial impairment expense of **$19.9 million** in FY2025, compared to **$1.0 million** in FY2024[10](index=10&type=chunk) - General and administrative costs increased from **$3.4 million** in FY2024 to **$5.2 million** in FY2025[10](index=10&type=chunk) - Despite a higher net loss, basic loss per share decreased due to a significant increase in the weighted average number of common shares outstanding (from **172,937** to **1,387,666**)[10](index=10&type=chunk)

[Company Overview & Recent Developments](index=1&type=section&id=Company_Overview_Recent_Developments) [Executive Summary & Key Announcements](index=1&type=section&id=Executive_Summary_Key_Announcements) Benitec Biopharma announced FY2025 results and operational updates, anticipating BB-301 Cohort 1 interim results and Cohort 2 enrollment in Q4 2025, utilizing its "Silence and Replace" ddRNAi platform - Interim clinical study results for Cohort 1 of the BB-301 Phase 1b/2a Treatment Study are anticipated in **Q4 2025**[1](index=1&type=chunk) - Enrollment of the first subject into Cohort 2 of the BB-301 Phase 1b/2a Treatment Study is expected in **Q4 2025**[1](index=1&type=chunk) - Benitec Biopharma is a clinical-stage, gene therapy-focused biotechnology company developing novel genetic medicines based on its proprietary **"Silence and Replace" DNA-directed RNA interference ("ddRNAi") platform**[1](index=1&type=chunk) [Corporate Highlights & Clinical Program Update](index=1&type=section&id=Corporate_Highlights_Clinical_Program_Update) Following DSMB recommendation, Benitec Biopharma plans to continue BB-301 Cohort 2 enrollment in Q4 2025 and provide additional Cohort 1 interim results - The Independent Data Safety Monitoring Board (DSMB) formally recommended continuing subject enrollment into the Phase 1b/2a Treatment Study, expected to begin in **Q4 2025**[3](index=3&type=chunk) - Additional interim clinical study results for Cohort 1 Subjects are expected in the **fourth calendar quarter of this year**[4](index=4&type=chunk) - The CEO expressed strong enthusiasm for BB-301's potential as a safe and efficacious therapy for improving swallowing in **OPMD patients with dysphagia**[2](index=2&type=chunk) [About Benitec Biopharma, Inc.](index=6&type=section&id=About_Benitec_Biopharma_Inc) Benitec Biopharma Inc. is a clinical-stage biotechnology company advancing novel genetic medicines using its proprietary "Silence and Replace" ddRNAi platform, primarily focused on Oculopharyngeal Muscular Dystrophy (OPMD) - Benitec Biopharma Inc. is a clinical-stage biotechnology company focused on the advancement of **novel genetic medicines**[12](index=12&type=chunk) - The proprietary **"Silence and Replace" DNA-directed RNA interference platform** combines RNA interference with gene therapy to facilitate sustained silencing of disease-causing genes and concomitant delivery of wildtype replacement genes[12](index=12&type=chunk) - The Company is developing Silence and Replace-based therapeutics for chronic and life-threatening human conditions, including **Oculopharyngeal Muscular Dystrophy (OPMD)**[12](index=12&type=chunk) [Financial Performance](index=2&type=section&id=Financial_Performance) [Full Year 2025 Financial Highlights](index=2&type=section&id=Full_Year_2025_Financial_Highlights) Benitec Biopharma reported increased total expenses, R&D, and G&A costs for FY2025, leading to a higher net loss, yet cash and cash equivalents nearly doubled year-over-year Key Financial Metrics (Year Ended June 30, in thousands) | Metric | FY2025 | FY2024 | Change (YoY) | | :----------------------------------- | :----- | :----- | :----------- | | Total Expenses | $41,765 | $22,490 | +85.7% | | Research and Development Expenses | $18,332 | $15,609 | +17.4% | | General and Administrative Expenses | $23,433 | $6,989 | +235.3% | | Loss from Operations | $(41,765) | $(22,490) | +85.7% | | Net Loss Attributable to Shareholders | $(37,917) | $(22,370) | +69.5% | | Net Loss per Share (Basic & Diluted) | $(1.05) | $(1.22) | -13.9% | | Cash and Cash Equivalents (as of June 30) | $97,744 | $50,866 | +92.2% | - The increase in research and development expenses was primarily related to the ongoing clinical development of **BB-301 for OPMD**, reflecting contract manufacturing and OPMD Natural History and Dosing study payments[5](index=5&type=chunk) - The increase in general and administrative expenses was primarily driven by **$14.5 million higher share-based compensation**, alongside increases in legal, consulting, travel, and salary expenses[6](index=6&type=chunk) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated_Balance_Sheets) As of June 30, 2025, Benitec Biopharma reported substantial increases in cash, total assets, and stockholders' equity, while total liabilities decreased over 50% year-over-year Consolidated Balance Sheet Highlights (as of June 30, in thousands) | Item | 2025 | 2024 | Change (YoY) | | :------------------------- | :----- | :----- | :----------- | | Cash and cash equivalents | $97,744 | $50,866 | +92.2% | | Total current assets | $98,518 | $51,674 | +90.7% | | Total assets | $99,592 | $52,210 | +90.7% | | Total current liabilities | $1,802 | $4,924 | -63.4% | | Total liabilities | $2,297 | $4,962 | -53.7% | | Additional paid-in capital | $326,308 | $238,398 | +36.9% | | Accumulated deficit | $(228,176) | $(190,259) | +20.0% | | Total stockholders' equity | $97,295 | $47,248 | +106.0% | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated_Statements_of_Operations_and_Comprehensive_Loss) For FY2025, Benitec Biopharma reported no revenues, a **$37.9 million net loss** (up from $21.8 million), driven by increased operating expenses despite higher interest income Consolidated Statements of Operations Highlights (Year Ended June 30, in thousands) | Item | 2025 | 2024 | Change (YoY) | | :----------------------------------- | :----- | :----- | :----------- | | Revenues | $0 | $0 | 0% | | Royalties and license fees | $0 | $(108) | N/A | | Research and development | $18,332 | $15,609 | +17.4% | | General and administrative | $23,433 | $6,989 | +235.3% | | Total operating expenses | $41,765 | $22,490 | +85.7% | | Loss from operations | $(41,765) | $(22,490) | +85.7% | | Interest income (expense), net | $3,286 | $904 | +263.5% | | Net loss | $(37,917) | $(21,751) | +74.3% | | Net loss attributable to common shareholders | $(37,917) | $(22,370) | +69.5% | | Basic and diluted net loss per share | $(1.05) | $(1.22) | -13.9% | | Weighted average shares outstanding | 36,209,271 | 18,364,386 | +97.2% | - A gain on extinguishment of liabilities of **$764 thousand** was recognized in 2025, compared to none in 2024[10](index=10&type=chunk) [Product & Technology](index=6&type=section&id=Product_Technology) [About BB-301](index=6&type=section&id=About_BB-301) BB-301 is a novel gene therapy for OPMD, using a modified AAV9 capsid to deliver a bifunctional construct that simultaneously silences the mutant PABPN1 gene and replaces it with a functional version - BB-301 is a novel, modified **AAV9 capsid** expressing a unique, single bifunctional construct[11](index=11&type=chunk) - The construct promotes co-expression of codon-optimized Poly-A Binding Protein Nuclear-1 (PABPN1) and two small inhibitory RNAs (siRNAs) against **mutant PABPN1**, the causative gene for OPMD[11](index=11&type=chunk) - The **"silence and replace" mechanism** of BB-301 is uniquely positioned for OPMD treatment by halting mutant expression while providing a functional replacement protein[11](index=11&type=chunk) [Forward-Looking Information](index=6&type=section&id=Forward_Looking_Information) [Forward Looking Statements](index=6&type=section&id=Forward_Looking_Statements) This section outlines forward-looking statements regarding Benitec's product development, clinical trials, regulatory processes, and ddRNAi platform benefits, which are subject to inherent risks and uncertainties - Forward-looking statements include plans for product candidate development and commercialization, timing of preclinical and clinical trials, data availability, patient enrollment, regulatory filings, and the clinical utility and potential attributes of **ddRNAi and Benitec's product candidates**[13](index=13&type=chunk) - These statements are based on current expectations and are subject to risks and uncertainties, including unanticipated developments in clinical trials, regulatory approvals, intellectual property, financing needs, and **market conditions**[14](index=14&type=chunk)[15](index=15&type=chunk) - The Company disclaims any intent or obligation to **update these forward-looking statements**[15](index=15&type=chunk) [Additional Information](index=7&type=section&id=Additional_Information) [Investor Relations Contact](index=7&type=section&id=Investor_Relations_Contact) This section provides contact details for investor relations inquiries - Investor Relations Contact: **Irina Koffler, LifeSci Advisors, LLC**[16](index=16&type=chunk) - Contact details: **(917) 734-7387, ikoffler@lifesciadvisors.com**[16](index=16&type=chunk)